Panevezio Statybos Trestas

Annual / Quarterly Financial Statement • Feb 26, 2010

PANEVĖŽIO STATYBOS TRESTAS AB

Consolidated and company financial statements for the year 2009

Unaudited

Company register given code 147732969 Address of registered office P. Puzino Str. 1, LT-35173 Panevėžys, Lithuania

STATEMENT OF EXECUTIVE OFFICERS OF THE COMPANY

Hereby we confirm that on the basis of the information available to us, the Consolidated Interim Financial Statement for the year 2009 made in accordance with the International Financial Reporting Standards is true and shows the assets, liabilities, financial state, and profit or loss of Panevėžio statybos trestas AB and companies of Panevėžio statybos trestas Company Group in a correct manner.

Gerland

Dalius Gesevičius, Managing Director Panevėžio statybos trestas AB

Sherces

Dalė Bernotaitienė, Finance Director Panevėžio statybos trestas AB

BALANCE SHEET

In Litas	Company
ASSETS	2009	2008
Non-current assets	73650975	61757462
Intangible assets	80009	287261
Tangible assets	28832083	34786471
Investments and amounts receivable in one year	44393475	24795793
Deferred tax assets	345408	1887937
Current assets	110815668	171959074
Inventories	4418046	8385119
Advance payments	4185396	3412379
Accounts receivable from buyers	47622898	103871477
Other current assets	654644	1519462
Cash and cash equivalents	53934684	54770637
TOTAL ASSETS	184466643	233716536

In Litas	Company
EQUITY AND LIABILITIES	2009	2008
Equity	124723932	121062113
Share capital	16350000	16350000
Reserves	11350624	11340058
Retained profit (loss)	97023308	93372055
Translation reserve
Minority share
Amounts payable and liabilities	59742711	112654423
Amounts payable in one year and long
term liabilities	7328058	11379016
Loans and borrowings	4323901	7148115
Warranty provision	1289640	1804644
Deferred taxes	1714517	2426257
Amounts payable in one year and short term liabilities	52414653	101275407
Loans and borrowings	2760113	3522594
Trade payables	17967773	60489169
Advance payments received	17798652	7525256
Profit tax payable	121446	5372137
Other liabilities	13766669	24366251
TOTAL EQUITY AND LIABILITIES	184466643	233716536

In Litas	Group
ASSETS	2009	2008
Non-current assets	40227805	42500612
Intangible assets	234725	486123
Tangible assets	32412105	39265580
Other investment and amounts receivable in one year	6231338	78166
Other intangible assets	1349637	2670743
Current assets	172833244	243080438
Inventories	53811431	65309702
Advance payments	6176074	5979085
Accounts receivable from buyers	54466719	108447300
Other assets	2156974	6200945
Cash and cash equivalents	56222046	57143406
TOTAL ASSETS	213061049	285581050

In Litas	Group
EQUITY AND LIABILITIES	2009	2008
Equity	100837101	112331982
Share capital	16350000	16350000
Reserves	12461301	12456137
Retained profit (loss)	71153962	82844071
Translation reserve	871838	681774
Minority share	$-405236$	4545502
Grants and awards	60563
Amounts payable and liabilities	112568621	168703566
Amounts payable in one year and
long term liabilities	19652516	21997805
Loans and other borrowings	15122085	16135788
Warranty provision	1362395	1861300
Deferred tax liabilities	1853180	2719481
Other liabilities	1314856	1281236
Amounts payable in one year and short term liabilities	92916105	146705761
Loans and borrowings	32563884	45554215
Trade payables	22255325	59886914
Advance payments received	18201667	8477483
Profit tax payable	122772	5554439
Other liabilities	19772457	27232710
TOTAL EQUITY AND LIABILITIES	213061049	285581050

$\omega$

Income Statement

Company
EQUITY AND LIABILITIES In Litas	Jan.-Dec. 2009	Jan.-Dec. 2008	Sept.-Dec. 2009	Sept.-Dec. 2008
SALE	167704471	558902531	36116444	100576866
COST OF SALE	139789187	469762064	28503893	82186648
GROSS PROFIT (LOSS)	27915284	89140467	7612551	18390218
OPERATING EXPENSES	23484120	31514753	8360860	5925856
Sale	406102	614888	82845	140724
General and administration	23078018	30899865	8278015	5785132
TYPICAL OPERATING PROFIT (LOSS)	4431164	57625714	-748309	12464362
OTHER ACTIVITIES	-225596	317897	$-87330$	136390
Income	424335	547529	98643	173609
Expenses	649931	229632	185973	37219
FINANCIAL AND INVESTMENT ACTIVITIES	3921321	$-24093$	1518235	$-46309$
Income	4677335	1186712	1698052	581755
Expenses	756014	1210805	179817	628064
USUAL ACTIVITY PROFIT (LOSS)	8126889	57919518	682596	12554443
WINDFALL PROFIT
LOSSES
PROFIT (LOSS) BEFORE TAXATION	8126889	57919518	682596	12554443
PROFIT TAX	3320570	9304074	317987	1547766
NET PROFIT (LOSS)	4806319	48615444	364609	11006677

Group
ITEM In Litas	2009 01-12	2008 01-12	$200909 - 12$	2008 09 - 12
SALE	184685381	586086434	39476837	114569272
COST OF SALE	154896185	485421845	31350873	90600236
GROSS PROFIT (LOSS)	29789196	100664589	8125964	23969036
OPERATING EXPENSES	40833019	59200361	21493086	9518632
Sale	477691	814882	91558	194218
General and administration	40355328	58385479	21401528	9324414
TYPICAL OPERATING PROFIT (LOSS)	-11043823	41464228	-13367122	14450404
OTHER ACTIVITIES	-400604	$-177105$	$-145283$	$-14863$
Income	417072	282079	105248	115447
Expenses	817676	459184	250531	130310
FINANCIAL AND INVESTMENT ACTIVITIES	621485	$-5261308$	1945974	$-2652345$
Income	6392997	1518453	3357455	647778
Expenses	5771512	6779761	1411481	3300123
USUAL ACTIVITY PROFIT (LOSS)	$-10822942$	36025815	$-11566431$	11783196
WINDFALL PROFIT
LOSSES
PROFIT (LOSS) BEFORE TAXATION	$-10822942$	36025815	$-11566431$	11783196
PROFIT TAX	3033498	9897459	331650	1950566
NET PROFIT (LOSS)	-13856440	26128356	-11898081	9832630
ATTRIBUTABLE TO SHAREHOLDERS	-8903993	34661732	-9071794	10705953
ATTRIBUTABLE TO MINORITY INTEREST	-4952447	-8533376	$-2826287$	$-873323$

CASH FLOW STATEMENT

	Company
	Jan.-Dec. 2009	Jan.-Dec. 2008
Cash flow from operating activities
Net profit	4.806.319	48.615.444
Depreciation and amortisation costs	6.484.399	5.628.530
Profit (loss) from non-current asset transfer	$-9.814$	$-71.758$
Profit tax expense	3.320.570	9.304.074
Other non-monetary items	899.485	3.516.067
	15.500.959	66.992.357
Change in inventories	3.967.073	2.954.356
Change in buyer borrowings and other amounts
receivable	56.248.580	6.199.536
Change in advance payments	$-713.724$	-984.471
Change in amounts receivable in one year	$-106.258$	58.236
Change in other assets	861.817	$-751.474$
Change in trade payables	10.273.396	$-4.249.200$
Change in prepayments received	$-42.521.396$	$-38.237.286$
Change in provisions and other liabilities	$-12.699.192$	2.970.595
	30.811.255	34.952.649
Profit tax paid	$-8.418.396$	$-7.670.010$
Net cash from operating activities	22.392.859	27.282.639
Cash flow from investing activities
Acquisition of long term assets (excl. investment)	$-438.922$	$-2.314.085$
Transfer of long term assets (excl. investment)	57.281	108.687
Acquisition of investment		0
Loans issued	$-17.550.927$	$-9.000$
Loans recovered	9.045.538	117.450
Dividends and interest received	3.263.158
Change in other financial assets	$-10.983.035$	0
Net cash used in investing activities	$-16.606.907$	$-2.096.948$
Cash flow from financial activities
Dividends and bonuses paid	$-2.271.930$	$-4.040.103$
Proceeds from loans and other borrowings		0
Repayments from loans and other borrowings		$-506.732$
Payment of financial lease liabilities	$-3.645.988$	$-4.070.786$
Interest paid	$-703.987$	$-838.151$
Net cash used in financing activities	$-6.621.905$	$-9.455.772$
Increase (decrease) in net cash flow	$-835.953$	15.729.919
Impact of translation reserve on cash balance
Cash and its equivalents in the beginning of the year	54.770.637	39.040.718
Cash and its equivalents at the end of the year	53.934.684	54.770.637

	Group
	Jan.-Dec. 2009	Jan.-Dec. 2008
Cash flow from operating activities
Net profit	$-13.856.440$	24.183.631
Elimination of non-monetary items:
Depreciation and amortisation costs	7.519.689	7.627.161
Other non-monetary items	$-1.123.152$	20.040.831
Profit tax expenses	3.033.498	9.537.011
	$-4.426.405$	61.388.634
Change in inventories	11.498.271	$-1.084.087$
Change in amounts receivable from buyers	53.971.306	5.409.111
Change in advance payments	$-191.415$	$-3.397.211$
Change in other assets	4.047.351	$-3.866.116$
Change in trade payables	$-37.631.589$	$-6.373.247$
Change in advance payments received	9.724.184	$-37.451.201$
Change in provisions and other liabilities	$-6.737.545$	5.147.122
	30.254.158	19.773.005
Profit tax paid	$-8.692.630$	$-8.823.801$
Elimination of results from financial and investing
activities	2.110.893	5.365.371
Net cash from operating activities	23.672.421	16.314.575
Cash flow from investing activities	$-685.569$	$-1.584.376$
Acquisition of non-current assets (except investments)	213.967	158.230
Transfer of non-current assets (except investments) Investment assignment
Loans issued	$-17.560.202$
Loans recovered	9.095.540	670.339
Dividends and interest received	3.240.863
Net cash used in investing activities	$-5.695.401$	-755.807
Cash flow from financial activities		5.249.400
Cash paid by minority interest	0
Dividends and bonuses paid	$-2.271.930$	-4.380.103 6.688.346
Proceeds from loans and borrowings	13.644.480
Repayments from loans and borrowings	$-21.266.284$	$-718.178$
Payment of financial lease liabilities	$-4.038.548$	$-5.742.984$
Interest paid	$-4.966.098$	$-4.121.355$
Net cash from financing activities	$-18.898.380$	$-3.024.874$
Increase (decrease) in net cash flow	$-921.360$	12.533.894
Cash and its equivalent at the end of the period	57.143.406	44.609.512
Cash and its equivalent at the end of the year	56.222.046	57.143.406

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$\overline{C} + \overline{\overline{C}}$
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STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

Group In Litas	Authorised capital	Revaluation reserve	reserve Legal	Translation reserve impact	Accrued profit	company share Equity share falling to parent	Minority share	Total
Balance as of 1 January 2008	16,350.000	3.636.299	1.642.718	122.291	53.820.670	75.571.978	7.869.553	83.441.531
Non-current asset revaluation		9.000.150				9.000.150	27.079	9.027.229
Change in revalued reserve and deferred tax		$-366.328$			366.328			0
Paid up capital							5.249.400	5.249.400
Net profit (loss) for 2008					32.778.216	32.778.216	$-8.594.585$	24.183.631
Dividend					-3.760.500	$-3.760.500$		-3.760.500
Translation reserve impact				559,483		559.483		559.483
Legal reserves formed			360.643		$-360.643$			0
Deferred tax liability		$-1.817.345$				$-1.817.345$	$-5.945$	$-1.823.290$
Balance as of 31 December 2008	16.350.000	10,452.776	2.003.361	681.774	82.844.071	112.331.982	4.545.502	116.877.484
Change in revalued reserve and						$-11.456$		$-11.456$
deferred tax		$-11.456$			$-8.849.623$	-8.849.623	4.950.738	$-13.800.361$
Net profit (loss) for 2009 Dividend					$-1.144.501$	$-1.144.501$		$-1.144.501$
Translation reserve impact				190.064		190.064		190.064
Reserves formed			16.620		$-16.620$			0
Company incorporation					$-1.679.365$	$-1.679.365$		$-1.679.365$
Balance as of 31 December 2009	16.350.000	10.441.320	2.019.981	871.838	71.153.962	100.837.101	405.236	100.431.865

$\mathbb{C}$ ompan $\mathbb{Y}$ In Litas	Authorised capital	premium Share	Fixed asset revaluation	Financial reserve	reserve Legal	reserves Other	Deferred result	Total
Balance as of 31 December 2007 Revaluation reserve increase Fixed asset revaluation	16.350.000		$-321.175$ 8.411.802 3.296.761		1.635.030		48.195.936 321.175	8.411.802 69.477.727
Postponed tax related liability Net profit (loss) for 2008 Dividends			$-1.682.360$				-3.760.500 48.615.444	-3.760.500 46.933.084
Balance as of 31 December 2008	16.350.000	0	9.705.028	0	1.635.030	0	93.372.055	121.062.113
Net profit (loss) for 2009 unrecognised Related postponed tax liability Revaluation of fixed assets			711.740 $-701.174$				$-711.740$ 701.174
Net profit (loss) for 2009 Dividends							4.806.319 $-1.144.500$	$-1.144.500$ 4.806.319
Reserves formed								$\circ$
Increase (decrease) of authorised capital Reserves used								O
Balance as of 31 December 2009	16.350.000	0	9.715.594	0	1.635.030	0	97.023.308	124.723.932

EXPLANATORY NOTE

General Information

Panevėžio statybos trestas AB (hereinafter "the Company") was established in 1957 and for a long tome was known as the North Lithuania Construction Trust (Šiaurės Lietuvos statybos trestas). In 1991 the Company was registered as a State Capital Company. On 30 October 1993 the State Capital Company was reorganized to a Public Limited Liability Company. Company code 147732969, VAT code LT477329610. Registration certificate No. 013732, issued on 27 September 2004 by the State Register Centre Panevėžys Branch.

2009 the following subsidiaries were functioning in the company: Gerbusta, Pastatų apdaila and Genranga. These subsidiaries keep separate records, but their assets, liabilities and financial results are included when preparing financial accountability of the Company. The Company has its representative offices in Tchrepovec and a subsidiary in Kaliningrad. Financial year of the Company is calendar year. The period of commercial-economic activities of the Company is unlimited.

The main activity of the Company and its subsidiaries (hereinafter "the Group") is designing and construction of various buildings, structures, facilities, communications and other similar objects in Lithuania and abroad, real estate development. In addition to the listed activities the Company rents out premises and equipment, resells utility and communication services.

Subsidiaries	Type of activities	Share controlled (per cent)	Headquarter address
Skydmedis UAB	Production of wood constructions	100	Pramonės Str. 5,
			Panevėžys
			Tel.: $+37045583341$
Metalo meistrai UAB	Production of metal constructions	100	Tinklų Str. 7, Panevėžys
Vekada UAB	Electrical installation works	96	Marijonų Str. 36,
			Panevėžys
			Tel: $+37045461311$
Vilniaus papėdė TŪB	Construction works	69	Švitrigailos Str. 8, Vilnius
			Tel.: +370 5 2609405
Alinita UAB	Air conditioning equipment	100	Dubysos Str. 31, Klaipėda
			Tel.: +370 46 340363
PS Trests SIA	Construction	100	Vietalvas Str. 5, Riga
Baltlitstroij OOO	Construction	100	Sovetskij Ave. 43,
			Kaliningrad
			Tel.: 0074012350435
	Real estate development	67	Konstitucijos Ave. 7,
PST Investicijos UAB			Vilnius Tel.: $+3705$
			2728213
Subsidiaries of PST investicijos UAB:
	Real estate development and	100	Konstitucijos Ave. 7,
Ateities projektai UAB	sales		Vilnius
		100	Konstitucijos Ave. 7,
Sakališkės UAB	Real estate development and		Vilnius
	sales

As of 31 December 2009 the Group includes the parent company and 8 subsidiaries:

Kauno erdvė UAB	Real estate development and sales	100	Konstitucijos Ave. 7, Vilnius
Gėlužės projektai UAB	Real estate development and sales	100	Konstitucijos Ave. 7, Vilnius
Verkių projektas UAB	Real estate development and sales	100	Konstitucijos Ave. 7, Vilnius
OOO ISK Baltevromarket	Construction investment company	100	Sovetskij Lane 43, Kaliningrad
Smiltynių kalvos UAB	Real estate development and sales	100	Konstitucijos Ave. 7, Vilnius

Basis of Interim Financial Statement Preparation

The figures in the interim financial statement are presented in the national currency of Lithuania

• the Litas which is also the Company's functional currency.

The same accounting principles were applicable to the interim financial statement as to the annual financial statement.

The following currency rates were used when preparing the interim financial statement:

Currency	31 December 2009	31 December 2008
1 EUR	3.4528	3.4528
10 RUB	0.79465	0.8334

Principles of Consolidation

The consolidated financial statement incorporates the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved when the Company has the power to manage the financial and operating policies of the entity where the capital has been invested so as to obtain benefits from its activity.

The financial results of the subsidiary companies, acquired or sold during the year, are included in the consolidated operating statement covering the period from the subsidiary company acquisition date till the subsidiary company selling date. The financial statements of the subsidiary companies are revised so that they comply with the accounting policies applicable by the group in case they were different.

For consolidation purposes all significant remaining balance, transactions and unrealized profit (loss) of the operations between the companies the Group were eliminated from the financial statement.

Investments in Non-Current Assets

The investments of the Group related to acquisition of non-current tangible and intangible assets amounted 704,472 Litas in 2009: Panevėžio statybos trestas AB acquired non-current assets for the amount of 438,922 Litas.

In January through December 2009 depreciation of non-currents assets of the Company amounted 6,484,399 Litas, whereas depreciation of non-currents assets of the Group amounted 7.519.689 Litas.

Loans

On 31 December 2009, PST investicijos UAB Company Group had long-term and short-term loans amounting 39,897,310 Litas including bank credits for the amount of 37,630,171 Litas. The interest rate of bank credits is 6 months Vilibor and $+1.1 - 1.55\%$ .

Guarantees, Sureties

On 31 December 2009 the warranty deeds granted by credit institutions for the liabilities of Panevėžio statybos trestas AB amounted 13,910,667 Litas, including 11,243,558 Litas for projects financed by the Environmental Project Financing Agency under the Ministry of Environment of the Republic of Lithuania.

On 21 July 2009 on the basis of Surety Agreement related to fulfilment of liabilities undertaken by PST investicijos UAB based on the Credit Agreement, Panevėžio statybos trestas AB paid in equivalent Litas 10,983,034 to DnB NORD AB.

Transactions with Associated Parties

The Board of Panevėžio statybos trestas AB adopted the resolution to give a target loan to PST investicijos UAB to cover administration costs, interest payable to banks, and land and real estate of PST investicijos UAB, to finance technical design of real estate project under development by OOO ISK Baltevromarket on April through December 2009. The amount of the given loan is up to 5.84 mln. Litas. During the reporting period PST investicijos UAB was given the loan in the amount of 1.5 mln. Litas.

The Board of Panevėžio statybos trestas AB adopted the resolution to give a target loan of up to 10 mln. Litas to Panevėžio keliai AB for the period expiring on 2 January 2011. 6.2 mln. Litas were paid in July 2009.

Dividends

The annual General Meeting of the Shareholders of Panevėžio statybos trestas AB that took place on 15 May 2009 took the decision to pay dividends in the amount of 1,144,500 Litas (0.07) Litas per share) and bonuses in the amount of 1,144,500 Litas.

Bonuses were paid during the first half of the year. Dividends paid for the accounting period amounted 1,118,033 Litas.

Significant Changes in the Interim Financial Statement during the Reporting Period

There are no essential changes in the Financial Statement for the fourth quarter of 2009.

	Group		Company
	31 Dec. 2009	31 Dec. 2008	31 Dec. 2009	31 Dec. 2008
Income	184685	586086	167704	558903
Cost price	154896	485422	139789	469762
Gross profit	29789	100664	27915	89140
Gross profit margin (per cent)	16,13	17,18	16,65	15,95
Net profit margin (per cent)	$-7,50$	4,13	2,87	8,70
EBIT (thousands Litas)	$-5856$	37841	8831	58757
EBITDA (thousands Litas)	1264	44472	15315	64386
Profit per share (Litas)	$-0,54$	2,0	0,29	2,97
Return on equity (per cent) (ROE)	$-13,74$	21,53	3,85	40,16
Return on assets or asset profitability (ROA)	$-6,50$	8,47	2,61	20,80
Equity to asset ration	0,47	0,39	0,68	0,52
Current liquidity ratio	1,86	1,66	2,11	1,70
Book value of a share	6,15	7,15	7,63	7,40
Share price/book value ratio (P/BV)	0,62	0,21	0,50	0,20

Key Indicators of Panevėžio statybos trestas AB Company Group (thousands Lt):