Panevezio Statybos Trestas

Quarterly Report • May 29, 2008

PANEVĖŽIO STATYBOS TRESTAS AB

Consolidated and Company Financial Statements for Three Month Accountability Ending March 31, 2008

Unaudited

Company register given code 147732969 Domicile address P. Puzino g. 1, LT-35173 Panevėžys, Lithuania

CONFIRMING RESPONSIBLE PERSONS OF THE COMPANY

This is to confirm that on the basis of information we have, the Financial Consolidated Interim Statement for Three Months of 2008, prepared according to international standards of financial accountability is true and shows estates, liabilities, financial situation, and profit or loses of Panevėžio statybos trestas AB and companies of Panevėžio statybos trestas Company Group.

Dalius Gesevičius, Managing Director Dalė Bernotaitienė, Finance Director Panevėžio statybos trestas AB Panevėžio statybos trestas AB

BALANCE SHEET

In Litas		Group	Company
ASSETS	31 Mar 2008	2007	31 Mar 2008	2007
Non-current assets	33549859	31519095	49882483	48083577
Intangible assets	1476307	1495343	268738	300137
Tangible non-current assets	28819278	27197687	24177602	22355648
Financial assets	770727	748505	23796158	23787807
Other intangible assets	2483547	2077560	1639985	1639985
Current assets	254236852	247649072	163938681	167057755
Inventories	15369524	15248424	10779901	10846700
Advance payments	1773726	2581874	1544053	2881764
Contracts in progress	66550960	65496361
Accounts receivable in one year	127790230	117378072	124555836	113523585
Other current assets	12527054	2334829	501925	764988
Cash and cash equivalents	30225358	44609512	26556966	39040718
TOTAL ASSETS	287786711	279168167	213821164	215141332

In Litas	Group			Company
EQUITY AND LIABILITIES	31 Mar 2008	2007	31 Mar 2008	2007
Equity	79063652	75571978	73439989	69477727
Share capital	16350000	16350000	16350000	16350000
Reserves	5225972	5279017	4892026	4931791
Retained profit (loss)	57271461	53820670	52197963	48195936
Translation reserve	216219	122291
Minority share	12704806	7869553
Amounts payable and liabilities	196018253	195726636	140381175	145663605
Amounts payable in one year and long	54894073	51749181	6376068	6845001
term liabilities
Loans and borrowings	52937432	49841995	4510624	5107725
Warranty provision	1311915	1265486	1283663	1155495
Deferred tax liabilities	644726	641700	581781	581781
Amounts payable in one year and short	141124180	143977455	134005107	138818604
term liabilities
Loans and borrowings	5341411	3323435	4879871	2650805
Trade payables	66134603	66260161	62869482	64738369
Prepayments received	46782611	45928684	46978119	45762542
Current tax payable	4316754	4502537	3392873	3652237
Other liabilities	18548801	23962638	15884762	22014651
TOTAL EQUITY AND
LIABILITIES	287786711	279168167	213821164	215141332

Income Statement

IN LITAS		Group	Company
	31 March 2008	31 March 2007	31 March 2008	31 March 2007
SALES	93217292	127338827	90203771	124106119
COST OF SALES	81908688	115951047	80036082	114276825
GROSS PROFIT (LOSS)	11308604	11387780	10167689	9829294
OPERATING COSTS	7339366	6404949	5552850	4733411
Sales	172362	95496	157655	95496
General and administrative	7167004	6309453	5395195	4637915
PROFIT (LOSS) FROM TYPICAL ACTIVITIES	3969238	4982831	4614839	5095883
OTHER ACTIVITIES	-263354	-95510	97505	37606
Revenue	161990	57143	149942	93183
Expenses	425344	152653	52437	55577
FINANCIAL AND INVESTING ACTIVITIES	-268908	-569098	-67702	26559
Revenue	903189	285518	236112	227150
Expenses	1172097	854616	303814	200591
PROFIT (LOSS) FROM ORDINARY ACTIVITIES	3436976	4318223	4644642	5160048
EXTRAORDINARY INCOME
EXTRAORDINARY EXPENSES
PROFIT BEFORE TAXATION	3436976	4318223	4644642	5160048
TAX ON PROFIT	404477	1081904	682380	995725
NET PROFIT (LOSS)	3032499	3236319	3962262	4164323
FALLING TO SHAREHOLDERS OF THE COMPANY	3397746	3626749
FALLING TO MINORITY SHARE	-365247	-390430

CASH FLOW STATEMENT

		Group		Company
	31 March	31 March	31 March	31 March
Cash flow from operating activities	2008	2007	2008	2007
Net profit (loss)
Elimination of other non-monetary items	3,032,499	3,236,319	3,962,262	4,164,323
Depreciation and amortisation costs
Profit (loss) from transfer of non-current assets	1,488,735	1,162,535	1,245,737	931,618
Other non-cash items	-94,407	-1,779	-48,344	-1,779
	-399,577	7,001,677	3,384	2,177
	4,027,250	11,398,752	5,163,039	5,096,339
Changes in operating capital:
Decrease (increase) in inventories	-121,100	992,361	520,655	165,554
Change in long-term receivables	-15,489	-34,241	-10,288	-34,241
Decrease (increase) in trade receivables	-10,412,028	-7,699,970	-11,032,251	-8,392,730
Decrease (increase) in prepayments	808,148	28,966,583	883,855	22,118,129
Decrease (increase) in contracts in progress	-1,054,599	-7,531,715
Decrease (increase) in amounts receivable and other assets	-10,192,355	-6,120,692	263,063	9,226
Increase (decrease) in trade payables	-95,558	10,050,842	-1,413,310	4,052,888
Increase (decrease) in provisions	133,429	307,116	888,169	341,616
Increase (decrease) in prepayments received	853,927	-1,837,497		3,350,536
Increase (decrease) in profit tax obligations	-185,783	980,594	-259,364	895,720
Increase (decrease) in employment related liabilities	-1,443,011	-217,528	-2,093,946	-450,193
Increase (decrease) in other payables and liabilities	-4,057,525	-2,312,652	-4,035,643	-2,424,791
	-21,754,694	26,941,953	-11,126,021	24,728,053
Elimination of results of financial and investing activities	1,085,423	569,098	-89,317	-23,609
Net cash flow from operating activities	-20,669,271	27,511,051	-11,215,338	24,704,444
Cash flow from investing activities
Acquisition of long term assets (excl. investment)	-320,674	-632,909	-108,236	-263,497
Transfer of long term assets (excl. investment)
	94,412	1,779	48,349	1,778
Acquisition of investments
Transfer of investment
Loans issued	-14,670	-99,480	-6,000
Loans recovered	-6,733		236,112	-599,480
Dividends and interest received	269,047	120,166		201,040
Other increase in cash flow from investing activities
Other decrease in cash flow from investment activities
Net cash flow from investing activities	21,382	-610,444	170,225	-660,159
Cash flow from financial activities
Cash flow related to owners of the company	5,200,199	-63	-301	-63
Increase in financial liabilities	4,589,607
Decrease in financial liabilities	-1,540,082	-11,573,975	-506,732	-11,975,347
Interest paid	-1,002,930	-793,132	-136,624	-141,225
Leasing (financial lease) payments	-1,043,478	-872,097	-792,748	-742,527
Increase in other cash flow from financial activities		26,110		26,110
Decrease in other cash flow from financial activities	-3,509	-2,038	-2,234	-549
Net cash flow from financing activities	6,199,807	-13,215,195	-1,438,639	-12,833,601
Increase (decrease) in net cash flow	-14,448,082	13,685,412	-12,483,752	11,210,684
Result of changes in currency rate on the balance of cash and
its equivalents Cash and its equivalent at the beginning of the period	93,928	-790
Cash and its equivalent at the end of the period	44,609,512	32,891,037	39,040,718	31,830,941
	30,255,358	46,575,659	26,556,966	43,041,625

STATEMENT of CHANGES IN SHAREHOLDERS' EQUITY

				Cu rre nc y		ha s re
ho ise d Au t r	S ha re	lu io Re t va a n	l Le g a	f lu io tu t c a n	d Ac cr ue	fa l l in to g	in i M ty or
i l ta ca p	iu p re m m	re se rv e	re se rv e	im t p ac	f i t p ro	h Pa t c re n .s	ha s re	l To ta
3 0 0 0 1 5		8 0 6 3 7	6 1 15 5	9 0 6 1	27 3 95 7 4	3 0 8 4 1 7	6 9 3 6 1	3, 8 2 9, 21 5 4
								0
		0 3 -5 4			0 5 45	0 5 45		2
								0
								3, 2 3 6, 3 8 1
								0
								0
				9 0 -7		9 0 -7		9 0 -7
							6, 9 9 9, 2 0 0	6, 9 9 9, 2 0 0
								0
1 6, 3 5 0, 0 0 0	0	3, 7 27 0 2 0 ,	1, 6 1 9, 15 5	1 0, 11 6	3 1, 0 5 6, 74 8	5 2, 8 1 6, 0 8 2	11 3 0 0, 9 0 5 ,	6 4, 0 6 3, 94 4
6, 3 0, 0 0 0 1 5	0	3, 6 3 6, 2 9 9	6 2, 8 1, 4 71	2 2, 2 9 1 1	3, 8 2 0, 6 0 5 7	97 8 75 5 71 , ,	8 6 9, 3 7, 5 5	8 3, 3 44 1, 5 1
		3, 0 -5 45			0 5, 45		-6 11	-6 11
								0
								0
							5, 2 0 0, 5 0 0	5, 2 0 0, 5 0 0
							6 11	6 11
					3, 3 97 74 6 ,	3, 3 97 74 6 ,	-3 6 5, 24 7	3, 0 3 2, 4 9 9
								0
				9 3, 9 2 8		9 3, 9 2 8		9 3, 9 2 8
								0
								0
								0
								9 1, 7 6 8, 45 8
	6, 0, 1 6, 3 5 0, 0 0 0	0	3, 0, 3, 3, 5 8 3, 25 4	9, 1, 1, 6 4 2, 71 8	0, 21 6, 21 9	6, , 3, 3, 6 2 6, 9 74 5 7, 27 1, 4 6 1	9, 7, 3, 3, 6 2 6, 9 74 7 9, 0 6 3, 6 5 2	2, 4, -3 9 0, 3 4 1 1 2, 7 0 4, 8 0 6

Company

In L i ta s	Au ho ise d t r	S ha re	F A	F in ia l an c	Le l g a	O he t r	fe De d rre
	i l ta ca p	iu p re m m	lu io t re va a n	re se rv e	re se rv e	re se rv es	l t re su	l To ta
Ba lan fo r D be 3 1, 2 0 0 6 ce as ec em r	6, 3 0, 0 0 0 1 5		3, 3 9 6, 9 6 8		6 9, 1, 1 15 5		2 6, 0 8 6 45 7	9 0 9 47 41 1,
lua f fix d a Re t ion ts va o e sse							,	, 0
d t late d lia b lity Po stp i on e ax re								0
lia b lity late d t lua f F Po stp . ta i t ion A x re o r eva o								0
Ne fit ( los ) 2 0 0 7 t p ro s			-3 6 7 5				2 0 0 8 8	1 6 3 2 3
for d Re ser ves me			9,				4, 4,	4, 4, 0
( de ) f a ho d c l Inc ut rise ita rea se cre ase o ap								0
lan fo h Ba r M 3 1, 2 0 0 7 ce as arc	1 6, 3 5 0, 0 0 0	0	3, 3 5 7, 2 0 3	0	1, 6 1 9, 15 5	0	3 0, 24 9, 8 74	5 1, 5 7 6, 2 3 2
Ba lan fo r D be 3 1, 2 0 0 7 ce as ec em r	3 0, 0 0 0 1 6, 5	0	3, 9 2 6, 7 6 1	0	3 0 3 0 1, 6 5,	0	8, 95 9 3 4 1 6 ,	9, 6 47 7, 7 27
lua ion f fix d a Re t ts va o e sse								0
late d p d t lia b lity Re ost i p on e ax								0
d p fit lat d t lua f F Po stp tax t ion A on e ro re e o r eva o								0
Ne fit ( los ) 2 0 0 8 u nis d t p ro s nre cog e			-3 9, 6 7 5				3 9, 6 7 5	0
Ne fit ( los ) 2 0 0 8 t p ro s							3, 9 6 2, 2 6 2	3, 9 6 2, 2 6 2
Div i de d n								0
for d Re ser ves me								0
d Re ser ves us e								0
Inc ( de ) f a ho rise d c ita l ut rea se cre ase o ap								0
Ba la f Ma h 3 1, 2 0 0 8 nc e as o rc	6, 3 0, 0 0 0 1 5	0	3, 25 6, 9 9 6	0	6 3 0 3 0 1, 5,	0	2, 97 9 6 3 5 1 ,	3, 3 9, 9 8 9 7 4

EXPLANATORY NOTE

General Information

Panevėžio statybos trestas AB (hereinafter "the Company") was established in 1957 and for a long tome was known as 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.

In January through March 2008 the following subsidiaries were functioning in the company: Gerbusta, Pastatų apdaila and Genranga. These subsidiaries keep separate records, but their estate, liabilities and financial results are included into preparing financial accountability of the Company. The Company has its quarters in Čerepovec and its branch 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 Group rents out premises and equipment, resells utility and communication services.

Name	Country	Address	Shares held	Activities
Skydmedis UAB				Construction of
		Pramonės Str. 5,		prefabricated panel
	Lithuania	Panevėžys	100 per cent	houses
Metalo meistrai UAB				Fabrication of metal
	Lithuania	Tinklų Str. 7, Panevėžys	100 per cent	constructions
Vekada UAB		Marijonų Str. 36,		Electrical
	Lithuania	Panevėžys	96 per cent	installation works
Vilniaus papėdė TŪB		Švitrigailos Str. 8/14,
	Lithuania	Vilnius	69 per cent	Construction works
PST investicijos UAB		Konstitucijos Str. 7,		Real estate
	Lithuania	Vilnius	67 per cent	development
Alinita UAB		Dubysos Str. 31,		Air conditioning
	Lithuania	Klaipėda	100 per cent	equipment
PS Trests SIA	Latvia	Vietalvas 5, Riga	100 per cent	Construction
Baltilstroij OOO		Sovetskij Ave. 43,
	Russia	Kaliningrad	100 per cent	Construction

As for 31 March 2008 the Group includes the parent company and 8 subsidiaries:

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 March 2008	31 December 2007	31 March 2007
1 EUR	3.4528	3.4528	3.4528
10 SEK	3.6755	3.6437	3.6965
10 RUB	0.93119	0.96085	0.99623

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 where the Company has the power to govern the financial and operating policies of the entity 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 balance, dealings and unrealized profit (loss) of the operations between the companies the companies of the Group were eliminated from the financial statement.

Investments in Non-current Assets

Group investments for long-term assets in January through March 2008 were 3 219 779 Lt.: the Company acquired long-term assets for the amount of 3 030 919 Lt.

Loans

On 31 March 2008 PST investicijos UAB Company Group had long-term bank loans for 47 102 534 Lt. All the loans must be paid back in May - September, 2008. The interest rate of the loans is 6 months Vilibor + 1.05 – 1.55 % .

Guarantees, Sureties

On 31 March 2008 guarantee credit institutions granted liabilities to the Company for the Environmental Project Management Agency of the Ministry of Environment of the Republic of Lithuania and Lietuvos geležinkeliai AB had 22 023 164 Lt. of the Company guarantees PST investicijos UAB dispensation of duties on Credit Agreement with NORD/LB for the amount of 4 164 124 USD.

Dividends

The annual General Meeting of the Shareholders of Panevėžio statybos trestas AB that took place on 25 April 2008 took the decision to pay dividends in the amount of 3 760 500 Lt. (0.23 Lt. per share) and bonuses in the amount of 326 000 Lt.

Significant Changes in the Interim Financial Statement during the Reporting Period

Based on the unaudited data the turnover of the PST Company Group for January through March of this year amounted to 93.2 mln. Litas, however it was lower by 34.1 mln. Litas compared to the corresponding period of the last year (some equipment at the Panevėžys Power Plant was installed in the first quarter of 2007. The unaudited profit of the Group before taxes was 3.4 mln. Litas, whereas last year it was 4.3 mln. for the same period. Though the turnover of the first quarter of 2008 decreased, the total profitability of the Group increased by 3.4 percent (from 7.9 % to 11.3 %) compared to the first quarter of 2008.

	Group		Company
	2008 03 31	2007 03 31	2008 03 31	2007 03 31
Revenue	93217	127339	90204	124106
Cost price	81909	115951	80036	114277
Gross profit	11308	11388	10168	9829
Gross profit margin (per cent)	12.13	8.94	11.27	7.92
Net profit margin (per cent)	3.25	2.54	4.39	3.36
Profit per one share (Litas)	0.19	0.20	0.24	0.25
Return on equity (per cent) (ROE)	3.84	6.13	5.40	8.07
Return on assets (ROA)	1.05	1.32	1.85	2.35
Return on investment (ROI)	2.07	2.74	4.96	7.31
Current liquidity ratio	1.80	1.70	1.22	1.09
Book value of a share	5.61	3.92	4.49	3.15
Share price/book value ratio (P/BV)	2.12	4.35	2.65	5.40

Key Indicators of Panevio statybos trestas AB Company Group (thou. Lt):