Panevezio Statybos Trestas

Quarterly Report • May 27, 2011

PANEVĖŽIO STATYBOS TRESTAS AB

Consolidated and Company Financial Statements for Three Months Ending 31 March 2011

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 Three Months of 2011 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.

D. Glodend

Dalius Gesevičius, Managing Director Panevėžio statybos trestas AB

DBercer

Dalė Bernotaitienė, Finance Director Panevėžio statybos trestas AB

BALANCE SHEET

In Litas Company
ASSETS	31 Mar. 2011	31 Dec. 2010
Non-current assets	75176731	75247542
Intangible assets	19055	25287
Tangible non-current assets	22782534	23967094
Investment and amounts receivable in
one year	51792779	50653326
Other intangible assets	582363	601835
Current assets	107297589	111336306
Inventories	4240086	2232619
Advance payments	2063621	856186
Accounts receivable in one year	42816623	36184693
Other current assets	29148239	31215288
Cash and cash equivalents	29029020	40847520
TOTAL ASSETS	182474320	186583848

In Litas Company
EQUITY AND LIABILITIES	31 Mar. 2011 31 Dec. 2010
Equity	133235886	132588076
Share capital	16350000	16350000
Reserves	10579333	10754627
Retained profit (loss)	106306553	105483449
Translation reserve
Minority share
Amounts payable and liabilities	49238434	53995772
Amounts payable in one year and long
term liabilities	3241374	4436922
Loans and borrowings	988210	2095887
Warranty provision	775293	731694
Deferred tax liabilities	1477871	1609341
Amounts payable in one year and short term liabilities	45997060	49558850
Loans and borrowings	2677612	2185392
Trade payables	17079085	18826212
Prepayments received	15215259	14107720
Current tax payable	0	0
Other liabilities	11025104	14439526
TOTAL EQUITY AND LIABILITIES	182474320	186583848

BALANCE SHEET

In Litas		Group
ASSETS	31 Mar. 2011	31 Dec. 2010
Non-current assets	37922029	39177628
Intangible assets	136786	144049
Tangible non-current assets	25653075	26981910
Other investment and amounts
receivable in one year	10208092	10109516
Other intangible assets	1924076	1942153
Current assets	153971784	159597741
Inventories	40217703	38006600
Advance payments	4753611	3524674
Accounts receivable in one year	51059709	37760979
Other assets	24433513	31145798
Cash and cash equivalents	33507248	49159690
TOTAL ASSETS	191893813	198775369

In Litas	Group
EQUITY AND LIABILITIES	31 Mar. 2011 31 Dec. 2010
Equity	114573483	114038887
Share capital	16350000	16350000
Reserves	11610027	11804420
Retained profit (loss)	86641496	85449807
Translation reserve	$-28040$	434660
Minority share	4600112	4820707
Amounts payable and liabilities	72720218	79915775
Amounts payable in one year and long term liabilities	19453404	20546478
Loans and borrowings	15646497	16645051
Provisions	1741801	1710734
Deferred tax liabilities	1600552	1732022
Grants and subsidies	51000	52913
Other payable amounts	413554	405758
Amounts payable in one year and short term liabilities	53266814	59369297
Loans and borrowings	2832078	2396801
Trade payables	21223311	22310164
Prepayments received	15730340	16995547
Current tax payable	57882	135017
Other liabilities	13423203	17531768
TOTAL EQUITY AND LIABILITIES $1 - 1 - 1$	191893813	198775369

$\rightarrow$

INCOME STATEMENT

path a factor of a state

$\label{eq:K} \mathbf{y} = \begin{bmatrix} \mathbf{z}^T & \mathbf{w} & \mathbf{y} & \mathbf{y} \ \mathbf{w} & \mathbf{z} & \mathbf{y} & \mathbf{y} \ \mathbf{w} & \mathbf{w} & \mathbf{y} & \mathbf{y} \end{bmatrix}$

$\label{eq:1} \begin{split} \mathbf{v}(t) &= \frac{v^2}{2} \sum_{\substack{1 \leq i \leq n \ 1 \leq i \leq n}} \frac{v^2}{2} \mathbf{v}(t) \ &= \frac{v^2}{2} \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \ &= \frac{v^2}{2} \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf{v}(t) \mathbf$

IN LITAS	Company		Group
	31 March 2011	31 March 2010	31 March 2011	31 March 2010
SALES	27,922,755	20,232,610	40,743,784	26,149,651
COST OF SALES	24,465,651	18,209,080	35,385,681	22,771,651
GROSS PROFIT (LOSS)	3,457,104	2,023,530	5,358,103	3,378,000
OPERATING COSTS	2,885,324	2,507,796	4,402,422	4,001,741
Sales	80,210	57,383	152,763	75,053
General and administrative	2,805,114	2,450,413	4,249,659	3,926,688
PROFIT (LOSS) FROM TYPICAL ACTIVITIES	571,780	$-484,266$	955,681	$-623,741$
OTHER ACTIVITIES	$-78,933$	$-43,134$	$-122,393$	$-170,529$
Revenue	256,991	153,025	249,843	99,297
Expenses	335,924	196,159	372,236	269,826
FINANCIAL AND INVESTING ACTIVITIES	313,450	1,130,736	216,845	1,608,267
Revenue	394,275	1,287,811	388,013	2,662,340
Expenses	80,825	157,075	171,168	1,054,073
PROFIT (LOSS) FROM ORDINARY ACTIVITIES	806,297	603,336	1,050,133	813,997
EXTRAORDINARY INCOME
EXTRAORDINARY EXPENSES
PROFIT BEFORE TAXATION	806,297	603,336	1,050,133	813,997
TAX ON PROFIT	158,487	130,581	273,433	390,722
NET PROFIT (LOSS)	647,810	472,755	776,700	423,275
FALLING TO SHAREHOLDERS OF THE COMPANY			997,296	606,103
FALLING TO MINORITY SHARE			$-220,596$	$-182,828$

CASH FLOW STATEMENT

	Company
	31 March 2011	31 March 2010
Cash flow from operating activities
Net profit (loss)	647,810	472,755
Depreciation and amortisation costs	1,298,960	1,517,181
Profit (loss) from transfer of non-current assets	$-10,403$	$-30,296$
Income tax expense	158,487	130,581
	2,094,854	2,090,221
Change in inventories	$-2,007,467$	$-489,557$
Change in amounts receivable	$-6,631,928$	12,522,340
Change in prepayments	$-1,207,435$	2,133,022
Change in amounts receivable after one year	$-198,024$	$-40,842$
Change in other assets	8,311,058	$-7,229,143$
Change in trade payables	$-1,747,127$	$-5,916,745$
Change in prepayments received	1,107,539	$-2,920,765$
Change in provisions and other liabilities	$-3,277,066$	$-5,185,080$
	$-3,555,596$	$-5,036,549$
Income tax paid	$-574,558$	$-507,333$
Net cash from operating activities	$-4,130,154$	$-5,543,882$
Cash flow from investing activities
Acquisition of long term assets (excl, investment)	$-108,178$	$-54,817$
Transfer of long term assets (excl, investment)
	10,413	84,648
Acquisition of investments	0	0
Loans issued Loans recovered	$-10,345,895$	$-4,313,241$
Dividends and interest received	3,189,738	0
	276,546	441,860
Net cash used in investing activities	$-6,977,376$	$-3,841,550$
Cash flow from financial activities
Dividends paid	$-17,644$	$-63$
Proceeds from loans and borrowings	0	0
Repayments from loans and borrowings	$\Omega$	$\mathbf{0}$
Payment of finance lease liabilities	$-615,457$	$-874,936$
Interest paid	$-77,869$	$-122,031$
Net cash from (used in) financing activities	$-710,970$	-997,030
Increase (decrease) in net cash flow	$-11,818,500$	$-10,382,462$
Cash and its equivalent at the beginning of the period	40,847,520	53,934,684
Cash and its equivalent at the end of the period	29,029,020	43,552,222

31 March 31 March 2011 2010 Cash flow from operating activities Net profit (loss) 776,700 Elimination of other non-monetary items Depreciation and amortization costs 1,507,003 1,759,310 Other non-monetary items $-123,795$ 2,159,908 Change in inventories $-2,211,103$ $-2,555,216$ Change in amounts receivable $-13,298,730$ 8,866,338 Change in prepayments $-1,228,937$ 2,998,507 Change in other assets 8,496,520 $-7,709,192$ Change in trade payables $-1,086,853$ $-5,066,738$ Change in prepayments received $-1,265,207$ $-2,848,144$ Change in provisions and other liabilities -4,593,806 $-4,403,491$ $-13,028,208$ Elimination of results from financial and investing activities 46,755 159,407 Net cash from operating activities $-12,981,453$ $-8,224,892$ Cash flow from investing activities Acquisition of non-current assets (except investments) $-169,107$ $-57,486$ Transfer of non-current assets (except investments) 10,413 9,536 Loans issued $-2,575,380$ Loans recovered 692,569 Dividends and interest received 115,719 431,554 Net cash used in investing activities $-1,925,786$ 383,604 Cash flow from financial activities Cash paid by minority interest $-17,644$ $-63$ 109,123 $-672,400$ $-952,733$ $-164,282$ $-999,110$ $-745,203$ $-1,951,906$ Increase (decrease) in net cash flow $-15,652,442$ $-9,793,194$ 49,159,690 56,139,567		Group
			423,275
			151,052
			2,333,637
			$-8,384,299$
	Dividends paid
	Proceeds from loans and borrowings
	Repayments from loans and borrowings
	Payment of finance lease liabilities
	Interest paid
	Net cash from (used in) financing activities
	Cash and cash equivalent in the beginning of the period
33,507,248 46,346,373	Cash and cash equivalent at the end of the period

$\mathcal{L}{\mathbf{A}}^{\mathbf{a}}$ , $\mathcal{L}{\mathbf{C}}^{\mathbf{a}}$ , $\mathcal{L}_{\mathbf{C}}^{\mathbf{a}}$ ,

$\sqrt{6}$

Panevėžio statybos trestas AB Interim Financial Statement for Three Months of 2011

,

$\overline{C}$

STATEMENT of CHANGES IN SHAREHOLDERS' EQUITY

		ì ś	֚֬

Company In Litas	Authorised capital	premium Share	revaluation FA	Financial reserve	reserve Legal	reserves Other	Deferred result	Total
Net profit (loss) 2010 unrecognized Balance as for 31 December 2009 Net profit (loss) 2010 Dividend	16,350,000		9,715,594 $-175,293$		1,635,030		97,031,157 175,293 472.755	472,755 124,731,781
Net profit (loss) 2010 unrecognized Balance as for 31 December 2010 Balance as for 31 March 2010 Net profit (loss) 2010 Dividend	16,350,000 16,350,000		9,119,597 $-175.294$ 9,540,301		1,635,030 1,635,030		97,679,205 647,810 175,294 105,483,449	125,204,536 132,588,076 647,810
Balance as of 31 March 2011	16,350,000		8,944,303		1,635,030		106,306,553	133,235,886

Panevėžio statybos trestas AB Interim Financial Statement for Three Months of 2011									∞
In Litas Group	Authorized capital	premium Share	Revaluation reserve	reserve Legal	fluctuation Currency impact	Accrued profit	company share Equity share falling to parent	Minority share	$\frac{1}{2}$ Total
Decrease in reappraisal reserve Balance as of 1 January 2010	16,350,000		10,445,141 $-194,391$	2,019,981	810,470	71,488,724 194,392	101,114,316	$-670,604$	100,443,712
Net profit (loss) for 201009 Dividend						606,103	606,103	$-182,828$	423,275
Influence of currency rate change Reserves formed					408,150		-408,150	$-61,106$	$-469,256$
Balance as of 31 March 2010	16,350,000	0	10,250,750	2,019,981	402,320	72,289,219	101,312,270	$-914,538$	100,397,732
Balance as of 31 December 2010 Decrease in reappraisal reserve	16,350,000		9,784,208 $-194,393$	2,020,212	434,660	85,449,807 194,393	114,038,887	4,820,707	118,859,594
Net profit (loss) for 2010 Dividend						997,296	997,296	$-220,595$	776,701
Influence of currency rate change Company transfer Reserves formed					-462,700		-462,700		$-462,700$
Balance as of 31 March 2011	16,350,000	0	589,815 ö	2,020,212	$-28,040$	86,641,496	114,573,483	4,600,112	119,173,595

PST E

$\frac{1}{\alpha}$ ,

$\frac{\pi}{4} = \frac{\pi}{2}$

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 (Siaures 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 September 2010 the following subsidiaries were functioning in the company: Gerbusta, Pastatu apdaila, Genranga and Klaipstata. 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 Cherepovec, a subsidiary in Kaliningrad and a permanent establishment in the United Kingdom of Great Britain and Northern Ireland. 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.

As of 31 March 2011 the Group includes the parent company and 9 subsidiaries:

Subsidiaries	Type of activities	Share controlled (per cent)	Registered address
Skydmedis UAB	Production of wood constructions	100	Pramonės Str. 5, Panevėžys Tel.: +370 45 583341
Metalo meistrai UAB	Production of metal constructions	100	Tinklų Str. 7, Panevėžys
Vekada UAB	Electrical installation activities	96	Marijonų Str. 36, Panevėžys Tel.: +370 45 461311
Vilniaus papėdė TUB	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
KINGSBUD Sp.zo.o.	Construction material wholesale	100	A.Patli Str. 16-400 Suwalki, Poland
PS Trests SIA	Construction	100	Vietalvas Str. 5, Riga
OOO Baltlitstroj	Construction	100	Sovetskij Ave. 43, Kaliningrad Tel.: 0074012350435
PST Investicijos UAB	Real estate development	68	Lvovo Str. 25, Vilnius Tel.: +370 5 2102130
Subsidiaries of PST investicijos UAB:
Ateities projektai UAB	Real estate development and sales	100	Lvovo Str. 25, Vilnius AKCINÉ BENDROVÉ. IL

Panevėžio statybos trestas AB Interim Financial Statement for Three Months of 2011
------------------------------------------------------------------------------------	--	--	--

Šeškinės projektai UAB	Real estate development and sales	100	Lvovo Str. 25, Vilnius
Sakališkės UAB	Real estate development and sales	100	Lvovo Str. 25, Vilnius
Kauno erdvė UAB	Real estate development and sales	100	Lvovo Str. 25, Vilnius
Verkių projektas UAB	Real estate development and sales	100	Lvovo Str. 25, Vilnius
OOO ISK Baltevromarket	Construction investment company	100	Cherniachovsk Str. 6 Kaliningrad

Basis of interim financial statement preparation

The figures in the interim financial statement are presented in the national currency of Lithuania, Litas, which is also the Company's functional currency.

The same accounting principles were applicable to both - the interim financial statement and to the annual financial statement.

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

Currency	31 March 2011	31 Dec. 2010
1 EUR	3.4528	3.4528
10 RTUB	0.8633	0.8554
$1$ LV	4.8679	4.8643
1PLN	0.8655	0.8716
$1$ GBP	3.9329	4.0494

Principles of consolidation

Subsidiary companies are the companies controlled by the parent company. Such control is defined as a capability to a company to have determinant effect on other company, manage and influence financial and economic activities to get benefit from that company. For the purposes of control assessment the total available number of shareholders' votes at the General Meeting of Shareholders is considered. The financial statements of subsidiary companies are included into the Consolidated Financial Statement from the day of control gain and are excluded from the day of control loss. During consolidation of financial statement the income and expenses, amounts receivable and payable and unrealized results of the Company Group are eliminated.

Investment in non-current assets

In the first quarter of 2011 the investments of the Group in acquisition of non-current assets amounted to 169,107 Litas: Panevėžio statybos trestas AB acquired non-current assets for 108,177 Litas. During the year 2011 the costs related to depreciation and amortization of assets of the Group amounted to 1,507,003

Litas, including 1,298,960 Litas accounted for in the Financial Statement of Panevėžio statybos trestas AB.

Loans

As of 31 March 2011 the long-term loans of the Company Group of PST investicijos UAB amounted to 14,369,282 Litas including bank credits totaling 13,526,734 Litas. For using credits SEB AB is paid the interest rate 1 month VILIBOR $+$ 1.1%, for other loans the interest rate is 3 months VILIBOR and the interest margin is 1.9%.

Guarantees, sureties

As of 31 March 2011 the guarantees of the liabilities of Panevėžio statybos trestas AB by credit institutions amounted to 14,538,749 Litas.

On 29 April 2011 an Agreement of Financial Liability Limit was signed with DnB Nord bankas. On the basis of this agreement the Performance Bond for the amount of 14,708,193 Litas has been issued to Akmenės cementas AB.

Transactions with associated parties

As per resolution adopted by the Board of Panevėžio statybos trestas AB dated 20 July 2009, the loan of Panevėžio statybos trestas AB to Panevėžio keliai AB amounts 10 mln. Litas. By the resolution adopted by the Board of Panevėžio statybos trestas AB on 18 February 2011, the repayment period was extended until 11 January 2013.

Dividends

The Annual General Meeting of the Shareholders of Panevėžio statybos trestas AB that took place on 22 April 2011 made the decision to pay dividends in the amount of 1,144,500 Litas (0.07 Litas per share) and bonuses in the amount of 2,000,000 Litas. Dividends are paid by DnB NORD bank in accordance with the contract.

Significant changes in the interim financial statement during the reporting period

Referring to the unaudited data, during three months of 2011 the Group of Panevėžio statybos trestas AB (PST) was on the income of 40.7 mln. Litas (11.8 mln. EUR), that is by 1.56 times more than last year, and made by 29 percents higher before tax profit amounting 1.05 mln. Litas (0.3 mln. EUR). The company of PST made before tax profit in the amount of 0.806 mln. Litas (0.233 mln. EUR) and was on the income of 27.9 mln. Litas (8.087 mln. EUR).

	Company		Group Company
	31 March 2011	31 March 2010	31 March 2011	31 March 2010
Income	27923	20234	40744	26150
Cost price	24466	18209	35386	22772
Gross profit	3457	2024	5358	3378
Gross profit margin (per cent)	12.38	10.00	13.15	12.92
Net profit margin (per cent)	2.32	2.34	1.91	1.62
Earnings before taxes and interest, EBIT (thousands Litas)	884	725	1214	1813
Earnings before taxes, interest, depreciation and amortisation EBITDA (thousands Litas)	2183	2242	2721	3572
Profit per one share (Litas)	0.04	0.03	0.06	0.04
Return on equity (per cent) (ROE)	0.49	0.38	0.68	0.42
Return on assets (ROA)	0.36	0.28	0.40	0.21
Return on investment (ROI)	0.47	0.36	0.56	0.38
Current liquidity ratio	2.33	2.53	2.89	1.82
Book value of a share	8.15	7.66	7.01	6.20
Share price/book value ratio (P/BV)	0.79	0.54	0.92	0.66

$\bar{\tau}$

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