The unaudited annual financial statements of AB Kauno Tiekimas have been drawn up in pursuance of the International Financial Reporting Standards. in 2006, the sales revenues increased by 1.3 percent in comparison to the revenue of LTL639.6 million (EUR185.2m) in 2005 and amounted to LTL648 million (EUR187.7m); in 2006, the cost of goods sold and the operating expenses increased by 6.4 percent in comparison to the same period in 2005 and amounted to LTL665 million (EUR192.6m); in 2006, the profit before tax amounted to LTL0.7 million (EUR0.2m); it was 7.6 times lower than the profit before tax in 2005 (LTL5.1m or EUR1.48m). The unaudited net profit in 2006 amounted to LTL0.4 million (EUR0.12m), which was 11.7 times lower than the net profit in 2005 (LTL4.9m or EUR1.1m). The decrease in the profit indices for 2006 was directly influenced by the results of the main operating activities of the company, i.e. the wholesale trade in alumina, which were affected by the fall in the price of alumina, the main raw material in the production of aluminium. Compared to 2005, the prices in the international markets shrank 2.2 times. Moreover, the operating costs of the company increased by 20 percent, mainly due to larger product transportation costs, and especially sea freightage, as well as the constant growth of the energy prices in international markets. Although the company was facing great difficulties in the international business market, we managed to achieve profitable annual results, to maintain our positions in the global market, and to continue our business in this field. Irena Keblerienė General Director 8-37 473744