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POLL Polymer Log.

8.00
0.00 (0.00%)
Last Updated: 01:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Polymer Log. LSE:POLL London Ordinary Share NL0000687465 ORD EUR0.01 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 8.00 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Proposed De-Listing and Preliminary Results

07/04/2009 7:01am

UK Regulatory



 

TIDMPOLL 
 
RNS Number : 2490Q 
Polymer Logistics N.V. 
07 April 2009 
 

Polymer Logistics N.V. 
 
 
("Polymer Logistics" or "the Company") 
 
 
Proposed De-Listing and Preliminary Results 
 
 
 
 
Polymer Logistics N.V. (the "Company"), the provider of sustainable 'one-touch' 
logistics solutions to retailers and suppliers, announces today that it has 
notified the London Stock Exchange of the proposed cancellation of trading of 
the Company's shares on AIM ("De-listing") and its audited results for the year 
ended 31 December 2008. 
 
 
FINANCIAL HIGHLIGHTS 
 
 
+----+-----------------------------------------------------------------------------------+ 
| -  | Revenues up 15% to EUR42.3m (2007: 36.9m)                                           | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | Profit before taxation and interest ('EBIT') down 99% to EUR0.03m (2007:            | 
|    | EUR4.0m)Basic loss per share EUR0.02 (2007: earnings EUR0.05)                           | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | Board proposing not to pay an annual dividend                                     | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | Cash generated from operating activities of EUR7.7m (2007: EUR0.9m) due to an         | 
|    | improvement in the ratio between debtors and creditors and non-cash expenses such | 
|    | as depreciation                                                                   | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | Strong balance sheet with EUR1.1m of cash at year end (2007: EUR0.8m)                 | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | The Company has invested EUR7.7m in pool equipment and other fixed assets (2007:    | 
|    | EUR24.5m)                                                                           | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
 
 
STRATEGIC AND OPERATIONAL HIGHLIGHTS 
 
 
+----+-----------------------------------------------------------------------------------+ 
| -  | Consolidation of the new operations established during 2007 in Italy, the US and  | 
|    | Israel                                                                            | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | Expansion of our product range which commenced last year, creating new innovative | 
|    | product families which provide solutions to a broad range of Retail Ready         | 
|    | Packaging needs                                                                   | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | Investments in the US market reached profitability in the second half of 2008     | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
 
 
Zvi Yemini, Chairman, commented: 
 
 
"2008 was a year of consolidation and of building a solid base for the future. 
It was a challenging year considering the rapid increases in raw material 
prices, the currency volatility, (especially Sterling's 25% devaluation against 
the Euro) and the difficult economic environment." 
 
 
"In spite of the current global recession, management is confident that the 
infrastructure put in place over in the last two years, and the long-term 
relationships with its customers, will support the medium term opportunities for 
the Company and will underpin the cash generative qualities of the business." 
 
 
Proposed De-listing 
 
 
In accordance with the AIM Rules, a circular is today being sent to shareholders 
of the Company ("Shareholders") explaining the rationale behind the De-listing 
and convening a general meeting for the purpose of approving the De-listing (the 
"General Meeting"). 
 
 
Following careful consideration, the Directors have concluded that it is no 
longer in the best interests of the Company or its Shareholders to maintain the 
admission to trading on AIM of the Company's Ordinary Shares. 
 
 
It is the opinion of the Directors that the Company is worth substantially more 
that the current market capitalisation and that whilst there are many factors 
affecting the Company's share price, it is impacted in particular by the lack of 
demand for its Ordinary Shares in current market conditions and the small free 
float. 
 
 
The Directors also believe that the Company's listing on the AIM has the 
following disadvantages: 
 
 
+----+-----------------------------------------------------------------------------------+ 
| -  | the high direct costs of maintaining the Company's AIM listing. The Company       | 
|    | estimate that the annual costs exceed EUR250,000;                                   | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | the management time taken up with the Company's AIM listing could more usefully   | 
|    | be deployed elsewhere to the benefit of the Company;                              | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | the management time, legal and regulatory burden associated with maintaining the  | 
|    | Company's admission to trading on AIM is disproportionate to the benefits to the  | 
|    | Company;                                                                          | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | there is a limited investor appreciation of the Company's business areas and an   | 
|    | increasing difficulty in attracting and maintaining institutional investors in    | 
|    | the Company, particularly in the current economic environment;                    | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | the current economic turmoil has led to significant falls in the values of global | 
|    | stock markets, from which the Company is not immune. The susceptibility of the    | 
|    | share price to the wider general equity market conditions is not of benefit to    | 
|    | the marketing of our operational business;                                        | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | the share price does not reflect the inherent value of the Company. For some time | 
|    | now, the Company's share price performance has been disappointing and a source of | 
|    | frustration to the Directors, who believe that the development of the Company has | 
|    | not been adequately reflected in the value attributed by the public markets to    | 
|    | the Company's shares. In particular, the De-listing will allow the Company to     | 
|    | grow without the pressure to deliver short term performance over long term        | 
|    | positioning and growth; and                                                       | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | there is a lack of liquidity in the Company's shares. More than 75% of the        | 
|    | Company's shares are held by the Company's founders, Directors and one major      | 
|    | shareholder.  During the 12 months to 2 April 2009, there were 112 days when no   | 
|    | Ordinary Shares were traded in the London Stock Exchange (43% of trading days).   | 
|    | In addition to these days, there were 48 days when less than 10,000 Ordinary      | 
|    | Shares were traded (18.4% of trading days); and                                   | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | new fundraisings are unlikely to be successful given the current economic climate | 
|    | and the Company's current rating by the market.                                   | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
 
 
With this in mind, the Board has decided to propose De-listing to focus on 
continuing to grow the inherent value of the Company. 
 
 
Strategy following the De-listing 
 
 
Following the De-listing, the Company will continue to focus on organic growth 
in countries where it has already established operational infrastructures. The 
Company will concentrate its efforts both on existing customers and new ones, 
introducing its comprehensive products and services portfolio. In doing this, 
the Company will aim to maintain its market leadership and execution experience 
and maintain the highest standards of customer satisfaction. 
 
 
Following the De-listing, the Board intends to continue to keep Shareholders 
informed of the Company's financial and operational performance through regular 
updates on the Company's website: www.polymerlogistics.com. 
 
 
Approving the De-listing 
 
 
Under the AIM Rules, it is a requirement that the De-listing must be approved by 
not less than 75 per cent. of Shareholders voting in the General Meeting. The 
General Meeting is to be held at 13.00 pm (CET) on May 6, 2009. If approved, it 
is expected that the Cancellation will take effect at 7 am on May 15, 2009. 
 
 
Directors and other shareholders holding an aggregate 59,996,068 Ordinary Shares 
representing approximately 76.99 per cent of the entire issued share capital of 
the Company have given irrevocable undertakings to vote in favour of the 
Resolution at the General Meeting. 
 
 
Following the De-listing 
 
 
Whilst the Board believes that the De-Listing is in the Shareholders' interests, 
it recognises that the Cancellation will make it more difficult for the 
Shareholders to buy and sell Ordinary Shares should they so wish. 
 
 
Following the De-Listing, the Board intends to set up a matched bargain 
arrangement to enable Shareholders to trade the Ordinary Shares. Under this 
facility, it is intended that Shareholders or persons wishing to acquire shares 
will be able to leave an indication with a matched bargain facility provider 
that they are prepared to buy or sell at an agreed price. In the event that the 
matched bargain settlement facility provider is able to match that order with an 
opposite sell or buy instruction, at a mutually acceptable price, the matched 
bargain settlement facility provider will contact both parties and then effect 
the bargain. Shareholders who do not have their own broker may need to register 
with the matched bargain settlement facility provider as a new client. This can 
take some time to process and therefore Shareholders who consider they are 
likely to use this facility are encouraged to commence it at the earliest 
opportunity. Once the facility has been arranged, details will be made available 
to Shareholders on the Company's website at www.polymerlogistics.com. 
 
 
 
 
 
 
 
 
 
 
For further information: 
 
 
+-------------------------------------------+----------------------------+ 
| Polymer Logistics N.V.                    | +31 (0) 164 271 660        | 
+-------------------------------------------+----------------------------+ 
| Gideon Feiner, Chief Executive Officer    |                            | 
+-------------------------------------------+----------------------------+ 
| Dana Gerner, Chief Financial Officer      |                            | 
+-------------------------------------------+----------------------------+ 
|                                           |                            | 
+-------------------------------------------+----------------------------+ 
| Collins Stewart Europe Limited            | +44 (0) 20 7523 8350       | 
+-------------------------------------------+----------------------------+ 
| Adrian Hadden / Adam Cowen                |                            | 
+-------------------------------------------+----------------------------+ 
 
 
 
 
Polymer Logistics is a provider of sustainable 'one-touch' logistics solutions 
to leading retailers and suppliers in the UK, Continental Europe and the US. 
 
 
Polymer Logistics' Retail Ready Packaging (RRP) is designed to be 'display 
ready' from factory to the point of sale. Consumers purchase directly from RRP 
units in-store, with no requirement for retailers to unpack goods from the RRP 
units onto the shelves. The units are reusable, thereby reducing the 
environmental impact due to the volume of waste created by disposable 'one-way' 
packaging made out of timber or cardboard. In addition, Polymer Logistics' RRP 
units are stackable and foldable and are designed to maximize the capacity of 
delivery vehicles which reduces the number of trips required to be taken in the 
logistics loop. 
 
Polymer Logistics is based in The Netherlands with subsidiaries in the UK, 
Israel, Italy and the US and branch office in Spain. Its principal customers are 
located in the United Kingdom Continental Europe and in the US. The Group has 
ongoing relationships with a number of blue chip retailers including Tesco, 
Asda, Sainsbury and Fresh & Easy, as well as blue chip FMCG suppliers including 
Coca Cola Enterprises Limited, Danone Waters, Britvic Soft Drinks and Arla Food. 
 
 
Polymer Logistics listed on the AIM market of the London Stock Exchange in 
December 2006 and its ticker symbol is POLL. For further information please 
visit the company website, www.polymerlogistics.com. 
 
 
 
 
CHAIRMAN'S STATEMENT 
 
 
 
 
2008 was a year of consolidation and of building a solid base for the future. It 
was a challenging year considering the rapid increases in raw material prices, 
the currency volatility (especially Sterling's 25% devaluation against the Euro) 
and the difficult economic environment. 
 
 
In the first half of 2008 the Board focused on consolidating the operations 
established during 2007 in Italy, the US and Israel, and driving them to achieve 
profitability. At the same time, we continued to invest time launching the 
contracts won in the US. 
 
 
Throughout the year, our marketing team made a significant push to complete the 
expansion of our product range, creating new innovative product families which 
provide solutions to a broad range of Retail Ready Packaging needs. We are 
already experiencing an increase in the penetration of these products to both 
new and existing customers. 
 
Business Development and Strengthening Operations 
 
 
We are very pleased with the results of our main business - the pool and 
services of Retail Ready Packaging (RRP). Both Europe and US contributed to our 
revenue growth and profits. 
 
 
Our investments in the US market reached break-even and profitability in the 
second half of 2008. We are encouraged by the receptiveness of the US retailers 
to our Retail Ready Packaging solutions. 
 
 
The global economic crisis had impacted the sales segment of the Company. We 
experienced a complete drop off of sales toward Christmas period in the UK as 
most retailers were exhausting their existing fleet and delaying the purchase of 
additional equipment - sales which were a repetitive business segment in 
previous years. The increased oil prices in the first half of 2008 resulted in 
higher plastic raw materials and transport prices, negatively impacting the 
Group. The Company, in line with its competitors, was unable to pass on all of 
the increased raw material costs to its customers. 
 
 
The Board believes the company now has the infrastructure required to support 
the successful implementation of the Board's business plan for 2009. 
 
 
People 
 
 
We are very proud with our employees and management. The Company's core values 
are well embedded with our employees- striving to achieve more with 
uncompromising quality in everything we do. It is a privilege to work with such 
dedicated and passionate colleagues, and the Board would like to thank all of 
the Company's employees for their substantial contribution towards meeting this 
year's challenges. 
 
 
De-listing 
 
 
It is the opinion of the board of directors of the Company that the Company's 
current market capitalisation does not reflect the inherent value of the 
Company. 
 
 
There is a lack of liquidity in the Company's share. Over 75% of the shares are 
held by the Company's founders, Directors and one major shareholder. 
 
 
During the last 12 months, there were 112 days when no shares were traded in the 
London Stock exchange and 48 days when less than 10,000 shares were traded With 
this in mind the Directors have concluded that there is no advantage in the 
Company's ordinary shares continuing to be traded on AIM and that it would be in 
the best interests of the Company for it to cancel trading of its Ordinary 
Shares on AIM. 
 
 
Looking Ahead 
 
 
The Company has already set its goals for 2009. We will focus on organic growth 
where we have established human and operational infrastructures and focus our 
efforts both on servicing existing customers and attracting new ones - 
introducing our comprehensive products and services portfolio. In doing this, we 
will aim to maintain our market leadership and execution experience and maintain 
the highest standards of customer satisfaction. 
 
 
In spite of the current global recession, management is confident that the 
infrastructure put in place over the last two years, and the long-term 
relationships with its customers, will support the medium term opportunities for 
the Company and will underpin the cash generative qualities of the business. 
 
 
Zvi Yemini 
Chairman 
April 7th, 2009 
 
 
 
 
 
 
CHIEF EXECUTIVE'S REVIEW 
 
 
Introduction 
 
 
In 2008 the Company's management focused on consolidating the substantial 2007 
investments in Italy and US and building the infrastructure to manage the 
expected growth over the next few years. The Company grew its core business, 
pool and services, by 40%. Eliminating Sterling's devaluation against the Euro - 
the real increase was even higher - 48%. 
 
 
The Company's sales segment was hit by both the increased raw material prices in 
the first half of 2008 and by the global recession in the second half of the 
year. The repetitive Christmas sales we experienced in previous years failed to 
materialise, as customers decided to exhaust their existing equipment instead of 
renewing it. The increased raw material prices drew our sales margins down, as 
the Company, in-line with its competitors, was unable to pass on all of the 
increased raw material costs to its customers. 
 
 
The Company accomplished its marketing target by completing the development of 
its products' portfolio - an important step in accomplishing the Board's 2009 
business plan. 
 
 
De-Listing 
 
 
Following careful consideration, the Directors have concluded that it is no 
longer in the best interests of the Company or its Shareholders to maintain the 
admission to trading on AIM of the Company's Ordinary Shares. 
The Company considered the following reasons: 
 
 
+----+-----------------------------------------------------------------------------------+ 
| -  | The management time taken up with the Company's AIM listing could more usefully   | 
|    | be deployed elsewhere to the benefit of the Company and the management time,      | 
|    | legal and regulatory burden associated with maintaining the Company's admission   | 
|    | to trading on AIM is disproportionate to the benefits to the Company.             | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | The De-Listing will save the high direct costs of maintaining the Company's AIM   | 
|    | listing.                                                                          | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | New fundraisings are unlikely to be successful given the current economic climate | 
|    | and the Company's current rating by the market                                    | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
| -  | The De-Listing will allow the Company to grow without pressure to deliver         | 
|    | short-term performance over long-term positioning and growth                      | 
|    |                                                                                   | 
+----+-----------------------------------------------------------------------------------+ 
 
 
Business Review: 
 
 
In 2008 the Company faced several challenges: 
 
 
+----+----------------------------------------------------------------------------------+ 
| 1. | UK -our most mature market, where the Company started its pooling business in    | 
|    | 2000. In 2008 the pool business grew by 8% (Pound at constant exchange rates) in | 
|    | comparison to 2007. Our sales business was hit hard as it suffered from the      | 
|    | global economic crisis in the second half of 2008, where most of our traditional | 
|    | customers decided to refrain from ordering new equipment to enlarge and renew    | 
|    | their current fleet.                                                             | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| 2. | Italy - after the successful launch in 2007, the Italian management focused on   | 
|    | achieving the project's operational KPIs.                                        | 
|    | During 2008 we increased our penetration with our existing customers and         | 
|    | maintained all operational KPIs in-line with our budget (in spite the increased  | 
|    | oil prices and transportation costs).                                            | 
|    | Towards the end of the first half, the Company was requested by one of its       | 
|    | customers to pay a rebate contribution of EUR1.0m towards implementation costs.    | 
|    | The Company's management, after considering the contract and relations with the  | 
|    | customer, agreed to accept this request. This request had a negative impact on   | 
|    | the Company EBIT in the first half of EUR1.0m.                                     | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| 3. | US - the Company has several pool-management contracts which were launched in    | 
|    | late 2007. The Company achieved breakeven in September 2008 - one quarter later  | 
|    | than budgeted                                                                    | 
|    | In 2008 we established a team which is comprised of: pool management, customer   | 
|    | service, operations, sales and business development and finance. We believe this | 
|    | team can support the 4.Company's plans to grow in the coming years.              | 
|    | We believe the US business will continue to grow in a healthy manner.            | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| 5. | Benelux and Germany - the Company introduced its new line of bins to retailers   | 
|    | in the Benelux and Germany and received very encouraging responses. First orders | 
|    | were received in 2008 and were supplied in early 2009. The Company believes that | 
|    | this line of bins will allow better penetration in those markets, with both      | 
|    | existing and new customers.                                                      | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| 6. | Spain - The Company continued its pool operation in the Spanish market as in     | 
|    | 2007 under its current agreement with a Spanish retailer.                        | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| 7. | Direct sales - 2008 sales fell 39% compared to 2007 due to some customers        | 
|    | ceasing capital expenditure.                                                     | 
|    | Furthermore the Big Bin supply contract signed in the second quarter of 2006 is  | 
|    | being re-evaluated by the customer.                                              | 
|    | At the same time the Company managed to increase the number of customers served  | 
|    | to include the largest retailer in Israel and few more customers in Europe.      | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
 
 
CAPEX Investments 
 
 
In 2008, the Company invested in the expansion of its pool equipment fleet 
mainly for the US market and supplementary investments for Italy and the UK 
markets. Total investment in pool-equipment was EUR4.0m (GBP4.0m) (2007: EUR15.4m 
(GBP11.8m)). 
 
 
The Company invested EUR2.1m (GBP2.1m) in moulds for new products to support its 
expansion into new markets and product categories. 
 
 
The Company continued its investments in the production plant and wash-sites 
which were established / purchased in 2007. Total investment was EUR0.9m 
(GBP0.8m). 
 
 
In 2009 we will continue with our investments in pool equipment in connection 
with the roll out of our business in the US, the additional penetration in Italy 
and the completion of investments in moulds for our new product portfolio. 
 
 
 
 
Challenges in 2008 
 
 
The economic turbulence that characterized 2008 put substantial strain on 
management in respect of its marketing, operational and financial activities: 
 
 
+------+--------------------------------------------------------------------------------+ 
| -    | segment, mainly during the second half of the year.                            | 
|      |                                                                                | 
+------+--------------------------------------------------------------------------------+ 
| -    | Increased raw material prices on one hand and the economic crisis on the other | 
|      | paralysed the sale                                                             | 
|      |                                                                                | 
+------+--------------------------------------------------------------------------------+ 
| -    | The sharp devaluation of the British Pound since July had also a negative      | 
|      | impact on revenues, profits and cash-flow, the UK being a major business       | 
|      | centre.                                                                        | 
|      |                                                                                | 
+------+--------------------------------------------------------------------------------+ 
| -    | Increased oil prices also impacted our pool operational expenses, though most  | 
|      | of this was managed through annual service contracts signed with suppliers     | 
|      | which minimized our exposure.                                                  | 
|      |                                                                                | 
+------+--------------------------------------------------------------------------------+ 
 
 
In spite of these difficulties the Company overcame the semi-annual operational 
loss in the second half of 2008, and most importantly, set in place the 
infrastructure to support the successful implementation of its business plan for 
2009. 
 
 
Risk Management 
 
 
The Company's internal risk management procedures are integrated into our 
internal reporting procedures and business strategy. The Company decided to 
enhance these procedures and tighten its risk management reporting procedures, 
by implementing a KPI's reporting system, both on weekly and monthly basis and 
frequent internal management reporting. 
 
 
These actions ensure the Company's executive management, and the board of 
directors and its committees are fully informed on a regular basis. 
 
 
Factors that could materially affect the Company business, financial conditions 
and operational result are outlined below. The Company may also face other 
risks, which at the present time may not be known to the Company, or the Company 
may consider them as less material, but in the future could have an adverse 
impact on the Company business. 
 
 
+----+----------------------------------------------------------------------------------+ 
| -  | Rapid Growth - the Company experienced significant growth in the US in 2008.     | 
|    | Managing this growth was highly demanding of the Company's executive management  | 
|    | and local management.                                                            | 
|    | The Board decided to re-evaluate and agree on best Company structure, to allow   | 
|    | the Company to continue business and profit growth in the future.                | 
|    | Continuous high-rate growth can jeopardize the Company's operational margins,    | 
|    | cash flows and profitability.                                                    | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| -  | Customers' Relations - the Company business segment is the retail market. The    | 
|    | Company has long term relationships with most of its retail customers, which are | 
|    | maintained by the Company's commitment to deliver excellent service.             | 
|    | Losing one or more of these customers can result in a materially negative impact | 
|    | on the Company's revenue, profit and cash-flow.                                  | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| -  | Customers' Relations - the Company business segment is the retail market. The    | 
|    | Company has long term relationships with most of its retail customers, which are | 
|    | maintained by the Company's commitment to deliver excellent service.             | 
|    | Losing one or more of these customers can result in a materially negative impact | 
|    | on the Company's revenue, profit and cash-flow.                                  | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| -  | Customers' Relations - the Company business segment is the retail market. The    | 
|    | Company has long term relationships with most of its retail customers, which are | 
|    | maintained by the Company's commitment to deliver excellent service.             | 
|    | Losing one or more of these customers can result in a materially negative impact | 
|    | on the Company's revenue, profit and cash-flow.                                  | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| -  | Competition - the Company faces competition both on the service and sales        | 
|    | businesses. The competition for the service business is from both other service  | 
|    | providers of RRP and traditional packaging companies. The competition for the    | 
|    | sales business comes mainly from other production companies of compatible        | 
|    | equipment as that produced by the Company. This competition may limit the        | 
|    | Company's ability to increase prices and negatively affect company revenues and  | 
|    | profit.                                                                          | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| -  | Foreign Exchange (FOREX) risk - the Company and its subsidiaries generates sales | 
|    | and operates in different local currencies, mainly the Euro, British Pound, US   | 
|    | Dollar and New Israeli Shekel (NIS). We translate the local currencies to Euros  | 
|    | in reporting the consolidated financial results. Any depreciation or             | 
|    | appreciation of the various currencies versus the Euro has a negative impact on  | 
|    | the Company's revenues, costs and profit as reported in the consolidated         | 
|    | financial statements.                                                            | 
|    | The Company purchases its polymer raw material mainly in US Dollars, while the   | 
|    | selling currency can vary mainly between the Euro, British Pound and the US      | 
|    | Dollar. Our currency risk therefore arises from the difference between the       | 
|    | purchase currency and the receivable currency.                                   | 
|    | The Company uses long-term bank facilities to finance its investments in RRP.    | 
|    | The Company policy is to have the bank facilities in the same currency that the  | 
|    | future income from the rental of the RRP will be, and by that using the positive | 
|    | cash flow from the RRP rental to pay back the bank facilities, to reduce         | 
|    | currency exposure.                                                               | 
|    | The Company is also hedging on its cash-flow exposure for Euro-NIS and GBP-NIS   | 
|    | using either Forward contracts or Cylinder-Options tools, as per the Company     | 
|    | hedging policy.                                                                  | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| -  | Financial Resources - the Company utilizes bank credit facility to support its   | 
|    | investments in its pool equipment fleet on an ongoing basis. The global          | 
|    | financial banking crisis has changed the financial industry working rules,       | 
|    | making it much more challenging to secure new debt facilities. Although the      | 
|    | Company has bank facilities it has not yet utilised the Company is aware that it | 
|    | may face difficulties raising funds in the future.                               | 
|    | The Company's board approved the 2009 business plan within the current bank      | 
|    | facilities already secured by the Company.                                       | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
 
 
2009 - More New Business and Deeper Penetration 
The Company's strategy is clearly defined: to focus on pool and services. The 
Company will use it's products portfolio to drive organic growth in geographies 
where it has existing infrastructure (human and operational) both with new and 
existing customers. 
 
 
The current financial markets set challenges to rapid growth - we will work 
within our financial resources by selectively choosing strategic projects. 
 
 
The Company remains focused on its customers' needs and continues to pursue its 
objective of becoming a leading RRP solution provider to retailers and their 
suppliers, challenging new categories and solving existing problems with 
innovative solutions. 
 
 
The Board is fully supportive and confident in the ability of the Polymer 
Logistics' team to deliver in the year ahead. We continue to see opportunities 
for growth in our market and this, coupled with the current strong order book, 
gives us confidence that we will achieve revenue growth in 2009. 
 
 
Gideon Feiner 
Chief Executive Officer 
April 7th, 2009 
 
 
 
 
FINANCIAL REVIEW 
 
 
Introduction 
 
 
The 2008 financial reports are prepared under International Financial Reporting 
Standards ("IFRS"). 
 
 
 
 
Financial Key Performance Results 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |        2008 |        2007 |  Difference | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |       EUR'000 |       EUR'000 |           % | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
| Revenues                          |      42,328 |      36,853 |         15% | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
| Gross Profit                      |      15,577 |      15,004 |          4% | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |       36.8% |       40.7% |             | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
| EBIT (excluding exceptional       |          33 |       4,037 |        -99% | 
| costs)                            |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
| EBIT (excluding exceptional       |       0.08% |       10.9% |             | 
| costs) - %                        |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
| Net Profit (Loss) (excluding      |     (1,853) |       4,002 |       -146% | 
| exceptional costs)                |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
| Net Profit (excluding exceptional |       -4.4% |       10.9% |             | 
| costs) - %                        |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
| Net Profit (Loss)                 |     (1,853) |       3,536 |       -152% | 
+-----------------------------------+-------------+-------------+-------------+ 
| Net Profit - %                    |       -4.4% |        9.6% |             | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
| Basic earnings per share          |       -0.02 |        0.05 |       -140% | 
+-----------------------------------+-------------+-------------+-------------+ 
| Fully diluted earnings per share  |       -0.02 |        0.04 |       -175% | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
| Cash generated from operating     |       7,692 |         854 |             | 
| activities                        |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
|                                   |             |             |             | 
+-----------------------------------+-------------+-------------+-------------+ 
 
 
The Company sale segment was hit by both the increased raw material prices in 
the first half of 2008 and by the global recession in the second half of the 
year. 
 
 
Margins on product sales are principally impacted, as we were unable to 
pass-through in full increases in raw material costs to our sales clients. 
However, the impact on pool margins is generally small as most of our income and 
costs are related to already in-use pool equipment, while new business takes 
into account cost increases. 
 
 
The declining GBP:EUR exchange rate in 2008 also had a significant negative 
impact of EUR1.9m on the P&L statement. Although income from pool activities is 
GBP1m more than in 2007 the income in Euros is EUR0.7m less than last year. 
 
 
Additional one-off events which affected the Company gross profit and EBIT 
margins were: 
 
 
+------+---------------------------------------------------------------------------------+ 
| 1.   | Towards the end of the first half, the Company was requested by one of its      | 
|      | customers to pay a rebate contribution of EUR1.0m towards implementation costs.   | 
|      | The Company's management, after considering the contract and relations with the | 
|      | customer, agreed to accept this request. This request had a negative impact on  | 
|      | the Company EBIT in the first half of EUR1.0m.                                    | 
|      |                                                                                 | 
+------+---------------------------------------------------------------------------------+ 
| 2.   | A sharp decline in the Company's traditional sales in the second half of the    | 
|      | year due to the global economic environment. The Company's customers decided to | 
|      | exhaust their existing equipment and to freeze their procurement budgets.       | 
|      |                                                                                 | 
+------+---------------------------------------------------------------------------------+ 
| -    | The increase in free cash-flow resulted mainly from the continuous improvement  | 
|      | in our current asset/liability ratio.                                           | 
|      |                                                                                 | 
+------+---------------------------------------------------------------------------------+ 
 
 
Significant Accounting Policies 
 
 
The Company is reporting its results in accordance with the International 
Financial Reporting Standards (IFRS) as adopted by the European Union and 
International Financial Reporting Standards as issued by the IASB that are 
effective at 31 December 2008. 
 
 
The consolidated financial statements are presented in Euros, the functional 
currency of the Company, a subsidiary in Italy and one of its subsidiaries in 
Israel. The functional currency of the subsidiary in the UK is the British 
Pound; the functional currency of the subsidiary in the US is the US Dollar; and 
the functional currency of the remaining subsidiary in Israel is the New Israeli 
Shekel. 
 
 
Cash flow 
 
 
Cash and cash equivalents increased by EUR0.4m to EUR1.1m at 31 December 2008 (31 
December 2007: EUR0.8m). 
 
 
In the year to 31 December 2008, the Company generated EUR7.7m from operating 
activities (2007: EUR0.9m). 
 
 
In 2008, the Company executed on its investment policy, investing EUR4m in 
continuing building its equipment pool, mainly for the US market (2007: EUR15.4m). 
 
 
The Company invested a total of EUR2.4m in new moulds in 2008 (2007: EUR2.8m) mainly 
for the new product portfolio. The Company also invested a total of EUR0.8m in the 
2 wash-sites in Italy, the wash-site in California and the production plant in 
Israel. 
 
 
The Company has agreed with its major banks on short-term and long-term 
facilities of EUR22m, of which EUR20m was utilized as at 31 December 2008. The 
Company is comfortably meeting all of its covenants. 
 
 
Taxation 
The Company's subsidiary Polymer Logistics (Israel) Ltd ("PL Israel") enjoys an 
"industrial company" status as defined by the Israeli Law of Encouragement of 
Industry. PL Israel, under the Law of Capital Investment, is entitled to certain 
reduced tax programs. 
 
 
Based on the Group transfer pricing policy each of the Group companies (except 
PL Israel) is left with a certain profit before tax, for which local taxes are 
charged and paid. For that reason, although the Group is as loosing on a 
consolidated basis, it still paid taxes in 2008. 
 
 
The Board expects the Group's ongoing corporation tax rate to be in the region 
of 10% for the foreseeable future. 
 
 
Exchange rates 
 
 
The Company reports its financial statements in Euros. However, the Group's 
operations are based in the United Kingdom, Israel and the United States as well 
as countries in the zone in which the Euro is the lawful currency. Transactions 
in foreign currencies are recorded at the exchange rate prevailing at the date 
of the transaction. Monetary assets and liabilities denominated in foreign 
currencies are retranslated at the exchange rate prevailing at the balance sheet 
date. All translation differences are recorded in the consolidated income 
statement. 
 
 
The assets and liabilities of the subsidiaries in the UK, the US and one of the 
Israeli subsidiaries are translated into Euros at the exchange rate prevailing 
at the balance sheet date. Revenues and expenses in the statement of income are 
translated at the exchange rate prevailing at the date of the transaction. The 
exchange differences arising on the translation are recorded as a separate 
component of equity. 
 
 
The devaluation of the Euro to the New Israeli Shekel (NIS) and the US Dollar to 
the Euro in 2008 resulted in an increase in the FOREX costs due to short-term 
facilities in NIS provided by banks to the Israeli subsidiary and long term US 
Dollar loan that supported the penetration into the US market. Forex costs were 
EUR0.6m. 
 
 
Earnings per share 
 
 
Basic and fully diluted loss per share for the year to 31 December 2008 were 
EUR0.02 respectively (2007: earnings per share: EUR0.05 and EUR0.04 respectively). 
 
 
Subsequent events 
 
 
There are no significant post balance sheet events. 
 
 
Dividend 
 
 
It has been the Board's intention to pursue a progressive dividend policy in 
respect of excess capital over and above that required to finance the organic 
growth of the Company's business. Although management remains confident on the 
medium and long term opportunities for the Company and the cash generative 
qualities of the business, given the global economic climate, the Board is 
proposing not to pay an annual dividend. 
 
 
 
 
 
 
 
 
Dana Gerner 
Director of Finance 
April 7th, 2009 
 
 
 
 
CONSOLIDATED BALANCE SHEETS 
Euros in thousands 
 
 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|                                                    | |         |  |        December 31,      | 
+----------------------------------------------------+-+---------+--+--------------------------+ 
|                                                    | |   Note  |  |     2008  |  |    2007   | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|                     ASSETS                         | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|                                                    | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|    Current assets:                                 | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Cash and cash equivalents               | |     3   |  |     1,099 |  |       807 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Trade receivables                       | |     4   |  |     9,838 |  |    13,874 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Other accounts receivable and           | |     5   |  |     2,883 |  |     4,656 | 
|            prepayments                             | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Income tax receivables                  | |         |  |         - |  |        26 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Inventories                             | |     6   |  |     1,620 |  |     3,073 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|                                                    | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|                                                    | |         |  |    15,440 |  |    22,436 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|                                                    | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|    Non-current assets:                             | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Plant and equipment                     | |     7   |  |    17,528 |  |    16,100 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Assets held for lease                   | |     8   |  |    34,068 |  |    35,047 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Long term prepaid expenses of           | |     9   |  |       363 |  |       346 | 
|            operational lease                       | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Finance lease receivable                | |     10  |  |     2,550 |  |     4,263 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Deposits                                | |         |  |       344 |  |       264 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|            Deferred tax asset                      | |     11  |  |     1,991 |  |     1,518 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|                                                    | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|                                                    | |         |  |    56,844 |  |    57,538 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|                                                    | |         |  |           |  |           | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
|    Total assets                                    | |         |  |    72,284 |  |    79,974 | 
+----------------------------------------------------+-+---------+--+-----------+--+-----------+ 
 
 
The accompanying notes are an integral part of the consolidated financial 
statements. 
 
 
CONSOLIDATED BALANCE SHEETS 
Euros in thousands 
 
 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |         December 31,       | 
+----------------------------------------------------+-+---------+--+----------------------------+ 
|                                                    | |   Note  |  |     2008  |  |     2007    | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                             EQUITY AND LIABILITIES | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|    Current liabilities:                            | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                     Bank borrowings and current    | |     12  |  |     9,801 |  |      13,891 | 
|                     maturities of long-term loans  | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                     Trade payables                 | |     13  |  |     5,134 |  |      13,074 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Other accounts payable                  | |     14  |  |     3,330 |  |     *)1,789 | 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Deposits from customers                 | |     15  |  |     2,337 |  |    **)2,713 | 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Income taxes payable                    | |         |  |       362 |  |         552 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |    20,964 |  |      32,019 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|    Non-current liabilities:                        | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Long-term loans                         | |     16  |  |    10,965 |  |       5,517 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Deposits from customers                 | |     15  |  |         - |  |        **)- | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Deferred taxes                          | |     11  |  |       238 |  |         167 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Other long-term liabilities             | |     17  |  |       200 |  |        *)66 | 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |    11,403 |  |       5,750 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|    Total liabilities                               | |         |  |    32,367 |  |      37,769 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|    Equity:                                         | |     19  |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Issued capital                          | |         |  |       779 |  |         776 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Share premium                           | |         |  |    35,034 |  |      34,785 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|            Foreign currency translation reserve    | |         |  |     (402) |  |        (32) | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                     Retained earnings              | |         |  |     4,506 |  |       6,676 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|    Total equity                                    | |         |  |    39,917 |  |      42,205 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|                                                    | |         |  |           |  |             | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
|    Total equity and liabilities                    | |         |  |    72,284 |  |      79,974 | 
+----------------------------------------------------+-+---------+--+-----------+--+-------------+ 
 
 
*) Reclassified accrued severance pay at the amount of EUR66 as at 31 December 
2007 from Other accounts payable to Other long-term liabilities. 
 
 
**) Reclassified Deposits from customers from Non current liabilities to Current 
liabilities at the amount of EUR2,663 as at 31 December 2007. See also note 2. 
 
 
The accompanying notes are an integral part of the consolidated financial 
statements. 
 
 
CONSOLIDATED STATEMENTS OF INCOME 
Euros in thousands, except share and per share data 
 
 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |         Year ended December 31,       | 
+-----------------------------------+--------+---------+---+---------------------------------------+ 
|                                   |        |   Note  |   |     2008   | |   2007  | |     2007   | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Revenues:                      |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|            Rental income          |        |         |   |     35,355 | |         | |     25,331 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|            Sale of goods          |        |         |   |      6,973 | |         | |     11,522 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |     42,328 | |         | |     36,853 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Cost of revenues:              |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|            Cost of rentals        |        |    22a  |   |     19,374 | |         | |   *)12,726 | 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|            Cost of goods sold     |        |    22b  |   |      5,836 | |         | |      8,588 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|            Depreciation of moulds |        |     8   |   |      1,541 | |         | |      *)535 | 
|            and machines           |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |     26,751 | |         | |     21,849 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Gross profit                   |        |         |   |     15,577 | |         | |     15,004 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Selling and marketing expenses |        |    22c  |   |      7,084 | |         | |      3,423 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    General and administrative     |        |    22d  |   |      8,460 | |   7,544 | |            | 
|    expenses                       |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Exceptional general and        |        |     23  |   |          - | |     466 | |            | 
|    administrative expenses        |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |      8,010 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Finance income                 |        |    22e  |   |      (370) | |         | |      (945) | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Finance costs                  |        |    22f  |   |      2,136 | |         | |        993 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Other expenses (income), net   |        |    22g  |   |         13 | |         | |       (19) | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Profit (loss) before taxes     |        |         |   |    (1,746) | |         | |      3,542 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Income tax expenses            |        |     11  |   |        107 | |         | |          6 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|    Net profit (Loss)              |        |         |   |    (1,853) | |         | |      3,536 | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|            Basic earnings (Loss)  |        |         |   |     (0.02) | |         | |       0.05 | 
|            per share (in Euros)   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|            Diluted earnings       |        |         |   |     (0.02) | |         | |       0.04 | 
|            (Loss) per share (in   |        |         |   |            | |         | |            | 
|            Euros)                 |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|            Weighted average       |        |     25  |   | 77,830,169 | |         | | 77,482,468 | 
|            number of shares used  |        |         |   |            | |         | |            | 
|            for computing basic    |        |         |   |            | |         | |            | 
|            earnings per share     |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|                                   |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
|            Weighted average       |        |     25  |   | 77,830,169 | |         | | 79,633,384 | 
|            number of shares used  |        |         |   |            | |         | |            | 
|            for computing diluted  |        |         |   |            | |         | |            | 
|            earnings per share     |        |         |   |            | |         | |            | 
+-----------------------------------+--------+---------+---+------------+-+---------+-+------------+ 
 
 
*) Reclassified machines depreciation at the amount of EUR222 from Depreciation of 
moulds and machines to Cost of rental. 
 
 
The accompanying notes are an integral part of the consolidated financial 
statements. 
 
 
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
Euros in thousands 
 
 
 
 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                                 |  | Issued  |  |Additional  |  |  Foreign    |  |  Retained  |  |   Total    |  | 
|                                 |  |capital  |  |  paid-in   |  |  currency   |  |  Earnings  |  |            |  | 
|                                 |  |         |  |  capital   |  |translation  |  |            |  |            |  | 
|                                 |  |         |  |            |  |  reserve    |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                                 |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|            At January           |  |     775 |  |     34,365 |  |        (55) |  |      3,265 |  |     38,350 |  | 
|            1, 2007              |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                                 |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Foreign     |  |       - |  |          - |  |          23 |  |          - |  |         23 |  | 
|                     currency    |  |         |  |            |  |             |  |            |  |            |  | 
|                     translation |  |         |  |            |  |             |  |            |  |            |  | 
|                     adjustment  |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Net         |  |       - |  |          - |  |          23 |  |          - |  |         23 |  | 
|                     income      |  |         |  |            |  |             |  |            |  |            |  | 
|                     and         |  |         |  |            |  |             |  |            |  |            |  | 
|                     expense     |  |         |  |            |  |             |  |            |  |            |  | 
|                     for the     |  |         |  |            |  |             |  |            |  |            |  | 
|                     year        |  |         |  |            |  |             |  |            |  |            |  | 
|                     recognised  |  |         |  |            |  |             |  |            |  |            |  | 
|                     directly    |  |         |  |            |  |             |  |            |  |            |  | 
|                     in equity   |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Profit      |  |         |  |            |  |             |  |      3,536 |  |      3,536 |  | 
|                     for         |  |         |  |            |  |             |  |            |  |            |  | 
|                     the         |  |         |  |            |  |             |  |            |  |            |  | 
|                     year        |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Total       |  |       - |  |          - |  |          23 |  |      3,536 |  |      3,559 |  | 
|                     income      |  |         |  |            |  |             |  |            |  |            |  | 
|                     and         |  |         |  |            |  |             |  |            |  |            |  | 
|                     expense     |  |         |  |            |  |             |  |            |  |            |  | 
|                     for the     |  |         |  |            |  |             |  |            |  |            |  | 
|                     year        |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Issuance    |  |         |  |       (58) |  |             |  |            |  |       (58) |  | 
|                     of          |  |         |  |            |  |             |  |            |  |            |  | 
|                     Ordinary    |  |         |  |            |  |             |  |            |  |            |  | 
|                     shares      |  |         |  |            |  |             |  |            |  |            |  | 
|                     on          |  |         |  |            |  |             |  |            |  |            |  | 
|                     admission,  |  |         |  |            |  |             |  |            |  |            |  | 
|                     net         |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Issuance    |  |       1 |  |         17 |  |             |  |            |  |         18 |  | 
|                     of          |  |         |  |            |  |             |  |            |  |            |  | 
|                     Ordinary    |  |         |  |            |  |             |  |            |  |            |  | 
|                     shares      |  |         |  |            |  |             |  |            |  |            |  | 
|                     upon        |  |         |  |            |  |             |  |            |  |            |  | 
|                     exercise    |  |         |  |            |  |             |  |            |  |            |  | 
|                     of          |  |         |  |            |  |             |  |            |  |            |  | 
|                     options     |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Share-based |  |         |  |        461 |  |             |  |            |  |        461 |  | 
|                     payment     |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Dividend    |  |         |  |            |  |             |  |      (125) |  |      (125) |  | 
|                     payout      |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                                 |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|            At December          |  |     776 |  |     34,785 |  |        (32) |  |      6,676 |  |     42,205 |  | 
|            31, 2007             |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                                 |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Foreign     |  |         |  |            |  |       (370) |  |            |  |      (370) |  | 
|                     currency    |  |         |  |            |  |             |  |            |  |            |  | 
|                     translation |  |         |  |            |  |             |  |            |  |            |  | 
|                     adjustment  |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Net         |  |       - |  |          - |  |       (370) |  |          - |  |      (370) |  | 
|                     income      |  |         |  |            |  |             |  |            |  |            |  | 
|                     and         |  |         |  |            |  |             |  |            |  |            |  | 
|                     expense     |  |         |  |            |  |             |  |            |  |            |  | 
|                     for the     |  |         |  |            |  |             |  |            |  |            |  | 
|                     year        |  |         |  |            |  |             |  |            |  |            |  | 
|                     recognised  |  |         |  |            |  |             |  |            |  |            |  | 
|                     directly    |  |         |  |            |  |             |  |            |  |            |  | 
|                     in equity   |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Loss        |  |       - |  |          - |  |           - |  |    (1,853) |  |    (1,853) |  | 
|                     for         |  |         |  |            |  |             |  |            |  |            |  | 
|                     the         |  |         |  |            |  |             |  |            |  |            |  | 
|                     year        |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Total       |  |       - |  |          - |  |       (370) |  |     (1853) |  |    (2,223) |  | 
|                     income      |  |         |  |            |  |             |  |            |  |            |  | 
|                     and         |  |         |  |            |  |             |  |            |  |            |  | 
|                     expense     |  |         |  |            |  |             |  |            |  |            |  | 
|                     for the     |  |         |  |            |  |             |  |            |  |            |  | 
|                     year        |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Issuance    |  |       3 |  |         59 |  |           - |  |          - |  |         62 |  | 
|                     of          |  |         |  |            |  |             |  |            |  |            |  | 
|                     Ordinary    |  |         |  |            |  |             |  |            |  |            |  | 
|                     shares      |  |         |  |            |  |             |  |            |  |            |  | 
|                     upon        |  |         |  |            |  |             |  |            |  |            |  | 
|                     exercise    |  |         |  |            |  |             |  |            |  |            |  | 
|                     of          |  |         |  |            |  |             |  |            |  |            |  | 
|                     options     |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Share-based |  |       - |  |        190 |  |           - |  |          - |  |        190 |  | 
|                     payment     |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                     Dividend    |  |       - |  |          - |  |           - |  |      (317) |  |      (317) |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|                                 |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
|            At December          |  |     779 |  |     35,034 |  |       (402) |  |      4,506 |  |     39,917 |  | 
|            31, 2008             |  |         |  |            |  |             |  |            |  |            |  | 
+---------------------------------+--+---------+--+------------+--+-------------+--+------------+--+------------+--+ 
 
 
The accompanying notes are an integral part of the consolidated financial 
statements. 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
Euros in thousands 
 
 
 
 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |      Year ended December    | 
|                                                             | |              31,            | 
+-------------------------------------------------------------+-+-----------------------------+ 
|                                                             | |     2008   |  |     2007    | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Cash flows from operating activities:            | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Net profit (loss)                       | |    (1,853) |  |       3,536 | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Adjustments necessary to reflect cash   | |      9,545 |  |     (2,682) | 
|                     flows provided by (used in) operating   | |            |  |             | 
|                     activities (a)                          | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Net cash provided in operating activities        | |      7,692 |  |         854 | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Cash flows from investing activities:            | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                             Purchase of assets held for     | |    (4,043) |  |    (15,414) | 
|                             lease                           | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Purchase of plant and equipment         | |    (3,689) |  |     (8,732) | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                             Purchase of long term assets    | |          - |  |       (350) | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                             Proceeds from sale of assets    | |          - |  |          17 | 
|                             held for lease                  | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Proceeds from sale of plant and         | |         20 |  |           6 | 
|                     equipment                               | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Long-term deposits                      | |       (80) |  |       (115) | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Net cash used in investing activities            | |    (7,792) |  |    (24,588) | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Cash flows from financing activities:            | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Proceeds from issuance of shares, net   | |         62 |  |        (40) | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Proceeds from long-term loans from      | |      5,390 |  |       5,001 | 
|                     banks and others                        | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                             Repayment of long-term loans    | |    (4,851) |  |     (4,217) | 
|                             from banks and others           | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Short-term bank credit, net             | |      1,263 |  |       3,875 | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Dividend payout                         | |      (285) |  |       (125) | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                     Receipt (repayment) of deposits from    | |      (376) |  |          84 | 
|                     customers, net                          | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Net cash provided by financing activities        | |      1,203 |  |       4,578 | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Net increase (decrease) in cash and cash         | |      1,103 |  |    (19,156) | 
|            equivalents                                      | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Net foreign exchange difference                  | |      (811) |  |         158 | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Cash and cash equivalents at the beginning of    | |        807 |  |      19,805 | 
|            the year                                         | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|                                                             | |            |  |             | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
|            Cash and cash equivalents at the end of the year | |      1,099 |  |         807 | 
+-------------------------------------------------------------+-+------------+--+-------------+ 
 
 
The cash flows resulting from payments on finance lease receivables that are 
related to sales are presented as operational cash flows. 
 
 
The accompanying notes are an integral part of the consolidated financial 
statements. 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
Euros in thousands 
 
 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |    Year ended December 31,  | 
+--------+------------------------------------------------------+-+-----------------------------+ 
|        |                                                      | |     2008   |  |     2007    | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|    (a) |            Adjustments necessary to reflect cash     | |            |  |             | 
|        |            flows provided by (used in) operating     | |            |  |             | 
|        |            activities:                               | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Income and expenses not involving         | |            |  |             | 
|        |            operating cash flows:                     | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Depreciation and amortization             | |      7,027 |  |       4,839 | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Deferred taxes, net                       | |      (402) |  |       (444) | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Exchange differences on long-term         | |        209 |  |       (436) | 
|        |            liabilities, net                          | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Loss on disposal of plant and equipment   | |         13 |  |           2 | 
|        |            and assets held for lease                 | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Share-based payment                       | |        190 |  |         461 | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |      7,037 |  |       4,422 | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Changes in operating assets and           | |            |  |             | 
|        |            liabilities:                              | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Decrease (increase) in trade and finance  | |      5,749 |  |     (6,401) | 
|        |            lease receivables                         | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Decrease (increase) in other accounts     | |      1,809 |  |     (1,320) | 
|        |            receivables and prepayments (including    | |            |  |             | 
|        |            long-term)                                | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Decrease (increase) in inventories        | |      1,437 |  |     (1,596) | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Increase (decrease) in trade and other    | |    (6,621) |  |     *)2,175 | 
|        |            accounts payables                         | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Increase in other long-term liabilities   | |        134 |  |       **)38 | 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |      2,508 |  |     (7,104) | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |      9,545 |  |     (2,682) | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|    (b) |    Non-cash activities:                              | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Long-term loan in respect of purchase of  | |          - |  |       2,415 | 
|        |            equipment                                 | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Reassignment of assets held for lease     | |        678 |  |         514 | 
|        |            into inventory                            | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Conversion of short-term bank credit to   | |      4,750 |  |           - | 
|        |            long-term bank loans                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Depreciation of moulds and machines       | |        192 |  |         712 | 
|        |            capitalized to assets held for lease      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Short-term accounts payable in respect of | |         32 |  |           - | 
|        |            dividend payment                          | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|    (c) |            Supplemental disclosure of cash flows:    | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Interest paid                             | |      1,538 |  |         991 | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Interest received                         | |        324 |  |         567 | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Income taxes paid                         | |        724 |  |         142 | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |                                                      | |            |  |             | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
|        |            Income taxes received                     | |         16 |  |          14 | 
+--------+------------------------------------------------------+-+------------+--+-------------+ 
*) Reclassified of changes in Trade and other accounts payable to increase in 
Other long-term liabilities at the amount of EUR38 as at 31 December 2007. 
 
 
The accompanying notes are an integral part of the consolidated financial 
statements. 
 
 
Towards the end of the first half, the Company was requested by one of its 
customers to pay a rebate contribution of EUR1.0m towards implementation costs. 
The Company's management, after considering the contract and relations with the 
customer, agreed to accept this request. This request had a negative impact on 
the Company EBIT in the first half of EUR1.0m. 
 
 
NOTE 1:- GENERAL 
 
 
Polymer Logistics N.V. ("the Company") and its subsidiaries ("the Group") 
specialize in developing, manufacturing and providing services for one-touch 
plastic packaging for the retail, industrial, and commercial markets. The 
Group's main markets are the U.K., Italy and the US. Its main product lines 
include plastic bins, crates, pallets and dollies for the retail market. The 
Company is a public limited liability company incorporated in the Netherlands. 
The Company's registered office is at Vierbundersweg 15, 5107 NL Dongen, the 
Netherlands. 
 
 
The Company profit and loss account is prepared under the application of Article 
402, Book 2 of the Dutch Civil Code. 
 
 
NOTE 2:- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
 
+----+----------------------------------------------------------------------------------+ 
| a. | Basis of preparation:                                                            | 
|    | The consolidated financial statements have been prepared in accordance with      | 
|    | International Financial Reporting Standards ("IFRS") as adopted by the European  | 
|    | Union and International Financial Reporting Standards as issued by the IASB that | 
|    | are effective at December 31. The consolidated financial statements have been    | 
|    | prepared on a historical cost basis.                                             | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| b. | Changes in accounting policy and disclosures                                     | 
|    | The accounting policies adopted are consistent with those of the previous year   | 
|    | except as follow:                                                                | 
+----+----------------------------------------------------------------------------------+ 
 
 
+----+-------------------------------------------------------------------------------+ 
| -  | IAS 37 Provisions, Contingent Liabilities and Contingent Assets - Deposits on | 
|    | returnable containers                                                         | 
|    | Following the agenda decision by the IFRIC published in May 2008, the Group   | 
|    | accounting for deposits changed. The adoption of this decision has resulted   | 
|    | in a reclassification of deposits in the balance sheet with no impact on the  | 
|    | Group's results.                                                              | 
|    | The adopted the following new and amended IFRS and IFRIC interpretation       | 
|    | during the year. Adoption of those revised standards and interpretations did  | 
|    | not have any effect on the financial performance or position of the Group.    | 
|    | They did however give rise to additional disclosures, including in some       | 
|    | cases, revisions to accounting Group has policies.                            | 
+----+-------------------------------------------------------------------------------+ 
 
 
+------+-------------------------------------------------------------------------+ 
| -    | IFRIC 11 IFRS 2 - Group and Treasury Share Transactions                 | 
|      |                                                                         | 
+------+-------------------------------------------------------------------------+ 
| -    | IFRIC 12 - Service Concession Arrangements                              | 
|      |                                                                         | 
+------+-------------------------------------------------------------------------+ 
| -    | IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding | 
|      | Requirements and their Interaction.                                     | 
|      |                                                                         | 
+------+-------------------------------------------------------------------------+ 
|      | The principal effects of these changes are as follows:                  | 
|      |                                                                         | 
+------+-------------------------------------------------------------------------+ 
 
 
+-----+--------------------------------------------------------------------+ 
| -   | IFRIC 11 IFRS 2 - Group and Treasury Share Transactions            | 
|     | This Interpretation requires arrangements whereby an employee is   | 
|     | granted rights to an entity's equity instruments, to be accounted  | 
|     | for as an equity-settled scheme, even if the entity buys the       | 
|     | instruments from another party, or the shareholders provide the    | 
|     | equity instruments needed. The Interpretation had no impact on the | 
|     | financial position or performance of the Group.                    | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IFRIC 12 Service Concession Arrangements                           | 
|     | IFRIC Interpretation 12 was issued in November 2006 and becomes    | 
|     | effective for annual periods beginning on or after 1 January 2008. | 
|     | This Interpretation applies to service concession operators and    | 
|     | explains how to account for the obligations undertaken and rights  | 
|     | received in service concession arrangements. This interpretation   | 
|     | will have no impact on the Group.                                  | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IFRIC 14 IAS 19 - The limit on a Defined Benefit Assets, Minimum   | 
|     | Funding Requirements and their Interaction                         | 
|     | This Interpretation provides guidance on how to assess the limit   | 
|     | on the amount of surplus in a defined benefit scheme that can be   | 
|     | recognized as an asset under IAS 19 Employee Benefits. As the      | 
|     | Group's defined benefit schemes are currently in deficit, the      | 
|     | Interpretation had no impact on the financial position or          | 
|     | performance of the Group                                           | 
+-----+--------------------------------------------------------------------+ 
 
 
The Company has not early adopted the following amendments to standards 
following the 2007 Improvements to IFRSs' project, that have been issued but are 
not effective as of December 31, 2008. Management expects that adoption of those 
pronouncements will not have a material impact on the financial position and 
results of operations of the Company in the period of initial application. 
 
 
+-----+--------------------------------------------------------------------+ 
| -   | IFRS 2 (Revised)- Share- based Payment: An amendment to IFRS 2     | 
|     | that clarifies the definition of a vesting condition and           | 
|     | prescribes the treatment for an award that is effectively          | 
|     | canalled.                                                          | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IFRS 7- Financial Instruments Disclosures: Removal of the          | 
|     | reference to total interest income as a component of financial     | 
|     | costs.                                                             | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IFRS 8- Operating Segments: IFRS 8 replaces IAS 14 Segment         | 
|     | reporting.                                                         | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IAS 8- Accounting Policies, Change in Accounting Estimates and     | 
|     | Errors: Clarification that only implantation guidance that is an   | 
|     | integral part of an IFRS in mandatory when selecting accounting    | 
|     | policies.                                                          | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IAS 10- Events after Reporting Period: Clarification that          | 
|     | dividends declared after the end of the reporting period are not   | 
|     | obligations.                                                       | 
|     | IAS 16- Property, Plant and equipment: Items of property, plant    | 
|     | and equipment held for -rental are routinely in the ordinary       | 
|     | course of business after rental, are transferred to inventory when | 
|     | rental ceases and they are held for sale.                          | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IAS 18- Revenue: Replacement of the term "direct cost" with        | 
|     | "transaction costs" as defined in IAS 39.                          | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IAS 19- Employee Benefits: Revised the definition of "past service | 
|     | costs", "return on plan assets", and short term and other long     | 
|     | term employee benefits. Amendments to plans that result in a       | 
|     | reduction in benefits related to future services are accounted for | 
|     | as curtailment. Deleted the reference to the recognition of        | 
|     | contingent liabilities to ensure consistency with IAS 37.          | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IAS 20- Accounting for Government Grants and disclosures of        | 
|     | Government Assistance: Loans granted in the future with no or low  | 
|     | interest rates will not be exempt from the requirement to impute   | 
|     | interest. The difference between the amount received and the       | 
|     | discounted amount in accounted for as government grant.            | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IAS 23- Borrowing costs (Revised): The revised IAS 23 requires     | 
|     | capitalization of borrowing costs that are directly attributable   | 
|     | to the acquisition, construction or production of a qualifying     | 
|     | asset.                                                             | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IAS 27- Consolidation and Separate Financial Statements            | 
|     |                                                                    | 
+-----+--------------------------------------------------------------------+ 
| -   | IAS 34- Interim Financial Reporting: Earning per share is          | 
|     | disclosed in interim financial reports if as entity is within the  | 
|     | scope of IAS 33                                                    | 
+-----+--------------------------------------------------------------------+ 
+------+---------------------------------------------------------------------------------+ 
| c.   | Significant accounting judgments, estimates and assumption:                     | 
|      | Judgements                                                                      | 
|      | In the process of applying the Group's accounting policies, management has made | 
|      | the following judgments, apart from those involving estimations, which have the | 
|      | most significant effect on the amounts recognized in the financial statements:  | 
+------+---------------------------------------------------------------------------------+ 
 
 
+-----+-----------------------------------------------------------------------------+ 
| -   | Operating and finance lease commitments - Group as Lessor                   | 
|     | The Group has entered into commercial equipment leases on its products      | 
|     | portfolio. The Group classified a lease as a finance lease if it transfers  | 
|     | substantially all the risks and rewards incidental to ownership. A lease is | 
|     | classified as an operating lease if it does not transfer substantially all  | 
|     | the risks and rewards incidental to ownership.                              | 
+-----+-----------------------------------------------------------------------------+ 
 
 
Estimates and assumptions 
 
 
The key assumptions concerning the future and other key sources of estimation 
uncertainty at the balance sheet date, that have a significant risk of causing a 
material adjustment to the carrying amounts of assets and liabilities within the 
next financial year are discussed below. 
 
 
+-----+------------------------------------------------------------------------+ 
| -   | Deferred tax assets                                                    | 
|     | Deferred tax assets are recognized for all unused tax losses to the    | 
|     | extent that it is probable that taxable profit will be available       | 
|     | against which the losses can be utilized. Significant management       | 
|     | judgment is required to determine the amount of deferred tax assets    | 
|     | that can be recognized, based upon the likely timing and level of      | 
|     | future taxable profits together with future tax planning strategies.   | 
|     | Further details are contained in Note 11b.                             | 
|     |                                                                        | 
+-----+------------------------------------------------------------------------+ 
| -   | Taxes                                                                  | 
|     | There are estimation uncertainties with regard to tax positions taken  | 
|     | by the Group which are only validated after tax audits.                | 
|     |                                                                        | 
+-----+------------------------------------------------------------------------+ 
| -   | Assets held for lease                                                  | 
|     | The Company carefully examines its depreciation policy and considers   | 
|     | various parameters which have material impact on its asset evaluation. | 
|     | The Company evaluates the residual value for each product group (bins, | 
|     | pallets, trays and crates) and their location (Europe or USA). The     | 
|     | residual value is evaluated based on raw material cost and the Company | 
|     | regrinding costs.                                                      | 
+-----+------------------------------------------------------------------------+ 
 
 
+----+-------------------------------------------------------------------------------------------------+ 
| c. | Financial statements in Euros - the presentation currency:                                      | 
|    | The consolidated financial statements are presented in Euros, the functional                    | 
|    | currency of the Company and its subsidiaries in Italy and Israel. The functional                | 
|    | currency of the subsidiary in the UK is the British Pound and the functional                    | 
|    | currency of the subsidiary in the U.S.A. is the U.S. Dollar. The Functional                     | 
|    | currency of a subsidiary of the Israeli subsidiary is the New Israeli Shekel.                   | 
|    |                                                                                                 | 
+----+-------------------------------------------------------------------------------------------------+ 
| d. | Financial statements in Euros - the presentation currency                                       | 
|    | Transactions in foreign currencies are recorded at the exchange rate prevailing                 | 
|    | at the date of the transaction. Monetary assets and liabilities denominated in                  | 
|    | foreign currencies are retranslated at the exchange rate prevailing at balance                  | 
|    | sheet date. All translation differences are recorded in the statement of income.                | 
|    | The assets and liabilities of the subsidiaries in the UK, the U.S.A. and one of                 | 
|    | the Israeli subsidiaries are translated into Euros at the exchange rate                         | 
|    | prevailing at the balance sheet date. Revenues and expenses in the statement of                 | 
|    | income are translated at the exchange rate prevailing at the date of the                        | 
|    | transaction. The exchange differences arising on the translation are recorded as                | 
|    | a separate component of equity.                                                                 | 
|    |                                                                                                 | 
+----+-------------------------------------------------------------------------------------------------+ 
| e. | Basis of consolidation:                                                                         | 
|    | The consolidated financial statements comprise the financial statements of the                  | 
|    | Company and its subsidiaries. The financial statements of the subsidiaries are                  | 
|    | prepared for the same reporting year as the Company, using consistent accounting                | 
|    | policies.                                                                                       | 
|    | All intra-group balances, transactions, income and expenses and profits and                     | 
|    | losses resulting from intra-group transactions that are recognized in assets,                   | 
|    | are eliminated in full.                                                                         | 
|    | Subsidiaries are fully consolidated from the date of inception, being the date                  | 
|    | on which the Group obtains control, and continue to be consolidated until the                   | 
|    | date that such control ceases.                                                                  | 
|    |                                                                                                 | 
+----+-------------------------------------------------------------------------------------------------+ 
| f. | Financial assets:                                                                               | 
|    | Financial assets within the scope of IAS 39 are classified as financial assets                  | 
|    | at fair value through profit or loss or as loans and receivables as appropriate.                | 
|    | The Group determines the classification of its financial assets at initial                      | 
|    | recognition.                                                                                    | 
|    | Financial assets are recognized initially at fair value plus, in the case of                    | 
|    | investment not at fair value through profit or loss, directly attributable                      | 
|    | transaction costs.                                                                              | 
|    | Purchases or sale of financial assts that require delivery of assets within a                   | 
|    | time frame established by regulation or convention in the marketplace are                       | 
|    | recognized on the trade date.                                                                   | 
|    | The Group's financial assets include cash, trade and other receivables, loan and                | 
|    | other receivables and derivative financial instruments.                                         | 
|    | The subsequent measurement of financial assets depends on their classification                  | 
|    | as follows:                                                                                     | 
|    | Financial assets at fair value through profit and loss includes financial assets                | 
|    | held for trading and financial assets designated upon initial recognition at                    | 
|    | fair value through profit and loss. Financial assets are classified as held for                 | 
|    | trading if they are acquired for the propose of selling in the near time.                       | 
|    | Financial assets at fair value through profit and loss are carried in the                       | 
|    | balance sheet at fair value with gains or losses recognized in the income                       | 
|    | statement.                                                                                      | 
|    | Loans and receivables are non- derivative financial assets with fixed or                        | 
|    | determinable payments that are not quoted in an active market. Such financial                   | 
|    | assets are carried at amortized cost using the effective interest rate method.                  | 
|    | Gains and losses are recognized in the consolidated income statement when the                   | 
|    | loans and receivables are derecognized or impaired, as well as through the                      | 
|    | amortization process.                                                                           | 
|    | Financial liabilities:                                                                          | 
|    | Financial liabilities within the scope of IAS 39 are classified as financial                    | 
|    | liabilities at fair value through profit or loss or as loans and borrowings as                  | 
|    | appropriate. The Group determines the classification of its financial assets at                 | 
|    | initial recognition.                                                                            | 
|    | Financial liabilities are recognized initially at fair value and in the case of                 | 
|    | loans and borrowings, directly attributable transaction costs.                                  | 
|    | The Group's financial liabilities include trade and other payables, bank                        | 
|    | overdraft, loans and borrowings and derivative financial instruments.                           | 
|    | The subsequent measurement of financial liabilities depends on their                            | 
|    | classification as follows:                                                                      | 
|    | Financial liabilities at fair value through profit and loss includes financial                  | 
|    | liabilities held for trading and financial liabilities designated upon initial                  | 
|    | recognition at fair value through profit and loss. Financial liabilities are                    | 
|    | classified as held for trading if they are acquired for the propose of selling                  | 
|    | in the near time. Financial liabilities at fair value through profit and loss                   | 
|    | are carried in the balance sheet at fair value with gains or losses recognized                  | 
|    | in the income statement.                                                                        | 
|    | Loans and borrowings- After initial recognition, interest bearing loans and                     | 
|    | borrowings are subsequently measured at amortized cost using the effective                      | 
|    | interest rate method.                                                                           | 
|    | Gains and losses are recognized in the consolidated income statement when the                   | 
|    | liabilities are derecognized as well as through the amortization process.                       | 
|    |                                                                                                 | 
+----+-------------------------------------------------------------------------------------------------+ 
| g. | Cash and cash equivalents:                                                                      | 
|    | Cash and cash equivalents in the balance sheet comprise cash in the bank and in                 | 
|    | hand and short-term deposits with an original maturity of three months or less.                 | 
|    |                                                                                                 | 
+----+-------------------------------------------------------------------------------------------------+ 
| h. | Inventories:                                                                                    | 
|    | Inventories are valued at the lower of cost and net realizable value.                           | 
|    | Costs incurred in bringing each product to its present location and conditions                  | 
|    | are accounted for as follows:                                                                   | 
|    | Raw materials - using the average cost method.                                                  | 
|    | Work in progress and finished goods - using the average cost method which                       | 
|    | includes materials, labor, direct manufacturing expenses and other indirect                     | 
|    | expenses.                                                                                       | 
|    |                                                                                                 | 
+----+-------------------------------------------------------------------------------------------------+ 
| i. | Trade receivables:                                                                              | 
|    | Trade receivables, which generally have 30-90 days terms, are recognized and                    | 
|    | carried at original invoice amount less an allowance for any uncollectible                      | 
|    | amounts. A provision is recorded when there is objective evidence that the Group                | 
|    | will not be able to collect the debts. Bad debts are written off when                           | 
|    | identified. As of December 31, 2008 and 2007, there is no allowance for                         | 
|    | uncollectible accounts.                                                                         | 
|    |                                                                                                 | 
+----+-------------------------------------------------------------------------------------------------+ 
| j. | Finance lease receivable:                                                                       | 
|    | The Group has leased equipment to customers under a sales-type, finance lease.                  | 
|    | These receivables are recorded at their discounted contractual amounts. As of                   | 
|    | December 31, 2008 and 2007, there is no allowance for uncollectible accounts                    | 
|    |                                                                                                 | 
+----+-------------------------------------------------------------------------------------------------+ 
| k. |                                                                                      Plant      | 
|    |                                                                                      and        | 
|    |                                                                                      equipment: | 
|    |                                                                                                 | 
+----+-------------------------------------------------------------------------------------------------+ 
 
 
+-----+------------------------------------------------------------------------------+ 
| 1.  | Plant and equipment are stated at cost, excluding the costs of day-to-day    | 
|     | servicing, less accumulated depreciation and provisions for impairment. Such | 
|     | cost includes the cost of replacing part of such plant and equipment when    | 
|     | that cost is incurred if the recognition criteria are met.                   | 
|     | The carrying values of plant and equipment are reviewed for impairment when  | 
|     | events or changes in circumstances indicate that the carrying value may not  | 
|     | be recoverable.                                                              | 
|     | A plant and equipment item is derecognized upon disposal or when no future   | 
|     | economic benefits are expected from its use or disposal. Any gain or loss    | 
|     | arising on derecognition of the asset (calculated as the difference between  | 
|     | the net disposal proceeds and the carrying amount of the asset) is included  | 
|     | in the statement of income in the period the asset is derecognized.          | 
|     | The assets' residual values, useful lives and depreciation methods are       | 
|     | reviewed, and adjusted if appropriate, at each financial year end.           | 
|     |                                                                              | 
+-----+------------------------------------------------------------------------------+ 
| 2.  | As for impairment, see n below.                                              | 
|     |                                                                              | 
+-----+------------------------------------------------------------------------------+ 
| 3.  | Depreciation is computed using the straight-line method over the estimated   | 
|     | useful life of the asset. The annual depreciation rates are as follows:      | 
|     |                                                                              | 
+-----+------------------------------------------------------------------------------+ 
 
 
+----------------------------------+--+----------------------+ 
|                                  |  |           %          | 
+----------------------------------+--+----------------------+ 
|                                  |  |                      | 
+----------------------------------+--+----------------------+ 
|            Machines              |  |          5-10        | 
+----------------------------------+--+----------------------+ 
|            Moulds                |  |        14 - 20       | 
+----------------------------------+--+----------------------+ 
|            Furniture and         |  |         6 - 15       | 
|            fittings              |  |                      | 
+----------------------------------+--+----------------------+ 
|            Computers             |  |           33         | 
+----------------------------------+--+----------------------+ 
|            Buildings             |  |           4          | 
+----------------------------------+--+----------------------+ 
|            Motor vehicles        |  |           15         | 
+----------------------------------+--+----------------------+ 
 
 
+-----+-------------------------------------------------------------------------+ 
| 1.  | Derivative financial instruments and hedge accounting                   | 
|     | Initial recognition and subsequent measurement:                         | 
|     | The Group uses derivative financial instruments such as forward         | 
|     | currency contracts and put/call options (hereinafter - "hedge           | 
|     | instruments ") to hedge its foreign currency fluctuations. Such         | 
|     | derivatives financial instruments are initially recognized at fair      | 
|     | value on the date on which a derivative contract is entered into and    | 
|     | are subsequently re-measured at fair value. Derivatives are carried as  | 
|     | financial assets when the fair value is positive and as financial       | 
|     | liabilities when the fair value is negative.                            | 
|     | Any gains or losses arising from changes in fair value on derivatives   | 
|     | during the year that do not qualify for hedge accountings are taken     | 
|     | directly to the income statement.                                       | 
|     | For the purpose of hedge accounting, hedges are classified as           | 
+-----+-------------------------------------------------------------------------+ 
 
 
+---+--------------------------------------------------------------------+ 
| - |       Cash flows hedges when hedging exposure to variability in    | 
|   |       cash flows that is either attributable to a particular risk  | 
|   |       associated with a recognized asset or liability or a highly  | 
|   |       probable forecast transaction or the unrecognized firm       | 
|   |       commitment.                                                  | 
|   |                                                                    | 
+---+--------------------------------------------------------------------+ 
| - |       Fair value hedges when hedging the exposure to changes in    | 
|   |       the fair value of a recognized asset or a liability or an    | 
|   |       unrecognized firm commitment (except for foreign currency    | 
|   |       risk).                                                       | 
|   |                                                                    | 
+---+--------------------------------------------------------------------+ 
 
 
At the inception of a hedge relationship, the Group formally designates and 
documents the hedge relationship to which the Group wishes to apply hedge 
accounting and risk management objective and strategy for undertaking the hedge. 
The documentation includes identification of the hedging instruments, the hedge 
item or transaction, the nature of the risk being hedged and how the entity will 
assess the hedging instrument's effectiveness in offsetting the exposure to 
changes in the hedge item's fair value or cash flow attributable to the hedge 
risk. Such hedges are expected to be highly effective in achieving offsetting 
changes in fair value or cash flows and are assessed on an ongoing basis to 
determine that they actually have been highly effective throughout the financial 
reporting periods for which they were designated. 
 
 
Hedges which meet the strict criteria for hedge accounting are accounted for as 
follows: 
 
 
Cash flow hedges 
 
 
The effective portion of the gain or loss on the hedging instrument is 
recognized directly in equity, while any ineffective portion is recognized 
immediately in the income statement. 
 
 
Amounts taken to equity are transferred to the income statement when the hedged 
transaction affects profit or loss, such as when the hedged financial income or 
financial expense is recognized or when a forecast sale occurs. Where the hedged 
item is the cost of non-financial asset or non-financial liability, the amounts 
taken to equity are transferred to the initial carrying amount of the 
non-financial asset or liability. 
 
 
If the forecast transaction or Group commitment is no longer expected to occur, 
amounts previously recognized in equity are transferred to the income statement. 
If the hedging instruments expires or is sold, terminated or exercised without 
replacement or rollover, or if its designation as a hedge is revoked, amounts 
previously recognized in equity remain in equity until the forecast transaction 
or firm commitments occurs. 
The Group uses forward exchange contracts and put/call options as hedges for its 
exposure for foreign currency risks of forecasted net cash-flows in the 
different currencies the Group is working with. 
 
 
The Company defined a policy with respect to the financial instruments, which is 
implemented as of the end of 2008. For that reason there is no material impact 
of this policy in 2008. 
 
 
+----+----------------------------------------------------------------------------------+ 
| m. | Assets held for lease:                                                           | 
|    | Assets leased to customers under operating leases are classified as assets held  | 
|    | for lease. Assets held for lease are stated at cost less accumulated             | 
|    | depreciation. Depreciation is computed (after deducting estimated residual       | 
|    | value) using the straight-line method over the estimated useful life of the      | 
|    | asset. The annual depreciation rates are 10%-20%.                                | 
|    | As for impairment, see n below.                                                  | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| n. | Impairment of non-current assets:                                                | 
|    | At each reporting date, the Group assesses whether there is any indication that  | 
|    | an asset may be impaired. Where an indicator of impairment exists, the Group     | 
|    | makes a formal estimate of recoverable amount. Where the carrying amount of an   | 
|    | asset exceeds its recoverable amount, the asset is considered impaired and is    | 
|    | written down to its recoverable amount. Recoverable amount is the higher of an   | 
|    | asset's fair value, less costs to sell and its value in use, and is determined   | 
|    | for an individual asset, unless the asset does not generate cash inflows that    | 
|    | are largely independent of those from other assets or groups of assets.          | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| o. | Accounting for operating leases:                                                 | 
|    | Operating lease - leases of assets under which substantially all risks and       | 
|    | rewards of ownership are effectively retained by the lessor                      | 
|    | The Group as lessee - lease payments under an operating lease are recognized as  | 
|    | an expense on a straight-line basis over the lease term.                         | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| p. | Taxes:                                                                           | 
|    | Current income tax                                                               | 
|    | Current income tax assets and liabilities for the current and prior periods are  | 
|    | measured at the amount expected to be recovered from or paid to the taxation     | 
|    | authorities. The tax rates and tax laws used to compute the amount are those     | 
|    | that are enacted or substantively enacted by the balance sheet date.             | 
|    | Current income tax relating to items recognized directly in equity is recognized | 
|    | in equity and not in the income statement.                                       | 
|    | Deferred income tax                                                              | 
|    | Deferred income tax is provided using the liability method on temporary          | 
|    | differences at the balance sheet date between the tax bases of assets and        | 
|    | liabilities and their carrying amounts for financial reporting purposes.         | 
|    | The carrying amount of deferred income tax assets is reviewed at each balance    | 
|    | sheet date and reduced to the extent that it is no longer probable that          | 
|    | sufficient taxable profit will be available to allow all or part of the deferred | 
|    | income tax asset to be utilized. Unrecognized deferred income tax assets are     | 
|    | reassessed at each balance sheet date and are recognized to the extent that it   | 
|    | has become probable that future taxable profit will allow the deferred tax asset | 
|    | to be recovered.                                                                 | 
|    | Deferred income tax assets and deferred income tax liabilities are offset, if a  | 
|    | legally enforceable right exists to set off current tax assets against current   | 
|    | income tax liabilities and the deferred income taxes relate to the same taxable  | 
|    | entity and the same taxation authority.                                          | 
|    | Taxes that would apply in the event of the realization of investments in         | 
|    | subsidiaries have not been taken into account in computing the deferred taxes,   | 
|    | as it is the Company's intention to hold these investments. Similarly, taxes     | 
|    | that would apply in the event of the distribution of earnings by subsidiaries as | 
|    | dividends have not been taken into account in computing deferred taxes, when the | 
|    | distribution of a dividend does not involve an additional tax liability or when  | 
|    | the Company is able to control the distribution of dividends that will cause an  | 
|    | additional tax liability.                                                        | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| q. | Severance pay:                                                                   | 
|    | The Group liability for severance pay is calculated pursuant to the law in each  | 
|    | subsidiary's country.  The Group's liability is covered by monthly deposits to   | 
|    | severance pay funds, insurance policies and by an accrual on the balance sheet.  | 
|    | Deposits with severance pay funds and insurance policies are not under the       | 
|    | control or administration of the Group, and accordingly, neither those amounts   | 
|    | nor the corresponding liability are reflected in the consolidated financial      | 
|    | statements.                                                                      | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| r. | Revenue recognition:                                                             | 
|    | Revenue is recognized to the extent that it is probable that the economic        | 
|    | benefits will flow to the Group and the revenue can be reliably measured. The    | 
|    | following specific recognition criteria must also be met before revenue is       | 
|    | recognized:                                                                      | 
|    | Sale of goods                                                                    | 
|    | Revenues from sales are recognized when the significant risks and rewards of     | 
|    | ownership of the goods have passed to the buyer.                                 | 
|    | Finance leases                                                                   | 
|    | Revenues from finance leases where the Group transfers substantially all the     | 
|    | risks and rewards incidental to legal ownership and the Group is the             | 
|    | manufacturer of the goods are accounted for as sales-type leases. The present    | 
|    | value of minimum lease payments computed at a market rate of interest is         | 
|    | recorded as revenues. Unearned financing income is recognized over the term of   | 
|    | the lease under the effective interest method.                                   | 
|    | Rental income                                                                    | 
|    | Revenues from operating leases in which a significant portion of the risks and   | 
|    | rewards of ownership are retained by the lessor are recognized over the term of  | 
|    | the lease agreement or at the time that services are rendered.                   | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| s. | Borrowing costs:                                                                 | 
|    | Borrowing costs are recognized as an expense when incurred.                      | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| t. | Share-based payment transactions:                                                | 
|    | In accordance with IFRS 2, "Share-based Payment", an expense is recognized where | 
|    | the Company buys goods or services in exchange for shares or rights over shares  | 
|    | ("equity-settled transactions"), or in exchange for other assets equivalent in   | 
|    | value to a given number of shares of rights over shares ("cash-settled           | 
|    | transactions").                                                                  | 
|    | The cost of equity-settled transactions is measured by reference to the fair     | 
|    | value at the date at which they were granted. The fair value is determined by    | 
|    | using an option-pricing model.                                                   | 
|    | The cost of equity-settled transactions is recognized, together with a           | 
|    | corresponding increase in equity, over the period in which the performance       | 
|    | conditions are fulfilled, ending on the date the options vest.                   | 
|    | Pursuant to the transitional of IFRS 2, the Company applied IFRS 2 to shares and | 
|    | share options that were granted after November 7, 2002, and that had not yet     | 
|    | vested at January 1, 2005.                                                       | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| u. | Research and development:                                                        | 
|    | Research costs are expenses as incurred. Development costs are capitalized if it | 
|    | is probable that the expected future economic benefits that are attributable to  | 
|    | the asset will flow to entity; and the cost of the asset can be measured         | 
|    | reliably.                                                                        | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| v. | Derecognizing of financial assets and liabilities:                               | 
|    | A financial asset is derecognized where the rights to receive cash flows from    | 
|    | the asset have expired. A financial liability is derecognized when the           | 
|    | obligation under the liability is discharged or cancelled or expires.            | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| w. | Basic and diluted earnings per share                                             | 
|    | Basic earnings per share are computed using the weighted average number of       | 
|    | Ordinary shares outstanding during the period. Diluted earnings per share are    | 
|    | computed based on the weighted average number of Ordinary shares outstanding     | 
|    | during each period, adjusted for the effects of dilutive options, outstanding    | 
|    | during the period.                                                               | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
 
 
NOTE 3:-    CASH AND CASH EQUIVALENTS 
 
 
+----------------------------------------------------+-+-----------+--+-----------+ 
|                                                    | |        December 31,      | 
+----------------------------------------------------+-+--------------------------+ 
|                                                    | |   2008    |  |   2007    | 
+----------------------------------------------------+-+-----------+--+-----------+ 
|                                                    | |           |  |           | 
+----------------------------------------------------+-+-----------+--+-----------+ 
|            Cash at banks and in hand               | |     1,099 |  |       807 | 
+----------------------------------------------------+-+-----------+--+-----------+ 
 
 
The fair value of cash is EUR1,099 (2007: EUR807). 
 
 
NOTE 4:- TRADE RECEIVABLES 
 
 
Trade receivables are non-interest bearing and are generally 30-90 days terms. 
 
 
As at 31 December, the aging analysis of trade receivables is as follows: 
 
 
+--------------+----------+----------+-----------+-----------+----------+--------+ 
|              |          |              Past due but not impaired               | 
+--------------+----------+------------------------------------------------------+ 
| December 31  | Neither  |<30 days  |  30-60    |  60-90    |>90 days  | Total  | 
|              |past due  |          |   days    |   days    |          |        | 
|              |   nor    |          |           |           |          |        | 
|              |impaired  |          |           |           |          |        | 
+--------------+----------+----------+-----------+-----------+----------+--------+ 
| 2008         |    5,779 |    3,292 |       488 |       140 |      139 |  9,838 | 
+--------------+----------+----------+-----------+-----------+----------+--------+ 
| 2007         |    8,708 |    4,294 |       617 |       140 |      115 | 13,874 | 
+--------------+----------+----------+-----------+-----------+----------+--------+ 
 
 
No bad debt provision has been recorded. The book value is the maximum 
exposure to credit risk. 
 
 
Further reference is made to note 21c. 
 
 
NOTE 5:- OTHER ACCOUNTS RECEIVABLE AND PREPAYMENTS 
 
 
+--------------------------------------------------+-+------------+--+----------+ 
|                                                  | |        December 31,      | 
+--------------------------------------------------+-+--------------------------+ 
|                                                  | |    2008    |  |  2007    | 
+--------------------------------------------------+-+------------+--+----------+ 
|                                                  | |            |  |          | 
+--------------------------------------------------+-+------------+--+----------+ 
|    Government authorities                        | |        114 |  |    1,076 | 
+--------------------------------------------------+-+------------+--+----------+ 
|    Related party *)                              | |          - |  |        6 | 
+--------------------------------------------------+-+------------+--+----------+ 
|    Employees                                     | |         30 |  |       79 | 
+--------------------------------------------------+-+------------+--+----------+ 
|    Prepaid expenses                              | |        325 |  |      297 | 
+--------------------------------------------------+-+------------+--+----------+ 
|    Income receivable                             | |        226 |  |      619 | 
+--------------------------------------------------+-+------------+--+----------+ 
|    Current maturities of finance lease           | |      1,950 |  |    2,238 | 
|    receivable **)                                | |            |  |          | 
+--------------------------------------------------+-+------------+--+----------+ 
|    Others                                        | |        238 |  |      341 | 
+--------------------------------------------------+-+------------+--+----------+ 
|                                                  | |            |  |          | 
+--------------------------------------------------+-+------------+--+----------+ 
|                                                  | |      2,883 |  |    4,656 | 
+--------------------------------------------------+-+------------+--+----------+ 
 
 
*)  Non-interest bearing, current account. 
**) See Note 10 
 
 
NOTE 6:- INVENTORIES 
 
 
+------------------------------------------------+-+------------+--+------------+ 
|                                                | |         December 31,       | 
+------------------------------------------------+-+----------------------------+ 
|                                                | |    2008    |  |    2007    | 
+------------------------------------------------+-+------------+--+------------+ 
|                                                | |            |  |            | 
+------------------------------------------------+-+------------+--+------------+ 
|    Raw materials                               | |        433 |  |      1,021 | 
+------------------------------------------------+-+------------+--+------------+ 
|    Work in progress                            | |        116 |  |        566 | 
+------------------------------------------------+-+------------+--+------------+ 
|    Finished goods                              | |      1,071 |  |      1,486 | 
+------------------------------------------------+-+------------+--+------------+ 
|                                                | |            |  |            | 
+------------------------------------------------+-+------------+--+------------+ 
|            Total inventories at the lower of   | |      1,620 |  |      3,073 | 
|            cost and net realizable value       | |            |  |            | 
+------------------------------------------------+-+------------+--+------------+ 
 
 
NOTE 7:- PLANT AND EQUIPMENT 
 
 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |  Machines  | |  Moulds   | |Furniture  | |Computers  | |  Building  |      |  Motor   |      |  Total    | 
|                               |  |            | |           | |    and    | |           | |            |      |vehicles  |      |           | 
|                               |  |            | |           | | fittings  | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|    Cost:                      |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|    Balance at                 |  |      2,589 | |     7,951 | |       199 | |       828 | |          - |      |       84 |      |    11,651 | 
|    January 1, 2007            |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                     Additions |  |    *)4,399 | |     2,754 | |     1,149 | |       464 | |    *)2,289 |    ` |       95 |    1 |    11,150 | 
|                     during    |  |            | |           | |           | |           | |            |      |          |      |           | 
|                     the year  |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Disposals          |  |            | |           | |           | |      (31) | |            |      |          |      |      (31) | 
|            during             |  |            | |           | |           | |           | |            |      |          |      |           | 
|            the year           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Balance            |  |      6,988 | |    10,705 | |     1,348 | |     1,261 | |      2,289 |      |      179 |      |    22,770 | 
|            at                 |  |            | |           | |           | |           | |            |      |          |      |           | 
|            December           |  |            | |           | |           | |           | |            |      |          |      |           | 
|            31, 2007           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|    Accumulated                |  |            | |           | |           | |           | |            |      |          |      |           | 
|    depreciation:              |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|    Balance at                 |  |        406 | |     3,980 | |        65 | |       570 | |          - |      |        9 |      |     5,030 | 
|    January 1, 2007            |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                     Additions |  |     **)427 | |       897 | |       133 | |       134 | |      **)50 |      |       23 |      |     1,664 | 
|                     during    |  |            | |           | |           | |           | |            |      |          |      |           | 
|                     the year  |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Disposals          |  |            | |           | |           | |      (24) | |            |      |          |      |      (24) | 
|            during             |  |            | |           | |           | |           | |            |      |          |      |           | 
|            the year           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Balance            |  |        833 | |     4,877 | |       198 | |       680 | |         50 |      |       32 |      |     6,670 | 
|            at                 |  |            | |           | |           | |           | |            |      |          |      |           | 
|            December           |  |            | |           | |           | |           | |            |      |          |      |           | 
|            31, 2007           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Depreciated        |  |      6,155 | |     5,828 | |     1,150 | |       581 | |      2,239 |      |      147 |      |    16,100 | 
|            cost at            |  |            | |           | |           | |           | |            |      |          |      |           | 
|            December           |  |            | |           | |           | |           | |            |      |          |      |           | 
|            31, 2007           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|    Cost:                      |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|    Balance at                 |  |      6,988 | |    10,705 | |     1,348 | |     1,261 | |      2,289 |      |      179 |      |    22,770 | 
|    January 1, 2008            |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                     Additions |  |        644 | |     2,391 | |       302 | |       310 | |         23 |      |       19 |      |     3,689 | 
|                     during    |  |            | |           | |           | |           | |            |      |          |      |           | 
|                     the year  |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Disposals          |  |       (26) | |           | |       (1) | |      (15) | |            |      |     (13) |      |      (55) | 
|            during             |  |            | |           | |           | |           | |            |      |          |      |           | 
|            the year           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Foreign            |  |         98 | |           | |         5 | |      (10) | |        184 |      |     (19) |      |       258 | 
|            currency           |  |            | |           | |           | |           | |            |      |          |      |           | 
|            translation        |  |            | |           | |           | |           | |            |      |          |      |           | 
|            adjustments        |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Balance            |  |      7,704 | |    13,096 | |     1,654 | |     1,546 | |      2,496 |      |      166 |      |    26,662 | 
|            at                 |  |            | |           | |           | |           | |            |      |          |      |           | 
|            December           |  |            | |           | |           | |           | |            |      |          |      |           | 
|            31, 2008           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|    Accumulated                |  |            | |           | |           | |           | |            |      |          |      |           | 
|    depreciation:              |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|    Balance at                 |  |        833 | |     4,877 | |       198 | |       680 | |         50 |      |       32 |      |     6,670 | 
|    January 1, 2008            |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                     Additions |  |        662 | |     1,237 | |       222 | |       225 | |        115 |      |       38 |      |     2,499 | 
|                     during    |  |            | |           | |           | |           | |            |      |          |      |           | 
|                     the year  |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Disposals          |  |        (3) | |           | |           | |      (12) | |            |      |      (7) |      |      (22) | 
|            during             |  |            | |           | |           | |           | |            |      |          |      |           | 
|            the year           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Foreign            |  |          8 | |           | |       (4) | |      (18) | |          4 |      |      (3) |      |      (13) | 
|            currency           |  |            | |           | |           | |           | |            |      |          |      |           | 
|            translation        |  |            | |           | |           | |           | |            |      |          |      |           | 
|            adjustments        |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Balance            |  |      1,500 | |     6,114 | |       416 | |       875 | |        169 |      |       60 |      |     9,134 | 
|            at                 |  |            | |           | |           | |           | |            |      |          |      |           | 
|            December           |  |            | |           | |           | |           | |            |      |          |      |           | 
|            31, 2008           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|                               |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
|            Depreciated        |  |      6,204 | |     6,982 | |     1,238 | |       671 | |      2,327 |      |      106 |      |    17,528 | 
|            cost at            |  |            | |           | |           | |           | |            |      |          |      |           | 
|            December           |  |            | |           | |           | |           | |            |      |          |      |           | 
|            31, 2008           |  |            | |           | |           | |           | |            |      |          |      |           | 
+-------------------------------+--+------------+-+-----------+-+-----------+-+-----------+-+------------+------+----------+------+-----------+ 
 
 
EUR 2,653 of the capitalized machines relates to finance leases (2007: EUR 2,653) 
*) Reclassified additions of Machines to Building at the amount EUR307. 
 **) Reclassified depreciation of Machines to Building depreciation at the 
amount EUR12. 
 
 
NOTE 8:- ASSETS HELD FOR LEASE 
 
 
+----+----------------------------------------------------------------------------------+ 
| a. | The Group rents its products (pallets and bins) to its customers under operating | 
|    | leases with an average term of 3-5 years and which in some cases, includes an    | 
|    | automatic renewal policy. The contracts are typically subject to termination at  | 
|    | will by the customer with 3-12 months prior notice.                              | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
| b. | Equipment leased to customers under operating leases:                            | 
|    |                                                                                  | 
+----+----------------------------------------------------------------------------------+ 
 
 
+------------------------------------------------------+--+--------------+ 
|    Cost :                                            |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Balance at January 1, 2007                        |  |       32,381 | 
+------------------------------------------------------+--+--------------+ 
|                     Additions during the year        |  |       16,126 | 
+------------------------------------------------------+--+--------------+ 
|            Disposals during the year                 |  |      (1,553) | 
+------------------------------------------------------+--+--------------+ 
|                     Foreign currency translation     |  |        (178) | 
|                     adjustments                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Balance at December 31, 2007                      |  |       46,776 | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Accumulated depreciation:                         |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Balance at January 1, 2007                        |  |        9,575 | 
+------------------------------------------------------+--+--------------+ 
|                     Additions during the year        |  |        3,883 | 
+------------------------------------------------------+--+--------------+ 
|            Disposals during the year                 |  |      (1,021) | 
+------------------------------------------------------+--+--------------+ 
|                     Foreign currency translation     |  |         (37) | 
|                     adjustments                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Balance at December 31, 2007                      |  |       12,400 | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|            Depreciated cost at December 31, 2007     |  |       34,376 | 
+------------------------------------------------------+--+--------------+ 
|            Raw materials and packaging used for      |  |          671 | 
|            assets for lease                          |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|            Total assets held for lease               |  |       35,047 | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Cost:                                             |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Balance at January 1, 2008                        |  |       46,776 | 
+------------------------------------------------------+--+--------------+ 
|                     Additions during the year        |  |        4,235 | 
+------------------------------------------------------+--+--------------+ 
|            Disposals during the year                 |  |      (1,379) | 
+------------------------------------------------------+--+--------------+ 
|                     Foreign currency translation     |  |        (691) | 
|                     adjustments                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Balance at December 31, 2008                      |  |       48,941 | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Accumulated depreciation:                         |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Balance at January 1, 2008                        |  |       12,400 | 
+------------------------------------------------------+--+--------------+ 
|                     Additions during the year        |  |        4,709 | 
+------------------------------------------------------+--+--------------+ 
|            Disposals during the year                 |  |        (701) | 
+------------------------------------------------------+--+--------------+ 
|                     Foreign currency translation     |  |        (172) | 
|                     adjustments                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|    Balance at December 31, 2008                      |  |       16,236 | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|            Depreciated cost at December 31, 2008     |  |       32,705 | 
+------------------------------------------------------+--+--------------+ 
|            Raw materials and packaging used for      |  |        1,363 | 
|            assets for lease                          |  |              | 
+------------------------------------------------------+--+--------------+ 
|                                                      |  |              | 
+------------------------------------------------------+--+--------------+ 
|            Total assets held for lease               |  |       34,068 | 
+------------------------------------------------------+--+--------------+ 
 
 
 
 
NOTE 9:- LONG TERM PREPAID EXPENSES OF OPERATIONAL LEASE 
Real estate rights held by Group in an operating lease from the Israel Lands 
Administration are classified as accrued expenses of operational lease. 
Amortization is calculated on a straight-line basis over the rest of the lease 
period (35 years). 
 
 
Please also see Note 18b. 
 
 
NOTE 10: FINANCE LEASE RECEIVABLE 
 
 
+------+---------------------------------------------------------------------------------+ 
| a.   | The Group has leased equipment (bins) to customers under a sales-type, finance  | 
|      | lease with an average term of between three to six years at a weighted average  | 
|      | annual interest rate of 5.5%.                                                   | 
|      |                                                                                 | 
+------+---------------------------------------------------------------------------------+ 
 
 
 
 
+---------------+-------------------------------------------+-+-------------+--+-------------+ 
|               |                                           | |          December 31,        | 
+---------------+-------------------------------------------+-+------------------------------+ 
|               |                                           | |     2008    |  |     2007    | 
+---------------+-------------------------------------------+-+-------------+--+-------------+ 
|               |                                           | |             |  |             | 
+---------------+-------------------------------------------+-+-------------+--+-------------+ 
|            b. |               Receivables from finance    | |       4,500 |  |       6,501 | 
|               |               leases                      | |             |  |             | 
+---------------+-------------------------------------------+-+-------------+--+-------------+ 
|               |               Less - current maturities   | |     (1,950) |  |     (2,238) | 
|               |               (included in other accounts | |             |  |             | 
|               |               receivable)                 | |             |  |             | 
+---------------+-------------------------------------------+-+-------------+--+-------------+ 
|               |                                           | |             |  |             | 
+---------------+-------------------------------------------+-+-------------+--+-------------+ 
|               |                                           | |       2,550 |  |       4,263 | 
+---------------+-------------------------------------------+-+-------------+--+-------------+ 
 
 
c. Future lease payments receivable are as follows: 
 
 
+------------------------------------------+--+-------------+--+-------------+ 
|                                          |  |             |  |             | 
+------------------------------------------+--+-------------+--+-------------+ 
|            First year                    |  |       2,145 |  |       2,541 | 
+------------------------------------------+--+-------------+--+-------------+ 
|            Second year                   |  |       1,605 |  |       2,080 | 
+------------------------------------------+--+-------------+--+-------------+ 
|            Third year                    |  |         730 |  |       1,540 | 
+------------------------------------------+--+-------------+--+-------------+ 
|            Fourth year                   |  |         320 |  |         669 | 
+------------------------------------------+--+-------------+--+-------------+ 
|            Fifth year                    |  |          24 |  |         289 | 
+------------------------------------------+--+-------------+--+-------------+ 
|            Unearned finance income       |  |       (324) |  |       (618) | 
+------------------------------------------+--+-------------+--+-------------+ 
|                                          |  |             |  |             | 
+------------------------------------------+--+-------------+--+-------------+ 
|                                          |  |       4,500 |  |       6,501 | 
+------------------------------------------+--+-------------+--+-------------+ 
NOTE 11:- TAXES ON INCOME 
 
 
a. Taxes on income included in the statements of income: 
 
 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |     Year ended December  | 
|                                               | |             31,          | 
+-----------------------------------------------+-+--------------------------+ 
|                                               | |   2008    |  |  2007     | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |           |  |           | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|    Current taxes                              | |       462 |  |       487 | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|    Deferred taxes                             | |     (324) |  |     (444) | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|    Current taxes in respect of previous years | |      (31) |  |      (37) | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |           |  |           | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |       107 |  |         6 | 
+-----------------------------------------------+-+-----------+--+-----------+ 
 
 
b. Deferred taxes: 
 
 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | | Balance  | |  Amounts  | | Balance  | |  Amounts  | |  Amounts    | | Balance  | 
|                         | |    at    | | recorded  | |    at    | | recorded  | |  recorded   | |    at    | 
|                         | | January  | |    in     | |December  | |    in     | |     in      | |December  | 
|                         | | 1, 2007  | |statement  | |31, 2007  | |statement  | |  Capital    | |31, 2008  | 
|                         | |          | |of income  | |          | |of income  | |  reserve    | |          | 
|                         | |          | |           | |          | |           | |    from     | |          | 
|                         | |          | |           | |          | |           | |translation  | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|            Plant        | |     (80) | |      (90) | |    (170) | |       611 | |          37 | |      478 | 
|            and          | |          | |           | |          | |           | |             | |          | 
|            equipment    | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|            Employee     | |       11 | |         5 | |       16 | |         5 | |           1 | |       22 | 
|            benefit      | |          | |           | |          | |           | |             | |          | 
|            liabilities  | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|            Allowance    | |        - | |      (13) | |     (13) | |        13 | |           - | |        - | 
|            for          | |          | |           | |          | |           | |             | |          | 
|            doubtful     | |          | |           | |          | |           | |             | |          | 
|            accounts     | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|            Carry        | |      169 | |       542 | |      711 | |       148 | |          40 | |      899 | 
|            forward      | |          | |           | |          | |           | |             | |          | 
|            tax          | |          | |           | |          | |           | |             | |          | 
|            losses       | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|            Share        | |        - | |         - | |        - | |        28 | |           - | |       28 | 
|            based        | |          | |           | |          | |           | |             | |          | 
|            payments     | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|            Timing       | |        - | |         - | |        - | |        22 | |           - | |       22 | 
|            differences  | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|            Intellectual | |        - | |         - | |        - | |       222 | |           - | |      222 | 
|            property     | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|            IPO          | |      807 | |         - | |      807 | |     (725) | |           - | |       82 | 
|            expenses     | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|                         | |          | |           | |          | |           | |             | |          | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
|            Total        | |      907 | |       444 | |    1,351 | |       324 | |          78 | |    1,753 | 
+-------------------------+-+----------+-+-----------+-+----------+-+-----------+-+-------------+-+----------+ 
 
 
Presented in the balance sheet, as follows: 
 
 
+-----------------------------------------------+-+----------+--+----------+ 
|                                               | |       December 31,     | 
+-----------------------------------------------+-+------------------------+ 
|                                               | |  2008    |  |  2007    | 
+-----------------------------------------------+-+----------+--+----------+ 
|                                               | |          |  |          | 
+-----------------------------------------------+-+----------+--+----------+ 
|    Non-current assets                         | |    1,991 |  |    1,518 | 
+-----------------------------------------------+-+----------+--+----------+ 
|    Long-term liabilities                      | |    (238) |  |    (167) | 
+-----------------------------------------------+-+----------+--+----------+ 
|                                               | |          |  |          | 
+-----------------------------------------------+-+----------+--+----------+ 
|                                               | |    1,753 |  |    1,351 | 
+-----------------------------------------------+-+----------+--+----------+ 
 
 
c. A reconciliation of theoretical tax expense assuming all income is taxed at 
the statutory rate applicable to the income of companies in the Netherlands, and 
the actual tax expense is as follows: 
 
 
+-----------------------------------------------+-+------------+--+----------+ 
|                                               | |     Year ended December  | 
|                                               | |             31,          | 
+-----------------------------------------------+-+--------------------------+ 
|                                               | |    2008    |  |  2007    | 
+-----------------------------------------------+-+------------+--+----------+ 
|                                               | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Profit (loss) before taxes, as     | |    (1,746) |  |    3,542 | 
|            reported in the consolidated       | |            |  |          | 
|            statements of income               | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|                                               | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Statutory tax rate in the          | |      25.5% |  |    25.5% | 
|            Netherlands                        | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|                                               | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Theoretical tax expense (income)   | |      (445) |  |      903 | 
+-----------------------------------------------+-+------------+--+----------+ 
|                                               | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Increase (decrease) in taxes       | |            |  |          | 
|            resulting from:                    | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|                                               | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Non-deductible expenses            | |         40 |  |       91 | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Exempt income                      | |      (723) |  |        - | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Tax losses not valued              | |         52 |  |      119 | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Adjustments in respect of currency | |        471 |  |    (101) | 
|            difference for statutory tax       | |            |  |          | 
|            purposes (1)                       | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Difference in statutory tax rates  | |        743 |  |    (941) | 
|            in various jurisdiction and other  | |            |  |          | 
|            differences, net                   | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|            Taxes in respect of prior years    | |       (31) |  |     (65) | 
|            and others                         | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|                                               | |            |  |          | 
+-----------------------------------------------+-+------------+--+----------+ 
|                                               | |        107 |  |        6 | 
+-----------------------------------------------+-+------------+--+----------+ 
 
 
(1) Polymer Logistics (Israel) calculates its taxable income in NIS. 
 
 
d. The Group companies are subject to tax laws applicable in the countries which 
they operate. The principal tax rates applicable to the companies whose place of 
incorporation is outside the Netherlands are: 
 
 
A company incorporated in Israel - See e below. 
 
 
A company incorporated in England - tax at the rate of 28%. (2007: 30%) 
 
 
A company incorporated in Italy - tax at the rate of 33%. 
 
 
A company incorporated in Spain - tax at the rate of 25%-30%. 
 
 
A company incorporated in the USA - tax at the rate of 40%. 
 
 
e. The tax laws applicable to the company incorporated in Israel ("PL Israel"): 
 
 
Income Tax (Inflationary Adjustments) Law, 1985: 
 
 
According to the above law, the results for tax purposes are measured based on 
the changes in the Israeli CPI. PL Israel is taxed under this law. 
 
 
The Law for the Encouragement of Industry (Taxation), 1969: 
 
 
PL Israel has "industrial company" status as defined by this law. According to 
this status and by virtue of regulations published, PL Israel claims a deduction 
for accelerated depreciation on equipment used in industrial activity, as 
determined in the regulations effective under the Inflationary Law. 
 
 
The Law for the Encouragement of Capital Investments, 1959: 
 
 
According to the Law, PL Israel is entitled to tax benefits by force of the 
"Approved Enterprise" status granted to its enterprises, defined by this law. 
The principal benefits are: 
 
 
1. Reduced tax rates: 
 
 
PL Israel has three approved programs in two different tracks (grant track and 
alternative track). Under the grant track, PL Israel has one program and will be 
entitled to a tax rate of 25% for a period of 10 years ending in 2008 in respect 
of the income that will be generated from the approved investments. Under the 
alternative track, PL Israel has two expansion programs and will be entitled to 
a tax exemption for a period of 10 years ending in 2011 and 2014 in respect of 
the income derived from the expansion of the enterprise. 
 
 
If a dividend is distributed out of tax exempt profits, as above, PL Israel will 
then become liable for tax at the rate applicable to its profits from the 
"Approved Enterprise" in the year in which the income was accrued, had it not 
chosen the alternative track of benefits (tax at the rate of 25%). PL Israel's 
policy is not to distribute dividends out of these profits. 
 
 
2. Conditions for the entitlement to the benefits: 
 
 
The above benefits are conditional upon the fulfillment of the conditions 
stipulated by the Law, regulations published thereunder and the letters of 
approval for the specific investments in the approved enterprises. Noncompliance 
with these conditions is liable to result in the cancellation of the benefits, 
in whole or in part, and the refund of the amounts of the benefits including 
interest. In management's estimation, PL Israel is complying with the 
aforementioned conditions. 
 
 
NOTE 12:- BANK BORROWINGS AND CURRENT MATURITIES OF LONG-TERM LOANS 
 
 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|                                    | |    Weighted    | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|                                    | |    average     | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|                                    | |  interest (*)  | |        December 31,      | 
+------------------------------------+-+----------------+-+--------------------------+ 
|                                    | |       %        | |   2008    |  |   2007    | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|                                    | |                | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|    Bank overdrafts                 | |                | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|            In NIS                  | |  5.75-6.25     | |       723 |  |       482 | 
|                                    | |  (6.75-7.25)   | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|            In British Pounds       | |  4.5 (8.25)    | |         4 |  |     1,049 | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|                                    | |                | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|    Loans from banks:               | |                | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|            In NIS                  | |          5-5.5 | |     5,039 |  |     7,722 | 
|                                    | |    (6.25-6.35) | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|                                    | |                | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|                                    | |                | |     5,766 |  |     9,253 | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|            Current maturities of   | |                | |     4,035 |  |     4,638 | 
|            long-term loans         | |                | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|                                    | |                | |           |  |           | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
|                                    | |                | |     9,801 |  |    13,891 | 
+------------------------------------+-+----------------+-+-----------+--+-----------+ 
(*) Floating rate at December 31, 2008 (December 31, 2007) 
 
 
Bank overdrafts 
The bank overdraft facilities of the UK and the Israeli subsidiaries are secured 
by a floating charge over their assets. The overdraft facilities are renewed 
annually. Interest is calculated on the utilized facility only. 
 
 
Bank loans 
 
 
Those loans are secured by a floating charge over certain of the Group's assets. 
Part of those loans was replaced by long term loans in January-February 2009. 
The loans are renewed automatically unless the Company would like to change the 
loans terms. 
 
 
NOTE 13:- TRADE PAYABLES 
 
 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |        December 31,      | 
+---------------------------------------------------+-+--------------------------+ 
|                                                   | |   2008    |  |   2007    | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |           |  |           | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|    Open accounts                                  | |     4,819 |  |    12,235 | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|    Checks payable                                 | |       315 |  |       839 | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |           |  |           | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |     5,134 |  |    13,074 | 
+---------------------------------------------------+-+-----------+--+-----------+ 
 
 
Trade payables are non-interest bearing and are generally settled on 30-90 day 
terms. The aforementioned are the contractual amounts. 
 
 
NOTE 14:- OTHER ACCOUNTS PAYABLE 
 
 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |        December 31,      | 
+---------------------------------------------------+-+--------------------------+ 
|                                                   | |   2008    |  |   2007    | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |           |  |           | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|            Employees and payroll accruals         | |       672 |  |       544 | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|    Accrued expenses                               | |     2,435 |  |     1,240 | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|    Government authorities                         | |       218 |  |         - | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|    Other                                          | |         5 |  |       *)5 | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |           |  |           | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |     3,330 |  |     1,789 | 
+---------------------------------------------------+-+-----------+--+-----------+ 
 
 
*) Reclassified accrued severance pay at the amount of EUR66 as at 31 December 
2007 from Other accounts payable to Other long-term liabilities. Other accounts 
payable are non-interest bearing. Payments to employees and payroll accruals are 
generally settled within 30 days. Accrued expenses are generally settled between 
30-180 days and payments to government authorities are generally settled within 
120 days. 
 
 
NOTE 15:- DEPOSITS FROM CUSTOMERS 
 
 
Deposits from customers against equipment are non-interest bearing and are 
repaid on return of the equipment. Repayment is settled at the time the 
equipment is returned by customers to the Company. The aforementioned is 
non-interest bearing. 
 
 
NOTE 16:- LONG-TERM LOANS 
 
 
a. Composition: 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|                                | |      Interest        | |         December 31,       | 
|                                | |        Rate          | |                            | 
+--------------------------------+-+----------------------+-+----------------------------+ 
|                                | |          %           | |    2008    |  |    2007    | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|                                | |                      | |            |  |            | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|    Euro - Suppliers            | |        5.75-9.5      | |      2,309 |  |      2,653 | 
|                                | |                      | |            |  |            | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|    Euro - Bank                 | |          Euro        | |      5,778 |  |      2,417 | 
|                                | |         LIBOR +      | |            |  |            | 
|                                | |         2%-2.6%      | |            |  |            | 
|                                | |           *)         | |            |  |            | 
|                                | |                      | |            |  |            | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|    British Pound - Bank        | |       LIBOR+2.5      | |      1,574 |  |     5,085  | 
|                                | |           **)        | |            |  |            | 
|                                | |                      | |            |  |            | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|    Israeli Shekel - Bank       | |   Prime+0.7%-1%***)  | |      3,545 |  |          - | 
|                                | |                      | |            |  |            | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|    US Dollar - Bank            | |         LIBOR +      | |      1,794 |  |          - | 
|                                | |          2.64        | |            |  |            | 
|                                | |         ****)        | |            |  |            | 
|                                | |                      | |            |  |            | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|                                | |                      | |            |  |            | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|                                | |                      | |     15,000 |  |     10,155 | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|    Less - current maturities   | |                      | |    (4,035) |  |    (4,638) | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|                                | |                      | |            |  |            | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
|                                | |                      | |     10,965 |  |      5,517 | 
+--------------------------------+-+----------------------+-+------------+--+------------+ 
 
 
*) The Euro LIBOR rate as of December 31, 2008 - 2.6%-2.9% (2007:4.28%). LIBOR 
is repriced on a monthly and quarterly basis. 
**) The British Pound LIBOR rate as of December 31, 2008 - 2.17% (2007:5.95%). 
LIBOR is repriced on a monthly basis. 
***) The Israeli Shekel Prime rate as of December 31, 2008 - 4% (2007:5.75%). 
LIBOR is repriced on a quarterly basis. 
****) The US Dollar LIBOR rate as of December 31, 2008 - 1.4%. LIBOR is repriced 
on a quarterly basis. 
 
 
The aforementioned long-term loans represent the contractual amounts with 
suppliers and banks and do not include amortized costs. 
 
 
b. As for charges, see Note 18b. 
 
 
c. As for covenants, see Note 18c. 
 
 
d. The long-term loans are repayable in the years subsequent to December 31, 
2008: 
+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
|            |       |           |  Fixed    |             |  Floating   |         |  Total  |           | Interest  | 
|            |       |           |   Rate    |             |    Rate     |         |         |           |           | 
+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
|            |       |           |Suppliers  |             |    Banks    |         |         |           |           | 
+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
| Year 1     | 2008  |           |       635 |             |       3,401 |         |   4,015 |           |       667 | 
+            +-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
|            | 2007       |       |       637 |           |       4,001 |             |   4,638 |         |       589 | 
+------------+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+ 
| Year 2     | 2008  |           |       450 |             |       2,262 |         |   2,691 |           |       523 | 
+            +-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
|            | 2007       |       |       581 |           |       2,493 |             |   3,074 |         |       294 | 
+------------+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+ 
| Year 3     | 2008  |           |       496 |             |       1,370 |         |   1,841 |           |       390 | 
+            +-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
|            | 2007       |       |       393 |           |       1,008 |             |   1,401 |         |       121 | 
+------------+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+ 
| Year 4     | 2008  |           |       303 |             |       2,846 |         |   3,123 |           |       250 | 
+            +-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
|            | 2007       |       |       407 |           |           - |             |     407 |         |        62 | 
+------------+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+ 
| Year 5 &   | 2008  |           |       425 |             |       2,812 |         |   3,167 |           |       102 | 
| after      |       |           |           |             |             |         |         |           |           | 
+            +-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
|            | 2007       |       |       635 |           |           - |             |     635 |         |        58 | 
+------------+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+ 
|            |       |           |           |             |             |         |         |           |           | 
+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
| Total      | 2008  |           |     2,309 |             |      12,691 |         |  14,836 |           |     1,932 | 
+            +-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
|            |            |       |           |           |             |             |         |         |           | 
+            +------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+ 
|            | 2007       |       |     2,653 |           |       7,502 |             |  10,155 |         |     1,124 | 
+------------+-------+-----------+-----------+-------------+-------------+---------+---------+-----------+-----------+ 
 
 
The Company has agreed with its major banks on bank facilities of EUR22m, of which 
EUR20m was utilized as at 31 December 2008. The Company is meeting all its banks' 
covenants. 
 
 
NOTE 17:- OTHER LONG TERM LIABILITIES 
 
 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |        December 31,      | 
+---------------------------------------------------+-+--------------------------+ 
|                                                   | |   2008    |  |   2007    | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |           |  |           | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|            Accrued severance pay                  | |       130 |  |      *)66 | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|    Accrued expenses                               | |        70 |  |         - | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |           |  |           | 
+---------------------------------------------------+-+-----------+--+-----------+ 
|                                                   | |       200 |  |        66 | 
+---------------------------------------------------+-+-----------+--+-----------+ 
 
 
*) Reclassified accrued severance pay at the amount of EUR66 as at 31 December 
2007 from Other accounts payable to Other long-term liabilities. 
 
 
NOTE 18:- COMMITMENTS, CONTINGENT LIABILITIES AND CHARGES 
 
 
a. Commitment: 
 
 
The Group has operating lease agreements for various facilities and motor 
vehicles, which expire on various dates. Future minimum lease payments under 
non-cancelable leases are as follows: 
 
 
+--------------------------------------------+-+------------+-+------------+ 
|                                            | |              December 31, | 
+--------------------------------------------+-+---------------------------+ 
|                                            | |     2008   | |     2007   | 
+--------------------------------------------+-+------------+-+------------+ 
|                                            | |            | |            | 
+--------------------------------------------+-+------------+-+------------+ 
|    First year                              | |      1,110 | |      1,556 | 
+--------------------------------------------+-+------------+-+------------+ 
|    Second year                             | |      1,032 | |      1,475 | 
+--------------------------------------------+-+------------+-+------------+ 
|    Third year                              | |        955 | |      1,306 | 
+--------------------------------------------+-+------------+-+------------+ 
|    Fourth year                             | |        936 | |      1,226 | 
+--------------------------------------------+-+------------+-+------------+ 
|                                            | |            | |            | 
+--------------------------------------------+-+------------+-+------------+ 
|                                            | |      4,033 | |      5,563 | 
+--------------------------------------------+-+------------+-+------------+ 
 
 
Rent expenses, included in cost of rentals, cost of goods sold and general and 
administrative expenses were approximately EUR 1,565 and EUR 921 for the periods 
ended December 31, 2008 and 2007, respectively. 
 
 
b. Charges: 
 
 
As collateral for bank liabilities in the amount of EUR18,457 at December 31, 2008 
(2007: EUR16,756), the UK and the Israeli subsidiaries placed a floating charge 
over their assets. Further an Israeli subsidiary placed a pledge on its Real 
estate rights in an operating lease from the Israel Lands Administration. 
 
 
As security for long-term loans of EUR 839 at December 31, 2008 (2007: EUR1,477) 
from equipment supplier, a fixed charge over the equipment was recorded. The 
equipment value in the financial statements at December 31, 2008 is EUR1,959 
(2007: EUR2,245). 
 
 
c. Covenants in respect of a bank loan are as follows: 
 
 
1. The tangible equity (as defined in the loan agreement) shall equal or exceed 
35% of total consolidated assets basis, but not less than EUR 10,000. 
 
 
2. Consolidated annual EBITDA exceeds the Company's debt service and that the 
Company's long-term debts and obligations or financial debts shall not exceed 
the annual EBITDA of the Company multiplied by four. 
 
 
The Company has also undertaken, save for certain exceptions, not to enter into 
any merger with an unrelated party. In addition, the Company has undertaken, 
save for certain exceptions, not to repay any shareholders' loans and not to 
distribute any dividends. As of December 31, 2008, the Company is in compliance 
with the above covenants. 
 
 
NOTE 19:- SHAREHOLDERS' EQUITY 
 
 
a.    The share capital is composed as follows: 
+--------------------------------------------+-+----------------+--+----------------+ 
|                                            | |         Year ended December        | 
|                                            | |                 31,                | 
+--------------------------------------------+-+------------------------------------+ 
|                                            | |      2008      |  |      2007      | 
+--------------------------------------------+-+----------------+--+----------------+ 
|                                            | |           Number of shares         | 
+--------------------------------------------+-+------------------------------------+ 
|            Share capital is comprised of   | |                |  |                | 
|            Ordinary shares of EUR 0.01 par   | |                |  |                | 
|            value each                      | |                |  |                | 
+--------------------------------------------+-+----------------+--+----------------+ 
|                                            | |                |  |                | 
+--------------------------------------------+-+----------------+--+----------------+ 
|            Authorized - Ordinary shares    | |    117,000,000 |  |    117,000,000 | 
+--------------------------------------------+-+----------------+--+----------------+ 
|                                            | |                |  |                | 
+--------------------------------------------+-+----------------+--+----------------+ 
|            Issued and fully paid -         | |     77,923,303 |  |     77,602,083 | 
|            Ordinary shares                 | |                |  |                | 
+--------------------------------------------+-+----------------+--+----------------+ 
|                                            | |                |  |                | 
+--------------------------------------------+-+----------------+--+----------------+ 
 
 
b. On November 14, 2007 140,000 Ordinary shares were issued pursuant to options 
under the Company's employee stock option plan granted on December 30, 2004 at a 
price of $ 0.193. 
 
 
c. On April 2, 2008, June 6, 2008 and June 19, 2008 total of 221,220 Ordinary 
shares were issued pursuant to options under the Company's employee stock option 
plan granted on September 10, 2007 at a price of EUR0.222. 
 
 
d. On April 2, 2008 100,000 Ordinary shares were issued pursuant to options 
under the Company's employee stock option plan granted on December 30, 2004 at a 
price of US$ 0.193. 
 
 
e. Share option plan: 
 
 
+-----+----------------------------------------------------------------------+ 
| 1.  | On December 30, 2004, the Company authorized in an extraordinary     | 
|     | general meeting a plan for the grant of up to 3,754,395 options to   | 
|     | purchase up to 3,754,395 Ordinary shares (subject to adjustments).   | 
|     | On December 30, 2004, the Company granted to the Company's           | 
|     | executives 3,754,395 options of which 1,323,000 options were granted | 
|     | to the managing director at an exercise price of US$ 0.193 per share | 
|     | and 540,360 options were granted to the Chairman of the Supervisory  | 
|     | Board at an exercise price of EUR 0.222 per share.                     | 
|     | The options expire 10 years from the date of grant. Options to       | 
|     | purchase 2,056,815 shares were fully vested at the date of grant.    | 
|     | The balance of the options granted vest over periods of one to three | 
|     | years.                                                               | 
|     | Unless otherwise determined by the Administrator, all Options        | 
|     | Allocated on a certain date shall, subject to continued employment   | 
|     | with or service to the Company or Affiliate by the Participant,      | 
|     | become vested and exercisable in accordance with the vesting         | 
|     | schedule and/or the performance conditions of exercise (if any)      | 
|     | specified in the Grant Letter, save that no Option may be exercised  | 
|     | in a Close Period. Options that have not been exercised within the   | 
|     | period stipulated in or subsequent to this Plan or the Grant Letter  | 
|     | shall expire.                                                        | 
|     | The exercise prices for 2,286,135 options and 1,468,260 options are  | 
|     | US$0.193 (EUR0.137) and EUR0.222, respectively.                          | 
|     | As of December 31, 2008, 2,011,275 (2007: 2,111,275) options are     | 
|     | outstanding and are exercisable at a weighted average exercise of $  | 
|     | 0.193 and EUR 0.222.                                                   | 
|     | The fair value of the options was estimated by applying a binomial   | 
|     | option pricing model with adjustments for the specific terms and     | 
|     | conditions of the options. Under this model, the per-option weighted | 
|     | average fair market value, as of the grant date, was EUR 0.042 and the | 
|     | total fair market value of the options amounted to EUR 156. In respect | 
|     | of options that                                                      | 
|     | were granted and fully vested prior to January 1, 2005, the Company  | 
|     | elected, in accordance with the transition provisions of IFRS 2, not | 
|     | to record compensation expenses.                                     | 
|     | The weighted average fair value of options granted by the Company in | 
|     | December 2004 was estimated based on the following data and          | 
|     | assumptions:                                                         | 
|     | Share price - EUR 0.15; expected volatility - 48%; risk-free interest  | 
|     | rate - 3%; expected dividends - 0% and expected average life of      | 
|     | options - 2 years.                                                   | 
|     |                                                                      | 
+-----+----------------------------------------------------------------------+ 
| 2.  | On September 10, 2007, the Company adopted four new share option     | 
|     | plans for up to 3,695,805 Ordinary shares at exercise prices that    | 
|     | range between EUR0.222, US$ 0.9326 (EUR 0.669) and GBP0.82 (EUR0.859). The | 
|     | options vest over periods of one to three years and expire 10 years  | 
|     | from the date of grant. Options to purchase of 497,745 shares were   | 
|     | fully vested at the date of grant. The vesting of Options to         | 
|     | purchase 1,981,215 shares are linked to the Company's financial      | 
|     | performance (hereinafter: "Performance Criteria"), as was            | 
|     | recommended by the remuneration committee and approved by the        | 
|     | Company's board of directors.                                        | 
|     | Unless otherwise determined by the Administrator, all Options        | 
|     | Allocated on a certain date shall, subject to continued employment   | 
|     | with or service to the Company or Affiliate by the Participant,      | 
|     | become vested and exercisable in accordance with the vesting         | 
|     | schedule and/or the performance conditions of exercise (if any)      | 
|     | specified in the Grant Letter, save that no Option may be exercised  | 
|     | in a Close Period. Options that have not been exercised within the   | 
|     | period stipulated in or subsequent to this Plan or the Grant Letter  | 
|     | shall expire.                                                        | 
|     | The fair value of the options was estimated by applying a binomial   | 
|     | option pricing model with adjustments for the specific terms and     | 
|     | conditions of the options. Under this model, the per-option weighted | 
|     | average fair market value, as of the grant date, was EUR0.332 and the  | 
|     | total fair market value of the options amounted to EUR797.             | 
|     | As of December 31, 2008 1,597,335 Options to purchase shares were    | 
|     | forfeited, as the required Performance Criteria were not met (2007:  | 
|     | 660,405).                                                            | 
|     |                                                                      | 
|     | As of December 31, 2008 719,055 options were vested from that option | 
|     | plan (2007: 719,010).                                                | 
|     |                                                                      | 
+-----+----------------------------------------------------------------------+ 
| 3.  | On 24 June 2008, 467,500 share options were granted to middle        | 
|     | management and 1,610,000 shares options were granted to certain      | 
|     | directors of the Company under the Company's Share Option Scheme     | 
|     | (the "Options"). The exercise price of the Options is GBP 0.4121 (EUR  | 
|     | 0.4316) per share, which represents a premium of 5% over the opening | 
|     | mid-market price per share as at the date of grant.                  | 
|     | Each grant of Options will vest in three equal annual tranches, one  | 
|     | in each of the three years after the date of grant. The Options will | 
|     | be subject to performance conditions, measured over a performance    | 
|     | period of one, two or three years corresponding to their vesting     | 
|     | period.                                                              | 
|     | The performance measure for the 2008 financial year is nominal       | 
|     | compound annual growth of fully diluted earnings per share ("CAGR"). | 
|     | CAGR will be calculated by taking the fully diluted earnings per     | 
|     | share in 2007 and the fully diluted earnings per share in 2008,      | 
|     | 2009, and 2010 respectively for the three tranches, and calculating  | 
|     | the CAGR between the two. For nominal CAGR of between 5% and 12.5%,  | 
|     | between 25% and 100% of the Options will vest, on a straight-line    | 
|     | basis. For nominal CAGR of less than 5%, no Options will vest.       | 
|     | Options will lapse at the end of their performance period, to the    | 
|     | extent that the performance condition has not been met. If the       | 
|     | performance condition is met, Option holders may choose when to      | 
|     | exercise their Option, any time between vesting and the end of the   | 
|     | ten-year option term. There are no cash settlement options. The fair | 
|     | value of options granted was EUR 211.                                  | 
|     | As at December 31, 2008 no option were vested.                       | 
|     | The total costs of share-based payments amounted to EUR190 for 2008    | 
|     | (2007: EUR461).                                                        | 
|     |                                                                      | 
+-----+----------------------------------------------------------------------+ 
 
 
NOTE 20:-RELATED PARTIES 
 
 
a. Balances with related parties (shareholders): 
 
 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |        December 31,      | 
+-----------------------------------------------+-+--------------------------+ 
|                                               | |   2008    |  |   2007    | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |           |  |           | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|            Current assets                     | |         - |  |         6 | 
+-----------------------------------------------+-+-----------+--+-----------+ 
 
 
b. Compensation of key management personnel: 
 
 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |        December 31,      | 
+-----------------------------------------------+-+--------------------------+ 
|                                               | |   2008    |  |   2007    | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |           |  |           | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|            Salary Board of Directors *)       | |       900 |  |       520 | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |           |  |           | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|            Employee benefits other key        | |       206 |  |       217 | 
|            management personnel               | |           |  |           | 
+-----------------------------------------------+-+-----------+--+-----------+ 
|                                               | |           |  |           | 
+-----------------------------------------------+-+-----------+--+-----------+ 
*) the amounts disclosed are only the amounts charged to the Group since the 
date of appointment as director. 
 
 
c. Slotz Limited, of which Mr J.C. Anderson is the director, charges rent and 
maintenance to the UK subsidiary in the total amount of EUR 63 (2007: EUR 88). The 
rent and maintenance charges are at arm's length basis. 
 
 
 
 
NOTE 21:- FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES 
 
 
The Group's principal financial liabilities, other than derivatives, comprise 
bank loans and overdrafts, finance leases and trade payables. The main purpose 
of these financial liabilities is to raise finance for the Group operations. The 
Group has various financial assets such as trade receivables, lease receivables 
and cash, which arise directly from its operations. 
 
 
The main risks arising from the Group's financial instruments are cash flow 
interest rate risk, liquidity risk, foreign currency risk and credit risk. 
 
 
a. Interest rate risk: 
 
 
The Group's exposure to the risk for changes in market interest rates relates 
primarily to the Group's long-term debt obligations with a floating interest 
rate. 
 
 
The Group's policy is to manage its interest cost using a mix of fixed and 
variable rate debts and short-term deposits at variable rates. 
 
 
Interest rate risk table: 
 
 
The following table demonstrates the sensitivity to reasonably possible changes 
in interest rates, with all other variables held constant, of the Group's profit 
before tax (through the impact on floating rate borrowings). The impact on the 
Group's equity is the same as on the Group's profit. 
 
 
+------------+----------------+--------------+----------------+---------------+ 
|            |   Increase/    |  Effects on  |   Increase/    |  Effects on   | 
|            |  decrease in   |    profit    |  decrease in   |profit before  | 
|            |  basic points  |  before tax  |  basic points  |      tax      | 
+------------+----------------+--------------+----------------+---------------+ 
|            |             2008              |              2007              | 
+------------+-------------------------------+--------------------------------+ 
| Libor      |      +15%      |     (5)      |      +15%      |     (49)      | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      +20%      |     (7)      |      +20%      |     (65)      | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      -10%      |      3       |      -10%      |      32       | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      -15%      |      5       |      -15%      |      49       | 
+------------+----------------+--------------+----------------+---------------+ 
| Euro Libor |      +15%      |    (23)      |      +15%      |     (15)      | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      +20%      |    (30)      |      +20%      |     (21)      | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      -10%      |      15      |      -10%      |      10       | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      -15%      |      22      |      -15%      |      15       | 
+------------+----------------+--------------+----------------+---------------+ 
| USD Libor  |      +15%      |     (4)      |      +15%      |      -        | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      +20%      |     (6)      |      +20%      |      -        | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      -10%      |      3       |      -10%      |      -        | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      -15%      |      4       |      -15%      |      -        | 
+------------+----------------+--------------+----------------+---------------+ 
| ILS Libor  |      +15%      |    (25)      |      +15%      |      -        | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      +20%      |    (34)      |      +20%      |      -        | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      -10%      |      17      |      -10%      |      -        | 
+------------+----------------+--------------+----------------+---------------+ 
|            |      -15%      |      25      |      -15%      |      -        | 
+------------+----------------+--------------+----------------+---------------+ 
 
 
b. Foreign currency risk: 
 
 
As a result of significant investment operations in the United Kingdom, the 
Group's balance sheet can be affected significantly by movements in the British 
pound/ Euro exchange rates. The Group seeks to mitigate the effect of its 
structural currency exposure by borrowing in British pound. 
 
The Group management regularly monitors its foreign exchange risk and attempts 
to limit such risks by managing its cash and credit positions. 
 
 
The following table demonstrates the sensitivity to a reasonable change in the 
relevant exchange rates, with all other variables held constant, of the Group's 
profit before tax (due to changes in the fair value of monetary assets and 
liabilities). 
 
 
+----------------------------+------+---------+--------+-------+--------+------+ 
|                            |            As at December 31, 2008              | 
+----------------------------+-------------------------------------------------+ 
| Currency ratio             |  New Israeli   | United States  |British Pound  | 
|                            |  Shekel/Euro   |  Dollar/Euro   |    / Euro     | 
+----------------------------+----------------+----------------+---------------+ 
| Changes in currency rate   | -5%  |   5%    |  -5%   |  5%   |  -5%   |  5%  | 
+----------------------------+------+---------+--------+-------+--------+------+ 
|                            |      |         |        |       |        |      | 
+----------------------------+------+---------+--------+-------+--------+------+ 
| Effect of currency changes | 259  |  (259)  |  187   |(187)  |  (31)  |  31  | 
| on profit before tax       |      |         |        |       |        |      | 
+----------------------------+------+---------+--------+-------+--------+------+ 
|                            |      |         |        |       |        |      | 
+----------------------------+------+---------+--------+-------+--------+------+ 
|                            |            As at December 31, 2007              | 
+----------------------------+-------------------------------------------------+ 
| Currency ratio             |  New Israeli   | United States  |British Pound  | 
|                            |  Shekel/Euro   |  Dollar/Euro   |    / Euro     | 
+----------------------------+----------------+----------------+---------------+ 
| Changes in currency rate   | -5%  |   5%    |  -5%   |  5%   |  -5%   |  5%  | 
+----------------------------+------+---------+--------+-------+--------+------+ 
|                            |      |         |        |       |        |      | 
+----------------------------+------+---------+--------+-------+--------+------+ 
| Effect of currency changes | 575  |  (575)  |  164   |(164)  | (219)  | 219  | 
| on profit before tax       |      |         |        |       |        |      | 
+----------------------------+------+---------+--------+-------+--------+------+ 
|                            |      |         |        |       |        |      | 
+----------------------------+------+---------+--------+-------+--------+------+ 
 
 
c. Credit risk 
 
 
The Group trades only with recognized, high credit rating third parties. 
Receivable balances are monitored on an ongoing basis with the result that the 
Group's exposure to bad debts is not significant. There are no significant 
concentrations of credit risk within the Group. 
 
 
With respect to credit risk arising from the other financial assets of the 
Group, which comprise cash and cash equivalents and loans, the Group's exposure 
to credit risk arises from default of the counterparty, with a maximum exposure 
equal to the carrying amount of these instruments. 
 
 
d. Liquidity risk 
 
 
The Group monitors its risk to a shortage of funds using a recurring liquidity 
planning tool. This tool considers the maturity of both its financial 
investments and financial assets (account receivables, other financial assets) 
and projected cash flow from operations. 
 
 
The Group's objective is to maintain a balance between continuity of funding and 
flexibility through the use of bank overdraft, bank loans and finance leases. 
 
 
Further reference is made to Note 12, 13, 14, 15, 16d, 17, and 18a. 
 
 
e. Commodity price risk: 
 
 
On long-term leasing contracts, the Group is exposed to the risk for changes in 
the prices of raw materials. Increase/ decrease of raw material prices by 5% 
will result in EUR19 profit/ Loss respectively. 
 
 
f. Fair values of financial instruments and reconciliation from classes to 
categories: 
 
 
The carrying amounts of cash and cash equivalents, long-term deposits, trade and 
other receivables, credit from banks and others, trade and other payables, and 
long-term loans approximate their fair value. 
 
 
Set out below is a comparison by category of carrying amounts of all the Group's 
financial instruments. 
 
 
Fair values of financial instruments and reconciliation from classes to 
categories 
 
 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |                     December 31,                    | 
+---------------------------------+-+-----------------------------------------------------+ 
|                                 | |           2008          | |           2007          | 
+---------------------------------+-+-------------------------+-+-------------------------+ 
|                                 | |      fair |    Carrying | |      fair |    carrying | 
|                                 | |     value |    value    | |     value |    value    | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Financial   | |           |             | |           |             | 
|                     Assets      | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|            Current              | |           |             | |           |             | 
|            assets-              | |           |             | |           |             | 
|            Loans and            | |           |             | |           |             | 
|            receivables:         | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Cash        | |     1,099 |       1,099 | |       807 |         807 | 
|                     and         | |           |             | |           |             | 
|                     cash        | |           |             | |           |             | 
|                     equivalents | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Trade       | |     9,838 |       9,838 | |    13,874 |      13,874 | 
|                     receivables | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Other       | |     2,883 |       2,883 | |     4,656 |       4,656 | 
|                     accounts    | |           |             | |           |             | 
|                     receivable  | |           |             | |           |             | 
|                     and         | |           |             | |           |             | 
|                     prepayments | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |    13,820 |      13,820 | |    19,337 |      19,337 | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|            Non-current          | |           |             | |           |             | 
|            assets-              | |           |             | |           |             | 
|            Loans and            | |           |             | |           |             | 
|            receivables:         | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Deposits    | |       344 |         344 | |       264 |         264 | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Finance     | |     2,550 |       2,550 | |     4,263 |       4,263 | 
|                     lease       | |           |             | |           |             | 
|                     receivable  | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |     2,894 |       2,894 | |     4,527 |       4,527 | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|            Current              | |           |             | |           |             | 
|            liabilities          | |           |             | |           |             | 
|            - Financial          | |           |             | |           |             | 
|            liabilities          | |           |             | |           |             | 
|            at                   | |           |             | |           |             | 
|            amortized            | |           |             | |           |             | 
|            cost                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Bank        | |     9,801 |       9,801 | |    13,891 |      13,891 | 
|                     borrowings  | |           |             | |           |             | 
|                     and         | |           |             | |           |             | 
|                     current     | |           |             | |           |             | 
|                     maturities  | |           |             | |           |             | 
|                     of          | |           |             | |           |             | 
|                     long-term   | |           |             | |           |             | 
|                     loans       | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Trade       | |     5,134 |       5,134 | |    13,074 |      13,074 | 
|                     payables    | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Other       | |     3,330 |       3,330 | |     1,789 |       1,789 | 
|                     accounts    | |           |             | |           |             | 
|                     payable     | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                     Deposits    | |     2,337 |       2,337 | |     2,713 |       2,713 | 
|                     from        | |           |             | |           |             | 
|                     customers   | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |    20,602 |      20,602 | |    31,467 |      31,467 | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|            Non-current          | |           |             | |           |             | 
|            liabilities          | |           |             | |           |             | 
|            - Financial          | |           |             | |           |             | 
|            liabilities          | |           |             | |           |             | 
|            at                   | |           |             | |           |             | 
|            amortized            | |           |             | |           |             | 
|            cost                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|            Long-term            | |    10,965 |      10,965 | |     5,517 |       5,517 | 
|            loans                | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |           |             | |           |             | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
|                                 | |    10,965 |      10,965 | |     5,517 |       5,517 | 
+---------------------------------+-+-----------+-------------+-+-----------+-------------+ 
 
 
The fair value of the fixed interest loans does not vary materially from the 
amounts recorded in the balance sheet. 
 
 
g. Capital Management 
 
 
The primary objective of the Group's capital management is to ensure that it 
maintains a strong credit rating and healthy capital ratios in order to support 
its business and maximize shareholder value. The Group is doing so by converting 
part of its large short-term bank facilities into long-term loans and ensuring 
that the loans currency will not create a balance-sheet and cash-flow currency 
exposure. 
 
 
The Group manages its capital structure and makes adjustments to it, in light of 
changes in economic conditions. To maintain or adjust the capital structure, the 
Group may adjust the dividend payment to shareholders, return capital to 
shareholders or issue new shares. 
No changes were made in the objectives, policies or processes during the years 
end 31 December 2008 and 31 December 2007. 
 
 
Further reference is made to Note 18c. 
 
 
NOTE 22:SUPPLEMENTARY INFORMATION TO STATEMENTS OF INCOME 
 
 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |     Year ended December    | 
|       |                                              | |             31,            | 
+-------+----------------------------------------------+-+----------------------------+ 
|       |                                              | |     2008  |  |     2007    | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|    a. |    Cost of rentals:                          | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Depreciation                      | |     5,167 |  |     *)4,105 | 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Warehouse rental and maintenance  | |     8,318 |  |       4,959 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Repair costs                      | |     1,159 |  |         384 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Freight                           | |     4,310 |  |       2,803 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Wages and salaries                | |       248 |  |         282 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Others                            | |       172 |  |         193 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |    19,374 |  |      12,726 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|    b. |    Cost of goods sold:                       | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Salaries and related benefits     | |       544 |  |      **)243 | 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Materials and subcontracted labor | |     2,740 |  |    **)4,763 | 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Rental and maintenance            | |       693 |  |         523 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Communications, postage and       | |     1,630 |  |       2,905 | 
|       |            freight                           | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Others                            | |       229 |  |         154 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |     5,836 |  |       8,588 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|    c. |            Selling and marketing expenses:   | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Salaries and related benefits     | |     1,386 |  |       1,122 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Advertising                       | |       283 |  |         499 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Sales commission                  | |     4,912 |  |       1,344 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Consultants                       | |       176 |  |         168 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |            Others                            | |       327 |  |         290 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |           |  |             | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
|       |                                              | |     7,084 |  |       3,423 | 
+-------+----------------------------------------------+-+-----------+--+-------------+ 
 
 
*) Reclassified machines depreciation at the amount of EUR222 from Depreciation of 
moulds and machines to Cost of rental. 
 
 
**) Reclassified EUR606 from Salaries and related benefits expenses to Material 
and subcontractors expenses. 
 
 
 
 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |     Year ended December  | 
|               |                                              | |             31,          | 
+---------------+----------------------------------------------+-+--------------------------+ 
|               |                                              | |     2008  |  |     2007  | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|    d.         |    General and administrative expenses:      | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Salaries and related benefits     | |     4,329 |  |     3,461 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Share-based payment costs         | |       190 |  |       461 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Rental fees, maintenance and      | |       547 |  |       485 | 
|               |            office expenses                   | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Professional fees *)              | |     1,092 |  |     1,374 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Depreciation                      | |       348 |  |       199 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Motor vehicle expenses            | |       675 |  |       550 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Communication                     | |       237 |  |       222 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Computer support                  | |       287 |  |       203 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Insurance                         | |       209 |  |       106 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Others                            | |       546 |  |       483 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |     8,460 |  |     7,544 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|            e. |            Finance income:                   | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Interest on finance leases        | |     (304) |  |     (336) | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Bank interest receivables         | |      (20) |  |     (218) | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Other interest                    | |         - |  |      (12) | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Exchange differences, net         | |      (46) |  |     (379) | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |     (370) |  |     (945) | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|            f. |            Finance costs:                    | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            In respect of long-term loans     | |       917 |  |       601 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            In respect of short-term          | |       621 |  |       392 | 
|               |            borrowings                        | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            In respect of financial           | |         3 |  |         - | 
|               |            derivatives                       | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Exchange differences, net         | |       595 |  |         - | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |     2,136 |  |       993 | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|            g. |            Other expenses (income), net:     | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Loss on disposal of plant and     | |        13 |  |         2 | 
|               |            equipment and assets held for     | |           |  |           | 
|               |            lease                             | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |            Other                             | |         - |  |      (21) | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |           |  |           | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
|               |                                              | |        13 |  |      (19) | 
+---------------+----------------------------------------------+-+-----------+--+-----------+ 
 
 
h. Research and development expenses: 
 
 
EUR 2,391 was capitalized to molds (2007: EUR 2,754) 
EUR 452 Research and Development salaries are included in the salaries and related 
benefits under general and administrative expenses (2007: EUR 369). 
 
 
NOTE 23:-EXCEPTIONAL GENERAL AND ADMINISTRATIVE EXPENSES 
 
 
During 2007 and the early part of 2008 the Company negotiated the acquisition of 
a business that the Directors believed would have facilitated the implementation 
of its expansion plans in the US. By February 2008, the Company had reached the 
point where it had completed the due diligence process and agreed terms in 
principle with the vendor. However, the Board decided that it was not the 
appropriate time for the company to make a material acquisition and that it was 
more prudent to focus management attention on ensuring the Company's organic 
growth plans are executed successfully. The decision not to proceed with the 
acquisition has resulted in the Company incurring EUR466 of abortive acquisition 
costs which are disclosed as an exceptional charge in the 2007 income statement. 
 
 
NOTE 24:-DIRECTOR'S REMUNERATION 
 
 
Remuneration relating to the members of the Board of Directors amounted to EUR 
1,048 (2007: EUR 866) 
 
 
At year end 2008, the members of the Board of Directors held 4,723,955 stock 
options (year-end 2007: 3,113,955) at a weighted average exercise price of EUR 
0.53(year-end 2007: EUR 0.79). 
Remuneration for the following persons: 
 
 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
|             |                      2008                       |  |                      2007                       | 
+-------------+-------------------------------------------------+--+-------------------------------------------------+ 
|             |Salary  |  | Pension  |  |  Share  |  |Director  |  |Salary  |  | Pension  |  |  Share  |  |Director  | 
|             |        |  | costs &  |  |  based  |  |   Fee    |  |        |  | costs &  |  |  based  |  |   Fee    | 
|             |        |  |  Social  |  |payment  |  |          |  |        |  |  Social  |  |payment  |  |          | 
|             |        |  |security  |  |         |  |          |  |        |  |security  |  |         |  |          | 
|             |        |  |  costs   |  |         |  |          |  |        |  |  costs   |  |         |  |          | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
|             |        |  |          |  |         |  |        - |  |        |  |          |  |         |  |          | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
| G. Feiner   |    261 |  |       46 |  |      21 |  |        - |  |    258 |  |       49 |  |       9 |  |        - | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
| D. Gerner   |    207 |  |       35 |  |      11 |  |        - |  |    160 |  |       36 |  |       3 |  |        - | 
| *)          |        |  |          |  |         |  |          |  |        |  |          |  |         |  |          | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
| Z. Yemini   |        |  |          |  |       5 |  |       38 |  |      - |  |        - |  |       6 |  |       42 | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
| J. A.C.     |        |  |          |  |         |  |       35 |  |      - |  |        - |  |       - |  |       34 | 
| Stuart      |        |  |          |  |         |  |          |  |        |  |          |  |         |  |          | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
| F. Lewis    |        |  |          |  |         |  |       35 |  |      - |  |        - |  |       - |  |       34 | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
| U. S.       |        |  |          |  |         |  |       35 |  |      - |  |        - |  |       - |  |       34 | 
| Wascher     |        |  |          |  |         |  |          |  |        |  |          |  |         |  |          | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
| J. C.       |    276 |  |       31 |  |      12 |  |        - |  |      - |  |        - |  |       5 |  |      196 | 
| Anderson    |        |  |          |  |         |  |          |  |        |  |          |  |         |  |          | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
|             |        |  |          |  |         |  |          |  |        |  |          |  |         |  |          | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
|             |    744 |  |      112 |  |      49 |  |      143 |  |    418 |  |       85 |  |      23 |  |      340 | 
+-------------+--------+--+----------+--+---------+--+----------+--+--------+--+----------+--+---------+--+----------+ 
 
 
 
 
+------------+--------------+----------------+--+--------------+----+---------------+ 
| Number of restricted share rights          |  |              |    |               | 
+--------------------------------------------+--+--------------+----+---------------+ 
|            |    As of     |  Purchase of   |  | Exercise of  |    |    As of      | 
|            | Jan 1, 2008  |    shares      |  |   options    |    | Dec 31, 2008  | 
|            |              |                |  | during 2008  |    |               | 
+------------+--------------+----------------+--+--------------+----+---------------+ 
|            |              |                |  |              |    |               | 
+------------+--------------+----------------+--+--------------+----+---------------+ 
| G. Feiner  | 20,077,043*) |        100,000 |  |      -       |    |    20,177,043 | 
+------------+--------------+----------------+--+--------------+----+---------------+ 
| Z. Yemini  |  7,135,290*) |       -        |  |      -       |    |     7,135,290 | 
+------------+--------------+----------------+--+--------------+----+---------------+ 
| U. S.      |   449,060*)  |      2,995,000 |  |      -       |    |    3,444,060  | 
| Wascher    |              |                |  |              |    |               | 
+------------+--------------+----------------+--+--------------+----+---------------+ 
 
 
+---------------------------+--+---------------+--+--------------+--+---------------+ 
| Number of restricted share   |               |  |              |  |               | 
| rights                       |               |  |              |  |               | 
+------------------------------+---------------+--+--------------+--+---------------+ 
|                           |  | As of Jan 1,  |  | Purchase of  |  |    As of      | 
|                           |  |     2007      |  |    Shares    |  | Dec 31, 2007  | 
+---------------------------+--+---------------+--+--------------+--+---------------+ 
|                           |  |               |  |              |  |               | 
+---------------------------+--+---------------+--+--------------+--+---------------+ 
| G. Feiner                 |  |  20,077,043*) |  |      -       |  |  20,077,043*) | 
+---------------------------+--+---------------+--+--------------+--+---------------+ 
| Z. Yemini                 |  |  7,135,290*)  |  |      -       |  |   7,135,290*) | 
+---------------------------+--+---------------+--+--------------+--+---------------+ 
| U. S. Wascher             |  |     399,060*) |  |  50,000*)    |  |     449,060*) | 
+---------------------------+--+---------------+--+--------------+--+---------------+ 
 
 
*) corrected 
 
 
 
 
NOTE 24:-DIRECTOR'S REMUNERATION (Cont.) 
 
 
 
 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| Options     |  |          |  |          |  |             |  |            |  |          |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
|             |  |  As of   |  |  Issued  |  |  Forfeited  |  |   As of    |  |Exercise  |  |  Expiry  | 
|             |  |  Jan 1,  |  |  during  |  |during 2008  |  |  Dec 31,   |  |  price   |  |  date    | 
|             |  |  2008    |  |  2008    |  |             |  |    2008    |  |          |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
|             |  |          |  |          |  |             |  |            |  |          |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| G. Feiner   |  |  516,180 |  |          |  |  -258,090   |  |    258,090 |  |  GBP0.82 |  |  10.9.17 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| G. Feiner   |  |          |  | 700,000  |  |             |  |    700,000 |  | GBP0.412 |  |  26.6.18 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| D. Gerner   |  |  412,785 |  |          |  |             |  |    412,785 |  |  $0.1933 |  | 31.12.14 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| D. Gerner   |  |  414,990 |  |          |  |             |  |    414,990 |  |        EUR |  | 31.12.14 | 
|             |  |          |  |          |  |             |  |            |  |    0.222 |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| D. Gerner   |  |  184,350 |  |          |  |  -92,175    |  |     92,175 |  |  GBP0.82 |  |  10.9.17 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| D. Gerner   |  |          |  | 405,000  |  |             |  |    405,000 |  | GBP0.412 |  |  26.6.18 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| Z. Yemini   |  |  360,270 |  |          |  |             |  |    360,270 |  |        EUR |  | 31.12.14 | 
|             |  |          |  |          |  |             |  |            |  |    0.222 |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| Z. Yemini   |  |  313,410 |  |          |  |  -156,705   |  |    156,705 |  |  GBP0.82 |  |  10.9.17 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| Z. Yemini   |  |          |  | 100,000  |  |             |  |    100,000 |  | GBP0.412 |  |  26.6.18 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| J. C.       |  |  270,000 |  |          |  |  -135,000   |  |    135,000 |  |  GBP0.82 |  |  10.9.17 | 
| Anderson    |  |          |  |          |  |             |  |            |  |          |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| J. C.       |  |          |  | 405,000  |  |             |  |    405,000 |  | GBP0.412 |  |  26.6.18 | 
| Anderson    |  |          |  |          |  |             |  |            |  |          |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
 
 
 
 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| Options     |  |          |  |          |  |             |  |            |  |          |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
|             |  |  As of   |  |  Issued  |  |  Forfeited  |  |   As of    |  |Exercise  |  |  Expiry  | 
|             |  |  Jan 1,  |  |  during  |  |during 2007  |  |  Dec 31,   |  |  price   |  |  date    | 
|             |  |  2007    |  |  2007    |  |             |  |    2007    |  |          |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
|             |  |          |  |          |  |             |  |            |  |          |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| G. Feiner   |  |    -     |  | 774,270  |  |  -258,090   |  |    516,180 |  |  GBP0.82 |  |  10.9.17 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| D. Gerner   |  |  412,785 |  |    -     |  |             |  |    412,785 |  |  $0.1933 |  | 31.12.14 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| D. Gerner   |  |  414,990 |  |          |  |             |  |    414,990 |  |        EUR |  | 31.12.14 | 
|             |  |          |  |          |  |             |  |            |  |    0.222 |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| D. Gerner   |  |    -     |  | 276,525  |  |  -92,175    |  |    184,350 |  |  GBP0.82 |  |  10.9.17 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| Z. Yemini   |  |  360,270 |  |    -     |  |             |  |    360,270 |  |        EUR |  | 31.12.14 | 
|             |  |          |  |          |  |             |  |            |  |    0.222 |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| Z. Yemini   |  |    -     |  | 470,115  |  |  -156,705   |  |    313,410 |  |  GBP0.82 |  |  10.9.17 | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
| J. C.       |  |    -     |  | 405,000  |  |  -135,000   |  |    270,000 |  |  GBP0.82 |  |  10.9.17 | 
| Anderson    |  |          |  |          |  |             |  |            |  |          |  |          | 
+-------------+--+----------+--+----------+--+-------------+--+------------+--+----------+--+----------+ 
 
 
 
 
NOTE 25:-EARNINGS PER SHARE 
 
 
The following reflects the income and share data used in the basic and diluted 
earnings per share computations: 
 
 
+------------------------------------------------+-+---------------+--+---------------+ 
|                                                | |       Year ended December 31,    | 
+------------------------------------------------+-+----------------------------------+ 
|                                                | |       2008    |  |      2007     | 
+------------------------------------------------+-+---------------+--+---------------+ 
|                                                | |               |  |               | 
+------------------------------------------------+-+---------------+--+---------------+ 
|         Net profit (Loss) for basic and        | |       (1,853) |  |         3,536 | 
|         diluted earnings per share             | |               |  |               | 
+------------------------------------------------+-+---------------+--+---------------+ 
|                                                | |               |  |               | 
+------------------------------------------------+-+---------------+--+---------------+ 
|         Weighted average number of Ordinary    | |    77,830,169 |  |    77,482,468 | 
|         and Preferred shares for basic         | |               |  |               | 
|         earnings per share                     | |               |  |               | 
+------------------------------------------------+-+---------------+--+---------------+ 
|         Effect of dilution:                    | |               |  |               | 
+------------------------------------------------+-+---------------+--+---------------+ 
|                   Share options                | |             - |  |     2,150,916 | 
+------------------------------------------------+-+---------------+--+---------------+ 
|                                                | |               |  |               | 
+------------------------------------------------+-+---------------+--+---------------+ 
|         Adjusted weighted average number of    | |    77,830,169 |  |    79,633,384 | 
|         Ordinary shares for diluted earnings   | |               |  |               | 
|         per share                              | |               |  |               | 
+------------------------------------------------+-+---------------+--+---------------+ 
 
 
 
 
NOTE 26:-DIVIDEND PAID AND PROPOSED 
 
 
+------------------------------------------------+-+-------------+--+-------------+ 
|                                                | |     Year ended December 31,  | 
+------------------------------------------------+-+------------------------------+ 
|                                                | |     2008    |  |     2007    | 
+------------------------------------------------+-+-------------+--+-------------+ 
|         Declared and paid during the year:     | |             |  |             | 
+------------------------------------------------+-+-------------+--+-------------+ 
|         Equity dividends on ordinary shares:   | |             |  |             | 
+------------------------------------------------+-+-------------+--+-------------+ 
|         Interim dividend for 2007: EUR 0.004     | |         163 |  |         125 | 
+------------------------------------------------+-+-------------+--+-------------+ 
|         Final dividend for 2007: EUR 0.0017      | |         122 |  |             | 
+------------------------------------------------+-+-------------+--+-------------+ 
|                                                | |             |  |             | 
+------------------------------------------------+-+-------------+--+-------------+ 
|                                                | |         285 |  |         125 | 
+------------------------------------------------+-+-------------+--+-------------+ 
|         Proposed for approval at AGM (not      | |             |  |             | 
|         recognized as a liability as at 31     | |             |  |             | 
|         December):                             | |             |  |             | 
+------------------------------------------------+-+-------------+--+-------------+ 
|         Equity dividends on ordinary shares:   | |             |  |             | 
+------------------------------------------------+-+-------------+--+-------------+ 
|         Final dividend for 2007: EUR 0.0017    | |           - |  |         132 | 
+------------------------------------------------+-+-------------+--+-------------+ 
 
 
A remaining unpaid dividend at the amount of EUR32 is classified in current 
liabilities. 
 
 
NOTE 27:SUBSEQUENT EVENTS 
 
 
The Company announces that it has notified the London Stock Exchange of the 
proposed cancellation of trading of the Company's shares on AIM ("De-listing"). 
 
 
 
 
(After profit appropriation) 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |          December 31,        | 
+-----------------------------------------------+--+---------+--+------------------------------+ 
|                                               |  |   Note  |  |     2008    |  |     2007    | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                     ASSETS                    |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
| Fixed assets:                                 |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|            Tangible fixed assets              |  |  (I)    |  |         448 |  |       3,507 | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|            Financial fixed assets             |  |  (II)   |  |      35,391 |  |      37,255 | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |      35,839 |  |      40,762 | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|    Current assets:                            |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|            Inventories                        |  |  (III)  |  |         338 |  |         298 | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|            Income tax receivables             |  |         |  |           - |  |          26 | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|            Receivables                        |  |  (IV)   |  |       6,766 |  |      10,861 | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|            Cash and cash equivalents          |  |  (V)    |  |         108 |  |         536 | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |       7,212 |  |      11,721 | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|            Total assets                       |  |         |  |      43,051 |  |      52,483 | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
|                                               |  |         |  |             |  |             | 
+-----------------------------------------------+--+---------+--+-------------+--+-------------+ 
 
 
(After profit appropriation) 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |         December 31,       | 
+------------------------------------------------+--+---------+--+----------------------------+ 
|                                                |  |   Note  |  |     2008   |  |     2007   | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                             EQUITY AND         |  |         |  |            |  |            | 
|                             LIABILITIES        |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|    Shareholders' equity:                       |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Issued capital                      |  |  (VI)   |  |        779 |  |        776 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Share premium                       |  |  (VI)   |  |     35,034 |  |     34,785 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Foreign currency translation        |  |  (VI)   |  |      (402) |  |       (32) | 
|            adjustment                          |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Retained earnings                   |  |         |  |      4,506 |  |      6,676 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Total equity                        |  |         |  |     39,917 |  |     42,205 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|    Long-term liabilities:                      |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Long-term loans                     |  |  (VII)  |  |        242 |  |      1,176 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Deposits from customers             |  | (VIII)  |  |          - |  |        *)- | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Other long-term liabilities         |  |         |  |          - |  |         66 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |        242 |  |      1,242 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
| Current liabilities:                           |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Trade creditors                     |  |         |  |        299 |  |      4,192 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Bank borrowings and current         |  |         |  |         52 |  |        171 | 
|            maturities of long-term loans       |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Deposits from customers             |  | (VIII)  |  |      2,265 |  |    *)2,713 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Income tax payables                 |  |         |  |          - |  |        128 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Taxation and social security        |  |         |  |         27 |  |         84 | 
|            contributions                       |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Other current liabilities           |  | (VIII)  |  |        249 |  |      1,748 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |      2,892 |  |      9,063 | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|                                                |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
|            Total shareholders' equity and      |  |         |  |     43,051 |  |     52,483 | 
|            liabilities                         |  |         |  |            |  |            | 
+------------------------------------------------+--+---------+--+------------+--+------------+ 
 
 
*) Reclassified Deposits from customers from Long-term liabilities to Current 
liabilities at the amount of EUR2,663 as at 31 December 2007. 
 
 
+-------------------------------------------------+--+-------+--+------------+--+------------+ 
|                                                 |  |       |  |  Year ended December 31,   | 
+-------------------------------------------------+--+-------+--+----------------------------+ 
|                                                 |  | Note  |  |    2008    |  |    2007    | 
+-------------------------------------------------+--+-------+--+------------+--+------------+ 
|                                                 |  |       |  |            |  |            | 
+-------------------------------------------------+--+-------+--+------------+--+------------+ 
| Result from subsidiaries                        |  |       |  |  (6,232)   |  |   4,088    | 
+-------------------------------------------------+--+-------+--+------------+--+------------+ 
| Other result                                    |  | (IX)  |  |   4,379    |  |   (552)    | 
+-------------------------------------------------+--+-------+--+------------+--+------------+ 
|                                                 |  |       |  |            |  |            | 
+-------------------------------------------------+--+-------+--+------------+--+------------+ 
| Net result                                      |  |       |  |  (1,853)   |  |   3,536    | 
+-------------------------------------------------+--+-------+--+------------+--+------------+ 
 
 
 
 
ACCOUNTING POLICIES FOR THE COMPANY'S FINANCIAL STATEMENTS 
 
 
 
 
GENERAL INFORMATION 
 
 
+------+---------------------------------------------------------------------------------+ 
| a.   | The company financial statements have been prepared in accordance with Title 9  | 
|      | of Book 2 of the Netherlands Civil Code. As permitted by Article 2:362          | 
|      | paragraph 8 of this code, the company financial statements have been prepared   | 
|      | applying the same IFRS accounting policies as used in the consolidated          | 
|      | financial statements in order to maintain consistency between the figures in    | 
|      | the consolidated and company financial statements.                              | 
|      | The principal accounting policies adopted are the same as those set out in note | 
|      | 2 to the consolidated financial statements except that investments in           | 
|      | subsidiaries are stated at net asset value as the company effectively exercises | 
|      | influence of significance over the operational and financial activities of      | 
|      | these investments. The net asset value is determined on the basis of the        | 
|      | accounting policies applied by the company.                                     | 
|      |                                                                                 | 
+------+---------------------------------------------------------------------------------+ 
| b.   | At the end of March, 2008 the company contributed its investments in the net    | 
|      | assets of its Italian branch to a fully owned Italian subsidiary.               | 
|      |                                                                                 | 
+------+---------------------------------------------------------------------------------+ 
| c.   | At the end of December 2008 the company contributed its investments in Polymer  | 
|      | Logistics Inc., a fully owned subsidiary located in the USA, to Polymer         | 
|      | Logistics UK in consideration of one ordinary share.                            | 
|      |                                                                                 | 
+------+---------------------------------------------------------------------------------+ 
 
 
 
 
 
 
 
 
CHANGES IN ACCOUNTING POLICIES 
 
 
Reference is made to the notes to the consolidated balance sheet. 
 
 
 
 
TANGIBLE FIXED ASSETS (I) 
 
 
Movements in the tangible fixed assets were as follows: 
 
 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |     Molds   | |   Motors  | |     Office   | |   Computers  | |     Rental   | |   Total  | 
|                                  | |      and    | |           | |   equipment  | |       and    | |   equipment  | |          | 
|                                  | |   machines  | |           | |              | |   software   | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Cost:                         | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    At January 1, 2007            | |       2,006 | |        14 | |          100 | |          486 | |          884 | |    3,490 | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|            Additions             | |       1,927 | |         - | |          726 | |          243 | |           58 | |    2,954 | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                     Disposals    | |             | |           | |              | |              | |        (302) | |    (302) | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Balance at December           | |       3,933 | |        14 | |          826 | |          729 | |          640 | |    6,142 | 
|    31, 2007                      | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Depreciation:                 | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    At January 1, 2007            | |       1,346 | |         2 | |           41 | |          375 | |          875 | |    2,639 | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|            Depreciation          | |         126 | |         2 | |          102 | |           60 | |            8 | |      298 | 
|            for the year          | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|            Disposals             | |             | |           | |              | |              | |        (302) | |    (302) | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Balance at December           | |       1,472 | |         4 | |          143 | |          435 | |          581 | |    2,635 | 
|    31, 2007                      | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Book value:                   | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    At January 1, 2007            | |         660 | |        12 | |           59 | |          111 | |            9 | |      851 | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Balance at December           | |       2,461 | |        10 | |          683 | |          294 | |           59 | |    3,507 | 
|    31, 2007                      | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Cost:                         | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    At January 1, 2008            | |       3,933 | |        14 | |          826 | |          729 | |          640 | |    6,142 | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                     Contribution | |     (3,792) | |         - | |        (771) | |        (402) | |            - | |  (4,965) | 
|                     to           | |             | |           | |              | |              | |              | |          | 
|                     subsidiary   | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                     Additions    | |           - | |         - | |           23 | |          238 | |           18 | |      279 | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                     Disposals    | |           - | |      (14) | |            - | |         (79) | |        (549) | |    (642) | 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Balance at December           | |         141 | |         - | |           78 | |          486 | |          109 | |      814 | 
|    31, 2008                      | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Depreciation:                 | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    At January 1, 2008            | |       1,472 | |         4 | |          143 | |          435 | |          581 | |    2,635 | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|            Contribution          | |     (1,419) | |         - | |        (151) | |        (346) | |            - | |  (1,916) | 
|            to                    | |             | |           | |              | |              | |              | |          | 
|            subsidiary            | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|            Depreciation          | |          67 | |         3 | |           45 | |           83 | |           18 | |      216 | 
|            for the year          | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|            Disposals             | |           - | |       (7) | |            - | |         (13) | |        (549) | |    (569) | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Balance at December           | |         120 | |         - | |           37 | |          159 | |           50 | |      366 | 
|    31, 2008                      | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Book value:                   | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    At January 1, 2008            | |       2,461 | |        10 | |          683 | |          294 | |           59 | |    3,507 | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|                                  | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
|    Balance at December           | |          21 | |         - | |           41 | |          327 | |           59 | |      448 | 
|    31, 2008                      | |             | |           | |              | |              | |              | |          | 
+----------------------------------+-+-------------+-+-----------+-+--------------+-+--------------+-+--------------+-+----------+ 
 
 
 
 
FINANCIAL FIXED ASSETS (II) 
 
 
Financial fixed assets can be detailed as follows: 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
|                                                   |  |       |  |      December 31,      | 
+---------------------------------------------------+--+-------+--+------------------------+ 
|                                                   |  |       |  |  2008    |  |  2007    | 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
|                                                   |  |       |  |          |  |          | 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
|    Subsidiaries                                   |  |       |  |   34,227 |  |   35,412 | 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
|    Long-term loan to subsidiaries                 |  |       |  |      616 |  |      814 | 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
|    Deferred taxes                                 |  |       |  |      360 |  |      850 | 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
|    Finance lease receivables                      |  |       |  |      182 |  |        - | 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
|    Other assets                                   |  |       |  |        6 |  |      179 | 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
|                                                   |  |       |  |          |  |          | 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
|    Balance at December 31, 2008                   |  |       |  |   35,391 |  |   37,255 | 
+---------------------------------------------------+--+-------+--+----------+--+----------+ 
 
 
The movement of these accounts is the following: 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                                  |   Subsidiaries  |    Long-term |   Deferred  |     Finance    |    Other  |   Total  | 
|                                  |                 |     loans to |     taxes   |       lease    |           |          | 
|                                  |                 | subsidiaries |             |   receivables  |   assets  |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                                  |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Balance      |          35,412 |          814 |         850 |              - |     179   |   37,255 | 
|                     at 1         |                 |              |             |                |           |          | 
|                     January      |                 |              |             |                |           |          | 
|                     2008         |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Increase     |                 |              |             |                |           |          | 
|                     (decrease),  |                 |              |             |                |           |          | 
|                     net          |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Contribution |              29 |            - |          13 |              - |     (173) |    (131) | 
|                     to           |                 |              |             |                |           |          | 
|                     subsidiary   |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Release      |               - |            - |       (503) |              - |         - |    (503) | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Capital      |            170  |            - |           - |              - |         - |      170 | 
|                     reserve      |                 |              |             |                |           |          | 
|                     for          |                 |              |             |                |           |          | 
|                     share        |                 |              |             |                |           |          | 
|                     based        |                 |              |             |                |           |          | 
|                     option       |                 |              |             |                |           |          | 
|                     plan         |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Investment   |           3,189 |            - |           - |              - |         - |    3,189 | 
|                     in           |                 |              |             |                |           |          | 
|                     subsidiaries |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Investment   |           1,400 |            - |           - |              - |         - |    1,400 | 
|                     in Capital   |                 |              |             |                |           |          | 
|                     note to      |                 |              |             |                |           |          | 
|                     subsidiary   |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Exchange     |           1,102 |        (198) |           - |              - |         - |      904 | 
|                     differences  |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Result       |         (6,232) |            - |           - |              - |         - |  (6,232) | 
|                     2008         |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Financial    |                 |            - |           - |            182 |         - |      182 | 
|                     lease        |                 |              |             |                |           |          | 
|                     receivables  |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Reclassify   |           (843) |              |             |                |           |    (843) | 
|                     deficit      |                 |              |             |                |           |          | 
|                     equity of    |                 |              |             |                |           |          | 
|                     subsidiary   |                 |              |             |                |           |          | 
|                     from         |                 |              |             |                |           |          | 
|                     receivables  |                 |              |             |                |           |          | 
|                     to           |                 |              |             |                |           |          | 
|                     investment   |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                                  |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
|                     Balance      |          34,227 |          616 |         360 |            182 |         6 |   35,391 | 
|                     at 31        |                 |              |             |                |           |          | 
|                     December     |                 |              |             |                |           |          | 
|                     2008         |                 |              |             |                |           |          | 
+----------------------------------+-----------------+--------------+-------------+----------------+-----------+----------+ 
 
 
The subsidiaries of the company are: 
+-----------------------------------------+--+-------------+--+--------------+--+----------+ 
|                                         |  |    Country  |  |    City      |  |    %     | 
+-----------------------------------------+--+-------------+--+--------------+--+----------+ 
|    Polymer Logistics (Israel) Ltd       |  |      Israel |  |     Ra'anana |  |      100 | 
+-----------------------------------------+--+-------------+--+--------------+--+----------+ 
|    Polymer Logistics Italy S.R.L        |  |       Italy |  |       Milano |  |      100 | 
+-----------------------------------------+--+-------------+--+--------------+--+----------+ 
|    Polymer Logistics (UK) Ltd           |  |          UK |  |   Birmingham |  |      100 | 
+-----------------------------------------+--+-------------+--+--------------+--+----------+ 
|    Polymer Logistics Inc *)             |  |         USA |  |       Arroyo |  |      100 | 
|                                         |  |             |  |       Grande |  |          | 
+-----------------------------------------+--+-------------+--+--------------+--+----------+ 
|    Polymer Logistics Injections Ltd     |  |      Israel |  |       Migdal |  |      100 | 
|    **)                                  |  |             |  |      Ha'emek |  |          | 
+-----------------------------------------+--+-------------+--+--------------+--+----------+ 
 
 
*) held 100% by Polymer Logistics (UK) Ltd 
**) held 100% by Polymer Logistics (Israel) Ltd 
 
 
Total deferred taxes amounted to 360 of which: 
< 1 year - 40 
> 5 years- 0 
 
 
INVENTORIES (III) 
 
 
All inventories are finished goods of net realisable value. 
 
 
RECEIVABLES (IV) 
 
 
Trade and other receivables can be detailed as follows: 
 
 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|                                                   |  |       |  |      December 31,        | 
+---------------------------------------------------+--+-------+--+--------------------------+ 
|                                                   |  |       |  |   2008    |  |   2007    | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|                                                   |  |       |  |           |  |           | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|    Trade receivables                              |  |       |  |       496 |  |     4,870 | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|    Group companies                                |  |       |  |     6,066 |  |     3,887 | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|    Current maturities of finance lease            |  |       |  |        55 |  |         - | 
|    receivables                                    |  |       |  |           |  |           | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|    Government authorities                         |  |       |  |        21 |  |       355 | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|    Prepaid expenses and accrued income            |  |       |  |       128 |  |     1,543 | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|    Other receivables                              |  |       |  |         - |  |       206 | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|                                                   |  |       |  |           |  |           | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|                                                   |  |       |  |     6,766 |  |    10,861 | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
 
 
CASH AND CASH EQUIVALENTS (V) 
 
 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|                                                   |  |       |  |      December 31,        | 
+---------------------------------------------------+--+-------+--+--------------------------+ 
|                                                   |  |       |  |   2008    |  |   2007    | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|                                                   |  |       |  |           |  |           | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
|    Cash at bank and in hand                       |  |       |  |       108 |  |       536 | 
+---------------------------------------------------+--+-------+--+-----------+--+-----------+ 
 
 
SHAREHOLDERS EQUITY (VI) 
 
 
Reference is made to the consolidated statements of changes in equity and note 
19. 
 
 
LONG-TERM LIABILITIES (VII) 
 
 
Long Term Loans 
 
 
+-----------------------------------------+---+-------------+---+----------+---+----------+ 
|                                         |   |  Interest   |   |      December 31,       | 
|                                         |   |    rate     |   |                         | 
+-----------------------------------------+---+-------------+---+-------------------------+ 
|                                         |   |      %      |   |  2008    |   |  2007    | 
+-----------------------------------------+---+-------------+---+----------+---+----------+ 
|                                         |   |             |   |          |   |          | 
+-----------------------------------------+---+-------------+---+----------+---+----------+ 
|    Euro- Supplier                       |   |   6.65-9.5  |   |      294 |   |    1,347 | 
+-----------------------------------------+---+-------------+---+----------+---+----------+ 
|                                         |   |             |   |          |   |          | 
+-----------------------------------------+---+-------------+---+----------+---+----------+ 
|    Less- current maturities             |   |             |   |     (52) |   |    (171) | 
+-----------------------------------------+---+-------------+---+----------+---+----------+ 
|                                         |   |             |   |          |   |          | 
+-----------------------------------------+---+-------------+---+----------+---+----------+ 
|                                         |   |             |   |      242 |   |    1,176 | 
+-----------------------------------------+---+-------------+---+----------+---+----------+ 
 
 
+-----------------------------------------+----------------+----------+---+----------+ 
|                                         |                |            December 31, | 
+-----------------------------------------+----------------+-------------------------+ 
|                                         |                |    2008  |   |    2007  | 
+-----------------------------------------+----------------+----------+---+----------+ 
|                                         |                |          |   |          | 
+-----------------------------------------+----------------+----------+---+----------+ 
|    First year- current maturities       |                |       52 |   |      171 | 
+-----------------------------------------+----------------+----------+---+----------+ 
|    Second year                          |                |       57 |   |      183 | 
+-----------------------------------------+----------------+----------+---+----------+ 
|    Third year                           |                |       87 |   |      196 | 
+-----------------------------------------+----------------+----------+---+----------+ 
|    Fourth year                          |                |       98 |   |      797 | 
+-----------------------------------------+----------------+----------+---+----------+ 
|                                         |                |          |   |          | 
+-----------------------------------------+----------------+----------+---+----------+ 
|                                         |                |      294 |   |    1,347 | 
+-----------------------------------------+----------------+----------+---+----------+ 
 
 
CURRENT LIABILITIES (VIII) 
 
 
a. Other current liabilities can be detailed as follows: 
 
 
+---------------------------------------------------+------+----------+---+----------+ 
|                                                   |      |      December 31,       | 
+---------------------------------------------------+------+-------------------------+ 
|                                                   |      |  2008    |   |  2007    | 
+---------------------------------------------------+------+----------+---+----------+ 
|                                                   |      |          |   |          | 
+---------------------------------------------------+------+----------+---+----------+ 
| Group companies                                   |      |       60 |   |        - | 
+---------------------------------------------------+------+----------+---+----------+ 
| Accrued expenses                                  |      |      189 |   |    1,748 | 
+---------------------------------------------------+------+----------+---+----------+ 
|                                                   |      |      249 |   |    1,748 | 
+---------------------------------------------------+------+----------+---+----------+ 
 
 
b. Deposits from customers: 
 
 
Deposits from customers against equipment are non-interest bearing and are 
repaid on return of the equipment. 
 
 
OTHER RESULTS (IX) 
+---------------------------------------------------+------+----------+---+----------+ 
|                                                   |      |Year ended December 31,  | 
+---------------------------------------------------+------+-------------------------+ 
|                                                   |      |  2008    |   |  2007    | 
+---------------------------------------------------+------+----------+---+----------+ 
|                                                   |      |          |   |          | 
+---------------------------------------------------+------+----------+---+----------+ 
| Sell of IP rights                                 |      |    1,771 |   |        - | 
+---------------------------------------------------+------+----------+---+----------+ 
|    Interest income for long term- loan            |      |    2,966 |   |        - | 
+---------------------------------------------------+------+----------+---+----------+ 
|    Others                                         |      |    (358) |   |    (552) | 
+---------------------------------------------------+------+----------+---+----------+ 
|                                                   |      |    4,379 |   |    (552) | 
+---------------------------------------------------+------+----------+---+----------+ 
 
 
CONTINGENT LIABILITIES (IX) 
 
 
The Company has operating lease agreements for various facilities and vehicles, 
which expire on various dates. Future minimum lease payments under 
non-cancelable leases as of December 31, 2008 are as follows: 
 
 
+----------------------------------------------------------------------+----------+ 
|    First year                                                        |      215 | 
+----------------------------------------------------------------------+----------+ 
|    Second year                                                       |      123 | 
+----------------------------------------------------------------------+----------+ 
|    Third year                                                        |       33 | 
+----------------------------------------------------------------------+----------+ 
|                                                                      |          | 
+----------------------------------------------------------------------+----------+ 
|                                                                      |      371 | 
+----------------------------------------------------------------------+----------+ 
 
 
PERSONNEL (X) 
 
 
+--------------------------------------------------------+----------+----+----------+ 
|                                                        |        December 31,      | 
+--------------------------------------------------------+--------------------------+ 
|                                                        |    2008  |    |    2007  | 
+--------------------------------------------------------+----------+----+----------+ 
|                                                        |          |    |          | 
+--------------------------------------------------------+----------+----+----------+ 
|            Wages and salaries                          |      535 |    |      971 | 
+--------------------------------------------------------+----------+----+----------+ 
|            Pension costs                               |       60 |    |       54 | 
+--------------------------------------------------------+----------+----+----------+ 
|            Social security costs                       |      141 |    |      247 | 
+--------------------------------------------------------+----------+----+----------+ 
|            Share based payment costs                   |       20 |    |      240 | 
+--------------------------------------------------------+----------+----+----------+ 
|                                                        |          |    |          | 
+--------------------------------------------------------+----------+----+----------+ 
|                                                        |      756 |    |    1,512 | 
+--------------------------------------------------------+----------+----+----------+ 
 
 
The number of personnel employed in 2008 was 6 employees (2007 - 21 employees). 
 
 
AUDIT EXPENSES (XI) 
 
 
The fees charged by Ernst & Young Accountants LLP in the Netherlands are as 
follows: 
 
 
 
 
+--------------------------------------------------+-+-----------+--+-----------+ 
|            Audit services                        | |        80 |  |        82 | 
+--------------------------------------------------+-+-----------+--+-----------+ 
|            Audit related services                | |        40 |  |        35 | 
+--------------------------------------------------+-+-----------+--+-----------+ 
|            Non audit services                    | |         - |  |         - | 
+--------------------------------------------------+-+-----------+--+-----------+ 
|                                                  | |       120 |  |       117 | 
+--------------------------------------------------+-+-----------+--+-----------+ 
 
 
DIRECTOR'S REMUNERATION (XII) 
 
 
Reference is made to the consolidated statements of changes in equity and note 
24. 
 
 
AUTHORISATION OF FINANCIAL STATEMENTS 
 
 
The 2008 Financial Statements of Polymer Logistics N.V. have been signed by all 
members of the board of directors. The Financial Statements are to be adopted by 
the general meeting of shareholders of the Company. 
 
 
+--------------------------------------------+--------------------------------------------+ 
| G. Feiner                                  | Z.Yemini                                   | 
|                                            |                                            | 
+--------------------------------------------+--------------------------------------------+ 
| D. Gerner                                  | J.A.C. Stuart                              | 
|                                            |                                            | 
+--------------------------------------------+--------------------------------------------+ 
|                                            | U.S. Wascher                               | 
|                                            |                                            | 
+--------------------------------------------+--------------------------------------------+ 
|                                            | J.C. Anderson                              | 
|                                            |                                            | 
+--------------------------------------------+--------------------------------------------+ 
|                                            | M Geiger                                   | 
+--------------------------------------------+--------------------------------------------+ 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 FR SSSSIWSUSELL 
 

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1 Year Polymer Log. Chart

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