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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Technoplast | LSE:TNP | London | Ordinary Share | IL0005410118 | ORD ILS1.0 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:4676Z
Technoplast Industries Ld
7 June 2004
TECHNOPLAST INDUSTRIES LIMITED
FINANCIAL STATEMENTS
31st MARCH 2004
UNAUDITED
TECHNOPLAST INDUSTRIES LIMITED
FINANCIAL STATEMENTS AS AT 31st MARCH 2004
TABLE OF CONTENTS
Page
Management Discussion and Analysis A-J
Auditor's Review Report 2
Condensed Consolidated Profit and Loss Account 3
Condensed Consolidated Statement of Recognised Gains and Losses 3
Condensed Consolidated Balance Sheet 4
Condensed Consolidated Cash Flow Statement 5-6
Notes to the Financial Statements 7-15
Management Discussion and Analysis
for the three month period ended 31st March 2004
We take pleasure in presenting the consolidated financial statements of
Technoplast Industries Limited for the period ended 31st March 2004 (hereinafter
- "the period under report"). The term "Company" as used in this report refers
to the parent company, Technoplast Industries Ltd. and the term "Group" refers
to the consolidation of the Company and its subsidiaries.
We present below a description of the main events that occurred during the
period under report.
* On 13 May 2004, the merger with Kidron Plastics Ltd. was
consummated. As part of the merger, 145,613,968 no-par value shares were issued
to Kidron Management and Holdings (1961) Ltd. and others, in return for U.S.$
500 thousand and 100% of the shares of Kidron Plastics Ltd.
* On 13 May 2004, the Tel Aviv District Court approved a creditor
arrangement for the Company, the major provisions of which are as follows:
The guaranteed creditors (the banks), to whom the Company owes an amount of NIS
65 million, (as of 31st March 2004) will receive the following:
- A payment of NIS 15 million within 6 months.
- A payment of NIS 28 million, spread out over a 10-year period.
- Participation in profits up to an amount of NIS 10 million over a ten-year
period (an amount of 25% of the Company's pre-tax income in excess of U.S.$ 1.1
million from operations and/or the sale of injection mould plastic products).
- An amount of NIS 12 million will be erased, subject to the payment of the
NIS 15 million within six months of the approval of the creditor arrangement.
Unsecured creditors, to whom the Company owes an amount of NIS 13 million, will
receive the following:
- Two alternatives: Alternative A - A cash payment (within 90 days) of 25% of
their debt; Alternative B - A cash payment (within 90 days) of 15% of their debt
and 25% spread out over 5 years.
- Participation in profits, unlimited in time, of 25% of their debt (15% of
the Company's pre-tax income in excess of U.S.$ 1.1 million from operations and/
or the sale of injection mould plastic products).
- Erasure of 50% of their debt, with an alternative of 35%.
Creditors to whom the Company owes less than NIS 10,000 each will receive 70% of
their debt.
As a result of the creditor arrangement, the Company expects to record a gain in
2004 of NIS 18 million, deriving from the erasure of debts as part of the
arrangement.
* In April 2004, the Company signed an assessment agreement with the
tax assessing officer, whereby the order issued to the Company in respect of the
1998 tax year, in an amount of NIS 11.7 million (including interest and linkage
differentials) would be cancelled. Concurrently, an amount of NIS 22 million
would be deducted from the Company's tax loss carryforwards.
As a result of the aforementioned assessment arrangement, the Company erased a
provision for taxes in an amount of NIS 5 million.
* Following consummation of the merger agreement with Kidron, on 23
May 2004, the Company's board of directors approved a new production agreement
between the Company and Z.A.G. Industries Ltd. (hereinafter - "Z.A.G."), whereby
Z.A.G. undertook to transfer to the Company at least 30% of Z.A.G.'s injection
production of plastic products in Israel (whether the production is done by
Z.A.G., subcontractors or third parties), but not less than US$9 million, at
agreed-upon prices.
The production agreement is for a period of 10 years, commencing with the
signing of the agreement. Notwithstanding the above, after four years of
operation, either party is entitled to terminate the production agreement upon
advance notice of 12 months. In the event such advance notice is given, the
other party has the right to extend the advance notice period by an additional
12 months (i.e., a total of 24 months).
In addition, the board of directors of the Company approved another agreement
between Z.A.G., the Company and a limited partnership of Technoplast Investments
(1993) Ltd. The Limited Partnership will manufacture and have sole global
marketing rights for agreed-upon products of Z.A.G. and products of the Company.
For purposes of its operations, the Limited Partnership will purchase
production services from the Company, at agreed-upon prices. Z.A.G. will act as
the sole representative of the Limited Partnership in North America.
The agreement is for a two-year period, commencing with the date of its signing,
and will be automatically extended for additional periods of two years, unless
any of the parties notifies the other party prior to the end of the agreement
period of its desire to terminate the agreement at the end of the agreement
period. Such notice must be given at least three months in advance, with the
other party having the right to extend the advance notice period by an
additional three months (i.e., a total of six months).
The aforementioned agreements are contingent upon the approval of the Supervisor
of Restrictive Trade Practices by no later than 15 August 2004. If such
approval is not forthcoming by that date, the agreements shall expire.
* As part of a compromise agreement signed with its banks, the Company
undertook to allot the banks 8,131,053 option warrants that will comprise 5% of
the Company's share capital after exercise of the options. The exercise price
per option was set at U.S.$ 0.0178 per share. The options are exercisable until
12 May 2009.
* On 16 March 2004, the board of directors of the Company approved the
sale of all of the shares and rights of the Company in SMS to a third party, in
return for the cancellation of the Company's guarantee of the debts of SMS to a
certain bank and in return for an amount equal to 15% of the annual net income
of SMS in excess of NIS 3 million, relative to the shares being sold, but not to
exceed an aggregate amount of NIS 650 thousand, linked to the Israeli Consumer
Price Index, over a period of 60 months.
The sale of the shares to the third party is subject to receipt of the approval
of the banks having perpetual liens on company's assets, by no later than 15 May
2004.
The date for obtaining the approval of the banks was extended by mutual
agreement with the third party to 30 June 2004 and, concurrently, the date by
which the Company is entitled to demand return of the shares and rights in SMS
was also extended to 15 July 2004.
If no demand is made for the return of the rights and shares, they shall remain
the possession of the third party.
In accordance with the approval of the sale of shares, the activity of the SMS
subsidiary is segregated from the activity of the Company in the consolidated
statement of operations and is presented as a "Loss on discontinued operations".
The assets of the subsidiary are presented in the consolidated balance sheet
as "Assets from discontinued operations" and its liabilities are presented in
the consolidated balance sheet as "Liabilities of discontinued operations".
The discontinued operations generated a first quarter loss in the consolidated
statement of operations in an amount of NIS 2.8 million (NIS 16.6 million in
2003).
Subject to consummation of the transaction, the Company will erase the provision
in an amount of NIS 18 million in the financial statements of 2004.
Further to its resolution of 16 March 2004 regarding the sale of its holdings in
SMS and the resignation of the representatives of the Company from the board of
directors of SMS, the board of directors of the Company resolved, on 30 May
2004, that it had no intention of investing in or supporting the activities of
SMS in any manner of form. A notice regarding this decision will be circulated
to the other shareholders of SMS and to the banks financing SMS.
* Results of operations during the quarter under report reflected the
following:
- Company sales totalled NIS 30.7 million during the quarter, an
increase of 21.3% over the same period last year.
- The Company's gross profit reached 10% for the quarter, compared
with 16% in the same quarter last year, and 11% in all of 2003. The decrease in
the gross profit margin derived mainly from the increase in raw material prices
in recent months.
- The Company showed a positive cash flow from current operations in
an amount of NIS 0.3 million, compared with a negative cash flow in the same
quarter last year in an amount of NIS 2.8 million, and compared with a negative
cash flow of NIS 4.5 million during all of 2003.
- Company sales amounted to NIS 30.7 million during the quarter,
compared with NIS 25.3 million in the same quarter last year, and NIS 33.3
million in the prior quarter.
* We present below condensed income statement data for the quarter,
compared with results of operations in 2003 and in the same quarter last year,
in NIS millions:
Q1 2004 Year ended December Q1 2003
31, 2003
Sales 30.7 97.4 25.3
Gross profit 10% 11.2% 16%
Operating loss before financing (1.5) (9.9) (0.8)
Operating loss after financing (3.1) (12.9) (1.8)
Loss from continuing operations (1,355) (887) (20,747)
* The loss from continuing operations amounted to NIS 1.3 million for
the quarter, compared with NIS 0.9 million in the same quarter last years and
compared with a loss of NIS 20.7 million for all of 2003. The Group had a
consolidated loss for the quarter (including the loss from discontinued
operations) of NIS 4.2 million, compared with NIS 1.6 million during the same
quarter last year, and a loss of NIS 37.3 million in all of 2003.
The loss includes other expenses, mainly in respect of provisions during the
quarter pertaining to debit balances recorded in the past on the books of the
Company, in an amount of NIS 3.3 million.
* As at 31st March 2004, the Group had a shareholders' deficit of NIS
19.7 million and a working capital deficit of NIS 45.9 million. The Group has
accumulated losses as at 31st March 2004 in an amount of NIS 106.3 million.
Additional material events during the period were as follows:
* On 13th May 2004, Messrs. Itamar Patishi, Shlomo Tisser, and Aviad
Shachar resigned their membership oin the board of directors. In their stead,
the following people were appointed: Messrs. Michael Susz, Rami Mardor, Yaacov
Meidan, Moshe Katz, and Ofer Zimchi.
In addition, in May 2004, Mr. Shai Eshel completed his service as an
external director on the board of directors.
Mr. Michael Susz was appointed as permanent chairman of the board of
directors of the Company. The terms of his employment are in accordance with
those agreed upon in the merger transaction.
The Group and its Business Environment
General
The Company is an industrial concern engaged in the manufacture of
injection-moulded and pressed plastic products. The Company has an active plant
in Migdal Ha'emek.
Subsidiaries, associated undertakings and other companies
AFIC Printing Products Ltd. (hereafter - "AFIC")
The Company holds 25.1% of AFIC's shares. AFIC is engaged in the production and
marketing of cartridges for printers and cash registers.
The years 2002 and 2003 were characterised by a significant expansion in
activity and in a transition from loss to profit.
Sales of AFIC during the quarter totalled NIS 5.7 million, compared with NIS 6.3
million during the same period last year and NIS 24.5 million for all of 2003.
Net earnings for the period amounted to NIS 0.4 million, compared with NIS 0.6
million during the same period last year and NIS 2.3 million for all of 2003.
The company's shareholders' equity as at 31st March 2004 amounted to NIS 6.5
million, compared with NIS 4.4 million at the end of the same quarter last year,
and NIS 6.1 million as at 31st December 2003. The investment in AFIC is
presented in the financial statements under the equity method.
As at 31st March 2004, the Company recorded its investment in AFIC at an amount
of NIS 1.6 million, 25.1% of the shareholders' equity of AFIC at that date.
Financial Position (consolidated)
31st March 2004 31st March 2003 31st December 2003
% of balance % of balance % of balance
NIS'000 sheet NIS'000 sheet NIS'000 sheet
Total balance sheet 136,899 176,336 143,076
Current assets 25,104 18% 32,476 18% 29,352 21%
Investments 1,647 1% 1,181 1% 1,578 1%
Tangible assets 54,463 40% 70,941 40% 56,356 39%
Assets attributed to 55,685 41% 71,738 41% 55,790 39%
discontinued operations
Current liabilities 71,035 52% 64,043 36% 73,498 51%
Long-term liabilities 11,777 8% 20,927 12% 14,051 10%
Liabilities attributed to 73,769 54% 71,097 40% 71,037 50%
discontinued operations
Shareholders' funds (19,682) (14%) 20,269 12% (15,510) (11%)
(deficit)
The explanations below pertain to the changes in the consolidated balance sheet
which took place during the reporting period.
Current assets decreased during the period under report by approximately NIS 4.3
million. This decrease resulted from the decrease of approximately NIS 3.4
million in accounts receivable and other debits, and the decrease of NIS 1.5
million in inventory, offset by the NIS 0.6 million increase in trade debtors.
The NIS 1.9 million decrease in tangible fixed assets originated from
depreciation for the period in an amount of NIS 1.8 million, and the sale of
fixed assets, the depreciated cost of which amounted to NIS 0.6 million, less
purchases of fixed assets in an amount of NIS 0.5 million.
Current liabilities presented in the balance sheet as at 31 March 2004 decreased
by approximately NIS 2.5 million, as a result of the increase in short-term
credit from banking institutions in an amount of NIS 3.2 million, of which an
amount of NIS 2.3 million was in respect of loans that were originally granted
for the long term but, due to the fact that the Company is in arrears in
repaying the loans, the banks were entitled to demand immediate repayment of the
entire amount. These increases were offset by the decrease in trade and other
creditors of approximately NIS 5.7 million.
Upon the consummation of the first phase of the agreement with the banks
(payment of NIS 15 million), the large overdraft will be brought under control
as part of the new credit frameworks to be granted to the Company by the banks.
The NIS 2.3 million decrease in long-term liabilities derived from the loans
that were originally granted for the long term but which were presented as
short-term (as above), from net repayment of loans that occurred during the
period, and from the erosion of loans linked to foreign currency.
The NIS 4.2 million decrease in shareholders' funds derived from the loss for
the period under report.
Results of consolidated operations
Quarter Ended 31st March Year Ended 31st December
2004 2003 2003
NIS'000 % of sales NIS'000 % of sales NIS'000 % of sales
Turnover 30,683 - 25,340 - 97,412 -
Gross profit 2,959 10% 4,136 16% 11,189 11%
Operating loss (1,536) (5%) (848) (3%) (9,989) (10%)
Financing expenses, net (1,578) (5%) (998) (4%) (2,884) (3%)
Operating loss after financing (3,114) (10%) (1,846) (7%) (12,873) (13%)
Other (income) expenses, net (3,319) (11%) 817 3% (8,448) (9%)
Taxes on income 5,000 16% - - - -
Share of Group in profits of 98 0% 142 1% 574 0%
associated undertaking
Loss on discontinued operations (2,837) (9%) (669) (3%) (16,588) (18%)
Loss for the period (4,172) (14%) (1,556) (6%) (37,335) (38%)
Analysis of the results of consolidated operations for the period ended 31st
March 2004
Turnover
Group sales during the period increased by NIS 5.3 million (21%) compared with
sales in the first quarter of 2003, and totalled NIS 30.7 million for the
period.
Gross profit
Consolidated gross profit during the period decreased from NIS 4.1 million (16%
of sales during the same period last year), to NIS 3 million (10% of sales),
compared with a gross profit margin of 11% for all of 2003. The decrease in
gross profit derived mainly from an increase in the percentage of raw materials
out of total sales during the quarter (56% of sales, compared with 41% raw
material consumption in the same period last year). The increase in the
percentage of raw material consumption derived from the sharp increase in raw
material prices and from a change in the product mix sold during the first
quarter of 2004, compared with the products that were sold in the same quarter
last year.
Operating loss
The operating loss for the period amounted to NIS 1.5 million (5% of sales),
compared with NIS 0.8 million in the same period last year (3% of sales), and
compared with an operating loss of 10% in all of 2003. The decrease in gross
profit was the major factor contributing to the increase in the operating loss.
Selling and marketing expenses decreased by NIS 0.5 million and amounted to NIS
2.9 million (9% of sales) in the first quarter of the year, compared with NIS
3.4 million (13% of sales) in the same quarter last year. The decrease in these
expenses contributed to a decrease in the operating loss. The decrease in
selling expenses was achieved as a result of the efficiency measures taken by
Company management in recent quarters.
General and administrative expenses amounted to NIS 1.5 million during the
period and during the same period last year (5% of sales during the period and
6% of sales during the same period last year).
Financing expenses
Financing expenses amounted to NIS 1.6 million during the quarter, compared with
NIS 1 million in the same period last year. The increase was mainly due to
exchange rate differences amounting to NIS 0.5 million during the reporting
period.
Other expenses
Other expenses amounted to NIS 3.3 million during the quarter, compared with
other income of NIS 0.8 million in the same period last year. Most of the other
expenses for the quarter represent the erasure of various receivables previously
recorded in the books of the Company.
Taxes on income
In accordance with the assessment agreement signed by the Company with the tax
assessing officer in April 2004, whereby the order issued against the Company in
respect of the 1998 tax year in an amount of NIS 11.7 million was cancelled, the
Company erased the provision for taxes it recorded in its books in an amount of
NIS 5 million.
Other expenses
Other expenses totaled NIS 3.3 million for the quarter, compared with other
income of NIS 0.8 million in the same period last year. The expenses include
mainly provisions recorded during the quarter in respect of debit balances
previously recorded on the books of the Company.
Taxes on income
In accordance with the agreement with the assessing officer in April 2004,
whereby the order issued to the Company in respect of the 1998 tax year for a
payment of NIS 11.7 million would be cancelled, the Company erased the provision
for tax which it had previously recorded in an amount of NIS 5 million.
Loss from discontinued operations
Further to the approval of the board of directors of the sale of all of the
shares and rights of the Company in its subsidiary, SMS, to a third party, the
share of the Company in the results of the subsidiary was recorded as a loss
from discontinued operations.
Liquidity and cash flows
Liquidity data (consolidated) 31/3/04 31/3/03 31/12/03
Working capital deficit (45,931) (31,567) (44,146)
Cash, bank deposits and short-term trade investments 320 1,540 211
Liquidity ratios (consolidated)
Cash, bank deposits and short-term trade investments/current 0.013 0.048 0.007
assets
Current ratio 0.35 0.51 0.40
Quick ratio 0.28 0.39 0.30
Cash flows (consolidated)
Company cash flows from operations for the period totalled an inflow of NIS 0.3
million, compared with a cash inflow from current operations of NIS 2.8 million
during the same period last year.
The factors that contributed to the cash flows were as follows: the loss for the
period in an amount of NIS 4.2 million, less expenses in a net amount of NIS 1.1
million not constituting a cash flow, offset by a decrease in inventories (NIS
1.5 million), a decrease in other receivables (NIS 3.4 million), depreciation
and amortisation of NIS 1.8 million, a loss on discontinued operations in an
amount of NIS 2.8 million, plus an increase in trade debtors (NIS 0.6 million)
and a decrease in trade creditors and other payables (NIS 5.7 million).
The discontinued operations had a cash outflow from current operations of NIS
3.2 million.
Cash flows used in investment activity during the period under report totalled
an outflow of approximately NIS 0.6 million, compared with NIS 0.9 million in
the same quarter last year. The outflow was used mainly for the purchase of
fixed assets.
Cash flows from financing activity during the period under report amounted to an
inflow of approximately NIS 0.4 million during the period under report, compared
with an outflow of NIS 1.3 million in the same quarter last year. The inflow
resulted from the receipt of short-term bank credit in a net amount of NIS 2.2
million, offset by the net repayment of long-term loans in an amount of NIS 1.8
million.
The discontinued operations had a cash inflow from financing activity of NIS 2.4
million.
Sources of finance
As a result of the creditor arrangement that was approved by the court, and the
investment of shareholders, as described above, Company management believes that
the credit framework the Company receives from the bank will be adequate to
cover its current financing needs.
The Company is negotiating with its banks for an additional increase in the
credit lines it needs to finance its working capital needs and future
investments.
Donations
Company policy is to contribute to the community, especially in the areas
surrounding its plants, based on the financial ability to do so.
During the period under report, in accordance with this policy, the Company made
contributions of NIS 5 thousand to various institutions and organizations.
Exposure to market risks and risk management
General
The Group's activity in competitive international markets for consumer goods
exposes the Company to risks deriving from changes in exchange rates and prices
of raw materials, to the risks of granting credit to customers in Israel and
abroad, and to the risks of being dependent on major customers.
The Company's board of directors discusses market risks and the manner in which
they are handled, at its quarterly meetings.
The general manager is responsible for managing risks deriving from changes in
raw material prices (including changing selling prices in accordance with the
up-to-date prices of raw materials), changes in exchange rates and the risks of
granting credit to customers and the risks from dependency on major customers.
The Company is exposed to the following market risks:
Exchange rate fluctuations
Approximately 90% of the Group's sales are denominated in the dollar or European
currencies (hereinafter - "foreign currency"). In addition, 90% of the raw
material costs are foreign currency denominated and about 20% of the Group's
other expenses are foreign currency linked.
As at 31st March 2004, the excess of the Group's liabilities in foreign currency
over its assets in foreign currency amounted to NIS 4.7 million.
The above data show that the Company is exposed to two opposing foreign currency
effects - on the one hand, a devaluation of the shekel results in financing
expenses because of the outstanding foreign currency liabilities. On the other
hand, since the percentage of foreign currency linked expenses is lower than the
percentage of foreign currency linked revenues, the Company's operating income
increases as a result of the same devaluation.
Changes in raw material prices
In accordance with the Company's agreement with ZAG, the Company's major
customer (approximately 56% of all Company sales during the period), any change
in the price of raw materials is immediately and entirely transferred to the
prices of products.
With regard to other customers, the Company has no obligation to fixed prices
over the long-term. As a result, no forward transactions are entered into, to
guarantee raw material prices. Nevertheless, it is difficult to raise product
prices every time raw material prices increase and under the best of
circumstances, compensation is only partial.
Recently, raw material prices rose by approximately 10%, but the Company and its
competitors have not raised the prices of merchandise they sell to their
customers. The effects of the increases in raw material prices will be felt
mainly during the second quarter of 2004.
Customer credit risks
As indicated below, the Group has a major customer, Z.A.G., comprising 56% of
the consolidated sales turnover during the quarter. Management estimates that
the credit risk in respect of this customer is not high and does not justify
taking out credit insurance. Therefore, the Group does not insure itself for
credit risks.
The Company entered into an agreement with an international provider of business
and financial data regarding companies around the world, and it uses the data it
obtains to conduct initial and ongoing credit risk evaluations of both its new
and existing customers.
Dependency on a major customer
The Company has a major customer - Z.A.G., to which it sold during the period,
56% of the total Group sales.
As mentioned above, on 23rd May 2004, the Company's board of directors approved
new long-term agreements between the Company and its major customer. Management
believes that these agreements significantly reduce the risks deriving from
dependency on a major customer.
Linked balance sheet as at 31st March 2004 (NIS '000)
Denominated in Linked to the Unlinked Non-monetary Total
or linked to ICPI items
foreign currency
Assets
Cash and cash equivalents 206 - 114 - 320
Trade debtors 17,406 - 577 - 17,983
Other debtors - 743 846 - 1,589
Stocks - - - 5,212 5,212
Investments - 5 - 1,642 1,647
Tangible assets - - - 54,463 54,463
Assets attributed to
discontinued 8,129 6,755 5,275 35,526 55,685
operations
Total assets 25,741 7,503 6,812 96,843 136,899
Liabilities
Credit from banking
institutions 11,181 8,300 27,858 - 47,339
Trade creditors 534 - 13,609 - 14,143
Other creditors - - 2,347 300 2,647
Long-term loans 18,683 - - - 18,683
Liabilities attributed to 29,333 6,787 37,432 217 73,769
discontinued operations
Total liabilities 59,731 15,087 81,246 517 156,581
Surplus (deficit) of assets
over (33,990) (7,584) (74,434) 96,326 (19,682)
liabilities
Michael Susz Moshe Katz
Chairman of the Board General Manager and Director
31st May 2004
The Board of Directors of 31 May 2004
Technoplast Industries Ltd.
Dear Sirs:
Re: Review of the Unaudited Condensed Interim Consolidated
Financial Statements for the three month period ended 31 March 2004
At your request, we have reviewed the condensed interim consolidated balance
sheet of TECHNOPLAST INDUSTRIES LIMITED and its subsidiaries as at 31 March
2004, the condensed consolidated profit and loss accounts, condensed statements
of recognised gains and losses, condensed statements of changes in shareholders'
equity and the condensed consolidated statements of cash flows for the three
month period then ended.
Our review was conducted in accordance with procedures prescribed by the
Institute of Certified Public Accountants in Israel and included, inter alia,
reading the said financial statements, reading the minutes of the shareholders'
meetings and of the meetings of the Board of Directors and its committees, as
well as making inquiries of persons responsible for financial and accounting
matters.
We were furnished with reports of other auditors regarding the review of the
condensed interim financial statements of a subsidiary whose assets included in
the consolidated balance sheet as "assets of a discontinued operation"
constitute approximately 41% of total consolidated assets and whose results of
operations for the three month period ended 31 March 2004 were included in the
consolidation as a "loss on discontinued operation". In addition, the data
presented in the consolidated financial statements, which relate to the equity
of the Company in the results of an associated undertaking are based on
financial statements that were reviewed by other auditors.
Since the review performed is limited in scope and does not constitute an audit
in accordance with generally accepted auditing standards, we do not express an
opinion on the condensed financial statements.
During the performance of our review, including reading review reports of other
auditors as stated above, nothing came to our attention that would necessitate
any material modifications to the condensed financial statements referred to
above in order for them to be in conformity with generally accepted accounting
principles and in accordance with Section D of the Securities Regulations
(Periodic and Immediate Reports), 1970.
We draw your attention to Note 1D of the financial statements regarding the
doubt as to the ability of the subsidiary, Smart Modular Ltd., to continue as a
"going concern". The activity of the subsidiary was presented in the financial
statements as part of discontinued operations.
The financial statements do not contain any adjustments or reclassifications of
assets and liabilities of the subsidiary, Smart Modular Ltd. that may prove to
be necessary if the subsidiary cannot continue operating as a "going concern".
Fahn Kanne & Co. Schmidt & Co.
Certified Public Accountants (Isr.) Certified Public Accountants (Isr.)
The accompanying notes are an integral part of these condensed statements.
CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT
Convenience
translation
Year ended Three months Three months Three months
31st December ended ended ended
31st March 31st March 31 March
2003 2003 2004 2004
Adjusted(1) Reported cost(2)
NIS' 000 NIS' 000 NIS' 000 #' 000
(Audited) (Unaudited) (Unaudited) (Unaudited)
Turnover 97,412 25,340 30,683 3,694
Cost of sales 86,223 21,204 27,724 3,338
_______ ______ ______ _____
Gross profit 11,189 4,136 2,959 356
Selling, general and administrative expenses 21,178 4,984 4,495 541
_______ ______ ______ _____
Operating loss before other expenses (9,989) (848) (1,536) (185)
Other income (expenses) (8,448) 817 (3,319) (400)
_______ ______ ______ _____
Loss on ordinary activities before financial (18,437) (31) (4,855) (585)
expenses
Net financial expenses (2,884) (998) (1,578) (190)
_______ ______ ______ _____
Loss on ordinary activities before taxes (21,321) (1,029) (6,433) (775)
Tax - - 5,000 602
_______ ______ ______ _____
Loss after taxation (21,321) (1,029) (1,433) (173)
Net equity in profits of associated undertaking 574 142 98 12
_______ ______ ______ _____
Loss from continuing operation (20,747) (887) (1,335) (161)
Loss from discontinued operation (16,588) (669) (2,837) (341)
_______ ______ ______ _____
Loss for the year (37,335) (1,556) (4,172) (502)
_______ ______ ______ _____
_______ ______ ______ _____
Loss per share (NIS/#)
Loss from continuing operation (0.62) (0.03) (0.11) (0.004)
Loss from discontinued operation (0.49) (0.02) (0.08) (0.010)
_____ ______ ______ _____
(1.11) (0.05) (0.12) (0.014)
_____ ______ ______ _____
_____ ______ ______ _____
Basic number of shares (in thousands) 33,584 33,854 33,584 33,584
______ ______ ______ _____
______ ______ ______ _____
CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES
Convenience
translation
Three months Three months Three months
Year ended ended ended ended
31st December 31st March 31st March 31 March
2003 2003 2004 2004
Adjusted(1) Reported cost(2)
NIS' 000 NIS' 000 NIS' 000 #' 000
(Audited) (Unaudited) (Unaudited) (Unaudited)
Total recognised losses for the year (37,335) (1,556) (4,172) (502)
_______ ______ ______ _____
_______ ______ ______ _____
(1) Adjusted to NIS of December 2003.
(2) See Note 2.
The accompanying notes are an integral part of these condensed statements.
CONDENSED CONSOLIDATED BALANCE SHEETS
Convenience
translation
31st December 31st March 31st March 31st March
2003 2003 2004 2004
Adjusted(1) Reported cost(2)
NIS' 000 NIS' 000 NIS' 000 #' 000
(Audited) (Unaudited) (Unaudited) (Unaudited)
Assets attributed to the discontinued operation 55,790 71,738 55,685 6,704
---------- ---------- ---------- ----------
Fixed assets
Tangible assets 56,356 70,941 54,463 6,557
Investee company 1,544 1,113 1,642 198
Severance pay - redundancy provision 34 68 5 -
_______ _______ _______ ______
57,934 72,122 56,110 6,755
---------- ---------- ---------- ----------
Current assets
Stocks 6,711 7,203 5,212 627
Debtors 22,430 23,733 19,572 2,356
Cash at bank and in hand 211 1,540 320 38
_______ _______ _______ ______
29,352 32,476 25,104 3,021
---------- ---------- ---------- ----------
Creditors: amounts falling due within one year
Bank loans and overdrafts 51,001 40,403 54,245 6,531
Creditors 22,497 23,640 16,790 2,021
_______ _______ _______ ______
73,498 64,043 71,035 8,552
---------- ---------- ---------- ----------
Net current assets/liabilities (44,146) (31,567) (45,931) (5,531)
_______ _______ _______ ______
_______ _______ _______ ______
Total assets less current liabilities 69,578 112,293 65,864 7,928
_______ _______ _______ ______
_______ _______ _______ ______
Liabilities attributed to the discontinued 71,037 71,097 73,769 8,882
operation
---------- ---------- ---------- ----------
Creditors: amounts falling due after more than
one year
Non-convertible bank loans 14,051 20,927 11,777 1,418
---------- ---------- ---------- ----------
Net assets/liabilities (15,510) 20,269 (19,682) (2,372)
_______ _______ _______ ______
_______ _______ _______ ______
Capital and reserves (Note 5) (15,510) 20,269 (19,682) (2,372)
_______ _______ _______ ______
_______ _______ _______ ______
Date of approval: 30 May 2004.
Michael Susz Moshe Katz Aliza Perry
Chairman of the Board General Manager Comptroller
and Director
(1) Adjusted to NIS of December 2003.
(2) See Note 2.
The accompanying notes are an integral part of these condensed statements.
CONSOLIDATED CASH FLOW STATEMENTS
Convenience
translation
Year ended Three months Three months Three months
31st December ended ended ended
31st March 31st March 31 March
Adjusted(1) Reported cost(2)
2003 2003 2004 2004
NIS' 000 NIS' 000 NIS' 000 #' 000
(Audited) (Unaudited) (Unaudited) (Unaudited)
Net cash flows from operating activities
(Appendix A)
Net cash flow from continuing operating (2,915) 2,751 308 37
activities
Net cash outflow from discontinued operating (1,545) (5,541) (3,181) (383)
activities
______ ______ ______ _____
(4,460) (2,790) (2,873) (346)
--------- --------- --------- -------
Investing activities
Payments to acquire tangible fixed assets (1,245) (678) (552) (66)
Receipts from sales of tangible fixed assets 1,089 668 - -
______ ______ ______ _____
Net cash outflow from continuing investing (156) (10) (552) (66)
activities
Net cash outflow from discontinued investing (1,283) (925) (72) (9)
activities
______ ______ ______ _____
Net cash flow from investing activities (1,439) (935) (624) (75)
______ ______ ______ _____
Financing activities
Receipt of long-term bank loans 4,470 - - -
Repayment of long-term loans (8,210) (2,629) (1,838) (221)
Short-term bank loans and credit, net 6,901 1,309 2,191 264
______ ______ ______ _____
Net cash inflow (outflow) from continuing 3,161 (1,320) 353 43
financing activities
Net cash inflow from discontinued financing 3,916 6,307 2,400 289
activities
______ ______ ______ _____
7,077 4,987 2,753 332
--------- --------- --------- -------
______ ______ ______ _____
Increase in cash and cash equivalents 1,178 1,262 (744) (89)
______ ______ ______ _____
______ ______ ______ _____
Opening balance - from continuing operation 121 121 211 24
______ ______ ______ _____
______ ______ ______ _____
Opening balance - from discontinued operation 806 806 1,894 228
______ ______ ______ _____
______ ______ ______ _____
Closing balance - from continuing operation 211 1,540 320 38
______ ______ ______ _____
______ ______ ______ _____
Closing balance - from discontinued operation 1,894 649 1,041 125
______ ______ ______ _____
______ ______ ______ _____
(1) Adjusted to NIS of December 2003.
(2) See Note 2.
The accompanying notes are an integral part of these condensed statements.
APPENDIX A
RECONCILIATION OF OPERATING PROFIT TO NET
CASH INFLOW FROM OPERATING ACTIVITIES
Convenience
translation
Year ended Three months Three months Three months
31st December ended ended ended
31st March 31st March 31 March
2003 2003 2004 2004
Adjusted(1) Reported cost(2)
NIS' 000 NIS' 000 NIS' 000 #' 000
(Audited) (Unaudited) (Unaudited) (Unaudited)
Loss for the year (37,335) (1,556) (4,172) (502)
Loss from discontinued operation 16,588 669 2,837 341
Depreciation of tangible fixed assets and 15,340 2,543 1,834 222
intangible assets
Write-down of investment in other company (970) (945) - -
Loss on sale of tangible fixed assets, net 1,855 92 611 74
Decrease (increase) in the value of capital note (27) - - -
Increase (erosion) in the value of long-term (1,176) (576) 617 74
liabilities
Company's equity in losses of associated (574) (142) (98) (12)
undertakings, net
Decrease/(increase) in stocks 467 (25) 1,499 180
Decrease/(increase) in trade debtors 5,592 3,421 (552) (66)
Decrease/(increase) in other debtors (475) 393 3,410 410
Increase/(decrease) in trade creditors (2,180) (2,301) 1,555 187
Increase/(decrease) in other creditors 176 1,408 7,262) (874)
Decrease in redundancy provision (196) (230) 29 3
______ ______ ______ _____
Net cash outflow from operating activities (2,915) 2,751 308 37
______ ______ ______ _____
______ ______ ______ _____
(1) Adjusted to NIS of December 2003.
(2) See Note 2.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE 1 - GENERAL
A. Company activities
Technoplast Industries Limited (hereafter - the Company) is a public company
engaged in the manufacture and marketing of plastic products.
B. Merger transaction with Kidron
Further to the agreement in principle signed on 29 June 2003, a final agreement
was signed on 31 August 2003 with Kidron Management and Holdings Company (1961)
Ltd. on its behalf and on behalf of others (hereinafter - "Kidron"), whereby
Kidron will transfer to the Company, by means of a merger, all the shares of
Kidron Plastics Ltd. (a company active in importing and marketing raw materials
for the plastics industry), in return for an allotment of shares in the Company,
which will grant Kidron 75% of the issued and outstanding shares (fully diluted)
of the Company.
In addition, Kidron was granted an option for purchasing additional shares in
return for an amount of US$ 500 thousand.
The percentage of the Company held by Kidron was determined on the basis of a
company valuation by an outside party.
On 22 December 2003, the general shareholders meeting of the Company approved
the allotment of shares to Kidron.
On 13 May 2004, the merger with Kidron Plastics Ltd. was consummated. As part
of the merger, 145,613,968 no-par value shares were issued to Kidron Management
and Holdings (1961) Ltd., in return for U.S.$ 500 thousand and 100% of the
shares of Kidron Plastics Ltd.
C. Creditor Arrangement
On 13 May 2004, the Tel Aviv District Court approved a creditor arrangement for
the Company, the major provisions of which are as follows:
The guaranteed creditors (the banks), to whom the Company owes an amount of NIS
65 million (as of 31 March 2004), will receive the following:
- A payment of NIS 15 million within 6 months.
- A payment of NIS 28 million, spread out over a 10-year period.
- Participation in profits up to an amount of NIS 10 million over a
ten-year period (25% of the Company's pre-tax income from operations and/or the
sale of injection mould plastic products, in excess of U.S.$ 1.1 million).
- An amount of NIS 12 million will be erased, subject to the payment of the
NIS 15 million within six months of the approval of the creditor arrangement.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE 1 - GENERAL
C. Creditor Arrangement (cont.)
Unsecured creditors, to whom the Company owes an amount of NIS 13 million, will
receive the following:
- Two alternatives: Alternative A - A cash payment (within 90 days) of 25%
of their debt; Alternative B - A cash payment (within 90 days) of 15% of their
debt and 25% spread out over 5 years.
- Participation in profits, unlimited in time, of up to 25% of their debt
(up to 25% of the Company's pre-tax income from operations and/or the sale of
injection mould plastic products, in excess of U.S.$ 1.1 million).
- Erasure of 50% of their debt, with an alternative of 35%.
Creditors to whom the Company owes less than NIS 10,000 each will receive 70% of
their debt.
As a result of the crediting arrangement, the review report of the Company's
independent auditor did not draw attention to the issue of the ability of the
Company to continue as a "going concern", which reference was made to in the
auditors report on the latest annual financial statements.
As part of a compromise agreement signed with its banks, the Company undertook
to allot the banks 8,131,053 option warrants that will comprise 5% of the
Company's share capital after exercise of the options. The exercise price per
option was set at U.S.$ 0.0178 per share. The options are exercisable until 12
May 2009.
As a result of the creditors arrangement, the Company expects to record a fain
in an amount of NIS 18 million in respect of the write-off of the relevant
liability.
D. Sale of Smart Modular Storage Ltd. Shares (hereafter: "SMS")
On 16 March 2004, the board of directors of the Company approved the sale of all
of the shares and rights of the Company in SMS to a third party, in return for
the cancellation of the Company's guarantee of the debts of SMS to a certain
bank (the guarantee was for an amount of U.S.$ 400 thousand) and in return for
an amount equal to 15% of the annual net income of SMS in excess of NIS 3
million, relative to the shares being sold, but not to exceed an aggregate
amount of NIS 650 thousand linked to the Israeli Consumer Price Index over a
period of 60 months.
The sale of the shares to the third party is subject to receipt of the approval
of the creditor banks, by no later than 15 May 2004.
The date for obtaining the approval of the banks was extended by mutual
agreement to 30 June 2004 and, concurrently, the date by which the Company is
entitled to demand return of the shares and rights in SMS was also extended to
15 July 2004.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE 1 - GENERAL
D. Sale of Smart Modular Storage Ltd. Shares (jereafter: "SMS") (cont.)
If no demand is made for the return of the rights and shares, they shall remain
the possession of the third party.
Since 16 March 2004, the Company has no representative on the board of directors
of SMS.
The financial statements present the SMS activity as discontinued operations, in
accordance with Standard No. 8 of the Israeli Accounting Standards Board.
In accordance with Opinion No. 57 of the Institute of Certified Public
Accountants in Israel, the Company also included in the results of its
operations for the first quarter, the minority share in the shareholders'
deficit of SMS, which exceeds SMS's liabilities to the minority shareholders and
the guarantees received from the minority shareholders.
Subject to the consummation of this decision by the Company to sell the shares
of SMS, the Company will record a provision in an amount of NIS 18 million in
the financial statements of 2004.
Further to its resolution of 16 March 2004 regarding the sale of its holdings in
SMS and the resignation of the representatives of the Company from the board of
directors of SMS, the board of directors of the Company resolved, on 30 May
2004, that it had no intention of investing in or supporting the activities of
SMS in any manner or form. A notice regarding this decision will be circulated
to the other shareholders of SMS and to the banks financing SMS.
In their review letter on the financial statements as of 31 March 2004, the
accountants of the subsidiary, Smart Modular Storage Ltd., drew attention to the
loss of NIS 3.1 million in the reporting period, the shareholders deficit in an
amount of NIS 33.5 million, the deficit in working capital in an amount of NIS
39.3 million and the negative cash flow from operating activities in an amount
of NIS 3.2 million. In addition, the accountants pointed out that the financing
of the working capital needed by the subsidiary is conditioned upon the
extension of due dates of bank loans and the receipt of alternative lines of
credit.
The financial statements do not contain any adjustments or reclassifications of
assets and liabilities that may prove to be necessary if the subsidiary cannot
continue operating as a "going concern".
E. New production agreement with Z.A.G.
On 23 May 2004, the Company's board of directors approved a new
production agreement between the Company and Z.A.G. Industries Ltd. (hereinafter
- "Z.A.G."), whereby Z.A.G. undertook to transfer to the Company at least 30% of
Z.A.G.'s injection production of plastic products in Israel (whether the
production is done by Z.A.G., subcontractors or third parties), but not less
than US$9 million, at agreed-upon prices.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE 1 - GENERAL
E. New production agreement with Z.A.G. (cont.)
The production agreement is for a period of 10 years, commencing with
the signing of the agreement. Notwithstanding the above, after four years of
operation, either party is entitled to terminate the production agreement upon
advance notice of 12 months. In the event such advance notice is given, the
other party has the right to extend the advance notice period by an additional
12 months (i.e., a total of 24 months).
In addition, the board of directors of the Company approved another
agreement between Z.A.G., the Company and a limited partnership in which a
subsidiary of the Company serves as an unlimited partner and the Company serves
as the sole limited partner (hereinafter - the "Limited Partnership"). The
Limited Partnership will have sole global marketing rights for agreed-upon
products of Z.A.G. and products of the Company (hereinafter - the "Products of
the Limited Partnership").
For purposes of its operations, the Limited Partnership will purchase
production services from the Company at agreed-upon prices and will appoint
Z.A.G. as its sole representative in North America for purposes of marketing and
selling the Products of the Limited Partnership for an agreed-upon
consideration.
The marketing of the Products of the Limited Partnership to the rest of
the world will be done by the Limited Partnership, at its discretion.
The agreement is for a two-year period, commencing with the date of its
signing, and will be automatically extended for additional periods of two years,
unless any of the parties notifies the other party prior to the end of the
agreement period of its desire to terminate the agreement at the end of the
agreement period (either original or extension). Such notice must be given at
least three months in advance, with the other party having the right to extend
the advance notice period by an additional three months (i.e., a total of six
months).
The aforementioned agreements are contingent upon the approval of the
Supervisor of Restrictive Trade Practices by no later than 15 August 2004. If
such approval is not forthcoming by that date, the agreements shall expire.
The aforementioned agreements are several and are not contingent upon
one another.
Z.A.G. is a major customer of the Company and its purchases from the
Company amounted to NIS 37 million in 2003 and NIS 43 million in 2002. It is
the owner of the large Stanley Works concern, which is listed for trade on a New
York exchange.
F. Tax assessment arrangement
In April 2004, the Company signed an assessments agreement with the tax
assessing officer, whereby the order issued to the Company in respect of the
1998 tax year, in an amount of NIS 11.7 million (including interest and linkage
differentials) would be cancelled. Concurrently, an amount of NIS 22 million
would be deducted from the Company's tax loss carryforwards.
As a result of the aforementioned assessment arrangement, the Company erased a
provision for taxes in an amount of NIS 5 million during the period under
report.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
A. The Company implements Accounting Standard No. 14 - Financial Reporting
for Interim Periods, issued by the Israeli Accounting Standards Board.
Except for the exceptions below, the significant accounting policies
applied in the interim statements are consistent with those applied in the
annual financial statements of the Company at 31st December 2003.
B. In 2001, the Israeli Accounting Standards Board issued Standard No. 12, "
Discontinuance of Adjusting Financial Statements for Inflation". In December
2002, the Board approved Standard No. 17, "Postponement of the Discontinuance of
the Adjustment of Financial Statements". According to Standard No. 12 and
Standard No. 17, financial statements will no longer be adjusted for inflation
commencing on 1 January 2004. The Company implemented the provisions of the
Standards and, as of 1 January 2004, it no longer adjusts its financial
statements.
C. Financial statements in reported amounts
1. Definitions
A. Adjusted amount - a nominal historical amount adjusted in accordance with
the provisions of Opinions 23, 36, and 50 of the Institute of Certified Public
Accountants in Israel.
B. Reported amount - an adjusted amount as of December 31, 2003, plus amounts
in nominal values added subsequent to December 31, 2003, less amounts deducted
subsequent to December 31, 2003.
C. Adjusted financial reporting - financial reporting based on the provisions
of Opinions 23, 36 and 50 of the Institute of Certified Public Accountants in
Israel.
D. Nominal financial reporting - financial reporting based on reported
amounts.
2. Basis for financial statement presentation
A. In the past, the Company presented its financial statements on the basis
of historical cost, adjusted for changes in the Israeli Consumer Price Index.
The adjusted values, as above, presented in the 31 December 2003 financial
statements served as the basis for nominal financial reporting as of 1 January
2004. Additions made during the quarter are presented in nominal shekel values.
B. The amounts of non-monetary assets do not necessarily reflect the economic
or realizable value of such assets. Rather, they reflect the reported value of
the assets.
C. The term "cost" as used in the financial statements refers to "reported
cost" (see definition below).
D. Comparative data for prior periods were adjusted to the Israeli Consumer
Price Index of December 2003.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.)
C. Financial statements in reported amounts (cont.)
3. Balance sheet
A. Non-monetary items are presented in reported amounts.
B. Monetary items are presented in the balance sheet in nominal historic
values as of the balance sheet date.
4. Income statement
A. Revenues and expenses deriving from non-monetary items or from reserves
included in the balance sheet are derived from the difference between the
reported amount at the beginning of the period and the reported amount at the
end of the period.
B. The remainder of the income statement items are presented in nominal
amounts.
NOTE 3 - FINANCIAL STATEMENTS IN ADJUSTED VALUES
The accompanying financial statements are prepared on the basis as described in
Note 2.
Comparative figures in these financial statements were adjusted to the NIS of
December 2003.
The percentage change in the Israeli Consumer Price Index ("CPI") and in the
representative foreign currency exchange rates are as follows:
CPI # $
2004 2003 2004 2003 2004 2003
% % % % % %
For the three months ended 31 March (0.1) 0.78 5.81 (2.98) 3.4 (1.06)
For the year ended 31 December - (1.89) - 2.83 - (7.56)
NOTE 4 - CONVENIENCE TRANSLATION
The adjusted financial statements at 31 March 2003 (including the profit and
loss account and the balance sheet) have been translated into Sterling using the
representative exchange rate at the balance sheet date (#1 = NIS 8.3057). The
translation has been made solely for the convenience of the reader. The amounts
presented in these financial statements should not be construed to represent
amounts receivable or payable in Sterling or convertible into Sterling, unless
otherwise indicated in these statements.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE 5 - STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
A. Reported cost
(Unaudited)
Share Premium Capital Loss account Total
capital on shares funds
NIS' 000 NIS' 000 NIS' 000 NIS' 000 NIS' 000
Three month period ended
31 March 2004
Balances at 1 January 2004 42,724 43,608 327 (102,169) (15,510)
Net loss for three months - - - (4,172) (4,172)
______ ______ ____ ______ ______
Balances at 31 March 2004 42,724 43,608 327 (106,341) (19,682)
______ ______ ____ ______ ______
______ ______ ____ ______ ______
B. Convenience Translation
(Unaudited)
Share Premium Capital Loss account Total
capital on shares funds
# '000 # '000 NIS' 000 # '000 # '000
Three month period ended
31 March 2004
Balances at 1 January 2004 5,144 5,249 39 (12,302) (1,870)
Net loss for three months - - - (502) (502)
_____ _____ ___ ______ ______
Balances at 31 March 2004 5,144 5,249 39 (12,804) (2,372)
_____ _____ ___ ______ ______
_____ _____ ___ ______ ______
C. Adjusted to NIS of December 2003
(Unaudited)
Share Premium Capital Profit Total
capital on shares funds and loss
account
NIS' 000 NIS' 000 NIS' 000 NIS' 000 NIS' 000
Three month period ended
31 March 2003
Balances at 1 January 2003 42,724 43,608 327 (64,834) 21,825
Net loss for three months - - - (1,556) (1,556)
______ ______ ____ ______ ______
Balances at 31 March 2003 42,724 43,608 327 (66,390) 20,269
______ ______ ____ ______ ______
______ ______ ____ ______ ______
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE 5 - STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (cont.)
D. Adjusted to NIS of December 2003
Year ended 31 December 2003
(Audited)
Share Premium Capital Profit Total
capital on shares funds and loss
account
NIS' 000 NIS' 000 NIS' 000 NIS' 000 NIS' 000
Balances at 1 January 2003
Changes during 2003 42,724 43,608 327 (64,834) 21,825
Loss for the year - - - (37,335) (37,335)
______ ______ ___ ______ ______
Balances at 42,724 43,608 327 (102,169) (15,510)
31 December 2003
______ ______ ___ ______ ______
______ ______ ___ ______ ______
NOTE 6 - BUSINESS SEGMENTS
A. General
Group companies are engaged in two main business segments:
Manufacture and marketing for subcontractors (including Z.A.G.), and
manufacture of self manufactured products.
B. Business segments
Reported cost
Production of self Production & Total
manufactured products marketing - consolidated
subcontracting
(including Z.A.G.)
NIS'000 NIS'000 NIS'000
Three month period ended
31 March 2004 (unaudited)
Segmental turnover 14,540 16,143 30,683
______ ______ ______
______ ______ ______
Segmental results (1,282) (254) (1,536)
______ ______ ______
______ ______ ______
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE 6 - BUSINESS SEGMENTS (cont.)
B. Business segments (cont.)
Convenience translation
(unaudited)
Production of self Production & Total
manufactured products marketing - consolidated
subcontracting
(including Z.A.G.)
# '000 # '000 # '000
Three month period ended
31 March 2004 (unaudited)
Segmental turnover 1,751 1,943 3,694
_____ _____ _____
_____ _____ _____
Segmental results (154) (31) (185)
_____ _____ _____
_____ _____ _____
Adjusted to NIS of December 2003
Production of self Production & Total
manufactured products marketing - consolidated
subcontracting
(including Z.A.G.)
NIS'000 NIS'000 NIS'000
Three month period ended
31 March 2003 (unaudited)
Segmental turnover 14,296 11,044 25,340
______ ______ ______
______ ______ ______
Segmental results (260) (588) (848)
______ ______ ______
______ ______ ______
Adjusted to NIS of December 2003
Production of self Production & Total
manufactured products marketing - consolidated
subcontracting
(including Z.A.G.)
NIS'000 NIS'000 NIS'000
Year ended
31 December 2003 (audited)
Segmental turnover 56,103 41,309 97,412
______ ______ _______
______ ______ _______
Segmental results (6,985) (3,004) (9,989)
______ ______ _______
______ ______ _______
This information is provided by RNS
The company news service from the London Stock Exchange
END
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