Exhibit 1
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NEWS |
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For Release: IMMEDIATE |
Hadera Paper Ltd.
Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2009
Hadera, Israel, August 10, 2009 –
Hadera Paper Ltd. (AMEX:AIP) (the “Company” or “Hadera Paper”) today
reported financial results for the second quarter and first six months ended June 30,
2009. The Company, its subsidiaries and associated companies – is referred to
hereinafter as the “Group”.
Since the Company’s share in the
earnings of associated companies constitutes a material component in the Company’s
statement of income (primarily on account of its share in the earnings of Mondi Hadera
Paper Ltd. (“Mondi Hadera”) and Hogla-Kimberly Ltd. (“H-K”)),
before the presentation of the consolidated data below, the aggregate data which include
the results of all the companies in the Hadera Paper Group (including the associated
companies whose results appear in the financial statements under “earnings from
associated companies”) is being presented, without considering the rate of holding
therein and net of mutual sales.
Aggregate sales during the reported
period amounted to NIS 1,618.8 million, similar to the level of aggregate sales last year.
Aggregate sales in the second quarter
this year amounted to NIS 788.8 million, as compared with NIS 771.0 million in the
corresponding period last year, and as compared with NIS 830.0 million in the first
quarter of the year.
Aggregate operating profit totaled
NIS 118.0 million during the reported period, as compared with NIS 111.3 million in the
corresponding period last year.
Aggregate operating profit totaled
NIS 54.1 million in the second quarter of the year, as compared with NIS 51.5 million in
the corresponding quarter last year, and as compared with NIS 63.9 million in the first
quarter of the year.
The Consolidated Data set forth below
excluding the results of operation of the associated companies: Mondi Hadera, H-K.
Consolidated Data include the sales turnover of Carmel Containers Systems Ltd.
(“Carmel”) and Frenkel- C.D. Ltd. (“Frenkel- C.D.”) that were
consolidated as of September 2008, as a result of the fact that the holding rate in Carmel
has increased from 36.2% to 89.3%, and at Frenkel CD, indirectly, from 37.93% to 52.72%.
Commencing January 1, 2009, the
company applies IFRS 8, “Operating Segments”, and has accordingly recognized the
packaging products and board segment, which includes the operations of Carmel and Frenkel
C.D., as a separate segment. The associated companies H-K and Mondi Hadera were also
recognized as independent segments. For further details, see page 4 below.
Consolidated sales in the reported
period amounted to NIS 434.0 million, as compared to NIS 275.8 million in the
corresponding period last year, representing an increase which was due mainly to the
first-time consolidation of the data of Carmel and Frenkel C.D. in the reported period, in
the amount of approximately NIS 240.1 million.
Consolidated sales in the second
quarter, amounted to NIS 204.1 million, as compared with NIS 133.3 million in
the corresponding quarter last year.
Operating profit totaled NIS 13.9
million during the reported period, as compared with NIS 30.1 million in the corresponding
period last year. The decrease in the operating profits originated from the erosion of
selling prices of packaging paper and recycling, the impact of a certain slowdown in
operations at some of the companies as a result of the global crisis and its local
repercussions, that was offset by the recording of non-recurring revenues on account of a
unilateral dividend.
Operating loss amounted to NIS 4.6
million in the second quarter of the year, as compared with operating profit of NIS 12.6
million in the corresponding quarter last year.
Net profit attributed to the
Company’s shareholders in amounted to NIS 34.7 million in the reported period, as
compared with net profit of NIS 39.3 million in the corresponding period last year, and
was affected by the improvement in operating profitability at some of the groups companies
in Israel and in Turkey, by the recording of earnings as a result of the distribution of a
unilateral dividend on account of the application of a preferred share by an associated
company, and by a reduction in the company’s share in the losses on account of the
operations in Turkey (KCTR).
The net profit for the second quarter
this year amounted to NIS 15.6 million, as compared with a net profit of NIS 18.0 million
in the corresponding quarter last year.
Basic earnings per share amounted to
NIS 6.86 per share ($1.75 per share) in the reported period, as compared with basic
earnings per share of NIS 7.77 per share ($2.32 per share) in the corresponding period
last year.
Basic earnings per share amounted to NIS 3.09 per share in the second quarter
($0.79 per share), as compared with earnings of NIS 3.56 per share ($1.06 per share) in
the corresponding quarter last year.
The inflation rate during the
reported period amounted to 2.1%, as compared with an inflation rate of 2.3% in the
corresponding period last year.
The US dollar exchange rate was
devaluated by 3.1% during the reporting period, in relation to a revaluation of
approximately 12.8% during the corresponding period last year.
Mr. Avi Brener, Chief Executive Officer of the Company said that “The Group
manages a wide and relatively diverse portfolio of companies and businesses.
This fact is instrumental in dealing with the local and global crisis. The
Group’s financial stability, coupled with its efficiency in international
terms, in terms of its production lines, energy systems and supply chains, in
conjunction with its diverse portfolio consisting primarily of basic consumer
goods, are all enabling the company to contend with a difficult and challenging
business environment, while preserving its aggregate turnover and while
incurring only a limited erosion of the net profit. Alongside the said global
financial crisis, the Israeli economy experienced significant fluctuations in
foreign currency exchange rates vis-à-vis the NIS, during the reported
period. The company’s business portfolio, including its associated
companies, is balanced in terms of foreign currency and the level of the
company’s exposure to sharp fluctuations in currency rates is therefore
low. The decreasing trend in the prices of inputs such as fibers, chemicals and
commodities as a result of the global crisis, moderated somewhat during the
reported period. This trend allowed for a partial compensation for the slowdown
in operations, in both local and export markets. These savings were partially
offset as a result of the rising water prices during the reported period. The
devaluation of the NIS in relation to the dollar and to the euro, had a negative
impact on the company in terms of the imported inputs, while on the other hand,
serving to improve the selling prices that previously eroded, in the
Company’s main sectors of operation, whose prices are in line with import
prices, in US dollars. In facing the global and local economic crisis, the Group
managed to align its assets in advance in order to correctly contend, in a
focused manner, with the sharp change in the business environment. The Group was
quick to formulate, an aggressive program for efficiency and savings in
purchasing for all its companies. The plan for Company growth and improving
profitability is based on business opportunities in the core sectors in Israel
and worldwide and on empowering company operations in terms of development and
innovation in the various business sectors, so as to generate new products that
will provide a distinct added value for both the businesses and the consumer.
The Group also operated in order to intensively manage, in a controlled manner,
the operating working capital, while carefully monitoring trade receivables and
risk management”.
2
In the reported period, the
implementation of the new recycled packaging paper manufacturing network, is progressing
as planned and the construction of the machine’s building is advancing in 2009 at the
Hadera site, along with installation of the equipment. The new production lines are
scheduled to begin operating at full capacity in early 2010, after a startup of several
months.
The financial expenses during the
reported period amounted to NIS 10.0 million, as compared with NIS 11.1 million in the
corresponding period last year.
The company’s share in the
earnings of associated companies totaled NIS 34.9 million during the reported period, as
compared with NIS 25.8 million in the corresponding period last year.
The following principal changes were
recorded in the Company’s share in the earnings of associated companies, in relation
to the corresponding period last year:
| – |
The
Company’s share in the net profit of Mondi Hadera Paper (49.9%) decreased by NIS 1.9
million. The decrease in profits originated primarily from the decrease in the operating
profit of Mondi, that fell from NIS 17.7 million last year to NIS 15.9 million this year,
primarily as a result of the erosion of prices due to imports at dumping prices. The net
profit also decreased as a result of an increase in financial expenses during the
reported period in relation to last year, primarily on account of the impact of the
devaluation of the NIS against the US dollar. |
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The
company’s share in the net earnings of Hogla-Kimberly Israel (49.9%) increased by
NIS 6.4 million. Hogla’s operating profit grew from NIS 85.1 million to NIS 102.3
million this year. The improved operating profit originated from a quantitative increase
in sales, improved selling prices in some of the sectors of operation, the continuing
trend of raising the proportion of certain premium products out of the products basket,
while innovating products and empowering the Company’s brands, a decrease in the
prices of certain company inputs in view of the erosion of global commodity prices,
continuing efficiency measures across the company and growing savings in procurement that
also contributed significantly to the profit. |
3
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The
Company’s share in the losses of KCTR Turkey (49.9%) decreased by NIS 3.6 million.
The significant decrease in the loss is attributed primarily to the growth in the volumes
of operation that led to the continued reduction in the operating loss, from NIS 20.9
million last year to approximately NIS 14.1 million this year. Moreover, due to the
increase in the shareholders’ equity of KCTR through a financial influx from
Hogla-Kimberly last year and during the reported period, the bank loans were repaid,
while reducing the financial expenses, thereby leading to an additional reduction in the
net loss. |
As aforementioned, according to IFRS
8, the Company has identified five segments and fields of operation, as follows: (1) The
paper and recycling segment – generates revenue from the sale of paper products to
paper manufacturing companies as well as from the recycling of paper and cardboard. (2)
The office supplies marketing segment – generates revenue from the sale of office
supplies to customers. (3) The packaging and cardboard products segment – generates
revenue from the sale of packaging and cardboard products to customers. (4) The Hogla
Kimberly segment – an associated company that generates revenue from the manufacture
and marketing of household paper products, hygiene products, disposable diapers and
complementary kitchen products, in Israel and in Turkey. (5) The Mondi Hadera Paper
segment – an associated company that generates revenue from the manufacture and
marketing of fine paper.
This report contains various
forward-looking statements based upon the Board of Directors’ present expectations
and estimates regarding the operations and plans of the Group and its business
environment. The Company does not guarantee that the future results of operations will
coincide with the forward-looking statements and these may in fact differ considerably
from the present forecasts as a result of factors that may change in the future, such as
changes in costs and market conditions, failure to achieve projected goals, failure to
achieve anticipated efficiencies and other factors which lie outside the control of the
Company as well as certain other risks detailed from time to time in the Company’s
filings with the Securities and Exchange Commission. The Company undertakes no obligation
for publicly updating the said forward-looking statements, regardless of whether these
updates originate from new information, future events or any other reason.
4
Hadera PAPER LTD.
SUMMARY OF RESULTS
(UNAUDITED)
except per share
amounts
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2009
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2008
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Six months ended June 30,
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NIS IN THOUSANDS (1)
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| Net sales |
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| 434,034 |
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| 275,786 |
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Net earnings attributed to the
Company's shareholders | | |
| 34,716 |
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| 39,302 |
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Basic net earnings per share
attributed to the Company's
shareholders | | |
| 6.86 |
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| 7.77 |
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Fully diluted earnings per share
attributed to the Company's
shareholders
| | |
| 6.86 |
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| 7.76 |
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2009
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2008
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Three months ended June 30,
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NIS IN THOUSANDS (1)
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| Net sales |
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| 204,153 |
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| 133,267 |
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| Net earnings attributed to the | | |
| Company's shareholders | | |
| 15,637 |
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| 18,032 |
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| Basic net earnings per share | | |
| attributed to the Company's | | |
| shareholders | | |
| 3.09 |
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| 3.56 |
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| Fully diluted earnings per share | | |
| attributed to the Company's | | |
| shareholders | | |
| 3.09 |
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| 3.55 |
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(1)
The representative exchange rate at June 30, 2009 was N.I.S. 3.919=$1.00.
Contact:
Lea Katz, Adv.
Corporate Secretary and
Chief of Legal Department
Hadera Paper Ltd. Group
Tel:+972-4-6349408
Leak@hadera-paper.co.il
5
Exhibit 2
Hadera Paper Ltd.
Update to Chapter A (Description of the Corporation's Business) of the
Information Presented in the Company's Periodical Report
As of December 31, 2008
Details in accordance with Regulation
39a of the Securities Regulations (Periodic and Immediate Reports), 1970.
Update to Section 2
Chapter A “Corporate operations and description of development of its business”
According to IFRS 8, the
Company has identified five segments and fields of operation, as follows:
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1. |
The
paper and recycling segment – generates revenue from the sale of
paper products to paper manufacturing companies as well as from the
recycling of paper and cardboard. |
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2. |
The
office supplies marketing segment – generates revenue from the
sale of office supplies to customers. |
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3. |
The
packaging and cardboard products segment – generates revenue
from the sale of packaging and cardboard products to customers. |
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4. |
The
Hogla Kimberly segment – an associated company that generates
revenue from the manufacture and marketing of household paper
products, hygiene products, disposable diapers and complementary kitchen products, in
Israel and in Turkey. |
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5. |
The
Mondi Hadera Paper segment – an associated company that
generates revenue from the manufacture and marketing of fine paper. |
1
Translation from Hebrew
August 9, 2009
MANAGEMENT DISCUSSION
We are honored to present the
consolidated financial statements of the Hadera Paper Group Ltd. (“Hadera Paper”
or “The Company”) (formerly – American Israeli Paper Mills –
“AIPM”) for the first six months of 2009. The Company, its consolidated
subsidiaries and its associated companies – hereinafter: “The Group”.
| A. |
Description
of the Company’s Business |
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Hadera
Paper Group deals in the manufacture and sale of packaging paper, corrugated board
packaging, consumer product packaging and unique packaging for industry, recycling of
paper and plastic waste and in the marketing of office supplies – through
subsidiaries. The Company also holds associated companies that deal in the manufacture
and marketing of fine paper, in the manufacture and marketing of household paper
products, hygiene products, disposable diapers and complementary kitchen products. |
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The
company’s securities are traded on the Tel Aviv Stock Exchange and on the American
Stock Exchange, AMEX. |
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a. |
Principal
Current Operations |
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1. |
The
Business Environment |
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The
local financial crisis continued during the reported period as part of the global
financial crisis. The increase in unemployment in Israel and worldwide, along with a
considerable decrease in investments and credit all served to impair the volume of global
demand and commerce in the financial sector, services sector and various consumer goods. |
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Nevertheless,
most economic indicators in the global paper industry currently show that in terms of the
volume of demand and price erosion, the paper sector has arrived at the bottom of the
global crisis. Expectations on the part of research companies in the global paper sector,
along with the estimations of the Hadera Paper Group, indicate initial improvements and
renewed growth in the volume of operations and in global paper prices, that will probably
be evident by the end of the current year. |
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The
above information pertaining to trends in the paper market and input prices constitutes
forward-looking information as defined in the Securities Law, based on the company’s
estimates at the date of this report. These estimates may not materialize – in whole
or in part – or may materialize in a different manner, inter alia on account of
factors that lie outside the control of the company, such as changes in global raw
material prices and changes in the supply and demand of global paper products. |
2
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2. |
Impact
of the Business Environment on Company Operations |
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The
Hadera Paper Group manages a wide and relatively diverse portfolio of companies and
businesses. This fact is instrumental in dealing with the local and global crisis. The
company’s sectors of operation focus on consumer goods and basic inputs that are
affected in a relatively limited manner by the repercussions of the global economic and
financial crisis. The company’s primary operations in the paper and paper products
sector, both in the B2B and in the B2C sectors are exposed to relatively small changes in
the volume of demand during crisis periods such as the one currently experienced. The
changes in demand for FMCG products, such as paper products and absorbent products, lie
in the range between 0% and a 5% decrease, while most of the impact is evident in price
competition and in a preference on the part of customers and consumers for attractively
priced products. |
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The
company is acting according to a multi-annual business and marketing strategy in terms of
Premium products, Value products and Economy products. This fact provides the company
with the necessary flexibility in order to protect market share, while preserving the
quantitative volume of operations and while optimizing profits. |
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In
light of the above, the company has successfully managed to continue improving its
profits despite the challenging business environment in these areas. |
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In
the packaging paper and recycling sector, the reduction in global trade in household
electrical appliances, electronics, automotive, textile, furniture and other sectors is
serving to lower demand for corrugated board that serves for the packaging of such
products. This has led to surplus supply of packaging paper in Europe and worldwide. |
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The
company estimates that since 2008, these products are being imported at dumping prices,
primarily from Europe. The company is working to rectify this situation with the Dumping
Supervisor at the Ministry of Industry, Trade and Labor. |
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In
the fine paper sector, the impact of the global crisis is evident primarily in the
advertising industry. The volume of demand for newsprint paper and fine paper has
decreased by a rate of 5% to 10% in the global market. |
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The
reduced demand is creating surplus supply in Europe and worldwide, as fine paper is being
imported to Israel at dumping prices since 2008. In this respect, the company is also
working with the Dumping Supervisor in order to control imports at these prices. |
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In
the office supplies marketing sector, the crisis has reduced the volume of purchases of
most companies in the market as part of their efficiency measures. As part of the
implementation of its strategy for encouraging growth, Graffiti has managed to increase
its operations in the office supplies marketing sector, despite the shrinking market,
while gradually increasing its market share. |
3
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To
conclude, the group’s financial stability, coupled with the fact that it is an
efficient company in international terms, in terms of its production lines, energy
systems and supply chains, in conjunction with its diverse portfolio consisting primarily
of basic consumer goods, are all enabling the company to contend with a difficult and
challenging business environment, while preserving its aggregate turnover and while
incurring only a limited erosion of the net profit. |
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Alongside
the said global financial crisis, the Israeli economy experienced significant
fluctuations in foreign currency exchange rates vis-à-vis the NIS, during the
reported period. |
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The
company’s business portfolio, including its associated companies, is balanced in
terms of foreign currency and the level of the company’s exposure to sharp
fluctuations in currency rates is therefore low. |
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These
market developments and fluctuations may potentially have adverse effects on the business
results of the Company and its investee companies, including an effect on their
liquidity, the value of their assets, the ability to divest assets, the state of their
business, their financial indicators and standards, their credit rating, ability to
distribute dividends, ability to raise financing for their current operations and
long-term plans, as well as on their financing terms. |
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True
to the date of publication of the financial statements, there is no material impact as a
result of the crisis, on the Company’s business results, its financial soundness or
the value of its assets. |
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The
above information constitutes forward-looking information as defined in the Securities
Law, based on the company’s estimates at the date of this report. These estimates
may not materialize – in whole or in part – or may materialize in a different
manner, inter alia on account of factors that lie outside the control of the company,
such as the global crisis in credit and banking markets. |
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As
at the date of publication of these financial statements, no material changes have
occurred to the Company’s risk management policy. |
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The
decreasing trend in the prices of inputs such as fibers, chemicals and commodities as a
result of the global crisis, moderated somewhat during the reported period. This trend
allowed for a partial compensation for the slowdown in operations, in both local and
export markets. These savings were partially offset as a result of the rising water
prices during the reported period by an average rate of 6% in relation to the
corresponding period last year. The devaluation of the NIS in relation to the dollar by a
rate of approximately 3.1% during the reported period and the devaluation of the NIS in
relation to the euro by a rate of approximately 4.5%, had a negative impact on the
company in terms of the imported inputs, while on the other hand, serving to improve the
selling prices that previously eroded, in the Company’s main sectors of operation,
whose prices are in line with import prices, in US dollars. |
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The
US dollar exchange rate was devaluated by 3.1% during the reporting period, in relation
to a revaluation of approximately 12.8% during the corresponding period last year. |
4
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The
inflation rate during the reported period amounted to 2.1%, as compared with an inflation
rate of 2.3% in the corresponding period last year. |
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The
above information pertaining to trends in the paper market and input prices constitutes
forward-looking information as defined in the Securities Law, based on the company’s
estimates at the date of this report. These estimates may not materialize – in whole
or in part – or may materialize in a different manner, inter alia on account of
factors that lie outside the control of the company, such as changes in global raw
material prices and changes in the supply and demand of global paper products. |
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3. |
The
Groups Operations Vis-À-Vis the Business Environment |
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In
facing the global and local economic crisis , as reflected by a reduction in investments
and credit and by a reduction in demand and global commerce, the Hadera Paper Group
managed to align its assets in advance in order to correctly contend, in a focused
manner, with the sharp change in the business environment. |
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Hadera
Paper Group is financially sound, possessing efficient production lines on a global
scale, along with efficient energy systems and supply chains. First and foremost, the
group enjoys a wide and diverse portfolio of companies in businesses that are
instrumental in contending with the changing business environment. |
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Hadera
Paper Group was quick to formulate, at an early stage, an aggressive program for
efficiency and savings in purchasing for all its companies, across all sectors of
operation. During the reported period, most of the Group companies have met their defined
objectives, while rendering it possible to compensate for the lower prices dictated by
the global crisis, the local slowdown and the imports of fine paper and packaging paper
at dumping prices, primarily from Europe. The group companies also operated in order to
intensively manage, in a controlled manner, the operating working capital, while
carefully monitoring trade receivables and risk management. |
| |
The
group will continue to focus on the successful implementation of efficiency measures,
savings in purchasing and the management of operating capital, while continuing to
monitor trade receivable risks later on this year, while also devoting management
attention to growth-promoting operations. |
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Hadera
Paper Group is conducting initiatives to gradually encourage demand by increasing
institutional and private consumption and while focusing on expanding market share so as
to return to growth across most of its businesses. |
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The
group has recently devoted efforts to accelerating business development in international
markets for its various products, so as to encourage growth and improve profits. (See
Section A(2) A(5.4) Strategic Investment in Turkey – below) |
5
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The
plan for Company growth and improving profitability is based on business opportunities in
the core sectors in Israel and worldwide and on empowering company operations in terms of
development and innovation in the various business sectors, so as to generate new
products that will provide a distinct added value for both the businesses and the
consumer. These efforts, which are focused on the group’s technological center and
also on the various companies, have led to the launch of new and upgraded products during
the reported period, in both the FMCG and the paper sectors. (See Section A(2) A(5.2)
– Innovative Development of High-Quality Recycled Paper – below). |
| |
In
view of the company’s estimates regarding the continuing imports of paper at dumping
prices – primarily from Europe – in both packaging paper and fine paper, the
Company has joined Mondi Hadera Paper – an associated company – in appealing to
the Dumping Supervisor at the Ministry of Industry, Trade and Labor (hereinafter: “The
Supervisor”) and has filed a complaint against the dumping imports of packaging
paper from several European countries into Israel. Upon review of the complaint, the
Supervisor decided to launch an investigation of this issue. On February 26, 2009, the
company announced that the subsidiary Mondi Hadera Paper had filed a complaint to the
Supervisor, regarding the dumping imports of fine paper from several European nations to
Israel. Upon review of the complaint, the Supervisor decided to launch an investigation
of this issue. According to the Company announcement, there is no certainty that the
above complaints would be accepted, and the Company is currently unable to estimate the
impact of such acceptance on its business results. |
| |
The
company continued its environmental operations during the reporting period, while
upgrading various technological and operating systems in order to expand paper recycling,
increase the reuse of processed water and lower noise levels so as to benefit the company
employees, the community and to improve the financial results. |
| |
The
Company has continued to implement its policy for social responsibility and for
contributing to the community. The company’s employees and managers at the various
sites are all taking an active role in community involvement, in supporting teenagers and
primarily in working toward reducing social gaps and in providing equal opportunity for
education and for personal accomplishments within the framework of the company and the
community. |
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4. |
Principal
Current Operations |
| |
During
the reported period, despite the sharp changes in the business environment, the company
managed to preserve the level of its aggregate sales turnover, at the same level as that
of the corresponding period last year. |
| |
Implementation
and Assimilation of Organization-Wide Processes |
| |
In
the course of the reported period, the Group companies continued to implement and
assimilate organization-wide processes that are intended to support the continued growth
and increased profitability in organizational development, purchasing, B2B marketing,
development and innovation. The gradual and successful implementation of these brands
will enable the company to better deal with the challenging business environment, while
improving profitability. |
6
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5. |
Promoting
the Strategic Plans |
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In
parallel to the ongoing operations, the Company is working to successfully implement the
strategic plans that are intended to lead to continued growth in operations and improved
profitability over the coming years: |
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5.1. |
Expanding
the recycled packaging paper manufacturing network |
| |
The
investment in the project for the construction of the new manufacturing network, totaling
NIS 690 million was approved on October 15, 2007 by the Company’s Board of Directors.
The Company has selected the most highly advanced technologies in this area, from the
leading suppliers in the sector, in order to amplify its competitive advantage and
potential for profitability in the long term. |
| |
The
implementation of the project is progressing as planned and subsequent to the signing of
the central agreements for the acquisition of the principal equipment for production
systems last year, the construction of the machine’s building is advancing in 2009 at
the Hadera site, along with installation of the equipment. |
| |
The
new production lines are scheduled to begin operating at full capacity in early 2010,
after a startup of several months. |
| |
In
parallel, the Amnir subsidiary is continuing to expand the collection of cardboard and
newspaper waste and is continuing to accumulate inventories toward the planned operation
of the new machine by the beginning of 2010. The company is preparing for increasing the
proportion of paper recycling in Israel from the current 26% up to 45% within several
years, as part of the demand for the new manufacturing system. |
| |
As
part of this project, the company is investing in the reorganization of the principal site
in Hadera, including an expansion of the energy system and the adaptation of the traffic
routes and upgrading of environmental systems, as required. The central building of the
machine is also planned to house a visitor center that will serve as the Israeli Center
for paper recycling and is intended to educate Israeli youth in the areas of recycling and
the environment. |
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5.2. |
Innovative
Development of High-Quality Recycled Paper |
| |
Over
the past year, the packaging paper and recycling segment launched the rapid development of
paper types based on 100% recycled fibers, whose superior quality would allow them to
replace pulp-based packaging paper in the corrugated board industry in Israel and
overseas. |
| |
The
technological and operational development process is currently in advanced stages and is
meant to essentially increase the volume of the potential market for packaging paper for
the local corrugated board industry. |
7
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The
development of new paper types is based on the characterization of fibers, developing and
implementing new chemical additives and using advanced manufacturing technologies, both
in the existing production lines and in the new production line, to render it possible to
gradually launch new products, as early as this year and throughout 2010. |
| |
According
to the plan, the cost of the new paper types will be competitive as compared with the cost
of pulp-based paper and will allow for a gradual improvement in the profitability of the
sector. According to laboratory results, indications from the development processes at the
production lines and customer commitments regarding the provision of some of the products
whose development process has been completed, the probability of success of this venture
appears to be relatively high. |
| |
During
the reported period, the company has started to market these products in the local market
as well as in export markets. The expansion of the sales volume of these products is
planned for this year. |
| |
The
above information pertaining to the innovative developments in the paper market
constitutes forward-looking information as defined in the Securities Law, based on the
company’s estimates at the date of this report. These estimates may not materialize
– in whole or in part – or may materialize in a different manner, inter alia on
account of completion and development factors that lie outside the control of the company. |
| |
5.3. |
Development
of Export Markets for Packaging Paper |
| |
The
significant increase in the output capacity of recycled packaging paper by Hadera Paper
Group, upon the operation of the new manufacturing system, will allow for an expansion of
the Segment’s operations both in Israel and overseas. The process of developing
pulp-replacement packaging paper products on the basis of 100% recycled fibers, as
mentioned above, will enable the segment to expand the sale of such products for the first
time, as a substitute for pulp-based packaging paper in international markets. The new
products are planned to be sold at a significant price supplement per ton of paper, as
compared with the selling prices of basic paper types. |
| |
The
development of new paper products, that began in 2008, is enabling the segment to create
international business relations for the first time with a network of distributors and
marketers, while formulating long-term agreements with international clients. |
| |
During
the reported period, the company has acted to develop export markets and has reached
preliminary agreements with several agents operating in various countries and in Europe
for the distribution and marketing of various types of packaging paper. This operation has
already started and will expand gradually in the course of the year. |
| |
Initial
reactions overseas as regards the quality of the types of paper provided are good and it
appears that this significant business and technological development will render it
possible to diversify the segment’s portfolio of products and markets, while serving
as a basis for accelerating growth and profitability. |
8
| |
The
above information pertaining to development of innovative products and development of
export markets for packaging paper constitutes forward-looking information as defined in
the Securities Law, based on the company’s estimates at the date of this report.
These estimates may not materialize – in whole or in part – or may materialize
in a different manner, inter alia on account of factors that lie outside the control of
the company, such as changes in global raw material prices and changes in the supply and
demand of global paper products. |
| |
5.4. |
The
Strategic Investment in Turkey |
| |
In
2008, Kimberly Clark Turkey, KCTR, a wholly-owned Hogla Kimberly subsidiary (49.9% of
which is held by the company) – continued to implement its strategic plan GBP –
(Global Business Plan) that was formulated together with the international partner,
Kimberly Clark. The plan is intended to introduce Kimberly Clark’s global brands to
Turkey, on the basis of local manufacturing. If fully implemented, KCTR is expected to
grow to become a company with annual sales in the area of $300 million, by 2015. |
| |
The
KCTR turnover totaled NIS 262.8 million during the reported period, as compared with NIS
195.8 million in the corresponding period last year, representing growth of 34.2%. |
| |
During
the reported period, the company continued to empower its brands and especially the
Huggies and Kotex brands, while realizing constant growth in both market share and rising
awareness toward the company’s products. In parallel, the volume of exports to
Kimberly-Clark in various other countries in Europe and Africa also increased. |
| |
During
the reported period, the company received two Effie awards for marketing in Turkey,
serving as an indication of marketing professionalism in the launch and build up of the
brands. |
| |
The
Company’s continuing marketing and advertising operations are being felt in the
gradual strengthening of the brands, as expressed by consumer studies that are being
conducted regularly, alongside consistent growth in sales, while curtailing the operating
loss and a considerable reduction in the Company’s net loss. |
| |
As
part of the strategic plan, the Company intends to continue its marketing and sales
promotion efforts, while launching new products that will support the establishment of the
brands and the creation of customer loyalty. |
| |
In
the course of the reported period, the Company continued to promote the collaboration with
Unilever and expanded the number of points of sale in the Turkish market that sell KCTR
brands. |
| |
In
parallel, the company has started marketing its products to BIM, the largest supermarket
chain in Turkey. |
9
| |
The
continuing high level of competition in the markets where the company is working to
introduce and penetrate its brands calls for regular and significant investments in
advertising and sales promotion. |
| |
All
of the expenses detailed above associated with the penetration of products, advertising,
expansion of the distribution network and more – are regularly recorded as an
expenditure in the KCTR statements of income. KCTR recorded an operating loss of NIS 14.1
million (approximately $3.5 million) in the reported period, as compared with NIS 20.9
million (approximately $6.2 million) in the corresponding period last year. |
| |
The
continued implementation of the strategic business plan, while strengthening the brands
and recording a gradual growth in the Unilever distribution and sales platforms, in
combination with increased exports and continuing cost reductions at the diaper plant
– have rendered it possible to maintain the trend of improving operating profit,
while reducing the operating loss for the ninth consecutive quarter – as mentioned
above. |
| |
The
above information pertaining to the KCTR business plans and their implementation
constitutes forward-looking information as defined in the securities law, based on the
company’s estimates at the date of this report. These estimates may not materialize
– in whole or in part – or may materialize in a different manner, inter alia on
account of factors that lie outside the control of the company, such as market conditions,
legislation and various costs. |
| |
The
new power plant project, intended to supply steam and electricity to the production system
in Hadera and to sell surplus electricity to Israel Electric Company (IEC) and/or to
private consumers, is on hold, awaiting the business stabilization of potential gas
sources in order to conclude the contract to acquire the required gas at a price range
that would allow the Company to be competitive with expected IEC rates. Due to the delay
in finalizing the engagement for the purchase of gas as mentioned above, is not possible
to meet the milestones set in the contingent production license held by the company.
During this waiting stage, the company has decided not to request an extension of the
license and will instead acts to renew the license once progress is made in the purchase
of gas for the power plant. |
| |
The
discovery of natural gas at the Tamar 1 and especially at the Dalit 1 sites off the coast
at Hadera, along with the progress being made with the Egyptian gas franchise holder (EMG)
in the additional franchise holder Yam-Tethys – all serve to increase the probability
of the reawakening of negotiations and the restart of the project. |
| |
The
above information pertaining to trends in the energy sector, based on natural gas,
constitutes forward-looking information as defined in the Securities Law, based on the
Company’s estimates at the date of this report. These estimates may not materialize
– in whole or in part – or may materialize in a different manner, inter alia on
account of factors that lie outside the control of the company, such as the size of the
actual gas reservoir, as well as changes in gas prices worldwide. |
10
| |
Regarding
the consolidated data, see Section C(5), below. |
| |
Since
the Company’s share in the earnings of associated companies constitutes a material
component in the company’s statement of income (primarily on account of its share in
the earnings of Mondi Business Hadera PaperLtd. [Mondi Hadera] and Hogla-Kimberly
Ltd.), before the presentation of the consolidated data below, we also present the
aggregate data which include the results of all the companies in the Hadera Paper Group
(including the associated companies whose results appear in the financial statements
under “earnings from associated companies”), without considering the rate of
holding therein and net of mutual sales. |
| |
The
aggregate sales during the reported period amounted to NIS 1,618.8 million, similar to
the level of aggregate sales last year. |
| |
The
aggregate sales in the second quarter this year amounted to NIS 788.8 million, as
compared with NIS 771.0 million in the corresponding period last year, representing
growth of approximately 2.3% and as compared with NIS 830.0 million in the first quarter
of the year. |
| |
The
aggregate operating profit totaled NIS 118.0 million during the reported period, as
compared with NIS 111.3 million in the corresponding period last year, representing
growth of approximately 6.0%. |
| |
The
aggregate operating profit totaled NIS 54.1 million in the second quarter of the year, as
compared with NIS 51.5 million in the corresponding quarter last year, representing
growth of 5.0% and as compared with NIS 63.9 million in the first quarter of the year. |
| |
The
growth in the aggregate operating profit, despite the erosion of prices at some of the
companies, originates from the improved growth and profits in the group operations in
consumer goods, the continued growth in approved profitability at Hogla Kimberly in
Israel and the continuing reduction in the operating loss in Turkey, coupled with
non-recurring income on account of a unilateral dividend at an associated company. |
| |
For
the operations in Turkey – see also Section C(5)7 below – Company’s share
in the earnings of associated companies. |
11
| |
2. |
Details
of the Various Operations |
| |
1. |
Hogla-Kimberly
(Household Products Segment) |
| |
The
sales turnover of Hogla-Kimberly Israel amounted to approximately NIS 626 million in
the reported period, as compared with approximately NIS 608.1 million in the
corresponding period last year, representing an increase of 2.9%. |
| |
The
increase in sales over the corresponding period last year was primarily attributed to a
quantitative increase, resulting from the ongoing expansion of market shares alongside
the market growth, which was partly offset by the decrease in selling prices and the
reduced market share in certain categories of premium products. |
| |
Sales
in the second quarter of the year amounted to NIS 302.1 million, as compared with NIS 298.0
million in the corresponding quarter last year and NIS 323.9 million in the first
quarter of the year. The decrease in comparison with the previous quarter is due to
seasonality. |
| |
The
operating profit of Hogla-Kimberly Israel amounted to approximately NIS 102.3
million in the reported period, as compared with approximately NIS 85.1 million in
the corresponding period last year, representing an increase of 20.2%. |
| |
The
improvement in the operating profit in comparison to last year was due to the aforesaid
increase in the quantities sold and the implementation of efficiency measures, alongside
a significant increase in the output of some of the company’s manufacturing
facilities and the global decrease in input prices, which has significantly contributed
to the improvement in the profit. |
| |
The
operating profit for the second quarter of the year amounted to NIS 54.4 million, as
compared with NIS 44.0 million in the corresponding quarter last year and as
compared with NIS 47.9 million in the first quarter of the year, despite the
revaluation of the dollar that partly offset part of the decrease in NIS-denominated
input prices. |
| |
The
sales turnover of KCTR , Hogla-Kimberly’s subsidiary operating in Turkey, amounted
to approximately NIS 262.8 million (approximately $64.6 million) in the reported
period, as compared with approximately NIS 195.8 million (approximately $55.6
million) in the corresponding period last year. |
| |
KCTR’s
strategic cooperation agreement with Unilever, under which Unilever carries out the
selling, distribution and collection activities nationwide, with the exception of retail
chains to which KCTR continues to sell independently, continues to expand the customer
base and to bring about the resulting increase in sales and enhancement of the Huggies
and Kotex brands. |
| |
See
also section A(2)a(5.4) above with respect to the strategic investment in Turkey. |
12
| |
2. |
Mondi
Hadera Paper (Mondi Hadera – Fine Paper) |
| |
The
sales turnover of fine paper amounted to NIS 343.6 million in the reported period,
as compared with NIS 383.2 million in the corresponding period last year,
representing a decrease of 10.3%. The sales turnover of fine paper in the second quarter
of 2009 amounted to NIS 161.6 million, as compared with NIS 178.1 million in
the corresponding period last year, representing a decrease of 9.3%, and as compared with
NIS 182.0 million in the first quarter of 2009, representing a decrease of 11.2%. |
| |
The
operating profit of Mondi Hadera amounted to NIS 15.9 million in the reported
period, as compared with an operating profit of NIS 17.7 million in the
corresponding period last year. In the second quarter of 2009, Mondi Hadera’s
operating profit amounted to NIS 10.5 million, as compared with an operating profit
of NIS 8.0 million in the corresponding quarter last year and as compared with NIS 5.4
million in the first quarter of 2009. |
| |
In
the second quarter of the year, selling prices in Israel decreased by 5.2% as compared
with the first quarter of the year, primarily due to the dumping prices of paper imported
by competitors, that reached bottom levels as a result of paper surpluses created by the
recession in Europe. The erosion of prices in the local market is more acute than in the
European market, where attempts are made by the manufacturers to maintain a certain level
of prices. |
| |
During
the quarter, the prices of pulp dropped by 14.2% in dollar terms, thereby offsetting the
effect of the reduction in selling prices. |
| |
3. |
Carmel
Container Systems |
| |
The
aggregate sales turnover of Carmel Container Systems (including Frenkel C.D.) amounted to
NIS 243.7 million in the first half of 2009, as compared with NIS 266.1 million
in the corresponding period last year (a decrease of 9.2%). |
| |
In
the first half of 2009, the consolidated sales turnover of Carmel Container Systems
amounted to NIS 196.1 million, as compared with NIS 217.1 million in the
corresponding period last year (a decrease of 9.7%). |
| |
The
decrease in the volume of sales is primarily attributed to the downturn in the local
market and in the high-tech market as a result of the global crisis and as a result of
customer attrition in the boards and slaughterhouse sectors in favor of competitors,
which was offset by the quantitative increase in sales to the agricultural sector in
relation with the corresponding period last year. |
| |
The
consolidated operating profit of Carmel Container Systems amounted to NIS 4.7
million in the reported period, as compared with an operating loss of NIS 1.6
million in the corresponding period last year. The improvement in Carmel’s operating
profit is due to the decrease in input prices and the implementation of an aggressive
efficiency program that compensated for the erosion in the quantities sold and in the
selling prices. |
| |
The
aggregate operating profit of Carmel Container Systems (including Frenkel C.D.) amounted
to NIS 4.6 million in the reported period, as compared with an operating loss of NIS 0.6
million in the corresponding period last year. |
13
| |
4. |
Packaging
Paper and Recycling |
| |
The
sales turnover of the Packaging Paper and Recycling Segment amounted to NIS 162.2
million in the reported period, as compared with NIS 215.0 million in the
corresponding period last year. The segment’s sales turnover in the second quarter
totaled NIS 81.7 million, as compared with NIS 105.5 million in the
corresponding quarter last year and NIS 80.5 million in the first quarter of the
year. |
| |
The
decrease in the sales turnover was partly due to the quantitative decrease in sales, both
as a result of the downturn in the local market and the sharp reduction of inventories by
manufacturers of corrugated board as a means to improve their cash flows. Sales were also
affected by the preparations for the development of new markets overseas, the reduction
in selling prices at Amnir and in the packaging paper segment, and the effect of dumping
prices of paper since the import from Europe (with respect to dumping and counteractions,
see Section A(2) A(3), above). |
| |
The
segment concluded the first half of 2009 with an operating loss of approximately NIS 7.9
million, as compared with an operating profit of NIS 27.2 million in the
corresponding period last year. The segment’s operating loss in the second quarter
of the year amounted to NIS 8.1 million, as compared with an operating profit of NIS 10.3
million in the corresponding quarter last year and NIS 0.2 million in the first
quarter of the year. |
| |
The
deterioration in the operating profit in the reported period is primarily attributed to
the aforesaid decrease in quantities sold and the reduction in selling prices caused by
dumping. Consequently, extensive efficiency measures have been implemented at Amnir, both
at the packaging paper plant and at the plastic recycling plant, which significantly
offset the substantial loss incurred by the paper segment. |
| |
5. |
Graffiti
Office Supplies & Paper Marketing |
| |
Graffiti’s
sales turnover during the reported period amounted to NIS 69.2 million as compared with
NIS 60.9 million in the corresponding period last year, representing an increase of 13.6%. |
| |
In
the reported period, Graffiti recorded an operating profit of NIS 1.2 million, as
compared to an operating profit of NIS 1.4 million in the corresponding period last
year. The decrease in the operating profit in the reported period was due mainly to the
increase in the Yavne Pitango customer portfolio amortization expenses and to the
increase in selling and marketing expenses, all as part of the preparations for the
company’s planned accelerated growth in this market. |
| |
At
the beginning of August 2008, Graffiti purchased the operations of Yavne Pitango 2000
(1994) Ltd., which was also engaged in the marketing of office equipment and supplies to
businesses and institutions in Northern Israel. The sales turnover of Yavne Pitango
shortly before the execution of the transaction was estimated at NIS 20 million. The
additional sales by Graffiti resulting from the operations of Yavne Pitango in the
reported period amounted to approximately NIS 8.4 million. |
14
| |
Graffiti
continues to grow in the marketing of office supplies to businesses market and is taking
several courses of action in order to establish its position as a leader in this market: |
| |
a. |
Graffiti
is constantly working to improve the procurement network, with an emphasis
on imports from the Far-East that will serve to significantly reduce
purchasing costs, aiming to improve the gross and operating profitability. |
| |
b. |
In
2010, Graffiti, together with other companies in the group, is scheduled to
relocate to a modern distribution center, which would allow to
significantly cut operating costs, while enabling continued growth in
sales and profit. |
| |
c. |
In
the reported period, Graffiti continued the development of the IT platform
that will enable the acceleration of growth and profit alongside the
improvement of customer service, in complement to the transfer to the new
and modern distribution site. |
| C. |
Analysis
of the Company’s Financial Situation |
| |
Commencing
January 1, 2009, the company applies International Financial Reporting Standard
(IFRS) No. 8, “Operating Segments”, and has accordingly recognized the
packaging products and board segment, which includes the operations of Carmel Container
Systems and Frenkel C.D., as a separate segment. The associated companies Hogla-Kimberly
and Mondi Hadera were also recognized as independent segments (for further details, see
Note 9 to the financial statements). Please note that the following analysis of
financial results relates to the companies that are consolidated in the results of Hadera
Paper and is affected by the adoption of the Standard mentioned above. |
| |
Starting
September 1, 2008, the financial statements of Carmel and Frenkel CD Ltd. (an associated
company of Carmel’s and of the Company), are being consolidated within the Company’s
financial statements, as a result of the fact that the holding rate in Carmel has
increased from 36.2% to 89.3%, and at Frenkel CD, indirectly, from 37.93% to 52.72% (for
details see Note 15 to the annual financial statements as at December 31, 2008). |
| |
— |
The
cash and cash equivalents item rose from NIS 5.6 million on June 30, 2008 to NIS 16.5
million on June 30, 2009. |
| |
— |
Designated
Deposits increased from NIS 67.1 million as at June 30, 2008 to NIS 96.9
million as at June 30, 2009. The increase in deposits stems from the company’s
preparation for the purchase of equipment and fixed assets for the Machine 8
Project. |
15
| |
— |
Trade
receivables relating to the packaging paper and recycling segment decreased from NIS 119.3
million as at June 30, 2008 to NIS 71.7 million as at June 30, 2009. This
decrease is due to the erosion of prices as a result of paper imported at dumping prices,
a quantitative decrease in sales (mainly in April) and the change in the composition of
markets in which the company sells its products. In the packaging products and board
segment, trade receivables totaled NIS 177.7 million as at June 30, 2009.
Accounts receivable for the office supplies marketing sector rose from NIS 39.9 million
as at June 30, 2008 to NIS 44.6 million, as at June 30, 2009, as a result of growth in
the volume of operations. |
| |
— |
Other
accounts receivables relating to the packaging paper and recycling segment decreased from
NIS 93.2 million as at June 30, 2008 to NIS 91.3 million as at June 30,
2009. In the packaging products and cardboard segment, other receivables totaled NIS 2.8
million as at June 30, 2009. Other accounts receivables relating to the marketing of
office supplies segment decreased from NIS 3.8 million as at June 30, 2008 to
NIS 2.7 million as at June 30, 2009. |
| |
— |
Inventories
of the packaging paper and recycling segment increased from NIS 51.1 million as at
June 30, 2008 to NIS 78.3 million as at June 30, 2009. This increase is
primarily attributed to the continuing increase in the inventories of wastepaper as part
of Amnir’s preparation for the transition to the new packaging paper machine, the
development of export markets and the securing of paper availability for overseas
shipment. In the packaging products and board segment, inventories totaled NIS 67.7
million as at June 30, 2009. Inventories of the marketing of office supplies segment
increased from NIS 18.1 million as at June 30, 2008 to NIS 23.0 million as
at June 30, 2009. This increase was due mainly to the larger bulk of products
imported from Eastern Asia for the purpose of improving profitability and to the
inventories purchased as part of the acquisition of the operations of Yavne Pitango in
Northern Israel at the beginning of August 2008 with an eye to accelerating the company’s
growth. |
| |
— |
The
investment in associated companies decreased from NIS 351.2 million as at June 30,
2008 to NIS 318.5 million as at June 30, 2009. The principal causes for the
decrease, despite the company’s share in the profits of associated companies of NIS 60.4
million between the reported periods, were the derecognition of NIS 49.8 million
with respect to Carmel Container Systems and Frenkel C.D. from the investments in
associated companies due to their consolidation as of September 1, 2008, following
the increase in their holding percentage; the company’s share of NIS 16.3
million in a dividend distributed by an associated company and the company’s share
of NIS 20.8 million in a dividend declared by an associated company, which reduced
the total investment in the reported period. |
| |
— |
Short-term
credit increased from NIS 106.3 million as at June 30, 2008 to NIS 114.8
million as at June 30, 2009. The composition of short-term credit changed due to the
credit in the amount of NIS 50 million raised from public institutions in 2009 and
the repayment of short-term bank credit. |
| |
— |
Accounts
payables and accrued expenses relating to the packaging paper and recycling segment
increased from NIS 74.7 million as at June 30, 2008 to NIS 84.4 million as
at June 30, 2009. The increase was due mainly to the increase in expenses accrued
with respect to interest on the debentures issued in the third quarters of the previous
year. In the packaging products and board segment, other payables and accrued expenses
totaled NIS 18.3 million as at June 30, 2009. Other payables and accrued
expenses relating to the marketing of office supplies segment increased from NIS 5.1
million as at June 30, 2008 to NIS 5.3 million as at June 30, 2009. |
16
| |
— |
The
company’s shareholders’ equity increased from NIS 690.5 million as at June 30,
2008 to NIS 801.5 as at June 30, 2009. The change was due mainly to the net
profit of NIS 65.1 million attributed to the shareholders of the company between the
periods, a positive capital reserve in the amount of NIS 17.3 million from the
transition to consolidation and with the addition of minority interests in the amount of
NIS 25.5 million. |
| |
1. |
Investments
in Fixed Assets |
| |
Investments
in fixed assets amounted to NIS 217.6 million in the reported period, as compared with
NIS 128.2 million in the corresponding period last year. The investments this year
consisted primarily of payments on account of purchasing from equipment vendors for the
new packaging paper manufacturing network (Machine 8), in the sum of NIS 195 million (net
of supplier credit in the amount of approximately NIS 60 million). Additional investments
included were related to environmental protection (wastewater treatment) and current
investments in equipment renewal, means of transportation and building maintenance at the
Hadera site. |
| |
The
long-term liabilities (including current maturities) amounted to NIS 733.0 million as at
June 30, 2009, as compared with NIS 290.1 million as at June 30, 2008. Long-term
liabilities grew year-over-year, primarily as a result of the issuing of two debenture
series (Series 3 and Series 4) in the third quarter last year, in the total sum of NIS
427 million, coupled with long-term loans assumed intended for financing payments on
account of Machine 8 and the consolidation of the loans of Carmel and Frenkel CD, in the
total sum of NIS 90.6 million. This increase was offset as a result of the repayment of
the old debenture series, coupled with the repayment of a capital note to an associated
company. |
| |
The
long-term liabilities include primarily three series of debentures and the following
long-term bank loans: |
| |
Series
2 – NIS 160.4 million, for repayment until 2013. |
| |
Series
3 – NIS 192.7 million, for repayment until 2018. |
| |
Series
4 – NIS 235.6 million, for repayment until 2015. |
| |
Long-term
loans – NIS 142.2 million. |
| |
The
outstanding short-term credit totaled NIS 114.8 million as at June 30, 2009, as compared
with NIS 106.3 million as at June 30, 2008 and NIS 77.7 million as at December 31, 2008. |
| |
After
balance date, the Company raised approximately NIS 100 million, by way of NIS long term
loan from institutional loner. |
| |
3. |
Financial
liabilities at fair value through the statement of income |
| |
Put
Option to a Shareholder at an Associated Company |
| |
As
part of an agreement dated November 21, 1999 with Mondi Business Paper (hereinafter –MBP,
formerly Neusiedler AG) Mondi Hadera acquired the Group’s operation in fine paper
and issued MBP 50.1% of its shares. |
17
| |
As
part of this agreement, MBP was granted the option to sell its holdings in Mondi Hadera
to the Company at a price 20% lower than its value (as defined in the agreement), or $20
million, less 20% – the higher of the two. According to verbal understandings that
were reached in proximity to the signing of the agreement, between elements at the
company and elements at MBP, the latter can exercise the option only in the most
exceptional cases, such as those that paralyze production in Israel for long periods of
time. |
| |
Due
to the extended period of time that has passed since these understandings were reached
and in view of recent changes in the management of MBP, the Company has decided to adopt
a conservative approach in this respect and to reflect the economic value of the option.
The value of the option was calculated according to IFRS and was recognized as a
liability that is measured at fair value, with changes in fair value being allocated to
the statement of income in accordance with IAS 39.
The difference between the value of
the liabilities according to the agreement – NIS 62.7 million – as compared
with the value of the liabilities through fair value – NIS 12.6 million – amounts
to NIS 50.1 million. |
| |
The
liability on account of the Put option to the shareholder at the associated company as at
June 30, 2009, June 30, 2008, and as at December 31, 2008, amounts to NIS 12.6 million,
NIS 5.2 million and NIS 13.9 million, respectively. |
| |
On
account of the Put option, other expenses grew by NIS 1.3 million during the reported
period, as compared with other expenses of NIS 1.3 million in the corresponding period
last year. |
| |
The
principal factors behind the change in the fair value during the reported period include
the change in the risk-free interest rate and the change in the standard deviation of the
Hadera paper share that serve for the calculation of the value of the option. |
| |
4. |
The
net profit and the earnings per share attributed to the Company’s shareholders |
| |
The
net profit attributed to the Company’s shareholders in amounted to NIS 34.7 million
in the reported period, as compared with net profit of NIS 39.3 million in the
corresponding period last year, representing a decrease of 11.7%. |
| |
The
net profit attributed to the company shareholders during the reported period was affected
by the improvement in operating profitability at some of the groups companies in Israel
and in Turkey and by the recording of earnings as a result of the distribution of a
unilateral dividend on account of the application of a preferred share by an associated
company that generated net revenues of NIS 8.4 million for the company. Moreover, a
reduction in the company’s share in the losses on account of the operations in
Turkey (KCTR) in relation to the corresponding period last year (see above, Strategic
Investment in Turkey, as well as chapter C7, below) also contributed to the improved
profitability. |
| |
The
net profit for the second quarter this year amounted to NIS 15.6 million, as compared
with a net profit of NIS 18.0 million in the corresponding quarter last year,
representing a decrease of approximately 13%. |
18
| |
Basic
earnings per share amounted to NIS 6.86 per share ($1.75 per share) in the reported
period, as compared with basic earnings per share of NIS 7.77 per share ($2.32 per share)
in the corresponding period last year. |
| |
Diluted
earnings per share amounted to NIS 6.86 per share ($1.75 per share) in the reported
period, as compared with NIS 7.76 per share ($2.31 per share) in the corresponding period
last year. |
| |
The
basic earnings per share amounted to NIS 3.09 per share in the second quarter ($0.79 per
share), as compared with earnings of NIS 3.56 per share ($1.06 per share) in the
corresponding quarter last year. |
| |
Diluted
earnings per share amounted to NIS 3.09 per share ($0.79 per share) in the second quarter
of the year, as compared with earnings of NIS 3.55 per share ($1.06 per share) in the
corresponding quarter last year. |
| |
5. |
Analysis
of Operations and Profitability |
| |
The
analysis set forth below is based on the consolidated data. |
| |
Consolidated
sales in the reported period amounted to NIS 434.0 million, as compared to NIS 275.8
million in the corresponding period last year, representing an increase of 57.4%, which
was due mainly to the first-time consolidation of the data of Carmel Container Systems
and Frenkel C.D. in the reported period, in the amount of approximately NIS 240.1
million. |
| |
Sales
of the packaging paper and recycling sector amounted to NIS 125.1 million in the reported
period, as compared with NIS 216.5 million in the corresponding period last year. |
| |
The
reduction in the sales turnover of the packaging paper and recycling segment was due both
to the decrease in sales of packaging and recycling as a result of the erosion of selling
prices, which was not counteracted by the increase of NIS prices (the sales of the
segment are affected by the dollar-denominated import prices) and to the quantitative
decrease in sales as a result of the import of paper from Europe at dumping prices, the
reduced volume of activity of corrugated board manufacturers, the diminished demands in
the local market, the slowdown of Israeli exports, and the non-recurring reduction of
inventories in the reported period by the manufacturers of corrugated board as a means to
improve cash flows. |
| |
Sales
in the packaging products and cardboard segment amounted to NIS 240.1 million in the
reported period. |
| |
Sales
in the marketing of office supplies segment amounted to NIS 68.8 million in the
reported period, as compared with NIS 59.3 million in the corresponding period last
year, representing an increase of 16.0%, which was due to the continued implementation of
the segment’s growth plan by way of expanding the customer base and acquiring
competing companies. |
| |
In
the second quarter, consolidated sales amounted to NIS 204.1 million, as compared
with NIS 133.3 million in the corresponding quarter last year, representing an
increase of 53.1%, which is mainly due to the first-time consolidation of the data of
Carmel Container Systems and Frenkel C.D. in the reported period, in the amount of
approximately NIS 109.3 million, and compared with sales of NIS 229.9 million
in the first quarter of the year, representing a decrease of 11.2%. |
19
| |
Sales
in the packaging paper and recycling segment amounted to NIS 62.5 million in the
second quarter of the year, as compared to NIS 107.1 million in the corresponding
quarter last year, mainly as a result of the import of paper from Europe at dumping
prices, the reduction of inventories by the manufacturers of corrugated board as a means
to improve cash flows, adjustment to demands and preparations for the development of
export markets in connection with the development of the new products as a substitute to
pulp. |
| |
Sales
in the packaging products and cardboard segment amounted to NIS 109.3 million in the
second quarter of the year. |
| |
Sales
in the marketing of office supplies segment amounted to NIS 32.3 million in the
second quarter of the year, as compared with NIS 26.1 million in the corresponding
quarter last year. This increase was due mainly to the expansion of the company’s
customer portfolio in this market. |
| |
The
cost of sales amounted to NIS 373.2 million – or 86.0% of sales – during the
reported period, as compared with NIS 208.9 million – or 75.8% of sales – in
the corresponding period last year. |
| |
The
gross profit totaled NIS 60.8 million during the reported period (14.0% of sales), as
compared with NIS 66.8 million (24.2% of sales) in the corresponding period last year,
representing a decrease of 9.0% in relation to the corresponding period last year. |
| |
The
decrease in gross profit in relation originates primarily from the erosion of the prices
of packaging paper as well as a result of the slowdown in the markets and the decrease in
quantitative sales, coupled with a 6% increase in the price of water, that was offset by
the lowering of paper collection costs and the procurement of raw materials, along with a
1% decrease in electricity prices. These impacts were offset as a result of the
consolidation for the first time of the results of Carmel Container Systems and Frenkel
CD during the reported period. Additionally, the cost of sales included an amortization
of NIS 3.7 million in excess cost, as a result of excess cost recorded from the
acquisition of Carmel and Frenkel CD in 2008. |
| |
The
labor wages within the cost of sales amounted to NIS 104.1 million during the reported
period (approximately 24.0% of sales), as compared with NIS 60.4 million last year
(approximately 21.9% of sales). |
| |
The
labor wages within the general and administrative expenses amounted to NIS 44.3 million
during the reported period (approximately 10.2% of sales), as compared with the sum of
NIS 31.0 million last year (approximately 11.2% of sales). |
20
| |
The
growth in the cost of labor wages in relation to the corresponding period last year
originates primarily from additional labor expenses of NIS 52.3 million as a result of
the consolidation of Carmel and Frenkel CD. |
| |
Moreover,
the cost of labor includes the labor costs derived from the issue of options to
executives and the allocation of the expenditure thereupon, at a cumulative rates of NIS
2.1 million during the reported period, an expenditure not involving cash flows. |
| |
As
part of the alignment with the global economic crisis, the Company’s management
adopted a policy of mutually-agreed pay cuts for executives. In this capacity, senior
executives and managers have mutually agreed to cut their wages by 8% to 10% in 2009,
while senior employees have agreed that their wages be cut by 5%. The company also
decided to freeze any raises in labor wages for employees under a personal employment
contract in 2009. |
| |
3. |
Selling,
General and Administrative and Other Expenses |
| |
The
selling, general and administrative (including wages) and other expenses amounted to NIS
46.9 million in the reported period – or 10.8% of sales – as compared with NIS
36.8 million – or 13.3% of sales – in the corresponding period last year. When
neutralizing revenues, as a result of the distribution of a unilateral dividend on
account of a preferred share that was allocated by an associated company in the sum of
NIS 16.4 million, the selling general, administrative and other expenses amounted to NIS
63.3 million. |
| |
The
increase in selling, general and other expenses originated primarily from the
consolidation of the expenses of Carmel and Frenkel CD in the company’s financial
statements, in the sum of NIS 26.4 million. |
| |
The
operating profit totaled NIS 13.9 million during the reported period (3.2% of sales), as
compared with NIS 30.1 million (10.9% of sales) in the corresponding period last year.
The decrease in the operating profits originated from the erosion of selling prices of
packaging paper and recycling, the impact of a certain slowdown in operations at some of
the companies as a result of the global crisis and its local repercussions, that was
offset by the recording of non-recurring revenues in the sum of NIS 16.4 million on
account of a unilateral dividend. |
| |
The
operating loss of the paper and recycling sector amounted to NIS 8.2 million in the
reported., as compared with NIS 28.7 million the corresponding period last year,
primarily as a result of dumping prices of competing imports, that serve to erode the
prices and quantities as mentioned above. The operating profit was also affected by the
recording of revenues on account of a Put option to a shareholder at an associated
company in the sum of NIS 1.3 million during the reported period. |
| |
The
operating profit of the packaging products and cardboard sector amounted to NIS 4.6
million, while the operating profit of the office-supply sector amounted to NIS 1.2
million as compared with NIS 1.4 million during the corresponding period last year. |
21
| |
The
operating loss amounted to NIS 4.6 million in the second quarter of the year, as compared
with operating profit of NIS 12.6 million in the corresponding quarter last year. |
| |
The
operating loss of the paper and recycling sector in the second quarter of the year
amounted to NIS 5.6 million, as compared with operating profit of NIS 11.9 million in the
corresponding quarter last year, as mentioned above, as a result of the continuing impact
of dumping prices on sales in the sector. |
| |
The
operating profit of the packaging products and cardboard sector amounted to NIS 0.7
million. |
| |
The
operating profit of the office supplies sector amounted to NIS 0.2 million, as compared
with NIS 0.8 million in the corresponding quarter last year. |
| |
The
financial expenses during the reported period amounted to NIS 10.0 million, as compared
with NIS 11.1 million in the corresponding period last year, representing a decrease of
9.9%. |
| |
The
total average of interest bearing liabilities, net, carried to the company’s
financial expenses, decreased by approximately NIS 38 million between the periods
2008-2009. This decrease originated primarily from the positive cash flows from operating
activities between the periods, net of the current investments in fixed assets. |
| |
The
interest on the short-term interest-bearing credit decreased by NIS 1.8 million, both as
a result of the decrease in the balance of short-term credit and as a result of the lower
interest rate between the two periods. The interest expenses in respect of CPI-linked
long-term liabilities (debentures) decreased by NIS 2.2 million as compared with the
corresponding period last year, as a result of both the decrease in the balance of
debentures following redemptions made to the holders of the debentures, coupled with
hedging transactions on the CPI-linked debentures against the increase in the CPI, whose
costs amounted to 0.3% per annum in 2009, as compared with 2.6% in 2008, and as a result
of the valuation of the hedging transactions to their fair value, in accordance with
international standards. The actual index rose by 2.1% in this period. |
| |
Furthermore,
an increase of NIS 1.8 million was recorded in financial expenses, originating primarily
on account of the impact of the devaluation vis-à-vis the US dollar in the amount
of 3.1% during the reported period, as compared with a revaluation of 12.8% during the
corresponding period last year on the balance of dollar-denominated assets. |
| |
Taxes
on income amounted to NIS 4.4 million in the reported period, as compared with NIS 5.4
million in the corresponding period last year. The decrease in tax expenses originates
primarily from the decrease in pre-tax profits in the sum of NIS 15.1 million, that was
offset a result of the recording of a provision for taxes on account of events that were
included during the reported period. |
22
| |
7. |
Company’s
Share in Earnings of Associated Companies |
| |
The
companies whose earnings are reported under this item (according to Hadera Paper’s
holdings therein), include primarily: Mondi Hadera, Hogla-Kimberly. |
| |
The
company’s share in the profits of associated companies totaled NIS 34.9 million
during the reported period, as compared with NIS 25.8 million in the corresponding period
last year. |
| |
The
following principal changes were recorded in the Company’s share in the earnings of
associated companies, in relation to the corresponding period last year: |
| |
– |
The
Company’s share in the net profit of Mondi Hadera Paper (49.9%) decreased by NIS 1.9
million. The decrease in profits originated primarily from the decrease in the operating
profit of Mondi, that fell from NIS 17.7 million last year to NIS 15.9 million this year,
primarily as a result of the erosion of prices due to imports at dumping prices. The net
profit also decreased as a result of an increase in financial expenses during the
reported period in relation to last year, primarily on account of the impact of the
devaluation of the NIS against the US dollar. |
| |
– |
The
company’s share in the net earnings of Hogla-Kimberly Israel (49.9%) increased by
NIS 6.4 million. Hogla’s operating profit grew from NIS 85.1 million to NIS 102.3
million this year. The improved operating profit originated from a quantitative increase
in sales, improved selling prices in some of the sectors of operation, the continuing
trend of raising the proportion of certain premium products out of the products basket,
while innovating products and empowering the Company’s brands, a decrease in the
prices of certain company inputs in view of the erosion of global commodity prices,
continuing efficiency measures across the company and growing savings in procurement that
also contributed significantly to the profit. |
| |
– |
The
Company’s share in the losses of KCTR Turkey (formerly: “Ovisan”) (49.9%)
decreased by NIS 3.6 million. The significant decrease in the loss is attributed
primarily to the growth in the volumes of operation (see above – “Strategic
Investment in Turkey”) that led to the continued reduction in the operating loss,
from NIS 20.9 million last year to approximately NIS 14.1 million this year. Moreover,
due to the increase in the shareholders’ equity of KCTR through a financial influx
from Hogla-Kimberly last year and during the reported period, the bank loans were repaid,
while reducing the financial expenses, thereby leading to an additional reduction in the
net loss. |
23
| |
The
cash flows from operating activities totaled NIS 89.3 million during the reported period,
as compared with NIS 56.7 million in the corresponding period last year. The increase in
the cash flows from operating activities during the reported period, originated primarily
from the reduced working capital in the reported period, that amounted to NIS 17.5
million, as compared with growth of NIS 6.9 million last year. The decrease in working
capital during the reported period originated primarily from a decrease in the trade
receivables item, that was offset as a result of a decrease in the accounts payable item,
primarily due to the lowering of procurement costs during the reported period, as
mentioned above. |
| |
See
Section B2 – Financial Liabilities and further details in the table below. |
| F. |
Exposure
and Management of Market Risks |
| |
The
Company conducts periodical discussions regarding market risks and exposure to exchange
rate and interest rate fluctuations, with the participation of the relevant factors, so
as to reach decisions in this matter. The individual responsible for the implementation
of market risk management policy at the Company is Shaul Glicksberg, the Group’s VP
of Finance and Business Development. |
| |
2. |
Market
Risks to which the Company is Exposed |
| |
Description
of Market Risks |
| |
The
market risks reflect the risk of changes in the value of financial instruments affected
by changes in the interest rate, in the Consumer Price Index and in foreign currency
exchange rates. |
| |
Approximately
half of the Company’s sales are denominated in US dollars, whereas a significant
share of its expenses and liabilities are in NIS. The Company is therefore exposed to
fluctuations in the exchange rate of the NIS vis-à-vis the US dollar. This
exposure includes economic exposure (on account of surplus proceeds on payments in
foreign currency or linked thereto) and accounting exposure (on account of a surplus of
dollar-linked assets over foreign-currency-denominated liabilities). |
| |
The
Company periodically reexamines the need for hedging on account of this exposure. True to
June 30, 2009, the Company entered into hedging transactions in the sum of 19 million
euro, in order to hedge the cash flows for the acquisition of fixed assets from equipment
vendors for Machine 8. |
| |
It
should be noted that on the aggregate level that includes associated companies, the
currency exposure is limited. |
| |
Consumer
Price Index Risks |
| |
The
Company is exposed to changes in the Consumer Price Index, pertaining to the debentures
issued by the Company and to long-term loans, in the total sum of NIS 382.2 million. |
24
| |
In
early 2009, the Company entered into hedging transactions for a period of one year, to
protect itself against a rise in the CPI, in the amount of NIS 250 million, pursuant to
previous transactions that were made in early 2008 and in August 2008 and terminated at
the end of 2008. |
| |
The
company also enjoys natural hedging due to the current debt of an associated company that
is linked to the consumer price index. |
| |
Most
of the Group’s sales are made in Israel to a large number of customers and the
exposure to customer-related credit risks is consequently generally limited. The Group
regularly analyzes – through credit committees that operate within the various
companies – the quality of the customers, their credit limits and the relevant
collateral required, as the case may be. |
| |
The
financial statements include provisions for doubtful debts, based on the existing risks
on the date of the statements. |
| |
Sensitivity
Analysis Tables for Sensitive Instruments, According to Changes in Market Elements as at
June 30, 2009: |
Sensitivity to Interest Rates
|
Sensitive Instruments
|
Profit (loss) from changes
|
Fair value as
at
Jun-30-09
|
Profit (loss) from changes
|
|
Interest
rise
10%
|
Interest
rise
5%
|
Interest
decrease
5%
|
Interest
decrease
10%
|
In NIS thousands
|
| |
|
|
|
|
|
| Series 2 Debentures |
|
|
| (1,517 |
) |
| (762 |
) |
| (170,959 |
) |
| 768 |
|
| 1,541 |
|
| Series 3 Debentures | | |
| (3,397 |
) |
| (1,710 |
) |
| (206,823 |
) |
| 1,733 |
|
| 3,489 |
|
| Series 4 Debentures | | |
| (3,177 |
) |
| (1,596 |
) |
| (270,192 |
) |
| 1,612 |
|
| 3,240 |
|
| Fixed-interest loans | | |
| (195 |
) |
| (98 |
) |
| (27,029 |
) |
| 99 |
|
| 198 |
|
| Long-term loans and capital | | |
| notes - granted | | |
| 193 |
|
| 96 |
|
| 50,258 |
|
| (97 |
) |
| (194 |
) |
The fair value of the loans is based
on a calculation of the present value of the cash flows, according to the
generally-accepted interest rate on loans with similar characteristics (4% in 2009).
Regarding the terms of the debentures and other liabilities – See Note 8 to the
annual financial statements dated December, 31, 2008.
Regarding long-term loans and
capital notes granted – See Note 4 to the annual financial statements dated December
31, 2008.
Sensitivity of €-linked instruments to changes in the € exchange rate
|
Sensitive Instruments
|
Profit (loss) from changes
|
Fair value as
at
Jun-30-09
|
Profit (loss) from changes
|
|
Rise in €
10%
|
Rise in €
5%
|
Decrease in €
5%
|
Decrease in €
10%
|
In NIS thousands
|
| |
|
|
|
|
|
| Cash and cash equivalents |
|
|
| 164 |
|
| 82 |
|
| 1,641 |
|
| (82 |
) |
| (164 |
) |
| Designated deposits | | |
| 3,191 |
|
| 1,596 |
|
| 31,913 |
|
| (1,596 |
) |
| (3,191 |
) |
| Other Accounts Receivable | | |
| 264 |
|
| 132 |
|
| 2,635 |
|
| (132 |
) |
| (264 |
) |
| Other Accounts Payable | | |
| (7,760 |
) |
| (3,880 |
) |
| (77,595 |
) |
| 3,880 |
|
| 7,760 |
|
| NIS-€ forward transaction | | |
| 10,954 |
|
| 5,696 |
|
| 429 |
|
| (4,819 |
) |
| (10,077 |
) |
Sensitivity to the US Dollar Exchange Rate
|
Sensitive Instruments
|
Profit (loss) from changes
|
Fair value as
at
Jun-30-09
|
Profit (loss) from changes
|
|
Revaluation
of $
10%
|
Revaluation
of $
5%
|
Devaluation
of $
5%
|
Devaluation
of $
10%
|
In NIS thousands
|
| |
|
|
|
|
|
| Cash and cash equivalents |
|
|
| 257 |
|
| 128 |
|
| 2,565 |
|
| (128 |
) |
| (257 |
) |
| Other Accounts Receivable | | |
| 1,338 |
|
| 669 |
|
| 13,380 |
|
| (669 |
) |
| (1,388 |
) |
| Other Accounts Payable | | |
| (2,783 |
) |
| (1,392 |
) |
| (27,834 |
) |
| 1,392 |
|
| 2,783 |
|
| Liabilities at fair value | | |
| through the statement of income | | |
| (1,255 |
) |
| (628 |
) |
| (12,553 |
) |
| 628 |
|
| 1,255 |
|
Other accounts receivable reflect
primarily short-term customer debts.
Capital note – See Note 4d to the annual
financial statements dated December 31, 2008
Accounts payable reflect primarily
short-term liabilities to suppliers.
26
| |
Below
are the balance sheet items, according to linkage bases, as at June 30, 2009: |
In NIS millions
|
Unlinked
|
CPI-linked
|
In foreign
currency, or
linked thereto
(primarily US$)
|
€-linked
|
Non-Monetary
Items
|
Total
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Assets |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| Cash and cash equivalents | | |
| 12.3 |
|
| |
|
| 2.6 |
|
| 1.6 |
|
| |
|
| 16.5 |
|
| Short-term deposits and investments | | |
| 64.9 |
|
| |
|
| |
|
| 31.9 |
|
| |
|
| 96.8 |
|
| Other Accounts Receivable | | |
| 369.1 |
|
| 0.9 |
|
| 14.3 |
|
| 2.6 |
|
| 3.9 |
|
| 390.8 |
|
| Inventories | | |
| |
|
| |
|
| |
|
| |
|
| 169.1 |
|
| 169.1 |
|
| Current tax assets | | |
| 0.1 |
|
| |
|
| |
|
| |
|
| |
|
| 0.1 |
|
| Investments in Associated Companies | | |
| 53.7 |
|
| |
|
| |
|
| |
|
| 264.8 |
|
| 318.5 |
|
| Deferred taxes on income | | |
| |
|
| |
|
| |
|
| |
|
| 31.5 |
|
| 31.5 |
|
| Fixed assets, net | | |
| |
|
| |
|
| |
|
| |
|
| 1,013.8 |
|
| 1,013.8 |
|
| Intangible Assets | | |
| |
|
| |
|
| |
|
| |
|
| 29.0 |
|
| 29.0 |
|
| Land under lease | | |
| |
|
| |
|
| |
|
| |
|
| 38.1 |
|
| 38.1 |
|
| Other assets | | |
| |
|
| |
|
| |
|
| |
|
| 2.5 |
|
| 2.5 |
|
| Assets on account of employee benefits | | |
| 0.7 |
|
| |
|
| |
|
| |
|
| |
|
| 0.7 |
|
| Total Assets | | |
| 500.8 |
|
| 0.9 |
|
| 16.9 |
|
| 36.1 |
|
| 1,552.7 |
|
| 2,107.4 |
|
|
| |
| |
| |
| |
| |
| |
| | | |
| Liabilities | | |
| Short-term credit from banks | | |
| 114.8 |
|
| |
|
| |
|
| |
|
| |
|
| 114.8 |
|
| Other Accounts Payable | | |
| 223.7 |
|
| |
|
| 30.5 |
|
| 77.6 |
|
| |
|
| 331.8 |
|
| Deferred taxes on income | | |
| |
|
| |
|
| |
|
| |
|
| 75.8 |
|
| 75.8 |
|
| Long-Term Loans | | |
| 111.5 |
|
| 31.7 |
|
| |
|
| |
|
| |
|
| 143.2 |
|
| Notes (debentures) - including current maturities | | |
| 238.3 |
|
| 351.4 |
|
| |
|
| |
|
| |
|
| 589.7 |
|
| Liabilities on account of employee benefits | | |
| 38.1 |
|
| |
|
| |
|
| |
|
| |
|
| 38.1 |
|
| Liabilities at fair value through the statement of income | | |
| |
|
| |
|
| 12.5 |
|
| |
|
| |
|
| 12.5 |
|
| Shareholders' equity, reserves and retained earnings | | |
| |
|
| |
|
| |
|
| |
|
| 801.5 |
|
| 801.5 |
|
| Total liabilities and equity | | |
| 726.4 |
|
| 383.1 |
|
| 43.0 |
|
| 77.6 |
|
| 877.3 |
|
| 2,107.4 |
|
|
| |
| |
| |
| |
| |
| |
| | | |
| Surplus financial assets (liabilities) as at Jun-30-09 | | |
| (225.6 |
) |
| (382.2 |
) |
| (26.1 |
) |
| (41.4 |
) |
| 730.0 |
|
| |
|
| Surplus financial assets (liabilities) as at Dec-31-08 | | |
| (157.4 |
) |
| (389.0 |
) |
| (12.6 |
) |
| 107.6 |
|
| 471.4 |
|
| |
|
| |
* |
As
to hedging transactions associated with surplus CPI-linked liabilities, see Section F(2),
above. |
27
| |
Hadera
Paper is exposed to various risks associated with operations in Turkey, where
Hogla-Kimberly is active through its subsidiary, KCTR. These risks originate from
concerns regarding economic and political instability, high devaluation and elevated
inflation rates that have characterized the Turkish economy in the past and that may
recur and harm the KCTR operations. |
| G. |
Forward-Looking
Statements |
| |
This
report contains various forecasts that constitute forward-looking statements, as defined
in the Securities Law, based upon the Board of Directors’ present expectations and
estimates regarding the operations of the Group and its business environment. The Company
does not guarantee that the future results of operations will coincide with the
forward-looking statements and these may in fact differ considerably from the present
forecasts as a result of factors that may change in the future, such as changes in costs
and market conditions, failure to achieve projected goals, failure to achieve anticipated
efficiencies and other factors which lie outside the control of the Company. The Company
undertakes no obligation to publicly update such forward-looking statements, regardless
of whether these updates originate from new information, future events or any other
reason. |
| H. |
Detailed
processes undertaken by the company’s supreme supervisors, prior
to the approval of the financial statements |
| |
The
Company’s Board of Directors has appointed the Company’s Audit Committee to
serve as a Balance Sheet Committee and to supervise the completeness of the financial
statements and the work of the CPAs and to offer recommendations regarding the approval
of the financial statements and the discussion thereof prior to said approval. The
Committee consists of three directors, of which two possess accounting and financial
expertise. The meetings of the Balance Sheet Committee, as well as the board meetings
during which the financial statements are discussed and approved, are attended by the
company’s auditing CPAs, who are instructed to present the principal findings – if
there are any – that surfaced during the audit or review process, as well as by the
Internal Auditor. |
| |
The
Committee conducts its examination via detailed presentations from company executives and
others, including: General Manager – Avi Brener, and CFO – Shaul Glicksberg.
The material issues in the financial reports, including any extraordinary transactions
–if any, the material assessments and critical estimates implemented in the
financial statements, the reasonability of the data, the financial policy implemented and
the changes therein, as well as the implementation of proper disclosure in the financial
statements and the accompanying information. The Committee examines various aspects of
risk assessment and control, as reflected in the financial statements (such as reporting
of financial risks), as well as those affecting the reliability of the financial
statements. In case necessary, the Committee demands to receive comprehensive reviews of
matters with especially relevant impact, such as the implementation of international
standards. |
28
| |
The
approval of the financial statements involves several meetings, as necessary: The first
is held by the Audit Committee to discuss the material reporting issues in depth and at
great length, whereas the second is held by the Board of Directors to discuss the actual
results. Both meetings are held in proximity to the approval date of the financial
statements. As to the supreme supervision regarding the impact of the transition to
international financial reporting standards, the Committee held a detailed discussion
regarding the said disclosure and the accounting policy implemented in its respect. |
|
|
|
|
|
|
|
|
|
|
| —————————————— |
—————————————— |
| Zvika Livnat |
Avi Brener |
| Chairman of the Board of Directors |
General Manager |
29
Exhibit 3
HADERA PAPER LTD
UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
HADERA PAPER LTD
UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
TABLE OF CONTENTS
F - 1
HADERA PAPER LTD
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(NIS in thousands)
|
Note
|
June 30
|
December 31
|
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
| Assets |
|
|
| |
|
| |
|
| |
|
| |
|
| Current Assets | | |
| Cash and cash equivalents | | |
| |
|
| 16,530 |
|
| 5,553 |
|
| 13,128 |
|
| Designated deposits | | |
| |
|
| 96,862 |
|
| 67,055 |
|
| 249,599 |
|
| Accounts receivable: | | |
| Trade receivables | | |
| |
|
| 293,993 |
|
| 159,224 |
|
| 318,926 |
|
| Other receivables | | |
| |
|
| 96,831 |
|
| 97,011 |
|
| 100,888 |
|
| Current tax assets | | |
| |
|
| 65 |
|
| 5,478 |
|
| 6,271 |
|
| Inventory | | |
| |
|
| 169,014 |
|
| 69,201 |
|
| 168,755 |
|
|
|
| |
| |
| |
| Total Current Assets | | |
| |
|
| 673,295 |
|
| 403,522 |
|
| 857,567 |
|
|
|
| |
| |
| |
| | | |
| Non-Current Assets | | |
| Fixed assets, net | | |
| |
|
| 1,013,787 |
|
| 527,165 |
|
| 767,542 |
|
| Investments in associated companies | | |
| |
|
| 318,509 |
|
| 351,221 |
|
| 318,101 |
|
| Deferred tax assets | | |
| |
|
| 31,481 |
|
| 21,037 |
|
| 29,848 |
|
| Prepaid expenses with respect to an operating lease | | |
| |
|
| 38,117 |
|
| 35,797 |
|
| 36,344 |
|
| Other intangible assets | | |
| |
|
| 29,011 |
|
| 1,503 |
|
| 31,519 |
|
| Other assets | | |
| |
|
| 2,549 |
|
| - |
|
| 2,549 |
|
| Employee benefit assets | | |
| |
|
| 705 |
|
| * 645 |
|
| 624 |
|
|
|
| |
| |
| |
| Total Non-Current Assets | | |
| |
|
| 1,434,159 |
|
| 937,368 |
|
| 1,186,527 |
|
|
|
| |
| |
| |
| | | |
| Total Assets | | |
| |
|
| 2,107,454 |
|
| 1,340,890 |
|
| 2,044,094 |
|
|
|
| |
| |
| |
|
|
|
|
|
| |
*
Reclassified, see note 10. |
| |
The
accompanying notes are an integral part of the condensed interim consolidated financial
statements. |
F - 2
HADERA PAPER LTD
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(NIS in thousands)
|
Note
|
June 30
|
December 31
|
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
|
|
|
| Liabilities and Equity |
|
|
| |
|
| |
|
| |
|
| |
|
| Current Liabilities | | |
| Credit from banks and others | | |
| |
|
| 114,769 |
|
| 106,276 |
|
| 77,655 |
|
| Current maturities of long-term bonds and long term loans | | |
| |
|
| 69,636 |
|
| 50,984 |
|
| 76,469 |
|
| Trade payables | | |
| |
|
| 222,940 |
|
| 103,501 |
|
| 195,020 |
|
| Other payables and accrued expenses | | |
| |
|
| 108,824 |
|
| * 79,802 |
|
| * 104,943 |
|
| Short term employee benefit liabilities | | |
| |
|
| 20,382 |
|
| * 12,576 |
|
| * 17,478 |
|
| Other financial liabilities | | |
| |
|
| - |
|
| 31,990 |
|
| 32,770 |
|
| Financial liabilities at fair value through profit and loss | | |
| 7 |
|
| 12,553 |
|
| 5,196 |
|
| 13,904 |
|
|
|
| |
| |
| |
| Total Current Liabilities | | |
| |
|
| 549,104 |
|
| 390,325 |
|
| 518,239 |
|
|
|
| |
| |
| |
| | | |
| Non-Current Liabilities | | |
| Loans from banks and others | | |
| |
|
| 105,694 |
|
| 51,617 |
|
| 121,910 |
|
| Bonds | | |
| |
|
| 557,699 |
|
| 155,487 |
|
| 554,124 |
|
| Deferred tax liabilities | | |
| |
|
| 75,771 |
|
| 42,566 |
|
| 76,641 |
|
| Employee benefit liabilities | | |
| |
|
| 17,696 |
|
| * 10,352 |
|
| * 15,551 |
|
|
|
| |
| |
| |
| Total Non-Current Liabilities | | |
| |
|
| 756,860 |
|
| 260,022 |
|
| 768,226 |
|
|
|
| |
| |
| |
| | | |
| Capital and reserves | | |
| Issued capital | | |
| |
|
| 125,267 |
|
| 125,267 |
|
| 125,267 |
|
| Reserves | | |
| |
|
| 308,720 |
|
| 289,687 |
|
| 299,949 |
|
| Retained earnings | | |
| |
|
| 341,971 |
|
| 275,589 |
|
| 306,097 |
|
|
|
| |
| |
| |
| capital and reserves attributed to shareholders | | |
| |
|
| 775,958 |
|
| 690,543 |
|
| 731,313 |
|
| Minority Interests | | |
| |
|
| 25,532 |
|
| - |
|
| 26,316 |
|
|
|
| |
| |
| |
| | | |
| Total capital and reserves | | |
| |
|
| 801,490 |
|
| 690,543 |
|
| 757,629 |
|
|
|
| |
| |
| |
| Total Liabilities and Equity | | |
| |
|
| 2,107,454 |
|
| 1,340,890 |
|
| 2,044,094 |
|
|
|
| |
| |
| |
|
|
|
|
|
| |
*
Reclassified, see note 10. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Z. Livnat |
A. Brener |
S. Gliksberg |
| Chairman of the Board of Directors |
Chief Executive Officer |
Chief Financial and Business
Development Officer |
|
|
|
| |
Approval
date of the interim financial statements: August 9, 2009. |
| |
The
accompanying notes are an integral part of the condensed interim consolidated financial
statements. |
F - 3
HADERA PAPER LTD
CONDENSED CONSOLIDATED INCOME STATEMENTS
(NIS in thousands)
|
Note
|
Six months ended
June 30
|
Three months ended
June 30
|
Year ended
December 31
|
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
|
(Unaudited)
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
|
| |
|
| 434,034 |
|
| 275,786
|
|
| 204,153 |
|
| 133,267 |
|
| 673,484 |
|
| Cost of sales | | |
| |
|
| 373,195 |
|
| 208,937 |
|
| 180,685 |
|
| 102,958 |
|
| 542,387 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Gross profit | | |
| |
|
| 60,839 |
|
| 66,849 |
|
| 23,468 |
|
| 30,309 |
|
| 131,097 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Selling and marketing expenses | | |
| |
|
| 34,982 |
|
| 15,653 |
|
| 16,966 |
|
| 7,765 |
|
| 45,674 |
|
| General and administrative expenses | | |
| |
|
| 29,917 |
|
| 19,670 |
|
| 15,686 |
|
| 9,546 |
|
| 54,970 |
|
| Other (income) expenses, net | | |
| 7 |
|
| (17,965 |
) |
| 1,445 |
|
| (4,577 |
) |
| 378 |
|
| (4,898 |
) |
|
|
| |
| |
| |
| |
| |
| | | |
| Total expenses | | |
| |
|
| 46,934 |
|
| 36,768 |
|
| 28,075 |
|
| 17,689 |
|
| 95,746 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Profit (loss) from ordinary operations | | |
| |
|
| 13,905 |
|
| 30,081 |
|
| (4,607 |
) |
| 12,620 |
|
| 35,351 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Finance income | | |
| |
|
| 3,814 |
|
| 3,530 |
|
| 783 |
|
| 1,636 |
|
| 12,069 |
|
| Finance expenses | | |
| |
|
| 13,809 |
|
| 14,660 |
|
| 6,228 |
|
| 5,959 |
|
| 27,112 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Finance expenses, net | | |
| |
|
| 9,995 |
|
| 11,130 |
|
| 5,445 |
|
| 4,323 |
|
| 15,043 |
|
|
|
| |
| |
| |
| |
| |
| Profit after financial expenses | | |
| |
|
| 3,910 |
|
| 18,951 |
|
| (10,052 |
) |
| 8,297 |
|
| 20,308 |
|
| | | |
| Share in profit of associated companies, net | | |
| |
|
| 34,905 |
|
| 25,771 |
|
| 19,857 |
|
| 11,138 |
|
| 51,315 |
|
|
|
| |
| |
| |
| |
| |
| Profit (loss) before taxes on income | | |
| |
|
| 38,815 |
|
| 44,722 |
|
| 9,805 |
|
| 19,435 |
|
| 71,623 |
|
| | | |
| Taxes on income | | |
| 8 |
|
| 4,409 |
|
| 5,420 |
|
| (5,545 |
) |
| 1,403 |
|
| 3,663 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Profit for the period | | |
| |
|
| 34,406 |
|
| 39,302 |
|
| 15,350 |
|
| 18,032 |
|
| 67,960 |
|
| | | |
| Attributed to: | | |
| Company shareholders | | |
| |
|
| 34,716 |
|
| 39,302 |
|
| 15,637 |
|
| 18,032 |
|
| 69,710 |
|
| Minority interests | | |
| |
|
| (310 |
) |
| - |
|
| (287 |
) |
| - |
|
| (1,750 |
) |
|
|
| |
| |
| |
| |
| |
| | | |
| | | |
| |
|
| 34,406 |
|
| 39,302 |
|
| 15,350 |
|
| 18,032 |
|
| 67,960 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Earning for share: | | |
| Primary attributed to Company shareholders | | |
| |
|
| 6.86 |
|
| 7.77 |
|
| 3.09 |
|
| 3.56 |
|
| 13.77 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Fully diluted attributed to company shareholders | | |
| |
|
| 6.86 |
|
| 7.76 |
|
| 3.09 |
|
| 3.55 |
|
| 13.77 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Number of share used to compute the primary | | |
| earnings per share | | |
| |
|
| 5,060,774 |
|
| 5,060,774 |
|
| 5,060,774 |
|
| 5,060,774 |
|
| 5,060,774 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Number of share used to compute the fully diluted | | |
| earnings per share | | |
| |
|
| 5,060,774 |
|
| 5,067,954 |
|
| 5,060,774 |
|
| 5,073,967 |
|
| 5,060,774 |
|
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
| |
The
accompanying notes are an integral part of the condensed interim consolidated financial
statements. |
F - 4
HADERA PAPER LTD
CONDENSED CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
(NIS in thousands)
|
Six months ended
|
Three months ended
|
Year ended
|
|
June 30
|
June 30
|
December 31
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
| |
|
|
|
|
|
| Comprehensive Income |
|
|
| 34,406 |
|
| 39,302 |
|
| 15,350 |
|
| 18,032 |
|
| 67,960 |
|
|
| |
| |
| |
| |
| |
| | | |
| Other Comprehensive Income | | |
| Profit (loss) on cash flow hedges, net | | |
| 4,875 |
|
| - |
|
| (551 |
) |
| - |
|
| (2,306 |
) |
| Actuarial profit (loss) and defined benefit plans, net | | |
| 320 |
|
| - |
|
| 95 |
|
| - |
|
| (1,501 |
) |
| Revaluation from step acquisition | | |
| - |
|
| - |
|
| - |
|
| - |
|
| 17,288 |
|
| Share in Other Comprehensive Income of associated | | |
| companies, net | | |
| 1,968 |
|
| (21,191 |
) |
| 2,156 |
|
| (1,271 |
) |
| (28,094 |
) |
|
| |
| |
| |
| |
| |
| Total Other Comprehensive Income for the period, net | | |
| 7,163 |
|
| (21,191 |
) |
| 1,700 |
|
| (1,271 |
) |
| (14,613 |
) |
|
| |
| |
| |
| |
| |
| Total Comprehensive Income for the period | | |
| 41,569 |
|
| 18,111 |
|
| 17,050 |
|
| 16,761 |
|
| 53,347 |
|
|
| |
| |
| |
| |
| |
| | | |
| Attributed to: | | |
| Company shareholders | | |
| 41,905 |
|
| 18,111 |
|
| 17,416 |
|
| 16,761 |
|
| 55,115 |
|
| Minority interests | | |
| (336 |
) |
| - |
|
| (366 |
) |
| - |
|
| (1,768 |
) |
|
| |
| |
| |
| |
| |
| | | |
| 41,569 |
|
| 18,111 |
|
| 17,050 |
|
| 16,761 |
|
| 53,347 |
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
| |
The
accompanying notes are an integral part of the condensed interim consolidated financial
statements. |
F - 5
HADERA PAPER LTD
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(NIS in thousands)
|
Share
capital
|
Capital
reserves
|
Share based
payments
reserves
|
Capital reserves
resulting from
tax
benefit on
exercise of
employee options
|
Capital
reserve from
revaluation
from step
acquisition
|
Hedging
reserves
|
Foreign
currency
translation
reserves
|
Retained
earnings
|
Total for
Company
shareholders
|
Minority
Interests
|
Total
|
|
(Unaudited)
|
|
NIS in thousands
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance - January 1, 2009 |
|
|
| 125,267 |
|
| 301,695 |
|
| 6,227 |
|
| 3,397 |
|
| 15,908 |
|
| (5,092 |
) |
| (22,186 |
) |
| 306,097 |
|
| 731,313 |
|
| 26,316 |
|
| 757,629 |
|
| | | |
| For the six months ended | | |
| June 30, 2009: | | |
| Total Comprehensive Income for the period | | |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 4,812 |
|
| 2,091 |
|
| 35,002 |
|
| 41,905 |
|
| (336 |
) |
| 41,569 |
|
| Purchasing shares of subsidiary company | | |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (448 |
) |
| (448 |
) |
| Depreciation of capital from | | |
| revaluation from step acquisition to | | |
| retained earnings | | |
| - |
|
| - |
|
| - |
|
| - |
|
| (872 |
) |
| - |
|
| - |
|
| 872 |
|
| - |
|
| - |
|
| - |
|
| Share based payment | | |
| - |
|
| - |
|
| 2,740 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 2,740 |
|
| - |
|
| 2,740 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Balance - June 30, 2009 | | |
| 125,267 |
|
| 301,695 |
|
| 8,967 |
|
| 3,397 |
|
| 15,036 |
|
| (280 |
) |
| (20,095 |
) |
| 341,971 |
|
| 775,958 |
|
| 25,532 |
|
| 801,490 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | | |
| Balance - January 1, 2008 | | |
| 125,267 |
|
| 301,695 |
|
| - |
|
| 3,397 |
|
| - |
|
| (635 |
) |
| 3,810 |
|
| 236,437 |
|
| 669,971 |
|
| - |
|
| 669,971 |
|
| For the six months ended | | |
| June 30, 2008: | | |
| Total Comprehensive Income for the period | | |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (3,096 |
) |
| (17,945 |
) |
| 39,152 |
|
| 18,111 |
|
| - |
|
| 18,111 |
|
| Share based payment | | |
| - |
|
| - |
|
| 2,461 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 2,461 |
|
| - |
|
| 2,461 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Balance - June 30, 2008 | | |
| 125,267 |
|
| 301,695 |
|
| 2,461 |
|
| 3,397 |
|
| - |
|
| (3,731 |
) |
| (14,135 |
) |
| 275,589 |
|
| 690,543 |
|
| - |
|
| 690,543 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
The
accompanying notes are an integral part of the condensed interim consolidated financial
statements. |
F - 6
HADERA PAPER LTD
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(NIS in thousands)
|
Share
capital
|
Capital
reserves
|
Share based
payments
reserves
|
Capital reserves
resulting from tax
benefit on exercise of
employee options
|
Capital
reserve from
revaluation
from step
acquisition
|
Hedging
reserves
|
Foreign
currency
translation
reserves
|
Retained
earnings
|
Total for
Company
shareholders
|
Minority
Interests
|
Total
|
|
(Unaudited)
|
|
NIS in thousands
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance - April 1, 2009 |
|
|
| 125,267 |
|
| 301,695 |
|
| 7,887 |
|
| 3,397 |
|
| 15,473 |
|
| 861 |
|
| (22,930 |
) |
| 325,812 |
|
| 757,462 |
|
| 25,898 |
|
| 783,360 |
|
| | | |
| For the three months ended | | |
| June 30, 2009: | | |
| Total Comprehensive Income for the period | | |
| - |
|
| - |
|
| |
|
| |
|
| |
|
| (1,141 |
) |
| 2,835 |
|
| 15,722 |
|
| 17,416 |
|
| (366 |
) |
| 17,050 |
|
| Depreciation of capital from | | |
revaluation from step acquisition
to retained earnings | | |
| - |
|
| - |
|
| - |
|
| - |
|
| (437 |
) |
| - |
|
| - |
|
| 437 |
|
| - |
|
| - |
|
| - |
|
| Share based payment | | |
| - |
|
| - |
|
| 1,080 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1,080 |
|
| - |
|
| 1,080 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Balance - June 30, 2009 | | |
| 125,267 |
|
| 301,695 |
|
| 8,967 |
|
| 3,397 |
|
| 15,036 |
|
| (280 |
) |
| (20,095 |
) |
| 341,971 |
|
| 775,958 |
|
| 25,532 |
|
| 801,490 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | | |
| Balance - April 1, 2008 | | |
| 125,267 |
|
| 301,695 |
|
| 723 |
|
| 3,397 |
|
| - |
|
| (547 |
) |
| (16,198 |
) |
| 257,707 |
|
| 672,044 |
|
| - |
|
| 672,044 |
|
| | | |
| For the three months ended | | |
| June 30, 2008: | | |
| Total Comprehensive Income for the period | | |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (3,184 |
) |
| 2,063 |
|
| 17,882 |
|
| 16,761 |
|
| - |
|
| 16,761 |
|
| Share based payment | | |
| - |
|
| - |
|
| 1,738 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1,738 |
|
| - |
|
| 1,738 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Balance - June 30, 2008 | | |
| 125,267 |
|
| 301,695 |
|
| 2,461 |
|
| 3,397 |
|
| - |
|
| (3,731 |
) |
| (14,135 |
) |
| 275,589 |
|
| 690,543 |
|
| - |
|
| 690,543 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
The
accompanying notes are an integral part of the condensed interim consolidated financial
statements. |
F - 7
HADERA PAPER LTD
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(NIS in thousands)
|
Share
capital
|
Capital
reserves
|
Share based
payments
reserves
|
Capital reserves
resulting from tax
benefit on exercise of
employee options
|
Capital
reserve from
revaluation
from step
acquisition
|
Hedging
reserves
|
Foreign
currency
translation
reserves
|
Retained
earnings
|
Total for
Company
shareholders
|
Minority
Interests
|
Total
|
|
NIS in thousands
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance - January 1, 2008 |
|
|
| 125,267 |
|
| 301,695 |
|
| - |
|
| 3,397 |
|
| - |
|
| (635 |
) |
| 3,810 |
|
| 236,437 |
|
| 669,971 |
|
| - |
|
| 669,971 |
|
| | | |
| For the year ended | | |
| December 31, 2008: | | |
| Total Comprehensive Income for the year | | |
| - |
|
| - |
|
| - |
|
| - |
|
| 17,288 |
|
| (4,457 |
) |
| (25,996 |
) |
| 68,280 |
|
| 55,115 |
|
| (1,768 |
) |
| 53,347 |
|
| First transfer to consolidation - | | |
| create minority interests | | |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 28,084 |
|
| 28,084 |
|
| Depreciation of capital from | | |
| revaluation from step acquisition to | | |
| retained earnings | | |
| - |
|
| - |
|
| - |
|
| - |
|
| (1,380 |
) |
| - |
|
| - |
|
| 1,380 |
|
| - |
|
| - |
|
| - |
|
| Share based payment | | |
| - |
|
| - |
|
| 6,227 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 6,227 |
|
| - |
|
| 6,227 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Balance - December 31, 2008 | | |
| 125,267 |
|
| 301,695 |
|
| 6,227 |
|
| 3,397 |
|
| 15,908 |
|
| (5,092 |
) |
| (22,186 |
) |
| 306,097 |
|
| 731,313 |
|
| 26,316 |
|
| 757,629 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
The
accompanying notes are an integral part of the condensed interim consolidated financial
statements. |
F - 8
HADERA PAPER LTD
CONDENSED CONSOLIDATED STATMENTS OF CASH FLOWS
(NIS in thousands)
|
Six months ended
|
Three months ended
|
Year ended
December 31
|
|
June 30
|
June 30
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
(unaudited)
|
(unaudited)
|
|
| |
|
|
|
|
|
| Cash flows - operating activities |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| Profit for the period | | |
| 34,406 |
|
| 39,302 |
|
| 15,350 |
|
| 18,032 |
|
| 67,960 |
|
| Taxes on income recognized in profit and loss | | |
| 4,409 |
|
| 5,420 |
|
| (5,545 |
) |
| 1,403 |
|
| 3,663 |
|
| Finance expenses recognized in profit and loss | | |
| 9,995 |
|
| 11,130 |
|
| 5,445 |
|
| 4,323 |
|
| 15,043 |
|
| Capital loss (gain) on disposal of fixed assets | | |
| (196 |
) |
| 150 |
|
| (225 |
) |
| 158 |
|
| (284 |
) |
| Share in profit of associated companies | | |
| (34,905 |
) |
| (25,771 |
) |
| (19,857 |
) |
| (11,138 |
) |
| (51,315 |
) |
| Dividend received from associated company | | |
| 16,352 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| Depreciation and amortization | | |
| 39,016 |
|
| 22,273 |
|
| 19,477 |
|
| 11,188 |
|
| 59,784 |
|
| Share based payments expenses | | |
| 2,061 |
|
| 1,997 |
|
| 839 |
|
| 1,274 |
|
| 4,913 |
|
| Gain from negative goodwill | | |
| - |
|
| - |
|
| - |
|
| - |
|
| (14,664 |
) |
|
| |
| |
| |
| |
| |
| | | |
| 71,138 |
|
| 54,501 |
|
| 15,484 |
|
| 25,240 |
|
| 85,100 |
|
|
| |
| |
| |
| |
| |
| | | |
| Changes in assets and liabilities: | | |
| Decrease in trade and other receivables | | |
| 57,877 |
|
| 17,197 |
|
| 69,142 |
|
| 4,863 |
|
| 66,805 |
|
| Decrease (Increase) in inventory | | |
| (259 |
) |
| 406 |
|
| 8,146 |
|
| (354 |
) |
| (19,868 |
) |
| Decrease in trade payables and other payables | | |
| (40,069 |
) |
| * (10,906 |
) |
| (27,324 |
) |
| * (11,372 |
) |
| * (16,923 |
) |
Increase (Decrease) in financial liabilities at fair
value through profit and loss | | |
| (1,351 |
) |
| * 1,295 |
|
| (4,350 |
) |
| * 236 |
|
| 10,003 |
|
| Increase (Decrease) in employee benefit liabilities | | |
| 5,287 |
|
| * 3,424 |
|
| 1,078 |
|
| * 3,120 |
|
| * (3,063 |
) |
|
| |
| |
| |
| |
| |
| | | |
| 21,485 |
|
| 11,416 |
|
| 46,692 |
|
| (3,507 |
) |
| 36,954 |
|
|
| |
| |
| |
| |
| |
| | | |
| Tax Payments | | |
| (3,315 |
) |
| (9,500 |
) |
| (1,488 |
) |
| (5,754 |
) |
| (8,182 |
) |
|
| |
| |
| |
| |
| |
| | | |
| Net cash generated by operating activities | | |
| 89,308 |
|
| 56,417 |
|
| 60,688 |
|
| 15,979 |
|
| 113,872 |
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
| |
*
Reclassified, see note 10. |
| |
The
accompanying notes are an integral part of the condensed consolidated financial
statements. |
F - 9
HADERA PAPER LTD
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(NIS in thousands)
|
|
Six months ended
June 30
|
Three months ended
June 30
|
Year ended
December 31
|
|
Note
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
|
(Unaudited)
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows - investing activities |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| Acquisition of property plant and equipment | | |
| 5 |
|
| (217,553 |
) |
| (128,188 |
) |
| (99,358 |
) |
| (70,203 |
) |
| (230,053 |
) |
| Acquisition of subsidiaries | | |
| |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (70,567 |
) |
| Proceeds from disposal of fixed assets | | |
| |
|
| 1,030 |
|
| 184 |
|
| 880 |
|
| 39 |
|
| 825 |
|
| Decrease (Increase) in designated deposits, net | | |
| |
|
| 155,896 |
|
| (73,026 |
) |
| (15,381 |
) |
| 40,288 |
|
| (255,244 |
) |
| Interest received | | |
| |
|
| 1,379 |
|
| 2,424 |
|
| 370 |
|
| 2,219 |
|
| 7,764 |
|
| Prepaid expenses with respect to an operating lease | | |
| |
|
| (2,318 |
) |
| (1,397 |
) |
| - |
|
| (228 |
) |
| (2,622 |
) |
| Acquisition of other assets | | |
| |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (2,770 |
) |
| Associated companies: | | |
| Purchase of shares and granting of loans | | |
| |
|
| (510 |
) |
| - |
|
| - |
|
| - |
|
| (422 |
) |
| Repayments of loans to an associated company | | |
| |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 2,851 |
|
|
|
| |
| |
| |
| |
| |
| Net cash by used in investing activities | | |
| |
|
| (62,076 |
) |
| (200,003 |
) |
| (113,489 |
) |
| (27,885 |
) |
| (550,238 |
) |
|
|
| |
| |
| |
| |
| |
| | | |
| Cash flows - financing activities | | |
| Proceeds from issuing bonds | | |
| |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 424,617 |
|
| Short-term bank credit - net | | |
| |
|
| 37,114 |
|
| (36,739 |
) |
| 77,034 |
|
| 23,303 |
|
| (111,444 |
) |
| Borrowings received from banks and from others | | |
| |
|
| 3,154 |
|
| 35,000 |
|
| 3,154 |
|
| - |
|
| 39,448 |
|
| Repayment of borrowings from banks | | |
| |
|
| (19,353 |
) |
| (4,916 |
) |
| (9,752 |
) |
| (3,586 |
) |
| (11,801 |
) |
| Repayment of capital note | | |
| |
|
| (32,770 |
) |
| - |
|
| - |
|
| - |
|
| - |
|
| Interest Paid | | |
| |
|
| (3,681 |
) |
| (4,759 |
) |
| (1,815 |
) |
| (2,582 |
) |
| (20,360 |
) |
| Repayment of bonds | | |
| |
|
| (7,505 |
) |
| (7,192 |
) |
| (7,505 |
) |
| (7,192 |
) |
| (38,904 |
) |
|
|
| |
| |
| |
| |
| |
| Net cash generated by (used in) financing activities | | |
| |
|
| (23,041 |
) |
| (18,606 |
) |
| 61,116 |
|
| 9,943 |
|
| 281,556 |
|
|
|
| |
| |
| |
| |
| |
| | | |
| Increase (Decrease) in cash and cash equivalents | | |
| |
|
| 4,191 |
|
| (162,192 |
) |
| 8,315 |
|
| (1,963 |
) |
| (154,810 |
) |
| Cash and cash equivalents - beginning of period | | |
| |
|
| 13,128 |
|
| 167,745 |
|
| 9,435 |
|
| 7,330 |
|
| 167,745 |
|
| Net foreign exchange difference | | |
| |
|
| (789 |
) |
| - |
|
| (1,220 |
) |
| 186 |
|
| 193 |
|
|
|
| |
| |
| |
| |
| |
| Cash and cash equivalents - end of period | | |
| |
|
| 16,530 |
|
| 5,553 |
|
| 16,530 |
|
| 5,553 |
|
| 13,128 |
|
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
| |
The
accompanying notes are an integral part of the condensed consolidated financial
statements. |
F - 10
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 1 |
– |
DESCRIPTION OF BUSINESS AND GENERAL |
| |
A. |
Description
Of Business |
| |
Hadera
Paper Limited (former – American Israeli Paper Mills Limited) and its subsidiaries
(hereinafter – the Company) are engaged in the production and sale of paper
packaging, in paper recycling activities and in the marketing of office supplies. The
Company also has holdings in associated companies that are engaged in the productions and
sale of paper and paper products including the handling of solid waste (the Company and
its investee companies – hereinafter – the Group). Most of the Group’s
sales are made on the local (Israeli) market. For segment information, see note 9. |
| |
B. |
For
further information read these concise reports in connection with the
Company’s annual financial statements as of December 31, 2008 and the
year then ended, and the accompanying notes. |
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| |
The
consolidated concise financial statements (hereinafter – “interim financial
statements”) of the Group were prepared in accordance with IAS 34 “Financial
Reporting for Interim Periods” (hereinafter –IAS 34). |
| |
In
the preparation of these interim financial statements the Group applied identical
accounting policy, presentation rules and calculation methods to those that were applied
in the preparation of its financial statements as of December 31, 2008 and the year then
ended, except for changes in the accounting policy that arose from the implementation of
standards, amendment to standards and new interpretations that became effective on the
date of the financial statements as specified in section c below. |
| |
B. |
The
consolidated concise financial statements were prepared in accordance with
the provisions of Section D of the Securities Regulations (Periodic and
Immediate Reports), 1970. |
| |
C. |
Standards,
amendments to standards and new interpretations that are in effect, which
were applied in these financial statements |
| |
n |
IFRS
8, Operating Segments |
| |
The standard, which replaces IAS 14
“Segment Reporting”, details how an entity must report on data according to
operating segments. The standard, among other things, stipulates that segmental reporting
of the Group will be based on the information that management of the Group uses for
purposes of evaluating performance of the segments, and for purposes of allocating
resources to the various operating segments. The standard applies to annual reporting
periods commencing on January 1, 2009, with retroactively restatement of comparative
figures for prior reporting periods. |
| |
As for the reporting of the
Group’s operating segments in accordance with the provisions of IFRS 8, including the
retroactive restatement of data, see note 9. |
F - 11
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
C. |
Standards,
amendments to standards and new interpretations that are in effect, which
were applied in these financial statements (cont.) |
| |
n |
IAS
1 (Amended) “Presentation of Financial Statements” |
| |
The
standard stipulates the presentation required in the financial statements, and itemizes a
general framework for the structure of the financial statements and the minimal contents
which must be included in the context of the report. In the context of the amendment to
this standard, changes have been made to the existing presentation format of the
financial statements, and the presentation and disclosure requirements for the financial
statements have been broadened, including the presentation of an additional report in the
framework of the financial statements known as the “report of comprehensive income”,
and the addition of a balance sheet as of the beginning of the earliest period that was
presented in the financial statements, in cases of changes in accounting policy by means
of retroactive implementation, restatement and reclassifications. |
| |
The
standard applies, by way of retroactive implementation, to reporting periods commencing
on January 1, 2009. Pursuant to the provisions of the standard the Group published a
report of comprehensive income on the totals of segment profit, which specifies the
components of the total profit separately from the components presented in the statement
of income, as well as a statement of changes in shareholders’ equity, which presents
balances in respect of transactions with shareholders, as part of their duty as
shareholders. The first-time implementation of the standard does not have any impact on
the reported results of operation and the financial situation of the Group. |
| |
n |
IAS
23 (Amended) “Borrowing Costs” |
| |
The
standard stipulates the accounting treatment of borrowing costs. In the context of the
amendment to this standard, the possibility of immediately recognizing borrowing costs
related to assets with a significant period of eligibility or construction in the
statement of operations, was cancelled. Those borrowing costs will capitalize to the
assets cost. The standard apply to borrowing costs that relate to eligible assets as to
which the capitalization period began from January 1, 2009 or earlier, as defined by the
Group.
The implementation of the Standard does not expect to have effect on the Group’s
financial statements. |
| |
n |
IFRIC
16 "Hedges of a Net Investment in a Foreign Operation" |
| |
This
interpretation establishes the nature of the hedged risk and the amount of the hedged
item under the hedges of a net investment in a foreign operation. In addition, the
interpretation stipulates that the hedging instrument may be held by any entity within
the group, and the amount to be reclassified from equity to profit or loss when the
entity disposes of the foreign operation, for which the accounting method of hedges of a
net investment in a foreign operation has been implemented. |
| |
The
provisions of the interpretation apply, by way of prospective implementation, to annual
reporting periods that commence on January 1, 2009.
The implementation of the
interpretation does not expect to have effect on the Group’s financial statements. |
F - 12
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
C. |
Standards, amendments to standards and new interpretations that are in
effect, which were applied in these financial statements
(cont.) |
| |
n |
Amendment
to IFRS 2, Share Based Payment- Vesting and Revocation Conditions |
| |
The
amendment to the standard stipulates the conditions under which the measurement of fair
value must be considered on the date of the grant of a share based payment and explains
the accounting treatment of instruments without terms of vesting and revocation. |
| |
The
provisions of the amendment apply by way of retroactive implementation, to annual
reporting periods that commence on January 1, 2009. |
| |
The
implementation of the Amendment Standard does not expect to have effect on the Group’s
financial statements. |
| |
n |
Amendment
to IAS 32, "Financial Instruments: Presentation", and IAS 1, "Presentation of
Financial Statements" |
| |
The
amendment to IAS 32 changes the definition of a financial liability, financial asset and
capital instrument and determines that certain financial instruments, which are
exercisable by their holder, will be classified as capital instruments. |
| |
The
provisions of the standard apply to annual financial reporting periods which start on
January 1, 2009 and thereafter. |
| |
The
implementation of the Amendment Standard does not expect to have effect on the Group’s
financial statements. |
| |
n |
Amendment
to IFRS 7 “Financial Instruments: Disclosure” |
| |
The
amendment expands the required disclosures regarding liquidity risk and measurement of
fair value, while setting a three-level scale for the presentation of fair-value
measurements. |
| |
The
provisions of the standard apply to annual financial reporting periods which start on
January 1, 2009 and thereafter. The provisions of the amendment apply by way of
retroactive implementation. |
| |
The
implementation of the standard does not have any impact on the Group’s financial
statements. |
| |
n |
Improvement
to International Financial Reporting Standards (IFRS) 2008 |
| |
In
May 2008 the IASB published a series of improvements for IFRS. |
| |
Improvements
include amendments to some of the standards, which change the manner of presentation,
recognition and measurement of different items in the financial statements.
In addition,
amendments have been made to terms that have a negligible impact, if any, on the
financial statements. |
| |
Most
of the amendments become effective as of the annual reporting period commencing January
1, 2009. The first time implementation of most amendments carried out by retrospective
adjustment of comparative figures. |
| |
In
context to the amendments that were made, some of the amendments are expected, under
relevant circumstances, to have a material impact on the financial statements. The
prominent amendments are the new or amended requirements with respect to the following: |
F - 13
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
C. |
Standards,
amendments to standards and new interpretations that are in effect, which
were applied in these financial statements (cont.) |
| |
n |
Improvement
to International Financial Reporting Standards (IFRS) 2008 (cont.) |
| |
(1) |
Amendment
to IAS 16 “Property Plant and Equipment” stipulates that
entities, which during the ordinary course of business, dispose of
property, plant and equipment items that are used for rental purposes,
shall classify these items as inventory as of the date of the discontinued
leasing thereof and shall present the revenue from the sale of these items
as income in the income statement. The cash flows for the purchase and
sale of these items will be presented under cash flows that derived from
or used in operating activity. |
| |
The
amendment applies to annual periods commencing on January 1, 2009. The amendment, with
the implementation of related revisions in IAS 7 “Cash Flow Statements” is to
be applied retroactively. |
| |
The
implementation of the provisions of the amendment did not have any impact on the
financial statements of the Group. |
| |
(2) |
Amendment to IAS 28 “Investments in Associated Companies”, which
stipulates that the impairment of investment in an associated company shall be
treated as an impairment of a single asset and that the amount of impairment can
be cancelled in subsequent periods. |
| |
The
amendment applies to annual periods commencing on January 1, 2009. Implementation is to
be applied prospectively. |
| |
The
implementation of the Amendment Standard does not expect to have effect on the Group’s
financial statements. |
| |
(3) |
Amendment
IAS 38 “Intangible Assets”, which stipulates that payments in
respect of advertising and sales promotion activities will be recognized as
an asset until the date in which the entity has the right to access the
acquired goods or in the event of a receipt of services, until the date of
receipt of the services. |
| |
The
amendment applies to annual periods commencing on January 1, 2009. Implementation is to
be applied retroactively. |
| |
The
implementation of the Amendment Standard does not expect to have effect on the Group’s
financial statements. |
| |
(4) |
Amendment
IAS 19 “Employee benefits”, which stipulates that an accrued
eligibility for compensation on account of absences will be classified as
short-term employee benefits, or as other long-term employee benefits,
based on the date at which the employee’s right to the benefit was
created. Consequently, the Company is presenting benefits on account of
vacation leave as short-term employee benefits, measured at the height of
the non-capitalized amount that the Company is anticipating to pay on
account of the implementation of this right. |
F - 14
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
D. |
Standards, Amended Standards and Clarifications that have been Published but
not yet Become Effective, and have not been Adopted by the Company in
Early Adoption |
| |
n |
For
information regarding commencement dates, transitional provisions and the expected impact
on the Company from the standards, amendments to standards and interpretations detailed
below see note 2 to the annual financial statements of the Company as of December 31,
2008 and the year then ended: |
| |
(1) |
IAS
27 (Revised) “Consolidated and Separate Financial Statements” |
| |
(2) |
IFRS
3 (Revised) “Business Combinations”. |
| |
(3) |
IAS
39 “Financial instruments: “Recognition and Measurement” |
| |
n |
Amendment
to IFRIC 9, "Reassessment of Embedded Derivatives" and IAS 39, "Financial
Instruments: Recognition and Measurement" |
| |
The
Amendment clarifies that, whenever a financial asset is declassified from the “fair
value through profit or loss” group, the need to separate out its embedded
derivatives must be reviewed. The provisions of the Amendments are applicable to annual
periods ending on June 30, 2009 or thereafter and are to be applied retroactively. |
| |
Company
management believes that the implementation of the Amendment will not have any effect on
the Group’s financial statements. |
| |
n |
Improvements
to International Financial Reporting Standards, 2008 |
| |
The
Improvements included the amendment of IFRS 5, “Non-Current Assets Held for
Sale and Discontinued Operations”. Pursuant to the Amendment, the assets and
liabilities of a subsidiary are to be classified as held for sale to the extent that the
parent company has undertaken to carry out a program for the sale of its controlling
interest therein, even if it intends to maintain non-controlling interest. |
| |
The
Amendment is applicable to reporting periods commencing January 1, 2010. Early
adoption is permitted. Entities that opt for early adoption of the amendments are
required to follow the provisions of IAS 27 (Revised). The Amendment is to be
applied prospectively. |
| |
Company
management believes that the implementation of the Amendment will not have any effect on
the Group’s financial statements. |
| |
n |
Improvements
to International Financial Reporting Standards, 2009 |
| |
In
April 2009, the International Accounting Standards Board (IASB) published a standard
regarding Improvements to International Financial Reporting Standards 2009.
The
Improvements include the amendment of certain Standards and Interpretations, which
affects the presentation, recognition and measurement of various items in the financial
statements. |
| |
The
Amendments are largely applicable to annual periods commencing on January 1, 2010 or
thereafter. Early adoption is permitted. |
| |
The
improvements include some Amendments that are likely, under certain circumstances, to
have a significant effect on the financial statements. These are principally the
following new or revised requirements: |
| |
(1) |
Amendment
to IFRS 8, “Operating Segments”, determines that disclosure is
to be provided with respect to the measurement of the assets of a reportable
segment only to the extent that such information is regularly reported to
the chief operating decision-maker. |
F - 15
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
D. |
Standards, Amended Standards and Clarifications that have been Published but
not yet Become Effective, and have not been Adopted by the Company in
Early Adoption (cont.) |
| |
n |
Improvements
to International Financial Reporting Standards, 2009 (cont.) |
| |
The
Amendment is to be retroactively applied in annual reporting periods commencing on January 1,
2010 or thereafter. Early adoption is permitted. Company management believes that the
implementation of the Amendment will not have any effect on the Group’s financial
statements. |
| |
(2) |
Amendment
to IAS 7, “Cash Flow Statements”, clarifies that only a
cash expenditure for an asset recognized in the statement of financial
position qualifies for classification as cash flows used in investing
activities. |
| |
The
Amendment is to be retroactively applied in annual reporting periods commencing on January 1,
2010 or thereafter. Early adoption is permitted. |
| |
Company
management believes that the implementation of the Amendment will not have any effect on
the Group’s financial statements. |
| |
(3) |
Amendment
to IAS 17, “Leases”, provides for the classification of
land leases as a financing lease or an operating lease in accordance with
the general principles of the Standard. |
| |
The
Amendment is to be retroactively applied in annual reporting periods commencing on January 1,
2010 or thereafter. Early adoption is permitted. |
| |
The
Amendment is to be retroactively applied to existing leases for which the required
information is available at the initial date of the lease. Land leases for which the
required information is unavailable are to be reviewed as for the date of the adoption of
the Amendment. |
| |
The
Group leases land (other than investment property that is measured at fair value) from
the Israel Land Administration under a capitalized lease. Amounts paid under said leases,
aggregating NIS 38,117,000, NIS 35,797,000 and NIS 36,344,000 as of June 30,
2009, June 30, 2008 and December 31, 2008, respectively, which are presented
under “prepaid expenses with respect to an operating lease”, are to be carried
to fixed assets. |
| |
(4) |
Amendment
to IAS 36, “Impairment of Assets”, stipulates that the
cash-generating units or groups of cash-generating units to which goodwill
is allocated within the framework of impairment testing shall not be
larger than an operating segment, excluding the grouping of segments with
similar financial characteristics. |
| |
The
Amendment is to be applied prospectively in annual reporting periods commencing on January 1,
2010 or thereafter. Early adoption is permitted. |
| |
At
this stage, Group management is unable to estimate the effect of the Amendment’s
implementation on its financial statements. |
| |
(5) |
Amendment
to IAS 39, “Financial Instruments: Recognition and Measurement”,
limits the exemption from the implementation of the Standard solely to forward
contracts between a seller and a buyer for the purchase or sale of an acquiree
under a business combination on a future purchase date, provided that the
obtaining of the required approvals and the closing of the transaction do not
exceed a reasonable period. The Amendment is to be applied prospectively to all
contracts in effect in annual periods commencing on January 1, 2010 or
thereafter. Early adoption is permitted. |
F - 16
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
D. |
Standards, Amended Standards and Clarifications that have been Published but
not yet Become Effective, and have not been Adopted by the Company in
Early Adoption (cont.) |
| |
n |
Improvements
to International Financial Reporting Standards, 2009 (cont.) |
| |
Additionally,
the Amendment clarifies that gains or losses attributed to a cash flow hedge in a
forecast transaction are to be reclassified from shareholders’ equity to profit or
loss during the period in which the hedged anticipated cash flows affect the profit or
loss. The Amendment is to be applied prospectively to all contracts in effect in annual
periods commencing on January 1, 2010 or thereafter. Early adoption is permitted. |
| |
The
Amendment further determines that the early repayment option that is embedded in a host
debt or insurance contract is invariably linked to the host contract, with the exercise
increment of the early repayment option serving as an indemnification to the lender for
the loss of interest. The Amendment is to be applied prospectively to all contracts in
effect in annual periods commencing on January 1, 2010 or thereafter. Early adoption
is permitted. |
| |
At
this stage, Group management is unable to estimate the effect of the Amendment’s
implementation on its financial statements. |
| |
E. |
Exchange
Rates and Linkage Basis |
| |
(1) |
Foreign
currency balance, or balances linked to foreign currency are included in
the financial statements according to the exchange rate announced by the
Bank of Israel on the balance sheet date. |
| |
(2) |
Balances
linked to the CPI are presented according to index of the last month of
the report period. |
| |
(3) |
Following
are the changes in the representative exchange rates of the Euro and the
U.S. dollar vis-a-vis the NIS and in the Israeli Consumer Price Index (“CPI”): |
| |
As of:
|
Representative
exchange rate of
the dollar
(NIS per $1)
|
Representative
exchange rate of
the Euro
(NIS per
€1)
|
CPI
"in respect of"
(in points) (*)
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
June 30, 2009 |
|
|
| 3.919 |
|
| 5.5346 |
|
| 202.66 |
|
| |
June 30, 2008 | | |
| 3.352 |
|
| 5.285 |
|
| 195.62 |
|
| |
December 31, 2008 | | |
| 3.802 |
|
| 5.297 |
|
| 198.42 |
|
| |
Increase (decrease) during the:
|
%
|
%
|
%
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
Three months ended June 30, 2009 |
|
|
| (6.42 |
) |
| (0.7 |
) |
| 2.3 |
|
| |
Three months ended June 30, 2008 | | |
| (5.6 |
) |
| (5.9 |
) |
| 2.2 |
|
| |
Six months ended June 30, 2009 | | |
| 3.08 |
|
| 4.49 |
|
| 2.1 |
|
| |
Six months ended June 30, 2008 | | |
| (12.8 |
) |
| (6.6 |
) |
| 2.3 |
|
| |
Year ended December 31, 2008 | | |
| (1.1 |
) |
| (6.39 |
) |
| 3.8 |
|
| |
|
|
|
|
| |
(*)
Based on the index for the month ending on each balance sheet date, on the
basis of 1993 average = 100. |
F - 17
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 3 |
– |
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
| |
In
the application of the Group’s accounting policies, management is required, in some
cases, to make judgments, estimates and assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates. |
| |
The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision and future periods if
the revision affects both current and future periods. |
| |
B. |
Critical
judgments in applying accounting policies |
| |
The
following are the critical judgments, apart from those involving estimations, that have
an effect on the amounts recognized in financial statements: |
| |
— |
Deferred
taxes- the Company recognizes deferred tax assets for all of the deductible temporary
differences up to the amount as to which it is anticipated that there will be taxable
income against which the temporary difference will be deductible. During each period, for
purposes of calculation of the utilizable temporary difference, management uses estimates
and approximations as a basis which it evaluates each period. |
| |
— |
Approximation
of length of life of items of fixed assets- each period, the Company’s management
evaluates salvage values, depreciation methods and length of useful lives of the fixed
assets. |
| |
— |
Measuring
provisions and contingent liabilities and contingent liabilities- see C(1) below. |
| |
— |
Measuring
obligation for defined benefits and employee benefits- see C(2) below. |
| |
— |
Measuring
share based payments- see note 6 below. |
| |
— |
Measuring
the fair value of an option to sell shares of an associated company – see C(3)
below. |
| |
— |
Measuring
the fair value on account of the allocation of the cost of acquisition – see C(4)
below. |
| |
C. |
Key
sources of estimation uncertainty. |
| |
1. |
Provisions
for legal proceeding |
| |
Against
the Company and its subsidiaries there are 7 claims pending and open in a total amount of
approximately NIS 8,371 thousands (June 30, 2008: NIS 5,524 thousands, December 31, 2008:
NIS 10,680 thousands), in respect of them a provision was credited in a sum of NIS 1,188
thousands (June 30, 2008: a provision was not required, December 31, 2008: NIS 28
thousands was recorded). For purposes of evaluating the legal relevance of these claims,
as well as determining the reasonableness that they will be realized to its detriment,
the Company’s management relies on the opinion of legal and professional advisors.
After the Company’s advisors expound their legal position and the probabilities of
the Company as regards the subject of the claim, whether the Company will have to bear
its consequences or whether it is will be able to rebuff it, the Company approximates the
amount which it must record in the financial statements, if at all. |
F - 18
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 3 |
– |
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Cont.) |
| |
C. |
Key
sources of estimation uncertainty (cont.) |
| |
1. |
Provisions
for legal proceeding (cont.) |
| |
An
interpretation that differs from that of the legal advisors of the Company as to the
existing legal situation, a varying understanding by the Company’s management of the
contractual agreements as well as changes derived from relevant legal rulings or the
addition of new facts may influence the value of the overall provision with respect to
the legal proceedings that are pending against the Company and, thus affect the Company’s
financial condition and operating results. |
| |
The
present value of the Company’s obligation for the payment of benefits to pensioners
and severance pay to employees that are not covered under Section 14 to the Severance Pay
Law is based upon a great amount of data, which are determined on the basis of an
actuarial estimation, through the utilization of a large number of assumptions, including
the capitalization rate. Changes in the actuarial assumptions could affect the book value
of the obligation of the Company for employees’ benefits. The Company approximates
the capitalization rate once annually, on the basis of the capitalization rate of
government bonds. Other key assumptions are determined on the basis of conditions present
in the market, and on the basis of the cumulative past experience of the Company. |
| |
3. |
Fair
value of an option to sell shares of an associated company |
| |
The
Company has a liability that arises from an option to sell shares of an associated
company, which is classified as a fair value liability through profit or loss. |
| |
In
establishing the fair value of the option, the Company bases its decision primarily on
the valuation of an independent external expert with the required expertise and
experience. This valuation is carried out once a quarter. |
| |
The
Company strives to establish a fair value that is as objective as possible, but at the
same time the process of establishing the fair value includes some subjective elements,
since changes in the assumptions used in determining the fair value can have a material
impact on the financial situation and operating results of the Company. |
| |
4. |
Measurement
at fair value on account of the allocation of the cost of acquisition |
| |
For
the purpose of allocating the cost of acquisition and determining the fair value of the
tangible and intangible assets and the liabilities of the consolidated subsidiaries at
the date of consolidation, the Company’s management based itself primarily on
valuations prepared by external and independent real-estate appraisers and assessors,
possessing the required know-how, experience and expertise. |
| |
The
fair value was determined according to generally-accepted valuation methods, including:
Proposed market prices in active markets, discounting of cash flows and the comparison of
selling prices of similar assets and company assets in the immediate proximity. When the
discounted cash flows method was employed, the interest rate for discounting the net cash
flows expected from the assets possesses a material impact on its fair value. |
F - 19
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 3 |
– |
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Cont.) |
| |
C. |
Key
sources of estimation uncertainty (Cont.) |
| |
4. |
Measurement
at fair value on account of the allocation of the cost of acquisition (cont.) |
| |
In
determining the fair value, the business/operational risk associated with the Company’s
operations is taken into account, to the extent relevant. Part of the said risk is the
risk associated with the nature of the sector wherein the Company operates, while part of
the risk stems from the Company’s specific characteristics. |
| |
The
Group strives to determine a fair value that is as objective as possible, yet the process
of estimating the fair value also includes subjective elements, originating inter alia
from the past experience of the Company’s management and its understanding of
expected events in the market wherein the Group operates at the date when the fair value
was determined. |
| |
In
light of the above, and in view of the aforementioned in the preceding paragraph, the
setting of the fair value of the Group calls for employing judgment. Changes in the
assumptions that serve for setting the fair value can materially affect the Group’s
situation and results of operation. |
| NOTE 4 |
– |
SEGNIFICANT TRANSACTIONS AND EVENTS |
| |
a. |
On
March 19, 2009 a dividend in the amount of NIS 32.77 million was received
from an associated company in respect of a preferred share that was
allotted during the first quarter of 2009, which allows the Company to
receive dividend in accordance with the resolution of the Board of
Directors of the associated company. |
| |
b. |
On February 26, 2009 a dividend was declared by an associated company in the
amount of $10 million out of the unauthorized profits for 2008. The
Company’s share in the dividend is NIS 20.8 million (see also note 11
below). |
| |
c. |
On March 19, 2009 capital note in the amount of NIS 32.77 million was repaid by
the Company for an associated company (See also note 7 below). |
| |
d. |
On May 25, 2009, the Company obtained credit in the amount of NIS 50
million from public institutions, bearing interest at the rate of Bank of Israel
+ 2%. The loan is for a period of two years, with an exit option being available
to either of the parties every three months. |
F - 20
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| |
Acquisition
of items of fixed assets |
| |
During
the period of six and three months ended June 30 2009, the Company became committed in
agreements to purchase fixed assets at a cost of approximately NIS 217,553 thousands and
NIS 99,358 thousands, respectively. During the period of six and three months ended June
30 2008, the Company became committed in agreements to purchase fixed assets at a cost of
approximately NIS 128,188 thousands and NIS 70,203 thousands, respectively. |
| |
Most
of the acquisitions of the fixed assets during the reported period, in sum of NIS 194,730
thousand (without suppliers’ credit in the amount of NIS 59,560 thousands), were
made for Machine 8- a new machine for the packaging paper system. Total suppliers’ credit
from acquired fixed assets amounted to NIS 74,247 thousands as of June 30, 2009 (and NIS
17,261 thousands as of December 31, 2008). |
| NOTE 6 |
– |
SHARE BASED PAYMENT |
| |
In
January 2009, the Company’s Board of Directors approved the granting of 34,000 non
negotiable option warrants to directors in subsidiaries under the 2008 Option Plan for
senior officers in the Group, which had been approved by the Company’s Board of
Directors in January 2008. The grant was executed on January 8, 2009 under the
terms of Section 102 of the Income Tax Ordinance (capital gains track). |
| |
Each
option is exercisable into one ordinary share of the Company with NIS 0.01 par value
against the payment of an exercise increment in the amount of NIS 223.965. The options
will vest in installments as follows: 25% of the total options will be exercisable from
January 14, 2009; 25% of the total options will be exercisable from January 14, 2010; 25%
of the total options will be exercisable from January 14, 2011; and 25% of the total
options will be exercisable from January 14, 2012. The vested options are exercisable
through January 14, 2012, 2013, 2014 for the first and second, third and fourth portions,
respectively. |
| |
The
cost of the benefit embedded in the allotted options as above, on the basis of the fair
value as of the date they are granted, was approximated to be the amount of approximately
NIS 0.3 million. This amount will be charged to the statement of operations over the
vesting period. The debt for the grant to officers of the affiliates will be paid in cash. |
| |
The
fair value of the options granted as aforementioned was estimated by applying the Black
and Scholes model. In this context, the effect of the terms of vesting will not taken
into account by the Company. |
| |
The
parameters which were used for implementation of the model are as follows: |
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
Share price (NIS) |
123.9 |
|
| |
Exercise price (NIS) |
223.965 |
|
| |
Anticipated volatility (*) |
31.01% |
|
| |
Length of life of the options (years) |
3-5 |
|
| |
Non risk interest rate |
6.30% |
|
| |
(*)
The anticipated volatility is determined on the basis of historical
fluctuations of the share price of the Company. The average length of life of
the option was determined in accordance with management’s forecast as to
the holding period by the employees of options granted to them, in
consideration of their functions in the Company and past experience of the
Company with employees leaving. |
F - 21
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 7 |
– |
OTHER INCOME (EXPENSES) |
| |
a. |
On March 19, 2009 the Company recorded income of NIS 16.3 million in respect of
a dividend paid to the Company only, which was distributed to the Company by an
associated company against the allocation of preferred shares, as stated in note
4 above. |
| |
b. |
During the period of six and three months ended June 30 2009, the Company
recorded other incomes in the amount of NIS 1.3 million and NIS 4.3 million
respectively, in respect of a revaluation of PUT option on an associated
company. |
| NOTE 8 |
– |
INCOME TAX CHARGE |
| |
The
tax expenses for the six months period ended June 30, 2009 are NIS 4.4 million, mainly
due to tax provision for occasions at the financial statements report period and because
of non-deductible expenses such as revaluation of PUT option for investee and other
non-deductible expenses. |
| NOTE 9 |
– |
SEGMENT INFORMATION |
| |
The
Group has been implementing IFRS 8 “operating segments” (hereinafter –“IFRS
8”) as of January 1, 2009. In accordance with the provisions of IFRS 8, operating
segments are identified on the basis of internal reports on the Group’s components,
which are regularly reviewed by the chief operational decision maker of the Group for the
purpose of allocating resources and evaluating the performance of the operating segments. |
| |
In
contrast, the previous standard (IAS 14 “segment reporting”) required an entity
to identify two segment systems (business and geographic), based on the risk-reward
approach, while the internal financial reporting system for the key managerial staff of
the entity served only as the starting point for the identification of said segments. |
| |
Following
the adoption of the new standard the Group identified reportable segments that were
different than those presented in previous reporting periods. |
| |
The
paper and recycling segment –generates revenue from the sale of paper products
to paper manufacturing companies as well as from the recycling of paper and cardboard. |
| |
The
office supplies marketing segment – generates revenue from the sale of office
supplies to customers. |
| |
The
packaging and cardboard products segment – generates revenue from the sale of
packaging and cardboard products to customers. |
| |
The
Hogla Kimberly segment – an associated company that generates revenue from the
manufacture and marketing of household paper products, hygiene products, disposable
diapers and complementary kitchen products, in Israel and in Turkey. |
| |
The Mondi Hadera Paper segment
– an associated company that generates revenue from the manufacture and marketing of
fine paper. |
| |
For
the purpose of tracking the performance of segments and allocating resources among them,
the chief operational decision-maker monitors the tangible, intangible and financial
assets of each segment. All assets are allocated to the different segments except for
other financial assets and deferred tax assets. |
| |
Information
relating to these assets is reported below. Amounts that were reported with respect to
previous reporting periods are reported on the basis of the new segment reporting. |
F - 22
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 9 |
– |
SEGMENT INFORMATION (cont.) |
| |
b. |
Analysis
of incomes and results according to operating segments: |
| |
The
results of the segment include the profit (loss) generated from the activity of every
reportable segment. These reports were edited based on the same accounting policy
implemented by the Company. |
|
Six months ended June 30, 2009
|
|
(Unaudited)
|
|
NIS in thousands
|
|
Paper and recycling
|
Marketing of
office supplies
|
Packaging and carton
products
|
Hogla Kimberly
|
Mondi Hadera Paper
|
Adjustments to
consolidation
|
Total
|
|
Jan-June
2009
|
Jan- June
2008
|
Jan-June
2009
|
Jan-June
2008
|
Jan-June
2009
|
Jan-June
2008
|
Jan-June
2009
|
Jan-June
2008
|
Jan-June
2009
|
Jan-June
2008
|
Jan-June
2009
|
Jan-June
2008
|
Jan-June
2009
|
Jan-June
2008
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales to external |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| customers | | |
| 105,448 |
|
| 150,714 |
|
| 68,279 |
|
| 58,239 |
|
| 236,101 |
|
| 263,920 |
|
| 882,902 |
|
| 797,832 |
|
| 332,914 |
|
| 376,774 |
|
| (1,191,610 |
) |
| (1,371,693 |
) |
| 434,034 |
|
| 275,786 |
|
| Sales between | | |
| Segments | | |
| 56,655 |
|
| 65,756 |
|
| 946 |
|
| 1,077 |
|
| 7,118 |
|
| 6,449 |
|
| 1,323 |
|
| 1,299 |
|
| 10,646 |
|
| 7,032 |
|
| (76,688 |
) |
| (81,613 |
) |
| - |
|
| - |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Total sales | | |
| 162,103 |
|
| 216,470 |
|
| 69,225 |
|
| 59,316 |
|
| 243,219 |
|
| 270,369 |
|
| 884,225 |
|
| 799,131 |
|
| 343,560 |
|
| 383,806 |
|
| (1,268,298 |
) |
| (1,453,306 |
) |
| 434,034 |
|
| 275,786 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Segment results | | |
| 8,411 |
|
| 28,717 |
|
| 1,165 |
|
| 1,364 |
|
| 4,552 |
|
| (606 |
) |
| 88,239 |
|
| 63,637 |
|
| 15,901 |
|
| 17,651 |
|
| (104,363 |
) |
| (80,682 |
) |
| 13,905 |
|
| 30,081 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|
Three months ended June 30, 2009
|
|
(Unaudited)
|
|
NIS in thousands
|
|
Paper and recycling
|
Marketing of
office supplies
|
Packaging and carton
products
|
Hogla Kimberly
|
Mondi Hadera Paper
|
Adjustments to
consolidation
|
Total
|
|
April-June
2009
|
April - June
2008
|
April-June
2009
|
April - June
2008
|
April-June
2009
|
April - June
2008
|
April-June
2009
|
April - June
2008
|
April-June
2009
|
April - June
2008
|
April-June
2009
|
April - June
2008
|
April-June
2009
|
April - June
2008
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales to external |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| customers | | |
| 50,638 |
|
| 77,235 |
|
| 32,121 |
|
| 25,627 |
|
| 108,024 |
|
| 122,246 |
|
| 446,139 |
|
| 393,357 |
|
| 156,030 |
|
| 176,793 |
|
| (588,799 |
) |
| (661,991 |
) |
| 204,153 |
|
| 133,267 |
|
| Sales between | | |
| Segments | | |
| 30,951 |
|
| 29,723 |
|
| 411 |
|
| 517 |
|
| 2,728 |
|
| 2,923 |
|
| 269 |
|
| 444 |
|
| 5,498 |
|
| 1,872 |
|
| (39,857 |
) |
| (35,479 |
) |
| - |
|
| - |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Total sales | | |
| 81,589 |
|
| 106,958 |
|
| 32,532 |
|
| 26,144 |
|
| 110,752 |
|
| 125,169 |
|
| 446,408 |
|
| 393,801 |
|
| 161,528 |
|
| 178,665 |
|
| (628,656 |
) |
| (697,470 |
) |
| 204,153 |
|
| 133,267 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Segment results | | |
| (5,530 |
) |
| 11,851 |
|
| 248 |
|
| 769 |
|
| 722 |
|
| (3,437 |
) |
| 48,300 |
|
| 33,568 |
|
| 10,496 |
|
| 8,015 |
|
| (58,843 |
) |
| (38,146 |
) |
| (4,607 |
) |
| 12,620 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F - 23
HADERA PAPER LTD
NOTES TO CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 9 |
– |
SEGMENT INFORMATION (cont.) |
| |
b. |
Analysis
of incomes and results according to operating segments: (cont.) |
|
Year ended December 31, 2008
|
|
NIS in thousands
|
|
Paper and
recycling
|
Marketing of office
supplies
|
Marketing of office
supplies
|
Hogla Kimberly
|
Mondi Hadera Paper
|
Adjustments to
consolidation
|
Total
|
| |
|
|
|
|
|
|
|
| Sales to external customers |
|
|
| 273,436 |
|
| 129,068 |
|
| 500,069 |
|
| 1,605,376 |
|
| 717,424 |
|
| (2,551,889 |
) |
| 673,484 |
|
| Sales between Segments | | |
| 133,331 |
|
| 2,046 |
|
| 12,508 |
|
| 3,200 |
|
| 14,923 |
|
| (166,008 |
) |
| - |
|
|
| |
| |
| |
| |
| |
| |
| |
| Total sales | | |
| 406,767 |
|
| 131,114 |
|
| 512,577 |
|
| 1,608,576 |
|
| 732,347 |
|
| (2,717,897 |
) |
| 673,484 |
|
|
| |
| |
| |
| |
| |
| |
| |
| Segment results | | |
| 37,773 |
|
| 3,233 |
|
| (6,226 |
) |
| 135,753 |
|
| 34,090 |
|
| (169,272 |
) |
| 35,351 |
|
|
| |
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
|
F - 24
HADERA PAPER LTD
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 10 |
– |
RECLASSIFICATION |
| |
Comparative
figures related to employee benefits sections as of March 31, 2008 and December 31, 2008
were reclassified in these financial statements as follows: |
| |
a. |
On December 31, 2008 NIS 17,478 thousand were reclassified from employee benefit
obligations in non-current liabilities to employee benefit obligations in
current liabilities. |
| |
b. |
On December 31, 2008 NIS 1,119 thousand were reclassified from other payables to
employee benefit obligations in current liabilities. |
| |
c. |
On June 30, 2008 NIS 3,072 thousand were reclassified from other payables to
employee benefit obligations in non-current liabilities. |
| |
d. |
On June 30, 2008 NIS 542 thousand were reclassified from employee obligations in
non-current liabilities to employee benefit assets. |
| |
e. |
On June 30, 2008 NIS 12,576 thousand were reclassified from employee benefit
obligations in non-current liabilities to employee benefit obligations in
current liabilities. |
| NOTE 11 |
– |
SUBSEQUENT EVENTS |
| |
1) |
On
July 1, 2009 a dividend in cash, in the amount of NIS 19.6 million was
received from an associated company (see also note 4b above). |
| |
2) |
On
July 2, 2009, the Company obtained long-term NIS credit from public
institutions in the amount of NIS 100 million. The loan is for a
period of 8 years, bears a nominal fixed interest of 6.3% and is repayable
(principal and interest) in semi-annual installments. |
| |
3) |
On
July 30, 2009, an associated company declared the distribution of a
dividend in the amount of approximately NIS 19 million out of the
unapproved retained earnings accumulated as of June 30, 2009. The Company’s
share in the dividend is approximately NIS 9.5 million. |
| |
4) |
On
July 25, 2005, the Knesset (the Israeli parliament) passed the Law for
the Amendment of the Income Tax Ordinance (No. 147), 2005, which provides,
inter alia, for a gradual reduction in the corporate tax rate down to 25%
in the 2010 tax year and thereafter. On July 14, 2009, the Knesset
passed the Economic Efficiency (Legislation Amendments to the
Implementation of the Economic Program for the Years 2009 and 2010) Law,
2009, which provides, inter alia, for an additional gradual reduction in
the corporate tax rate down to 18% in the 2016 tax year and thereafter.
According to said Amendments, the corporate tax rates applicable in the
2009 tax year and thereafter are as follows: 2009 – 26%; 2010 – 25%;
2011 – 24%; 2012 – 23%; 2013 – 22%; 2014 – 21%;
2015 – 20%; and from 2016 onward – 18%. |
| |
The effect of the aforesaid change in
the tax rate will be reflected in the financial statements for the third quarter of 2009
in the reduction of the balance of deferred tax liabilities and the recording of tax
income in the amount of approximately NIS 7 million, and increase in the share in
profit of associated companies, net, in approximately NIS 6 million. |
F - 25
Exhibit 4
Enclosed please find the financial
reports of the following associated companies:
| |
– |
Mondi
Hadera Paper Ltd. |
Hadera-Paper LTD group
Meizer st' Industrial Zone,
P.O.B 142 Hadera 38101,Israel
Tel: 972-4-6349402
Fax: 972-4-6339740
hq@hadera-paper.co.il
www.hadera-paper.co.il
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
TABLE OF CONTENTS
|
|
|
 |
|
Brightman Almagor Zohar
Haifa Office
5 Ma'aleh Hashichrur Street
Haifa, 33284
P.O.B. 5648, Haifa 31055
Israel
|
| |
|
|
|
|
Tel: +972 (4) 860 7373
Fax: +972 (4) 867 2528
Info-haifa@deloitte.co.il
www.deloitte.com
|
Review report of the independent auditor to the shareholders of
Mondi Hadera Paper LTD
Introduction
We have reviewed the accompanying
financial information of Mondi Hadera Paper Ltd. (hereafter- “the
Company”) which includes the condensed consolidated statement of financial position
as of June 30, 2009 and the condensed consolidated statements of income, comprehensive
income, changes in equity and cash flows for the periods of six and three months ended on
that date. The board of directors and management are responsible for the preparation and
presentation of this interim financial information in accordance with IAS 34 “Interim
Financial Reporting” and they are also responsible for the preparation of this
interim financial information in accordance with Chapter D of Securities Regulations
(Periodic and Immediate Reports) – 1970. Our responsibility is to express a
conclusion on this interim financial information based on our review.
Scope of Review
We conducted our review in accordance
with Review Standard 1 of the Institute of Certified Public Accountants in Israel
“Review of Interim Financial Information Performed by the Independent Auditor of the
Entity”. A review of interim financial information consists of making inquiries,
primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope than an
audit conducted in accordance with accepted auditing standards in Israel and consequently
does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come
to our attention that causes us to believe that the above financial information is not
prepared, in all material respects, in accordance with IAS 34.
In addition to what was stated in the
previous paragraph, based on our review, nothing has come to our attention that causes us
to believe that the above financial information is not prepared, in all material respects,
in accordance with the disclosure provisions of Chapter D of the Securities Regulations
(Periodic and Immediate Reports) – 1970.
Brightman Almagor Zohar & Co.
Certified Public Accountants
A Member Firm of Deloitte Touche Tohmatsu
July 28, 2009
Haifa, Israel.
M - 1
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(NIS in thousands)
|
June 30,
|
December 31,
|
|
2009
|
2008
|
2008
|
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
|
| Assets |
|
|
| |
|
| |
|
| |
|
| | | |
| Current assets | | |
| Cash and cash equivalents | | |
| 5,052 |
|
| 9,140 |
|
| 13,315 |
|
| Financial assets carried at fair value through profit or loss | | |
| - |
|
| - |
|
| 2,382 |
|
| Trade receivables | | |
| 180,597 |
|
| 186,693 |
|
| 168,911 |
|
| Other receivables | | |
| 2,569 |
|
| 2,604 |
|
| 1,379 |
|
| Inventories | | |
| 125,981 |
|
| 116,737 |
|
| 140,002 |
|
|
| |
| |
| |
| Total current assets | | |
| 314,199 |
|
| 315,174 |
|
| 325,989 |
|
|
| |
| |
| |
| | | |
| Non-current assets | | |
| Property, plant and equipment | | |
| 150,386 |
|
| 154,443 |
|
| 154,441 |
|
| Goodwill | | |
| 3,177 |
|
| 3,177 |
|
| 3,177 |
|
| Other Assets | | |
| 199 |
|
| 72 |
|
| 355 |
|
|
| |
| |
| |
| Total non-current assets | | |
| 153,762 |
|
| 157,692 |
|
| 157,973 |
|
|
| |
| |
| |
| Total assets | | |
| 467,961 |
|
| 472,866 |
|
| 483,962 |
|
|
| |
| |
| |
| | | |
| Equity and liabilities | | |
| | | |
| Current liabilities | | |
| Short-term bank credit | | |
| 98,578 |
|
| 91,690 |
|
| 105,388 |
|
| Current maturities of long-term bank loans | | |
| 15,032 |
|
| 15,204 |
|
| 15,768 |
|
| Financial liabilities carried at fair value through profit or loss | | |
| 2,228 |
|
| 1,004 |
|
| - |
|
| Capital notes to shareholders | | |
| - |
|
| 4,918 |
|
| - |
|
| Trade payables | | |
| 91,073 |
|
| (*) 91,738 |
|
| 97,293 |
|
| Hadera Paper Ltd. Group, net | | |
| 60,930 |
|
| 74,801 |
|
| 69,614 |
|
| Other financial liabilities | | |
| 3,583 |
|
| - |
|
| 5,512 |
|
| Current tax liabilities | | |
| 300 |
|
| 218 |
|
| 107 |
|
| Other payables and accrued expenses | | |
| 17,874 |
|
| (*) 19,167 |
|
| (*) 18,387 |
|
| Accrued severance pay, net | | |
| 285 |
|
| 46 |
|
| 214 |
|
|
| |
| |
| |
| Total current liabilities | | |
| 289,883 |
|
| 298,786 |
|
| 312,283 |
|
|
| |
| |
| |
| | | |
| Non-current liabilities | | |
| Long-term bank loans | | |
| 16,537 |
|
| 31,345 |
|
| 23,484 |
|
| Deferred taxes | | |
| 27,388 |
|
| 22,361 |
|
| 24,274 |
|
| Employees benefits | | |
| 2,097 |
|
| 1,130 |
|
| (*) 1,363 |
|
| |
| |
| |
| |
| Total non-current liabilities | | |
| 46,022 |
|
| 54,836 |
|
| 49,121 |
|
|
| |
| |
| |
| | | |
| Capital and reserves | | |
| Share capital | | |
| 1 |
|
| 1 |
|
| 1 |
|
| Premium | | |
| 43,352 |
|
| 43,352 |
|
| 43,352 |
|
| Capital reserves | | |
| (1,723 |
) |
| 929 |
|
| (3,150 |
) |
| Retained earnings | | |
| 90,426 |
|
| 74,962 |
|
| 82,355 |
|
|
| |
| |
| |
| | | |
| 132,056 |
|
| 119,244 |
|
| 122,558 |
|
|
| |
| |
| |
| Total equity and liabilities | | |
| 467,961 |
|
| 472,866 |
|
| 483,962 |
|
|
| |
| |
| |
(*) reclassified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| D. Muhlgay |
A. Solel |
R. Starkov |
| Financial Director |
General Manager |
Chairman of the Supervisory Board |
|
|
|
Approval date of the interim
financial statements: July 28, 2009.
The accompanying notes are an
integral part of the condensed interim consolidated financial statements.
M - 2
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED INCOME STATEMENT
(NIS in thousands)
|
Six months ended
June
30,
|
Three months ended
June
30,
|
Year ended
December 31,
|
|
2009
|
2008
|
2009
|
2008
|
2008
|
|
(Unaudited)
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
|
| 343,560 |
|
| (*) 383,806 |
|
| 161,528 |
|
| (*) 178,665 |
|
| 732,347 |
|
| Cost of sales | | |
| 301,582 |
|
| (*) 340,492 |
|
| 138,466 |
|
| (*) 155,475 |
|
| 649,640 |
|
| |
| |
| |
| |
| |
| |
| Gross profit | | |
| 41,978 |
|
| 43,314 |
|
| 23,062 |
|
| 23,190 |
|
| 82,707 |
|
|
| |
| |
| |
| |
| |
| | | |
| Operating costs and expenses | | |
| Selling expenses | | |
| 20,683 |
|
| (*) 19,585 |
|
| 9,766 |
|
| (*) 12,174 |
|
| 38,293 |
|
| General and administrative expenses | | |
| 5,383 |
|
| 5,380 |
|
| 2,734 |
|
| 2,258 |
|
| 9,740 |
|
| Other expenses | | |
| 11 |
|
| 698 |
|
| 66 |
|
| 743 |
|
| 584 |
|
|
| |
| |
| |
| |
| |
| | | |
| 26,077 |
|
| 25,663 |
|
| 12,566 |
|
| 15,175 |
|
| 48,617 |
|
|
| |
| |
| |
| |
| |
| | | |
| Operating profit | | |
| 15,901 |
|
| 17,651 |
|
| 10,496 |
|
| 8,015 |
|
| 34,090 |
|
| | | |
| Finance income | | |
| (99 |
) |
| (4,906 |
) |
| - |
|
| (844 |
) |
| (5,889 |
) |
| Finance costs | | |
| 5,131 |
|
| 6,756 |
|
| 4,469 |
|
| 3,495 |
|
| 13,496 |
|
|
| |
| |
| |
| |
| |
| | | |
| 5,032 |
|
| (1,850 |
) |
| 4,469 |
|
| (2,651 |
) |
| 7,607 |
|
|
| |
| |
| |
| |
| |
| | | |
| Profit before tax | | |
| 10,869 |
|
| 15,801 |
|
| 6,027 |
|
| 5,364 |
|
| 26,483 |
|
| | | |
| Income tax charge | | |
| (2,798 |
) |
| (3,838 |
) |
| (1,545 |
) |
| (1,324 |
) |
| (7,127 |
) |
|
| |
| |
| |
| |
| |
| | | |
| Profit for the period | | |
| 8,071 |
|
| 11,963 |
|
| 4,482 |
|
| 4,040 |
|
| 19,356 |
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
(*) reclassified
The accompanying notes are an integral
part of the condensed interim consolidated financial statements.
M - 3
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED COMPREHENSIVE INCOME
(NIS in thousands)
|
Six months ended
June 30,
|
Three months ended
June 30,
|
Year ended
December 31,
|
|
2009
|
2008
|
2009
|
2008
|
2008
|
|
(Unaudited)
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Profit for period |
|
|
| 8,071 |
|
| 11,963 |
|
| 4,482 |
|
| 4,040 |
|
| 19,356 |
|
| | | |
| Cash flow hedges, net | | |
| (935 |
) |
| - |
|
| 3 |
|
| - |
|
| (4,079 |
) |
| Transfer to profit or loss from equity | | |
| on cash flow hedge | | |
| 2,362 |
|
| - |
|
| 1,394 |
|
| - |
|
| - |
|
|
| |
| |
| |
| |
| |
| Total comprehensive income for the | | |
| period (net of tax) | | |
| 9,498 |
|
| 11,963 |
|
| 5,879 |
|
| 4,040 |
|
| 15,277 |
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
The accompanying notes are an
integral part of the condensed interim consolidated financial statements.
M - 4
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY
(NIS in thousands)
|
Share
capital
|
Premium
|
Capital
reserves
|
Retained
earnings
|
Total
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six months ended June 30, 2009 |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| (unaudited) | | |
| Balance - January 1, 2009 | | |
| 1 |
|
| 43,352 |
|
| (3,150 |
) |
| 82,355 |
|
| 122,558 |
|
| Total comprehensive income for the period | | |
| - |
|
| - |
|
| 1,427 |
|
| 8,071 |
|
| 9,498 |
|
|
| |
| |
| |
| |
| |
| Balance - June 30, 2009 | | |
| 1 |
|
| 43,352 |
|
| (1,723 |
) |
| 90,426 |
|
| 132,056 |
|
|
| |
| |
| |
| |
| |
| | | |
| Six months ended June 30, 2008 | | |
| (unaudited) | | |
| Balance - January 1, 2008 | | |
| 1 |
|
| 43,352 |
|
| 929 |
|
| 62,999 |
|
| 107,281 |
|
| Total comprehensive income for the period | | |
| - |
|
| - |
|
| - |
|
| 11,963 |
|
| 11,963 |
|
|
| |
| |
| |
| |
| |
| Balance - June 30, 2008 | | |
| 1 |
|
| 43,352 |
|
| 929 |
|
| 74,962 |
|
| 119,244 |
|
|
| |
| |
| |
| |
| |
| | | |
| Three months ended June 30, 2009 | | |
| (Unaudited) | | |
| Balance - April 1, 2009 | | |
| 1 |
|
| 43,352 |
|
| (3,120 |
) |
| 85,944 |
|
| 126,177 |
|
| Total comprehensive income for the period | | |
| - |
|
| - |
|
| 1,397 |
|
| 4,482 |
|
| 5,879 |
|
|
| |
| |
| |
| |
| |
| Balance - June 30, 2009 | | |
| 1 |
|
| 43,352 |
|
| (1,723 |
) |
| 90,426 |
|
| 132,056 |
|
|
| |
| |
| |
| |
| |
| | | |
| Three months ended June 30, 2008 | | |
| (Unaudited) | | |
| Balance - April 1, 2008 | | |
| 1 |
|
| 43,352 |
|
| 929 |
|
| 70,922 |
|
| 115,204 |
|
| Total comprehensive income for the period | | |
| - |
|
| - |
|
| - |
|
| 4,040 |
|
| 4,040 |
|
|
| |
| |
| |
| |
| |
| Balance - June 30, 2008 | | |
| 1 |
|
| 43,352 |
|
| 929 |
|
| 74,962 |
|
| 119,244 |
|
|
| |
| |
| |
| |
| |
| | | |
| Year ended December 31, 2008 | | |
| Balance - January 1, 2008 | | |
| 1 |
|
| 43,352 |
|
| 929 |
|
| 62,999 |
|
| 107,281 |
|
| Total comprehensive income for the year | | |
| - |
|
| - |
|
| (4,079 |
) |
| 19,356 |
|
| 15,277 |
|
|
| |
| |
| |
| |
| |
| Balance - December 31, 2008 | | |
| 1 |
|
| 43,352 |
|
| (3,150 |
) |
| 82,355 |
|
| 122,558 |
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
The accompanying notes are an integral
part of the condensed interim consolidated financial statements.
M - 5
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(NIS in thousands)
|
Six
months
ended June 30,
|
Three
months
ended June 30,
|
Year ended
December 31,
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
Unaudited
|
Unaudited
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Cash flows - operating activities |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| Profit for the period | | |
| 8,071 |
|
| 11,963 |
|
| 4,482 |
|
| 4,040 |
|
| 19,356 |
|
| Adjustments to reconcile net profit to net | | |
| cash used in operating activities | | |
| (Appendix A) | | |
| 3,286 |
|
| 25,449 |
|
| 13,409 |
|
| 20,121 |
|
| 28,792 |
|
|
| |
| |
| |
| |
| |
| Net cash provided by operating activities | | |
| 11,357 |
|
| 37,412 |
|
| 17,891 |
|
| 24,161 |
|
| 48,148 |
|
|
| |
| |
| |
| |
| |
| | | |
| Cash flows - investing activities | | |
| Acquisition of property plant and equipment | | |
| (2,191 |
) |
| (4,650 |
) |
| (727 |
) |
| (2,871 |
) |
| (10,608 |
) |
| Proceeds from sale of property plant and | | |
| equipment | | |
| 275 |
|
| 174 |
|
| 110 |
|
| 174 |
|
| 288 |
|
| Interest received | | |
| 63 |
|
| 204 |
|
| 23 |
|
| 114 |
|
| 415 |
|
|
| |
| |
| |
| |
| |
| Net cash used in investing activities | | |
| (1,853 |
) |
| (4,272 |
) |
| (594 |
) |
| (2,583 |
) |
| (9,905 |
) |
|
| |
| |
| |
| |
| |
| | | |
| Cash flows - financing activities | | |
| Short-term bank credit, net | | |
| (6,810 |
) |
| (10,070 |
) |
| (20,632 |
) |
| (10,397 |
) |
| 3,628 |
|
| Repayment of long-term bank loans | | |
| (7,872 |
) |
| (6,453 |
) |
| (5,073 |
) |
| (4,425 |
) |
| (14,024 |
) |
| Repayment of capital notes to shareholders | | |
| - |
|
| - |
|
| - |
|
| - |
|
| (5,700 |
) |
| Interest paid | | |
| (4,095 |
) |
| (5,578 |
) |
| (2,836 |
) |
| (2,694 |
) |
| (10,852 |
) |
|
| |
| |
| |
| |
| |
| Net cash used in financing activities | | |
| (18,777 |
) |
| (22,101 |
) |
| (28,541 |
) |
| (17,516 |
) |
| (26,948 |
) |
|
| |
| |
| |
| |
| |
| | | |
| Increase (decrease) in cash and | | |
| cash equivalents | | |
| (9,273 |
) |
| 11,039 |
|
| (11,244 |
) |
| 4,062 |
|
| 11,295 |
|
| Cash and cash equivalents at the | | |
| beginning of the financial period | | |
| 13,315 |
|
| 323 |
|
| 16,115 |
|
| 5,927 |
|
| 323 |
|
| | | |
| Net foreign exchange difference on cash and | | |
| cash equivalents | | |
| 1,010 |
|
| (2,222 |
) |
| 181 |
|
| (849 |
) |
| 1,697 |
|
|
| |
| |
| |
| |
| |
| Cash and cash equivalents of the | | |
| end of the financial period | | |
| 5,052 |
|
| 9,140 |
|
| 5,052 |
|
| 9,140 |
|
| 13,315 |
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
The accompanying notes are an
integral part of the condensed interim consolidated financial statements.
M - 6
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED
APPENDICES TO STATEMENTS OF CASH FLOWS
(NIS in thousands)
| |
|
Six
months
ended June 30,
|
Three
months
ended June 30,
|
Year ended
December 31,
|
| |
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
| |
|
Unaudited
|
Unaudited
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| A. |
Adjustments to reconcile net profit to net cash |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
(used in) provided by operating activities | | |
| |
| | |
| |
Finance expenses (income) recognized in | | |
| |
profit and loss, net | | |
| 5,032 |
|
| 1,850 |
|
| 4,469 |
|
| 2,651 |
|
| 7,607 |
|
| |
Taxes on income recognized in profit and loss | | |
| 2,798 |
|
| 3,838 |
|
| 1,545 |
|
| 1,324 |
|
| 7,127 |
|
| |
Depreciation and amortization | | |
| 5,960 |
|
| 5,828 |
|
| 3,045 |
|
| 2,919 |
|
| 11,649 |
|
| |
Capital loss on disposal of property | | |
| |
plant and equipment | | |
| 11 |
|
| 698 |
|
| 66 |
|
| 698 |
|
| 584 |
|
| |
| | |
| |
Changes in assets and liabilities: | | |
| |
Decrease (Increase) in trade receivables | | |
| |
and other receivables | | |
| (11,808 |
) |
| (97 |
) |
| 3,042 |
|
| 14,164 |
|
| 21,652 |
|
| |
Decrease (Increase) in inventories | | |
| 14,021 |
|
| 26,629 |
|
| (10,896 |
) |
| 3,982 |
|
| 2,551 |
|
| |
Increase (Decrease) in trade and other | | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
payables, and accrued expenses | | |
| (4,011 |
) |
| (16,936 |
) |
| 14,468 |
|
| (6,047 |
) |
| (20,776 |
) |
| |
Increase (Decrease) in | | |
| |
Hadera Paper Ltd. Group, net | | |
| (8,684 |
) |
| 3,692 |
|
| (2,319 |
) |
| 461 |
|
| (1,495 |
) |
| |
|
| |
| |
| |
| |
| |
| |
| | |
| 3,319 |
|
| 25,502 |
|
| 13,420 |
|
| 20,152 |
|
| 28,899 |
|
| |
| | |
| |
Income tax paid | | |
| (33 |
) |
| (53 |
) |
| (11 |
) |
| (31 |
) |
| (107 |
) |
| |
|
| |
| |
| |
| |
| |
| |
| | |
| 3,286 |
|
| 25,449 |
|
| 13,409 |
|
| 20,121 |
|
| 28,792 |
|
| |
|
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
The accompanying notes are an integral
part of the condensed interim consolidated financial statements.
M - 7
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 1 |
– |
DESCRIPTION OF BUSINESS AND GENERAL |
| |
Mondi
Hadera Paper Ltd. (“the Company”) was incorporated and commenced operations on
January 1, 2000. The Company and its Subsidiaries are engaged in the production and
marketing of paper, mainly in Israel. |
| |
The
Company is presently owned by Neusiedler Holdings BV. ("NL" or the "Parent Company")
(50.1%) and Hadera Paper Ltd. (49.9%). |
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| |
The
condensed financial statements have been prepared in accordance with International
Accounting Standard 34 Interim Financial Reporting. |
| |
The
unaudited condensed interim consolidated financial statements as of June 30, 2009 and for
the six and three months then ended (“interim financial statements”) of the
Company and subsidiaries should be read in conjunction with the audited consolidated
financial statements of the Company and subsidiaries as of December 31, 2008 and for the
year then ended, including the notes thereto. |
| |
The
condensed Financial Statements were prepared in accordance with section D of the Israeli
Securities Regulations (Periodic and Immediate Reports), 1970. |
| |
B. |
Significant
accounting policies |
| |
The
same accounting policies, presentation and methods of computation have been followed in
these condensed financial statements as were applied in the preparation of the Group’s
financial statements for the year ended 31 December 2008, except for the impact of the
adoption of the Standards and Interpretations described below: |
| |
IAS
1 (revised 2007) Presentation of Financial Statements |
| |
The
revised Standard has introduced a number of terminology changes (including revised titles
for the condensed financial statements) and has resulted in a number of changes in
presentation and disclosure. According to the requirements of the standard the statement
of comprehensive income is presented separated from the income statement. |
| |
However,
the revised Standard has had no impact on the reported results of financial position of
the Group. |
M - 8
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
C. |
Recent
Accounting Standards |
| |
Amendment
to IFRS 7 “Financial Instruments Disclosure” |
| |
The
amendments require enhanced disclosures about fair value measurements and liquidity risk,
by establishing a three level hierarchy for making fair value measurements. |
| |
Entities
are required to apply the amendments for annual periods beginning on or after January 1,
2009, with earlier application permitted. |
| |
At
this stage, the management of the Group estimated that the implementation of the
amendment is not expected to have any influence on the financial statements of the Group. |
| |
Amendment
to IAS 17 “Leases” |
| |
The
amendment determines that land and building leased will be classified in accordance to
general classification instructions to each component, therefore land leases from the
Israeli land administration could be classified as finance lease. |
| |
The
amendment is effective commencing January 1, 2010, early adoption is permitted. |
| |
At
this stage management is examining the effect of this amendment on the group’s
financial statements. |
| |
Annual
improvements issued by the IASB |
| |
The
definitions of short-term and other long-term employee benefits, as Defined in IAS 19
“Employee Benefits” were amended as part of the May 2009 annual improvements
issued by the IASB. |
| |
According
to the amendment, the unused compensated absences should be classified as a short-term
benefit in accordance with IAS 19 and will be presented as a current liability in the
statement of financial position. |
| |
Effective
from 1 January 2009, the company measures the expected unused vacation costs as the
amount that the entity expects to pay as a result of the unused entitlement that has
accumulated at the end of the reporting period. |
| |
For
the affect of the amendment on the company’s results and financial position for 31
December 31 2009, 31 March 2009 and the periods then ended see note 4. |
| |
Comparative
figures relating to the year ended December 31, 2008 were reclassified in these financial
statements as follows: NIS 5,090 thousand were reclassified from employees benefits to
other payables |
| |
Comparative
figures relating to the period ended June 30, 2008 were reclassified in these financial
statements as follows: NIS 985 thousand were reclassified from other payables and accrued
expenses to trade payables, NIS 300 thousand were reclassified from cost of sales to
selling expenses and NIS 586 thousand were reclassified from revenue to selling expenses. |
M - 9
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
E. |
Exchange
Rates and Linkage Basis |
| |
Following
are the changes in the representative exchange rates of the Euro and the U.S. dollar
vis-a-vis the NIS and in the Israeli Consumer Price Index (“CPI”): |
| |
As of:
|
Representative
exchange rate of
the Euro
(NIS per €1)
|
Representative
exchange rate of
the dollar
(NIS per $1)
|
CPI
"in respect of"
(in points)
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
June 30, 2009 |
|
|
| 5.540 |
|
| 3.944 |
|
| 112.80 |
|
| |
June 30, 2008 | | |
| 5.285 |
|
| 3.352 |
|
| 108.89 |
|
| |
December 31, 2008 | | |
| 5.2973 |
|
| 3.8020 |
|
| 110.55 |
|
| |
Increase (decrease) during the:
|
%
|
%
|
%
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
Six months ended June 30, 2009 |
|
|
| 4.58 |
|
| 3.73 |
|
| 2.04 |
|
| |
Three months ended June 30, 2009 | | |
| (0.61 |
) |
| (5.28 |
) |
| 2.17 |
|
| |
Six months ended June 30, 2008 | | |
| (6.60 |
) |
| (12.84 |
) |
| 2.349 |
|
| |
Three months ended June 30, 2008 | | |
| (5.91 |
) |
| (5.66 |
) |
| 2.24 |
|
| |
Year ended December 31, 2008 | | |
| (6.4 |
) |
| (1.14 |
) |
| 3.9 |
|
M - 10
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 3 |
– |
RELATED PARTIES AND INTERESTED PARTIES |
| |
A. |
Balances
with Related Parties |
| |
|
Hadera Paper and
its subsidiaries
|
Neusiedler Holding and
its related parties
|
| |
|
June 30,
|
December 31,
|
June 30,
|
December 31,
|
| |
|
2009
|
2008
|
2008
|
2009
|
2008
|
2008
|
| |
|
(Unaudited)
|
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
|
| |
Other receivables |
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 370 |
|
| |
|
| |
| |
| |
| |
| |
| |
| |
Trade payables | | |
| 60,930 |
|
| 74,801 |
|
| 69,614 |
|
| 3,197 |
|
| 988 |
|
| 221 |
|
| |
|
| |
| |
| |
| |
| |
| |
| |
Capital notes to shareholders | | |
| - |
|
| 2,539 |
|
| - |
|
| - |
|
| 2,539 |
|
| - |
|
| |
|
| |
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
| |
B. |
Transactions
with Related Parties |
| |
|
Hadera Paper and
its subsidiaries
|
Neusiedler Holding and
its related parties
|
| |
|
Six months ended
June 30,
|
Year ended
December 31,
|
Six months ended
June 30,
|
Year ended
December 31,
|
| |
|
2009
|
2008
|
2008
|
2009
|
2008
|
2008
|
| |
|
(Unaudited)
|
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
|
| |
Sales |
|
|
| 10,763 |
|
| 7,080 |
|
| 14,862 |
|
| - |
|
| - |
|
| - |
|
| |
|
| |
| |
| |
| |
| |
| |
| |
Purchases of goods | | |
| - |
|
| - |
|
| - |
|
| 3,380 |
|
| 2,114 |
|
| 2,895 |
|
| |
|
| |
| |
| |
| |
| |
| |
| |
Cost of sales | | |
| 39,929 |
|
| 39,495 |
|
| 88,815 |
|
| 1,122 |
|
| 1,235 |
|
| 2,660 |
|
| |
|
| |
| |
| |
| |
| |
| |
| |
Sales, general and administrative expenses | | |
| 1,157 |
|
| 1,325 |
|
| 2,703 |
|
| - |
|
| - |
|
| - |
|
| |
|
| |
| |
| |
| |
| |
| |
| |
Financing expenses, net | | |
| 1,445 |
|
| 860 |
|
| 3,703 |
|
| - |
|
| - |
|
| 232 |
|
| |
|
| |
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
| |
C. |
(1) |
The Company leases its premises from Hadera paper and receives services
(including energy, water, maintenance and professional services) under
agreements, which are renewed based on shareholders agreements. |
| |
(2) |
The
Group is obligated to pay commissions to Mondi Neuseiedler Gmbh. |
M - 11
MONDI HADERA PAPER LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 4 |
– |
EFFECT OF IAS 19 AMENDMENT |
| |
Comparative
figures relating to the year ended December 31, 2008 were reclassified in these financial
statements as follows: NIS 5,090 thousand were reclassified from employees benefits to
other payables, |
M - 12
Exhibit 5
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
TABLE OF CONTENTS
|
|
Brightman Almagor Zohar
Haifa Office
5 Ma'aleh Hashichrur Street
Haifa, 33284
P.O.B. 5648, Haifa 31055
Israel
Tel: +972 (4) 860 7373
Fax: +972 (4) 867 2528
Info-haifa@deloitte.co.il
www.deloitte.com |
To the shareholders of
Hogla-Kimberly Ltd.
| Re: |
Review
of Unaudited Condensed Interim Consolidated |
| |
Financial
Statements for the Six and Three Months Ended June 30, 2009 |
Introduction
We have reviewed the accompanying
statement of financial position of Hogla Kimberly LTD. (“the Company”) as of
June 30, 2009 and the related statements of income, statement of comprehensive income,
changes in equity and cash flows for the three and six months then ended. Management is
responsible for the preparation and presentation of this interim financial information in
accordance with IAS 34 “Interim Financial Reporting” and in accordance with
Section D of the Israeli Securities Regulations (periodic and immediate reports), 1970.
Our responsibility is to express a conclusion on this financial information based on our
review.
Scope of Review
We conducted our review in accordance
with review standard No. 1, “Review of Interim Financial Information Performed by the
Independent Auditor of the Company”. A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Israeli Standards
on Auditing , and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come
to our attention that causes us to believe that the accompanying interim financial
information is not prepared, in all material respects, in accordance with International
Accounting Standard 34 “Interim Financial Reporting”.
In addition to the aforementioned in
the previous section, Based on our review, nothing has come to our attention that causes
us to believe that the accompanying interim financial information is not prepared, in all
material respects in accordance with Section D of the Israeli Securities Regulations
(periodic and immediate reports), 1970.
Brightman Almagor Zohar & Co.
Certified Public Accountants
A Member Firm of Deloitte Touche Tohmatsu
Israel
July, 30 2009
H - 1
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(NIS in thousands)
|
As of June 30,
|
As of December 31,
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
| Current Assets |
|
|
| |
|
| |
|
| |
|
| Cash and cash equivalents | | |
| 28,344 |
|
| 11,399 |
|
| 23,219 |
|
| Trade receivables | | |
| 313,099 |
|
| (*) 294,743 |
|
| 264,918 |
|
| Inventories | | |
| 229,424 |
|
| 199,577 |
|
| 234,841 |
|
| Current tax assets | | |
| - |
|
| 2,165 |
|
| 137 |
|
| Capital note of shareholder | | |
| - |
|
| 31,990 |
|
| 32,770 |
|
| Other current assets | | |
| 6,958 |
|
| (*) 4,762 |
|
| 6,340 |
|
|
| |
| |
| |
| | | |
| 577,825 |
|
| 544,636 |
|
| 562,225 |
|
|
| |
| |
| |
| Non-Current Assets | | |
| VAT Receivable | | |
| 40,825 |
|
| 39,725 |
|
| 41,423 |
|
| Property plant and equipment | | |
| 322,167 |
|
| 302,571 |
|
| 317,174 |
|
| Goodwill | | |
| 19,041 |
|
| 20,496 |
|
| 18,708 |
|
| Employee benefit asset | | |
| 288 |
|
| 905 |
|
| 343 |
|
| Deferred tax assets | | |
| 5,895 |
|
| 10,825 |
|
| 4,389 |
|
| Prepaid expenses for operating lease | | |
| 1,829 |
|
| 1,990 |
|
| 1,894 |
|
|
| |
| |
| |
| | | |
| 390,045 |
|
| 376,512 |
|
| 383,931 |
|
|
| |
| |
| |
| | | |
| 967,870 |
|
| 921,148 |
|
| 946,156 |
|
|
| |
| |
| |
| Current Liabilities | | |
| Borrowings | | |
| 24,590 |
|
| 73,760 |
|
| 52,718 |
|
| Trade payables | | |
| 296,608 |
|
| (*) 264,692 |
|
| 286,835 |
|
| Employee benefit obligations | | |
| 13,195 |
|
| (*) 11,266 |
|
| (*) 11,241 |
|
| Current tax liabilities | | |
| 10,274 |
|
| - |
|
| 5,413 |
|
| Dividend payables | | |
| 39,190 |
|
| - |
|
| - |
|
| Other payables and accrued expenses | | |
| 57,234 |
|
| (*) 47,085 |
|
| 44,023 |
|
|
| |
| |
| |
| | | |
| 441,091 |
|
| 396,803 |
|
| 400,230 |
|
|
| |
| |
| |
| Non-Current Liabilities | | |
| Borrowings | | |
| 47,262 |
|
| 71,166 |
|
| 59,044 |
|
| Employee benefit obligations | | |
| 8,277 |
|
| (*) 6,274 |
|
| (*) 7,879 |
|
| Deferred tax liabilities | | |
| 38,795 |
|
| 39,325 |
|
| 38,014 |
|
|
| |
| |
| |
| | | |
| 94,334 |
|
| 116,765 |
|
| 104,937 |
|
|
| |
| |
| |
| Capital and reserves | | |
| Issued capital | | |
| 265,246 |
|
| 265,246 |
|
| 265,246 |
|
| Reserves | | |
| (55,165 |
) |
| (43,864 |
) |
| (57,680 |
) |
| Retained earnings | | |
| 222,364 |
|
| 186,198 |
|
| 233,423 |
|
|
| |
| |
| |
| | | |
| 432,445 |
|
| 407,580 |
|
| 440,989 |
|
|
| |
| |
| |
| | | |
| 967,870 |
|
| 921,148 |
|
| 946,156 |
|
|
| |
| |
| |
|
|
|
|
(*) Reclassified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| T Davis |
O. Lux |
A. Melamud |
| Chairman of the Board of Directors |
Chief Financial Officer |
Chief Executive Officer |
|
|
|
Approval date of the interim
financial statements: July 30, 2009.
The accompanying notes are an
integral part of the condensed interim consolidated financial statements.
H - 2
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(NIS in thousands)
|
Six months ended
June 30,
|
Three months ended
June 30,
|
Year ended
December 31,
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
(Unaudited)
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
|
| 884,225 |
|
| 799,131 |
|
| 446,408 |
|
| 393,801 |
|
| 1,608,576 |
|
| Cost of sales | | |
| 604,162 |
|
| 542,361 |
|
| 302,323 |
|
| 265,544 |
|
| 1,097,567 |
|
|
| |
| |
| |
| |
| |
| Gross profit | | |
| 280,063 |
|
| 256,770 |
|
| 144,085 |
|
| 128,257 |
|
| 511,009 |
|
|
| |
| |
| |
| |
| |
| | | |
| Operating costs and expenses | | |
| | | |
| Selling and marketing expenses | | |
| 155,192 |
|
| 158,007 |
|
| 76,825 |
|
| 79,605 |
|
| 308,737 |
|
| General and administrative expenses | | |
| 36,632 |
|
| 35,126 |
|
| 18,961 |
|
| 15,084 |
|
| 66,519 |
|
|
| |
| |
| |
| |
| |
| Operating profit | | |
| 88,239 |
|
| 63,637 |
|
| 48,299 |
|
| 33,568 |
|
| 135,753 |
|
| | | |
| Finance expenses | | |
| (8,434 |
) |
| (9,657 |
) |
| (2,562 |
) |
| (4,346 |
) |
| (12,355 |
) |
| Finance income | | |
| 7,890 |
|
| 10,904 |
|
| 3,493 |
|
| 4,667 |
|
| 13,702 |
|
|
| |
| |
| |
| |
| |
| | | |
| Profit before tax | | |
| 87,695 |
|
| 64,884 |
|
| 49,230 |
|
| 33,889 |
|
| 137,100 |
|
| Income taxes charge | | |
| (24,254 |
) |
| (22,482 |
) |
| (14,237 |
) |
| (11,769 |
) |
| (47,473 |
) |
|
| |
| |
| |
| |
| |
| | | |
| Profit for the period | | |
| 63,441 |
|
| 42,402 |
|
| 34,993 |
|
| 22,120 |
|
| 89,627 |
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
The accompanying notes are an integral
part of the condensed interim consolidated financial statements.
H - 3
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(NIS in thousands)
|
Six months ended
June 30,
|
Three months ended
June 30,
|
Year ended
December 31,
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
(unaudited)
|
(unaudited)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Profit for period |
|
|
| 63,441 |
|
| 42,402 |
|
| 34,993 |
|
| 22,120 |
|
| 89,627 |
|
| Exchange differences arising on | | |
| translation of foreign operations | | |
| 4,190 |
|
| (35,961 |
) |
| 5,681 |
|
| 4,135 |
|
| (52,096 |
) |
| Cash flow hedges | | |
| 1,428 |
|
| (2,699 |
) |
| (1,279 |
) |
| (1,595 |
) |
| (572 |
) |
| Transfer to profit or loss from equity on | | |
| cash flow hedge | | |
| (3,711 |
) |
| 2,987 |
|
| (2,450 |
) |
| 1,631 |
|
| 4,081 |
|
| Income tax relating to components of other | | |
| comprehensive income | | |
| 608 |
|
| (85 |
) |
| 970 |
|
| (9 |
) |
| (987 |
) |
|
| |
| |
| |
| |
| |
| | | |
| Other comprehensive income for the | | |
| period (net of tax) | | |
| 2,515 |
|
| (35,758 |
) |
| 2,922 |
|
| 4,162 |
|
| (49,574 |
) |
|
| |
| |
| |
| |
| |
| | | |
| Total comprehensive income for the period | | |
| 65,956 |
|
| 6,644 |
|
| 37,915 |
|
| 26,282 |
|
| 40,053 |
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
The accompanying notes are an
integral part of the condensed interim consolidated financial statements.
H - 4
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(NIS in thousands)
|
Share
capital
|
Capital
reserves
|
Foreign currency
translation reserve
|
Accumulated other
comprehensive income
|
Retained
earnings
|
Total
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six months ended |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| June 30, 2009 (unaudited) | | |
| | | |
| Balance - January 1, 2009 | | |
| 29,638 |
|
| 235,608 |
|
| (58,853 |
) |
| 1,173 |
|
| 233,423 |
|
| 440,989 |
|
| Total comprehensive income | | |
| - |
|
| - |
|
| 4,190 |
|
| (1,675 |
) |
| 63,441 |
|
| 65,956 |
|
| Dividend | | |
| - |
|
| - |
|
| - |
|
| |
|
| (74,500 |
) |
| (74,500 |
) |
|
| |
| |
| |
| |
| |
| |
| Balance - June 30, 2009 | | |
| 29,638 |
|
| 235,608 |
|
| (54,663 |
) |
| (502 |
) |
| 222,364 |
|
| 432,445 |
|
|
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
|
Share
capital
|
Capital
reserves
|
Foreign currency
translation reserve
|
Accumulated other
comprehensive income
|
Retained
earnings
|
Total
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six months ended |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| June 30, 2008 (unaudited) | | |
| | | |
| Balance - January 1, 2008 | | |
| 29,638 |
|
| 235,608 |
|
| (6,757 |
) |
| (1,349 |
) |
| 143,796 |
|
| 400,936 |
|
| Total comprehensive income | | |
| - |
|
| - |
|
| (35,961 |
) |
| 203 |
|
| 42,402 |
|
| 6,644 |
|
|
| |
| |
| |
| |
| |
| |
| Balance - June 30, 2008 | | |
| 29,638 |
|
| 235,608 |
|
| (42,718 |
) |
| (1,146 |
) |
| 186,198 |
|
| 407,580 |
|
|
| |
| |
| |
| |
| |
| |
H - 5
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(NIS in thousands)
|
Share
capital
|
Capital
reserves
|
Foreign currency
translation reserve
|
Accumulated other
comprehensive income
|
Retained
earnings
|
Total
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| June 30, 2009 (unaudited) | | |
| | | |
| Balance - March 31, 2009 | | |
| 29,638 |
|
| 235,608 |
|
| (60,344 |
) |
| 2,257 |
|
| 187,371 |
|
| 394,530 |
|
| Total comprehensive income | | |
| - |
|
| - |
|
| 5,681 |
|
| (2,759 |
) |
| 34,993 |
|
| 37,915 |
|
|
| |
| |
| |
| |
| |
| |
| Balance - June 30, 2009 | | |
| 29,638 |
|
| 235,608 |
|
| (54,663 |
) |
| (502 |
) |
| 222,364 |
|
| 432,445 |
|
|
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
|
Share
capital
|
Capital
reserves
|
Foreign currency
translation reserve
|
Accumulated other
comprehensive income
|
Retained
earnings
|
Total
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| June 30, 2008 (unaudited) | | |
| | | |
| Balance - March 31, 2008 | | |
| 29,638 |
|
| 235,608 |
|
| (46,853 |
) |
| (1,173 |
) |
| 164,078 |
|
| 381,298 |
|
| Total comprehensive income | | |
| - |
|
| - |
|
| 4,135 |
|
| 27 |
|
| 22,120 |
|
| 26,282 |
|
|
| |
| |
| |
| |
| |
| |
| Balance - June 30, 2008 | | |
| 29,638 |
|
| 235,608 |
|
| (42,718 |
) |
| (1,146 |
) |
| 186,198 |
|
| 407,580 |
|
|
| |
| |
| |
| |
| |
| |
H - 6
HOGLA-KIMBERLY LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(NIS in thousands)
|
Share
capital
|
Capital
reserves
|
Foreign currency
translation reserve
|
Accumulated other
comprehensive income
|
Retained
earnings
|
Total
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Year ended December 31, 2008 |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| | | |
| Balance - January 1, 2007 | | |
| 29,638 |
|
| 235,608 |
|
| (6,757 |
) |
| (1,349 |
) |
| 143,796 |
|
| 400,936 |
|
| Total comprehensive income | | |
| - |
|
| - |
|
| (52,096 |
) |
| 2,522 |
|
| 89,627 |
|
| 40,053 |
|
|
| |
| |
| |
| |
| |
| |
| Balance - December 31, 2008 | | |
| 29,638 |
|
| 235,608 |
|
| (58,853 |
) |
| 1,173 |
|
| 233,423 |
|
| 440,989 |
|
|
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
|
The accompanying notes are an integral
part of the condensed interim consolidated financial statements.
H - 7
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED CASH FLOWS STATEMENTS
(NIS in thousands)
|
Six months ended
June 30,
|
Three months ended
June 30,
|
Year ended
December 31,
|
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
|
(unaudited)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows - operating activities |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| Profit for the period | | |
| 63,441 |
|
| 42,402 |
|
| 34,993 |
|
| 22,120 |
|
| 89,627 |
|
| Adjustments to reconcile operating profit | | |
| to net cash provided by operating | | |
| activities (Appendix A) | | |
| 5,666 |
|
| (20,573 |
) |
| 19,506 |
|
| 9,631 |
|
| 12,972 |
|
|
| |
| |
| |
| |
| |
| Net cash generated by | | |
| operating activities | | |
| 69,107 |
|
| 21,829 |
|
| 54,499 |
|
| 31,751 |
|
| 102,599 |
|
|
| |
| |
| |
| |
| |
| | | |
| Cash flows - investing activities | | |
| Acquisition of property plant and | | |
| equipment | | |
| (23,517 |
) |
| (20,061 |
) |
| (9,847 |
) |
| (12,913 |
) |
| (53,334 |
) |
| Proceeds from disposal of Property plant | | |
| and equipment | | |
| 24 |
|
| 220 |
|
| 2 |
|
| 92 |
|
| 4,851 |
|
| Repayment of capital note by shareholders | | |
| 32,770 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| Interest received | | |
| 237 |
|
| 1,212 |
|
| 110 |
|
| 1,010 |
|
| 1,525 |
|
|
| |
| |
| |
| |
| |
| Net cash provided by (used in) investing | | |
| activities | | |
| 9,514 |
|
| (18,629 |
) |
| (9,735 |
) |
| (11,811 |
) |
| (46,958 |
) |
|
| |
| |
| |
| |
| |
| | | |
| Cash flows - financing activities | | |
| Dividend paid | | |
| (32,770 |
) |
| - |
|
| - |
|
| - |
|
| - |
|
| Borrowings received | | |
| - |
|
| 100,000 |
|
| - |
|
| - |
|
| 100,000 |
|
| Borrowings paid | | |
| (11,781 |
) |
| (5,603 |
) |
| (5,932 |
) |
| (5,603 |
) |
| (17,053 |
) |
| Short-term bank credit | | |
| (28,122 |
) |
| (102,539 |
) |
| (32,493 |
) |
| (26,741 |
) |
| (124,286 |
) |
| Interest paid | | |
| (2,245 |
) |
| (4,632 |
) |
| (498 |
) |
| (3,407 |
) |
| (8,353 |
) |
|
| |
| |
| |
| |
| |
| Net cash Provided by (used in) financing | | |
| activities | | |
| (74,918 |
) |
| (12,774 |
) |
| (38,923 |
) |
| (35,751 |
) |
| (49,692 |
) |
|
| |
| |
| |
| |
| |
| | | |
| Net increase (decrease) in cash and cash equivalents | | |
| 3,703 |
|
| (9,574 |
) |
| 5,841 |
|
| (15,811 |
) |
| 5,949 |
|
| Cash and cash equivalents - beginning of period | | |
| 23,219 |
|
| 23,082 |
|
| 20,394 |
|
| 26,190 |
|
| 23,082 |
|
| Effects of exchange rate changes on the | | |
| balance of cash held in foreign currencies | | |
| 1,422 |
|
| (2,109 |
) |
| 2,109 |
|
| 1,020 |
|
| (5,812 |
) |
|
| |
| |
| |
| |
| |
| Cash and cash equivalents - end of period | | |
| 28,344 |
|
| 11,399 |
|
| 28,344 |
|
| 11,399 |
|
| 23,219 |
|
|
| |
| |
| |
| |
| |
|
|
|
|
|
|
The accompanying notes are an
integral part of the condensed interim consolidated financial statements.
H - 8
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
APPENDICES TO CONDENSED INTERIM CONSOLIDATED CASH FLOWS STATEMENTS
(NIS in thousands)
| |
|
Six months ended
June 30,
|
Three months ended
June 30,
|
Year ended
December 31,
|
| |
|
2 0 0 9
|
2 0 0 8
|
2 0 0 9
|
2 0 0 8
|
2 0 0 8
|
| |
|
(Unaudited)
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| A. |
Adjustments to reconcile operating profit to net |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
cash generated (used) by operating activities | | |
| |
| | |
| |
Finance expenses paid, net. | | |
| 2,008 |
|
| 3,419 |
|
| 388 |
|
| 2,399 |
|
| 6,828 |
|
| |
Taxes on income recognized in profit | | |
| |
and loss | | |
| 24,254 |
|
| 22,482 |
|
| 14,237 |
|
| 11,771 |
|
| 47,473 |
|
| |
Depreciation and amortization | | |
| 13,851 |
|
| 14,905 |
|
| 7,900 |
|
| 7,949 |
|
| 24,367 |
|
| |
Capital loss (gain) on disposal of property, | | |
| |
plant and equipment | | |
| 566 |
|
| 98 |
|
| 105 |
|
| (182 |
) |
| 2,878 |
|
| |
Effect of discounting capital note to | | |
| |
shareholder | | |
| - |
|
| (780 |
) |
| - |
|
| (390 |
) |
| (1,560 |
) |
| |
| | |
| |
Changes in assets and liabilities: | | |
| |
Decrease (Increase) in trade | | |
| |
receivables | | |
| (48,040 |
) |
| (35,256 |
) |
| 2,909 |
|
| (7,969 |
) |
| 5,465 |
|
| |
Decrease (Increase) in other | | |
| |
current assets | | |
| (546 |
) |
| 2,218 |
|
| 2,509 |
|
| (2,324 |
) |
| 3,872 |
|
| |
Decrease (Increase) in inventories | | |
| 6,185 |
|
| (25,008 |
) |
| (1,769 |
) |
| (12,710 |
) |
| (66,659 |
) |
| |
Increase (decrease) in trade payables | | |
| 21,410 |
|
| 7,113 |
|
| 8,228 |
|
| 13,802 |
|
| 18,407 |
|
| |
Net change in balances with related | | |
| |
parties | | |
| (6,093 |
) |
| (5,443 |
) |
| (5,619 |
) |
| (7,570 |
) |
| 1,339 |
|
| |
Increase (decrease) in other payables | | |
| |
and accrued expenses | | |
| 10,248 |
|
| 13,993 |
|
| 2,194 |
|
| 11,049 |
|
| (1,073 |
) |
| |
| | |
| |
Effect of exchange rate differences on | | |
| |
Dividend payables | | |
| (2,540 |
) |
| - |
|
| (2,540 |
) |
| - |
|
| - |
|
| |
Decrease (increase) in other long | | |
| |
term asset | | |
| 1,373 |
|
| (3,606 |
) |
| 910 |
|
| (3,564 |
) |
| (9,163 |
) |
| |
Change in employee benefit | | |
| |
obligations, net | | |
| 2,389 |
|
| 701 |
|
| (401 |
) |
| 1,067 |
|
| 9,682 |
|
| |
|
| |
| |
| |
| |
| |
| |
| | |
| 25,065 |
|
| (5,164 |
) |
| 29,051 |
|
| 13,328 |
|
| 41,856 |
|
| |
|
| |
| |
| |
| |
| |
| |
Income taxes received | | |
| 642 |
|
| 7,065 |
|
| 642 |
|
| 7,065 |
|
| 7,065 |
|
| |
Income taxes paid | | |
| (20,041 |
) |
| (22,474 |
) |
| (10,187 |
) |
| (10,762 |
) |
| (35,949 |
) |
| |
|
| |
| |
| |
| |
| |
| |
| | |
| 5,666 |
|
| (20,573 |
) |
| 19,506 |
|
| 9,631 |
|
| 12,972 |
|
| |
|
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
The accompanying notes are an integral
part of the condensed interim consolidated financial statements.
H - 9
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 1 |
– |
DESCRIPTION OF BUSINESS AND GENERAL |
| |
A. |
Description
Of Business |
| |
Hogla
Kimberly Ltd. (“the Company”) and its Subsidiaries are engaged principally in
the production and marketing of paper and hygienic products. The Company’s results
of operations are affected by transactions with shareholders and affiliated companies. |
| |
The
Company is owned by Kimberly Clark Corp. ("KC" or the "Parent Company") (50.1%) Hadera
Paper Ltd. (49.9%). |
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
The Company |
– |
Hogla-Kimberly Ltd. |
| |
|
| |
The Group |
– |
the Company and its Subsidiaries. |
| |
|
| |
Subsidiaries |
– |
companies in which the Company control, (as defined by IAS 27) directly or indirectly, and whose financial statements are fully consolidated with those of the Company. |
| |
|
| |
Related Parties |
– |
as defined by IAS 24. |
| |
|
| |
Interested Parties |
– |
as defined in the Israeli Securities Regulations (Presentation of Financial Statements), 1993. |
| |
|
| |
Controlling Shareholder |
– |
as defined in the Israeli Securities law and Regulations 1968. |
| |
|
| |
NIS |
– |
New Israeli Shekel. |
| |
|
| |
CPI |
– |
the Israeli consumer price index. |
| |
|
| |
Dollar |
– |
the U.S. dollar. |
| |
|
| |
YTL |
– |
the Turkish New Lira. |
| |
|
|
|
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| |
A. |
Applying
International Accounting Standards (IFRS) |
| |
The
condensed interim financial statements have been prepared using accounting policies
consistent with International Financial Reporting Standards and in accordance with
International Accounting Standard (IAS) 34 – “Interim Financial Reporting”. |
| |
The
unaudited condensed interim consolidated financial statements as of June 30, 2009 and for
the six and three months then ended (“interim financial statements”) of the
Company and subsidiaries should be read in conjunction with the audited consolidated
financial statements of the Company and subsidiaries as of December 31, 2008 and for the
year then ended, including the notes thereto. |
H - 10
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
B. |
The condensed Financial Statements were prepared in accordance with section D of
the Israeli Securities Regulations (Periodic and Immediate Reports), 1970. |
| |
C. |
Significant
accounting policies |
| |
The
same accounting policies, presentation and methods of computation have been followed in
these condensed financial statements as were applied in the preparation of the Group’s
financial statements for the year ended 31 December 2008, except for the impact of the
adoption of the Standards and Interpretations described below: |
| |
IAS
1 (revised 2007) Presentation of Financial Statements |
| |
The
revised Standard has introduced a number of terminology changes (including revised titles
for the condensed financial statements) and has resulted in a number of changes in
presentation and disclosure. According to the requirements of the standard the statement
of comprehensive income in presented in separate from the income statement. |
| |
However,
the revised Standard has had no impact on the reported results of operations and the
financial position of the Group. |
| |
D. |
Recent
Accounting Standards |
| |
Amendment
to IFRS 7 “Financial Instruments Disclosure” |
| |
Theamendments
require enhanced disclosures about fair value measurements and liquidity risk, by
establishing a three level hierarchy for making fair value measurements. |
| |
Entitiesare
required to apply the amendments for annual periods beginning on or after January 1,
2009, with earlier application permitted. |
| |
Atthis
stage, the management of the Group estimated that the implementation of the amendment is
not expected to have any influence on the financial statements of the Group. |
| |
Amendment
to IAS 17 “Leases” |
| |
The
amendment determines that land and building leased will be classified in accordance to
general classification instructions to each component, therefore land leases from the
Israeli land administration could be classified as finance lease. |
| |
The
amendment is effective commencing January 1, 2010, early adoption is permitted. |
| |
At
this stage management is examining the effect of this amendment on the group’s
financial statements. |
H - 11
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 2 |
– |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
| |
D. |
Recent
Accounting Standards (cont.) |
| |
Annual
improvements issued by the IASB |
| |
The
definitions of short-term and other long-term employee benefits, as Defined in IAS 19
“Employee Benefits” were amended as part of the May 2009 annual improvements
issued by the IASB. |
| |
According
to the amendment, the unused compensated absences should be classified as a short-term
benefit in accordance with IAS 19 and will be presented as a current liability in the
statement of financial position. |
| |
Effective
from 1 January 2009, the company measures the expected cost of unused, accumulated
compensated absences as the amount that the entity expects to pay as a result of the
unused entitlement that has accumulated at the end of the reporting period. |
| |
For
the affect of the amendment on the company’s results and financial position for
December 31 2008, 31 June 2009 and the periods then ended see note 7. |
| |
E. |
Exchange
Rates and Linkage Basis |
| |
Following
are the changes in the representative exchange rates of the U.S. dollar vis-a-vis the NIS
and the Turkish Lira and in the Israeli Consumer Price Index (“CPI”): |
| |
As of:
|
Turkish Lira
exchange rate
vis-a-vis the U.S.
dollar
(TL'000 per $1)
|
Representative
exchange rate of
the dollar
(NIS per $1)
|
CPI
"in respect of"
(in points)
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
June 30, 2009 |
|
|
| 1,541 |
|
| 3.919 |
|
| 111.82 |
|
| |
June 30, 2008 | | |
| 1,224 |
|
| 3.352 |
|
| 108.88 |
|
| |
December 31, 2008 | | |
| 1,521 |
|
| 3.802 |
|
| 110.44 |
|
| |
Increase (decrease) during the:
|
%
|
%
|
%
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
Six months ended June 30, 2009 |
|
|
| 1.28 |
|
| 3.08 |
|
| 1.25 |
|
| |
Three months ended June 30, 2009 | | |
| (8.68 |
) |
| (6.42 |
) |
| 1.39 |
|
| |
Six months ended June 30, 2008 | | |
| 4.08 |
|
| (12.84 |
) |
| 2.33 |
|
| |
Three months ended June 30, 2008 | | |
| (8.25 |
) |
| (5.66 |
) |
| 2.23 |
|
| |
Year ended December 31, 2008 | | |
| 29.38 |
|
| (1.14 |
) |
| 3.8 |
|
| |
|
|
|
|
| NOTE 3 |
– |
SEGNIFICANT TRANSACTIONS AND EVENTS |
| |
1. |
Hogla-Kimberly
issued one preference Share to Hadera Paper Ltd, which gives Hadera
Paper the right to receive special dividends according to the decision of
the Board from time to time.
On March 19, 2009 Hogla-Kimberly
distributed dividend in the amount of NIS 32.77 million to the holder
of the preference share. |
H - 12
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 3 |
– |
SEGNIFICANT TRANSACTIONS AND EVENTS (Cont.) |
| |
2. |
On
March 19, 2009 Hadera Paper Ltd repaid the capital note to the company in the
amount of NIS 32.77 million. |
| |
3. |
On
February 26, 2009 the board of directors decided to distribute Dividend
in the amount of Dollar 10 million from the unapproved enterprise
retained earnings of 2008 to the holders of the ordinary shares. |
| |
4. |
On
February 2004, a former customer “PIKANTI” filed a lawsuit against
the Company. This lawsuit is a part from multi-suppliers lawsuit,
filed by the customer claiming for one billion NIS from the Company
and each other supplier for alleged damages. On June 15, 2009 after
court denied the lawsuit and few appeals of plaintiff, the lawsuit
was finally denied and was erased. |
| NOTE 4 |
– |
RELATED PARTIES AND INTERESTED PARTIES |
| |
A. |
Balances
with Related Parties |
| |
|
June 30,
|
December 31,
|
| |
|
2009
|
2008
|
2008
|
| |
|
(Unaudited)
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
Trade receivables |
|
|
| 29,823 |
|
| 29,502 |
|
| 30,212 |
|
| |
|
| |
| |
| |
| |
Other receivables | | |
| 3,741 |
|
| 1,961 |
|
| 1,552 |
|
| |
|
| |
| |
| |
| |
Capital note - shareholder | | |
| - |
|
| 31,990 |
|
| 32,770 |
|
| |
|
| |
| |
| |
| |
Trade payables | | |
| 72,570 |
|
| 57,370 |
|
| 79,683 |
|
| |
|
| |
| |
| |
| |
|
|
|
|
| |
B. |
Transactions
with Related Parties |
| |
|
Six months ended
June
30,
|
Three months ended
June 30,
|
Year ended
December 31,
|
| |
|
2009
|
2008
|
2009
|
2008
|
2008
|
| |
|
(Unaudited)
|
(Unaudited)
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
Sales to related parties |
|
|
| 119,792 |
|
| 91,299 |
|
| 52,493 |
|
| 46,223 |
|
| 216,841 |
|
| |
|
| |
| |
| |
| |
| |
| |
Cost of sales | | |
| 167,724 |
|
| 73,208 |
|
| 85,162 |
|
| 26,897 |
|
| 268,476 |
|
| |
|
| |
| |
| |
| |
| |
| |
Royalties to the shareholders | | |
| 15,595 |
|
| 15,051 |
|
| 7,565 |
|
| 7,528 |
|
| 29,584 |
|
| |
|
| |
| |
| |
| |
| |
| |
General and administrative | | |
| |
expenses | | |
| 6,498 |
|
| 4,706 |
|
| 3,167 |
|
| 1,726 |
|
| 12,488 |
|
| |
|
| |
| |
| |
| |
| |
| |
|
|
|
|
|
|
| NOTE 5 |
– |
INCOME TAX CHARGE |
| |
The
effective tax rate for the six months period ended June 30, 2009 is 27%. |
H - 13
HOGLA-KIMBERLY LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2009
| NOTE 6 |
– |
RECLASSIFICATION |
| |
Comparative
figures as of June 30, 2008 were reclassified in these financial statements as follows: |
| |
1. |
NIS
12,200 thousand were reclassified from other payables and accrued expenses to
trade receivables. |
| |
2. |
NIS
2,712 thousand were reclassified from other current assets to trade payables. |
| |
3. |
NIS
5,018 thousand were reclassified from other payables and accrued expenses to
trade payables. |
| |
4. |
NIS
1,163 thousand were reclassified from other payables and accrued expenses to
employee benefit obligations in non-current liabilities. |
| NOTE 7 |
– |
EFFECT OF IAS 19 AMENDMENT |
| |
NIS
9,433 and 11,266 thousand were reclassified from employee benefit obligations in
non-current liabilities to employee benefit obligations in current liabilities as of
December 31, 2008 and June 30, 2008 respectively. |
| NOTE 8 |
– |
SUBSEQENT EVENTS |
| |
1. |
On
July 1, 2009 the company paid Dividend in the amount of NIS 39.2 million
(Dollar 10 million) to the holders of the ordinary shares. |
| |
2. |
On
July 30, 2009 the board of directors decided to distribute Dividend in the
amount of Nis
19,015 thousand from the unapproved enterprise retained earnings accumulated as of June
30, 2009 to the holders of the ordinary shares. |
H - 14