tefron ltd.tefron ltd. consolidated statements of comprehensive income for the three months ended...
TRANSCRIPT
TEFRON LTD.
Interim consolidated financial statements
as at March 31, 2013
Unaudited
Contents
Page
Review of the interim consolidated financial statements 2
Consolidated balance sheets 3-4
Consolidated statements of income 5
Consolidated statement of comprehensive income 6
Consolidated statements of changes in shareholders' equity 7
Consolidated statements of cash flows 8-9
Notes to the interim consolidated financial statements 10-17
2
ERNST & YOUNG
Review Report of the Auditors to the Shareholders of Tefron Ltd.
Preface
We have reviewed the attached financial information of Tefron Ltd. and its subsidiaries (hereinafter "the
Group"), which includes the condensed consolidated balance sheet as at March 31, 2013, and the
condensed consolidated statements of income, comprehensive income, changes in shareholders’ equity
and cash flows for the period of three month then ended. The Board of Directors and Management are
responsible for the preparation and presentation of the financial information for this interim period, in
accordance with International Accounting Standard IAS 34, "Financial Reporting for Interim Periods",
and are also responsible for the preparation of financial information for this interim period in accordance
with Chapter D of the Securities Regulations (Periodic and Immediate Reports) - 1970. Our responsibility
is to express a conclusion on the financial information for this interim period based on our review.
Scope of the review
We have performed our review in accordance with Review Standard 1 of the Institute of Certified Public
Accountants in Israel, "Review of Financial Information for Interim Periods prepared by the Entity’s
Auditor." A review of financial information for interim periods consists of making inquiries, primarily
with persons responsible for financial and accounting matters, and of applying analytical and other review
procedures. A review is considerably more limited in scope than an audit conducted in accordance with
generally accepted auditing standards in Israel, and therefore does not enable us to obtain assurance that
we will be aware of all significant matters which might have been identified in an audit. Consequently, we
are not expressing an opinion of an audit.
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 the aforesaid in the previous paragraph, based on our review, nothing has come to our
attention which would cause us to believe that the above financial information does not comply, in all
material respects, with the disclosure provisions of Chapter D of the Securities Regulations (Periodic and
Immediate Reports) - 1970.
Without qualifying our above conclusion, we draw attention to Note 1b of the financial statements
regarding the Company's operations and outcomes, as well as to the Management’s estimations regarding
meeting the financial covenants with the banks, and its plans in that regard.
Haifa, Israel KOST FORER GABBAY & KASIERER
May 19, 2013 Certified Public Accountants
3
Tefron Ltd. Consolidated balance sheets
As at
March 31,
As at
December 31,
2013 2012 2012
Unaudited Audited
Dollars thousands
Current assets
Cash 5,286 1,684 5,586 Investments in securities available
for sale 323 334
323
Trade receivables, net 18,394 17,780 18,356
Other receivables 2,804 2,256 2,986
Inventory 13,968 21,094 15,024
Assets held for sale - 2,805 -
40,775 45,953 42,275
Non-current assets held for sale - 930 -
Assets held for sale (see Note 4) 200 - -
40,975 46,883 42,275
Non-current assets
Property, plant and equipment, net 28,359 31,099 29,556
Inactive assets (see Note 5) 2,658 - 2,750
Goodwill and intangible assets, net 977 1,546 1,177
Software, net 266 304 284
Deferred taxes, net 2,630 1,178 2,659
34,890 34,127 36,426
75,865 81,010 78,701
The accompanying notes are an integral part of the interim consolidated financial statements
4
Tefron Ltd. . Consolidated balance sheets
As at As at
March 31, December 31, _
_ 2013 2012 2012 __
Unaudited Audited _
_ _ Dollars thousand _
Current liabilities
Bank credit 10,293 8,784 9,504
Trade payables 10,763 15,451 12,487
Other payables 4,460 4,668 4,387
Loans to be repaid from the
proceeds of assets held for sale - 2,805
-
25,516 31,708 26,378
Non-current liabilities
Long-term loans 18,636 17,839 20,200
Liabilities for bank options 370 464 318
Liabilities for benefits to
employees, net 541 552
596
Deferred Taxes 255 - 310
19,802 18,855 21,424
Equity attributed to the
Company’s shareholders
Share capital 19,818 19,818 19,818
Additional paid-in capital 107,348 107,228 107,321
Accumulated deficit (89,515) (89,233) (89,149)
Treasury shares (7,408) (7,408) (7,408)
Capital reserve for financial assets
available for sale (118) (148)
(118)
Capital reserve for hedging
transactions - -
55
Other capital reserves 422 190 380
Total equity 30,547 30,447 30,899
75,865 81,010 78,701
The accompanying notes are an integral part of the interim consolidated financial statements
May 19, 2013
Date of approval of
the financial statements
Arnon Tieberg
Chairman of the Board
Amit Meridor
CEO
Eliezer Parnafes
CFO
5
Tefron Ltd. Consolidated statements of income
For the three months
ended
March 31,
For the year
ended
December 31
2013 2012(*) 2012(*)
Unaudited Audited
Dollars thousands
Sales 20,768 19,775 98,963
Cost of sales 17,271 16,704 81,932
Gross profit 3,497 3,071 17,031
Development expenses, net 1,156 899 3,526
Selling and marketing expenses 2,071 2,005 8,262
General and administrative expenses 725 760 3,180
Other expenses - - 35
Operating profit (loss) (455) (593) 2,028
Financing income 61 5 64
Financing expenses (397) (752) (1,689)
Financing expenses, net (336) (747) (1,625)
Income (loss) before taxes on income (791) (1,340) 403
Tax benefit 55 7 2,233
Income (loss) from continuing operations (736) (1,333) 2,636
Income (loss) from discontinued operations, net 370 529 (3,094)
Loss (366) (804) (458)
Earnings (losses) per share attribute to the Company’s
shareholders (in dollars)
Basic and diluted earnings (losses) per share from continued
operations (0.11) (0.20) 0.40
Basic and diluted earnings (losses) per share from
discontinued operations 0.06 0.08 (0.47)
Basic and diluted losses per share (0.05) (0.12) (0.07)
(*) Restated due to discontinued operations, see Note 4.
The accompanying notes are an integral part of the interim consolidated financial statements
6
Tefron Ltd. Consolidated statements of comprehensive income
For the three months
ended
March 31
For the
year ended
Dec. 31
2013 2012 2012
Unaudited Audited
Dollars thousands
Loss (366) (804) (458)
Other comprehensive income (loss):
Realized income for hedging transaction of cash flows (55) - - Income not yet realized for hedging cash flows transactions - - 55 Income not yet realized for investments in securities
available for sale - - 30 Actuarial loss from defined benefit plans - - (262)
Total other comprehensive income (loss) (55) - (177)
Total comprehensive loss, attributed to the Company’s
shareholders (421) (804) (635)
The accompanying notes are an integral part of the interim consolidated financial statements
7
Tefron Ltd. Consolidated statements of changes in shareholders’ equity
Relating to the Company’s shareholders
Share
capital
Additional
paid in
capital
Accum.
deficit
Treasury
shares
Capital
reserve
for
financial
assets
available
for sale
Capital
reserve
for
hedging
trans-
actions
Other
capital
reserves
Total
equity
Unaudited
Dollars thousands
Balance as at January 1, 2013
(Audited) 19,818 107,321 (89,149) (7,408) (118) 55 380 30,899
Loss - - (366) - - - - (366)
Other comprehensive loss - - - - - (55) - (55)
Share based payment for employees
and directors
-
27
-
-
-
-
-
27
Share based payment for the
consultant
-
-
-
-
-
-
42
42
Balance as at March 31, 2013 19,818 107,348 (89,515) (7,408) (118) - 422 30,547
Relating to the Company’s shareholders
Share
capital
Additional
paid in
capital
Accum.
deficit
Treasury
shares
Capital
reserve
for
financial
assets
available
for sale
Other
capital
reserves Total Equity
Unaudited Dollars thousands
Balance as at January 1, 2012
(Audited) 19,818 107,198 (88,429) (7,408) (148) 190 31,221
Loss - - (804) - - - (804)
Share based payment - 30 - - - - 30
Balance as at March 31, 2012 19,818 107,228 (89,233) (7,408) (148) 190 30,447
Relating to the Company’s shareholders
Share
capital
Additional
paid in
capital
Accum.
deficit
Treasury
shares
Capital
reserve
for
financial
assets
available
for sale
Capital
reserve
for
hedging
trans-
actions
Other
capital
reserves
Total
equity
Unaudited
Dollars thousands
Balance as at January 1, 2012 19,818 107,198 (88,429) (7,408) (148) - 190 31,221
Loss - - (458) - - - - (458)
Other comprehensive income (loss) - - (262) - 30 55 - (177)
Share based payment for employees
and directors
-
123
-
-
-
-
-
123
Share based payment for the
consultant
-
-
-
-
-
-
190
190
Balance as at March 31, 2012 19,818 107,321 (89,149) (7,408) (118) 55 380 30,899
8
Tefron Ltd. Consolidated statements of cash flows
For the three months
ended
March 31,
For the year
ended
December 31
2013 2012 2012
Unaudited Audited
Dollars thousands
Cash flows from operating activities:
Loss (366) (804) (458)
Reconciliations required to present cash flows from operating
activities:
Adjustments to statement of income items:
Depreciation of fixed assets and intangible assets 1,168 1,353 4,999
Impairment of fixed assets, non-current assets held for sale and
intangible assets 294 - 33
Loss from impairment of inventory 241 275 864
Cost of share based payment 115 30 197
Loss on disposal of fixed assets - - 2
Change in deferred taxes, net (26) 140 (992)
Change in liabilities for benefits to employees, net (55) (52) (270)
Change in fair value of liabilities for bank options 52 210 64
Taxes on income 2 2 112
Financing expenses, net 297 317 1,334
2,088 2,275 6,343
Changes in assets and liabilities items:
Increase in trade receivables (38) (4,089) (4,665)
Decrease (increase) in other receivables 81 (54) (610)
Decrease (increase) in inventory 907 (2,589) 2,892
Increase (decrease) in trade payables (1,724) 2,796 196
Increase (decrease) in other payables 73 164 (117)
(701) (3,772) (2,304)
Cash paid and received during the period for:
Interest paid (271) (275) (1,201)
Interest received 5 4 18
Taxes paid (2) (2) (112)
(268) (273) (1,295)
Net cash provided from (used in) operating activities 753 (2,574) 2,286
The accompanying notes are an integral part of the interim consolidated financial statements
9
Tefron Ltd. Consolidated statements of cash flows
For the three months
ended
March 31,
For the year
ended
December 31
2013 2012 2012
Unaudited Audited
Dollars thousands
Cash flows from investing activities:
Acquisitions of fixed assets (247) (68) (454)
Acquisitions of intangible assets - (52) (100)
Proceeds from disposal of fixed assets - - 21
Net cash used for investing activities (247) (120) (533)
Cash flows from financing activities:
Short term bank credit, net 489 2,068 2,491
Repayment of long term loans (1,295) (296) (1,264)
Net cash provided by (used for) financing activities (806) 1,772 1,227
Increase (decrease) in cash and cash equivalents (300) (922) 2,980
Balance of cash and cash equivalents at beginning of period 5,586 2,606 2,606
Balance of cash and cash equivalents at end of period 5,286 1,684 5,586
For the three months
ended
March 31,
For the year
ended
December 31
2013 2012 2012
Unaudited Audited
Dollars thousands
(a) Significant transactions not in cash
Acquisition of assets through an exchange - 518 1,777
Disposal of assets through an exchange - 1,075 2,005
The accompanying notes are an integral part of the interim consolidated financial statements
Tefron Ltd. Notes to the interim consolidated financial statements
01
Note 1 - General
a. These financial statements were prepared in a condensed form as at March 31, 2013 and
for the three months period then ended (hereinafter - "interim consolidated financial
statements"). These statements should be read together with Tefron Ltd.'s (hereinafter-
“the Company”) annual financial statements as at December 31, 2012 and for the year
then ended, and the notes accompanying them (hereinafter -"annual financial
statements").
b. During the three-month periods ended March 31, 2013 and for the year that ended at
December 31, 2012, the Company recorded losses of 366 thousand dollars and 458
thousand dollars respectively, and had positive cash flows from operating activities of
753 thousand dollars and 2,286 thousand dollars respectively.
The management's plans to advance the Company’s business situation include, amongst
else: expanding its customer base, developing new products, making the production floor
and headquarters more efficient, expanding operations with factors of production in the
Far East, and developing a brand. In 2012 the Company expanded, for the first time, its
distribution channels to the field of direct distribution of the brands of X – technology
Swiss research & development GmbH (hereinafter- “XTS”), in the field of activewear. In
the framework of the business cooperation with XTS, the Company will manufacture
and distribute, exclusively, clothing in the field of activewear and socks in the United
States, for which XTS is the right-holder, and they would be distributed in the American
continent during the manufacturing period.
Furthermore, the Company has been negotiating with an incorporated private company
in China regarding a long term joint venture between both parties, the main goal of
which is the manufacturing of clothing using the “Seamless” technology.
On March 3, 2013, the Board of Directors decided on leaving the field of manufacturing
and marketing of swimwear and beachwear. For additional details see Note 4, as
follows.
These activities support the Company’s efforts to restore its position as a world leader of
seamless technology.
On May 19, 2013, the Company received a Letter of Waiver from the lending banks
which amends some of the financial covenants that the Company is required to meet, as
detailed in Note 9a, as follows.
The Company's management estimates, as the date of signing the financial statements,
that the chance of the Company meeting the financial covenants is reasonable; although,
there is no certainty that it will meet the financial covenants in the coming year, as
meeting them is subjected to events occurring in the future.
Note 2 - Significant accounting principles
a. Form of preparation of the interim consolidated financial statements
The interim consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for the preparation of financial statements
Tefron Ltd. Notes to the interim consolidated financial statements
00
Note 2 - Significant accounting principles (cont.)
a. Form of preparation of the interim consolidated financial statements (cont.)
for interim periods, in accordance with International Accounting Standard 34
"Financial Reporting for Interim Periods" and in accordance with the disclosure
requirements of Chapter D of the Securities Regulations (Periodic and Immediate
Reports) -1970.
The significant accounting policies and methods of calculation used in preparing the
interim consolidated financial statements are consistent with those used in preparing
the annual financial statements.
b. New IFRS which were implemented by the Company for the first time
IAS 19 (amended) - employee benefits
In June, 2011, the IASB published the IAS 19 (amended) which the Company is
obliged to implement as of January 1, 2013. The amendments relate mainly to the
accounting principles of the Defined Benefit Plan. The implementation of the IAS 19
(amended), for the first time, did not have any significant effect on the financial
statements of the Company.
Note 3 – Seasonality
The Company does not identify any seasonal trends in respect of intimate apparel and
activewear. In respect of swimwear, most of the Company's sales are made from December
until May. Consideration of such seasonality should be taken into account when studying the
operating results.
Note 4 – Discontinued operations
On March 3, 2013, the Board of Directors decided on leaving the field of manufacturing and
marketing of swimwear and beachwear.
On March 20, 2013, the Company and Macro Clothing Ltd. (hereinafter – “the Seller”), a
subsidiary of the Company, signed on an agreement with Gottex Swimwear Brands Ltd.
(hereinafter – “the Purchaser”), in the framework of which the Seller would sell the Purchaser
its operations in the field of developing, manufacturing and marketing of beachwear and
swimwear, including the intellectual property and goodwill of the Seller in regards to the
aforementioned operations, the client and suppliers list, and all of the Seller’s rights in the
incorporated companies in Hong Kong and China (hereinafter: “the Agreement” or “the
Transaction” and “the Operations”, respectively).
In return to the aforementioned selling, upon the completion of the transaction, the Purchaser
would pay the Seller a total sum of 300 thousand dollars US plus VAT as applicable by law.
Furthermore, the Agreement includes clauses regarding non-competition by the seller or any
of the companies related to it in the field of swimwear, for a limited period of time, as well as
clauses regarding indemnity the Purchaser in entitled to from the Seller for damages that
might be caused to it due to false presentations and/or legal claims and/or demands by any
third party, and all of the above as detailed in the Agreement.
Tefron Ltd. Notes to the interim consolidated financial statements
02
Note 4 – Discontinued operations (cont.)
It should be noted that the Agreement is subjected to a number of conditions, amongst of
which, the completion of a Due diligence and the approval of the Company’s lending banks.
For March 31, 2013, the Company classified fixed assets relating to the discontinued
activities on the sum of 200 thousand dollars, to the assets held for sale item. The fixed assets
were presented according to their fair value as of March 31, 2013.
The following is the data regarding the operations’ outcomes relating to the discontinued
operations:
For the three months
ended
March 31,
For the year
ended
December 31
2013 2012 2012
Unaudited Audited
Dollars thousands
Sales 5,890 8,609 14,527
Cost of sales 4,149 6,457 11,224
Gross profit 1,741 2,152 3,303
Selling and marketing expenses 850 1,477 4,801
General and administrative expenses 113 (25) (11)
Other expenses 294 - -
Operating profit (loss) 484 700 (1,487)
Financing expenses, net 114 31 367
Taxes on income - (140) (1,240)
Income (loss) relating to discontinued operations 370 529 (3,094)
The following is the data regarding the balance of other comprehensive loss, net, attributed to
the Company’s shareholder, which was recorded to the Shareholders’ equity, relating to the
discontinued operations:
March 31 December, 31
2013 2012 2012
Unaudited Audited
Dollars thousands
Actuarial loss from defined benefit plan - - (16)
Tefron Ltd. Notes to the interim consolidated financial statements
03
Note 4 – Discontinued operations (cont.)
The following is data regarding cash flows, net relating to the discontinued operations that
resulted from (used for) the activities:
For the three months
ended
March 31,
For the year
ended
December 31
2013 2012 2012
Unaudited Audited
Dollars thousands
Operating activities 704 600 (2,828)
Investing activities - (3) (14)
Note 5 – Inactive assets
On March 3, 2011 the Company decided to discontinue the production in the Cut & Sew field
in Israel. This decision was due to the decline in the levels of production in Israel of this field
until reaching minor production at the end of 2010. The decline in production in Israel was
due to the transfer of production lines abroad and also due to the discontinuation of
production of losing products. The Company took a decision to realize the production assets
and started a process of locating a potential buyer. As a result, the Company reclassified the
machines used in these operations from the fixed assets item to the assets held for sale item.
Since a long period of time has passed and the Company was successful in realizing those
assets only partially, in 2012 the Company classified the remaining assets that have yet to be
realized to the non-current assets item, and this was done only after an independent qualified
evaluator gave his estimation regarding the value of the equipment as of that day. As of the
date of the aforementioned classification, the equipment is handled as inactive fixed assets
and is reduced systematically.
Note 6 – Additional significant events during the period of the report
a. Receipt of a Letter of Waiver from the lending banks
On March 7, 2013, the Company received Letters of Waiver concerning some of the
financial covenants which were determined in regard to the fourth quarter of 2013, as
follows:
(1) The tangible shareholders equity that is defined in the agreement with the banks will
not be less than 27.5 million dollars instead of 35 million dollars as defined in the
Letter of Amendment to the agreement with the banks as of December 24, 2010.
(2) The balance of the Company's trade receivables (less the trade receivables’ balances
for which the Company carried out factoring transactions) will not be less than 13
million dollars instead of 14 million dollars as defined in the Letter of Amendment to
the agreement with the banks as of December 24, 2010.
It is noted that no deviation of the aforementioned amounts would be allowed.
Tefron Ltd. Notes to the interim consolidated financial statements
04
Note 6 – Additional significant events during the period of the report (cont.)
b. Granting options to the consultant
On March 17, 2013 the Company's Board of Directors approved the granting of 12,500
option warrants which can be exercised to 12,500 ordinary shares of NIS 10 par value
each to the consultant who is not an interested party in the Company and will not
become an interested party in the Company after the granting. The allotment of the
option warrants to the offeree will be carried out according to the option plan for
employees, officers and consultants of the Company. The exercise price for every
option will be 3.8 dollars after being translated to NIS at the representative rate of the
US dollar on the date prior to the date of granting. Entitlement to realize the options
will vest over a period of three years as of March 17, 2013.
The market value of the Company’s shares on the day of the granting was 3.4 dollars.
The value of the benefit inherent in granting of these options according to the share
price on the date of trading on the stock exchange aggregates 20 thousand dollars.
Note 7 – Operating segments
a. General:
The Group’s companies are engaged in two operating business segments:
Seamless apparel
("Seamless")
- Design, development, production and sale of intimate
apparel and activewear by the "seamless" method.
Knitted apparel ("Cut
& Sew")
- Design, development, production and sale of intimate
apparel, swimwear and activewear by the "Cut & Sew"
method.
Design is done mostly in Israel; production is done mostly
in the Far East, while the sale of the finished products is
carried out mainly in the USA and Europe.
The Company's two operating segments take place at a number of main geographical
regions in the world. In Israel, the Company’s place of residence and that of its
subsidiaries, Hi-tex founded by Tefron Ltd., and Macro Clothing Ltd., is carried out the
process of design, development and sales operations of the intimate apparel, activewear
and swimwear. It should be noted that the operation of the swimwear was discontinued,
following the Company’s Board of Directors decision as of March, 3, 2013 as mentioned
in Note 4 aforementioned. The production process of the Seamless items is carried out in
Israel, Jordan and the Far East, while the production process of the Cut & Sew items is
carried out mainly in the Far East. The subsidiaries, Tefron USA and Tefron England,
carry out the marketing and sales operations.
The information that the Company provides in accordance with the IFRS 8 definitions is
based on available financial information which is reviewed regularly and is used by the
Chief Operating Decision Maker (CODM) so as to make decision regarding the
resources to be allocated to the segment and in order to evaluate the segment’s
performance. The Chief Operating Decision Maker is the CEO. Based on the criteria in
IFRS 8 regarding determining the reportable segment operations, the available financial
Tefron Ltd. Notes to the interim consolidated financial statements
05
Note 7 – Operating segments (cont.)
a. General (cont.):
information is reviewed by the Company's CEO, and the Company has determined that it
operates in two reportable operating segments.
The Group's financing (including financing costs and financing revenues) and taxes on
income are managed on a Group basis and do not relate to operating segments.
b. Reporting on operating segments:
For the three months period ended
March 31, 2013
For the three months period ended
March 31, 2012
Seamless
Cut &
Sew
Total
Seamless
Cut &
Sew(*)
Total
Unaudited
Dollars thousands
Revenues from external
parties 20,409 359 20,768 19,366 409 19,775
Gross profit (loss) 3,521 (24) 3,497 3,007 64 3,071
Segmental results (389) (66) (455) (637) 44 (593)
Financing expenses, net (336) (747)
Tax benefit 55 7
Profit from discontinued
operations
370
529
Loss (366) (804)
(*) Restated due to discontinued operations, see Note 4.
For the year ended December 31, 2012
Seamless
Cut & Sew
(*)
Total
Audited
Dollars thousands
Revenues from external parties 96,583 2,380 98,963
Gross profit 16,555 476 17,031
Segmental results 1,786 242 2,028
Financing expenses, net (1,625)
Tax benefit 2,233
Loss from discontinued operations (3,094)
Loss (458)
Tefron Ltd. Notes to the interim consolidated financial statements
06
Note 8 – Financial instruments
a. Fair value
The carrying amounts in the financial statements of the cash, trade receivables, other
receivables, bank credit and long-term loans, trade payables and other payables
approximate their fair value.
b. Classification of financial instruments at fair value
The financial instruments presented in the balance sheet by fair value are classified by
groups with similar characteristics of fair value hierarchy as follows, that was
determined by reference to the source of inputs used to derive the fair value:
Level 1: Quoted prices (unadjusted) in active market for identical assets and liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable
either directly or indirectly.
Level 3: Inputs that are not based on observable market data (valuation techniques
without the usage of observable market inputs).
For financial instruments recognized at fair value periodically, the company estimates at
the end of each reporting period whether there have been transfers between different
levels of the fair value hierarchy.
As of March 31, 2013, the Company holds financial instruments measured at fair value
by the following classifications:
Financial assets measured at fair value
Level 2 Level 3 Total
Dollars thousands Financial assets measured at fair value Investment in securities available for sale - 323 323 Derivatives for forward transactions 34 - 34 Total 34 323 357
Financial liabilities measured at fair value
Liabilities for bank options (370) - (370)
Note 9 – Events subsequent to the balance sheet date
a. Receipt of a Letter of Waiver from the lending banks
In continuation of the Letters of Waiver that were granted to the Company by the
landing banks as detailed in Note 6a aforementioned, on May 19, 2013, the Company
received Letters of Waiver regarding some of the financial covenants which were
determined in regard to the first quarter of 2014, as follows:
Tefron Ltd. Notes to the interim consolidated financial statements
07
Note 9 – Events subsequent to the balance sheet date (cont.)
a. Receipt of a Letter of Waiver from the lending banks (cont.)
(1) The tangible shareholders equity that is defined in the agreement with the banks will
not be less than 27.5 million dollars instead of 35 million dollars as defined in the
Letter of Amendment to the agreement with the banks as of December 24, 2010.
(2) The balance of the Company's trade receivables (less the trade receivables’ balances
for which the Company carried out factoring transactions) will not be less than 13
million dollars instead of 14 million dollars as defined in the Letter of Amendment to
the agreement with the banks as of December 24, 2010.
b. End of term of The company’s CEO
On May 19, 2013 the Company’s CEO, Mr. Amit Meridor announced on the end of his
term of office. The Board of Directors established a search committee in order to
examine candidates for the position of CEO of the Company. The committee is
expected to deliver its conclusions to the Board in the near future. Mr. Amit Meridor is
going to continue to serve as the Company’s CEO until the appointment of a new CEO
or until August 19, 2013, whichever comes first.