B.S.D CROWN LTD.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF 31 MARCH 2015

UNAUDITED

IN U.S. DOLLARS





 

INDEX

Report on Review of Interim Condensed Consolidated Financial Statements

To the Shareholder and Board of Directors of

B.S.D CROWN LTD.

Introduction:

We have reviewed the accompanying interim condensed consolidated statement of financial position of B.S.D CROWN LTD.   and its subsidiaries ("the Group") as of 31 March 2015 and the related interim condensed consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the three month period then ended and explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with IAS 34, "Interim Financial Reporting ("IAS 34"). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

The Group`s financial statements as of 31 March 2014 and for the three months then ended reviewed by another auditor who expressed an unqualified opinion on those statements on May 29, 2014.

Scope of review:

We conducted our review in accordance with International Standard on Review Engagements 2410, 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 International 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 condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

Brightman Almagor Zohar & Co.

Certified Public Accountants

A member firm of Deloitte Touche Tohmatsu Limited

Tel-Aviv 28 May ,2015

B.S.D CROWN LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

B.S.D CROWN LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

B.S.D CROWN LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Basic and diluted net earnings per share attributable to Company's equity holders (in U.S dollars):

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

(*) Less then, 0.01 per share USD.

B.S.D CROWN LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

B.S.D CROWN LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

B.S.D CROWN LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

B.S.D CROWN LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

B.S.D CROWN LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

NOTE 1   -         GENERAL

B.S.D Crown Ltd. ("B.S.D" or the "Company") is a corporation registered in Israel.

In August 2014 the Company effected a change of its name from Emblaze Ltd. to B.S.D Crown Ltd.

NOTE 2   -         SIGNIFICANT ACCOUNTING POLICIES

a.      Basis of preparation of the interim consolidated financial statements:

The interim condensed consolidated financial statements for three month periods ended 31 March 2015 have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the European Union. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2014.

b.      Income tax:

The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings. In order to calculate the average annual effective income tax, the company reduces tax losses that no deferred tax assets were recognized in respect to them, and it expects them to reduce the annual current taxable profit.

The major components of income tax expense in the interim condensed statement of profit or loss are: Current income tax expense, Deferred income tax expense relating to origination and reversal of temporary Differences except to the extent that the tax arises from transactions which recognized directly in equity and business combinations.

NOTE 3   -    DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THE ADOPTION

a.      IFRS 13 Fair Value Measurement:

The amendment is applied prospectively and clarifies that the portfolio exception in IFRS 13 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of IFRS 9 (or IAS 39, as applicable). This amendment has no impact on the financial statements.

b.  Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

IAS 19 requires an entity to consider contributions from employees or third parties when accounting for defined benefit plans. Where the contributions are linked to service, they should be attributed to periods of service as a negative benefit. These amendments clarify that, if the amount of the contributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service. This amendment is effective for annual periods beginning on or after 1 July 2014. These amendments have no impact on the financial statements.

c.       An amendment to IAS 24 "Related Party Disclosures" (regarding key management personnel)

         The amendment clarifies that a management company providing key management personnel services to the reporting entity is a "related party" of the reporting entity. The amendment is applied retrospectively for annual reporting periods beginning on or after July 1, 2014 or thereafter.
 

NOTE 4   -         SUPPLEMENTARY INFORMATION

a.      Loan agreement to controlling shareholder:

On 24 February, 2015, Israel 18, Israel 180 Ltd. (“Israel 180”) and Orot Israel 18 Ltd. (“Orot Israel” and together, the “Israel 18 Group”) entered into a loan agreement (the “Loan Agreement”) for a loan to be provided by Zwi Williger (“ZW”) and Joseph Williger (“JW” and together, the “Willigers”), either in their personal capacities or through companies under their control (the “Lenders”), pursuant to which Israel 18 was to borrower a sum of NIS 83 million (approximately USD 20.9 million) (the “Loan Amount”).

The Loan Amount was to be used, among others, for the purposes of exercising the call options in respect of a further 19.09 per cent of the Company’s shares (the “Options”).

Following the failure by the parties to the Loan Agreement to reach completion thereof The Loan Amount was returned to the Willigers on 7 May, 2015.

b.  Put options over Company shares:

(1)      On 4 March, 2015, ZW, a director of Willi-Food Investments Ltd. (“WFI”) and the chairman of the board of directors of G. Willi-Food International Ltd. (“WFINT”) and JW, the president of WFINT and chairman of the board of directors of WFI, each, exercised options over 66,667 shares of WFINT (the “Williger Shares”). In consideration for the Williger Shares, each of ZW and JW paid the amount of USD 433 thousand to WFI, reflecting an exercise price of USD 6.5 per each of the Williger Shares.

(2)      Following ZW and JW’s acquisition of the abovementioned Williger Shares, on 24 March 2015, the Company paid an amount of USD 800 thousand to each of ZW and JW and acquired 66,667 shares of WFINT from each of ZW and JW, reflecting an exercise price of USD 12 per share of WFINT.

(3)      Following a further exercise by ZW of part of his put options in respect of 166,666 shares of WFINT, on 7 May, 2015, the Company paid an aggregate total amount of USD 2 million and acquired an aggregate of 166,666 shares of WFINT. As such, the Company now directly holds 2.29% of the shares of WFINT and indirectly holds a further approximately 36.59% of the shares of WFINT through WFI.

(4)      On 26 May 2015, the Company paid amount of USD 1 Million to ZW as partial pre-payment in accordance with the terms of an agreement for the acquisition of 337,741 shares of WFINT.

c.      Claim against controlling shareholder:

On 24 February, 2015, Public Joint Stock Company Alfa Bank (“Alfa”), a Ukrainian banking entity, submitted a request to the Tel Aviv District Court (the “Court”) to attach certain assets as well as direct and indirect holdings of the Company’s ultimate controlling shareholder, Oleksandr Granovskyi. This request was submitted as part of a claim filed by Alfa against Mr Granovskyi and others with respect to alleged debts owing by them to Alfa. On 11 April, 2015, Alfa and Mr Granovskyi entered into a settlement agreement, following which the Court cancelled all interim measures previously ordered by it in the course of the relevant proceedings.

NOTE 5   -         FINANCIAL INSTRUMENTS

Financial instruments that are not measured at fair value:

Except as detailed in the following table, the Group believes that the carrying amount of financial assets and liabilities that are presented at amortised cost in the financial statements approximates their fair value.

Financial liabilities:

Below are details of the Group's financial assets that are measured in the Company's statement of financial position at fair value by levels:

Financial assets at fair value:

NOTE 6   -         OPERATING SEGMENTS

a.      General:

Upon the completion of the Company’s acquisition of WFI in May 2014, the Group's main activity and its sole operating segment are import, marketing and distribution of food products to retail chains, supermarkets, wholesalers, and institutions mainly in Israel.

An operating segment is identified on the basis of information that is reviewed by the chief operating decision maker ("CODM") to make decisions about resources to be allocated and assess its performance.

b.      Reporting segments:

(*)    Other includes mainly unallocated corporate general and administrative expenses and      expenses relating to research and development activities.

Seasonality

The operating results of WFI and its subsidiaries (the “WFI Group”) may be subject to variations from quarter to quarter depending, among others, the timing of sales campaigns and major Jewish holidays. Therefore, the operating results of WFI Group in the period ended 31 March 2015 are not necessarily indicative of its operating results for the year.  

NOTE 6   -    OPERATING SEGMENTS (Cont.)

c.       Revenues from major customers that contributed 10% or more to the Company’s group (the “Group”) revenues (as percentage of the total revenue):

The revenues from the following products contributed 10% or more to the Group revenues (as percentage of the total segment revenue):

NOTE 7   -         SUBSEQUENT EVENTS

On 1 April 2015 the Company appointed Mr. Oleksandr Granovskyi, as the chairman of the board of directors instead of Abraham Wolff who was appointed as a director of the Company and as a the chairman of its board of directors, on 14 August 2013. Mr. Wolff announced on the same day, his resignation as a director of the Company.