Africa Israel Investments Ltd.

Transcription

1 Separate-Company Financial Information At September 30, 2014

2 Separate-Company Financial Information At September 30, 2014 Unaudited Contents Page Auditors Special Report regarding the Separate-Company Financial Information 2 Financial statements: Condensed Interim Data regarding Financial Position 3 4 Condensed Interim Data regarding Income 5 Condensed Interim Data regarding Comprehensive Income 6 Condensed Interim Data regarding Cash Flows 7 8 Additional Information with respect to the Condensed Interim Separate-Company Financial Information 9 10

3 To: The Shareholders of Africa Israel Investments Ltd. Dear Sirs: Re: Special Report of the Auditor regarding the Interim Separate-Company Financial Information in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970 We have reviewed the interim separate-company financial information presented in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970, of Africa Israel Investments Ltd. (hereinafter the Company ) as at September 30, 2014 and for the nine-month and three-month periods then ended. The interim separate-company financial information is the responsibility of the Company s Board of Directors and Management. Our responsibility is to express a conclusion on the interim separate-company financial information for this interim period based on our review. The information included in the separate-company financial information relating to the carrying value of the Company s investments and its share in the income of investee companies is based on financial statements some of which were reviewed by other auditors and our conclusion, to the extent it relates to amounts included in respect of those companies, is based on the review reports of the other auditors. Scope of the Review We conducted our review in accordance with Review Standard 1, Review of Financial Information for Interim Periods Performed by the Independent Auditor of the Entity of the Institute of Certified Public Accountants in Israel. A review of financial information for interim periods 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 generally 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 and on the review reports of other auditors, nothing has come to our attention that causes us to believe that the above-mentioned financial information was not prepared, in all material respects, in accordance with the provisions of Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), Somekh Chaikin Certified Public Accountants (Isr.) Breitman Almagor Zohar & Co. Certified Public Accountants (Isr.) November 27,

4 Separate-Company Data regarding Financial Position At September 30 At December (Unaudited) (Audited) Current Assets Cash and cash equivalents 227, , ,970 Short-term investments 483,260 15,246 Marketable securities 9,096 6,773 8,964 Trade receivables Other receivables and debit balances 14,834 11,508 30,207 Receivables investee companies 14, , ,502 Receivables income tax Inventory of buildings held for sale 16,896 8,694 12, , , , Non-Current Assets Investments in investee companies 6,218,683 6,242,164 6,098,189 Loans to investee companies 241, , ,509 Property, plant and equipment Investment property 74,130 93,810 76,830 Long-term loans, investments and other debit balances 55, Inventory of real estate 1,812 1,812 1,812 Intangible assets 1,005 1,194 1,130 6,593, ,662, ,420, ,359,888 7,034,932 6,802,425 3

5 Separate-Company Data regarding Financial Position At September 30 At December (Unaudited) (Audited) Current Liabilities Debentures 140,736 94,081 94,284 Credit from banks 64, , ,278 Contractors and suppliers 1, ,618 Other payables and credit balances, including financial derivatives 104, ,600 50,422 Payables investee companies 27,691 20,505 76,106 Advances from customers 27,345 22,202 26,227 Provisions 8,507 9,572 8, , , , Long-Term Liabilities Loans from investee companies 49, ,307 19,794 Debentures 2,930,348 2,509,737 2,535,963 Liabilities to banks 10, , ,765 Excess of losses over investments in investee companies 3, Other liabilities 100,419 11, ,583 Liability for deferred taxes 34,359 26,883 26,883 Employee benefits 976 1,045 1,047 3,125,596 3,026,902 2,876, Equity Share capital and premium 384, , ,647 Premium on shares 4,492,044 4,191,238 4,191,341 Capital reserves (2,229,126) (2,142,490) (2,234,652) Retained earnings 1,212,668 1,202,919 1,205,103 Total equity attributable to the owners of the Company 3,860, ,632, ,542, ,359,888 7,034,932 6,802,425 Lev Leviev Avraham Novogrocki Menashe Sagiv Chairman of the Board of Directors CEO CFO Approval date of the financial statements: November 27,

6 Separate-Company Data regarding Income For the Nine Months Ended Three Months Ended Year Ended September 30 September 30 December (Unaudited) (Unaudited) (Audited) Revenues Construction and real estate transactions 173 8, ,154 Rental and operation of properties 3,377 4,052 1,191 1,315 5,419 Income of investee companies, net 284, , , ,300 Increase in fair value of investment property, net 51 Other income 8,421 14,437 2,058 9,581 23, , , , ,247 34,401 Cost and expenses Construction and real estate transactions 1,452 3, ,128 Maintenance, supervision and management of real estate and properties Loss from investee companies, net 231,930 Decline in fair value of investment property, net 2,838 5,832 2,800 10,617 Administrative and general expenses 18,507 22,198 5,625 6,751 31,941 Other expenses 2,689 7, ,766 7,702 25,814 39,677 10,113 9, ,060 Operating income (loss) 270, , , ,109 (250,659) Financing expenses (271,555) (342,016) (93,907) (124,544) (432,510) Financing income 15,263 8,426 10,553 2, ,506 Financing income (expenses), net (256,292) (333,590) (83,354) (122,040) 175,996 Income (loss) from operations before taxes on income 13,884 (77,649) 58,551 43,069 (74,663) Taxes on income (7,378) (169) (3,684) (56) (206) Income (loss) for the period attributable to the owners of the Company 6,506 (77,818) 54,867 43,013 (74,869) 5

7 Separate-Company Data regarding Comprehensive Income For the Nine Months Ended Three Months Ended Year Ended September 30 September 30 December (Unaudited) (Unaudited) (Audited) Income (loss) for the period attributable to the owners of the Company 6,506 (77,818) 54,867 43,013 (74,869) Items other comprehensive income where after their initial recognition in comprehensive income were transferred or will be transferred to the statement of income Currency translation differences in respect of foreign activities and other reserves in respect of investee companies 5,830 (336,983) 105,052 (69,729) (431,142) Foreign currency translation differences in respect of foreign activities recorded in the statement of income 71,950 75,550 Realization of revaluation reserve in respect of acquisition in stages (8,012) (8,012) Total other comprehensive income (loss) for the period where after its initial recognition in comprehensive income in were transferred or will be transferred to the statement of income, net of tax 5,830 (273,045) 105, (69,729) (363,604) Items other comprehensive income that will not be transferred to the statement of income Re-measurement of defined benefit plan (1,719) Total other comprehensive loss for the year that will not be transferred to the statement of income, net of tax (1,719) Total comprehensive income (loss) for the period attributable to the owners of the Company 12,336 (350,863) 159,919 (26,716) (440,192) 6

8 Separate-Company Data regarding Cash Flows For the Nine Months Ended Three Months Ended Year Ended September 30 September 30 December (Unaudited) (Unaudited) (Audited) Cash flows from operating activities Income (loss) for the period attributable to the owners of the Company 6,506 (77,818) 54,867 43,013 (74,869) Adjustments: Depreciation and amortization 502 1, ,358 Decline in value of investments, net 4, ,612 Gain on sale of investment property (6,941) Gain on sale of investee companies (6,417) (6,417) (6,417) Change in fair value of investment property, net 2,838 5,832 2,800 (51) 10,617 Financing expenses (income), net 252, ,989 84, ,783 (185,675) Share of Company in results of investee companies, net (284,019) (268,698) (148,713) (163,300) 231,930 Loss (income) from marketable securities, net (132) 10,349 (2,111) 784 8,158 Share-based payment transactions 298 1, Taxes on income 7, , Change in inventory of buildings held for sale (4,747) (155) (3,122) Change in trade receivables and other receivables and debits 9,638 9, ,084 12,079 Change in advances from customers 1,118 (15) ,010 Change in trade payables and other payables and credits (7,704) (6,890) (994) (4,345) (8,071) Change in provisions and employee benefits (2,872) (3,015) (33) (146) (461) Income taxes received (paid), net 124 (636) (50) (57) (673) Net cash provided by (used in) operating activities before transactions with investee companies (18,568) (8,915) (5,416) 714 (12,334) Net cash from operating activities in respect of investee companies 46,378 4,402 18,190 (280) 32,245 Net cash provided by (used in) operating activities 27,810 (4,513) 12, ,911 7

9 Separate-Company Data regarding Cash Flows For the Nine Months Ended Three Months Ended Year Ended September 30 September 30 December (Unaudited) (Unaudited) (Audited) Cash flows from investing activities Interest received 1,862 2, ,385 Dividends received 58,082 20,647 39,532 20,647 20,669 Proceeds from sale of investee companies 10,713 10,713 10,713 Repayment of long-term deposits and loans 1,769 1,000 2,599 Investment in long-term deposits and loans (56,641) (55,783) Acquisition of property, plant and equipment (191) (79) (136) (38) (131) Acquisition of intangible assets (137) (279) (89) (105) (408) Investment in investment property (138) (7,412) (100) (29) (8,017) Proceeds from sale of investment property 15,900 2,000 Short-term investments, net (468,167) (467,864) Net cash provided by (used in) investing activities before transactions with investee companies (449,430) 28,023 (484,144) 32,575 30,810 Net cash from investing activities in respect of transactions with investee companies 164,147 1,860 18,252 24,202 1,781 Net cash provided by (used in) investing activities (285,283) 29,883 (465,892) 56,777 32,591 Cash flows from financing activities Repayment of loans and debentures (376,191) (543,159) (141,206) (28,878) (574,728) Receipt of long-term loans and liabilities 522,652 18, ,652 18, ,841 Issuance of Company shares less issuance expenses 305, , ,496 Proceeds from sale of options for shares 104 Acquisition of non-controlling interests (5,925) (5,925) Issuance of options for debentures 15,520 15,520 Interest paid (124,912) (114,972) (4,487) (4,232) (231,783) Net cash provided by (used in) financing activities before transactions with investee companies 342,996 (427,719) 392,479 (14,269) (475,995) Net cash from financing activities in respect of transactions with investee companies (144,986) (144,986) Net cash provided by (used in) financing activities 342,996 (572,705) 392,479 (14,269) (620,981) Increase (decrease) in cash and cash equivalents 85,523 (547,335) (60,639) 42,942 (568,479) Cash and cash equivalents at beginning of the period 135, , , , ,403 Impact of changes in the currency exchange rate on balances of cash and cash equivalents 6,497 (3,659) 7,533 (287) (3,954) Cash and cash equivalents at the end of the period 227, , , , ,970 8

10 Additional Information with respect to the Financial Data At September 30, 2014 (1) General Set forth below is condensed financial data from the Group s interim condensed consolidated financial statements as at September 30, 2014 (hereinafter the Consolidated Statements ) published as part of the Periodic Reports, which relate to the Company itself (hereinafter the Separate Interim Condensed Financial Information ) which is presented in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970, the Separate Interim Condensed Financial Information of a company. The Separate Interim Condensed Financial Information should be read together with separate-company financial information as at and for the year ended December 31, 2013 and together with the interim consolidated financial statements as at September 30, In this interim separate-company financial information: A. The Company Africa Israel Investments Ltd. B. Subsidiaries companies, including a partnership, the financial statements of which are fully consolidated, directly or indirectly, with those of the Company. C. Investee Companies subsidiaries and companies, including a partnership or a joint venture, the Company s investment in which is included, directly or indirectly, in the financial statements based on the equity method of accounting. (2) Significant additional information required for understanding the interim separate-company financial information A. In May 2014, a subsidiary, Danya Cebus Ltd., declared distribution of a dividend, in the amount of NIS 60,000 thousand. The Company s share in the dividend is about NIS 19 million, which was paid to the Company in June B. On August 14, 2014, a subsidiary, Africa Israel Properties Ltd., declared distribution of a dividend, in the amount of NIS 75,000 thousand. The Company s share in the dividend is about NIS 42 million, and it was paid to the Company in September C. The Company is carrying on negotiations for sale of its rights in four land plots and/or residential projects and/or proximate to residential projects (including sale of shares in companies owning rights as stated) (hereinafter the Properties ) to a subsidiary, Africa Israel Residences Ltd., as detailed below: 50% of the issued and paid-up share capital of Renanot Initiations and Investments Ltd. (hereinafter Renanot ), a company that holds part of the rights in land, having an area measuring about 42 dunams, in the Kibbutz Galil Yam nearby to Herzliya, which is intended for residential purposes, on which Renanot is constructing a residential project having a total of 660 residential units (including the share of the Kibbutz). 9

11 Additional Information with respect to the Financial Data At September 30, 2014 (2) Significant additional information required for understanding the interim separate-company financial information (Cont.) C. (Cont.) 40% of the issued and paid-up share capital of Afriram Ltd. (hereinafter Afriram ), a company that holds the ownership rights in 37.5% of a lot on an area measuring about 11 dunams (the share of Afriram is about 4 dunams), located on Ben Saruk St. in Tel-Aviv, and known as the Sumail complex, which is zoned for residential and commercial use. Afriram will act, together with others, to construct residential units and commercial space on the site, where Afriram will be entitled to about 93 residential units and about 1,530 square meters of commercial space. It is noted that Africa Residences has rights in the Sumail complex by virtue of its holdings in Ram-Nah Ltd. and Sumail Towers Ltd. 50% of the ownership rights in a lot measuring about 8 dunams, located in the Savyonei Yam neighborhood, in North Kiryat Yam, which is zoned for commercial use, including a commercial building on a built-up area for marketing measuring about 780 square meters, and additional building rights on an area measuring about 1,200 square meters. It is noted that the Savyonei Yam neighborhood is a neighborhood that was constructed by Africa Residences and that borders on this lot, and the intention of Africa Residences is to see to advancement of the zoning and construction of additional residential units. Lease rights (which are capitalized with reference to the building rights only) in a country and commercial site in the Savyon community, on an area measuring about 70 dunams, including a built-up country area of about 1,860 square meters, along with commercial areas and office space of about 3,000 square meters (a commercial center and two office buildings). Utilization of these areas for Africa Residences purposes, if and to the extent it is decided to acquire them, is subject, in part, to a change in the Urban Planning Scheme. It is clarified that at this preliminary stage, there is no certainty in connection with execution of the transactions, in whole or in part, due to, among other things, a failure to reach agreement regarding the terms of the transactions and/or due to findings of the due diligence examinations Africa Residences is performing and/or receipt of approvals and/or consents of third parties and/or the planning situation. D. In connection with management and services agreements with related parties see Notes 4B(2)(c), 4D(2), 4F(3), 4G(4), and 4G(6) to the consolidated financial statements. Regarding additional significant information see Notes 1, 4A, 4G(1), 4G(3), 4G(4), 4G(5), 10A, 10D and 10G to the condensed interim consolidated financial statements. 10