|
Note 3 - Property, Plant And Equipment:
A. Composition of assets, grouped by major classifications, and
changes therein during 1998, are as follows:
| |
Cost |
Accumulated depreciation |
| |
Balance at beginning of year |
Additions during the year |
Retirements during the year |
Other changes (see c) |
Balance at end of year |
Balance at beginning of year |
Depreciation charged during the year |
Depreciation in respect of retirements during the year |
Other changes (see c) |
Balance at end of year |
Depreciated Balance - December 31 |
|
1998 |
1997 |
| |
U.S.$ in thousands |
U.S.$ in thousands |
|
Land - including leasehold land |
16,701 |
1,817 |
|
1,943 |
20,461 |
|
|
|
|
|
20,461
|
16,701
|
|
Buildings*
|
192,617
|
6,397
|
(113)
|
15,099
|
214,000
|
43,677
|
7,282
|
(25)
|
(334)
|
50,600
|
163,400
|
148,940
|
|
Machinery and equipment
|
362,413
|
29,107
|
(7,512)
|
17,976
|
401,984
|
169,663
|
32,631
|
(7,690)
|
118
|
194,722
|
207,262
|
192,750
|
|
Motor vehicles, computer
equipment, furniture and other assets
|
93,225
|
15,648
|
(4,325)
|
3,756
|
108,304
|
41,803
|
13,348
|
(2,556)
|
1,739
|
54,334
|
53,970
|
51,422
|
|
Payments on account of fixed assets
|
7,460
|
1,570
|
(102)
|
961
|
9,889
|
|
|
|
|
|
9,889
|
7,460
|
|
|
672,416
|
54,539
|
(12,052)
|
39,735
|
754,638
|
255,143
|
53,261
|
(10,271)
|
1,523
|
299,656
|
454,982
|
417,273
|
|
Net of investment grant received, see b. below
|
8,663
|
439
|
|
|
9,102
|
4,353
|
149
|
|
|
4,502
|
4,600
|
4,310
|
|
* Includes financial expenses capitalized
|
11,673
|
481
|
|
|
12,154
|
1,339
|
970
|
|
|
2,309
|
9,845
|
10,334
|
|
Rights
to leasehold land extend over original periods of 49 years ending in the years
2012-2047.
B. Investment grants have been received from the State of Israel
by Teva and certain of its subsidiaries under the terms of the Law for the
Encouragement of Capital Investments, 1959 (see also note 9a(1)). As
security for implementation of the approved projects and compliance with the
conditions of the approvals, floating charges have been registered on the above
companies' assets in favor of the State of Israel.
C. These changes relate to differences
resulting from translation of the financial statements of subsidiaries drawn up
in non-dollar currency.
Note 4 - Intangible Assets:
| |
Original amount |
Accumulated
amortization |
| |
December 31 |
December 31 |
| |
1998 |
1997 |
1998 |
1997 |
| |
U. S. $ in thousands |
| Goodwill - in subsidiaries |
183,793 |
93,056 |
22,324 |
17,944 |
| Know-how, patents and product rights |
14,485 |
16,658 |
3,749 |
10,154 |
| |
198,278 |
109,714 |
26,073 |
28,098 |
Note 5 - Employee Rights Upon Retirement:
a. Israeli law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The following principal plans relate to employee rights upon retirement, as applicable to the Group's Israeli companies.
1) Pension plans for the majority of the Company's employees. Under collective labor agreements, these external pension plans provide 72% of the severance pay liability. The pension and severance pay liabilities covered by these plans are not reflected in the financial statements as the pension and severance pay risks have been irrevocably transferred to the pension funds.
2) Insurance policies for employees in managerial positions. These policies provide coverage for severance pay and pension liabilities of managerial personnel. The policies are Company assets and under labor agreements, subject to certain limitations, they may be transferred to the ownership of the beneficiary employees.
3) Pension and severance pay liabilities not covered as above are fully provided for in the Company's financial statements. The Company, at its discretion, deposits monies in funds managed by major Israeli banks which are earmarked as cover for these liabilities.
Employees dismissed before attaining retirement age are entitled to severance pay, computed on the basis of the most recent salary. In the event that the amounts accumulated in the pension and severance pay funds are insufficient to cover severance pay computed as above, Teva and its subsidiaries are obligated to supplement the deficiency. Past experience indicates that the vast majority of employees continue in service until retirement age. Accordingly, management is of the opinion that the liability for supplemental severance pay is insignificant; consequently, no provisions were made.
b. The employees of Pharmachemie in the Netherlands and APS/Berk in the U.K. can participate in the following pension schemes: a defined benefits scheme providing benefits based on final pensionable pay and a defined contribution scheme.
c. Teva USA has various defined contribution plans for the benefit of its employees. Teva USA's contributions under these plans are based on specified percentages of pay.
d. The employees of the Hungarian and Italian subsidiaries are entitled to a retirement grant when they leave the company. In the consolidated accounts, a full accrual of the Company's liability is made based on length of service and remuneration of each employee at the balance sheet date.
e. The balance sheet liability for employee rights upon retirement, and the amount funded, are composed as follows:
| |
December 31 |
| |
1998 |
1997 |
| |
U.S. $ in thousands |
| Liability |
30,200 |
32,373 |
| L e s s amount funded |
26,305 |
27,959 |
| Unfunded balance |
3,895 |
4,414 |
Under Israeli GAAP, amounts funded, as above, are deducted from the related severance pay liability. Under U.S. GAAP, the amounts funded should be presented as a long-term investment among the Company's assets.
f. The net amounts of pension and severance pay charged to income in the years 1998, 1997 and 1996 (excluding, in 1998, amounts relating to termination of employment, which were charged to restructuring expenses) were approximately $ 4.7 million, $ 3.8 million and $ 2.6 million, respectively.
Click here for the next page
|
|
