TEFRON LTD.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

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


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.


6

Tefron Ltd. Consolidated statements of comprehensive income


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)


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


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


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


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


9

Tefron Ltd. Consolidated statements of cash flows


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


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


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


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.


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:


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)


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:


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.


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


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)


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:


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.

TEFRON LTD.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

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