::Jerusalem Cigarette Co.LTD ::

INCOME STATEMEMT

Description	Notes	2007	2006
		JD	JD
SALES		49,877,819	49,129,047
LESS: COST OF SALES
BALANCE TO BEGIN FINISHED GOODS		1,585,524	1,133,635
ADD COST OF PRODUCTION		45,683,846	45,499,490
		47,269,370	46,633,125
LESS BALANCE TO END FINISHED GOODS		1,554,431	1,585,524
COST OF SALES		45,714,939	45,047,601
GROSS PROFIT		4,162,880	4,081,446

LESS EXPENSES
SALES AND MARKETING		636,523	576,507
GENERAL AND ADMINISTRATION		1,702,721	1,232,334
TOTAL EXPENSES		2,339,244	1,808,841

NET INCOME BEFORE NON TRADING INCOME		1,823,636	2,272,605
NON TRADING INCOME		358,623	373,847
NET INCOME BEFORE TAX		2,182,259	2,646,452
INCOME TAX PROVISION		327,798	396,516
NET INCOME BEFORE ALLOCATION		1,854,461	2,249,936

LESS ALLOCATIONS:
DIRECTORS FEES		8,250	8,250
INCOME TAX SETTLEMENT PRIOR YEARS		19,579	360,399
VOLUNTARY RESERVE			388,113
COMPENSATION PROVISION		123,737	12,228
PAYROLL TAX DIFFERENCE YEAR 2005		2,932
TOTAL ALLOCATION		154,498	768,990
NET INCOME FOR DISPOSAL		1,699,963	1,480,946