SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

Dated March 30, 2004

Commission File Number 333-100683

BARAN GROUP LTD.
(Translation of Registrant’s name into English)

Baran House
8 Omarim St. Industrial Park
Omer 84965
ISRAEL
(Address of Principal Corporate Offices)

Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.

Form 20-F x     Form 40-F o

Indicateby check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes o No x

BARAN GROUP LTD.
Form 6-K

Company Contact:  
Baran Group, USA
Alex Berd, Esq
212-207-4755
alex.berd@barangroup.com
 
Baran Group, Israel
Sasson Shilo, CFO
972-8-6200200
sasson.shilo@barangroup.com

BARAN GROUP REPORTS FOURTH QUARTER AND YEAR END 2003
FINANCIAL RESULTS

NEW YORK, NY - March 30, 2004 - The Baran Group Ltd. (NASDAQ, TASE: BRAN) announced its results of operations for the year ended December 31, 2003. a full and detailed report will be published in the Form 20-F in the coming month.

All U.S. $ figures are adjusted to December 31, 2003 exchange rate.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

Convenience translation into thousands of U.S. dollars
December
31,
2002
December
31,
2003
CURRENT ASSETS:            
Cash and cash equivalents       20,615     14,680  
Short-term investment       19,691     14,574  
Restricted Cash       318     300  
Account receivable       58,703     52,916  
Trade and income receivable    
Other       10,640     11,227  
Inventories       2,098     3,763  
Total current assets       112,065     97,460  
INVESTMENTS, LOANS AND    
LONG-TERM RECEIVABLES:    
Investments in associated companies       6,124     5,521  
Other investments, loans and long-term    
receivable       6,363     2,884  
Deferred income taxes       356     393  
        12,843     8,798  
LAND AND BUILDINGS FOR LEASE    
Cost       15,779     16,349  
Less- accumulated depreciation    
and amortization       1,685     2,101  
        14,094     14,248  
FIXED ASSETS    
Cost       33,588     34,332  
Less- accumulated depreciation    
and amortization       17,103     19,309  
        16,485     15,023  
GOODWILL,    
net of accumulated amortization       22,210     11,694  
 
OTHER INTANGIBLE ASSETS, net of    
Accumulated amortization       1,371     600  
        179,068     147,823  
LIABILITIES AND STOCKHOLDERS' EQUITY    
CURRENT LIABILITIES    
Short-term credit and bank loans       22,641     30,765  
Accounts payable and accruals    
Trade       22,182     15,456  
Other       35,551     25,773  
  Total current liabilities       80,374     71,994  
 
LONG-TERM LIABILITIES    
Liability-for employee rights    
upon retirement, net of amount funded       1,309     1,163  
Bank loans, net of current maturities       37,390     31,939  
Capital notes issued to minority    
Shareholders of a subsidiary, net       2,500     2,449  
Deferred income taxes       11     5  
Total long-term liabilities       41,210     35,556  
 
MINORITY INTERESTS       2,045     2,394  
 
SHAREHOLDERS' EQUITY       55,439     37,879  
TOTAL LIABILITIES    
AND STOCKHOLDERS' EQUITY       179,068     147,823  

Baran Group Ltd.
FINANCIAL HIGHLIGHTS
In thousands, except share and per share information)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Convenience translation from adjusted NIS
into thousands U.S. dollars
For the Year ended December 31
 
2001
2002
2003
Revenues       230,867     203,339     158,814  
Cost of Sales       190,119     172,219     142,536  
Gross Profit       40,748     31,120     16,278  
% Gross Profit       18 %   15 %   10 %
     
Research and Development Expenses, net       836     1,370     295  
Selling and Marketing, net       2,166     5,291     4,669  
General and Administrative       13,488     11,986     16,727  
Operating Profit       24,258     12,473     (5,413 )
% Operating Profit       11 %   6 %   -  
     
Financing Income (Expenses)       1,785     (3,911 )   (2,295 )
Other Income (Expenses)       94     237     167  
Goodwill impairment             -     (8,290 )
     
Income before Taxes       26,137     8,799     (15,831 )
Taxes on Income       10,161     3,871     2,244  
Income after Taxes on Income       15,976     4,928     (18,075 )
     
Share in Profits of Associated Companies       (725 )   237     (141 )
Minority Interest in Loss (Profits)       131     489     569  
Net Income       15,382     5,654     (17,647 )
Earning per Share - basic and diluted       2.035     0.73     (2.2 )

BARAN GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Convenience translation from adjusted NIS into
thousands U.S. dollars
Year ended December
2001
2002
2003
 CASH FLOWS FROM OPERATING ACTIVITIES:                
 Net income for the period       15,382     5,654     (17,647 )
Adjustments to reconcile net income to net cash    
provided by operating activities:       19,476     (40,263 )   3,191  
 Net cash provided by (used in) operating activities       34,858     (34,609 )   (14,456 )
 CASH FLOWS FROM INVESTING    
    ACTIVITIES:    
 Purchase of fixed assets and buildings for sale       (4,950 )   (4,730 )   (2,451 )
Proceeds from sale of investments in an associated    
company                   210  
Acquisition of subsidiaries consolidated for the    
first time       (2,520 )   (2,367 )   82  
 Sale of investment designed for sale                   1,122  
 Investment in associated companies       (225 )   (181 )
 Other investments acquired       (58 )
 Proceeds from sale of fixed assets       1,052     996     992  
Decrease (increase) in short-term deposits, net       1,351     200     (991 )
 Increase in restricted cash           (318 )
 Sale (purchase) of short-term marketable securities,    
 net       (89 )   (19,145 )   7,681  
 Increase in long term deposits       (2,490 )         (159 )
 Grant of long-term loan             (124 )   (55 )
 Net cash provided by (used in) investing    
 activities       (7,929 )   (25,669 )   6,431  

BARAN GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Convenience translation from adjusted NIS into
thousands U.S. dollars
Year ended December
2001
2002
2003
CASH FLOWS FROM FINANCING ACTIVITIES:                
Issuance of restricted shares       45  
Long-term bank loans received       5,838     34,706     332  
Repayment of long-term bank loans       (6,168 )   (1,812 )   (6,121 )
Dividend paid       (7,322 )   (2,990 )
Dividend paid to minority shareholders in consolidated    
subsidiary                   (50 )
Short-term bank credit - net       6,472     161     1,390  
Short-term bank loans - net       1,705     1,288     6,249  
Cost of acquisition of company shares held by a    
subsidiary           (399 )
Capital note issued to minority in a subsidiary                   556  
Net cash provided by (used in) financing activities       570     30,954     2,356  
TRANSLATION DIFFERENCES ON CASH BALANCES    
OF A SUBSIDIARY OPERATING INDEPENDENTLY       (2 )   22     (266 )
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS       27,497     (29,302 )   (5,935 )
 
BALANCE OF CASH AND CASH    
   EQUIVALENTS AT BEGINNING    
      OF PERIOD       22,420     49,917     20,615  
BALANCE OF CASH AND CASH    
   EQUIVALENTS AT END OF PERIOD       49,917     20,615     14,680  

A full and detailed discussion of Baran Group Ltd. activities for the year ended December 31, 2003, will be included in the forthcoming Form 20-F.

Full Year 2003

  • For the 2003 full-year period, the Company reported revenue of $159 million, compared to revenue of $203 million in the year ago period, a decrease of 22%.

  • In 2003 gross profit was $16.3 million, compared with gross profit of $ 31.1 million in 2002, a decrease of 48%. As a percentage of revenues, gross profit in the 2003 were 10% compared to 15% in 2002.

  • Operating income in 2003 declined to a loss of ($5.4) million from operating income of $12.5 million a year ago.

  • Income before taxes declined to loss of ($15.8) million from an income of $8.8 million in 2002.

  • The Company reported net loss of ($17.6) million in 2003, or ($2.2) per share, compared to net income of $5.6 million, or $0.73 per share, in 2002.

The decrease in revenues is mainly attributable to the local and worldwide recession, economic downturn, and to political changes and dominant presence of governmental entities in the infrastructure market in Israel, which resulted in the slowdown of large-scale projects that Baran has already retained.

Additionally, the decrease in revenues is also influenced by the completion of large scaled projects mainly in the Industry and Communication divisions and the fact that several existing and future large scaled infrastructure projects are suspended or postponed.

Another significant reason influencing the decrease in revenues is the severe and extensive difficulties arisen during the last quarter of 2003, in one of Baran’s large scaled projects; Baran recorded an accrual for additional costs of the project of approximately $1.4 million. Some of the difficulties may have further future implications and Baran and its partners are operating to resolve them.

Furthermore, Baran’s activity in the United States lagged behind the income target and its planned work budget and incurred losses during 2003. Additionally, in connection with the annual review of assets required by FAS 142 issued by the Financial Accounting Standard Board, as well as the IFAS 15 issued by the Israeli Financial Accounting Standard, Baran determined to writ down approximately $8.3 million of its goodwill and its amortization, resulting mainly of Baran Telecom Inc (Baran’s US subsidiary) goodwill impairment.

Liquidity and capital resource
Baran generated negative cash flow in the year ended December 31, 2003 in the amount of $14.5 as compared to a $34.6 negative cash flow in the year ended December 31, 2002. Baran’s primary source of funds in 2001 was cash generated from operations and retained earnings. However, in the years 2002 and 2003 during which the Baran suffered negative cash flow, Baran used past cash surplus as well as bank credit as its main financing source.

Financial information by divisional classification
Baran currently operates through four divisions since the end of 2003. Each division’s relative contribution to the aggregate revenues of Baran during the years 2001, 2002 and 2003, was as follows:

Division 2003 2002* 2001*
Communications Division       34 %   38 %   42 %
Civil Engineering Division       8 %   5 %   3 %
Industry Division       19 %   30 %   44 %
Technology and Services Division       39 %   27 %   11 %
Total       100 %   100 %   100 %
Revenues     $ 159 M $ 203 M $ 231 M

(*) The relative contribution ascribed to each division during these years is estimated, based on the assumption that the divisional structure of Baran during the years 2002 and 2001 is similar to the divisional structure in the year of 2003.

Geographical breakdown of Baran's revenues for the years ended December 2003, 2002 and 2001was as follows:

Division
2003
2002
2001
Israel       74 %   71 %   91 %
Europe       10 %   21 %   8.5 %
USA       14 %   4 %   0.5 %
The rest of the world       2 %   4 %   0  
Total       100 %   100 %   100 %

Baran intends to expand its international operations to approximately 40% of its total operations in 2004, compared with 26% in 2003 and approximately 29% in 2002.

About the Baran Group
The Baran Group, Ltd. is a global provider of engineering, technology and construction solutions. The Company provides full-service, turnkey engineering and technological planning and production services to a broad range of industries through four professional divisions: communications, civil engineering, industry and technology and services. Baran specializes in handling complex and challenging projects, offering creative and unconventional solutions, and customizing projects to clients’ real needs. Baran’s services include feasibility & planning, detailed engineering, procurement, project management, facility management, and construction management.

For more information about the Baran Group, visit www.barangroup.com .

The information contained in this news release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors, including general economic conditions, consumer spending levels, adverse weather conditions and other factors could cause actual results to differ materially from the Company’s expectations.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

BARAN GROUP LTD.


BY: /S/ Sasson Shilo
——————————————
Sasson Shilo
Chief Financial Officer

Date: 30 March, 2004