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Unitronics

Quarterly Report Aug 29, 2013

7101_ir_2013-08-29_018b2877-cf15-4a49-a970-371354cbc1db.pdf

Quarterly Report

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Unitronics (1989) (R"G) Ltd

Quarterly Report as of June 30, 2013

Table of Contents

Chapter /
Paragraph
Content Page
Chapter A Preface 3
1
2
3
General
Description of the Company and Its Business Environment
Main Events in the Period of the Report and Up To Its
Publication
3
3
4
Chapter B Board of Directors' Report 5
1 Financial Position 5
2 Operating Results 6
3 Liquidity and Sources of Financing 10
4 Qualitative Report Concerning Exposure to Market Risks
and Methods of Managing Them
10
5 Acquisition Plans 10
6 Consolidated Linkage Bases Report 11
7 Sensitivity Tests on Financial Instruments 12
8 Dedicated Disclosure to the Debenture Holders 14
9 Quarterly
Report
on
the
Balance
of
the
Company's
Liabilities by Repayment Dates
18
10 Projected Cash Flow 18
11 Details of the Approval Process of the Company's Financial
Statements
18

Chapter C Condensed Interim Consolidated Financial Statements as of June 30, 2013 (Unaudited) 21

1 Review Report 23
2 Condensed Interim Consolidated Statement of Financial
Position
24
3 Condensed Interim Consolidated Statement of Income 26
4 Condensed Interim Consolidated Statement of 27
Comprehensive Income
5 Condensed Interim Consolidated Statement of Changes in 28
Shareholders' Equity
5 Condensed Interim Consolidated Statement of Cash Flow 30
6 Notes to the Financial Statements 33
Financial
data
taken
from
the
Condensed
Interim
39
Consolidated
Financial
Statements
attributed
to
the
Company itself - Special Report Pursuant to Regulation 38d
(unaudited)

Chapter D Quarterly Report on the Effectiveness of Internal Controls 49

This report contains forward-looking information within the meaning of Section 32A of the Israeli Securities Law, 1968, including forecasts, assessments, estimates, expectations or other information pertaining to future events or issues, the realization of which is uncertain and not solely under the Company's control, if at all. This information is identified as such where it is used in this report. Although such information is based on data available to the Company as of the date of the report, and reflects the Company's intents and assessments as of such date, the actual occurrences and/or results may differ substantially from those presented in the report or implied therefrom as projected or anticipated, since their realization is subject, inter alia, to uncertainties and other factors beyond the Company's control as set out in this report below.

CHAPTER A – PREFACE

1. General

Company Name: Unitronics (1989) (R"G) Ltd. (hereinafter: "the Company" or "Unitronics")

Company No.: 520044199

Address: Unitronics Building, Arava Street, Airport City, P.O.B. 300, Israel 70100

Email Address: [email protected]

Telephone: 03 977 8888

Facsimile: 03 977 8877

2. Description of the Company and Its Business Environment

Unitronics engages, through its Products Department, in the design, development, production, marketing and sale of industrial automation products, mainly programmable logic controllers (hereinafter: "PLCs"). PLCs are computer-based electronic products (hardware and software) used in the command and control of machines performing automatic tasks, such as production systems and automatic systems for industrial storage, retrieval and logistics, and automated parking facilities. The Company also engages, through its Systems Department, in design, construction and maintenance services in the framework of projects for automation, computerization and integration of computerized production and/or logistics systems, mainly automated warehouses and automated distribution centers. In addition, the Company engages, through wholly owned subsidiaries, in automated system design, development, marketing, production, construction and maintenance services for automated parking solutions.

The Company's PLCs are distributed by over one hundred and fifty distributors in approx. fifty countries (including Israel) throughout Europe, Asia, America and Africa, as well as by means of Unitronics Inc., a wholly owned company incorporated in the US. The Systems Department services are provided mainly to customers in Israel, and, in a few cases, outside of Israel as well. The services of the Parking Solutions Department are primarily provided to customers in Israel and in the US.

The Company mainly operates from facilities located in "Unitronics Building," an office and industrial building which is leased, in part, by the Company, and a different part therein is leased to the Company. Unitronics Building is situated at Airport City next to the David Ben-Gurion Airport, and it houses the Company's offices and all its other facilities in Israel.

As of May 2004, the Company's shares are traded on the Tel Aviv Stock Exchange, and as of September 1999 on the Belgian Stock Exchange (first on the EuroNM Belgium Stock Exchange and, starting from the year 2000, on the EuroNext Stock Exchange in Brussels, Belgium).

3. Main Events in the Period of the Report and Up To Its Publication

3.1 Plan for the Buyback of the Company Shares

On May 26, 2013, the Board of Directors approved the condensed interim financial statements as of March 31, 2013, pursuant to which the threshold conditions for the buyback of the Company's shares, as set out in the Companies Law, 1999, have not been met. Therefore, the Company's management informed the Board of Directors that additional shares of the Company will not be acquired under a plan for the buyback of the Company's shares, which began on March 26, 2013 and expired on June 30, 2013 (for details, see immediate report on the approval of the purchase plan, which included herein by way of reference, dated August 30, 2012, Ref. No. 2013-01-015298).

As of the date of publication of this report, the Company holds a total of 1,676,192 shares (of 11,678,504 existing ordinary shares in the Company's issued share capital). As long as these shares remain under the ownership of the Company, the shares are "dormant shares" as the term is defined in the Companies Law, 1999. For details regarding previous buyback plans adopted by the Company in previous years, see section 2.1.2.8 of Chapter B of the Periodic Report.

3.2 Termination of agreement with a market maker

On May 1, 2013 the Company decided to discontinue using the services of a market maker in the Company's shares on the Tel Aviv Stock Exchange. An appropriate notice was delivered to the Company's market maker. In accordance with the agreement, the Company's market maker continued to carry out market making in the Company's shares on the Tel Aviv Stock Exchange until June 15, 2013 (For additional details see the company's Immediate Report of an Event or Matter Outside the Ordinary Course of Business dated May 1, 2013, included herein by way of reference, Ref. No. 2013-01- 8050824).

3.3 Agreement with a market maker

On June 11, 2013 the Company entered into an agreement for market making in the Company's shares listed on the Tel Aviv Stock Exchange with Israel Brokerage and Investments I.B.I. Ltd. ("IBI"). The term of the market making agreement is one year from the date of receipt of approval by the Tel Aviv Stock Exchange for market making in the Company's securities by IBI, and it will be automatically extended each year for an additional one-year term (for additional details, see the Company's Immediate Report of an Event or Matter Outside the Ordinary Course of Business dated June 11, 2013, included herein by way of reference, Ref. No. 2013-01-061794). On June 12, 2013, the Tel Aviv Stock Exchange gave its approval.

3.4 Payment for the debentures (Series 2)

On August 25, 2013, the Company paid the fifth installment out of five of the debentures Fund (Series 2), issued by the Company under the 2006 Prospectus. Following this payment, no debentures (Series 2) remain outstanding (for details see immediate report on the Capital and Registered Securities of the Corporation and Changes Therein, included herein by way of reference, dated 25 August 2013, reference No. 2013 - 01- 155076)

1. Financial Position

Assets

The total assets per the consolidated balance sheet of the Company as of June 30, 2013, increased to approx. NIS 206.707 million compared with approx. NIS 185.548 million as of December 31, 2012. This increase primarily stems from the increase in the balance of cash and cash equivalents as set forth below.

The cash, cash equivalents and marketable securities items recorded an increase, and together they amounted to approx. NIS 61.151 million as of June 30, 2013, compared with approx. NIS 49.699 million as of December 31, 2012. This increase mainly stems from positive cash flows from financing activities, which including the issuance of debentures (Series 4), net of cash flows that were used in operating activities and in investment activities, as explained in Paragraph 3 below.

An increase was recorded in the inventory of work in progress, which stood at approx. NIS 19.891 million as of June 30, 2013, compared with approx. NIS 18.011 million as of December 31, 2012, and reflects progress in the implementation of projects on the reporting date only.

An increase was recorded in intangible assets, which amounted to NIS 39.494 million as of June 30, 2013, compared with approx. NIS 34.046 million as of December 31, 2012. The increase is mainly attributable to the recording of Company development assets in respect of which the development costs satisfy the conditions for recognition as an intangible asset, offset by current amortization.

Liabilities

A decrease was recorded in trade payables, which amounted to approx. NIS 15.839 million as of June 30, 2013, compared with approx. NIS 30.753 million as of December 31, 2012. The decrease in this item is primarily due to a decrease in trade balances in the systems and products segment.

Liabilities in respect of embedded derivatives (net) increased to NIS 2.513 million as of June 30, 2013, compared with NIS 1.469 million as of December 31, 2012. Most of the growth stems from expectations for depreciation in the Euro's value against the NIS. The Company has sale contracts which are denominated in currencies other than the Company's functional currency. These contracts include embedded derivatives in foreign currency.

The non-current liabilities as of June 30, 2013, totaled approx. NIS 96.837 million, compared with NIS 58.728 million as of December 31, 2011. The decrease in noncurrent liabilities stems from the issuance of NIS 53.125 million par value debentures (Series 4), offset by the first installment out of five of debenture principal (Series 3).

An increase was recorded in the Company's working capital, which totaled approx. NIS 57.376 million as of June 30, 2013, compared with approx. NIS 27.992 million as of December 31, 2012. This increase primarily stems from an increase in the balance of cash and cash equivalents and in the inventory of work in progress offset by a decrease in trade payables as specified in this section above.

The Company's shareholders' equity decreased to approx. NIS 41.144 million as of June 30, 2013, compared with approx. NIS 43.900 million as of December 31, 2012. The decrease in shareholders equity was mainly due to the loss recorded for the period as detailed below.

2. Operating Results

Revenues

There was little change in the Company's revenues in the first half of 2013 compared to the first half of 2012 and they totaled approx. NIS 72.486 million, compared with approx. NIS 71.745 million (an increase of approx. 1%). The Company's revenues in the quarter ended June 30, 2013, came to approx. NIS 40.093 million, compared with approx. NIS 37.158 million in the same quarter of 2012 (an increase of approx. 8%). The increase in revenues in the second quarter stems from revenues generated by the systems segment, as detailed below.

Company revenues from the products segment in the quarter ended June 30, 2013, amounted to approx. NIS 23.970 million, an increase of approx. 1% compared with approx. NIS 23.829 million in the corresponding quarter of 2012. Revenues from the products segment in the first half of 2013 amounted to approx. NIS 47.260 million, an increase of approx. 1% compared with approx. NIS 46.726 million in the first half of 2012.

Revenues from the systems segment in the quarter ended June 30, 2013, amounted to approx. NIS 15.626 million, an increase of approx. 19% compared with approx. NIS 13.098 million in the corresponding quarter of 2012. Revenues from the systems segment in the firsts half of 2013 amounted to approx. NIS 24.488 million, approx. 1% down from approx. NIS 24.707 million in the corresponding half of 2012. The changes in revenues from the systems segment stems from changes in the actual rate of progress in the construction of several logistic systems by the Company's systems department, mainly in connection with the planning and construction of logistics systems for key customers in Israel (for details see Sections 1.10.9 of the Company's Periodic Report), and in the pace of receipt of orders from customers for the construction of systems in the reporting period, which is explained, among others by the relative volatility of this segment.

Revenues from the parking solutions segment amounted to approx. NIS 392,000 in the quarter ended on June 30, 2013, compared with approx. NIS 139,000 in the same quarter of 2012. Revenues from the parking solutions segments in the first half of 2013 totaled approx. NIS 528,000 compared to approx. NIS 139,000 in the first half of 2012.

Revenues from the products segment in the quarter ended June 30, 2013, accounted for some 60% of total Company revenues in this quarter, revenues from the systems segment in the same period accounted for some 39% of total revenues and revenues from the parking solutions segments accounted for 1% of revenues for the period. In the same period of 2012, revenues from the products segment were 64% of total Company revenues for the period, revenues from the systems segment accounted for 35% of total revenues and revenues from the parking solutions segment were less than 1% of total revenues for the period. Overall for the year 2012, revenues from products accounted for some 68% of total revenues, revenues from systems accounted for 31% of total revenues and revenues from parking solutions were less than 1% from total revenues for the period.

Cost of Revenues and Gross Profit

The total gross profit in the quarter ended June 30, 2013, amounted to approx. NIS 11.171 million (about 28% of the revenues for the period), compared with approx. NIS 10.364 million in the corresponding quarter of 2012 (about 28% of revenues for the period). Total gross profit in the first half of 2013 amounted to approx. NIS 18.652 million (about 26% of revenues for the period), compared with approx. NIS 19.652 million in the corresponding half of 2012 (about 27% of revenues for the period).

The change in the gross profit margins stems mainly from a change in overall revenue mix from different business segments (the gross profit margins the systems segment are lower than profit margins in the products segment, and accordingly, when the revenue mix from the systems segment rises, the weighted gross profit margin drops, and viceversa) and from the change in the gross profit margins of the Company's operating segments (for details, see the analysis of business results by operating segment in Paragraph 2.2.4 of the Periodic Report).

Development Costs, Net

Net development costs in the quarter ended June 30, 2013, amounted to approx. NIS 1.103 million, compared with approx. NIS 1.287 in the corresponding quarter of 2012. Net development costs in the first half of 2013 amounted to approx. NIS 3.357 million, compared with approx. NIS 2.610 million in the first half of 2012. In addition, during the reporting period, an intangible asset in respect of development costs was recognized in the amount of approx. NIS 7.549 million, compared with NIS 6.652 million in the corresponding period of 2012. Total development costs that were recognized as an intangible asset in the reporting period, which grew in comparison with the corresponding period, reflect the continued development of technologies required to support the Company's operations, with a corresponding adjustment of its development staff, which is designed to address its business plans in the different fields of operation.

Selling and Marketing Expenses

No change was recorded in the selling and marketing expenses in the quarter ended June 30, 2013, and it came to approx. NIS 4.193 million (about 10% of revenues), compared with approx. NIS 4.4019 million (about 11% of revenues) in the corresponding quarter of 2012. Selling and marketing expenses in the first half of 2013 came to approx. NIS 8.074 million (about 11% of revenues), compared with approx. NIS 8.370 million (about 12% of revenues) in the same half of 2012.

General and Administrative Expenses

General and administrative expenses grew in the quarter ended June 30, 2013, and they amounted to approx. NIS 2.850 million, compared with approx. NIS 2.301 million in the corresponding quarter of 2012, and in the first half of 2013 it amounted to approx. NIS 5.551 million, compared with approx. NIS 3.934 million in the first half of 2012. The moderate increase in general and administrative expenses in the reported quarter stems, in the Company's opinion, from the fixed costs required for the continued operation and support of the parking solutions segment as set forth below. Most of the increase in these expenses in the first half of 2013, compared to the same period of 2012, stems from a one-off compensation recorded in the first half of 2012, which was ruled in favor of the Company upon the completion of legal proceedings.

Operating Profit

There was no material change in the operating profit for the quarter ended June 30, 2013, and it amounted to approx. NIS 3.025 million (about 10% of revenues), compared to an operating profit of approx. NIS 2.757 million in the corresponding quarter of 2012 (approx. 7% of revenues).

In the first half of 2013, there was a decrease in the operating profit, which amounted to approx. NIS 1.965 million, compared with an operating profit of approx. NIS 4.738 million in the second quarter of 2012. The decrease in the operating profit posted in the first half of 2013 primarily stems from lower gross profit and an increase in development expenses, net and in administrative and general expenses, as set forth above.

Financing Income and Expenses

Net financing expenses in the quarter ended June 30, 2013, amounted to approx. NIS 1.612 million, compared with net financing expenses of approx. NIS 2.605 million in the second quarter of 2012. Net financing expenses in the first half of 2013 amounted to approx. NIS 4.580 million, compared with net financing expenses of approx. NIS 3.023 million in the first half of 2012.

Most of the increase in this item stems from an increase in revaluation expenses in respect of embedded derivatives, which was the result of an expected depreciation in the Euro against the NIS and an increase in credit costs related to debentures, due to an increase in the balance of outstanding debentures in the reported period, offset by a YoY decrease in long-term credit costs, due to the decline in the Euro against the NIS in the reported period.

Profit

In the reported quarter, the Company posted a net profit totaling approx. NIS 1.413 million (4% of revenues), compared to a profit of approx. NIS 152,000 in the corresponding quarter of 2012 (less than 1% of revenues). In the first half of 2013, the Company posted a loss totaling approx. NIS 2.615 million (about 2% of revenues), compared with a profit of approx. NIS 1.715 million (about 8.5% of revenues) in the corresponding half of 2012.

The changes in the profit and loss results in the reported periods stem, in the Company's opinion, from the decrease in profit and loss from operating activities and an increase in financing expenses, as stated above.

Analysis of Business Results by Operating Segments

As mentioned above, the Company's main commercial activity of the Company is conducted by means of three business departments: the Products Department, the Systems Department and the Parking Solutions Department. In the years 2011 and 2012, the Company began consolidating the parking solutions activities which, until that time, were reported as part of the systems segment, within wholly owned subsidiaries. The operating results of the parking solutions segment in prior periods contributed an insignificant amount to total results. As of January 1, 2013, the Company is presenting the operating activity of the parking solutions segment separately. For further details regarding the Company's operating segments, see Chapter A, sections 1.8, 1.9, 1.10 and 1.11 of the Company's Periodic Report.

Details on the various segments' results appear hereunder.

Products Segment

No material change was recorded in the Products Segment, which generated a profit of approx. NIS 6.933 million in the reporting quarter, compared with a profit of approx. NIS 7.359 million in the corresponding quarter of 2012. The results of the Products Segment in the first half of 2013 came to approx. NIS 13.726 million, compared with a profit of approx. NIS 14.401 million in the first half of 2012. Most of the change in the results of the products segment in the reported six months, stems from a slight decline in the gross profit margin which, in the Company's opinion, is attributable to the effect of the YoY decline in the main currencies of sales against the NIS, offset by lower selling and marketing expenses attributed to this segment.

Systems Segment

The results of the Systems Segment amounted to a loss of approx. NIS 1.388 million in the reported quarter, compared with a loss of approx. NIS 478,000 in the second quarter of 2012. The results of the Systems Segment amounted to a profit of less than NIS 1,000 in the first half of 2013, compared with a loss of approx. NIS 1.700 million in the first half of 2012. The increase in the segment's results stems, in the Company's opinion, from a YoY increase in revenues from the construction of systems, with a higher gross profit margin, offset by fixed expenses, which are required for continued operation and support in this segment.

Parking Solutions Segment

The operating results of the Parking Solutions Segment decreased to a loss of approx. NIS 1.243 million in the reported quarter, compared with a loss of approx. NIS 219,000 in the second quarter of 2012. The results of the Parking Solutions Segment amounted to a loss of approx. NIS 2.405 million in the first half of 2013, compared with a loss of approx. NIS 644,000 in the first half of 2012. The change in segment results in the reported period, in the Company's opinion, is primarily attributable to from an increase in the fixed expenses required for the continued operation and support The increase in the segment's results stems, in the Company's opinion, from a YoY increase in revenues from the construction of systems, with a higher gross profit margin, offset by fixed expenses, which are required for continued operation and support in this segment, the pace of progress in parking solution projects and different gross profit margins across segments, in line with the Company's plans.

3. Liquidity and Sources of Financing

The balance of cash, cash equivalents and marketable securities of the Company, as of June 30, 2013, totaled approx. NIS 61.151 million, compared with approx. NIS 49.699 million as of December 31, 2012. Most of the increase in this item stems from positive cash flow generated by financing activities, offset by negative cash flow used in operating and investment activities, as explained below.

The cash flow from operating activities in the quarter ended June 30, 2013, amounted to a negative cash flow of approx. NIS 1.105 million. Net negative cash flow stemmed from changes in assets and liability items (mainly a decrease in trade payables offset by a decrease in inventory of work in progress), offset by profit for the quarter and net of expenses no involving cash flows. In the first half of 2013, the cash flow from operating activities amounted to a negative cash flow of approx. NIS 16.717 million. The negative cash flow stemmed from changes in asset and liability items (an increase in trade payables and in increase in inventory of work in progress) and the loss for the sixmonth period net of expenses not involving cash flows.

Cash flows used in investment activities in the quarter ended June 30, 2013, amounted to approx. NIS 4.621 million. In the first half of 2013, cash flows used in investment activities amounted to a negative cash flow of approx. NIS 10.211 million. The negative cash flow was mainly due to the recording of investments in development assets during the period.

The cash flow used for financing activities in the quarter ended June 30, 2013, amounted to approx. NIS 1.046 million. In the first half of 2013, cash flows used in financing activities amounted to approx. NIS 37,384 million. The positive cash flow primarily stems from the issuance of debentures (Series 4) offset by the first of five installments of debentures (Series 3).

On June 30, 2013, total credit lines available to the Company for its operating activities amounted to approx. NIS 30.2 million. As of June 30, 2013, NIS 29.8 million of the credit facility was utilized to secure the Company's obligations in projects carried out by the Systems and Parking Solutions Segments.

4. Qualitative Report Concerning Exposure to Market Risks and Methods of Managing Them

There were no material changes during the reporting period and in the aggregate period from the end of 2012 until the date of publication this quarterly report with respect to the Company's exposure to market risks and the methods of managing them.

5. Acquisition Plans

For details on the Company's acquisition programs that it reported during the reporting period or which are in effect during the reporting period, see Paragraph 3.1 of Chapter A above.

6. Consolidated Linkage Bases Report

As of June 30, 2013
Israeli Currency
Foreign Currency
Non
In Other Monetary
Unlinked CPI-Linked In EURO In USD Currencies Balances Total

NIS in Thousands

Assets

Cash and cash
equivalents
10,662 - 5,779 13,250 - - 29,691
Cash limited in use 4,130 - - - - - 4,130
Marketable
securities
15,789 15,624 - 47 - - 31,460
Trade and income
receivable
4,274 - 5,998 5,093 - - 15,365
Accounts
receivable
1,215 - - 21 - 1,338 2,574
Inventory - - - - - 22,993 22,993
Inventory of work
in progress
- - - - - 19,891 19,891
Long-term
deposits
- - - - - 351 351
Fixed assets - - - - - 40,758 40,758
Intangible assets - - - - - 39,494 39,494
Total assets 36,070 15,624 11,777 18,411 - 124,825 206,707

Liabilities

Short-term loans
and current
maturities of long
term loans
69 - 3,930 395 - - 4,394
Current maturities
of debentures
- 18,013 - - 18,013
Suppliers and
service providers
8,371 - 2,862 4,592 11 - 15,836
Embedded
derivatives
- - 2,513 - - 2,513
Accounts payable
and credit
balances
6,916 - - 484 - 20,572 27,972
Long-term loans
from banks and
others
43 - 7,078 1,381 - - 8,502
Debentures - 85,803 - - - - 85,803
Liabilities due to
employee benefits,
net
- - - - - 2,532 2,532
Total liabilities 15,399 103,816 16,383 6,852 11 23,104 165,565
Net assets
(liabilities)
20,671 ( 88,192) ( 4,606 ) 11,559 ( 11) 101,721 41,142

7. Sensitivity Tests on Financial Instruments as of June 30, 2013

The Company conducted, as of the balance sheet date, 5 sensitivity tests in respect of changes within an upper and lower range of 5% and 10% in market factors. The market factor tests were based on the model specified.

1) Table listing the changes in the fair value of financial instruments sensitive to fluctuations in the dollar exchange rate:

Profit (Loss) on Change, NIS in NIS in Profit (Loss) on Change NIS in
Thousands Thousands Thousands
10% 5% Fair Value -
5%
-
10%
NIS to \$ 3.980 3.799 3.618 3.437 3.256
Cash and cash
equivalents 1,325 663 13,250 ) (
663
( 1,325
)
Marketable
securities 5 2 47 )2( )5(
Trade and income
receivable 509 255 5,093 ) (
255
( 509
)
Accounts
receivable 2 1 21 )1( )2(
Current maturities
of loans 40(
)
20(
)
) (
395
20 40
Trade payable (
459)
(
230
)
(
4,592
)
230 459
Accounts payable
and accruals 48(
)
24(
)
) (
484
24 48
Long-term loans ( 138) 69( ) ( 1,381) 69 138
Total 1,156 578 11,559 ( 578) ( 1,156)

2) Table listing the changes in the fair value of financial instruments sensitive to fluctuations in the Euro exchange rate:

Profit (Loss) on Change, NIS NIS in Profit (Loss) on Change, NIS
in Thousands Thousands in Thousands
10% 5% Fair Value 5%- -
10%
NIS to Euro 5.192 4.956 4.720 4.484 4.248
Cash and cash
equivalents
578 289 5,779 ) (
289
( 578
)
Trade and income
receivable
600 300 5,998 ) (
300
( 600
)
Current maturities
of loans
(
393)
(
197
)
(
3,930
)
197 393
Trade payable (
286)
(
143
)
(
2,862
)
143 286
Accounts payable
and accruals
0 0 0 0 0
Long-term loans ( 708) ( 354) ( 7,078) 354 708
Total ( 209) ( 105) ( 2,093) 105 209

3) The following table presents the fair value changes in financial instruments sensitive to fluctuations in the Consumer Price Index:

Profit (Loss) on Change, NIS
NIS in
Profit (Loss) on Change, NIS
in Thousands Thousands in Thousands
10% 5% Fair Value 5%- -
10%
CPI in points 243.05 232.00 220.95 209.90 198.86
Marketable
securities
1,562 781 15,624 (781) (1,562)
Current
maturities of
debentures
(
1,801)
(
901
)
(
18,013
)
901 1,801
Debentures
() (*)
(8,580) (4,290) (85,803) 3,856 6,450
Total (8,819) (4,410) (88,192) 3,976 6,689

(*) Series 3 debentures linked to the CPI 212.73 (1993 base)

(**) Series 4 debentures linked to the CPI 219.80 (1993 base)

4) The following table presents the fair value changes in derivative financial instruments that are sensitive to changes in underlying assets denominated in Euro:

Profit (Loss) on Change, NIS in
Thousands
NIS in
Thousands
Profit (Loss) on Change, NIS in
Thousands
10% increase in
the underlying
asset
5% increase
in the
underlying
asset
Fair Value 5% decline in the
underlying asset
10% decline in
the underlying
asset
Liability in respect of
embedded derivatives
3,406
1,703
( 2,513) ( 1,703) ( 3,406)

5) The following table presents the fair value changes in financial instruments sensitive to fluctuations in rates of marketable securities:

Profit (Loss) on Change NIS NIS in Profit (Loss) on Change
in Thousands Thousands NIS in Thousands
10% 5% Fair Value -5% -
10%
Local –
government 1,462 731 14,618 ) (
731
( 1,462
)
Local –
corporate 1,397 699 13,973 ) (
699
( 1,397
)
Shares 287 143 2,869 ( 143) ( 287)
Total 3,146 1,573 31,460 ( 1,573) ( 3,146)

8. Dedicated Disclosure to the Debenture Holders

The Corporation's Liability Certificates:

(1) Security Debentures (Series 2)1
A Issue date August 2006
B Total par value on issue date 34,000,000
Par value as of the reporting 5,380,000
C date
Par value according to linkage 6,320,000
D terms – as of the report date
Accrued interest as of the 131,100
E report date
Liability value as of the report 6,289,000
F date
G Stock Exchange value 6,563,000
Type of interest, including
H description 6.1% annual interest
Payment dates of outstanding Last annual installment paid on August 26,
I principal 2013
Future interest payment dates Last interest payment paid on August 26,
J 2013
Details of linkage basis of Principal and interest linked to the Consumer
interest and principal Price Index at a base rate of no less than
188.1 (July 2006 index according to the 1993
K base)
L Are the liability certificates
convertible?
Not convertible
Corporation's right to perform Does not exist
M early redemption
Has a guarantee been given No
for payment of the liability in
N the trust deed?
O Is the liability material to the Yes
Company?
(2) The trustee in charge of the Hermetic Trust (1975) Ltd
debenture series in the trust Dan Avnon and/or Merav Ofer-Oren,
company; the trustee's contact 113 Hayarkon Street, Tel Aviv 63573,
details Telephone: 03-5274867
Fax: 03-5271451, Email:
[email protected]
  • (5+6) As of the reporting period, and throughout said period, the Company, to the best of its knowledge, was in full compliance with all the terms and obligations of the trust deed for Debentures (Series 2), the Company was not found to be in violation of any undertaking or term that was set forth in the trust deeds and which are not of a technical nature, and there were no grounds to call for immediate repayment of the liability certificates.
  • (8) The Debentures (Series 2) are not secured by any charge whatsoever.

1 After the balance sheet date on August 25, 2013, the Company repaid the last of five installments of the principal amount of the debenture (series 2). Further details, see Section 3.4 of Chapter A of this quarterly report

(1) Security Debentures (Series 3)
A Issue date March 2011
B Total par value on issue date 56,442,000
Par value as of the reporting 45,153,600
C date
Par value according to linkage 46,898,000
D terms – as of the report date
Accrued interest as of the 713,000
E report date
Liability value as of the report 45,640,000
F date
G Stock Exchange value 48,811,000
Type of interest, including 5.65% annual interest
H description
Payment dates of outstanding Four equal annual payments as of March 23,
I principal 2014
Future interest payment dates Every 23rd of March and September starting
from September 2013, up until March 23,
J 2017 (inclusive)
Details of linkage basis of Principal and interest linked to the Consumer
interest and principal Price Index at a base rate of no less than
212.73 (February 2011 index according to
K the 1993 basis)
Are the liability certificates Not convertible
L convertible?
Corporation's right to perform Exists (for details regarding the terms under
early redemption which the Company's right to perform early
redemption can be exercised, see paragraph
M 12 of the Shelf Offering Report dated March
22, 2011, reference no: 2011-01-088428)
N Has a guarantee been given for No
payment of the liability in the
trust deed?
Is the liability material to the Yes
O Company?
(2) The trustee in charge of the Reznick, Paz, Nevo Trust Ltd
debenture series in the trust 14 Yad Harutzim St, Tel Aviv 67778
company; the trustee's contact Tel: 03-6389200; Fax: 03-6393316
details Email: [email protected]
  • (5+6) As of the reporting period, and throughout said period, the Company, to the best of its knowledge, was in full compliance with all the terms and obligations of the trust deed for Debentures (Series 3), the Company was not found to be in violation of any undertaking or term that was set forth in the trust deeds and which are not of a technical nature, and there were no grounds to call for immediate repayment of the liability certificates.
  • (8) On April 4, 2011, a pledge over a bank account deposit was created at the Registrar of Companies, in the amount of the annual interest on the debentures, to secure the payment of interest pursuant to the terms of the debentures (Series 3). As long as the Company has an outstanding balance of the debentures (Series 3), the Company will refrain from creating additional charges on its assets, in excess of those that existed on the date of signing the trust deed in connection with the debentures (Series 3), in favor of any third party whatsoever, without the trustee's advance written consent,

save with regard to charges on land and/or equipment that will be purchased by the Company subsequent to the date of signing the trust deed, the pledging thereof will serve solely for the purpose of securing the funding to be given for purchasing the asset that is the object of the charge – and which the Company will be permitted to create without any restrictions in favor of any person or corporation. Subject to the aforesaid, the Company shall be entitled to create, without any limitation, additional charges of any type on its assets, all or part thereof, without this derogating from the Company's ability to undertake towards third parties to refrain from creating additional charges and without derogating from the aforesaid undertakings which the Company made to the banks prior to the date of signing the Debenture trust deed (Series 3).

(1) Security Debentures (Series 4)
A Issue date January 2013
B Total par value on issue date 53,125,000
C Par value as of the reporting 53,125,000
date
D Par value according to linkage 53,402,000
terms – as of the report date
E Accrued interest as of the 1,215,000
report date
F Liability value as of the report 51,887,000
date
G Stock Exchange value 57,162,000
H Type of interest, including 5.4% annual interest
description
I Payment dates of outstanding Six unequal annual payments payable on
principal January 31 of each of the years 2015 through
2020, at the following rates, by years in
chronological order: (a) 12.5% of the
principal; (b) 12.5% of the principal; (c)
12.5% of the principal; (d) 20.5% of the
principal; (e) 21% of the principal; (f) 21% of
the principal.
J Future interest payment dates Every 31ST of January and July starting from
July 31 2013, up until January 13, 2020
(inclusive)
K Details of linkage basis of Principal and interest linked to the Consumer
interest and principal Price Index at a minimum base rate of 219.80
(December 2012 index according to the 1993
basis), No hedging performed.
L Are the liability certificates Not convertible
convertible?
M Corporation's right to perform Exists (for details regarding the terms under
early redemption which the Company's right to perform early
redemption can be exercised, see paragraph
12 of the Shelf Offering Report dated January
24, 2013, reference no: 2013-01-021699)
N Has a guarantee been given for No
payment of the liability in the
trust deed?
O Is the liability material to the Yes
Company?
(2) The trustee in charge of the Mishmeret - Trust Services Ltd.
debenture series in the trust 48, Menachem Begin St, Tel Aviv 66184
company; the trustee's contact Tel: 03-6374352; Fax: 03-6374344
details Email: [email protected]

(5+6) As of the reporting period, and throughout said period, the Company, to the best of its knowledge, was in full compliance with all the terms and obligations of the trust deed for Debentures (Series 4), the Company was not found to be in violation of any undertaking or term that was set forth in the trust deeds and which are not of a technical nature, and there were no grounds to call for immediate repayment of the liability certificates.

(8) On February 12, 2013, a pledge over a bank account deposit was created at the Registrar of Companies, in the amount of the semiannual interest on the debentures, to secure the payment of interest pursuant to the terms of the debentures (Series 4). As long as the Company has an outstanding balance of the debentures (Series 4), the Company and any of its subsidiaries (on the date of signing the trust deed and any additional subsidiary that will be established or acquired until the date of repayment of the outstanding debentures (Series 4)) will refrain from creating a general floating lien on its assets, in favor of any third party whatsoever, without the prior consent of a meeting of the debenture holders by means of a simple majority. It is emphasized that the Company and/or any of its subsidiaries shall be entitled to establish specific liens on all or part of their assets, including cash and cash equivalents, in favor of the lenders that will provide financing for the acquisition of assets or equipment, including floating lien on specific asset/s, and including for the purchase of construction services for a building, including for the purpose of replacing lenders holding liens on the date of the offering, by other lenders, without obtaining the consent of a meeting of the debenture holders (Series 4).

9. Quarterly Report on the Company's Liabilities by Repayment Dates

For details on the Company's liabilities by repayment dates, as of June 30, 2013, see report dated August 29, 2013, which the Company published concurrently with the publication of this report.

10. Projected Cash Flow

The Board of Directors determined, following a review of the warning signs specified in Regulation 10(b)(14) of the Securities Regulations (Periodic and Immediate Reports) – 1970, regarding disclosure of the anticipated cash flow for financing payment of the Company's obligations, that the Company has no liquidity problems and is able to meet its obligations, including the full payment of its liabilities in respect of the issuance of Debentures (Series 3 and 4). An examination as stated is performed by the Board of Directors on a quarterly basis, at the time of approval of the financial statements published by the Company for the quarter in question.

11. Details of the Approval Process of the Company's Financial Statements

11.1 Preparation of the Financial Statements

The Company's financial statements were prepared by the Company's CFO. The statements were reviewed by the Company's auditor, who is given full access to all data and information in the Company, including meetings with the Company's employees and managers, as required by him. Subsequent to the auditor's review, the financial statements were submitted to the members of the Financial Statements Review Committee.

11.2 Financial Statements Review Committee

Once the Companies Regulations (Directives and Conditions Concerning the Procedure for Approving Financial Statements), 2010, went into effect, the Audit Committee was appointed by the Company's Board of Directors (during its meeting on November 11, 2010) to also serve as a Balance Sheet Committee for Review of the Financial Statements ("the Committee"), said committee being of a composition and significance that are in line with said regulations, in everything related to the Financial Statements as at December 31, 2010, and thereafter. As of the reporting date, the following directors serve on this committee:

Name CPA Zvi CPA Yoel CPA
Livneh Sela Moshe
Braaz
An independent or an No External External
external director director director
Chairman of the Committee No No Yes
for Review of the Financial
Statements
Has accounting and financial Yes Yes Yes
expertise
Did he provide a statement Yes Yes Yes
prior to his nomination?

* For details regarding the education and experience of the members of the Committee for Review of the Financial Statements, see Section 4.10 of Chapter D of the Periodic Report.

As part of the process of approval of the financial statements as of June 30, 2013, a Committee meeting was held on August 27, 2013. In this meeting, the Committee discussed the effectiveness of internal controls over financial reporting and disclosure by the Company, which are the responsibility of the person in charge of reporting and the person in charge of control oversight, and which are supervised by the steering committee, which serves as a top-level supervising entity to ensure full compliance with reporting regulations, in accordance with internal procedures adopted by the Board of Directors on February 2, 2011 in connection with periodic and immediate reports. A comprehensive discussion of material issues took place in order to formulate the Committee's recommendations to the Board of Directors, for the purpose of its approval of the financial statements; later, the Committee approved its recommendations.

The following persons were invited to, and attended, the Committee meeting on August 27, 2013: members of the Committee (CPAs Yoel Sela, Zvi Livneh and Moshe Braaz), other Board members (Messrs: Haim Shani, Bareket Shani and Edna Ramot), Mr. Yair Itzkovitch, CFO; Mr. Eyal Saban, VP; Ms. Miri Ben-David, CPA, Comptroller, Mr. Nir Weisberger, Company attorney; CPA Gal Amit, of the Company's accounting firm; and Mr. Miguel Elchanati, of the Company's internal audit firm.

The committee discussed and formulated its recommendations to the Board of Directors regarding the following matters: assessments and estimates made in connection with the financial statements; internal controls related to the financial reporting process; the integrity and appropriateness of the disclosure in the financial statements; the accounting policy adopted and the accounting treatment implemented in material issues; valuations including the underlying assessments and estimates. The draft financial statements and Committee recommendations were submitted to the Board's review two business days before the Board convened to discuss the financial statements, which is a reasonable timeframe, in the Board's estimation, to submit the recommendations to the Board of Directors.

11.3 The Company's Board of Directors

The Company regards the Board of Directors as the entity in charge of overall control of the Company's financial statements. The members of the Company's Board of Directors and their respective duties in the Company are as follows:

    1. Mr. Haim Shani Chairman of the Board and Company CEO, and a director with professional qualifications.
    1. Mrs. Bareket Shani Director with professional qualifications, Vice President and Head of Human Resources, member of the Credit, Investments and Securities Committee of the Company's Board of Directors.
    1. Mr. Zvi Livneh, CPA Director with accounting skills, member of the Credit, Investments and Securities Committee, member of the Audit Committee, member of the Committee for Review of the Financial Statements and member of the Remuneration Committee.
    1. Mr. Yoel Sela, CPA External and independent director with accounting skills, member of the Audit Committee, member of the Committee for Review of the Financial Statements, member of the Remuneration Committee and member of the Board's Credit, Investments and Securities Committee.
    1. Mr. Moshe Braaz, CPA External and independent director with accounting skills, member and Chairman of the Audit Committee, member and Chairman of the Remuneration Committee, member of the Committee for Review of the Financial Statements and member of the Credit, Investments and Securities Committee of the Company's Board of Directors.
    1. Mrs. Edna Ramot Director with professional skills.

Following the Board of Directors' review of the financial statements, a Board meeting was held for the purpose of presenting and discussing the financial statements. In the meeting on August 29, 2013, Company management reviewed the key data of the financial statements. The Company's auditor attended the meeting and responded to the questions of the Board of Directors, which were addressed to him (together with the Company's CEO and CFO, who responded to questions addressed to them). At the end of the discussion, the financial statements were approved by unanimous vote by the Board of Directors.

_________________ _________________ Zvi Livneh Haim Shani Director Chairman and CEO

Date: August 29, 2013

UNITRONICS (1989) (R"G) LTD.

Condensed Consolidated Interim Financial Statements June 30, 2013

(Unaudited)

Unitronics (1989) (R"G) Ltd.

Condensed Consolidated Interim Financial Statements

June 30, 2013

(unaudited)

Table of contents

Page

23 Review Report
24-25 Condensed consolidated interim statement of financial position
26 Condensed consolidated interim statement of operations
27 Condensed consolidated interim statement of other comprehensive
income (loss)
28-29 Condensed consolidated interim statement of changes in equity
30-32 Condensed consolidated interim statement of cash flows
33-38 Notes to the financial statements

REVIEW REPORT OF THE AUDITIORS OF UNITRONICS (1989) (R"G) LTD.

Introduction

We reviewed the attached financial information of Unitronics (1989) (R"G) Ltd. and its subsidiaries (hereinafter – "the Group") which include the condensed consolidated interim statement of financial position as at June 30, 2013 and the condensed consolidated interim statements of operations, other comprehensive income, changes in shareholders' equity and cash flows for the periods of six and three months then ended. The Board of Directors and management are responsible for the preparation and presentation of the financial information for this interim periods in accordance with IAS 34 "Financial reporting for interim periods", and they are responsible for the preparation for of financial information for this interim periods under Chapter D of the Securities Regulations (Periodic and Immediate Reports) – 1970. Our responsibility is to express a conclusion on the financial information for the interim periods, based on our review.

Scope of the review

We prepared our review in accordance with Review Standard No. 1 of the Institute of Certified Public Accountants in Israel "Review of financial information for interim periods performed by the entity's auditor". The review of the financial information for interim periods comprises clarifications, mainly with the people responsible for financial and accounting matters, and from adopting analytical and other review procedures. A review is more limited in scope to a much larger extent than an audit performed in accordance with generally accepted auditing standards in Israel, and therefore does not enable us to be certain that we will know of all the significant matters which could have been identified in an audit. Consequently, we are not issuing an audit opinion.

Conclusion

Based on our review, nothing came to our notice which would cause us to think that the above financial information is not prepared, in all significant aspects, in accordance with IAS 34.

In addition to the remarks in the previous paragraph, based on our review, nothing came to our notice which would cause us to think that the above financial information does not meet, in all significant aspects, the provisions of disclosure under Chapter D of the Israeli Securities Regulations (Periodic and Immediate Reports) – 1970.

Amit, Halfon Certified Public Accountants (Israel)

Ramat Gan, August 29, 2013

16 Aba Hillel Silver St. Ramat-Gan 52506 Israel Tel: +972-3-6123939 Fax: +972-3-6125030 e-mail: [email protected]

Amit, Halfon is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Unitronics (1989) (R"G) Ltd. Condensed consolidated interim statement of financial position

June 30,
2013
June 30,
2013
June 30,
2012
December 31,
2012
(unaudited) (unaudited)
(in thousands)
Convenience
translation
into Euro (1)
NIS
Current assets
Cash and cash equivalents
Restricted cash
Marketable securities
6,291
875
6,666
29,691
4,130
31,460
12,817
3,318
35,242
19,013
3,349
30,686
Accounts receivable -
Trade
Other
Embedded derivatives
3,256
545
-
15,365
2,574
-
21,727
1,014
230
14,702
2,814
40
Inventory
Inventory - work in progress
4,872
4,214
22,993
19,891
16,992
8,697
22,297
18,011
26,719 126,104 100,037 110,912
Non-current assets
Long-term deposits
Property and equipment, net
74
8,636
351
40,758
199
40,363
157
40,433
Intangible assets, net 8,368
17,078
39,494
80,603
28,607
69,169
34,046
74,636
43,797 206,707 169,206 185,548
Haim Shani
Chairman of the Board of
Directors and C.E.O.
Tzvi Livne
Director
Yair Itscovich
Chief Financial Officer
Approved: August 29, 2013.

(1) See note 1C.

Unitronics (1989) (R"G) Ltd. Condensed consolidated interim statement of financial position

June 30,
2013
June 30,
2013
June 30,
2012
December 31,
2012
(unaudited) (unaudited)
Convenience
translation
into Euro (1)
(in thousands)
NIS
Current liabilities
Current maturities of long-term
loans
Current maturities of bonds
Accounts payable -
931
3,817
4,394
18,013
4,410
17,882
4,590
17,788
Trade
Other
Embedded derivatives
3,355
5,927
532
15,836
27,972
2,513
16,569
16,807
1,031
30,753
28,280
1,509
14,562 68,728 56,699 82,920
Non-current liabilities
Loans from banks and others
Bonds
Liabilities for benefits to employees, net
1,802
18,180
536
20,518
8,502
85,803
2,532
96,837
13,579
50,622
2,633
66,834
11,063
45,025
2,640
58,728
Shareholders' equity
Share capital
Share premium
Capital reserve from translation of
75
10,718
352
50,588
352
50,588
352
50,588
foreign operation
Company shares held by the company
Reserve from a transaction with a
(255)
(1,492)
(1,204)
(7,042)
(393)
(6,643)
(957)
(7,042)
controlling party
Retained earnings (loss)
22
(351)
8,717
104
(1,656)
41,142
-
1,769
45,673
-
959
43,900
43,797 206,707 169,206 185,548

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be
3
1,
ce
m
r
2
0
1
3
2
0
1
3
2
0
1
2
2
0
1
3
2
0
1
3
2
0
1
2
2
0
1
2
(
d
i
d
)
(
d
i
d
)
(
d
i
d
)
(
d
i
d
)
te
te
te
te
un
au
un
au
un
au
un
au
(
d
i
d
)
te
au
(
in
ho
ds
)
t
us
an
Co
ien
Co
ien
nv
en
ce
nv
en
ce
la
io
in
la
io
in
tra
t
to
tra
t
to
ns
n
ns
n
Eu
(
)
N
I
S
Eu
(
)
N
I
S
1
1
ro
ro
Ne
f
i
(
los
)
fo
he
io
d
(
)
(
)
5
5
4
2,
6
1
5
1,
7
1
5
2
9
9
1,
4
1
3
1
5
2
t p
t
t
ro
s
r
p
er
1,
4
0
0
O
he
he
ive
inc
(
los
)
t
r c
om
p
re
ns
om
e
s
I
ha
be
las
i
f
ie
d
f
ds
f
i
te
t
t m
t
te
to
t o
ms
ay
n
o
c
s
a
rw
ar
p
ro
r
los
s
Ac
ia
l
los
tu
ar
s
-
-
-
-
-
-
(
)
4
9
5
I
ha
be
las
i
f
ie
d
f
i
los
in
he
te
t
t m
to
t o
t
ms
ay
re
c
s
p
ro
r
s
fu
i
f c
in
d
i
ion
tu
ta
t
t -
re
er
co
n
s a
re
me
Tr
la
ion
f
fo
ig
ion
(
5
2
)
(
2
4
7
)
2
5
5
(
9
)
(
4
5
)
4
8
6
t
t
an
s
o
re
n o
p
er
a
(
3
0
9
)
O
fo
he
he
ive
inc
(
los
)
he
io
d
(
5
2
)
(
2
4
7
)
2
5
5
(
9
)
(
4
5
)
4
8
6
t
t
r c
om
p
re
ns
om
e
s
r
p
er
(
8
0
4
)
Co
he
ive
inc
(
los
)
fo
he
io
d
(
6
0
6
)
(
2,
8
6
2
)
1,
9
7
0
2
9
0
1,
3
6
8
6
3
8
t
m
p
re
ns
om
e
s
r
p
er
5
9
6

Unitronics (1989) (R"G) Ltd. Condensed consolidated interim statement of other comprehensive income (loss)

(1) See note 1C.

Unitronics (1989) (R"G) Ltd. Condensed consolidated interim statement of changes in equity

Share
capital
Share
premium
Capital reserve
from
translation of
foreign
operation
Company
shares
held by the
company
Reserve
from at
transaction
with a
controlling
party
Retained
earnings
(loss)
Total
NIS in thousands
Balance at January 1, 2012 (audited)
Net profit for the year
Other comprehensive loss for the year
352
-
-
50,588
-
-
(648)
-
(309)
(6,643)
-
-
-
-
-
54
1,400
(495)
43,703
1,400
(804)
Total comprehensive income (loss) for
the year
Purchase of company shares
by the company
- - (309) - - 905 596
- - - (399) - - (399)
Balance at December 31, 2012 (audited)
Net loss for the period
Other comprehensive loss for the period
Total comprehensive loss for the period
Capital benefit arising from a transaction
with a controlling party
352
-
-
50,588
-
-
(957)
-
(247)
(7,042)
-
-
-
-
-
959
(2,615)
-
43,900
(2,615)
(247)
- - (247) - - (2,615) (2,862)
- - - - 104 - 104
Balance at June 30, 2013 (unaudited) 352 50,588 (1,204) (7,042) 104 (1,656) 41,142
Balance at January 1, 2012 (audited)
Net profit for the period
Other comprehensive profit for the
352
-
50,588
-
(648)
-
(6,643)
-
-
-
54
1,715
43,703
1,715
period
Total comprehensive income for the
- - 255 - - - 255
period - - 255 - - 1,715 1,970
Balance at June 30, 2012 (unaudited) 352 50,588 (393) (6,643) - 1,769 45,673
Balance at April 1, 2013 (unaudited)
Net profit for the period
Other comprehensive loss for the period
352
-
-
50,588
-
-
(1,159)
-
(45)
(7,042)
-
-
104
-
-
(3,069)
1,413
-
39,774
1,413
(45)
Total comprehensive income (loss) for
the period
- - (45) - - 1,413 1,368
Balance at June 30, 2013 (unaudited) 352 50,588 (1,204) (7,042) 104 (1,656) 41,142
Balance at April 1, 2012 (unaudited)
Net profit for the period
Other comprehensive income for the
352
-
50,588
-
(879)
-
(6,643)
-
-
-
1,617
152
45,035
152
period - - 486 - - - 486
Total comprehensive income for the
period
- - 486 - - 152 638
Balance at June 30, 2012 (unaudited) 352 50,588 (393) (6,643) - 1,769 45,673

Unitronics (1989) (R"G) Ltd. Condensed consolidated interim statement of changes in equity

Share
capital
Share
premium
Capital
reserve from
translation of
foreign
operation
Company
shares held
by the
company
Reserve
arising from
a transaction
with a
controlling
party
Retained
earnings
(loss)
Total
Convenience translation into Euro (1), in thousands
(unaudited)
Balance at December 31, 2012
(audited)
Net loss for the period
Other comprehensive loss for the
75
-
10,718
-
(203)
-
(1,492)
-
-
-
203
(554)
9,301
(554)
period - - (52) - - - (52)
Total comprehensive loss for the
period
- - (52) - - (554) (606)
Capital benefit arising from a
transaction with a controlling party
- - - - 22 - 22
Balance at June 30, 2013 (unaudited) 75 10,718 (255) (1,492) 22 (351) 8,717

(1) See note 1C.

Un
Co
de
d
n
ns
e
co
ns
o
i
ics
(
9
8
9
tro
1
n
l
i
da
d
in
te
te
r
)
(
R
"G
)
L
d.
t
im
ta
te
t o
s
m
en
f
Ca
h
F
low
s
s
Fo
he
r t
ix
hs
nt
s
mo
io
d
de
d
p
er
en
Ju
3
0,
ne
Fo
he
r t
s
io
d
p
er
Ju
ne
ix
hs
nt
mo
de
d
en
3
0,
Fo
he
hr
r t
t
ee
hs
nt
mo
io
d
de
d
p
er
en
Ju
3
0,
ne
Fo
he
hr
hs
r t
t
t
ee
m
on
io
d
de
d
p
er
en
Ju
3
0,
ne
Fo
he
r t
y
ea
r
de
d
en
De
be
3
1,
ce
m
r
2
0
1
3
2
0
1
3
2
0
1
2
2
0
1
3
2
0
1
3
2
0
1
2
2
0
1
2
(
d
ite
d
)
un
au
(
un
au
d
ite
d
)
(
d
ite
d
)
un
au
(
un
au
d
ite
d
)
(
d
ite
d
)
au
Co
ien
nv
en
ce
lat
ion
tra
ns
int
Eu
(
1
)
o
ro
N I
S
(
in
ho
ds
)
t
us
an
Co
ien
nv
en
ce
lat
ion
tra
ns
int
Eu
(
1
)
o
ro
N
I
S
Ca
f
h
low
ing
iv
i
ies
t
t
t
s
s -
op
er
a
a
c
Ne
f
i
(
los
)
fo
he
io
d
t p
t
t
ro
s
r
p
er
A
d
j
ho
he
h
f
low
ing
tm
ts
to
t
t
us
en
ne
ce
ss
ar
s
ca
s
s -
o
er
a
w
(
5
5
4
)
(
2,
6
1
5
)
1,
7
1
5
2
9
9
1,
4
1
3
1
5
2
1,
4
0
0
p
y
iv
i
ies
(
Ap
d
ix
A
)
t
t
ac
p
en
(
2,
9
8
8
)
(
1
4,
1
0
2
)
3,
0
4
4
(
5
3
3
)
(
2,
5
1
8
)
3,
6
1
1
2
0,
9
1
4
Ca
h
f
low
i
de
d
by
(
d
in
)
ing
iv
i
ies
t
t
t
s
s p
rov
us
e
op
er
a
a
c
(
3,
5
4
2
)
(
1
6,
7
1
7
)
4,
7
5
9
(
2
3
4
)
(
1,
1
0
5
)
3,
7
6
3
2
2,
3
1
4
Ca
h
f
low
inv
ing
iv
i
ies
t
t
t
s
s -
es
a
c
Sa
le
(
Pu
ha
)
f m
ke
b
le
i
ies
ta
t
t
rc
se
o
ar
se
cu
r
ne
,
Pu
ha
f p
d
ip
ty
t
rc
se
o
ro
p
er
an
eq
me
n
u
Sa
le
f p
d
ip
ty
t
o
ro
p
er
an
eq
u
me
n
(
)
1
3
3
(
)
2
6
2
1
6
(
)
6
2
7
(
)
1,
2
3
5
7
7
8
6
4
(
)
4
9
0
-
(
)
9
3
(
)
1
4
5
-
(
)
4
4
3
(
)
6
8
2
-
5
0
1
(
)
1
6
5
-
7,
2
3
6
(
)
1,
3
9
6
-
Inv
in
ic
d
h
tm
t
tr
te
es
en
re
s
ca
s
Re
f r
ic
d
h
t o
tr
te
p
ay
me
n
es
ca
s
(
3
0
7
)
1
4
(
1,
4
5
4
)
7
0
- - - - -
Re
(
inv
)
in
lon
de
i
t
tm
t
te
ts,
t
p
ay
me
n
es
en
g-
rm
p
os
n
e
Inv
in
in
i
b
le
tm
t
ta
ts
es
en
as
se
8
1
(
1,
6
2
6
0
3
(
7,
6
7
5
-
(
2
7
)
(
6,
6
1
4
-
-
(
7
4
0
-
(
2
)
(
3,
4
9
4
-
(
2
0
)
(
3,
1
7
0
-
(
2
9
)
(
1
4,
3
8
5
ng
Ca
h
f
low
d
in
inv
ing
iv
i
ies
t
t
t
s
s u
se
es
a
c
)
(
2,
1
6
3
)
)
(
1
0,
2
1
1
)
)
(
6,
2
6
7
)
)
(
9
7
8
)
)
(
4,
6
2
1
)
)
(
2,
8
5
4
)
)
(
8,
5
7
4
)
Ca
h
f
low
f
ina
ing
iv
i
ies
t
t
s
s -
nc
a
c
Re
f
lon
loa
t o
te
p
ay
me
n
g-
rm
ns
Bo
ds
iss
n
ue
(
)
4
6
2
1
0,
9
1
4
(
)
2,
1
8
2
5
1,
5
0
9
(
)
2,
1
9
0
-
(
)
2
2
2
-
(
)
1,
0
4
6
-
(
)
1,
0
9
5
-
(
)
4,
4
0
1
-
Re
f
bo
ds
t o
p
ay
me
n
n
Pu
ha
f c
ha
by
he
t
rc
se
o
om
p
an
s
re
s
co
m
p
an
y
y
(
)
2,
4
6
7
-
(
)
1
1,
6
4
3
-
-
-
-
-
-
-
-
-
(
)
6,
2
5
1
(
)
3
9
9
Ca
h
f
low
i
de
d
by
(
d
in
)
f
ina
ing
iv
i
ies
t
t
s
s p
rov
us
e
nc
a
c
7,
9
8
5
3
7,
6
8
4
(
2,
1
9
0
)
(
2
2
2
)
(
1,
0
4
6
)
(
1,
0
9
5
)
(
1
1,
0
5
1
)
Tr
la
ion
d
i
f
fe
in
f
fo
ig
ion
t
t o
t
an
s
re
nc
es
re
sp
ec
re
n o
p
er
a
h
ba
lan
ca
s
ce
s
(
1
7
)
(
7
8
)
4
8
(
5
)
(
2
2
)
1
1
2
(
1
4
3
)
C
ha
in
h a
d
h e
iva
len
fo
he
io
d
ts
t
ng
e
ca
s
n
ca
s
q
u
r
p
er
Ca
h a
d c
h e
iva
len
be
inn
ing
f p
io
d
ts
t
s
n
as
q
a
g
o
er
u
2,
2
6
3
4,
0
2
8
1
0,
6
7
8
1
9,
0
1
3
(
)
3,
6
5
0
1
6,
4
6
7
(
)
1,
4
3
9
7,
7
3
0
(
)
6,
7
9
4
3
6,
4
8
5
(
)
7
4
1
2,
8
9
1
2,
5
4
6
1
6,
4
6
7
Ca
h a
d c
h e
iva
len
d
f p
io
d
ts
t e
s
n
as
q
u
a
n
o
er
6,
2
9
1
2
9,
6
9
1
1
2,
8
1
7
6,
2
9
1
2
9,
6
9
1
1
2,
8
1
7
1
9,
0
1
3

(1) See note 1C

Un
Co
de
d
n
ns
e
co
ns
i
ics
(
9
8
9
tro
1
n
l
i
da
d
in
im
te
te
o
r
)
(
R
"G
)
L
d.
t
ta
te
t o
s
m
en
f c
h
f
lo
as
ws
Fo
he
r t
ix
hs
nt
s
mo
io
d
de
d
p
er
en
Ju
3
0,
ne
Fo
he
r t
s
io
d
p
er
Ju
ne
ix
hs
nt
mo
de
d
en
3
0,
Fo
he
r t
hr
hs
t
t
ee
m
on
io
d
de
d
p
er
en
Ju
3
0,
ne
Fo
he
hr
hs
r t
t
t
ee
m
on
io
d
de
d
p
er
en
Ju
3
0,
ne
Fo
he
r t
y
ea
r
de
d
en
De
be
3
1,
ce
m
r
2
0
1
3
(
d
ite
d
)
un
au
2
0
1
3
2
0
1
2
2
0
1
3
2
0
1
3
2
0
1
2
2
0
1
2
(
d
un
au
ite
d
)
(
d
ite
d
)
un
au
(
in
ho
ds
)
t
us
an
(
d
un
au
ite
d
)
(
d
ite
d
)
au
Co
ien
nv
en
ce
lat
ion
tra
ns
int
Eu
(
)
1
o
ro
N
I
S Co
ien
nv
en
ce
lat
ion
tra
ns
int
Eu
(
)
1
o
ro
N
I
S
Ap
d
ix
A
A
d
j
ho
he
h
tm
ts
to
t
p
en
us
en
ne
ce
ss
ar
s
ca
s
y
w
-
f
low
ing
iv
i
ies
t
t
t
s -
o
p
er
a
a
c
Inc
d e
inv
lv
ing
h
f
low
t
om
e
an
xp
en
se
s n
o
o
ca
s
s:
De
ia
ion
d
iza
ion
t
t
t
p
re
c
a
n
am
or
Lo
(
f
i
)
fro
ke
b
le
i
ies
t
ta
t
t
ss
p
ro
m
ma
r
se
cu
r
ne
,
C
ha
in
l
ia
b
i
l
i
ies
fo
be
f
i
loy
t
ts
to
t
ng
e
r
ne
em
p
ee
s,
ne
7
7
2
(
3
1
)
(
2
3
)
3,
6
3
9
(
1
4
7
)
(
1
0
8
)
3,
1
3
7
1
2
3
1
0
1
3
9
6
(
5
9
)
(
1
7
)
1,
8
7
0
(
2
7
7
)
(
8
2
)
1,
5
7
1
6
3
6
6
5
7,
4
9
4
(
1,
6
9
3
)
(
1
9
1
)
Ex
ha
ha
f
lon
loa
d
bo
ds
te
te
c
ng
e
ra
c
ng
es
o
g-
rm
ns
a
n
n
Ca
i
l
los
ta
p
s
1
6
2
7
7
7
8
8
0
1
8
4
8
6
8
9
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Unitronics (1989) (R"G) Ltd. Condensed consolidated interim statement of cash flows

(1) See note 1C.

Note 1 - General

  • A. These financial statements have been prepared in a condensed format as at June 30, 2013, and for the six and three months periods then ended ("consolidated interim financial statements"). These financial statements should be read in conjunction with the Company's audited annual financial statements and accompanying notes as at December 31, 2012 and for the year then ended.
  • B. Following are data regarding the Israeli CPI and the exchange rate of the U.S. dollar and the Euro:
As of Israeli CPI Exchange rate of
1 U.S. dollar
Exchange rate of
1 Euro
Points (*) NIS NIS
June 30, 2013 222.70 3.618 4.7197
June 30, 2012 218.35 3.923 4.9319
December 31, 2012 219.80 3.733 4.9206
Change during the period % % %
Six month ended June 30, 2013 1.32 (3.08) (4.08)
Six month ended June 30, 2012 0.96 2.67 (0.13)
Three month ended June 30, 2013 1.29 (0.82) 1.26
Three month ended June 30, 2012 0.57 5.60 (0.43)
For the year ended December 31, 2012 1.63 (2.3) (0.35)

(*) The index on an average basis of 1993 = 100.

C. Convenience translation in EURO

For the convenience of the reader, the NIS amounts for the last reported period have been translated in EURO by dividing each NIS amount by the representative rate of exchange of the EURO as at June 30, 2013 (EURO 1 = NIS 4.7197).

The translated EURO amounts presented in these financial statements should not be construed as representing amounts receivable or payable in EURO unless otherwise indicated.

Note 2 - Significant Accounting Policies

A. The interim consolidated financial statements are prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods as set forth in IAS 34 – "Financial reporting for interim periods" including the requirements of disclosure under Chapter D of the Israeli Securities Regulations (Periodic and Immediate Reports) – 1970.

The significant accounting principles and the methods of calculation which were implemented in the preparation of the interim financial statements are identical to those used in the preparation of the last annual financial statements, apart from those mentioned in clause B below.

Note 2 - Significant Accounting Policies (cont'd)

  • B. Initial implementation of new accounting standards
    1. IAS 19 (Revised) Employee Benefits

In June 2011, the IASB published IAS 19 (Revised), which is required to be implemented as from January 1, 2013. The principal revisions relate to the accounting treatment of defined benefit plans. The initial implementation of IAS 19 (Revised) has had a negligible impact on the Company's financial statements.

2. IFRS 10 and - IAS 27R - Consolidated and Separate Financial Statements

IFRS 10 (hereinafter- IFRS 10) replaces IAS 27 on the subject of the accounting treatment of consolidated financial statements, and it also contains the accounting treatment of structured entities, which were previously dealt with in SIC 12 – the consolidation of special purpose entities.

IAS 27R (hereinafter- IAS 27R) replaces IAS 27 and deals solely with separate financial statements. The existing guidance in respect of separate financial statements remains unchanged within the framework of IAS 27R

The initial implementation of IFRS 10 and of IAS 27R has not had a significant impact on the Company's financial statements

3. IFRS 13- Fair value measurement

IFRS 13 establishes guidance for the measurement of fair value, to the extent that such measurement is required according to the international standards. IFRS 13 defines fair value as the price that would be received on the sale of an asset or that would be paid on the transfer of a liability in an orderly transaction between market participants at the measurement date. The fair value reflects the ability of a market participant to produce economic benefits by means of the highest and best use of an asset. In addition, IFRS details the characteristics of market participants on which the assumptions have been based in the calculation of the fair value. Fair value measurement is to be based on the assumption that the transaction will take place in the asset's or the liability's principal market, or in the absence of a principal market, in the most advantageous market. The provisions of IFRS 13 are to be applied prospectively as from January 1, 2013, and they do not apply to comparative figures.

The initial implementation of IFRS 13 has not had a significant impact on the Company's financial statements

4. IAS 1 - Presentation of Financial Statements

On June 2011, the IASB published the amendment to International Accounting Standard No. 1 - Presentation of Financial Statements (IAS 1) (hereinafter: "the Amendment").

According to the Amendment, the method for presenting items of other comprehensive income in the financial statements are changed, so that other comprehensive income items, which in the future will be transferred to the statement of operations in subsequent periods, will be presented separately in the statement to comprehensive income items which will never be transferred to the statement of operations.

If the statement of operations and the statement of comprehensive income be presented as one statement, then the amendment changes the name of the statement from "statement of comprehensive income" to "statement of operations and comprehensive income".

The amendment will be applied retroactively for annual periods starting from January 1, 2013, or thereafter.

Accordingly, the Company separated the amounts of other comprehensive income at the statement of other comprehensive income (loss)

Note 3 - Events in the reported period

A. On January 24, 2013 the Company published a Shelf Offer Report ("Offer Report") in the framework of which the public was offered NIS 53,125,000 par value of bonds (Series 4) of the Company, which were issued at 100% of their par value; the bonds and are linked (principal interest) to the consumer price index for the month of December 2012 (which was published on January 15, 2013). The bonds will be repayable (principal) in six (6) annual unequal installments, which will be paid on January 31 of each of the years of 2015 – 2020 (inclusive), as detailed in the Offer Report. The bonds (Series 4) will bear interest for the unpaid balance of the bonds (Series 4) which will paid in semi-annual equal installments as from July 31, 2013. The proceeds (gross) from the bonds allotted in accordance with the Shelf Offer Report, aggregate NIS 53,125,000 (in total 53,125 bond units (Series 4) were allotted, the annual rate of interest that the bonds bear was set in the tender at 5.4%. The annual effective interest rate is 6.25%.

On January 17, 2013, in the framework of the Shelf Offer Report, the Company engaged in a trust deed for the bonds (Series 4) (hereinafter – "the Trust Deed") according to which it undertook, inter alia, to meet financial covenants of a ratio of the financial debt to net CAP which will not exceed 80% and the ratio of financial debt to EBITDA which will not exceed 10, and a condition that shareholders' equity will not be less than NIS 20 million, including setting a mechanism for updating the interest for exceptional periods from the financial covenants agreed, and circumstances which are grounds for immediate repayment, and all as detailed in the Trust Deed. An examination whether the Company meets its financial covenants will be made twice a year in every calendar year on the date of publishing the financial statements as at June 30 and December 31, as long as the bonds exist and are in circulation. The first report to be examined will be the financial statements as at June 30, 2013. As of 30 June 2013 the Company meets its financial covenants.

In addition, the Company undertook to pledge a deposit in an amount of the semi-annual interest on the bonds in favor of the bond holders (Series 4).

B. In March 2013, the Company's Board of Directors approved the adoption of a plan to purchase additional ordinary shares of the Company, based on the financial statements for the year 2012, for an amount not exceeding NIS 2 million, (hereinafter – "March plan"), which replaces a previous plan of the Company on the subject whose unutilized balance expired. March plan is in force up to June 30, 2013.

Correct as at june 30, 2013, the Company held 1,676,192 shares, comprising 14.35% of the Company's issued share capital, which were purchased for a total amount of NIS 7,042 thousand (unchanged compared to the previous period).

C. In March 2012 a one-sided one-time waiver of an annual bonus to Mr. Haim Shani, a controlling party and CEO of the Company, for the 2012 year of 7.5% of the profits before tax which aggregated NIS 104 thousand was approved. The waiver was enrolled as capital benefit arising from a transaction with a controlling party.

Note 4 - Financial Instruments

A. Fair value

Below the balances books and the fair value of financial instruments which are not presented in the financial statements according to their fair value Which there is a substantial difference between the carrying amount to fair value as at June 30, 2013:

Book value Fair value
Financial liabilities (1) NIS, (in thousands)
Bonds linked to the Israeli CPI 103,816 112,536

(1) The fair value is based on stock market value as at the report date.

B. Classification of financial instruments at fair value rating

The financial instruments presented in the statement of financial position at fair value or that disclosure of their fair value, are classified, according to groups with similar characteristics, to the rating of fair value as follows, which is determined in accordance with the source of the data used in determining fair value:

Level 1: Quoted prices (without adjustments) in an active market of identical assets and liabilities.

Level 2: Data which is not quoted prices included in Level 1, which can be seen directly or indirectly.

Level 3: Data which is not based on market data which can be seen (evaluation techniques without the use of market data which can be seen).

As of June 30, 2013, the Company holds financial instruments measured at fair value according to the classifications as follows:

Level 1 Level 2 Level 3 Total
NIS, (in thousands)
Financial assets at fair value:
Marketable securities
31,460 - - 31,460
Financial liabilities at fair value:
Embedded derivatives
- 2,513 - 2,513

During the six-month period ended June 30, 2013, there were no transfers between Level 1 and Level 2, and there were no transfers to or from Level 3.

C. Evaluation techniques.

The Company has sales contracts denominated in currencies which are not the Company's functional currency. These contracts included imbedded derivatives which are measured based on the current spot rates, the yield curve of the relevant currencies and the margins between the currencies.

Note 6 - Business segments

A. The Group defined the Company's CEO who makes the strategic decisions as the chief operating decision maker, of the Group. The CEO reviews the internal reports of the Group in order to evaluate performance and allocate recourses and determines the operating segments based on these reports.

The CEO examines the segments operating performance on the basis of measuring operating income, this measurement basis is not affected by one-time expenses in the operating segments, such as the costs of structural change and impairment in the value of assets, where the impairment in value results from a single one time event. Interest revenues and expenses are not included in the results in each of the operating segments examined by senior management.

  • B. The company and its subsidiaries operate in three main business segments.
  • Programmable Logic Controllers systems (hereinafter "The products segment").
  • System integration projects (hereinafter "The system integration projects segment").
    • Planning, construction and maintenance of automated parking systems (hereinafter "Parking solutions segment").

The business activity in the parking solutions segment presented separately since January 1, 2013 onwards, Including the provision of information in relation to this segment in prior periods also, in accordance with the accounting policy described in paragraph A above.

Note 6 - Business segments (cont'd)

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(1) See note 1C.

UNITRONICS (1989) (R"G) LTD.

Financial data from the interim consolidated financial statements attributed to the company itself

June 30 ,2013

(Unaudited)

Amit, Halfon

To the shareholders of Unitronics (1989) (R"G) Ltd.

Re: Special review report on separate interim financial information under Regulation 38D to the Israeli Securities Regulations (Periodic and Immediate Reports)- 1970

Introduction

We reviewed the separate interim financial information presented under Regulation 38D to the Israeli Securities Regulations (Periodic and Immediate Reports) - 1970 of Unitronics (1989) (R"G) Ltd. (hereinafter – "the Company") as at June 30, 2013 and for the periods of six and three months then ended. The separate financial information is in the responsibility of the Company's Board of Directors and Management. Our responsibility is to express a conclusion on the separate interim financial information for the interim periods, based on our review.

Scope of the review

We prepared our review in accordance with Review Standard No. 1 of the Institute of Certified Public Accountants in Israel "Review of financial information for interim periods prepared by the entity's auditor". The review of the financial information for interim periods comprises clarifications, mainly with the people responsible for financial and accounting matters, and from adopting analytical and other review procedures. A review is more limited in scope to a much larger extent than an audit performed in accordance with generally accepted auditing standards, and therefore does not enable us to be certain that we will know of all the significant matters which could have been identified in an audit. Consequently, we are not issuing an audit opinion.

Conclusion

Based on our review, nothing came to our notice which would cause us to think that the above separate interim financial information is not prepared, in all significant aspects, in accordance with regulation 38D of the Israeli Securities Regulations (Periodic and Immediate Reports) -1970.

Amit, Halfon Certified Public Accountants (Israel)

Ramat Gan, August 29, 2013

16 Aba Hillel Silver St. Ramat-Gan 52506 Israel Tel: +972-3-6123939 Fax: +972-3-6125030 e-mail: [email protected]

Amit, Halfon is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Unitronics (1989) (R"G) Ltd.

Assets and liabilities included in the interim consolidated financial statements attributed to the company

June 30,
2013
June 30,
2013
June 30,
2012
December 31,
2012
(unaudited) (unaudited) (audited)
(in thousands)
Convenience
translation
into Euro (1)
NIS
Current assets
Cash and cash equivalents
Restricted cash
Marketable securities
Accounts receivable -
5,319
875
6,666
25,105
4,130
31,460
10,464
3,318
35,242
15,019
3,349
30,686
Trade
Other
Accounts receivable - other -
2,389
374
11,277
1,764
17,444
694
11,411
2,173
subsidiaries
Embedded derivatives
Inventory
Inventory - work in progress
3,885
-
4,446
3,694
27,648
18,335
-
20,985
17,433
130,489
10,117
230
15,446
7,996
100,951
13,665
40
20,081
16,780
113,204
Non-current assets
Long-term deposits
Property and equipment, net
Intangible assets, net
74
8,514
7,184
15,772
351
40,182
33,908
74,441
199
39,822
27,176
67,197
157
39,831
30,758
70,746
43,420 204,930 168,148 183,950
Haim Shani
Chairman of the Board of
Directors and C.E.O.
Tzvi Livne
Director
Yair Itscovich
Chief Financial Officer

Approved: August 29, 2013.

(1) See note 1C.

The additional information to the financial information forms an integral part thereof.

Unitronics (1989) (R"G) Ltd.

Assets and liabilities included in the interim consolidated financial statements attributed to the company

June 30,
2013
June 30,
2013
June 30,
2012
December 31,
2012
(unaudited) (unaudited) (audited)
Convenience
translation
into Euro (1)
(in thousands) NIS
Current liabilities
Current maturities of long-term loans
Current maturities of bonds
Accounts payable -
Trade
Other
Embedded derivatives
931
3,817
3,163
4,402
532
12,845
4,394
18,013
14,926
20,777
2,513
60,623
4,410
17,882
16,192
15,471
1,031
54,986
4,590
17,788
29,116
25,819
1,509
78,822
Non-current liabilities
Liabilities less assets associated with
subsidiaries
Loans from banks and others
Bonds
Liabilities for benefits to employees, net
1,341
1,801
18,180
536
21,858
6,328
8,502
85,803
2,532
103,165
655
13,579
50,622
2,633
67,489
2,500
11,063
45,025
2,640
61,228
Shareholders' equity
Share capital
Share premium
Capital reserve from translation of
foreign operation
Company shares held by the company
Reserve from a transaction with a
controlling party
Retained earnings (loss)
75
10,718
(255)
(1,492)
22
(351)
8,717
43,420
352
50,588
(1,204)
(7,042)
104
(1,656)
41,142
204,930
352
50,588
(393)
(6,643)
-
1,769
45,673
168,148
352
50,588
(957)
(7,042)
-
959
43,900
183,950

The additional information to the financial information forms an integral part thereof.

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(
1
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Se
1
C.
te
e
no
4
7 -
-

48 - The additional information to the financial information forms an integral part thereof.

Un
i
ics
(
9
8
9
tro
1
n
)
(
R
"G
)
L
d.
t
Ca
h
F
s
lo
in
lu
de
d
in
t
ws
c
t
tr
a
he
in
im
te
r
c
i
bu
d
he
te
to
t
l
i
da
d
f
te
on
so
c
om
p
an
y
in
ia
l s
ta
te
ts
an
c
m
en
Fo
he
r t
s
ix
hs
nt
mo
io
d
de
d
p
er
en
Ju
3
0,
ne
Fo
he
r t
s
io
d
p
er
Ju
ne
ix
hs
nt
mo
de
d
en
3
0,
Fo
he
r t
hre
hs
t
t
e m
on
d Ju
io
d
de
p
er
en
3
0,
ne
Fo
he
hr
r t
t
io
d
p
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t
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m
on
de
d
en
3
0,
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de
d
y
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r e
n
De
be
3
1,
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m
r
2
0
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3
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3
2
0
1
2
2
0
1
3
2
0
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3
2
0
1
2
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0
1
2
(
d
ite
d
)
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au
(
un
au
d
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d
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d
ite
d
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au
(
d
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(
d
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Co
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(
1
)
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p
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l n
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to
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0
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Bo
k
ing
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l
be
f
i
is
ing
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h a
ta
t a
tra
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a
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a
ns
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ty
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(
)
Se
C.
2
te
1
e
no
T
he
d
d
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in
fo
ion
he
f
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l
in
fo
ion
fo
t
t
to
t
t
a
a
rm
a
nc
rm
a
rm
in
l p
he
te
t
t
s a
n
g
ra
ar
f.
re
o
4
7 -
-

Unitronics (1989) (R"G) Ltd.

Additional information

Note 1 - General

  • A. These separate interim financial information have been prepared in accordance with regulation 38D of the Israeli Securities Regulations (Periodic and Immediate Reports) - 1970 and do not includes all the information required in regulation 9C and the 10th addition of the Israeli Securities Regulations (Periodic and Immediate Reports), 1970 about separate financial information of the company. These separate interim financial information should be read in with the Company's audited annual separate financial information as at December 31, 2012 and for the year then ended, and with the condensed consolidated interim financial statement as at June 30, 2013.
  • B. Consolidated companies defined in Note 1D to the consolidated financial statements as at December 31, 2012.
  • C. Convenience translation in EURO

For the convenience of the reader, the NIS amounts for the last reported period have been translated into EURO by dividing each NIS amount by the representative rate of exchange of the EURO as at June 30, 2013 (EURO 1 = NIS 4.7197).

The translated EURO amounts presented in these financial statements should not be construed as representing amounts receivable or payable in EURO unless otherwise indicated.

Chapter D - Quarterly Report on Effectiveness of Internal Control over Financial Reporting and Disclosure

  • a. Quarterly report on effectiveness of internal control over financial reporting and disclosure, pursuant to Regulation 38c(a) of Securities Law Regulations (Periodic and Immediate Reports), 1970 (the "Regulations")
  • b. Certification by CEO pursuant to Regulation 38c(d)(1) of the regulations
  • c. Certification by CFO pursuant to Regulation 38c(d)(2) of the regulations

Following is the Quarterly Report on Effectiveness of Internal Control Over Financial Reporting and Disclosure, pursuant to Regulation 38c(a) of the Regulations:

The Management, supervised by the Board of Directors of UNITRONICS (1989) (R"G) Ltd. (the "Corporation") is responsible to set and maintain proper internal control over financial reporting and disclosure by the corporation.

For this matter, the Management consists of: HAIM SHANI, Company CEO BAREKET SHANI, Deputy CEO EYAL SABAN, VP YAIR ITZKOVICH, CFO

Internal control over financial reporting and disclosure consists of existing controls and procedures of the Corporation, designed by the general manager and most senior financial officer, or under their supervision, or by those acting in said capacities, under supervision of the Corporation's Board of Directors, which are to provide reasonable certainty with respect to reliability of financial reporting and preparation of reports pursuant to statutory provisions, and to ensure that information which the Corporation is required to disclose in reports issued pursuant to statutory provisions is accumulated, processed, summarized and reported on schedule and in the format prescribed by Law.

Internal control includes, inter alia, controls and procedures which are designated to ensure that information which the Corporation is required to disclose, is accumulated and submitted to corporate's Management, including to the general manager and to the most senior financial officer, or to those acting in said capacities, in order to enable decisions to be made at the appropriate time with regard to the required disclosure.

Due to structural limitations, internal control over financial reporting and disclosure is not designed to provide absolute certainty that misrepresentation or omission of information on the reports would be avoided or discovered.

In the Quarterly Report on The Effectiveness of Internal Control Over Financial Reporting and Disclosure that was attached to the quarterly report for the period ended on March 31, 2013 (hereinafter - the "Last Quarterly Report on Internal Control"), the internal control system in the company was resolved as effective.

Until the reporting date, no event or matter have been brought to the attention of the board of directors and the Management, which could change the assessment of effectiveness of internal control, as it was resolved in the Last Quarterly Report on Internal Control.

As of the date of this report, based on the Last Quarterly Report on Internal Control, and based on information brought to the attention of the board of directors and the Management as stated above, the internal control is effective;

Certification by CEO pursuant to Regulation 38c(d)(1) of the regulations:

I, HAIM SHANI, certify that:

    1. I have reviewed the periodic report of UNITRONICS (1989) (R"G) Ltd. (the "Corporation") for the second quarter of 2013 (the "Report").
    1. To the best of my knowledge, the Report is free of any misrepresentation of material fact and is not lacking any representation of material fact required for the representations made therein not to be misleading in reference to the period covered by the Report, under the circumstances in which they were made.
    1. To the best of my knowledge, as of the dates and for the periods to which the Report refers, the financial statements and other financial information included in the Report, properly reflect, in all material aspects, the financial standing, operating results and cash flows of the Corporation.
    1. Based on my most current assessment of the internal control over financial reporting and disclosure, I have disclosed to the Corporation's Independent Auditor, the Board of Directors and the Audit Committee of the Corporation's Board of Directors:
  • a. All significant faults and material weaknesses in installation and operation of the internal control over financial reporting and disclosure, which may reasonably impact the Corporation's capacity to accumulate, process, summarize or report financial information, in a manner which may cast doubt over the reliability of the financial reporting and preparation of the financial statements, pursuant to statutory provisions; and -
  • b. Any fraud, whether or not material, involving the General Manager or any of the direct reports thereof, or any other involved employees having a significant capacity in the internal control over financial reporting and disclosure;
    1. I, on my own or with others of the Corporation:
  • a. Have installed controls and procedures, or verified its installation or existence under my supervision, which designed to ensure that material information with regard to the Corporation, including subsidiaries thereof, as defined in Securities Regulations (Annual financial statements), 2010, is brought to my attention by others at the Corporation and its subsidiaries, and specifically during the period of preparation of the Report; and -
  • b. Have installed controls and procedures or verified its installation or existence under my supervision, which designed to reasonably ensure the reliability of financial reporting and preparation of the financial statements pursuant to statutory provisions, including pursuant to generally-accepted accounting principles;
  • c. No event or matter that occurred during the period between the last reporting date (quarterly or periodically, as the case may be) and this reporting date which could change the conclusion of the board of directors and the management, regarding the effectiveness of internal control over financial reporting and the company's disclosure, has been brought to my attention.

The foregoing shall not derogate from any of my statutory responsibility, or that of any other person.

August 29, 2013

HAIM SHANI, CEO

____________

Certification by CFO pursuant to Regulation 38c(d)(2) of the regulations

  • I, YAIR ITZKOVICH, certify that:
    1. I have reviewed the interim financial statements and other financial information included in the report for interim periods report of UNITRONICS (1989) (R"G) Ltd. (the "Corporation") for the second quarter of 2013 (the "Report" or the "Report for Interim Periods").
    1. To the best of my knowledge, the interim financial statements and other financial information included in the Report for Interim Periods is free of any misrepresentation of material fact and is not lacking any representation of material fact required for the representations made therein, not to be misleading in reference to the period covered by the Report under the circumstances in which they were made.
    1. To the best of my knowledge, as of the dates and for the periods to which the Report refers to, the interim financial statements and other financial information included in the Report for Interim Periods properly reflect, in all material aspects, the financial standing, operating results and cash flows of the Corporation.
    1. Based on my most current assessment of the internal control over financial reporting and disclosure, I have disclosed to the Corporation's Independent Auditor, Board of Directors and Audit Committee of the Corporation's Board of Directors,:
  • a. All significant faults and material weaknesses in installation and operation of the internal control over financial reporting and disclosure, as relevant to the financial statements and other financial information included in the Reports, which may reasonably impact the Corporation's capacity to accumulate, process, summarize or report financial information in a manner which may cast doubt over the reliability of financial reporting and preparation of financial statements pursuant to statutory provisions; and-
  • b. Any fraud, whether or not material, involving the General Manager or any of the direct reports thereof, or any other involved employees having a significant capacity in the internal control over financial reporting and disclosure;
    1. I, on my own or with others at the Corporation:
  • a. Have installed controls and procedures or verified its installation or existence under our supervision, designed to ensure that material information with regard to the Corporation, including subsidiaries thereof, as defined in Securities Regulations (Annual financial statements), 2010, is brought to my attention by others at the Corporation and its subsidiaries, specifically during the period of preparation of the Report; and-
  • b. Have installed controls and procedures or verified its installation or existence under my supervision, designed to reasonably ensure the reliability of financial reporting and preparation of the financial statements pursuant to statutory provisions, including pursuant to generally-accepted accounting principles;
  • c. No event or matter, which could change, to my opinion the conclusion of the board of directors and the management, regarding the effectiveness of

internal control over financial reporting and the company's disclosure that occurred during the period between the last reporting date (quarterly or periodic, as the case may be) and this reporting date was brought to my attention

The foregoing shall not derogate from my statutory responsibility, or that of any other person.

August 29, 2013

YAIR ITZKOVICH, CFO

_______________________

Unitronics (1989) (R''G) Ltd.

Fair Value Valuation of Embedded Derivatives

Valuation Date: 30/06/2013

Limitation Conditions

The document was prepared solely for the management of Unitronics ltd. (Hereinafter: the "Management", "Unitronics" or the "Company") for the purposes stated herein and should not be relied upon for any other purpose. Unless required by law it shall not be provide to any third party without our prior written consent. In no event, regardless of whether consent has been provided, shall we assume any responsibility to any third party to which the report is disclosed or otherwise made available.

In the course of our analysis, we made use of financial and other information and representations provided to us by the Management or its representatives. We assume such information reliable. The more significant sources of this information are identified in the accompanying report. Our conclusions are dependent on such information being complete and accurate in all material respects; however, we have not examined such information and, accordingly, do not express an opinion or any other form of assurance thereon.

While our work has involved an analysis of financial information and accounting records, our engagement does not include an audit in accordance with generally accepted auditing standards of the existing business records of the Company. Accordingly, we assume no responsibility and make no representations with respect to the accuracy or completeness of any information provided by and on behalf of the Management.

Projections relating to future events are based on assumptions, which may not remain valid for the whole of the relevant period. Particularly, projections are based solely on the information that was available on Valuation Dates, and may differ from projections and/or financial results that were made available later on. Consequently, this information cannot be relied upon to the same extent as that derived from audited accounts for completed accounting periods. We express no opinion as to how closely the actual results will correspond to those projected by the Company.

The valuation is not a precise science and the conclusions arrived at in many cases will of necessity be subjective and dependent on the exercise of individual judgment. Therefore, there is no indisputable single value and we normally express our opinion on the value as falling within a likely range. However, as purpose requires the expression of a single value, we have adopted a value at the mid-point of our valuation range.

Whilst we consider our value/range of values to be both reasonable and defensible based on the information available to us, others may place a different value on the business.

Excluding gross negligence and malice, Financial Immunities and its employees or any other party acting on its behalf, shall not be liable for any loss or damage whatsoever that the Company may suffer, directly or indirectly, as a result of Financial Immunities services.

Without derogating from the previously mentioned, in any event whatsoever, Financial Immunities liability shall be limited to the amount of fees payable by the Company to Financial Immunities in respect with providing its services for preparing the Project.

The Company will indemnify Financial Immunities against all claims by third parties that arise out of or in connection with the Project and/or services rendered under this agreement

Finally, the results of our valuation do not constitute a Solvency Opinion or a Fairness Opinion, and should not be relied upon as such. Furthermore, the analysis we perform should not be taken to supplant any procedures that the Company should undertake in connection with the transaction.

Financial Immunities has no personal interest in the Company, and its fees are not contingent on the conclusions of this opinion.

Sincerely, Financial Immunities Ltd.

1. Background5
2. Methodology8
3. Calculation Model
8
4. ILS Cash Flow Calculations 9
5. Fair Value Calculations
18
6. Findings23

Fair Value Valuation of Embedded Derivatives

1. Background

Unitronics Company focuses on the design, development, manufacture, marketing, sale and support of mass production line automation products and realization of logistic systems automation projects. The Company signed an agreement with a customer. Under the terms of the agreement, the Company undertook to accomplish a project expected to generate to the Company future cash flows denominated in euro. As of this moment, EUR does not represent the functional currency either for Unitronics or for the customer. Company's experience with the analogous projects indicates that there exists a reasonable probability for deviation of payment terms from the originally scheduled ones.

The table bellow presents the expected payments as reported by the Company:

Transaction No. Date of
order signing
Inflow in EUR
SO9024592 06/05/2009 € 10,591,854
SO9024593 06/05/2009,07/12/2009 € 4,497,003
SO9026013 29/09/2009,11/12/2009,15/01/2010, 24/03/2010 € 1,440,190
SO9027063 23/12/2009 € 177,000
SO10027583 04/02/2010 € 137,458
SO9026912 17/12/2009,13/01/2010 € 1,671,892
SO10028957 31/05/2010 € 45,325
SO10029075 10/06/2010 € 85,748
SO10028772 16/05/2010 € 1,726,001
SO10029601 28/07/2010 € 1,158,700
SO10029738 12/08/2010 € 179,575
SO10030086 19/09/2010 € 139,421
SO10030459 24/10/2010 € 48,000
SO10030873 28/11/2010 € 77,649
SO10030874 28/11/2010 € 234,260
SO10031217 22/12/2010 € 21,814
SO10031195 21/12/2010 € 28,093
SO10030475 25/10/2010 € 74,817
SO10031025 07/12/2010 € 41,453
SO10030653 08/11/2010 € 33,000
SO11033018 16/03/2011 € 24,179
SO11033017 16/03/2011 € 32,626
USO1202098 24/05/2012 € 10,238,123
Total € 32,704,181
Cumulative Total 2009 2010 2011 2012
Actual Cumulative Year 2009 Year 2010 Year 2011 Year 2012
Transaction
No.
Amount in
EUR as of
30/06/2013
Actual Amount
in ILS as of
30/06/2013
Total
Expected
Amount in
ILS
Total Actual
Amount in
ILS
Total
Expected
Amount in
ILS
Total Actual
Amount in
ILS
Total
Expected
Amount in
ILS
Total Actual
Amount in
ILS
Total
Expected
Amount in
ILS
Total Actual
Amount in
ILS
SO9024592 € 9,432,538 ₪48,247,171 ₪14,577,321 ₪14,746,628 ₪29,747,772 ₪26,656,597 ₪5,237,501 ₪4,743,947 ₪0 ₪0
SO9024593 € 4,497,003 ₪22,980,597 ₪6,918,719 ₪6,875,196 ₪11,682,369 ₪10,517,110 ₪6,191,981 ₪5,588,291 ₪0 ₪0
SO9026013 € 1,296,171 ₪6,631,183 ₪1,384,069 ₪1,395,250 ₪5,671,166 ₪5,235,933 ₪0 ₪0 ₪0 ₪0
SO9027063 € 177,000 ₪906,618 ₪0 ₪0 ₪719,572 ₪683,235 ₪239,650 ₪223,383 ₪0 ₪0
SO10027583 € 128,537 ₪644,729 ₪0 ₪0 ₪582,058 ₪566,248 ₪56,001 ₪54,827 ₪24,760 ₪23,654
SO9026912 € 1,409,140 ₪7,200,670 ₪0 ₪0 ₪7,077,563 ₪6,657,687 ₪585,143 ₪542,983 ₪0 ₪0
SO10028957 € 36,260 ₪174,423 ₪0 ₪0 ₪86,233 ₪84,613 ₪86,335 ₪89,811 ₪0 ₪0
SO10029075 € 85,748 ₪428,740 ₪0 ₪0 ₪280,603 ₪302,640 ₪116,978 ₪126,100 ₪0 ₪0
SO10028772 € 1,380,801 ₪6,844,850 ₪0 ₪0 ₪4,938,815 ₪5,139,187 ₪1,572,012 ₪1,705,663 ₪0 ₪0
SO10029601 € 1,158,700 ₪5,829,432 ₪0 ₪0 ₪2,004,760 ₪2,011,463 ₪3,728,806 ₪3,817,969 ₪0 ₪0
SO10029738 € 163,642 ₪821,962 ₪0 ₪0 ₪773,057 ₪796,804 ₪24,723 ₪25,158 ₪0 ₪0
SO10030086 € 139,421 ₪684,614 ₪0 ₪0 ₪0 ₪0 ₪679,862 ₪684,614 ₪0 ₪0
SO10030459 € 48,000 ₪240,000 ₪0 ₪0 ₪0 ₪0 ₪242,487 ₪240,000 ₪0 ₪0
SO10030873 € 77,649 ₪377,422 ₪0 ₪0 ₪189,002 ₪182,273 ₪170,136 ₪176,266 ₪18,897 ₪18,883
SO10030874 € 222,547 ₪1,081,679 ₪0 ₪0 ₪570,203 ₪549,902 ₪513,285 ₪531,777 ₪0 ₪0
SO10031217 € 21,814 ₪106,849 ₪0 ₪0 ₪0 ₪0 ₪0 ₪0 ₪102,697 ₪106,849
SO10031195 € 28,093 ₪133,000 ₪0 ₪0 ₪0 ₪0 ₪132,855 ₪133,000 ₪0 ₪0
SO10030475 € 59,853 ₪294,336 ₪0 ₪0 ₪244,980 ₪237,162 ₪56,501 ₪57,174 ₪0 ₪0
SO10031025 € 33,163 ₪160,480 ₪0 ₪0 ₪0 ₪0 ₪160,228 ₪160,480 ₪0 ₪0
SO10030653 € 33,000 ₪167,134 ₪0 ₪0 ₪0 ₪0 ₪165,701 ₪167,134 ₪0 ₪0
SO11033018 € 24,179 ₪120,000 ₪0 ₪0 ₪0 ₪0 ₪119,895 ₪120,000 ₪0 ₪0
SO11033017 € 32,626 ₪161,923 ₪0 ₪0 ₪0 ₪0 ₪161,772 ₪161,923 ₪0 ₪0
USO1202098 € 3,659,153 ₪18,033,429 ₪0 ₪0 ₪0 ₪0 ₪0 ₪0 ₪14,118,200 ₪14,230,530
€ 24,145,037 ₪122,271,242 ₪22,880,108 ₪23,017,074 ₪64,568,155 ₪59,620,853 ₪20,241,852 ₪19,350,499 ₪14,264,554 ₪14,379,917

The following table reports the expected inflows in ILS as of the date of agreement signing and the valuation date (30/06/2013):

2013
Year 2013
Total Expected
Amount in ILS
Total Actual
Amount in ILS
₪3,925,162 ₪3,500,150
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪0 ₪0
₪8,982,976 ₪8,722,897
₪12,908,138 ₪12,223,047

2. Methodology

An embedded derivative is a derivative that embedded in buy or sales contracts of products or services. In accounting literature, those contracts are also known as "Host Contracts". In Israel, embedded derivatives are often a part of transactions denominated in a currency, which is not the functional currency of a reporting company and/or of transaction counterpart's company (for example, foreign currency derivatives in such transactions as purchases from suppliers, sales to customers, or real estate rent contracts).

According to IAS 39 – "Financial Instruments: Recognition and Management", embedded derivatives have to be separated from host contracts, and treated as separate derivative financial instruments. In particular, embedded derivatives have to be evaluated with respect to their fair value estimated against corresponding profits and losses.

3. Calculation Model

We derive our calculation model from the decision making model. Since the exact date of payment is unknown and there is a probability for a delay, we chose to use the decision tree algorithm.

In accordance with the data obtained from the Company, the probability to each of the scenarios to occur is assumed equal (i. e. 50% probability for each of the scenarios).

The following figure illustrates possible implementation of the introduced above model. More specifically, the figure shows that if payment is made at

the originally scheduled date, then no delay will be considered. In contrast, if the payment has not been made on time, we will move to the next point (of the model) – possible payment date next to the initially scheduled one - and then reexamine whether or not the payment is made.

4. ILS Cash Flow Calculations

A. Applying decision tree algorithm, we first compute forward rate, which afterward used for calculations of ILS payment equivalent as of the agreement inception date. The forward rate calculations based on the assumption that probability of not receiving payment in time is equal to 50%. Based on its experience with similar projects, the Company estimates possible delay in payment as of up to three months (with respect to the payment terms set forth in the project's schedule). To examine the probability of delay in the payment, we test a number of possible scenarios with different delay lengths (two weeks, month, and so on up to three months, increasing the lag period in 15 days each time). In order to estimate the forward rates, we used the forward rates as of agreement inception dates for each of the future scenario terms (06/05/2009, 29/09/2009, 07/12/2009, 11/12/2009, 17/12/2009, 23/12/2009, 13/01/2010, 15/01/2010, 04/02/2010, 24/03/2010, 16/05/2010, 31/05/2010, 10/06/2010, 28/07/2010, 12/08/2010, 19/09/2010, 24/10/2010, 25/10/2010, 08/11/2010, 28/11/2010, 07/12/2010, 21/12/2010, 22/12/2010, 16/03/2011, 24/05/2012). For example: for the payment expected on 31/05/2010 there is a probability of 50% to be made on this date (in accordance with the future rate determined for the corresponding date), and a probability of 50% to be made during the next three months following after the initially scheduled date (according to the Company).

B. After we estimated the constant ILS inflow for each payment date, we estimate the forward rate for 30/06/2013 (the valuation date). We compute the forward rate for the valuation date in a similar way we do for the agreement inception date. Since such market parameters as interest rate, exchange rate, and others changed over the period between the agreement inception date and the valuation date, values of forward rates for those two dates are not the same.

Transaction Date of order signing Inflow in ILS
SO9024592 06/05/2009 ₪58,238,562
SO9024593 06/05/2009,07/12/2009 ₪24,793,069
SO9026013 29/09/2009,11/12/2009,15/01/2010, 24/03/2010 ₪7,847,375
SO9027063 23/12/2009 ₪959,222
SO10027583 04/02/2010 ₪710,019
SO9026912 17/12/2009,13/01/2010 ₪9,095,186
SO10028957 31/05/2010 ₪217,647
SO10029075 10/06/2010 ₪397,581
SO10028772 16/05/2010 ₪8,192,370
SO10029601 28/07/2010 ₪5,733,566
SO10029738 12/08/2010 ₪877,294
SO10030086 19/09/2010 ₪679,862
SO10030459 24/10/2010 ₪242,487
SO10030873 28/11/2010 ₪378,036
SO10030874 28/11/2010 ₪1,141,148
SO10031217 22/12/2010 ₪102,697
SO10031195 21/12/2010 ₪132,855
SO10030475 25/10/2010 ₪378,421
SO10031025 07/12/2010 ₪201,140
SO10030653 08/11/2010 ₪165,701
SO11033018 16/03/2011 ₪119,895
SO11033017 16/03/2011 ₪161,772
USO1202098 24/05/2012 ₪50,671,265
Total ₪171,437,167

C. The following table reports payments in ILS for a corresponding agreement inception date:

D. The following tables summarize the data used for the forward rate and ILS payment calculations for corresponding agreement inception date.

Date: 06/05/2009.

06/05/2009
(Original) Date of Payment Forward Rate
15/01/2010 5.5147
01/03/2010 5.5181
01/04/2010 5.5212
01/05/2010 5.5245
01/07/2010 5.5340
01/08/2010 5.5551
01/10/2010 5.5515
01/11/2010
5.5583
01/12/2010 5.5654
23/12/2010 5.5711
23/03/2011 5.5953

Date: 29/09/2009.

29/09/2009
(Original) Date of Payment Forward Rate
31/01/2010 5.4864
31/07/2010
5.4894
30/06/2012 5.5246

Date: 07/12/2009.

07/12/2009
(Original) Date of Payment Forward Rate
01/03/2010 5.6343
01/04/2010 5.6325
01/05/2010 5.6313
01/07/2010 5.6286
01/08/2010 5.6271
01/10/2010 5.6244

Date: 11/12/2009.

11/12/2009
(Original) Date of Payment Forward Rate
31/03/2010 5.5551
31/07/2010 5.5511
30/06/2012 5.5564

Date: 17/12/2009.

17/12/2009
(Original) Date of Payment Forward Rate
30/05/2010 5.4517
30/07/2010 5.4499
15/08/2010 5.4495
03/10/2010 5.4476
19/01/2011 5.4484
19/04/2011 5.4544

Date: 23/12/2009.

23/12/2009
(Original) Date of Payment Forward Rate
31/03/2010 5.4202
31/05/2010 5.4192

Date: 13/01/2010.

13/01/2010
(Original) Date of Payment Forward Rate
30/05/2010 5.3426
15/08/2010 5.3446
19/01/2011 5.3544
19/04/2011 5.3647

Date: 15/01/2010.

15/01/2010
(Original) Date of Payment Forward Rate
30/03/2010 5.3028
30/07/2010 5.3058
30/06/2012 5.3182

Date: 04/02/2010.

04/02/2010
(Original) Date of Payment Forward Rate
31/03/2010 5.1562
31/05/2010 5.1638
01/06/2010 5.1639
01/08/2010 5.1672
01/09/2010 5.1704

Date: 24/03/2010.

24/03/2010
(Original) Date of Payment Forward Rate
31/07/2010 5.0034
30/09/2010 5.0076
30/06/2012 5.0234

Date: 16/05/2010.

16/05/2010
(Original) Date of Payment Forward Rate
15/06/2010 4.7106
15/09/2010 4.7171
15/10/2010 4.7198
15/02/2011 4.7311
03/04/2011 4.7366
03/07/2011 4.7501

Date: 31/05/2010.

31/05/2010
(Original) Date of Payment Forward Rate
31/07/2010 4.7540
30/11/2010 4.7600
28/02/2011 4.7652

Date: 10/06/2010.

10/06/2010
(Original) Date of Payment Forward Rate
31/07/2010 4.6344
31/10/2010 4.6388
31/12/2010 4.6424
30/06/2012 4.6487

Date: 28/07/2010.

28/07/2010
(Original) Date of Payment Forward Rate
31/01/2011 4.9512
28/02/2011 4.9524
30/04/2011 4.9545
31/07/2011 4.9586

Date: 12/08/2010.

12/08/2010
(Original) Date of Payment Forward Rate
31/08/2010 4.8701
31/10/2010 4.8726
31/01/2011 4.8772
30/04/2011 4.8827

Date: 19/09/2010.

19/09/2010
(Original) Date of Payment Forward Rate
30/11/2010 4.8737
31/01/2011 4.8759

Date: 24/10/2010.

24/10/2010
(Original) Date of Payment Forward Rate
31/12/2010 5.0516

Date: 25/10/2010.

25/10/2010
(Original) Date of Payment Forward Rate
30/01/2011 5.0369
28/02/2011 5.0367
30/04/2011 5.0362
03/07/2011 5.0361

Date: 08/11/2010.

08/11/2010
(Original) Date of Payment
Forward Rate
31/01/2011 5.0215
28/02/2011 5.0212
30/04/2011 5.0211
31/07/2011 5.0234

Date: 28/11/2010.

28/11/2010
(Original) Date of Payment
Forward Rate
30/06/2012 4.8713

Date: 07/12/2010.

07/12/2010
(Original) Date of Payment Forward Rate
07/12/2010 4.8273
15/01/2011 4.8327
30/01/2011 4.8327
15/02/2011 4.8329
30/04/2011 4.8344
30/07/2011 4.8385

Date: 21/12/2010.

21/12/2010
(Original) Date of Payment
Forward Rate
28/02/2011 4.7300

Date: 22/12/2010.

22/12/2010
(Original) Date of Payment Forward Rate
28/02/2011 4.7108

Date: 16/03/2011.

16/03/2011
(Original) Date of Payment
Forward Rate

Date: 24/05/2012.

24/05/2012
(Original) Date of Payment Forward Rate
31/05/2012 4.8896
31/08/2012 4.8937
30/09/2013 4.9917
31/01/2013 4.9389
31/01/2013 4.9389
30/04/2013 4.9584
30/04/2013 4.9584
30/06/2013 4.9717
30/04/2013 4.9584
30/06/2013 4.9717
30/06/2013 4.9717
31/07/2013 4.9784
31/01/2014 5.0173
31/03/2014 5.0301
31/05/2012 4.8896
30/09/2012 4.8895
30/06/2013 4.9518
30/04/2013 4.9584
30/06/2013 4.9717
30/06/2013 4.9717
31/07/2013 4.9784
30/09/2013 4.9917
30/09/2013 4.9917
30/11/2013 5.0039
30/11/2013 5.0039
31/01/2014 5.0173
31/03/2014 5.0301
31/05/2012 4.8896
30/09/2012 4.8895
30/06/2013 4.9717
30/09/2013 4.9917
31/07/2013 4.9784
30/09/2013 4.9917
30/11/2013 5.0039
31/01/2014 5.0173
31/05/2014 5.0433
31/07/2014 5.0565
31/05/2012 4.8896
30/09/2012 4.9079
30/09/2012 4.8895
30/06/2013 4.9717
30/09/2013 4.9917

E. The following tables present the data used for the forward rate and ILS payment calculations for the valuation date (30/06/2013):

30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO9024592 06/05/2009 23/03/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO9026013 29/09/2009 31/03/2011 30/09/2013 4.7170
SO9026013 29/09/2009 31/03/2011 30/09/2013 4.7170
SO9026013 29/09/2009 31/03/2011 30/09/2013 4.7170
SO9026013 29/09/2009 31/03/2011 30/09/2013 4.7170
SO9026013 11/12/2009 31/03/2011 30/09/2013 4.7170
SO9026013 11/12/2009 31/03/2011 30/09/2013 4.7170
SO9026013 15/01/2010 31/03/2011 30/09/2013 4.7170
SO9026013 15/01/2010 31/03/2011 30/09/2013 4.7170
SO9026013 24/03/2010 31/03/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO10027583 04/02/2010 31/03/2010 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO9026912 17/12/2009 19/01/2011 30/09/2013 4.7170
SO9026912 17/12/2009 19/01/2011 30/09/2013 4.7170
SO9026912 13/01/2010 19/01/2011 30/09/2013 4.7170
SO9026912 17/12/2009 19/04/2011 30/09/2013 4.7170
SO9026912 17/12/2009 19/04/2011 30/09/2013 4.7170
SO9026912 13/01/2010 19/04/2011 30/09/2013 4.7170
SO9026912 13/01/2010 19/04/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO10028957 31/05/2010 28/02/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO10029075 10/06/2010 31/03/2011 30/09/2013 4.7170
SO10029075 10/06/2010 31/03/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO10028772 16/05/2010 03/04/2011 30/09/2013 4.7170
SO10028772 16/05/2010 03/07/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO10029738 12/08/2010 30/04/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO10030874 28/11/2010 31/03/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO10030475 25/10/2010 30/04/2011 30/09/2013 4.7170
SO10030475 25/10/2010 03/07/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
SO10031025 07/12/2010 30/04/2011 30/09/2013 4.7170
SO10031025 07/12/2010 30/07/2011 30/09/2013 4.7170
30/06/2013
Transaction No. Order Date (Original) Date of Payment (Revised) Date Forward Rate
USO1202098 24/05/2012 30/04/2013 31/07/2013 4.7184
USO1202098 24/05/2012 30/04/2013 31/07/2013 4.7184
USO1202098 24/05/2012 30/06/2013 30/09/2013 4.7170
USO1202098 24/05/2012 30/04/2013 31/07/2013 4.7184
USO1202098 24/05/2012 30/06/2013 30/09/2013 4.7170
USO1202098 24/05/2012 30/06/2013 30/09/2013 4.7170
USO1202098 24/05/2012 31/07/2013 31/07/2013 4.7184
USO1202098 24/05/2012 31/01/2014 31/01/2014 4.7127
USO1202098 24/05/2012 31/03/2014 31/03/2014 4.7099
USO1202098 24/05/2012 30/04/2013 31/07/2013 4.7184
USO1202098 24/05/2012 30/06/2013 30/09/2013 4.7170
USO1202098 24/05/2012 30/06/2013 30/09/2013 4.7170
USO1202098 24/05/2012 31/07/2013 31/07/2013 4.7184
USO1202098 24/05/2012 30/09/2013 30/09/2013 4.7170
USO1202098 24/05/2012 30/09/2013 30/09/2013 4.7170
USO1202098 24/05/2012 30/11/2013 30/11/2013 4.7151
USO1202098 24/05/2012 30/11/2013 30/11/2013 4.7151
USO1202098 24/05/2012 31/01/2014 31/01/2014 4.7127
USO1202098 24/05/2012 31/03/2014 31/03/2014 4.7099
USO1202098 24/05/2012 30/06/2013 30/09/2013 4.7170
USO1202098 24/05/2012 30/09/2013 30/09/2013 4.7170
USO1202098 24/05/2012 31/07/2013 31/07/2013 4.7184
USO1202098 24/05/2012 30/09/2013 30/09/2013 4.7170
USO1202098 24/05/2012 30/11/2013 30/11/2013 4.7151
USO1202098 24/05/2012 31/01/2014 31/01/2014 4.7127
USO1202098 24/05/2012 31/05/2014 31/05/2014 4.7071
USO1202098 24/05/2012 31/07/2014 31/07/2014 4.7060
USO1202098 24/05/2012 30/06/2013 30/09/2013 4.7170
USO1202098 24/05/2012 30/09/2013 30/09/2013 4.7170
USO1202098 24/05/2012 31/05/2014 31/05/2014 4.7071

5. Fair Value Calculations

The fair value for 30/06/2013 computed as the difference between multiples of expected payment and forward rate on agreement inception date, and multiples of expected payment and forward rate on the valuation date. Each of the obtained results (profit/loss), discounted by risk free rate estimated for the corresponding period. This value discounted to 30/06/2013 by risk free rate matching to this period.

Contract
Inception Date
EUR/ILS
Exchange Rate
06/05/2009 5.5069
29/09/2009 5.4968
07/12/2009 5.6437
11/12/2009 5.5644
17/12/2009 5.4603
23/12/2009 5.4274
13/01/2010 5.3439
15/01/2010 5.3050
04/02/2010 5.1542
24/03/2010 4.9991
16/05/2010 4.7132
31/05/2010 4.7564
10/06/2010 4.6363
28/07/2010 4.9471
12/08/2010 4.8735
19/09/2010 4.8749
24/10/2010 5.0606
25/10/2010 5.0465
08/11/2010 5.0291
28/11/2010 4.8745
07/12/2010 4.8392
21/12/2010 4.7342
22/12/2010 4.7147
16/03/2011 4.9630
24/05/2012 4.8359

EUR/ILS Exchange Rate data:

F. The following table and figure show the risk free rate curve we use to define discount rate in the implemented model.

30/06/2013
Month 1 2 3 4 5 6 7 8 9 10 11 12
Rate
of
Return
1.08% 1.10% 1.12% 1.14% 1.16% 1.19% 1.21% 1.23% 1.25% 1.25% 1.26% 1.26%

6. Findings

Transaction Transaction
Volume in
Expected CF Transaction
Volume
Balance in
EUR as of
Expected CF
in ILS
Balance as
of
CF in ILS
Balance as
of
Fair Value as
of
No. EUR in ILS 30/06/2013 30/06/2013 30/06/2013 30/06/2013
SO9024592 € 10,591,854 ₪58,238,562 € 867,186 ₪4,750,806 ₪4,090,491 ₪(660,315)
SO9024593 € 4,497,003 ₪24,793,069 € 0 ₪0 ₪0 ₪0
SO9026013 € 1,440,190 ₪7,847,375 € 144,019 ₪792,140 ₪679,333 ₪(112,807)
SO9027063 € 177,000 ₪959,222 € 0 ₪0 ₪0 ₪0
SO10027583 € 137,458 ₪710,019 € 8,922 ₪47,199 ₪42,082 ₪(5,117)
SO9026912 € 1,671,892 ₪9,095,186 € 262,752 ₪1,432,480 ₪1,239,393 ₪(193,087)
SO10028957 € 45,325 ₪217,647 € 9,065 ₪45,078 ₪42,759 ₪(2,319)
SO10029075 € 85,748 ₪397,581 € 0 ₪0 ₪0 ₪0
SO10028772 € 1,726,001 ₪8,192,370 € 345,200 ₪1,681,543 ₪1,628,298 ₪(53,245)
SO10029601 € 1,158,700 ₪5,733,566 € 0 ₪0 ₪0 ₪0
SO10029738 € 179,575 ₪877,294 € 15,933 ₪79,514 ₪75,155 ₪(4,358)
SO10030086 € 139,421 ₪679,862 € 0 ₪0 ₪0 ₪0
SO10030459 € 48,000 ₪242,487 € 0 ₪0 ₪0 ₪0
SO10030873 € 77,649 ₪378,036 € 0 ₪0 ₪0 ₪0
SO10030874 € 234,260 ₪1,141,148 € 11,713 ₪57,659 ₪55,250 ₪(2,409)
SO10031217 € 21,814 ₪102,697 € 0 ₪0 ₪0 ₪0
SO10031195 € 28,093 ₪132,855 € 0 ₪0 ₪0 ₪0
SO10030475 € 74,817 ₪378,421 € 14,964 ₪76,939 ₪70,585 ₪(6,355)
SO10031025 € 41,453 ₪201,140 € 8,291 ₪40,912 ₪39,107 ₪(1,806)
SO10030653 € 33,000 ₪165,701 € 0 ₪0 ₪0 ₪0
SO11033018 € 24,179 ₪119,895 € 0 ₪0 ₪0 ₪0
SO11033017 € 32,626 ₪161,772 € 0 ₪0 ₪0 ₪0
USO1202098 € 10,238,123 ₪50,671,265 € 5,534,702 ₪27,570,089 ₪26,098,712 ₪(1,471,376)
€ 32,704,181 ₪171,437,167 € 7,222,746 ₪36,574,361 ₪34,061,167 ₪(2,513,194)

The table below presents the Fair Value as of 30/06/2013:

The fair value is the liability in amount of (- ₪2,513,194) ILS.

PRESS RELEASE Airport City, Israel, August 29, 2013

UNITRONICS (1989) (R"G) LTD.

***Regulated Information******For Immediate Release*** Corporation's Liabilities Status Report by Dates of Payment

Airport City, Israel - August 29, 2013 - Unitronics published the attached Immediate Report pursuant to the requirements of Israeli law, in connection with the requirement to report the Corporation's liabilities status by dates of payment.

About Unitronics

Unitronics (1989) (R"G) Ltd. is an Israeli company that designs, develops, produces and markets Programmable Logic Controllers (PLCs), the computer 'brains' that enable control of automated production lines, storage systems and machines. Unitronics' products include controllers designed to enable bi-directional man-machine interaction through simple user-friendly interface (including integrated graphic operator interface), as well as products embedded with Internet and Intranet capabilities, intended for remote diagnostics and communications on the Internet and Ethernet/LAN levels, and GSM enabled PLC's designed to allow remote control and m-commerce solutions. Unitronics' international distribution network composes of approximately 140 distributors and sales representatives spanning Europe, America, Israel and the Far East, as well as most of the states of the USA, whose efforts are coordinated and supported through Unitronics' wholly owned US subsidiary, Unitronics, Inc.

This press release contains certain forward-looking statements and information relating to the Company that are based on the beliefs of the Management of the Company as well as assumptions made by and information currently available to the Management of the Company. Such statements reflect the current views of the Company with respect to future events, the outcome of which is subject to certain risks and other factors which may be outside of the Company's control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein as projected, anticipated, believed, estimated, expected or intended.

Unitronics (1989) (R"G) Ltd. (the "Company")

Re: An Immediate Report Concerning Corporation's Liabilities Status by Dates of Payment

Pursuant to section 36A of the Israeli Securities Law, 1968.

Reporting period: June 30th, for the year: 2013. Detailed Corporation's liabilities status by dates of payment is as follows:

A. Debentures issued by the reporting Corporation to the public and held by the public, excluding such Debentures held by the Corporation's parent company, its controlling shareholder, companies controlled by same or companies which are controlled by the Corporation ("Solo" report) (in NIS thousands)

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9
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9

B. Private debentures and non banking-credit, excluding debentures or credit which was given by the Corporation's parent company, its controlling shareholder, companies controlled by same or companies which are controlled by the Corporation – based on data from the Corporation's separate financial reports ("Solo" report) (in NIS thousands)

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To
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1
1
2
9

C. Bank credit – from Israeli banks ("Solo" report) (in NIS thousands)

Fu
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Pa
ts
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--- --- --- O
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In
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(
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3,
9
3
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3
9
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3
1
2
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co
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1,
9
6
2
3
9
5
2
3
2
T
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Ye
ar
9
2
3
3
9
5
1
8
2
Fo
h
Ye
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8
2
9
3
9
5
1
4
8
F
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3,
3
6
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4
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6
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1
1,
0
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8
1,
7
7
7
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D. Ba
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(
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" r
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--- --- --- O
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E. Summary table of tables A-D, Total credit- banking, non-banking and debentures ("Solo" report) (in NIS thousands)

Fu
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Pa
ts
n
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m
en
S
N
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--- --- --- O
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1
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6
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2
3
3
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2,
9
7
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3
3,
3
7
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0
6,
6
2
1
1
1
2
1
1,
0
0
8
1,
7
7
7
2
2,
2
7
8

F. External balance credit exposure ("Solo" report) (in NIS thousands)

Fu
d
Pa
ts
n
y
m
en
N
I
S
In
de
x
L
in
ke
d
N
I
S
In
de
x
Un
l
in
ke
d
Eu
ro
U
S
D
--- --- --- O
he
t
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G
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ss
In
te
t
re
s
Pa
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m
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(
W
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F
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Se
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Fo
h
Ye
t
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F
i
f
h
Ye
t
ar
d
So
On
an
To
l
ta

G. External balance credit exposure of all consolidated companies, excluding companies which are reporting companies and excluding the reporting Corporation's data included in table F above (in NIS thousands)

Fu
d
Pa
ts
n
y
m
en
S
N
I
In
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x
L
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ke
d
S
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I
In
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x
Un
l
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d
Eu
ro
U
S
D
--- --- --- O
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t
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G
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ss
In
te
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Pa
t
m
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y
(
W
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Ye
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Fo
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Ye
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F
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So
On
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To
l
ta

H. Total credit balance, banks, non banks and debentures of all consolidated companies, excluding companies which are reporting companies and excluding the reporting Corporation's data included in tables A-D above (in NIS thousands)

Fu
d
Pa
ts
n
m
en
y
N
I
S
In
de
x
L
in
ke
d
N
I
S
In
de
x
Un
l
in
ke
d
Eu
ro
U
S
D
--- --- --- O
he
t
r
G
ro
ss
In
te
t
re
s
Pa
t
y
m
en
(
W
i
ho
t
t
u
Ta
x
De
du
io
)
t
c
n
F
irs
Ye
t
ar
Se
d
co
n
Ye
ar
T
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ir
d
Ye
ar
Fo
h
Ye
t
ur
ar
F
i
f
h
Ye
t
ar
d
So
On
an
To
l
ta
    1. Total credit balance provided to the reporting Corporation by its parent company or controlling shareholder and balance of debentures issued by the reporting Corporation and held by its parent company or controlling shareholder: 0.
    1. Total credit balance provided to the reporting Corporation by companies controlled by its parent company or controlling shareholder which are not controlled by the reporting Corporation, and balance of debentures issued by the reporting Corporation and held by companies controlled by its parent company or controlling shareholder which are not controlled by the reporting Corporation: 0.
    1. Total credit balance provided to the reporting Corporation by consolidated companies and balance of debentures issued by the reporting Corporation and held by the consolidated companies: 0.
  • I. (1) Cash and cash equivalents, marketable securities and short term deposits ("Solo" report) (in NIS thousands):56,565
    • (2) Cash and cash equivalents, marketable securities and short term deposits of all consolidated companies (in NIS thousands):61,151
    • (*) Restricted cash is excluded.

Respectfully,

Unitronics (1989) (R"G) Ltd.

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