Half Yearly Report

Michael Rosenberg, ChairmanAvi Hartmann, CEO

Eitan Yanuv, CFOStarcom PlcTel: 07785727595

+972 543070103

+972 36199901

Matt Ridsdale/Niall Walsh

Tavistock Communications

(Public Relations)Tel: 020 7920 3150

Luke Cairns/Edward Hutton/Lauren Kettle

Northland Capital Partners Limited(Nominated Adviser)Tel: 020 7796 8800

John Howes/Alice Lane

Northland Capital Partners Limited

(Broking)

Tel: 020 7796 8800

 June 30

December 31

Note

2013

2012

2012

Unaudited

Unaudited

Audited

ASSETS

NON-CURRENT ASSETS:

Property, plant and equipment, net

296

310

285

Intangible assets

4

1,721

1,371

1,560

Repurchase option

3

89

89

89

Long-term bank deposit

99

43

95

Income Tax Authorities

42

28

-

Deferred tax asset

-

250

-

Total Non-Current Assets

2,247

2,091

2,029

CURRENT ASSETS:

Inventories

1,946

1,036

1,236

Trade receivables

4,798

2,249

3,761

Other receivables

384

108

565

Shareholders

-

46

-

Income Tax Authorities

-

-

34

Deferred issuance costs

-

-

107

Short-term deposit

10

9

10

Cash and cash equivalents

25

91

118

Total Current Assets

7,163

3,539

5,831

TOTAL ASSETS

9,410

5,630

7,860

LIABILITIES AND EQUITY

EQUITY

Equity attributable to owners of the company

5,635

2,300

2,744

Non-controlling interest

-

19

(6)

Total Equity

5,635

2,319

2,738

NON-CURRENT LIABILITIES:

Long-term loan from non controlling interest

3

-

248

303

Long-term loans from banks

424

443

571

Deferred tax liability

128

-

116

Put option

-

215

-

Total Non-current Liabilities

552

906

990

CURRENT LIABILITIES:

Short-term bank credit

82

16

80

Short-term loans from banks

330

199

288

Current maturities of loan from non controlling interest

3

-

425

506

Related Parties

6

171

-

156

Trade payables

2,433

1,641

2,940

Other payables

207

124

162

Total Current Liabilities

3,223

2,405

4,132

TOTAL LIABILITIES AND EQUITY

9,410

5,630

7,860

Date of Approval of the Financial Statements

Director

Six Months Ended June 30

Year Ended December 31

Note

2013

2012

2012

Unaudited

Unaudited

Audited

Revenues

3,498

3,414

8,093

Cost of sales

(1,513)

(1,553)

(3,874)

Gross profit

1,985

1,861

4,219

Operating expenses:

Research and development, net

(70)

(56)

(98)

Selling and marketing

(268)

(164)

(299)

General and administrative

(1,038)

(632)

(1,786)

(1,376)

(852)

(2,183)

Operating profit

609

1,009

2,036

Finance income

1

62

2

Finance expenses

7

(699)

(203)

(385)

Net finance costs

(698)

(141)

(383)

Profit (loss) before deferred income tax

(89)

868

1,653

Deferred income tax (income tax expense)

-

51

(315)

 Total comprehensive income (loss) for the period

(89)

919

1,338

Attributable to:

Owners of the company

(86)

917

1,345

Non-controlling interest

(3)

2

(7)

Comprehensive income (loss)

(89)

919

1,338

 Earnings per share:

Basic and diluted earnings (loss) per share (in dollars)

5

(0.00)

0.02

0.02

Share

Capital *

Premium on Shares

Receipts on Account of Shares

Capital Reserve

Accumulated Earnings

Total

Non- Controlling interest

Total

Capital Reserve for Share-based payment

(Unaudited)

Balance- January 1, 2013

-

28

-

447

-

2,269

2,744

(6)

2,738

Proceeds from issued share capital, net of mobilization costs - see Note 3a

-

2,939

-

-

-

-

2,939

-

2,939

Exchange of Keren Hagshama shares -see Note 3c

-

349

-

(358)

-

-

(9)

9

-

Share based payment -see note 3b

-

(195)

-

-

242

-

47

-

47

Comprehensive loss for the period

-

-

-

-

-

(86)

(86)

(3)

(89)

Balance- June 30, 2013

-

3,121

-

89

242

2,183

5,635

-

5,635

(Unaudited)

Balance- January 1, 2012

-

-

225

(197)

-

924

952

-

952

Comprehensive income for the period

-

-

-

-

-

917

917

2

919

Issuance to others of shares in subsidiary - see Note 3c

-

 -

-

431

-

-

431

17

448

Balance- June 30, 2012

-

-

225

234

-

1,841

2,300

19

2,319

(Audited)

Balance- January 1, 2012

-

-

225

(197)

-

924

952

-

952

Receipts (refunds) on account of shares

-

28

(225)

197

-

-

-

-

-

Issuance to others of shares in a subsidiary (see Note 3c)

-

-

-

447

-

-

447

1

448

Comprehensive income for the year

-

-

-

-

-

1,345

1,345

(7)

1,338

Balance- December 31, 2012

-

28

-

447

-

2,269

2,744

(6)

2,738

Six Months Ended

June 30

Year Ended December 31

2013

2012

2012

CASH FLOWS FROM OPERATING ACTIVITIES:

Unaudited

Unaudited

Audited

Comprehensive income (loss)

(89)

919

1,338

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

108

73

184

Interest expense (income) and linkage differences

237

(68)

212

Equity settled option-based payment expense

47

-

-

Deferred income tax

12

(51)

315

Update of sale options

-

18

-

Interest to shareholders

-

-

2

Interest expense in regard to options

-

-

28

Changes in assets and liabilities:

Increase in inventories

(710)

(124)

(324)

Increase in trade receivables

(1,037)

(1,288)

(2,800)

Decrease (Increase) in other receivables

181

93

(364)

Increase in Income Tax Authorities

(8)

(2)

(8)

Increase in deferred issuance costs

(75)

-

(107)

Increase (Decrease) in trade payables

(507)

(361)

938

Increase in other payables

45

22

60

Net cash used in operating activities

(1,796)

(769)

(526)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(44)

(11)

(18)

Proceeds to related parties

-

(35)

-

Increase in short-term deposit

-

(1)

(2)

Decrease (Increase) in long-term deposits

(1)

120

71

Purchase of intangible assets

(236)

(314)

(582)

Net cash used in investing activities

(281)

(241)

(531)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term bank credit, net

2

16

80

Short-term loans from banks

(27)

(39)

(13)

Long-term loans

-

100

327

Proceeds received from shareholders

15

-

165

Repayment of long-term loans

(127)

(105)

(288)

Repayment of Put Options

-

-

(225)

Proceeds from (Repayment of) long-term loan from non controlling interest, net

(1,000)

1,000

1,000

Consideration from issue of shares

3,121

-

-

Net cash provided by financing activities

1,984

972

1,046

Decrease in cash and cash equivalents

(93)

(38)

(11)

Cash and cash equivalents at the beginning of the period

118

129

129

Cash and cash equivalents at the end of the period

25

91

118

Appendix A - Additional Information

Interest received during the period

1

1

2

Interest paid during the period

(127)

(104)

(142)

NOTE 1 -

GENERAL INFORMATION

a.

The Reporting Entity

Starcom plc ("the Company") was incorporated in Jersey on November 28, 2012. During February 2013 the Company signed an asset purchase agreement with Starcom Systems S.A., a Panamanian company that specializes in easy-to-use practical wireless solutions that combine advanced technology, telecommunications and digital data for the protection and management of people, fleets of vehicles, containers and assets and engages in production, marketing, distribution, research and development of G.P.S systems.

In accordance with the agreement, Starcom Systems S.A. sold to the Company for a nominal consideration its business and assets, including its holdings in Starcom G.P.S. Systems Limited, an Israeli company that engages in the same field.

Subsequent to completion of the transaction, the Company transferred to an additional company in Jersey, Starcom Systems Limited, its entire activity, except for its holdings in Starcom G.P.S Limited, for a nominal consideration. Thus, the Company became a holding company, holding 100% of Starcom Systems Limited and approximately 97% of Starcom G.P.S Limited, where Company operations are conducted.

During the reported period, the Company acquired the remaining 3% of Starcom G.P.S. Limited. See Note 3c.

On February 27, 2013 the Company's shares were admitted to trading on London's Stock Exchange Alternative Investment Market ("AIM") following a successful Initial Public Offering ("IPO") raising £ 2.72 ($ 4.09) million before expenses, reflecting a Company valuation of £ 14.2 ($ 27.53) million. For additional detail in regard to the infusion of capital see Note 3a.

b.

Definitions in these financial statements

1.

The Company - Starcom Plc

2.

Starcom Israel - Starcom G.P.S. Systems Ltd.

3.

Starcom Jersey - Starcom GPS Limited

4.

The Group - Starcom Plc and its subsidiaries

NOTE 2 -

BASIS OF PREPARATION AND CHANGE IN THE GROUP'S ACCOUNTING POLICIES

a.

Company structural change as presented in the financial statements:

The Company's operations are the continuation of the operations of Starcom Systems S.A, (including its holdings in Starcom G.P.S. Systems Limited) that was held by the same shareholders of the Company. On February 19, 2013, Starcom Systems S.A. transferred all its operations, assets and liabilities to the Company for nominal consideration.

NOTE 2 -

BASIS OF PREPARATION AND CHANGE IN THE GROUP'S ACCOUNTING POLICIES (cont.)

a.

Company structural change as presented in the financial statements (cont.)

Since all the assets, liabilities and operations have been transferred from Starcom Systems S.A. to the Company, it is appropriate in these Unaudited Interim Consolidated Financial Statements to present the Company's operations as if the abovementioned transaction always existed, while adjusting the capital structure to the Company capital structure.

 b.

Basis of preparation

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in International Accounting Standard No. 34 ("Interim Financial Reporting").

The interim consolidated financial information should be read in conjunction with the annual financial statements as of 31 December, 2012 and for the year ended on that date and with the notes thereto,

The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2012 are applied consistently in these interim consolidated financial statements, except Share-based payment and adoption of new standards and interpretations effective as of 1 January 2013, as detailed below.

Share-based payments

Where equity settled share options are awarded to employees and renderers of services, the fair value of the options at the grant date is charged to the statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense charged is not adjusted for failure to achieve a market vesting condition.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the statement of comprehensive income over the remaining vesting period.

NOTE 2 -

BASIS OF PREPARATION AND CHANGE IN THE GROUP'S ACCOUNTING POLICIES (cont.)

c.

New standards, interpretations and amendments adopted by the Group

The Group applies, for the first time, certain standards and amendments. These include IFRS 10 Consolidated Financial Statements, IFRS 13 Fair Value Measurement and Amendments to IAS 1 Presentation of Financial Statements. As required by IAS 34, the nature and the effect of these changes are disclosed below.

IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS 1

The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time (e.g., net gain on hedge of net investment, exchange differences on translation of foreign operations, net movement on cash flow hedges and net loss or gain on available-for-sale financial assets) now have to be presented separately from items that will never be reclassified (e.g., actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affected presentation only and had no impact on the Group's financial position or performance.

IAS 1 Clarification of the requirement for comparative information (Amendment)

The amendment to IAS 1 clarifies the difference between voluntary additional comparative information and the minimum required comparative information. An entity must include comparative information in the related notes to the financial statements when it voluntarily provides comparative information beyond the minimum required comparative period. The additional voluntarily comparative information does not need to be presented in a complete set of financial statements.

An opening statement of financial position (known as the 'third balance sheet') must be presented when an entity applies an accounting policy retrospectively, makes retrospective restatements, or reclassifies items in its financial statements, provided any of those changes has a material effect on the statement of financial position at the beginning of the preceding period. The amendment clarifies that a third balance sheet does not have to be accompanied by comparative information in the related notes. Under IAS 34, the minimum items required for unaudited interim financial statements do not include a third balance sheet.

NOTE 2 -

BASIS OF PREPARATION AND CHANGE IN THE GROUP'S ACCOUNTING POLICIES (cont.)

c.

New standards, interpretations and amendments adopted by the Group (cont.)

IAS 32 Tax effects of distributions to holders of equity instruments (Amendment)

The amendment to IAS 32 Financial Instruments: Presentation clarifies that income taxes arising from distributions to equity holders are accounted for in accordance with IAS 12 Income Taxes. The amendment removes existing income tax requirements from IAS 32 and requires entities to apply the requirements in IAS 12 to any income tax arising from distributions to equity holders. The amendment did not have an impact on the interim condensed consolidated financial statements for the Group, as there is no tax consequences attached to cash or non-cash distribution.

IAS 34 Interim financial reporting and segment information for total assets and liabilities (Amendment)

The amendment clarifies the requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment to enhance consistency with the requirements in IFRS 8 Operating Segments. Total assets and liabilities for a reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity's previous annual consolidated financial statements for that reportable segment. The Group provides this disclosure as total segment assets were reported to the chief operating decision maker (CODM). The amendment did not have an impact on the unaudited interim consolidated financial statements for the Group, as the assets and liabilities are not reported to the CODM.

IFRS 7 Financial Instruments: Disclosures - Offsetting Financial Assets and Financial Liabilities Amendments to IFRS 7

The amendment requires an entity to disclose information about rights to set-off financial instruments and related arrangements (e.g., collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity's financial position. The new disclosures are required for all recognized financial instruments that are set off in accordance with IAS 32. The disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether the financial instruments are set off in accordance with IAS 32. As the Group is not setting off financial instruments in accordance with IAS 32 and does not have relevant offsetting arrangements, the amendment does not have an impact on the Group.

NOTE 2 -

BASIS OF PREPARATION AND CHANGE IN THE GROUP'S ACCOUNTING POLICIES (cont.)

c.

New standards, interpretations and amendments adopted by the Group (cont.)

IFRS 10 Consolidated Financial Statements and IAS 27 Separate Financial Statements

IFRS 10 establishes a single control model that applies to all entities including special purpose entities.

IFRS 10 replaces the parts of previously existing IAS 27 Consolidated and Separate Financial Statements that dealt with consolidated financial statements and SIC-12 Consolidation - Special Purpose Entities. IFRS 10 changes the definition of control such that an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. To meet the definition of control in IFRS 10, all three criteria must be met, including: (a) an investor has power over an investee; (b) the investor has exposure, or rights, to variable returns from its involvement with the investee; and (c) the investor has the ability to use its power over the investee to affect the amount of the investor's returns. IFRS 10 had no impact on the consolidation of investments held by the Group.

IFRS 12 Disclosure of Interests in Other Entities

IFRS 12 sets out the requirements for disclosures relating to an entity's interests in subsidiaries, joint arrangements, associates and structured entities. None of these disclosure requirements are applicable for interim consolidated financial statements, unless significant events and transactions in the interim period requires that they are provided. Accordingly, the Group has not made such disclosures.

IFRS 13 Fair Value Measurement

IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The application of IFRS 13 has not materially impacted the fair value measurements carried out by the Group.

IFRS 13 also requires specific disclosures on fair values, some of which replace existing disclosure requirements in other standards, including IFRS 7 Financial Instruments: Disclosures. Some of these disclosures are specifically required for financial instruments by IAS 34.16A(j), thereby affecting the unaudited interim consolidated financial statements period. The Group provides these disclosures in Note 8.

In addition to the above-mentioned amendments and new standards, IFRS 1 First-time Adoption of International Financial Reporting Standards was amended with effect for reporting periods starting on or after 1 January 2013. The Group is not a first-time adopter of IFRS, therefore, this amendment is not relevant to the Group.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

NOTE 2 -

BASIS OF PREPARATION AND CHANGE IN THE GROUP'S ACCOUNTING POLICIES (cont.)

d.

Foreign currency and linkage basis

Henceforth are the details of the foreign currencies of the main currencies and the changes percentage in the reporting period:

Six Months Ended

June 30

Year Ended December 31

2013

2012

2012

 CPI (in points) *

123.96

121.9

122.4

 Exchange Rate of NIS in U.S. $

0.276

0.255

0.268

 Exchange Rate of GBP in U.S. $

1.526

1.564

1.617

Six Months Ended

June 30

Year Ended December 31

2013

2012

2012

Change in CPI

1.27%

1.2%

1.66%

Change in Exchange Rate of NIS

2.99%

(2.6%)

2.36%

Change in Exchange Rate of GBP

(5.63%)

1.43%

4.87%

* Base Index 2002 =100.

NOTE 3 -

SIGNIFICANT EVENTS DURING THE REPORTED PERIOD

a.

Issue of Shares and Mobilization of Capital

On February 19, 2013, the Company issued 18,783,333 Ordinary Shares to each of the controlling interest pro-rata to their holdings in the Company.

On February 27, 2013, the Company's shares were admitted to trading on London's Stock Exchange Alternative Investment Market ("AIM") following a successful Initial Public Offering ("IPO") raising £ 2.72 ($ 4.09) million before expenses.

The Company issued 13.6 million new shares at £ 0.2 per share to new investors.

In the framework of the IPO, the Company signed agreements with an advisor, brokers and others, including granting of Options (see below).

The Company issued upon admission an additional 1,150,000 Ordinary Shares to a lender to the Company - "Keren Hagshama Ltd" (hereinafter: Keren Hagshama, see also c. below).

NOTE 3 -

SIGNIFICANT EVENTS DURING THE REPORTED PERIOD (cont.)

b.

Options issued

1.

During February 2013 the Company issued to its directors 1,422 Options for purchase of Company shares at the exercise price of £ 0.2 per share. The Options will be vested in three equal parts during three intervals commencing February 2013 and will expire at the end of ten years. Total expenses recorded in regard to these Options in the statement of comprehensive income for the reported period amounted to $ 47 thousand.

2.

During February 2013, the Company issued to professional consultants and brokers 1,610,500 Options at the exercise price of £ 0.2 per share. The Options are fully vested. Approximately one million Options will expire in February 2018 and approximately 600 thousand will expire in February 2014. Fair value of the Options that was recorded as an offset against receipts from issuance is in the amount of $ 195 thousand.

c.

Long-term loan from non-controlling interest

During April 2012, Starcom Israel received a loan through Keren Hagshama Ltd in the amount of $1 million for a period of four years that will be repaid in four equal installments of principal and interest at the end of every year. The loan bears monthly interest at the rate of 0.8%. In addition Starcom Israel received $50 thousand through Keren Hagshama as an investment in the share capital of Starcom Israel.

The Company has an option for early repayment as well as to lengthen the loan period in a year.

In consideration for the loan, the Company will transfer an amount of shares contingent upon the duration of the loan period and whether the Company will offer shares in an Initial Public Offering (IPO), as detailed in the following excerpts from the agreement:

In the event that the Company becomes a publicly traded entity, then Keren Hagshama will receive 2% - 6% of the Company shares in accordance with the loan period.

In the event that the Company will remain a private entity, then Keren Hagshama will receive 3.3% - 10% of the shares of the subsidiary company in accordance with the loan period.

Upon completion of registration of shares the Company has an option to repurchase the public Company shares within a six month period commencing from the Initial Public Offering (IPO) date in accordance with the realization price per ordinary share as computed in accordance with the Company valuation of $18 million. In the event that the public Company valuation will exceed $23 million, the realization price will be higher, as detailed in the agreement.

As of the loan grant date, the Company transferred 3.3% of Starcom Israel share capital to Keren Hagshama.

The Company paid $50 thousand as fees for mobilization of a loan through Keren Hagshama.

NOTE 3 -

SIGNIFICANT EVENTS DURING THE REPORTED PERIOD (cont.)

c.

Long-term loan from non-controlling interest (cont.)

The loan was evaluated and divided to different components by independent appraisers as follows (in thousands):

Repurchase option -$89

Liability (short and long term)-$670

Capital reserve-$469.

The mobilization costs were allocated according to the components ratio.

The loan was assessed assuming a fifty-percent likelihood that the loan will be repaid within a year and a fifty percent likelihood according to the original terms.

Effective annual interest rate was determined as 42.46%.

On February 27, 2013 Starcom Israel and the Company agreed with Keren Hagshama pursuant to the Hagshama agreement that upon admission the Company will issue 1,150,000 Ordinary Shares, that present 2% of the Company shares before the IPO, to Keren Hagshama and repay $ 1,150 thousand which is composed of $ 1,000 loan principal, interest in the amount of $ 100 thousand and expenses in regard to clearing of the loan in the amount of $ 50 thousand. Keren Hagshama will transfer its respective shares in Starcom Israel to the Company, following which no further rights or obligations exist under the Hagshama Loan Agreement save as set out below.

As a result of the early repayment, the Company recorded financial expenses in the amount of approximately $ 340 thousand.

The Ordinary Shares are subject to limitations on sale for a period of six months from admission in which the Company is entitled (but not obliged) to acquire Keren Hagshama Ordinary Shares.

This option expired on August 26, 2013.

d.

Distribution contract

On June 13, 2013, the Company signed a significant distribution contract with Benish GPS of the Ukraine which includes the Ukrainian distributor being required to purchase a minimum of 20,000 WatchLock units before December 31, 2014 in order to retain exclusivity. The first order is for in excess of 6,000 units and is worth approximately $ 1.13 million. This amount was recorded as an income by the Company during the reported period.

NOTE 4 -

INTANGIBLE ASSETS

a. Composition:

Cost of

Materials (including

overhead costs)

Direct Labour

Total

Cost:

Balance as of January 1 2013

1,097

617

1,714

Additions during the year

122

114

236

Balance as of June 30 2013

1,219

731

1,950

Accumulated Depreciation:

Balance as of January 1 2013

127

 27

154

Depreciation during the year

27

48

75

Balance as of June 30 2013

154

75

229

Net book value as of June 30 2013

1,065

656

1,721

Cost of Materials (including

overhead costs)

Direct Labour

Total

Cost:

Balance as of January 1 2012

799

333

1,132

Additions during the year

179

135

314

Balance as of June 30 2012

978

468

1,446

Accumulated Depreciation:

Balance as of January 1 2012

28

 7

35

Depreciation during the year

29

11

40

Balance as of June 30 2012

57

18

75

Net book value as of June 30 2012

921

450

1,371

NOTE 4 -

INTANGIBLE ASSETS (cont.)

a. Composition (cont.):

Cost of Materials (including

overhead costs)

Direct Labour

Total

Cost:

Balance as of January 1 2012

798

334

1,132

Additions during the year

299

283

582

Balance as of December 31 2012

1,097

617

1,714

Accumulated Depreciation:

Balance as of January 1 2012

28

7

35

Depreciation during the year

99

20

119

Balance as of December 31 2012

127

27

154

Net book value as of December 31 2012

970

590

1,560

NOTE 5 -

SHARE CAPITAL

a.

Composition - as of June 30 2013 common stock of no par value, authorized 118,500,000 shares; issued and outstanding - 71,100,000.

b.

A Company share grants to its holder voting rights, rights to receive dividends and rights to net assets upon dissolution.

c.

See Note 3a.

NOTE 6 -

RELATED PARTIES

a.

Related parties that own the controlling shares in the Group are:

Mr. Avraham Hartman (26%), Mr. Uri Hartman (26%), Mr. Doron Kedem (26%).

b.

Balances: