PILAT TECHNOLOGIES INTERNATIONAL LTD.

("PTI", the "Group" or the "Company")

Results for the Half Year and Second Quarter ended 30 June 2007

London and Tel Aviv 31 August 2007 - Pilat Technologies International Ltd, 
the AIM quoted human resources management consultancy, software and services
group, announces its results for the half year and second quarter ended 
30 June 2007. PTI is also quoted on the Tel Aviv Stock Exchange.

SUMMARY

-        Group second quarter operating profits increased by 20% to �49,000 
compared to the second quarter of 2006

-        �263,000 net cash provided by operating activities compared to a net
 cash out flow of �60,000 in the second quarter of 2006

-        Revenues decreased by 6.7% for the half year and 2.7% for the quarter
 compared to the comparative periods in 2006

-        Operating loss of �52,000 for the first half compared to an operating
 profit of �140,000 in first half of 2006

Through three main subsidiaries, Pilat Europe, Pilat North America and Pilat 
Israel, the Group provides consultancy, advanced web based software applications 
and data processing and analysis services in the fast growing field of Human 
Capital Management.

Pilat has a wide and varied client base including many major global corporations 
and international public sector bodies. The Company works across all sectors with 
organisations employing from a few hundred to hundreds of thousands of staff. 
Pilat has extensive industry experience in Financial Services, Energy and 
Telecommunications and sector specific offerings in Healthcare, Public Housing,
Local Government and Education.

The shares of PTI are quoted on both AIM and the Tel Aviv Stock Exchange.

Enquiries:

Pilat Technologies International Ltd     00 972 3 767 9200
 
Chaim Helfgott, Corporate Secretary
Jonathan Berger, Chief Financial Officer
 
Hanson Westhouse Limited                 0113 246 2610
Tim Feather / Matthew Johnson


CHAIRMAN'S STATEMENT

The Board of PTI presents the Company's results for the first half and second quarter
 of 2007.

The second quarter showed an improvement from the disappointing first quarter results 
with sales growth in Europe and Israel but broadly flat results in North America. The 
operating income for the quarter was �49,000 compared to �41,000 for the equivalent 
quarter of 2006 (a 20% increase). However the Group recorded a loss of �52,000 during 
the six months ended 30 June 2007.

Pilat Europe external sales (excluding inter-group sales) were up 28% compared to the 
second quarter of 2006 resulting in total external sales growth for the first half of 
2007 of 18% compared to the same period in 2006. The Consultancy Division showed especially 
strong results with income nearly doubling compared to the first half of 2006. Consultancy 
activities are important for developing client relationships and provide an entry point 
into new clients for the Company. We were especially pleased to win or start new projects 
in the Talent Engagement and Retention field with a number of major organisations including 
a contract with the National School of Government in the UK to provide pre-training surveys 
for delegates on their courses. Larger system sales included a sale to a major international 
consumer brand who purchased a new Talent Management system that will be used by up to 10,000 
staff in more than 100 countries. The implementation of this system will start in the fourth 
quarter of  2007.

In Israel, following the rise in sales in quarter one (like-for-like in Shekel terms), sales 
rose by 11% in the second quarter and 11% for the half year compared to the same periods in 
2006. In July we completed the acquisition of the business of "Nekudat Mifne" ("Turning Point"), 
a provider of outplacement services in the Israeli market. The six "Turning Point" staff are 
being transferred to our offices in Tel Aviv and Haifa and will continue to provide outplacement 
and strategic HR consulting under the Pilat brand. The sales of Nekudat Mifne were NIS 1,210,000 
in 2006. Outplacement Consulting is a natural complement to our recruitment and assessment 
services and adding these services broadens our portfolio with a counter-cyclical income stream.

In Pilat North America, following the fall in sales of 17% in US$ terms in the first quarter 
compared to the comparative quarter in 2006, the second quarter sales were just 1% down on the 
same period in 2006 leaving the half year down 9% in US$ terms compared to the first half of 2006. 
Major contracts for the implementation of performance and talent management systems were won at 
a leading telecommunication group and the Ottawa Police Department. The implementation of a PULSE 
based performance management system in the Ottawa Police Department will be the second system 
purchased by the Canadian Police Service.

As reported last quarter, spending on research and development is set to rise in the second 
half of 2007 as we build an outsourced development team in India. In addition new web based 
products for Engagement Surveys and Coaching Management are in the pipeline with a launch 
planned for Q4 2007. Our new developments are based on the latest releases of the 
Microsoft .NET framework and AJAX technology, allowing users to experience a much richer 
and smoother user interface and functionality.

Following the AGM on 31 July 2007, the board has seen two of its members retire and one 
new appointment.

Alicia Rotbard completed her maximum statutory two consecutive terms of three years each 
as an "External Director" an independent non-executive director established by Israeli 
company law to represent the public interest on the boards of quoted companies.

Len Israelstam decided to retire for personal reasons and not to stand for re-election at the 
last AGM. The board would like to thank both Alicia and Len for their support and guidance 
during their time on the board.

Our new External Director is Amir Shomroni. Amir is an experienced engineer, consultant and 
businessman who apart from his heavy influence on transport infrastructure policy in Israel 
and Africa (via the United Nations) also built up his own successful Engineering Consultancy 
Company. Amir has extensive personal knowledge of the challenges smaller engineering and 
consulting firms face in international business and we are looking forward to his contribution
 to the board.

Revenues and profitability

Overall sales in the first half were �3,758,000, a decrease of 6.7% compared to the first half 
of 2006.  This was primarily due to the disappointing performance of Pilat North America.

Total sales in quarter two 2007 were �1,932,000 reflecting a 3% decrease from the equivalent 
quarter of 2006 (�1,985,000). However comparing like for like sales, reflecting the sale of 
part of our Israeli operations in 2006, there was a 11% increase during the second quarter of 2007.

Sales at Pilat Europe to non-Group customers during the second quarter of 2007 were �616,000 
reflecting a 28% increase over quarter two 2006 (�481,000).  Total sales, including internal Group, 
increased by 11% during the quarter to �659,000 (Q2, 2006 �594,000).

In Israel, sales during the second quarter of  2007 stood at �727,000 an increase of 11% over 
quarter two 2006, like for like sales (�655,000) and a 15% reduction in reported sales (�854,000).

Mainly due to exchange rate changes, Pilat North America sales during quarter two, 2007 were 
down by 9% to �589,000 (Q2, 2006 �650,000).  In US$ terms quarter two sales changed only 
slightly compared to Q2, 2006 (down 1.5 %).

The gross margin for the quarter stood at 40%, similar to the gross
margin in 2006, but slightly higher than the margin in the equivalent quarter
of 2006 (38%) and the first quarter of 2007 (35%). The reason for the margin
growth is that relatively more sales originated from our non-Israeli
operations where the margins are higher.

Research and development costs increased by 7% to �89,000 in the
second quarter compared to �83,000 in 2006 in line with management policy.

Sales and marketing expenditure increased by 5% to �228,000 in the
second quarter compared to �218,000 in the equivalent quarter in 2006.

General and administrative decreased slightly in the quarter to
�408,000 (from �419,000 in 2006).

Operating profit for the quarter rose 20% to �49,000 (Q2, 2006
�41,000), profit before tax rose 193% to �82,000 (Q2, 2006 �28,000) and net
income for the quarter stood at �93,000 compared with �3,000 in the equivalent
quarter of 2006.

Balance Sheet

The Group's current assets at 30 June 2007 were �4,163,000, which
represents approximately 92% of assets (89% at 30 June 2006 and 92% at 31
December 2006).

Current liabilities decreased slightly over the period from �1,746,000
at the end of Q1, 2007 to �1,577,000 mainly due to decreases in other accounts
payables. Long-term liabilities stood at �30,000 at the period end.

The Group's current ratio is a healthy 2.64 (2.18 at 30 June 2006 and
2.61 at 31 December 2006).

Shareholders' equity decreased slightly during the quarter to
�2,893,000 (31 March 2007 �2,903,000), which arose from net profits of
�93,000, issuing of shares from exercised options of �6,000 and negative
foreign currency translation adjustments of �109,000.

Liquidity

The Group's cash flow from operating activities for the half year was
�15,000 compared to �103,000 for the first half of 2006. During the second
quarter of 2007 the Group had a positive cash flow of �263,000 from operating
activities compared to a negative cash flow of �60,000 in the equivalent
quarter of 2006. The positive cash flow was mainly due to the profit for the
period, a decrease in trade receivables due to improved collection coupled
with a smaller decrease in trade payables.

Negative effects of currency exchange rates were �62,000 giving a net
increase of �186,000 in cash and cash equivalents in the second quarter (Q2,
2006 decrease of �509,000).

At 30 June 2007 the cash and short term investment balances of the
Company were �2,100,000 (30 June 2006: �1,297,000) with total liabilities to
banks at �22,000 (30 June 2006: �31,000).

Michael Zuckerman, Chairman of the Board
David Sapiro, Chief Executive Officer
Jonathan Berger, Chief Financial Officer


CONSOLIDATED BALANCE SHEETS

British pounds in thousands

                                         June 30,        December 31,
                                     2007        2006            2006
                                         Unaudited            Audited
 
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents             1,956      719            2,044
Short term investments                  144      578              144
Trade receivables                     1,788    2,123            1,828
Other accounts receivable               275      302              208
 
                                      4,163    3,722            4,224
 
LONG-TERM LOANS AND RECEIVABLES          20       24               14
 
FIXED ASSETS, NET
Cost                                  1,329    1,394            1,324
Less - accumulated depreciation       1,003      995              974
 
                                        326      399              350
 
DEFERRED TAXES                            3       59                2
 
                                      4,512    4,204            4,590
 
The accompanying notes are an integral part of the interim consolidated
financial statements.

CONSOLIDATED BALANCE SHEETS

British pounds in thousands

                                           June 30,        December 31,
                                       2007          2006          2006
                                      Unaudited                 Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Short-term bank credit                     12           8            18
Trade payables                            372         357           334
Other accounts payable                  1,193       1,345         1,266
 
                                        1,577       1,710         1,618
 
LONG-TERM LIABILITIES:
Liabilities to banks                       10          23            15
Accrued severance pay, net                 20           3            12
 
                                           30          26            27
 
LIABILITIES RELATED TO DISCONTINUED                                  12
 
OPERATIONS                                 12         105
 
SHAREHOLDERS' EQUITY                    2,893       2,363         2,933
 
                                        4,512       4,204         4,590

The accompanying notes are an integral part of the interim consolidated
financial statements.

CONSOLIDATED STATEMENTS OF INCOME

British pounds in thousands (except for net earnings per share amounts)

                                                                                         Year ended
                                            Six months ended      Three months ended
                                                                                           December
                                                June 30,               June 30,                 31,
                                            2007       2006         2007        2006           2006
                                                           Unaudited                        Audited
 
Revenues                                     3,758      4,027         1,932     1,985         8,162
Cost of revenues                             2,347      2,469         1,158     1,224         4,911
 
Gross profit                                 1,411      1,558           774       761         3,251
 
Research and development costs                 164        149            89        83           283
Selling and marketing expenses                 465        452           228       218           868
General and administrative expenses            834        817           408       419         1,553
 
Operating income (loss)                       (52)        140            49        41           547
Financial income (expenses), net                31         18            33      (13)            13
Other incomes, net                               -          -             -         -           271
 
Net income (expenses) before
taxes on income                               (21)        158            82        28           831
Taxes on income                                 40       (45)            11      (25)         (180)
 
Net income from continuing operations           19        113            93         3           651
Income from discontinued operations, net         -        197             -         - -         269
 
Net income                                      19        310            93         3           920
 
Net earnings per share (in British
Pence):
 
Basic earnings:
 
Net earnings from continuing operations       0.07       0.44          0.36      0.01          2.50
 
Earnings from discontinued
operations, net                                  -       0.76             -         -          1.04
 
Net earnings per share                        0.07       1.20          0.36      0.01          3.54
 
Diluted earnings:
 
Net earnings from continuing operations       0.07       0.40          0.35      0.01          2.47
 
Earnings from discontinued operations,
net                                              -       0.70             -         -          1.02
 
Net earnings per share                        0.07       1.10          0.35      0.01          3.49
 
The accompanying notes are an integral part of the interim consolidated
financial statements.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

British pounds in thousands

                                                                   Cumulative
                                                                     foreign
                                                Additional  Share   currency                 Less shares
                                                 paid-in   options translation  Accumulated    held by
                                  Share capital  capital   reserve adjustments    deficit    subsidiaries     Total

Balance at January 1, 2007                   49      7,078       -       (251)      (3,847)          (96)     2,933
 
Issued of shares from exercised
options                                       1          5       -           -            -             -         6
Net income                                    -          -       -           -           19             -        19
Amounts assigned to employees and
director stock-based compensation             -          -       4           -            -             -         4
Cumulative foreign currency
translation adjustments                       -          -       -        (69)            -             -      (69)
 
Balance at June 30, 2007
(unaudited)                                  50      7,083       4       (320)      (3,828)          (96)     2,893
 
Balance at January 1, 2006
(audited)                                    48      7,065       -       (137)      (4,767)          (96)     2,113
 
Issued of shares from exercised
options                                       1          6       -           -            -             -         7
Net income                                    -          -       -           -          310             -       310
Cumulative foreign currency
translation adjustments                       -          -       -        (67)            -             -      (67)
 
Balance at June 30, 2006
(unaudited)                                  49      7,071       -       (204)      (4,457)          (96)     2,363
Balance at April 1, 2007
(unaudited)                                  49      7,078       3       (210)      (3,921)          (96)     2,903
 
Issued of shares from exercised
options                                       1          5       -           -            -             -         6
Net income                                    -          -       -           -           93             -        93
Amounts assigned to employees and
director
 
stock-based compensation                      -          -       1           -            -             -         1
Cumulative foreign currency
translation adjustments                       -          -       -       (110)            -             -     (110)
 
Balance at June 30, 2007
(unaudited)
                                             50      7,083       4       (320)      (3,828)          (96)     2,893
 
Balance at April 1, 2006
(unaudited)                                  48      7,065       -       (178)      (4,460)          (96)     2,379
 
Issued of shares from exercised
options                                       1          6       -           -            -             -         7
Net income                                    -          -       -           -            3             -         3
Cumulative foreign currency
translation adjustments                       -          -       -        (26)            -             -      (26)
 
Balance at June 30, 2006
(unaudited)                                  49      7,071       -       (204)      (4,457)          (96)     2,363

The accompanying notes are an integral part of the interim consolidated financial statements.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

British pounds in thousands

                                                          Cumulative
                                                             foreign
                               Additional     Share         currency
                        Share     paid-in   options      translation     Accumulated   Less shares held
                      capital     capital   reserve      adjustments         deficit    by subsidiaries   Total
 
Balance at January
1, 2006 (audited)          48       7,065           -              (137)     (4,767)      (96)            2,113
 
Net income                  -           -           -                  -         920         -              920
Issued of shares
from exercised
options                     1          13           -                  -           -         -               14
Cumulative foreign
currency translation
adjustments                 -           -           -              (114)           -         -            (114)
 
Balance at December
31, 2006 (audited)         49       7,078           -              (251)     (3,847)      (96)            2,933
 
The accompanying notes are an integral part of the interim consolidated
financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

British pounds in thousands

                                                                                Year ended
                                    Six months ended      Three months ended      December
                                        June 30,               June 30,                31,
                                     2007       2006         2007        2006         2006
                                                   Unaudited                       Audited
Cash flows from operating
activities:
Net income                               19       310          93           3          920
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities
(a)                                     (4)     (207)         170        (63)          155
 
Net cash provided by (used in)
operating activities                     15       103         263        (60)        1,075
 
Cash flows from investing
activities:
Purchase of fixed assets, net          (54)      (45)        (10)        (17)         (84)
Proceeds from sale of fixed
assets                                    -         -           -           -           26
Short and long term investments,
net                                     (4)     (181)         (4)       (399)          242
 
Net cash used in continuing
investing activities                   (58)     (226)        (14)       (416)          184
Net cash used in discontinued
investing activities                      -      (58)           -        (12)         (64)
 
Net cash provided by investing
activities                             (58)     (284)        (14)       (428)          120
 
Cash flows from financing
activities:
Issued of shares from exercised
options                                   6         7           6           7            -
Repayment of long-term loans from
banks                                  (11)      (20)         (6)        (11)         (29)
Short-term bank credit, net               -         -           -           -           14
 
Net cash used in financing
activities                              (5)      (13)           -         (4)         (15)
 
Effect of exchange rate changes
on cash and cash equivalents           (40)      (25)        (63)        (17)         (74)
 
Increase (decrease) in cash and
cash equivalents                       (88)     (219)         186       (509)        1,106
Cash and cash equivalents at the
beginning of the period               2,044       938       1,770       1,228          938
 
Cash and cash equivalents at the
end of the period                     1,956       719       1,956         719        2,044


The accompanying notes are an integral part of the interim consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

British pounds in thousands

                                                                               Year ended
                                    Six months ended      Three months ended     December
                                        June 30,               June 30,               31,
                                     2007       2006       2007        2006          2006
                                                   Unaudited                      Audited
 
(a) Adjustments to reconcile net
    income (loss) to net cash
    provided by (used in) operating
    income:
 
    Income and expenses not
    involving cash flows:
 
    Share-based payment cost             4         -          1           -           -
    Profit from discontinued
    operations, net                      -      (197)         -           -        (269)
    Depreciation and amortization       72        69         36          35         146
    Deferred taxes, net               (40)         4          1           1          53
    Increase (decrease) in accrued
    severance pay, net                   9        18         (1)         (8)         28
    Capital gain from sale of fixed
    assets                               -         -          -           -          (4)
 
    Changes in operating assets and
    liability items:
 
    Decrease (increase) in trade
    receivables, other accounts
    receivable and long-term loans
    and receivables                   (51)      (176)        268         87         158
    Increase (decrease) in trade
    payables and other accounts
    payable                              2         75       (135)      (178)         43
 
                                       (4)      (207)        170        (63)        155
(b) Non cash investing and
    financing activities
    Property and equipment acquired
    Under capital leases                 -         6           -          -          21
 
The accompanying notes are an integral part of the interim consolidated
financial statements.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: GENERAL

These financial statements have been prepared in a condensed format as of June
30, 2007, and for the six months then ended ("interim financial statements").
These financial statements should be read in conjunction with the Company's
audited annual financial statements and accompanying notes as of December 31,
2006 and for the year then ended.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

a. The interim financial statements have been prepared in accordance with
generally accepted accounting principles for the preparation of financial
statements for interim periods, as prescribed in Accounting Standard No. 14 of
the Israel Accounting Standards Board and in accordance with the Chapter D of
the Securities Regulations (periodic and Immediate reports), 1970.

The significant accounting policies and methods of computation followed in the
preparation of the interim financial statements are identical to those
followed in the preparation of the latest annual financial statements.

b. Initial adoption of new Accounting Standards:

(1) Accounting Standard No. 26 - Inventories:

In August 2006 the Israeli Accounting Standards Board published Accounting
standard No. 26 - "Inventory" ("the Standard"), which outlines the accounting
treatment for inventory.

The Standard applies to all types of inventory, other than building earmarked
for sale and addressed by accounting standard No.2 ("construction of Buildings
for Sale"), inventory of work in progress stemming from performance contracts,
addressed by Accounting Standard No.4 ("Work Based on Performance Contract"),
financial instruments and biological assets relating to agricultural activity
and agricultural production during harvest.

The Standard establishes, among other things, that inventory should be stated
at the lower between cost and net realizable value. Cost is determined by the
first in, first out (FIFO) method or by average weighted cost used
consistently for all types of inventory of similar nature and uses. In certain
circumstances the Standard requires cost determination by a specific
identification of cost, which includes all purchase and production costs, as
well as any other costs incurred in reaching the inventory's present stage.

When inventory is acquired on credit incorporating a financing component, the
inventory should then be presented at cost equaling purchase cost in cash. The
financing component is recognized as a financing expense over the term of the
credit period.

Any reduction of inventory to net realizable value following impairment as
well as any other inventory loss should be expensed during the current period.
Subsequent elimination of an impairment write-down that stems form an increase
in net realizable value will be allocated to operations during the period in
which the elimination took place.

This Standard will apply to financial statements covering periods beginning
January 1, 2007 and onwards and should be implemented retroactively.

This new standard does not have effect on the Company's financial statements.

(2) Accounting Standard No. 27 - Fixed Assets:

In September 2006 the Israeli Accounting Standards Board published Accounting
Standard No. 27 ("Fixed Assets"), which establishes the accounting treatment
for fixed assets, including recognition of assets, determination of their book
value, related depreciation, losses from impairment as well as the disclosure
required in the financial statements.

The Standard states that a fixed-asset item will be measured at the initial
recognition date at cost which includes, in addition to the purchase price,
all the related costs incurred for bringing the item to the position enabling
it to operate in the manner contemplated be management. The cost also includes
the initial estimate of costs required to dismantle and remove the item, along
with the expenses incurred in reconstructing the site in which the item had
been placed and in respect of which the entity incurred that obligation when
the item had been acquired or following its use over a given period of time
not in the production of inventory during that period.

The Standard also states that when acquiring assets in exchange for a
non-monetary asset or a combination of monetary as well as non-monetary
assets, the cost will be determined at fair value unless (a) the barter
transaction has no commercial essence or (b) it is impossible to reliably
measure the fair value of the asset received and the asset provided. Should
the provided asset not be measured at fair value, its cost would equal book
value.

Following the initial recognition, the Standard permits the entity to
implement in its accounting policy the measurement of the fixed assets by the
cost method or by revaluation method, as defined in the Standard, so long as
this policy is implemented in regard to all items in that group.

This new Standard apply to financial statements covering periods beginning
January 1, 2007 and onwards and implemented retroactively, except for in cases
where an entity.

An entity chooses, on January 1, 2007 the revaluation method and will treat
the difference between the asset's estimated book value and its cost as a
revaluation reserve at that time, or incase when an entity did not include in
the cost of an item, upon initial recognition, the initial estimate of
dismantling and removing costs along with site reconstruction costs.

This new standard does not have a material effect on the Company's financial
position, results of operations and cash flows.

(3) Accounting Standard No. 23 - Accounting for Transactions between an Entity
and a controlling party

In December 2006 the Israeli Accounting Standards Board published Accounting
Standard No.23. "Accounting for Transactions between an Entity and a
controlling Party (hereinafter-the standard). The standard applies entities
subject to the Israeli Securities Law -1968.

The standard establishes the requirements for accounting for transactions
between an entity and its controlling party which involve the transposition of
an asset, the taking on of a liability, reimbursement or debt concession, and
the receiving of loans. The standard does not apply to business combinations
under common control. The standard stipulates that transactions between an
entity and a controlling party will be measured based on fair value
transactions which in nature are owner investment should be report directly in
equity and not be recognized in the controlled entity's profit and loss, the
differences between the consideration set in transactions between an entity
and a controlling party and their fair value will be allocated directly to the
equity and current and deferred taxes pertaining to the items allocated to
equity due to transactions with controlling parties will be allocated directly
to equity as well.

The standard is effective for transactions between an entity and a controlling
party taking place subsequent to January 1, 2007 and for loans granted from or
given to a controlling party prior to the Standard's coming into effect,
starting on the standard's effective date.

This new standard does not have a material effect on the Company's financial
position, results of operations and cash flows.

c. Disclosure of the impact of new accounting standard in the period prior its
application:

Accounting standard No. 29 - Adoption of International Financial Standards:

In July 2006, the Israeli Accounting Standard Board published Accounting
Standard No. 29

"Adoption of International Financial Standards (IFRS)" hereafter - "the
Standard"). The Standard provides that entities that are subject to the
Securities Law, 1968 and that are required to report in accordance with this
Law's provisions, shall prepare their financial statements pursuant to IFRS
standards for periods commencing January 1, 2008.

Initial adoption of IFRS Standard is to be effected by means of application of
the provisions of IFRS 1, "First-Time Application of IFRS Standards", for
purposes of the transition.

In accordance with the Standard, the Company is required to include in a note
to the annual financial statements as at December 31, 2007 the balance-sheet
data as at December 31, 2007 and the income-statement for the year then ended,
after they have undergone application of the recognition, measurement and
presentation rules of IFRS Standards.

d. Following are data regarding the exchange rate of the British pound in
relation to the NIS:

                             Exchange rate
                                        of
As of                          one British
                                     pound
                                       NIS
 
June 30, 2007                       8.5067
June 30, 2006                       8.1376
December 31, 2006                   8.2884
 
Change during the period                 %
 
June 2007 (six months)                 2.6
June 2006 (six months)                 2.5
June 2007 (three months)               4.7
June 2006 (three months)               0.1
December 2006 (12 months)              4.4


NOTE 3: SEGMENTS

                                   Six months ended June 30, 2007

                                              North   Adjustments
                        Israel   Europe     America                 Total

                                             Unaudited

                                    British pounds in thousands
 
External revenues        1,439    1,249       1,070
Inter-segment                                               (100)
revenues                     -      100           -
Total revenues           1,439    1,349       1,070         (100)   3,758
 
Segment results             82      160        (27)             -     215
 
General joint
expenses
unallocated                                                         (267)
Operating loss                                                       (52)
 
                                   Six months ended June 30, 2006
 
                                              North
                        Israel   Europe     America   Adjustments   Total

                                             Unaudited

                                    British pounds in thousands
 
External revenues        1,664    1,063       1,300
Inter-segment                                               (217)
revenues                     -      217           -
Total revenues           1,664    1,280       1,300         (217)   4,027
 
Segment results             95      125         185             -     405
 
General joint
expenses
unallocated                                                         (265)
Operating income                                                      140
 
                                  Three months ended June 30, 2007
 
                                            North
                      Israel     Europe    America    Adjustments   Total

                                             Unaudited

                                    British pounds in thousands
 
External revenues          727      616         589
Inter-segment                                                (43)
revenues                     -       43           -
Total revenues             727      659         589          (43)   1,932
 
Segment results             42       62          60             -     164
 
General joint
expenses
unallocated                                                         (115)
Operating income                                                       49
 
                                  Three months ended June 30, 2006
 
                                              North
                        Israel   Europe     America   Adjustments   Total

                                             Unaudited

                                    British pounds in thousands
 
External revenues          854      481         650
Inter-segment                                               (113)
revenues                     -      113           -
Total revenues             854      594         650         (113)   1,985
 
Segment results             76       13          86             -     175
 
General joint
expenses
unallocated                                                         (134)
Operating income                                                       41
 
                                    Year ended December 31, 2006
 
                                            North
                      Israel     Europe    America    Adjustments   Total

                                             Unaudited

                                    British pounds in thousands
 
External revenues        3,240    2,309       2,613
Inter-segment                                               (437)
revenues                     -      437           -
Total revenues           3,240    2,746       2,613         (437)   8,162
 
Segment results            199      532         322                 1,053
 
General joint
expenses
unallocated                                                         (506)
Operating income                                                      547
 
NOTE 4: Additional information

In April 2007, a lawsuit for 1.2 million NIS was filed against the company by
a former employee. In June 2007, the company filed a response to the lawsuit
claim within the court, and a counterclaim of 2 million NIS. The Company's
management, based upon the advice of its legal counsel, considers that it has
valid defence that would result the judgment in its favour. Therefore in its
financial statements, the Company has provided only for the legal fees related
to such lawsuit.




END



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