[LETTERHEAD OF SOMEKH CHAIKIN]

Tel Aviv, March 8, 1998

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE
SHAREHOLDERS OF DEP TECHNOLOGY HOLDINGS LTD.

We have audited the balance sheets of DEP Technology Holdings Limited and the
consolidated balance sheets of the Company and its subsidiaries as of December
31, 1997 and 1996, the related statements of income and shareholders' equity and
cash flows for each of the years then ended, expressed in New Israel Shekels.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards, including those prescribed under the Auditors Regulations (Auditor's
Mode of Performance), 1973 and, accordingly we have performed such auditing
procedures as we considered necessary in the circumstances. For purposes of
these financial statements there is no material difference between generally
accepted Israeli auditing standards and auditing standards generally accepted in
the U.S. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentations.
We believe that our audits provide a reasonable basis for our opinion.

The above statements have been prepared on the basis of historical cost as
adjusted for the changes in the general purchasing power of the Israeli currency
in accordance with opinions issued by the Institute of Certified Public
Accountants in Israel. Condensed statements in historical values which formed
the basis of the adjusted statements appear in Note 23 to the financial
statements.

In our opinion, based on our audit, the above mentioned financial statements
present fairly the financial position of the Company and the consolidated
balance sheets of the Company and its subsidiaries as at December 31, 1997 and
1996, the results of its operations, the changes in shareholder's equity and
cash flows for each of the years then ended, in conformity with accounting
principles generally accepted in Israel, consistently applied.


Accounting principles generally accepted in Israel differ in certain respects
from accounting principles generally accepted in the United States. The
application of the latter would have affected the determination of
nominal/historical net profit (loss) and shareholders' equity to the extent
summarized in Note 23(4) to the financial statements.

/s/ Somekh Chaikin

Somekh Chaikin
CERTIFIED PUBLIC ACCOUNTANTS (ISR)