[LETTERHEAD OF SOMEKH CHAIKIN]

Tel Aviv March 4, 1997

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE
SHAREHOLDERS OF ISPAH HOLDINGS LTD.

We have audited the balance sheets of Ispah Holdings Limited as of December 31,
1996 and 1995, the related statements of income and shareholders' equity and
cash flows for each of the years in the period 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 Israel 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 4 to the financial statements.

The data relating to the net asset value of the Company's investments in an
investee company and to its equity in that Company's operating results, is based
on financial statements audited by other auditors.


In our opinion, based on our audit and on the report of the abovementioned other
auditors, the above mentioned financial statements present fairly the financial
position of the Company as at December 31, 1996 and 1995, the results of its
operations, the changes in shareholder's equity and cash flows for each of the
years in the period ended December 31, 1996, 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 5 to the financial statements.


/s/ Somekh Chaikin

Somekh Chaikin
CERTIFIED PUBLIC ACCOUNTANTS (ISR)