# EDGAR Filing Document

**Accession Number:** 0000876779
**File Stem:** 0000950103-25-015752
**Filing Date:** 2025-12
**Character Count:** 1261884
**Document Hash:** d97d7fc2ade69b0c4215e50ea45e664a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950103-25-015752.hdr.sgml**: 20251204

**ACCESSION NUMBER**: 0000950103-25-015752

**CONFORMED SUBMISSION TYPE**: CB/A

**PUBLIC DOCUMENT COUNT**: 154

**FILED AS OF DATE**: 20251204

**DATE AS OF CHANGE**: 20251204

**SUBJECT COMPANY**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MAGIC SOFTWARE ENTERPRISES LTD
- **CENTRAL INDEX KEY:** 0000876779
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 330477418
- **STATE OF INCORPORATION:** L3
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** CB/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 005-41906
- **FILM NUMBER:** 251550634

**BUSINESS ADDRESS:**
- **STREET 1:** YAHADUT CANADA 1 ST.
- **CITY:** OR YEHUDA ISRAEL
- **STATE:** L3
- **ZIP:** 6037501
- **BUSINESS PHONE:** 972-3-538-9474

**MAIL ADDRESS:**
- **STREET 1:** YAHADUT CANADA 1 ST.
- **CITY:** OR YEHUDA ISRAEL
- **STATE:** L3
- **ZIP:** 6037501
**FILED BY**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Matrix I.T. Ltd.
- **CENTRAL INDEX KEY:** 0002093979

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** L3
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** CB/A

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 3 ATIR YEDA
- **CITY:** KFAR SABA
- **PROVINCE COUNTRY:** L3
- **ZIP:** 4464303
- **BUSINESS PHONE:** 97299598810

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 3 ATIR YEDA
- **CITY:** KFAR SABA
- **PROVINCE COUNTRY:** L3
- **ZIP:** 4464303

**UNITED STATES<br> SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549**

**FORM CB** **/A**<br> TENDER OFFER/RIGHTS OFFERING NOTIFICATION FORM<br> (AMENDMENT NO. 1)

Please place an X in the box(es) to designate the appropriate rule provision(s) relied upon to file this Form:

---

| | |
|:---|:---|
| Securities Act Rule 801 (Rights Offering) | ◻ |
| Securities Act Rule 802 (Exchange Offer) | ⌧ |
| Exchange Act Rule 13e-4(h)(8) (Issuer Tender Offer) | ◻ |
| Exchange Act Rule 14d-1(c) (Third Party Tender Offer) | ◻ |
| Exchange Act Rule 14e-2(d) (Subject Company Response) | ◻ |

---

---

| |
|:---|
| **Magic Software Enterprises Ltd.** |
| (Name of Subject Company) |
| **N/A** |
| (Translation of Subject Company's Name into English (if applicable)) |
| **Israel** |
| (Jurisdiction of Subject Company's Incorporation or Organization) |
| **Matrix IT Ltd.** |
| (Name of Person(s) Furnishing Form) |
| **Ordinary Shares, NIS 0.01 par value** |
| (Title of Class of Subject Securities) |
| **559166 10 3** |
| (CUSIP Number of Class of Securities (if applicable)) |
| **Yifat Givol, Adv.<br> Head of Legal Department and Corporate Secretary** <br> **3 Atir Yeda** <br> **Kfar Saba 4464303** <br> **Israel** <br> **Tel: +972 9 9598810**  |
| (Name, Address (including zip code) and Telephone Number (including area code)<br> of Person(s) Authorized to Receive Notices and Communications on Behalf of the Filer) |
| Copies to:<br>**Nir Dash, Adv.<br> Herzog Fox Ne'eman<br> Yitzhak Sadeh 6<br> Tel Aviv, Israel<br> Telephone: +972 3 692 2020**  |
| **December 4, 2025** |
| (Date Tender Offer/Rights Offering Commenced) |

---

**PART I - INFORMATION SENT TO SECURITY HOLDERS**

**Item 1. Home Jurisdiction Documents**

(a) The following documents are attached as exhibits to this Form CB:

---

| | |
|:---|:---|
| **<u>Exhibit<br> Number</u>** |  |
| [99.1](dp238175_ex9901.htm) | [English translation of Shelf Offer Report of Matrix IT Ltd. ("Matrix"), filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on December 3, 2025.](dp238175_ex9901.htm) |

---

(b) Not applicable.

**Item 2. Informational Legends**

A legend complying with Rule 802(b) under the U.S. Securities Act of 1933, as amended, is included in each of the documents referred to in Item 1.

**PART II - INFORMATION NOT REQUIRED TO BE SENT TO SECURITY HOLDERS** 

---

| | |
|:---|:---|
| **<u>Exhibit<br> Number</u>** |  |
| [99.2](dp238175_ex9902.htm) | [English translation of Shelf Prospectus of Matrix, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on July 17, 2025.](dp238175_ex9902.htm) |
| [99.3](dp238175_ex9903.htm) | [English translation of Articles of Association of Matrix.](dp238175_ex9903.htm) |
| [99.4](dp238175_ex9904.htm) | [English translation of Quarterly Financial Statements for Q2 2025, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on August 12, 2025.](dp238175_ex9904.htm) |
| [99.5](dp238175_ex9905.htm) | [English translation of Corporate Liabilities by Maturity as of June 30, 2025, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on August 12, 2025.](dp238175_ex9905.htm) |
| [99.6](dp238175_ex9906.htm) | [English translation of Investor Presentation related to Financial Results as of June 30, 2025, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on August 12, 2025.](dp238175_ex9906.htm) |
| [99.7](dp238175_ex9907.htm) | [English translation of Cash Dividend Distribution, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on August 12, 2025.](dp238175_ex9907.htm) |
| [99.8](dp238175_ex9908.htm) | [English translation of Quarterly Financial Statements for Q3 2025, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on November 12, 2025.](dp238175_ex9908.htm) |
| [99.9](dp238175_ex9909.htm) | [English translation of Cash Dividend Distribution, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on November 12, 2025.](dp238175_ex9909.htm) |
| [99.10](dp238175_ex9910.htm) | [English translation of Corporate Liabilities by Maturity as of September 30, 2025, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on November 12, 2025.](dp238175_ex9910.htm) |
| [99.11](dp238175_ex9911.htm) | [English translation of Immediate Report on the Convening of a General Meeting for December 17, 2025 regarding Approval of Director Reappointments, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on November 12, 2025.](dp238175_ex9911.htm) |
| [99.12](dp238175_ex9912.htm) | [English translation of Immediate Report regarding a related party transaction (Chairman compensation), filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on November 12, 2025.](dp238175_ex9912.htm) |
| [99.13](dp238175_ex9913.htm) | [English translation of Investor Presentation related to Financial Results as of September 30, 2025, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on August 12, 2025.](dp238175_ex9913.htm) |
| [99.14](dp238175_ex9914.htm) | [English translation of Annual Financial Statements for Fiscal Year 2024, filed by Matrix with the Israel Securities Authority and Tel Aviv Stock Exchange on March 11, 2025.](dp238175_ex9914.htm) |

---

**PART III - CONSENT TO SERVICE OF PROCESS**

Matrix IT Ltd. submitted to the Securities and Exchange Commission a written irrevocable consent and power of attorney on Form F-X dated November 4, 2025.

**PART IV - SIGNATURES**

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

---

| | |
|:---|:---|
| **Matrix IT Ltd.** | **Matrix IT Ltd.** |
| /s/ Nevo Brenner | /s/ Nevo Brenner |
| Name: | Nevo Brenner |
| Title: | Chief Financial Officer |
| Date: December 4, 2025 | Date: December 4, 2025 |

---

## Exhibit 99.1

**Exhibit 99.1**

***This exchange offer (the "Offer") is being made for the ordinary shares of Magic Software Enterprises Ltd. (the "Issuer") by Matrix IT Ltd. (the "Offeror"), each of which is a company incorporated in Israel. The Offer and information distributed in connection with the Offer are subject to disclosure requirements of Israel that are different from those of the United States. Financial statements and financial information included in the document, if any, have been prepared in accordance with International Financial Reporting Standards (IFRS Accounting Standards) that may not be comparable to the financial statements or financial information of United States companies.***

***It may be difficult for you to enforce your rights and any claim you may have arising under U.S. federal securities laws in respect of the Offer, since the Issuer and the Offeror are located in Israel, and some or all of their officers and directors may be residents of Israel or other countries outside the U.S. You may not be able to sue a company incorporated outside the U.S. or its officers or directors in a non-U.S. court for violations of U.S. securities laws. It may be difficult to compel a company incorporated outside the U.S. and its affiliates to subject themselves to a U.S. court's judgment.***

***You should be aware that the issuer may purchase securities otherwise than under the exchange offer, such as in open market or privately negotiated purchases.***

![???????????? (????????) ??? ????????????????](image_015.jpg)

December 3, 2025

**Matrix IT Ltd.<br> (the "Company")**

**<u>Shelf Offering Report</u>**

Pursuant to the Company's Shelf Prospectus published on July 16, 2025, bearing the date July 17, 2025 (Reference No.: 2025-01-052877) (the "**Shelf Prospectus**"), and in accordance with the provisions of the Securities Regulations (Shelf Offering of Securities), 5766-2005 (the "**Offering Articles**"), the Company hereby publishes this Shelf Offering Report for the issuance and listing for trading on the Tel Aviv Stock Exchange Ltd. (the "**Stock Exchange**") of the securities detailed in Section 1.1 below (this "**Shelf Offering Report**").

The Company is publishing this Shelf Offering Report as part of the Company's engagement in a reverse triangular merger transaction, pursuant to a merger agreement signed on November 3, 2025, with: (a) Magic Software Enterprises Ltd., a publicly traded company whose shares are traded on NASDAQ and on the Stock Exchange ("**Magic**"), whose controlling shareholder is Formula Systems (1985) Ltd. ("**Formula**"), the controlling shareholder of the Company; and (b) Magitrix Ltd., a private company incorporated in Israel wholly owned by the Company<sup>1</sup> (the "**Merger Sub**", the "**Merger Transaction**" and the "**Merger Agreement**", as applicable). -Upon completion of the Merger Transaction (to the extent completed), the Merger Sub will merge with and into Magic, such that all of the Merger Sub's operations, assets and liabilities will be transferred into Magic; the Merger Sub will be struck from the Companies Registrar; and all shareholders of Magic, as of the effective date for eligibility to the consideration shares, as defined in section 3.2 below(the "**Eligible Magic Shareholders**"), will receive from the Company, by way of allotment, the Offered Shares (as defined below) offered under this Shelf Offering Report. Upon completion of the Merger Transaction, Magic's shares will be delisted from trading on NASDAQ and on the Stock Exchange, and Magic will become a private company wholly owned (100 percent) by the Company. For further details concerning the Merger Transaction and the shareholders meeting of the Company's shareholders convened for its approval, see the Notice of Special Shareholders Meeting published by the Company on November 3, 2025 (Reference No.: 2025-01-083233) (the "**Meeting Notice**").

The offering of the securities under this Shelf Offering Report will be made by way of a non-uniform offering, in accordance with the provisions of Article 11(a)(3) of the Securities Regulations (Manner of Offering Securities to the Public), 5767-2007, as it is directed to holders of securities of another corporation (Magic).

Unless otherwise stated herein, terms used in this Shelf Offering Report shall have the meaning given to them in the Shelf Prospectus.

<sup>1</sup> Which was established for purposes of the Merger Transaction and in which no business and/or other activity has taken place from the date of its incorporation.

1.  **<u>Securities Offered</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;1.1. Up
 to 29,020,184 ordinary shares of the Company, registered by name, par value NIS 1 each, such
 that each Eligible Magic Shareholder shall receive 0.5910508 ordinary shares of the Company
 for each Magic share held by such shareholder. (the "**Offered Shares**" or
 the "**Offered Securities** "). To the best of the Company's knowledge,
 as of the date of this Report, Magic's issued and outstanding share capital (on an
 actual and on a fully diluted basis) consists of 49,099,305 ordinary shares, par value NIS
 0.1 each.

For the avoidance of doubt, the number of Offered Shares that will actually be allotted to the Eligible Magic Shareholders may be less than the number of Offered Shares under this Shelf Offering Report, and shall be calculated, pursuant to the Merger Agreement, such that immediately after completion of the transaction, the Magic shareholders will hold 31.125 percent of the Company's issued and outstanding share capital on a fully diluted basis (the "**Consideration Shares**"), and the shareholders who held Company shares immediately prior to completion of the Merger Transaction will hold 68.875 percent of the Company's issued and outstanding share capital on a fully diluted basis. For purposes of determining the number of shares to be allotted to the Eligible Magic Shareholders, "**the Company's issued and outstanding share capital on a fully diluted basis**" means the Company's issued and outstanding share capital as of the end of the seventh trading day before the date of completion of the transaction (the "**Calculation Date**"), assuming the theoretical exercise of all options existing in the Company's share capital on the Calculation Date, with the number of shares underlying such theoretical option exercises calculated based on the Net-Exercise method, on the basis of the Company share closing price on the Stock Exchange on the Calculation Date.

The Company will publish an Immediate Report containing the final calculation of the exchange ratio, pursuant to which the number of Consideration Shares will be determined, no later than four (4) business days prior to completion of the Merger Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;1.2. The
 Offered Shares shall be equal in their rights to the Company's existing ordinary shares.
 For details regarding the rights attached to the Company's ordinary shares, see Chapter
 3 of the Shelf Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;1.3. The
 allotment of the Offered Shares pursuant to this Shelf Offering Report shall be made as set
 forth in Section 3 below, by way of a non-uniform offering pursuant to Article 11(a)(3) of
 the Securities Regulations (Manner of Offering Securities to the Public), 5767-2007, as it
 is directed to holders of securities of another corporation (Magic).

&nbsp;&nbsp;&nbsp;&nbsp;1.4. The
 Offered Shares shall be listed for trading on the Stock Exchange as soon as practicable after
 completion of the Merger Transaction, all subject to law and to the requirements of the Stock
 Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;1.5. The
 offering of securities under this Shelf Offering Report is not underwritten.

&nbsp;&nbsp;&nbsp;&nbsp;1.6. The
 issuance of the shares to the Eligible Magic Shareholders pursuant to this Shelf Offering
 Report is being carried out as part of the Merger Transaction and is contingent upon fulfillment
 of all conditions precedent to the Merger Transaction and completion of the Merger Transaction,
 as set forth in Section 3.3 below.

&nbsp;&nbsp;&nbsp;&nbsp;1.7. In
 the event the Merger Agreement is cancelled (which may occur under the circumstances described
 in Section 2.8 of the Meeting Notice), the offering under this Shelf Offering Report shall
 lapse, and the Company will publish an Immediate Report to that effect.

2.  **<u>Details Concerning the Company's Share Capital</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;2.1. As
 of the date of this Shelf Offering Report, the Company's registered share capital is
 NIS 100,000,000 divided into 100,000,000 ordinary shares, par value NIS 1 each. It is noted
 that, as part of the Meeting Notice, an increase of the Company's registered share
 capital from NIS 100,000,000 divided into 100,000,000 ordinary shares, par value NIS 1 each,
 to NIS 200,000,000 divided into 200,000,000 ordinary shares, par value NIS 1 each, has been
 proposed.

&nbsp;&nbsp;&nbsp;&nbsp;2.2. Below
 are details concerning the Company's issued and outstanding share capital shortly before
 publication of this Shelf Offering Report, and after completion of the offering under this
 Shelf Offering Report, assuming issuance of all Offered Shares:

---

| |
|:---|
| **Near the publication of the Offering Report** |
| **Issued and paid up capital** |
| 63638357<sup>2</sup><sup>2</sup>64217357<sup>2</sup>92658541<sup>2</sup>93237541 |

---

For purposes of this Section 2.2, "**fully diluted**" means all shares in the Company's issued and outstanding share capital, assuming the exercise of all Company securities exercisable into Company shares, namely the exercise of all unlisted options granted by the Company that have not yet been exercised or lapsed. It is noted that this assumption is theoretical only, as the options granted by the Company are exercisable using the Net-Exercise method, and accordingly, the actual number of shares allotted to an offeree exercising options will not be the full number underlying the options, but only such number reflecting the cash benefit embedded in the options exercised.

&nbsp;&nbsp;&nbsp;&nbsp;2.3. All
 shares in the Company's issued and outstanding share capital are fully paid.

&nbsp;&nbsp;&nbsp;&nbsp;2.4. The
 Offered Securities under this Shelf Offering Report shall, upon completion of the offering
 pursuant hereto and assuming issuance of all Offered Securities, constitute approximately
 31.319% percent of the Company's issued and outstanding share capital and approximately
 31.319% percent of its voting rights, and approximately 31,125% percent of the Company's
 issued and outstanding share capital and voting rights on a fully diluted basis. <sup>3</sup>

<sup>2</sup> Net of 653,860 are dormant shares held by the Company and which do not confer any rights in the Company's equity or voting rights.

<sup>3</sup> On the theoretical assumption of cash-based exercise of options. It is clarified that this is a theoretical assumption only, since the options existing in the Company's share capital are exercisable using the Net-Exercise method.

&nbsp;&nbsp;&nbsp;&nbsp;2.5. <u>Share prices of the Company's securities on the Stock Exchange</u> 

Below are data regarding the lowest and highest adjusted closing prices (in agorot) of the Company's shares in 2023, in 2024, and in the period from January 1, 2025 through shortly before the publication date of this Report:<sup>4</sup>

---

| | | | | |
|:---|:---|:---|:---|:---|
| **High closing price** | **High closing price** | **Low closing price** | **Low closing price** | **Period** |
| **Date** | **High price (agorot)** | **Date** | **Low price (agorot)** | **Period** |
| October 2, 2023 | 7483.7904 | March 28, 2023 | 5662.9888 | 2023 |
| December 16, 2024 | 8608.09 | January 16, 2024 | 6321.3412 | 2024 |
| December. 1, 2025 | 14140 | April 7, 2025 | 8227.5395 | As of January 1, 2025, until the publication of the Shelf Offering Report<sup>5</sup> |

---

&nbsp;&nbsp;&nbsp;&nbsp;2.6. All
 shares issued pursuant to this Shelf Offering Report shall be registered in the name of the
 Nominee Company of the Tel Aviv Stock Exchange Ltd. (the "**Nominee Company** ").

3.  **<u>Details of the offering of the securities</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;3.1. <u>General</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.1. On
 November 3, 2025, the Company entered into the Merger Agreement, pursuant to which, subject
 to the fulfillment of the conditions precedent contained in the Merger Agreement (including
 receipt of approval of the Merger Transaction by the shareholders meeting of the Company
 and of Magic), a reverse triangular merger shall be effected in accordance with Sections
 314 through 327 of the Companies Law, 5759-1999 (the "**Companies Law** "),
 whereby the Merger Sub shall merge with and into Magic, such that all of the Merger Sub's
 operations, assets and liabilities shall be transferred into Magic, and the Merger Sub shall
 be struck from the Companies Registrar pursuant to Section 323 of the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.2. Under
 the Merger Agreement, upon completion of the Merger Transaction, the Eligible Magic Shareholders
 shall receive from the Company, by way of allotment, in consideration for the Magic shares
 they hold, ordinary shares of the Company, par value NIS 1 each, such that immediately following
 completion of the transaction, the Eligible Magic Shareholders shall hold 31.125 percent
 of the Company's issued and outstanding share capital on a fully diluted basis (as
 defined in Section 1.1 above), and the shareholders who held Company shares immediately prior
 to completion of the Merger Transaction shall hold 68.875 percent of the Company's
 issued and outstanding share capital on a fully diluted basis (as defined in Section 1.1
 above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.3. Upon
 completion of the Merger Transaction, Magic will become a wholly owned (100 percent) subsidiary
 of the Company; Magic's shares will be delisted from trading on NASDAQ and on the Stock
 Exchange; and Magic will convert from a publicly traded company into a private company.

<sup>4</sup> The data are taken from the Stock Exchange website at http://www.tase.co.il/ and take into account any dividend distribution or bonus share distribution, split, reverse split, or rights offering, to the extent any such actions were taken by the Company (i.e., adjusted closing price).

<sup>5</sup> Until December 1, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.4. For
 further details concerning the Merger Agreement, see the Meeting Notice, which is incorporated
 by reference into this Shelf Offering Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.5. Subject
 to completion of the Merger Transaction, the Company shall carry out all actions required
 for the allotment of the Consideration Shares to the Eligible Magic Shareholders, and shall
 act to have such shares registered for trading on the Stock Exchange as soon as practicable
 following completion of the Merger Transaction. It is noted that the allotment of the Consideration
 Shares in the name of the Nominee Company shall be deemed an allotment of such shares to
 the Eligible Magic Shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.6. Pursuant
 to the provisions of the Merger Agreement, the vote of Magic's shareholders meeting
 whose agenda includes approval of the Merger Transaction and receipt of the Consideration
 Shares shall be deemed to constitute a purchase of securities under a prospectus, within
 the meaning of the Securities Law, 5728-1968 (the "**Securities Law** "), and/or
 under any other offering document pursuant to the applicable laws of the United States.

&nbsp;&nbsp;&nbsp;&nbsp;3.2. <u>Allotment of the Offered Shares</u> 

In this Section, the following terms shall have the meanings set forth beside them:

---

| |
|:---|
| **The "Effective Date for eligibility to the Consideration Shares"** – The Effective Date for eligibility to the Consideration Shares will be determined based on the date of receipt of the merger certificate, as follows: (1) if the merger certificate is received prior to the commencement of trading on the date of receipt of the merger certificate – the Effective Date for eligibility to the Consideration Shares will occur on that same day; (2) if the merger certificate is received after the commencement of trading on the date of receipt of the merger certificate – the Effective Date will occur on the next trading day; |
| **The "Merger Completion Date"** – The tenth (10th) business day following the date on which all conditions precedent for completion of the transaction have been fulfilled (see Section 2.3 of the Meeting Notice in this regard), except for such conditions precedent whose fulfillment a party entitled to do so under the Merger Agreement has waived; and except for such condition precedent relating to receipt of the merger certificate, which will be fulfilled immediately prior to the Merger Completion Date, all unless the parties to the Merger Agreement agree on another date. |

---

---

| | |
|:---|:---|
| **The "Conditions Precedent"** | The conditions precedent to completion of the transaction. In this regard, see Section 2.3 of the Meeting Notice. |

---

<u>Dates</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.1. Shortly
 after fulfillment of the Conditions Precedent, except for receipt of the merger certificate
 from the Companies Registrar, the Company shall publish an Immediate Report stating that
 all Conditions Precedent (other than receipt of the merger certificate) have been fulfilled,
 and shall specify in such report the expected date for receipt of the merger certificate.
 It is hereby clarified that the merger certificate will be received only after the fulfillment
 of the other conditions precedent detailed in Section 2.3 of the Meeting Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.2. Upon
 receipt of the merger certificate, the Company shall publish an Immediate Report regarding
 receipt thereof, which shall also specify: (1) the Effective Date for eligibility to the
 Consideration Shares (as defined above); (2) the Merger Completion Date; and (3) the date
 of allotment of the Consideration Shares to the Eligible Magic Shareholders (expected to
 be the Merger Completion Date or a date shortly thereafter) (the "**Date of Allotment of the Consideration Shares** "). It is clarified that, unless the Company notifies
 otherwise, the Effective Date for eligibility to the Consideration Shares and the Merger
 Completion Date will occur on the same day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.3. On
 the date of receipt of the merger certificate, trading in the Magic shares on the Stock Exchange
 and on NASDAQ shall cease, all subject to and in accordance with the requirements of the
 Stock Exchange and/or the Israel Securities Authority and/or NASDAQ, as in effect from time
 to time. From the cessation of trading as stated, no transactions or transfers in Magic shares
 on the Stock Exchange or on NASDAQ may be effected, and no changes to Magic's share
 register shall be made, except for the transfer of all Magic shares to the Company and registration
 of the Company in Magic's share register as the holder of all issued and outstanding
 Magic shares.

<u>Allotment of the Consideration Shares to the Eligible Magic Shareholders</u>

The Company shall transfer and allot the Consideration Shares as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.4. <u>Allotment to Eligible Magic Shareholders who hold their shares through the Magic Nominee Company</u> 

With respect to Eligible Magic Shareholders who hold their Magic shares through the Magic Nominee Company, on the Merger Completion Date, the Company shall allot to them the Consideration Shares to which they are entitled, by allotting such shares in the name of the Nominee Company and crediting such shares to the relevant TASE member accounts of such shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.5. <u>Allotment to Eligible Magic Shareholders who do not hold their shares through the Magic Nominee Company</u> 

By the Merger Completion Date, Magic and the Company shall enter into an agreement with a Transfer Agent (the "**Transfer Agent**"), who, after completion of the Merger Transaction, shall hold, for the benefit of Eligible Magic Shareholders who do not hold their Magic shares through the Magic Nominee Company (including shareholders registered in Magic's share register) (the "**Certain Shareholders**"), the Consideration Shares to which they are entitled.

With respect to the Certain Shareholders (including, for the avoidance of doubt, shareholders registered in Magic's share register), the Company shall allot the Consideration Shares to which they are entitled in the name of the Nominee Company, and such shares shall be credited to the TASE member account of the Transfer Agent. The Transfer Agent shall hold the Consideration Shares for the benefit of the Certain Shareholders pursuant to the agreement to be executed with it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.6. The
 Consideration Shares shall be allotted to the Eligible Magic Shareholders as fully paid shares,
 free and clear of any debt, lien, pledge, attachment, encumbrance, claim, right of first
 refusal or any other right of any third party, equal in all respects to all ordinary shares
 issued and/or to be issued by the Company through the Merger Completion Date.

<u>Completion of the Merger</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.7. As
 of the date of receipt of the merger certificate, the Magic shares shall no longer confer
 any rights upon the Eligible Magic Shareholders who held them prior to such date, such that
 the Eligible Magic Shareholders (whether they voted for, against, abstained, or did not participate
 in the Magic shareholders meeting whose agenda included approval of the Merger Transaction)
 shall have no rights in the Magic shares previously held by them, other than the right to
 receive their portion of the Consideration Shares.

&nbsp;&nbsp;&nbsp;&nbsp;3.3. <u>Conditions precedent for completion of the Merger Transaction and the allotment of the Offered Securities</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3.1. The
 Consideration Shares shall be allotted subject to the completion of the Merger Transaction,
 and subject to fulfillment of the conditions precedent set out in the Merger Agreement (see
 Section 2.3 of the Meeting Notice in this regard) (the "**Conditions Precedent** ").
 Accordingly, the allotment of the Offered Securities pursuant to this Shelf Offering Report
 is contingent upon fulfillment of all the Conditions Precedent, which, in the Company's
 estimation, are expected to be fulfilled within approximately 60 days from the date of the
 Company's shareholders meeting convened to approve the Merger.

***The Company's assessments regarding the expected date for the fulfillment of the last of the Conditions Precedent for completion of the Merger Transaction constitute forward-looking statements, within the meaning of the Securities Law, 5728-1968. Such assessments may not materialize, or may materialize on a date different from the Company's current assessment, inter alia due to circumstances beyond the Company's control, including the timing of receipt of the regulatory approvals required for completion of the transaction.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3.2. As
 of the publication date of this Report, approval of the Merger Sub's shareholders meeting
 for the Merger Transaction has been received, in accordance with the Companies Law. Approval
 of the shareholders meeting of the Company and of Magic for the Merger Transaction has not
 yet been obtained. In addition, as of this date, the transaction remains subject to the fulfillment
 of additional Conditions Precedent, which include, among others, receipt of a pre-ruling
 from the Israel Tax Authority, as described in Section 7.2 below. Accordingly, it is hereby
 clarified that as of this date there is no certainty that the transaction will be completed.

&nbsp;&nbsp;&nbsp;&nbsp;3.4. <u>Cancellation of the allotment of the Offered Securities in the event of cancellation of the Merger Agreement</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4.1. No
 minimum amount for the offering has been set in this Shelf Offering Report, as provided in
 Section 27(a) of the Securities Law, 5728-1968.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4.2. Pursuant
 to the Merger Agreement, the agreement may be cancelled by the Company or by Magic until
 the Merger Completion Date, as set forth in Section 2.8 of the Meeting Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4.3. **If the Merger Agreement is cancelled in accordance with its terms, the offering under this Shelf Offering Report shall be cancelled, and the allotment of the Offered Securities hereunder shall be cancelled.** 

4.  **<u>Terms of the Offered Securities</u>** 

The Offered Shares shall be equal in all respects to the Company's ordinary shares that are, as of this date, listed for trading on the Stock Exchange. For details regarding the rights attached to the ordinary shares, see the Company's Articles of Association, as published by the Company in an Immediate Report dated November 5, 2019 (Reference No.: 2019-01-094746), which is incorporated herein by reference.

5.  **<u>Avoidance of arrangements</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;5.1. The
 Company and the directors – by signing this Shelf Offering Report, undertake to refrain
 from making any arrangements not written in the Shelf Prospectus or in this Shelf Offering
 Report, in connection with the offering of the Offered Securities under this Shelf Offering
 Report, their distribution and dissemination to the public, and undertake to refrain from
 granting any right to purchasers of securities offered under this Shelf Offering Report to
 sell the securities they purchased beyond what is detailed in the Shelf Prospectus or in
 this Shelf Offering Report.

&nbsp;&nbsp;&nbsp;&nbsp;5.2. The
 Company and the directors – by signing this Shelf Offering Report, undertake to notify
 the Israel Securities Authority of any arrangement known to them with a third party in connection
 with the registration and offering of the Offered Securities under this Shelf Offering Report,
 their distribution and dissemination to the public, which contradicts the undertaking set
 forth in Section 5.1 above.

&nbsp;&nbsp;&nbsp;&nbsp;5.3. The
 Company and the directors – by signing this Shelf Offering Report, undertake to refrain
 from entering into any arrangement with any third party in connection with the registration
 and offering of the securities to be offered under this Shelf Offering Report, their distribution
 and dissemination to the public, who, to the best of their knowledge, has engaged in arrangements
 contrary to Section 5.1 above.

6.  **<u>Permits and approvals</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;6.1. The
 Company has received all permits, approvals, and licenses required by law for offering the
 Offered Securities, issuing them, and publishing this Shelf Offering Report.

&nbsp;&nbsp;&nbsp;&nbsp;6.2. The
 Company has applied to the Stock Exchange for listing the Offered Shares for trading pursuant
 to this Report, and the Stock Exchange has granted its approval.

&nbsp;&nbsp;&nbsp;&nbsp;6.3. **The said approval of the Stock Exchange shall not be regarded as an approval of the details set forth in this Shelf Offering Report, of their reliability or completeness, nor shall it be deemed an expression of any opinion regarding the Company or the nature of the Offered Securities or the price at which they are offered.** 

7.  **<u>Taxation of the Offered Shares</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;7.1. <u>General</u> 

In recent years, several amendments have been enacted that significantly change the provisions of the Income Tax Ordinance [New Version], 5721-1961 (the "**Ordinance**"), applicable to the taxation of securities traded on the Stock Exchange.

**Due to the substantial changes in the taxation of the capital market in recent years, proper practice for applying the provisions described below has not yet been fully established, and multiple interpretations may exist regarding their implementation. Moreover, additional amendments may be enacted beyond those already implemented. Naturally, their content and impact cannot be predicted.**

**The provisions included in this Shelf Offering Report concerning taxation of securities are not intended to constitute an authoritative interpretation of the law referenced in this Shelf Offering Report and are not a substitute for professional advice tailored to the specific facts and circumstances of each purchaser. Therefore, we recommend seeking professional advice based on each purchaser's individual circumstances.**

It should be noted that, with respect to an individual who became a resident of Israel for the first time or a "Returning Resident Veteran" as defined in the Ordinance, different tax implications from those described below may apply, and such persons are advised to seek personal advice to examine their eligibility for tax benefits in Israel.

It should also be noted that, with respect to investors who qualify as controlling shareholders or as substantial shareholders as defined in the Ordinance, additional tax implications may apply beyond those described below.

Under current law, the Offered Securities (in this Section: the "**Security**" or the "**Securities**") are subject to the tax arrangements described below in summary.

&nbsp;&nbsp;&nbsp;&nbsp;7.2. <u>Tax ruling</u> 

On May 27, 2025, the Company and Magic applied to the Israel Tax Authority for a tax ruling regarding the acquisition of Magic shares from the Eligible Magic Shareholders in the Merger Transaction, which, as noted, is being carried out as a reverse triangular merger. Under this structure, the Eligible Magic Shareholders will transfer 100 percent of the Magic shares (including Magic shares held by a trustee) in consideration for the Consideration Shares, such that the allotment of the Consideration Shares, which will be allotted to the Eligible Magic Shareholders shall not be considered a "sale" under Part E2 of the Ordinance at the time of completion of the Merger Transaction, but rather only upon the actual sale of the Consideration Shares, in accordance with the provisions of Section 103t of the Ordinance (the "**Tax Ruling**"). As of this date, the Tax Ruling has not yet been issued by the Israel Tax Authority. It is clarified that receipt of the Tax Ruling is a Condition Precedent for completion of the Merger Transaction. For details, see Section 2.3 of the Meeting Notice.

<u>Below are the main elements of the requested Tax Ruling:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.1. The
 Tax Ruling shall not determine the final tax liability with respect to the sale of the <u>Consideration</u> Shares and/or Magic shares. This matter may be determined by the assessing officer and/or
 the Israel Tax Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.2. The
 exchange of Magic shares for the Consideration Shares must be completed within 90 days from
 the date of issuance of the Tax Ruling; otherwise, the Tax Ruling shall be null and void
 retroactively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.3. The
 Company shall allot to the Eligible Magic Shareholders equivalent shares based on their relative
 proportion of all rights in Magic, in lieu of their rights in Magic, pursuant to Sections
 103C(4) and 103C(5) of the Ordinance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.4. Upon
 sale of the Consideration Shares, including bonus shares, splits, and any right allotted
 by virtue thereof before or after issuance of the Tax Ruling, the provisions of Section 103F
 of the Ordinance shall apply with respect to the original cost and the date of acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.5. The
 original cost and date of acquisition of the Magic shares held by the Company shall be determined
 in accordance with Section 103E of the Ordinance, and for purposes of such Section, the Magic
 shares shall be considered transferred assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.6. Upon
 sale of the Magic shares held by the Company, or upon sale of the Company's shares
 by its shareholders, as applicable, the original cost and acquisition date shall be determined
 on a relative (pro-rata) basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.7. The
 provisions of Section 103t(b1) of the Ordinance shall apply to the Company, including the
 non-allowance of offsetting a gain or loss from the sale of Magic shares against a loss or
 gain (respectively) from the sale of the Consideration Shares by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.8. The
 provisions of Section 103C(8)(a) of the Ordinance shall apply to each shareholder of the
 Company and of Magic, except for shareholders of the Company who were not controlling shareholders
 of the Company immediately prior to the merger.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.9. The
 loss-offset limitations set out in Sections 103t(b1) and (b2) of the Ordinance shall apply
 to the Merger Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.10. During
 the required period, as defined in Section 103 of the Ordinance, the Company's aggregate
 rights in Magic shall not fall below 51 percent of each of Magic's rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.11. The
 Company and Magic, as well as the controlling shareholders of those companies (as "controlling
 shareholder" is defined in Section 103 of the Ordinance), undertook to submit to the
 Mergers and Splits Department of the Israel Tax Authority and to the assessing officer, within
 60 days from the Merger Date, a valuation demonstrating compliance with the relative-value
 requirements specified in Section 103C(6)(b) of the Ordinance, up to a ratio of 1:19. If
 valuations confirming such compliance are not received within 60 days from the date of issuance
 of the Tax Ruling, the Israel Tax Authority shall have the right to retroactively cancel
 the Tax Ruling. Likewise, if the valuation submitted as required does not demonstrate compliance
 with the above-mentioned relative-value conditions, the Tax Ruling shall be null and void
 retroactively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.12. All
 conditions set out in the Tax Ruling comply with the conditions specified in Section 103t
 of the Ordinance and the conditions set out in Sections 103C(1) and 103C(7) of the Ordinance,
 including the conditions relating to the required period, as defined in Section 103 of the
 Ordinance, commencing on the Merger Date. If the provisions of Sections 103C and 103t of
 the Ordinance are breached, the holders of rights in Magic and in the Company shall be liable
 for taxes and mandatory payments from which they were exempt, together with indexation differentials
 and interest from the Merger Date until the date of payment, all in accordance with Section
 103j of the Ordinance. The transfer of Magic shares by the Eligible Magic Shareholders in
 exchange for the Consideration Shares shall be exempt from withholding tax.

&nbsp;&nbsp;&nbsp;&nbsp;7.3. <u>Capital gain from the sale of the Securities</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.1. Pursuant
 to Section 91 of the Ordinance, real capital gain from the sale of securities by an individual
 who is an Israeli resident is subject to tax at the individual's marginal tax rate
 under Section 121 of the Ordinance, but at a rate not exceeding 25 percent, and such capital
 gain shall be deemed the highest tier of the individual's taxable income. This does
 not apply to the sale of securities by an individual who is a "substantial shareholder"
 of the Company <sup>6</sup> at the time of sale or at any time during the preceding 12 months, for whom the tax rate
 on real capital gain shall not exceed 30 percent. It should be noted that, notwithstanding
 the above, the tax rates applicable to capital gains on the sale of securities that are not
 index-linked may differ. In addition, an assessee who claimed deductible real interest expenses
 and indexation differences in respect of the securities shall be taxed at a rate of 30 percent
 on the real capital gain from the sale of the securities, until rules and conditions for
 deducting real interest expenses are prescribed under Section 101A(a)(9) of the Ordinance.
 The said tax rate shall not apply to an individual for whom the income from the sale of the
 securities constitutes income from a "business" or "profession",
 pursuant to Sections 2(1) and 2(2) of the Ordinance. In such event, the individual shall
 pay tax at the marginal rate under Section 121 of the Ordinance. It should be noted that
 an additional tax may apply to income exceeding certain thresholds, as detailed in Section
 7.6 below.

<sup>6</sup> As this term is defined in Section 88 of the Ordinance, namely a person who holds, directly or indirectly, alone or together with another, at least 10 percent in one or more of any type of means of control in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.2. A
 corporation shall be subject to corporate tax on real capital gains from the sale of securities,
 at the corporate tax rate set forth in Section 126(a) of the Ordinance (in 2025, 23 percent).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.3. A
 tax-exempt mutual fund and provident funds, as well as entities exempt from tax under Section
 9(2) of the Ordinance, are exempt from tax on capital gains from the sale of securities as
 described above. For a taxable mutual fund, the tax rate applicable to income from the sale
 of securities shall be the rate applicable to an individual whose income does not constitute
 income from a "business" or "profession," unless expressly provided
 otherwise. If no special tax rate is prescribed for such income, the income shall be taxed
 at the maximum rate prescribed under Section 121 of the Ordinance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.4. As
 a general rule, a foreign resident (individual or corporation), as defined in the Ordinance,
 is exempt from tax on capital gains from the sale of securities traded on the Stock Exchange
 in Israel, provided the capital gain is not attributable to a permanent establishment in
 Israel. If the acquisition date of the security was prior to its listing on the Stock Exchange
 and the foreign resident was not entitled to a tax exemption upon its sale as provided in
 Section 97(b3) of the Ordinance, the portion of the gain that would have accrued had the
 security been sold prior to its listing shall be taxed under the conditions specified in
 Section 97(b2) of the Ordinance. The above exemption does not apply to a foreign-resident
 corporation if Israeli residents are controlling shareholders, beneficiaries, or entitled
 to 25 percent or more of the income or profits of such foreign-resident corporation, directly
 or indirectly, as provided in Section 68A of the Ordinance. If the exemption does not apply,
 the exemption under an applicable tax treaty between Israel and the foreign resident's
 country of residence may apply, if such treaty exists, all subject to its provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.5. With
 respect to withholding tax on real capital gain from the sale of the Offered Securities,
 under the Income Tax Regulations (Withholding from Consideration, Payment or Real Capital
 Gain in the Sale of a Security, in the Sale of a Unit in a Mutual Fund or in a Future Transaction),
 5763-2002 (in this Section, the "**Withholding Regulations** "), the "obligor"
 who pays the seller consideration for the sale of securities shall withhold tax at a rate
 of 25 percent of the real capital gain, and for non-index-linked securities at a rate of
 15 percent of the gain, where the seller is an individual, and at the rate set forth in Section
 126(a) of the Ordinance where the seller is a corporation. This is subject to a withholding
 tax exemption (or reduced rate) certificate issued by the Israel Tax Authority, and subject
 to offsetting losses that the withholding agent is permitted to offset. No withholding tax
 shall be deducted from a foreign resident if certain conditions in the regulations are met.
 Likewise, no withholding tax shall be deducted for provident funds, mutual funds and other
 entities exempt from withholding tax under law. It should be noted that if, on the date of
 sale, the full withholding tax is not deducted from the real capital gain as set out above,
 the provisions of Section 91(d) of the Ordinance and the regulations thereunder concerning
 reporting and advance tax payments shall apply.

&nbsp;&nbsp;&nbsp;&nbsp;7.4. <u>Offset of losses from the sale of the Offered Securities</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.1. As
 a general rule, a capital loss that would have been taxable had it been a capital gain, incurred
 in the tax year from the sale of a security, may be offset against capital gains and real
 estate appreciation arising from the sale of any asset, in Israel or abroad (excluding taxable
 inflationary capital gain, which may be offset at a ratio of 1 to 3.5).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.2. Under
 Regulation 9 of the Withholding Regulations, in calculating capital gain for purposes of
 withholding tax by the obligor (including from the sale of traded securities), the obligor
 shall offset the capital loss incurred from the sale of traded securities under its management,
 provided the gain was realized in the same tax year in which the loss was incurred, whether
 before or after the loss. The assessing officer may, in certain cases, approve the offset
 of losses from a securities portfolio not managed by the obligor, for purposes of withholding
 tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.3. Pursuant
 to Section 92(a)(4) of the Ordinance, a capital loss incurred in the tax year may also be
 offset against interest or dividend paid in respect of the same security and/or against interest
 or dividend paid in respect of other securities in the same tax year (provided that the tax
 rate applicable to interest and dividend from such other security does not exceed the rate
 prescribed under Section 126(a) of the Ordinance for a corporation, and under Sections 125B(1)
 or 125c(b) for an individual). The loss offset shall be carried out by offsetting the capital
 loss against capital gains, or against interest or dividend income as stated above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.4. A
 loss that cannot be offset as described above shall be offset only against capital gains,
 as provided in Section 92(b) of the Ordinance, in subsequent tax years following the year
 in which the loss was incurred, provided that a tax return was filed with the assessing officer
 for the tax year in which the loss was incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.5. With
 respect to the offset of losses from the sale of traded securities incurred prior to 2006,
 additional restrictions apply regarding the manner of offset, as set out in the transitional
 provisions applicable to Section 92 of the Ordinance prior to its amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.6. Pursuant
 to Section 94B of the Ordinance, and subject to the conditions set out therein, where the
 seller of a share is a corporation or an individual who was a substantial shareholder of
 the Company at the time of the sale of the Offered Securities or at any time during the 12
 months preceding the sale, and who purchased the shares prior to January 1, 2003, the Section
 shall apply such that the portion of the distributable profits <sup>7</sup> attributable to the seller's relative share in the profits shall be taxed at the dividend
 tax rate, and not at the rate set out in Section 91 of the Ordinance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.7. Pursuant
 to Section 94C of the Ordinance, in the sale of a share by a corporation, the amount of capital
 loss incurred from the sale of the share shall be reduced by the amount of dividend received
 in respect of that share during the 24 months preceding the sale, but not more than the amount
 of the loss, excluding dividend on which tax was paid (other than tax paid outside Israel)
 at a rate of 15 percent or more, but not more than the amount of the loss.

&nbsp;&nbsp;&nbsp;&nbsp;7.5. <u>Tax rate applicable to dividend income in respect of the Company's shares</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5.1. A
 dividend derived from the Company's shares, provided it is not a dividend derived from
 an Approved Enterprise, a Privileged Enterprise, a Preferred Enterprise or a Preferred Technological
 Enterprise, as defined in the Encouragement of Capital Investments Law, 5719-1959 (the "**Encouragement Law** "), shall generally be taxable, pursuant to Section 125B(1) of the Ordinance,
 at a rate of 25 percent for Israeli-resident individuals, except for an individual who is
 a substantial shareholder of the Company at the time of receipt of the dividend or at any
 time during the preceding 12 months, for whom the tax rate shall be 30 percent pursuant to
 Section 125B(2) of the Ordinance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5.2. Section
 126(b) of the Ordinance provides that, in calculating the taxable income of a corporation
 (other than a family company) subject to corporate tax, income from the distribution of profits
 or from dividend derived from income produced or accrued in Israel received directly or indirectly
 from another corporation subject to corporate tax shall not be included, except for dividend
 derived from an Approved Enterprise or a Privileged Enterprise that has not filed a waiver
 notice under Amendment No. 68 to the Encouragement Law. Dividend derived from income produced
 or accrued outside Israel, as well as dividend sourced outside Israel, shall be subject to
 corporate tax at the rate of 23 percent (or as applicable from time to time). Dividend received
 by a family company shall be taxed at a rate of 25 percent, unless the "representative
 taxpayer" is a "substantial shareholder" of the distributing company, in
 which case the dividend shall be taxed at a rate of 30 percent. Dividend received by a foreign
 resident (individual or corporation) who is not a substantial shareholder shall be taxed
 at a rate of 25 percent. Dividend received by a foreign resident individual or corporation
 who is a substantial shareholder at the time of receipt of the dividend or at any time during
 the preceding 12 months shall be taxed at a rate of 30 percent. Tax rates applicable to dividend
 distributed to a foreign resident may vary under an applicable double-taxation treaty between
 Israel and the foreign resident's country of residence, subject to the treaty.

<sup>7</sup> The expenses include, among else, legal fees and the fee payable to the Israel Securities Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5.3. Notwithstanding
 the above, dividend distributed by the Company out of dividend derived from "Preferred
 Income," "Benefited Income" and/or "Technological Income" (as
 applicable), from an enterprise entitled to tax benefits under the Encouragement Law, shall
 generally be taxable at a rate of 20 percent for both individuals and foreign-resident corporations.
 Subject to the conditions set out in the Encouragement Law, dividend received by a foreign-resident
 corporation from a "Privileged Enterprise" and/or a "Preferred Technological
 Enterprise," as defined in the Encouragement Law, shall be entitled to a tax rate of
 4 percent. As noted above, tax rates applicable to dividend distributed to a foreign resident
 (individual or corporation) may vary under an applicable double-taxation treaty, if any exists
 between the State of Israel and the country of residence of the foreign resident, subject
 to the treaty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5.4. Dividend
 received by a taxable mutual fund shall be taxed at the rate applicable to an individual
 whose income does not constitute income from a business or profession, unless explicitly
 provided otherwise. A tax-exempt mutual fund, as well as provident funds and other entities
 exempt from tax under Section 9(2) of the Ordinance, shall be exempt from tax on such dividend,
 provided that such income does not constitute income from a "business" or "profession,"
 and subject to the conditions of Section 9(2) of the Ordinance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5.5. Pursuant
 to the Income Tax Regulations (Withholding from Interest, Dividend and Certain Profits),
 5766-2005, the withholding tax rate applicable to dividend paid to an individual or to a
 foreign resident (individual or corporation), including dividend paid to such a substantial
 shareholder at the time of receipt of the dividend or at any time during the preceding 12
 months, whose shares are registered and held through the Nominee Company, shall be 25 percent.
 For an individual or foreign resident (individual or corporation) who is a substantial shareholder
 and whose shares are not registered and not held through the Nominee Company, withholding
 tax shall be deducted at a rate of 30 percent. For the avoidance of doubt, the withholding
 tax rate applicable to a foreign resident shall be subject to the provisions of an applicable
 double-taxation treaty, if one exists between Israel and the foreign resident's country
 of residence, in accordance with the treaty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5.6. No
 withholding tax shall be deducted in respect of payments to provident funds, mutual funds
 and other entities exempt from withholding tax under law. If a limited tax rate is prescribed
 by law regarding the dividend, withholding tax shall be deducted at the prescribed rate,
 if the shareholder is an Israeli-resident corporation. For a foreign resident, the withholding
 tax rate shall also be subject to the provisions of the applicable double-taxation treaty
 between Israel and the shareholder's country of residence, if one exists, and subject
 to receipt of an appropriate certificate from the Israel Tax Authority in advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5.7. As
 of January 1, 2013, withholding tax on dividend paid by an Israeli-resident corporation whose
 shares are listed for trading on a Stock Exchange, in respect of shares held through the
 Nominee Company, shall be performed through a financial institution.

&nbsp;&nbsp;&nbsp;&nbsp;7.6. <u>Tax on high income</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6.1. Pursuant
 to Section 121B(a) of the Ordinance, an individual whose taxable income in the tax year (2025)
 exceeds NIS 721,560 shall be liable for an additional tax at a rate of 3 percent on the portion
 of taxable income exceeding such amount. It is noted that an individual's taxable income,
 for purposes of the additional tax, includes all taxable income as defined in Section 1 of
 the Ordinance and as defined in Section 89 of the Ordinance, excluding the inflationary amount
 as defined in Section 88 of the Ordinance and as defined in Section 47 of the Real Estate
 Taxation (Appreciation and Purchase) Law, 5723-1963.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6.2. Pursuant
 to Section 121B(a1) of the Ordinance, as of January 1, 2025, an individual whose taxable
 income from capital sources in the tax year (2025) exceeds the amount set forth in Section
 121B(a) (NIS 721,560) shall be liable for an additional tax at a rate of 2 percent on the
 portion of his or her taxable income from capital sources exceeding such amount. It is noted
 that taxable income from capital sources for purposes of this additional tax includes all
 taxable income, excluding income from personal exertion.

**The above description is general only and does not constitute a substitute for individualized advice by experts, taking into account the unique circumstances of each investor. Each purchaser of securities under this Shelf Offering Report is advised to seek professional advice in order to clarify the tax implications applicable to him or her based on their specific circumstances.**

8.  **<u>Payment of fee</u>** 

Pursuant to Regulation 4A of the Securities Regulations (Fee for Application for Permit to Publish a Prospectus), 5755-1995, the Company shall pay the Israel Securities Authority the additional fee for the securities offered pursuant to this Shelf Offering Report.

9.  **<u>Consideration for the offering and its use</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;9.1. <u>The merger consideration was determined through negotiations between the independent committees of the Company and of Magic, with the assistance of external and independent advisors, and was approved by the Board of Directors of the Company, following approval by the independent committee and the audit committee of each party, based, inter alia, on fairness opinions obtained by each of the independent committees of the Company and of Magic from an external valuation expert regarding the fairness of the transaction consideration from a financial perspective for their respective shareholders. For further details, see Section 2.1 of the Meeting Notice.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;9.2. Upon
 completion of the Merger Transaction, against the allotment of 0.5910508 ordinary shares
 of the Company pursuant to this Shelf Offering Report for each Magic share held by an Eligible
 Magic Shareholder, the Merger Sub shall merge into Magic and shall be dissolved, and Magic
 shall become a private company wholly owned by the Company. The Company shall not receive
 any cash consideration in respect of the allotment of the Offered Securities.

&nbsp;&nbsp;&nbsp;&nbsp;9.3. For
 details concerning Magic, which will become a wholly owned subsidiary of the Company as part
 of the Merger Transaction as described above, including Magic's financial statements,
 see  **<u>Appendices B, C and D</u>** to the Meeting Notice.

10.  **<u>Material changes and developments in the Company's business</u>** 

For details regarding material changes that have occurred in the Company's business from the publication date of the Shelf Prospectus until the publication date of this Shelf Offering Report, see the Company's current reports published on the Israel Securities Authority's distribution website at <u>http://www.magna.isa.gov.il</u> and on the Stock Exchange website at <u>https://maya.tase.co.il</u>. Such current reports are incorporated by reference into this Shelf Offering Report, in accordance with Article 4(a) of the Shelf Offering Articles.

11.  **<u>Consent letter of the independent auditor</u>** 

The Company has received a consent letter from its independent auditor, which includes the auditor's consent to include in this Shelf Offering Report, by way of reference, the auditor's reports and review reports, as applicable, included in this Shelf Offering Report by way of reference. The consent letter is attached as **<u>Appendix A</u>** to this Shelf Offering Report.

12.  **<u>Legal opinion</u>** 

Below is the legal opinion received by the Company from Herzog, Fox, Neeman, Advocates, 6 Yitzhak Sadeh Street, Tel Aviv:

![..\|..\|..\|Volumes\|SivanWorks\|??????????%20????????%20????????\|????????%20??????\|%20LOGO_new%20](image_016.jpg)

December 3, 2025

File No. 72765

To:

Matrix IT Ltd. (the "**Company**")

3 Atir Yeda Street

<u>Kfar Saba</u>

Dear Sir/Madam,

Re: **<u>Matrix IT Ltd. – Shelf Offering Report dated 3 December, 2025</u>**

With reference to the Company's Shelf Prospectus dated July 17, 2025 (the "**Shelf Prospectus**") and to the Shelf Offering Report referred to herein (the "**Shelf Offering Report**"), which is published pursuant thereto, we hereby provide our legal opinion as follows:

1. In
 our opinion, the rights attached to the Offered Securities pursuant to the Shelf Offering
 Report have been correctly described in the Shelf Offering Report.

2. In
 our opinion, the Company is authorized to issue the Offered Securities pursuant to the Shelf
 Offering Report in the manner described in the Shelf Prospectus and in the Shelf Offering
 Report.

3. In
 our opinion, the directors of the Company have been duly appointed and their names are included
 in the Shelf Offering Report.

We agree that this legal opinion shall be included in the Shelf Offering Report.

Sincerely,

Nir Dash, Adv. Reut Alcalay, Adv. Shani Simani, Adv. <br> Herzog, Fox, Neeman, Advocates

Herzog Tower, 6 Yitzhak Sadeh Street, Tel Aviv 6777506 \| Tel: 03-692-2020, Fax: 03-696-6464 \| <u>www.herzoglaw.co.il</u>

**<u>Signatures</u>**

---

| |
|:---|
| **<u>The Company</u>**: |
| Matrix IT Ltd. |
| **<u>The Directors</u>**: |
| Guy Bernstein |
| Tal Barnoach |
| Eliezer Oren |
| Pini Greenfeld |
| Limor Bar-On |

---

**<u>Appendix A<br> Consent Letter of the Independent Auditor</u>**

December 3, 2025

To:

The Board of Directors of

Matrix IT Ltd.

3 Atir Yeda Street, Kfar Saba

Re:

---

| | |
|:---|:---|
| Subject: | **<u>Letter of Consent Regarding the Shelf Offering Report of Matrix IT Ltd. (the "Company") from December 2025, Pursuant to the Company's Shelf Prospectus Dated July 17, 2025</u>** |

---

In connection with the above-referenced shelf offering report of the Company, we hereby notify you of our consent to include (including by way of reference) the reports detailed below:

&nbsp;&nbsp;&nbsp;&nbsp;1. Review report
 dated August 11, 2025, on the condensed consolidated financial information of the Company
 as of June 30, 2025, and for the six and three month periods ended on that date.

&nbsp;&nbsp;&nbsp;&nbsp;2. Auditor's
 review report dated August 11, 2025, on the condensed standalone financial information of
 the Company as of June 30, 2025, and for the six and threemonth periods ended on that date,
 pursuant to Regulation 38D of the Securities Regulations (Periodic and Immediate Reports),
 5730-1970 (the "**Reporting Regulations** ").

&nbsp;&nbsp;&nbsp;&nbsp;3. Review report
 dated November 11, 2025, on the condensed consolidated financial information of the Company
 as of June 30, 2025, and for the nine and three month periods ended on that date.

&nbsp;&nbsp;&nbsp;&nbsp;4. Auditor's
 review report dated November 11, 2025, on the condensed standalone financial information
 of the Company as of June 30, 2025, and for the nine and three month periods ended on that
 date, pursuant to Regulation 38D of the Reporting Regulations.

Sincerely, <br> Ziv Haft <br> Certified Public Accountants

## Exhibit 99.2

**Exhibit 99.2**

![](image_001.jpg)

**Matrix I.T. Ltd. (the "Company")<br> Shelf Prospectus**

Under this Shelf Prospectus, the Company may issue various types of securities in accordance with applicable law, including: the Company's ordinary shares, preferred shares<sup>1</sup>, bonds that are not convertible, bonds that are convertible into shares, warrants exercisable into shares, warrants exercisable into bonds, warrants exercisable into convertible bonds, and commercial securities.

The offering of securities under this Shelf Prospectus will be made pursuant to the provisions of Section 23A(f) of the Securities Law, 5728–1968, by means of Shelf Offering Reports, in which all particulars specific to each offering will be completed, in accordance with any applicable law (including the provisions of the bylaws of the Tel Aviv Stock Exchange Ltd. (the "**Stock Exchange**") and the directives issued thereunder), as may be in effect from time to time.

The risk factors that the Company estimates to have a significant impact on its business are as follows: **Industry factor**: cyber and information security; **Macro risk factors**: the security situation; the economic and political situation in Israel. For details regarding these risk factors and additional risk factors applicable to the Company, see Section 19 of Part A (Description of the Corporation's Business) of the Company's 2024 Periodic Report, as published on March 11, 2025, Reference No.: 2025-01-015935 (the "**Company's 2024 Periodic Report**").

The Company's dividend distribution policy is an annual dividend of up to 75% of the net annual profit attributable to shareholders. The dividend is distributed quarterly, subject to examining compliance with the distribution tests under the law at each relevant date. For further details, see Note 17(e) and Note 10d to the Company's consolidated financial statements as of December 31, 2024, included in the Company's 2024 Periodic Report.

As of the date of this Prospectus, the Company has an issuer rating of Aa3.il with a stable outlook, dated March 24, 2025. In addition, the Company's commercial paper rating as of that date is P-1.il, and the rating of Series B bonds issued by the Company as of that date is Aa3.il stable. For further details, see the Company's Immediate Report dated March 24, 2025, Reference No.: 2025-01-019742.

The full text of the Prospectus is available for review on the website of the Israel Securities Authority at <u>www.magna.isa.gov.il</u> and on the website of the Stock Exchange at <u>http://maya.tase.co.il</u>.

**Date of Prospectus: July 17, 2025**

<sup>1</sup> The issuance of preferred shares (if made) will be subject to the conditions set forth in the Stock Exchange bylaws and directives and to the provisions of any applicable law, including compliance with the provisions of Section 46B of the Securities Law, 5728–1968.

**Table of Contents**

**<u>Page</u>**

---

| | | | |
|:---|:---|:---|:---|
| **1.** | **Introduction** | **Introduction** | **1** |
|  | 1.1 | General | 1 |
|  | 1.2 | Permits and Approvals | 1 |
|  | 1.3 | Share capital, Funds and Surpluses | 1 |
|  | 1.4 | The Company's Bonds | 2 |
|  | 1.5 | Allocations and Undertakings to Allocate Securities of the Company in Consideration not |  |
|  |  | Entirely in Cash During the Two Years Preceding the Date of the Prospectus | 2 |
|  | 1.6 | Brokerage Fees Paid or Undertaken to be Paid by the Company in Connection with the |  |
|  |  | Issuance of Securities During the Two Years Preceding the Date of the Prospectus | 3 |
|  | 1.7 | Payments Based on the Rate of the Company's Property, Turnover, Income, or Profits | 3 |
| **2.** | **The Company's Capital and its Holders** | **The Company's Capital and its Holders** | **4** |
|  | 2.1 | Company Capital – Genera | 4 |
|  | 2.2 | Development of the Company's Capital | 4 |
|  | 2.3 | Holdings in Securities | 4 |
|  | 2.4 | Agreements Regarding the Company's Shares | 5 |
|  | 2.5 | Convertible Securities of the Company | 6 |
|  | 2.6 | Data Summary | 6 |
|  | 2.7 | The Company's Undertakings to Issue Securities or to Refrain from Issuing or Offering | 6 |
|  | Them, Generally or Under Certain Conditions, or to Refrain from Obtaining a Loan | Them, Generally or Under Certain Conditions, or to Refrain from Obtaining a Loan | 6 |
| **3.** | **Rights Attached to the Company's Shares** | **Rights Attached to the Company's Shares** | **4** |
|  | 3.1 | Provisions of the Company's Articles of Association | 7 |
|  | 3.2 | Arrangements Prescribed in the Articles of Association under the Companies Law | 7 |
| **4.** | **Consideration for the Issuance and its Purpose** | **Consideration for the Issuance and its Purpose** | **10** |
| **5.** | **Description of the Company's business** | **Description of the Company's business** | **11** |
|  | 5.1 | General | 11 |
|  | 5.2 | Details Regarding Principal Investees of the Company | 11 |
|  | 5.3 | Board of Directors' Explanations Regarding the Company's Affairs | 12 |
| **6.** | **The Company's Board of Directors** | **The Company's Board of Directors** | **13** |
|  | 6.1 | The Company's Board of Directors | 13 |
|  | 6.2 | Additional Senior Officers | 13 |
|  | 6.3 | Independent Authorized Signatories | 13 |
|  | 6.4 | Additional Information | 13 |
|  | 6.5 | Provisions of the Company's Articles of Association Relating to Members of the Board of Directors | 13 |
| **7.** | **Interested Parties in the Company** | **Interested Parties in the Company** | **14** |
|  | 7.1 | Remuneration of Interested Parties and Senior Officers | 14 |
|  | 7.2 | Transactions with Controlling Shareholders | 15 |
| **8.** | **Financial Statements** | **Financial Statements** | **16** |
|  | 8.1 | Reports Included in this Prospectus by Way of Reference | 16 |
|  | 8.2 | Auditors' Consent Letter Attached to this Prospectus | 17 |
|  | 8.3 | Events Report | 20 |
| **9.** | **Additional Information** | **Additional Information** | **22** |
|  | 9.1 | Legal Opinion | 22 |
|  | 9.2 | Fee for Request for Authorization to Publish the Prospectus | 23 |
|  | 9.3 | Inspection of Documents | 23 |
| **10.** | **Signatures** | **Signatures** | **24** |
|  | 10.1 | The Company | 24 |
|  | 10.1 | The Directors | 24 |

---

**Matrix I.T. Ltd.** 

**(in this Prospectus – the "Company")**

**Chapter 1 – Introduction**

**1.1** **General** 

The Company was incorporated in 1989 under the laws of the State of Israel and is a public company (as this term is defined in the Companies Law, 5759–1999 (the "**Companies Law**")), whose securities have been listed for trading on the Tel Aviv Stock Exchange Ltd. (the "**Stock Exchange**") since 1993.

**1.2** **Permits and Approvals** 

The Company has received all permits, approvals, and licenses required by law for the publication of the Prospectus.

This Prospectus is a Shelf Prospectus, as defined in Section 23A(a) of the Securities Law, 5728–1968 (the "**Securities Law**"), and the offering of securities under it will be made by way of Shelf Offering Reports completing the particulars specific to each offering.

**The approval of the Israel Securities Authority for the publication of this Prospectus shall not be deemed to constitute verification of the details contained herein or confirmation of their reliability or completeness, and shall not be construed as an expression of opinion on the nature of the securities offered hereunder.**

The Company approached the Stock Exchange, which granted its preliminary approval for the listing for trade of the Company's ordinary shares, preferred shares<sup>2</sup>, non-convertible bonds, bonds convertible into shares, warrants exercisable into shares, warrants exercisable into non-convertible bonds, warrants exercisable into convertible bonds, and commercial securities (the "**Securities**").

**This approval by the Stock Exchange shall not be regarded as confirmation of the information contained in the Prospectus or of its reliability or completeness, and shall not constitute any opinion on the Company, the nature of the Securities, or the price at which they will be offered.**

The granting of the aforementioned preliminary approval does not constitute approval for listing the Securities for trade, which will be subject to obtaining approval for listing the Securities pursuant to a Shelf Offering Report to be submitted in accordance with the Securities Law and the Securities Regulations (Shelf Offering of Securities), 5766–2005.

The granting of such preliminary approval shall not constitute a commitment to grant approval for the listing of the Securities for trading under the Shelf Offering Report. The approval of an application for listing the Securities for trading under the Shelf Offering Report shall be subject to the provisions of the Stock Exchange bylaws and the directives issued thereunder, as in effect at the time of submission of the application for listing.

<sup>1</sup> The issuance of preferred shares (if made) will be subject to the conditions set forth in the Stock Exchange bylaws and directives and to the provisions of any applicable law, including compliance with the provisions of Section 46B of the Securities Law, 5728–1968.

**1.3** **Share Capital, Funds and Surpluses** 

&nbsp;&nbsp;&nbsp;&nbsp;1.3.1 <u>The Company's share capital as of the date near the date of the Prospectus:</u> 

---

| | |
|:---|:---|
| | **Registered share<br> capital** |
| **Number of shares** | 100000000 64280355<sup>(\*)</sup> 64884355<sup>(\*)</sup> |

---

(\*) Including 653,860 dormant shares (as this term is defined in Section 308 of the Companies Law) held by the Company as of the Prospectus date.

&nbsp;&nbsp;&nbsp;&nbsp;1.3.2 <u>Components of the Company's Equity (in NIS thousands) as of March 31, 2025<sup>3</sup>:</u> 

---

| | |
|:---|:---|
| Share capital | 68494 |
| Share premium | 326638 |
| Treasury shares | (7982) |
| Retained earnings | 733387 |
| Adjustments arising from translation of financial statements of foreign operations | (3444) |
| Reserve for transactions between a corporation and its controlling shareholder | 10186 |
| Reserve for share-based payment and liabilities in respect of an option to holders of non-controlling interests | (18644) |
| **Total** | 1108636 |
| Non-controlling interests | 60627 |
| **Total equity** | 1169263 |

---

For further details, see the Company's consolidated financial statements as of March 31, 2025, included in the Company's quarterly report for the first quarter of 2025, as published on May 13, 2025, Reference No.: 2025-01-033244 (the "**Company's Report for the First Quarter of 2025**" and the "**Company's Financial Statements for the First Quarter of 2025**," respectively).

**1.4** **The Company's Bonds** 

For details regarding the Company's bonds outstanding as of the date of the Prospectus (Series B Bonds), see Appendix A to the Company's Board of Directors' Report for the first quarter of 2025, included in the Company's Report for the First Quarter of 2025.

From the date of their issuance until the date of the Prospectus, the Company has complied with all material terms and obligations under the trust deed for the said bonds, and no conditions have arisen that would give cause for the immediate repayment of the bonds.

**1.5** **Allocations and Undertakings to Allocate Securities of the Company in Consideration Not Entirely in Cash During the Two Years Preceding the Date of the Prospectus** 

&nbsp;&nbsp;&nbsp;&nbsp;1.5.1 For details regarding employee options exercisable into Company shares that were granted by the Company
to officers and managers during the two years preceding the date of the Prospectus, see Sections 2.2 and 2.5 of the Prospectus and Note
18 to the Company's 2024 financial statements.

<sup>2</sup> Assuming that all convertible securities allocated by the Company to its officers and which have not yet expired or been exercised are exercised into ordinary shares of the Company. For details regarding the terms of such securities, see Note 18 to the Company's consolidated financial statements for 2024, included in the Company's 2024 Periodic Report. The actual full dilution rate may be lower depending on the exercise terms of the options (net exercise).

<sup>3</sup> The financial data in this Prospectus are presented in accordance with International Financial Reporting Standards (IFRS).

&nbsp;&nbsp;&nbsp;&nbsp;1.5.2 For details regarding restricted shares allocated by the Company to the Company's CEO (Mr. Moti
Gutman), see Note 18b(1) to the Company's 2024 financial statements.

Except as detailed above, during the two years preceding the date of the Prospectus, the Company has not allocated and has not undertaken to allocate securities in consideration not entirely in cash.

**1.6** **Brokerage Fees Paid or Undertaken to Be Paid by the Company in Connection with the Issuance of Securities During the Two Years Preceding the Date of the Prospectus** 

For details regarding fees paid by the Company in connection with the issuance of its Series B Bonds, see Section 11.1 of the Shelf Offering Report for the initial issuance of that series, as published on September 14, 2022, Reference No.: 2022-01-117502.

Except as detailed above, during the two years preceding the date of the Prospectus, the Company has not paid and has not undertaken to pay brokerage fees in connection with the underwriting or sub-underwriting of securities it has issued.

**1.7** **Payments Based on the Rate of the Company's Property, Turnover, Income, or Profits** 

&nbsp;&nbsp;&nbsp;&nbsp;1.7.1 For the sake of caution and in accordance with the provisions of the Company's compensation policy,
as published on April 3, 2022, Reference No.: 2022-01-042259, certain Company officers are entitled and/or may become entitled to variable
compensation derived from (and/or conditional upon, as applicable) the Company's financial results. See also Article 21 in Part
D (Additional Information Regarding the Corporation) of the Company's 2024 Periodic Report.

&nbsp;&nbsp;&nbsp;&nbsp;1.7.2 In addition, during the Company's ordinary course of business, managers and employees engaged in
sales and marketing may be entitled to bonuses based on their contributions and sales performance, or in accordance with the income/profits
of the units under their management.

**Chapter 2 – The Company's Capital and Its Holders**

**2**

&nbsp;&nbsp;&nbsp;&nbsp;**2.1** **Company Capital – General** 

The Company's share capital consists of ordinary shares with a par value of NIS 1.00 each (the "**Shares**" or "**Ordinary Shares**").<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;**2.2** **Development of the Company's Capital** 

Except as detailed below, during the three (3) years preceding the publication date of the Prospectus, there has been no change in the Company's registered, issued, and paid-up share capital:

---

| | | |
|:---|:---|:---|
| **Date** | **Change** | **See the Company's reports on the dates below, <br> included in this Prospectus by way of reference** |
| January 1, 2023 | Exercise of 360,000 Employee Options 1/19 into 201,411 shares (according to the "net exercise" mechanism). | Company Report dated January 1, 2023 (Reference No.: 2023-01-000765), included in this Prospectus by way of reference. |
| February 1, 2023 | Allocation of 375,000 restricted shares (RS) to an officer. | Company Report dated February 2, 2023 (Reference No.: 2023-01-013773), included in this Prospectus by way of reference. |
| March 13, 2023 | Exercise of 51,378 restricted shares (RS) into 51,378 shares by an officer. | Company Report dated March 13, 2023 (Reference No.: 2023-01-026601), included in this Prospectus by way of reference. |
| March 29, 2023 | Allocation of 920,000 unlisted Employee Options 3/23 to officers and senior managers. | Company Report dated March 29, 2023 (Reference No.: 2023-01-034422), included in this Prospectus by way of reference. |
| August 22, 2023 | Allocation of 45,000 unlisted Employee Options 8/23 to an officer. | Company Report dated August 23, 2023 (Reference No.: 2023-01-097290), included in this Prospectus by way of reference. |
| June 2, 2024 | Allocation of 20,000 unlisted Employee Options 3/23 to an officer, and expiration of 45,000 Employee Options 3/23. | Company Report dated June 3, 2024 (Reference No.: 2024-01-056452), included in this Prospectus by way of reference. |
| March 12, 2025 | Exercise of 290,750 Employee Options 3/23 into 88,917 shares (according to the "net exercise" mechanism). | Company Report dated March 13, 2025 (Reference No.: 2025-01-016946), included in this Prospectus by way of reference. |
| May 14, 2025 | Exercise of 35,250 Employee Options 3/23 into 11,562 shares (according to the "net exercise" mechanism). | Company Report dated May 15, 2025 (Reference No.: 2025-01-034031), included in this Prospectus by way of reference. |
| June 18, 2025 | Exercise of 10,000 Employee Options 3/23 into 3,940 shares (according to the "net exercise" mechanism). | Company Report dated July 7, 2025 (Reference No.: 2025-01-049803), included in this Prospectus by way of reference. |

---

For details regarding the Company's registered, issued, and paid-up share capital as of the Prospectus date, see Section 1.3.1 of the Prospectus.

**2.3** **Holdings in Securities** 

<sup>1</sup> It should be noted that, pursuant to and subject to the provisions of Section 46B of the Securities Law, as of the date of the listing of the Company's shares for trading, the Company's share capital will consist of one class of shares only, granting equal voting rights (without prejudice to the Company's right to issue preferred shares subject to applicable law). Any distribution of dividends or bonus shares shall be subject to the bylaws and rules of the Stock Exchange Clearing House as may be in effect from time to time. All shares in the Company's share capital shall be fully paid. All existing shares in the Company's capital shall be registered in the Company's shareholders' register in the name of a registration company, in accordance with the Stock Exchange bylaws.

&nbsp;&nbsp;&nbsp;&nbsp;2.3.1 <u>Holdings of Interested Parties and Senior Officers in the Company's Securities</u> 

For details, to the best of the Company's and its management's knowledge, regarding the Company's securities held by interested parties and senior officers as of the date close to the Prospectus date and as of the date twelve (12) months prior thereto<sup>2</sup>, see:

<u>As of the date close to the Prospectus date</u> – the Company's Immediate Report dated July 7, 2025, Reference No.: 2025-01-049801, regarding the holdings of interested parties and senior officers as of June 30, 2025, incorporated herein by way of reference.

<u>As of the date twelve (12) months prior to the Prospectus date</u> – see the Company's Immediate Report regarding the holdings of interested parties and senior officers dated July 7, 2024, Reference No.: 2024-01-070393, incorporated herein by way of reference.

&nbsp;&nbsp;&nbsp;&nbsp;2.3.2 <u>Details, to the best of the Company's knowledge, regarding the Company's Controlling Shareholders</u> 

The following are details, to the best of the Company's knowledge, regarding those who may be deemed Controlling Shareholders of the Company, as the term "Control" is defined in Section 268 of the Companies Law, 5759–1999 (the "**Companies Law**"):

The controlling shareholder of the Company is Formula Systems (1985) Ltd. ("**Formula**"), which holds, as of the Prospectus date, 48.14% of the Company's equity and voting rights. Formula is a public company whose securities are traded on the Tel Aviv Stock Exchange Ltd. and on NASDAQ.

To the best of the Company's knowledge and based on information received from Formula, the controlling shareholder of Formula is Asseco Poland S.A., a Polish company whose shares are traded on the Warsaw Stock Exchange in Poland and which holds 25.82% of the issued and paid-up share capital of Formula. For additional details, see the Company's Immediate Report dated July 7, 2025, Reference No.: 2025-01-049801, regarding the holdings of interested parties and senior officers as of June 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;2.3.3 <u>Holdings of Interested Parties and Senior Officers in Securities of the Company's Subsidiaries and Affiliates</u> 

To the best of the Company's and its management's knowledge, as of the date close to the Prospectus date and as of the date twelve (12) months prior thereto, the Company's interested parties and senior officers (as of the Prospectus date) did not hold securities of the Company's subsidiaries and affiliated companies.

**2.4** **Agreements Regarding the Company's Shares** 

As of the Prospectus date, no details have come to the knowledge of the Company or its management regarding any existing agreements between the Company's shareholders concerning their holdings in the Company's shares.

<sup>2</sup> The data for such date refer to March 31, 2025, with respect to those who were interested parties and senior officers of the Company at that relevant time.

**2.5** **Convertible Securities of the Company** 

As of the Prospectus date, there are 604,000 Matrix Up 03/23 employee options outstanding, exercisable (in aggregate) into up to 604,000 ordinary shares of the Company.<sup>3</sup> For details regarding the terms of the aforementioned Matrix Up 03/23 options, see Note 18 to the Company's financial statements as of December 31, 2024, as well as Article 21 in Part D (Additional Information Regarding the Corporation) of the Company's 2024 Periodic Report.

**2.6** **Data Summary** 

&nbsp;&nbsp;&nbsp;&nbsp;2.6.1 The equity attributable to the Company's shareholders per share (no par value), according to the
Company's financial statements as of December 31 of each of the years 2023 and 2024 and as of March 31, 2025 (without taking into
account the Company's financial results after those dates, as applicable), amounted to approximately NIS 1,048,587, approximately
NIS 1,088,733, and approximately NIS 1,108,636, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;2.6.2 The net profit (loss) per share attributable to the Company's shareholders as of December 31 of
each of the years 2023 and 2024 and as of March 31, 2025, amounted to approximately NIS 227,333, approximately NIS 272,422, and approximately
NIS 75,579, respectively.

**2.7** **The Company's Undertakings to Issue Securities or to Refrain from Issuing or Offering Them, Generally or Under Certain Conditions, or to Refrain from Obtaining a Loan** 

Pursuant to the terms of the trust deed for the Company's Bonds (Series B), any expansion of the series is subject to the Company's compliance with certain conditions. For details, see Section 4.10 of the trust deed for the said series, as published in the Company's Shelf Offering Reports for the initial issuance of that series dated September 14, 2022 (Reference No.: 2022-01-117502), incorporated herein by way of reference.

Furthermore, the trust deed for the Company's Bonds (Series B) provides that, if the Company issues any additional series of bonds and/or other debt securities, the Company shall not stipulate in their terms that such series will be subordinated to the Series B Bonds in the event of liquidation of the Company, except where such series are secured by collateral or liens of any kind, and only in respect of such collateral and liens. See Section 4.10 of the said trust deed.

In addition, as part of the Group's arrangements with financial institutions for obtaining credit, the Group has undertaken to maintain certain financial covenants, compliance with which may, for the purpose of maintaining them, create restrictions on the Company's ability to issue securities. For details regarding such covenants, see Note 10d to the Company's consolidated financial statements for 2024, included in the Company's 2024 Periodic Report.

For the sake of caution, it is noted that under certain circumstances, the Company's undertakings to the holders of its Bonds (Series B) may restrict the Company's incurrence of additional debt, in light of its obligation vis-à-vis the bondholders (under the trust deed) to comply with certain financial covenants. For details, see Section 4 of Appendix A to the Company's Board of Directors' Report for the first quarter of 2025.

<sup>3</sup> It is emphasized that the number of shares that may result from the exercise of the options granted by the Company is a theoretical figure, since in practice, each holder who exercises such options (if exercised) will be allocated shares reflecting only the benefit component (net exercise).

**Chapter 3 – Rights Attached to the Company's Shares**

**3**

**3.1** The provisions of the Company's Articles of Association regarding the rights attached to the Company's
shares are incorporated in this Prospectus by way of reference to the Articles of Association of the Company, as published in the Company's
Immediate Report dated November 5, 2019, Reference No.: 2019-01-094746 (the "**Articles**" or the "**Company's Articles of Association** ").

**3.2** The following are the arrangements, as set forth in Section 26(d) of the Securities Regulations (Details
of Prospectus and Draft Prospectus – Structure and Form), 5729–1969 (the "**Prospectus Details Regulations** "),
which are included in the Company's Articles of Association pursuant to the provisions of the Companies Law:

&nbsp;&nbsp;&nbsp;&nbsp;3.2.1 <u>Arrangements under Sections 20 and 22 of the Companies Law regarding amendment of the Articles and amendment of rights –</u> According to the provisions of the Articles: (a) The Company may amend the Articles by a
 resolution adopted at a General Meeting by a simple majority; (b) Unless otherwise provided in the terms of the issuance of the
 shares and subject to applicable law, the rights attached to any class of shares may be amended following a resolution of the
 Company's Board of Directors and its approval at a General Meeting of the shareholders of that class, adopted by a simple
 majority, or by written consent of all shareholders of that class. The provisions of the Company's Articles regarding General
 Meetings shall apply, mutatis mutandis, to a General Meeting of the holders of that class. The rights conferred upon holders of
 shares of a particular class that were issued with special rights shall not be deemed altered by the creation or issuance of
 additional shares ranking equally therewith, unless otherwise stipulated in the issuance terms of such shares. See Sections 10 and
 28 of the Company's Articles.

&nbsp;&nbsp;&nbsp;&nbsp;3.2.2 <u>Arrangements under Sections 59 and 222 of the Companies Law regarding the appointment of directors and their term of office</u> – According to the provisions of the Articles: (a) The Company's directors shall
 be elected at an Annual General Meeting and/or at a Special Meeting and shall serve until
 the end of the next Annual General Meeting or until they cease to serve in accordance with
 the provisions of the Articles or any law; (b) In addition to the foregoing in subsection
 (a) above, the Board of Directors may appoint a director to fill a vacancy and/or as an addition
 to the Board of Directors, subject to the maximum number of directors permitted under Section
 15.1 of the Articles.<sup>1</sup> A written resolution of the Board of Directors appointing
 a director shall remain valid until the next Annual General Meeting or until such director
 ceases to serve in accordance with the Articles or any law. The appointment of a director
 appointed under Section 15 of the Articles may be revoked by a regular resolution of the
 Board of Directors; (c) Subject to any non-derogable provisions of law, a director whose
 term has ended may be re-elected. A director's term shall commence on the date of appointment
 or on a later date if so specified in the appointment resolution; (d) The Board of Directors
 shall elect from among its members a Chairperson. If no Chairperson is elected or if the
 Chairperson is absent 15 minutes after the scheduled time of a meeting, the directors present
 shall choose one of them to serve as Chairperson for that meeting, and the person so

<sup>1</sup> Pursuant to Section 15.1 of the Company's Articles, the number of directors of the Company (including External Directors) shall be determined from time to time by the Annual General Meeting, provided that it shall not be less than four and not more than eleven directors.

chosen shall conduct the meeting and sign the minutes thereof; (e) The General Meeting may, at any time, remove any director from office before the expiration of his term, whether such director was appointed by the General Meeting pursuant to subparagraph (a) above or by the Board of Directors pursuant to subparagraph (b) above, provided that the director has been given a reasonable opportunity to present his position to the General Meeting; (f) Any member of the Board of Directors who is not an External Director may appoint an alternate director ("**Alternate Director**"), subject to the provisions of Section 15.10 of the Articles. No person shall be appointed or serve as an Alternate Director if he is not qualified to serve as a director, or if he is already serving as a director or as an Alternate Director; (g) A director's office shall be vacated in the circumstances set forth in the Companies Law; namely, if the director dies, is declared bankrupt (and in the case of a corporation – has resolved on voluntary liquidation or is subject to a liquidation order), or if the director becomes mentally incapacitated or is declared legally incompetent. See also Section 15 of the Articles.

&nbsp;&nbsp;&nbsp;&nbsp;3.2.3 <u>Arrangements under Section 81 of the Companies Law regarding a quorum at a General Meeting, an adjourned meeting, and the Chairperson of the meeting</u> - According to the provisions of the Articles: (a) The discussion at a General Meeting
shall not commence, and no resolution shall be adopted, unless a quorum is present at the opening of the discussion or at the time of
voting on the resolution, as applicable. A quorum shall consist of the presence of at least two shareholders holding at least twenty-five
percent (25%) of the voting rights (including participation by proxy or by voting instrument) within half an hour from the time scheduled
for the opening of the meeting; (b) If, within half an hour from the time scheduled for the commencement of the General Meeting, a quorum
is not present, the meeting shall be adjourned for one week, to the same day, time, and place, or to a later date if so specified in the
notice of the meeting or in the notice of adjournment (the "**Adjourned Meeting** "). The quorum for the commencement of
the Adjourned Meeting shall be two shareholders (including participation by proxy or by voting instrument). A General Meeting at which
a quorum is present may resolve to adjourn the meeting to another date and place as it may determine; (c) The Chairperson of the Board
of Directors, or another person appointed for this purpose by the Board of Directors, shall serve as the Chairperson of the General Meeting.
If the Chairperson of the Board of Directors is absent from the meeting within fifteen minutes from the time scheduled for the meeting
or refuses to chair the meeting, the Chairperson shall be elected by the General Meeting. See Section 12 of the Articles.

&nbsp;&nbsp;&nbsp;&nbsp;3.2.4 <u>Arrangements under Section 107 of the Companies Law regarding an additional vote for the Chairperson of the Board of Directors</u> – According to the provisions of the Articles, if the votes of the directors are equally divided,
the Chairperson of the Board of Directors shall not have an additional or casting vote, and the proposed resolution shall be deemed rejected.
See Section 16.8 of the Articles.

&nbsp;&nbsp;&nbsp;&nbsp;3.2.5 <u>Arrangements under Section 259 of the Companies Law regarding exemption of officers from liability</u> – According to the provisions of the Articles, and subject to applicable law, the Company may, in advance or retroactively, exempt
an Officer from all or part of his liability for damages caused by a breach of the duty of care toward the Company. Notwithstanding the
foregoing, the Company may not exempt in advance a director from liability toward the

Company for a breach of the duty of care in a distribution or in connection with a resolution or transaction in which a controlling shareholder or any officer of the Company (including an officer other than the one receiving the exemption) has a personal interest. See Section 19.6 of the Articles.

&nbsp;&nbsp;&nbsp;&nbsp;3.2.6 <u>Arrangements under Section 301 of the Companies Law regarding dividend distribution</u> – See
Section 22 of the Articles regarding the provisions of the Articles concerning dividend distribution.

**The description of the provisions of the Articles in the matters listed in Section 3.2 above is a concise summary of the relevant provisions and does not constitute a substitute for reviewing the full text of the Company's Articles of Association.**

**Chapter 4 – Consideration for the Issuance and Its Purpose**

This Shelf Prospectus does not include an actual offering of securities upon its publication, and accordingly, there will be no immediate consideration following the publication of the Prospectus.

Therefore, no specific purpose has been designated for the proceeds of the issuance. If, in the future, securities are offered under Shelf Offering Reports published pursuant to this Shelf Prospectus, the proceeds from such offering will be used to finance the Company's business operations and investments and/or in accordance with resolutions of the Company's Board of Directors as may be adopted from time to time.

If a specific or different purpose is determined for the proceeds of the issuance in accordance with a Shelf Offering Report published by the Company, it shall be detailed in such Shelf Offering Report.

**Chapter 5 – Description of the Company's Business**

**5**

**5.1** **General** 

&nbsp;&nbsp;&nbsp;&nbsp;5.1.1 The description of the Company's business is incorporated herein by way of reference to Part A (Description
of the Company's Business) of the Company's 2024 Periodic Report, as well as to the Company's quarterly report for the
first quarter of 2025, as published on May 13, 2025, Reference No.: 2025-01-033244 (the "**Company's Report for the First Quarter of 2025** ").

**5.2** **Details Regarding Principal Investees of the Company** 

&nbsp;&nbsp;&nbsp;&nbsp;5.2.1 To the best of the Company's and its directors' knowledge, as of the Prospectus date, the
Company does not have any principal (active) subsidiaries and/or associates held directly, in which other holders own twenty-five percent
(25%) or more of the issued share capital, voting power, or authority to appoint directors in such companies. For details regarding the
Company's principal subsidiaries and/or associates as of the Prospectus date, see Article 11 of Part D of the Company's 2024
Periodic Report.

&nbsp;&nbsp;&nbsp;&nbsp;5.2.2 The following are details of the profits
 (losses) (before and after tax) of the Company's principal (active) subsidiaries and
 associates as of March 31, 2025, for each of the years 2023 and 2024:<sup>1</sup>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Investee company** | **Description of activity of the investee company** | **2024** | **2024** | **2023** | **2023** |
| **Investee company** | **Description of activity of the investee company** | **Profit before tax** | **Profit after tax** | **Profit before tax** | **Profit after tax** |
| Matrix I.T. Systems Ltd. | IT solutions and services | 268615 | 190118 | 244934 | 172840 |
| John Bryce Training and Implementation Ltd. | Training and implementation | 12847 | 9911 | 3512 | 2582 |
| Matrix I.T. Integration and Infrastructures Ltd. | Cloud and computing infrastructures | 74630 | 57288 | 52581 | 38402 |
| Matrix Defense Ltd. | Security and defense IT solutions | 16275 | 12481 | 7111 | 5389 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.3 The following are details regarding the Company's income (expenses) from its principal (active)
subsidiaries and associates during 2023 and 2024, and during the first quarter of 2025 up to the date close to the Prospectus:

<u>For the year 2023</u> – see Article 13 of Part D of the Company's 2023 Periodic Report, as published on March 11, 2024, Reference No.: 2024-01-020848 (the "**Company's 2023 Periodic Report**").

<u>For the year 2024</u> – see Article 13 of Part D of the Company's 2024 Periodic Report.

<sup>1</sup> Financial data in the table are presented from the perspective of the investee companies.

<u>For the first quarter of 2025 and up to the date close to the Prospectus (in thousands of NIS):</u>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Investee company** | **Dividend** | **Dividend** | **Interest** | **Interest** | **Management fees** | **Management fees** |
| **Investee company** | **Received during the period or receivable by the Company for the period** | **Received after the period or receivable for the period after March 31, 2025 and up to the date close to the Prospectus** | **Received during the period or receivable by the Company for the period** | **Received after the period or receivable for the period after March 31, 2025 and up to the date close to the Prospectus** | **Received during the period or receivable by the Company for the period** | **Received after the period or receivable for the period after March 31, 2025 and up to the date close to the Prospectus** |
| Matrix I.T. Systems Ltd. | - | - | 14978 | - | - | - |
| John Bryce Training Ltd. | - | - | - | - | - | - |
| Matrix I.T. Integration and Infrastructures Ltd. | - | - | 1326 | - | - | - |
| Matrix Defense Ltd. | - | - | 1133 | - | - | - |

---

&nbsp;&nbsp;&nbsp;&nbsp;**5.3** **Board of Directors' Explanations Regarding the Company's Affairs** 

The Board of Directors' explanations regarding the Company's affairs as of December 31, 2024, are incorporated herein by way of reference to the said Board of Directors' Report attached to the Company's 2024 Periodic Report.

The Board of Directors' explanations regarding the Company's affairs as of March 31, 2025, are incorporated herein by way of reference to the said Board of Directors' Report attached to the Company's Report for the First Quarter of 2025.

**Chapter 6 – The Company's Board of Directors**

**6**

**6.1** **The Company's Board of Directors** 

As of the Prospectus date, the members of the Company's Board of Directors are:<br> Mr. Guy Bernstein (Chairman of the Board), Mr. Eliezer Oren (Director), Mr. Tal Barnoach (External Director), Ms. Limor Bar-On (External Director), and Mr. Pini Greenfield (Independent Director). For details regarding the aforementioned directors (incorporated herein by way of reference), see Article 26 in Part D of the Company's 2024 Periodic Report.

**6.2** **Additional Senior Officers** 

As of the Prospectus date, the Company's senior officers (who are not directors) are:<br> Mr. Moti Gutman (Chief Executive Officer), Mr. Nevo Brenner (Chief Financial Officer), Ms. Ranit Zexer (Chief Technology Officer), Ms. Yifat Givol (Head of Legal Department and Company Secretary), Mr. Ziv Mandl (Executive Vice President, Head of Cluster comprising the Business Systems, Expert and Consulting Services, Fintech and Digital, and R&D Services Divisions), Mr. Yaron Raz (Executive Vice President, Head of the Software Products Division, Head of the Defense Division, Data & AI, and Xtivia), Ms. Hila Tal (Vice President of Human Resources), Mr. Nitsan Alon (Vice President of Strategy and Chairperson of Matrix Defense Ltd.), Mr. Avi Goldstein (Director of Integration and Infrastructure Division), Ms. Liat Tennenholtz (Vice President of Mergers and Acquisitions), Ms. Gali Katan (Chief Accountant), and Mr. Yisrael Gewirtz (Internal Auditor).

For details regarding the aforementioned senior officers (incorporated herein by way of reference), see Article 26A in Part D of the Company's 2024 Periodic Report.

**6.3** **Independent Authorized Signatories** 

As of the Prospectus date, the Company has no independent authorized signatories.

**6.4** **Additional Information** 

---

| | |
|:---|:---|
| Legal Counsel for the Prospectus: | **Goldfarb Gross Seligman & Co., Advocates** |
|  | 98 Yigal Alon Street, Tel Aviv |
| Company Auditors: | **BDO Ziv Haft, Certified Public Accountants** |
|  | 48 Menachem Begin Street, Tel Aviv |
| Registered Office of the Company: | 3 Atir Yeda Street, Kfar Saba |

---

**6.5** **Provisions of the Company's Articles of Association Relating to Members of the Board of Directors** 

The provisions of the Company's Articles of Association regarding the maximum and minimum number of directors in the Company, the manner of their appointment or election, their term of office, filling of vacancies, termination of office, their remuneration, and the establishment of Board committees and the powers conferred upon them are incorporated herein by way of reference to the Company's Articles of Association, as published in the Company's Immediate Report dated November 5, 2019, Reference No.: 2019-01-094746.

For arrangements under the Companies Law relating to the Company's Board of Directors as set forth in the Company's Articles, see Section 3.2 of this Prospectus.

**Chapter 7 – Interested Parties in the Company**

**7**

**7.1** **Remuneration to Interested Parties and Senior Officers** 

Data regarding the remuneration granted by the Company or by another party to each of the five most highly compensated senior officers of the Company<sup>1</sup> or of a corporation under its control, in connection with their service in the Company or in a controlled corporation (as recognized in the Company's financial statements); to each of the three senior officers of the Company who received the highest remuneration in connection with their service in the Company itself (and who are not among the five most highly compensated senior officers mentioned above); and to any Interested Party in the Company (other than the most highly compensated senior officers mentioned above), excluding a subsidiary of the Company, to whom remuneration was granted by the Company or by a corporation under its control, in connection with services rendered as an officeholder in the Company or in a corporation under its control — are incorporated herein by way of reference to:

&nbsp;&nbsp;&nbsp;&nbsp;7.1.1 <u>Year 2023</u>: Article 21 (Remuneration to Interested Parties and Senior Officers) in Part D of the
Company's 2023 Periodic Report.

&nbsp;&nbsp;&nbsp;&nbsp;7.1.2 <u>Year 2024</u>: Article 21 (Remuneration to Interested Parties and Senior Officers) in Part D of the
Company's 2024 Periodic Report.

<u>First Quarter of 2025 (in NIS):<sup>2</sup></u>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Position** | **Percentage of <br> holdings in the <br> Company, fully <br> diluted (%)** | **Salary <br> (NIS)** | **Bonus <br> (NIS)** | **Share-<br> based <br> payment <br> (NIS)** | **Total (NIS)** |
| **Mr. Moti <br> Gutman** | Chief Executive**** <br> Officer | 0.35 | 964861 | 2456318 | 1380981 | 4801160 |
| **Mr. Nevo <br> Brenner** | Chief Financial Officer | 0.06 | 372855 | 680211 | 177175 | 1230241 |
| **Mr. Ziv <br> Mandel** | Senior Vice President,**** <br> Head of Cluster | 0.08 | 405534 | 650000 | 177175 | 1232709 |
| **Mr. Avi <br> Goldstein** | Head of Cloud and**** <br> Computing**** <br> Infrastructure Division | 0.08 | 281863 | 896519 | 143954 | 1322336 |
| **Mr. Dennis <br> Robinson** | CEO of Xtivia | 0.05 | 261000 | 382500 | 99661 | 743161 |

---

For details regarding the employment terms and conditions of Messrs. Gutman, Brenner, Mandel, Robinson, and Goldstein, see Article 21 in Part D of the Company's 2024 Periodic Report.

**<u>Remuneration to any Interested Party in the Company (who is not among the most highly compensated senior officers mentioned above), excluding a subsidiary of the Company, to whom remuneration was granted by the Company or by a corporation under its control, in connection with services rendered as an officeholder in the Company or in a corporation under its control:</u>**

<sup>1</sup> Referring to Interested Parties and Senior Officers of the Company as of the relevant date.

<sup>2</sup> For the purpose of this Section, the terms "salary," "remuneration," and "share-based payment" shall have the meanings ascribed to them in Article 21 of the Securities Regulations (Periodic and Immediate Reports), 5730–1970. The remuneration amounts are presented as employer cost.

Directors' fees and related expenses, which were not exceptional and were paid by the Company for the first quarter of 2025, to those who served during that period as directors of the Company – a total of five (5) directors – amounted to approximately NIS 392 thousand.<sup>3</sup>

For details regarding the insurance of directors and officers of the Company and the indemnification letters granted to the Company's directors and officers, see Article 29A in Part D of the Company's 2024 Periodic Report.

For additional details, see the Company's Immediate Report dated November 14, 2024, Reference No.: 2024-01-615819.

**7.2** **Transactions with Controlling Shareholders** 

The following are details (incorporated herein by way of reference), to the best of the Company's knowledge, regarding transactions with a Controlling Shareholder or in which a Controlling Shareholder has a personal interest in their approval, that the Company, its controlled companies, or its affiliated companies have entered into during the years 2023 and 2024, as well as during the period beginning on January 1, 2025, and ending on a date close to the Prospectus date, or on an earlier date if such transactions remain in effect as of the Prospectus date:

&nbsp;&nbsp;&nbsp;&nbsp;7.2.1 Article 22 (Transactions with a Controlling Shareholder or in which a Controlling Shareholder has a Personal
Interest) in Part D of the Company's 2023 Periodic Report;

&nbsp;&nbsp;&nbsp;&nbsp;7.2.2 Article 22 (Transactions with a Controlling Shareholder or in which a Controlling Shareholder has a Personal
Interest) in Part D of the Company's 2024 Periodic Report;

&nbsp;&nbsp;&nbsp;&nbsp;7.2.3 Except as detailed in Sections 7.2.1 and 7.2.2 above, as of January 1, 2025, the Company has not engaged
in transactions with a Controlling Shareholder or in which a Controlling Shareholder had a personal interest in their approval, that were
entered into by the Company, its controlled companies, or its affiliated companies.

<sup>3</sup> As a rule, VAT is added to directors' fees and payment is made against an invoice. The remuneration to which all current and future members of the Board of Directors are entitled, who are not employed by the Company (either as employees or independent service providers), shall include an annual fee and participation fee in accordance with the amounts set forth in the Second and Third Addenda to the Companies Regulations (Rules Regarding Compensation and Expenses for External Directors), 5760–2000, as may be updated from time to time, distinguishing between directors who are experts and those who are not, as set forth in the said Regulations.

**Chapter 8 – Financial Statements**

**8**

**8.1** **Financial Statements Included in this Prospectus by Way of Reference** 

&nbsp;&nbsp;&nbsp;&nbsp;8.1.1 The financial statements included in this Prospectus, in accordance with Articles 60B and 60D of the Prospectus
Details Regulations, are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1.1.1 The Company's consolidated annual financial statements for 2024, incorporated herein by way of reference
to the said financial statements attached to the Company's 2024 Periodic Report (as defined in Section 5.1.1 of this Prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1.1.2 The report regarding financial data and financial information from the Company's consolidated financial
statements for 2024 attributable to the Company, pursuant to Article 9C of the Securities Regulations (Periodic and Immediate Reports),
5730–1970 (the "**Reporting Regulations** "), incorporated in this Prospectus by way of reference to the said report
attached to the Company's 2024 Periodic Report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1.1.3 The Company's consolidated financial statements for the first quarter of 2025, incorporated herein
by way of reference to the said financial statements attached to the Company's Report for the First Quarter of 2025 (as defined
in Section 5.1.1 of this Prospectus);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1.1.4 The report regarding financial data and financial information from the Company's consolidated financial
statements for the first quarter of 2025 attributable to the Company, pursuant to Article 38D of the Reporting Regulations, incorporated
herein by way of reference to the said report attached to the Company's Report for the First Quarter of 2025;

&nbsp;&nbsp;&nbsp;&nbsp;8.1.2 The report regarding the effectiveness of internal control over financial reporting and disclosure, including
the statements of the Company's Chief Executive Officer and Chief Financial Officer for 2024, in accordance with Article 9B of the
Reporting Regulations, included in this Prospectus pursuant to Article 60E of the Prospectus Details Regulations, by way of reference
to the said report and the said statements as attached to the Company's 2024 Periodic Report;

&nbsp;&nbsp;&nbsp;&nbsp;8.1.3 The quarterly report regarding the effectiveness of internal control over financial reporting and disclosure,
including the statements of the Company's Chief Executive Officer and Chief Financial Officer for the first quarter of 2025, in
accordance with Article 38C of the Reporting Regulations, included in this Prospectus pursuant to Article 60E of the Prospectus Details
Regulations, by way of reference to the said report and the said statements as attached to the Company's Report for the First Quarter
of 2025;

&nbsp;&nbsp;&nbsp;&nbsp;8.1.4 The Company's report on its liability balances by repayment dates as of December 31, 2024, in accordance
with Article 9D of the Reporting Regulations, incorporated in this Prospectus by way of reference to the said report published concurrently
with the publication of the Company's 2024 Periodic Report;

&nbsp;&nbsp;&nbsp;&nbsp;8.1.5 The Company's report on its liability balances by repayment dates as of March 31, 2025, in accordance
with Article 38E of the Reporting Regulations, incorporated in this Prospectus by way of reference to the said report
published concurrently with the publication of the Company's Report for the First Quarter of 2025.

**8.2** **Auditors' Consent Letter Attached to this Prospectus** 

In accordance with Article 62(a1) of the Prospectus Details Regulations, the following is attached under Section 8.4 of this Prospectus: a consent letter from the Company's independent auditors, which includes their consent to the inclusion in the Prospectus, including by way of reference, of their audit reports and review reports (as applicable) for each of the reports listed in Sections 8.1.1 and 8.1.2 of this Prospectus, all in accordance with the wording of the said consent letter.

![](image_002.jpg)

July 15, 2025

To<br> The Board of Directors of

Matrix I.T. Ltd.

3 Atir Yeda Street, Kfar Saba

To Whom It May Concern:

Re: **<u>Consent Letter for the Inclusion of the Independent Auditor's Report in the Shelf Prospectus of Matrix I.T. Ltd. (the "Company") Intended for Public Publication in July 2025</u>**

We hereby confirm our consent to the inclusion (including by way of reference) in the above-mentioned Shelf Prospectus of our following reports:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Independent Auditor's Report dated March 10, 2025, on the Company's consolidated financial
statements as of December 31, 2024, and for the year then ended.

&nbsp;&nbsp;&nbsp;&nbsp;(2) The Independent Auditor's Report dated March 10, 2025, on the audit of components of internal control
over financial reporting of the Company as of December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;(3) The Independent Auditor's Report dated March 10, 2025, on the Company's separate financial
information in accordance with Article 9C of the Securities Regulations (Periodic and Immediate Reports), 5730–1970, as of December
31, 2024, and for the year ended on December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;(4) The Review Report dated May 12, 2025, on the condensed consolidated financial information of the Company
as of March 31, 2025, and for the three-month period then ended.

&nbsp;&nbsp;&nbsp;&nbsp;(5) The Independent Auditor's Report dated May 12, 2025, on the condensed separate financial information
of the Company as of March 31, 2025, and for the three-month period then ended, in accordance with Article 38D of the Securities Regulations
(Periodic and Immediate Reports), 5730–1970.

Sincerely,<br> Ziv Haft<br> Certified Public Accountant

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Tel Aviv**<br> 03-6386868  | **Jerusalem**<br> 02-6546200  | **Haifa**<br> 04-8680600  | **Be'er Sheva**<br> 077-7784100/2  | **Bnei Brak**<br> 073-7145300  | **Kiryat Shmona**<br> 077-5054906  | **Petach Tikva**<br> 077-7784180  | **Modiin Illit**<br> 08-9744111  | **Nazareth**<br> 04-6555888  | **Eilat**<br>08-6339911  |

---

**Main Office:** BDO Amot House, 48 Menachem Begin Road, Tel Aviv, 6618001 \|**Email:** <u>bdo@bdo.co.il</u> \|**Visit our website:** <u>www.bdo.co.il</u>

BDO Israel, an Israeli partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the <br> International BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

---

| | | |
|:---|:---|:---|
| **Kost Forer Gabbay & Kasierer**<br> 144a Menachem Begin Road,<br> Tel Aviv 6492102 | Tel: +972-3-6232525<br> ey.com | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;![A logo with a yellow light AI-generated content may be incorrect.](image_006.jpg) |

---

July 15, 2025

<u>To</u>:<br> The Board of Directors of<br> Matrix I.T. Ltd. (hereinafter: the "**Company**")<br> 3 Atir Yeda Street, Kfar Saba

To Whom It May Concern,

**Re: <u>Consent Letter for the Inclusion of the Independent Auditor's Report in the Shelf Prospectus of Matrix I.T. Ltd. Intended for Publication in July 2025</u>**

We hereby notify you that we consent to the inclusion (including by way of reference) in the above-mentioned Shelf Prospectus of our reports listed below:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Independent Auditor's Report dated March 10, 2024, on the Company's consolidated financial
statements as of December 31, 2023, and 2022, and for each of the three years in the period ended on December 31, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;2. The Independent Auditor's Report dated March 10, 2024, on the audit of components of internal control
over the Company's financial reporting as of December 31, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;3. The Independent Auditor's Report dated March 10, 2024, on the Company's separate financial
information in accordance with Article 9C of the Securities Regulations (Periodic and Immediate Reports), 5730–1970, as of December
31, 2023, and 2022, and for each of the three years in the period ended on December 31, 2023.

Sincerely,

<br> Kost Forer Gabbay & Kasierer,

Certified Public Accountants

**8.3** **Events Report** 

Below is the "Events Report," as defined in Article 56A of the Prospectus Details Regulations, regarding material events (as defined in said Article) that occurred after the signing date of the Company's consolidated financial statements for the first quarter of 2025 (i.e., May 12, 2025) and up to the date of publication of this Prospectus:

**<u>Events Report</u>**

**<u>As defined in Article 56A of the Securities Regulations (Details of Prospectus and Draft Prospectus<br> – Structure and Form), 5729–1969, regarding material events (as defined therein) that occurred<br> after the signing date of the Company's consolidated financial statements for the first quarter of<br> 2025 (i.e., May 12, 2025) and up to the publication date of this Prospectus:</u>**

No events.

---

| | | |
|:---|:---|:---|
| **Guy Bernstein** <br> Chairman of the Board | **Moti Gutman** <br> Chief Executive Officer | **Nevo Brenner** <br> Chief Financial Officer |

---

Date: July 15, 2025

**Chapter 9 – Additional Information**

**9.1 Legal Opinion**

The Company has received the following legal opinion:

![](image_005.jpg)

July 16, 2025

To:<br> Matrix I.T. Ltd.

3 Atir Yeda Street,

<u>Kfar Saba 4464303</u>

Re: **<u>Matrix I.T. Ltd. (the "Company") – Shelf Prospectus of the Company (the "Shelf Prospectus")</u>**

At your request, and with respect to the above-mentioned Shelf Prospectus, we hereby confirm that the directors of the Company were duly appointed and that their names are included in the Shelf Prospectus.

We agree that this opinion shall be included in the Shelf Prospectus.

Sincerely,

<br> Doron Segal, Adv.<br> Ghazi Jaljoly, Adv.<br> Goldfarb Gross Seligman & Co., Advocates

Electra Tower, 98 Yigal Alon Street, Tel Aviv 6789141 \| 03-608-9999 <u>www.goldfarb.com</u> <br> The Round Tower, 1 Azrieli Center, Tel Aviv 6701101 \| 03-607-4444 <u>info@goldfarb.com</u> <br> Mittelstrasse 14, 8008 Zurich, Switzerland

&nbsp;&nbsp;&nbsp;&nbsp;**9.2** **Fee for Request for Authorization to Publish the Prospectus** 

Pursuant to Section 4A of the Securities Regulations (Fee for Request for Authorization to Publish a Prospectus), 5755–1995, the Company has paid the Israel Securities Authority the fee for the request for authorization to publish a Shelf Prospectus; however, the additional fee shall be paid for the securities offered at the time of publication of the Shelf Offering Report under which such securities will be issued, in the amounts and at the times prescribed in the said Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;**9.3** **Inspection of Documents** 

Copies of this Prospectus, and of any legal opinions or approvals mentioned herein, are available for public inspection during regular business hours and by prior arrangement at the Company's offices, located at 3 Atir Yeda Street, Kfar Saba.

In addition, copies of this Prospectus and of the Company's Articles of Association are available for public inspection on the Israel Securities Authority's distribution website at: <u>www.magna.isa.gov.il</u>.

**Chapter 10 – Signatures**

&nbsp;&nbsp;&nbsp;&nbsp;**10.1** **The Company** 

Matrix I.T. Ltd.  

&nbsp;&nbsp;&nbsp;&nbsp;**10.2** **The Directors** 

---

| |
|:---|
| Guy Bernstein |
| Tal Barnoach |
| Limor Bar-On |
| Pini Greenfield |
| Eliezer Oren |

---

## Exhibit 99.3

**Exhibit 99.3**

**ARTICLES OF ASSOCIATION**

**Of**

**MATRIX I.T. LTD.**

**In Accordance With**

**The Companies Law, 1999**

1. **<u>Name of the Company</u>**

The name of the Company is Matrix I.T. Ltd.

2. **<u>Objectives and Purpose of the Company</u>**

The objectives of the Company are as set forth in the Memorandum of Association of the Company.

3.  **<u>Interpretation</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Words which are in the singular form shall be deemed to include the plural form, and *vice versa*.
Words which are in the masculine gender shall be deemed to include the feminine gender, and *vice versa*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Other than if these Articles include specific definitions for certain terms, each word and phrase in these
Articles shall have the meaning given to them in the Companies Law, 1999 (in these Articles: the **"Companies Law"**), unless
this contradicts the stated subject or its content.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 For the avoidance of doubt, it is understood that in regard to subjects regulated in the Companies Law
in such manner that the arrangements in their respect may be stipulated in the Articles, and these Articles do not contain provisions
that differ from the provisions of the Companies Law in their respect – the provisions of the Companies Law shall apply.

4. **<u>Share Capital of the Company and Rights Attaching to the Shares</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 The registered share capital of the Company shall be NIS 100,000,000 divided into 100,000,000 Ordinary
Shares of NIS 1.00 par value each.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 The Ordinary Shares shall confer upon the holders thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.1 An equal right to participate and vote in General Meetings of the Company, whether they be Annual Meetings
or Special Meetings, and each of the shares of the Company shall entitle the holder thereof, such holder being present at the Meeting
and participating in the vote in person, by proxy or by voting deed, to one vote;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.2 An equal right to participate in a distribution of dividends, whether in cash or in bonus shares, in the
distribution of assets or any other distribution, *pro rata* to the par value of shares held by them;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.3 An equal right to participate in the distribution of the surplus assets of the Company upon its liquidation, *pro rata* to the par value of the shares held by them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 The Board of Directors may issue shares and other securities, convertible or exercisable into shares,
up to the limit of the registered share capital of the Company. For the purpose of calculating the limit of the registered share capital,
convertible securities or securities exercisable into shares shall be deemed to have been converted or exercised on the date of issue
thereof.

5. **<u>Limitation of Liability</u>**

The liability of the Shareholders for the debts of the Company shall be limited to the full amount (par value plus premium) they were required to pay to the Company for the shares and which has not yet been paid by them.

6.  **<u>Jointly-Held Shares and Share Certificates</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 A Shareholder who is registered in the Register of Shareholders is entitled to receive from the Company, *gratis*, within a three-month period after the allotment or registration of the transfer, one share certificate imprinted with the
Company stamp with respect to all shares registered in his name, which shall enumerate the number of shares, or, if the Board of Directors
shall so approve (after he has paid the sum determined by the Board of Directors), a number of share certificates with respect to the
shares registered in his name. In the case of a jointly-held share, the Company shall issue one share certificate to all joint owners
of the share, and delivery of the said certificate to the owner whose name is listed first in the Register of Shareholders shall be deemed
delivery to all joint owners.

Each share certificate shall bear the signatures of two Directors or the signatures of one Director and the Company Secretary, together with the Company stamp.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 A share certificate which has been mutilated, defaced or lost may be renewed subject to the submission
of such proof and guarantees as required by the Company from time to time.

7. **<u>Company's Remedies with Respect to Shares which Are Not Fully Paid-Up</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 Where the consideration which a Shareholder has undertaken to pay to the Company for his shares has not
been delivered, in whole or in part, on the date and under the conditions determined in the terms and conditions of allotment of his shares
and/or in the payment call described in clause 7.2 below, the Company many, pursuant to a resolution of the Board of Directors, forfeit
the shares which consideration was not paid in full. The shares shall be forfeited, provided, however, that the Company has sent the Shareholder
written notice of its intention to forfeit his shares within at least 7 days from the date of receipt of such notice if the payment is
not made within the period prescribed in the notice.

The Board of Directors may, at any and all times prior to the date whereon a forfeited share was sold, re-allotted or otherwise transferred, rescind the forfeiture under such terms and conditions as it deems fit.

The forfeited shares shall be held by the Company as dormant shares or shall be sold to another. In the case of resale, the Board of Directors may appoint a person who shall sign the deed of transfer of the share which was sold, and procure that the buyer's name is entered in the Register of Shareholders as a Shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 If, in accordance with the terms and conditions of a share issue no date is prescribed for the payment
of any part of the price payable for the shares, the Board of Directors may from time to time make calls of Shareholders in respect of
sums not yet paid for the shares held by them, and each Shareholder shall be bound to pay to the Company the amount of the call on the
date determined as aforesaid, plus interest at the rate determined by the Board of Directors and any and all expenses incurred by the
Company to procure the payment of such sum, provided, however, that he shall have received 14 days' notice of the date and venue for payment
(**"Payment Call"**). The notice shall state that failure to make payment on the date determined or prior thereto at the
specified location may lead to forfeiture of the shares in which respect payment was called. A Payment Call may be cancelled or postponed
to a different date, all as the Board of Directors shall decide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 Unless determined otherwise in the terms and conditions of the share allotment, a Shareholder shall not
be entitled to receive a dividend or to use any right as a Shareholder in respect of shares which have not been fully paid-up.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 Joint owners of a share shall be jointly and severally liable for payment of the sums owed to the Company
in respect of the said share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 The provisions of this clause shall not derogate from any other relief available to the Company against
a Shareholder who has not paid his debt to the Company in respect of his shares.

8. **<u>Share Transfers</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 Shares of the Company which are fully paid-up may be transferred without limitation and without the approval
of the Board of Directors being required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 A share transfer must be made in writing and shall not be registered unless –

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2.1 A proper share transfer deed is delivered to the Company at its registered office, together with the certificates
of the shares which are to be transferred, if issued. The transfer deed shall be signed by the transferor and by a witness authenticating
the transferor's signature, and by the person receiving the shares and by a witness authenticating the transferee's signature; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2.2 A court order for the amendment of the registration is delivered to the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2.3 It has been proved to the Company that the terms and conditions determined in the law for assignment of
the right in and to the share have been met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 The transfer of shares which are not fully paid-up requires the approval of the Board of Directors, which
may refuse to give its approval at its absolute discretion and without justification. Where the Board of Directors has refused to approve
a share transfer, it shall inform the transferor thereof by no later than 30 days from the date of receipt of the transfer deed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 The transferee shall be deemed the owner of the transferred shares from the time his name is entered in
the Register of Shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 The Company may close its Share Transfer Books and Registers of Shareholders for such time as the Board
of Directors deems fit, provided, however, that this shall not exceed a total of thirty (30) days each year and shall not take place in
the 14 days preceding the record date for entitlement to vote at the General Meeting determined by the Board of Directors as provided
in section 182 of the Companies Law. The Company shall give 7 days' notice of the closure of the abovementioned registers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 The Company shall be entitled to collect payment for registration of the transfer in the amount determined
by the Board of Directors from time to time, which shall not exceed the sum of one hundred New Shekels in respect of the registration
of one transfer deed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.  **<u>Modification of Share Capital</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 The General Meeting may increase the registered share capital of the Company by creating new shares of
an existing or new class, all as determined by resolution of the General Meeting passed by an ordinary majority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 The General Meeting may cancel registered share capital that has not yet been allotted, provided, however,
that there is no undertaking by the Company, including a conditional undertaking, to allot the shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 The General Meeting may, subject to the provisions of the law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.1 Consolidate and re-divide its share capital or any part thereof into shares of greater par value than
the par value of the existing shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.2 By sub-dividing its existing shares, all or part thereof, divide its share capital, all or part thereof,
into shares of lower par value than the par value of the existing shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3.3 Reduce its share capital and any capital redemption reserve fund in such manner and under such terms and
conditions and upon the receipt of such approval, as required by the Companies Law.

10. **<u>Modification of the Rights Attaching to Share Classes</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 For as long as it has not been determined otherwise in the terms and conditions of the share issue and
subject to the provisions of the law, the rights of a share class may be modified after a resolution by the Board of Directors of the
Company has been carried and with the approval thereof in the General Meeting of Shareholders of that share class, passed by an ordinary
majority, or with the written agreement of all Shareholders of that class. The provisions of the Company's Articles with respect to General
Meetings shall apply, *mutatis mutandis*, to a General Meeting of Class Shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 The rights conferred upon the holders of shares of a particular class which were issued with special rights
shall not be deemed to have been modified by the creation or issue of other shares *pari passu*, save and except if stipulated otherwise
in the terms and conditions of issue of the said shares.

11. **<u>General Meetings</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 General Meetings shall be convened at least once a year at the venue and on the date determined by the
Board of Directors, but no later than 15 months after the last General Meeting. These General Meetings shall be called "Annual General
Meetings". All other General Meetings of the Company shall be referred to as "Special Meetings".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 The Board of Directors may convene a Special Meeting by resolution, and is required to convene a General
Meeting where it receives a written request in accordance with the provisions of section 63 of the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 Notice of the convening of a General Meeting shall be given at least twenty-one days prior to the convening
thereof, or with shorter notice in accordance with the provisions of applicable law. The notice will include the agenda, the proposed
resolutions and arrangements for voting in writing, as well as any and all information required by the provisions of the law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 The notice shall be posted on the Company's website or published in any other manner permitted by
law, as decided by the Board of Directors. The Company shall not be required to deliver a personal notice to each of the Shareholders
registered in the Register of Shareholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 The accidental omission to give notice of a Special General Meeting to a Shareholder entitled to receive
such notice, or the non-receipt of such notice, shall not invalidate any resolution carried at that Meeting.

12. **<u>Proceedings at General Meetings</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 Deliberations at the General Meeting shall not begin and no resolution shall be carried unless a quorum
is present at the time of the commencement of deliberations or the vote on a resolution, as the case may be. A quorum is the presence
of at least two Shareholders holding at least twenty-five (25) percent of the voting rights (including presence by proxy or voting deed)
within half-an-hour of the time appointed for the Meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 If a quorum is not present at a General Meeting after half-an-hour has elapsed from the time appointed
for the Meeting, the Meeting shall stand adjourned to the same day, time and venue in the following week, or to a later date if so stated
in the invitation to the Meeting or notice of the Meeting (the **"Adjourned Meeting"**).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 The quorum for the commencement of the Adjourned Meeting shall be two Shareholders (including presence
by proxy or voting deed).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 The Chairman of the Board of Directors or other person appointed by the Board of Directors for such purpose
shall serve as Chairman of the General Meeting. If the Chairman of the Board of Directors is not present at the Meeting within 15 minutes
from the time appointed for the Meeting, or should he refuse to chair the Meeting, the Chairman shall be elected by the General Meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 A General Meeting at which a quorum is present may decide to adjourn the Meeting to a different date and
to the venue it shall determine.

13. **<u>Voting at the General Meeting</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 A Shareholder of the Company shall be entitled to vote at General Meetings, in person or by proxy or by
voting deed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 Shareholders who are entitled to participate and vote at General Meetings are the Shareholders on the
date determined by the Board of Directors in the resolution to convene a General Meeting and subject to applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 In each vote, each Shareholder shall have a number votes as per the number of shares held by him.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 Resolutions at a General Meeting shall be adopted by an ordinary majority, unless a different majority
is determined in the Companies Law or in these Articles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 All proposed resolutions submitted to the Meeting shall be adopted by way of a poll.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6 [Omitted]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.7 The announcement by the Chairman that a resolution has been adopted unanimously or by a certain majority,
or has been rejected, or has not been adopted by a certain majority, shall constitute *prima facie* evidence of the content thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.8 In the event of a tie vote, the Chairman of the Meeting shall not have a second or casting vote, and the
resolution put to the vote shall be rejected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.9 Shareholders of the Company may vote at a General Meeting via a voting deed wherever this is required
by law or determined in the convening notice for the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.10 A Shareholder may state how he will vote in the voting deed and deliver it to the Company up to 48 hours
before the time appointed for the Meeting. A voting deed wherein a Shareholder has stated how he will vote, which has reached the Company
48 hours before the time appointed for the meeting (with respect to an Adjourned Meeting – 48 hours before the time appointed for
the Adjourned Meeting), shall be deemed presence at the meeting, including for the purpose of the presence of a quorum as provided in
clause 13.1 above; however, the Chairman of the Meeting may waive this requirement with respect to a particular meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.11 Proxies shall be appointed in writing and the instrument signed by the appointer (hereinafter: **"Deed of Proxy"**). A corporation shall vote through its representatives, who shall be appointed in a document duly signed by the corporation
(hereinafter: **"Deed of Appointment"**).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.12 Voting in accordance with the terms and conditions of the Deed of Proxy shall be legal even if prior thereto
the appointer has passed or become incompetent, been liquidated, declared bankrupt, or has revoked the Deed of Proxy or has transferred
the share in which respect it was given, save and except if written notice was received in the office, before the meeting, that the owner
of the share had passed, become incompetent, been liquidated, declared bankrupt, or had revoked the Deed of Proxy or transferred the share
as aforesaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.13 The Deed of Appointment and Deed of Proxy or a copy certified by an attorney shall be deposited at the
registered office of the Company at least forty-eight (48) hours prior to the time appointed for the Meeting or the Adjourned Meeting
at which the person named in the document intends to vote; however, the Chairman of the Meeting may waive this requirement with respect
to a particular meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.14 A Shareholder of the Company shall be entitled to vote in Meetings of the Company via a number of proxies
who shall be appointed by him, provided, however, that each proxy shall be appointed with respect to different portions of shares held
by the Shareholder. There shall be no prevention against each such proxy voting differently in Meetings of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.15 If a Shareholder is legally incompetent he may vote via his board of trustees, guardian of his estate,
natural guardian or other legal guardian, and they may vote themselves or by proxy or by voting deed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.16 Where two or more people or more are the joint owners of a share, the vote of the person whose name is
listed first in the Register of Shareholders as the owner of that share, himself or by proxy, shall be accepted in a vote on any matter,
and he may deliver voting deeds to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.17 A Shareholder that is a corporation may, pursuant to a resolution of its board of directors or other management
organ, empower by Deed of Appointment such person as it deems fit, whether or not he is a member of the corporation, to act as its proxy
at any and all General Meetings of the Company in which the corporation is entitled to participate and to vote, and the person so authorized
may act therein as a member of the Company as if he were an individual. A person holding a Deed of Appointment as aforesaid may appoint
any other person as his proxy, whether or not the proxy is a member of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.18 The Deed of Proxy and Deed of Appointment shall be valid for any and all Adjourned Meetings of the Meeting
whereto they refer.

14. **<u>The Board of Directors</u>**

The Board of Directors shall define Company policy and shall oversee the performance of the duties of the General Manager and his actions. The Board of Directors may apply any power of the Company which is not granted to another organ under the Companies Law or in these Articles.

15.  **<u>Appointment of Directors and Termination of Office of Directors</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1 The number of Directors of the Company (including external Directors) shall be determined by the Annual
General Meeting from time to time, provided, however, that it shall be no less than four and no more than eleven Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2 At least two Directors shall be external Directors, as they are defined in the Companies Law.

---

| | |
|:---|:---|
| 15.2A | The percentage of independent Directors shall be as set forth below, as the case may be: |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To the extent that there is no controlling shareholder or holder of a controlling block in the Company
(in this clause – Controlling Shareholder) – the majority of members of the Board of Directors shall be independent Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) To the extent that there is a Controlling Shareholder of the Company – at least one-third of the
members of the Board of Directors shall be independent Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3 The Directors of the Company shall be appointed at an Annual Meeting and/or Special Meeting, and shall
hold office until the end of the next Annual Meeting or until they cease to hold office pursuant to the provisions of these Articles or
by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4 In addition to the provisions of clause 16.3 above, the Board of Directors may appoint a Director in lieu
of a Director whose office has fallen vacant and/or as an additional Director, subject to the maximum number of Directors on the Board
of Directors as set forth in clause 16.1 above. A resolution in writing by the Board of Directors on the appointment of a Director shall
be valid until the next Annual Meeting or until he ceases to hold office in accordance with the provisions of these Articles or by law.
The appointment of a Director appointed pursuant to the provisions of this clause may be revoked by ordinary resolution of the Board of
Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5 Subject to the provisions of any law which may not be stipulated, a Director whose term of office has
ended may be re-elected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.6 The office of a Director shall begin on the date of his appointment or on a later date, if such date is
determined in the resolution for appointment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.7 The Board of Directors shall appoint one of their number as Chairman of the Board of Directors. If no
Chairman is appointed, or if the Chairman of the Board of Directors is not present at the Meeting within 15 minutes from the time appointed
for the Meeting, the Directors who are present shall appoint one of their number to chair that Meeting, and the person so elected shall
preside over the Meeting and sign the minutes of the discussion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.8 The General Meeting may, at any and all times, remove any Director from office prior to the termination
of his term of office, whether the Director was appointed by the General Meeting under clause 16.3 above or whether he was appointed by
the Board of Directors under clause 16.4 above, provided, however, that the Director has been given a reasonable opportunity to present
his position to the General Meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.9 Where the office of a Director has fallen vacant, the remaining Directors may continue to act for as long
as their number has not fallen below the minimum number of Directors determined in these Articles. Where the number of Directors has fallen
below the above minimum, the remaining Directors may act exclusively to fill the seat of the Director which has fallen vacant as provided
in clause 16.4 above or to summon a General Meeting of the Company, and until such General Meeting is convened they may act to carry on
the business of the Company only with respect to matters which cannot be postponed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.10 Any member of the Board of Directors who is not an external Director may appoint a substitute (hereinafter: **"Alternate Director"**). A person who is not competent to hold the office of a Director may not be appointed nor serve
as an Alternate Director, as well as a person holding the office of Director or Alternate Director.

An Alternate Director shall be appointed or removed from office in a written instrument signed by the Director who had appointed him; however, in any case the office of an Alternate Director shall be terminated should any of the circumstances set forth in the paragraphs contained in clause 16.11 below befall him, or if the office of the Director whom he serves as substitute should fall vacant for any reason.

An Alternate Director shall be deemed tantamount to a Director and all provisions of the law and of these Articles shall apply to him, save and except for the provisions with respect to the appointment and/or dismissal of a Director set forth in these Articles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.11 An Alternate Director shall not be entitled to vote in lieu of his appointer in any meeting of the Board
of Directors or of a committee of the Board of Directors, at which the Director who appointed him is present in person.

15.12 (1) The office of a Director shall fall vacant in the cases enumerated in the Companies Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Upon his death, or if he is declared bankrupt, and if he is a corporation – has resolved to voluntarily
wind up its affairs and dissolve, or a winding-up order has been issued against it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Has been declared insane or legally incompetent.

16. **<u>Meetings of the Board of Directors</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1 The Board of Directors shall convene according to the Company's needs and at least once in three (3) months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2 The Chairman of the Board of Directors may convene the Board of Directors at any and all times and shall
be obliged to convene it in the cases set forth in section 89 of the Companies Law, in accordance with the provisions of that section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.3 Notice of a meeting of the Board of Directors shall be given to all members thereof at least twenty-four
(24) hours prior to time appointed for the meeting. Notice of a meeting of the Board of Directors may be given orally, by telephone, in
writing (including by facsimile transmission or email). The notice shall be delivered to the Director's address, given to the Company
in advance, and shall state the date, time and venue of the meeting, as well as reasonable details of all items on the agenda.

A Director who is regularly out of the country shall not be entitled, during his absence, to receive notices of the convening of meetings of the Board of Directors, on condition that if the absent Director has appointed an Alternate Director pursuant to these Articles, notice shall be sent to such Alternate Director. Notwithstanding the foregoing, the Board of Directors may convene without notice with the consent of all Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.4 The quorum for a meeting of the Board of Directors shall be deemed present if the majority of members
of the Board of Directors are present (or represented by an Alternate Director). Where a quorum is not present after half-an-hour has
elapsed from the time appointed for the meeting, the meeting shall stand adjourned to a different date as decided by the Chairman of the
Board of Directors, or in his absence, by the Directors present at the meeting convened, provided that twenty-four (24) hours' notice
of the adjourned meeting is given to all Directors. The quorum for conducting business at an adjourned meeting shall be no less than two
Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.5 Resolutions of the Board of Directors shall be adopted by a majority of votes of the Directors present.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.6 A resolution in writing signed by all Directors, or whereto the Directors have agreed in writing; and
a resolution adopted via the media – provided, however, that all participating Directors are able to hear each other simultaneously
– shall be as valid for all purposes as a resolution adopted by a meeting of the Board of Directors which was duly convened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.7 The Board of Directors may carry resolutions without actually convening, provided, however, that all Directors
entitled to participate in discussions and to vote on the subject have agreed thereto. Where resolutions are adopted as provided in this
clause, the Chairman of the Board of Directors shall keep minutes of the resolutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.8 In the case of a tie vote, the Chairman of the Board of Directors shall not have an additional or casting
vote, and the resolution put to the vote shall be rejected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.  **<u>Committees of the Board of Directors</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.1 The Board of Directors may establish committees and appoint members to such committees from among its
members (hereinafter: **"Committee/s of the Board of Directors"**). Where Committees of the Board of Directors have been
established the Board of Directors shall, in the terms and conditions of their empowerment, determine whether certain powers of the Board
of Directors shall be delegated to a Committee of the Board of Directors, in such manner that a resolution by the Committee shall be deemed
a resolution by the Board of Directors, or whether a resolution by the Committee shall be within the bounds of a recommendation only,
which is subject to approval by the Board of Directors, provided, however, that no powers of resolution shall be delegated to a Committee
on the subjects set forth in section 112 of the Companies Law, other than as determined in that section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.2 Meetings and discussions of all Committees of the Board of Directors comprising two or more members shall
be governed by the provisions contained in these Articles with respect to meetings of the Board of Directors and voting therein, *mutatis mutandis* and subject to the resolutions of the Board of Directors relating to the proceedings for Committee meetings (if there are
any such resolutions).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.3 A Committee of the Board of Directors may comprise one Director (provided that he is an external Director,
in its meaning in the Companies Law) or several Directors (provided that one of them is an external Director).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.  **<u>General Manager</u>** 

The Board of Directors of the Company shall appoint a General Manager and may appoint more than one General Manager. The General Manager shall be responsible for the day-to-day management of the Company's business in the framework of policies defined by the Board of Directors and subject to its instructions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.  **<u>Insurance, Indemnification and Exemption</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1 The Company may indemnify its officers *post factum* against a liability or expense as set forth
in paragraphs 19.1.1-19.1.7 below, imposed upon him or expended by him due to an act performed in his capacity as an officer of the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1.1 A financial liability imposed upon him in favor of another person by judgment, including a judgment awarded
in a settlement or an arbitration award approved by the court;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1.2 Reasonable litigation expenses, including attorney's fees, expended by the officer as a result of an inquiry
or proceeding conducted against him by a competent authority empowered to conduct same, which was concluded without the filing of an indictment
against the officer and without any financial penalty being imposed upon him in lieu of a criminal proceeding, or which was concluded
without the filing of an indictment against him but with the imposition of a financial liability in lieu of a criminal proceeding in respect
of an offense which does not require proof of criminal intent or in connection with a financial sanction. In this context: **"Conclusion of a proceeding without the filing of an indictment in a case in which a criminal proceeding was instituted"** and **"financial penalty in lieu of a criminal proceeding"** – in their meaning in section 260(a)(1a) of the Companies Law, as amended from
time to time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1.3 Reasonable litigation expenses, including attorney's fees, which the officer expended or was obligated
to expend by the court, in a proceeding filed against the officer by the Company or on behalf of the Company by another person, or in
a criminal charge of which the officer was acquitted or in a criminal charge of which the officer was convicted, which does not require
proof of criminal intent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1.4 As a result of payment to a party injured by the violation as part of an administrative enforcement proceeding,
as set forth in section 52(54)(a)(1)(a) of the Securities Law, 1968, as amended from time to time (the **"Securities Law"**);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1.5 Costs expended by an officer in connection with an administrative enforcement proceeding conducted in
his case, including reasonable litigation expenses, which include attorney's fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1.6 Costs expended by an officer in connection with a proceeding conducted in his case under the Economic
Competition Law, 1988, including reasonable litigation expenses, which include attorney's fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1.7 Any other obligation or expense in which respect the liability of an officer may be indemnified, at present
and/or in the future, under applicable law as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.2 The Company may undertake in advance to an officer to indemnify him in respect of a liability or expense
as set forth in clause 19.1 above, in any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As set forth in clause 19.1.1, provided, however, that the liability shall be limited to events which,
in the opinion of the Board of Directors, are expected in light of the Company's actual activity at the time of grant of the indemnification
undertaking, and to the sum or criterion which the Board of Directors determined to be reasonable in the circumstances, and that the indemnification
undertaking shall state the events which, in the opinion of the Board of Directors, are expected in light of the Company's actual activity
at the time of grant of the indemnification undertaking and the sum or criterion which the Board of Directors determined to be reasonable
in the circumstances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As set forth in clauses 19.1.2-19.1.7;

In any event, the amount of indemnification which the Company shall pay (in addition to sums which shall be received from the insurer, if received, under the insurance purchased by the Company) to all officers of the Company cumulatively shall not exceed 25% of the Company's equity pursuant to its most recent financial statements at the time of actual payment of the indemnification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3 The Company may enter into a contract to insure the liability of an officer of the Company in respect
of an obligation imposed upon the officer and/or in respect of costs expended or which shall be expended by the officer as a result of
an action performed by him in his capacity as an officer of the Company, in any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3.1 Breach of the duty of care to the Company or to another person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3.2 Breach of the duty of loyalty to the Company, provided, however, that the officer acted in good faith
and had reasonable grounds to assume that the action in question would not be detrimental to the interests of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3.3 A financial liability imposed upon him in favor of another person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3.4 A financial liability imposed upon the officer in favor of a party injured by the violation as part of
an administrative enforcement proceeding, as set forth in section 52(54)(a)(1)(a) of the Securities Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3.5 Costs expended or which shall be expended by an officer in connection with an administrative enforcement
proceeding conducted in his case, including reasonable litigation expenses, which include attorney's fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3.6 Costs expended or which shall be expended by an officer in connection with a proceeding conducted in his
case under the Economic Competition Law, 1988 and/or in connection therewith, including reasonable litigation expenses, which include
attorney's fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3.7 Any other obligation or expense in which respect the liability of an officer may be indemnified, at present
and/or in the future, under applicable law as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.4 The Company may engage in a contract to insure the liability of any person, including an officer of the
Company, who holds or held office on behalf of the Company or at its request as a director of another company in which the Company holds
shares, directly or indirectly, or in which the Company has an interest, as a result of liability imposed upon him as set forth in clause
19.3 above and subject to the limitations in clause 20.3 above in connection with an action he performed in his capacity as a director
of such other company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.5 The provisions of this clause 19 above shall not derogate from the Company's right to insure and/or indemnify
any person who is not an officer of the Company, including and without derogating from the generality of the foregoing, any and all employees,
agents, consultants or contractors of the Company who are not officers of the Company; and/or any officer of the Company, to the extent
that such insurance and/or indemnification are permitted by law; all subject to such resolution being approved by the Audit Committee
of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.6 Subject to the provisions of applicable law, the Company may, in advance and in retrospect, exempt an
officer from all or part of his liability for damage caused as a result of the breach of the duty of care to the Company. Notwithstanding
the foregoing, the Company may not exempt a Director in advance from his liability to the Company as a result of the breach of the duty
of care in a distribution or in connection with a resolution or transaction in which the controlling shareholder or any officer of the
Company (including an officer other than the officer being granted the deed of exemption) has a personal interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.  **<u>Auditor</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1 The Annual Meeting shall appoint an auditor for the Company. The auditor shall hold office until the end
of the next Annual Meeting or for a longer period as determined by the Annual Meeting, provided, however, that his term of office shall
not be extended beyond the end of the third Annual Meeting after the Meeting in which he was appointed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.2 The auditor's fee for performing the audit shall be determined by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.  **<u>Signing in the Name of the Company</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.1 The signing rights in the Company's name shall be determined from time to time by the Board of Directors
of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.2 The signatory in the Company's name shall place his signature together with the imprint of the Company's
seal or alongside its printed name.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.  **<u>Dividends and Bonus Shares</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.1 A resolution by the Company to distribute a dividend and/or bonus shares shall be adopted by the Board
of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.2 Shareholders who are entitled to a dividend are the Shareholders on the date of the resolution regarding
the dividend or on a later date, if another date is determined in the resolution on the distribution of the dividend.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.3 Cash dividends and bonus shares shall be paid or distributed, as the case may be, to the holders of the
shares *pro rata* to the par value, the amount paid up or deemed to be paid up on their shares, irrespective of any premium paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.4 Unless determined otherwise by the Board of Directors, all dividends may be paid by cheque or payment
order sent by mail to the address of the Shareholder or of the party entitled thereto, or, in the case of registered joint owners, to
the Shareholder whose name is listed first in the Register of Shareholders with respect to the joint ownership. Any and all such cheques
shall be made to the order of the person to whom they are sent. A receipt from a person who, on the date the dividend was declared, is
registered in the Register of Shareholders as the owner of any share, or, in the case of joint owners, from one of the joint owners, shall
serve as confirmation regarding all payments made in respect of that share and in which respect the receipt was received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.5 For the purpose of performing any and all resolutions pursuant to the provisions of this clause, the Board
of Directors may settle any difficulty that may arise with respect to the distribution of the dividend and/or bonus shares as it deems
fit, including to determine the value of certain assets for the purpose of such distribution and to decide that payments in cash shall
be made to members on the basis of the value so determined, and to determine instructions with respect to share fractions or to the non-payment
of sums below NIS 200.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.6 The Board of Directors may withhold a dividend or bonus shares or other benefit rights relating to a share
in which respect the Company has a lien, and use any such sum or the consideration which shall be received from the sale of any bonus
shares or other benefit rights to clear the debts or liabilities in which respect the Company has a lien.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.7 The Board of Directors may deduct from any dividends or other benefit rights all such sums which the holder
of a share in which respect the dividend is paid or other bonus rights are awarded owes to the Company in respect of such share, whether
or not payment has fallen due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.8 Dividends or other benefit rights in respect of shares shall not bear interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.  **<u>Redeemable Securities</u>** 

The Company may, subject to the law, issue redeemable securities under the terms and conditions determined by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.  **<u>Contributions</u>** 

The Company may contribute a reasonable sum to a worthy cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.  **<u>Accounts</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.1 The Company shall keep books of account and prepare financial statements in accordance with the Securities
Law and all laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.2 The books of account shall be kept in the registered office of the Company or in such other location as
the Directors deem fit, and shall at all times be open for inspection by the Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.  **<u>Notices</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.1 Subject to applicable law, notices or any other documents furnished by the Company, which it is entitled
or required to furnish pursuant to the provisions of these Articles and/or the Companies Law, shall be furnished by the Company by way
of posting on the Company's website, via the Israel Securities Authority's distribution site, or in any other manner determined
by the Board of Directors, which is permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.2 Where a certain number of days' notice is required to be given, or in the case of a notice that is valid
for a certain period, the date of delivery shall be included in the number of days or the period, subject to the provisions of applicable
law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27.  **<u>Approval of a Transaction that is not an Extraordinary Transaction</u>** 

Subject to the provisions of the Companies Law, a transaction between the Company and an officer of the Company and a transaction between the Company and another person, in which an officer of the Company has a personal interest and is not an extraordinary transaction, requires the approval of the Board of Directors or of another party authorized by the Board of Directors for this purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28.  **<u>Modification of the Articles</u>** 

These Articles may be modified by a Shareholder resolution carried by an ordinary majority in the General Meeting.

## Exhibit 99.4

**Exhibit 99.4**

![](image_004.jpg)<br>**CHAPTER A**<br>Board of Directors' Report<br> for the six months<br> ended 30.06.2025<br>

The information contained in these Description of the Corporation`s Business published by the Company constitutes a translation of the Description of the Corporation`s Business published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

![](image_008.jpg)

---

| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

---

| | | |
|:---|:---|:---|
| [1.](#a_001) | [The Board of Directors' Explanations for the State of the Corporation's Affairs](#a_001) | [3](#a_001) |
| [1.1.](#a_002) | [Analysis of results of operations](#a_002) | [3](#a_002) |
| [1.1.1.](#a_003) | [Description of operating segments](#a_003) | [3](#a_003) |
| [1.1.2.](#a_004) | [Business environment](#a_004) | [3](#a_004) |
| [1.1.3.](#a_005) | [Material events during the reporting period](#a_005) | [7](#a_005) |
| [1.1.4.](#a_006) | [Condensed Statements of Consolidated Profit and loss for the three months ending June 30, 2025, and 2024 and the six months ended on those same dates](#a_006) | [8](#a_006) |
| [1.2.](#a_007) | [Analysis of results of operations](#a_007) | [9](#a_007) |
| [1.2.1.](#a_008) | [Seasonality](#a_008) | [9](#a_008) |
| [1.2.2.](#a_009) | [Consolidated analysis of profit and loss](#a_009) | [9](#a_009) |
| [1.2.3.](#a_005) | [Condensed results of consolidated profit and loss according to segmental activity for the three months ended June 30, 2025, and 2024 and the six months ended on those same dates](#a_005) | [16](#a_005) |
| [1.2.4.](#a_011) | [Analysis of results of operations according segment](#a_011) | [19](#a_011) |
| [1.2.5.](#a_012) | [Commitments and special events](#a_012) | [23](#a_012) |
| [1.3.](#a_013) | [Financial position, liquidity, and financing sources](#a_013) | [23](#a_013) |
| [1.3.1.](#a_014) | [Analysis of financial position as of June 30, 2025](#a_014) | [23](#a_014) |
| [1.3.2.](#a_015) | [Condensed statements of cash flow](#a_015) | [25](#a_015) |
| [1.3.3.](#a_016) | [Average short-term credit](#a_016) | [26](#a_016) |
| [1.3.4.](#a_017) | [Disclosure regarding statement of cash flow forecast pursuant to Article 10(B)(1)(d) of the Israel Securities Regulations](#a_017) | [26](#a_017) |
| [1.3.5.](#a_018) | [Summary statements of changes in equity](#a_018) | [27](#a_018) |
| [2.](#a_019) | [Disclosure provisions in connection with the corporation's financial reporting](#a_019) | [28](#a_019) |
| [Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date](#a_020) | [Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date](#a_020) | [29](#a_020) |

---

1. The
 Board of Directors' Explanations for the Corporation's results of operations and financial
 position

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. Analysis
 of results of operations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.1. Description
 of operating segments

Matrix IT Ltd., together with its subsidiaries, is a company operating in the fields of information technology (IT) solutions and services, consulting, and management in Israel and overseas.

The Matrix Group employs approximately 12,000 software, hardware, engineering, integration, and training personnel, who provide services in advanced fields of information and management technology to hundreds of customers in the Israeli market as well as customers in the US market. The Group also engages in the sales and marketing of software and hardware products from a wide range of manufacturers from Israel and overseas, as well as the provision of consulting, project management and multidisciplinary engineering consulting services.

The Company has four<sup>1</sup> areas of activity - (1) Information Technology Solutions and Services ("IT") Consulting and Management in Israel; (2) IT Solutions and Services in the USA; (3) Marketing and Support of Software Products; and (4) Cloud and Computing Infrastructures. The Company provides solutions, services, and products to thousands of customers in the following main sectors ("sectors"): banking and finance, high-tech and startups, government and the public sector, defense, transportation, health, industry, retail and trade, education, and academia. Unique divisions operate in each one of these sectors, specializing in providing specific solutions to the particular sector in which they operate, as well as managing and carrying out projects for the Company's lateral entities. <br> The specialization in the various sectors is reflected in the applicative, professional, and marketing facets of that sector. Accordingly, a professional and marketing infrastructure is developed in each sector which is required to support such sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.2. Business
 environment

The business environment in which the Company operates is directly affected by global and local trends and events, the most significant of which will be presented below. For additional details regarding the Company's business environment, see Section 1.1.2 of the Board of Directors' Report as of 31.12.2024, and Section 6 of the chapter on the Description of the Corporation's Affairs, in the 2024 Periodic Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Global economic
 environment

As of the date of this report, in general, the global economy has continued to stabilize after facing the effects of the increase in inflation rates in recent years, which was followed by rising interest rates during the course of the post-COVID-19 period.

The decrease in inflation in the US market has come to a stop and is currently at 2.7% (June 2025, in annual terms, based on the last 12 months - LTM). At the same time, the US Federal Reserve has maintained the interest rate at 4.5%.

<sup>1</sup> As of the 2024 financial statements, the Company presents the training and implementation activity, which was previously presented as a separate operating segment, as part of the IT, Consulting, and Management Solutions in Israel segment. For further details, see Note 24 to the Consolidated Financial Statements.

Board of Directors' Report 3

The downward trend in inflation has also come to an end in the Eurozone and stands at 2.3% (June 2025 – LTM). The European Central Bank's interest rate, as of the report date, stands at 2.15%, following several interest rate reductions by the European Central Bank.

As of April 2025, the US administration has been implementing a plan to increase tariffs on imports into the US from countries with significant trade surpluses with the US. As a result, several new trade agreements have been signed between the US and various countries around the world. The tariff imposed on imports to the US from Israel stands at 15% (Compare to an almost zero tariff exemption in Israel on goods imported from the US.) In the Company's assessment, the above tariffs are not expected to have a direct impact on the Company's activities.

Despite the downward trend in global inflation in recent years, there are still concerns of further inflationary outbursts and price increases. This is due, *inter alia*, to the imposition of tariffs by the US government and the possibility of the development and/or worsening of geopolitical conflicts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Israel economic
 environment

The main global economic trends described above are reflected, to a considerable extent, in the Israeli economy as well. At the same time, the Israeli economy was impacted in the past two years primarily by unique and complex local events that had a substantial impact, primarily the Iron Swords War and its consequences.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. National Security
 Situation

As of the report date, the Iron Swords War is ongoing. On June 13, 2025, the State of Israel initiated a large-scale military operation on Iran, dubbed "Operation Rising Lion," whose conclusion led to an increase in equity prices on the Tel Aviv Stock Exchange and a significant strengthening of the Israeli shekel's foreign currency exchange rates. (See below for information on the effect of changes in the USD-NIS exchange rate on the Company's results.) At the same time, the conflict resulted in substantial damages, with reconstruction costs estimated at approximately NIS 20 billion, which could increase the deficit.

Accordingly, the Bank of Israel maintained its interest rate unchanged, contrary to expectations prevailing prior to the operation.

As of the reporting date, the majority of hostilities are concentrated in the Gaza Strip. Nevertheless, the continuation of the war, on its various fronts, remains unclear.

The security situation and the uncertainty surrounding it naturally impact on economic activity. International ratings agencies downgraded the State of Israel's sovereign credit rating significantly because of the increased geopolitical risks and the concern over long-term harm to the Israeli economy. Credit ratings are currently: Moody's - Baa1 (negative outlook); S&P - A- (negative outlook). The increased perception of the risk faced by the State of Israel is also expressed in the yield on State of Israel government bonds. Nevertheless, as of the second half of 2024 and as a result of Israel's military successes, signs of improvement in economic indicators have been observed. Thus, despite the many difficulties and challenges facing the business environment, the Israeli economy has demonstrated robustness and resilience.

Board of Directors' Report 4

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Economic Indicators

1) Inflation and interest

It should be noted that even before the outbreak of the war, the Israeli economy faced high inflation and rising interest rates, partly due to domestic policy-related developments and related social unrest. These trends slowed in late 2023 and the first half of 2024. Accordingly, in January 2024, the Bank of Israel lowered the interest rate to 4.5% and this rate remains unchanged as at the reporting date. The CPI increased (June index - LTM) by 3.3%.

The Company estimates that the inflationary impact on the results of its operations is immaterial, *inter alia*, because the Company's financial debt is not linked to the CPI. On the other hand, any rise in interest rates may negatively affect the results of the Company's operations by increasing financial costs for variable-interest loans (commercial securities and short-term bank loans), as well as for new fixed interest loans that will replace loans that come due. In this context, it should also be noted that the main component of the Company's expenses is wages (about 55% of the Company's operating expenses), which, in the Company's assessment, are impacted mainly by trends in supply and demand of technological staffing, and inflation is expected to have a limited effect on them.

2) Real economic activity

Gross domestic product (GDP) grew by 0.9% in 2024, and according to the Finance Ministry forecast, it is expected to grow by 3.1% in 2025. <br> Heavy war-related spending has led to an increase in Israel's trade deficit, which was 5% of GDP in June 2025. Similarly, the unemployment rate in June 2025 was 2.7%, reflecting a tight labor market.

3) Exchange rates

Changes in the US dollar exchange rate (and to a lesser extent, the euro), along with its volatility, affect the Company's results. This is especially true for the Cloud and Computing Infrastructures segment and the Sales, Marketing, and Support of Software Products segment (including cloud, hardware, and software products transactions, some of which are denominated in US dollars), as well as the shekel-denominated results of the IT Solutions segment in the US. The exchange rate also affects translation adjustments of the financial statements of US subsidiaries (which are recorded under the foreign currency translation reserve). In general, an increase in the US dollar exchange rate during a given period has a positive effect on the Company's results, and the opposite is true when the dollar exchange rate falls. The Company occasionally hedges against foreign currency transactions.

During the second quarter (mainly at its end), the US dollar exchange rate against the shekel dropped sharply by about 9.3%, following the conclusion of Operation Rising Lion and its military achievements. Following the shekel's appreciation against the US dollar (and the euro), during the quarter, the Company recorded financial expenses from exchange rate differences (net of gains from hedging transactions) of about NIS 10 million. In addition, the company accounted for an adjustment in the foreign currency translation reserve (net of the impact of hedging activities recorded in the capital reserve) of about NIS 30.5 million, which was recorded under other comprehensive income.

Board of Directors' Report 5

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. The high-tech
 industry

As a provider of IT solutions, products, and services, the Company competes with other companies in the high-tech industry for quality personnel. In addition, a significant part of the Company's revenues (approximately 16% in 2024) derive from companies in the high-tech sector. The past two years have been challenging for the Israeli high-tech sector. This is reflected, inter alia, in a decline in the number of startups and a decrease in demand for technological staffing (with an emphasis on inexperienced employees – juniors).

According to a report by the Israel Innovation Authority from April 2025, in 2024, there has been a decrease (for the first time in a decade) in the number of employees in the high-tech industry in Israel.

In the Company's assessment, the reduction trend in the demand for staffing high-tech companies may make it easier for the Company to recruit and retain employees, and to mitigate the pressure for wage increases on the part of the employees. On the other hand, the uncertainty in the high-tech industry could lead to a decrease in demand and even harm some of the Company's customers in this operating sector and consequently, harm the Company's operating results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Effect on
 the Company's operating results

As at the date of the financial statements and as at the reporting date, approximately 420 and approximately 190 of the Company's employees (respectively) are on active reserve duty.

Notwithstanding the above, as explained below, the Company's operations in the second quarter and first half of 2025 were characterized by continued growth in the volume of the Company's activity and continued improvement of its operating results.

The information mentioned above in this section concerning the Company's assessments as to the impact on the war on its operations, a war that is at its peak and whose full effects and implications have not yet been ascertained, the Company's economic environment, and developments in the high-tech industry, constitutes forward-looking information, as defined in the Securities Law, 1968 (the "Securities Law"). It is based on management's assessments and business experience, as well as assumptions, various scenarios, analyses, and public information, along with the assessments of research companies and analysts as of the report date. The information may not materialize, in whole or in part, or materialize differently, including in a manner that is materially different than expected, inter alia, as a result of high uncertainty, economic instability, and developments that cannot be assessed at this time in connection with the war, its duration, intensity, and impact, including in relation to the functioning of the economy and the home front, as a result of market competition, economic slowdown or instability in the economy, and as a result of the realization of all or part of the risk factors appearing in Section 19 of the Company's Periodic Report.

Board of Directors' Report 6

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.3. Material
 events during the reporting period

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Entering
 into a MOU for a merger with Magic

On March 10, 2025, a memorandum of understanding (MOU) was signed between Matrix IT Ltd. ("Matrix") and Magic Software Enterprises Ltd. ("Magic") for the purpose of negotiating a binding merger agreement, under which Matrix will acquire the entire issued and paid-up share capital of Magic by way of a reverse triangular merger. The considerations to Magic shareholders under the transaction will be in shares of Matrix (hereinafter: the "Magic transaction"). Upon completion of the transaction, Magic will become a private company wholly owned by Matrix.

As Formula Systems (1985) Ltd. is the controlling shareholder in both the Company and Magic, and in light of the materiality of the transaction, the Company's Board of Directors appointed an independent committee that was empowered to examine the engagement in the transaction, to negotiate with Magic regarding the terms of the transaction, to approve the transaction, and to formulate recommendations to the Board with regard thereto. For additional details, see the immediate report dated 11.3.2025 (reference: 2025-01-015939).

As of the report date, the Company is progressing in the process of approving the Magic transaction, and it expects it to be submitted for approval at the general meeting during the fourth quarter of 2025.

Pursuant to generally accepted accounting principles, the transaction will be accounted for using the pooling method rather than the purchase method. Meaning, the Company will consolidate Magic's assets and liabilities in its financial statements at the values recorded in the controlling shareholder's books.

*The Company's assessments regarding the transaction, its consummation, progress, and the timelines set forth above constitute forward-looking statements, as defined in the Israeli Securities Law, 1968. This information may not materialize or may materialize in a manner or at times differing from the Company's assessments, including non-consummation of the merger, inter alia, as a result of factors that are outside of the Company's control, including the failure to enter into a binding agreement, nonfulfillment of the conditions precedent for the completion of the transaction, or the failure to obtain the approvals required to complete the transaction, and/or changes in the state of the capital markets and the markets in which the Company and Magic operate, or as a result of the materialization of one or more of the risk factors set forth in the Company's 2024 annual report.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Acquisition
 of Gav Systems

On February 4, 2025, the Company, through its subsidiary Matrix IT Systems Ltd., completed the acquisition of 70% of the share capital of Gav Systems Ltd. and Gav Expert Ltd. for a total of approximately NIS 45.5 million.

In addition, the sellers were paid a dividend for the accrued earnings up until 31.12.23 in the amount of NIS 29 million. Pursuant to the agreement, the Company and the seller have a mutual option to sell and purchase the seller's remaining shares to the Company. Gav Systems provides professional services, primarily in the fields of computing and software development. Gav Systems' operating results are consolidated in the Company's financial statements (in the IT, Consulting, and Management Solutions in Israel segment) as of the beginning of the first quarter of 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Transaction
 with non-controlling interests

During the first quarter, the Company entered into a mutual put/call options renewal agreement with minority holders in a subsidiary for the sale and acquisition of the minority holder's remaining shares of that subsidiary. The transaction was accounted for directly to equity.

Board of Directors' Report 7

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.4. Condensed
 Statements of Consolidated Profit and loss for the three months ending June 30, 2025, and
 2024 and the six months ended on those same dates (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three<br> months ended | For the three<br> months ended | Change in % | For the six<br> months ended | For the six<br> months ended | Change in % |
| | **30.06.25** | **30.06.24** | | **30.06.25** | **30.06.24** | |
| **Revenues** | 1451379 | 1332732 | 8.9% | 2997579 | 2786445 | 7.6% |
| Cost of revenues<br> and services | 1228682 | 1130946 | 8.6% | 2547822 | 2377516 | 7.2% |
| **Gross profit** | **222697** | **201786** | 10.4% | **449757** | **408929** | 10.0% |
| **% of revenues** | **15.3%** | **15.1%** |  | **15.0%** | **14.7%** |  |
| Selling and marketing expenses | 50052 | 46615 | 7.4% | 104893 | 97663 | 7.4% |
| General and administrative expenses | 45926 | 43916 | 4.6% | 92154 | 89333 | 3.2% |
| **Operating income** | **126719** | **111255** | **13.9%** | **252710** | **221933** | **13.9%** |
| **% of revenues** | **8.7%** | **8.3%** |  | **8.4%** | **8.0%** |  |
| Financial expenses, net | 25382 | 14833 | 71.1% | 44760 | 31419 | 42.5% |
| income before taxes on income | 101337 | 96422 | 5.1% | 207950 | 190514 | 9.2% |
| Taxes on income | 25054 | 23321 | 7.4% | 51084 | 45991 | 11.1% |
| **Net income** | **76283** | **73101** | **4.4%** | **156866** | **144523** | **8.5%** |
| **% of revenues** | **5.3%** | **5.5%** |  | **5.2%** | **5.2%** |  |
| **Net income attributable to** |  |  |  |  |  |  |
| Equity holders of the company | 72918 | 69495 | 4.9% | 148497 | 138141 | 7.5% |
| Non-controlling interests | 3365 | 3606 | (6.7%) | 8369 | 6382 | 31.1% |
| **Net income** | **76283** | **73101** | **4.4%** | **156866** | **144523** | **8.5%** |
| **% of revenues** | **5.3%** | **5.5%** |  | **5.2%** | **5.2%** |  |
| **EBITDA** | **176067** | **154987** | **13.6%** | **351656** | **312471** | **12.5%** |
| **% of revenues** | **12.1%** | **11.6%** |  | **11.7%** | **11.2%** |  |

---

Board of Directors' Report 8

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. Analysis
 of results of operations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.1. Seasonality

The second quarter, similar to the same quarter last year, was affected by the Passover holiday and other holidays. (For details regarding the seasonality - *see also*, Section 9 of the Report on the Corporation's Affairs in the periodic report) Thus, in the second quarter of this year (similar to the same quarter last year), the number of working days was lower compared to the first quarter of 2025. The number of working hours in the second quarter and in the period was higher by 3.5% and 1.7%, respectively, compared to the corresponding periods last year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.2. Consolidated
 analysis of profit and loss

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Revenues** 

The Company's revenues for the quarter totaled NIS 1,451.4 million, compared to NIS 1,332.7 million in the corresponding quarter last year, an increase of about 8.9%. The growth rate in revenues, adjusted for the increase in revenues accounted for on a net basis, is about 13.3%. (See Section E below for details).

The Company's revenues for the period totaled NIS 2,997.6 million, compared to NIS 2,786.4 million in the corresponding period, an increase of about 7.6%. The growth rate in revenues, adjusted for the increase in the volume of revenues accounted for on a net basis, is about 12.2%. (See Section E below for details).

The increase in revenues during the quarter derived from growth in the revenues in the IT Solutions and Services, Consulting, and Management in Israel segment, and the Cloud and Computing Infrastructures segment, offset in part by a decrease in revenues in the Marketing and Support of Software Products segment and in the IT Solutions and Services in the US segment.

The increase in the volume of revenues during the quarter and during the period was impacted by the first-time consolidation of the operating results of companies acquired by the Company - Gav Systems (starting as of the first quarter 2025), Ortec (starting December 2024), and Alacer (starting as of the fourth quarter 2024). Net of the effect of the consolidation of these companies for the first time, the Company recorded organic growth in revenues of approximately 4% and 2.8% during the quarter and during the period, respectively. Organic growth in revenues, after neutralizing the effect of the increase in revenues recorded on a net basis came to 8.4% and 7.5% during the quarter and during the period, respectively.

Board of Directors' Report 9

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Gross profit** 

Gross profit in the quarter amounted to NIS 222.7 million (approximately 15.3% of revenues), compared with NIS 201.8 million in the corresponding quarter (approximately 15.1% of revenues), an increase of approximately 10.4%.

Gross profit during the period amounted to NIS 449.8 million (approximately 15% of revenues), compared with NIS 408.9 million in the corresponding period (approximately 14.7% of revenues), an increase of approximately 10%.<br> The increase in gross profit and its share of total revenues during the quarter and during the period is driven by an increase in revenues and an increase in the Company's profit margin, primarily from the IT Solutions and Services in the US segment and the Marketing and Support of Software Products segment, as well as from operational efficiency measures carried out by the Company.

The impressive growth in gross profit and gross profit margin was achieved despite a one-time gain recorded in the corresponding quarter (which reduced the cost of revenues in that quarter). This gain was from retroactive compensation received from the National Insurance Institute for the social benefits component in the salaries of Company employees called up for reserve duty (about NIS 6 million for 2023 and about NIS 3 million for the first quarter of 2024).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Selling, marketing, general & administrative expenses** 

SG&A expenses in the fourth quarter amounted to NIS 95.9 million (approximately 6.6% of revenues), compared to NIS 90.5 million in the corresponding quarter (approximately 6.8% of total revenues). SG&A expenses during the period amounted to NIS 197 million (approximately 6.6% of revenues), compared to NIS 187 million in the corresponding period (approximately 6.7% of total revenues).

Most of the increase during the quarter and during the period derived from an increase in the volume of activities (including first-time consolidation of subsidiaries during the period), while their percentage of total revenues decreased.

It should be noted that selling expenses include amortization of intangible assets arising from business combinations in the amounts of NIS 7.8 million and NIS 14.6 million during the quarter and during the period, respectively (compared with NIS 5.4 million and NIS 10.9 million in the corresponding periods last year). The increase in the amortization of intangible assets derives from the first-time consolidation of subsidiaries in the fourth quarter of 2024 and the first quarter of 2025, as detailed above.

General and administrative expenses include an amount of NIS 1.4 million and NIS 4.4 million during the quarter and during the period, respectively (compared with NIS 4.5 million and NIS 9 million in the corresponding periods last year) for expenditures for share based payments for officers and executives.

Board of Directors' Report 10

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Operating income** 

Operating income and its percentage of revenues in the quarter amounted to a record NIS 126.7 million (approximately 8.7% of revenues), compared with NIS 111.3 million in the corresponding quarter (approximately 8.3% of revenues), an increase of approximately 13.9%.

Operating income during the period amounted to NIS 252.7 million (approximately 8.4% of revenues), compared with NIS 221.9 million in the corresponding period (approximately 8% of revenues), an increase of approximately 13.9%.

The increase in operating income during the quarter and during the period compared to the corresponding periods is attributed to growth in profit in all segments.

Further to the details provided in the revenues section above.Net of the effect of the consolidation for the first time of Gav, Ortec and Alacer, the Company recorded organic growth in operating income of approximately 9% and 9.3% during the quarter and during the period, respectively.

For the impact of the increase revenues from transactions whose accounted for on a net basis on the operating income margin, see Section E below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Key results of the Company adjusted for the impact of revenue accounted for on a net basis** 

During the second quarter and during the period, the trend from the previous periods continued, with an increase in revenues , which, according to IFRS, must be recognized on a net basis. This affects the Company's revenues, revenue growth rate, and profit margin.

For the sake of comparability, the following analysis presents the Company's revenues and operating income, net of the impact of gross/net revenue presentation.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | Change in % | For the six months ended | For the six months ended | Change in % |
| | **30.06.25** | **30.06.24** | | **30.06.25** | **30.06.24** | |
| Revenues | 1451379 | 1332732 | 8.9% | 2997579 | 2786445 | 7.6% |
| **Adjustments for the increase in revenues accounted for on a net basis** | 58587 |  |  | 129654 |  |  |
| **Adjusted revenues** | **1509966** | **1332732** | **13.3%** | **3127233** | **2786445** | **12.2%** |
| Operating income | 126719 | 111255 | 13.9% | 252710 | 221933 | 13.9% |
| **% of revenues** | **8.4%** | **8.3%** |  | **8.1%** | **8%** |  |

---

Board of Directors' Report 11

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Financial expenses (net)** 

Financial expenses (net) in the quarter amounted to NIS 25.4 million, compared with financial expenses (net) in the amount of NIS 14.8 million in the corresponding quarter last year.

Financial expenses (net) in the period amounted to NIS 44.8 million, compared with financial expenses (net) in the amount of NIS 31.4 million in the corresponding period last year.

The following is a breakdown of financial expenses (net) (NIS thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | Change | For the six months ended | For the six months ended | Change |
| | **30.06.25** | **30.06.24** | | **30.06.25** | **30.06.24** | |
| Interest, commissions, and other (net) | 6207 | 5817 | 390 | 12650 | 13457 | (807) |
| **Exchange rate differences** | 10062 | 2866 | 7196 | 10377 | 5388 | 4989 |
| **Accounting finance expenses\*** | 9113 | 6150 | 2963 | 21733 | 12574 | 9159 |
| **Total financial expenses (net)** | **25382** | **14833** | **10549** | **44760** | **31419** | **13341** |

---

\* Financial expenses in respect of leases, adjustments for put options for non-controlling interests in subsidiaries, and adjustments for actuarial obligations to employees.

As set forth above, the increase in financial expenses in the second quarter compared to the corresponding quarter was driven primarily by higher expenses from exchange rate differences, resulting from a depreciation of about 9.3% in the US dollar exchange rate against the shekel during the quarter. (For additional details, see Section 1.1.2 of this report – Business Environment.)

The increase in financial expenses during the period compared to the corresponding period is due primarily to an increase in accounting financial expenses (deriving from the revaluation of liabilities from the acquisition of subsidiaries that were consolidated for the first time (Gav, Ortec, and Alacer), and by the revaluation of existing put options to minority shareholders derived from the increased profitability in these subsidiaries).

Board of Directors' Report 12

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.** **Taxes on income** 

Tax expenses in the quarter amounted to NIS 25 million (approximately 24.7% of income before tax), compared with NIS 23.3 million in the corresponding quarter of the previous year (approximately 24.2% of income before tax).

Tax expenses in the period amounted to NIS 51 million (approximately 24.6% of income before tax), compared with NIS 46 million in the corresponding period (approximately 24.1% of income before tax).

The increase in tax expenses reflects the increase in profit. The increase in the Company's effective tax rate during the quarter and during the period, compared with the corresponding periods, is mainly due to an increase in non-tax deductible expenses (primarily revaluation of liabilities in respect of business combinations and put options for minority shareholders).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H.** **Net income** 

Net income in the quarter amounted to NIS 76.3 million (approximately 5.3% of revenues), compared with NIS 73.1 million (approximately 5.5% of revenues) in the corresponding quarter, an increase of approximately 4.4%.

Net income in the period amounted to NIS 156.9 million (approximately 5.2% of revenues), compared with NIS 144.5 million (approximately 5.2% of revenues) in the corresponding period, an increase of approximately 8.5%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.** **Net income attributable to Equity holders of the company** 

The net income attributable to Equity holders of the company in the quarter amounted to NIS 72.9 million (about 5% of revenues), compared to NIS 69.5 million (about 5.2% of revenues) in the corresponding quarter, an increase of about 4.9%.

The net income attributable to Equity holders of the company in the period amounted to NIS 148.5 million (about 5% of revenues), compared to NIS 138.1 million (about 5% of revenues) in the corresponding period, an increase of about 7.5%.

Board of Directors' Report 13

**Total Comprehensive income (NIS thousands)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | For the six months ended | For the six months ended |
| | **30.06.25** | **30.06.24** | **30.06.25** | **30.06.24** |
| **Net income** | 76283 | 73101 | 156866 | 144523 |
| **Other comprehensive income (net of tax effects)** |  |  |  |  |
| Actuarial gain (loss) from remeasurement of defined benefit plans | 454 | 1138 | 1789 | 1928 |
| Change in fair value of instruments used in cash flow hedging | (1450) | (272) | (1729) | (195) |
| Adjustments for translation of financial statements | (30474) | 7065 | (23934) | 11894 |
| **Total comprehensive income** | **44813** | **81032** | **132992** | **158150** |

---

As noted above, during the second quarter and the period, the Company recorded other comprehensive loss from translation of financial statements of foreign operations (primarily US subsidiaries), net of hedging activities recorded in equity reserve, amounting to NIS 30 million and NIS 24 million, respectively. This was mainly due to a decline of approximately 9.3% in the U.S. dollar exchange rate against the shekel during the quarter (For additional details, see Section 1.1.2 of this report – Business Environment.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**J**. **income before interest, taxes, depreciation and amortization – EBITDA<br> (NIS thousands)** 

EBITDA figure is presented as it is a widely accepted indicator for measuring performance in comparable companies, and it represents an approximation of cash flows from operating activities, which excludes non-cash operating income and expenses, such as depreciation and amortization, including of intangible assets acquired in business combinations.

Board of Directors' Report 14

**Below are the EBITDA and adjusted EBITDA, net of IFRS 16:**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | Change in % | For the six months ended | For the six months ended | Change in % |
| | **30.06.25** | **30.06.24** | | **30.06.25** | **30.06.24** | |
| **Operating income** | 126719 | 111255 | 13.9% | 252710 | 221933 | 13.9% |
| Depreciation and amortization | 49348 | 43732 | 12.8% | 98946 | 90538 | 9.3% |
| **EBITDA** | **176067** | **154987** | **13.6%** | **351656** | **312471** | **12.5%** |
| % of total **revenues** | 12.1% | 11.6% |  | 11.7% | 11.2% |  |
| Net of depreciation expenses IFRS 16<sup>2</sup> | 33193 | 30521 | 8.8% | 67423 | 63196 | 6.7% |
| **EBITDA net of IFRS 16** | **142874** | **124466** | **14.8%** | **284233** | **249275** | **14%** |
| **% of total revenues** | 9.8% | 9.3% |  | 9.5% | 8.9% |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**K.** **Earnings per share attributable to Company shareholders** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | For the six months ended | For the six months ended |
| | **30.06.25** | **30.06.24** | **30.06.25** | **30.06.24** |
| Basic earnings per share | 1.15 | 1.09 | 2.34 | 2.17 |
| Diluted earnings per share | 1.14 | 1.09 | 2.33 | 2.17 |

---

<sup>2</sup> Pursuant to the IFRS16 - Leases, lease payments are recognized as depreciation and financial expenses. depreciation and lease financial expenses must berecognized, in lieu of rental

Board of Directors' Report 15

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.3. Condensed
 results of consolidated profit and loss according to segmental activity for the three
 months ended June 30, 2025, and 2024 and the six months ended on those same dates
 (NIS thousands)<sup>3</sup>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | Change in- % | For the six<br> months ended | For the six<br> months ended | Change in- % |
| | **30.06.25** | **30.06.24** | | **30.06.25** | **30.06.24** | |
| **Revenues according to operating segment** |  |  |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 920532 | 815553 | 12.9% | 1850063 | 1655282 | 11.8% |
| IT Solutions and Services in the US<sup>(2)</sup> | 114157 | 118795 | (3.9%) | 222996 | 237485 | (6.1%) |
| Marketing and Support of Software Products | 92704 | 121985 | (24.0%) | 181208 | 219336 | (17.4%) |
| Cloud and Computing Infrastructures | 354566 | 324278 | 9.3% | 815114 | 762060 | 7.0% |
| Inter-segmental adjustments | (30580) | (47879) |  | (71802) | (87718) |  |
| **Total revenues** | **1451379** | **1332732** | **8.9%** | **2997579** | **2786445** | **7.6%** |
| **Operating income** |  |  |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 74828 | 65157 | 14.8% | 144967 | 128484 | 12.8% |
| IT Solutions and Services in the US<sup>(2)</sup> | 19129 | 16919 | 13.1% | 34234 | 33888 | 1.0% |
| Marketing and Support of Software Products | 10091 | 8926 | 13.1% | 18551 | 16285 | 13.9% |
| Cloud and Computing Infrastructures | 25352 | 22826 | 11.1% | 61164 | 50456 | 21.2% |
| Inter-segmental adjustments | (2681) | (2573) |  | (6206) | (7180) |  |
| **Operating income** | **126719** | **111255** | **13.9%** | **252710** | **221933** | **13.9%** |

---

<sup>(1)</sup> Including immaterial operations in Europe

<sup>(2)</sup> Including operations in Canada

<sup>3</sup> As of the 2024 financial statements, the Company presents the training and implementation activity, which was presented in the past as a separate operating segment, as part of the IT, Consulting, and Management Solutions in Israel segment. The comparison numbers were adjusted retroactively.

Board of Directors' Report 16

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | For the six<br> months ended | For the six<br> months ended |
| | **30.06.25 - percentage** | **30.06.24 - percentage** | **30.06.25 - percentage** | **30.06.24 - percentage** |
| <br> **Operating income margin** |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 8.1% | 8.0% | 7.8% | 7.8% |
| IT Solutions and Services in the US<sup>(2)</sup> | 16.8% | 14.2% | 15.4% | 14.3% |
| Marketing and Support of Software Products | 10.9% | 7.3% | 10.2% | 7.4% |
| Cloud and Computing Infrastructures | 7.2% | 7.0% | 7.5% | 6.6% |
| **Operating income margin percentages** | **8.7%** | **8.3%** | **8.4%** | **8%** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | For the six<br> months ended | For the six<br> months ended |
| | **30.06.25 - percentage** | **30.06.24 - percentage** | **30.06.25 -**<br> **percentage** | **30.06.24 - percentage** |
| **Revenues according to operating segment** |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 62.1% | 59.1% | 60.3% | 57.6% |
| IT Solutions and Services in the US<sup>(2)</sup> | 7.7% | 8.6% | 7.2% | 8.3% |
| Marketing and Support of Software Products | 6.3% | 8.8% | 5.9% | 7.6% |
| Cloud and Computing Infrastructures | 23.9% | 23.5% | 26.6% | 26.5% |
| **Total revenues in percentages** | **100%** | **100%** | **100%** | **100%** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | For the six<br> months ended | For the six<br> months ended |
| | **30.06.25 - percentage** | **30.06.24 - percentage** | **30.06.25 -<br> percentage** | **30.06.24 - percentage** |
| **Contribution to operating** **income according to operating segments** |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 57.8% | 57.2% | 56% | 56.1% |
| IT Solutions and Services in the US<sup>(2)</sup> | 14.8% | 14.9% | 13.2% | 14.8% |
| Marketing and Support of Software Products | 7.8% | 7.8% | 7.2% | 7.1% |
| Cloud and Computing Infrastructures | 19.6% | 20.1% | 23.6% | 22.0% |
| **Total contribution in percentages** | **100%** | **100%** | **100%** | **100%** |

---

<sup>(1)</sup> Including immaterial operations in Europe

<sup>(2)</sup> Including operations in Canada

Board of Directors' Report 17

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | Change in % | For the six<br> months ended | For the six<br> months ended | Change in % |
| | **30.06.25** | **30.06.24** | | **30.06.25** | **30.06.24** | |
| **Geographic information** |  |  |  |  |  |  |
| **Revenues** |  |  |  |  |  |  |
| Revenues from Israel | 1343191 | 1235112 | 8.8% | 2796267 | 2588724 | 8.0% |
| Revenues from United States | 114157 | 118795 | (3.9%) | 222996 | 237485 | (6.1%) |
| Revenues from Europe | 24611 | 26704 | (7.8%) | 50118 | 47954 | 4.5% |
| Inter-segmental adjustments | (30580) | (47879) |  | (71802) | (87718) |  |
| **Total revenues** | **1451379** | **1332732** | **8.9%** | **2997579** | **2786445** | **7.6%** |
| **Operating income** |  |  |  |  |  |  |
| Operating income from Israel | 108344 | 95159 | 13.9% | 220729 | 191666 | 15.2% |
| Operating income from United States | 19129 | 16919 | 13.1% | 34234 | 33888 | 1.0% |
| Operating income from Europe | 1927 | 1750 | 10% | 3953 | 3559 | 11.1% |
| Inter-segmental adjustment | (2681) | (2573) |  | (6206) | (7180) |  |
| **Total operating income** | **126719** | **111255** | **13.9%** | **252710** | **221933** | **13.9%** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three<br> months ended | For the three<br> months ended | For the six<br> months ended | For the six<br> months ended |
| | **30.06.25 -**<br> **percentage** | **30.06.24 -**<br> **percentage** | **30.06.25 -**<br> **percentage** | **30.06.24 -**<br> **percentage** |
| **Geographical revenue rate** |  |  |  |  |
| Revenues from Israel | 90.6% | 89.5% | 91.1% | 90.1% |
| Revenues from United States | 7.7% | 8.6% | 7.3% | 8.3% |
| Revenues from Europe | 1.7% | 1.9% | 1.6% | 1.6% |
| **Total revenues in percentages** | **100%** | **100%** | **100%** | **100%** |
| **Geographical operating income margin** |  |  |  |  |
| Operating income margin from Israel | 8.1% | 7.7% | 7.9% | 7.4% |
| Operating income margin from the US | 16.8% | 14.2% | 15.4% | 14.3% |
| Operating income margin from Europe | 7.8% | 6.6% | 7.9% | 7.4% |
| **Operating income percentages** | **8.7%** | **8.3%** | **8.4%** | **8%** |
| **Rate of geographical contribution to operating income** |  |  |  |  |
| Operating income from Israel | 83.7% | 83.6% | 85.3% | 83.7% |
| Operating income from the US | 14.8% | 14.9% | 13.2% | 14.8% |
| Operating income from Europe | 1.5% | 1.5% | 1.5% | 1.5% |
| **Total contribution in percentages** | **100%** | **100%** | **100%** | **100%** |

---

Board of Directors' Report 18

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.4. Analysis
 of results of operations according segment

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. IT Solutions
 and Services, Consulting and Management in Israel

Revenues

Revenues of the IT Solutions and Services, Consulting, and Management in Israel segment during the quarter amounted to NIS 920.5 million, compared to NIS 815.5 million in the corresponding quarter last year, an increase of approximately 12.9%.

The segmental revenues for the period totaled NIS 1,850.1 million, compared to NIS 1,655.2 million in the corresponding period last year, an increase of about 11.8%.

Operating income

The operating income in this segment in the quarter amounted to NIS 74.8 million (approximately 8.1% of segmental revenues), compared with NIS 65.1 million in the corresponding quarter (approximately 8% of segmental revenues), an increase of 14.8%.

The segment's operating income in this period amounted to NIS 145 million (7.8% of the segmental revenues), compared to NIS 128.4 million (7.8% of the segmental revenues) in the corresponding period, an increase of 12.8%.

The increase in revenues and operating income of the quarter and of the period compared to the corresponding periods, resulted from the growth in the scale of operations and profitability in the segment's business lines, with an emphasis on data, cyber security, digital operations, core systems, the engineering division, the defense sector, and the financial sector, as well as the first-time consolidation of Gav Systems (as of the Q1 2025). The impressive growth in operating income was achieved despite a one-time gain recorded in the corresponding quarter (which reduced the cost of revenues in that quarter). This gain was from retroactive compensation received from the National Insurance Institute for social benefits component in the salaries of Company employees called up for reserve duty, the majority of which is attributed to this segment. (See additional details in explanations regarding gross profits, above.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. IT Solutions
 and Services in the US

Revenues

Segmental revenues of IT Solutions and Services in the US during the quarter amounted to NIS 114.2 million, compared to NIS 118.8 million in the corresponding quarter, a decrease of approximately 3.9%.

Segmental revenues in this period amounted to NIS 223 million, compared to NIS 237.5 million in the corresponding period, a decrease of 6.1%.

Operating income

The operating income in this segment in the second quarter amounted to NIS 19.1 million (approximately 16.8% of segmental revenues), compared with NIS 16.9 million in the corresponding quarter (approximately 14.2% of segmental revenues), an increase of approximately 13.1%.

Board of Directors' Report 19

The segment's operating income during the period amounted to NIS 34.2 million (approximately 15.4% of segmental revenues), compared with NIS 33.9 million in the corresponding period (approximately 14.3% of segmental revenues), an increase of approximately 1%.

The increase in operating income and improvement in the segment's operating margin for the quarter and the period, compared to the corresponding periods resulted from gradual delivery of new projects secured by the company at the end of 2024 and in the first half of 2025, together with improved resource utilization.

The impact of consolidating Alacer's results for the first time was positive but immaterial.

The improvement in the segment's operating income was partially offset by the depreciation of the US dollar exchange rate against the shekel during the quarter and the period, as described above.

**In order to offset the external effects of fluctuating exchange rates, see an analysis of the segmental results is also presented below in USD** (USD millions):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | % change | For the six<br> months ended | For the six<br> months ended | % change |
| | **30.06.25** | **30.06.24** | | **30.06.25** | **30.06.24** | |
| Revenues | 31.9 | 31.9 |  | 62.0 | 64.3 | (3.6%) |
| Operating income | 5.3 | 4.6 | 16.7% | 9.5 | 9.2 | 3.8% |
| Profit margin (%) | 16.7% | 14.2% |  | 15.4% | 14.3% |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Marketing
 and Support of Software Products

Revenues

Segmental revenues of the Marketing and Support of Software Products segment during the quarter amounted to NIS 92.7 million, compared to NIS 122 million in the corresponding quarter last year, a decrease of approximately 24%.

Segmental revenues in this period amounted to NIS 181.2 million, compared to NIS 219.3 million in the corresponding period last year, a decrease of 17.4%.

Operating income

The operating income in this segment in the second quarter amounted to NIS 10.1 million (approximately 10.9% of segmental revenues), compared with NIS 8.9 million in the corresponding quarter(approximately 7.3% of segmental revenues), an increase of 13.1%.

Board of Directors' Report 20

The segment's operating income in this period amounted to NIS 18.6 million (10.2% of the segmental revenues), compared to NIS 16.3 million (7.4% of the segmental revenues) in the corresponding period, an increase of 13.9%.

The decrease in revenues alongside the increase in operating income and its margin are due to changes in transaction mix in the reported periods compared to corresponding periods. In the corresponding periods last year, several significant distribution transactions were delivered, with high revenue turnover and relatively low profit margins. During the second quarter and the period, the volume of said distribution transactions declined while reseller transactions, which carry a relatively high profit margin, increased.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Cloud and
 Computing Infrastructures

Revenues

Segmental revenues for the quarter amounted to NIS 354.6 million, compared to NIS 324.3 million in the corresponding quarter last year, an increase of approximately 9.3%.

Segmental revenues in this period amounted to NIS 815.1 million, compared to NIS 762.1 million in the corresponding period last year, an increase of 7%.

Operating income

The operating income in this segment in the quarter amounted to NIS 25.4 million (approximately 7.2% of segmental revenues), compared with NIS 22.8 million in the corresponding quarter (approximately 7% of segmental revenues), an increase of 11.1%.

Board of Directors' Report 21

The segment's operating income for the period amounted to NIS 61.2 million (approximately 7.5% of the segmental revenues), compared to NIS 50.5 million (approximately 6.6% of the segmental revenues) for the corresponding period last year, an increase of 21.2%.

The increase in revenues and operating income during the quarter and the period, compared to the corresponding periods is due to an increase in the volumes of operations in the segment, with an emphasis on sales, marketing, and integration of computing systems, and marketing, installation, and support of advanced technology solutions (the subsidiaries RDT and Ortec). The increase in the operating margin is partly due to the continued rise of EDP cloud transactions, whose revenues are accounted for on a net basis, as detailed above, and from transaction mix in the quarter (higher profit margines compared to corresponding periods).

Key segmental results excluding the presentation of revenues on a net basis

The recent trend continued during the quarter and the period, with a further increase in EDP cloud transactions (multi-year cloud service agreements in which the customer commits to a specified term and consumption volume), whose revenues are accounted for on a net basis.

For comparability, and to eliminate the external/accounting effects arising from the increase in revenues accounted for on a net basis, see an analysis of the Company's revenues and operating income excluding this effect.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | % change | For the six<br> months ended | For the six<br> months ended | % change |
| | **30.06.25** | **30.06.24** | | **30.06.25** | **30.06.24** | |
| Revenues | 354566 | 324278 | 9.3% | 815114 | 762060 | 7.0% |
| Adjustments for the increase in revenues accounted for on a net basis | 43503 |  |  | 64218 |  |  |
| **Adjusted revenues** | **398069** | **324278** | **22.8%** | **879332** | **762060** | **15.4%** |
| Operating income | 25352 | 22826 | 11.1% | 61164 | 50456 | 21.2% |
| **% of revenues** | **6.4%** | **7%** |  | **7%** | **6.6%** |  |

---

Board of Directors' Report 22

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.5. Commitments
 and special events

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Dividend
 distribution

---

| | | |
|:---|:---|:---|
| **Date of distribution** | **Dividend per share**<br> (agorot) | **Amount of dividend** <br> (in NIS millions) |
| 15.07.2025 | 89 | 56.6 |
| 08.04.2025 | 82 | 52.2 |
| **Total for H1 2025** | **171** | **108.8** |

---

The Company's dividend policy is a distribution of up to 75% of the net annual income attributable to shareholders. The dividend will be distributed once per quarter subject to the distribution requirements set by applicable law, which are examined by the Board of Directors at any relevant time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Confirmation
 of issuer credit rating

On March 24, 2025, Midroog confirmed an Aa3 issuer and debenture credit rating with a stable outlook and an Aa3 rating with a stable outlook for the Company's (Series B) Debentures and a rating of P-1.il for commercial securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. Financial
 position, liquidity, and financing sources

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.1. Analysis
 of financial position as of June 30, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A**. **Balances of liquid assets and financial indices (NIS thousands)** 

---

| | | | |
|:---|:---|:---|:---|
| | **30.06.2025** | **31.12.2024** | **Change** |
| **Cash and cash equivalents** | 547753 | 668495 | (120742) |
| Short-term credit | (469739) | (470006) | 266 |
| Long-term credit | (329456) | (315098) | (14358) |
| Net debt – short-term and long-term credit, net of cash and cash equivalents | (251442) | (116609) | (134834) |
| Total balance sheet | 4455116 | 4479636 | (24520) |
| Ratio of net financial debt to the total balance sheet | 5.6% | 2.6% |  |
| Current ratio | 1.1 | 1.1 |  |
| Balance of retained earnings | 750131 | 708634 | 41497 |
| Total equity attributable to shareholders | 1095170 | 1088733 | 6437 |
| Ratio of shareholder equity to balance sheet | 24.6% | 24.3% |  |

---

Board of Directors' Report 23

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B**. **Summary of consolidated statements of financial position (NIS thousands)** 

---

| | | | |
|:---|:---|:---|:---|
| | **30.06.2025** | **31.12.2024** | **Change** |
| **Assets:** | | | |
| **Cash and cash equivalents** | 547753 | 668495 | (120742) |
| Trade receivables and unbilled receivables, net | 1876794 | 1926190 | (49396) |
| Inventories | 151127 | 101861 | 49266 |
| Goodwill | 993995 | 955988 | 38007 |
| Intangible assets, net | 96933 | 89893 | 7040 |
| Right-of-use assets | 378615 | 369935 | 8680 |
| All others (property, plant, and equipment, right-of-use assets, etc.) | 409899 | 367274 | 42625 |
| **Total assets** | **4455116** | **4479636** | **(24520)** |
| **Liabilities:** |  |  |  |
| Credit from banks and other credit providers | 798854 | 785079 | 13775 |
| Trade payables | 831976 | 926753 | (94777) |
| Deferred revenues | 480276 | 427786 | 52490 |
| Leasing liabilities | 389940 | 372809 | 17131 |
| Liabilities for options to holders of non-controlling interests and contingent liabilities for business combinations | 167841 | 125687 | 42154 |
| All others | 633202 | 697195 | (63993) |
| **Total liabilities** | **3302089** | **3335309** | **(33220)** |

---

Changes in asset line-items were resulted from a decrease in cash and cash equivalents (primarily payments to suppliers, the acquisition of Gav, and payment of a dividend) as well as a reduction in accounts receivable. These were partly offset by an increase in inventory (mainly from sales transactions of hardware, software, and communication products in the field of AI that were delivered after the reporting date) and in other receivables (presented above under "All others").

The decrease in total liabilities derives mainly by a reduction in trade payables and a decrease in employee and institutional liabilities for salaries and payables (presented above under "All others"). This was offset in part by an increase in deferred revenues.

Board of Directors' Report 24

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.2. Condensed
 statements of cash flow (NIS thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three<br> months ended | For the three<br> months ended | For the six<br> months ended | For the six<br> months ended |
| | **30.06.2025** | **30.06.2024** | **30.06.2025** | **30.06.2024** |
| **Cash flows from operating activities** |  |  |  |  |
| Net income | 76283 | 73101 | 156866 | 144523 |
| Adjustments to profit and loss items | 98621 | 78335 | 195196 | 160952 |
| Changes in assets and liabilities items | (15661) | (42263) | (151577) | (149552) |
| Cash paid and received for interest and taxes, net | (36782) | (13537) | (63351) | <br> (62110) |
| **Net cash provided by operating activities** | **122461** | **95636** | **137134** | **93813** |
| **Cash flow from investment activities** |  |  |  |  |
| Acquisition of property, plant, and equipment | (5733) | (6227) | (15711) | (15811) |
| Acquisition of a subsidiary | - | - | (65362) | - |
| Others (net) | 173 | 582 | 1140 | 1559 |
| **Net cash used for investment activities** | **(5560)** | **(5645)** | **(79933)** | **(14252)** |
| **Cash flows from financing activities** |  |  |  |  |
| Repayment of credit, net | (55919) | (22113) | (77566) | (26095) |
| Distribution of a dividend | (52161) | (80673) | (100438) | (80673) |
| Payment of leasing liabilities | (31244) | (32842) | (58583) | (64354) |
| Dividend distribution to non-controlling interests | (7292) | (16742) | (7835) | (18838) |
| Repayment of debentures |  | - | (33959) | (33959) |
| Repayment of liabilities in respect of business combinations | (1686) | (561) | (3418) | (561) |
| Repayment of liabilities for put options to non-controlling interests | - | (1124) | - | (1124) |
| Acquisition of non-controlling interests | - | (3000) | - | (3499) |
| Payment in respect of long-term loans from banks and credit providers | - | - | 120000 | - |
| **Net cash used for financing activities** | **(148302)** | **(157055)** | **(161799)** | **(229103)** |

---

Board of Directors' Report 25

**Cash flows from operating activities**

During the quarter, the Company recorded a positive cash flow from operating activities amounting to NIS 122.5 million compared with a positive cash flow during the corresponding quarter from operating activities amounting to NIS 95.6 million.

During the period, the Company recorded positive cash flow from operating activities amounting to NIS 137 million compared with a positive cash flow during the corresponding period from operating activities amounting to NIS 93.8 million.

The Company's cash flow from operating activities over the last 12 months (LTM) amounted to NIS 662.5 million, compared to LTM cash flow from operating activities of NIS 543.9 million in the corresponding period last year.

**Cash flows used for investment activities**

The cash flow used in investment activities during the second quarter and during the period amounted to NIS 5.6 million and NIS 79.9 million, respectively. This is compared with a cash flow used in investing activities amounting to NIS 5.6 million and NIS 14.2 million in the corresponding periods last year.

Most of the difference is attributed to the sum of NIS 65.4 million paid in the period for the acquisition of Gav Systems.

**Cash flows used for financing activities**

The cash flow used in financing activities during the period amounted to NIS 161.8 million, compared with NIS 229.1 million in the corresponding period.<br> Most of the difference derived from bank loans in the amount of NIS 120 million, which was partially offset by an increase in net credit repayments to financial institutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.3. Average
 short-term credit\* (NIS thousands)

---

| | | |
|:---|:---|:---|
| | **30.06.2025** | **30.06.2024** |
| **Trade receivables** | 1891337 | 1688114 |
| Trade payables | 834,708 | 667,282 |

---

\* Quarterly average of the last 12 months as at the report date

The Company finances its ongoing operations (including the gap between average customer credit and average supplier credit) using cashflow from operating activities, credit facilities, shareholder's equity, and from outstanding financial liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.4. Disclosure
 regarding statement of cash flow forecast pursuant to Article 10(B)(1)(d) of the Israel Securities
 Regulations (Periodic and Immediate Reports):

As of June 30, 2025, the Company's standalone statements (Solo financial statements) there present a negative working capital. In view of this, the Company's Board of Directors has reviewed the Company's financial indicators, its financial covenants, and the Company's existing and expected cash sources and requirements. Further to said review, the Company's Board of Directors determined that it does not indicate a liquidity problem. In light of the above, the Company is not required to publish a statement of cash flow forecast.

Board of Directors' Report 26

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.5. Summary
 statements of changes in equity (NIS thousands)

---

| | | |
|:---|:---|:---|
| | **For the six months ended** <br> **30.06.2025** | **For the six months ended** <br> **30.06.2024** |
| **Opening balance** | 1144327 | 1107472 |
| **Net income** | 156866 | 144523 |
| **Dividend declared** | (108789) | (132126) |
| **Dividend to non-controlling interests** | (5806) | (8672) |
| **Translation differences** | (25663) | 11699 |
| **Share based payment** | 4406 | 8997 |
| **Transactions with non-controlling interests** | \*(14103) | (25899) |
| **Actuarial earnings in respect of a benefit plan** | 1789 | 1928 |
| **Closing balance** | **1153027** | **1107922** |

---

\* During the first quarter, the Company entered into a mutual put/call options renewal agreement with minority holders in a subsidiary for the sale and acquisition of the minority holder's remaining shares of that subsidiary. The transaction was accounted for directly to equity.

Board of Directors' Report 27

2. Disclosure provisions
 in connection with the corporation's financial reporting

**Goodwill**

The goodwill, as included in the Company's financial statements, is material to the Company's total assets. The goodwill represents the surplus cost of the investment over the total book value in subsidiaries that have been acquired by the Group.

In accordance with generally accepted accounting principles, the Company annually examines the need for impairment. In addition to the annual examination of the need for impairment, during the year, the Company also assesses whether there are indications of impairment.

**August 11, 2025**

Guy Bernstein Chair of the Board of Directors Moti Gutman CEO

Board of Directors' Report 28

**Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date**

**1)** **The following are details regarding the Series B Debentures - NIS thousands** 

---

| | |
|:---|:---|
| **Disclosure item** | **Details regarding the Series B Debentures <sup>(2)</sup>** |
| Date of issue | Initial issue on September 18, 2022; Series expanded on December 4 |
| Total par value on the date of issue<sup>(1)</sup> | 295,249 upon initial issue and 180,366 upon expansion of the series |
| Par value balance as of June 30, 2025 | 339779 |
| Par value balance on the reporting date, revalued according to linkage terms | The series is not linked |
| Value in the financial statements as at June 30, 2025 (amortized cost according to the effective interest method) | 342660 |
| Accrued interest as of June 30, 2025 | 6049 |
| Exchange value as of June 30, 2025 | 341954 |
| Type of interest | Fixed interest at a rate of 4.1% per annum.<br>It should be noted that the trust deed in respect of the Series B Debenture attached to the offer report (the "trust deed") provided mechanisms for adjustment of a change in the annual interest in respect of the Series B Debenture, in the event of non-compliance with the financial covenants or if there is a decrease in the rating of the Series B Debenture. Pursuant to said adjustment mechanisms (cumulatively), the overall rate of interest increments will not exceed 1%. For details, see Sections 5.8 and 5.9 of the trust deed. |
| Dates for payment of principal | The principal of the Series B Debentures shall be due for repayment in fourteen (14) six-monthly installments, made up of thirteen equal payments - each payment is 7.14% of the principal and the last payment being 7.18%, commencing August 1, 2023, through February 1, 2030. |
| Interest payment dates | The interest in respect of the Series B Debenture shall be paid in six-monthly installments, to be paid on February 1 and August 1, commencing February 1, 2023, through February 1, 2030. |

---

Board of Directors' Report 29

---

| | |
|:---|:---|
| **Disclosure item** | **Details regarding the Series B Debentures <sup>(2)</sup>** |
| Principal and interest linkage basis | The Series B Debenture are unlinked (principal and interest) to any linkage base. |
| Is there a right of conversion? | No |
| Early repayment or forced conversion of debentures | The Company shall be entitled to initiate the early repayment of the Series B Debentures, all in accordance with the provisions of Section 6.2 of the trust deed. |
| Guarantee for payment of the Company's obligations pursuant to the trust deed |  |
| As of the report date, is the Company in compliance with all of the conditions and undertakings according to the trust deed? | Yes |
| As of the report date and during the reporting period, were the conditions met that constitute grounds for calling the debentures due immediately? | No |
| Is the Company required by the trustee to perform various actions, including calling meetings of debenture holders? | No |
| Details of guarantees/liens |  |

---

**2)** **Details regarding the trustee for the Series B Debentures**

<u>Trustee name</u> <u>Reznick Paz Nevo Trustees Ltd.</u> <br> <u>Debenture administrator</u> <u>Shani Krasnoshansky</u> <br> <u>Contact information</u> <u>14 Yad Harutzim St., Tel Aviv <br> (Tel: 03-689200 Fax: 03-6389222)<br> email: Shani@rpn.co.il</u>

**3)** **Details about the Series B Debentures' rating**

---

| | |
|:---|:---|
| Name of rating company as of the report date | Midroog Ltd. ("Midroog") |
| Rating at the date of issue: | Aa3 with a stable outlook |
| Rating on the report date | Unchanged<br> For the up-to-date rating, see Immediate Report published by the Company on 24.03.2025<br> (ref. 2025-01-019742) |

---

<sup>(1)</sup> On September 14, 2022, the Company published a shelf offering report (ref.: 2022-01-117502) (the "offer report") in which the Company issued in an initial public offering a total of NIS 295,249 thousand par value of Series B Company Debentures. In addition, on December 4, 2022, the Company issued Series B Debentures by way of an expansion of the series, for a net amount of NIS 178,000 thousand.

<sup>(2)</sup> As at the report date, in accordance with the provisions of the Securities Regulations, § 10(b)(13)(a), the Company considers the Series B Debentures to be a significant series.

Board of Directors' Report 30

**4)** **Financial covenants – Series B Debentures**

The table below sets forth the various covenants that the Company undertook with respect to debenture holders and the calculation of their results as of June 30, 2024, as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Security** | **Balance of nominal value of the security in circulation as at June 30, 2025** | **Balance of nominal value of the security in circulation immediately prior to the report date** | **Financial covenant** | **Actual covenant as of June 30, 2025** |
| Series B Debentures | 339779 | 305820 | Ratio of consolidated net financial debt (as defined in the trust deed) to total balance sheet must not exceed 45% | 5.6% |
| Series B Debentures | 339779 | 305820 | Ratio of consolidated net financial debt (as defined in the trust deed) to adjusted EBITDA (as defined in the trust deed) shall not exceed 5 | 0.35 |
| Series B Debentures | 339779 | 305820 | Shareholder equity (as defined in the trust deed) is minimal, must be no less than NIS 275,000 thousand | 1153027 |

---

Board of Directors' Report 31

![](image_004.jpg)<br>**CHAPTER B**<br>Interim Consolidated Financial Statements<br> as at June 30, 2025<br> Unaudited<br>

The information contained in these Financial Statements published by the Company constitutes a convenience translation of the Financial Statements published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only**.**

**<br>![](image_008.jpg)**

<br> ---

| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

---

| | |
|:---|:---|
| [Review Report of the Independent Auditor to the Shareholders of Matrix IT Ltd.](#a_021) | [3](#a_021) |
| [Consolidated Statements of Financial Position](#a_022) | [4](#a_022) |
| [Consolidated Statements of Profit and Loss and Other Comprehensive Income](#a_023) | [6](#a_023) |
| [Consolidated Statements of Changes in Equity Unaudited](#a_024) | [7](#a_024) |
| [Consolidated Statements of Cash Flows](#a_025) | [12](#a_025) |
| [Notes to the Interim Consolidated Financial Statements](#a_026) | [15](#a_026) |

---

![](image_011.jpg)

To

The Shareholders of

<u>Matrix IT Ltd.</u>

Ladies and gentlemen,

Review Report of the Independent Auditor to the Shareholders of Matrix IT Ltd.

**Introduction**

We have reviewed the accompanying interim financial information of Matrix IT Ltd. and its subsidiaries (the "**Group**"), that includes the condensed interim consolidated statement of financial position as at June 30, 2025, and the related condensed interim consolidated statements of profit and loss and other comprehensive income, changes in equity, and cash flows for the six and three month periods then ended. The Board of Directors and management are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 "Interim Financial Reporting" and they are also responsible for the preparation of this interim financial information in accordance with Chapter D of Securities Regulations (Periodic and Immediate Reports) - 1970. Our responsibility is to express a conclusion on this interim financial information based on our review.

**Scope of Review**

We conducted our review in accordance with Review Standard (Israel) 2410 of the Institute of Certified Public Accountants in Israel "Review of Interim Financial Information Performed by the Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially smaller in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

**Conclusion**

Based on our review, nothing has come to our attention that causes us to believe that the abovementioned financial information is not prepared, in all material respects, in accordance with IAS 34.

In addition to the statements in the previous paragraph, based on our review, nothing has come to our attention that causes us to believe that the abovementioned financial information does not comply, in all material respects, with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports) - 1970.

Tel Aviv, Israel Zif Haft <br> August 11, 2025 Certified Public Accountants (Isr.) - BDO Member Firm

Interim Consolidated Financial Statements 3

Consolidated Statements of Financial Position

(NIS thousands)<br>

---

| | | | |
|:---|:---|:---|:---|
| | As at<br> June 30,<br>**2025** | As at<br> June 30,<br>**2024** | As at<br> December 31,<br>**2024** |
| | Unaudited | Unaudited | Audited |
| **Current assets** |  |  |  |
| Cash and cash equivalents | 547753 | 498400 | 668495 |
| Trade receivables and unbilled receivables, net | 1876794 | 1666154 | 1926190 |
| Income tax receivable | 33917 | 43362 | 53567 |
| Other accounts receivable | 152864 | 138349 | 122273 |
| Inventories | 151127 | 107220 | 101861 |
|  | **2762455** | **2453485** | **2872386** |
| **Non-current assets** |  |  |  |
| Investment in a financial asset measured at fair value through profit and loss | 14512 | 17146 | 17146 |
| Prepaid expenses | 55565 | 41225 | 30203 |
| Right-of-use assets | 378615 | 215918 | 369935 |
| Property, plant, and equipment | 101022 | 93396 | 101616 |
| Goodwill | 993995 | 926199 | 955988 |
| Intangible assets | 96933 | 87524 | 89893 |
| Deferred taxes | 52019 | \*44,830 | 42469 |
|  | **1692661** | **1426238** | **1607250** |
|  | **4455116** | **3879723** | **4479636** |

---

\* Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity.

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

Interim Consolidated Financial Statements 4

Consolidated Statements of Financial Position

(NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | As at<br> June 30,<br>**2025** | As at<br> June 30,<br>**2024** | As at<br> December 31,<br>**2024** |
|  | Unaudited | Unaudited | Audited |
| &nbsp;&nbsp;**Current liabilities** |  |  |  |
| &nbsp;&nbsp;Credit from banks and other credit providers | 389443 | 442813 | 388640 |
| &nbsp;&nbsp;Current maturities of debentures | 79955 | 82698 | 81341 |
| &nbsp;&nbsp;Current maturities of lease liabilities | 117648 | 105678 | 115574 |
| &nbsp;&nbsp;Trade payables | 831976 | 580187 | 926753 |
| &nbsp;&nbsp;Income tax payable | 6908 | 11759 | 21063 |
| &nbsp;&nbsp;Other accounts payable | 104555 | 98485 | 133631 |
| &nbsp;&nbsp;Employees and payroll accruals | 480338 | 438931 | 510995 |
| &nbsp;&nbsp;Liabilities in respect of business combinations | 7383 | 469 | 10244 |
| &nbsp;&nbsp;Put options for non-controlling interests | 88026 | 79272 | 82308 |
| &nbsp;&nbsp;Deferred revenues | 424058 | 326721 | 382119 |
|  | **2530290** | **2167013** | **2652668** |
| &nbsp;&nbsp;**Non-current liabilities** |  |  |  |
| &nbsp;&nbsp;Loans from banks and other lenders | 66751 | 42611 | 19671 |
| &nbsp;&nbsp;Debentures | 262705 | 327917 | 295427 |
| &nbsp;&nbsp;Deferred revenues | 56218 | 64194 | 45667 |
| &nbsp;&nbsp;Put options for non-controlling interests | 62984 | 25991 | 24764 |
| &nbsp;&nbsp;Lease liabilities | 272292 | 111057 | 257235 |
| &nbsp;&nbsp;Deferred taxes | 29453 | \*25,013 | 23871 |
| &nbsp;&nbsp;Liabilities in respect of business combinations | 9448 | - | 8371 |
| &nbsp;&nbsp;Employee benefit liabilities | 11948 | 8005 | 7635 |
|  | **771799** | **604788** | **682641** |
| &nbsp;&nbsp;**Equity attributable to Company shareholders** |  |  |  |
| &nbsp;&nbsp;Share capital and capital reserves | 345039 | 384663 | 380099 |
| &nbsp;&nbsp;Retained earnings | 750131 | 673924 | 708634 |
|  | **1095170** | **1058587** | **1088733** |
| &nbsp;&nbsp;**Non-controlling interests** | **57857** | **49335** | **55594** |
| &nbsp;&nbsp;**Total equity** | **1153027** | **1107922** | **1144327** |
|  | **4455116** | **3879723** | **4479636** |

---

\* Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity.

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

August 11, 2025       <br> Date of approval of the financial statements Guy Bernstein Chair of the Board of Directors Moti Gutman CEO Nevo Brenner CFO

Interim Consolidated Financial Statements 5

Consolidated Statements of Profit and Loss and Other Comprehensive Income **-** (NIS thousands)<br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | For the six<br> months ended<br> June 30, | For the six<br> months ended<br> June 30, | For the three <br> months ended<br> June 30, | For the three<br> months ended <br> June 30, | For the<br> year ended<br> December 31, |
|  | **2025** | **2024** | **2025** | **2024** | **2024** |
|  | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| Revenues | 2997579 | 2786445 | 1451379 | 1332732 | 5579538 |
| Cost of sales and services | 2547822 | 2377516 | 1228682 | 1130946 | 4746544 |
| Gross profit | 449757 | 408929 | 222697 | 201786 | 832994 |
| Selling and marketing expenses | 104893 | 97663 | 50052 | 46615 | 196231 |
| General and administrative expenses | 92154 | 89333 | 45926 | 43916 | 186689 |
| Operating income | 252710 | 221933 | 126719 | 111255 | 450074 |
| Financial expenses | 55369 | 42388 | 30071 | 20898 | 86956 |
| Financial income | 10609 | 10969 | 4689 | 6065 | 20084 |
| Income before taxes on income | 207950 | 190514 | 101337 | 96422 | 383202 |
| Taxes on income | 51084 | 45991 | 25054 | 23321 | 94978 |
| **Net income** | **156866** | **144523** | **76283** | **73101** | **288224** |
| Other comprehensive income (net of tax effects) |  |  |  |  |  |
| **Amounts that will not be subsequently reclassified to profit or loss** |  |  |  |  |  |
| Gain from remeasurement of defined benefit plans | 1789 | 1928 | 454 | 1138 | 2722 |
| **Amounts that will be, or that have been, reclassified to profit or loss if specific conditions are met** |  |  |  |  |  |
| Adjustments for translation of financial statements | (23934) | 11894 | (30474) | 7065 | (1140) |
| Change in fair value of instruments used in cash flow hedging | (1729) | (195) | (1450) | (272) | (4) |
| **Total comprehensive income** | **132992** | **158150** | **44813** | **81032** | **289802** |
| Net earnings attributable to: |  |  |  |  |  |
| Company shareholders | 148497 | 138141 | 72918 | 69495 | 272422 |
| Non-controlling interests | 8369 | 6382 | 3365 | 3606 | 15802 |
|  | **156866** | **144523** | **76283** | **73101** | **288224** |
| Total comprehensive income attributable to: |  |  |  |  |  |
| Company shareholders | 124923 | 151616 | 41777 | 77570 | 273804 |
| Non-controlling interests | 8069 | 6534 | 3036 | 3462 | 15998 |
|  | **132992** | **158150** | **44813** | **81032** | **289802** |
| **Net earnings per share attributable to the Company's shareholders (NIS)** |  |  |  |  |  |
| Basic net income | 2.34 | 2.17 | 1.15 | 1.09 | 4.29 |
| Diluted net income | 2.33 | 2.17 | 1.14 | 1.09 | 4.29 |

---

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

Interim Consolidated Financial Statements 6

Consolidated Statements of Changes in Equity<br> Unaudited (NIS thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share capital** | **Share premium** | **Treasury shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share-based payment and transactions with non-controlling interests** | **Retained earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | &nbsp;&nbsp;**Total**<br> **Equity** |
| **Balance at January 1, 2025 (audited)** | 68255 | 309447 | (7982) | (9675) | 10186 | 9868 | 708634 | 1088733 | 55594 | 1144327 |
| Net income | - | - | - | - | - | - | 497148 | 148497 | 8369 | 156866 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | (25363) | - | - | - | (25363) | (300) | (25663) |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 1789 | 1789 | - | 1789 |
| Total other comprehensive income | - | - | - | (25363) | - | - | 1789 | (23574) | (300) | (23874) |
| Total comprehensive income | - |  | - | (25363) | - | - | 150286 | 124923 | 8069 | 132992 |
| Exercise of employee options | 254 | 18188 | - | - | - | (18442) | - | - | - | - |
| Dividend declared | - | - | - | - | - | - | (108789) | (108789) | - | (108789) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (5806) | (5806) |
| Transactions with non-controlling interests | - | - | - | - | - | (14103) | - | (14103) | - | (14103) |
| Share-based payment | - | - | - | - | - | 4406 | - | 4406 | - | 4406 |
| **Balance at June 30, 2025** | **68509** | **327635** | **(7982)** | **(35038)** | **10186** | **(18271)** | **750131** | **1095170** | **57857** | **1153027** |

---

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

Interim Consolidated Financial Statements 7

Consolidated Statements of Changes in Equity<br> Unaudited (NIS thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share** <br> **capital** | **Share premium** | **Treasury**<br> **shares** | **Reserve for adjustments<br> arising from <br> translation of <br> financial <br> statements of <br> foreign operations<br> and cash flow<br> hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share-based payment and transactions with non-controlling interests** | **Retained**<br> **earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total**<br> **Equity** |
| **Balance as at January 1, 2024 (audited)** | 68255 | 309447 | (7982) | (8335) | 10186 | 11035 | 665981 | 1048587 | 58885 | 1107472 |
| Net income | - | - | - | - | - | - | 138141 | 138141 | 6382 | 144523 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | 11547 | - | - | - | 11547 | 152 | 11699 |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 1928 | 1928 | - | 1928 |
| Total other comprehensive income | - | - | - | 11547 | - | - | 1928 | 13475 | 152 | 13627 |
| Total comprehensive income | - | - | - | 11547 | - | - | 140069 | 151616 | 6534 | 158150 |
| Dividend declared | - | - | - | - | - | - | (132126) | (132126) | - | (132126) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (8672) | (8672) |
| Transactions with non-controlling interests | - | - | - | - | - | (18487) | - | (18487) | (7412) | (25899) |
| Share-based payment | - | - | - | - | - | 8997 | - | 8997 | - | 8997 |
| **Balance at June 30, 2024** | **68255** | **309447** | **(7982)** | **3212** | **10186** | **1545** | **673924** | **1058587** | **49335** | **1107922** |

---

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

Interim Consolidated Financial Statements 8

Consolidated Statements of Changes in Equity<br> Unaudited (NIS thousands)<br>

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share** <br> **capital** | **Share premium** | **Treasury shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations <br> and cash flow hedge** | **Reserve for transactions between a corporation<br> and a controlling shareholder** | **Reserve for <br> share-based <br> payment and transactions<br> with non-<br> controlling<br> interests** | **Retained**<br> **earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total**<br> **Equity** |
| **Balance at April 1, 2025** | 68494 | 326638 | (7982) | (3443) | 10186 | (18644) | 733387 | 1108636 | 60627 | 1169263 |
| Net income | - | - | - | - | - | - | 72918 | 72918 | 3365 | 76283 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | (31595)<br>| - | - | - | (31595)<br>| (329)<br>| (31924)<br>|
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 454 | 454 | - | 454 |
| Total other comprehensive income | - | - | - | (31595) | - | - | 454 | (31141) | (329) | (31470) |
| Total comprehensive income | - | - | - | (31595) | - | - | 73372 | 41777 | 3036 | 44813 |
| Exercise of employee options | 15 | 997 | - | - | - | (1012) | - | - | - | - |
| Dividend declared |  |  |  |  |  |  | (56628) |  |  |  |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (5806)<br>| (5806)<br>|
| Share-based payment | - | - | - | - | - | 1385 | - | 1385 | - | 1385 |
| **Balance at June 30, 2025** | **68509** | **327635** | **(7982)** | **(35038)** | **10186** | **(18271)** | **750131** | **1095170** | **57857** | **1153027** |

---

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

Interim Consolidated Financial Statements 9

Consolidated Statements of Changes in Equity<br> Unaudited (NIS Thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share capital** | **Share premium** | **Treasury shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cashflow hedge** | **Retained earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total**<br> **Equity** |
| **Balance at April 1, 2024** | 68255 | 309447 | (7982) | (3725) | 10186 | (1572) | 654744 | 1029353 | 54057 | 1083410 |
| Net income | - | - | - | - | - | - | 69495 | 69495 | 3606 | 73101 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | 6937<br>| - | - | - | 6937<br>| (144)<br>| 6793<br>|
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 1138<br>| 1138<br>| -<br>| 1138<br>|
| Total other comprehensive income | - | - | - | 6937 | - | - | 1138 | 8075 | (144) | 7931 |
| Total comprehensive income | - | - | - | 6937 | - | - | 70633 | 77570 | 3462 | 81032 |
| Transactions with non-controlling interests | - | - | - | - | - | (1392) | - | (1392) | (1608) | (3000) |
| Dividend declared | - | - | - | - | - | - | (51453) | (51453) | - | (51453) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | -<br>| (6576)<br>| (6576)<br>|
| Share-based payment | - | - | - | - | - | 4509 | - | 4509 | - | 4509 |
| **Balance at June 30, 2024** | **68255** | **309447** | **(7982)** | **3212** | **10186** | **1545** | **673924** | **1058587** | **49335** | **1107922** |

---

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

Interim Consolidated Financial Statements 10

Consolidated Statements of Changes in Equity<br> Unaudited (NIS thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share** <br> **capital** | **Share premium** | **Treasury**<br> **shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share-based payment and transactions with non-controlling interests** | **Retained**<br> **earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total**<br> **equity** |
| **Balance at January 1, 2024** | 68255 | 309447 | (7982) | (8335) | 10186 | 11035 | 665981 | 1048587 | 58885 | 1107472 |
| Net income | - | - | - | - | - | - | 272422 | 272422 | 15802 | 288224 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | (1340) | - | - | - | (1340) | 196 | (1144) |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 2722 | 2722 | - | 2722 |
| Total other comprehensive income | - | - | - | (1340) | - | - | 2722 | 1382 | 196 | 1578 |
| Total comprehensive income | - | - | - | (1340) | - | - | 275144 | 273804 | 15998 | 289802 |
| Non-controlling interests in a company that was consolidated for the first time | - | - | - | - | - | - | - | - | 950 | 950 |
| Dividend declared | - | - | - | - | - | - | (232491) | (232491) | - | (232491) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (13133) | (13133) |
| Transactions with non-controlling interests | - | - | - | - | - | (19193) | - | (19193) | (7106) | (26299) |
| Share-based payment | - | - | - | - | - | 18026 | - | 18026 | - | 18026 |
| **Balance at December 31, 2024** | **68255** | **309447** | **(7982)** | **(9675)** | **10186** | **9868** | **708634** | **1088733** | **55594** | **1144327** |

---

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

Interim Consolidated Financial Statements 11

Consolidated Statements of Cash Flows<br> (NIS thousands)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | For the six<br> months ended<br> June 30, | For the six<br> months ended<br> June 30, | For the three<br> months ended<br> June 30, | For the three<br> months ended<br> June 30, | For the<br> year ended <br> December 31, |
|  | **2025** | **2024** | **2025** | **2024** | **2024** |
|  | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| **Cash flows from operating activities** |  |  |  |  |  |
| **Net income** | **156866** | **144523** | **76283** | **73101** | **288224** |
| Adjustments required to reconcile net income to net cash (used in) provided by operating activities: |  |  |  |  |  |
| **Adjustments to profit and loss items** |  |  |  |  |  |
| Depreciation and amortization | 98946 | 90538 | 49348 | 43732 | 186811 |
| Taxes on income | 51084 | 45991 | 25054 | 23321 | 94978 |
| Change in liabilities for employee benefits | 4224 | 1404 | 1088 | 909 | 1553 |
| Other financial expenses, net | 27398 | 11199 | 17715 | 4993 | 27619 |
| Revaluation of long-term bank loans | 670 | (205) | (134) | (97) | (392) |
| Revaluation of liabilities in respect of business combinations | 1634 | (2741) | 785 | (2741) | (1741) |
| Capital gain from disposal of property, plant, and equipment | (596) | (248) | (93) | (196) | (301) |
| Share-based payment | 4406 | 8997 | 1385 | 4509 | 18026 |
| Revaluation of liabilities for put options for non-controlling interests | 7430 | 6017 | 3473 | 3905 | 15321 |
|  | **195196** | **160952** | **98621** | **78335** | **341874** |
| **Changes in assets and liabilities items** |  |  |  |  |  |
| Increase (decrease) in trade receivables | 121144 | 16250 | 127403 | 63923 | (245505) |
| Decrease (increase) in other receivables and prepaid expenses | (58052) | (44427) | 35326 | (8112) | (15712) |
| Decrease (increase) in inventories | (47865) | 38869 | (61810) | 12972 | 44413 |
| Increase (decrease) in trade payables | (124505) | (207343) | (50144) | (75628) | 140568 |
| Increase (decrease) in employees and institutions, deferred revenues, and other accounts payable | (42299) | 47099 | (66436) | (35418) | 188813 |
|  | **(151577)** | **(149552)** | **(15661)** | **(42263)** | **112577** |
| **Cash paid and received over the course of the period for** |  |  |  |  |  |
| Interest paid | (25099) | (26207) | (6592) | (8926) | (49375) |
| Interest received | 10609 | 10969 | 4689 | 6065 | 20084 |
| Taxes paid | (69015) | (71722) | (39237) | (27568) | (124758) |
| Taxes received | 20154 | 24850 | 4358 | 16892 | 30595 |
|  | **(63351)** | **(62110)** | **(36782)** | **(13537)** | **(123454)** |
| **Net cash provided by operating activities** | **137134** | **93813** | **122461** | **95636** | **619221** |

---

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

Interim Consolidated Financial Statements 12

Consolidated Statements of Cash Flows<br> (NIS thousands)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | For the six months ended<br> June 30, | For the six months ended<br> June 30, | For the three months ended<br> June 30, | For the three months ended<br> June 30, | For the<br> year ended<br> December 31, |
|  | **2025** | **2024** | **2025** | **2024** | **2024** |
|  | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| **Cash flows from investment activities** |  |  |  |  |  |
| Proceeds from sale of property, plant, and equipment | 1140 | 1559 | 173 | 582 | 1936 |
| Acquisition of property, plant, and equipment | (15711) | (15811) | (5733) | (6227) | (41541) |
| Acquisition of subsidiaries consolidated for the first time (a) | (65362) | - | - | - | (17321) |
| **Net cash from used in investment activities** | **(79933)** | **(14252)** | **(5560)** | **(5645)** | **(56926)** |
| **Cash flows from financial activities** |  |  |  |  |  |
| Short-term credit from banks and other credit providers, net | - | 63234 | (11021) | 22594 | (24019) |
| Receipt from the issuing of commercial securities (NAAM) | - | - | - | - | 100000 |
| Repayment of long-term loans from banks and credit providers | (77566)<br>| (89329)<br>| (44898)<br>| (44707)<br>| (179003) |
| Dividend distribution | (100438) | (80673) | (52161) | (80673) | (184214) |
| Payment in respect of long-term loans from banks and credit providers | 120000 | - | - | - | - |
| Repayment of liabilities in respect of business combinations | (3418) | (561) | (1686) | (561) | (11561) |
| Repayment of lease liabilities | (58583) | (64354) | (31244) | (32842) | (129435) |
| Dividend distribution to non-controlling interests | (7835) | (18838) | (7292) | (16742) | (30271) |
| Repayment of liabilities for put options to non-controlling interests | - | (1124)<br>| - | (1124)<br>| (1124) |
| Acquisition of non-controlling interests | - | (3499) | - | (3000) | (3899) |
| Repayment of debentures | (33959) | (33959) | - | - | (67918) |
| **Net cash used in financial activities** | **(161799)** | **(229103)** | **(148302)** | **(157055)** | **(531444)** |
| **Translation differences for cash and cash equivalent balances** | **(16144)**<br>| **7734**<br>| **(20819)**<br>| **4631**<br>| **(2564)** |
| **Increase (decrease) in cash and cash equivalents** | (120742) | (141808) | (52220) | (62433) | 28287 |
| **Balance of cash and cash equivalents at the beginning of the period** | **668495** | **640208** | **599973** | **560833** | **640208** |
| **Balance of cash and cash equivalents at end of the period** | **547753** | **498400** | **547753** | **498400** | **668495** |

---

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

Interim Consolidated Financial Statements 13

Consolidated Statements of Cash Flows<br> (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | For the six<br> months ended June 30, | For the six<br> months ended June 30, | For the three<br> months ended<br> June 30, | For the three<br> months ended<br> June 30, | For the<br> year ended <br> December 31, |
|  | | **2025** | **2024** | **2025** | **2024** | **2024** |
|  | | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| **(a)** | **Acquisition of subsidiaries consolidated for the first time** |  |  |  |  |  |
|  | The subsidiaries' assets and liabilities at date of acquisition: |  |  |  |  |  |
|  | Working capital (other than cash and cash equivalents) | (11991) | - | - | - | 663 |
|  | Property, plant, and equipment | (1322) | - | - | - | (270) |
|  | Income tax receivable | (3255) | - | - | - | - |
|  | Deferred tax | (3289) | - | - | - | (155) |
|  | Inventories | (1401) | - | - | - | (185) |
|  | Goodwill | (55537) | - | - | - | (36038) |
|  | Intangible assets | (21666) | - | - | - | (13656) |
|  | Employee benefit liabilities | 2414 | - | - | - | - |
|  | Provision for tax | 4983 | - | - | - | 3224 |
|  | Liabilities for options to holders of non-controlling interests | <br> 25702 |  |  |  | - |
|  | Non-controlling interests | - | - | - | - | 950 |
|  | Liabilities in respect of business combinations | - | - | - | - | 28146 |
|  |  | **(65362)** | **-** | **-** | **-** | **(17321)** |
| **(b)** | **Significant non-cash transactions** |  |  |  |  |  |
|  | Distribution of dividend declared and not yet paid | 56628 | 51453 | 56628 | 51453 | 48277 |
|  | Right-of-use asset recognized with corresponding lease liability | 76164 | 65143 | 24003 | 18767 | 286695 |
|  | Issuing call options to non-controlling interests | - | 22400 | - | - | 22400 |

---

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

Interim Consolidated Financial Statements 14

Notes to the Interim Consolidated Financial Statements

---

| | |
|:---|:---|
| **Note 1** | **General** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Matrix
 IT Ltd. (the "Company") was incorporated in Israel on September 12, 1989,
 and started its business operations on that day. The Company provides advanced IT services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. These
 financial statements have been prepared in condensed format as at June 30, 2025, and
 for the six and three month periods then ended (the "Consolidated Interim Financial
 Statements"). The condensed consolidated financial statements of the Group as at June 30,
 2025 include those of the Company and its subsidiaries (the "Group") and the
 Group's interests in associates and joint arrangements. The financial statements should
 be read in the context of the Company's annual financial statements as at December 31,
 2024, and for the year then ended and their accompanying notes (the "Consolidated Annual
 Financial Statements").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The Company
 is a direct subsidiary of Formula Systems (1985) Ltd. ("Formula Systems"), which
 is controlled by Asseco Poland SA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The Company's
 shares are listed on the Tel Aviv Stock Exchange.

---

| | |
|:---|:---|
| **Note 2** | **Significant Accounting Policies** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **-Preparation format of the Consolidated Interim Financial Statements** 

The Consolidated Interim Financial Statements have been prepared in accordance with IAS 34, Interim Financial Reporting, and in accordance with the disclosure requirements of Chapter D of the Israel Securities Regulations (Periodic and Immediate Reports), 1970.

The accounting policy applied in the preparation of the Consolidated Interim Financial Statements is consistent with that applied in the preparation of the Consolidated Annual Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Below is information about changes in the CPI and relevant exchange rates** 

---

| | | | |
|:---|:---|:---|:---|
| | As at<br> 30.06.25 | As at<br> 30.06.24 | As at<br> 31.12.24 |
| **Consumer price index (2020 basis)** |  |  |  |
| Israel (index basis) | 117.3 | 113.5 | 114.8 |
| In Israel (known index) | 102.8 | 113.4 | 115.11 |
| **NIS exchange rate** |  |  |  |
| USD | 3.37 | 3.76 | 3.65 |
| EUR | 3.96 | 4.02 | 3.80 |

---

Interim Consolidated Financial Statements 15

Notes to the Interim Consolidated Financial Statements

---

| | |
|:---|:---|
| **Note 2** | **Significant Accounting Policies (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Below is information about changes in the CPI and relevant exchange rates (cont.)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | For the six<br> months ended <br> 30.06.25 | For the six<br> months ended <br> 30.06.24 | For the three<br> months ended<br> 30.06.25 | For the three<br> months ended<br> 30.06.24 | For the<br> year ended<br> 31.12.24 |
| **Consumer price index** <br> **(2020 basis)** |  |  |  |  |  |
| Israel (index basis) | 2.14% | 2.07% | 1.08% | 1.13% | 3.24% |
| In Israel (known index) | 1.57% | 1.89% | 1.28% | 1.61% | 3.43% |
| **NIS exchange rate** |  |  |  |  |  |
| USD | (7.54%) | 3.64% | (9.31%) | 2.12% | 0.55% |
| EUR | 4.18% | 0.21% | (1.66%) | 1.03% | (5.36%) |

---

---

| | |
|:---|:---|
| **Note 3** | **Segments** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **General** 

The operating segments are based on information that is reviewed by the chief operating decision maker (CODM) for the allocation of resources and assessment of performance. Accordingly, for management purposes, the Group is organized into operating segments based on the products and services and on the geographic location of the business units.

The Company operates directly and through subsidiaries, and it has the following operating segments:

IT Solutions and Services, Consulting, and Management in Israel;

IT Solutions and Services in the US;

Cloud and Computing Infrastructures;

Marketing and Support of Software Products.

Interim Consolidated Financial Statements 16

Notes to the Interim Consolidated Financial Statements

---

| | |
|:---|:---|
| **Note 3** | **Segments (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **General (cont.)** 

**IT Solutions and Services, Consulting, and Management in Israel**

This segment includes a wide range of technological and other solutions and services in the sectors: core systems, data and AI, information security and cyber, digital, and more. As part of these solutions, the Company is engaged in the development of large-scale technological systems and the provision of related services; execution of IT and software integration projects; development of operational solutions and C<sup>4</sup> ISR systems for defense entities in Israel and abroad; outsourcing services and professional services by experts and consultants; offshore/nearshore services; BPO and call center services; software project management; software development; software and QA testing; enhancement and upgrading of existing technological systems; as well as the provision of training and implementation services.

In addition, this activity includes management consulting and multidisciplinary engineering and operational consulting services, including supervision of complex engineering projects, particularly infrastructure projects in the transportation sector.

**IT Solutions and Services in the United States**

This segment is conducted through two arms – Matrix US Holding and XTIVIA – each of which holds several subsidiaries in the United States. <br> The activity includes the provision of solutions and expert services in the sector of GRC – Government Risk & Compliance, fraud prevention, cyber risk, and anti-money laundering, as well as specialized advisory services in this sector and specialized IT services for the healthcare sector.

This segment also includes the provision of specialized technological solutions and services in the sectors of portals, BI, CRM, DBA, and EIM; dedicated solutions for the US Government Contracting market; distribution and marketing services for software products; and the provision of professional services and offshore solutions, including through employees at the Company's operational centers in India. The operations also include professional services and projects conducted by experts from across the Matrix Group, serving as a gateway to the business model of exporting the Company's services and products to the US market.

Interim Consolidated Financial Statements 17

Notes to the Interim Consolidated Financial Statements

---

| | |
|:---|:---|
| **Note 3** | **Segments (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **General (cont.)** 

**Cloud and Computing Infrastructures**

The Company's activity in this segment primarily includes providing a wide range of cloud solutions and services, including sales, service, and support for public cloud (PaaS, SaaS, IaaS) and private cloud at all implementation stages - consulting, architecture, development, deployment, environment management, and support - as well as advanced FinOps services (through the Company's specialized business unit, CloudZone). It also includes computing solutions for IT infrastructure, communication solutions, marketing and sales of hardware, software licenses, and peripheral equipment for business.

customers, alongside with related professional services. Additionally, the Company offers multimedia solutions and command-and-control centers for smart offices, office automation and printing solutions, sales and marketing of test and measurement equipment, communication, cybersecurity, and RF solutions, automation projects and integration, advanced calibration services, and industrial video and image processing solutions (through RDT Equipment and Systems and Asio Vision). Furthermore, the Company is engaged in the import, sales, and service of automated manufacturing machines for component assembly and automated testing machines for assembly processes and components in production lines across various industries, including industrial, medical, military, laser, and sensor applications for civilian and defense purposes, as well as optical communication systems and automotive radar systems.

**Marketing and Support of Software Products**

This segment primarily includes the sale and distribution of software products (mainly from foreign software manufacturers) across various sectors, such as control and monitoring products, cybersecurity, communication solutions, virtualization, knowledge management products, databases and Big Data, open-source systems, and IT management products. It also includes providing professional support services for these products, as well as implementation projects, training, support, and maintenance for integrated products and systems.

Interim Consolidated Financial Statements 18

Notes to the Interim Consolidated Financial Statements

---

| | |
|:---|:---|
| **Note 3** | **Segments (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Composition** 

For the six months ended June 30, 2025 - unaudited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **IT Solutions and Services, Consulting, and Management in Israel** | **Sales, Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues to non-related parties | 1806513 | 168177 | 800316 | 222573 | - | 2997579 |
| Inter-segment revenues | 43550 | 13031 | 14798 | 423 | (71802) | - |
| Revenues | 1850063 | 181208 | 815114 | 222996 | (71802) | 2997579 |
| Segment results | 144967 | 18551 | 61164 | 34234 | (6206) | 252710 |
| Financial expenses |  |  |  |  |  | (55369) |
| Financial income |  |  |  |  |  | 10609 |
| Taxes on income |  |  |  |  |  | (51084) |
| Net income |  |  |  |  |  | 156866 |

---

For the six months ended June 30, 2024 - unaudited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **IT Solutions and Services, Consulting, and Management in Israel** | **Sales, Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues to non-related parties | 1609866 | 206480 | 735075 | 235024 | - | 2786445 |
| Inter-segment revenues | 45416 | 12856 | 26985 | 2461 | (87718) | - |
| Revenues | 1655282 | 219336 | 762060 | 237485 | (87718) | 2786445 |
| Segment results | 128484 | 16285 | 50456 | 33888 | (7180) | 221933 |
| Financial expenses |  |  |  |  |  | (42388) |
| Financial income |  |  |  |  |  | 10969 |
| Taxes on income |  |  |  |  |  | (45991) |
| Net income |  |  |  |  |  | 144523 |

---

Interim Consolidated Financial Statements 19

Notes to the Interim Consolidated Financial Statements

---

| | |
|:---|:---|
| **Note 3** | **Segments (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Composition (cont.)** 

For the three months ended June 30, 2025 - unaudited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT Solutions and Services, Consulting, and Management in Israel** | **Sales, Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues to non-related parties | 900557 | 90856 | 346073 | 113893 | - | 1451379 |
| Inter-segment revenues | 19975 | 1848 | 8493 | 264 | (30580) | - |
| Revenues | 920532 | 92704 | 354566 | 114157 | (30580) | 1451379 |
| Segment results | 74828 | 10091 | 25352 | 19129 | (2681) | 126719 |
| Financial expenses |  |  |  |  |  | (30071) |
| Financial income |  |  |  |  |  | 4689 |
| Taxes on income |  |  |  |  |  | (25054) |
| Net income |  |  |  |  |  | 76283 |

---

For the three months ended June 30, 2024 - unaudited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT Solutions and Services, Consulting, and Management in Israel** | **Sales, Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues to non-related parties | 793334 | 114843 | 306782 | 117773 | - | 1332732 |
| Inter-segment revenues | 22219 | 7142 | 17496 | 1022 | (47879) | - |
| Revenues | 815553 | 121985 | 324278 | 118795 | (47879) | 1332732 |
| Segment results | 65157 | 8926 | 22826 | 16919 | (2573) | 111255 |
| Financial expenses |  |  |  |  |  | (20898) |
| Financial income |  |  |  |  |  | 6065 |
| Taxes on income |  |  |  |  |  | (23321) |
| Net income |  |  |  |  |  | 73101 |

---

Interim Consolidated Financial Statements 20

Notes to the Interim Consolidated Financial Statements

---

| | |
|:---|:---|
| **Note 3** | **Segments (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Composition (cont.)** 

For the year ended December 31, 2024 - audited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT Solutions and Services,** <br> **Consulting, and Management in Israel** | **Sales, Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| &nbsp;&nbsp;Revenue from external customers | 3227608 | 425971 | 1465935 | 460024 | - | 5579538 |
| &nbsp;&nbsp;Inter-segment revenues | 109659 | 30794 | 49996 | 915 | (191364) | - |
| &nbsp;&nbsp;**Total revenues** | 3337267 | 456765 | 1515931 | 460939 | (191364) | 5579538 |
| &nbsp;&nbsp;**Segmental results** | 250113 | 45364 | 106405 | 66865 | (18673) | 450074 |
| &nbsp;&nbsp;Financial expenses |  |  |  |  |  | (86956) |
| &nbsp;&nbsp;Financial income |  |  |  |  |  | 20084 |
| &nbsp;&nbsp;Taxes on income |  |  |  |  |  | (94978) |
| &nbsp;&nbsp;Net income |  |  |  |  |  | 288224 |
| &nbsp;&nbsp;**Additional information** |  |  |  |  |  |  |
| &nbsp;&nbsp;Cost of sales | 2893978 | 374515 | 1357891 | 311524 | &nbsp;&nbsp;&nbsp;&nbsp;(191364) | 4746544 |
| &nbsp;&nbsp;Depreciation and amortization | 148210 | 6640 | 26997 | 4964 | - | 186811 |

---

Interim Consolidated Financial Statements 21

Notes to the Interim Consolidated Financial Statements

---

| | |
|:---|:---|
| **Note 4** | **Significant Events During the Reporting Period** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Dividend distribution** 

Following the declaration of the dividend on March 10, 2025, on April 8, 2025, the Company distributed a dividend in the amount of NIS 52.2 million to its shareholders (reflecting NIS 0.82 for each NIS 1 par value ordinary shares).

Following the declaration of the dividend on May 12, 2025, on July 15, 2025, the Company distributed a dividend in the amount of NIS 56.6 million to its shareholders (reflecting NIS 0.89 for each NIS 1 par value ordinary shares).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Transactions with holders of non-controlling interests in a subsidiary** 

In the first quarter, the Company entered into a mutual put/call options renewal agreement with non-controlling interests in a subsidiary for the sale and acquisition of the balance of the subsidiary's shares. The transaction was recorded against equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Acquisition of Gav** 

On February 4, 2025, the Company, through its subsidiary Matrix IT Systems Ltd., completed the acquisition of 70% of the share capital of Gav Systems Ltd. and Gav Experts Ltd. for a total of approximately NIS 45.5 million. In addition, the sellers were paid a dividend for accrued earnings up until 31.12.23 in the amount of NIS 29 million. Pursuant to the agreement, the Company and the seller have a mutual option to sell and purchase the seller's remaining shares to the Company. The acquired company provides outsourcing services, primarily in the form of computing and software personnel.

As at the report date, the valuation underlying the allocation of the consideration to assets and liabilities (the PPA) has not yet been completed and accordingly, this allocation is temporary, according to management's assessment, and may be updated in the coming periods after the valuation is completed.

According to the provisional allocation, the excess purchase cost of approximately NIS 72.2 million was attributed to net intangible assets in the amount of approximately NIS 16.8 million, and the remainder was allocated to goodwill.

As indicated above, the Group recognized the fair value of the assets acquired and liabilities that were undertaken in the business combination according to a temporary measurement. Thus, the consideration for the acquisition as well as the fair value of the assets and liabilities acquired are subject to final adjustment up to 12 months from the acquisition date.

Interim Consolidated Financial Statements 22

Notes to the Interim Consolidated Financial Statements

---

| | |
|:---|:---|
| **Note 4** | **Significant Events During the Reporting Period (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Entering into a memorandum of understanding for a merger with Magic** 

On March 10, 2025, a memorandum of understanding (MOU) was signed between Matrix IT Ltd. ("Matrix") and Magic Software Enterprises Ltd. ("Magic") for the purpose of negotiating a binding merger agreement, under which Matrix will acquire the entire issued and paid-up share capital of Magic by way of a reverse triangular merger. The considerations to Magic shareholders under the transaction will be in shares of Matrix (hereinafter: the "Magic transaction"). Upon completion of the transaction, Magic will become a private company wholly owned by Matrix.

As Formula is the controlling shareholder in both the Company and Magic, and in light of the materiality of the transaction, the Company's Board of Directors appointed an independent committee that was empowered to examine the engagement in the transaction, to negotiate with Magic regarding the terms of the transaction, to approve the transaction, and to formulate recommendations to the Board with regard thereto. For additional details, see the immediate report dated 11.3.2025 (reference: 2025-01-015939).

Pursuant to generally accepted accounting principles, the transaction will be accounted for using the pooling method rather than the purchase method. Meaning,

the Company will include Magic's assets and liabilities in its financial statements at the values recorded in the controlling shareholder's books. In addition, as at the report

date, the Company had already recognized transaction costs related to the Magic transaction totaling about NIS 7 million (NIS 5 million in 2024 and the remainder in the second half of 2025).

Interim Consolidated Financial Statements 23

![](image_004.jpg)<br>**CHAPTER C**<br>Financial Information from the Consolidated Interim Financial Statements attributable to the Company<br> June 30, 2025<br>

The information contained in these separate interim financial statements published by the Company constitutes a translation of the separate interim financial statements published by the Company. The hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

![](image_008.jpg)

---

| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

---

| | |
|:---|:---|
| [Special report of the auditing accountant to the shareholders of Matrix I.T. Ltd. on separate interim financial information pursuant to Regulation 38(d) of the Securities Regulations (periodic and immediate reports), 1970](#a_027) | [3](#a_027) |
| [Financial Information from the Consolidated Statements of Financial Position attributable to the Company](#a_028) | [4](#a_028) |
| [Financial Information from the Consolidated Statements on the Comprehensive Income attributable to the Company](#a_029) | [6](#a_029) |
| [Financial Information from the Consolidated Statements Cash Flows attributable to the Company](#a_030) | [7](#a_030) |
| [Additional information](#a_031) | [10](#a_031) |

---

![](image_011.jpg)

To the shareholders of Matrix IT. Ltd

**Re: Special report of the Auditing Accountant**

**on Separate Interim Financial information pursuant to Chapter 38D of the Securities Regulations (Periodic and Immediate reports), 1970**

**Introduction**

We reviewed the separate interim financial information presented pursuant to Regulation 38(d) of the Securities Regulations (Periodic and Immediate Reports), 1970 of Matrix IT Ltd. (hereinafter - the Company), as of June 30, 2025 and for the six and three months periods then ended. The separate interim financial information is 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 this interim period based on our review.

**<br> Scope of Review**

We performed our review pursuant to Review Standard (Israel) 2410 of the Institute of Certified Public Accountants in Israel, "Review of Interim Financial Information Performed by the Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and of applying analytical and other review procedures. A review is substantially smaller in scope than an audit performed pursuant to generally accepted auditing standards in Israel and as a result, does not enable us to obtain assurance that we would become aware of all significant matters that may be identified in an audit. Consequently, we are not expressing an audit opinion.

**Conclusion**

Based on our review, nothing has come to our attention that causes us to believe that the aforementioned Separate Financial Information is not prepared, in all material respects, in accordance with the provisions of Chapter 38D of the Securities Regulations (Periodic and Immediate Reports), 1970.

---

| | |
|:---|:---|
| Tel Aviv, Israel | **Ziv Haft Certified Public Accountants (Isr.)<br>**  |
| August 11, 2025 | **BDO Member Firm** |

---

![](image_012.jpg)

**MATRIX IT LTD** 

**Financial Information from the Consolidated Statements of Financial Position attributable to the Company**

**(NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **30, June** | **30, June** | |
|  | **2025** | **2024** | **31, December**<br>**2024** |
|  | **Unaudited** | **Unaudited** | **Audited** |
| **Current assets** |  |  |  |
| Cash and cash equivalents | 8416 | 3263 | 4727 |
| Trade receivables | 88232 | 75815 | 103692 |
| Related parties debit balances | 25295 | 79455 | 91663 |
| Income taxes receivable | 4662 | 9753 | 12594 |
| Other accounts receivable | 10771 | 7407 | 21787 |
|  | **137376** | **175693** | **234463** |
| **Non-current assets** |  |  |  |
| Balance in respect of investee controlled companies, net | 2643994 | 2426869 | 2561496 |
| Capital notes granted to controlled investees | 24659 | 24659 | 24659 |
| Right-of-use assets | 171132 | 1942 | 178504 |
| Deferred taxes | 6800 | 4,971\* | 6053 |
|  | 2846585 | 2458441 | 2770712 |
|  | **2983961** | **2634134** | **3005175** |

---

\* Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity.

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**MATRIX IT LTD** 

**Financial Information from the Consolidated Statements of Financial Position attributable to the Company**

**(NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
| | **30, June** | **30, June** | **31, December** |
| | **2025** | **2024** | **2024** |
| | **Unaudited** | **Unaudited** | **Audited** |
| **Current liabilities** |  |  |  |
| Credit from banks and other credit providers | 304780 | 203004 | 300000 |
| Current maturities of debentures | 79955 | 82698 | 81341 |
| Current maturities of lease liabilities | 14973 | 796 | 8761 |
| Trade payables | 52574 | 29118 | 36802 |
| Employees and payroll accruals | 22931 | 23051 | 36964 |
| Other accounts payable | 70670 | 64612 | 68514 |
| Related Parties credit balances | 912217 | 843517 | 917845 |
|  | 1458100 | 1246796 | 1450227 |
| **Non-current liabilities** |  |  |  |
| Debentures | 262705 | 327917 | 295427 |
| Lease liabilities | 167890 | - | 170627 |
| Deferred taxes | - | 644 | - |
| Employee benefit liabilities, net | 96 | 190 | 161 |
|  | 430691 | 328751 | 466215 |
| **Equity attributable to Company shareholders** |  |  |  |
| Share capital and capital reserves | 345039 | 384663 | 380099 |
| Retained earnings | 750131 | 673924 | 708634 |
|  | 1095170 | 1058587 | 1088733 |
|  | **2983961** | **2634134** | **3005175** |

---

August 11, 2025   <br> Date of approval of the financial statements Guy Bernstein Chairman of the Board Moti Gutman Chief Executive Officer Nevo Brenner Chief Financial Officer

\* Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity.

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**MATRIX IT LTD** 

**Financial Information from the Consolidated Statements on the Comprehensive Income attributable to the Company**

**(NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **<br> Six months**<br> **ended,**<br> **30.06.25** | **<br> Six months ended,**<br> **30.06.24** | **Three months ended,**<br> **30.06.25** | **Three months ended,**<br> **30.06.24** | **<br>Year ended,<br> 31.12.24** |
|  | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Audited** |
| Revenues | &nbsp;&nbsp;&nbsp;&nbsp;127656 | &nbsp;&nbsp;109143 | 61866 | 51615 | 197122 |
| Cost of revenues | &nbsp;&nbsp;&nbsp;&nbsp;41313 | &nbsp;&nbsp;52115 | 18127 | 21038 | 61815 |
| **Gross profit** | &nbsp;&nbsp;&nbsp;&nbsp;**86343** | &nbsp;&nbsp;**57028** | **43739** | **30577** | **135307** |
| Selling and marketing expenses | &nbsp;&nbsp;&nbsp;&nbsp;6671 | &nbsp;&nbsp;10358 | 4253 | 7841 | 23960 |
| General and administrative expenses | &nbsp;&nbsp;&nbsp;&nbsp;21552 | &nbsp;&nbsp;20791 | 12370<br>| 11835<br>| 54965 |
| **Operating income** | &nbsp;&nbsp;&nbsp;&nbsp;**58120** | &nbsp;&nbsp;**25879** | **27116** | **10901** | **56382** |
| Financial expenses | &nbsp;&nbsp;&nbsp;&nbsp;20477 | &nbsp;&nbsp;14558 | 9587 | 7623 | 61382 |
| Financial income | &nbsp;&nbsp;&nbsp;&nbsp;55 | &nbsp;&nbsp;88 | (138) | &nbsp;&nbsp;&nbsp;&nbsp;8 | 254 |
| Company`s share of income of companies accounted for at equity, net | &nbsp;&nbsp;&nbsp;&nbsp;119469 | &nbsp;&nbsp;130367 | 60456 | 67621 | 277824 |
| Income before taxes on income | &nbsp;&nbsp;&nbsp;&nbsp;157167 | &nbsp;&nbsp;141776 | 77847 | 70907 | 273078 |
| Taxes on income | &nbsp;&nbsp;&nbsp;&nbsp;8670 | &nbsp;&nbsp;3635 | 4929 | 1412 | 656 |
| **Net income** **attributable to the Company** | &nbsp;&nbsp;&nbsp;&nbsp;148497 | &nbsp;&nbsp;138141 | 72918 | 69495 | 272422 |
| Actuarial gains from defined benefit plans | &nbsp;&nbsp;&nbsp;&nbsp;1789 | &nbsp;&nbsp;1928 | 454 | 1138 | 2722 |
| Adjustments for translation of financial statements | &nbsp;&nbsp;&nbsp;&nbsp;(25363) | &nbsp;&nbsp;11547 | (31595) | 6937 | (1340) |
| **Total comprehensive income attributable to the Company** | &nbsp;&nbsp;&nbsp;&nbsp;**124923** | &nbsp;&nbsp;**151616** | **41777** | **77570** | **273804** |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**MATRIX IT LTD** 

**Financial Information from the Consolidated Statements Cash Flows attributable to the Company<br> (NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**Cash flows from operating activities:** | **Six months**<br> **ended, <br> June 30, 2025**<br>**Unaudited** | **Six months**<br> **ended, <br> June 30, 2024**<br>**Unaudited** | **Three months ended, <br> June 30, 2025**<br>**Unaudited** | **Three months ended, <br> June 30, 2024**<br>**Unaudited** | **<br> Year ended,**<br> **December 31, 2024**<br>**Audited** |
| &nbsp;&nbsp;**Net income** | **148497** | **138141** | **72918** | **69495** | **272422** |
| &nbsp;&nbsp;&nbsp;**Adjustments to reconcile net income to net cash provided by operating activities:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Adjustments to the profit or loss items:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company`s share of income of companies accounted for at equity, net | (119469) | (130367) | (60456) | (67621) | (277824) |
| &nbsp;&nbsp;&nbsp;Taxes on income | 8670 | 3635 | 4929 | 1412 | 656 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 8507 | 6749 | 4276 | 4402 | 9155 |
| &nbsp;&nbsp;&nbsp;Change in employee benefit liabilities | (65) | (62) | (43) | (164) | (91) |
| &nbsp;&nbsp;&nbsp;Other financial expenses, net | 20839 | 13252 | 10178 | 10974 | 30384 |
| &nbsp;&nbsp;&nbsp;Revaluation of long-term loans from banks |  | (3) | - | (2) | (7) |
| &nbsp;&nbsp;&nbsp;Share based payment | 4406 | 8997 | 1385 | 4509 | 18026 |
|  | **(77112)** | **(97799)** | **(39731)** | **(46490)** | **(219701)** |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**MATRIX IT LTD** 

**Financial Information from the Consolidated Statements Cash Flows attributable to the Company<br> (NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Six months**<br> **ended, <br> June 30, 2025**<br>**Unaudited** | **Six months**<br> **ended, <br> June 30, 2024**<br>**Unaudited** | **Three months ended, <br> June 30, 2025**<br>**Unaudited** | **Three months ended, <br> June 30, 2024**<br>**Unaudited** | **<br> Year ended,**<br> **December 31, 2024**<br>**Audited** |
| &nbsp;&nbsp;&nbsp;**Changes in assets and liability items:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Decrease (increase(in trade receivables | 15460 | 446 | (8858) | (8381) | (27431) |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in other accounts receivable and prepaid expenses | 11016 | (2748) | 2701 | (686) | (17128) |
| &nbsp;&nbsp;&nbsp;Increase(decrease) in trade payables | 15772 | 7742 | 4179 | (1345) | 15426 |
| &nbsp;&nbsp;&nbsp;Increase in employee benefit liabilities, deferred revenues and other accounts payable | (21088) | (22923) | (28085) | (15175) | (1504) |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in Related Parties Balances | 60740 | 67341 | 52552 | 83034 | 129461 |
|  | 81900 | 49858 | 22462 | 63990 | 98824 |
| &nbsp;&nbsp;&nbsp;**Cash paid and received during the year for:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest paid | (15437) | (10014) | (2139) | (6912) | (31293) |
| &nbsp;&nbsp;&nbsp;Interest received | 55 |  | 20 |  | 126 |
| &nbsp;&nbsp;&nbsp;Taxes paid |  | (5250) |  | (340) | (7235) |
| &nbsp;&nbsp;&nbsp;Taxes received | 1010 | 3746 | 2936 | 3746 | 3746 |
|  | (14372) | (15604) | 817 | (3506) | (34656) |
| &nbsp;&nbsp;&nbsp;**Net cash provided (used) by operating activities** | **138913** | **74596** | **56466** | **83489**  | **116889** |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**MATRIX IT LTD** 

**Financial Information from the Consolidated Statements Cash Flows attributable to the Company<br> (NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **<br> Six months**<br> **ended, <br> June 30, 2025**<br>**Unaudited** | **<br> Six months**<br> **ended, <br> June 30, 2024**<br>**Unaudited** | **<br> Three months ended, <br> June 30, 2025**<br>**Unaudited** | **Three months ended, <br> June 30, 2024**<br>**Unaudited** | **<br> Year ended,**<br> **December 31, 2024**<br>**Audited** |
| **Cash flows from financing activities:** |  |  |  |  |  |
| Short-term credit from banks and other credit providers, net |  |  | <br> - | - | 100000 |
| Repayment of lease liabilities |  | (5172) | - | (2333) | (5500) |
| Repayment of long-term loans from banks and others |  | (3000) | - | (1500) | (6000) |
| Dividend paid | (100438) | (80673) | (52161) | (80673) | (184214) |
| Debenture payment | (33959) | (33959) |  |  | (67918) |
| **Net cash provided /(used) in financing activities** | **(134397)** | **(122804)** | **<br> (52161)** | **<br> (84506)** | **(163682)** |
| Translation differences for cash and cash equivalents | (827) | 915 | (828) | 440 | 964 |
| Increase) Decrease) in cash and cash equivalents | 3689 | (47293) | 3477 | (577) | (45829) |
| **Balance of cash and cash equivalents at the beginning of the year** | **4727** | **50556** | **4939** | **3840** | **50556** |
| **Balance of cash and cash equivalents at the end of the year** | **8416** | **3263** | **8416** | **3263** | **4727** |
| **Significant non-cash transactions** |  |  |  |  |  |
| Dividend declared and not yet paid | &nbsp;&nbsp;&nbsp;**56628** | &nbsp;&nbsp;&nbsp;**-** | &nbsp;&nbsp;&nbsp;**56628** | &nbsp;&nbsp;&nbsp;**-** | &nbsp;&nbsp;&nbsp;**48277** |
| Right-of-use asset recognized with corresponding lease liability | &nbsp;&nbsp;&nbsp;**8508** | &nbsp;&nbsp;&nbsp;**-** | &nbsp;&nbsp;&nbsp;**8240** | &nbsp;&nbsp;&nbsp;**-** | 182166 |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**MATRIX IT LTD** 

**Additional information**

---

| | |
|:---|:---|
| **1:** | **General** |

---

This "Separate financial information" of Matrix I. T. Ltd. (hereinafter – "the Company"), prepared in a condensed format for June 30, 2025 and for the periods of six and three months that ended on that date, were prepared in accordance with the provisions of Regulation 38(d) of the Securities Regulations (Periodic and Immediate Reports), 1970. This Separate financial information report, should be reviewed in connection with the "Separate financial information" of the Company's annual Financial Statements for December 31, 2024 and for the year ended on that date, and the additional information accompanying them.

---

| | |
|:---|:---|
| **2:** | **Significant accounting policies** |

---

The accounting policy applied in preparing this "Separate financial information report" is consistent with the one applied in preparing the "Separate financial information report" for December 31, 2024.

![](image_004.jpg)<br>**CHAPTER D**<br>Quarterly Report on the effectiveness of Internal Control over Financial Reporting and Disclosure<br> pursuant to Regulation 38c`(a)<br>

The information contained in the Quarterly Report on the effectiveness of Internal Control over Financial Reporting and disclosure pursuant to Regulation 38c`(a) constitutes a translation of Report published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

![](image_008.jpg)

---

| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

---

| | |
|:---|:---|
| [Quarterly report on the effectiveness of internal control over financial reporting and disclosure in accordance pursuant to Regulation 38c`(a).](#a_032) | [3](#a_032) |
| [Certification of CEO](#a_033) | [4](#a_033) |
| [Certification of the most senior financial executive officer](#a_034) | [6](#a_034) |

---

Quarterly report on the effectiveness of internal control over financial reporting and disclosure pursuant to Regulation 38c`(a):

Management, under the supervision of the Board of Directors of Matrix IT Ltd. (hereby: "the Company"), is responsible for establishing and maintaining appropriate internal control over financial reporting and disclosure in the Company.

For this matter, the members of Management are:

&nbsp;&nbsp;&nbsp;&nbsp;1. Moti Gutman,
 CEO

&nbsp;&nbsp;&nbsp;&nbsp;2. Nevo Brenner,
 CFO

&nbsp;&nbsp;&nbsp;&nbsp;3. Gali Katan,
 Controller

Internal control over financial reporting and disclosure includes controls and procedures in the Company, which were planned by the CEO and the most senior financial officer, or under their supervision, or by whoever fulfills those functions in practice, under the supervision of the Board of Directors of the Company, and were designed to provide reasonable assurance as to the reliability of the financial reporting and the preparation of the reports in accordance with the provisions of the law, and to ensure that information that the Company is required to disclose in the reports it publishes in accordance with the provisions of the law is collected, processed, summarized and reported on the date and in the format laid down in law.

Internal control includes, among other things, controls and procedures planned to ensure that the information the Company is required to disclose as aforesaid, is accumulated and forwarded to the Management of the Company, including to the CEO and the most senior financial officer or to whoever fulfills those functions in practice, in order to enable decisions to be made at the appropriate time in relation to the disclosure requirements.

Due to its structural limitations, internal control over financial reporting and disclosure is not intended to provide absolute assurance that misstatement or omission of information from the reports will be prevented or will be detected.

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 March 31, 2025 (the "Last Quarterly Report on Internal Control"), internal control was found to be effective.

Up to the reporting date, no event or matter was brought to the attention of the Board of Directors and Management that could change the evaluation of the effectiveness of internal control, as found in the Last Quarterly Report on Internal Control.

As of the reporting date, based on that stated in the Last Quarterly Report on Internal Control, and based on information that was brought to the attention of the Board of Directors and Management as aforesaid, the internal control is effective.

3 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

**Management certifications:**

**(a1) CEO certification pursuant to Regulation 38c`(d)(1):**

Management certification<br> CEO Certification

I, Moti Gutman, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed
 the quarterly report of Matrix IT Ltd. ("the Company") for the second quarter of
 2025 ("the Reports").

&nbsp;&nbsp;&nbsp;&nbsp;2. To
the best of my knowledge, the Reports do not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period of the Reports.

&nbsp;&nbsp;&nbsp;&nbsp;3. To the best
 of my knowledge, the financial statements and other financial information included in the
 Reports reflect fairly, in all material respects, the financial position, results of operations
 and cash flows of the Company as of the dates and for the periods presented in the Reports.

&nbsp;&nbsp;&nbsp;&nbsp;4. I have disclosed
 the following to the Independent Auditor of the Company, to the Company's Board of
 Directors, and to the Audit and the Financial Statements Review Committees of the Board of
 Directors of the Company, based on my most recent evaluation of internal control over financial
 reporting and disclosure:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All the significant
 deficiencies and material weaknesses in the design or operation of internal control over
 financial reporting and disclosure which are reasonably likely to adversely affect the Company's
 ability to collect, process, summarize or report financial information, in a way that could
 cast doubt on the reliability of the financial reporting and the preparation of the financial
 statements in accordance with the provisions of the law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud,
 whether or not material, that involves the CEO or anyone directly subordinate to the CEO,
 or which involves other employees who have a significant role in the Company's internal
 control over financial reporting and disclosure.

5. I, alone or together
 with others in the Company:

&nbsp;&nbsp;&nbsp;&nbsp;a) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to ensure that material information relating to the Company,
 including its subsidiaries as defined in the Securities Regulations (Annual Financial Statements),
 2010, is brought to my attention by others in the Company and in the subsidiaries, particularly
 during the period of preparation of the Reports;

4 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

&nbsp;&nbsp;&nbsp;&nbsp;b) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to provide reasonable assurance regarding the reliability
 of the financial reporting and the preparation of the financial statements in accordance
 with the provisions of the law, including in accordance with generally accepted accounting
 principles;

&nbsp;&nbsp;&nbsp;&nbsp;c) No event or
 matter that occurred in the period between the date of the last report (the quarterly report
 as of March 31, 2025) and this reporting date was brought to my attention that would change
 the conclusion of the Board of Directors and Management concerning the effectiveness of internal
 control over the Company's financial reporting and disclosure.

Nothing in the foregoing shall derogate from my responsibility or that of anyone else, in law.

Moti Gutman<br> CEO August 11, 2025

5 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

**Management certifications :**

**(b) CFO Certification pursuant to Regulation 38C(d)(2)**

**Management certification<br> Certification of the most senior financial executive officer** 

I, Nevo Brenner, certify that:

1. I have reviewed
 the quarterly report of Matrix IT Ltd. ("the Company") for the second quarter of
 2025 ("the Reports").

2. To the best
 of my knowledge, the Reports do not contain any untrue statement of a material fact or omit
 to state a material fact necessary to make the statements made, in light of the circumstances
 under which such statements were made, not misleading with respect to the period of the Reports.<br>

3. To the best
 of my knowledge, the financial statements and other financial information included in the
 Reports reflect fairly, in all material respects, the financial position, results of operations
 and cash flows of the Company as of the dates and for the periods presented in the Reports.

4. I have disclosed
 the following to the Independent Auditor of the Company, to the Company's Board of
 Directors, and to the Audit and the Financial Statements Review Committees of the Board of
 Directors of the Company, based on my most recent evaluation of internal control over financial
 reporting and disclosure:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All the
 significant deficiencies and material weaknesses in the design or operation of internal control
 over financial reporting and disclosure which are reasonably likely to adversely affect the
 Company's ability to collect, process, summarize or report financial information, in
 a way that could cast doubt on the reliability of the financial reporting and the preparation
 of the financial statements in accordance with the provisions of the law;

&nbsp;&nbsp;&nbsp;&nbsp;a) Any fraud,
 whether or not material, that involves the CEO or anyone directly subordinate to the CEO,
 or which involves other employees who have a significant role in the Company's internal
 control over financial reporting and disclosure.

5. I, alone or together with others in the Company:

&nbsp;&nbsp;&nbsp;&nbsp;a) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to ensure that material information relating to the Company,
 including its subsidiaries as defined in the Securities Regulations (Annual Financial Statements),
 2010, is brought to my attention by others in the Company and in the subsidiaries, particularly
 during the period of preparation of the Reports;

6 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to provide reasonable assurance regarding the reliability
 of the financial reporting and the preparation of the financial statements in accordance
 with the provisions of the law, including in accordance with generally accepted accounting
 principles;

&nbsp;&nbsp;&nbsp;&nbsp;c) No event
 or matter that occurred during the period between the date of the last Report (the quarterly
 Report as of March 31, 2025) and the date of this Report has been brought to my attention
 that would change my conclusions regarding the effectiveness of internal control over financial
 reporting and disclosure, insofar as it relates to the financial statements and other financial
 information included in the Reports that were presented to Management and the Board of Directors
 and are incorporated in this Report.

Nothing in the foregoing shall derogate from my responsibility or that of anyone else, in law.

Nevo Brenner<br> CFO August 11, 2025

7 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

## Exhibit 99.5

**Exhibit 99.5**

**MATRIX IT LTD**<br> Company No.: 520039413

To: Israel Securities Authority To: Tel Aviv Stock Exchange Ltd. F126 (Public) Filed via MAGNA: Aug. 12, 2025<br> Reference No.: 2025-01-059568 <br> <u>www.isa.gov.il</u> <u>www.tase.co.il</u>

**<u>Report on a Corporation's Liability Position According to Maturity Dates</u>**<br> **Articles 9D and 38E of the Securities Regulations (Periodic and Immediate Reports), 5730–1970**

Report Period: *June 30 of the current year 2025*

Below is a detailed breakdown of the Corporation's liability position according to maturity dates:

A. Bonds issued to the public by the reporting Corporation and held by the public, excluding such bonds held by the Corporation's parent company, its controlling shareholder, companies controlled by any of them, or companies controlled by the Corporation – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 79955 | 0 | 0 | 0 | 0 | 12074 | 92029 |
| Second year | 0 | 67918 | 0 | 0 | 0 | 0 | 9290 | 77208 |
| Third year | 0 | 67918 | 0 | 0 | 0 | 0 | 6505 | 74423 |
| Fourth year | 0 | 67918 | 0 | 0 | 0 | 0 | 3721 | 71639 |
| Fifth year and thereafter | 0 | 58951 | 0 | 0 | 0 | 0 | 933 | 59884 |
| Total | 0 | 342660 | 0 | 0 | 0 | 0 | 32523 | 375183 |

---

B. Private bonds and non-bank credit, excluding bonds or credit provided by the Corporation's parent company, its controlling shareholder, companies controlled by any of them, or controlled by the Corporation – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 304780 | 0 | 0 | 0 | 0 | 14412 | 319192 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 304780 | 0 | 0 | 0 | 0 | 14412 | 319192 |

---

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C. Bank credit from banks in Israel – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

D. Bank credit from banks abroad – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

E. Summary table for Sections A–D: Total bank credit, non-bank credit, and bonds – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 384735 | 0 | 0 | 0 | 0 | 26486 | 411221 |
| Second year | 0 | 67918 | 0 | 0 | 0 | 0 | 9290 | 77208 |
| Third year | 0 | 67918 | 0 | 0 | 0 | 0 | 6505 | 74423 |
| Fourth year | 0 | 67918 | 0 | 0 | 0 | 0 | 3721 | 71639 |
| Fifth year and thereafter | 0 | 58951 | 0 | 0 | 0 | 0 | 933 | 59884 |
| Total | 0 | 647440 | 0 | 0 | 0 | 0 | 46935 | 694375 |

---

F. Off-balance sheet credit exposure (financial guarantees and credit commitments) – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

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G. Off-balance sheet credit exposure (financial guarantees and credit commitments) of all consolidated companies, excluding companies that are reporting corporations and excluding the reporting corporation data in Section F (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

H. Total bank credit balances, non-bank credit, and bonds of all consolidated companies, excluding companies that are reporting corporations and excluding the reporting corporation data in Sections A–D (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 84663 | 0 | 0 | 0 | 0 | 5308 | 89971 |
| Second year | 0 | 51751 | 0 | 0 | 0 | 0 | 2172 | 53923 |
| Third year | 0 | 15000 | 0 | 0 | 0 | 0 | 404 | 15404 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 151414 | 0 | 0 | 0 | 0 | 7884 | 159298 |

---

I. Credit balances granted to the reporting corporation by the parent company or controlling shareholder, and bond balances issued by the reporting corporation and held by the parent company or controlling shareholder (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

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J. Credit balances granted to the reporting corporation by companies controlled by the parent company or controlling shareholder and not controlled by the reporting corporation, and bond balances issued by the reporting corporation and held by such companies (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked<br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

K. Credit balances granted to the reporting corporation by consolidated companies, and bond balances issued by the reporting corporation and held by consolidated companies (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

**Authorized signatory on behalf of the Corporation:**

---

| | | |
|:---|:---|:---|
| | **Name of signatory** | **Position** |
| 1 | Nevo Brenner | Chief Financial Officer |

---

Explanation: Pursuant to Article 5 of the Periodic and Immediate Reports Regulations (5730-1970), a report submitted under these Regulations shall be signed by those authorized to sign on behalf of the Corporation. A Staff Position on the matter may be found on the Authority's website: <u>click here</u>.

Reference numbers of previous documents on the matter (the reference does not constitute incorporation by reference):

The Corporation's securities are listed for trading on the Tel Aviv Stock Exchange

Form Structure Update Date: February 4, 2025

Short Name: Matrix

Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598810, Fax: 09-9598050

Email: <u>yifatg@matrix.co.il</u>; Company website: <u>https://www.matrix-globalservices.com/</u>

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Former names of the reporting entity: Romtech Electronics Ltd.

Name of electronic filer: Nevo Brenner Nevo

Position: Chief Financial Officer

Employer:

Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598850, Fax: 09-9598826

Email: <u>nevobr@matrix.co.il</u>

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## Exhibit 99.6

**Exhibit 99.6**

![](ex9913_001.jpg)

I n v e s t or Meeting Financial Statements as at 30.6.25 The information contained in this Investors presentation constitutes a convenience translation. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law and represents the binding version and the only one having legal effect.

![](ex9913_002.jpg)

D isclaimer • The presentation contains forecasts, estimates and plans of the Company regarding its operations and other information about future events and matters, which constitute forward - looking information, as defined in the Securities Law, 1968 , and materialization thereof is uncertain and may be affected by factors that are unforeseeable or beyond the Company's control . Therefore, the Company is uncertain whether its forecasts and/or estimates and/or plans will be realized, in whole or in part, or whether they will be realized differently than expected, inter alia , due to factors beyond its control, changes in market conditions, business and competition environment, as well as materialization of any of the Company's risk factors . • The presentation includes, inter alia , information from various publications as well as data received from external sources (noted in the presentation), and macroeconomic facts and figures, the contents of which have not been reviewed by the Company independently, including slides relating to analyst ratings, all as known by the Company at the time of preparation of the presentation . • For the avoidance of doubt, we note that the Company does not undertake to update and/or change the information included in this presentation. • This presentation was prepared as a summary and for convenience only, and is not intended to be in lieu of a review of the reports publicized by the Company, including its financial statements. • The information contained in this presentation is subject to that stated in the relevant Company's reports. • This presentation should not be viewed an offer or invitation to acquire the Company's securities . The information included in the presentation is not a recommendation or opinion to invest in the Company and is not in lieu of a potential investor's judgment .

![](ex9913_003.jpg)

Summary of Q2 and H1 2025

![](ex9913_004.jpg)

Q2 2025 Continued growth in revenues, gross profit, operating income, EBITDA, net income, net income attributable to shareholders and cash flows Revenues grew 8.9% to NIS 1.45 billion, 13.3% growth adjusted for revenues accounted for on a net basis)\*(. Gross profit grew 10.4% to NIS 222.7 million, improving its margin to 15.3% . Operating income grew 13.9% to a record NIS 126.7 million , improving its margin to 8.7% . Net income grew 4.4% to NIS 76.3 million (5.3% margin). Net income attributable to shareholders grew 4.9% to NIS 72.9 million (5% margin) . EBITDA grew 13.6% to a record NIS 176.1 million, improving its margin to 12.1% . Cash flows from operating activities grew 28% to NIS 122.5 million.)\*(During the second quarter, revenues accounted for on a net basis continued to increase. This affects the Company's revenues, revenue growth rate, and profit margin (See more, later in this presentation).

![](ex9913_005.jpg)

H1 2025 (\*(During the period, revenues accounted for on a net basis continued to increase. This affects the Company's revenues, revenue growth rate, and profit margin (See more, later in this presentation). Continued growth in revenues, gross profit, operating income, EBITDA, net income, net income attributable to shareholders, and cash flows Revenues grew 7.6% to NIS 2.99 billion 12.2% growth adjusted for revenues accounted for on a net basis(\*). Gross profit grew 10% to NIS 449.8 million, improving its margin to 15% . Operating income grew 13.9% to a record NIS 252.7 million, improving its margin to 8.4% . Net income grew 8.5% to NIS 156.9 million (5.2% margin). Net income attributable to shareholders grew 7.5% to NIS 148.5 million (5% margin). EBITDA grew 12.5% to a record NIS 351.7 million , improving its margin to 11.7% . Cash flows from operating activities grew 46.2% to NIS 137.1 million.

![](ex9913_006.jpg)

Improved profitability alongside growth in operations • Operating income margin above 8% with an upward trajectory. • Gross profit margin ~ 15% with an upward trajectory. NIS billions 6 5 4 3 2 1 full year run rate

![](ex9913_007.jpg)

19.4 % 17.9 % 16.8 % 16.9 % 16 % 16 % 15.4 % 14.7 % 14.7 % 14.4 % 14.6 % 14. 5 % 14.4 % 14.6 % 14.9 % 15 % 3 2 1 4 5 6 Improved profitability alongside growth in operations • Operating income margin above 8% with an upward trajectory. • Gross profit margin ~ 15% with an upward trajectory. NIS billions full year run rate

![](ex9913_008.jpg)

19. 4 % 17.9 % 16.8 % 16.9 % 16 % 16 % 15.4 % 14.7 % 14.7 % 14. 4 % 14.6 % 14.5 % 14.4 % 14.6 % 14.9 % 15 % 8.6 % 7.8 % 7.1 % 7.1 % 6.8 % 7 % 7.4 % 6.9 % 7 % 7.1 % 7.5 % 7.6 % 7.5 % 7.5 % 8.1 % 8 . 4 % R e v e nu e s Gross profit margin Operating income margin 1 4 3 2 5 6 full year run rate Improved profitability alongside growth in operations • Operating income margin above 8% with an upward trajectory. • Gross profit margin ~ 15% with an upward trajectory. NIS Billions

![](ex9913_009.jpg)

• In the Company's assessment, the war has no material impact on its business results. The Company's business operations continue as usual across most market sectors in which Matrix operates. • Despite the ongoing conflict, including the timing of "Operation Rising Lion" during the course of the second quarter, the Company continued to demonstrate strong growth in revenues, profit, and cash flows . • As of 30.06.25, 420 of the Company's employees have been called up to reserve duty; as of the report publication date – 190 employees are on active reserve duty. • The Company's operations in defense, cyber security, and software products continue to grow. The War's Impact

![](ex9913_010.jpg)

Matrix's Positioning 30.6.2025

![](ex9913_011.jpg)

MTRX TASE 10 0+ M&As A 1 D 2 C 3 That's us! Approximately 13% of profits are generated abroad Rated Aa3 for the last 17 years (according to Midroog) 3000+ Customers Ranked #1 in 51 technology categories (according to STKI) 12,000+ Professio n a ls # 1 Ranked as the leading software services company 20 consecutive years, according to STKI NIS 6B annual revenue run rate

![](ex9913_012.jpg)

IT Solutions & Computing in Israel and Abroad BPO & Call Centers Commerce and Advanced Technology Solutions Consulting & Enginee r ing Defense Matrix's Lines of Business

![](ex9913_013.jpg)

Leading Partners

![](ex9913_014.jpg)

Cl o ud Cyber & Risk D a ta/AI Digital & Mobile C o re Off ice International Expansion and Growth

![](ex9913_015.jpg)

![](ex9913_016.jpg)

Financial Statements 30.6.2025

![](ex9913_017.jpg)

Gross profit 223 202 10.4% SG&A 96 91 6.0% Ope r a t i n g i n c o me 127 111 13 . 9 % Financial expenses, net 25 15 71.1% Taxes on income 25 23 7.4% Net income 76 73 4.4% Net income attributable to Company shareholders 73 69 4.9% EBITDA\*\* 176 155 13.6% Gross profit margin 15.3% 15.1% SG&A margin 6.6% 6.8% Operating income margin 8.7% 8.3% EBITDA margin\*\* 12.1% 11.6% Net income margin 5.3% 5.5% P&L – Q2/2025, compared to the corresponding quarter Key results (NIS millions) % • 13.3% growth adjusted for revenues 4 - 6/2024 4 - 6/2025 9. % accounted for on a net basis(\*) • 8.4% organic growth adjusted for 1,333 1,451 Revenues revenues accounted for on a net basis(\*) basis ues accounted for on a net) Adjusted for the increase in reven (\* (\*\*) Earnings before interest, taxes, depreciation and amortization (\*\*\*) Adjusted to exclude retroactive reimbursement from the National Insurance Institute relating to social benefits of employees called up for reserve duty, which was received in the corresponding quarter (approximately NIS 9 million).

![](ex9913_018.jpg)

F i nan c i a l e xpen s e s, ne t 25 15 71.1 % Taxes on income 25 23 7.4% Net income 76 73 4.4% Net income attributable to Company shareholders 73 69 4.9% EB I TDA \* \* 176 155 13.6 % Gross profit margin 15.3% 15.1% SG&A margin 6.6% 6.8% Operating income margin 8.7% 8.3% EBITDA margin\*\* 12.1% 11.6% Net income margin 5.3% 5.5% P&L – Q2/2025, compared to the corresponding quarter Key results (NIS millions) • 13 . 3 % growth adjusted for revenues accounted for on a net basis(\*) • 8 . 4 % organic growth adjusted for revenues accounted for on a net basis(\*) % 4 - 6/2024 4 - 6/2025 8.9% 1,333 1,451 Revenues 10.4% 202 223 Gross profit 6% 91 96 SG&A • 9% organic growth in operating income • 23.9% adjusted growth(\*\*\*) • 18.6% adjusted organic growth(\*\*\*) 13.9% 111 127 Operating income (\*) Adjusted for the increase in revenues accounted for on a net basis (\*\*) Earnings before interest, taxes, depreciation and amortization (\*\*\*) Adjusted to exclude retroactive reimbursement from the National Insurance Institute relating to social benefits of employees called up for reserve duty, which was received in the corresponding quarter (approximately NIS 9 million).

![](ex9913_019.jpg)

4.4% 73 76 Net income 4.9% 69 73 shareholders 13.6% 155 176 EBITDA(\*\*) 15.1% 15.3% Gross profit margin 6.8% 6.6% SG&A margin 8.3% 8.7% Operating income margin 11.6% 12.1% EBITDA margin(\*\*) 5.5% 5.3% Net income margin Net income attributable to P&L – Q2/2025, compared to the corresponding quarter Key results (NIS millions) o r t inc o me \*\*\*) • 13.3 % growth (\*) % 4 - 6/2024 4 - 6/2025 • 8.4% organic growth adjusted f revenues accounted for on a ne 8.9% 1,333 1,451 Revenues basis(\*) 10.4% 202 223 Gross profit • 9% organic growth in operating 6% 91 96 SG&A • 23.9% adjusted growth\*\*\* • 18.6% adjusted organic growth(13.9% 111 127 Operating income 71.1% 15 25 Financial expenses, net 7.4% 23 25 Tax expenses (\*) Adjusted for the increase in revenues accounted for on a net basis (\*\*) Earnings before interest, taxes, depreciation and amortization (\*\*\*) Adjusted to exclude retroactive reimbursement from the National Insurance Institute relating to social benefits of employees called up for reserve duty, which was received in the corresponding quarter (approximately NIS 9 million).

![](ex9913_020.jpg)

Gross profit 450 409 10% SG&A 197 187 5.4% Ope r a t i n g i n c o me 253 222 13 . 9 % Financial expenses, net 45 31 42.5% Taxes on income 51 46 11.1% Net i n c o me 157 145 8.5 % Net income attributable to Company shareholders 148 138 7.5% EBITDA\*\* 352 312 12.5% Gross profit margin 15.3% 15.1% SG&A margin 6.6% 6.8% Operating income margin 8.7% 8.3% EBITDA margin\*\* 12.1% 11.6% Net income margin 5.3% 5.5% P&L – H1/2025, compared to the corresponding half year Key results (NIS millions) % • 12.2% growth adjusted for revenues accounted for on a net basis(\*) 1 - 6/2024 1 - 6/2025 7.6% • 7.5% organic growth adjusted for 2,786 2,998 Revenues revenues accounted for on a net basis(\*) (\*) Adjusted for the increase in revenues accounted for on a net basis (\*\*) Earnings before interest, taxes, depreciation and amortization (\*\*\*) Adjusted to exclude retroactive reimbursement from the National Insurance Institute relating to social benefits of employees called up for reserve duty, which was received in the corresponding period (approximately NIS 6 million).

![](ex9913_021.jpg)

F i nan c i a l e xpen s e s, ne t 45 31 42.5 % Taxe s on i nc om e 51 46 11.1 % Net i n c o me 157 145 8.5 % Net income attributable to Company shareholders 148 138 7.5% EB I TDA \* \* 352 312 12.5 % Gross profit margin 15.3% 15.1% SG&A margin 6.6% 6.8% Operating income margin 8.7% 8.3% EBITDA margin\*\* 12.1% 11.6% Net income margin 5.3% 5.5% P&L – H1/2025, compared to the corresponding half year Key results (NIS millions) • 12 . 2 % growth adjusted for revenues accounted for on a net basis(\*) • 7 . 5 % organic growth adjusted for revenues accounted for on a net basis(\*) % 1 - 6/2024 1 - 6/2025 7.6% 2,786 2,998 Revenues 10% 409 450 Gross profit 5.4% 187 197 SG&A • 9.3% organic growth • 17% adjusted growth(\*\*\*) • 12.3% adjusted organic growth(\*\*\*) 13.9% 222 253 Operating income (\*) Adjusted for the increase in revenues accounted for on a net basis (\*\*) Earnings before interest, taxes, depreciation and amortization (\*\*\*) Adjusted to exclude retroactive reimbursement from the National Insurance Institute relating to social benefits of employees called up for reserve duty, which was received in the corresponding period (approximately NIS 6 million).

![](ex9913_022.jpg)

shareholders P&L – H1/2025, compared to the corresponding half year Key results (NIS millions) • 9.3% organic growth • 17% adjusted growth(\*) % 1 - 6/2024 1 - 6/2025 • 12.3% adjusted organic growth(\* 7.6% 2,786 2,998 Revenues • 12.2% growth adjusted for revenu accounted for on a net basis(\*\* 10% 409 450 Gross profit • 7.5% organic growth adjusted fo revenues accounted for on a net 5.4% 187 197 SG&A 13.9% basis(\*\*\*) 222 253 Operating income 42.5% 31 45 Financial expenses, net 11.1% 46 51 Tax expenses 8.5% 145 157 Net income 7.5% 138 148 Net income attributable to 12.5% 312 352 EBITDA(\*\*) 14.7% 15% Gross profit margin 6.7% 6.6% SG&A margin 8% 8.4% Operating income margin 11.7% 11.7% EBITDA margin(\*\*) 5.2% 5.2% Net income margin) es \*) r (\*) Adjusted for the increase in revenues accounted for on a net basis (\*\*) Earnings before interest, taxes, depreciation and amortization (\*\*\*) Adjusted to exclude retroactive reimbursement from the National Insurance Institute relating to social benefits of employees called up for reserve duty, which was received in the corresponding period (approximately NIS 6 million).

![](ex9913_023.jpg)

% 1 - 6/2024 1 - 6/2025 % 4 - 6/2024 4 - 6/2025 7.6% 2,786 2,997 8.9% 1,333 1,451 Revenues - 130 - 59 Adjustments for the increase in revenues accounted for on a net basis\* 12.2% 2,786 3,127 13.3% 1,333 1,510 Adjusted revenues 13.9% 222 253 13.9% 111 127 Operating income 8% 8.1% 8.3% 8.4% % of revenues \* During the second quarter and the period, revenues accounted for on a net basis continued to increase. This affects the Company's revenues, revenue growth rate, and profitability margin. P&L – Key financial results adjusted for increase in revenues accounted for on a net basis (NIS millions)

![](ex9913_024.jpg)

201 .7 222.7 Q2 2024 Q2 2025 Q2 2025 Summary - Key results (NIS millions) 15 . 1 % 10.4% growth in gross profit to NIS 222.7 million while improving profit margin 111 .2 126.7 Q2 2024 Q2 2025 13.9% growth in operating income to a record NIS 126.7 million, improving its margin to 8.7% 8. 7 % 8. 3 % Gross profit Operating income + 10 . 4 % + 13 . 9 % 8.9% growth in revenues to NIS 1.45 billion 13.3% after adjustment for revenues accounted for on a net basis 1,332.7 1,451.4 Q2 2024 Q2 2025 Revenues + 8 . 9 % 15 .3 %

![](ex9913_025.jpg)

1 5 4.9 176.1 \* Earnings before interest, taxes, depreciation and amortization 11.6% 12.1% Q2 2024 Q2 2025 13.6% growth in EBITDA a record NIS 176.1 million 69 .5 72 .9 Q2 2024 Q2 2025 4.9% growth in net income attributable to shareholders to NIS 72.9 million 5. 2 % 5 % EBITDA\* Net income to shareholders Q2 2025 Summary – Key results (NIS millions) + 4 . 9 % + 13 . 6 % Financial expenses, net (NIS millions) Q2 2025 Q2 2024 Interest, commissions, and other (net) 6.2 5.8 FX differences 10.1 2.9 Accounting financial expenses 9.1 6.1 Total financial expenses (net) 25.4 14.8 73 .1 76.3 Q2 2024 Q2 2025 4.4% growth in net income to NIS 76.3 million The growth in operating income was partly offset by an increase in financial expenses (primarily FX differences) 5. 5 % 5. 3 % Net income + 4 . 4 %

![](ex9913_026.jpg)

73 .1 76.3 Q2 2024 Q2 2025 4.4% growth in net income to NIS 76.3 million The growth in operating income was partly offset by an increase in financial expenses (primarily FX differences) 5. 5 % 5. 3 % 69 .5 72 .9 Q2 2024 Q2 2025 4.9% growth in net income attributable to shareholders to NIS 72.9 million 5. 2 % 5 % Net income Net income to shareholders Q2 2025 Summary – Key results (NIS millions) + 4 . 4 % + 4 . 9 % Financial expenses, net (NIS millions) Q2 2025 Q2 2024 Interest, commissions, and other (net) 6.2 5.8 FX differences 10.1 2.9 Accounting financial expenses 9.1 6.1 Total financial expenses (net) 25.4 14.8 1 5 4.9 176.1 \* Earnings before interest, taxes, depreciation and amortization 11.6% 12.1% Q2 2024 Q2 2025 13.6% growth in EBITDA a record NIS 176.1 million EBITDA\* + 13 . 6 %

![](ex9913_027.jpg)

Revenue breakdown by customer sector\* Government 18% Financial Organizations 18% Hi - Tech 16% Industry, Communications & Retail 16% Healthcare & Transportation 13% Defense 11% Other 8% \* According to FY 2024 revenues 18 % 18 % 16 % 16 % 13% 11 % 8 %

![](ex9913_028.jpg)

Israeli Market

![](ex9913_029.jpg)

r H1 2025 15.1% growth in opera8% grtingowth in revenues income 11.2% 4YR CAGR 9.2% 4YR CAGR +15.1% +8% 224.7 2,637 2,846 195.2 H1 2024 H1 2025 H1 2024 H1 2025 13% growth adjusted fo revenues accounted for on a net basis 1, 262 1 , 3 68 + 8 . 4 % Q2 2024 Q2 2025 12.8% growth adjusted for revenues accounted for on a net basis \* Including immaterial operations in Europe 8.4% growth in revenues 8.8% 4YR CAGR 96.9 110 .3 Q2 2024 Q2 2025 + 13 . 8 % in operating income 10.8% 4YR CAGR Q2 2025 13.8% growth Financial Results in Israel\* (NIS millions)

![](ex9913_030.jpg)

Financial Results in Israel\* (NIS millions) 2, 637 2 , 8 46 + 8 % H1 2024 H1 2025 13% growth adjusted for revenues accounted for on a net basis 8% growth in revenues 9.2% 4YR CAGR H1 2025 1, 262 1 , 3 68 + 8 . 4 % Q2 2024 Q2 2025 12.8% growth adjusted for revenues accounted for on a net basis \* Including immaterial operations in Europe 8.4% growth in revenues 8.8% 4YR CAGR Q2 2025 96.9 110 .3 Q2 2024 Q2 2025 + 13 . 8 % 13.8% growth in operating income 10.8% 4YR CAGR 195.2 224 .7 H1 2024 H1 2025 + 15 . 1 % 15.1% growth in operating income 11.2% 4YR CAGR

![](ex9913_031.jpg)

Operating Segments in Israel - Q2/2025 (NIS thousands) • Strong growth driven by an increase in Data Services, Cyber, Digital Solutions, and Core Systems • Continued growth in the defense and financial sectors . • Mega projects in the IT and engineering sectors provide high growth and high visibility going forward . • First - time consolidation of Gav Systems also contributed to segmental results . • The strong growth in operating income was achieved despite a one - time income recorded in the corresponding quarter, for retroactive compensation received from the National Insurance Institute for social benefits of employees called up for reserve duty, the majority of which is attributed to this segment . Operating income Revenues % Q2/2024 Q2/2025 % Q2/2024 Q2/2025 14.8% 65,157 74,828 12.9% 815,553 920,532 IT Solutions and Services, Consulting, and Management in Israel 8% 8.1% Profit margin (%)

![](ex9913_032.jpg)

Operating income Revenues % Q2/2024 Q2/2025 % Q2/2024 Q2/2025 14.8% 65,157 74,828 12.9% 815,553 920,532 IT Solutions and Services, Consulting, and Management in Israel 8% 8.1% Profit margin (%) 11.1% 22,826 25,352 9.3% 324,278 354,566 Cloud and Computing Infrastructures 7% 7.2% Profit margin (%) Operating Segments in Israel - Q2/2025 (NIS thousands) • Growth in volume driven by sales of computing systems and integration, and by marketing, implementation, and support of advanced IT solutions. • Continued increase in EDP cloud transaction revenues, which are accounted for on a net basis. Multi - year engagements contribute to high visibility going forward. • This quarter was characterized by a transaction mix with relatively high profitability . • Increase in cloud services in Western Europe. • The first - time consolidation of Ortec had a positive impact on the segment's results.

![](ex9913_033.jpg)

Cloud and Computing Infrastructures – Results adjusted for increase in revenues accounted for on a net basis (NIS thousands) % 1 - 6/2024 1 - 6/2025 % 4 - 6/2024 4 - 6/2025 7% 762,060 815,114 9.3% 324,278 354,566 Revenues - 64,218 - 43,503 Adjustments for the increase in revenues accounted for on a net basis 15.4% 762,060 879,332 22.8% 324,278 398,069 Adjusted revenues 21.2% 50,456 61,164 11.1% 22,826 25,352 Operating income 6.6% 7% 7% 6.4% % of revenues • Continued increase in the EDP cloud transaction revenues, which are accounted for on a net basis. Multi - year engagements generate high visibility going forward.

![](ex9913_034.jpg)

Operating income Revenues % Q2/2024 Q2/2025 % Q2/2024 Q2/2025 14.8% 65,157 74,828 12.9% 815,553 920,532 IT Solutions and Services, Consulting, and Management in Israel 8% 8.1% Profit margin (%) 11.1% 22,826 25,352 9.3% 324,278 354,566 Cloud and Computing Infrastructures 7% 7.2% Profit margin (%) 13.1% 8,926 10,091 (24%) 121,985 92,704 Sales, Marketing and Support of Software Products 7.3 % 10.9% Profit margin (%) Operating Segments in Israel - Q2/2025 (NIS thousands) • Strong demand for software products of cyber - security, digital acceleration, cloud, data and AI solutions (including AI software products and communications equipment). • Change in the transaction mix for the quarter and the period – a decrease in distribution transactions alongside an increase in reseller transactions, which have relatively higher profit margins – reflected in the decrease in revenue alongside an increase in the amount and rate of operating income.

![](ex9913_035.jpg)

US Market

![](ex9913_036.jpg)

IT Solutions & Services in the US - Q2/2025 (NIS/USD thousands) • The increase in operating income and profitability margin are driven by improved utilization and the onboarding of new projects with higher profitability. • The impact of the first - time consolidation of Alacer's results was immaterial. • The results in NIS were affected by the weakening of the USD/NIS exchange rate. Operating income Revenues Segmental results in NIS % Q2/2024 Q2/2025 % Q2/2024 Q2/2025 13.1% 16,919 19,129 (3.9%) 118,795 114,157 14.2% 16.8% Profit margin (%) 16.7% 4,573 5,337 - 31,884 31,871 Segmental results in USD 14.2% 16.7% Profit margin (%)

![](ex9913_037.jpg)

IT Solutions & Services in the US Operating income trend in the past year (LTM) (USD millions) • Q2 2025 indicates the return to growth in profits, following the improvement since the beginning of the year. • In light of new engagements, Matrix expects this growth to continue in the coming quarters. 5 . 1 5.5 6 . 3 4.6 4.6 4.6 4.4 4.5 4.2 5.3 (0. 5) (1. 1) (1 . 8) (0. 4) 0.7 Corresponding quarter Actual quarter Change

![](ex9913_038.jpg)

60.3 % 26.6 % Revenues 5.9% 7.2% Breakdown of revenues and profit by operating segments in H1/2025 56 % 23.6 % 13.2 % Contribution to profits 7.2% IT Solutions in Israel Cloud and Computing Infrastructures IT Solutions in the US Software Products

![](ex9913_039.jpg)

C h a nge 1 - 6/2024 1 - 6/2025 Change 4 - 6/2024 4 - 6/2025 (807) 13,457 12,650 390 5,817 6,207 Interest, commissions, and other (net) 4,989 5,388 10,377 7,196 2,866 10,062 FX differences 9,159 12,574 21,733 2,963 6,150 9,113 Accounting financial expenses 13 ,3 41 31,419 44,760 10,549 14,833 25,382 Total financial expenses (net) • Q2 financial expenses rose mainly due to FX differences driven by a 9.3% depreciation in the USD/NIS exchange rate. • H1 financial expenses increased primarily from accounting expenses, mainly revaluations of M&A liabilities and put options held by minority holders in subsidiaries. Financial expenses (NIS thousands)

![](ex9913_040.jpg)

Q1 31 . 3 . 2 4 Q2 30 . 6 . 2 4 Q3 30 . 9 . 2 4 Q4 31 . 1 2 . 2 4 Q1 31 . 3 . 2 5 Q2 30 . 6 . 2 5 6.2 6.4 5.9 6.1 5.8 7.7 1 9 . 2 1 3 . 0 1 3 . 2 10.2 9.0 8.9 1 9 . 4 1 9 . 3 1 6 . 1 1 4 . 8 1 6 . 6 Breakdown of financial expenses (NIS millions) Interest expenses (net) and commissions Accounting financial expenses and FX differences 25.4 2024 2025 Despite the increase in FX differences expenses and accounting expenses, interest expenses remain stable

![](ex9913_041.jpg)

Financial indexes

![](ex9913_042.jpg)

Financial indexes (NIS millions) 2 7 8 . 9 2 7 2 . 4 4 1 2 . 2 543 .9 6 6 2 . 5 LTM LTM LTM LTM LTM 6 . 2 0 2 1 6 . 2 0 2 2 6 . 2 0 2 3 6 . 2 0 2 4 6 . 2 0 2 5 Cash flows from operating activities - LTM + 21 . 8 % 31.12.2024 30.6.2025 668 548 Cash and cash equivalents 1,229 1,237 Unused credit facilities\* 1,897 1,785 Total liquid assets \* Of which NIS 300 million are committed credit facilities Aa3 credit rating from Midroog (confirmed - March 2025) Cash flows from operating activities: • Positive cash flow in H1/2025 - NIS 137.1 million , compared to a positive cash flow of NIS 93.8 in the corresponding period. • Positive cash flow LTM - NIS 662.5 million , compared to NIS 543.9 million in the corresponding period.

![](ex9913_043.jpg)

1,1 53 300 156 343 Capital Structure)\*(Earnings before financing, taxes, and depreciation 31.12.24 30.06.25 1,144 1,153 Equity 25.5% 25.9% % of total balance sheet 785.1 799.1 Gross financial debt 116.6 251.4 Financial Net debt 1.1 1.1 Current ratio 2.6% 5.6% Financial Net debt to balance sheet ratio 0.23 0.37 Financial Net debt to EBITDA)\*(ratio LTM Financial indexes (NIS millions) Equity Commercial securities (NAAM) - due by February 2030 Loans from financial institutions Debentures Series B

![](ex9913_044.jpg)

Dividend of NIS 54.1 million (85 ag. per share)

![](ex9913_045.jpg)

Summary and Outlook Continued growth – organic and through acquisitions, while maintaining our operating income margin at 8% and higher. Driven, inter alia , by improved operating efficiency and stable SG&A expenses. Continued growth in the US Revenue run - rate returned to +$120M, with a 15% profit margin. Maintaining leadership across all key categories in the Israeli IT market (see STKI rankings) . Matrix has maintained market leadership for 20 years. Our strong technological capabilities across all key categories (A¹D²C³(, combined with our established reputation, enable us to sustain growth despite the ongoing war. Merger between Matrix and Magic is progressing according to plan . Approval by the general meeting is expected by the fourth quarter of 2025 . The merger is expected to enhance Matrix's domestic and international standing in cloud, cybersecurity, data, and AI . It is expected to increase revenue from proprietary IP, increase revenues from global markets, as well as greater revenues from the financial, defense, high - tech, and healthcare sectors . The merger is also anticipated to improve the company's profit margins and strengthen its balance sheet (and no expected amortizations …) . AI - Increasing adoption of the technology by the company and its clients Strong business opportunity for the software products division, improved developer productivity enhances our competitiveness in project execution, accelerated sales of GPUs alongside high performance communication systems, growth in our A 1 D 2 C 3 lines of business where Matrix is a market leader .

![](ex9913_046.jpg)

T h a n k you!

## Exhibit 99.7

**Exhibit 99.7**

**Matrix IT Ltd.**<br> Israeli Registrar No.: 520039413

To: Israel Securities Authority To: Tel Aviv Stock Exchange Ltd. F081 (Public) Filed via MAGNA: August 12, 2025<br> Reference No.: 2025-01-059615 <br> <u>www.isa.gov.il</u> <u>www.tase.co.il</u>

**Corrected Report to a Faulty Report submitted on August 12, 2025, whose Reference No. is: *<u>2025-01-059566</u>***

The fault: *The total amount of the dividend was mistakenly omitted.*

Reason for the fault: *Human error*.

Main correction: *Adding the total dividend amount in Section 4 of the form.*

**<u>Immediate Report on the Distribution of Cash Dividend to Securities</u><br> Article 37(a) of the Securities Regulations (Periodic and Immediate Reports), 5730-1970**

1. We hereby report that on *August 11, 2025*, it was resolved to distribute a dividend.

2. The effective date (ex-date): *September 30, 2025* 

Payment date: *October 20, 2025*

3. Payment details:

🗷 Dividend distributed by an Israeli resident company (composition of dividend sources and tax rates see Section 7A)

◻ Dividend distributed by a Real Estate Investment Trust Fund (composition of dividend sources and tax rates see Section 7C)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Eligible <br> Security <br> No.** | **Name of <br> Security** | **Dividend <br> amount <br> per one <br> security** | **Dividend <br> amount <br> currency** | **Payment <br> currency** | **Representative <br> rate for <br> payment for <br> date** | **Tax – <br> individuals <br> %** | **Tax – <br> corporations <br> %** |
| 445015 | ______ | 0.85 | NIS ___ | NIS | _____ | 25 | 0 |

---

◻ Dividend distributed by a foreign resident company (for tax rates, see Section 7B)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Security <br> No.** | **Name of <br> security** | **Gross <br> amount <br> per <br> security** | **Currency** | **Foreign <br> tax %** | **Treaty <br> tax %** | **Remaining <br> tax to be <br> withheld in <br> Israel – <br> individuals <br> %** | **Remaining <br> tax to be <br> withheld in <br> Israel – <br> corporations <br> %** |
|  |  | **Payment <br> amount in <br> Israel per <br> security** | **Currency** | **Exchange rate for <br> payment for date** | **Exchange rate for <br> payment for date** | **Tax for <br> individuals <br> in Israel – <br> actual %** | **Corporate <br> tax in Israel <br> – actual %** |

---

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Please specify the amount of the dividend to be paid with precision of up to 7 digits after the decimal point when the currency of the dividend amount is NIS, and up to 5 digits after the decimal point when the dividend amount is in another currency.

*Note to Section 2 – The amount of dividend to be paid shall be calculated at NIS 0.85 per share.*

4. The total amount of the dividend to be paid is: *NIS 54,082,521 _______.* 

5. The balance of the Corporation's profits, as defined in Section 302 of the Companies Law, 5759-1999,
after the distribution that is the subject of this Report, is in the amount of:<br> *NIS 696,048,479 ___________________* 

6. Process for approving the dividend distribution:

*The dividend distribution was approved by the Company's Board of Directors on August 11, 2025.*

*For further details see Section 10 below.*

The above distribution is with Court approval pursuant to Section 303 of the Companies Law: *No*<br> The final dividend per share is subject to changes due to _______________

The final dividend per share may be updated up to 2 trading days prior to the effective date.

7. The withholding tax rates set out below are for the purpose of withholding tax at source by the TASE members.

7A. Composition of the dividend sources distributed by an Israeli resident company from shares and financial instruments, excluding a REIT Fund.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **% of the <br> Dividend** | **Individuals** | **Corporations** | **Foreign <br> Residents** |
| Taxable income subject to Corporate Tax (1) | 100 | 25% | 0% | 25% |
| Income sourced abroad (2) | 0 | 25% | 23% | 25% |
| Income from Approved/Benefited Enterprise (3) | 0 | 15% | 15% | 15% |
| Income from Preferred Enterprise – Ireland until 2013 (4) | 0 | 15% | 15% | 4% |
| Income from Preferred Enterprise – Ireland starting 2014 (5) | 0 | 20% | 20% | 4% |
| Preferred income | 0 | 20% | 0% | 20% |
| Income from Approved Tourism/Agriculture Enterprise (6) | 0 | 20% | 20% | 20% |
| Income from Approved/Benefited Enterprise that submitted a waiver notice (7) | 0 | 15% | 0% | 15% |
| Distribution classified as capital gain | 0 | 25% | 23% | 0% |
| Distribution by participation unit | 0 | 0 | 0 | 0 |
| Other | 0 | 0 | 0 | 0 |

---

Explanation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Taxable income subject to Corporate Tax – income from distribution of profits or dividend sourced in income produced or accrued in Israel and received directly or indirectly from another corporate entity subject to Corporate Tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Income sourced abroad is income produced or accrued abroad and not taxed in Israel.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Including income from a Benefited Tourism Enterprise where the election/operation year is until 2013.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Preferred Enterprise – Ireland, where the election year is until 2013.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Preferred Enterprise – Ireland, where the election year is from 2014 onward.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Including income from a Benefited Tourism Enterprise where the election/operation year is from 2014 onward.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Approved or Benefited Enterprise that submitted a waiver notice by June 30, 2015, after Corporate Tax was deducted as required.

7B. Dividend distributed by a foreign resident company:

---

| | | | |
|:---|:---|:---|:---|
| | **Individuals** | **Corporations** | **Foreign Residents** |
| Dividend distributed by a foreign resident company | 25% | 23% | 0% |

---

7C. Dividend distributed by a Real Estate Investment Trust Fund:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **% of the <br> Dividend** | **Individuals <br> (1)** | **Corporations** | **Foreign <br> Resident <br> Corporations** | **Exempt <br> Mutual <br> Fund** | **Provident <br> Fund (2)** |
| From real-estate appreciation, capital gain and depreciation (3) | ____ | 25% | 23% | 23% | 0% | 0% |
| Other taxable income (e.g., rental fees) | ____ | 47% | 23% | 23% | 23% | 0% |
| From revenue-generating real estate for residential leasing | ____ | 20% | 20% | 20% | 0% | 0% |
| Income taxed by the Fund (4) | ____ | 25% | 0% | 25% | 0% | 0% |
| Irregular income | ____ | 70% | 70% | 70% | 60% | 70% |
| Other | ____ | ____ | ____ | ____ | ____ | ____ |
| % weighted withholding tax at source | 100% | ____ | ____ | ____ | ____ | ____ |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Individuals – including income of a taxable mutual fund, individuals who are foreign residents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Provident fund for pension or for severance or for compensation as defined in the Income Tax Ordinance, as well as a provident fund or foreign pension fund that is a resident of a treaty country.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) from real-estate appreciation or capital gain, except from the sale of real estate held for a short period, as well as from income in the amount of depreciation expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) a distribution from income that was taxed at the Fund level pursuant to Section 64A4(e).

8. The number of the Corporation's dormant securities that are not entitled to dividend payment and
for which a waiver letter must be provided in order to receive the dividend payment: *653,860* 

9. The effect of the dividend distribution on convertible securities:

◻ The Company has no convertible securities

◻ The dividend distribution has no effect on the convertible securities

🗷 The effect of the dividend distribution on the convertible securities is as follows:

---

| | | |
|:---|:---|:---|
| **Name of the <br> Security** | **Security <br> Number** | **Remarks** |
| *Matrix UP 3/23* | 1194760 | Other<br> *On the ex-date, the current exercise price of each option will be reduced by the amount of the gross dividend per share.* |

---

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10. The recommendations and resolutions of the directors in connection with the dividend distribution pursuant
to Article 37(a)(1) of the Securities Regulations (Periodic and Immediate Reports), 5730-1970:

*Below are additional details regarding the resolution of the Company's Board of Directors concerning the distribution of a dividend from the Company's profits for the second quarter of 2025 in the amount of approximately NIS 54 million (the "**Distribution**"):*

&nbsp;&nbsp;&nbsp;&nbsp;*1.* *In light of the Company's dividend distribution policy (distribution of up to 75% of its profits each quarter, subject to meeting the relevant tests), the Board of Directors reviewed the Company's financial statements as of June 30, 2025, and additional data provided by Company management. Among other things, the Board of Directors reviewed the Company's balance of retained earnings, the projected cash flow statement in order to assess solvency for the next 4 years, the maturity dates of financial liabilities and compliance with financial covenants, including vis-à-vis financial institutions and pursuant to the trust deed for the bonds (Series B), the shareholders' equity attributable to equity holders, cash balances, cash flow from operating activities, unused credit facilities, the Company's positive current ratio, and the net profit attributable to equity holders, including sensitivity analyses in various scenarios.* 

&nbsp;&nbsp;&nbsp;&nbsp;*2.* *This review satisfied the Board of Directors that the Company meets the distribution tests as defined in the Companies Law, 5759-1999:* 

*"The Profit Test" – the Company has distributable retained earnings as of June 30, 2025 in the amount of approximately NIS 750.1 million.*

*"The Solvency Test" – the Board of Directors reviewed and noted, among other things, the Company's leverage ratio, high cash balances and significant unused credit facilities.*

*The Company has no pledged assets and does not expect changes in the financial covenants to which it is committed.*

*The Company has an issuer rating of Aa3 with a stable outlook from Midroog.*

&nbsp;&nbsp;&nbsp;&nbsp;*3.* *Based on all of the above, the Board of Directors was of the opinion that there is no reasonable concern that the Distribution will prevent the Company from meeting its existing and expected obligations as they fall due, or from continuing to carry out its current activities and future plans, or adversely affect its capital structure, its level of leverage, its compliance with the financial ratios required of it, the Company's compliance with the financial covenants for distribution set forth in the trust deed for the bonds (Series B), and its ability to implement investment plans once formulated, taking into account the Company's financial position, the scope of the Distribution, and the scope of the Company's existing and expected liabilities, all based on the data available to the Company and known to the Board of Directors at the time of approving the Distribution.* 

The Company's assessments regarding its projected cash flow constitute forward-looking information as defined in the Securities Law, 5728-1968. The Company's assessments may not materialize, in whole or in part, or may materialize differently than expected, and they depend on factors not under the Company's control; among other things, such assessments involve changes to the Company's needs and plans and market conditions.

__________

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**Authorized signatories permitted to sign on behalf of the Corporation:**

---

| | | |
|:---|:---|:---|
| | **Name of Signatory** | **Position** |
| **1** | Nevo Brenner | Chief Financial Officer |

---

Explanation: Pursuant to Article 5 of the Periodic and Immediate Reports Regulations (5730-1970), a report submitted under these Regulations shall be signed by those authorized to sign on behalf of the Corporation. A Staff Position on the matter may be found on the Authority's website: <u>click here</u>.

This Report was signed by Adv. Yifat Givol, Head of the Legal Department and Corporate Secretary.

Reference numbers of previous documents on the matter (the reference does not constitute incorporation by reference):

The Corporation's securities are listed for trading on the Tel Aviv Stock Exchange

Form Structure Update Date: July 15, 2025

Short Name: Matrix<br> Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598810, Fax: 09-9598050<br> Email: <u>yifatg@matrix.co.il</u>; Company website: <u>https://www.matrix-globalservices.com/</u>

Former names of the reporting entity: Romtech Electronics Ltd.

Name of electronic filer: Nevo Brenner<br> Position: Chief Financial Officer<br> Employer:<br> Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598850, Fax: 09-9598826<br> Email: <u>nevobr@matrix.co.il</u>

5/5 https://mayafiles.tase.co.il/rhtm/1685001-1686000/H1685041.htm

## Exhibit 99.8

**Exhibit 99.8**

![](image_004.jpg)<br>**CHAPTER A**<br>Board of Directors' Report<br> for the nine months<br> ended 30.09.2025 <br>

The information contained in this Board of Directors' Report published by the Company constitutes a convenience translation of the Board of Directors' Report published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

![](image_008.jpg)

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| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

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| | | |
|:---|:---|:---|
| 1. | The Board of Directors' Explanations for the Corporation's Results of Operations and Financial Position | 3 |
| 1.1. | Analysis of results of operations | 3 |
| 1.1.1. | Description of operating segments | 3 |
| 1.1.2. | Business environment | 3 |
| 1.1.3. | Material events during the reporting period | 8 |
| 1.1.4. | Condensed statements of profit and loss for the three and nine months ended September 30, 2025, and 2024 | 10 |
| 1.2. | Analysis of results of operations | 11 |
| 1.2.1. | Seasonality | 11 |
| 1.2.2. | Consolidated analysis of profit and loss | 11 |
| 1.2.3. | Condensed results of consolidated profit and loss according to operating segmental for the three months ended September 30, 2025 and 2024, and for the nine months ended on those dates | 17 |
| 1.2.4. | Analysis of results of operations according to segment | 20 |
| 1.2.5. | Commitments and special events | 23 |
| 1.3. | Financial position, liquidity, and financing sources | 24 |
| 1.3.1. | Analysis of financial position as of September 30, 2025 | 24 |
| 1.3.2. | Condensed statements of cash flow | 26 |
| 1.3.3. | Average short-term credit | 27 |
| 1.3.4. | Disclosure regarding statement of cash flow forecast pursuant to Article 10(B)(1)(d) of the Israel Securities Regulations | 27 |
| 1.3.5. | Summary statements of changes in equity | 28 |
| 2. | Disclosure provisions in connection with the corporation's financial reporting | 29 |
| Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date 30 | Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date 30 | Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date 30 |

---

1. The Board of
 Directors' Explanations for the Corporation's Results of Operations and Financial Position

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. Analysis
 of results of operations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.1. Description
 of operating segments

Matrix IT Ltd., together with its subsidiaries, is a company operating in the fields of information technology (IT) solutions and services, consulting, and management in Israel and overseas.

The Matrix Group employs approximately 12,000 software, hardware, engineering, integration, and training personnel, who provide services in advanced fields of information and management technology to hundreds of customers in the Israeli market as well as customers in the U.S. market. The Group also engages in the sales and marketing of software and hardware products from a wide range of manufacturers from Israel and overseas, as well as the provision of consulting, project management and multidisciplinary engineering consulting services.

The Company has four<sup>1</sup> areas of activity - (1) Information Technology Solutions and Services ("IT") Consulting and Management in Israel; (2) IT Solutions and Services in the USA; (3) Marketing and Support of Software Products; and (4) Cloud and Computing Infrastructures. The Company provide solutions, services, and products to thousands of customers in the following main sectors ("sectors"): banking and finance, high-tech and startups, government and the public sector, defense, transportation, health, industry, retail and trade, education and academia. Unique divisions operate in each one of these sectors, specializing in providing specific solutions to the particular sector in which they operate, as well as managing and carrying out projects for the Company's lateral entities. <br> The specialization in the various sectors is reflected in the applicative, professional, and marketing facets of that sectors. Accordingly, a professional and marketing infrastructure is developed in each sector which is required to support such sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.2. Business
 environment

The business environment in which the Company operates is directly affected by global and local trends and events, the most significant of which will be presented below. For additional details regarding the Company's business environment, see Section 1.1.2 of the Board of Directors' Report as of 31.12.2024, and Section 6 of the chapter on the Description of the Corporation's Affairs, in the 2024 Periodic Report.

<sup>1</sup> As of the 2024 financial statements, the Company presents the training and implementation activity, which was previously presented as a separate operating segment, as part of the IT, Consulting, and Management Solutions in Israel segment. For further details, see Note 24 to the Consolidated Financial Statements.

Board of Directors' Report 3

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Global
 economic environment

As of the date of this report, in general, the global economy has continued to stabilize after facing the effects of the increase in inflation rates in recent years, which was followed by rising interest rates during the course of the post-COVID-19 period.

In the U.S. market, the downward trend in inflation has stabilized, and is currently approximately 3% (September 2025, annual terms, based on the last 12 months – LTM). As a result, in October 2025, the U.S. Federal Reserve reduced the interest rate to 4%.

In the Eurozone, the downward trend in inflation continues at a more moderate pace and is approximately 2.1% (October 2025 – LTM). The European Central Bank's interest rate, as of the reporting date, is 2.15%, following several interest rate reductions by the European Central Bank (the most recent of which was in June 2025).

As of April 2025, the US administration has been implementing a plan to increase tariffs on imports into the US from countries with significant trade surpluses with the US. As a result, several new trade agreements have been signed between the US and various countries around the world. The tariff imposed on imports to the US from Israel stands at 15% (compared to an almost zero tariff on goods imported from the US in the past). In the Company's assessment, the above tariffs are not expected to have a direct impact on the Company's activities.

Despite the downward trend in global inflation in recent years, there are still concerns of further inflationary outbursts and price increases. This is due, *among other things*, to the imposition of tariffs by the US government and the possibility of the development and/or worsening of geopolitical conflicts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Israel
 economic environment

The main global economic trends described above are reflected, to a large extent, in the Israeli economy as well. At the same time, the Israeli economy was impacted in the past two years primarily by unique and complex local events that had a substantial impact, primarily the Iron Swords War and its consequences.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. National
 security situation

As of the reporting date, the "Iron Swords" war (including related combat operations in other areas) continues to impact Israel's geopolitical and economic environment. The war erupted on October 7, 2023 following a large-scale Hamas terror attack in southern Israel. Since then, Israel has conducted military operations against Iran-backed terrorist organizations in the Gaza Strip, Lebanon, Syria, and Yemen. During 2025, a short and direct round of confrontation took place between Israel and Iran ("Operation Rising Lion"), during which both sides exchanged missile and UAV strikes. The operation concluded on June 24, 2025.

In the northern arena, a ceasefire between Israel and Lebanon/Hezbollah has been in effect since November 27, 2024, significantly limiting open hostilities along the border.

In the Gaza arena, on October 9, 2025, the Government of Israel approved a U.S.-brokered ceasefire agreement, which includes the withdrawal of Israeli forces from parts of the Gaza Strip and the release of Israeli hostages in exchange for the release of Palestinian prisoners. It is noted that significant uncertainty remains regarding the stability of the agreements and the risk of renewed escalations on any of the fronts.

The heightened geopolitical risk environment has led to rating downgrades and negative outlooks. Moody's downgraded the State of Israel's credit rating to Baa1 in September 2024 and maintained a negative outlook. In July 2025, Moody's reaffirmed the Baa1 rating with a negative outlook. S&P downgraded Israel's credit rating to A on October 1, 2024 and reaffirmed the rating with a negative outlook on May 9, 2025. On November 7, 2025, S&P announced its decision to revise the rating outlook to stable, while affirming Israel's credit rating at A.

Board of Directors' Report 4

Nevertheless, as of the second half of 2024 and as a result of Israel's military successes, signs of improvement in economic indicators have been observed. Thus, despite the many difficulties and challenges facing the business environment, the Israeli economy has demonstrated robustness and resilience.

Capital and foreign exchange markets – around the period of the direct confrontation with Iran (June 2025) and following the end of the hostilities, the shekel strengthened sharply and the Tel Aviv Stock Exchange recorded significant gains. Government bonds also reflected a decline in the risk premium compared with the initial days of the escalation.

In view of the uncertainty and security developments, the Bank of Israel left the interest rate unchanged in the third quarter of 2025 (4.5%).

Alongside the positive signals in the financial markets, estimates of the direct and indirect damages from the confrontation with Iran and the continuation of the overall campaign range in the tens of billions of shekels, mainly due to the cost of repairing the damage and destruction caused during the fighting and the high defense expenditures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Economic
 Indicators

1) Inflation and interest

It should be noted that even before the outbreak of the war, the Israeli economy faced high inflation and rising interest rates. These trends slowed in late 2023 and the first half of 2024. Further to this, in January 2024, the Bank of Israel lowered the interest rate to 4.5% and this rate remains unchanged as at the reporting date. The CPI increased (June index - LTM) by 2.5%.

The Company estimates that the inflationary impact on the results of its operations is immaterial, *among other things,* because the Company's financial debt is not linked to the CPI. On the other hand, any rise in interest rates may negatively affect the results of the Company's operations by increasing financial costs for variable-interest loans (commercial securities and short-term bank loans), as well as for new fixed-interest loans that will replace loans that come due. Conversely, the opposite is true in the case of interest rate reductions. In this context, it should also be noted that the main component of the Company's expenses is wages (about 55% of the Company's operating expenses), which, in the Company's assessment, are impacted mainly by trends in supply and demand of technological staffing, and inflation is expected to have a limited effect on them.

Board of Directors' Report 5

2) Real economic activity

Gross domestic product (GDP) grew by approximately 0.9% in 2024, and according to the Bank of Israel's forecast<sup>2</sup>, assuming the fighting in Gaza ends in the first quarter of 2026, GDP is expected to grow by about 2.5% in 2025 and by approximately 4.7% in 2026.<br> Heavy war-related spending has led to an increase in Israel's trade deficit, which was 4.7% of GDP in June 2025. In addition, the unemployment rate currently stands at approximately 3%, reflecting a tight labor market.

3) Exchange rates

Changes in the U.S. dollar exchange rate (and to a lesser extent, the euro), along with its volatility, affect the Company's results. This is especially true for the Cloud and Computing Infrastructures segment and the Marketing, and Support of Software Products segment (including cloud, hardware, and software products transactions, some of which are denominated in US dollars), as well as the shekel-denominated results of the IT Solutions segment in the US. The exchange rate also affects translation adjustments of the financial statements of US subsidiaries (which are recorded under the foreign currency translation reserve). In general, an increase in the US dollar exchange rate during a given period has a positive effect on the Company's results, and the opposite is true when the dollar exchange rate falls. The Company regularly hedges against foreign currency transactions.

During the third quarter, the downward trend in the U.S. dollar exchange rate against the shekel continued, decreasing by approximately 2% during the quarter and by about 9.4% over the first three-quarters of the year, respectively.

As explained above, the appreciation of the shekel has an offsetting negative effect on the Company's continued growth trend in revenues and profits (that is, absent this effect, the Company would have recorded even higher growth). In addition, following the appreciation of the shekel against the U.S. dollar (and the euro), the Company recorded in the quarter and in the period financial expenses from exchange rate differences (net of gains recorded from hedging transactions) of approximately NIS 6 million and approximately NIS 16.4 million, respectively. In addition, movements in the foreign currency translation reserve (net of the impact of hedging activities recorded in the capital reserve) of approximately NIS 8.5 million and approximately NIS 34.1 million, respectively, which were recorded under other comprehensive income.

<sup>2</sup> https://www.boi.org.il/publications/pressreleases/29-9-25a/

Board of Directors' Report 6

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. The high-tech
 industry

As a provider of IT solutions, products, and services, the Company competes with other companies in the high-tech industry for quality personnel. In addition, a significant part of the Company's revenues (approximately 16% in 2024) derive from companies in the high-tech sector. The past two years have been challenging for the Israeli high-tech sector. This is reflected, *among other things*, in a decline in the number of startups and a decrease in demand for technological staffing (with an emphasis on inexperienced employees – juniors).

A report by the Israel Innovation Authority from September 2025<sup>3</sup> indicates continued stagnation in the number of employees in Israel's high-tech industry.

In the Company's assessment, the reduction trend in the demand for staffing high-tech companies may make it easier for the Company to recruit and retain employees, and to mitigate the pressure for wage increases on the part of the employees. On the other hand, the uncertainty in the high-tech industry could lead to a decrease in demand and even harm some of the Company's customers in this operating sector and consequently, harm the Company's operating results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Effect
 on the Company's operating results

As of the date of the financial statements and the reporting date, approximately 160 of the Company's employees are on active reserve duty. Notwithstanding the above, as detailed below, the Company's operations in the third quarter and the first nine months of 2025, as well as throughout the entire period of the war, were characterized by continued growth in the volume of its operations and in its operating results.

*The information mentioned above in this section concerning the Company's assessments as to the impact on the war on its operations, a war whose full effects and implications have not yet been ascertained, the Company's economic environment, and developments in the high-tech industry, constitutes forward-looking information, as defined in the Securities Law, 1968 (the "Securities Law"). It is based on management's assessments and business experience, as well as assumptions, various scenarios, analyses, and public information, along with the assessments of research companies and analysts as of the report date. The information may not materialize, in whole or in part, or may materialize differently, including in a manner that is materially different than expected, among other things, as a result of high uncertainty, economic instability, and developments that cannot be assessed at this stage in connection with the war and its effects, as a result of market competition, economic slowdown or instability in the economy, and as a result of the realization of all or part of the risk factors appearing in Section 19 of the Company's Periodic Report.*

<sup>3</sup> https://innovationisrael.org.il/wp-content/uploads/2025/09/Annual-Report-The-State-of-High-Tech-hebrew.pdf

Board of Directors' Report 7

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.3. Material
 events during the reporting period

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Entry into
 a merger agreement with Magic

Further to the Company's memorandum of understanding dated March 10, 2025 with Magic Software Enterprises Ltd. ("Magic") to negotiate the terms of a binding merger agreement, under which the Company would acquire all of Magic's issued and outstanding share capital by way of a reverse triangular merger [for further details, see Immediate Report dated March 11, 2025 (ref. 2025-01-015939)], the Company entered into a merger agreement (the "Merger Agreement"), which was signed on November 3, 2025. For further details, see Immediate Report dated November 3, 2025 (ref. 2025-01-083233) (the "transaction report").

Under the merger agreement, and subject to the fulfillment of the conditions precedent as detailed in the immediate report, upon completion of the transaction the Company will acquire all of Magic's issued and outstanding share capital. Upon completion of the merger, Magic will become a private company wholly owned by Matrix (100%). Magic's shares will be delisted from trading on NASDAQ and the TASE, and the company will transition from a public company to a private one. For a description of the principal terms of the merger agreement, see the transaction report.

As Formula Systems (1985) Ltd. is the controlling shareholder in both the Company and Magic, and in light of the materiality of the transaction, in August 2023 the Company's Board of Directors appointed an independent committee composed solely of directors of the Company who are external and independent directors (the "special committee"). The special committee served in its role from the date of its establishment until the date of approval of the merger transaction by the Company's Board of Directors and the signing of the merger agreement on November 3, 2025. For further details, see the transaction report.

Completion and execution of the merger are subject to the fulfillment of a number of conditions precedent, as detailed in the transaction report, including approval of the merger transaction by the special general meetings of shareholders of the Company and of Magic, which have been convened for December 10, 2025.

Pursuant to generally accepted accounting principles, the transaction will be accounted for using the as-pooling method rather than the purchase method. Meaning, the Company will consolidate Magic's assets and liabilities in its financial statements at the values recorded in the controlling shareholder's books. (No intangible assets, net will be created in the acquisition, and accordingly, no amortization of intangible assets, net will be recorded thereafter.)

In addition, since the transaction is being executed as a merger, its implementation will not involve any financial expenses for the Company.

The merger agreement provides that during the period from the date of signing the merger agreement until the completion date or the date of termination of the agreement in accordance with its terms (whichever is earlier) (the "interim period"), and subject to applicable law, the business of the companies shall be conducted in the ordinary course of business, such that no changes shall occur outside the ordinary course of business, and no actions or undertakings shall be made that could materially adversely affect the assets, business, financial condition of the companies, or the ability to complete the transaction.

Board of Directors' Report 8

In addition, pursuant to the provisions of the merger agreement, during the interim period, the Company and Magic may make distributions (as the term "distribution" is defined in the Companies Law) only in accordance with their respective dividend distribution policies as in effect on the date of signing the agreement (and for the avoidance of doubt, neither shall distribute more than 75% of their respective net income attributable to shareholders). Such a distribution will not affect or change the exchange ratio or the merger consideration.

*The Company's assessments regarding the transaction, its consummation, its closing, and the timelines set forth above constitute forward-looking statements, as defined in the Israeli Securities Law, 1968. This information may not materialize or may materialize in a manner or at times differing from the Company's assessments, including non-consummation of the merger, among other things, as a result of factors that are outside of the Company's control, including nonfulfillment of the conditions precedent for the completion of the transaction, or the failure to obtain the approvals required to complete the transaction, and/or changes in the state of the capital markets and the markets in which the Company and Magic operate, or as a result of the materialization of one or more of the risk factors set forth in the Company's 2024 annual report.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Acquisition
 of Gav Systems

On February 4, 2025, the Company, through its subsidiary Matrix IT Systems Ltd., completed the acquisition of 70% of the share capital of Gav Systems Ltd. and Gav Expert Ltd. for a total of approximately NIS 45.5 million. <br> In addition, the sellers were paid a dividend for the accrued earnings up until 31.12.23 in the amount of approximately NIS 29 million. Pursuant to the agreement, the Company and the seller have a mutual option to sell and purchase the seller's remaining shares to the Company. Gav Systems provides professional services, primarily in the fields of computing and software development. Gav Systems' operating results are consolidated in the Company's financial statements (in the IT, Consulting, and Management Solutions in Israel segment) as of the beginning of the first quarter of 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Transaction
 with non-controlling interests

During the first quarter, the Company entered into a mutual put/call options renewal agreement with minority holders in a subsidiary for the sale and acquisition of the minority holder's remaining shares of that subsidiary. The transaction was accounted for directly to equity.

Board of Directors' Report 9

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.4. Condensed
 Statements of Consolidated Profit and loss for the three months ending September 30, 2025,
 and 2024 and the nine months ended on those same dates (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three<br> months ended | For the three<br> months ended | Change in % | For the nine<br> months ended | For the nine<br> months ended | Change in % |
| | **30.09.25** | **30.09.24** | | **30.09.25** | **30.09.24** | |
| **Revenues** | 1641610 | 1418810 | 15.7% | 4639189 | 4205255 | 10.3% |
| **Cost of revenues and services** | 1400062 | 1213763 | 15.3% | 3947884 | 3591279 | 9.9% |
| **Gross profit** | **241548** | **205047** | **17.8%** | **691305** | **613976** | **12.6%** |
| **% of revenues** | **14.7%** | **14.5%** |  | **14.9%** | **14.6%** |  |
| Selling and marketing expenses | 58859 | 48650 | 21% | 163752 | 146313 | 11.9% |
| General and administrative expenses | 51209 | 48216 | 6.2% | 143363 | 137549 | 4.2% |
| **Operating income** | **131480** | **108181** | **21.5%** | **384190** | **330114** | **16.4%** |
| **% of revenues** | **8%** | **7.6%** |  | **8.3%** | **7.9%** |  |
| Financial expenses, net | 19833 | 16155 | 22.8% | 64593 | 47574 | 35.8% |
| Income before taxes on income | 111647 | 92026 | 21.3% | 319597 | 282540 | 13.1% |
| Taxes on income | 27311 | 22308 | 22.4% | 78395 | 68299 | 14.8% |
| **Net income** | **84336** | **69718** | **21%** | **241202** | **214241** | **12.6%** |
| **% of revenues** | **5.1%** | **4.9%** |  | **5.2%** | **5.1%** |  |
| **Net income attributable to** |  |  |  |  |  |  |
| Equity holders of the company | 77973 | 64396 | 21.1% | 226470 | 202537 | 11.8% |
| Non-controlling interests | 6363 | 5322 | 19.6% | 14732 | 11704 | 25.9% |
| **Net income** | **84336** | **69718** | **21%** | **241202** | **214241** | **12.6%** |
| **% of revenues** | **5.1%** | **4.9%** |  | **5.2%** | **5.1%** |  |
| **EBITDA** | **182776** | **155465** | **17.6%** | **534432** | **467936** | **14.2%** |
| **% of revenues** | **11.1%** | **11%** |  | **11.5%** | **11.1%** |  |

---

Board of Directors' Report 10

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. Analysis
 of results of operations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.1. Seasonality

In the third quarter, the number of working hours was approximately 3.9% lower compared with the corresponding quarter. This was due to the timing of the Tishrei holidays, which in 2025 fell in the third and fourth quarters, whereas in the corresponding period they fell in the fourth quarter only (for details, *see also* Section 9 of the "Description of the Corporation's Business" chapter as of December 31, 2024, under "Seasonality"). In the first three quarters of the year, the number of working hours was similar to that of the corresponding period. Most of the seasonality effect, as noted above, is in the IT Solutions and Services, Consulting, and Management in Israel segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.2. Consolidated
 analysis of profit and loss

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Revenues** 

The Company's revenues for the quarter reached a record of approximately NIS 1,641.6 million, compared with approximately NIS 1,418.8 million in the corresponding quarter, an increase of about 15.7%. The growth rate in revenues, adjusted for the increase in revenues accounted for on a net basis, was approximately 20.7% (see Section E below for details).

The Company's revenues for the period totaled NIS 4,639.2 million, compared to NIS 4,205.2 million in the corresponding period, an increase of about 10.3%. The growth rate in revenues, adjusted for the increase in volume of revenues accounted for on a net basis, is about 15.1% (see Section E below for details).

The increase in revenues during the quarter derived from growth in the volume of activity across all segments. The increase in revenues during the period derived from growth in the volume of activity across all segments, except for an immaterial decrease in the IT Solutions and Services in the USA segment (in NIS terms, compared with an increase in revenues in USD terms).

The increase in the volume of revenues during the quarter and during the period was impacted by the first time consolidation of the operating results of companies acquired by the Company - Gav Systems (starting as of the first quarter 2025), Ortec (starting December 2024), and Alacer (starting as of the fourth quarter 2024). Net of the effect of the consolidation of these companies for the first time, the Company recorded organic growth in revenues of approximately 10.6% and 5.5% during the quarter and during the period, respectively. <br> Organic growth in revenues, after neutralizing the effect of the increase in revenues recorded on a net basis came to 15.6% and 10.2% during the quarter and during the period, respectively.

Board of Directors' Report 11

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Gross profit** 

Gross profit in the quarter amounted to a record of approximately NIS 241.5 million (approximately 14.7% of revenues), compared with approximately NIS 205 million in the corresponding quarter (approximately 14.5% of revenues), an increase of approximately 17.8%.

Gross profit during the period amounted to a record of approximately NIS 691.3 million (approximately 14.9% of revenues), compared with approximately NIS 614 million in the corresponding period (approximately 14.6% of revenues), an increase of approximately 12.6%.

The increase in gross profit and its margin of total revenues during the quarter and during the period is driven primarily by an increase in the Company's volume of activity and by operational efficiency measures carried out by the Company.

The significant growth in gross profit and gross profit margin in the quarter was achieved despite the offsetting effect of a decrease in working hours compared with the corresponding quarter (see details in Section 1.2.1 above).

The impressive growth in gross profit and gross profit margin during the period was achieved despite a one-time gain recorded in the corresponding period (which reduced the cost of revenues in that period). This gain was from retroactive compensation received from the National Insurance Institute for the social benefits component in the salaries of Company employees called up for reserve duty (about NIS 6 million paid in the second quarter of 2024 for 2023).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Selling, marketing, general & administrative expenses** 

SG&A expenses in the quarter amounted to approximately NIS 110.1 million (approximately 6.7% of revenues), compared to approximately NIS 96.9 million in the corresponding quarter (approximately 6.8% of total revenues). SG&A expenses during the period amounted to NIS 307.1 million (approximately 6.6% of revenues), compared to NIS 283.9 million in the corresponding period (approximately 6.8% of total revenues).

Most of the increase in SG&A expenses during the quarter and during the period derived from an increase in the volume of activities (including first-time consolidation of subsidiaries during the period), while their margin of total revenues decreased.

It should be noted that selling expenses include amortization of intangible assets arising from business combinations in the amounts of approximately NIS 7 million and NIS 21.6 million during the quarter and during the period, respectively (compared with approximately NIS 5.4 million and NIS 16.3 million in the corresponding periods). The increase in the amortization of intangible assets derives from the first-time consolidation of subsidiaries in the fourth quarter of 2024 and the first quarter of 2025, as detailed above.

General and administrative expenses include an amount of approximately NIS 1.9 million and NIS 6.3 million during the quarter and during the period, respectively (compared with approximately NIS 4.5 million and NIS 13.5 million in the corresponding periods for share-based payment expenses for officers and senior executives.

Board of Directors' Report 12

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Operating income** 

Operating income in the quarter amounted to a record of approximately NIS 131.5 million (approximately 8% of revenues), compared with approximately NIS 108.2 million in the corresponding quarter (approximately 7.6% of revenues), an increase of approximately 21.5%. <br>

Operating income during the period amounted to a record of approximately NIS 384.2 million (approximately 8.3% of revenues), compared with approximately NIS 330.1 million in the corresponding period (approximately 7.9% of revenues), an increase of approximately 16.4%.

The increase in operating income during the quarter and during the period, and in its margin of total revenues, compared with the corresponding periods, is attributed to growth in profit across all segments.

Further to the details provided in the revenues section above, net of the effect of the first-time consolidation of Gav, Ortec, and Alacer, the Company recorded organic growth in operating income of approximately 15.2% and 11.5% during the quarter and during the period, respectively. <br>

For the impact of the increase revenues from transactions whose accounted for on a net basis on the operating income margin, see Section E below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Key results of the Company adjusted for the impact of revenue accounted for on a net basis** 

During the third quarter and during the period, the trend from previous periods continued, with an increase in revenues that, according to IFRS, must be recognized on a net basis. This affects the Company's revenues, revenue growth rate, and profit margin.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| For the sake of comparability, the following analysis presents the Company's revenues and operating income, net of the impact of gross/net revenue presentation | For the three<br> months ended | For the three<br> months ended | Change in % | For the nine<br> months ended | For the nine<br> months ended | Change in % |
|  | **30.09.25** | **30.09.24** |  | **30.09.25** | **30.09.24** |  |
| Revenues | 1641610 | 1418810 | 15.7% | 4639189 | 4205255 | 10.3% |
| Adjustments for the increase in revenues accounted for on a net basis | 70551 |  |  | 200205 | <br>- |  |
| **Adjusted revenues** | **1712161** | **1418810** | **20.7%** | **4839394** | **4205255** | **15.1%** |
| Operating income | 131480 | 108181 | 21.5% | 384190 | 330114 | 16.4% |
| **% of revenues** | **7.7%** | **7.6%** |  | **7.9%** | **7.9%** |  |

---

Board of Directors' Report 13

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Financial expenses, net** 

Financial expenses (net) in the quarter amounted to NIS 19.8 million, compared with financial expenses (net) in the amount of NIS 16.2 million in the corresponding quarter.

Financial expenses (net) in the period amounted to NIS 64.6 million, compared with financial expenses (net) in the amount of NIS 47.6 million in the corresponding period.<br>

The following is a breakdown of financial expenses (net) (NIS thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three<br> months ended | Change | For the nine<br> months ended | For the nine<br> months ended | Change |
| | **30.09.25** | **30.09.24** | | **30.09.25** | **30.09.24** | |
| Interest, commissions, and other (net) | 6097 | 5897 | 200 | 18747 | 19354 | (607) |
| **Exchange rate differences** | 6024 | 4335 | 1689 | 16401 | 9723 | 6678 |
| **Accounting financial expenses\*** | 7712 | 5923 | 1789 | 29445 | 18497 | 10948 |
| **Total financial expenses (net)** | **19833** | **16155** | **3678** | **64593** | **47574** | **17019** |

---

\* Mainly financial expenses in respect of leases, adjustments for put options for non-controlling interests in subsidiaries, and changes in the fair value of investments measured at fair value.

As set forth above, the increase in financial expenses in the third quarter and during the period, compared with the corresponding periods, is primarily due to an increase in accounting financial expenses, mainly resulting from increased profitability in subsidiaries on the revaluation of existing put options to minority shareholders derived from the increased profitability in these subsidiaries (including subsidiaries consolidated for the first time), and from exchange rate differences resulting from the depreciation of the U.S. dollar against the shekel by approximately 2% and 9.4% during the quarter and during the period, respectively. (For further details, see Section 1.1.2 of this report.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.** **Taxes on income** 

Tax expenses in the quarter amounted to NIS 27.3 million (approximately 24.5% of profit before tax), compared with NIS 22.3 million in the corresponding quarter (approximately 24.2% of profit before tax).

Tax expenses in the period amounted to NIS 78.4 million (approximately 24.5% of income before tax), compared with NIS 68.3 million in the corresponding period (approximately 24.2% of income before tax).

The increase in tax expenses reflects the increase in profit. The increase in the Company's effective tax rate during the quarter and during the period, compared with the corresponding periods, is mainly due to an increase in non-tax-deductible expenses and to tax income for prior years that was recognized in the corresponding period.

Board of Directors' Report 14

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H.** **Net income** 

Net income in the quarter amounted to NIS 84.3 million (approximately 5.1% of revenues), compared with NIS 69.7 million (approximately 4.9% of revenues) in the corresponding quarter, an increase of approximately 21%.

Net income in the period amounted to NIS 241.2 million (approximately 5.2% of revenues), compared with NIS 214.2 million (approximately 5.1% of revenues) in the corresponding period, an increase of approximately 12.6%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**I.** **Net income attributable to equity holders of the Company** 

The net income attributable to equity holders of the Company in the quarter amounted to NIS 78 million (approximately 4.7% of revenues), compared to NIS 64.4 million (approximately 4.5% of revenues) in the corresponding quarter. The net income attributable to equity holders of the Company in the period amounted to NIS 226.5 million (approximately 4.9% of revenues), compared to NIS 202.5 million (approximately 4.8% of revenues) in the corresponding period.

**Total Comprehensive income (NIS thousands)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three months ended | For the three<br> months ended | For the nine<br> months ended | For the nine<br> months ended |
| | **30.09.25** | **30.09.24** | **30.09.25** | **30.09.24** |
| **Net income** | 84336 | 69718 | 241202 | 214241 |
| **Other comprehensive income (net of tax effects)** |  |  |  |  |
| Actuarial gain (loss) from remeasurement of defined benefit plans | 1026 | (5) | 2815 | 1923 |
| Change in fair value of instruments used in cash flow hedging | 3233 | 63 | 1504 | (132) |
| Adjustments for translation of financial statements | (11715) | (3705) | (35649) | 8189 |
| **Total comprehensive income** | **76880** | **66071** | **209872** | **224221** |

---

As noted above, during the third quarter and during the period, the Company recorded other comprehensive loss from the translation of financial statements of foreign operations (primarily U.S. subsidiaries), net of hedging activities recorded in the equity reserve, amounting to approximately NIS 8.5 million and NIS 34.1 million, respectively. This was due to the depreciation of the U.S. dollar against the shekel by approximately 2% and 9.4% during the quarter and during the period, respectively. (For additional details, see Section 1.1.2 of this report – Business Environment).

Board of Directors' Report 15

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**J**. **Earnings before interest, taxes, depreciation and amortization – EBITDA (NIS thousands)** 

EBITDA figure is presented as it is a widely accepted indicator for measuring performance in comparable companies, and it represents an approximation of cash flows from operating activities, which excludes non-cash operating income and expenses, such as depreciation and amortization, including of intangible assets acquired in business combinations.

**Below are the EBITDA and adjusted EBITDA, net of IFRS 16:**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three<br> months ended | For the three<br> months ended | <br> Change in % | For the nine<br> months ended | For the nine<br> months ended | <br> Change in % |
| | **30.09.25** | **30.09.24** | | **30.09.25** | **30.09.24** | |
| **Operating income** | 131480 | 108181 | 21.5% | 384190 | 330114 | 16.4% |
| Depreciation and amortization | 51296 | 47284 | 8.5% | 150242 | 137822 | 9% |
| **EBITDA** | **182776** | **155465** | **17.6%** | **534432** | **467936** | **14.2%** |
| % of total revenues | 11.1% | 11% |  | 11.5% | 11.1% |  |
| Net of depreciation expenses IFRS 16<sup>4</sup> | 37013 | 33388 | 10.9% | 104436 | 96584 | 8.1% |
| **EBITDA net of IFRS16** | **145763** | **122077** | **19.4%** | **429996** | **371352** | **15.8%** |
| **% of total revenues** | **8.9%** | **8.6%** |  | **9.3%** | **8.8%** |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**K.** **Earnings per share attributable to the Company shareholders** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | For the nine<br> months ended | For the nine<br> months ended |
| | **30.09.25** | **30.09.24** | **30.09.25** | **30.09.24** |
| Basic earnings per share | 1.23 | 1.01 | 3.56 | 3.19 |
| Diluted earnings per share | 1.22 | 1.01 | 3.55 | 3.19 |

---

<sup>4</sup> Pursuant to IFRS 16 – Leases, lease payments are recognized as depreciation and financial expenses rather than as rental expenses.

Board of Directors' Report 16

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.3. Condensed
 consolidated statements of profit and loss by operating segments for the three months ended
 September 30, 2025 and 2024, and for the nine months ended on those same dates (NIS
 thousands<sup>)5</sup>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | Change in % | For the nine months ended | For the nine months ended | Change in % |
| | **30.09.25** | **30.09.24** | | **30.09.25** | **30.09.24** | |
| **Revenues according to operating segment** |  |  |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 979359 | 863213 | 13.5% | 2829422 | 2518495 | 12.3% |
| IT Solutions and Services in the US<sup>(2)</sup> | 118951 | 111104 | 7.1% | 341947 | 348589 | (1.9%) |
| Marketing and Support of Software Products | 174282 | 118610 | 46.9% | 355490 | 337946 | 5.2% |
| Cloud and Computing Infrastructures | 410349 | 367951 | 11.5% | 1225463 | 1130011 | 8.4% |
| Inter-segmental adjustments | (41331) | (42068) |  | (113133) | (129786) |  |
| **Total revenues** | **1641610** | **1418810** | **15.7%** | **4639189** | **4205255** | **10.3%** |
| **Operating income** |  |  |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 72936 | 56190 | 29.8% | 217903 | 184674 | 18% |
| IT Solutions and Services in the US<sup>(2)</sup> | 19006 | 16511 | 15.1% | 53240 | 50399 | 5.6% |
| Marketing and Support of Software Products | 11680 | 9067 | 28.8% | 30231 | 25352 | 19.2% |
| Cloud and Computing Infrastructures | 32722 | 27969 | 17% | 93886 | 78425 | 19.7% |
| Inter-segmental adjustments | (4864) | (1556) |  | (11070) | (8736) |  |
| **Operating income** | **131480** | **108181** | **21.5%** | **384190** | **330114** | **16.4%** |

---

<sup>(1)</sup> Including immaterial operations in Europe

<sup>(2)</sup> Including operations in Canada

<sup>5</sup> As of the 2024 financial statements, the Company presents the training and implementation activity, which was presented in the past as a separate operating segment, as part of the IT, Consulting, and Management Solutions in Israel segment. The comparison numbers were adjusted retroactively.

Board of Directors' Report 17

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three <br> months ended | For the three<br> months ended | For the nine<br> months ended | For the nine<br> months ended |
| | **30.09.25 - percentage** | **30.09.24 - percentage** | **30.09.25 - percentage** | **30.09.24 - percentage** |
| <br> **Operating income margin** |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 7.4% | 6.5% | 7.7% | 7.3% |
| IT Solutions and Services in the US<sup>(2)</sup> | 16% | 14.9% | 15.6% | 14.5% |
| Marketing and Support of Software Products | 6.7% | 7.6% | 8.5% | 7.5% |
| Cloud and Computing Infrastructures | 8% | 7.6% | 7.7% | 6.9% |
| **Operating income margin percentages** | **8%** | **7.6%** | **8.3%** | **7.9%** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three<br> months ended | For the three<br> months ended | For the nine<br> months ended | For the nine<br> months ended |
| | **30.09.25 - percentage** | **30.09.24 - percentage** | **30.09.25 -**<br> **percentage** | **30.09.24 - percentage** |
| **Revenues according to operating segment** |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 58.1% | 59.1% | 59.5% | 58.1% |
| IT Solutions and Services in the US<sup>(2)</sup> | 7.1% | 7.6% | 7.2% | 8% |
| Marketing and Support of Software Products | 10.4% | 8.1% | 7.5% | 7.8% |
| Cloud and Computing Infrastructures | 24.4% | 25.2% | 25.8% | 26.1% |
| **Total revenues in percentages** | **100%** | **100%** | **100%** | **100%** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three<br> months ended | For the three<br> months ended | For the nine<br> months ended | For the nine<br> months ended |
| | **30.09.25 - percentage** | **30.09.24 - percentage** | **30.09.25 -**<br> **percentage** | **30.09.24 - percentage** |
| **Contribution to operating income according to operating segments** |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel<sup>(1)</sup> | 53.5% | 51.2% | 55.1% | 54.5% |
| IT Solutions and Services in the US<sup>(2)</sup> | 13.9% | 15.0% | 13.5% | 14.9% |
| Marketing and Support of Software Products | 8.6% | 8.3% | 7.6% | 7.5% |
| Cloud and Computing Infrastructures | 24% | 25.5% | 23.8% | 23.1% |
| **Total contribution in percentages** | **100%** | **100%** | **100%** | **100%** |

---

<sup>(1)</sup> Including immaterial operations in Europe

<sup>(2)</sup> Including operations in Canada

Board of Directors' Report 18

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three<br> months ended | For the three<br> months ended | <br> Change in % | For the nine months ended | For the nine months ended | <br> Change in % |
| | **30.09.25** | &nbsp;&nbsp;**30.09.24** | | **30.09.25** | **30.09.24** | |
| **Geographic information** |  |  |  |  |  |  |
| **Revenues** |  |  |  |  |  |  |
| Revenues from Israel | 1536860 | 1325883 | 15.9% | 4333127 | 3914607 | 10.7% |
| Revenues from the United States | 118951 | 111104 | 7.1% | 341947 | 348589 | (1.9%) |
| Revenues from Europe | 27130 | 23891 | 13.6% | 77248 | 71845 | 7.5% |
| Inter-segmental adjustments | (41331) | (42068) |  | (113133) | (129786) |  |
| **Total revenues** | **1641610** | **1418810** | **15.7%** | **4639189** | **4205255** | **10.3%** |
| **Operating income** |  |  |  |  |  |  |
| Operating income from Israel | 115378 | 90641 | 27.3% | 336107 | 282307 | 19.1% |
| Operating income from the US | 19006 | 16511 | 15.1% | 53240 | 50399 | 5.6% |
| Operating income from Europe | 1960 | 2585 | (24.2%) | 5913 | 6144 | (3.8%) |
| Inter-segmental adjustment | (4864) | (1556) |  | (11070) | (8736) |  |
| **Total operating income** | **131480** | **108181** | **21.5%** | **384190** | **330114** | **16.4%** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three <br> months ended | For the three<br> months ended | For the nine <br> months ended  | For the nine<br> months ended |
| | **30.09.25 - percentage** | **30.09.24 - percentage** | **30.09.25 -**<br> **percentage** | **30.09.24 - percentage** |
| **Geographical revenue rate** |  |  |  |  |
| Revenues from Israel | 91.3% | 90.8% | 91.2% | 90.3% |
| Revenues from the United States | 7.1% | 7.6% | 7.2% | 8% |
| Revenues from Europe | 1.6% | 1.6% | 1.6% | 1.7% |
| **Total revenues in percentages** | **100%** | **100%** | **100%** | **100%** |
| **Geographical operating income margin** |  |  |  |  |
| Operating income margin from Israel | 7.5% | 6.8% | 7.8% | 7.2% |
| Operating income margin from the US | 16% | 14.9% | 15.6% | 14.5% |
| Operating income margin from Europe | 7.2% | 10.8% | 7.7% | 8.6% |
| **Operating income percentages** | **8%** | **7.6%** | **8.3%** | **7.9%** |
| **Rate of geographical contribution to operating income** |  |  |  |  |
| Operating income from Israel | 84.7% | 82.6% | 85% | 83.3% |
| Operating income from the US | 13.9% | 15% | 13.5% | 14.9% |
| Operating income from Europe | 1.4% | 2.4% | 1.5% | 1.8% |
| **Total contribution in percentages** | **100%** | **100%** | **100%** | **100%** |

---

Board of Directors' Report 19

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.4. Analysis
 of results of operations according to segment

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. IT Solutions
 and Services, Consulting and Management in Israel

Revenues

Segmental revenues for the quarter amounted to NIS 979.4 million, compared to NIS 863.2 million in the corresponding quarter, an increase of approximately 13.5%.

The segmental revenues for the period totaled NIS 2,829.4 million, compared to NIS 2,518.5 million in the corresponding period, an increase of about 12.3%.

Operating income

The operating income in this segment in the quarter amounted to NIS 72.9 million (approximately 7.4% of segmental revenues), compared with NIS 56.2 million in the corresponding quarter (approximately 6.5% of segmental revenues), an increase of 29.8%.<br>

The segment's operating income in this period amounted to NIS 217.9 million (approximately 7.7% of the segmental revenues), compared to NIS 184.7 million (approximately 7.3% of the segmental revenues) for the corresponding period, an increase of 18%. <br>

The increase in revenues and operating income (both in absolute amount and margin) during the quarter and during of period, compared with the corresponding periods, resulted from the growth in the scale of operations and profitability in the segment's business lines, with an emphasis on data and analytics, digital operations, core systems, the defense sector, and the financial sector, as well as from the first-time consolidation of Gav Systems (as of Q1 2025).

The significant growth in operating income in the quarter (both in absolute amount and margin) was achieved despite a decrease of approximately 3.9% in working hours in the third quarter compared with the corresponding quarter.<br> The impressive growth in revenues and operating income during the period was achieved despite a one-time gain recorded in the corresponding period, from retroactive compensation received from the National Insurance Institute for the social benefits component in the salaries of Company employees called up for reserve duty, most of which is attributed to this segment. (See additional details in the explanations regarding gross profit above.)

The sharp increase in the operating income margin is due, among other factors, to activity in the IBM Mainframe field within this segment, which began this year and for which revenues are presented on a net basis.

Board of Directors' Report 20

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. IT Solutions
 and Services in the US

**Segmental results (USD millions)** 

In order to offset the external effects of fluctuating exchange rates, see an analysis of the segment results is presented below in US dollars (USD millions):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | For the three months ended | For the three months ended | <br> % change | For the nine<br> months ended | For the nine<br> months ended | <br> % change |
| | **30.09.25** | **30.09.24** | | **30.09.25** | **30.09.24** | |
| Revenues | 35.2 | 29.9 | 17.7% | 97.2 | 94.2 | 3.2% |
| Operating income | 5.6 | 4.4 | 27% | 15.1 | 13.6 | 11.1% |
| Profit margin (%) | 16% | 14.8% |  | 15.6% | 14.5% |  |

---

The increase in revenues and operating income in US dollars, and the improvement in the segment's operating margin during the quarter and of the period, compared with the corresponding periods, resulted from continued growth in the segment's volume of activity and the gradual delivery of new projects secured by the Company at the end of 2024 and during 2025, together with improved resource utilization. The impact of consolidating Alacer's results for the first time was positive but immaterial.

**Segmental results (NIS millions)** The improvement in the segment's operating income was partially offset by the depreciation of the US dollar against the shekel, with the average USD/NIS exchange rate decreasing by approximately 9.5% and 4.9% during the quarter and during of period, respectively, as detailed below.

Revenues

Segmental revenues for the quarter amounted to NIS 119 million, compared to NIS 111.1 million in the corresponding quarter, an increase of approximately 7.1%.

Segmental revenues in this period amounted to NIS 341.9 million, compared to NIS 348.6 million in the corresponding period, a decrease of 1.9%.

Operating income

The operating income in this segment in the quarter amounted to NIS 19 million (approximately 16% of segmental revenues), compared with NIS 16.5 million in the corresponding quarter (approximately 14.9% of segmental revenues), an increase of approximately 15.1%.<br>

The segment's operating income during the period amounted to NIS 53.2 million (approximately 15.6% of segmental revenues), compared with NIS 50.4 million in the corresponding period (approximately 14.5% of segmental revenues), an increase of approximately 5.6%.

Board of Directors' Report 21

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Marketing
 and Support of Software Products

Revenues

Segmental revenues for the quarter amounted to NIS 174.3 million, compared to NIS 118.6 million in the corresponding quarter, an increase of approximately 46.9%.

Segmental revenues in this period amounted to NIS 355.5 million, compared to NIS 337.9 million in the corresponding period, an increase of 5.2%.

Operating income

The operating income in this segment in the quarter amounted to NIS 11.7 million (approximately 6.7% of segmental revenues), compared with NIS 9.1 million in the corresponding quarter (approximately 7.6% of segmental revenues), an increase of 28.8%.

The segment's operating income for the period amounted to NIS 30.2 million (approximately 8.5% of the segmental revenues), compared to NIS 25.4 million (approximately 7.5% of the segmental revenues) for the corresponding period, an increase of 19.2%.

The increase in revenues and operating income during the quarter and of the period, compared with the corresponding periods, resulted from organic growth in the segment's volume of activity.

The changes in the segment's profit margin between the periods (a decrease in the quarterly profit margin compared with the corresponding quarter, and an increase in the profit margin for the period compared with the corresponding period) result from changes in the mix of transactions in each period. In general, distribution transactions entered into by the Company (such as the Company's activity in the distribution of software products and communications equipment in the AI field) have high revenue volumes but lower profit margins compared with reseller transactions, which generally have higher profit margins. Accordingly, this segment shows relative volatility between reporting periods in both revenues and profit margins, depending on the share and timing of distribution transactions within the segment's overall revenue mix.

Board of Directors' Report 22

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Cloud and
 Computing Infrastructures

Revenues

Segmental revenues for the quarter amounted to NIS 410.3 million, compared to NIS 368 million in the corresponding quarter, an increase of approximately 11.5%.

Segmental revenues in this period amounted to NIS 1,225.5 million, compared to NIS 1,130 million in the corresponding period, an increase of 8.4%.

Operating income

The operating income in this segment in the quarter amounted to NIS 32.7 million (approximately 8% of segmental revenues), compared with NIS 28 million in the corresponding quarter (approximately 7.6% of segmental revenues), an increase of approximately 17%.

The segment's operating income for the period amounted to NIS 93.9 million (approximately 7.7% of segmental revenues), compared to NIS 78.4 million (approximately 6.9% of segmental revenues) in the corresponding period, an increase of approximately 19.7%.

The increase in revenues and operating income during the quarter and the period, compared to the corresponding periods is due to an increase in the volumes of operations in the segment, with an emphasis on sales, marketing, and integration of computing systems, and marketing, installation, and support of advanced technology solutions (the subsidiaries RDT and Ortec).

The increase in the operating margin is partly due to the continued rise in EDP cloud transactions, whose revenues are accounted for on a net basis, and to the transaction mix in the segment (transactions with higher profit margins compared with the corresponding periods).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.5. Commitments
 and special events

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Dividend
 distribution

---

| | | |
|:---|:---|:---|
| **Date of distribution** | **Dividend per share**<br> (agorot) | **Amount of dividend** <br> (NIS millions) |
| 20.10.2025 | &nbsp;&nbsp;85 | &nbsp;&nbsp;54.1 |
| 15.07.2025 | &nbsp;&nbsp;89 | &nbsp;&nbsp;56.6 |
| 08.04.2025 | &nbsp;&nbsp;82 | &nbsp;&nbsp;52.2 |
| **Total as of 30.09.2025** | &nbsp;&nbsp;**256** | &nbsp;&nbsp;**162.9** |

---

The Company's dividend policy is a distribution of up to 75% of the net annual income attributable to shareholders. The dividend will be distributed once per quarter subject to the distribution requirements set by applicable law, which are examined by the Board of Directors at any relevant time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Confirmation
 of issuer credit rating

On March 24, 2025, Midroog confirmed an Aa3 issuer and debenture credit rating with a stable outlook and an Aa3 rating with a stable outlook for the Company's (Series B) Debentures and a rating of P-1.il for commercial securities.

Board of Directors' Report 23

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Purchase of
 directors' and officers' liability insurance policy

On December 29, 2025, the Company's Compensation Committee approved the renewal of the Company's directors' and officers' (D&O) liability insurance policy (including for the CEO) and for the Company's subsidiaries and affiliates, as they may exist from time to time, including a SIDE A DIC D&O policy, effective as of October 1, 2025. The Committee confirmed that the renewal meets the criteria established at the Company's general meeting held in December 2024. (For further details on the general meeting, see the immediate report dated December 23, 2024, reference number 2024-01-626578.)

The insurance coverage is for liability limits of USD 35 million per claim and in the aggregate, and the coverage under the SIDE A DIC D&O policy is for liability limits of USD 10 million.

Under the policy, all officers of the Company and its subsidiaries and affiliates, including directors, are insured on identical terms, whether serving currently or in the past. None of the Company's officers is a controlling shareholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. Financial
 position, liquidity, and financing sources

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.1. Analysis
 of financial position as of September 30, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A**. **Balances of liquid assets and financial indices (NIS thousands)** 

---

| | | | |
|:---|:---|:---|:---|
| | **30.09.2025** | **31.12.2024** | **Change** |
| **Cash and cash equivalents** | 498187 | 668495 | (170308) |
| Gross financial debt | (737519) | (785104) | 47585 |
| Net debt – short-term and long-term credit, net of cash and cash equivalents | (239332) | (116609) | (122723) |
| Total balance sheet | 4382381 | 4479636 | (97255) |
| Ratio of net financial debt to the total balance sheet | 5.5% | 2.6% |  |
| Current ratio | 1.09 | 1.1 |  |
| Balance of retained earnings | 775047 | 708634 | 66413 |
| Total equity attributable to shareholders | 1113541 | 1088733 | 24808 |
| Ratio of shareholder equity to balance sheet | 25.4% | 24.3% |  |

---

Board of Directors' Report 24

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B**. **Summary of consolidated statements of financial position (NIS thousands)** 

---

| | | | |
|:---|:---|:---|:---|
| | **30.09.2025** | **31.12.2024** | **Change** |
| **Assets:** | | | |
| **Cash and cash equivalents** | 498187 | 668495 | (170308) |
| Trade receivables and unbilled receivables, net | 1940301 | 1926190 | 14111 |
| Inventories | 77193 | 101861 | (24668) |
| Goodwill | 986312 | 955988 | 30324 |
| Intangible assets, net | 95639 | 89893 | 5746 |
| Right-of-use assets | 370545 | 369935 | 610 |
| All others (property, plant and equipment, deferred taxes, etc.) | 414204 | 367274 | 46930 |
| **Total assets** | **4382381** | **4479636** | **(97255)** |
| **Liabilities:** |  |  |  |
| Credit from banks and other credit providers | 737428 | 785079 | (47651) |
| Trade payables | 815422 | 926753 | (111331) |
| Deferred revenues | 452338 | 427786 | 24552 |
| Leasing liabilities | 381394 | 372809 | 8585 |
| Liabilities for options to holders of non-controlling interests and contingent liabilities for business combinations | 166054 | 125687 | 40367 |
| All others | 654532 | 697195 | (42663) |
| **Total liabilities** | **3207168** | **3335309** | **(128141)** |

---

The decrease in total assets was affected by a decline in cash and cash equivalents (primarily payments to suppliers, the acquisition of Gav, and the payment of a dividend) and a reduction in inventory, which was partially offset by an increase in trade receivables (presented above under "All others").

The decrease in total liabilities was mainly by a reduction in trade payables, continued net repayment of financial liabilities, and a decrease in accrued expenses (presented above under "All others"). This was offset in part by an increase in deferred revenues (mainly advanced payments from customers for software products transactions, that were not delivered).

Board of Directors' Report 25

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.2. Condensed
 statements of cash flow (NIS thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | For the three<br> months ended | For the three<br> months ended | For the nine<br> months ended | For the nine<br> months ended |
| | **30.09.2025** | **30.09.2024** | **30.09.2025** | **30.09.2024** |
| **Cash flows from operating activities** |  |  |  |  |
| Net income | 84336 | 69718 | 241202 | 214241 |
| Adjustments to profit and loss items | 96868 | 84709 | 292064 | 245661 |
| Changes in assets and liabilities items | (9698) | 75483 | (161275) | (74069) |
| Cash paid and received for interest and taxes, net | (39902) | (39527) | (103253) | (101637) |
| **Net cash provided by operating activities** | **131604** | **190383** | **268738** | **284196** |
| **Cash flow from investment activities** |  |  |  |  |
| Acquisition of property, plant, and equipment | (9515) | (18218) | (25226) | (34029) |
| Acquisition of a subsidiary | - | - | (65362) | - |
| Others (net) | 44 | 133 | 1184 | 1692 |
| **Net cash used in investment activities** | **(9471)** | **(18085)** | **(89404)** | **(32337)** |
| **Cash flows from financing activities** |  |  |  |  |
| Repayment of credit, net | (27523) | (127449) | (105089) | (153544) |
| Receipt from issuing of commercial securities | - | 100000 | - | 100000 |
| Receipt in respect of long-term loans | - | - | 120000 | - |
| Distribution of a dividend | (56628) | (51453) | (157066) | (132126) |
| Payment of leasing liabilities | (37433) | (31732) | (96016) | (96086) |
| Dividend distribution to non-controlling interests | (9704) | (4759) | (17539) | (23597) |
| Repayment of liabilities in respect of business combinations | - | - | (3418) | (561) |
| Repayment of liabilities for put options to non-controlling interests | (1130) | - | (1130) | (1124) |
| Acquisition of non-controlling interests | - | (400) | - | (3899) |
| Repayment of debentures | (33959) | (33959) | (67918) | (67918) |
| **Net cash used in financing activities** | **(166377)** | **(149752)** | **(328176)** | **(378855)** |

---

Board of Directors' Report 26

**Cash flows from operating activities**

During the quarter, the Company recorded positive cash flow from operating activities amounting to NIS 131.6 million, compared with positive cash flow from operating activities amounting to NIS 190.4 million in the corresponding quarter. During the period, the Company recorded positive cash flow from operating activities amounting to NIS 268.7 million, compared with positive cash flow from operating activities amounting to NIS 284.2 million in the corresponding period. The decrease during the quarter and during the period was mainly due to changes in working capital.

The Company's cash flow from operating activities over the last 12 months (LTM) amounted to NIS 603.8 million, compared with LTM cash flow from operating activities of NIS 617.1 million in the corresponding period.

**Cash flows used in investment activities**

The cash flow used for investment activities during the quarter and during the period amounted to NIS 9.5 million and NIS 89.4 million, respectively. This is compared with cash flow used in investing activities amounting to NIS 18.1 million and NIS 32.3 million in the corresponding quarter and period.

Most of the difference during the period is attributed to the sum of NIS 65.4 million paid in the period for the acquisition of Gav Systems.

**Cash flows used in financing activities**

Cash flow used in financing activities during the third quarter and during the period amounted to NIS 166.4 million and NIS 328.2 million, respectively, compared with NIS 149.8 million and NIS 378.9 million in the corresponding periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.3. Average
 short-term credit\* (NIS thousands)

---

| | | |
|:---|:---|:---|
| | **30.09.2025** | **30.09.2024** |
| **Trade receivables** | 1939777 | 1704126 |
| Trade payables | 865,623 | 677,603 |

---

\* Quarterly average of the last 12 months as at the report date

The Company finances its ongoing operations (including the gap between average customer credit and average supplier credit) using cashflow from operating activities, credit facilities, shareholder's equity, and from outstanding financial liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.4. Disclosure
 regarding statement of cash flow forecast pursuant to Article 10(B)(1)(d) of the Israel Securities
 Regulations (Periodic and Immediate Reports):

As of September 30, 2025, the Company's standalone statements (Solo financial statements) present a negative working capital. In view of this, the Company's Board of Directors has reviewed the Company's financial indicators, its financial covenants, and the Company's existing and expected cash sources and requirements. Further to said review, the Company's Board of Directors determined that it does not indicate a liquidity problem. In light of the above, the Company is not required to publish a statement of cash flow forecast.

Board of Directors' Report 27

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3.5. Summary
 statements of changes in equity (NIS thousands)

---

| | | |
|:---|:---|:---|
| | **For the nine months ended** <br> **30.09.2025** | **For the nine months ended** <br> **30.09.2024** |
| **Opening balance** | 1144327 | 1107472 |
| **Net income** | 241202 | 214241 |
| **Dividend declared** | (162872) | (184214) |
| **Dividend to non-controlling interests** | (8321) | (9059) |
| **Translation differences** | (34145) | 8057 |
| **Share based payment** | 6310 | 13508 |
| **Transactions with non-controlling interests** | <sup>\*</sup> (14103) | (26299) |
| **Actuarial earnings in respect of a benefit plan** | 2815 | 1923 |
| **Closing balance** | **1175213** | **1125629** |

---

\* During the first quarter, the Company entered into a mutual put/call options renewal agreement with minority holders in a subsidiary for the sale and acquisition of the minority holder's remaining shares of that subsidiary. The transaction was recorded against equity.

Board of Directors' Report 28

2. Disclosure provisions
 in connection with the corporation's financial reporting

**Goodwill**

The goodwill, as included in the Company's financial statements, is material to the Company's total assets. The goodwill represents the surplus cost of the investment over the total balance sheet value in subsidiaries that have been acquired by the Group.

In accordance with generally accepted accounting principles, the Company annually examines the need for impairment. In addition to the annual examination of the need for impairment, during the year, the Company also assesses whether there are indications of impairment.

**November 11, 2025**

  <br> Guy Bernstein Chair of the Board of Directors Moti Gutman CEO

Board of Directors' Report 29

**Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date**

**1)** **The following are details regarding the Series B Debentures - NIS thousands** 

---

| | |
|:---|:---|
| **Disclosure item** | **Details regarding the Series B Debentures <sup>(2)</sup>** |
| Date of issue | Initial issue on September 18, 2022; Series expanded on December 4 |
| Total par value on the date of issue<sup>(1)</sup> | 295,249 upon initial issue and 180,366 upon expansion of the series |
| Par value balance as of September 30, 2025 |  |
| Par value balance on the reporting date, revalued according to linkage terms | The series is not linked |
| Value in the financial statements as at September 30, 2025 (amortized cost according to the effective interest method) | 305325 |
| Accrued interest as of September 30, 2025 | 2212 |
| Market capitalization as of September 30, 2025 | 305239 |
| Type of interest | Fixed interest at a rate of 4.1% per annum.<br>It should be noted that the trust deed in respect of the Series B Debenture attached to the offer report (the "trust deed") provided mechanisms for adjustment of a change in the annual interest in respect of the Series B Debenture, in the event of non-compliance with the financial covenants or if there is a decrease in the rating of the Series B Debenture. Pursuant to said adjustment mechanisms (cumulatively), the overall rate of interest increments will not exceed 1%. For details, see Sections 5.8 and 5.9 of the trust deed.<br>|
| Dates for payment of principal | The principal of the Series B Debentures shall be due for repayment in fourteen (14) installments every six months, made up of thirteen equal payments - each payment is 7.14% of the principal and the last payment being 7.18%, commencing August 1, 2023, through February 1, 2030. |
| Interest payment dates | The interest in respect of the Series B Debenture shall be paid in biannual installments every six month, to be paid on February 1 and August 1, commencing February 1, 2023, through February 1, 2030. |
| Principal and interest linkage basis | The Series B Debenture are unlinked (principal and interest) to any linkage base. |
| Is there a right of conversion? | No |
| Early repayment or forced conversion of debentures | The Company shall be entitled to initiate the early repayment of the Series B debentures, all in accordance with the provisions of Section 6.2 of the trust deed. |

---

Board of Directors' Report 30

---

| | |
|:---|:---|
| **Disclosure item** | **Details regarding the Series B Debentures <sup>(2)</sup>** |
| Guarantee for payment of the Company's obligations pursuant to the trust deed |  |
| As of the report date, is the Company in compliance with all of the conditions and undertakings according to the trust deed? | Yes |
| As of the report date and during the reporting period, were the conditions met that constitute grounds for calling the debentures due immediately? | No |
| Is the Company required by the trustee to perform various actions, including calling meetings of debenture holders? | No |
| Details of guarantees/liens |  |

---

**2)** **Details regarding the trustee for the Series B Debentures**

<u>Trustee name</u> <u>Reznick Paz Nevo Trustees Ltd.</u> <br> <u>Debenture administrator</u> <u>Shani Krasnoshansky</u> <br> <u>Contact information</u> <u>14 Yad Harutzim St., Tel Aviv <br> (Tel: 03-689200 Fax: 03-6389222)<br> email: Shani@rpn.co.il</u>

**3)** **Details about the Series B Debentures' rating**

<u>Name of rating company as of the report date</u> <u>Midroog Ltd. ("Midroog")</u> <br> <u>Rating at the date of issue:</u> <u>Aa3 stable horizon</u> <br> <u>Rating on the report date</u> <u>Unchanged For the most recent rating report, see the immediate report published by the Company on 24.03.2025.<br> (ref. 2025-01-019742)</u>

<sup>(1)</sup> On September 14, 2022, the Company published a shelf offering report (ref.: 2022-01-117502) (the "offer report") in which the Company issued in an initial public offering a total of NIS 295,249 thousand par value of Series B Company Debentures. In addition, on December 4, 2022, the Company issued Series B Debentures by way of an expansion of the series, for a net amount of NIS 178,000 thousand.

<sup>(2)</sup> As at the report date, in accordance with the provisions of the Securities Regulations, § 10(b)(13)(a), the Company considers the Series B Debentures to be a significant series.

Board of Directors' Report 31

**4)** **Financial covenants – Series B Debentures**

The table below sets forth the various covenants that the Company undertook with respect to debenture holders and the calculation of their results as of September 30, 2025, as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Security** | **Balance of nominal value of the security in circulation as at September 30, 2025** | **Balance of nominal value of the security in circulation immediately prior to the report date** | **Financial covenant** | **Actual covenant as of September 30, 2025** |
| Series B Debentures | 305820 | 305820 | Ratio of consolidated net financial debt (as defined in the trust deed) to total balance sheet must not exceed 45% | 5.4% |
| Series B Debentures | 305820 | 305820 | Ratio of consolidated net financial debt (as defined in the trust deed) to adjusted EBITDA (as defined in the trust deed) shall not exceed 5 | 0.33 |
| Series B Debentures | 305820 | 305820 | Shareholder equity (as defined in the trust deed) is minimal, must be no less than NIS 275,000 thousand | 1175213 |

---

Board of Directors' Report 32

![](image_004.jpg)<br>**CHAPTER B**<br>Interim Consolidated Financial Statements<br> as of September 30, 2025<br> Unaudited<br>

The information contained in these Financial Statements published by the Company constitutes a convenience translation of the Financial Statements published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only**.**

![](image_008.jpg)

---

| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

---

| | |
|:---|:---|
| Review Report Of The Independent Auditor To The Shareholders Of Matrix It Ltd. | 3 |
| Consolidated Statements Of Financial Position | 4 |
| Consolidated Statements Of Profit And Loss And Other Comprehensive Income | 6 |
| Consolidated Statements Of Changes In Equity Unaudited | 7 |
| Consolidated Statements Of Cash Flows | 12 |
| Notes To The Consolidated Interim Financial Statements | 15 |

---

Matrix IT Ltd.

![](image_011.jpg)

To

The Shareholders of

<u>Matrix IT Ltd.</u> 

Ladies and gentlemen,

Review Report of the Independent Auditor to the Shareholders of Matrix IT Ltd.

Introduction

We have reviewed the accompanying interim financial information of Matrix IT Ltd. and its subsidiaries (the "**Group**"), that includes the condensed interim consolidated statement of financial position as at September 30, 2025, and the related condensed interim consolidated statements of profit and loss and other comprehensive income, changes in equity, and cash flows for the nine and three month periods then ended. The Board of Directors and management are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 "Interim Financial Reporting" and they are also responsible for the preparation of this interim financial information in accordance with Chapter D of Securities Regulations (Periodic and Immediate Reports) - 1970. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of Review

We conducted our review in accordance with Review Standard (Israel) 2410 of the Institute of Certified Public Accountants in Israel "Review of Interim Financial Information Performed by the Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially smaller in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the abovementioned financial information is not prepared, in all material respects, in accordance with IAS 34.

In addition to the statements in the previous paragraph, based on our review, nothing has come to our attention that causes us to believe that the abovementioned financial information does not comply, in all material respects, with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports) - 1970.

Tel Aviv, Israel Zif Haft <br> November 11, 2025 Certified Public Accountants (Isr.) - BDO Member Firm

Matrix IT Ltd.

Consolidated Statements of Financial Position<br> (NIS thousands)<br>

---

| | | | |
|:---|:---|:---|:---|
| | September 30,<br>**2025** | September 30,<br>**2024** | December 31,<br>**2024** |
| | Unaudited | Unaudited | Audited |
| **Current assets** |  |  |  |
| Cash and cash equivalents | 498187 | 519845 | 668495 |
| Trade receivables and unbilled receivables, net | 1940301 | 1746539 | 1926190 |
| Income tax receivable | 35646 | 42124 | 53567 |
| Other accounts receivable | 158551 | 113123 | 122273 |
| Inventories | 77193 | 94291 | 101861 |
|  | **2709878** | **2515922** | **2872386** |
| **Non-current assets** |  |  |  |
| Investment in a financial asset measured at fair value through profit and loss | 14512 | 17146 | 17146 |
| Prepaid expenses | 50020 | 36207 | 30203 |
| Right-of-use assets | 370545 | 370367 | 369935 |
| Property, plant, and equipment, net | 103176 | 102984 | 101616 |
| Goodwill | 986312 | 923464 | 955988 |
| Intangible assets, net | 95639 | 82136 | 89893 |
| Deferred taxes | 52299 | 46074 | 42469 |
|  | **1672503** | **1578378** | **1607250** |
|  | **4382381** | **4094300** | **4479636** |

---

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

Consolidated Interim Financial Statements 4

**Matrix IT Ltd.**

Consolidated Statements of Financial Position<br> (NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | September 30,<br>**2025** | September 30,<br>**2024** | December 31,<br>**2024** |
|  | Unaudited | Unaudited | Audited |
| &nbsp;&nbsp;**Current liabilities** |  |  |  |
| &nbsp;&nbsp;Credit from banks and other credit providers | 381104 | 430541 | 388640 |
| &nbsp;&nbsp;Current maturities of debentures | 77726 | 80439 | 81341 |
| &nbsp;&nbsp;Current maturities of lease liabilities | 113748 | 115875 | 115574 |
| &nbsp;&nbsp;Trade payables | 815422 | 691762 | 926753 |
| &nbsp;&nbsp;Income tax payable | 7406 | 6726 | 21063 |
| &nbsp;&nbsp;Other accounts payable | 99807 | 104777 | 133631 |
| &nbsp;&nbsp;Employees and payroll accruals | 505023 | 464800 | 510995 |
| &nbsp;&nbsp;Liabilities in respect of business combinations | 7383 | 469 | 10244 |
| &nbsp;&nbsp;Put options for non-controlling interests | 92716 | 80491 | 82308 |
| &nbsp;&nbsp;Deferred revenues | 395843 | 305608 | 382119 |
|  | **2496178** | **2281488** | **2652668** |
| &nbsp;&nbsp;**Non-current liabilities** |  |  |  |
| &nbsp;&nbsp;Loans from banks and other lenders | 50999 | 27340 | 19671 |
| &nbsp;&nbsp;Debentures | 227599 | 292153 | 295427 |
| &nbsp;&nbsp;Deferred revenues | 56495 | 56319 | 45667 |
| &nbsp;&nbsp;Put options for non-controlling interests | 54718 | 23296 | 24764 |
| &nbsp;&nbsp;Lease liabilities | 267646 | 256747 | 257235 |
| &nbsp;&nbsp;Deferred taxes | 30471 | 23993 | 23871 |
| &nbsp;&nbsp;Liabilities in respect of business combinations | 11237 | - | 8371 |
| &nbsp;&nbsp;Employee benefit liabilities | 11825 | 7335 | 7635 |
|  | **710990** | **687183** | **682641** |
| &nbsp;&nbsp;**Equity attributable to Company shareholders** |  |  |  |
| &nbsp;&nbsp;Share capital and capital reserves | 338494 | 384768 | 380099 |
| &nbsp;&nbsp;Retained earnings | 775047 | 686227 | 708634 |
|  | **1113541** | **1070995** | **1088733** |
| &nbsp;&nbsp;**Non-controlling interests** | **61672** | **54634** | **55594** |
| &nbsp;&nbsp;**Total equity** | **1175213** | **1125629** | **1144327** |
|  | **4382381** | **4094300** | **4479636** |

---

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

November 11, 2025       <br> Date of approval of the financial statements Guy Bernstein Chair of the Board of Directors Moti Gutman CEO Nevo Brenner CFO

Consolidated Interim Financial Statements 5

**Matrix IT Ltd.**

Consolidated Statements of Profit and Loss and Other Comprehensive Income<br> (NIS thousands)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | For the nine months ended September 30, | For the nine months ended September 30, | For the three months ended September 30, | For the three months ended September 30, | For the year ended<br> December 31, |
| | **2025** | **2024** | **2025** | **2024** | **2024** |
| | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| Revenues | 4639189 | 4205255 | 1641610 | 1418810 | 5579538 |
| Cost of revenues and services | 3947884 | 3591279 | 1400062 | 1213763 | 4746544 |
| Gross profit | 691305 | 613976 | 241548 | 205047 | 832994 |
| Selling and marketing expenses | 163752 | 146313 | 58859 | 48650 | 196231 |
| General and administrative expenses | 143363 | 137549 | 51209 | 48216 | 186689 |
| Operating income | 384190 | 330114 | 131480 | 108181 | 450074 |
| Financial expenses | 79788 | 62894 | 24419 | 20506 | 86956 |
| Financial income | 15195 | 15320 | 4586 | 4351 | 20084 |
| Income before taxes on income | 319597 | 282540 | 111647 | 92026 | 383202 |
| Taxes on income | 78395 | 68299 | 27311 | 22308 | 94978 |
| **Net income** | **241202** | **214241** | **84336** | **69718** | **288224** |
| **Other comprehensive income (net of tax effects)** |  |  |  |  |  |
| **Amounts that will not be subsequently reclassified to profit or loss** |  |  |  |  |  |
| Gain from remeasurement of defined benefit plans | 2815 | 1923 | 1026 | (5) | 2722 |
| **Amounts that will be, or that have been, reclassified to profit or loss if specific conditions are met** |  |  |  |  |  |
| Adjustments for translation of financial statements | &nbsp;&nbsp;&nbsp;(35649) | &nbsp;&nbsp;&nbsp;8189 | &nbsp;&nbsp;&nbsp;(11715) | &nbsp;&nbsp;&nbsp;(3705) | &nbsp;&nbsp;&nbsp;(1140) |
| Change in fair value of instruments used in cash flow hedging | &nbsp;&nbsp;&nbsp;1504 | &nbsp;&nbsp;&nbsp;(132) | &nbsp;&nbsp;&nbsp;3233 | &nbsp;&nbsp;&nbsp;63 | &nbsp;&nbsp;&nbsp;(4) |
| **Total comprehensive income** | &nbsp;&nbsp;&nbsp;**209872** | &nbsp;&nbsp;&nbsp;**224221** | &nbsp;&nbsp;&nbsp;**76880** | &nbsp;&nbsp;&nbsp;**66071** | &nbsp;&nbsp;&nbsp;**289802** |
| Net income attributable to: |  |  |  |  |  |
| Equity holders of the Company | &nbsp;&nbsp;&nbsp;226470 | &nbsp;&nbsp;&nbsp;202537 | &nbsp;&nbsp;&nbsp;77973 | &nbsp;&nbsp;&nbsp;64396 | &nbsp;&nbsp;&nbsp;272422 |
| Non-controlling interests | &nbsp;&nbsp;&nbsp;14732 | &nbsp;&nbsp;&nbsp;11704 | &nbsp;&nbsp;&nbsp;6363 | &nbsp;&nbsp;&nbsp;5322 | &nbsp;&nbsp;&nbsp;15802 |
|  | &nbsp;&nbsp;&nbsp;**241202** | &nbsp;&nbsp;&nbsp;**214241** | &nbsp;&nbsp;&nbsp;**84336** | &nbsp;&nbsp;&nbsp;**69718** | &nbsp;&nbsp;&nbsp;**288224** |
| Total comprehensive income attributable to: |  |  |  |  |  |
| Equity holders of the Company | &nbsp;&nbsp;&nbsp;195473 | &nbsp;&nbsp;&nbsp;212307 | &nbsp;&nbsp;&nbsp;70550 | &nbsp;&nbsp;&nbsp;60691 | &nbsp;&nbsp;&nbsp;273804 |
| Non-controlling interests | &nbsp;&nbsp;&nbsp;14399 | &nbsp;&nbsp;&nbsp;11914 | &nbsp;&nbsp;&nbsp;6330 | &nbsp;&nbsp;&nbsp;5380 | &nbsp;&nbsp;&nbsp;15998 |
|  | &nbsp;&nbsp;&nbsp;**209872** | &nbsp;&nbsp;&nbsp;**224221** | &nbsp;&nbsp;&nbsp;**76880** | &nbsp;&nbsp;&nbsp;**66071** | &nbsp;&nbsp;&nbsp;**289802** |
| **Net earnings per share attributable to equity holders of the Company (NIS)** |  |  |  |  |  |
| Basic net earnings per share | &nbsp;&nbsp;&nbsp;3.56 | &nbsp;&nbsp;&nbsp;3.19 | &nbsp;&nbsp;&nbsp;1.23 | &nbsp;&nbsp;&nbsp;1.01 | &nbsp;&nbsp;&nbsp;4.29 |
| Diluted net earnings per share | &nbsp;&nbsp;&nbsp;3.55 | &nbsp;&nbsp;&nbsp;3.19 | &nbsp;&nbsp;&nbsp;1.22 | &nbsp;&nbsp;&nbsp;1.01 | &nbsp;&nbsp;&nbsp;4.29 |

---

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

Consolidated Interim Financial Statements 6

**Matrix IT Ltd.**

Consolidated Statements of Changes in Equity

Unaudited (NIS thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Share capital** | **Share premium** | **Treasury shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share-based payment and transactions with non-controlling interests** | **Retained earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total**<br> **equity** |
| **Balance as of January 1, 2025 (audited)** | 68255 | 309447 | (7982) | (9675) | 10186 | &nbsp;&nbsp;&nbsp;9868 | &nbsp;&nbsp;&nbsp;708634 | &nbsp;&nbsp;&nbsp;1088733 | &nbsp;&nbsp;&nbsp;55594 | &nbsp;&nbsp;&nbsp;1144327 |
| Net income | - | - | - | - | - | &nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;226470 | &nbsp;&nbsp;&nbsp;226470 | &nbsp;&nbsp;&nbsp;14732 | &nbsp;&nbsp;&nbsp;241202 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | (33812) | - | - | - | (33812) | (333) | (34145) |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 2815 | 2815 | - | 2815 |
| Total other comprehensive income | - | - | - | (33812) | - | - | 2815 | (30997) | (333) | (31330) |
| Total comprehensive income | - | - | - | (33812) | - | - | 229285 | 195473 | 14399 | 209872 |
| Exercise of options | 261 | 18547 | - | - | - | (18808) | - | - | - | - |
| Dividend declared | - | - | - | - | - | - | (162872) | (162872) | - | (162872) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (8321) | (8321) |
| Transactions with non-controlling interests | - | - | - | - | - | (14103) | - | (14103) | &nbsp;&nbsp;&nbsp;- | (14103) |
| Share-based payments | - | - | - | - | - | 6310 | - | 6310 | &nbsp;&nbsp;&nbsp;- | 6310 |
| **Balance as of September 30, 2025** | **68516** | **327994** | **(7982)** | **(43487)** | **10186** | **(16733)** | **775047** | **1113541** | &nbsp;&nbsp;&nbsp;**61672** | **1175213** |

---

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

Consolidated Interim Financial Statements 7

**Matrix IT Ltd.**

Consolidated Statements of Changes in Equity<br> Unaudited (NIS thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Share capital** | **Share premium** | **Treasury**<br> **shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share-based payment and transactions with non-controlling interests** | **Retained earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total**<br> **equity** |
| **Balance as of January 1, 2024 (audited)** | 68255 | 309447 | (7982) | (8335) | 10186 | 11035 | 665981 | 1048587 | 58885 | 1107472 |
| Net income | - | - | - | - | - | - | 202537 | 202537 | 11704 | 214241 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | 7847 | - | - | - | 7847 | 210 | 8057 |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 1923 | 1923 | - | 1923 |
| Total other comprehensive income | - | - | - | 7847 | - | - | 1923 | 9770 | 210 | 9980 |
| Total comprehensive income | - | - | - | 7847 | - | - | 204460 | 212307 | 11914 | 224221 |
| Dividend declared | - | - | - | - | - | - | (184214) | (184214) | - | (184214) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (9059) | (9059) |
| Transactions with non-controlling interests | - | - | - | - | - | &nbsp;&nbsp;&nbsp;(19193) | &nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;(19193) | (7106) | (26299) |
| Share-based payments | - | - | - | - | - | &nbsp;&nbsp;&nbsp;13508 | &nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;13508 | &nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;13508 |
| **Balance as of September 30, 2024** | **68255** | **309447** | **(7982)** | **(488)** | **10186** | &nbsp;&nbsp;&nbsp;**5350** | &nbsp;&nbsp;&nbsp;**686227** | &nbsp;&nbsp;&nbsp;**1070995** | &nbsp;&nbsp;&nbsp;**54634** | &nbsp;&nbsp;&nbsp;**1125629** |

---

<br> The accompanying notes constitute an integral part of the interim consolidated financial statements.

Consolidated Interim Financial Statements 8

**Matrix IT Ltd.**

Consolidated Statements of Changes in Equity<br> Unaudited (NIS thousands)<br>

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Share** <br> **capital** | **Share premium** | **Treasury shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share-based payment and transactions with non-controlling interests** | **Retained**<br> **earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total equity** |
| **Balance as of July 1, 2025** | 68509 | 327635 | (7982) | (35038) | 10186 | (18271) | 750131 | 1095170 | 57857 | 1153027 |
| Net income | - | - | - | - | - | - | 77973 | 77973 | 6363 | 84336 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | (8449) | - | - | - | (8449) | (33)<br>| (8482) |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 1026 | 1026 | - | 1026 |
| Total other comprehensive income | - | - | - | (8449) | - | - | 1026 | (7423) | (33) | (7456) |
| Total comprehensive income | - | - | - | (8449) | - | - | 78999 | 70550 | 6330 | 76880 |
| Exercise of options | 7 | 359 | - | - | - | (366) | - | - | - | - |
| Dividend declared | - | - | - | - | - | - | (54083) | (54083) | - | (54083) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (2515)<br>| (2515)<br>|
| Share-based payments | - | - | - | - | - | 1904 | - | 1904 | - | 1904 |
| **Balance as of September 30, 2025** | **68516** | **327994** | **(7982)** | **(43487)** | **10186** | **(16733)** | **775047** | **1113541** | **61672** | **1175213** |

---

<br> The accompanying notes constitute an integral part of the interim consolidated financial statements.<br>

Consolidated Interim Financial Statements 9

**Matrix IT Ltd.**

Consolidated Statements of Changes in Equity<br> Unaudited (NIS thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Share capital** | **Share premium** | **Treasury shares** | **Reserve for share-based payment and transactions with non-controlling interests** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge** | **Retained earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total**<br> **equity** |
| **Balance as of July 1, 2024** | 68255 | 309447 | (7982) | 3212 | 10186 | 1545 | 673924 | 1058587 | 49335 | 1107922 |
| Net income | - | - | - | - | - | - | 64396 | 64396 | 5322 | 69718 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | (3700) | - | - | - | (3700) | 58 | (3642) |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | (5) | (5) | - | (5) |
| Total other comprehensive income | - | - | - | (3700) | - | - | (5) | (3705) | 58 | (3647) |
| Total comprehensive income | - | - | - | (3700) | - | - | 64391 | 60691 | 5380 | 66071 |
| Transactions with non-controlling interests | - | - | - | - | - | (706) | - | (706) | 306 | (400) |
| Dividend declared | - | - | - | - | - | - | (52088) | (52088) | - | (52088) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (387) | (387) |
| Share-based payments | - | - | - | - | - | 4511 | - | 4511 | - | 4511 |
| **Balance as of September 30, 2024** | **68255** | **309447** | **(7982)** | **(488)** | **10186** | **5350** | **686227** | **1070995** | **54634** | **1125629** |

---

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

Consolidated Interim Financial Statements 10

**Matrix IT Ltd.**

Consolidated Statements of Changes in Equity

Audited (NIS thousands)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Share** <br> **capital** | **Share premium** | **Treasury**<br> **shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cash flow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share-based payment and transactions with non-controlling interests** | **Retained**<br>**earnings**<br>| **Total attributable to Company shareholders** | **Non-controlling interests** | **Total**<br> **equity** |
| **Balance as of January 1, 2024** | 68255 | 309447 | (7982) | (8335) | 10186 | 11035 | 665981 | 1048587 | 58885 | 1107472 |
| Net income | - | - | - | - | - | - | 272422 | 272422 | 15802 | 288224 |
| Adjustments for translation of financial statements of foreign operations and cash flow hedge | - | - | - | (1340) | - | - | - | (1340) | 196 | (1144) |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 2722 | 2722 | - | 2722 |
| Total other comprehensive income | - | - | - | (1340) | - | - | 2722 | 1382 | 196 | 1578 |
| Total comprehensive income | - | - | - | (1340) | - | - | 275144 | 273804 | 15998 | 289802 |
| Non-controlling interests in a company that was consolidated for the first time | - | - | - | - | - | - | - | - | 950 | 950 |
| Dividend declared | - | - | - | - | - | - | (232491) | (232491) | - | (232491) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (13133) | (13133) |
| Transactions with non-controlling interests | - | - | - | - | - | (19193) | - | (19193) | (7106) | (26299) |
| Share-based payments | - | - | - | - | - | 18026 | - | 18026 | - | 18026 |
| **Balance as of December 31, 2024** | **68255** | **309447** | **(7982)** | **(9675)** | **10186** | **9868** | **708634** | **1088733** | **55594** | **1144327** |

---

<br> The accompanying notes constitute an integral part of the interim consolidated financial statements.

Consolidated Interim Financial Statements 11

**Matrix IT Ltd.**

Consolidated Statements of Cash Flows<br> (NIS thousands)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | For the nine<br> months ended September 30, | For the nine<br> months ended September 30, | For the three months ended September 30, | For the three months ended September 30, | For the<br> year ended<br> December 31, |
| | **2025** | **2024** | **2025** | **2024** | **2024** |
| | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| **Cash flows from operating activities** |  |  |  |  |  |
| **Net income** | **241202** | **214241** | **84336** | **69718** | **288224** |
| Adjustments required to reconcile net income to net cash (used in) provided by operating activities: |  |  |  |  |  |
| **Adjustments to profit and loss items** |  |  |  |  |  |
| Depreciation and amortization | 150242 | 137822 | 51296 | 47284 | 186811 |
| Taxes on income | 78395 | 68299 | 27311 | 22308 | 94978 |
| Change in liabilities for employee benefits | 5434 | 728 | 1210 | (676) | 1553 |
| Other financial expenses, net | 38363 | 19146 | 10965 | 7947 | 27619 |
| Revaluation of long-term bank loans | 505 | (297) | (165) | (92) | (392) |
| Revaluation of liabilities in respect of business combinations | 2724 | (2741) | 1090 | - | (1741) |
| Capital loss (gain) from disposal of property, plant, and equipment | (451) | (258) | 145 | (10) | (301) |
| Share-based payments | 6310 | 13508 | 1904 | 4511 | 18026 |
| Revaluation of liabilities for put options for non-controlling interests | 10542 | 9454 | 3112 | 3437 | 15321 |
|  | **292064** | **245661** | **96868** | **84709** | **341874** |
| **Changes in assets and liabilities items** |  |  |  |  |  |
| Increase (decrease) in trade receivables | 55138 | (66147) | (66006) | (82397) | (245505) |
| Decrease (increase) in other receivables and prepaid expenses | (58491) | (14434) | (439) | 29993 | (15712) |
| Decrease (increase) in inventories | 26069 | 51798 | 73934 | 12929 | 44413 |
| Increase (decrease) in trade payables | (139679) | (94684) | (15174) | 112659 | 140568 |
| Increase (decrease) in employees and institutions, deferred revenues, and other accounts payable | (44312) | 49398 | (2013) | 2299 | 188813 |
|  | **(161275)** | **(74069)** | **(9698)** | **75483** | **112577** |
| **Cash paid and received over the course of the period for** |  |  |  |  |  |
| Interest paid | (40051) | (42051) | (14952) | (15844) | (49375) |
| Interest received | 15195 | 15320 | 4586 | 4351 | 20084 |
| Taxes paid | (99001) | (99937) | (29986) | (28215) | (124758) |
| Taxes received | 20604 | 25031 | 450 | 181 | 30595 |
|  | **(103253)** | **(101637)** | **(39902)** | **(39527)** | **(123454)** |
| **Net cash provided by operating activities** | **268738** | **284196** | **131604** | **190383** | **619221** |

---

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

Consolidated Interim Financial Statements 12

**Matrix IT Ltd.**

Consolidated Statements of Cash Flows<br> (NIS thousands)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | For the nine<br> months ended September 30, | For the nine<br> months ended September 30, | For the three months ended September 30, | For the three months ended September 30, | For the<br> year ended<br> December 31, |
| | **2025** | **2024** | **2025** | **2024** | **2024** |
| | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| **Cash flows from investment activities** |  |  |  |  |  |
| Proceeds from sale of property, plant, and equipment | 1184 | 1692 | 44 | 133 | 1936 |
| Acquisition of property, plant, and equipment | (25226) | (34029) | (9515) | (18218) | (41541) |
| Acquisition of subsidiaries consolidated for the first time (a) | (65362) | - | - | - | (17321) |
| **Net cash from (used in) investment activities** | **(89404)** | **(32337)** | **(9471)** | **(18085)** | **(56926)** |
| **Cash flows from financing activities** |  |  |  |  |  |
| Short-term credit from banks and other credit providers, net | - | (19421) | - | (82655) | (24019) |
| Receipt in respect of long-term loans | 120000 | - | - | - | - |
| Receipt from the issuing of commercial securities | - | 100000 | - | 100000 | 100000 |
| Repayment of long-term loans from banks and credit providers | (105089) | (134123) | (27523) | (44794) | (179003) |
| Dividend distribution | (157066) | (132126) | (56628) | (51453) | (184214) |
| Repayment of liabilities in respect of business combinations | (3418) | (561) | - | - | (11561) |
| Repayment of lease liabilities | (96016) | (96086) | (37433) | (31732) | (129435) |
| Dividend distribution to non-controlling interests | (17539) | (23597) | (9704) | (4759) | (30271) |
| Repayment of liabilities for put options to non-controlling interests | (1130)<br>| (1124) | (1130)<br>| -<br>| (1124) |
| Acquisition of non-controlling interests | - | (3899) | - | (400) | (3899) |
| Repayment of debentures | (67918) | (67918) | (33959) | (33959) | (67918) |
| **Net cash used in financing activities** | **(328176)** | **(378855)** | **(166377)** | **(149752)** | **(531444)** |
| **Translation differences for cash and cash equivalent balances** | **(21466)** | **6633** | **(5322)** | **(1101)** | **(2564)** |
| **Increase (decrease) in cash and cash equivalents** | (170308) | (120363) | (49566) | 21445 | 28287 |
| **Balance of cash and cash equivalents at the beginning of the period** | **668495** | **640208** | **547753** | **498400** | **640208** |
| **Balance of cash and cash equivalents at the end of the period** | **498187** | **519845** | **498187** | **519845** | **668495** |

---

<br> The accompanying notes constitute an integral part of the interim consolidated financial statements.

Consolidated Interim Financial Statements 13

**Matrix IT Ltd.**

Consolidated Statements of Cash Flows<br> (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | For the nine months ended September 30, | For the nine months ended September 30, | For the three months ended September 30, | For the three months ended September 30, | For the<br> year ended<br> December 31, |
|  | | **2025** | **2024** | **2025** | **2024** | **2024** |
|  | | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| **(a)** | **Acquisition of subsidiaries consolidated for the first time** |  |  |  |  |  |
|  | The subsidiaries' assets and liabilities at date of acquisition: |  |  |  |  |  |
|  | Working capital (other than cash and cash equivalents) | (11991) | - | - | - | 663 |
|  | Property, plant, and equipment | (1322) | - | - | - | (270) |
|  | Income tax receivable | (3255) | - | - | - | - |
|  | Deferred tax | (3289) | - | - | - | (155) |
|  | Inventories | (1401) | - | - | - | (185) |
|  | Goodwill | (55537) | - | - | - | (36038) |
|  | Intangible assets, net | (21666) | - | - | - | (13656) |
|  | Employee benefit liabilities | 2414 | - | - | - | - |
|  | Provision for tax | 4983 | - | - | - | 3224 |
|  | Liabilities from put options to holders of non-controlling interests | 25702 | - | - | - | - |
|  | Non-controlling interests | - | - | - | - | 950 |
|  | Liabilities in respect of business combinations | - | - | - | - | 28146 |
|  |  | **(65362)** | **-** | **-** | **-** | **(17321)** |
| **(b)** | **Significant non-cash transactions** |  |  |  |  |  |
|  | Distribution of dividend declared and not yet paid | 54083 | 52088 | 54083 | 52088 | 48277 |
|  | Right-of-use asset recognized with corresponding lease liability | 105116 | 252992 | 28952 | 187849 | 286695 |
|  | Issuing of call options to non-controlling interests | - | 22400 | - | - | 22400 |

---

Consolidated Interim Financial Statements 14

**Matrix IT Ltd.**

Notes to the Consolidated Interim Financial Statements

---

| | |
|:---|:---|
| **Note 1** | **General** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Matrix
 IT Ltd. (the "Company") was incorporated in Israel on September 12, 1989,
 and started its business operations on that day. The Company provides advanced IT services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. These
 financial statements have been prepared in condensed format as of September 30, 2025,
 and for the nine and three month periods then ended (the "Consolidated Interim Financial
 Statements"). The condensed consolidated financial statements of the Group as of September 30,
 2025, include those of the Company and its subsidiaries (the "Group") and the
 Group's interests in associates and joint arrangements. The financial statements should
 be read in the context of the Company's annual financial statements as of December 31,
 2024, and for the year then ended and their accompanying notes (the "Consolidated Annual
 Financial Statements").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The Company
 is a direct subsidiary of Formula Systems (1985) Ltd. ("Formula Systems"), which
 is controlled by Asseco Poland SA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The Company's
 shares are listed on the Tel Aviv Stock Exchange.

---

| | |
|:---|:---|
| **Note 2** | **Significant Accounting Policies** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Preparation format of the Consolidated Interim Financial Statements** 

The Consolidated Interim Financial Statements have been prepared in accordance with IAS 34, Interim Financial Reporting, and in accordance with the disclosure requirements of Chapter D of the Israel Securities Regulations (Periodic and Immediate Reports), 1970.

The accounting policy applied in the preparation of the Consolidated Interim Financial Statements is consistent with that applied in the preparation of the Consolidated Annual Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Below is information about changes in the CPI and relevant exchange rates** 

---

| | | | |
|:---|:---|:---|:---|
| | As of<br> **30.09.25** | As of<br> **30.09.24** | As of<br> **31.12.24** |
| **Consumer price index (2020 basis)** | | | |
| Israel (actual CPI) | 117.83 | 115 | 114.8 |
| Israel (known CPI) | 118.51 | 115.2 | 115.11 |
| **NIS exchange rate** |  |  |  |
| USD | 3.306 | 3.71 | 3.647 |
| EUR | 3.88 | 4.97 | 3.80 |

---

Consolidated Interim Financial Statements 15

**Matrix IT Ltd.**

Notes to the Consolidated Interim Financial Statements

---

| | |
|:---|:---|
| **Note 2** | **Significant Accounting Policies (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Below is information about changes in the CPI and relevant exchange rates (cont.)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | For the nine<br> months ended <br> **30.09.25** | For the nine<br> months ended <br> **30.09.24** | For the three<br> months ended<br> **30.09.25** | For the three<br> months ended<br> **30.09.24** | For the<br> year ended <br> **31.12.24** |
| **Consumer price index** <br> **(2020 basis)** |  |  |  |  |  |
| Israel (actual CPI) | 2.64% | 3.43% | 0.49% | (0.2%) | 3.24% |
| Israel (known CPI) | 2.95% | 3.52% | 1.36% | 1.59% | 3.43% |
| **NIS exchange rate** |  |  |  |  |  |
| USD | (9.35%) | 2.29% | (1.96%) | (1.3%) | 0.55% |
| EUR | 2.22% | 3.51% | (1.88%) | 3.29% | (5.36%) |

---

---

| | |
|:---|:---|
| **Note 3** | **Segments** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **General** 

The operating segments are based on information that is reviewed by the chief operating decision maker (CODM) for the allocation of resources and assessment of performance. Accordingly, for management purposes, the Group is organized into operating segments based on the products and services and on the geographic location of the business units.

The Company operates directly and through subsidiaries, and it has the following operating segments:

IT Solutions and Services, Consulting, and Management in Israel;

IT Solutions and Services in the US;

Cloud and Computing Infrastructures;

Marketing and Support of Software Products.

**IT Solutions and Services, Consulting, and Management in Israel**

This segment includes a wide range of technological and other solutions and services in these sectors: core systems, data and AI, information security and cyber, digital, and more. As part of these solutions, the Company is engaged in the development of large-scale technological systems and the provision of related services; execution of IT and software integration projects; development of operational solutions and C<sup>4</sup> ISR systems for defense entities in Israel and abroad; outsourcing services and professional services by experts and consultants; offshore/nearshore services; BPO and call center services; software project management; software development; software and QA testing; enhancement and upgrading of existing technological systems; as well as the provision of training and implementation services. In addition, this segment includes management consulting and multidisciplinary engineering and operational consulting services, including supervision of complex engineering projects, particularly infrastructure projects in the transportation sector.

Consolidated Interim Financial Statements 16

**Matrix IT Ltd.**

Notes to the Consolidated Interim Financial Statements

---

| | |
|:---|:---|
| **Note 3** | **Segments (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **General (cont.)** 

**IT Solutions and Services in the US**

This segment is conducted through two arms – Matrix US Holding and XTIVIA – each of which holds several subsidiaries in the US. <br> The activity includes the provision of solutions and expert services in the sector of GRC – Government Risk & Compliance, fraud prevention, cyber risk, and anti-money laundering, as well as specialized advisory services in this sector and specialized IT services for the healthcare sector.

This segment also includes the provision of specialized technological solutions and services in the sectors of portals, BI, CRM, DBA, and EIM; dedicated solutions for the US Government Contracting market; distribution and marketing services for software products; and the provision of professional services and offshore solutions, including through employees at the Company's operational centers in India. The operations also include professional services and projects carried out by experts from across the Matrix Group, serving as a gateway to the business model of exporting the Company's services and products to the US market.

**Cloud and Computing Infrastructures**

The Company's activity in this segment primarily includes providing a wide range of cloud solutions and services, including sales, service, and support for public cloud (PaaS, SaaS, IaaS) and private cloud at all implementation stages - consulting, architecture, development, deployment, environment management, and support - as well as advanced FinOps services (through the Company's specialized business unit, CloudZone). It also includes computing solutions for IT infrastructure, communication solutions, marketing and sales of hardware, software licenses, and peripheral equipment for business customers, alongside related professional services. Additionally, the Company offers multimedia solutions and command-and-control centers for smart offices, office automation and printing solutions, sales and marketing of test and measurement equipment, communication, cybersecurity, and RF solutions, automation projects and integration, advanced calibration services, and industrial video and image processing solutions (through RDT Equipment and Systems and Asio Vision). Furthermore, the Company is engaged in the import, sales, and service of automated manufacturing machines for component assembly and automated testing machines for assembly processes and components in production lines across various industries, including industrial, medical, military, laser, and sensor applications for civilian and defense purposes, as well as optical communication systems and automotive radar systems.

Consolidated Interim Financial Statements 17

**Matrix IT Ltd.**

Notes to the Consolidated Interim Financial Statements

---

| | |
|:---|:---|
| **Note 3** | **Segments (cont.)** |

---

**Marketing and Support of Software Products**

This segment primarily includes the sale and distribution of software products (mainly from foreign software manufacturers) across various sectors, such as control and

monitoring products, cybersecurity, communication solutions, virtualization, knowledge management products, databases and Big Data, open-source systems, and IT management products. It also includes providing professional support services for these products, as well as implementation projects, training, support, and maintenance for integrated products and systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Composition** 

For the nine months ended September 30, 2025 - unaudited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **IT Solutions and Services, Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues to non-related parties | 2757076 | 341064 | 1199677 | 341372 | - | 4639189 |
| Inter-segment revenues | 72346 | 14426 | 25786 | 575 | (113133) | - |
| Revenues | 2829422 | 355490 | 1225463 | 341947 | (113133) | 4639189 |
| Segment results | 217903 | 30231 | 93886 | 53240 | (11070) | 384190 |
| Financial expenses |  |  |  |  |  | (79788) |
| Financial income |  |  |  |  |  | 15195 |
| Tax expenses |  |  |  |  |  | (78395) |
| Net income |  |  |  |  |  | 241202 |

---

Consolidated Interim Financial Statements 18

**Matrix IT Ltd.**

Notes to the Consolidated Interim Financial Statements

---

| | |
|:---|:---|
| **Note 3** | **Segments (cont.)** |

---

For the nine months ended September 30, 2024 - unaudited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **IT Solutions and Services, Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues to non-related parties | 2447189 | 319979 | 1093340 | 344747 | - | 4205255 |
| Inter-segment revenues | 71306 | 17967 | 36671 | 3842 | (129786) | - |
| Revenues | 2518495 | 337946 | 1130011 | 348589 | (129786) | 4205255 |
| Segment results | 184674 | 25352 | 78425 | 50399 | (8736) | 330114 |
| Financial expenses |  |  |  |  |  | (62894) |
| Financial income |  |  |  |  |  | 15320 |
| Tax expenses |  |  |  |  |  | (68299) |
| Net income |  |  |  |  |  | 214241 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Composition (cont.)** 

For the three months ended September 30, 2025 - unaudited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT Solutions and Services, Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues to non-related parties | 950563 | 172887 | 399361 | 118799 | - | 1641610 |
| Inter-segment revenues | 28796 | 1395 | 10988 | 152 | (41331) | - |
| Revenues | 979359 | 174282 | 410349 | 118951 | (41331) | 1641610 |
| Segment results | 72936 | 11680 | 32722 | 19006 | (4864) | 131480 |
| Financial expenses |  |  |  |  |  | (24419) |
| Financial income |  |  |  |  |  | 4586 |
| Tax expenses |  |  |  |  |  | (27311) |
| Net income |  |  |  |  |  | 84336 |

---

Consolidated Interim Financial Statements 19

**Matrix IT Ltd.**

Notes to the Consolidated Interim Financial Statements

---

| | |
|:---|:---|
| **Note 3** | **Segments (cont.)** |

---

For the three months ended September 30, 2024 - unaudited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT Solutions and Services, Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues to non-related parties | 837323 | 113499 | 358265 | 109723 | - | 1418810 |
| Inter-segment revenues | 25890 | 5111 | 9686 | 1381 | (42068) | - |
| Revenues | 863213 | 118610 | 367951 | 111104 | (42068) | 1418810 |
| Segment results | 56190 | 9067 | 27969 | 16511 | (1556) | 108181 |
| Financial expenses |  |  |  |  |  | (20506) |
| Financial income |  |  |  |  |  | 4351 |
| Tax expenses |  |  |  |  |  | (22308) |
| Net income |  |  |  |  |  | 69718 |

---

For the year ended December 31, 2024 - audited (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT Solutions and Services,** <br> **Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues to non-related parties | 3227608 | 425971 | 1465935 | 460024 | **-** | 5579538 |
| Inter-segment revenues | 109659 | 30794 | 49996 | 915 | (191364) | - |
| Revenues | 3337267 | 456765 | 1515931 | 460939 | (191364) | 5579538 |
| Segment results | 250113 | 45364 | 106405 | 66865 | (18673) | 450074 |
| Financial expenses |  |  |  |  |  | (86956) |
| Financial income |  |  |  |  |  | 20084 |
| Taxes on income |  |  |  |  |  | (94978) |
| Net income |  |  |  |  |  | 288224 |
| **Additional information** |  |  |  |  |  |  |
| Cost of revenues | 2893978 | 374515 | 1357891 | 311524 | (191364) | 4746544 |
| Depreciation and amortization | 148210 | 6640 | 26997 | 4964 | - | 186811 |

---

Consolidated Interim Financial Statements 20

**Matrix IT Ltd.**

Notes to the Consolidated Interim Financial Statements

---

| | |
|:---|:---|
| **Note 4** | **Significant Events During the Reporting Period** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Dividend distribution** 

Following the declaration of the dividend on March 10, 2025, on April 8, 2025, the Company distributed a dividend in the amount of NIS 52.2 million to its shareholders (reflecting NIS 0.82 for each NIS 1 par value ordinary shares).

Following the declaration of the dividend on May 12, 2025, on July 15, 2025, the Company distributed a dividend in the amount of NIS 56.6 million to its shareholders (reflecting NIS 0.89 for each NIS 1 par value ordinary shares).

Following the declaration of the dividend on August 12, 2025, on October 20, 2025, the Company distributed a dividend in the amount of NIS 54.1 million to its shareholders (reflecting NIS 0.85 for each NIS 1 par value ordinary shares).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Transactions with holders of non-controlling interests in a subsidiary** 

During the first quarter, the Company entered into a mutual put/call options renewal agreement with minority holders in a subsidiary for the sale and acquisition of the minority holder's remaining shares of that subsidiary. The transaction was accounted for directly to equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Acquisition of Gav** 

On February 4, 2025, the Company, through its subsidiary Matrix IT Systems Ltd., completed the acquisition of 70% of the share capital of Gav Systems Ltd. and Gav Expert Ltd. for a total of approximately NIS 45.5 million. In addition, the sellers were paid a dividend for the accrued earnings up until December 23, 2023, in the amount of NIS 29 million. Pursuant to the agreement, the Company and the seller have a mutual option to sell and purchase the seller's remaining shares to the Company. The acquired company provides professional services, primarily in the fields of computing and software development.

As of the report date, the valuation underlying the purchase price allocation to assets and liabilities (the PPA) has not yet been completed and accordingly, this allocation is temporary, according to management's assessment, and may be updated in the coming periods after the valuation is completed.

According to the provisional allocation, the excess purchase cost of approximately NIS 72.2 million was attributed to net intangible assets in the amount of approximately NIS 16.8 million, and the remainder was allocated to goodwill.

As noted above, the Group has recognized, on a provisional basis, the fair value of the assets acquired and liabilities assumed in the business combination. Accordingly, both the purchase consideration and the fair values of the assets acquired and liabilities assumed are subject to final measurement adjustments within a period of up to 12 months from the acquisition date, in accordance with IFRS 3.

Consolidated Interim Financial Statements 21

**Matrix IT Ltd.**

Notes to the Consolidated Interim Financial Statements

---

| | |
|:---|:---|
| **Note 4** | **Significant Events During the Reporting Period (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Entering into a MOU for a merger with Magic** 

Further to the Company's memorandum of understanding dated March 10, 2025 with Magic Software Enterprises Ltd. ("Magic") to negotiate the terms of a binding merger agreement, under which the Company would acquire all of Magic's issued and outstanding share capital by way of a reverse triangular merger [for further details, see Immediate Report dated March 11, 2025 (ref. 2025-01-015939)], the Company entered into a merger agreement (the "Merger Agreement"), which was signed on November 3, 2025. For further details, see Immediate Report dated November 3, 2025 (ref. 2025-01-083233) (the "transaction report"). <br>

Under the merger agreement, and subject to the fulfillment of the conditions precedent as detailed in the immediate report, upon completion of the transaction the Company will acquire all of Magic's issued and outstanding share capital. Upon completion of the merger, Magic will become a private company wholly owned (100%) by Matrix. Magic's shares will be delisted from trading on NASDAQ and the TASE, and the company will transition from a public company to a private one. For a description of the principal terms of the merger agreement, see the transaction report.

As Formula Systems (1985) Ltd. is the controlling shareholder in both the Company and Magic, and in light of the materiality of the transaction, in August 2023 the Company's Board of Directors appointed an independent committee composed solely of directors of the Company who are external and independent directors (the "special committee"). The special committee served in its role from the date of its establishment until the date of approval of the merger transaction by the Company's Board of Directors and the signing of the merger agreement on November 3, 2025. For further details, see the transaction report.

Completion and execution of the merger are subject to the fulfillment of a number of conditions precedent, as detailed in the transaction report, including approval of the merger transaction by the special general meetings of shareholders of the Company and of Magic, which have been convened for December 10, 2025.

Pursuant to generally accepted accounting principles, the transaction will be accounted for using the as-pooling method rather than the purchase method. Meaning, the Company will consolidate Magic's assets and liabilities in its financial statements at the values recorded in the controlling shareholder's books. (No intangible assets, nets will be created in the acquisition, and accordingly, no amortization of intangible assets, net will be recorded thereafter.)

Consolidated Interim Financial Statements 22

**Matrix IT Ltd.**

Notes to the Consolidated Interim Financial Statements

---

| | |
|:---|:---|
| **Note 4** | **Significant Events During the Reporting Period (cont.)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Entering into a MOU for a merger with Magic (Cont.)** 

In addition, since the transaction is being executed as a merger, its implementation will not result in any financial expenses for the Company.

The merger agreement provides that during the period from the date of signing the merger agreement until the completion date or the date of termination of the agreement in accordance with its terms (whichever is earlier) (the "interim period"), and subject to applicable law, the business of the companies shall be conducted in the ordinary course of business, such that no changes shall occur outside the ordinary course of business, and no actions or undertakings shall be made that could materially adversely affect the assets, business, financial condition of the companies, or the ability to complete the transaction.

In addition, pursuant to the provisions of the merger agreement, during the interim period, the Company and Magic may make distributions (as the term "distribution" is defined in the Companies Law) only in accordance with their respective dividend distribution policies as in effect on the date of signing the agreement (and for the avoidance of doubt, neither shall distribute more than 75% of their respective net income attributable to shareholders). Such a distribution will not affect or change the exchange ratio or the merger consideration.

Consolidated Interim Financial Statements 23

![](image_004.jpg)<br>**CHAPTER C**<br>Financial Information from the Consolidated Interim Financial Statements attributable to the Company<br> September 30, 2025<br> (unaudited)<br>

The information contained in these separate interim financial statements published by the Company constitutes a translation of the separate interim financial statements published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

![](image_008.jpg)

---

| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

---

| | |
|:---|:---|
| Special report of the auditing accountant to the shareholders of Matrix I.T. Ltd. on separate interim financial information pursuant to Regulation 38(d) of the Securities Regulations (periodic and immediate reports), 1970 | 3 |
| Financial Information from the Consolidated Statements of Financial Position attributable to the Company | 4 |
| Financial Information from the Consolidated Statements on the Comprehensive Income attributable to the Company | 6 |
| Financial Information from the Consolidated Statements Cash Flows attributable to the Company | 7 |
| Additional information | 10 |

---

![](image_011.jpg)

**Special report of the Auditing Accountant**

**to the shareholders of Matrix IT. Ltd**

**on separate interim financial information pursuant to Regulation 38(d) of the Securities Regulations (Periodic and Immediate reports), 1970**

**Introduction**

We reviewed the separate interim financial information presented pursuant to Regulation 38(d) of the Securities Regulations (Periodic and Immediate Reports), 1970 of Matrix IT Ltd. (hereinafter - the Company), as of September 30, 2025 and for the periods of nine and three months ended on the same date. The separate interim financial information is 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 this interim period based on our review.

**<br> Scope of Review**

We conducted our review in accordance with Israel Review Standard (2410) of the Israel Institute of Certified Public Accountants "Review of Financial Information for Interim Periods Conducted by the Entity's Auditor". A review of separate financial information for interim periods consists of inquiries, primarily with persons responsible for financial and accounting matters, and the application of analytical and other review procedures. A review is considerably more limited in scope than an audit conducted in accordance with auditing standards accepted in Israel and therefore does not allow us to obtain assurance that we will know all the significant matters that could have been identified in the audit. Accordingly, we do not express an audit opinion.

**Conclusion**

Based on our review, nothing has come to our attention that causes us to believe that the aforementioned separate financial information is not prepared, in all material respects, in accordance with the provisions of Regulation 38(d) of the Securities Regulations (Periodic and Immediate Reports), 1970.

---

| | |
|:---|:---|
| Tel Aviv, Israel | **Ziv Haft Certified Public Accountants (Isr.)<br>**  |
| November 11, 2025 | BDO Member Firm |

---

separate interim financial information pursuant to Regulation 38(d) 3

**Matrix IT Ltd.**

**Financial Information from the Consolidated Statements of Financial Position attributable to the Company (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
| | 30, September | 30, September | 31, December |
| | **2025** | **2024** | **2024** |
| | Unaudited | Unaudited | Audited |
| **Current assets** |  |  |  |
| Cash and cash equivalents | 1954 | 3026 | 4727 |
| Trade receivables | 86192 | 70911 | 103692 |
| Related parties debit balances | 22572 | 77564 | 91663 |
| Income taxes receivable | - | 7495 | 12594 |
| Other accounts receivable | 10681 | 5709 | 21787 |
|  | **121399** | **164705** | **234463** |
| **Non-current assets** |  |  |  |
| Balance in respect of investee controlled companies, net | 2698052 | 2480670 | 2561496 |
| Capital notes granted to controlled investees | 24659 | 24659 | 24659 |
| Right-of-use assets | 171227 | 162598 | 178504 |
| Deferred taxes | 6780 | 5392 | 6053 |
|  | 2900718 | 2673319 | 2770712 |
|  | **3022117** | **2838024** | **3005175** |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

separate interim financial information pursuant to Regulation 38(d) 4

**Matrix IT Ltd.**

**Financial Information from the Consolidated Statements of Financial Position attributable to the Company (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
| | 30, September | 30, September | 31, December |
| | **2025** | **2024** | **2024** |
| | Unaudited | Unaudited | Audited |
| **Current liabilities** |  |  |  |
| Credit from banks and other credit providers | 308376 | 301502 | 300000 |
| Current maturities of debentures | 77726 | 80439 | 81341 |
| Current maturities of lease liabilities | 15828 | 8508 | 8761 |
| Trade payables | 51366 | 28235 | 36802 |
| Employees and payroll accruals | 27775 | 29162 | 36964 |
| Other accounts payable | 69454 | 63904 | 68514 |
| Related Parties credit balances | 964119 | 809473 | 917845 |
|  | 1514644 | 1321223 | 1450227 |
| **Non-current liabilities** |  |  |  |
| Debentures | 227599 | 292153 | 295427 |
| Lease liabilities | 166264 | 153236 | 170627 |
| Deferred taxes | - | 196 | - |
| Employee benefit liabilities, net | 69 | 221 | 161 |
|  | 393932 | 445806 | 466215 |
| **Equity attributable to Company shareholders** |  |  |  |
| Share capital and capital reserves | 338494 | 384768 | 380099 |
| Retained earnings | 775047 | 686227 | 708634 |
|  | 1113541 | 1070995 | 1088733 |
|  | **3022117** | **2838024** | **3005175** |

---

November 11, 2025   <br> Date of approval of the financial statements Guy Bernstein Chairman of the Board Moti Gutman Chief Executive Officer Nevo Brenner Chief Financial Officer

The additional information provided constitutes an integral part of the financial data and the separate financial information.

separate interim financial information pursuant to Regulation 38(d) 5

**Matrix IT Ltd.**

**Financial Information from the Consolidated Statements on the Comprehensive Income attributable to the Company (NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **<br> Nine months**<br> **ended,**<br> **30.09.25** | **Nine months**<br> **ended,**<br> **30.09.24** | **Three months**<br> **ended,**<br> **30.09.25** | **Three months**<br> **ended,**<br> **30.09.24** | **<br>Year ended,<br> 31.12.24** |
|  | **Unaudited** | **Unaudited** | **Unaudited** | **Unaudited** | **Audited** |
| Revenues | &nbsp;&nbsp;199272 | &nbsp;&nbsp;167270 | &nbsp;&nbsp;71616 | &nbsp;&nbsp;58127 | &nbsp;&nbsp;197122 |
| Cost of revenues | &nbsp;&nbsp;61157 | &nbsp;&nbsp;72300 | &nbsp;&nbsp;19844 | &nbsp;&nbsp;20185 | &nbsp;&nbsp;61815 |
| **Gross profit** | &nbsp;&nbsp;**138115** | &nbsp;&nbsp;**94970** | &nbsp;&nbsp;**51772** | &nbsp;&nbsp;**37942** | &nbsp;&nbsp;**135307** |
| Selling and marketing expenses | &nbsp;&nbsp;15084 | &nbsp;&nbsp;20658 | &nbsp;&nbsp;8413 | &nbsp;&nbsp;10300 | &nbsp;&nbsp;23960 |
| General and administrative expenses | &nbsp;&nbsp;38217 | &nbsp;&nbsp;32598 | &nbsp;&nbsp;16665 | &nbsp;&nbsp;11807 | &nbsp;&nbsp;54965 |
| **Operating income** | &nbsp;&nbsp;**84814** | &nbsp;&nbsp;**41714** | &nbsp;&nbsp;**26694** | &nbsp;&nbsp;**15835** | &nbsp;&nbsp;**56382** |
| Financial expenses | &nbsp;&nbsp;29997 | &nbsp;&nbsp;22306 | &nbsp;&nbsp;9520 | &nbsp;&nbsp;7748 | &nbsp;&nbsp;61382 |
| Financial income | &nbsp;&nbsp;80 | &nbsp;&nbsp;102 | &nbsp;&nbsp;25 | &nbsp;&nbsp; 14 | &nbsp;&nbsp;254 |
| Company`s share of income of companies accounted for at equity, net | &nbsp;&nbsp;184625 | &nbsp;&nbsp;188713 | &nbsp;&nbsp;65156<br>| &nbsp;&nbsp;58346<br>| &nbsp;&nbsp;277824 |
| Income before taxes on income | &nbsp;&nbsp;239522 | &nbsp;&nbsp;208223 | &nbsp;&nbsp;82355<br>| &nbsp;&nbsp;66447<br>| &nbsp;&nbsp;273078 |
| Taxes on income | &nbsp;&nbsp;13052 | &nbsp;&nbsp;5686 | &nbsp;&nbsp;4382 | &nbsp;&nbsp;2051 | &nbsp;&nbsp;656 |
| **Net income attributable to the Company** | &nbsp;&nbsp;226470 | &nbsp;&nbsp;202537 | &nbsp;&nbsp;77973<br>| &nbsp;&nbsp;64396<br>| &nbsp;&nbsp;272422 |
| Gain from remeasurement of defined benefit plans | &nbsp;&nbsp;2815 | &nbsp;&nbsp;1923 | &nbsp;&nbsp;1026 | &nbsp;&nbsp;(5) | &nbsp;&nbsp;2722 |
| Adjustments for translation of financial statements | &nbsp;&nbsp;(33812) | &nbsp;&nbsp;7847 | &nbsp;&nbsp;(8449)<br>| &nbsp;&nbsp;(3700) | &nbsp;&nbsp;(1340) |
| **Total comprehensive income attributable to the Company** | &nbsp;&nbsp;**195473** | &nbsp;&nbsp;**212307** | &nbsp;&nbsp;**70550**<br>| &nbsp;&nbsp;**60691**<br>| &nbsp;&nbsp;**273804** |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

separate interim financial information pursuant to Regulation 38(d) 6

**Matrix IT Ltd.**

**Financial Information from the Consolidated Statements Cash Flows attributable to the Company<br> (NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | Nine months ended,**** <br> September 30, | Nine months ended,**** <br> September 30, | Three months ended,**** <br> September 30, | Three months ended,**** <br> September 30, | Year ended,<br> December 31, |
| | **2025** | **2024** | **2025** | **2024** | **2024** |
| &nbsp;&nbsp;&nbsp;**Cash flows from operating activities:** | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| &nbsp;&nbsp;**Net income** | **226470** | &nbsp;&nbsp;&nbsp; **202537** | **77973** | &nbsp;&nbsp;&nbsp; **64396** | **272422** |
| &nbsp;&nbsp;&nbsp;**Adjustments to reconcile net income to net cash provided by operating activities:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Adjustments to the profit or loss items:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company`s share of income of companies accounted for at equity, net | (184625) | (188713) | (65156) | (58346) | (277824) |
| &nbsp;&nbsp;&nbsp;Taxes on income | 13052 | 5686 | 4382 | 2051 | 656 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 13885 | 7432 | 5378 | 683 | 9155 |
| &nbsp;&nbsp;&nbsp;Change in employee benefit liabilities | (92) | (31) | (27) | 31 | (91) |
| &nbsp;&nbsp;&nbsp;Other financial expenses, net | 29615 | 20554 | 8776 | 7302 | 30384 |
| &nbsp;&nbsp;&nbsp;Revaluation of long-term loans from banks | - | (5) | - | (2) | (7) |
| &nbsp;&nbsp;&nbsp;Share based payment | 6310 | 13508 | 1904 | 4511 | 18026 |
|  | **(121855)** | **(141569)** | **(44743)** | **(43770)** | **(219701)** |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

separate interim financial information pursuant to Regulation 38(d) 7

**Matrix IT Ltd.**

**Financial Information from the Consolidated Statements Cash Flows attributable to the Company<br> (NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Nine months ended,**** <br> September 30, | Nine months ended,**** <br> September 30, | Three months ended,**** <br> September 30, | Three months ended,**** <br> September 30, | <br> Year ended,<br> December 31, |
|  | **2025** | **2024** | **2025** | **2024** | **2024** |
|  | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| &nbsp;&nbsp;&nbsp;**Changes in assets and liability items:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Decrease (increase(in trade receivables | 17500 | 5350 | 2040 | 4904 | (27431) |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in other accounts receivable and prepaid expenses | 12302 | (1050) | 1286 | 1698 | (17128) |
| &nbsp;&nbsp;&nbsp;Increase(decrease) in trade payables | 14564 | 6859 | (1208) | (883) | 15426 |
| &nbsp;&nbsp;&nbsp;Increase in employee benefit liabilities, deferred revenues and other accounts payable | (13388) | (17625) | 7700 | 5298 | (1504) |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in related parties balances | 115365 | 35188 | 54625<br>| <br> (32153) | 129461 |
|  | 146343 | 28722 | 64443 | (21136) | 98824 |
| &nbsp;&nbsp;&nbsp;**Cash paid and received during the year for:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest paid | (24918) | (25543) | (9481) | (11443) | (31293) |
| &nbsp;&nbsp;&nbsp;Interest received | 50 | - | (5) | - | 126 |
| &nbsp;&nbsp;&nbsp;Taxes paid | (80) | (6309) | (1090) | (1059) | (7235) |
| &nbsp;&nbsp;&nbsp;Taxes received | - | 3746 | - | - | 3746 |
|  | (24948) | (28106) | (10576) | (12502) | (34656) |
| &nbsp;&nbsp;&nbsp;**Net cash provided (used) by operating activities** | **226010** | **61584** | **87097** | **(13012)** | **116889** |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

separate interim financial information pursuant to Regulation 38(d) 8

**Matrix IT Ltd.**

**Financial Information from the Consolidated Statements Cash Flows attributable to the Company<br> (NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | Nine months ended,**** <br> September 30, | Nine months ended,**** <br> September 30, | Three months ended,**** <br> September 30, | Three months ended,**** <br> September 30, | Year ended,<br> December 31, |
| | **2025** | **2024** | **2025** | **2024** | **2024** |
| | Unaudited | Unaudited | Unaudited | Unaudited | Audited |
| **Cash flows from financing activities:** |  |  |  |  |  |
| Receipt from the issuing<br> of commercial securities | - | 100000 |  | 100000 | 100000 |
| Repayment of lease liabilities | (3903) | (5563) | (3903) | (391) | (5500) |
| Repayment of long-term loans from banks and others | - | (4500) | - | (1500) | (6000) |
| Dividend paid | (157066) | (132126) | (56628) | (51453) | (184214) |
| Debenture payment | (67918) | (67918) | (33959) | (33959) | (67918) |
| **Net cash provided /(used) in financing activities** | **(228887)** | **(110107)** | **<br> (94490)** | **<br> 12697** | **(163682)** |
| Translation differences for cash and cash equivalents | 104 | 993 | 931 | 78 | 964 |
| Increase) Decrease) in cash and cash equivalents | (2773) | (47530) | (6462) | (237) | (45829) |
| **Balance of cash and cash equivalents at the beginning of the period** | **4727** | **50556** | **8416** | **3263** | **50556** |
| **Balance of cash and cash equivalents at the end of the period** | **1954** | **3026** | **1954** | **3026** | **4727** |
| **Significant non-cash transactions** |  |  |  |  |  |
| Dividend declared and not yet paid | &nbsp;&nbsp;&nbsp;**54083** | &nbsp;&nbsp;&nbsp;**52088** | &nbsp;&nbsp;&nbsp;**54083** | &nbsp;&nbsp;&nbsp;**52088** | &nbsp;&nbsp;&nbsp;**48277** |
| Right-of-use asset recognized with corresponding lease liability | &nbsp;&nbsp;&nbsp;**6608** | &nbsp;&nbsp;&nbsp;**164537** | &nbsp;&nbsp;&nbsp;**5473** | &nbsp;&nbsp;&nbsp;**164537** | &nbsp;&nbsp;&nbsp;&nbsp;182166 |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

separate interim financial information pursuant to Regulation 38(d) 9

**Matrix IT Ltd.**

**Additional information**

---

| | |
|:---|:---|
| **1:** | **General** |

---

This "Separate financial information" of Matrix I. T. Ltd. (hereinafter – "the Company"), prepared in a condensed format for September 30, 2025 and for the periods of nine and three months that ended on that date, were prepared in accordance with the provisions of Regulation 38(d) of the Securities Regulations (Periodic and Immediate Reports), 1970. This Separate financial information report, should be reviewed in connection with the "Separate financial information" of the Company's annual Financial Statements for December 31, 2024 and for the year ended on that date, and the additional information accompanying them.

---

| | |
|:---|:---|
| **2:** | **Significant accounting policies** |

---

The accounting policy applied in preparing this "Separate financial information report" is consistent with the one applied in preparing the "Separate financial information report" for December 31, 2024.

separate interim financial information pursuant to Regulation 38(d) 10

![](image_004.jpg)<br>**CHAPTER D**<br>Quarterly Report on the effectiveness of Internal Control over Financial Reporting and Disclosure<br> pursuant to Regulation 38c`(a)<br>

The information contained in the Quarterly Report on the effectiveness of Internal Control over Financial Reporting and disclosure pursuant to Regulation 38c`(a) constitutes a translation of Report published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

![](image_008.jpg)

---

| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

Quarterly report on the effectiveness of internal control over financial reporting and disclosure in accordance pursuant to Regulation 38c`(a). 3 <br> Certification of CEO 4 <br> Certification of the most senior financial executive officer 6

Quarterly report on the effectiveness of internal control over financial reporting and disclosure pursuant to Regulation 38c`(a):

Management, under the supervision of the Board of Directors of Matrix IT Ltd. (hereby: "the Company"), is responsible for establishing and maintaining appropriate internal control over financial reporting and disclosure in the Company.

For this matter, the members of Management are:

&nbsp;&nbsp;&nbsp;&nbsp;1. Moti Gutman,
 CEO

&nbsp;&nbsp;&nbsp;&nbsp;2. Nevo Brenner,
 CFO

&nbsp;&nbsp;&nbsp;&nbsp;3. Gali Katan,
 Controller

Internal control over financial reporting and disclosure includes controls and procedures in the Company, which were planned by the CEO and the most senior financial officer, or under their supervision, or by whoever fulfills those functions in practice, under the supervision of the Board of Directors of the Company, and were designed to provide reasonable assurance as to the reliability of the financial reporting and the preparation of the reports in accordance with the provisions of the law, and to ensure that information that the Company is required to disclose in the reports it publishes in accordance with the provisions of the law is collected, processed, summarized and reported on the date and in the format laid down in law.

Internal control includes, among other things, controls and procedures planned to ensure that the information the Company is required to disclose as aforesaid, is accumulated and forwarded to the Management of the Company, including to the CEO and the most senior financial officer or to whoever fulfills those functions in practice, in order to enable decisions to be made at the appropriate time in relation to the disclosure requirements.

Due to its structural limitations, internal control over financial reporting and disclosure is not intended to provide absolute assurance that misstatement or omission of information from the reports will be prevented or will be detected.

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 June 30, 2025 (the "Last Quarterly Report on Internal Control"), internal control was found to be effective.

Up to the reporting date, no event or matter was brought to the attention of the Board of Directors and Management that could change the evaluation of the effectiveness of internal control, as found in the Last Quarterly Report on Internal Control.

As of the reporting date, based on that stated in the Last Quarterly Report on Internal Control, and based on information that was brought to the attention of the Board of Directors and Management as aforesaid, the internal control is effective.

3 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

**Management certifications:**

**(a1) CEO certification pursuant to Regulation 38c`(d)(1):**

Management certification<br> CEO Certification

I, Moti Gutman, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
have reviewed the quarterly report of Matrix IT Ltd. ("the Company") for the third quarter of 2025 ("the Reports").

&nbsp;&nbsp;&nbsp;&nbsp;2. To
the best of my knowledge, the Reports do not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period of the Reports.

&nbsp;&nbsp;&nbsp;&nbsp;3. To the best
 of my knowledge, the financial statements and other financial information included in the
 Reports reflect fairly, in all material respects, the financial position, results of operations
 and cash flows of the Company as of the dates and for the periods presented in the Reports.

&nbsp;&nbsp;&nbsp;&nbsp;4. I have disclosed
 the following to the Independent Auditor of the Company, to the Company's Board of
 Directors, and to the Audit and the Financial Statements Review Committees of the Board of
 Directors of the Company, based on my most recent evaluation of internal control over financial
 reporting and disclosure:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All the significant
 deficiencies and material weaknesses in the design or operation of internal control over
 financial reporting and disclosure which are reasonably likely to adversely affect the Company's
 ability to collect, process, summarize or report financial information, in a way that could
 cast doubt on the reliability of the financial reporting and the preparation of the financial
 statements in accordance with the provisions of the law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud,
 whether or not material, that involves the CEO or anyone directly subordinate to the CEO,
 or which involves other employees who have a significant role in the Company's internal
 control over financial reporting and disclosure.

5. I, alone or together
 with others in the Company:

&nbsp;&nbsp;&nbsp;&nbsp;a) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to ensure that material information relating to the Company,
 including its subsidiaries as defined in the Securities Regulations (Annual Financial Statements),
 2010, is brought to my attention by others in the Company and in the subsidiaries, particularly
 during the period of preparation of the Reports;

4 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

&nbsp;&nbsp;&nbsp;&nbsp;b) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to provide reasonable assurance regarding the reliability
 of the financial reporting and the preparation of the financial statements in accordance
 with the provisions of the law, including in accordance with generally accepted accounting
 principles;

&nbsp;&nbsp;&nbsp;&nbsp;c) No event or
 matter that occurred in the period between the date of the last report (the quarterly report
 as of June 30, 2025) and this reporting date was brought to my attention that would change
 the conclusion of the Board of Directors and Management concerning the effectiveness of internal
 control over the Company's financial reporting and disclosure.

Nothing in the foregoing shall derogate from my responsibility or that of anyone else, in law.

Moti Gutman<br> CEO November 11, 2025

5 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

**Management certifications :**

**(b) CFO Certification pursuant to Regulation 38C(d)(2)**

**Management certification<br> Certification of the most senior financial executive officer** 

I, Nevo Brenner, certify that:

1. I have reviewed
 the quarterly report of Matrix IT Ltd. ("the Company") for the third quarter of
 2025 ("the Reports").

2. To
the best of my knowledge, the Reports do not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period of the Reports.

3. To the best
 of my knowledge, the financial statements and other financial information included in the
 Reports reflect fairly, in all material respects, the financial position, results of operations
 and cash flows of the Company as of the dates and for the periods presented in the Reports.

4. I have disclosed
 the following to the Independent Auditor of the Company, to the Company's Board of
 Directors, and to the Audit and the Financial Statements Review Committees of the Board of
 Directors of the Company, based on my most recent evaluation of internal control over financial
 reporting and disclosure:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All the
 significant deficiencies and material weaknesses in the design or operation of internal control
 over financial reporting and disclosure which are reasonably likely to adversely affect the
 Company's ability to collect, process, summarize or report financial information, in
 a way that could cast doubt on the reliability of the financial reporting and the preparation
 of the financial statements in accordance with the provisions of the law;

&nbsp;&nbsp;&nbsp;&nbsp;a) Any fraud,
 whether or not material, that involves the CEO or anyone directly subordinate to the CEO,
 or which involves other employees who have a significant role in the Company's internal
 control over financial reporting and disclosure.

5. I, alone or together with others in the Company:

&nbsp;&nbsp;&nbsp;&nbsp;a) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to ensure that material information relating to the Company,
 including its subsidiaries as defined in the Securities Regulations (Annual Financial Statements),
 2010, is brought to my attention by others in the Company and in the subsidiaries, particularly
 during the period of preparation of the Reports;

6 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to provide reasonable assurance regarding the reliability
 of the financial reporting and the preparation of the financial statements in accordance
 with the provisions of the law, including in accordance with generally accepted accounting
 principles;

&nbsp;&nbsp;&nbsp;&nbsp;c) No event
 or matter that occurred during the period between the date of the last Report (the quarterly
 Report as of June 30, 2025) and the date of this Report has been brought to my attention
 that would change my conclusions regarding the effectiveness of internal control over financial
 reporting and disclosure, insofar as it relates to the financial statements and other financial
 information included in the Reports that were presented to Management and the Board of Directors
 and are incorporated in this Report.

Nothing in the foregoing shall derogate from my responsibility or that of anyone else, in law.

Nevo Brenner<br> CFO November 11, 2025

7 Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a)

## Exhibit 99.9

**Exhibit 99.9**

**Matrix IT Ltd.**<br> Israeli Registrar No.: 520039413

To: Israel Securities Authority To: Tel Aviv Stock Exchange Ltd. F081 (Public) Filed via MAGNA: November 11, 2025<br> Reference No.: 2025-01-086144 <br> <u>www.isa.gov.il</u> <u>www.tase.co.il</u>

The corporation shall time the reporting for publication on November 12, 2025, 6:40 AM.

**<u>Immediate Report on the Distribution of Cash Dividend to Securities</u><br> Article 37(a) of the Securities Regulations (Periodic and Immediate Reports), 5730-1970**

1. We hereby report that on *November 11, 2025*, it was resolved to distribute a dividend.

2. The effective date (ex-date): *December 7, 2025* 

Payment date: *December 30, 2025*

3. Payment details:

🗷 Dividend distributed by an Israeli resident company (composition of dividend sources and tax rates see Section 7A)

◻ Dividend distributed by a Real Estate Investment Trust Fund (composition of dividend sources and tax rates see Section 7C)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Eligible <br> Security <br> No.** | **Name of <br> Security** | **Dividend <br> amount <br> per one <br> security** | **Dividend <br> amount <br> currency** | **Payment <br> currency** | **Representative <br> rate for <br> payment for <br> date** | **Tax – <br> individuals <br> %** | **Tax – <br> corporations <br> %** |
| 445015 | ______ | 0.91 | NIS ___ | NIS | _____ | 25 | 0 |

---

◻ Dividend distributed by a foreign resident company (for tax rates, see Section 7B)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Security <br> No.** | **Name of <br> security** | **Gross <br> amount <br> per <br> security** | **Currency** | **Foreign <br> tax %** | **Treaty <br> tax %** | **Remaining <br> tax to be <br> withheld in <br> Israel – <br> individuals <br> %** | **Remaining <br> tax to be <br> withheld in <br> Israel – <br> corporations %** |
|  |  | **Payment <br> amount in <br> Israel per <br> security** | **Currency** | **Exchange rate for <br> payment for date** | **Exchange rate for <br> payment for date** | **Tax for <br> individuals <br> in Israel – <br> actual %** | **Corporate <br> tax in Israel <br> – actual %** |

---

Please specify the amount of the dividend to be paid with precision of up to 7 digits after the decimal point when the currency of the dividend amount is NIS, and up to 5 digits after the decimal point when the dividend amount is in another currency.

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*Note to Section 2 – The amount of dividend to be paid shall be calculated at NIS 0.91 per share.*

4. The total amount of the dividend to be paid is: *NIS 57,906,056 ____________.* 

5. The balance of the Corporation's profits, as defined in Section 302 of the Companies Law, 5759-1999,
after the distribution that is the subject of this Report, is in the amount of:<br> *NIS 717,140,944 ________________________* 

6. Process for approving the dividend distribution:

*The dividend distribution was approved by the Company's Board of Directors on November 11, 2025.*

*For further details see Section 10 below.*

The above distribution is with Court approval pursuant to Section 303 of the Companies Law: *No*<br> The final dividend per share is subject to changes due to __________________

The final dividend per share may be updated up to 2 trading days prior to the effective date.

7. The withholding tax rates set out below are for the purpose of withholding tax at source by the TASE members.

7A. Composition of the dividend sources distributed by an Israeli resident company from shares and financial instruments, excluding a REIT Fund.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **% of the <br> Dividend** | **Individuals** | **Corporations** | **Foreign <br> Residents** |
| Taxable income subject to Corporate Tax (1) | 100 | 25% | 0% | 25% |
| Income sourced abroad (2) | 0 | 25% | 23% | 25% |
| Income from Approved/Benefited Enterprise (3) | 0 | 15% | 15% | 15% |
| Income from Preferred Enterprise – Ireland until 2013 (4) | 0 | 15% | 15% | 4% |
| Income from Preferred Enterprise – Ireland starting 2014 (5) | 0 | 20% | 20% | 4% |
| Preferred income | 0 | 20% | 0% | 20% |
| Income from Approved Tourism/Agriculture Enterprise (6) | 0 | 20% | 20% | 20% |
| Income from Approved/Benefited Enterprise that submitted a waiver notice (7) | 0 | 15% | 0% | 15% |
| Distribution classified as capital gain | 0 | 25% | 23% | 0% |
| Distribution by participation unit | 0 | 0 | 0 | 0 |
| Other | 0 | 0 | 0 | 0 |

---

Explanation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Taxable income subject to Corporate Tax – income from distribution of profits or dividend sourced in income produced or accrued in Israel and received directly or indirectly from another corporate entity subject to Corporate Tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Income sourced abroad is income produced or accrued abroad and not taxed in Israel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Including income from a Benefited Tourism Enterprise where the election/operation year is until 2013.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Preferred Enterprise – Ireland, where the election year is until 2013.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Preferred Enterprise – Ireland, where the election year is from 2014 onward.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Including income from a Benefited Tourism Enterprise where the election/operation year is from 2014 onward.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Approved or Benefited Enterprise that submitted a waiver notice by June 30, 2015, after Corporate Tax was deducted as required.

7B. Dividend distributed by a foreign resident company:

---

| | | | |
|:---|:---|:---|:---|
| | **Individuals** | **Corporations** | **Foreign Residents** |
| Dividend distributed by a foreign resident company | 25% | 23% | 0% |

---

7C. Dividend distributed by a Real Estate Investment Trust Fund:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **% of the <br> Dividend** | **Individuals <br> (1)** | **Corporations** | **Foreign <br> Resident <br> Corporations** | **Exempt <br> Mutual <br> Fund** | **Provident <br> Fund (2)** |
| From real-estate appreciation, capital gain and depreciation (3) | ____ | 25% | 23% | 23% | 0% | 0% |
| Other taxable income (e.g., rental fees) | ____ | 47% | 23% | 23% | 23% | 0% |
| From revenue-generating real estate for residential leasing | ____ | 20% | 20% | 20% | 0% | 0% |
| Income taxed by the Fund (4) | ____ | 25% | 0% | 25% | 0% | 0% |
| Irregular income | ____ | 70% | 70% | 70% | 60% | 70% |
| Other | ____ | ____ | ____ | ____ | ____ | ____ |
| % weighted withholding tax at source | 100% | ____ | ____ | ____ | ____ | ____ |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Individuals – including income of a taxable mutual fund, individuals who are foreign residents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Provident fund for pension or for severance or for compensation as defined in the Income Tax Ordinance, as well as a provident fund or foreign pension fund that is a resident of a treaty country.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) from real-estate appreciation or capital gain, except from the sale of real estate held for a short period, as well as from income in the amount of depreciation expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) a distribution from income that was taxed at the Fund level pursuant to Section 64A4(e).

8. The number of the Corporation's dormant securities that are not entitled to dividend payment and
for which a waiver letter must be provided in order to receive the dividend payment: *653,860* 

9. The effect of the dividend distribution on convertible securities:

◻ The Company has no convertible securities

◻ The dividend distribution has no effect on the convertible securities

🗷 The effect of the dividend distribution on the convertible securities is as follows:

---

| | | |
|:---|:---|:---|
| **Name of the <br> Security** | **Security <br> Number** | **Remarks** |
| *Matrix UP 3/23* | 1194760 | Other<br> *On the ex-date, the current exercise price of each option will be reduced by the amount of the gross dividend per share.* |

---

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10. The recommendations and resolutions of the directors in connection with the dividend distribution pursuant
to Article 37(a)(1) of the Securities Regulations (Periodic and Immediate Reports), 5730-1970:

*Below are additional details regarding the resolution of the Company's Board of Directors concerning the distribution of a dividend from the Company's profits for the second quarter of 2025 in the amount of approximately NIS 54 million (the "**Distribution**"):*

&nbsp;&nbsp;&nbsp;&nbsp;*1.* *In light of the Company's dividend distribution policy (distribution of up to 75% of its profits each quarter, subject to meeting the relevant tests), the Board of Directors reviewed the Company's financial statements as of June 30, 2025, and additional data provided by Company management. Among other things, the Board of Directors reviewed the Company's balance of retained earnings, the projected cash flow statement in order to assess solvency for the next 4 years, the maturity dates of financial liabilities and compliance with financial covenants, including vis-à-vis financial institutions and pursuant to the trust deed for the bonds (Series B), the shareholders' equity attributable to equity holders, cash balances, cash flow from operating activities, unused credit facilities, the Company's positive current ratio, and the net profit attributable to equity holders, including sensitivity analyses in various scenarios.* 

&nbsp;&nbsp;&nbsp;&nbsp;*2.* *This review satisfied the Board of Directors that the Company meets the distribution tests as defined in the Companies Law, 5759-1999:* 

*"The Profit Test" – the Company has distributable retained earnings as of September 30, 2025 in the amount of approximately NIS 755 million.*

*"The Solvency Test" – the Board of Directors reviewed and noted, among other things, the Company's leverage ratio, high cash balances and significant unused credit facilities.*

*The Company has no pledged assets and does not expect changes in the financial covenants to which it is committed.*

*The Company has an issuer rating of Aa3 with a stable outlook from Midroog.*

&nbsp;&nbsp;&nbsp;&nbsp;*3.* *Based on all of the above, the Board of Directors was of the opinion that there is no reasonable concern that the Distribution will prevent the Company from meeting its existing and expected obligations as they fall due, or from continuing to carry out its current activities and future plans, or adversely affect its capital structure, its level of leverage, its compliance with the financial ratios required of it, the Company's compliance with the financial covenants for distribution set forth in the trust deed for the bonds (Series B), and its ability to implement investment plans once formulated, taking into account the Company's financial position, the scope of the Distribution, and the scope of the Company's existing and expected liabilities, all based on the data available to the Company and known to the Board of Directors at the time of approving the Distribution.* 

The Company's assessments regarding its projected cash flow constitute forward-looking information as defined in the Securities Law, 5728-1968. The Company's assessments may not materialize, in whole or in part, or may materialize differently than expected, and they depend on factors not under the Company's control; among other things, such assessments involve changes to the Company's needs and plans and market conditions.

__________

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**Authorized signatories permitted to sign on behalf of the Corporation:**

---

| | | |
|:---|:---|:---|
| | **Name of Signatory** | **Position** |
| **1** | Nevo Brenner | Chief Financial Officer |

---

Explanation: Pursuant to Article 5 of the Periodic and Immediate Reports Regulations (5730-1970), a report submitted under these Regulations shall be signed by those authorized to sign on behalf of the Corporation. A Staff Position on the matter may be found on the Authority's website: <u>click here</u>.

This Report was signed by Adv. Yifat Givol, Head of the Legal Department and Corporate Secretary.

Reference numbers of previous documents on the matter (the reference does not constitute incorporation by reference):

The Corporation's securities are listed for trading on the Tel Aviv Stock Exchange

Form Structure Update Date: October 21, 2025

Short Name: Matrix<br> Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598810, Fax: 09-9598050<br> Email: <u>yifatg@matrix.co.i</u>l; Company website: <u>https://www.matrix-globalservices.com/</u>

Former names of the reporting entity: Romtech Electronics Ltd.

Name of electronic filer: Nevo Brenner<br> Position: Chief Financial Officer<br> Employer:<br> Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598850, Fax: 09-9598826<br> Email: <u>nevobr@matrix.co.il</u>

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## Exhibit 99.10

**Exhibit 99.10**

**MATRIX IT LTD**<br> Company No.: 520039413

To: Israel Securities Authority To: Tel Aviv Stock Exchange Ltd. F126 (Public) Filed via MAGNA: Nov. 11, 2025<br> Reference No.: 2025-01-086157 <br> <u>www.isa.gov.il</u> <u>www.tase.co.il</u>

The corporation will schedule the report for publication on November 12, 2025 at 7:00 am

**<u>Report on a Corporation's Liability Position According to Maturity Dates</u>**<br> **Articles 9D and 38E of the Securities Regulations (Periodic and Immediate Reports), 5730–1970**

Report Period: *September 30 of the current year 2025*

Below is a detailed breakdown of the Corporation's liability position according to maturity dates:

A. Bonds issued to the public by the reporting Corporation and held by the public, excluding such bonds held by the Corporation's parent company, its controlling shareholder, companies controlled by any of them, or companies controlled by the Corporation – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 77726 | 0 | 0 | 0 | 0 | 11842 | 89568 |
| Second year | 0 | 67918 | 0 | 0 | 0 | 0 | 9058 | 76976 |
| Third year | 0 | 67918 | 0 | 0 | 0 | 0 | 6273 | 74191 |
| Fourth year | 0 | 67918 | 0 | 0 | 0 | 0 | 3489 | 71407 |
| Fifth year and thereafter | 0 | 23845 | 0 | 0 | 0 | 0 | 700 | 24545 |
| Total | 0 | 305325 | 0 | 0 | 0 | 0 | 31362 | 336687 |

---

B. Private bonds and non-bank credit, excluding bonds or credit provided by the Corporation's parent company, its controlling shareholder, companies controlled by any of them, or controlled by the Corporation – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 308376 | 0 | 0 | 0 | 0 | 14412 | 322788 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 308376 | 0 | 0 | 0 | 0 | 14412 | 322788 |

---

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C. Bank credit from banks in Israel – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

D. Bank credit from banks abroad – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

E. Summary table for Sections A–D: Total bank credit, non-bank credit, and bonds – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 386102 | 0 | 0 | 0 | 0 | 26254 | 412356 |
| Second year | 0 | 67918 | 0 | 0 | 0 | 0 | 9058 | 76976 |
| Third year | 0 | 67918 | 0 | 0 | 0 | 0 | 6273 | 74191 |
| Fourth year | 0 | 67918 | 0 | 0 | 0 | 0 | 3489 | 71407 |
| Fifth year and thereafter | 0 | 23845 | 0 | 0 | 0 | 0 | 700 | 24545 |
| Total | 0 | 613701 | 0 | 0 | 0 | 0 | 45774 | 659475 |

---

F. Off-balance sheet credit exposure (financial guarantees and credit commitments) – based on the Corporation's separate financial statements ("solo" statements) (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

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G. Off-balance sheet credit exposure (financial guarantees and credit commitments) of all consolidated companies, excluding companies that are reporting corporations and excluding the reporting corporation data in Section F (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

H. Total bank credit balances, non-bank credit, and bonds of all consolidated companies, excluding companies that are reporting corporations and excluding the reporting corporation data in Sections A–D (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 72728 | 0 | 0 | 0 | 0 | 4442 | 77170 |
| Second year | 0 | 40603 | 0 | 0 | 0 | 0 | 1555 | 42158 |
| Third year | 0 | 10396 | 0 | 0 | 0 | 0 | 202 | 10598 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 123727 | 0 | 0 | 0 | 0 | 6199 | 129926 |

---

I. Credit balances granted to the reporting corporation by the parent company or controlling shareholder, and bond balances issued by the reporting corporation and held by the parent company or controlling shareholder (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

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J. Credit balances granted to the reporting corporation by companies controlled by the parent company or controlling shareholder and not controlled by the reporting corporation, and bond balances issued by the reporting corporation and held by such companies (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

K. Credit balances granted to the reporting corporation by consolidated companies, and bond balances issued by the reporting corporation and held by consolidated companies (in NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** | **Principal payments** |
| | **CPI-<br> linked <br> shekel** | **Unlinked <br> shekel** | **Euro** | **Dollar** | **__** | **Other** | **Gross interest <br> payments <br> (without tax <br> withholding)** | **Total by <br> years** |
| First year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Second year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Third year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fourth year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fifth year and thereafter | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

---

**Authorized signatory on behalf of the Corporation:**

---

| | | |
|:---|:---|:---|
| | **Name of signatory** | **Position** |
| 1 | Nevo Brenner | Chief Financial Officer |

---

Explanation: Pursuant to Article 5 of the Periodic and Immediate Reports Regulations (5730-1970), a report submitted under these Regulations shall be signed by those authorized to sign on behalf of the Corporation. A Staff Position on the matter may be found on the Authority's website: <u>click here</u>.

Reference numbers of previous documents on the matter (the reference does not constitute incorporation by reference):

The Corporation's securities are listed for trading on the Tel Aviv Stock Exchange

Form Structure Update Date: February 4, 2025

Short Name: Matrix

Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598810, Fax: 09-9598050

Email: <u>yifatg@matrix.co.il</u>; Company website: <u>https://www.matrix-globalservices.com/</u>

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Former names of the reporting entity: Romtech Electronics Ltd.

Name of electronic filer: Nevo Brenner

Position: Chief Financial Officer

Employer:

Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598850, Fax: 09-9598826

Email: <u>nevobr@matrix.co.il</u>

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## Exhibit 99.11

**Exhibit 99.11**

![](image_003.jpg)

**Matrix IT Ltd. (the "Company")**

November 12, 2025

To: To: <br> Israel Securities Authority Tel Aviv Stock Exchange Ltd. <br> <u>www.isa.gov.il</u> <u>www.tase.co.il</u>

**<u>Immediate Report Regarding Convening of Annual General Meeting of the Shareholders<br> of the Company</u>**

Pursuant to the Companies Law, 5759-1999 (the "**Companies Law**"), the Securities Regulations (Periodic and Immediate Reports), 5730-1970 (the "**Reporting Regulations**"), the Companies Regulations (Written Voting and Position Statements), 5766-2005 (the "**Written Voting Regulations**"), the Companies Regulations (Notice and Announcement of a General Meeting and a Class Meeting in a Public Company and Adding an Item to the Agenda), 5760-2000, the Company hereby respectfully announces that on Wednesday, December 17, 2025, at 12:00 pm, an Annual General Meeting of the Shareholders of the Company (the "**General Meeting**") will convene at the offices of the Company, at 3 Atir Yeda Street, Kfar Saba, for the purpose of discussing and adopting resolutions on the matters on the agenda, as detailed below.

**<u>The matters on the agenda of the meeting:</u>**

1. **Agenda Item No. 1 – Discussion of the Board of Directors' Report and the Financial Statements of the Company for 2024**. This matter will be discussed only and will not be brought to a vote.

It is possible to review said reports included in the Company's Periodic Report for 2024, which was published on March 11, 2025 (Reference No.: 2025-01-015935) (the "**2024 Periodic Report**") on the website of the Israel Securities Authority at <u>https://www.magna.isa.gov.il</u> and on the website of the Stock Exchange at <u>https://maya.tase.co.il</u>.

2. **Agenda Item No. 2 – Reappointment of the accounting firm BDO Israel as the Company's independent auditors**.

As of the date of the report, the accounting firm BDO Israel ("**BDO Firm**") serves as the independent auditor of the Company, in effect until the end of the meeting convened pursuant to this report. Upon the recommendation of the Company's Audit Committee, it is proposed to reappoint the BDO Firm as the Company's independent auditor until the end of the next Annual General Meeting of the Company.

In this regard, it should be noted that in March 2024, a comprehensive discussion was held at the Audit Committee, which included, among other things, the establishment of professional criteria for the Company's needs, including the expertise of the independent auditor, its suitability to the Company's activities, as well as considerations relating to its appointment and replacement. For more details, see the Company's report dated March 11, 2024 (Reference No.: 2024-01-024189).

The proposed resolution text – "**To approve the reappointment of the accounting firm BDO Israel (BDO) as the independent auditors of the Company until the end of the next Annual General Meeting of the Company**."

![](image_003.jpg)

3. **Agenda Items No. 3 to 5 – Reappointment of all directors serving in the Company who are not external directors**.

It is proposed to renew the appointment of the directors serving in the Company (who are not external directors), Messrs. Guy Bernstein, Eliezer Oren and Pinhas Greenfeld (Independent Director) as directors of the Company until the end of the next Annual General Meeting of the Company. The vote regarding each director shall be made separately.

Each of the above directors whose appointment is brought for approval of the General Meeting that is the subject of this report has signed a declaration in accordance with the requirements of Section 224B and/or 241 of the Companies Law, as applicable. The directors' declarations are attached to this report.

The terms of office of the directors who are candidates for reappointment as stated will remain unchanged, including the annual compensation and participation compensation at the amount of the fixed sum as defined in the Companies Regulations (Rules Regarding Compensation and Expenses of an External Director), 5760-2000 (the "**Compensation Regulations**") and they will also be entitled to the continuation of validity of the indemnification and insurance arrangements for officers existing in the Company. For details regarding their terms of office and employment, see Articles 21, 22 and 29A in Chapter D of the Company's 2024 Periodic Report.

Details pursuant to Article 36B(a)(10) of the Reporting Regulations are included in this report by way of reference to the details presented about them pursuant to Article 26 of these Articles in Part D of the Company's 2024 Periodic Report. As of this date, and to the best of the Company's knowledge, no change has occurred in the details reported regarding this in the 2024 Periodic Report, except as detailed below:

Mr. Guy Bernstein also serves as a director in Formula Infrastructure Ltd. and Advance Engineering Ltd., and no longer serves as a director in Effective Solutions Ltd.

**<u>The proposed resolution texts:</u>**

**Agenda Item No. 3** – "To reappoint Mr. Guy Bernstein as a director of the Company for an additional term until the end of the next Annual General Meeting of the Company."

**Agenda Item No. 4** – "To reappoint Mr. Eliezer Oren as a director of the Company for an additional term until the end of the next Annual General Meeting of the Company."

**Agenda Item No. 5** – "To reappoint Mr. Pinhas Greenfeld (Independent Director) as a director of the Company for an additional term until the end of the next Annual General Meeting of the Company."

4.  **<u>Procedures of the General Meeting and voting therein</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;4.1.  **<u>Date of the General Meeting</u>** 

The General Meeting will convene on Wednesday, December 17, 2025, at 12:00 pm, at the offices of the Company, at 3 Atir Yeda Street, Kfar Saba.

&nbsp;&nbsp;&nbsp;&nbsp;4.2.  **<u>The effective date and the entitlement to participate and vote in the meeting</u>** 

The date for determining the entitlement of the shareholders to vote at the Shareholders' Meeting, as stated in Section 182 of the Companies Law and Article 3 of the Written Voting Regulations, is November 19, 2025 (the "**Effective Date**").

![](image_003.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;4.3.  **<u>Legal quorum</u>** 

Pursuant to the Company's Articles of Association, a legal quorum will be present when at least two shareholders (including presence by proxy or written ballot) holding together at least 25% of the voting rights in the Company, are present within half an hour from the time scheduled for the opening of the meeting. If no legal quorum is present at the General Meeting at the end of half an hour from the time scheduled for the beginning of the meeting, the meeting shall be postponed by one week, to the same day, the same hour, and the same place. The legal quorum for the beginning of the postponed meeting will be two shareholders who are present (including presence by proxy or written ballot).

&nbsp;&nbsp;&nbsp;&nbsp;4.4.  **<u>The required majority</u>** 

The required majority to approve the resolutions on Agenda Items 2–5 is an ordinary majority (that is, a majority of more than fifty percent (50%) of all votes of the shareholders participating in the meeting who are entitled to vote and voted therein, without abstaining votes).

&nbsp;&nbsp;&nbsp;&nbsp;4.5.  **<u>The method of voting</u>** 

Any shareholder of the Company on the Effective Date, whether registered in his name or holding through a TASE member (that is, one in whose favor a share is registered with a TASE member and such share is included among the shares registered in the shareholders register in the name of a nominee company, as stated in Section 177(1) of the Companies Law) (a "**Unregistered Shareholder**"), may participate and vote in the meeting in person or by proxy, and by way of a written ballot as defined in Section 87 of the Companies Law and whose form is attached to this report (the "**Written Ballot**"). In addition, an Unregistered Shareholder is also entitled to vote by means of an electronic ballot that will be transferred to the Company via the electronic voting system operating pursuant to Chapter G2, Part B of the Securities Law (the "**Electronic Voting System**") whose address is <u>https://votes.isa.gov.il</u>; all as stated below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5.1. <u>Voting by a shareholder in person or through a proxy</u> 

Shareholder entitled to participate and vote in the meeting may vote in person or by proxy, in accordance with the Company's Articles of Association. The appointment of a proxy shall be in writing signed by the appointer ("**Power of Attorney**"), and a corporation shall vote by its representatives, who shall be appointed by a document duly signed on behalf of the corporation ("**Letter of Appointment**"). The Letter of Appointment and the Power of Attorney, or a copy thereof certified by an attorney-at-law, shall be deposited at the registered office of the Company at least forty-eight (48) hours before the time scheduled for the meeting or the postponed meeting. Notwithstanding the above, the chairperson of the meeting may waive this requirement for any particular meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5.2. <u>Voting by Written Ballot</u> 

A shareholder entitled to participate and vote in the General Meeting may also vote on the matters on the agenda by Written Ballot. The voting in writing shall be performed using the second part of the Written Ballot attached to this report. For this purpose, the vote of a shareholder who voted by Written Ballot shall be deemed as if he was present and participated in the meeting.

![](image_003.jpg)

A shareholder may contact the Company directly and receive from it the form of the Written Ballot as well as Position Statements (as defined in Section 88 of the Companies Law), if provided (the "**Position Statements**"). Likewise, it is possible to review the Written Ballot and the Position Statements, if any, on the Distribution Website of the Israel Securities Authority, at <u>https://www.magna.isa.gov.il</u> (the "**Distribution Website**") and on the website of the Tel Aviv Stock Exchange Ltd., at <u>http://maya.tase.co.il</u> (the "**TASE Website**").

A TASE member shall send by email, without charge, a link to the form of the Written Ballot and the Position Statements (if any) on the Distribution Website, to every Unregistered Shareholder whose shares are registered with that TASE member, unless the shareholder notified that he is not interested in this or notified that he wishes to receive Written Ballots by mail against shipping fees only, provided that such notice was given with respect to a specific securities account and prior to the Effective Date.

The Written Ballot and the documents to be attached thereto (including proof of ownership), as detailed in the Written Ballot, shall be delivered to the Company's offices up to four (4) hours before the time of convening the meeting. For this purpose, the "Delivery Time" shall be the time at which the Written Ballot and the documents required to be attached thereto reached the Company's offices. An Unregistered Shareholder shall be entitled to provide the proof of ownership also via the Electronic Voting System as stated in Section 4.5.3 below.

A Written Ballot not accompanied by proof of ownership (or alternatively, where proof of ownership was not delivered via the Electronic Voting System) shall be invalid.

One or more shareholders holding five percent (5%) or more of all the voting rights in the Company (that is, holding approximately 3,181,651 ordinary shares of the Company), as well as anyone holding such percentage of all voting rights that are not held by the Company's controlling shareholder, as defined in Section 268 of the Companies Law (that is, holding approximately 1,650,490 ordinary shares of the Company), shall be entitled (in person or through a proxy) after the convening of the General Meeting, to review at the registered office of the Company, during regular business hours, the Written Ballots and the voting records via the Electronic Voting System that were received by the Company, as detailed in Article 10 of the Written Voting Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5.3. <u>Voting via the Electronic Voting System</u> 

As stated above, an Unregistered Shareholder may, after the Effective Date (upon receiving an identifying number and access code from the TASE member and after an identification process), vote via the Electronic Voting System.

Subject to and in accordance with the conditions set forth in the Written Voting Regulations and the directives of the Israel Securities Authority on this matter, voting via the Electronic Voting System shall be possible up to six (6) hours before the time of convening the meeting (the "**System Closing Time**"). It is clarified that voting via the Electronic Voting System may be changed or cancelled until the System Closing Time and may not be changed via the Electronic Voting System after such time.

Pursuant to Section 83(d) of the Companies Law, if a shareholder votes in more than one manner as stated above, his later vote shall be counted. For this purpose, a shareholder's vote in person or by proxy shall be deemed later than a vote by Written Ballot.

![](image_003.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;4.6. <u>Proof of Ownership</u> 

An Unregistered Shareholder shall be entitled to participate in the General Meeting if he delivers to the Company a confirmation from the TASE member with whom his share entitlement is registered, regarding his ownership of the Company's shares on the Effective Date. The confirmation shall include the details specified in Article 2 and in the form in the Schedule to the Companies Regulations (Proof of Ownership of a Share for Voting Purposes in the General Meeting), 5760-2000. Alternatively, an Unregistered Shareholder may deliver to the Company proof of ownership via the Electronic Voting System up to the System Closing Time (as stated in Section 4.5.3 above). Without derogating from the above, an approved electronic message under Section 44k5 of the Securities Law, concerning the data of users in the Electronic Voting System, shall be deemed as proof of ownership of shares for every shareholder included therein.

An Unregistered Shareholder as stated shall be entitled to receive proof of ownership from the TASE member through which he holds his shares, at the branch of the TASE member or by mail to his address against shipping fees only, if he so requested, provided that such request is given in advance for a specific securities account.

&nbsp;&nbsp;&nbsp;&nbsp;4.7. <u>The deadline for delivery of Position Statements</u> 

The deadline for delivery of Position Statements to the Company shall be no later than ten (10) days prior to the date of the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;4.8. <u>Request to include an item on the agenda by a shareholder</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8.1. After the publication of this convening report, changes may occur to the agenda, including adding an item
to the agenda; Position Statements may be published, and the updated agenda and the Position Statements may be reviewed in the Company's
reports published on the Distribution Website.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8.2. A shareholder's request under Section 66(b) of the Companies Law to include an item suitable for
discussion in the General Meeting on the agenda of the General Meeting shall be delivered to the Company within seven days after the convening
of the meeting. If such a request is submitted, the item may be added to the agenda, and its details will appear on the Distribution Website.
In such case, the Company shall publish an amended Written Ballot together with an amended convening report, no later than seven days
after the last date for submitting a request by a shareholder to include an item on the agenda, as stated above. The publication of the
updated agenda shall not change the Effective Date.

5.  **<u>Details of the Company's representative regarding the handling of the report</u>** 

The Company's representative regarding the handling of this report is Adv. Yifat Givol, Head of the Legal Department and Company Secretary, at 3 Atir Yeda Street, Kfar Saba, Telephone: 09-9598810.

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6.  **<u>Review of documents</u>** 

This report, the documents referenced herein (including the Written Ballot and Position Statements, if provided), and the full wording of the proposed resolutions on the agenda, may be reviewed at the offices of the Company, at 3 Atir Yeda Street, Kfar Saba, Telephone: 09-9598810, during regular business hours and by prior coordination with the Company Secretary, as well as on the Company's website at <u>http://www.matrix-globalservices.com</u>.

 **Matrix IT Ltd.**

Names and positions of the signatories:

Yifat Givol, Adv., Head of the Legal Department and Company Secretary

Nevo Brenner, Chief Financial Officer

## Exhibit 99.12

**Exhibit 99.12**

**Matrix IT Ltd.**<br> Corporation No.: 520039413

To: Israel Securities Authority To: Tel Aviv Stock Exchange Ltd. F136 (Public) Filed via MAGNA: November 12, 2025 <br> <u>www.isa.gov.il</u> <u>www.tase.co.il</u> Reference No.: 2025-01-086350

**<u>Immediate Report Regarding a Transaction with a Controlling Shareholder or<br> with a Director that Does Not Require Approval of the General Meeting</u>**

**Article 37A(5) of the Securities Regulations (Periodic and Immediate Reports), 5766-2006**

Reference numbers of previous reports on the matter: ___________________ , ___________________ , ___________________ .

1. A report is hereby submitted regarding approval of a transaction pursuant to Article 1A of the Companies
Regulations (Relief in Interested Parties' Transactions), 5760-2000.

2. Date of approval of the transaction by the Board of Directors: *November 11, 2025*.

3. Summary of the principal terms of the transaction and a summary of the reasoning of the Board of Directors
and the Audit Committee for approving the transaction.

*Pursuant to Articles 1A and 1B(3) of the Companies Regulations (Relief in Interested Parties' Transactions), 5760-2000 (the "**Relief Regulations**"), the Company reports that on November 11, 2025, the Company's Board of Directors, after receiving approval from the Compensation Committee which convened earlier this week, approved the payment of annual compensation and participation compensation to Mr. Guy Bernstein, Chairman of the Board of Directors of the Company, for an additional three-year period commencing in November 2025.*

*The annual compensation and participation compensation shall be in the amount of the fixed sum appearing in the Second Schedule and the Third Schedule to the Companies Regulations (Rules Regarding Compensation and Expenses of an External Director), 5760-2000 (the "**Compensation Regulations**"), in accordance with the Company's classification under the Compensation Regulations, as shall be from time to time.*

*The amounts of the annual compensation and the participation compensation shall be paid to the director under the terms and at the times set forth in the Compensation Regulations.*

*It is noted that Mr. Bernstein also serves as the CEO of Formula Systems (1985) Ltd., the controlling shareholder of the Company, and assigned to it his right to receive the compensation for his service as a director in the Company.*

*Summary of the reasoning of the Compensation Committee and the Board of Directors:*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*1.* *The compensation paid to Mr. Bernstein, who serves as Chairman of the Board of Directors of the Company, is identical to that of all directors in the Company. The compensation does not exceed the maximum amount that may be paid to external directors pursuant to the Compensation Regulations, and it does not exceed the lowest compensation paid to a director in the Company.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.* *To the best of the directors' knowledge, in general, the amounts specified in the Compensation Regulations constitute an accepted benchmark for determining directors' compensation in public companies in Israel, and considering that the proposed compensation complies with the provisions of the Compensation Regulations and the Relief Regulations, the Board of Directors is of the opinion that the compensation is reasonable under the circumstances.* 

1/2 mayafiles.tase.co.il/rhtm/1702001-1703000/H1702214.htm

11/25/25, 11:55 AM mayafiles.tase.co.il/rhtm/1702001-1703000/H1702214.htm

4. Principal points of the Companies Authority's opinion and principal points of the decision of the
Ministerial Committee for Privatization, or details of the alternative under which the exemption is granted

Explanation: to be completed if this concerns an extraordinary transaction of a government-controlled public company.

5. Attached file: _________

**Details of the authorized signatories signing on behalf of the corporation:**

---

| | | |
|:---|:---|:---|
| | **Name of Signatory** | **Position** |
| **1** | Adv. Yifat Givol | *Other – Head of the Legal Department and Company Secretary* |

---

Explanation: Pursuant to Article 5 of the Periodic and Immediate Reports Regulations (5730-1970), a report submitted pursuant to these Articles shall be signed by those authorized to sign on behalf of the corporation. A staff position on the matter can be found on the Authority's website: <u>click here</u>.

This Report was signed by Adv. Yifat Givol, Head of the Legal Department and Corporate Secretary.

Reference numbers of previous documents on the matter (the reference does not constitute incorporation by reference):

The Corporation's securities are listed for trading on the Tel Aviv Stock Exchange

Form Structure Update Date: August 6, 2024

Short Name: Matrix

Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598810, Fax: 09-9598050

Email: <u>yifatg@matrix.co.il</u>; Company website: <u>https://www.matrix-globalservices.com/</u>

Former names of the reporting entity: Romtech Electronics Ltd.

Name of electronic filer: Yifat Givol

Position: Head of the Legal Department and Corporate Secretary

Employer:

Address: 3 Atir Yeda Street, Kfar Saba 4464303; Telephone: 09-9598850, Fax: 09-9598826

Email: <u>yifatg@matrix.co.il</u>

2/2 mayafiles.tase.co.il/rhtm/1702001-1703000/H1702214.htm

## Exhibit 99.13

**Exhibit 99.13**

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Matri Investor Presentation INVESTORS MEETING Financial Statements as at 30.9.25 2 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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DISCLAIMER The presentation contains forecasts, estimates and plans of the Company regarding its operations and other information about future events and matters, which constitute forward - looking information, as deﬁned in the Securities Law, 1968 , and materialization thereof is uncertain and may be affected by factors that are unforeseeable or beyond the Company's control . Therefore, the Company is uncertain whether its forecasts and/or estimates and/or plans will be realized, in whole or in part, or whether they will be realized differently than e pected ,due to, among other things, factors beyond its control, changes in market conditions, business and competition environment, as well as materialization of any of the Company's risk factors . The presentation includes, among other things, information from various publications as well as data received from e ternal sources (noted in the presentation), and macroeconomic facts and ﬁgures, the contents of which have not been reviewed by the Company independently, including slides relating to analyst ratings, all as known by the Company at the time of preparation of the presentation. For the avoidance of doubt, we note that the Company does not undertake to update and/or change the information included in this presentation . This presentation was prepared as a summary and for convenience only, and is not intended to be in lieu of a review of the reports publicized by the Company, including its ﬁnancial statements. The information contained in this presentation is subject to that stated in the relevant Company's reports . This presentation should not be viewed an offer or invitation to acquire the Company's securities. The information included in the presentation is not a recommendation or opinion to invest in the Company and is not in lieu of a potential investor's judgment. MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 3 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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5 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED Positioning 2025 Third Quarter Summary Financial Statements Israeli Market US Market Financial Inde es 2025 Summary – Nine Month Period Ended 30.9.2025 The Companies' Merger Transaction

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THE COMPANIES' MERGER TRANSACTION MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 6 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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• On March 10, 2025, an MOU was signed between Matri and Magic to conduct negotiations for entering into a binding merger agreement. • As the transaction is between 2 companies under the same control (Formula), the Company's Board of Directors appointed an independent committee, which was authorized to e amine the engagement in the transaction, evaluate its fairness and possible alternatives, conduct negotiations with Magic regarding the terms of the transaction, approve the transaction, and formulate recommendations to the Board of Directors with respect thereto. • The committee was advised by the international investment bank Jefferies, the law ﬁrm Herzog Fo Neeman, and the accounting ﬁrm KPMG. • On November 3, 2025, the merger agreement was signed, pursuant to which Matri will acquire all of Magic's issued and outstanding share capital, in consideration for Matri shares allocated to Magic's shareholders. Following the completion of the transaction, Magic will become a wholly owned subsidiary of Matri . Magic's shares will be delisted from Nasdaq and the Tel Aviv Stock E change, and the company will become privately held. • Following completion, Magic's shareholders will hold 31.125% of the Company's issued and outstanding share capital on a fully diluted basis, while the shareholders who held Matri shares immediately prior to the merger completion date will hold 68.875% of the issued and outstanding share capital. MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 THE MERGER T RANS A C T ION 7 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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The combined market cap of Matri and Magic has increased by appro imately NIS 3 . 4 billion since the publication of the memorandum of understanding and currently stands at around NIS 11 . 25 billion, positioning the companies among the largest publicly traded IT ﬁrms globally . THE COMBINED COMPANY WOULD BE ONE OF THE LARGEST LISTED IT SERVICES FIRMS BY MARKET CAP MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 THE MERGER T RANS A C T ION MARCH 25 8 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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The combined market cap of Matri and Magic has increased by appro imately NIS 3 . 4 billion since the publication of the memorandum of understanding and currently stands at around NIS 11 . 25 billion, positioning the companies among the largest publicly traded IT ﬁrms globally . THE COMBINED COMPANY WOULD BE ONE OF THE LARGEST LISTED IT SERVICES FIRMS BY MARKET CAP MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 THE MERGER T RANS A C T ION NOVEMBER 25 9 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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A POWERFUL COMBINATION THAT ACCELERATES GROWTH OPPORTUNITIES • Matri ranks among the 10 largest publicly traded IT companies worldwide. (1) • A signiﬁcant increase in sales outside Israel • A technological force multiplier in the ﬁelds of - ERP, CYBER, CLOUD, DATA, AI • E pansion of the range of services and solutions for key sectors: defense, government, ﬁnance, high - tech, and healthcare • E panding the range of services and solutions for key sectors, including defense, government, ﬁnance, high - tech, and healthcare • Improved proﬁt margin and balance sheet structure • A unique transaction – with no ﬁnancing costs and no accounting amortization (pooling of interest method) • Integration of an e cellent and e perienced management team into the Company • Potential inclusion in the TA - 35 Inde $2bn+ FY24 Revenues 22% International (17% US) 12%+ FY24 EBITDA Margin 14 Platforms and IP Software Solutions 1 5 , 000+ Total Headcount 50+ Co un t r ies Served 6 , 000 + Active Cus t o mer s (1)Based on Market Cap. Matri and Magic Market Cap based on share price as of 03/06/2025 with a USD / ILS e change rate of 0.28. Analysis includes firms where IT Services is greater than 50% of both revenue and profit. MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 10 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED THE MERGER T RANS A C T ION

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Completion of the merger is subject to several conditions, including approval of the transaction at the special shareholders' meeting, scheduled for Wednesday, December 10, 2025, at 2:00 p.m. at Matri 's oﬃces. MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 11 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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SUMMARY OF Q3 AND THE NINE - MONTH PERIOD ENDED SEPTEMBER 30, 2025 2025 MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 12 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Q3 SUMMARY MATRIX INVESTOR PRESENTATION 13 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED FINANCIAL STATEMENTS AS AT 30.9.25

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2025 Growth leading to record results across all key ﬁnancial performance metrics THIRD QUARTER SUMMARY REVENUES (\*) During the third quarter, revenues accounted for, on a net basis, continued to increase. This affects the Company's revenues, revenue growth rate, and proﬁt margin. See more, later in this presentation. G r owth to a record NIS 1.64 billion Growth Adjusted for the increase in revenues accounted for on a net basis (\*) MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 14 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics THIRD QUARTER SUMMARY (\*) Growth in the quarter was achieved despite a decrease of about 3.9% in the number of working hours compared with the corresponding quarter. GROSS PROFIT improving its margin to Growth to a record NIS 241.5 million MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 15 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics THIRD QUARTER SUMMARY OPERATING INCOME improving its margin to Growth to a record NIS 131.5 million MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 16 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics THIRD QUARTER SUMMARY NET INCOME improving its margin to Growth to a record NIS 84.3 million MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 17 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics THIRD QUARTER SUMMARY NET INCOME ATTRIBUTABLE TO SHAREHOLDERS improving its margin to Growth to a record NIS 78 million MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 18 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics THIRD QUARTER SUMMARY E B I T D A Growth to a record NIS 182.8 million improving its margin to MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 19 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics THIRD QUARTER SUMMARY E B I T D A Growth to a record NIS 145.8 million improving its margin to MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 Adjusted (adjusted for IFRS 16) 20 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 NINE - MONTH PERIOD ENDED SEPTEMBER 30, 2025 MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 21 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics JANUARY - SEPTEMBER REVENUES (\*) During the third quarter, revenues accounted for, on a net basis, continued to increase. This affects the Company's revenues, revenue growth rate, and proﬁt margin. See more, later in this presentation. G r owth to a record NIS 4.6 billion Growth Adjusted for the increase in revenues accounted for on a net basis (\*) MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 22 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics JANUARY - SEPTEMBER MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 (\*) The growth rate for the period was achieved despite an income of about NIS 6 million recorded in the corresponding period from retroactive compensation received from the National Insurance Institute (for reserve duty). GROSS PROFIT improving its margin to Growth to a record NIS 691.3 million 23 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics JANUARY - SEPTEMBER MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 (\*) The growth rate for the period was achieved despite an income of about NIS 6 million recorded in the corresponding period from retroactive compensation received from the National Insurance Institute (for reserve duty). OPERATING INCOME improving its margin to Growth to a record NIS 384.2 million 24 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics JANUARY - SEPTEMBER MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 NET INCOME improving its margin to Growth to a record NIS 241.2 million 25 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics JANUARY - SEPTEMBER MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 NET INCOME ATTRIBUTABLE TO SHAREHOLDERS improving its margin to Growth to a record NIS 226.5 million 26 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics JANUARY - SEPTEMBER MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 E B I T D A Growth to a record NIS 534.4 million improving its margin to 27 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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2025 Growth leading to record results across all key ﬁnancial performance metrics JANUARY - SEPTEMBER MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 Growth to a record NIS 430 million improving its margin to 28 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED E B I T D A Adjusted (adjusted for IFRS 16)

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M A TRIX'S POSITIONING 30.9.2025 MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 29 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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30 T A S E MT R X #1 Ranked as the leading software services company in Israel 20 consecutive years #1 Ranked in 51 technology categories (according to STKI) NIS 6B annual revenue run rate based on 1 - 9/2025 100 + M&As 12,000+ Professionals 3 , 000 + Customers 13% of proﬁts are generated abroad Rated Aa3.il for the last 17 years (by Midroog - Moody's) A 1 D 2 C 3 That's us! MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX'S LINES OF BUSINESS Commerce and Advanced Technology Solutions BPO & Call Centers Defense Consulting & Engineering IT Solutions & Computing in Israel and Abroad MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 31 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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LEADING PARTNERS MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 32 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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OF F ICE CL OUD CYB E R & RISK DATA / AI DIGITAL & MOBILE CORE INTERNATIONAL GROWTH MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 33 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 FINANCIAL STATEMENTS 30.9.2025 34 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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(\*) Earnings Before Interest, Taxes, Depreciation, and Amortization MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 FINANCIAL STATEMENTS 30.09.2025 P&L - Q3 2025 Compared to the corresponding quarter Key results (NIS millions) % 7 - 9/2024 7 - 9/2025 15.7% 1,419 1,642 Revenues 17.8% 205 242 Gross proﬁt 13.6% 97 110 SG&A 21.5% 108 131 Operating income 22.8% 16 20 Financial expenses, net 22.4% 22 27 Tax expenses 21% 70 84 Net income 21.1% 64 78 Net income attributable to shareholders 17.6% 155 183 EBITDA (\*) 14.5% 14.7% Gross proﬁt margin 6.8% 6.7% SG&A margin 7.6% 8% Operating income margin 11% 11.1% EBITDA margin (\*) 4.9% 5.1% Net income margin • 20.7% growth adjusted for increase in revenues accounted for on a net basis • 15.6% organic growth adjusted for increase in revenues accounted for on a net basis • 15.2% organic growth in operating income 35 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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(\*) Earnings Before Interest, Taxes, Depreciation, and Amortization (\*\*) Adjusted to exclude retroactive reimbursement from the National Insurance Institute relating to employees called up for reserve duty, which was received in the corresponding period (~NIS 6 million). MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 Key results (NIS millions) FINANCIAL STATEMENTS 30.09.2025 P&L - 1 - 9/2025 Compared to the corresponding period % 1 - 9/2024 1 - 9/2025 10.3% 4,205 4,639 Revenues 12.6% 614 691 Gross proﬁt 8.2% 284 307 SG&A 16.4% 330 384 Operating income 35.8% 48 65 Financial expenses, net 14.8% 68 78 Tax expenses 12.6% 214 241 Net income 11.8% 203 226 Net income attributable to shareholders 14.2% 468 534 EBITDA (\*) 14.6% 14.9% Gross proﬁt margin 6.8% 6.6% SG&A margin 7.9% 8.3% Operating income margin 11.1% 11.5% EBITDA margin (\*) 5.1% 5.2% Net income margin • 15.1% growth adjusted for increase in revenues accounted for on a net basis • 10.2% organic growth adjusted for increase in revenues accounted for on a net basis • 11.5% organic growth in operating income 18.5%. adjusted growth(\*\*) in operating income • 13.6% adjusted organic growth(\*\*) in operating income 36 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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(\*) During the third quarter and the period, revenues accounted for, on a net basis, continued to increase. This affects the Company's revenues, revenue growth rate, and proﬁtability margin. MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 FINANCIAL STATEMENTS 30.09.2025 P&L - Key financial results adjusted for increase in revenues accounted for on a net basis Key results (NIS millions) % 1 - 9/2024 1 - 9/2025 % 7 - 9/2024 7 - 9/2025 10.3% 4,205 4,639 15.7% 1,419 1,642 Revenues - 200 - 70 Adjustments for the increase in revenues accounted for on a net basis(\*) 15.1% 4,205 4,839 20.7% 1,419 1,712 Adjusted revenues 16.4% 330 384 21.5% 108 131 Operating income 7.9% 7.9% 7.6% 7.7% % of revenues 37 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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Government Financial O r ganizations Hi - T ech Industry, Communication s & Retail Healthcare & T r anspo r tation D e f e nse O t h e r MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 FINANCIAL STATEMENTS 30.09.2025 REVENUE BREAKDOWN by customer sector According to FY 2024 revenues 38 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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1 , 642 1 , 419 1 , 333 1 , 130 1 , 027 +1 5 . 7% REVENUES(\*) Q3 Q3 Q3 Q3 Q3 202 1 202 2 202 3 202 4 2025 12.4% 4YR CAGR 241.5 205 187.1 161.4 146.7 GROSS PROFIT Q3 Q3 Q3 Q3 Q3 202 1 202 2 202 3 202 4 2025 14.3% 14 . 3 % 14% 14 . 5 % +17.8% 13.3% 4YR CAGR 14 . 7 % 131.5 108.2 93 . 3 80 . 1 75 OPERATING INCOME Q3 Q3 Q3 Q3 Q3 202 1 202 2 202 3 202 4 2025 7.3% 7.1% 7% 7.6% +21 . 5% 15.1% 4YR CAGR 8% THIRD QUARTER S U M M A R Y 2025 Ongoing improvement in performance metrics over time Consistent growth, reaching record revenues and proﬁts (NIS millions) (\*) Adjusted for the increase in revenues recognized on a net basis, revenue growth was 20.7%. FINANCIAL STATEMENTS 30.09.2025 MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 39 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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THIRD QUARTER S U M M A R Y 2025 Ongoing improvement in performance metrics over time Consistent growth, reaching record revenues and proﬁts (NIS millions) FINANCIAL STATEMENTS 30.09.2025 MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 182.8 155.5 145 127.8 103.9 +1 7 . 6% EBI D T A Q3 Q3 Q3 Q3 Q3 202 1 202 2 202 3 202 4 2025 15.2% 4YR CAGR 10 . 1 % 11 . 3 % 10 . 9 % 11% 11.1% 84 . 3 69 . 7 56 . 8 50 . 4 47 . 9 NET INCOME Q3 Q3 Q3 Q3 Q3 202 1 202 2 202 3 202 4 2025 4.7% 4.5% 4.3% 4.9% + 21 % 15.2% 4YR CAGR 5.1% 78 . 0 64 . 4 51 . 4 46 . 5 43 . 3 NET INCOME TO S H AR E H O LD E RS Q3 Q3 Q3 Q3 Q3 202 1 202 2 202 3 202 4 2025 4.2% 4.3% 3.9% 4.5% +21 . 1% 15.8% 4YR CAGR 4.7% 40 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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JANUARY - SEPTEMBER S U M M A R Y 2025 Ongoing improvement in performance metrics over time Consistent growth, reaching record revenues and proﬁts (NIS millions) (\*) Revenue growth adjusted for the increase in revenues recognized on a net basis, was 15.1%. (\*\*) In 2022 – adjusted for a gain from the sale of an investment in a subsidiary (NIS 150 million). FINANCIAL STATEMENTS 30.09.2025 MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 4 , 639 4 , 205 3 , 911 3 , 531 3 , 200 + 1 0 . 3 % REVENUES(\*) 1 - 9 1 - 9 1 - 9 1 - 9 1 - 9 202 1 202 2 202 3 202 4 2025 9.7% 4YR CAGR 691.3 614 560.8 488.8 457.3 GROSS PROFIT 1 - 9 1 - 9 1 - 9 1 - 9 1 - 9 202 1 202 2 202 3 202 4 2025 14 . 3 % 13.8% 14 . 3 % 14.6% + 12 . 6 % 10.9% 4YR CAGR 14 . 9 % 384.2 330.1 292.4 246.4 239.3 OPERATING INCOME(\*\*) 1 - 9 1 - 9 1 - 9 1 - 9 1 - 9 202 1 202 2 202 3 202 4 2025 7.5% 7.3% 7.5% 7.9% + 1 6 . 4 % 12.6% 4YR CAGR 8.3% 41 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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JANUARY - SEPTEMBER S U M M A R Y 2025 Ongoing improvement in performance metrics over time Consistent growth, reaching record revenues and proﬁts (NIS millions) (\*) In 2022 – adjusted for a gain from the sale of an investment in a subsidiary (NIS 121 million). FINANCIAL STATEMENTS 30.09.2025 MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 534.4 467.9 442 375.6 327.6 +14.2% EBI D T A 1 - 9 1 - 9 1 - 9 1 - 9 1 - 9 202 1 202 2 202 3 202 4 2025 13% 4YR CAGR 10.2% 10 . 6 % 11 . 3 % 11 . 1 % 11 . 5 % 241.2 214.2 184.9 179.7 157.7 NET INCOME(\*) 1 - 9 1 - 9 1 - 9 1 - 9 1 - 9 202 1 202 2 202 3 202 4 2025 4.9% 5.1% 4.7% 5.1% + 12 . 6 % 11.2% 4YR CAGR 5.2% 226.5 202.5 170.8 163 141.3 NET INCOME TO S H AR E H O LD E R S(\*) 1 - 9 1 - 9 1 - 9 1 - 9 1 - 9 202 1 202 2 202 3 202 4 2025 4.4% 4.6% 4.4% 4.8% + 11 . 8 % 12.5% 4YR CAGR 4.9% 42 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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M A R K ET MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 ISRA E LI 43 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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IN ISRAEL Key ﬁnancial results (NIS millions) (\*) Including immaterial operations in Europe OPERATING SEGMENTS MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 ISRAELI MARKET Q3 2024 Q3 2025 20.7% growth adjusted for growth in revenues accounted for on a net basis Growth IN REVENUES 13.7% 4YR CAGR 1,564 1,350 117 . 3 93 . 2 Q3 2024 Q3 2025 Growth IN OPERATING INCOME 16.4% 4YR CAGR 4,410 3,986 1 - 9 2024 1 - 9 2025 15.6% growth adjusted for growth in revenues accounted for on a net basis Growth IN REVENUES 10.7% 4YR CAGR 342 288 . 4 1 - 9 2024 1 - 9 2025 Growth IN OPERATING INCOME 12.9% 4YR CAGR Q3 2025 1 - 9 2025 44 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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Strong growth (primarily organic), driven by increased activity in Data & AI, digital, and core systems. IN ISRAEL OPERATING SEGMENTS Q3 2025 (NIS thousands) MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 ISRAELI MARKET % Q3 2024 Q3 2025 % Q3 2024 Q3 2025 29.8% 56,190 72,936 13.5% 863,213 IT Solutions and ,Services, Consulting 979,359 Israel 6.5% 7.4% Proﬁt margin (%) and Management in REVENUES OPERATING INCOME Continued growth in activity with the defense sector (including GTG transactions) and with the ﬁnancial sector. Mega projects in the IT and engineering sectors that provide high growth and high visibility over time. First - time consolidation of Gav Systems also contributed to the segment's results. Impressive proﬁt growth, in the quarter (despite an appro imately 3 . 9 % decrease in working hours compared with the corresponding quarter) ; in the period despite a one - time income recorded in the corresponding period from retroactive compensation received from the NII regarding employees called up for reserve duty, the majority of which is attributed to this segment . The increase in the operating proﬁt margin is due, among others, to the IBM Mainframe operation within this segment, which began this year and for which revenues are presented on a net basis . 45 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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IN ISRAEL OPERATING SEGMENTS Q3 2025 (NIS thousands) MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 ISRAELI MARKET REVENUES OPERATING INCOME Growth in volume driven by sales of computing systems and integration, and by marketing, implementation, and support of advanced IT solutions. Continued increase in the volume of EDP cloud transactions, whose revenues are accounted for on a net basis – multi - year engagements that contribute to high proﬁts visibility over time . This quarter was characterized by a transaction mi with relatively high proﬁtability. The ﬁrst - time consolidation of Ortec had a positive impact on the segment's results. % Q3 2024 Q3 2025 % Q3 2024 Q3 2025 29.8% 56,190 72,936 13.5% 863,213 IT Solutions and Services, Consulting, and 979 , 3 59 6.5% 7.4% Proﬁt margin (%) 17% 27,969 32,722 11.5% 367,951 Cloud and Computing 410,349 7.6% 8% Proﬁt margin (%) 46 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED Management in Israel Inf r astructu r es

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IN ISRAEL OPERATING SEGMENTS Q3 2025 (NIS thousands) MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 ISRAELI MARKET REVENUES OPERATING INCOME Strong demand for software products of cyber - security, digital acceleration, cloud, data and AI solutions (including AI software products and communications equipment) . Changes in proﬁt margin mainly reﬂect the transaction mi – in the quarter, an increase in distribution transactions (software products and equipment in the AI ﬁeld) resulted in higher sales volumes at relatively lower margins . % Q3 2024 Q3 2025 % Q3 2024 Q3 2025 29.8% 56,190 72,936 13.5% 863,213 IT Solutions and Services, Consulting, and 979 , 3 59 6.5% 7.4% Proﬁt margin (%) 17% 27,969 32,722 11.5% 367,951 Cloud and Computing 410,349 7.6% 8% Proﬁt margin (%) 28.8% 9,067 11,680 46.9% 118,610 Marketing and Support 174,282 7.6% 6.7% Proﬁt margin (%) 47 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED Management in Israel Infrastructures of Software Products

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US M A R K ET MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 48 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 M A R K ET US IT SOLUTIONS & SERVICES IN THE US Q3 2025 (NIS/USD thousands) REVENUES OPERATING INCOME Q3 2025 Q3 2024 % Q3 2025 Q3 2024 % Segmental results 118,951 111 , 1 in USD 04 7.1% 19,006 16,511 15.1% in NIS 14.9% 16% Proﬁt margin (%) 4,418 27% 17.7% 5,611 Segmental r esults 35 , 17 4 29 , 889 14.8% 16% Proﬁt margin (%) The increase in operating income and its margin is driven by continued growth in the volume of activity and the gradual onboarding of new, higher - margin projects . The results in NIS were affected by the depreciation of the USD/NIS e change rate compared to the corresponding periods. The impact of the ﬁrst - time consolidation of Alacer's results was positive but immaterial. 49 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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IT Solutions in Israel IT Solutions in the US Softwa re P r oducts Cloud and Computing Inf r astructu r es 7 . 6 % 13.5% 23.8% 55.1% PR O F I T 7 . 5 % 7 . 2 % 25.8% 59.5% REVENUES MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 BREAKDOWN OF REVENUES AND PROFIT BY Operating segments in January – September 2025 50 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 FINANCIAL EXPENSES Financial expenses, net (NIS thousands) Change 1 - 9 2024 1 - 9 2025 Change 7 - 9 2024 7 - 9 2025 (607) 19,354 18,747 200 5,897 Interest, commissions, and other (net) 6,097 6,678 9,723 16,401 1,689 4,335 FX differences 6,024 10,948 18,497 29,445 1,789 5,923 Accounting ﬁnancial 7,712 17,019 47,574 64,593 3,678 16,155 Total ﬁnancial 19,833 expenses expenses (net) The increase in ﬁnancial e penses for the quarter and the period is primarily attributable to higher non - cash accounting e penses (mainly due to the impact of increased proﬁtability in subsidiaries on the revaluation of e isting Put options held by minority shareholders), and from FX differences resulting from the depreciation of the USD/ILS e change rate (about 2 % in the quarter and 9 . 4 % in the period) . 51 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 Despite the increase in accounting e penses and FX - difference e penses, cash interest e penses remain stable. BREAKDOWN OF FINANCIAL EXPENSES (NIS millions) 13.7 19.2 13.0 13.2 10.2 9.0 8.9 6.1 6.2 6.4 6.1 5.9 5.8 7.7 19.8 25.4 19.4 19.3 16.1 14.8 16.6 Interest e penses (net) and commissions Accounting ﬁnancial e penses and FX differences 2025 2024 Q2 30 . 6 . 24 Q3 30. 9 . 24 Q4 31.12.24 Q1 31.3.25 Q2 30 . 6 . 25 Q3 30 . 9 . 25 Q1 31 . 3 . 24 52 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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FI N AN C I A L INDEXES MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 53 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 FINANCIAL INDEXES (NIS millions) 31.12.24 30.9.25 668 498 Cash and cash equivalents 1,229 1,235 Unused credit facilities\* 1,897 1,733 Total liquid assets \* Of which NIS 300 million are committed credit facilities Aa3 credit rating from Midroog (conﬁrmed - March 2025) Cash ﬂows from operating activities: Positive cash ﬂow in 1 – 9/2025 – NIS 268.7 million, compared with NIS 284.2 million in the corresponding period. Positive cash ﬂow – LTM – NIS 603.8 million, compared with NIS 617.1 million in the corresponding period. 54 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 FINANCIAL INDEXES (NIS millions) 31.12.24 30 . 9 . 25 1,144 1,175 Equity 25.5% 26 . 8% % of total balance sheet 785.1 737.5 Gross ﬁnancial debt 116.6 239.3 Financial net debt 1.1 1.09 Current ratio 2.6% 5.5% Financial net debt to balance sheet ratio 0.2 0.36 Financial net debt to EBITDA(\*) ratio LTM (\*) Earnings Before Interest, Ta es, Depreciation, and Amortization 305 132 300 1 , 175 Capital Structu r e E quity Loans from ﬁnancial institutions D e b e n t u r e s Series B Comme r cial securities due by February 2030 55 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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DIVIDEND NIS million 0 .91 ag. per share Dividend yield ~3.3% MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 56 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 57 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 58 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED CONTINUED GROWTH – ORGANIC AND THROUGH ACQUISITIONS, WHILE MAINTAINING OUR OPERATING INCOME MARGIN AT 8% AND HIGHER. Driven, among other factors, by improved operating eﬃciency and stable SG&A e penses.

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 59 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED STRONG GROWTH IN THE US The annual revenue run rate reached appro imately USD 140 million (USD 35 million in the quarter compared with USD 30 million), with an operating margin of about 16% (USD 5.6 million in the quarter compared with about USD 4.4 million).

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 60 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED MARKET LEADERSHIP ACROSS ALL KEY CATEGORIES IN THE ISRAELI IT MARKET (see STKI rankings) Matri has maintained market leadership for 20 years. Our strong technological capabilities across all key categories - A¹D²C³, combined with our established reputation, enable us to sustain growth.

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 INCREASING ADOPTION OF THE TECHNOLOGY BY THE COMPANY AND ITS CUSTOMERS Strong business opportunity for the software products segment, improved developer productivity enhances our competitiveness in project e ecution, accelerated sales of GPUs alongside high performance communication systems, growth in our A 1 D 2 C 3 lines of business where Matri is a market leader; potential for a force - multiplier when combined with Magic's capabilities in this segment. 61 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED

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MATRIX INVESTOR PRESENTATION FINANCIAL STATEMENTS AS AT 30.9.25 62 NAVIGATION SYSTEM ALL INTELLECTUAL CONTENT CONTAINED IN THIS FILE IS THE CONFIDENTIAL PROPERTY OF MATRIX 2025 ALL RIGHTS RESERVED THE MERGER BETWEEN MATRIX AND MAGIC The merger is progressing according to plan, with the goal of completing the transaction by the end of 2025 The merger is e pected to enhance Matri 's domestic and international standing, particularly in cloud, cybersecurity, data, and AI. It is also e pected to increase the share of revenues derived from the Company's proprietary IP, at higher proﬁtability; drive signiﬁcant growth in revenues from international markets; increase revenues from the ﬁnancial, defense, high - tech, and healthcare sectors; and strengthen the Company's proﬁt margins and balance sheet structure. (No ﬁnancing or amortization e penses e pected.) Potential inclusion in the TA - 35 Inde . All of the above e pected to enhance the Company's attractiveness to international investors.

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THANK YOU!

## Exhibit 99.14

**Exhibit 99.14**

<br>![](image_042.jpg)<br>**Matrix I.T. Ltd.**<br> Periodic Report<br> 2024<br>

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The information contained in these Description of the Corporation`s Business published by the Company constitutes a translation of the Description of the Corporation`s Business published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

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| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

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<br> **Chapter A**<br> Description of the Corporation's Business<br>_________________________________<br> **Chapter B**<br> Board of Directors' Report<br>_________________________________<br> **Chapter C**<br> Financial Statements<br> _________________________________<br>

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Chapter A Description of the Corporation's Business Chapter B Board of Director's Report Chapter C Financial Statements

![](image_004.jpg)<br>**CHAPTER A**<br>Description of the<br> Corporation's Business<br>

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Chapter A Description of the Corporation's Business

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| <br>![](ex9914_005.jpg)<br>| ![](ex9914_004.jpg) |

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1. Matrix 's Opertions and Description of Its Business
 Development 5

2. Fields of Operation 8

3. Investments in Matrix's Equity and Transactions in Its Shares 10

4. Distribution of Dividends 10

5. Financial Information Regarding the Matrix's Fields of Activities 11

6. General Environment and the Effect of Outside Factors 13

7. Description of Matrix's operations by areas of activity 20

8. Backlog 47

9. Seasonality 50

10. Property, Plant, and Equipment, Land, and Facilities 51

11. Human Capital 52

12. Working Capital 56

13. Financing 56

14. Taxes 58

15. Restrictions and Oversight Applicable to the Matrix's Operations 58

16. Legal Proceedings 60

17. Goals and Business Strategy 61

18. Financial information with regard to geographic areas 64

19. Discussion of Risk Factors 64

20. Glossary 73

1. Matrix's Activities and Description of Its Business Development

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. General

Matrix IT Ltd.,<sup>1</sup> (the "**Company**"), together with its subsidiaries, is a company operating in the fields of Information Technology (IT) Solutions and Services, Consulting, and Management in Israel and overseas.

The Matrix Group employs approximately 11,570 software, hardware, engineering, integration, and training personnel, who provide services in advanced fields of Information Technology and Management to hundreds of customers in the Israeli market, as well as customers in the US market, while specializing in the areas of banking and finance, government and the public sector, security, transportation, high-tech and startups, health, industry, retail and trade, education and academia. The Group is also engaged in the sale and marketing of software and hardware products from a wide range of manufacturers from Israel and around the world, as well as in the provision of consulting services, project management and multidisciplinary engineering consulting. The solutions, services, and products provided by the Group are designed to enhance its customers' competitiveness in the markets in which they operate by addressing their unique needs in the fields of IT, operational optimization and in the field of management and engineering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. Substantial purchase or sale of assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.1. On 24 April 2022, a transaction was completed in which the
Company sold holdings representing 45.2% of the issued share capital of the Company, Infinity Labs R.&D. Ltd. ("Infinity")
in exchange for NIS 154.5 million, such that after completing the transaction, the Company will be retain 4.9% of Infinity's share capital. Following
the transaction, the Company recorded a net capital gain after tax of approximately NIS 121 million and ceased consolidating Infinity
in its financial statements (Infinity was included in the Information Technology Solutions and Services, Consulting, and Management segment
in Israel), effective from the second quarter of 2022. See Note 3a to the financial statements for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.2. On 19 June 2022, the Company completed the acquisition of
RDT Equipment and Systems 1993 Ltd. ("RDT"), which markets solutions and systems for a wide range of technologies, including
control and automation systems, test and measurement equipment (T&M), advanced technological solutions for data communication testing,
EMC, and RF (Radio Frequency). RDT also serves as a representative in Israel for dozens of international companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.3. On 1 January 2023, the Company completed the acquisition
of Zebra A.G.R Ltd. ("Zebra"), which specializes in the distribution of software solutions and products in the fields of cybersecurity
and data communication. See Note 3b to the financial statements for details.

1 The Company was incorporated in Israel on 12 September 1989 and is a publicly traded company whose shares were listed for trade on the Tel Aviv Stock Exchange in May of 1993.

Description of the Corporation's Business 5

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.4. On 13 November 2024, the Company, through its subsidiary
Matrix Holding US LLC, completed the acquisition of 51% of the interests in Alacer, which is engaged in providing advisory services and
expert supply in the area of Governance, Regulation & Compliance, within the American financial market. See Note 3c to the financial
statements for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.5. On 3 December 2024, the Company completed the acquisition
of Moshe Ortec Holdings Ltd., which holds Ortec Marketing, Equipment & Supply Ltd. ("Ortec") which imports, distributes,
sells and provides support and characterization services for automatic manufacturing machines used for component assembly, as well as
automated inspection machines used for assembly processes and components on production lines in the fields of industry equipment, medical
devices, military equipment, lasers, and sensors for civilian and security applications, optical communication systems, radar systems
for cars. Additionally, it serves as a representative in Israel for dozens of international manufacturers. See Note 3d to the financial
statements for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.6. After the reporting date, on 4 February 2025, the Company
completed the acquisition of Gav Systems Ltd. and Gav Expert Ltd. ("Gav"), which provide outsourcing services, primarily for
IT and software professionals. See Note 25 to the financial statements for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. Holding structure

Below is the Company's holdings chart in the Matrix Group<sup>2</sup> as of the Company's 2024 annual report date (the "Report"), classified by areas of activity:

2 The chart includes material and additional companies. It is clarified that in addition to the holdings in the companies presented in the chart, the Company also holds interests in other companies.

Description of the Corporation's Business 6

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Description of the Corporation's Business 7

&nbsp;&nbsp;&nbsp;&nbsp;2. Areas of activity

Areas of activity The Group is engaged in four (4)<sup>3</sup> areas of activity: (1) Information Technology Solutions and Services, Consulting, and Management in Israel; (2) Information Technology Solutions and Services in the United States; (3) Sales, Marketing, and Support of Software Products; and (4) Cloud and Computing Infrastructures-which provide solutions, services, and products mainly to the following customer sectors ("sectors"): banking and finance, high-tech and startups, government and the public sector, defense, transportation, health, industry, retail and trade, education and academia. Unique divisions operate in each one of these sectors, specializing in providing specific solutions to the particular sector in which they operate, as well as managing and carrying out projects for the departments across the Company.

<br> The specialization in the various sectors is reflected in the applicative, professional, and marketing facets of that sector. Accordingly, a professional and marketing infrastructure is developed in each sector which is required to support such sector.

Below is a table presenting the percentage breakdown of the Company's sales from its customers, categorized by sectoral affiliation, for the Company's overall operations:

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|:---|:---|:---|
| **Sector** | **2024** | **2023** |
| Banking, finance, and insurance | 18.1% | 18.1% |
| Government | 18.3% | 17.6% |
| Hi-Tech | 16% | 14.1% |
| Industry, retail, and commerce | 13.2% | 10% |
| Defense | 10.7% | 8.9% |
| Transportation | 6.1% | 6.8% |
| Healthcare | 6.7% | 5.7% |
| Communications | 2.8% | 3% |
| Other<sup>\*</sup> | 8.2% | 15.8% |

---

\* As part of the 2024 periodic report, the Company refined the classification of customers by areas of activity.

In addition to the four focused areas of activity detailed above, the Matrix Group operates cross-organizational units that provide specialized services across all areas of activity and sectors.

&nbsp;&nbsp;&nbsp;&nbsp;o Centers of Expertise – approximately 30 Centers of Excellence (CoEs) in areas such as: AI, machine
learning, Digital, Cloud, Customer Experience, Mobile, Data, Security & Cyber, Learning Technology, DevOps, Agile & ALM, ERP,
CRM, Smart Campus, Low Code Data Bricks, etc. The Centers of Expertise are based on an organizational approach aimed at providing significant
professional and technological added value to both the Company's development teams and its customers. This includes expert groups
specializing in various content areas, hands-on experience with specialized technologies, an implementation framework (including, among
other things, methodologies and best practices) that shortens time-to-market and reduces risks, technological guidance from the Company's
CTO team, and more.

---

| | |
|:---|:---|
| 3 | As of the 2024 periodic statement, the Company presents the training and implementation activity, which was presented in the past as a separate operating area of activity and constituted approximately 3.4% and 2.9% of the Company's total sales and operating profit in 2023, as part of the IT, Consulting, and Management Solutions in Israel segment. For additional details regarding training operations, see Section 1.2.4 to the Board of Directors Report.  |

---

Description of the Corporation's Business 8

&nbsp;&nbsp;&nbsp;&nbsp;o Comprehensive management and engineering consulting services, from strategy formulation and management
consulting to execution and change implementation. This includes managing complex projects, such as large-scale engineering projects,
extensive engineering supervision projects, particularly in the transportation sector, national infrastructure projects, and projects
in planning and environmental quality. Additionally, the Company provides multidisciplinary engineering consulting services as well as
consulting and implementation services in supply chain management and operational logistics management.

&nbsp;&nbsp;&nbsp;&nbsp;o Matrix R&D and Offshore Services provides expert services for software development roles, as well
as software testing and quality assurance services, using offshore and nearshore models.

**Below is a summary description of the four areas of activities:** 

**Information Technology Solutions and Services, Consulting, and Management in Israel;** 

This activity includes a wide range of technological and other solutions and services in the areas of enterprise core systems, Data and AI, cybersecurity, digital solutions, and more. Among these solutions, the Company engages in the development of large-scale technological systems and the provision of related services, the execution of IT and software integration projects, and the development of operational solutions and systems - C<sup>4</sup>ISR for security organizations in Israel and worldwide, outsourcing services, professional services by experts and consultants, offshore/nearshore services, BPO and Call Center services, software project management, software development, software testing and QA, enhancement and upgrading of existing technological systems, as well as training and implementation services. In addition, this activity includes management consulting and multidisciplinary engineering and operational consulting services, including supervision of complex engineering projects, particularly infrastructure projects in the transportation sector.

**IT Solutions and Services in the United States** 

This activity is carried out through two branches, Matrix US Holding and Xtivia, each of which owns several subsidiaries in the United States. <br> The activity includes providing solutions and expert services in the fields of Government, Risk & Compliance (GRC), fraud prevention, cyber risk mitigation, and anti-money laundering, as well as specialized advisory services in these areas. Additionally, it includes specialized IT services for the healthcare sector. <br> This area of activity also includes the provision of specialized technological solutions and services in the fields of portals, BI, CRM, DBA and EIM, dedicated solutions for the US government contracting market, software product distribution and marketing services, and professional services and offshore solutions, including through employees in the Company's operational centers in India. The operations also include professional services and projects carried out by experts from across the Matrix Group, serving as a gateway to the business model of exporting the Company's services and products to the US market.

**Sales, Marketing and Support of Software Products;** 

This activity primarily includes the sale and distribution of software products (mainly from foreign software manufacturers) across various fields, such as control and monitoring products, cybersecurity, communication solutions, virtualization, knowledge management products, databases and Big Data, open-source systems, and IT management products. It also includes providing professional support services for these products, as well as implementation projects, training, support, and maintenance for integrated products and systems.

Description of the Corporation's Business 9

**Cloud and Computing Infrastructures** 

The Company's activity in this area primarily includes providing a wide range of cloud solutions and services, including sales, service, and support for public cloud (PaaS, SaaS, IaaS) and private cloud at all implementation stages - consulting, architecture, development, deployment, environment management, and support - as well as advanced FinOps services (through the Company's specialized business unit, CloudZone). It also includes computing solutions for IT infrastructure, communication solutions, marketing and sales of hardware, software licenses, and peripheral equipment for business customers, along with related professional services. Additionally, the Company offers multimedia solutions and command-and-control centers for smart offices, office automation and printing solutions, sales and marketing of test and measurement equipment, communication, cybersecurity, and RF solutions, automation projects and integration, advanced calibration services, and industrial video and image processing solutions (through RDT Equipment and Systems and Asio Vision). Furthermore, the Company is engaged in the import, sales, and service of automated manufacturing machines for component assembly and automated testing machines for assembly processes and components in production lines across various industries, including industrial, medical, military, laser, and sensor applications for civilian and defense purposes, as well as optical communication systems and automotive radar systems.

&nbsp;&nbsp;&nbsp;&nbsp;3. Investments in Matrix's Equity and transactions in its shares

In the years 2023–2024 and up to the report date, no investments were made in the Company's equity (other than the exercise of options or the vesting of restricted stock units (RSUs) by officers), and no material transactions in the Company's shares were conducted by interested parties outside the stock exchange.

For details regarding share-based payments, see Note 18 to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;4. Distribution of Dividends

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. For details regarding the dividends distributed by the Company during 2023 and 2024 and up to the date
of the report's publication, see Note 17(e) to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. Retained earnings

As of 31 December 2024, the distributable retained earnings (based on the retained earnings balance) amount to NIS 708,634 thousand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. Dividend distribution policy

For details regarding the dividend distribution policy, see Note 17(e) to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4. Restrictions on the corporation's ability to distribute dividends

For details regarding the financial covenants to which the Company has committed, see Notes 10(d) and 19(a)(1) to the financial statements.

Description of the Corporation's Business 10

5. Financial Information Regarding the Matrix's Fields of
Activities

Below are the key results of the Company, by areas of operation, for the years 2022–2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **2024** | **2024** | **2024** | **2024** | **2024** | **2024** | **2024** |
|  | **IT Solutions and Services, Consulting, and Management in Israel** | **Marketing and Support of Software Products**  | **Cloud and Computing Infrastructures**  | **IT Solutions and Services in the US**  | **Adjustments**  | **Total**  |
| Sales from unrelated parties | 3227608 | 425971 | 1465935 | 460024 | - | 5579538 |
| Intersegmental sales | 109659 | 30794 | 49996 | 915 | (191364) | - |
| **Total sales** | **3337267** | **456765** | **1515931** | **460939** | **(191364)** | **5579538** |
| Fixed expenses | 233529 | 14265 | 59972 | 44914 | - | 352680 |
| Variable expenses | 2743966 | 366342 | 1299558 | 348245 | 18673 | 4776784 |
| **Total operating expenses** | <br> **2977495** | <br> **380607** | <br> **1359530** | <br> **393159** | <br> **18673** | <br> **5129464** |
| Operating profit | 250113 | 45364 | 106405 | 66865 | (18673) | 450074 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| <br> **2023** | <br> **2023** | <br> **2023** | <br> **2023** | <br> **2023** | <br> **2023** | <br> **2023** |
|  | **IT Solutions and Services, Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures**  | **IT Solutions<br> and Services in <br> the US** | **Adjustments** | **Total** |
| Sales from unrelated parties | 3028576 | 294236 | 1430913 | 478380 | - | 5232105 |
| Intersegmental sales | 90917 | 35491 | 83106 | 8809 | (218323) | - |
| **Total sales** | **3119493** | **329727** | **1514019** | **487189** | **(218323)** | **5232105** |
| Fixed expenses | 212272 | 11852 | 86588 | 45844 | - | 356555 |
| Variable expenses | 2610646 | 246261 | 1256368 | 356368 | 12487 | 4482131 |
| **Total operating expenses** | <br> **2822918** | <br> **258113** | <br> **1342956** | <br> **402212** | <br> **12487** | <br> **4838686** |
| Operating profit | 205658 | 36123 | 87957 | 76168 | (12487) | 393419 |

---

Description of the Corporation's Business 11

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** |
|  | **IT Solutions and Services, Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT solutions** <br> **and services in the US**  | **Adjustments** | **Total** |
| Sales from unrelated parties | 2642988 | 249855 | 1345573 | 434273 | - | 4672689 |
| Intersegmental sales | 73343 | 21174 | 81843 | 628 | (176988) | - |
| **Total sales** | **2716331** | **271029** | **1427416** | **434901** | **(176988)** | **4672689** |
| Fixed expenses | 187449 | 8578 | 52518 | 43810 | - | 292356 |
| Variable expenses | 2256325 | 217077 | 1216448 | 330235 | 9761 | 4029845 |
| **Total operating expenses** | <br> **2443774** | <br> **225655** | <br> **1268966** | <br> **374045** | <br> **9761** | <br> **4322201** |
| Operating profit | 199214 | 24200 | 76607 | 60228 | (9761) | 350488 |

---

The Company does not maintain accounting records and/or a costing system that distinguishes between fixed and variable costs. Therefore, the aforementioned breakdown is performed for reporting purposes only. In calculating fixed costs, the Company included rental costs (including property tax, electricity, communication, etc.), depreciation and amortization (including depreciation related to leases and leasing), and general and administrative expenses.

The 2022 results do not include the one-time gain from the sale of the Company's investment in Infinity, amounting to approximately NIS 151 million (before tax).

For further details, see Notes 1(a) and 24 to the financial statements and Sections 1.2.4 and 1.2.5 of the Board of Directors' report.

Description of the Corporation's Business 12

6. General environment and the effect of outside factors

The Group's operations may be materially affected by several key general and external factors in the primary geographic markets in which it operates, primarily Israel and the United States.

The Israeli market

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. Israel economic environment

The Israeli economy is directly influenced by the global economy. As of the date of this report, the global economy has continued to stabilize after facing the effects of the significant increase in inflation rates in recent years, which was followed by rising interest rates during the post-COVID-19 period.

While the global economy has shown signs of stabilization, the Israeli economy experienced complex, unique local events over the past year with significant impact, foremost among them being the Iron Swords War, which continues as of the report date. The security situation and the uncertainty surrounding it, have led to a downward revision of the country's economic growth forecast, an expected increase in the government deficit and the debt-to-GDP ratio, and a downgrade of Israel's credit rating. For details, see Section 1.1.2 of the Board of Directors' report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. IT market trends:

This section outlines the global trends in this field for 2024, which have also been reflected in the Israeli IT market.

The year 2024 marked the beginning of a recovery trend in the global technology market. According to Forrester's 2024 data,<sup>4</sup> once the year-end figures are published and consolidated, global technology spending is expected to grow by 4.6%, with the software sector anticipated to show growth of approximately 11.5%, and IT services by 3.6%. In contrast, according to Gartner,<sup>5</sup> the expected growth in 2024 is projected to be 7.7%, with the software sector anticipated to grow by 12%, and IT services by 5.6%.

According to Gartner, the sector expected to show the highest growth in 2024<sup>6</sup> is Data Centers, with a projected growth rate of 39.4%, surpassing even the anticipated growth in Cloud Computing, which has led in percentage growth in recent years, with an expected increase of 19.2% in 2024, particularly in the IaaS segment, which is projected to grow to 21.3%.<sup>7</sup>

Gartner explains that the exceptional growth in Data Centers is driven by the accelerated adoption of smartphones, PCs, and AI-optimized servers. 70% of AI servers (AI Optimal Services) are purchased by service providers and Hyper-Scalers.

<sup>4</sup> https://www.forrester.com/report/global-tech-market-forecast-2024-to-2029/RES182048

<sup>5</sup> https://www.gartner.com/en/newsroom/press-releases/2025-01-21-gartner-forecasts-worldwide-it-spending-to-grow-9-point-8-percent-in-2025

<sup>6</sup> https://www.gartner.com/en/newsroom/press-releases/2025-01-21-gartner-forecasts-worldwide-it-spending-to-grow-9-point-8-percent-in-2025

<sup>7</sup> https://www.gartner.com/en/newsroom/press-releases/2024-11-19-gartner-forecasts-worldwide-public-cloud-end-user-spending-to-total-723-billion-dollars-in-2025

Description of the Corporation's Business 13

In Israel, IT spending forecasts for 2024 are still significantly influenced by the geopolitical situation and the uncertainty stemming from it. According to STKI, the 2024 data is expected to show an increase of only 2.95%.

Looking ahead to 2025, analysts predict that the growth rate of technology spending will continue its recovery and expansion trend. According to Forrester, global technology spending in 2025 is expected to grow to 5.6%, with the software sector projected to grow by 10.5% and IT services by 3.6%.<sup>8</sup>

According to Gartner, global IT spending is expected to grow by 9.8% in 2025, with the software sector projected to grow by 14.2% and IT services by 9%.<sup>9</sup> Also in 2025, the adoption of AI-optimized equipment will drive an increase in Data Center spending, which will continue to grow, albeit at a slightly lower rate, reaching 23.2%. Similarly, Cloud spending is expected to grow by 21.5%, with IaaS growth projected to be 24.8%.<sup>10</sup>

In Israel, according to STKI, a recovery in local IT spending is also expected, reaching a growth rate of about 8.17%.

A separate and additional reference to the expected implications of the "AI revolution," particularly GenAI and AI Agents, should be included ..

*The above information regarding the IT market constitutes forward-looking information, as defined in the Securities Law, and is based on analyses, public information, and analyst estimates as of the report date. The information may not materialize, in whole or in part, or materialize differently, including materially differently than expected, among other things, as a result of market competition, the economic situation of the market, and/or as a result of the realization of any or some of the risk factors listed in Section 19 of the Report.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. The High-Tech Industry and the lack of human capital in the technological and related professions:

In 2024, the slowdown in Israel's high-tech sector continued, a trend that worsened due to the implications of the disputes surrounding the judicial reform and the impact of the Iron Swords War. All these factors led to a sharp decline in investments in the high-tech sector in 2024, particularly from foreign sources. This was reflected, *inter alia*, in a decrease in the number of startups and a decline in demand for technological personnel, with an emphasis on less experienced employees (juniors). As a result, workforce reductions and layoffs occurred in some companies in the sector, including in the development centers of multinational high-tech companies. A large part of those who were laid off were re-employed in the industry, which still suffers from a shortage of technological manpower, particularly in certain roles,<sup>11</sup> especially experienced professionals.

<sup>8</sup> https://www.forrester.com/report/global-tech-market-forecast-2024-to-2029/RES182048

<sup>9</sup> https://www.gartner.com/en/newsroom/press-releases/2025-01-21-gartner-forecasts-worldwide-it-spending-to-grow-9-point-8-percent-in-2025

<sup>10</sup> https://www.gartner.com/en/newsroom/press-releases/2024-11-19-gartner-forecasts-worldwide-public-cloud-end-user-spending-to-total-723-billion-dollars-in-2025

<sup>11</sup> According to the CBS publication dated 15 July 2024, on the number of job vacancies for April–June 2024, the number of job vacancies in the high-tech sector in the second quarter of 2024 decreased to approximately 11,800, representing a decline of more than 8% compared to the corresponding quarter in 2023. <u>https://www.cbs.gov.il/he/mediarelease/DocLib/2023/230/20_23_230hightec.pdf</u>

Description of the Corporation's Business 14

Overall, the declining demand for employees in high-tech companies may make it easier for the Company to recruit and retain employees, and to mitigate the pressure for wage increases on the part of the employees. At the same time, the slowdown in the high-tech industry could lead to a decrease in demand and even damage to some of the Company's customers in this area of activity and consequently cause damage to the results of the Company's activities.

*The information in this section regarding human resource challenges, the crisis in the high-tech industry, and their implications for the Company's operations constitutes forward-looking information, as defined in the Securities Law. It is based on management's estimates as of the date of this report and its business experience. The information may not materialize, in whole or in part, or materialize differently, including materially differently than expected, among other things, as a result of market competition, the economic and general situation of the market, and/or as a result of the realization of any or some of the risk factors listed in Section 19 of the Report.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. Additional general trends that have been shaping the Israeli IT market over time and creating opportunities
for the Company to expand its business and market share include, *inter alia*:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o A focus on large and financially stable suppliers –
Given the complexity of services in the Company's areas of activity and their importance, including for business improvement and/or business
continuity of customers, there is an inherent preference for large suppliers with proven execution capabilities and high financial stability,
such as the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Mergers and acquisitions – Some of the trends outlined above have led to increased consolidation
and a rise in mergers and acquisitions of medium and small IT companies by larger, financially capable companies. The Company's leading
position, financial strength, and cash reserves, along with its reputation and extensive experience in mergers and acquisitions of IT
companies, may create opportunities to acquire companies operating in complementary fields adjacent to the Company's areas of activity.
Such acquisitions, at economically favorable prices relative to their potential, could expand the range of services offered by the Company
and broaden its customer base.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Offshore, Nearshore, and Outsourcing Activities – The constant need for operational efficiency and
cost savings in large organizations, alongside the shortage of technological personnel, creates an incentive for cost-effective and economical
solutions. Additionally, there is a growing trend of relocating parts of development teams abroad as a resilience mechanism to ensure
business continuity during times of war in Israel. This trend is expanding Matrix's operations in Eastern Europe. This trend may
lead to the expansion of the Company's business in these areas through Matrix Offshore and R&D Services and Babcom. [For further details,
see Section 7.1.1(b) of the report].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Defense Activity – Against the backdrop of geopolitical uncertainty worldwide and the security situation
in Israel, there has been an increase in the activity levels of defense companies, as well as in the volume of their contracts and backlogs.
This trend accordingly generates strong demand from defense customers for development services, professional services, and other work
scopes from these customers. Additionally, the uncertainty arising from escalating geopolitical tensions in Israel and worldwide increases
the threat levels faced by customers in the fields of cybersecurity and information
security. Accordingly, this drives strong demand in these areas, as well as in the sale and marketing of infrastructure and equipment
to establish or enhance business continuity (BCP) and disaster recovery plans.

Description of the Corporation's Business 15

*The above information regarding trends in the IT market constitutes forward-looking information, as defined in the Securities Law, and is based on management's estimates and business experience. The information may not materialize, in whole or in part, or materialize differently, including materially differently than expected, among other things, as a result of market competition, and/or as a result of the realization of any or some of the risk factors listed in Section 19 of the Report.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. The US market

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** The global technological trends detailed in Section 6.3 above are also relevant,
particularly to the US market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** The US IT market is directly influenced by economic developments in the United States. Throughout 2024,
the US economy continued its recovery, including a decline in inflation rates and a reduction in interest rates. In terms of GDP growth,
the US GDP increased by 2.8% annually in 2024, compared to 2.9% in 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** According to Forrester,<sup>12</sup>
 once the 2024 year-end data is published and consolidated, the US technology market is expected
 to show a growth of 5.8% in 2024 (compared to 4.6% globally) and an additional 5.6% growth
 in 2025 (matching the global rate).

The data is expected to show an increase of 11.5% in software spending in the US market in 2024 and 10.7% in 2025. The report is also expected to show a 3.9% increase in IT services spending in 2024 and a 3.5% increase in 2025. In 2024, the financial sector's share of total IT spending is estimated to be close to a quarter, at approximately 23.3%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** Regulatory requirements and operational and reporting guidelines in the US financial sector drive the
demand for the Company's GRC services. Due to the war between Russia and Ukraine, tensions with China, and fluctuations in the capital
markets, the US government has tightened financial regulations, driving demand in the GRC market. Financial institutions have continued
to invest in systems for anti-money laundering and fraud prevention. Additionally, cybersecurity regulations have been tightened, with
the US Securities and Exchange Commission (SEC) increasing reporting requirements for cyber incidents, leading to growing demand for AI-based
risk detection tools. Furthermore, the rise in digital transactions, including the massive increase in digital payments, fintech growth,
and cyber risks, has intensified regulatory oversight, particularly in fraud prevention, requiring the implementation of advanced systems.
The development and institutionalization of cryptocurrencies further reinforce the need for regulatory oversight and anti-money laundering
measures. These regulations and reporting requirements generally have a positive impact on the demand for the Company's services, as they
create a need for process and structural changes that require adjustments in IT systems and tailored solutions, often within a limited
and short timeframe.

The US elections held in November 2024 and the election of Donald Trump as President may have conflicting potential impacts on the Company's operations in the US. On the one hand, there are potential positive effects- the emphasis on national security, including cybersecurity, may drive increased demand for cybersecurity and AI solutions; labor shortages in the US, which could worsen due to restrictive immigration policies, may increase demand for skilled personnel, potentially boosting demand for professional services provided by the Company's centers in Israel, India, and Eastern Europe; and if the administration follows through on its stated intention to reduce the corporate tax rate to 15%, this would improve the Company's profitability and free up capital for additional investments. On the other hand, the new administration may ease financial regulatory requirements, which could reduce demand for traditional GRC systems, particularly in anti-money laundering and fraud prevention, potentially leading to a decline in demand for GRC and compliance services. Additionally, cuts to federal healthcare budgets may slow IT investments in the healthcare sector and delay IT upgrades in hospitals, which could impact the Company's clinical support services segment in healthcare. Furthermore, the "America First" policy could include tariffs on offshore services, potentially increasing the Company's operating costs and reducing the attractiveness of outsourcing for US customers.

<sup>12</sup> https://www.forrester.com/report/us-tech-market-forecast-2024-to-2029/RES182051

Description of the Corporation's Business 16

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** Similar to the Israeli market (see Section 6.2.1(c) above), the US also faces a shortage of experienced
technological workforce. The shortage and competition for technological workforce and related professions in the US may have conflicting
effects on the Company's business. On the one hand, the labor shortage makes it more challenging for the Company to meet the demand for
its technological services and necessitates wage increases in its US operations to retain existing employees and recruit new ones, which
could negatively impact profitability. On the other hand, the ability to work remotely has allowed the Company to reduce its office space
and expand its capacity to employ staff from Israel and Eastern Europe to provide services to the US market. While this does not necessarily
result in significant cost savings on labor (particularly concerning Israeli personnel), it provides an additional channel for meeting
the demand for high-quality workforce in the US, which may lead to increased demand for the Company's services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.** The increase in the exchange rate of the US dollar against the Israeli shekel in 2024 had a positive impact
on the Company's results in the Information Technology Solutions and Services segment in the US, as transactions in this sector are inherently
conducted in dollars, while the Company's financial results are reported in shekels.

*The above information regarding trends, implications, and effects constitutes forward-looking information, as defined in the Securities Law. It is based on management's estimates, business experience, and public information as of the report date, as well as on assumptions, analyses, public information, and analyst assessments as of the report date. The information may not materialize, in whole or in part, or may materialize differently, including materially differently than expected, due to economic slowdown, increased competition as a result thereof, and/or the realization of some or all of the risk factors outlined in Section 19 of the Report.*

Description of the Corporation's Business 17

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. Cyber

The escalation of cyber threats, particularly during a period of geopolitical tension, and even more so following the outbreak of the Iron Swords War, has led to an increase in the volume of incidents, threats, their intensity, attackers' capabilities, and the complexity of attacks. Consequently, there has been a rise in exposure to cyber risks, with a particular focus on Israeli entities. At the same time, rapid advancements in innovative technologies such as artificial intelligence (AI) and cloud computing are transforming the cybersecurity landscape, while also creating a broader attack surface for exploitation by threat actors. Among other threats, personalized phishing and Deepfake-based fraud have become more prevalent, alongside the accelerated shift to cloud services, which exposes the Company to risks such as account breaches and data manipulation. Additionally, the Company's reliance on third parties, including cloud service providers and SaaS platforms, exposes it to indirect risks. Security vulnerabilities in external providers' infrastructures could lead to data leaks, disruptions to business continuity, and loss of control over critical systems. The occurrence of a significant cyber threat targeting the core systems used by the Company for its day-to-day business operations, service delivery to customers, or third-party data stored within these systems could negatively impact the Company's operations and its ability to provide services to customers. Such an event could damage the Company's reputation, expose the Group to legal and regulatory proceedings, harm existing and/or future engagements, and result in substantial financial losses for the Company. On the other hand, concerns over cyber threats positively impact customer awareness of the need for cybersecurity solutions offered by the Company, particularly managed cybersecurity solutions and services, driving increased demand for these services provided by the Company.

The Company, which specializes in providing cybersecurity services to its customers, invests significant resources and efforts and continuously works to strengthen the protection of its systems against such threats. This includes implementing technological solutions within its systems, adopting methodologies and procedures to address cybersecurity incidents and risks, and responding to emerging threats such as the use of artificial intelligence (AI) for sophisticated fraud and phishing attacks. Additionally, the Company is aware of the security risks arising from reliance on external providers and digital supply chains and works to mitigate them through risk controls, periodic assessments, and compliance with information security standards. As part of its comprehensive policy in this field, the Company implements security mechanisms such as remote authentication, compliance with information security standards, regular updates and reviews of its security policies, periodic drills, employee training and awareness initiatives, and cybersecurity audits.

The Company's Board of Directors periodically receives briefings on the Company's preparedness for cyber threats and the actions taken to address these threats. The Company has a designated management official responsible for information security and cyber threat protection, as well as a Chief Information Security Officer (CISO) and a Data Protection Officer (DPO). Under their leadership, the Information Security Department, composed of professionals specializing in cybersecurity, is continuously engaged in protecting against cyber threats. The Information Security Department, in collaboration with external entities, conducts ongoing assessments of the Company's network and information asset protection levels. This includes performing security audits across various disciplines, such as risk assessments, penetration testing, vulnerability scans, survey-based evaluations, internal audits, and more. Additionally, the Company has a response team composed of professional experts and management personnel. In addition to implementing relevant methodologies, the Company conducts simulations of offensive cyber incidents against its systems and enhances its defenses based on the findings. In addition to utilizing its in-house expertise in this field, the Company has engaged with specialists in complementary areas of expertise.

Description of the Corporation's Business 18

The Company estimates that ongoing technological developments, the accelerated digital transformation of organizations, and global geopolitical tensions, including the Iron Swords War, the Russia-Ukraine war, and the US-China tensions, are expected to result in cybersecurity trends in 2025 that will be similar to those outlined above, and possibly even more challenging and complex.

According to Gartner,<sup>13</sup> in 2024, global cybersecurity spending is expected to increase by 13.4%, with an additional growth of 15.1% projected for 2025. According to the same study, the two cybersecurity subfields expected to experience the most significant growth in 2025 are cloud security, with an anticipated growth of nearly 30%, and cloud services, with a projected increase of 15.6%. Additionally, security software is expected to grow by approximately 15.1%, with a significant portion of this growth driven by new challenges and risks arising from the increasing use of GenAI.

*The above information regarding trends, implications, and effects in the cyber sector constitutes forward-looking information, as defined in the Securities Law. It is based on management's estimates, business experience, and public information as of the report date, as well as on assumptions, analyses, public information, and analyst assessments as of the report date. The information may not materialize, in whole or in part, or may materialize differently, including materially differently than expected, due to economic slowdown, increased competition as a result thereof, and/or the realization of some or all of the risk factors outlined in Section 19 of the Report.*

<sup>13</sup> <u>https://www.gartner.com/en/newsroom/press-releases/2024-08-28-gartner-forecasts-global-information-security-spending-to-grow-15-percent-in-2025</u>

Description of the Corporation's Business 19

&nbsp;&nbsp;&nbsp;&nbsp;7. Description of Matrix's Operations by Areas of Activity

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. IT Solutions and Services, Consulting, and Management in Israel

For the rates of contribution (in percentages) of this area of activity to the Company's sales and operating profit in 2023 and 2024, see Section 1.2.4 of the Report of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.1. General - Types of Services in the Area of Activity

Below are the main services provided by the Company to its customers in the field of Information Technology Solutions and Services, Consulting, and Management in Israel, as well as developments in the sector that impacted the Company's performance in this business segment in 2024. Additionally, details on expected developments in this field that may materially affect these results in the short and medium term are provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **Integration projects** 

As part of this, the Company provides its customers with comprehensive solutions for required system domains, integrating services from multiple business areas detailed later in Section 7.1.1, as well as solutions from the Company's other business segments, including software product marketing, training and implementation, and . The integration of all these components is designed to provide a comprehensive solution to the customer's needs in the required domain. These projects are typically of significant financial scope and require a wide range of specialized expertise.

Examples include: the development of a comprehensive system for the Central Bureau of Statistics (CBS) for the implementation and operation of a central storage system, data accessibility, and workflow management; defense projects executed by the Company for the Ministry of Defense and security organizations abroad; and the establishment of an end-to-end computing solution to support the launch of a consumer credit operation for an insurance company, including managed infrastructure services and core software enabling this activity. A project for the development of the next generation of a leading bank's digital infrastructure, based on a new and advanced technological platform.

The Company is also executing several major modernization projects, including for one of Israel's largest banks, within the government sector, and for a financial infrastructure company as part of a core system replacement process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **Offshore/Nearshore** 

Provision of software development and testing services by local or offshore employees at rates lower than those typically found in Israel. The Company promotes its offshore and nearshore business under a unified brand, Matrix R&D and Offshore Services ("Matrix R&D and Offshore Services") abroad and under the Talpiot brand in Israel.

The activities of Matrix R&D and Offshore Services include:

Talpiot Project – A training and placement program for women in the ultra-Orthodox sector, under which the Company operates software development and testing centers employing women who have been trained by the Company. The centers are tailored to the needs of the target population at each location, including working hours, work environment, and supportive infrastructure. As a result, there is high demand for employment within these centers among the target population.

Description of the Corporation's Business 20

The added value of the Talpiot Project (beyond being, in the Company's view, a first-tier national-Zionist initiative), is based on the availability of skilled talent with knowledge and experience, such as graduates of academic and engineering training programs, within the candidate pool for this project. This enables the rapid establishment of software development, automation, and QA teams while fostering long-term relationships with customers, built on the loyalty and high-quality capabilities of the employees in the project.

The Company also operates a development center in the south through its subsidiary Cambium, which operates in Dimona.

Provision of offshore services through the Company's subsidiaries in Eastern Europe (primarily in Bulgaria, Poland, Romania, Ukraine, and North Macedonia), targeting customers in Israel (mainly in the high-tech and startup sectors) and potentially also customers abroad.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **Cloud Computing Solutions** 

The Company's customers include global corporations, high-tech companies, enterprise organizations, government entities and public sector customers, academia, telecommunications, finance, healthcare, industry, and more.

In Israel, demand for these solutions is expected to continue growing, paltry due to the government's "Nimbus" project, which aims, among other things, to channel more government activities to cloud environments through the use of international cloud providers' services in the country. This project creates momentum for cloud adoption in the government, public, and defense sectors. The business sector is also shifting more activities to the cloud, and this trend is expected to intensify with the establishment of local cloud regions by Amazon, Google, and Microsoft, along with the government's significant steps toward cloud adoption.

The Company's main cloud computing solutions are concentrated in the CloudZone unit. For additional details about the CloudZone, see Section 7.4.2 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **BI and Big Data Solutions** 

"MatrixDnA" is the Group's Data division. MatrixDnA specializes in the development and implementation of complex, customized data projects tailored to customers' needs, based on the world's most advanced technologies.

The Company employs hundreds of leading experts and provides a wide range of solutions, services, and expertise in various BI fields, as well as in Big Data, AI, and machine learning. Additionally, the Company specializes in providing consulting services for data strategy formulation and data architecture for organizations, helping them transform into Data-Driven Organizations. According to Gartner, in 2025, the data sector is expected to grow by approximately 17%-20% as part of the overall growth in the AI field.

Description of the Corporation's Business 21

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **AI (Artificial Intelligence), GenAI, and Machine Learning Applications** 

"GenAI will Influence IT Spending, but IT Spending Won't Be on GenAI Itself"<sup>14</sup> – This is how Gartner describes the GenAI paradox: the segments of data centers, equipment, and software will experience double-digit growth in 2025, largely due to GenAI. However, investments in GenAI readiness have not yet yielded the functionality leap that GenAI is expected to provide, which should ideally result from such investments.

The Center of Expertise in the fields of artificial intelligence (AI) and deep learning was established by Matrix as part of the Matrix Defense operations. As part of this initiative, solutions were implemented for the defense sector, which serves as a pioneer and a key leader in the use of AI and deep learning technologies.

This Center of Expertise also provides "civilian" solutions, including, *inter alia*, solutions in the fields of text and automation, video, cyber anomaly detection in large networks, automated mapping, and robotics (autonomous vehicles and unmanned aircraft).

With the advancement of generative models such as ChatGPT, Gemini, Grok, Claude, Perplexity, CoPilot, DALL-E, Midjourney, SORA, and all open-source models, Matrix is developing and preparing for the next leap in AI, integrating AI into all relevant technological disciplines. The AI Center of Expertise leads the integration of AI capabilities across all divisions of Matrix. This integration has resulted in dozens of AI projects implemented by Matrix in 2024.

Additionally, the Hi-Tech Operations Division of Babcom (see below) offers a unique service that enables the production of labeled data for AI processes. This activity enables the tagging and annotation of various types of data (text, images, video, audio, and more) for AI technologies across a range of industries, including healthcare, transportation, defense, cybersecurity, retail, agriculture, and more.

Matrix also sells infrastructure (hardware, cloud, and communications) and software that support organizations in transitioning to the cloud.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.** **Professional Services Provided by Experts and Consultants** 

As part of this activity, the Company provides its customers with consultants and professional experts across the full spectrum of technological fields and information systems. Most consultants operate from the customers' offices, with the customers being responsible for their deployment and management. The Company provides these professional services to a wide range of customers across all sectors of the economy. To the best of the Company's knowledge, the main advantage customers perceive in this engagement model is increased managerial flexibility regarding workforce scaling based on changing needs, as well as the professional support and framework the Company provides to both its employees and customers.

<sup>14</sup> https://www.gartner.com/en/newsroom/press-releases/2025-01-21-gartner-forecasts-worldwide-it-spending-to-grow-9-point-8-percent-in-2025

Description of the Corporation's Business 22

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**g.** **Software Testing** 

The Company operates in the field of software testing, QA, and test automation through Matrix Testing and Automation, specializing in providing both manual and automated testing services across various technologies and sectors. It develops unique testing methodologies while utilizing a range of solutions and tools suited to different environments. Services are offered through various business models tailored to customer needs, including on-site consultants, full responsibility for a managed service project, execution from a remote site in a nearshore or offshore model, or a hybrid model. Additionally, the Company provides services based on automated testing environments and represents several leading software products in the field, including AI-powered solutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**h.** **Cyber and Information Security Solutions** 

Matrix operates in this field primarily through its subsidiaries: 2Bsecure Ltd., Integrity Software Ltd., Matrix Defense Ltd., Tangram Soft Ltd., and Zebra A.G.R. Technologies Ltd.

2Bsecure provides a wide range of information security services to organizations in Israel and worldwide, including penetration testing, risk assessments, guidance and implementation of secure development processes, development of multi-year strategic work plans, supply chain security management, executive drills, and a broad array of cybersecurity and information security solutions. The Company also offers risk management services and assists organizations in achieving compliance with information security and privacy regulations such as the Privacy Protection Law, ISOX, HIPAA, ISO 27001, and GDPR. Recently, many organizations have been migrating part of their information assets to the cloud, where there are numerous information security requirements and regulations. 2Bsecure specializes in providing regulatory consulting, compliance solutions, and technological responses to these challenges. 2Bsecure also executes information security projects, including the sale of cybersecurity and information security products from the world's leading manufacturers in these fields.

Additionally, the Company operates an advanced Security Operations Center (SOC) that monitors dozens of customers both in Israel and worldwide. This includes providing Incident Response Team (IRT) services, where, in the event of a critical incident, the team is rapidly deployed on-site or connects remotely when possible to provide response and mitigation. In recent years, 2Bsecure has handled dozens of organizations that have been attacked. The Company also provides solutions for CIMC (Critical National Infrastructure) entities.

As part of its response to the increasing threats and rising sophistication of attacks, 2Bsecure utilizes advanced AI solutions in its SOC framework and other services it provides. 2Bsecure leads its customers in adopting AI and automation technologies for defense strategies, ensuring secure and localized use of AI tools. Additionally, 2Bsecure provides custom-developed solutions not only for real-time attack response but also for the protection and maintenance of information systems and IT infrastructure, ensuring more immediate, precise, and effective security.

Additionally, the Company's subsidiaries are engaged in the distribution of software solutions in the fields of information security and data communication.

Description of the Corporation's Business 23

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i.** **Digital Strategy, Customer Experience, and Mobile** 

The Company's Center of Expertise in Customer Experience (CX) provides organizations with advanced technological solutions as part of a customer-driven digital strategy and an actionable work plan for executing digital transformation. Digital transformation processes within organizations drive the development of channel-based and omnichannel projects such as CRM, digital, mobile, customer analytics, and IoT.

Additionally, the Company provides advanced solutions in digital transformation, hyper-automation, and system modernization, including RPA-based process automation, core system modernization, and the development of digital solutions using low-code platforms. The Company also specializes in developing portals, websites, e-commerce platforms, and online business and service solutions for organizations across various sectors, including banking and finance, healthcare, government, defense, retail, media, and more.

The Company has extensive expertise and knowledge in implementing and integrating digital solutions for the financial sector, combining expertise in executing digital projects with the representation of various financial solutions.

Through its Center of Expertise in Mobile and a large development and implementation group specializing in mobile applications and solutions, the Company has developed a wide range of applications across business and commercial domains, with a particular focus on enterprise applications. The integration between the mobile unit and other development units within the Company (such as BI/DnA, Cloud, and more) enables a broader development and solution framework, allowing for the creation of mobile applications that provide an optimal customer experience while leveraging cloud services and analytics. Examples of such projects in 2024 include: the renewal of digital channels for a major bank, digitization as part of the "One Soul reform" at the Ministry of Defense, and digital channels for the Israel Electric Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. ERP

The Company's ERP operations are based on: 1. The Tafnit system, an ERP system developed by the Company and owned as its intellectual property. It includes leading vertical modules in the fields of non-bank credit, vehicle and leasing company management, and other areas. This year, a trend has begun of transitioning the system to cloud-based implementation. In operations based on Tafnit, the Company primarily operates in the financial sector with non-bank credit management systems, which are implemented in many of Israel's leading non-bank credit companies. Additionally, the Company operates in the healthcare sector (hospitals), the education sector (academic institutions), the retail sector, the automotive sector, and the consumer goods sector (mainly electrical appliances), among others. The Company is developing a solution based on the Tafnit system for a leading insurance company, enabling the establishment, management, and operation of consumer credit services for its customers. The solution provides end-to-end management of the operation, from the initial customer inquiry through loan origination, management, and repayment. The

Description of the Corporation's Business 24

solution also includes a digital customer interface and an interface for the insurance company's representatives. The Company also operates in the logistics sector, including the implementation of WMS (Warehouse Management System) solutions - advanced systems for managing logistics centers and distribution hubs. These systems are deployed in major logistics centers and large warehouses across Israel. 2. Priority solutions, implemented through the subsidiary Medatech, which is the leading implementer of Priority solutions in Israel. Medatech serves over 1,500 customers across a wide range of industries and specializations. To meet the unique requirements of businesses in various industries, Medatech has developed specialized modules that expand the built-in functionality of Priority solutions. Medatech's efficient support for various sectors and applications is based on dedicated vertical solutions developed by Medatech on the Priority software infrastructure. These include verticals for the construction and real estate industry, trade sector, medical companies, industrial sector (plastics, chemicals, hard metals, pharmaceuticals, medical devices, and more), high-tech, distribution, customer service, project management, and more. Medatech provides an end-to-end solution for all information system management activities at customer sites implementing Priority solutions. The Company provides complementary solutions for the Priority system, such as BI, web applications, and more. Additionally, through Medatech's subsidiary, Medatech Systems, it offers cloud hosting services as well as technical support for existing infrastructure at customer sites, including databases, operating systems, networks, and more.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**k.** **CRM** 

The Company specializes in CRM implementations, primarily those based on Microsoft Dynamics CRM solutions and the Salesforce platform. The Company also specializes in migration projects from older CRM solutions and systems to new platforms, as well as in cloud migration projects. In 2024, Matrix continued to expand and implement CRM solutions in various organizations, including Mekorot, Excellence, BDI, Netivei Ayalon, Netivei Ayalon/Public Transportation, the Ministry of Agriculture, the legal division of Bank Hapoalim, and more.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**l.** **Matrix Defense – Consulting, Research, Development, and Systems Engineering in the Defense Sector** 

Matrix Defense is a leading entity in the defense technology sector, with decades of experience and hundreds of successful and complex projects for critical defense systems.

Matrix Defense is recognized as a "defense industry" entity under the guidance of MALMAB, following the defense establishment's identification of the Company as having a significant presence in the defense sector and its involvement in key projects for the defense establishment.

The division employs hundreds of experts with extensive operational and technological experience, providing services to the IDF, the Ministry of Defense, and leading defense industries, as well as participating in projects for international defense organizations.

Description of the Corporation's Business 25

Matrix Defense specializes in engineering, technology, cybersecurity, and deep learning (AI & Deep Learning). It integrates advanced technologies into complex operational environments, planning and executing technological projects in fields such as Geographic Information Systems (GIS), NLP, video and image processing, advanced cybersecurity and intelligence - including embedded devices, embedded computer systems, and national defense systems (national CERT) - as well as the development of command and control systems, intelligence, simulation systems, and more.

The division operates one of the largest and most diverse defense consulting bodies in Israel, combining deep operational understanding with technology. Its expertise includes initiating processes, strategic consulting, business planning within the domain, market research and competitive intelligence, concept development, system planning and specification, as well as leading performance analysis capabilities in Israel.

The division has been awarded new projects, including those in public and private cloud environments, AI, data, and cybersecurity, and continues to execute projects for foreign governments.

In response to the challenges posed by the Iron Swords War, Matrix Defense faced a dual challenge: on one hand, the massive mobilization of reservists from among its employees, and on the other, the urgent need to provide critical support and adapt its operations to the evolving operational and security needs of its customers. This included a special commitment to the Ministry of Defense and the defense industries, rapid system deployments, round-the-clock 24/7 operations, and continuous support for customer systems, all of which contributed to the Company's growth in this sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**m.** **Training and Implementation** <sup>15</sup>

The Company's activities in this field primarily include training and implementation services for end users in organizations where an IT system is installed or is about to be implemented; professional courses and training programs for high-tech professionals; application courses and vocational training and retraining programs for individuals; soft skills and executive training courses through the Israeli Management Center (Hamil); and the provision of various professional services by the Company's top graduates in an outsourcing format ("John Bryce Talent"). The Company also provides training and implementation services for IT systems directly to organizations, as well as outsourcing and BPO services for the management of training centers for its customers.

<sup>15</sup> Starting from the 2024 periodic report, the Company presents its training and implementation activities, which were previously reported as a separate area of activity and accounted for approximately 3.4% of total revenue and 2.9% of the Company's operating profit in 2023, as part of the Information Technology Solutions and Services, Consulting, and Management segment in Israel. For additional details regarding training operations, see Section 1.2.4 to the Board of Directors Report.

Description of the Corporation's Business 26

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**n.** **Call Center and Operational Back Office Services** 

The Company operates in these fields through its subsidiary, Babcom, a multicultural company that provides employment opportunities in activity centers in the Galilee, the south, and other locations in the social periphery. Babcom specializes in providing managed call center services, technical support services, sales center services, operational back-office services, and data enrichment services for organizations through an outsourcing model. The Company also provides back-office, operations, and data tagging services for high-tech companies and startups. The Company also provides research services on the basis of surveys and forecast of statistical data, through its subsidiary SQ. The Company also offers cloud-based AI technology solutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**o.** **Management Consulting, Multidisciplinary Engineering and Project Consulting, and Infrastructure Project Management** 

The Company operates in this field through its subsidiary, Aviv. The activities in these fields include, among others, management consulting for organizations - ranging from in-depth, organization-wide strategic implementation to tactical applications, from operational efficiency to human resource development. Additionally, the Company provides project management and oversight services, as well as planning management services for environmental projects, including the engineering design of environmental facilities (such as wastewater treatment plants), master plans, architectural design, and programming. Aviv's activities also include comprehensive multidisciplinary engineering consulting services, from strategy formulation to execution and change implementation. This encompasses the management of complex projects, large-scale infrastructure projects, project oversight, and projects in the fields of planning, environmental quality, and transportation (such as serving as the civil engineering authority on behalf of the Tkuma Administration).

The Company also operates, through its subsidiary Dana Engineering Ltd. ("Dana Engineering"; a subsidiary of Aviv), in the management and supervision of mega infrastructure projects, specializing in large-scale transportation projects such as railways, roads, interchanges, bridges, and tunnels. Dana Engineering is also a leading entity in infrastructure management for residential projects and is certified as a managing company for the Ministry of Transport, the Ministry of Economy, and the Ministry of Construction and Housing.

Following Dana Engineering's success, in partnership with two other companies, in winning the tender issued by NTA – Metropolitan Mass Transit System Ltd. in August 2023, the partnership is executing the project for the planning, planning management, and execution management of the M1 line of the Tel Aviv metropolitan metro, with an estimated duration of approximately 13 years. For further details, see the Company's immediate report dated 21 August 2023 (Reference: 2023-01-096171).

Description of the Corporation's Business 27

Additionally, the Company operates in the field of supply chain management consulting and implementation, as well as logistics and operational management services, through its subsidiary Programa Logistic Systems Ltd. ("Programa"). Programa's activities include planning and consulting services in the field of logistics (including material flow processes and hazardous material neutralization), operations management, supply chain optimization, planning and management of automated warehouses (WMS), and process simulation for customers in Israel and abroad.

*The statements in this Section 7.1.1 (including all its subsections) regarding trends, developments, assessments, and the Company's activities accordingly in the relevant fields contain forward-looking information, as defined in the Securities Law, based on management's assessments, business experience, and publicly available information. The information may not materialize, in whole or in part, or materialize differently, including materially differently than expected, among other things, as a result of economic recession, as a result of market competition, and/or as a result of the realization of any or some of the risk factors listed in Section 19 of the Report.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.2. Services Offered to the Group's Customers in the area of
Information Technology Solutions and Services, Consulting, and Management in Israel

The Information Technology Solutions and Services, Consulting, and Management in Israel provided by the Company to its customers include the solutions detailed above, all tailored to the specific needs of each customer.

The Company's activities in the field of Information Technology Solutions and Services, Consulting, and Management in Israel are ongoing and continuous over time. The Information Technology Solutions and Services, Consulting, and Management provided by the Company to its customers in Israel are primarily offered under two types of agreements: [a] fixed-price agreements, in which the scope of work, final deliverable, delivery schedule, total price, and payment terms are predefined. [b] time & material agreements, where work is billed based on actual time spent and materials used. The majority of the Company's revenue comes from time and material agreements, where the contractual price is paid based on the actual working hours of the Company's employees, subject to an agreed rate (hourly, daily, monthly, etc.) between the Company and the customer. However, the share of fixed-price agreements in the Company's revenue has been steadily increasing. Additionally, some of the services in this field are provided under a managed services model, where compensation is determined based on deliverables defined in a pre-established Statement of Work (SOW). Regardless of the engagement model, some of the services are provided by the Company in a cloud environment.

Some of the Company's solutions for its customers are based on systems developed by the Company, primarily for vertical ERP solutions, while most are provided using systems developed by third parties. The systems and additional customizations are sold to the customer as a complete package. In other cases, the services and solutions are based on custom development for the customer, without relying on pre-existing solutions. In most cases, after delivering the systems to the customer, the Company continues to provide maintenance and support services for the systems.

Description of the Corporation's Business 28

The Company provides a limited warranty for software solutions developed by it. During the warranty period (typically up to one year) or the maintenance period, the Company fixes defects discovered in the system. Revenue from maintenance services and expenses related to warranty and maintenance are not material. Based on past experience, the Company does not record a warranty provision in its books but reflects its warranty obligations to customers within projects through the revenue recognition mechanism for projects.

This area of activity also includes the operation of training centers offering advanced courses for high-tech professionals, application courses, vocational training and retraining programs, and executive training. Additionally, it encompasses the provision of training and implementation services for IT systems directly to organizations, as well as outsourcing and BPO services for managing training centers for business customers. Professional services are also provided in an outsourcing format, including by the Company's top-performing training program graduates.

For details regarding the revenue recognition policy, see Note 2 to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.3. Trade receivables

The Company's activities in this field are focused on medium and large enterprises and organizations operating in most, if not all, sectors of the economy, including banks and financial institutions, insurance companies, credit companies, high-tech firms, industrial plants, retail and distribution networks, government ministries, the Ministry of Defense, the IDF, and more.

The Company has hundreds of customers in the field of Information Technology Solutions and Services, Consulting, and Management in Israel. Most customers in this field have been customers of the Company for over 10 years.

In the training sector, the Company serves business customers from various industries across the country, as well as thousands of private customers.

This area of activity is not dependent on any single customer or a small number of customers. However, if the Company's engagements with several of its major customers (particularly in the banking and finance sector and/or the government and defense sector) were to cease simultaneously - an event the Company considers unlikely - or if the terms of engagement with these customers were to materially deteriorate, the Company's operating results could be significantly impacted. Nevertheless, the Company does not view this as dependency, particularly since it involves multiple customers within the same sector rather than a single customer.

Description of the Corporation's Business 29

Below is a table showing the percentage breakdown of the Company's sales from its customers across the main sectors in this field of activity:

---

| | |
|:---|:---|
| **Sector** | **2024** |
| Government | 22.8% |
| Banking, finance, and insurance | 18.8% |
| Defense | 12.6% |
| Industry, retail, and commerce | 12.1% |
| Others | 33.7% |

---

For details about backlogs, see Section 8 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.4. Marketing and sales

Sales and marketing are managed from the Company's headquarters through its sales and marketing departments, which focus on cross-organizational initiatives, engagement with various target audiences - both existing and new - customer retention, leveraging opportunities, and expanding into new markets. These departments also maintain relationships with the Company's key suppliers and develop the Company's marketing strategy at the headquarters, division, and subsidiary levels.

Sales and marketing activities are tailored to the unique characteristics of each sector. Each sector has a dedicated sales and marketing team, with sales activities carried out by sales professionals who have specialized training in the sector in which they operate. The Company also employs sales professionals, as well as pre-sale and post-sale technical specialists, within its business units that offer various services. In some cases, the Company integrates subject matter experts from its business partners into marketing activities targeting potential customers.

In addition to ongoing sales activities, the Company initiates additional marketing efforts through media advertising, participation in exhibitions, raising employee awareness to generate business opportunities, direct mail campaigns, and organizing conferences, professional customer events, and virtual seminars (webinars). The Company also conducts digital campaigns and engages in social media activities.

Marketing and sales activities in the training and implementation sector are directed toward the private sector for career conversion courses and high-tech training, primarily through lead generation from online and mobile marketing efforts. For the business sector, the approach includes targeted outreach to existing customers to expand engagement, as well as outreach to prospective customers identified as strategic marketing targets. Marketing activities in this field are carried out by sales managers, call center representatives, and the relevant domain managers.

The Company's expenses for marketing and distribution in this area of activity are not material.

Description of the Corporation's Business 30

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.5. Competition

Although Matrix is consistently ranked as the market leader and holds the largest market share in Israel in the area of information technology services and value-added solutions, many other entities in Israel also provide information technology solutions, consulting, and management services. To the best of the Company's knowledge, its competitors in this field include Hilan, Malam-Team, One, TSG, Aman, Elad, Yael, Emet Computing, Amdocs, Abra, SQLink, Log-on, HMS, Speedvalue, Kyndryl, IBM Israel, and others. Additionally, dozens of medium-sized and small companies operate in Israel, specializing in the areas in which the Company is active, and they also serve as competitors. The Company does not have a reliable estimate of its market share in this area.

The main competitors in the engineering fields are companies specializing in project management for construction and infrastructure, engineering planning firms, environmental consulting and planning companies, and master planning management firms. These include Eldad Spivak Engineering, Gadish Group, Epstein Project Management, HPT Engineering, and Baran Group.

Additionally, the Big Four accounting firms provide IT services in areas such as BI, cybersecurity, ERP, CRM, cloud solutions, and more, as well as consulting and management services. These services present direct competition to the Company's business, particularly given these firms' access to senior decision-makers among the Company's potential customers. The more this trend increases, the more it will be an inhibiting factor in the development of the Company's business, due to the increase in competition.

Additionally, the acquisition of IT companies by well-funded private equity firms, as seen in recent years, may provide substantial financial resources to these acquired competitors, thereby intensifying competition with the Company.

Most of the Information Technology Solutions and Services, Consulting, and Management provided by the Company are not characterized by unique specialization, making the entry barrier for potential competitors relatively low.

However, the Company believes that its specialization in providing Information Technology Solutions and Services, Consulting, and Management in specific industries and sectors, along with its experienced management team, skilled workforce, efficient utilization, accumulated experience and reputation in delivering large-scale solutions, its size and financial stability, and the broad portfolio of products it offers to customers, provide it with significant competitive advantages. Additionally, the Company believes that the wide range of solutions it offers under one umbrella provides a competitive advantage in securing large and complex projects that require a combination of various specializations and solutions, along with their integration into a comprehensive solution.

*The statements in this section regarding the Company's competitors and their impact on the Company's operations and positioning with its customers constitute forward-looking information, as defined in the Securities Law, based on management's assessments and business experience. The information may not materialize, in whole or in part, or materialize differently, including materially differently than expected, among other things, as a result of market competition, and/or as a result of the realization of any or some of the risk factors listed in Section 19 of the Report.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.6. Intangible assets

See Note 9 to the financial statements.

Description of the Corporation's Business 31

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2. IT Solutions and Services in the United States

For the contribution rates (in percentages) of this business segment to the Company's revenue and operating profit for the years 2023 and 2024 in the US, see Section 1.2.4 of the Board of Directors' report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.1. General - Types of Services in the Business Segment

In the field of information technology solutions and services in the US, the Company operates through two divisions under its subsidiaries Matrix US Holding LLC and Xtivia Technologies Inc., which own several subsidiaries in the US, including Matrix-IFS, NIT - Network Infrastructure Technologies Inc., Stons Inc., Matrix Global Services, Alacer Matrix LLC, Rightstar Inc., and Hydus Technologies India (the "Subsidiaries").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **Matrix-IFS -** The Company provides its customers with expert solutions and services in the fields
of GRC (Governmental, Risk & Compliance) and financial crime, specialized advisory services in financial regulatory compliance, implementation
and operation of regulatory compliance systems, as well as global 24/7 support services. Additionally, the Company works to provide robotic
process automation (RPA) solutions and AI & data services through significant collaborations with leading companies in this field,
such as Databricks, Snowflakes, and others.

The Company has offices engaged in providing GRC services in the USA, Canada, London, India, and Israel.

Most of the Company's customers in the GRC field are large international financial institutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **MATRIX US HOLDING LLC ("Matrix US") -** executes projects and provides global services
through manpower from across the Matrix Group, serving as a gateway to the Company's business model of exporting its services and products
to the USA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **IT Services for the Healthcare Sector -** The activity in this field is focused on clinical
support services, Electronic Medical Records (EMR), and IT Help Desk and desktop support services specializing in the healthcare sector
in the USA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **Xtivia -** A wholly-owned subsidiary of Matrix, providing specialized technological solutions and
services in the field of information technology to a wide range of customers. Primarily in the USA, in the following fields:

Complex digital solutions, using platforms such as the open-source platform of Liferay, as well as systems like Contentful and Strapi. Integrating infrastructures from other vendors, including OpenShift, Dell Boomi, and Kubernetes, combined with the ability to provide optimal and customized solutions for the customer, alongside DevOps services.

Xtivia's CRM division provides strategy, development, and deployment of CRM systems across a wide range of technology industries, with a special emphasis on Salesforce and Microsoft solutions, leveraging these platforms to manage and analyze customer interactions, enhance business relationships, improve customer retention, and drive sales growth.

The Enterprise Information Management (EIM) division specializes in the implementation of products such as TIBCO, Informatica, Databricks, and Snowflake, which form the foundation for customers' data governance solutions, ensuring efficient management and optimal utilization of organizational data.

Description of the Corporation's Business 32

Xtivia provides comprehensive support for the main databases available in the market through the tools it has developed for them. This support is made possible through remote management tools developed by the company, enabling effective control over its customers' databases as well as the databases of its customers' clients. The support model is implemented through a combination of remote support (assistance via Virtual DBA) and on-site services at the customer's location.

DedicatedGovCon365 provides tailoredoriented solutions for businesses that supply products and services to US government agencies. These solutions leverage the businesses' relationships with the US government (GovCon - Government Contracting), based on Microsoft NAV Dynamics Business Central software, enabling efficient management and development of vertical applications for this field. GovCon365 implements proprietary solutions on the Company's IP platform, specifically addressing the unique challenges and requirements of government contractors.

**Rightstar** – A wholly-owned subsidiary of Xtivia, providing implementation, consulting, and support services for BMC and Atlassian products. Rightstar has a customer base from the public and government sectors in the USA, including those requiring high-level classification and classified facilities. Rightstar offers customers comprehensive solutions tailored to their unique ITSM needs.

Xtivia also markets a wide range of software products from leading technology companies, including IBM, Atlassian, Infor, Boomi, Liferay, BMC, Microsoft, Oracle, and others. The software products are marketed to a wide range of customers, from the business sector to high-profile government entities such as the US government and the Department of Defense, as well as part of transactions with the Ministry of Defense procurement delegation in the USA.

Xtivia operates a development and support center in India, serving its operations. This development center offers competitive offshore development services to its customer base in the USA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.2. Services offered to the Company's customers in the area of information technology solutions and services
in the USA include:

Consulting and Advisory services specializing in financial regulation, as well as development, customization, and implementation services in the GRC field by the subsidiaries Matrix-IFS and Alacer. These services are provided on off-the-shelf solutions for regulatory control and risk management systems, such as Actimize Oracle Financial Crime Systems, Bottomline Technologies, NASDAQ OMX Smarts, Quantifind, Quantexa, and others, as well as supporting data analytics systems (*e.g.,* SAS).

A significant portion of Matrix-IFS's operations is based on software systems from leading manufacturers, for which the Company provides supporting services. If Matrix-IFS's relationships with these manufacturers change significantly for the worse, or if these software manufacturers expand the services they provide directly to customers, the revenues and profits of Matrix-IFS may be significantly impacted.

Xtivia and its subsidiaries offer a wide range of services, including consulting, design, development, testing, and implementation services. The Company has collaborations with a wide range of technology providers, focusing on open-source solutions.

Description of the Corporation's Business 33

Xtivia implements, through its subsidiaries, solutions from a range of technology solution providers in its areas of expertise. The Company's customers interact directly with the technology solution providers in its areas of expertise, or through Xtivia itself, and engage with it when it acts as a distributor. The Company provides its customers with consulting, development, and implementation services based on the solutions of those providers.

The software solutions and services provided by the subsidiaries to their customers are mainly offered under license agreements for paid work, with charges based on time & material. Under these agreements, the price is paid according to the actual working hours of the Company's employees, subject to the pricing schedule established between the Company and the customer. At times, the services are provided under agreements with a fixed price.

The Company executes projects and provides global services in the USA through its subsidiary Matrix US, utilizing manpower from across the Matrix Group, based on a combination of local presence in the USA with sales and project managers, along with high and rapid execution capability in required fields, through the Group's companies in Israel. Accordingly, the Company has developed an integrated hybrid sales practice (from Israel and the USA), with local project management (US) and remote execution management (Israel) or Eastern Europe(Offshore).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.3. Trade receivables

In the GRC field, the Company's activity is focused on customers from the banking and finance sector (including global banks in the USA, Canada, and Europe), and it is not dependent on any single customer. However, if the Company's engagements with some of its major customers in this sector are discontinued simultaneously, or if the terms of engagement with these customers change significantly for the worse, the Company's operating results could be adversely affected as a result.

In addition, the Company provides additional services as mentioned above to customers across North America, including the public-government sector in the USA. The Company's customers span a wide range of industries and sizes, from small customers to large corporations.

Below is a table showing the percentage distribution of the Company's sales from its customers across the main sectors in this field of activity:

---

| | |
|:---|:---|
| **Sector** | **2024** |
| Banking, finance, and insurance | 36.6% |
| Industry, retail, and commerce | 14.1% |
| Hi-Tech | 11.5% |
| Healthcare | 9.2% |
| Others | 28.6% |

---

For details about backlogs, see Section 8 below.

*The content of this section (and all subsections within it) regarding developments and trends in the field and the relationships of subsidiary companies with leading manufacturers, and their implications on the Company's operations, constitutes forward-looking information, as defined in the Securities Law, based on the management's assessments and business experience. The information may not materialize, in whole or in part, or materialize differently, including materially differently than expected, among other things, as a result of economic recession, as a result of market competition, and/or as a result of the realization of any or some of the risk factors listed in Section 19 of the Report.*

Description of the Corporation's Business 34

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.4. Marketing and sales

Sales and marketing are managed from the headquarters of the subsidiaries in the US through the sales and marketing departments of each subsidiary, which engage in sales through cross-company initiatives, interaction with various target audiences, both existing and new, retention, leveraging, and the development of new markets and opportunities, as well as maintaining relationships with the Company's key suppliers, among other activities.

The sales and marketing activities in the GRC and financial crime field are tailored to the unique characteristics of the banking and finance segment. Sales activities are carried out by sales personnel with specialized training for the segment in which they operate, including some of the subsidiary company managers. Additionally, the subsidiary companies engage activity managers within the business units that offer the various services of the subsidiaries.

In most cases, the sales approach is direct, maintaining relationships with existing customers while expanding the services provided to them and proactively reaching out to organizations identified as sales targets.

The subsidiary Xtivia also operates a remote telesales center from its site in India. The subsidiary NIT also operates a telesales center in the US, Eastern Europe, and India.

The subsidiaries' expenses for marketing and distribution in this area of activity are not material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.5. Competition

There are numerous entities in the US that provide services in the subsidiaries' areas of activity. In some cases, competition is against companies providing offshore services (mainly from India) at reduced rates. The Company has no reliable estimate of its market share in this field; however, its market share in the US is insignificant.

<br> Some of the services provided by the Company in this area of activity are characterized by unique expertise, while others have a low competitive threshold, making it relatively easy for potential competitors to enter the market.

In the GRC field, the Company competes in some cases against large corporations such as IBM, Accenture, Oracle, and the consulting arms of the Big-4 accounting firms, as well as system manufacturers that provide implementation and support services for their own systems, which compete with the Company's services.

As part of its efforts to address the competitive conditions in this field, the Company distributes its activities among various development centers and offers low-cost solutions by performing certain operations at offshore centers in India and Eastern Europe, operating local nearshore development centers in Tampa, Florida, recruiting employees for full-time remote work across the US, and utilizing development resources in Israel.

Additionally, the Company is working to expand its service offerings, including through additional business partners and the development of new service delivery models, as well as by expanding its operations through acquisitions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.6. Intangible assets

See Note 9 to the financial statements.

Description of the Corporation's Business 35

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3. Sale, Marketing and Support of Software Products

For the contribution rates (in percentages) of this area of activity to the Company's sales and operating profit in 2023 and 2024, see Section 1.2.4 of the Board of Directors' report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.1. General

This activity focuses on the distribution, sales, support, and implementation of software products and software infrastructure from leading software companies, primarily international. The activity includes professional teams certified by software manufacturers to provide pre- and post-sale support, implementation, training, and maintenance services.

The Company serves as a distributor and marketer of software manufacturers and products across various fields, including computer system management products, IT service management (ITSM) infrastructure solutions, a range of open-source systems, user experience monitoring and management systems, software lifecycle management (ALM) products, application integration software, cybersecurity products, communication solutions, virtualization, knowledge management products, databases and Big Data, software development and testing tools, business continuity software solutions, process automation solutions, an enterprise application development platform using low-code solutions, and advanced predictive solutions for failure prevention. The software products marketed by the Company are from leading software companies in their fields, such as BMC, Red Hat, PTC, and others. The Company is also working to strengthen its activities in the field of engineering computing and the PLM solutions it markets as a gateway to the Industrial Internet of Things (IIoT) and Industry 4.0.

**Key Trends During the Reporting Period:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** Following the trend of establishing large data centers in Israel by international
entities and the development of the governmental and public cloud infrastructure ("Nimbus"), the Company, in collaboration with
the manufacturers it represents, is working to offer sales services through the public cloud marketplace.

The Company monitors the policies of the software manufacturers it represents, as well as those of additional software manufacturers that it may add to its portfolio of represented products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** Against the backdrop of the Iron Swords War, the Company's activities in this
field expanded with the Ministry of Defense, including the enhancement of its portfolio of distributed and marketed products and the expansion
of agreements under which security bodies procure software products from approved Ministry of Defense suppliers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** The transition of some software manufacturers from a perpetual licensing model
with annual maintenance to an annual subscription model has led to changes in revenue flow, which is now distributed more evenly over
time, and has introduced a different operational model for customer engagement. The transition to a subscription model reduces the Company's
current revenue from software products in the short term; however, in the medium to long term, it expands the Company's base of recurring
revenues.

Description of the Corporation's Business 36

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** Open-Source Solutions – The Company is engaged in an agreement for the marketing
of Red Hat's software solutions (acquired by IBM), which is considered the world's leading commercial entity in the field of open-source
solutions. In line with this trend, the Company continues to expand its portfolio of open-source-based solutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** End-to-End Digital Automation Management Trend – The acceleration of digital
transformation and the need for agility (availability and flexibility) require organizations to provide employees with advanced and intelligent
systems that are not dependent on specific times or locations and can be operated across multiple channels (including mobile devices).
This includes learning management systems (LMS) and infrastructure applications for daily operations, such as attendance, transportation,
and measurement systems.

*The information provided in Section 7.3.1 (including all its subsections) regarding developments and trends in the field constitutes forward-looking information, as defined in the Securities Law, based on management's assessments and business experience. The information may not materialize, in whole or in part, or materialize differently, including materially differently than expected, among other things, as a result of economic recession, as a result of market competition, and/or as a result of the realization of any or some of the risk factors listed in Section 19 of the Report.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.2. Products and services

The Company's activity in this area includes the distribution, marketing, sale, consulting, application, support and implementation of software products (mainly from abroad), the most important of which are: [1] Infrastructure solutions used mainly by information system managers in organizations to operate and control systems, as well as to manage system IT services; (2) Solutions in the field of life cycle management for software development (ALM) which are intended for software development managers in the organization; [3] Applicative solutions used by the organization itself in managing its business; [4] Solutions for managing the organization's databases with an emphasis on data mining, database management and generating insights (data science/forecast analytics/big data management platform/AI); [5] Solutions for smart industry 4.0 and advanced engineering solutions (IoT/CAD/AR/PLM). [6] Distribution of integration, communication, and cybersecurity solutions across all layers through the subsidiary Zebra.

The Company has agreements with numerous foreign software manufacturers for the marketing of their products in Israel, mostly on a non-exclusive basis, as well as with several Israeli software manufacturers. Additionally, to ensure the continued relevance of its marketed product line, the Company operates a business development team that identifies trends and new products in local and international markets to engage with new suppliers and expand the Company's product portfolio.

In some cases, the Company is the sole entity effectively representing and marketing the aforementioned software products in Israel, even if not under an exclusive distribution agreement with the supplier. In other cases, there are additional entities selling and distributing the same products, including, in some instances, local branches of the software manufacturers in Israel. Marketing rights are typically renewed annually or periodically. The Company estimates, based on past experience, that most of these agreements have been renewed, except in cases where the software supplier was acquired by another company.

Description of the Corporation's Business 37

In the perpetual license sales model, the Company enters into agreements with its customers for the sale of software in exchange for a one-time payment, as well as maintenance agreements under which it provides maintenance services for the products it markets, based on the customers' requirements and needs. Pricing for these services is determined through negotiations between the Company and its customers, based on the software manufacturers' maintenance price lists.

In the subscription model, the Company enters into agreements with its customers for the use of software products based on a monthly or annual subscription fee. These agreements are signed for a period of one year or more. As noted above, in this type of engagement, customer satisfaction is critical for subscription renewal. Therefore, the Company invests significantly in maintaining customer satisfaction to ensure Customer Success.

The Company provides various types of software products, some of which are supplemented with a diverse range of additional services, including, among others, setup and customization of off-the-shelf products, add-ons, migration services, translation and localization for the local market, implementation and deployment, product training and support services, integration of different solutions, and more.

The Company provides its customers with support, maintenance, and version update services for the software products it markets. To this end, the Company operates, among other things, a Help Desk support center to handle customer inquiries, which is ISO-certified and monitored.

Following engagements with customers, the Company purchases the software products (or software subscriptions) from the relevant software manufacturers, either at the prices set in the agreements or at discounted prices, particularly in cases of sales to large customers and/or high-value transactions. Although the products are intended for the Company's customers, the Company is generally the entity responsible toward the customers, including the financial risks associated with engagements with software manufacturers (such as customer credit, cancellations and/or modifications to agreements, product returns, and similar matters).

The software products marketed by the Company are sometimes integrated into the software solutions it offers. In other cases, the sale of software products is integrated into solutions, products, and services provided by business partners with whom the Company has engaged. These are sold jointly to the partners' customers as part of a solution or product for the end customer (OEM).

The Company handles issues arising from the use of the software products it markets - in some cases without requiring the customer to contact the software manufacturer directly (1st and 2nd Level Support) and in other cases with the assistance of the software manufacturer (3rd Level Support). In some cases, the Company provides a warranty of up to twelve months for the software packages it supplies, typically back-to-back with the warranty period provided by the software manufacturers. Based on past experience, the Company does not record a warranty provision in its books. Upon expiration of the warranty period, the Company offers its customers the option to enter into a paid maintenance agreement for the system.

Description of the Corporation's Business 38

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.3. Trade receivables

The Company's activities in this field are focused on medium and large companies and organizations operating across a wide range of industries, including government ministries, the IDF and the defense sector, banks and financial institutions, insurance companies, high-tech companies, industrial enterprises, retail and distribution networks, national infrastructure, startups, and more. Additionally, the Company sometimes sells software products through business partners who provide software solutions that are partially based on the software products sold by the Company. In some cases, the software products sold by the Company are purchased by customers who integrate them into their own software solutions, which are then sold to their end customers (OEM agreements).

The sale of software products is usually conducted directly between the Company and the customer. The software maintenance services provided by the Company are priced as a percentage of the software product's price. The implementation of products is priced based on a rate schedule (hourly, daily, monthly, etc.) agreed upon by the parties or on a fixed-price project basis.

The Sales, Marketing, and Support software product area of activity, is not dependent on any specific customer or a small number of customers.

Here is a table showing the percentage breakdown of the Company's sales from its customers by key sectors in this area of activity:

---

| | |
|:---|:---|
| **Sector** | **2024** |
| Banking, finance, and insurance | 29.4% |
| Hi-Tech | 27.6% |
| Defense | 12.5% |
| Industry, retail, and commerce | 9.9% |
| Other | 20.6% |

---

For details about backlogs, see Section 8 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.4. Marketing and sales

Marketing and sales activities are divided into sector-based marketing and sales, product line-based marketing and sales, or a combination of both (a matrix structure).

For ongoing sales activities, the marketing team initiates software product marketing efforts through participation in exhibitions, digital campaigns, and the organization of conferences and seminars.

The Company's expenses for marketing and sales in this business segment are not material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.5. Competition

The Company faces competition from numerous entities operating in the software products sector, with competitors present in each of the product lines it sells. In most cases, the Company competes with Israeli companies that sell competing software products manufactured by foreign software vendors or through local branches of foreign software vendors. In fewer cases, the Company competes with Israeli companies that have developed competing software products.

Description of the Corporation's Business 39

The unique factors influencing competition in this field include the relative positioning of the products sold by the Company, expertise and capability in product maintenance and support, and practical experience with the software products being sold. To the best of the Company's knowledge, its main competitors in this field include, among others, Hilan, Malam-Team, One, Yael, Aman, Emet Computing, and others. Additionally, cloud infrastructure providers such as AWS, Google, and Microsoft Azure present competition by offering customers the option to purchase third-party software subscriptions directly from them.

The Company has no reliable estimate of its market share in this area of activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.6. Trade payables

A significant portion of the Company's activity in this area of activity is based on several large suppliers (software manufacturers), in addition to smaller suppliers, for whom the Company serves as an authorized distributor under the distribution agreements signed with them. If the Company's engagement with these suppliers, or most of them, is terminated, if the terms of engagement change materially, if demand for these suppliers' products significantly decreases, if additional distributors are appointed beyond those currently in place, if these suppliers are acquired by competing software manufacturers, or if these suppliers expand their direct operations in Israel, the Company's revenue and profits in this business segment may be materially affected.

*The information provided in Section 7.3 (including all its subsections) regarding developments, risks, opportunities, and trends in the field constitutes forward-looking information, as defined in the Securities Law, based on management's assessments and business experience. The information may not materialize, in whole or in part, or materialize differently, including materially differently than expected, among other things, as a result of economic recession, as a result of market competition, and/or as a result of the realization of any or some of the risk factors listed in Section 19 of the Report.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3.7. Intangible assets

See Note 9 to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4. Cloud and Computing Infrastructures

For the contribution rates (in percentages) of this area of activity to the Company's revenue and operating profit in 2023 and 2024, see Section 1.2.4 of the Board of Directors' report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.1. General

In the area of Cloud and Computing Infrastructures, the Company's activities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Cloud Services – sales, service, and support for public cloud (PaaS, SaaS, IaaS) and private cloud
through the CloudZone unit. For further details, see Section 7.4.2 below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Sales and marketing of personal computers, desktops, laptops, servers, workstations, tablets, storage
systems (Storage), backup, disaster recovery (DRP), business continuity (BCP), and peripheral and auxiliary equipment, including monitors,
printers, photocopiers, enclosures and communication cabinets, print centers, and data centers.

Description of the Corporation's Business 40

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The Company's activities in the field of laptops, servers, and storage systems focus on marketing branded
systems from large, experienced, and reputable international companies such as HP, Lenovo, Dell, Cisco, and EMC. Additionally, the Company
has expertise in disaster recovery (DRP), business continuity (BCP), backup, storage, and virtualization, primarily on EMC, HP, and VMware
platforms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The Technology Center provides maintenance services for computers and complementary equipment, including
setup, upgrades, management, monitoring, and full operational responsibility for IT and communication infrastructure at customer sites
and in public and private cloud environments. Services include software and hardware maintenance, support and servicing, laboratory services,
PC and network technician services, managed IT services, user support centers and 24/7 Help Desk, nationwide call centers, and the placement
of professional personnel at customer sites and remote locations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Professional Services – Consulting and provision of professional services in the area of Integration
and IT infrastructure, including feasibility and technology compatibility assessments, risk surveys, specification, planning, development,
installation, implementation, training, management, monitoring, and execution of integration projects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o DataZone – Solutions in the field of NoSQL databases and Big Data through the DataZone unit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Outsourcing – Partial or full outsourcing at customer sites or remote locations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Communication – Providing infrastructure solutions for organizational communication systems, including
Platinum Partnership with HP Aruba and Gold Partnership with Cisco. Working on passive communication networks (cabling infrastructure,
server rooms) and active networks (data center, WAN, LAN, network switches, IP PBXs, server rooms, and other advanced communication solutions).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Data protection – hardware and software solutions that safeguard data against ransomware attacks
and enable rapid recovery, whether the information is stored in a private or public cloud.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The business unit offers comprehensive premium solutions provided by experts with the highest certification
levels from manufacturers such as Veeam, Dell, Exagrid, AvePoint, Zerto, Cohesity, and more.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The unit specializes, among other things, in modern managed backup services for cloud-based platforms
such as GSuite, Dynamics, Salesforce, M365, Atlassian, and more.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Multimedia – Projects in the fields of multimedia, control, and monitoring through the subsidiary
AVB. AVB Technologies specializes in consulting, product development, planning, supply, installation, and maintenance of multimedia systems,
providing solutions and implementing complex projects. This includes the construction of smart meeting rooms, video conferencing rooms,
smart display solutions, advanced audio solutions, security applications, simulators, control and monitoring systems, smart electricity,
electronic signage, public address systems, passive communication infrastructure, system integration, and computer networking.

Description of the Corporation's Business 41

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The solutions offered by the Company in this field also include added-value services in the
following areas: Cloud services (including consulting, architecture, and implementation
support), endpoint infrastructure, data communication, local and wide-area networks, multimedia solutions, the full range of services
in the Microsoft environment, storage and backup, information security, connectivity, and comprehensive solutions for the internet environment.

The adde-value infrastructure solutions serve as an additional layer in the portfolio of products, services, and solutions offered by the Company to its clients, enabling it to provide a comprehensive and holistic IT solution. The existence of both the organizational infrastructure and computing and communication domains under one umbrella enhances the Company's competitiveness in executing comprehensive IT projects.

In the field of trade and distribution of advanced hardware products, the Company's activities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Audio – Import and distribution of professional audio and lighting equipment through the subsidiary
Tech Top Marketing Ltd.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Office Automation – Providing a range of solutions in the field of office automation, printing services,
and document production through the subsidiary Gestetnertech Ltd. Additionally, offering 3D scanning services and marketing 3D printing
equipment using various printing technologies through Caliber – Engineering and Computers Ltd., a subsidiary of Gestetnertech.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Control and automation solutions and systems, test and measurement equipment (T&M), advanced technological
solutions for data communication testing, EMC, and radio frequency (RF), as well as support and calibration services for various fields,
provided through the subsidiaries RDT Equipment and Systems 1993 Ltd. and Asio Vision Ltd.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Ortec – Import, sales, and service provision for automated manufacturing machines for component
assembly and machines for automated testing of assembly processes and components on production lines. These solutions cater to industrial,
medical, and military instrumentation, lasers and sensors for civilian and defense applications, optical communication systems, and automotive
radar systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.2. Services offered to the Group's customers in this area of activity:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** Infrastructure Solutions – For computing and communication systems, including the marketing and
sale of hardware and peripheral equipment such as servers, desktop and laptop computers, handheld devices, and workstations operating
on Windows systems. This also includes the marketing of storage and backup systems (such as EMC, DELL), the sale of PC products based
on the Intel platform, computer network integration, the sale and implementation of Microsoft products, as well as providing service and
maintenance for the aforementioned products. Additionally, the Cloud and Computing Infrastructure Division specializes in virtualization
solutions based on VMware products.

Description of the Corporation's Business 42

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** CloudZone – A dedicated company within the Cloud and Computing Infrastructure Division, managing
the cloud solutions marketed by the Group in Israel and Europe. The company offers managed cloud computing services to enterprise organizations,
government offices and public sector entities, SMBs, and startups, provided by a team of experienced professionals. The company's services
include support and guidance throughout all stages of the implementation lifecycle: consulting, architecture, development, deployment,
environment management, financial optimization services (FinOps), guidance for transitioning to SaaS, onboarding to cloud providers' marketplaces,
and support for customers requiring Alliance Lead as a service. Additionally, the company provides cost-saving services alongside optimal
operational efficiency by offering managed data services to customers on the global Databricks platform, with support at various SLA levels.
The company is a partner of leading cloud providers: Amazon Web Services, Microsoft Azure, and Google. It holds the status of Premier
Consulting Partner and Reseller for Amazon Web Services, Gold partner for Microsoft, Cloud Provider, and Google Cloud Platform Reseller.
The Company also holds numerous certifications, such as AWS Migration, DevOps, Security, Data and Analytics, and Operations Competencies,
enabling it to provide professional services across various public cloud domains.

Additionally, the company has expanded its activities in the field of hybrid clouds to include private cloud services, known as InnerCloud. As part of InnerCloud, the company has established a private cloud in Israel, enabling a unique hybrid solution for customers, including, among other things, a high-speed direct connection to the public cloud – Cloud Port.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** DataZone – Services in the field of large-scale data infrastructure management and analysis are
provided through the DataZone business unit, a dedicated unit within the Cloud and Computing Infrastructure Division. DataZone offers
comprehensive solutions for managing and analyzing next-generation data repositories, including NoSQL, Big Data, and more. The unit offers
organizations a comprehensive solution to business challenges arising from multiple data sources and a significantly faster data flow
than in the past. The unit's services include guidance throughout the stages of architecture specification, technological research, evaluation
and assessment of necessary solutions, implementation up to production deployment, and providing training and certification for customers
on the technology. The unit partners with leading companies in the global Big Data market. Among its key solutions is Elastic, an enterprise
search engine technology that enables built-in search capabilities combined with machine learning and GenAI tools on data. Additional
solutions include monitoring and control systems, information security (SIEM), and endpoint security solutions. The unit distributes products
from Compulocs and Spin.ai.

Description of the Corporation's Business 43

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** Office Automation – through its subsidiary Gestetnertech, which provides businesses with comprehensive
solutions in printing services, document creators, and knowledge management. The company also markets advanced office automation solutions,
including laser printers, copiers, fax machines, shredders, auxiliary document processing equipment (such as binding and cutting), and
software for print management and printers in local networks. <br>
Gestetnertech provides service for tens of thousands of machines of various types installed at its customers' sites. Brands: Canon, Triumph-Adler,
Brother, Ricoh and Xerox.<br>
The company also operates in the field of 3D printer marketing through Caliber, a subsidiary of Gestetnertech, which specializes in the
distribution, sales, and servicing of advanced engineering solutions, including specialized software and 3D scanning services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** Control, Automation, Test and Measurement Equipment (T&M), and Computer Vision Solutions – Provided
through the subsidiaries RDT and Asio, which supply customers with equipment from the world's leading manufacturers in testing, measurement,
communication, and computer vision. Additionally, the companies provide projects and solutions in the field of automation, based on controllers,
sensors, cameras, and related technologies. RDT and Asio also provide their customers with repair and calibration services at the Company's
laboratories and customer facilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.** Import, distribution, sales, and provision of support and specification services for automated manufacturing
machines for component assembly and automated testing machines for assembly processes and components on production lines. These solutions
serve the industrial, medical, and military instrumentation sectors, lasers and sensors for civilian and defense applications, optical
communication systems, and automotive radar systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.3. Trade receivables

The Company provides solutions, services, and products to a wide range of customers across various industries. Most of the Company's customers in this field are medium and large companies operating in the industrial, high-tech, and financial sectors, as well as public and government institutions, educational institutions, local authorities, and defense industries.

Gestetnertech provides services to approximately 6,500 customers across various sectors, both large and small. Gestetnertech's common engagement model with its customers is based on a service contracts for a period of 3 to 5 years.

Below is a table showing the percentage breakdown of the Company's sales from its customers across the main sectors in this area of activity:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;**Sector** | **2024** |
| &nbsp;&nbsp;&nbsp;&nbsp;Hi-Tech | 24.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;Government | 16.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;Industry, retail, and commerce | 15.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 42.4% |

---

For details about backlogs, see Section 8 below.

Description of the Corporation's Business 44

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.4. Marketing and distribution

The Company operates separate marketing and sales teams for the following subfields: IT and communication infrastructure solutions, cloud solutions, computer and peripheral equipment sales, printing services and office automation, control, automation, and test and measurement equipment (T&M), computer vision, smart automated machines for production lines, and audio solutions. In each of the aforementioned subfields, marketing and sales activities are carried out by dedicated sales professionals. Typically, these marketing and sales professionals have specialized training for their respective sector. Marketing and sales activities in each subfield are divided according to product and solution lines.

In addition to ongoing sales activities, the Company initiates marketing efforts through conferences, seminars, digital media campaigns, and proactive outreach to potential customers.

RDT and Asio have developed advanced marketing capabilities based on specialized seminars, where they present customers with cutting-edge technologies, future roadmaps, and more. Additionally, in recent years, the companies have undergone a digital transformation and now invest in digital marketing, directly reaching customers through various media channels.

The Company's expenses for marketing and distribution, as described, are not material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.5. Competition

Infrastructure Solutions – There are many entities engaged in providing IT and communication infrastructure solutions, as well as in marketing computers and peripheral equipment. This field of activity is not characterized by specialized or unique expertise, making it relatively easy for potential competitors to enter the market. To the best of the Company's knowledge, its main competitors in the field of IT and communication infrastructure solutions are Malam-Team, Bynet Communications, and Taldor, along with a range of medium-sized and smaller companies.

Computers and Peripherals – Several distributors operate in Israel, marketing branded systems from the same manufacturers whose products the Company sells. To the best of the Company's knowledge, the main competitors in this field are One, Malam-Team, and Emet Computing, along with a range of medium-sized and smaller companies.

In the area of activity Cloud Solutions, the Company competes with cloud service providers, the main ones being, to the best of the Company's knowledge, All Cloud, DoIT, and the major cloud providers themselves through direct sales to customers: Microsoft, Google, and Amazon Web Services.

Office Automation – The market is characterized by relatively high entry barriers, including substantial capital investments in machinery and the establishment of a logistics and service infrastructure. To the best of the Company's knowledge, its main competitors in this field are Getter, Yazamco, Mafil, Copytech, and Tzilomatick.

RDT operates in a variety of fields and does not have direct competitors across all its areas of activity combined; however, it faces competition in each individual field. For example, in the field of testing and measurement, the Company competes with companies such as SchneiTech and UniT. In the field of automation, RDT competes with companies such as Siemens, ABB, Zik, and others.

Description of the Corporation's Business 45

Ortec – The Company does not have a reliable estimate of its market share in any of the aforementioned fields. Among the Company's competitors are DKR, ASI, Gsuite, TRI, Electron Csillag, and others.

The Company does not have a reliable estimate of its market share in any of the aforementioned fields.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.6. Trade payables

A significant portion of the Company's activity in this field is based on several suppliers for whom the Company serves as an authorized (but not exclusive) supplier of their products.

A significant portion of Gestetnertech's activity is based on several suppliers for whom it serves as an authorized supplier of their products, including Canon, Triumph-Adler, IDEAL, and Brother. Among the suppliers of the subsidiary Caliber are EnvisionTEC, Prusa, Raise, and 3D Systems.

A significant portion of RDT and Asio's activity is based on several suppliers for whom they serve as authorized suppliers of their products, including Fluke, Unitronics, and TDK Lambda.

A significant portion of Ortec's activity is based on several suppliers for whom it serves as an authorized supplier of their products, including Besi, CyberOptic, Ficontec, Mycronic, Yelo, Essegi Automation, and others.

If the Company's engagement with some of these suppliers is terminated, if the terms of engagement with these suppliers change significantly, if demand for the suppliers' products declines substantially, or if additional distributors are appointed beyond those currently in place, the Company's revenues from these fields of activity will be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.7. Inventory

In this field of activity, the Company is required to maintain inventory to provide an immediate response to customers' unforeseen needs as part of the comprehensive service it offers. A significant portion of the Company's inventory consists of hardware and equipment that has been ordered and sold to customers but has not yet been delivered. However, the Company's inventory levels are also determined based on sales forecasts prepared by the marketing and sales teams for the various products, taking into account the delivery times of the equipment manufacturers. Additionally, in certain cases, the Company purchases inventory products that it believes will not be difficult to sell to customers and that are offered by the manufacturer at a bargain price. In most cases, the inventory turnover period does not exceed approximately three months.

The Company maintains adequate inventory levels, taking into account demand levels and product availability. Accordingly, in recent years, the Company has planned and prepared for long-term available inventory, considering global supply chain challenges, which have been reflected, *inter alia*, in extended shipping times. This preparation has contributed to the Company's ability to provide customers with solutions within a reasonable timeframe, even during periods of supply chain disruptions.

For further details, see Note 7 to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4.8. Intangible assets

See Note 9 to the financial statements.

Description of the Corporation's Business 46

&nbsp;&nbsp;&nbsp;&nbsp;8. Backlog

**The entire Company (consolidated)** 

---

| | | | |
|:---|:---|:---|:---|
| **Period of recognition of expected <br> income** | **Backlog as at 31<br> December 2024**<br> **(in NIS Thousands)** | **Backlog as at 31<br> December 2023**<br> **(in NIS Thousands)** | **Percent change** |
| Q1 | 1353222 | 1248907 |  |
| Q2 | 1194479 | 1091401 |  |
| Q3 | 1214086 | 1107737 |  |
| Q4 | 1205744 | 1103598 |  |
| **Backlog for the current year** | **4967531** | **4551643** | **9.1%** |
| From the end of the year onward | 2061628 | 2331958 |  |
| **Total backlog** | **7029159** | **6883601** | **2.1%** |

---

The expected sales included in the backlog are presented in accordance with accounting standards for revenue recognition. Therefore, sales from certain transactions are presented in the backlog on a net basis, primarily in the software products segment and the Cloud and Computing Infrastructures segment.

The Company's backlog reflects the upward trend in net-based revenue recognition, with most of the growth attributed to multi-year cloud agreements (EDP) in the Cloud and Computing Infrastructure segment. Neutralizing the impact of the increase in net-based revenue recognition, the Company's backlog would have amounted to NIS 7,443 million (of which NIS 5,077 million is for the current year). That is, the growth rate in the backlog would have been 11.5% for the current year and 8.1% overall.

To provide a more accurate reflection of the Company's backlog from a forward-looking perspective, the backlog also includes the backlog of Gav Systems as of 31 December 2024, even though its acquisition was completed after the report date.

The following are the backlog balances by areas of activity:

**Information Technology Solutions and Services, Consulting, and Management in Israel (in NIS Thousands)** 

---

| | | | |
|:---|:---|:---|:---|
| <br> **Period of recognition of expected income** | **Backlog as at 31<br> December 2024** | **Backlog as at 31<br> December 2023** | **Percent change** |
| Q1 | 817241 | 714312 |  |
| Q2 | 766082 | 674043 |  |
| Q3 | 780511 | 696445 |  |
| Q4 | 770544 | 682391 |  |
| **Backlog for the current year** | **3134378** | **2767191** | 13.3% |
| From the end of the year onward | 1746670 | 1848466 |  |
| **Total backlog** | **4881048** | **4615657** | **5.7%** |

---

Description of the Corporation's Business 47

**IT Solutions and Services in the United States (in NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
| <br> **Period of recognition of expected income** | **Backlog as at 31<br> December 2024** | **Backlog as at 31<br> December 2023** | **Percent change** |
| Q1 | 89153 | 108622 |  |
| Q2 | 91559 | 103762 |  |
| Q3 | 92382 | 104292 |  |
| Q4 | 90309 | 103284 |  |
| **Backlog for the current year** | **363403** | **419960** | **(13.5%)** |
| From the end of the year onward | 10084 | 8103 |  |
| **Total backlog** | **373487** | **428063** | **(12.7%)** |

---

**Sales, Marketing and Support of Software Products (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
| <br> **Period of recognition of expected income** | **Backlog as at 31<br> December 2024** | **Backlog as at 31<br> December 2023** | **Percent change** |
| Q1 | 86647 | 89556 |  |
| Q2 | 79131 | 53257 |  |
| Q3 | 77574 | 44744 |  |
| Q4 | 79704 | 49192 |  |
| **Backlog for the current year** | **323056** | **236749** | **36.5%** |
| From the end of the year onward | 82926 | 70974 |  |
| **Total backlog** | **405982** | **307723** | **31.9%** |

---

**Cloud and Computing Infrastructures (in NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
| <br> **Period of recognition of expected income** | **Backlog as at 31<br> December 2024** | **Backlog as at 31<br> December 2023** | **Percent change** |
| Q1 | 360181 | 336417 |  |
| Q2 | 257707 | 260339 |  |
| Q3 | 263620 | 262256 |  |
| Q4 | 265187 | 268731 |  |
| **Backlog for the current year** | **1146695** | **1127743** | **1.7%** |
| From the end of the year onward | 221948 | 404415 |  |
| **Total backlog** | **1368643** | **1532158** | **(10.7%)** |

---

\* Neutralizing the impact of the increase in net-based revenue recognition (primarily multi-year cloud agreements of the EDP type), the growth rate in the backlog for the segment was 11.4% for the current year and 16.3% overall.

Description of the Corporation's Business 48

The backlog is based on signed agreements and/or purchase orders, as well as framework agreements, for which there is no certainty that they will be fully utilized.

As a rule, in accordance with common practice in the Company's fields of activity, most of the Company's engagements with its customers may be canceled or reduced in scope upon prior notice from the customer. By its nature, the Company does not have structured information regarding the customers' plans and intentions concerning cancelable orders. However, the cancellation rate of engagements at Matrix during the reported periods is not material. Given the Company's fields of activity, it sees value in providing disclosure regarding orders, even if the customer has the right to terminate or cancel the engagement.

A significant portion of the orders considered as part of the backlog, primarily in the segments of IT Solutions and Services in Israel and the US, relate to the provision of employee and professional expert services. The expected revenues from these orders are calculated as the product of the number of professionals required to perform the services for the customer, and the proceeds offered to the Company for those employees. The professional services provided by the Company to the customer are continuous in nature and can be stopped or reduced by the client at short notice. As noted, some of these engagements are in the form of framework agreements, for which, in calculating the backlog, the Company has assumed expected revenues equivalent to the revenues from existing orders (typically based on existing employees providing expert services, managed services, etc., as of the report date) for a period of only 12 months of operations. During the reported periods, there were no material differences in the assessments and estimates considered regarding the framework agreements presented as part of the backlog. Professional services in Israel are subject to seasonality (for further details, see Section 9 below).

*The data regarding the expected revenue recognition from the backlog is an estimate only and constitutes forward-looking information, as defined in the Securities Law, based on past experience and the scheduled timelines in accordance with the various engagements. Changes in these basic assumptions which led to the aforementioned estimate or* to *another effect on the estimates, or the realization of all or some of the risk factors in Section 19 of the Report, may change the Company's assessment regarding the expected revenue recognition of the backlog of orders compared to the data presented above, including substantially more than expected.* 

Description of the Corporation's Business 49

&nbsp;&nbsp;&nbsp;&nbsp;9. Seasonality

The Company's sales are directly affected by the number of professionals providing software services and the duration for which the service is provided. Therefore, in quarters where the number of working days is lower compared to other quarters, there is a decline in revenues from professional software services compared to quarters with a higher number of working days (neutralizing other factors such as new engagements and the termination of existing engagements).

The distribution of standardquarterly working hours in Israel for the years 2024 and 2025 as of the report date:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Q4** | **Q3** | **Q2** | **Q1** |
| **2024** | 24.6% | 26.3% | 23.6% | 25.5% |
| **2025** | 24.6% | 25.4% | 24.5% | 25.5% |

---

<br> The second and fourth quarters of 2024 were the weakest in terms of seasonality and potential working hours due to the fact that most of the Israeli holidays fell within these quarters.

In 2025, seasonality is expected to be normal, with the second and fourth quarters anticipated to be weaker in terms of potential working hours, primarily due to the timing of the holidays.

The primary impact of the aforementioned seasonality is in the field of IT Solutions and Services, Consulting, and Management in Israel.

In the US, seasonality is not significant; however, a non-significant decline in business activity can be observed toward the end of the year and the beginning of the year due to Christian holidays.

*The statements in this Section 9 regarding the expected seasonality in 2025 constitute forward-looking information, as defined in the Securities Law, based on management's assessments, past experience, and the data currently available to it. The information may not materialize, in whole or in part, or materialize differently, including materially differently than expected, among other things, as a result of market competition and/or as a result of another or additional effect on seasonality that is not related to the dates of the holidays or that the effect of the holidays will not be as expected and/or as a result of the realization of any or some of the risk factors listed in Section 19 of the Report.*

 

Description of the Corporation's Business 50

&nbsp;&nbsp;&nbsp;&nbsp;10. Property, Plant, and Equipment, Land, and Facilities

As of December 31, 2024, the Company leases offices across Israel (primarily in Kfar Saba, Tel Aviv, Rosh HaAyin, Jerusalem, Modi'in, Tefen, and Lod) with a total area of approximately 71,887 square meters. The lease agreements are for various terms, and in most cases, the Company has options to extend the lease term. The Company seeks to enter into lease agreements for lease terms of 3–4 years while maintaining flexibility during the lease term. The Company also leases office spaces outside Israel (in Bulgaria, Macedonia, India, the US, and England) with a total area of approximately 5,087 square meters.

For details regarding the Company's material lease agreements, including the lease agreement for the Company's new office building in Kfar Saba, see Note 16(c) to the financial statements.

The following are details regarding property, plant, and equipment as of 31 December 2024:

---

| | | |
|:---|:---|:---|
| **Type of property right** | **Area (m<sup>2</sup>)** | **Use** |
| **Rent (up to 3 years)** | 8367 | Development |
|  | 8796 | Management and sales |
|  | 7450 | Warehouses |
|  | 8587 | Training |
|  | 10000 | Call Center |
| **Rent (over 3 years)** | 13023 | Development |
|  | 7935 | Management and sales |
|  |  | Warehouses |
|  |  | Training |
|  | 7730 | Call Center |
| **Rentals overseas** | 5087 | Management, sales, development, call center |

---

Most of the payments specified in the aforementioned rental agreements in Israel are in NIS, and are linked to the Consumer Price Index. For guarantees related to lease fee payments, see Section 13, Financing, below.

Description of the Corporation's Business 51

&nbsp;&nbsp;&nbsp;&nbsp;11. Human Capital

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1. As of the report date,<sup>16</sup>
 the Company employs 11,570 employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.2.** High-tech industry and the shortage of technological manpower

In 2024, a continued decline in demand for high-tech employees and a moderation in the trend of the shortage of technological human capital were observed due to the slowdown in the sector - see Section 6.4 above and Section 1.1.2 of the Board of Directors' report.

The Company addresses the challenges of recruiting and retaining technological personnel through various means, including the development of its training sector via its subsidiaries John Bryce and John Bryce Talent (see Section 7.5 above), "Employee Referral Programs," and significant investment in recruitment and employee retention.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3. The Iron Swords War

With the outbreak of the Iron Swords War, the Company faced the challenges of working during wartime, including employees and families who were evacuated from their homes and the massive reserve duty mobilization of employees and their family members (for further details, see Section 1.1.2 of the Board of Directors' report). The Company established a support system that included communication and visits with the families of reservists and evacuees by managers and the human resources team, as well as mental health support provided by professionals. The Company also established a donation and assistance fund for employees and families in distress. As part of its social and volunteer activities, the Company contributed donations and efforts toward the reconstruction of the "Kfar Aza" Scouts troop and collaborated with the Hostages and Missing Families Forum. Throughout the year, the Company addressed the challenges of reintegrating returning reservist employees, supporting their families, and facilitating their return to work.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.4.** Hybrid work policy

The Company intends to continue operating under a hybrid model (a combination of remote and in-office work), in accordance with relevant needs and activities.

<sup>16</sup> After the report date, the acquisition of Gav Company, which employs approximately 890 employees, was completed.

Description of the Corporation's Business 52

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5. Recruitment, retention and employee connectedness

The Company invests significant efforts and resources in identifying and recruiting suitable candidates. To support recruitment efforts and enhance the recruitment framework, an organizational change was implemented to integrate the recruitment teams with the business units. The Company invests efforts in training its recruitment teams, both in identifying and onboarding new hires and through ongoing training to improve performance and address the challenges of the current period. Internal recruitment processes have also been implemented to improve and shorten the hiring process. Additionally, the Company has expanded its investment in technological infrastructure, improved information systems, and increased the use of advanced sourcing tools, as well as AI-driven processes and tools to enhance and streamline recruitment processes.

The Company invests significant efforts in developing its managers in areas related to employee engagement and retention, utilizing both personal tools and expanding the organizational toolkit to address engagement challenges. This includes expanding enrichment, training, and well-being programs for employees, as well as financial solutions and benefits for relevant groups.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6. Below is a description of the Company's organizational structure:

![](ex9914_007.jpg)

Description of the Corporation's Business 53

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7. Employment agreements

The Company's employees are employed according to personal employment contracts. Employees engaged in sales are eligible for bonuses based on their contributions and sales performance. In addition, the Company pays some employees bonuses based on unique personal goals that encourage creativity and organizational excellence.

For obligations regarding employee-employer relations, see Note 14 to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8. Remuneration policy

On 3 April 2022, the Company adopted an updated remuneration policy for the Company's officers and adjusted the CEO ceiling accordingly. For further details regarding the Company's updated remuneration policy, see the immediate report published by the Company on 3 April 2022 (ref: 2022-01-042259).

For further details regarding the remuneration for officers, see Regulation 21 of Part D of the Report (additional details about the corporation). The Company grants bonuses to its senior managers in accordance with the provisions of the Company's remuneration policy. For details regarding share-based payments, see Note 18 to the financial statements.

The Company estimates that its experienced management, and in particular its CEO, makes a significant contribution to the Company's success, operations, and performance.

On 28 December 2022, the Company approved the renewal of the contract with the Company's CEO, Mr. Moti Gutman, and the updating of the terms of his tenure and employment, including the capital remuneration mechanism, for a period of 5 years, commencing January 1, 2023 until 31 December 2027. For further details, see the immediate reports published by the Company on 10 November 2022 (Reference No. 2022-01-135274) and 29 December 2022 (Reference No. 2022-01-157564). *See also* Article 21 of Chapter D of the Report (Additional Details About the Corporation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.9.** As of the date of the report, the Company is not dependent on particular
employees.

The Equal Pay for Female and Male Employees Law - The Company advocates equal opportunities, a policy of gender equality and works to promote women and equality in the employment conditions of its employees. In 2024, the Company published a report on its website, as required by law, for 2023. 52% of the Company's employees are women; the Company will continue to work to promote women, reduce gaps, equality and diversity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.10.** The Company implements a program to encourage the employment of employees
with disabilities.

In this framework, the Company has appointed a person in charge of hiring employees with disabilities who is also responsible for the implementation of the work plan.

Description of the Corporation's Business 54

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.11.** **Regulation** 

The Company has internal enforcement programs in the areas of securities laws and economic competition laws and a compliance program and procedures in the field of privacy protection and database security. For further details, see Section 15 below.

The Company has a code of ethics according to which the Company conducts its business, while maintaining the principles of the law, morality and business ethics, including equal opportunities and the prevention of discrimination and harassment, prevention of conflict of interest, prevention of bribery and corruption, application of principles of corporate governance and the prohibition of exploitation of opportunities. In addition, the Company implemented a comprehensive enforcement plan to prevent bribery and corruption, within which the Company has adopted, among other things, a policy of zero tolerance towards bribery and corruption. The Company maintains procedures in the field of labor law, including for the prevention of sexual harassment and the creation of a safe work environment and a preventive organizational culture. The Company holds regular training courses and lectures for employees in these areas, and operates appropriate learning programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.12.** **ESG** 

As part of the ESG (Environmental, Social, and Governance) process, the Company has examined the material issues relevant to its operations. Given that its primary assets are human resources, the social aspect of ESG holds significant and central weight. This includes areas such as workforce diversity and equal opportunity, employee well-being and rights, recruitment and retention, and human rights. The Company recognizes that business success cannot be separated from considerations of corporate, environmental, and governance responsibility. The Company regularly monitors developments and trends in these matters, including the development of regulations in the field and acts accordingly. The Company has enshrined on its banner maintaining the values of transparency and proper corporate governance, gender diversity and preserving workers' rights, as part of its pillars. As a result, the Company invests considerable resources in the realization of the policy, in the implementation of related activities, in recognition of the importance and planning of additional activities in these areas.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.13.** **The Company considers the human resource as one of the most important factors for its success.** 

The Company invests many resources in employee development and training processes, among other things, to retain quality personnel and their abilities. The scope of the aforementioned internal trainings is not essential. The Company is certified for ISO 9001 (project management) and ISO 9000.3 (software houses), which include unique procedures for recruiting, evaluating and developing human resources.

The Company offers training and development programs for employees and managers, aligned with market demands, technological advancements, and personal growth.

In addition, after the admission of each new employee, an interactive process of evaluating and developing the employee's qualifications and skills is conducted, according to the position and the personal development path defined for him/her.

The Company operates in several learning channels with the aim of bringing about the professional development and improvement of the performance of its employees, including: a course of professional development courses, technological enrichment courses in various professional fields, cross-company professional forums, professional partners (leading software providers), public courses (mostly through John Bryce/Training Division), executive development programs and management workshops and online courses. This is in addition to training in the areas of connectedness and well-being, as mentioned above.

Description of the Corporation's Business 55

&nbsp;&nbsp;&nbsp;&nbsp;12. Working Capital

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1. Below is the composition of working capital as of 31 December, 2024 and 2023 on a consolidated basis in
thousands of NIS:

---

| | | | |
|:---|:---|:---|:---|
|  | **2024** | **2023** | **Change** |
| Current assets | 2872386 | 2618322 | 254064 |
| Current liabilities | (2652668) | (2240366) | (412302) |
| Excess current assets over current liabilities | 219718 | 377956 | (158238) |

---

For explanations regarding the main changes in assets and liabilities, including working capital, see Section 1.3 of the Board of Directors' report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2. Substantial investment activities in investee companies and investments in other activities

**For details regarding the holding in Infinity, in which the Company owns 4.9%, and the effect of the sale of the majority of the Company's holding, see Note 3a to the financial statements.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3. Inventory holding policy

See Section 7.4.7 above and Note 7 to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4. Customer balance and credit days

See Note 5 to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5. Average credit days (in days)

---

| | | |
|:---|:---|:---|
| | **2024** | **2023** |
| Trade receivables | 85 | 88 |
| Trade payables | 66 | 57 |

---

<sup>(\*)</sup> The calculation of Trade receivables days takes into account the neutralization of the impact of VAT components and the accounting presentation of sales<br> (based on gross or net figures).

&nbsp;&nbsp;&nbsp;&nbsp;13. Financing

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.1.** The Company finances its current activity from cash flow from operating
activities, from the shareholders' equity , from taking credit from financial entities and debentures issued to the public.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.2.** The financing of the activity is done centrally for all areas of activity.
The acquisitions of companies were financed with capital from own sources and medium and long-term credit.

For details about long-term credit, see Note 10b to the financial statements.

Description of the Corporation's Business 56

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.3.** On 14 September 2022, the Company published a Shelf Offering Report
(ref.: 2022-01-117502) in which the Company issued in an initial public offering a total of NIS 295 million nominal value of Series B
Company Debentures. On 29 November 2022, the Company expanded its bond series by issuing NIS 180 million in par value of the Company's
debentures (Series B). For further details, see Appendix A to the Report of the Board of Directors and Note 19 to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.4.** For details about credit and short-term loans, see Note 10a to the financial
statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.5.** **Rating** 

The Company has an issuer rating of Aa3 with a stable rating outlook from 28 March 2024.

The Company has a non-marketable commercial securities ("NAAM") rating of None/NOO P-1.il from 28 March 2024 and a stable Aa3 il rating for Series B debentures from 28 March 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6. Below are details about the Company's committed credit as at 31 December 2024 (in NIS millions):

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;**Credit provider** | **Committed<br> credit** | **Used as at<br> 31.12.24** | **Use immediately<br> prior to report<br> date**<br> (3.3.25) |
| &nbsp;&nbsp;Committed credit from financial institutions | 1405 | 176 | 177 |

---

Of these committed credit, NIS 300 million consists of signed committed credit, while the remainder are unsigned and granted for a period of one year.

There is no change in the terms and conditions as of the report date.

The credit utilization includes usage for guarantees, primarily performance guarantees issued to customers, amounting to approximately NIS 158.8 million, and lease payment guarantees totaling approximately NIS 17.7 million. There is no utilization for on-call loans.

The interest rates are determined when the loans are actually taken, in negotiations between the Company and the financial institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.7.** The Company issued non-marketable commercial securities (NAAM) in the
amount of NIS 300 million.

The NAAM was extended for a cumulative optional period of up to 5 years (until February 21, 2030). The NAAM includes a commitment to redeem at the investor's request with advance notice of at least 7 business days advance. The NAAM carries a variable interest rate at the Bank of Israel variable interest rate plus 0.25%.

For more details, see the Company's Immediate Reports from 13 December 2021 (ref.: 2021-01-108898), 15 December (ref.: 2021-01-109981), and from 18 July 2024 (ref. 2024-01-074415).

Description of the Corporation's Business 57

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Financial covenants** 

As part of the Company's financing arrangements with financial institutions and bondholders, the Company has undertaken certain commitments and financial covenants. As of the financial statement dates and the report publication date, the Company complies with all the aforementioned financial covenants.

**Details regarding the financial covenants with financial institutions:**

---

| | | |
|:---|:---|:---|
|  | **Financial benchmarks** | **31.12.24** |
| Percentage of credit from banking corporations to balance sheet (net of cash) | must not exceed 40% | 2.6% |
| Ratio of Debts of the Group (net of cash) to EBITDA | Shall not exceed 3.5 | 0.18 |
| Shareholders' equity (net of non-controlling interests) | Not less than NIS 275 million | NIS 1,088.7 million |
| Balance of Cash and Short-term investments | Not less than NIS 50 million | NIS 668.5 million |

---

**Details regarding financial covenants in connection with Series B debentures:**

See Appendix A to the Report of the Board of Directors.

In addition, the Company has undertaken to hold a balance of liquid assets and available credit facilities for the benefit of the NAAM, in an amount not less than NIS 450 million (of which, at least NIS 200 million in cash).

14. Taxes

See Note 15 to the financial statements for details.

15. Restrictions and Regulations Applicable to the Matrix's Operations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1. Standards

Most of the Group's activity is carried out according to work procedures which have been tested by the Israeli Standards Institute with reference to the requirements of the ISO-9001:2015 standard. The work procedures apply to professional areas of activity as well as to administrative areas of activity. The Standards Institute has been performing quality checks on the Matrix Group on an ongoing basis for many years and the Group has been found suitable to hold the ISO9001:2015 standard, both due to its compliance with the requirements of the standard (through relevant work procedures and/or work instructions), and due to its ability to provide the customer with a product that meets his requirements and applicable regulatory requirements, while effectively implementing the quality management system to the satisfaction of its customers, implementing processes for continuous improvement while focusing on the customer.

In addition, Matrix is certified by the Israeli Standards Institute in two Data Security Management Standards:

ISO 27001 is a standard that defines the basic principles for establishing and maintaining an data security management system suitable for an organization. The standard indicates that the organization has taken the necessary steps to properly protect the organizational information.

Description of the Corporation's Business 58

ISO 27799 is a standard based on strict requirements in the field of data security that focuses on data security in healthcare organizations or their service providers. The standard establishes principles and guidelines for medical organizations and their suppliers regarding the security of medical information in the organization and its systems. The application of the standard indicates that the manner in which the medical information is handled is done at the required high level, while maintaining the confidentiality, integrity and availability of the medical information in the systems and services provided to healthcare entities.

Compliance with these international standards raises the level of information security in the Company, *inter alia*, in the aspects of implementing secure development processes, secure management of organizational information systems and infrastructures, physical security, raising employee awareness, including information security in the Company's communications and services it provides, and as an added value, it also allows the Company to compete in tenders where these security standards are a threshold condition, including many government tenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2. A supplier recognized by the Ministry of Defense

**Some of the Group companies are recognized suppliers to the Ministry of Defense.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3. Privacy protection

The Company is subject to the relevant provisions of Privacy Protection Laws, including the Privacy Protection Law, 1981, the Privacy Protection (Information Security) Regulations, 2017, and for some of the Company's subsidiaries, the General Data Protection Regulation (GDPR) regulations (hereinafter: the "Privacy Protection Laws"). The Company operates on an ongoing basis to comply with privacy protection laws and is preparing for the implementation of Amendment 13 to the Privacy Protection Law, a process that began with the amendment's approval in August 2024 and is expected to continue until its entry into force in August 2025. As part of this preparation, the Company is conducting a mapping and reclassification of its databases and data processing procedures and updating its security protocols and privacy policy in accordance with the new requirements. In addition, internal procedures, policy documents, and agreements with third parties are being adjusted, including the enhancement of monitoring and reporting mechanisms for privacy incidents. Throughout the year, numerous actions were taken to maintain privacy protection in accordance with regulations and laws, including the appointment of a Data Protection Officer (DPO), the designation of unit-level privacy trustees, database updates, deletion of excess data, review and updating of security procedures, risk assessments, penetration testing, training for authorized database users, and periodic audits.

Description of the Corporation's Business 59

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4. The Company is subject to various regulatory restrictions, primarily in corporate law, and because it is a "reporting corporation". The Company has adopted an internal enforcement program which includes internal work procedures in the area of securities, which is intended to implement compliance norms with corporate law and securities law by the Group and to reduce the Group's exposure, its managers and employees to administrative enforcement procedures. The enforcement plan includes internal procedures that deal, *inter alia*, with the Company's reporting obligations, locating and approving transactions with interested parties, including the classification of negligible and non-exceptional transactions, work procedures for the Audit Committee and the Committee for Examining the Financial Statements, prohibition of the use of inside information, communication with the Authority and market factors, as well as dealing with the complaints of the Group's employees in connection with deficiencies and protection for 'whistleblower' employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5. The Company is subject to the restrictions of economic competition laws, especially with regard to the mergers and acquisitions of the companies it executes, and with regard to restrictive arrangements (collaborations, tenders and joint ventures). The Company adheres strictly to the provisions of the Competition Laws and, for many years, has been implementing an internal antitrust enforcement program and an enforcement procedure in competition matters (updated from time to time according to need and to the law), which include, *inter alia*, the appointment of an officer in charge of the internal enforcement of the Economic Competition Law, the appointment of an Internal Enforcement Committee, investment in implementation, training and lectures in the field of competition law, including through tutorials and periodic audits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.6. The attention of governments and regulators worldwide, including the Bank of Israel, to the impact of climate risks and environmental risk on the economy, various industries, and corporate risk profiles has significantly increased in recent years. This heightened focus stems from the understanding that the materialization of these risks could, in extreme cases, lead to global and systemic effects. ESG risk refers to the exposure of businesses or organizations to economic, legal, and regulatory vulnerabilities resulting from environmental, social, and governance impacts. These risks may arise from business activities that harm the environment, violations of labor rights, or issues in corporate governance, such as lack of transparency or unethical management.

Environmental and climate risks are a significant component of ESG, covering the impacts of climate change and pollution on society and the community. For example, risks stemming from rising temperatures, floods, extreme heat, and severe weather conditions can impact business operations and cause direct economic damage. Additionally, there is regulatory risk, where the State of Israel may tighten environmental laws and regulations, imposing fines on companies that harm the environment or fail to meet ecological requirements.

&nbsp;&nbsp;&nbsp;&nbsp;16. Legal Proceedings

See Note 16b to the financial statements.

Description of the Corporation's Business 60

&nbsp;&nbsp;&nbsp;&nbsp;17. Goals and Business Strategy

In general, the Company works to expand its activities through a combination of organic growth and acquisitions of activities and companies, and this on three main axes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The first axis is continued growth in Israel in the Company's core business
areas, based both on organic growth and local purchases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The second axis is the expansion of the Company's activities abroad,
particularly in the USA, which the Company sees as a strategic target market, also here based on organic growth of the Company's subsidiaries
in the USA, including through global projects, and on additional purchases. The Company is also working in this context to expand the
"export" of its capabilities from Israel to other markets worldwide, particularly to the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The third axis is expansion into tangential areas of activity that have
significant business potential for continued growth in the long term. Naturally, this axis of development is mainly based on acquisitions.

The Company is working to expand its activities through synergistic acquisitions, as an essential part of its long-term growth strategy. The Company's leading position, financial strength, and resources, as well as its reputation and experience in mergers and acquisitions, may continue to create opportunities for acquiring additional companies. These may include companies operating in the Company's core areas that complement its offered solutions, companies in adjacent fields that align with its operations and enable it to expand its activities and target markets, and companies that broaden the Company's international presence. All such acquisitions will be pursued at economically viable prices, considering the potential inherent in each opportunity. In doing so, the Company seeks to expand the range of services it offers, broaden its customer base, and enhance its long-term profitability. The Company intends to continue to examine options for expanding its activities in its core areas and in areas tangential to its traditional areas of activity, as well as expanding its activity abroad, through additional acquisitions.

The Company is also taking steps to expand its activities to additional areas of activity through internal initiative into new areas of activity and the expansion of its existing core activity, by internally initiating new solutions and service offerings, based on the needs of the Company's customers and on the basis of constant monitoring of the new technologies in the market.

The Company constantly and closely monitors the innovative technological developments around the world, which are occurring at an accelerated pace, through a continuous and close relationship with the top global technology analyst companies and with the largest software manufacturers in the world, and also learns about technological and applied trends from its largest customers abroad, while focusing on the more essential technologies with the most significant economic potential, as a basis for continued business expansion. The Company continues to take steps to acquire the appropriate knowledge in technologies in the Company (which, in some cases, is even reflected in the establishment of new Centers of Excellence, in accordance with technological developments around the world), while, at the same time, building business relationships with the world's leading suppliers in those innovative fields.

The Company is working to continue expanding the scope of its activities in the field of projects and project management, and in particular, large and complex integration projects, in which the Company can express the wide variety of products and services offered by the Company, all under one umbrella, a factor that, in the Company's assessment, provides it with a competitive advantage.

Description of the Corporation's Business 61

At the individual level, the goals and business strategy in each of the Company's areas of activity are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.1. In the area of Information Technology Solutions and Services, Consulting and Management in Israel:

The Company intends to continue to act in order to maintain its leading position in the area of Information Technology Solutions and Services, Consulting and Management and to continue to be the leading entity in Israel in the area of IT services.

The Company is constantly working to prepare for providing solutions in new fields using AI technological solutions. In the Company's assessment, the extensive practical experience it has gained in this field through its expanding operations in the defense sector, which it also applies to the civilian market, provides it with a competitive advantage. Additionally, the Company intends to continue expanding its range of services for customers in the areas of digital transformation solutions, cloud services, data services, IoT, and cybersecurity, as well as core system modernization, thereby strengthening its leading position in these fields. **A<sup>1</sup>D<sup>2</sup>C<sup>3</sup>**

The Company intends to continue expanding its operations in the areas of consulting and management, multidisciplinary engineering consulting, environmental quality consulting and engineering, supply chain and logistics-operational consulting, and the management and supervision of mega infrastructure projects, primarily in the transportation sector. This expansion will be pursued through both the organic growth of these activities and the identification of suitable companies for acquisition.

The Company intends to expand the operations of its advanced Security Operation Center (SOC) at its new offices, which monitors the activities of dozens of clients both in Israel and worldwide. This includes providing Incident Response Team (IRT) services and integrating advanced AI solutions into its SOC framework and other services it offers.

The Company intends to continue leading and offering its clients economic models for managed services, with an emphasis on MSSP services (and managed security services) and offshoring. Additionally, it aims to provide unique and flexible business models tailored to its clients' needs, including models based on Service Level Agreements (SLA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.2. In the area of activity Information Technology Solutions and Services in the USA:

The Company continuously evaluates opportunities and strategies to expand its operations in the United States, which has been designated by its management as a strategic target market. This includes growth in its core areas, with a particular focus on Governance, Risk & Compliance (GRC) and financial risk management. Expansion efforts will be pursued through both the organic growth of existing activities, adapting them to new market technologies, and extending services to additional areas in which the Company operates, such as information security, Data & AI. These efforts will leverage the advanced professional resources across the Matrix Group while integrating a local presence in the US Additionally, the Company will seek to identify suitable target companies for acquisition at economically viable prices.

Description of the Corporation's Business 62

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.3. In the area of activity Sales, Marketing and Support for Software Products:

The Company continues to work toward increasing its sales and expanding its operations in this field through advanced new solutions, which, in its assessment, will enhance market penetration. It also aims to broaden its product portfolio to meet future demand, including expanding the range of cloud solutions it offers (with an emphasis on hybrid products and cloud migration management solutions), AI, cybersecurity, digital and automation, open-source, low code, control and monitoring systems, and more. Simultaneously, the Company operates with the goal of expanding and deepening advanced and extensive support services.

The Company intends to continue expanding its operations within the framework of "Nimbus" for selling products through the MARKETPLACE channel to public sector entities, as well as strengthening its engagement with defense agencies.

The Company will continue to focus on maintaining its excellent relationships with its existing software suppliers, nearly all of whom are leading international industry giants.

The Company intends to continue to encourage a transition to subscription-based engagements also at the expense of perpetual model engagements, to expand the Company's Recurring Revenues base.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.4. In the area of activity Cloud and Computing Infrastructures:

The Company intends to maintain and strengthen its position as the leading provider of cloud services in Israel while expanding into European markets and continuing its growth in this field through its CloudZone (public cloud) and InnerCloud (private cloud) units. This will be achieved by broadening the range of solutions and services it offers and deepening business partnerships with leading market suppliers in Israel and abroad. The Company also aims to remain a key partner for its clients in their ongoing procurement and upgrading of systems, whether through the development and acquisition of new information systems or by expanding the use of existing ones. The Company intends to focus, among other things, on expanding its activities in the field of data backup and recovery systems for its clients, in response to the increased demand for Disaster Recovery Plan (DRP) solutions due to the worsening security situation.

The Company continues to work toward increasing the relative share of its Technology Center in the total revenue from the Cloud and Computing Infrastructure segment, including the provision of associated professional services and outsourcing.

The Company aims to expand the range of As-A-Service solutions it offers to its clients, which are characterized by significant long-term contracts based on MRR/ARR (monthly/annual recurring revenue).

The Company intends to integrate automation, artificial intelligence (AI), and machine learning (ML) technologies into its cloud infrastructure and professional services. This aims to optimize infrastructure management processes, resource allocation, load and failure prediction, and enhance customer experience through smarter and more automated services. This initiative will enable the Company to offer advanced and differentiated solutions in the market, strengthening its position as a leader in cloud innovation.

As part of the Company's activities in trade and advanced technology solutions, its strategy is to provide clients with the broadest possible technological solution by representing manufacturers with leading products across various fields that meet diverse client needs, thereby delivering significant added value. The primary goal is to provide the most diverse, comprehensive, and complete solutions by understanding client needs, expanding the offered product portfolio, and delivering excellent service across all relevant technological aspects. All of this is aimed at being the optimal partner in enhancing and improving the client's operations.

Description of the Corporation's Business 63

&nbsp;&nbsp;&nbsp;&nbsp;18. Financial Information With Regard to Geographic Areas

See Note 24(b) to the financial statements and Section 1.2.4 of the Board of Directors' report (Geographical Information).

19. Discussion of Risk Factors

The Company's activity is characterized by the following risk factors:

**Macro risk factors**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1. Security situation

Changes and deterioration in the security and political situation may negatively impact the business stability of some of the Company's clients, which could, in turn, affect the Company's business results, cash flow, and increase the volume of its bad debts. In addition, to the extent that there will be a deterioration in the security situation in Israel, which may lead, in extreme cases, to the shutdown of economic activity, this will lead to direct damage to the Company's income and business results. For details regarding the impact of the ongoing Iron Swords War on the Company's operations, see Section 1.1.2 of the Board of Directors' report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.2. The economic and political situation in Israel

Most of the Company's activity is in Israel, and most of the Company's revenues are derived from its operations in Israel. Economic slowdown and uncertainty in the market, political uncertainty (*see also* Section 6.2 above), whether due to an economic recession or any other factor affecting economic activity in Israel, including an increase in inflation and interest rates, may lead to reduced demand, cuts in activity volumes and IT procurement budgets, and cost reductions by some of the Company's customers. This may include project suspensions, workforce reductions, recruitment of the Company's employees by its customers, rate reductions, decreased demand for software and hardware products, and other cutbacks, which could adversely affect the Company's business results. Additionally, a worsening of the geopolitical situation and a deterioration in Israel's global standing, should they occur, may lead the Company's partners (such as equipment or software manufacturers) to refrain from conducting business with Israel, including doing business with the Company. Additionally, a recession or economic downturn may impact the ability of some of the Company's customers to pay their debts to the Company and may lead to financial difficulties among customers, thereby increasing the Company's bad debt balance and negatively affecting its cash flow.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.3. Increase in the interest rate

If interest rates in the market remain high for an extended period, they may adversely affect the Company's operating results by increasing its financing costs. In addition, to the extent that these will subsequently lead to a recession and economic slowdown in Israel, these are liable to lead to a reduction in demand and even damage to some of the Company's customers and, as a result, damage to the Company's operating results.

For details regarding financial risks, see Note 20 to the financial statements.

Description of the Corporation's Business 64

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.4. The political and economic situation in the USA

The IT market in the United States is directly affected by the economic and political developments in the US economy. Any economic uncertainty and/or downturn in the US economy (*e.g.,* due to expected impacts of tariff increases and/or trade wars following the new US administration's policies on interest rates) could affect demand in the US IT market and, consequently, negatively impact the Company's business results in the US Additionally, a negative economic trend in the US could impair the performance of the Company's customers in the region, potentially harming the Company's business in the US, increasing its bad debt exposure from US customers, and negatively affecting its cash flow. Additionally, if the new US administration eases or even repeals certain financial regulations, this may reduce demand for traditional GRC systems, particularly in the areas of anti-money laundering and fraud prevention, potentially leading to a decline in demand for the Company's GRC services in the US See Section 6.5(d) above for further details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.5. Change in the dollar exchange rate

Changes in the exchange rate of the US dollar and its volatility, both within and between years, impact the Company's business results, particularly profitability in the Software Solutions and Services segment in the US They also affect certain activities in the Software Sales, Marketing, and Support segment (as most software product prices are denominated in US dollars) and the Cloud and Computing Infrastructure segment. Additionally, exchange rate fluctuations influence translation adjustments related to the financial statements of the Company's US subsidiaries (translation differences). In general, an increase in the dollar exchange rate has a positive effect on the Company's results and vice versa. The Company periodically examines the implementation of hedges for foreign currency exposures.

*See also* Note 2(i) to the financial statements for further details.

**Sectoral risk factors** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.6. Human capital

A shortage of workers in the technology sector [see Section 6.4 above], particularly in new technologies that serve as the Company's growth drivers, creates challenges in recruiting and retaining the necessary workforce. This leads to increased costs for the Company in sourcing and hiring employees to meet market demands, as well as in retaining existing employees. The rising cost of living may lead to increased pressure for wage demands. Accordingly, the Company may be required to bear higher salary costs and invest more in various tools and unique solutions for both recruiting new employees and retaining existing ones. All of these may lead to an erosion of the Company's profitability and damage to its ability to provide its services to its customers, its growth rate, and its business.

In addition, the field of work is characterized by multiple regulations and frequent regulatory changes (including changes in the law, expansion orders, court rulings, etc.). The implementation of additional regulatory changes, if any, that may apply to the Company, could expose the Company to significant additional costs, and may even lead to damage to the Company's commitments with its customers and exposure to claims and lawsuits on the part of the Company's employees, which could lead to impairment in the Company's profits and adversely affect its business results.

Description of the Corporation's Business 65

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.7. Mergers and acquisitions

An important part of the Company's business strategy is expansion through mergers and acquisitions (see Section 17 above). The Company may, from time to time, compete for purchase and investment opportunities with established companies, whose financial means at their disposal exceed the Company's own means. This risk has increased in light of the growing trend in the scope of investments by private equity funds and those of the Big-4 (which benefit from financial resources in large volumes) in IT companies. Furthermore, the global trend of the increase in interest rates in the economy increases the effective cost of the purchases, in light of the increase in the financing costs associated with them. In addition, there is no certainty that the Company will be able to locate potential purchase or investment opportunities, in Israel or abroad that are suitable for its goals and at appropriate prices in its view. Also, mergers of acquired companies are complex and may fail. In all of the aforementioned cases, the Company's ability to expand and grow may be impaired, and It may even incur losses due to unsuccessful acquisitions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.8. Competition

The fierce competition in most of the Company's areas of activity (see details in Chapter 7 below), as well as the low barriers to entry in some of the Company's areas of activity, can lead to a reduction in the scope of the Company's commitments and/or to lower prices which may lead to an erosion of the Company's profits.

**Unique risk factors**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.9. Cyber and information security

The Company's activity is based on information systems and digital information of various types, including that of employees, suppliers and customers of the Company (and their customers). In recent years, there has been a significant increase in the frequency and severity of cyber incidents (including cyber crime, identity thefts, and ransomware attacks), particularly against Israeli entities and companies. This trend is expected to continue in the future and may even worsen (including due to the Iron Swords War), despite all the defense mechanisms employed against it. Artificial intelligence (AI) technologies also exacerbate risks, as they enable attackers to create personalized attacks, enhance phishing techniques, forge identities using deepfake technology, and improve hacking and intrusion capabilities into organizational systems. Cyber incidents may lead to unauthorized access, unauthorized exposure, abuse, disruption, deletion or modification of the information of the Company and its customers, ransom attacks, and may disrupt current activity, harm computing services, significantly slow them down, and even disable the Company's information systems and development projects.

In the event of damage to the Company (or to the Company's customers or suppliers) as a result of such cyber attacks, the Company may suffer negative consequences, including disruption of the activity of the Company and/or of customers to whom the Company provides services, disruption of the operation of the Company's information systems or their shutdown, impairment to development projects being performed by the Company, theft of information of the Company's and/or of its customers', information leakage, damage to customer trust in the Company may lead to harm to its reputation, exposure to lawsuits and regulatory procedures, as well as compensation payments and/or fines. All of these are liable to lead to various direct and indirect damages to the Company and adversely affect the Company's business results.

Description of the Corporation's Business 66

In order to protect its information technology system and minimize information security risks, with the increase in the level of risk and intrusion attempts, the Company invests considerable, ongoing efforts and substantial resources (organizational, financial, professional and computing) in the continuous strengthening and constant improvement of the Company's defenses against these risks, including the equipping of appropriate technological systems, strong identification and strict remote access controls, activation and upgrade of an Event management system and business continuity plan, conducting evaluation practices for cyber incidents, expanding and operating an internal information security unit, operating a 24/7 SOC hotline, meeting strict information security standards, engaging with experts in the field, updating and monitoring the Company's policies and procedures on a regular basis, training and raising employee awareness, as well as the purchase of designated insurance for cyber risks (Cyber Liability Insurance), which includes indemnification claims by third parties for cyber events, ransom and extortion events, loss of profits as a result of cyber incidents, coverage for the hardware of the computer systems following a cyber incident, expenses of the incident, such as: Information security teams, legal, multimedia liability, third-party and privacy regulation.

Additionally, the Company takes measures to comply with all regulatory requirements applicable to it regarding information security. Among other things, it regularly performs internal and external information security audits, including intrusion tests and periodic risk surveys and database controls, and conducts exercises and training to raise employee awareness of information security and privacy. In addition, the Company works to pre-screen its essential suppliers and ensure that its suppliers sign appropriate confidentiality and information security appendices, etc.

<br> In order to carry out the above, the Company invests considerable resources and may be required to increase the investment in these issues, taking into account the increase in risk, the increase in attempted cyber attacks and their sophistication, information security events that may be discovered and regulatory changes. The continued increase in these costs may negatively impact the Company's business results.

The occurrence of information security incidents within the Company may also lead to security breaches in its customers' information systems. The Company invests significant efforts and resources in protecting its systems related to its customers, including compliance with customer information security requirements and additional measures as mentioned above.

Despite all of the above, the Company cannot guarantee that the protective measures taken by it will completely prevent information security events or damage that may be caused as a result, as detailed above. This is especially in view of the lack of the possibility to identify all cyber-attacks when their occur or in the passage of time afterwards and/or the occurrence of cyber incidents as a result of non-technological failures, such as human errors or malicious acts. Furthermore, in certain cases, the occurrence of information security incidents at the Company's customers or suppliers can also lead to information security events in the Company's information systems. All of these may adversely affect the Company's business results and reputation.

Description of the Corporation's Business 67

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.10. Activity abroad

Regarding the Company's activities in different countries of the world (mainly in the USA), the possibilities of supervision and control over the activities of the overseas subsidiaries are less than the possibilities regarding the organic activity in Israel. The limited control is liable to lead to late detection of problem areas, if any, in the Company's activities at remote sites, and to prevent the Company from reacting with the required speed. In addition, the Company is also exposed to risks deriving from the very activity in foreign countries (including political and state risks) and risks arising from an economic slowdown in those countries, which will lead to a decrease in demand for the Company's services and impairment in its business results. *See also*, in this regard, Section 19.3 above. *See also* Section 19.4 above for further details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.11. Technological developments and changes in the IT field

The Company's success depends on its ability to maintain the technological relevance of the solutions it offers to its customers, and to develop or enter into agreements with foreign suppliers regarding new software systems and solutions that keep pace with the increasingly rapid technological advancements, the evolving IT landscape, and the frequent changes in customer needs. There is no certainty that the Company will be able to acquire the necessary expertise in new technologies in a timely manner (*see also* Section 19.6 above) or to enter into agreements related to such systems and solutions, including, but not limited to, identifying leading software suppliers and developing expertise and knowledge centers at the appropriate time to successfully meet the demand for new technologies and/or the evolving requirements of its customers.

Delays or failures in developing, adopting, or adapting appropriate solutions to technological changes and evolving market demands may negatively impact the Company's business results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.12. Technological developments in the field of artificial intelligence (AI)

The Company operates in a dynamic technological environment characterized by rapid changes, particularly in the field of artificial intelligence (AI), which has undergone dramatic developments over the past year. While the integration of AI technologies presents opportunities to enhance the Company's services and products for its customers, thereby increasing demand, it also poses significant risks.

There is a risk that the Company may fail to keep pace with technological advancements, which could impair its competitive ability, lead to customer and revenue loss, and result in decreased demand for the traditional services its customers currently purchase due to the increasing use of AI tools. Additionally, the use of AI solutions presents regulatory and ethical challenges, such as requirements for transparency, privacy, and information security. Regulatory changes may require the Company to incur additional expenses to comply with new requirements and may even restrict the use of these technologies.

Uncontrolled reliance on AI systems in business and operational decision-making may expose the Company to risks arising from errors in algorithmic models, data biases, or security vulnerabilities. All of these may result in financial losses, damage to the Company's reputation, and even legal claims against the Company. Additionally, systemic errors that may occur during the operation or implementation of AI systems could lead to inaccurate or incorrect findings, undermine system reliability, create information security breaches, and increase exposure to cyber threats. These risks may result in operational, financial, or legal damages for the Company's customers and third parties relying on the Company's outputs.

Description of the Corporation's Business 68

The Company invests resources in monitoring and overseeing AI developments and in establishing processes for managing technological and regulatory risks. However, there is no certainty that these measures will fully prevent the realization of these risks. Therefore, the Company's exposure to risks associated with rapid technological advancements and the use of AI may adversely affect its operating results, financial position, reputation, and competitive standing in the market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.13. Migration to Cloud solutions

For example: in the Sales, Marketing and Support for Software Products segment, opportunities are opening up for the Company to market new cloud-based software products and solutions, but, in many cases, these are substitutes for "traditional" solutions of software products, which are also marketed by the Company. For example, in the Software Sales, Marketing, and Support segment, the Company has opportunities to market new cloud-based software products and solutions. However, in many cases, these serve as alternatives to "traditional" (perpetual license-based) software solutions, which are also marketed by the Company. In the event that the extent of the decrease in demand for the Company's services, due to a transition to cloud solutions, exceeds the extent of the growth resulting from the cloud services marketed by the Company, the Company's business results may be adversely affected.

In addition, the gross margins of the cloud solutions supplied by the Company to its customers are often lower than those of the "traditional" solutions provided by the Company in the past, and which were replaced by the cloud solutions. As a result, the Company's profitability may be eroded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.14. Centrality of the banking, financial services, insurance, and high-tech customer sector

The Company is not materially dependent on any single customer; however, it considers the banking, financial services, insurance, and high-tech sectors to be significant to its operations (in the banking/financial sector, both in Israel and the US; see Section 2 above for further details). If the Company's engagement with some of its customers which are among the largest in these sectors is terminated at the same time, or if the extent of its activities with some of its customers in these sectors is significantly reduced, or if there is a slowdown in the rate of recruitment of new customers in these sectors by the Company, or if the terms of engagement with these customers materially change for the worse, or if there is a significant deterioration in some of these sectors that lead to a reduction in its IT demands, the results of the Company's activities are liable to be adversely affected as a consequence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.15. State budget and government tenders

A significant part of the Company's activity is conducted on the basis of government tenders. Delays in the approval of the state budget or budget reallocations and/or cuts, including due to increased defense expenditures and/or political instability and/or reductions in future state budgets, may lead to a decrease in government IT budgets as well as in other areas of the Company's activities with the government. The resulting reduction in the scope of government tenders and/or the failure to renew the Company's engagements in a number of government tenders and/or the Company's failure to win a number of substantial tenders, may impair the Company's revenues or create a need to submit offers with lower profit margins and result in impairment to the Company's business results.

Description of the Corporation's Business 69

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.16. Contractual engagements with customers on a fixed price basis

An increasing part of the Company's income is derived from contracts on a fixed-price basis. The pricing for these engagements is based on an estimate of future costs. In cases where the Company does not accurately estimate the resources required to carry out projects at a fixed price, and/or does not correctly estimate the costs of employee wages during those projects (including expected salary increases during the project) (*see also* Section 19.6 above), and/or its ability to complete its obligations on time established for this, may adversely affect the Company's business results. This risk will increase in direct proportion to the increase in the scope of fixed-price projects carried out by the Company, in light of the Company's tendency to expand its project activities. A similar risk, albeit to a lesser extent, also exists in respect of the expansion of the activities of the services managed by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.17. Contractual engagements with clients for the provision of professional services

In recent years, there has been a growing trend of customers replacing Professional services (PS) in the IT field, based on time and materials (T&M) pricing, for engagements based on managed services (outsourcing), which are based on defined product specifications (SOW) and fields.

If the Company does not manage to adjust to this trend in the Professional services market, while reducing the impairment to commitments for Professional services on the one hand, and increasing contracts with its customers based on managed services on the other hand, the Company's business results may be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.18. Dependence on suppliers and software manufacturers

The Company has no material dependence on any supplier. However, if the Company's engagement with a number of its major suppliers is terminated at the same time and/or if the terms of the commitment with these suppliers are substantially altered, and/or if those suppliers or software manufacturers expand their direct activity in the local market, including directly providing competing services for the services that the Company provides to its customers in connection with their products, and/or they appoint additional distributors, and/or the status of those suppliers is harmed, and/or if they are purchased by a competitor, and/or if their activity is discontinued for any reason, the results of the Company's activity may be adversely affected as a consequence.

In addition, some of the Company's professional services to its customers, both in Israel and in the US, are based on software products of leading software manufacturers and on the Company's business relationships with those software manufacturers. The termination of the Company's contract with those software manufacturers and/or a significant deterioration in the contract terms of the Company against them may lead to direct impairment in the scope of the Company's professional services, based on the software products of those companies, and adversely affect the Company's business results.

Description of the Corporation's Business 70

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.19. Supply chain delays and chip shortages

In recent years, disruptions in global supply chains have intensified. After a period of relative stabilization, these disruptions have worsened due to Houthi threats and attacks on ships in the Red Sea, leading to delays in delivery schedules alongside a sharp increase in transportation costs, particularly in maritime shipping. As a result, there has also been a shortage of electronic chips (semiconductors).

The combination of the two trends noted above mainly affects the activity of the Company's cloud and computing infrastructures sector and may lead to delays in the supplies of the equipment ordered by customers of this sector in the Company, as well as an increase in the prices of the equipment. The above applies to computer and server equipment sold by the Company; printers and printing services forming the core of the subsidiary Gestetnertec's operations; audio equipment sold by the subsidiary Tech Top; multimedia components forming the core of the subsidiary AVB's operations; control, automation, and testing equipment marketed by RDT and Asio; as well as equipment imported by Ortec.

If these trends of supply delays and rising maritime transportation costs persist, they may hinder the Company's ability to meet customer demand, cause delivery delays, and/or increase the Company's procurement costs. Consequently, this could negatively impact the business results of the Company's Cloud and Computing Infrastructure segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.20. Entry into new areas of activity

As stated above (see Section 17 above), the Company's business growth strategy is based, among other things, on entry into new technological areas and new areas of activity, as well as on expansion into tangential areas of activity, which have significant business potential for continued growth over time. Of course, this is an entry (in some cases, on the basis of purchases) into areas of activity in which the Company does not have many years of cumulative experience, and as a result, the Company may incur losses due to difficulties entering such new areas, which will lead to impairment to the Company's business results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.21. Legal and insurance risks

Due to the complex nature of some of the Company's engagements, particularly in projects involving the development of systems and software solutions and the management of complex infrastructure projects, the Company is exposed to legal proceedings initiated by its customers and/or suppliers. The Company is taking steps to mitigate the said risks, both through the terms of the contract and the limitation of its liability in agreements with its customers, through the purchase of general liability and professional liability insurance, and through strict management of the projects it carries out and the services it provides, in accordance with, and fully subject to the contractual conditions underlying the legal commitment of each of those projects.

If legal claims are brought against the Company and it loses in the legal proceedings that may be opened against it as a result, in an amount that exceeds the amount of its insurance coverage, or in the event that changes are introduced in to its insurance policies, the Company's business results are liable to be adversely affected. Additionally, involvement in such legal proceedings may entail significant legal expenses for the Company, which could negatively impact its business results.

Description of the Corporation's Business 71

In addition, the software manufacturers with which the Company has contracted has limited their liability in the commitment agreements with them for damages caused to the end-user of these products. In the event that the Company is found liable for damages caused as a result of products marketed by it or as a result of projects and services performed by it, this is liable to adversely affect the Company's business results.

Furthermore, professional insurance costs have been on a sharp upward trend for several years. Since the Company takes care to maintain adequate insurance coverage for its activities, its expenses for these insurances are expected to increase and adversely affect the Company's business results.

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| | | |
|:---|:---|:---|
| **Summary of risk factors/type of risk** | **Nature of the risk** | **Risk severity** |
| **Macro risk factors** | Security situation | High |
| | The Economic and Political Situation in Israel | High |
| | An increase in the interest rate | Moderate |
| | The Political and Economic Situation in the USA | Moderate |
| | Change in the exchange rate of the dollar | Low |
| **Sectoral risk factors** | Human Capital | Moderate |
| | Mergers And Acquisitions | Moderate |
| | Competition | Moderate |
| | Cyber and information security | High |
| **Unique risk factors** | Activity Abroad | Moderate |
| **Unique risk factors** | Technological developments and changes in the IT field | Low |
| **Unique risk factors** | Technological developments in the field of artificial intelligence (AI) | Moderate/Low |
| **Unique risk factors** | Migration to cloud solutions | Low |
| **Unique risk factors** | Significant dependence on customers | Low |
| **Unique risk factors** | State budget and government tenders | Moderate |
| **Unique risk factors** | Contractual engagements with customers on a fixed price basis | Moderate |
| **Unique risk factors** | Commitments with clients for professional services | Low |
| **Unique risk factors** | Dependence on suppliers and software manufacturers | Moderate |
| **Unique risk factors** | Supply chain delays and chip shortages | Low |
| **Unique risk factors** | Entry into new areas of activity | Low |
| **Unique risk factors** | Legal and insurance risks | Low |

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Description of the Corporation's Business 72

&nbsp;&nbsp;&nbsp;&nbsp;20. Glossary

<br> For convenience, in this report, the following terms shall have the meanings set forth beside them, unless the context indicates otherwise:

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| | |
|:---|:---|
| **Term** | **Definition** |
| **"Matrix" or "the Company"** | **Matrix IT Ltd.** |
| **"the Group" or "the Matrix Group"** | **The Company and its subsidiaries** |
| **""Agile** <br> Agility (agility + flexibility)  | **An iterative approach to project management and software development that helps teams provide value to their customers and aims to enable rapid responsiveness and flexibility to changes. The "Agile" approach is based on continuous and ongoing dialogue between the staff members and the customer in order to deal with changes in requirements as early as possible and to bring about early detection of problems in the software, which will allow them to be dealt with in the early stages.** |
| **"AI"** <br> Artificial Intelligence <br> (Artificial Intelligence)  | **A branch of computer science that deals with the ability to program computers to act in a way that displays capabilities that have so far characterized only in human intelligence.** |
| **"ALM"** <br> Application <br> Lifecycle <br> Management <br> (Management of the software development life cycle)  | **Tools and methodologies that make it possible to manage the software development process in a systematic, consistent and measurable and controlled way throughout the software development life cycle.** |
| **"BCP"** <br> Business Continuity Planning <br> (Business Continuity Planning) | **A management doctrine that relates to the activity that an organization is required to perform in order to ensure that critical business functions will be available to customers, suppliers, regulators and other entities with an interest in the organization in order to prepare and organize to achieve rapid recovery capability following a disaster.** |
| **"Big Data"**<br>| **A database of extremely large complexity and volume characterized by 3 main "V"s: Volume (extent), Velocity (update rate), Variety (diversity of information types in terms of structure, type and nature of the data).** |
| **"BPO"** <br> Business Process Outsourcing  | **Transferring business processes to the operation and responsibility of an external supplier - a third party.** |
| **C<sub>4</sub> ISR** | **Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR).** |
| **"Customer Analytics"**<br>("Customer Analysis")<br>| **A process of collecting and analyzing customer data to understand their behavior, preferences, and needs. The purpose of the process is to provide businesses with actionable insights that enable them to enhance customer experience, increase sales, and improve profitability.** |

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Description of the Corporation's Business 73

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|:---|:---|
| **"Customer Experience" (CX)** | **The set of interactions the customer has with the organization. Customer experience design enables the development of a structured plan. that will help provide the customer with a positive and meaningful experience throughout all his points of contact with the organization, whether through digital or physical channels (branches, billboards, television, etc.).** |
| **"Data Science"** <br> Data science, also known as "Data-driven Science"  | **A field of scientific methods, processes, algorithms and systems for sharing knowledge or generating insights from data in various forms, structured or unstructured, similar to machine learning.** |
| **"DBA"** <br> Data Base Administration <br> (Data Base Administration)  | **Planning, design, construction, ongoing maintenance, protection and constant optimization of the organization's databases, maintaining the "health" of the database including survivability, availability, information security and performance.** |
| **"Deep Learning" <br> and "Machine Learning"<br> Machine learning or deep learning.** | Computational learning deals with algorithms that allow the computer to learn from examples and is suitable for a variety of computational tasks where classical programming is not possible.<br>Deep Learning is a subfield of machine learning that handles even more difficult problems using huge data, unique hardware and multi-parameter neural networks.  |
| **"DevOps"<br> DevOps** | **A development culture that allows Dev-Development and Ops-Operation teams to work together on software planning, development, testing, distribution and operation, through a combination of automated tools, flexible computing infrastructure and work principles.** |
| **"DRP"** <br> Disaster Recovery Plan <br> (Disaster Recovery Plan)<br>| **A plan that includes processes, policies, procedures and infrastructure used to recover from a disaster that temporarily disables the technological infrastructure essential to the operation of an organization (such as: fire, earthquake, explosion, etc.), which is a subprocess of the Business Continuity Process (BCP) detailed above.** |
| **"DTO "** <br> (Data Driven Organization)  | **An organization where decision-making is based on data analysis and the insights derived from it, rather than intuition or gut feeling.** |
| **"EIM"** <br> Enterprise Information Management <br> Enterprise Information Management  | **Enterprise Information Management (EIM) is intended to ensure the reliability, integrity, and consistency of information throughout all business processes within the organization.** |
| **"ERP"** <br> &nbsp;&nbsp;&nbsp;&nbsp;Enterprise Resource Planning  | **A system that is used for administrative data processing and handles as one piece (integrative) key business processes in the organization including: human resources, finances, logistics, production, operations, etc.** |

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Description of the Corporation's Business 74

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|:---|:---|
| **"Fixed Price"<br>**  | **A contract with a pre-agreed amount in which the supplier is responsible for completing the project and providing agreed contents, subject to the amount stipulated in the contract.** |
| **"Generative AI"**<br>| **A field of artificial intelligence that focuses on developing models that can create new and unique content.** |
| **"GRC"** <br> Governance, Risk and Compliance <br>| **A combination of three disciplines: corporate governance, risk management and compliance (for regulations, laws and internal organizational procedures). The common denominator among them is protecting and safeguarding the organization from external threats, regulatory scrutiny, and managerial failures.** |
| **"IaaS"** <br> Infrastructure as a Service<br>| **A computing model in which computing infrastructures (computing power, memory, storage space) are offered for use as a service and can be consumed in a pay-as-you-go model, where the resources provided increase/decrease as needed (On-Demand) in an elastic manner.** |
| **"IoT"** <br> Internet of Things  | **A linked set of objects, uniquely identified, that incorporate technology that allows them to connect, monitor and perform operations. The "things" act against themselves, against the environment and against other objects.** |
| **"Industry 4.0"<br>** <br>| A term representing an organizational approach to managing factories and industrial processes in an intelligent and modern manner, incorporating communication and interface capabilities between production machines and integrating technologies such as the Internet of Things (IoT), real-time data analytics, robotics, artificial intelligence, and cybersecurity.<br>In the era of Industry 4.0, machines will increasingly rely on machine learning and will be capable of making independent decisions using big data, designing the production process, and conducting simulations with the support of cloud computing. A combination of robotics and smart sensors will improve and refine the manufacturing process.  |
| **IIoT** <br>Industrial Internet of Things <br>| **A specific type of IoT applied in the industrial sector (Industrial IoT) within manufacturing plants. Focusing on machine-to-machine (M2M) communication, big data, and machine learning, IIoT enables industries and organizations to achieve greater efficiency and reliability in manufacturing floor operations.** |
| **"ITSM"** <br>IT Service Management<br>| **All activities guided by policies, processes, and procedures that regulate the IT services provided by the information systems organization to its internal and external customers.** |

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Description of the Corporation's Business 75

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|:---|:---|
| **Low Code**<br>| A code development method using graphical interfaces and configuration tools alongside traditional code development. Enables rapid application development and significantly accelerates the path to functional applications.  |
| **"Nearshore"** | **A branch of outsourcing that involves transferring various professional activities, which are not part of the Company's core business, to specialized companies operating in the same country as the Company itself.** |
| **"Managed Services"**<br>| **Managed Services is a business practice in which an organization transfers the responsibility for managing and operating certain parts of its IT infrastructure or business processes to an external provider. The Managed Services Provider (MSP) assumes responsibility for monitoring, maintenance, support, and management of systems and applications, ensuring optimal performance and security.** |
| **"NLP"** <br> Natural Language Processing<br>| **A subfield of artificial intelligence and linguistics that investigates the problems associated with the processing and manipulation of natural language, and the understanding of natural language in order to make computers "understand" things that are said or written in human languages.** |
| **"OEM"** <br> Original Equipment Manufacture<br>| **A term used in various fields of production (including computing), which describes a manufacturer who integrates into its product a component (hardware or software) purchased from another Company.** |
| **Offshore** | In the Offshore model, organizations engage foreign suppliers and transfer various professional activities to them, whereas in the Nearshore model, organizations outsource professional activities to suppliers from the same country or nearby regions. |
| **"PaaS"** <br> Platform as a Service<br>| **A service that provides a platform for developing, running, and managing applications over the network using a subscription model and/or a pay-per-use model.** |
| **"PLM"**<br>Product Lifecycle Management <br>| **The process of managing the engineering knowledge in the life cycle of the product from the idea stage, through the stages of design, detailed design, production, marketing and sales, service and recycling or disposal.** |
| **"RPA" –**<br>Robotic Processing Automation<br>| **Software that becomes repetitive and rule-based processes performed by humans into automatic processes performed by bots.** |
| **"SaaS" –**<br>Software as a Service  | **The delivery of applications (such as email, billing, ERP, CRM) as services over the network, without local installation, using a subscription model and/or a pay-per-use model (Pay Per Use).** |

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Description of the Corporation's Business 76

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|:---|:---|
| **"SLA" -** <br>Service Level Agreement<br>| **A legal agreement between the service provider and the service recipient that quantitatively and conclusively defines the framework of the service, its content, how it is measured and its limitations. The agreement may include a penalty/reward mechanism based on compliance with the required service level.** |
| **"SOC" -**<br>Security Operation Center<br>| **An information security center in an organization that includes personnel, processes and dedicated technology for the purpose of prevention, detection, monitoring, analysis and ongoing response to information security and cyber incidents.** |
| **"Soft Skills" –**<br>| **The set of skills which are required for an employee/person as a basis for achieving his goals and are not derived directly from his profession/specialization (for example: interpersonal communication, presentation and public speaking skills, persuasion skills, negotiation skills, etc.).** |
| **"T&M"–**<br>Time & Materials<br>| **A billing method based on actual time worked plus the cost of materials.** |
| **"SOW"**<br>(Statement of Work)<br>| An official document defining all aspects of a specific project, including scope of work, deliverables, timelines, budget, and terms.<br>|
| **"WMS" -<br> Warehouse Management System** | WMS is software that allows you to manage logistics warehouses efficiently and effectively, sometimes in combination with robotic systems.<br>|

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Description of the Corporation's Business 77

![](image_004.jpg)<br>**CHAPTER B**<br>Board of Directors' Report<br> for the year ended<br> December 31, 2024<br>

![](image_032.jpg)

Board of Directors' Report 1 CHAPTER B Board of Directors' Report for the year ended December 31, 2024 The information contained in the Report of the Board of Directors published by the Company, constitutes a translation of the Report of the Board of Directors published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal e ﬀ ect. This translation was prepared for convenience purposes only .

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| | |
|:---|:---|
| <br>![](ex9914_005.jpg)<br>| ![](ex9914_004.jpg) |

---

1. The
 Board of Directors' Explanations for the State of the Corporation's affairs 4

1.1. Main data
 from the description of the Corporation's affairs - 2024 4

1.1.1. Description
 of activity segments 4

1.1.2. Business
 Environment 4

1.1.3. Material
 events during the reporting period 8

1.1.4. Material events
 after the date of the financial statements 8

1.1.5. Key breakdown
 of operating results in the past 5 years (2020-2024) 9

1.1.6. Condensed
 statements of consolidated income for the years ended December 31, 2024 and December 31, 2023 and for the fourth
 quarter of 2024 ended on those same dates 12

1.2. Analysis
 of results of operations 13

1.2.1. Seasonality 13

1.2.2. Consolidated
 analysis of profit and loss 13

1.2.3. Condensed
 results of consolidated profit and loss by quarters for 2024 including the fourth quarter of 2023 18

1.2.4. Condensed
 results of consolidated profit and loss by operating segments for 2024 compared with 2023 and for the fourth quarter of 2024 compared
 to the fourth quarter of 2023 19

1.2.5. Analysis
 of results of operations by according to operating segments for 2024 compared with 2023 22

1.2.6. Commitments
 and special events 27

1.3. Financial
 position, liquidity, and financial sources 27

2. Exposure
 to market risks and their management 31

---

| | | |
|:---|:---|:---|
| 3. | Aspects of corporate governance | 32 |
| 3.1. | Donations policy | 32 |
| 3.2. | Directors with accounting and financial expertise | 32 |
| 3.3. | Independent directors | 32 |
| 3.4. | Disclosure regarding the internal auditor in the corporation | 32 |
| 3.5. | Disclosure regarding auditors' fees | 34 |
| 3.6. | The work of the Board of Directors and its committees | 34 |
| 4. | Disclosure provisions in connection with the corporation's financial reporting | 35 |
| Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date | Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date | 36 |

---

Board of Directors' Report 3

1. The Board of Directors' Explanations for the Corporation's results of operations and financial position

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. Key Data from the Corporation's Business Description

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.1. Description of operating segments

Matrix IT Ltd., together with its subsidiaries, is a company operating in the fields of information technology (IT) solutions and services, consulting, and management in Israel and overseas.

The Matrix Group employs approximately 11,570 software, hardware, engineering, integration, and training personnel, who provide services in advanced fields of information and management technology to hundreds of customers in the Israeli market as well as customers in the U.S. market. The Group also engages in the sale and marketing of software and hardware products from a wide range of manufacturers from Israel and overseas, as well as the provision of consulting, project management and multidisciplinary engineering consulting services.

The Company has four areas of activity: (1) Information Technology Solutions and Services, Consulting, and Management in Israel ("**IT Solutions and Services, Consulting and Management in Israel**"); (2) Information Technology Solutions and Services in the United States ("**IT Solutions in the US**"); (3) Sales, Marketing, and Support of Software Products ("**Software Products**"); and (4) Cloud and Computing Infrastructures ("**Cloud and Computing Infrastructures**"). These provide solutions, services, and products mainly to the following customer sectors **("sectors"):** banking and finance, high-tech and startups, government and the public sector, defense, transportation, health, industry, retail and trade, education and academia. Unique divisions operate in each one of these sectors, specializing in providing specific solutions to the particular sector in which they operate, as well as managing and carrying out projects for the Company's lateral entities. <br> The specialization in the various sectors is reflected in the applicative, professional, and marketing facets of that sector. Accordingly, a professional and marketing infrastructure is developed in each sector which is required to support such sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.2. Business Environment<sup>1</sup>

The business environment in which the Company operates is directly affected by global and local trends and events, the most significant of which will be presented below.

**Global Economic Environment** 

As of the date of this report, the global economy has continued to stabilize after facing the effects of the significant increase in inflation rates in recent years, which was followed by rising interest rates during the post-COVID-19 recovery period.

Inflation decreased over the past two years and is currently at 3% (January 2025, in annual terms, based on the last 12 months – LTM). Parallel to the decrease in inflation, the US Federal Reserve Bank decreased interest rates from 5.5% to 4.5%. The eurozone has also stabilized in the past year with an inflation rate of approximately 2.5% (January 2025-LTM). This stabilization in inflation was accompanied by a reduction in interest rates, from 4.5% to 2.65%.

Nevertheless, there are still concerns of additional inflationary outbreaks (and in recent months, there have even been increases – albeit slight ones – in price indices). This is due, *inter alia*, to the expected increase in customs tariffs (due, *inter alia*, to the new US administration's stated policies) and the possibility of the development and/or worsening of geopolitical conflicts.

<sup>1</sup> Within this section, various data based on studies and different websites were included. The Company did not request, and in any case did not receive, the consent of the editors of the aforementioned websites for the inclusion of such information in the report. Such information is publicly available to the best of the Company's knowledge. Additionally, no verification was conducted by the Company regarding their accuracy or reliability.

Board of Directors' Report 4

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.3. Israel Economic Environment

The main global economic trends described above occurred, to a large extent, in the Israeli economy as well. At the same time, the Israeli economy was materially impacted in the past year by unique and complex local events that had a substantial impact, primarily the Iron Swords War.

<u>National Security Situation</u>

The Iron Swords War broke out on 7 October 2023, following a murderous attack by the terrorist organization Hamas on communities surrounding Gaza and other communities in the south of the country. The war against terror organizations (that are supported by Iran) continues in the Gaza Strip, in Lebanon, and in Syria. In October 2024, the fighting on the northern border of the State of Israel against the Hezbollah terrorist organization intensified, ending, as of this date, with the signing of a ceasefire agreement at the end of 2024.

Additionally, there is direct conflict with Iran, which has carried out two direct attacks by launching ballistic and cruise missiles as well as UAVs against the State of Israel. In October 2024, in response to the Iranian attacks against it, the State of Israel attacked military and other targets on Iranian soil. In light of the ceasefire on its northern border, the likelihood of an Iranian response to this attack has decreased, but it should be noted that a renewed escalation with Iran may have a significant impact on the State of Israel, the Middle East and other countries that are involved.

The war has thus far cost the lives of more than 1,800 Israelis and led to thousands more being injured. In addition, approximately 240 civilians and soldiers have been kidnapped by the terrorist organizations and dozens of them are still being held as hostages.

As of the date of the reporting date, the continuation of the war, on each of its fronts, remains unclear.

The security situation and the uncertainty surrounding it, naturally impact economic activity, and this has led to a decrease in the growth forecast and an expected increase in the government deficit and the country's debt-to-GDP ratio. Similarly, international ratings agencies downgraded State of Israel's sovereign credit rating significantly because of the increased geopolitical risks as a result of the worsening of hostilities and the concern over long-term harm to the Israeli economy. Credit ratings are currently: Moody's - Baa1 (negative outlook); S&P - A- (negative outlook). The increased perception of the risk faced by the State of Israel is also expressed in the yield on State of Israel government bonds. Nevertheless, as of the second half of 2024 and following Israel's military successes, signs of improvement in economic indicators have been observed . Thus, despite the many difficulties and challenges facing the business environment, the Israeli economy has demonstrated robustness and resilience. As noted, economic activity in Israel has begun to recover from the second half of the year.

Board of Directors' Report 5

<u>Economic Indicator</u>

It should be noted that even before the outbreak of the war, the Israeli economy faced high inflation and rising interest rates, inter alia, on the background of the legal reform and the wave of social protests that arose in its wake. These trends slowed in late 2023 and the first half of 2024. Accordingly, in January 2024, the Bank of Israel lowered the interest rate to 4.5% and this rate remains unchanged as at the reporting date. The slowdown in inflation reversed during the second half of 2024. The CPI increased (January index - LTM) by 3.8%.

The Company estimates that the inflationary impact on the results of its operations is immaterial, inter alia, because the Company's financial debt is not linked to the CPI. On the other hand, rising interest rates may negatively affect the results of the Company's operations by increasing financial costs for variable-interest loans (commercial securities and short-term bank loans), as well as for new fixed-interest loans that will replace loans that come due. In this context, it should also be noted that the main component of the Company's expenses is wages (about 55% of the Company's operating expenses), which, in the Company's assessment, are impacted mainly by trends in supply and demand of technological staffing, and inflation is expected to have a limited effect on them.

In terms of real economic activity - GDP grew by 0.6% in 2024, and according to the Bank of Israel forecast,<sup>2</sup> it is expected to grow by 4% in 2025.

Heavy war-related spending has led to an increase in Israel's trade deficit, which was 7% of GDP in December 2024, (reflecting a decrease compared to the data for September 2024 - 8.3%, but a sharp increase compared to 1.5% of GDP on the eve of the war). According to the Bank of Israel forecast, the deficit is expected to be 4.7% at the end of 2025.

Similarly, the unemployment rate in the economy remains low - 2.6% in December 2024, and reflects a tight labor market.

<u>The High-Tech Industry</u> 

As a provider of IT solutions, products, and services, the Company competes with other companies in the high-tech industry for quality personnel. In addition, a significant part of the Company's revenues (approximately 16% in 2024) are to companies in the high-tech sector. The past two years have been challenging for the Israeli high-tech sector. This is reflected, inter alia, in a decline in the number of startups and a decrease in demand for technological staffing (with an emphasis on inexperienced employees – juniors). Accordingly, in 2024, there was a halt in growth in terms of the absolute numbers of high-tech employees, remaining steady at around 400,000 employees – about 11% of the Israeli workforce.<sup>3</sup>

In the Company's assessment, the staffing reduction trend in high-tech companies may make it easier for the Company to recruit and retain employees, and to mitigate the pressure for wage increases on the part of the employees. On the other hand, the uncertainty in the high-tech industry could lead to a decrease in demand and even harm some of the Company's customers in this operating sector and consequently, harm the Company's operating results.

<sup>2</sup> https://www.boi.org.il/publications/pressreleases/6-1-25/

<sup>3</sup> https://dbisrael.co.il/wp-content/uploads/2025/01/%D7%A1%D7%99%D7%9B%D7%95%D7%9D-%D7%A9%D7%A0%D7%AA-2024.pdf

Board of Directors' Report 6

<u>Effect on the Company's Operating Results</u> 

As detailed below, despite the limited negative impact of the war on the Company's results, its operations in 2024 were characterized by a continued growth in operating volumes, revenues, profit, and cash flow.

As at the date of the financial statements and as at the reporting date, approximately 170 and approximately 125 of the Company's employees (respectively) are on active reserve duty, compared to approximately 470 who were on active duty at the end of December 2023.

In respect of employees serving in the reserves, during the reporting period, the Company recorded net expenses due to only partial reimbursement from the State. In May 2024, the National Insurance Regulations (Indemnification of Employers for the Period of Emergency Reserve Duty) (Temporary Provision – Iron Swords), were published. These regulations provide reimbursement to employers for pension contributions for employees who were called up for reserve duty during the state of emergency, up to 20% of the reserve duty remuneration. Accordingly, starting in the second quarter of the year, the Company received said indemnification from the National Insurance Institute. This indemnification was recorded in the financial statements as a decrease in cost of revenues. Out of said reimbursements, approximately NIS 6 million was retroactive reimbursement for Q4/23 and the remainder was for the current year.

For further details, see Section 19 of the Chapter: "Description of the Corporation's Business."

*The information mentioned above in this section concerning the Company's assessments as to the impact on the war on its operations, a war that is at its peak and whose full effects and implications have not yet been ascertained, the Company's economic environment, and developments in the high-tech industry, constitutes forward-looking information, as defined in the Securities Law, 1968 (the "Securities Law"). It is based on management's assessments and business experience, as well as assumptions, various scenarios, analyses, and public information, along with the assessments of research companies and analysts as of the report date. The information may not materialize, in whole or in part, or materialize differently, including in a manner that is materially different than expected, inter alia, as a result of high uncertainty, economic instability, and developments that cannot be assessed at this time in connection with the war, its duration, intensity, and impact, including in relation to the functioning of the economy and the home front, as a result of market competition, economic slowdown or instability in the economy, and as a result of the realization of all or part of the risk factors appearing in Section 19 of the Company's Periodic Report.*

Board of Directors' Report 7

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.4. Material events during the reporting period

**Changing auditors**

On 3 April 2024, a resolution was passed at the general meeting of the shareholders to appoint the auditing firm BDO Israel as the Company's auditor, starting from the first quarter of 2024, and to terminate the engagement with Ernst & Young – Kost Forer Gabbay & Kasierer (E&Y) on that date. See the Company's report dated 11 March 2024 (ref.: 2024-01-024189) for details.

**Commercial Securities**

Further to Note 10c to the Consolidated Financial Statements regarding (non-marketable) commercial securities (Series 1) (the "Commercial Securities"), in March 2024, the Company received the consent of the holders of the Commercial Securities to extend the term of the Commercial Securities by another five years, until 29 November 2029. <br> On 18 July 2024, the Company expanded this series of Commercial Securities by an additional NIS 100 million (for a total of NIS 300 million par value Commercial Securities). Similarly, the terms of the Commercial Securities have been amended such that as of that same date, the Commercial Securities bear variable interest at the Bank of Israel rate plus 0.25% (instead of 0.5%), and without any modification to the remaining terms of the Commercial Securities.

On 19 February 2025, the holders' consent was obtained to extend the Commercial Securities 's duration until 21 February 2030.

**Acquisition of Alacer's U.S. Operations**

See Note 3(d) to the consolidated financial statements for details.

**Acquisition of Ortec**

On 3 December 2024, the Company, through its subsidiary Matrix I.T. Integration and Infrastructure, completed the acquisition of 100% of the share capital of Moshe Ort Holdings Ltd. ("Ortec") for the sum of NIS 19.5 million (including equity) plus additional consideration that is contingent on the Company's future financial results. Ortec imports, distributes, sells and provides support and characterization services for automatic manufacturing machines used for component assembly, as well as automated inspection machines used for assembly processes and components on production lines in the sectors of industry equipment, medical devices, military equipment, lasers, and sensors for civilian and security applications, optical communication systems, radar systems for cars. Additionally, it serves, *inter alia*, as a representative in Israel for dozens of international manufacturers.

See Note 3e to the financial statements for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.5. Material events after the date of the financial statements

**Acquisition of Gav Systems**

On 4 February 2025, the Company, through its subsidiary Matrix I. T. Systems Ltd., completed the acquisition of 70% of the share capital of Gav Systems Ltd. and Gav Express Ltd. for the sum of NIS 45.5 million (including equity). Pursuant to the agreement, the Company and the seller have a mutual option for the sale and purchase of the seller's remaining shares to the Company. The company provides professional services, primarily in the fields of computing and software development. Pursuant to the purchase agreement, the Company and the seller have a mutual option to sell and purchase the seller's remaining shares to the Company. The Company is expected to consolidate the operating results of Gav Systems in its financial statements as of the beginning of the first quarter of 2025. See Note 25 to the financial statements for details.

Board of Directors' Report 8

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.6. Key breakdown of operating results in the past 5 years (2020-2024)

\*Neutralizing the increased revenues presented on a net basis, the growth in revenues in 2024 and in the quarter came to 10% and 10.2%, respectively. See Section 1.2.2 below for additional explanations.

![](ex9914_010.jpg)

\* In 2022 includes a capital gain from the realization of an investment in Infinity in the gross amount of NIS 150.1 million and NIS 121.6 million after tax.

Board of Directors' Report 9

![](ex9914_011.jpg)

![](ex9914_012.jpg)

\* In 2022 includes a capital gain from the realization of an investment in Infinity in the gross amount of NIS 150.1 million and NIS 121.6 million after tax.

Board of Directors' Report 10

![](ex9914_013.jpg)

![](ex9914_014.jpg)

\* In 2022 includes a capital gain from the realization of an investment in Infinity in the gross amount of NIS 150.1 million and NIS 121.6 million after tax.

Board of Directors' Report 11

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1.7 Condensed statements of consolidated income for the years ended December 31, 2024 and December 31, 2023 and for the fourth quarter of 2024 ended on those same dates (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the year<br> ended** | **For the year<br> ended** | **Change <br> in %** | **For the three months ended** | **For the three months ended** | **Change <br> in %** |
| | **31.12.24** | **31.12.23** | | **31.12.24** | **31.12.23** | |
| Revenues | 5579538 | 5232105 | \*6.6% | 1374283 | 1320690 | \*4.1% |
| Cost of revenues and services | 4746544 | 4467925 | 6.2% | 1155265 | 1117274 | 3.4% |
| **Gross profit** | **832994** | **764180** | **9%** | **219018** | **203416** | **7.7%** |
| **% of revenues** | **14.9%** | **14.6%** |  | **15.9%** | **15.4%** |  |
| Selling and marketing expenses | 196231<br>| 189698<br>| 3.4%<br>| 49918<br>| 51275<br>| (2.6%)<br>|
| General and administrative expenses | 186689 | 181063 | 3.1% | 49140 | 51129 | (3.9%) |
| **Operating income** | **450074** | **393419** | **14.4%** | **119960** | **101012** | **18.8%** |
| **% of revenues** | **8.1%** | **7.5%** |  | **8.7%** | **7.6%** |  |
| Financial expenses, net | 66872 | 68233 | (2.0%) | 19298 | 18908 | 2.1% |
| Profit before taxes on income | 383202 | 325186 | 17.8% | 100662 | 82104 | 22.6% |
| Taxes on income | 94978 | 78331 | 21.3% | 26679 | 20183 | 32.2% |
| **Net income** | **288224** | **246855** | **16.8%** | **73983** | **61921** | **19.5%** |
| **% of revenues** | **5.2%** | **4.7%** |  | **5.4%** | **4.7%** |  |
| **Net income attributable to:** |  |  |  |  |  |  |
| Equity holders of the company | 272422 | 227333 | 19.8% | 69885 | 56537 | 23.6% |
| Non-controlling interests | 15802 | 19522 | (19.1%) | 4098 | 5384 | (23.9%) |
| **Net income** | **288224** | **246855** | **16.8%** | **73983** | **61921** | **19.5%** |
| **%** | **5.2%** | **4.7%** |  | **5.4%** | **4.7%** |  |
| EBITDA<sup>4</sup> | 636885 | 597038 | 6.7% | 168949 | 155020 | 9% |
| % of revenues | 11.4% | 11.4% |  | 12.3% | 11.7% |  |

---

\* Neutralizing the increased revenues presented on a net basis, the growth in revenues in 2024 and in the fourth quarter came to 10% and 10.2%, respectively. See Section 1.2.2 below for additional explanations.

<sup>4</sup> Earnings before interest, taxes, depreciation and amortization

Board of Directors' Report 12

1.2. Analysis of results of operations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.1. Seasonality

In the fourth quarter of 2024, the number of work hours was approximately 5.2% lower compared to the corresponding quarter. This was due to the timing of the Jewish High Holidays, that in 2024 occurred during the fourth quarter, whereas during the parallel period, they fell on the third quarter. (For details, see also, section 9 of the Chapter "Description of the Corporation's Business" as at 31 December 2024, regarding "Seasonality.") Mostly, the impact of said seasonality was on the IT, Consulting, and Management in Israel segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.2. Analysis of results of activity

**1)** **The Company's revenues** in 2024 amounted to NIS 5,579.5 million, compared to NIS 5,232.1 million in 2023, an increase of approximately 6.6%. The growth rate in revenues, adjusted for the increase in revenues accounted for on a net basis, is about 10%. (See Section 5 below for details).

The Company's revenues in the fourth quarter amounted to NIS 1,374.3 million, compared to NIS 1,320.7 million in the corresponding quarter, an increase of approximately 4.1%. The growth rate in revenues in the fourth quarter, adjusted for the increase in the volume of revenues accounted for on a net basis, is about 10.2%. ((See Section 5 below for details). This growth was achieved despite the decreased number of work hours during the quarter, as noted forth above.

The increase in revenues in 2024 and during the fourth quarter comparted to the corresponding periods derived primarily from an increase in the scope of operations in the IT Solutions and Services, Consulting and Management in Israel segment, and in the Marketing and Support of Software Products segment, offset in part by a decrease in revenues, in the IT Solutions and Services in the US segment.

The vast majority of the growth in revenues was organic, as the first-time consolidation of results of acquired companies is at the end of 2024 - Ortec (as of December 2024) and Alacer (as of the fourth quarter of 2024). Net of the effect of the consolidation of these companies for the first time, the Company recorded organic growth in revenues of approximately 6.5% and 3.6% in 2024 and the fourth quarter, respectively (organic growth neutralizing the effect of the increase in revenues recorded on a net basis of approximately 9.9% and 9.7% in 2024 and during the fourth quarter, respectively).

**2)** **Gross profit** in 2024 came to NIS 833 million (approximately 14.9% of revenues) compared to NIS 764.2 million in 2023 (approximately 14.6% of revenues), an increase of 9%.

Gross profit in the fourth quarter amounted to a record NIS 219 million (approximately 15.9% of revenues), compared with NIS 203.4 million in the corresponding quarter (approximately 15.4% of revenues), an increase of 7.7%.

The increase in gross profit and gross margin in 2024 and in the fourth quarter is driven mainly by an increase in revenues as well as by operational efficiency measures carried out by the Company.

Gross profit in 2024 was positively affected as a result of indemnification for 2023 in respect of pension deposits for reservists, in the amount of approximately NIS 6 million that was received from the National Insurance Institute in the second quarter of this year.

Board of Directors' Report 13

**3)** **Sales, marketing, general & administrative, expenses** in 2024 amounted to NIS 382.9 million (approximately 6.9% of revenues), compared to approximately NIS 370.7 million in 2023 (approximately 7.1% of total revenues), an increase of NIS 12.2 million. The increase in SG&A expenses in 2024 derived primarily from an increase in the volume of the Company's operations, while its percentage out of total revenues decreased.

SG&A expenses in the fourth quarter amounted to NIS 99 million (approximately 7.2% of revenues), compared to approximately NIS 102.4 million in the corresponding quarter (approximately 7.8% of total revenues), a decrease of NIS 3.4 million.

It should be noted that selling expenses include an amount of NIS 22.2 million and NIS 5.9 million during the period and during the quarter, respectively, for amortization of intangible assets deriving from business combinations, compared to NIS 26.7 million and NIS 6.8 million during the corresponding periods.

General & administrative expenses include an amount of NIS 18 million and NIS 4.5 million during the period and the quarter, respectively, for the costs of share-based payments to officers and senior executives, as compared with NIS 16.1 million and NIS 4.5 million in the corresponding periods.

4) Operating income

Operating income in 2024 came to NIS 450 million (approximately 8.1% of revenues) compared to NIS 393.4 million in 2023 approximately 7.5% of revenues), an increase of 14.4%.

The Operating income in the fourth quarter amounted to NIS 120 million (about 8.7% of revenues), compared to NIS 101 million (about 7.6% of revenues), in the corresponding quarter, an increase of about 18.8%.

The increase in Operating income during the period and during the quarter compared to the corresponding periods is attributed mainly to growth in profit in all segments, except for the decrease in the IT Solutions in the US segment.

The absolute majority of the increase in Operating income is the result of organic growth. Further to the details provided in the revenues chapter above, Net of the effect of the consolidation for the first time of Ortec and Alacer, operating income grew organically by 13.6% and 15.5% during the period and the quarter, respectively.

For the impact of the increase revenues from transactions whose accounted for on a net basis on the operating income margin, see Section 5, below.

5) Key results of the Company adjusted for the impact of revenues accounted for on a net basis

During the period and during the fourth quarter, the Company recorded an increase in revenues , which, according to IFRS, must be recognized on a net basis (most of the increase was in the Cloud and Computing Infrastructure segment). This affects the Company's revenues, revenue growth rate, and profit margin.<br> For the sake of comparability, the following analysis presents the Company's revenues and operating income, net of the impact of gross/net revenue presentation.

Board of Directors' Report 14

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the year<br> ended** | **For the year<br> ended** | **Change <br> in %** | **For the three months ended** | **For the three months ended** | **Change<br> in %** |
| | **31.12.24** | **31.12.23** | | **31.12.24** | **31.12.23** | |
| **Revenues** | 5579538 | 5232105 | 6.6% | 1374283 | 1320690 | 4.1% |
| **Adjustments for the increase in revenues accounted for on a net basis** | 177441 |  |  | 81173 |  |  |
| **Adjusted revenues** | **5756979** | **5232105** | **10%** | **1455456** | **1320690** | **10.2%** |
| Operating income | 450074 | 393419 | 14.4% | 119960 | 101012 | 18.8% |
| **% of revenues** | **7.8%** | **7.5%** |  | **8.2%** | **7.6%** |  |

---

6) Financial expenses (net)

Financial expenses (net) in 2024 amounted to NIS 66.9 million, compared with financial expenses (net) in the amount of NIS 68.2 million in 2023. <br> Financial expenses (net) in the fourth quarter amounted to NIS 19.3 million, compared with financial expenses (net) in the amount of NIS 18.9 million in the fourth quarter of 2023.

The following are the details the financial expenses (NIS thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> year<br> ended** | **For the<br> year<br> ended** | **For the<br> three<br> months<br> ended** | **For the three months ended** |
|  | **31.12.24** | **31.12.23** | **31.12.24** | **31.12.23** |
| Interest, commissions, and other (net) | 25442 | 39530 | 6088 | 8413 |
| Exchange rate differences | 14321 | 1403 | 4598 | 5851 |
| Accounting finance expenses\* | 27109 | 27300 | 8612 | 4644 |
| **Total financial expenses, net** | **66872** | **68233** | **19298** | **18908** |

---

As noted above, the decrease in financial expenses, net, in 2024, compared with previous year, is due to a decrease in interest expenses on the Company's financial liabilities (net of financial income from investments and deposits), primarily in light of the continued decrease in the scope of the Company's financial debt. The decrease in net interest expenses was offset for the most part by an increase in exchange difference expenses during the period compared with the corresponding period. The slight increase in net financial expenses in the quarter compared to the corresponding quarter is due to an increase in accounting financial expenses (deriving primarily from the revaluation of existing put options to minority shareholders derived from the increased profitability in these subsidiaries). The increase in accounting financial expenses during the quarter was partially offset by a decrease in net interest expenses and exchange difference expenses.

\* Financial expenses in respect of leases, adjustments for put options for non-controlling interests in subsidiaries, and adjustments for actuarial obligations to employees.

Board of Directors' Report 15

7) Taxes on income

Tax expenses in 2024 amounted to NIS 95 million (about 24.8% of profits before tax), compared to NIS 78.3 million in 2023 (about 24.1% of profits before tax).

Tax expenses in the fourth quarter amounted to NIS 26.7 million (approximately 26.5% of profits before tax) compared to NIS 20.2 million (approximately 24.6% of profits before tax) in the corresponding quarter of the previous year.

The increase in tax expenses reflects the increase in profit. The increase in the Company's effective tax rate in the period and in the quarter, compared with the corresponding periods, is mainly due to an increase in non-tax deductible (such as revaluation of put options for minority shareholders in subsidiaries).

8) Net income

Net income in 2024 amounted to NIS 288.2 million (approximately 5.2% of revenues), compared to NIS 246.9 million (approximately 4.7% of revenues) in 2023, an increase of approximately 16.8%.

Net income in the fourth quarter amounted to NIS 74 million (about 5.4% of revenues), compared to NIS 61.9 million (about 4.7% of revenues), in the corresponding quarter , an increase of about 19.5%.

9) Net income attributable to Equity holders of the company

Net income attributable to Equity holders of the company in 2024 amounted to NIS 272.4 million (approximately 4.9% of revenues), compared to NIS 227.3 million (approximately 4.3% of revenues) in 2023, an increase of approximately 19.8%.

The net income attributable Equity holders of the company in the quarter amounted to NIS 69.9 million (about 5.1% of revenues), compared to NIS 56.6 million (about 4.3% of revenues) in the corresponding quarter, an increase of about 23.6%.

**10)** **comprehensive income (NIS thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> year<br> ended** | **For the <br> year<br> ended** | **For the three months ended** | **For the three months ended** |
|  | **31.12.24** | **31.12.23** | **31.12.24** | **31.12.23** |
| Net income | 288224 | 246855 | 73983 | 61921 |
| Other comprehensive income (net of tax effects) |  |  |  |  |
| Amounts that will not be subsequently reclassified to profit or loss: |  |  |  |  |
| Actuarial gain (loss) from remeasurement of defined benefit plans | 2722 | 3280 | 799 | (705) |
| Amounts that will be classified or reclassified to profit or loss if specific conditions are met: |  |  |  |  |
| Change in fair value of instruments used in cash flow hedging | (4) | (532) | 128 | 112 |
| Adjustments for translation of financial statements of foreign operations | (1140) | 11981 | (9329) | (18232) |
| **Total comprehensive income** | **289802** | **261584** | **65581** | **43096** |

---

Board of Directors' Report 16

11) Income before interest, taxes, depreciation and amortization - EBITDA (NIS thousands)

EBITDA figure is presented as it is a widely accepted indicator for measuring the performance in comparable companies, and it represents an approximation of cash flows from operating activities, that neutralizes the effect from the operating income expenses not involving cash flows, which excludes non-cash operating income and expenses, such as depreciation and amortization, including of intangible assets acquired in business combinations.

Below are the EBITDA and adjusted EBITDA, net of IFRS 16:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **Change in %** | **For the three months ended** | **For the three months ended** | **Change in %** |
|  | **31.12.24** | **31.12.23** | | **31.12.24** | **31.12.23** | |
| Operating income | 450074 | 393419 | 14.4% | 119960 | 101012 | 18.8% |
| Depreciation and amortization<sup>5</sup> | 186811 | 203619 | (8.3%) | 48989 | 54008 | (9.3%) |
| **EBITDA** | **636885** | **597038** | **6.7%** | **168949** | **155020** | **9%** |
| % of revenues | 11.4% | 11.4% |  | 12.3% | 11.7% |  |
| Net of depreciation expenses IFRS 16<sup>6</sup> | 130704 | 137903 | (5.2%) | 34120 | 36310 | (6%) |
| **EBITDA net of <br> IFRS 16** | <br> **506181** | **<br> 459135** | **<br> 10.2%** | **<br> 134829** | **<br> 118710** | **<br> 13.6%** |
| % of revenues | 9.1% | 8.8% |  | 9.8% | 9.0% |  |

---

12) Diluted net earnings per share attributable to the Company shareholders

---

| | |
|:---|:---|
| **Year** | **NIS** |
| 2024 | 4.29 |
| 2023 | 3.58 |
| 2022<sup>\*</sup> | 5.30 |
| 2021 | 3.09 |
| 2020 | 2.74 |

---

\* Net of the net capital gain from the realization of Infinity – NIS 3.37 per share.

<sup>5</sup> Most of the decrease in depreciation and amortization expenses in 2024 and in the fourth quarter, compared to the corresponding periods, is attributable to the acceleration of the amortization and depreciation of property, plant, and equipment in 2023, in connection with the Company's main office building in Herzliya, ahead of the relocation to the new building in Kfar Saba.

<sup>6</sup> In accordance with International Financial Reporting Standard Leases IFRS16 (presented under depreciation and financing expenses).

Board of Directors' Report 17

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.3. Summary of consolidated profit and loss results by quarters for 2024 including the fourth quarter of 2023 (NIS thousands)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Q4/24** | **Q3/24** | **Q2/24** | **Q1/24** | **Q4/23** |
| Revenues | 1374283 | 1418810 | 1332732 | 1453713 | 1320690 |
| Cost of revenues and services | 1155265 | 1213763 | 1130946 | 1246570 | 1117274 |
| **Gross profit** | **219018** | **205047** | **201786** | **207143** | **203416** |
| **% of revenues** | **15.9%** | **14.5%** | **15.1%** | **14.2%** | **15.4%** |
| Selling and marketing expenses | 49918 | 48650 | 46615 | 51048 | 51275 |
| General and administrative expenses | 49140 | 48216 | 43916 | 45417 | 51129 |
| **Operating income** | **119960** | **108181** | **111255** | **110678** | **101012** |
| **% of revenues** | **8.7%** | **7.6%** | **8.3%** | **7.6%** | **7.6%** |
| Financial expenses, net | 19298 | 16155 | 14833 | 16586 | 18908 |
| Profit before taxes on income | 100662 | 92026 | 96422 | 94092 | 82104 |
| Taxes on income | 26679 | 22308 | 23321 | 22670 | 20183 |
| **Net income** | **73983** | **69718** | **73101** | **71422** | **61921** |
| **% of revenues** | **5.4%** | **4.9%** | **5.5%** | **4.9%** | **4.7%** |
| **Other comprehensive income (after the effect of tax):** |  |  |  |  |  |
| Adjustments for translation of financial statements | (9329) | (3705) | 7065 | 4829 | (18232) |
| Remeasurement of defined benefit plans | 799 | (5) | 1138 | 790 | (705) |
| Change in fair value of instruments used in cash flow hedging | 128 | 63 | (272) | 77 | 112 |
| **Total comprehensive income** | 65581 | 66071 | 81032 | 77118 | 43096 |
| **Net income attributable to:** |  |  |  |  |  |
| Company shareholders | 69885 | 64396 | 69495 | 68646 | 56537 |
| Non-controlling interests | 4098 | 5322 | 3606 | 2776 | 5384 |
| **Net income** | **73983** | **69718** | **73101** | **71422** | **61921** |
| **Total comprehensive income attributable to:** |  |  |  |  |  |
| Company shareholders | 61497 | 60691 | 77570 | 74046 | 37774 |
| Non-controlling interests | 4084 | 5380 | 3462 | 3072 | 5322 |
| **Total comprehensive income** | 65581 | 66071 | 81032 | 77118 | 43096 |

---

Board of Directors' Report 18

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.4. Condensed results of consolidated profit and loss by operating segments for 2024 compared with 2023 and for the fourth quarter of 2024 compared to the fourth quarter of 2023<sup>7</sup> (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the year<br> ended** | **For the year<br> ended** | **Change<br> in %** | **For the three months <br> ended** | **For the three months ended** | **Change <br> in %** |
| | **31.12.2024** | **31.12.2023** | | **31.12.2024** | **31.12.2023** | |
| **Revenues according to operating segment:** | | | | | | |
| IT Solutions and Services, Consulting and Management in Israel <sup>(1)</sup> | 3337267 | 3119493 | 7.0% | 819026 | 780292 | 5.0% |
| IT Solutions and Services in the US <sup>(2)</sup> | 460939 | 487189 | (5.4%) | 112350 | 129966 | (13.6%) |
| Marketing and Support of Software Products | 456765 | 329727 | 38.5% | 118819 | 105264 | 12.9% |
| Cloud and Computing Infrastructures | 1515931 | 1514019 | 0.1% | 385920 | 395741 | (2.5%) |
| Inter-segmental adjustments | (191364) | (218323) |  | (61832) | (90573) |  |
| **Total revenues** | **5579538** | **5232105** | **6.6%** | **1374283** | **1320690** | **4.1%** |
| **Operating income:** |  |  |  |  |  |  |
| IT Solutions and Services, Consulting and Management in Israel <sup>(1)</sup> | 250113 | 205658 | 21.6% | 65439 | 47930 | 36.5% |
| IT Solutions and Services in the US <sup>(2)</sup> | 66865 | 76168 | (12.2%) | 16466 | 23200 | (29%) |
| Marketing and Support of Software Products | 45364 | 36123 | 25.6% | 20012 | 15091 | 32.6% |
| Cloud and Computing Infrastructures | 106405 | 87957 | 21.0% | 27980 | 23372 | 19.7% |
| Inter-segmental adjustments | (18673) | (12487) |  | (9937) | (8581) |  |
| **Operating income** | **450074** | **393419** | **14.4%** | **119960** | **101012** | **18.8%** |

---

<sup>(1)</sup> Including immaterial operations in Europe

<sup>(2)</sup> Including immaterial operations in Canada

<sup>7</sup> As of the 2024 financial statements, the Company presents the training and implementation activity, which was presented in the past as a separate operating segment, as part of the IT, Consulting, and Management Solutions in Israel segment. For full disclosure, the comparative figures will be presented at the end of this section, along with details of the operating results of the above operating segments, before presenting them as one segment.

Board of Directors' Report 19

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the year <br> ended** | **For the year <br> ended** | **For the three months ended** | **For the three months ended** |
| | **31.12.24 - percentage** | **31.12.23 - percentage** | **31.12.24 - percentage** | **31.12.23 - percentage** |
| **Operating income margin** | | | | |
| IT Solutions and Services, Consulting and Management in Israel <sup>(1)</sup> | 7.5% | 6.6% | 8% | 6.1% |
| IT Solutions and Services in the US <sup>(2)</sup> | 14.5% | 15.6% | 14.7% | 17.9% |
| Marketing and Support of Software Products | 9.9% | 11.0% | 16.8% | 14.3% |
| Cloud and Computing Infrastructures | 7.0% | 5.8% | 7.3% | 5.9% |
| **Operating income margin percentages** | **8.1%** | **7.5%** | **8.7%** | **7.6%** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the year <br> ended** | **For the year<br> ended** | **For the three months ended** | **For the three months ended** |
| | **31.12.24 - percentage** | **31.12.23 - percentage** | **31.12.24 - percentage** | **31.12.23 - percentage** |
| **Revenues according to operating segment** | | | | |
| IT Solutions and Services, Consulting and Management in Israel <sup>(1)</sup> | 57.8% | 57.2% | 57.0% | 55.3% |
| IT Solutions and Services in the US <sup>(2)</sup> | 8.0% | 8.9% | 7.8% | 9.2% |
| Marketing and Support of Software Products | 7.9% | 6.0% | 8.3% | 7.5% |
| Cloud and Computing Infrastructures | 26.3% | 27.9% | 26.9% | 28.0% |
| **Total revenues in percentages** | **100%** | **100%** | **100%** | **100%** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the year <br> ended** | **For the year<br> ended** | **For the three months ended** | **For the three months ended** |
| | **31.12.24 - percentage** | **31.12.23 - percentage** | **31.12.24 - percentage** | **31.12.23 - percentage** |
| **Contribution to Operating income according to operating segments:** | | | | |
| IT Solutions and Services, Consulting and Management in Israel <sup>(1)</sup> | 53.4% | 50.7% | 50.4% | 43.7% |
| IT Solutions and Services in the US <sup>(2)</sup> | 14.3% | 18.8% | 12.7% | 21.2% |
| Marketing and Support of Software Products | 9.7% | 9.0% | 15.4% | 13.8% |
| Cloud and Computing Infrastructures | 22.6% | 21.5% | 21.5% | 21.3% |
| **Total Operating income percentages** | **100%** | **100%** | **100%** | **100%** |

---

<sup>(1)</sup> Including immaterial operations in Europe

<sup>(2)</sup> Including immaterial operations in Canada

Board of Directors' Report 20

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year <br> ended** | **For the year <br> ended** | **Change <br> in %** | **For the three months ended** | **For the three months ended** | **Change <br> in %** |
|  | **31.12.24** | **31.12.23** | | **31.12.24** | **31.12.23** | |
| **Geographic information** | | | | | | |
| **Revenues** | | | | | | |
| Revenues from Israel | 5215701 | 4865957 | 7.2% | 1301348 | 1245005 | 4.5% |
| Revenues from United States | 460939 | 487189 | (5.4%) | 112350 | 129966 | (13.6%) |
| Revenues from Europe | 94262 | 97282 | (3.1%) | 22417 | 36292 | (38.2%) |
| Inter-segmental adjustments | (191364) | (218323) |  | (61832) | (90573) |  |
| **Total revenues** | **5579538** | **5232105** | **6.6%** | **1374283** | **1320690** | **4.1%** |
| **Operating income** |  |  |  |  |  |  |
| Operating income from Israel | 393752 | 322115 | 22.2% | 111445 | 84425 | 32% |
| Operating income from United States | 66865 | 76168 | (12.2%) | 16466 | 23200 | (29.0%) |
| Operating income from Europe | 8130 | 7623 | 6.7% | 1986 | 1968 | 0.9% |
| Inter-segmental adjustment | (18673) | (12487) |  | (9937) | (8581) |  |
| **Total Operating income** | **450074** | **393419** | **14.4%** | **119960** | **101012** | **18.8%** |

---

Board of Directors' Report 21

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year<br> ended** | **For the year<br> ended** | **For the three months ended** | **For the three months ended** |
|  | **31.12.24 - percentage** | **31.12.23 - percentage** | **31.12.24 - percentage** | **31.12.23 - percentage** |
| **Geographical revenue rate** | | | | |
| Revenues from Israel | 90.4% | 89.3% | 90.6% | 88.2% |
| Revenues from United States | 8.0% | 8.9% | 7.8% | 9.2% |
| Revenues from Europe | 1.6% | 1.8% | 1.6% | 2.6% |
| **Total revenues in percentages** | **100%** | **100%** | **100%** | **100%** |
| **Geographical operating income margin** |  |  |  |  |
| Operating income margin from Israel | 7.5% | 6.6% | 8.6% | 6.8% |
| Operating income margin from the US | 14.5% | 15.6% | 14.7% | 17.9% |
| Operating income margin from Europe | 8.6% | 7.8% | 8.9% | 5.4% |
| **Operating income percentages** | **8.1%** | **7.5%** | **8.7%** | **7.6%** |
| **Rate of geographical contribution to Operating income** |  |  |  |  |
| Operating income from Israel | 84% | 79.3% | 85.8% | 77.0% |
| Operating income from United States | 14.3% | 18.8% | 12.7% | 21.2% |
| Operating income from Europe | 1.7% | 1.9% | 1.5% | 1.8% |
| **Total contribution in percentages** | **100%** | **100%** | **100%** | **100%** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.5. Analysis of results by according to for 2024 compared with 2023

**IT Solutions and Services, Consulting and Management in Israel**

**Revenues**

Revenues of the IT Solutions and Services, Consulting and Management in Israel segment in 2024 amounted to NIS 3,337.3 million, compared to NIS 3,119.5 million in 2023, an increase of approximately 7%.

The segmental revenues in the fourth quarter amounted to NIS 819 million, compared to NIS 780.3 million in the corresponding quarter, an increase of approximately 5%.

Board of Directors' Report 22

**Operating income**

The segment's operating income in 2024 amounted to NIS 250.1 million (approximately 7.5% of the segment's revenues), compared to approximately NIS 205.7 million (approximately 6.6% of the segment's revenues) in 2023, an increase of approximately 21.6%.

The segment's operating income in the fourth quarter amounted to NIS 65.4 million (approximately 6.9% of the segment's revenues), compared to NIS 47.9 million in the corresponding quarter (approximately 6.1% of the segment's revenues), an increase of approximately 36.5%.

The increase in segmental revenues and operating income in 2024 and in the fourth quarter, compared to the corresponding periods, resulted from organic growth in the scale of operations and profitability in all business lines of the segmental operations, with emphasis on core systems, professional services, and defense operations.

The impressive growth in the segment's operating income in the fourth quarter, compared to the corresponding quarter, was achieved despite the effect of the seasonality as described in Section 1.2.1 above. (The number of work hours in the fourth quarter was approximately 5.2% lower compared to the corresponding quarter).

Operating income in 2024 and its margin was positively affected by the retroactive reimbursement of pension contributions for active duty reservists received from the National Insurance Institute in the second quarter in respect of 2023, the overwhelming majority of which is attributed to this segment.

**IT Solutions and Services in the US**

**Revenues**

The IT Solutions and Services in the US segmental revenues in 2024 amounted to NIS 460.9 million, compared to NIS 487.2 million in 2023, a decrease of approximately 5.4%.

The segmental revenues in this quarter amounted to NIS 112.4 million, compared to NIS 130 million in the corresponding quarter, a decrease of approximately 13.6%.

**Operating income**

The segmental Operating income in 2024 amounted to NIS 66.9 million (approximately 14.5% of revenues), compared to NIS 76.2 million (approximately 15.6% of revenues) in 2023, a decrease of approximately 12.2%.

The segmental operating income during the quarter amounted to NIS 16.5 million (approximately 14.7% of revenues), compared to NIS 23.2 million (approximately 17.9% of revenues) during the corresponding quarter, a decrease of approximately 29%.

The decrease in revenues and operating income in 2024 and the fourth quarter, compared to the corresponding periods, results from the completion of several GRC projects during the course of the period. This impact was only partially offset by new customer engagements, which are expected to be reflected in the scope of operations and profitability during 2025. it should be noted that the first-time consolidation of Alacer's operating results in the fourth quarter did not have a material impact on the 2024 results.

In order to offset the external effects of fluctuating exchange rates, see an analysis of the segment results is also presented below in USD (USD millions):

Board of Directors' Report 23

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year <br> ended** | **For the year<br> ended** | **Change <br> in %** | **For the three months ended** | **For the three months ended** | **Change <br> in %** |
|  | **31.12.24** | **31.12.23** | | **31.12.24** | **31.12.23** | |
| Revenues | 124.6 | 132.2 | (5.8%) | 30.4 | 35.3 | (13.9%) |
| **Operating income** | 18.1 | 20.7 | (12.7%) | 4.5 | 6.3 | (29.3%) |
| Profit margin (%) | 14.5% | 15.7% |  | 14.7% | 17.9% |  |

---

**Marketing and Support of Software Products**

**Revenues**

The Marketing and Support of Software Products segmental revenues in 2024 amounted to NIS 456.8 million, compared to NIS 329.7 million in 2023, an increase of approximately 38.5%.

The segmental revenues in the fourth quarter amounted to NIS 118.8 million, compared to NIS 105.3 million in the corresponding quarter, an increase of approximately 12.9%.

**Operating income**

The segmental operating income in 2024 amounted to NIS 45.4 million (approximately 9.9% of revenues), compared to NIS 36.1 million (approximately 11% of revenues) in 2023, an increase of approximately 25.6%.

The segmental operating income during the quarter amounted to NIS 20 million (approximately 16.8% of revenues), compared to NIS 15.1 million (approximately 14.3% of revenues) during the corresponding quarter, an increase of approximately 32.6%.

The increase in revenues and operating income reflects (entirely organic) growth in the scale of segmental operations. The changes in the segment's operating margin in 2024 and in fourth quarter, compared to the corresponding periods, result from variations in the transaction mix.

**Cloud and Computing Infrastructure**

**Revenues**

The Cloud and Computing Infrastructure segmental revenues in 2024 amounted to NIS 1,515.9 million, similar to NIS 1,514 million in 2023.

The segmental revenues in the fourth quarter amounted to NIS 385.9 million, compared to NIS 395.7 million in the corresponding quarter, a decrease of approximately 2.5%.

The modes increase in revenues during the period and the modest decrease during the quarter compared to the corresponding periods, primarily reflect a continued growth in the Enterprise Discount Program ("EDP") cloud transactions, whose revenues are accounted for on a net basis, out of all cloud transactions in this operating segment. For details regarding segmental revenues net of the above accounting effect, see Section 5, above.

Board of Directors' Report 24

**Operating income**

The segmental operating income in 2024 amounted to NIS 106.4 million (approximately 7% of revenues), compared to NIS 88 million (approximately 5.8% of revenues) in 2023, an increase of approximately 21%.

The segmental operating income during the quarter amounted to NIS 28 million (approximately 7.3% of revenues), compared to NIS 23.4 million (approximately 5.9% of revenues) during the corresponding quarter, an increase of approximately 19.7%.

The increase in operating income in 2024 and in the fourth quarter, compared to the corresponding periods, reflects growth in the volumes of operations in the segment, with an emphasis on revenues, marketing, and integration of computing systems, and marketing, installation, and support of advanced technology solutions (RDT and Ortec).

The increase in the operating margin is paltry due to the continued rise of EDP cloud transactions, whose revenues are accounted for on a net basis, as detailed above, and from transactions mix in the segment (higher profit transactions compared to corresponding periods).

Segmental results in the fourth quarter were also positively affected by the first-time consolidation of Ortec as of December 2024.

**Key segmental results excluding the presentation of income on a net basis**

For comparability, and to eliminate the external/accounting effects arising from the increase in revenues accounted for on a net basis, see an analysis of the Company's revenues and operating income excluding this effect.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year<br> ended** | **For the year <br> ended** | **Change in %** | **For the three months ended** | **For the three months ended** | **Change in %** |
|  | **31.12.24** | **31.12.23** | | **31.12.24** | **31.12.23** | |
| Revenues | 1515931 | 1514019 | 0.1% | 385920 | 395741 | (2.5%) |
| Adjustments for the increase in revenues accounted for on a net basis | 158180 |  |  | 68378 |  |  |
| **Adjusted revenues** | **1674111** | **1514019** | **10.6%** | **454298** | **395741** | **14.8%** |
| **Operating income** | 106405 | 87957 | 21% | 27980 | 23372 | 19.7% |
| **% of revenues** | **6.4%** | **5.8%** |  | **6.2%** | **5.9%** |  |

---

Board of Directors' Report 25

**Training and implementation operations**

As of the 2024 financial statements, the Company presents the training and implementation activity, which was presented in the past as a separate operating segment, and constituted approximately 3.4% and 2.9% of the Company's total revenues and Operating income in 2023, as part of the IT Solutions and Services, Consulting, and Management in Israel segment. The comparative figures were restated in order to reflect the change in the structure of the Company's operating segments.

For the purpose of full disclosure, details of the operating results of the above operating segments are presented below, prior to their consolidation as one segment.

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **I.T. in Israel** | **I.T. in Israel** | **I.T. in Israel** | **Training and Implementation** | **Training and Implementation** | **Training and Implementation** | **Adjustments** | **Adjustments** | **I.T. in Israel & Training and Implementation** | **I.T. in Israel & Training and Implementation** | **I.T. in Israel & Training and Implementation** |
| | **2024** | **2023** | **Growth in %** | **2024** | **2023** | **Growth in %** | **2024** | **2023** | **2024** | **2023** | **Growth in %** |
| **Revenues** | 3163723 | 2946194 | 7.4% | 180324 | 177837 | 1.4% | (6780) | (4538) | 3337267 | 3119493 | 7.0% |
| **Operating income** | 241820 | 198785 | 21.6% | 8293 | 11572 | (28.3%) | - | (4699) | 250113 | 205658 | 21.6% |
| **% of revenues** | 7.6% | 6.7% |  | 4.6% | 6.5% |  |  |  | 7.5% | 6.6% |  |

---

Board of Directors' Report 26

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2.6 Commitments and special events

**Dividend distribution**

---

| | | |
|:---|:---|:---|
| **Date of distribution** | **Amount of dividend<br> per share**<br>(agorot)  | **Amount of dividend**<br>(in NIS millions) |
| 15.04.2024 | 127 | 80.68 |
| 25.07.2024 | 81 | 51.45 |
| 01.10.2024 | 82 | 52.09 |
| 06.01.2025 | 76 | 48.27 |
| **Total for 2024** | 366 | 232.49 |
| **Total for 2023** | **199** | **126.4** |

---

The Company's dividend policy is a distribution of up to 75% of the net annual profit attributable to its shareholders. In general, the dividend will be distributed once per quarter subject to the distribution requirements set by applicable law, which are examined by the Board of Directors at any relevant time.

In the past five years (2020-2024), the Company distributed a total of NIS 915 million in dividends to its shareholders.

**Confirmation of issuer credit rating**

On 28 March 2024, Midroog confirmed an Aa3 issuer and debenture credit rating with a stable outlook and an Aa3 rating with a stable outlook for the Company's (Series B) Debentures. On 16 July 2024, Midroog confirmed a rating of P-1.il for the Commercial Securities.

1.3. Financial position, liquidity, and financial sources (NIS thousands)

Analysis of financial position as of 31 December 2024 and 31 December 2023

Balances of liquid assets and financial indices

---

| | | | |
|:---|:---|:---|:---|
| | **31.12.2024** | **31.12.2023** | **Change** |
| Cash and cash equivalents | 668495 | 640208 | 28287 |
| Short-term credit | (470006) | (487917) | 17911 |
| Long-term credit | (315098) | (468456) | 153358 |
| "Net" debt | (116609) | (316165) | 199556 |
| Total balance sheet | 4479636 | 4035232 | 444404 |
| Ratio of net financial debt to the total balance sheet | 2.6% | 7.8% |  |
| Current ratio | 1.1 | 1.2 |  |
| Balance of retained earnings | 708634 | 665981 | 42653 |
| Total equity attributable to shareholders | 1088733 | 1048587 | 40146 |
| Ratio of shareholder equity to balance sheet | 24.3% | 26% |  |

---

Board of Directors' Report 27

Summary of consolidated statements of financial position (NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
| | **31.12.2024** | **31.12.2023** | **Change** |
| **Assets:** | | | |
| Cash and cash equivalents | 668495 | 640208 | 28287 |
| Trade receivables and unbilled receivables, net | 1926190 | 1676969 | 249221 |
| Inventories | 101861 | 146089 | (44228) |
| Goodwill | 955988 | 918829 | 37159 |
| Intangible assets, net | 89893 | 98405 | (8512) |
| Right-of-use assets | 369935 | 213933 | 156002 |
| All others (property, plant, and equipment, deferred taxes, etc.) | 367274 | 340799 | 26475 |
| **Total assets** | **4479636** | **4035232** | **444404** |
| **Liabilities:** |  |  |  |
| Short-term credit from banks and other credit providers | 785079 | 956230 | (171151) |
| Trade payables | 926753 | 784599 | 142154 |
| Deferred revenues | 427786 | 298908 | 128878 |
| Leasing liabilities | 372809 | 215756 | 157053 |
| Liabilities for options to holders of non-controlling interests and contingent liabilities for business combinations | 125687 | 91907 | 33780 |
| All others | 697195 | 580360 | 116835 |
| **Total liabilities** | **3335309** | **2927760** | **407549** |

---

The increase in the assets line-items was resulted from an increase in trade receivables and in net accrued income (mainly in parallel with an increase in trade payables including in respect of marketing and distribution of software products transactions), as well as from an increase in goodwill (due to the consolidation of Ortec and Alacer). The increase was partially offset by a decrease in inventories.

The increase in total liabilities is mainly due to an increase in trade payables and deferred revenues (primarily advance payments from customers in long term transactions) and a revaluation of existing put options to minority shareholders derived from the increased profitability in these subsidiaries (in light of the first-time consolidation of subsidiaries), offset by a decrease in the credit from financial institutions and other credit providers (further to the decrease in the Company's financial debt).

Similarly, during the year, there was a corresponding increase in right-of-use assets and in lease liabilities in light of the transfer of the Company's management together with a large portion of its business units to new offices in Kfar Saba.

Board of Directors' Report 28

**Condensed statements of cash flow (NIS thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> year<br> ended** | **For the<br> year<br> ended** | **For the<br> three months<br> ended** | **For the <br> three months<br> ended** |
|  | **31.12.2024** | **31.12.2023** | **31.12.2024** | **31.12.2023** |
| **Cash flows from operating activities** | | | | |
| Net income | 288224 | 246855 | 73983 | 61921 |
| Adjustments to profit and loss items | 341874 | 351218 | 96213 | 94703 |
| Changes in assets and liabilities items | 112577 | 45271 | 186646 | 206867 |
| Cash paid and received for interest and taxes | (123454) | (147145) | (21817) | (30580) |
| **Net cash provided by operating activities** | **619221** | **496199** | **335025** | **332911** |
| Net cash deriving from investment operations: |  |  |  |  |
| Acquisition of property, plant, and equipment | (41541) | (38866) | (7512) | (6264) |
| Acquisition of companies and operations | (17321) | (38034) | (17321) | - |
| Others (net) | 1936 | 1148 | 244 | (730) |
| **Net cash used for investment activities** | **(56926)** | **(75752)** | **(24589)** | **(6994)** |
| Cash from financing activities: |  |  |  |  |
| Repayment of credit, net | (203022) | (258801) | (49478) | (103582) |
| Receipt from the issuing of commercial securities | 100000 | - | - | - |
| Dividends paid | (184214) | (126409) | (52088) | - |
| Payment of leasing liabilities | (129435) | (137896) | (33349) | (36207) |
| Repayment of liabilities in respect of business combinations | (11561) | (15211) | (11000) | (2739) |
| Distribution of dividends to non-controlling interests and repayment | (30271) | (27242) | (6674) | (1947) |
| Liabilities for options to non-controlling interests | (1124) | (29352) | - |  |
| Repayment of debentures | (67918) | (33959) | - | - |
| Acquisition of non-controlling interests | (3899) | - | - | - |
| **Net cash used for** **financing activities** | **(531444)** | **(628870)** | **(152589)** | **(144475)** |

---

Board of Directors' Report 29

**Cash flows from operating activities**

In 2024, the Company recorded a positive cash flow from operating activities amounting to NIS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;619.2 million compared with a positive cash flow from operating activities amounting to NIS 496.2 million in the corresponding period. An increase of about NIS 123 million.

Over the past 5 years (2020-2024), the Company has generated positive cash flow from operating activities in the aggregate amount of NIS 2.25 billion.

**Cash flows used for investment activities**

The cash flow used in investment activities in 2024 amounted to NIS 56.9 million, compared with a cash flow used in investing activities amounting to NIS 75.8 million in the corresponding period. Most of the difference is attributed to the amount of NIS 17.3 million that was paid for the acquisition of Ortec and Alacer, compared with NIS 38 million paid in the corresponding period for the acquisition of Zebra.

**Cash flows used for financing operations**

The cash flow used in financial activities in 2024 came to NIS 531.4 million, compared with NIS 628.9 million in the corresponding period.

Average short-term credit (NIS thousands)

---

| | | |
|:---|:---|:---|
|  | **31.12.2024** | **31.12.2023** |
| **Trade receivables** | 1,766,431 | 1,643,472 |
| Trade payables | 713,142 | 646,450 |

---

The Company finances its ongoing operating activities (including the gap between average customer credit and average supplier credit) using cashflow from operating activities, credit facilities, shareholder's equity, and from outstanding financial liabilities.

Disclosure regarding statement of cash flow forecast pursuant to Article 10(B)(1)(d) of the Israel Securities Regulations (Periodic and Immediate Reports):

As at 31 December 2024, in the Company's standalone statements (Solo financial statements), there present a negative working capital. In view of this, the Company's Board of Directors has reviewed the Company's financial indicators, its financial covenants, and the Company's existing and expected cash sources and requirements. Further to said review, the Company's Board of Directors determined that it does not indicate a liquidity problem. In light of the above, the Company is not required to publish a statement of cash flow forecast.

Board of Directors' Report 30

Summary statements of changes in equity (NIS thousands)

---

| | | |
|:---|:---|:---|
| | **31.12.2024** | **31.12.2023** |
| **Opening balance** | 1107472 | 964875 |
| **Net income** | 288224 | 246855 |
| **Dividends declared** | (232491) | (126409) |
| **Dividends to non-controlling interests** | (13133) | (11312) |
| **Translation differences** | (1144) | 11449 |
| **Share based payment** | 18026 | 16106 |
| **Transactions with Non-controlling interests** | \*(26299) | 2628 |
| **Non-controlling interests created in a company that was consolidated for the first time** | 950 | - |
| **Actuarial earnings in respect of a benefit plan** | 2722 | 3280 |
| **Closing balance** | **1144327** | **1107472** |

---

\* In the first quarter, the Company entered into a mutual future options agreement with a Non-controlling shareholder in a subsidiary for the sale/purchase of the minority interest in the subsidiary's shares. Similarly, in the second and third quarters, the Company entered into a mutual future options agreement with Non-controlling shareholders in different subsidiaries for the acquisition of their shares in the subsidiaries. These transactions were recorded as a transaction with Non-controlling interests and imputed directly to shareholder equity.

2. Exposure to market risks and their management

With regard to the market risks to which the Company is exposed, as well as with regard to the Company's policy in managing market risks - see note 20 to the financial statements.

Board of Directors' Report 31

3. Aspects of corporate governance

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. Donation's policy

The Company works for the community through cash donations, donations of computer equipment and development of systems, training courses, participation in expenses, and use of infrastructure.

In addition, the Company has set itself the goal, in the field of social responsibility, to create a channel of influence with which the Company will be identified and which will include long-term projects, some of which will be an opportunity for partnership and involvement of employees.

The Company does not have a fixed policy regarding donations, each request for a donation is considered individually and in accordance with the Company's donation policy. The Company has no commitment to provide donations in the future.

In 2024, the Company donated NIS 942 thousand in funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. Directors with accounting and financial expertise

See Article 26 of Part D of the Periodic Report (Additional Details About the Corporation) and the Corporate Governance Questionnaire attached to Part D of the Periodic Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3. Independent directors

See Article 26 of Part D of the Periodic Report (Additional Details About the Corporation) and the Corporate Governance Questionnaire attached to Part D of the Periodic Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4. Disclosure regarding the internal auditor in the corporation

1) Auditor's name: Israel Gvirtz, C.P.A.

2) Date tenure commenced: 29.01.2023

The internal auditor was appointed pursuant to the recommendation of the Audit Committee and a resolution by the Board of Directors of the Company based on his qualifications as detailed below.

3) Auditor's qualifications

The internal auditor is a certified public accountant, a partner in Fan Kane Control Management Ltd (Grant Thornton Israel), serves as an internal auditor in several organizations, and is a member of the Association of Internal Auditors in Israel.

4) Auditor's organizational supervisor

The auditor's organizational supervisor is determined by the Company CEO, Mr. Moti Gutman.

5) Audit plan

The annual work plan is submitted by the internal auditor and approved by the Audit Committee.

The annual audit plan is derived from the multi-year audit plan. The multi-year audit plan was derived from a risk survey conducted by the Company's auditor.

The Audit Committee is involved in determining the multi-year plan and the auditor has the discretion to deviate from it in an immaterial way. To the extent that there is a deviation other than as described, the matter is brought up for deliberation by the Audit Committee.

Board of Directors' Report 32

The annual planning of the audit tasks, the determination of priorities, and the frequency of the audit are influenced by the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The management, operational, and/or economic significance
of the issue in terms of internal control and achieving the organization's goals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The exposure to risks from operations, topics, and actions
pursuant to a risk survey conducted by the auditor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The likelihood of the existence of operational, administrative,
and managerial defects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Findings of previous audits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Subjects in which an audit is requested by the executive
institutions and/or parties outside the organization (Certified Public accountant);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Subjects required by law, according to internal or external
procedural provisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The existence of other relevant controls in the organization
and the information available on their effectiveness and/or weaknesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The need to maintain cyclicality.

The audit plan also addresses material investee corporations as well as overseas investee corporations.

6) Scope of the employment

---

| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;**31.12.2024** | &nbsp;&nbsp;&nbsp;**31.12.2023** |
| **Remuneration (NIS thousands)** | 378 | 326 |

---

According to the Company's Board of Directors, the scope of the Internal Auditor's work and the 2024 work plan are reasonable under the circumstances and have the potential to fulfill the goals of the Company's internal audit.

7) Professional standards

To the best of the Company's knowledge, the Internal Auditor conducts the internal audit in accordance with the generally accepted professional standards as noted in Section 4(b) of the Internal Audit Law, 1992.

The Internal Auditor was given free access as noted in Section 9 of the Internal Audit Law, 1992, including continuous and unmediated access to the corporation's information systems, including financial data, and a visit to the US subsidiary.

In order to determine that the auditor met the requirements established above, the Board of Directors relied on the Internal Auditor's reports regarding his compliance with the professional standards.

8) The Board of Directors' assessment of the Internal Auditor's activities – remuneration

For details regarding the internal remuneration method and its scope, see section 6 above.

To the best of the Company's knowledge, the character and contiguity of the Internal Auditor's activities and work plan are reasonable and, under the circumstances, fulfill the objectives of the internal audit of the corporation.

In the opinion of the Board of Directors, the remuneration of the Internal Auditor does not affect the exercise of his professional judgment, this, inter alia, taking into account the Board of Directors' impression of the manner in which he performs the internal audit work in the Company, and the degree of detail, accuracy and depth of the reports of the audit findings submitted by him to date, and also because that the auditor has additional clients and additional activities and is not dependent on compensation from the Company.

Board of Directors' Report 33

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5. Disclosure regarding auditors' fees

The corporation's accountants: BDO Israel. See Section 1.1.4 above for details regarding the replacement of the auditor.

Below is a breakdown of the fees paid to the external auditors (NIS thousands):

---

| | | |
|:---|:---|:---|
| | **2024** | **2023** |
| Remuneration for audit services, related services, and consulting and tax services related to the audit | 3,380 | 3,580 |

---

The auditor's fee was approved by the Company's Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6. The work of the Board of Directors and its committees

1) The Company's internal enforcement program

The Company has an internal enforcement program in the field of securities law. The plan was formulated based on the Company's unique characteristics and operations and in accordance with the criteria for an effective enforcement plan, which were published by the Israel Securities Authority. It is regularly updated in accordance with changes in the law and according to the Company's characteristics, needs, and activities.

The Company's Board of Directors has appointed the Company's Chief Financial Officer, Mr. Nevo Brenner, to be in charge of the Company's internal enforcement, including ensuring efficient and effective implementation of the plan, and it resolved that the Company's Audit Committee will serve as a dedicated Board of Directors committee for compliance and enforcement affairs.

At the date of the report, the enforcement plan includes nine procedures: a procedure for an enforcement system, a procedure for an audit committee, a procedure for a committee for reviewing financial statements, a procedure for reporting, a procedure for appointing officers and approving their remuneration, a procedure for entering into transactions with interested parties and preventing conflicts of interest and personal interest, a procedure for prohibiting the use of insider information, a procedure for communication with the Securities Authority and capital market factors and a procedure for handling complaints from Company employees about deficiencies.

The purpose of the above procedures is to ensure implementation of the law's provisions and the compliance with periodic control processes on the procedures, while regulating the work processes as part of the implementation of an effective enforcement plan at the Company.

2) For further details regarding the Board of Directors and its committees - see the Corporate Governance Questionnaire attached to Part D of the Periodic Report.

Board of Directors' Report 34

**Disclosure provisions in connection with the corporation's financial reporting**

**Critical accounting estimates**

The goodwill, as included in the Company's financial statements, is material to the Company's total assets. The goodwill represents the excess cost of the investment over the total balance sheet value of subsidiaries that have been acquired by the Group.

In accordance with generally accepted accounting principles, the Company annually examines the need for impairment.

According to the valuations carried out by the Company this year, it appears that there is no need to amortize the value of goodwill.

See also Article 8b(i) to Part D of the Report (Additional details about the corporation) regarding the material valuations.

See also, Note 9 to the financial statements.

March 10, 2025

Guy Bernstein Chair of the Board of Directors Moti Gutman Chief Executive Officer

Board of Directors' Report 35

**Appendix A – Details regarding the Series B Debentures issued by the Company and held by the public at the report date**

1) The following are details regarding the Series B Debentures – data in NIS thousands

---

| | |
|:---|:---|
| **Disclosure item** | **Details regarding the Series B Debentures <sup>(2)</sup>** |
| Date of issue | Initial issue on 18 September 2022; Series expanded on 4 December |
| Total par value on the date of issue<sup>(1)</sup> | 295,249 upon initial issue and 180,366 upon expansion of the series |
| Par value balance as at 31 December 2024 |  |
| Par value balance on the reporting date, revalued according <br> to linkage terms | The series is not linked |
| Value in the financial statements as at 31 December 2024 <br> (amortized cost according to the effective interest method) | 376768 |
| Accrued interest as at 31 December 2024 | 6875 |
| Exchange value as at 31 December 2024 | 373888 |
| Type of interest | Fixed interest at a rate of 4.1% per annum.<br>It should be noted that the trust deed in respect of the Series B Debenture attached to the offer report (the "trust deed") provided mechanisms for adjustment of a change in the annual interest in respect of the Series B Debenture, in the event of non-compliance with the financial covenants or if there is a decrease in the rating of the Series B Debenture. Pursuant to said adjustment mechanisms (cumulatively), the overall rate of interest increments will not exceed 1%. For details, see Sections 5.8 and 5.9 of the trust deed.<br>|
| Dates for payment of principal | The principal of the Series B Debentures shall be due for repayment in fourteen (14) six-monthly installments, made up of thirteen equal payments - each payment is 7.14% of the principal and the last payment being 7.18%, commencing 1 August 2023, through 1 February 2030. |
| Interest payment dates | The interest in respect of the Series B Debenture shall be paid in six monthly installments, to be paid on 1 February and 1 August, commencing 1 February 2023, through 1 February 2030. |
| Principal and interest linkage basis | The Series B Debenture are unlinked (principal and interest) to any linkage base. |
| Is there a right of conversion? | No |
| Early repayment or forced conversion of debentures | The Company shall be entitled to initiate the early repayment of the Series B debentures, all in accordance with the provisions of Section 6.2 of the trust deed. |
| Guarantee for payment of the Company's obligations <br> pursuant to the trust deed |  |

---

Board of Directors' Report 36

---

| | |
|:---|:---|
| **Disclosure item** | **Details regarding the Series B Debentures <sup>(2)</sup>** |
| As of the report date, is the Company in compliance with all of the conditions and undertakings according to the trust deed? | Yes |
| As of the report date and during the reporting period, were the conditions met that constitute grounds for calling the debentures due immediately? | No |
| Is the Company required by the trustee to perform various actions, including calling meetings of debenture holders? | No |
| Details of guarantees/liens |  |

---

**2)** **Details regarding the trustee for the Series B Debentures**

<u>Trustee name</u> <u>Reznick Paz Nevo Trustees Ltd.</u> <br> <u>Debenture administrator</u> <u>Shani Krasnoshansky</u> <br> <u>Contact information</u> <u>14 Yad Harutzim St., Tel Aviv <br> (Tel: 03-689200 Fax: 03-6389222)<br> e-mail: Shani@rpn.co.il</u>

**3)** **Details about the Series B Debentures' rating**

---

| | |
|:---|:---|
| Name of rating company as of the report date | Midroog Ltd. ("**Midroog**") |
| Rating at the date of issue: | Aa3 with a stable outlook |
| Rating on the report date | Unchanged<br>For the up-to-date rating, see Immediate Report published by the Company on 28.03.2023<br> (Ref. 2023-01-033000)<br>|

---

<sup>(1)</sup> On 14 September 2022, the Company published a shelf offering report (ref.: 2022-01-117502) (the "**offer report**"), in which the Company issued in an initial public offering a total of NIS 295,249 thousand nominal value of Series B Company Debentures. In addition, on 4 December 2022, the Company issued Series B Debentures by way of an expansion of the series, for a net amount of NIS 178 million.

<sup>(2)</sup> As at the report date, in accordance with the provisions of the Securities Regulations, § 10(b)(13)(a), the Company considers the Series B Debentures to be a significant series.

Board of Directors' Report 37

4) Financial covenant – Series B Debentures

The table below sets forth the various covenants that the Company undertook with respect to debenture holders and the calculation of their results as at 31 December 2024, as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Security** | **Balance of nominal value of the security in circulation as at 31 December 2024** | **Balance of nominal value of the security in circulation immediately prior to the report date** | **Financial covenant** | **Actual covenant as of December 31, 2024** |
| | **(NIS thousands)** | **(NIS thousands)** | | |
| Series B Debentures | 373738 | 339779 | Ratio of consolidated net financial debt (as defined in the trust deed) to total balance sheet must not exceed 45% | 2.6% |
| Series B Debentures | 373738 | 339779 | Ratio of consolidated net financial debt (as defined in the trust deed) to adjusted EBITDA (as defined in the trust deed) shall not exceed 5 | 0.17 |
| Series B Debentures | 373738 | 339779 | Shareholder equity (as defined in the trust deed) is minimal, must be no less than NIS 275,000 thousand | 1144327 |

---

Board of Directors' Report 38

![](image_004.jpg)<br>**CHAPTER C**<br>Consolidated Financial Statements<br> for the year ended<br> 31.12.2024<br>

---

| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

---

| | |
|:---|:---|
| Report of the Independent Auditor to the Shareholders of Matrix IT Ltd. | 3 |
| Regarding the Audit of Components of Internal Control Over Financial Reporting | 3 |
| Audit Procedures Procedures Performed in Response to the Key Audit Issue | 6 |
| Consolidated Statements of Financial Position | 7 |
| Consolidated Statements of Profit and Loss and Other Comprehensive Income | 9 |
| Consolidated Statements of Changes in Equity | 10 |
| Consolidated Statements of Cash Flows | 16 |
| <br> Notes to the Consolidated Financial Statements  | 17 |

---

Consolidated Financial Statements 2

![](image_027.jpg)

**Report of the Independent Auditor to the Shareholders of Matrix IT Ltd.** 

**Regarding the Audit of Components of Internal Control Over Financial Reporting** 

**Pursuant to Article 9B(c) of the Israel Securities Regulations (Periodic and Immediate Reports), 1970**

We have audited the components of internal control over the financial reporting of Matrix E. I. Ltd. and its subsidiaries (hereinafter, collectively: "the **Company**") as at 31 December 2024. These control components were determined as explained in the following paragraph. The Company's board of directors and management are responsible for maintaining effective internal control over financial reporting and for their assessment of the effectiveness of the components of internal control over financial reporting included in the accompanying periodic report for said date. Our responsibility is to express an opinion as to the components of the Company's internal control of its financial reporting based on our audit.

The components of internal control over financial reporting audited by us were determined in conformity with Auditing Standard (Israel) 911 of the Institute of Certified Public Accountants in Israel, "Audit of Components of Internal Control over Financial Reporting," as amended, ("**Auditing Standard (Israel) 911**"). These components consist of: (1) entity-level controls, including financial reporting preparation and close process controls and information technology general controls ("ITGCs"); (2) sale process controls; (3) payroll process controls; (4) impairment of intangible assets process controls; (5) purchase price allocation process controls (collectively, "**the audited control components**").

We conducted our audit pursuant to Israel Auditing Standard 911. Pursuant to that standard, we are required to plan our audit and carry it out with the objective of identifying the audited control components and obtaining a reasonable measure of certainty as to whether those control components were effectively fulfilled from all material aspects. Our audit included obtaining an understanding regarding internal control of financial reporting, identifying audited control components, assessing the risk that there is a material weakness in the audited control components, as well as examining and assessing the effectiveness of the planning and implementation of those control components based on the assessed risk. Our audit of these control components also included performing such other procedures as we considered necessary under the circumstances. Our audit only addressed the audited control components, as opposed to internal control of all material processes relating to financial reporting, and therefore, our opinion only addresses audited control components. Similarly, our audit did not address the reciprocal effects between audited and unaudited control components, and therefore, our opinion does not take into account such possible effects. We believe that our audit provides a reasonable basis for our opinion within the context described above.

Consolidated Financial Statements 3

![](image_027.jpg)

Due to inherent limitations, internal control of financial reporting, in general, and components thereof, in particular, may not prevent or detect a misstatement. Similarly, reaching conclusions regarding the future on the basis of any kind of an assessment of current effectiveness runs the risk of controls becoming unsuitable due to changes in circumstances or because the level of the fulfillment of policies or procedures has changed for the worse.

In our opinion, the Company has effectively fulfilled, from all material aspects, the audited control components as at 31 December 2024.

We also audited, according to Israeli generally accepted auditing standards, the Company's consolidated financial statements as at 31 December 2024 and for the year ending on that same date, and our report dated 10 March 2025, included an unqualified opinion on those financial statements.

Tel Aviv, 10 March 2025 Zif Haft Certified Public Accountants (Isr.)<br> BDO Member Firm

Consolidated Financial Statements 4

**Report of the Independent Auditor the Shareholders of Matrix IT Ltd.**

We have audited the attached consolidated statement of financial position for Matrix IT Ltd. (hereinafter: the "**Company**") as at 31 December 2024 and the consolidated statement of comprehensive income, changes in equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's board of directors and management. Our responsibility is to express an opinion as to these financial statements based on our audit. The Company's financial statements as at 31 December 2023 and for the two years ended on that date were audited by previous auditors whose auditors' report on them dated 10 March 2024 included an unqualified opinion.

We conducted our audit according to the generally accepted Israeli auditing standards, including the standards set forth in the Accountant Regulations (Accounting Methods), 5733-1973. According to those standards, we are required to plan the audit and execute it with the objective of obtaining a reasonable degree of certainty that the financial statements do not contain a material misstatement. An audit includes a sample review of evidence that supports the sums and information in the financial statements. An audit also includes a review of the accounting rules that were applied and the significant estimates that were used by the Company's board of directors and management as well as an assessment of the accuracy of the overall presentation in the financial statements. We believe that our audit and the other accountants' statements provide a sufficient basis for our opinion.

In our opinion, the aforesaid consolidated financial statements properly reflect, in all material respects, the Company's and its consolidated companies' financial position as at 31 December 2024, the results of their operations, and the changes in their equity and cash flows for the year ended on that same date, according to the International Financial Reporting Standards (IFRS) and the provisions of the Securities Regulations (Annual Financial Statements), 5770-2010.

**Key Audit Issues**

The key audit issues that are set forth below are those issues that were communicated or that should have been communicated to the Company's board and that, in our professional judgment, were particularly significant to the audit of the consolidated financial statements for the current period. Those issues include, *inter alia*, any issue that: (1) addresses or may address material lines or disclosures in the financial statements, and (2) with respect to which our judgment was challenging, subjective, or particularly complex. Those issues are addressed in our audit and by the formulation of our opinion on the consolidated financial statements in their entirety. The communication of these matters below does not change our opinion of the consolidated financial statements in their entirety, and we are not providing, by means thereof, a separate opinion on these issues or on the lines or disclosures to which they refer.

![](image_028.jpg)

Consolidated Financial Statements 5

![](image_027.jpg)

**Examination of impairment of goodwill**

As described in notes 2k and 9 to the consolidated financial statements, the balance of goodwill in the Company's books amounts to NIS 955,988 thousand as at 31 December 2023. The Company's management reviews impairment of goodwill once per annum on 31 December or more frequently if events or changes in circumstances indicate that there is an impairment. An examination of the impairment of goodwill is determined by examining the recoverable amount of the cash-generating unit to which the goodwill was allocated. When the recoverable amount is lower than the balance in the financial statements, the impairment loss that is attributed first to goodwill is recognized.

The process of examining the impairment of the cash-generating unit to which the goodwill is allocated is based on significant estimates that involve uncertainty and subjective assessments by management and those in charge of corporate governance. Changes to these estimates or these assessments are likely to have a material impact on the balance of the goodwill in the financial statements.

The matter of the estimates on which the examination of impairment of goodwill is based was identified as a key matter in the audit. An audit of a review of impairment of goodwill requires the auditor's judgment as well as know-how and experience for an examination of the reasonableness of the assumptions and data that management used in determining its estimate of the recoupable amount of the cash flow yielding units to which the goodwill relates.

**Audit Procedures Performed in Response to the Key Audit Issue**

The principal procedures we applied in connection with this key issue during our audit:

&nbsp;&nbsp;&nbsp;&nbsp;1. We have gained an understanding of the processes that exist in the Company
with regard to the process of examining impairment. We have reviewed the planning, implementation, and operational efficacy of audit relevant
controls.

&nbsp;&nbsp;&nbsp;&nbsp;2. An examination of the assessments made by the Group's valuator, including
a sensitivity examination.

&nbsp;&nbsp;&nbsp;&nbsp;3. Examination and assessment of the competence, abilities, and objective this
of the Group's valuator.

&nbsp;&nbsp;&nbsp;&nbsp;4. Review of the completeness and accuracy of the basic data that were used
in the model.

&nbsp;&nbsp;&nbsp;&nbsp;5. An assessment of the reasonableness of the Company's conclusions considering
the main assumptions it applied, such as projected cash flows including growth rates, discount rates, and projected earnings before interest,
depreciation, taxes and amortization (EBITDA).

We have also audited, in accordance with Auditing Standard (Israel) 911 of the Institute of Certified Public Accountants in Israel, "Audit of Components of Internal Control over Financial Reporting," the Company's components of internal control over financial reporting as at 31 December 2024, and our report dated 10 March 2025, expressed an unqualified opinion as to the effective existence of those components.

Tel Aviv, 10 March 2025 Zif Haft Certified Public Accountants (Isr.) - BDO Member Firm

Consolidated Financial Statements 6

**Consolidated Statements of Financial Position (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Note** | **December 31<br> 2024** | **December 31<br> 2023** |
| **Current assets** | | | |
| **Cash and cash equivalents** | 4 | 668495 | 640208 |
| Trade receivables and unbilled receivables, net | 5 | 1926190 | 1676969 |
| Income tax receivable |  | 53567 | 53376 |
| Other accounts receivable | 6 | 122273 | 101680 |
| Inventories | 7 | 101861 | 146089 |
|  |  | 2872386 | 2618322 |
| **Non-current assets** |  |  |  |
| Other investments and loans | 3a | 17146 | 16800 |
| Prepaid expenses |  | 30203 | 32785 |
| Right-of-use assets | 13 | 369935 | 213933 |
| Property, plant, and equipment, net | 8 | 101616 | 95358 |
| Goodwill | 9 | 955988 | 918829 |
| Intangible assets, net | 9 | 89893 | 98405 |
| Deferred taxes | 15d | 42469 | \*40,800 |
|  |  | **1607250** | **1416910** |
|  |  | **4479636** | **4035232** |

---

\* Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity. (*See also*, note 15d(1) for details.)

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

Consolidated Financial Statements 7

**Consolidated Statements of Financial Position (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
| | &nbsp;&nbsp;**Note** | **December 31<br> 2024** | **December 31<br> 2023** |
| **Current liabilities** | | | |
| **Credit from banks and other credit providers** | 10a, 20 | 388640 | 403694 |
| Current maturities of debentures | 19 | 81341 | 84080 |
| Current maturities of lease liabilities | 13 | 115574 | 109448 |
| Trade payables | 11 | 926753 | 784599 |
| Income tax payable |  | 21063 | 14770 |
| Other accounts payable | 12 | 133631 | 80965 |
| Employees and payroll accruals |  | 510995 | 447510 |
| Liabilities in respect of business combinations | 3 | 10244 | - |
| Liabilities for put options for non-controlling interests | <br> 3 | 82308 | 34065 |
| Deferred revenues |  | 382119 | 281235 |
|  |  | 2652668 | 2240366 |
| **Non-current liabilities** |  |  |  |
| Loans from banks and other lenders | 10b, 20 | 19671 | 108030 |
| Debentures | 19 | 295427 | 360426 |
| Deferred revenues |  | 45667 | 17673 |
| Lease liabilities | 13 | 257235 | 106308 |
| Deferred taxes | 15 | 23871 | <sup>\*</sup>28010 |
| Liabilities in respect of business combinations | 3 | 8371 | 3771 |
| Liabilities for put options for non-controlling interests | <br> 3 | 24764 | 54071 |
| Employee benefit liabilities | 14 | 7635 | 9105 |
|  |  | 682641 | 687394 |
| **Equity attributable to Company shareholders** | 17 |  |  |
| Share capital and capital reserves |  | 380099 | 382606 |
| Retained earnings |  | 708634 | 665981 |
|  |  | 1088733 | 1048587 |
| **Non-controlling interests** |  | 55594 | 58885 |
| **Total equity** |  | 1144327 | 1107472 |
|  |  | **4479636** | **4035232** |

---

\* Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity. (For details, *see also* Note 15d(1)).

      <br> Date of approval of the financial statements Guy Bernstein Chair of the Board of Directors Moti Gutman Chief Executive Officer Nevo Brenner Chief Financial Officer

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

Consolidated Financial Statements 8

Consolidated Statements of Profit and Loss and Other Comprehensive Income - (NIS thousands - other than data on net earnings per share)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Note** | **Year ended December 31,** **2024** | **Year ended December 31,** **2023** | **Year ended December 31,** **2022** |
| **Revenues** | 21a | 5579538 | 5232105 | 4672689 |
| **Cost of revenues and services** | 21b | 4746544 | 4467925 | 4000682 |
| Gross profit |  | 832994 | 764180 | 672007 |
| Selling and marketing expenses | 21c | 196231 | 189698 | 166246 |
| General and administrative expenses | 21d | 186689 | 181063 | 155273 |
| Gain on disposal of subsidiary |  | - | - | 150059 |
| Operating income |  | 450074 | 393419 | 500547 |
| Financial expenses | 21e | 86956 | 82738 | 50801 |
| Financial income | 21e | 20084 | 14505 | 5020 |
| Income before taxes on income |  | 383202 | 325186 | 454766 |
| Taxes on income | 15e | 94978 | 78331 | 100285 |
| Net income |  | 288224 | 246855 | 354481 |
| Other comprehensive income (net of tax effects) |  |  |  |  |
| **Amounts that will not be subsequently reclassified to profit or loss** |  |  |  |  |
| Gain from remeasurement of defined benefit plans |  | 2722 | 3280 | 8923 |
| **Amounts that will be, or that have been, reclassified to profit or loss if specific conditions are met** |  |  |  |  |
| Adjustments for translation of financial statements of foreign operations |  | (1140) | 11981 | 35842 |
| Change in fair value of instruments used in cashflow hedging |  | (4) | (532) | (375) |
| Total comprehensive income |  | **289802** | **261584** | **398871** |
| **Net income attributable to:** |  |  |  |  |
| Equity holders of the company |  | 272422 | 227333 | 334669 |
| Non-controlling interests |  | 15802 | 19522 | 19812 |
|  |  | **288224** | **246855** | **354481** |
| **Total comprehensive income attributable to:** |  |  |  |  |
| Equity holders of the company |  | 273804 | 241865 | 379261 |
| Non-controlling interests |  | 15998 | 19719 | 19610 |
|  |  | **289802** | **261584** | **398871** |
| **Net earnings per share attributable to the equity holders of the Company (NIS)** | 22 |  |  |  |
| Basic net earnings per share |  | 4.29 | 3.58 | 5.32 |
| Diluted net earnings per share |  | 4.29 | 3.58 | 5.30 |

---

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

Consolidated Financial Statements 9

**Consolidated Statements of Changes in Equity**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share capital** | **Share premium** | **Treasury shares** | **Reserve for adjustments<br> arising from translation<br> of financial statements of foreign operations and cashflow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share based payment and transactions with non-controlling interests** | **Retained earnings** | **Total attributable to <br> Company shareholders** | **Non-controlling interests** | **Total<br> Equity** |
| **Balance as of January 1, 2024** | 68255 | 309447 | (7982) | (8335) | 10186 | 11035 | 665981 | 1048587 | 58885 | 1107472 |
| Net income | - | - | - | - | - | - | 272422 | 272422 | 15802 | 288224 |
| Adjustments for translation of financial statements of foreign operations and cashflow hedge | - | - | - | (1340) | - | - | - | (1340) | 196 | (1144) |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 2722 | 2722 | - | 2722 |
| Total other comprehensive income | - | - | - | (1340) | - | - | 2722 | 1382 | 196 | 1578 |
| Total comprehensive income | - | - | - | (1340) | - | - | 275144 | 273804 | 15998 | 289802 |
| Non-controlling interests in a company that was consolidated for the first time | - | - | - | - | - | - | - | - | 950 | 950 |
| Dividend declared | - | - | - | - | - | - | (232491) | (232491) | - | (232491) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (13133) | (13133) |
| Transaction with holders of non-controlling interests | - | - | - | - | - | (19193) | - | (19193) | (7106) | (26299) |
| Share-based payments | - | - | - | - | - | 18026 | - | 18026 | - | 18026 |
| **Balance as of December 31, 2024** | 68255 | 309447 | (7982) | (9675) | 10186 | 9868 | 708634 | 1088733 | 55594 | 1144327 |

---

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

Consolidated Financial Statements 10

**Consolidated Statements of Changes in Equity (NIS thousands)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share capital** | **Share premium** | **Treasury**<br> **shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cashflow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share based payment and transactions with non-controlling interests** | **Retained earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total <br> Equity** |
| **Balance as of January 1, 2023** | 68002 | 305894 | (7982) | (19587) | 10186 | (1881) | 561777 | 916409 | 48466 | 964875 |
| Net income | - | - | - | - | - | - | 227333 | 227333 | 19522 | 246855 |
| Adjustments for translation of financial statements of foreign operations and cashflow hedge | - | - | - | 11252 | - | - | - | 11252 | 197 | 11449 |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 3280 | 3280 | - | 3280 |
| Total other comprehensive income | - | - | - | 11252 | - | - | 3280 | 14532 | 197 | 14729 |
| Total comprehensive income | - | - | - | 11252 | - | - | 230613 | 241865 | 19719 | 261584 |
| Exercise of<br>options<br>| 253 | 3553 | - | - | - | (3806) | - | - | - | - |
| Dividend declared | - | - | - | - | - | - | (126409) | (126409) | - | (126409) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (11312) | (11312) |
| Transaction with holders of non-controlling interests | - | - | - | - | - | 616 | - | 616 | 2012 | 2628 |
| Share-based payments | - | - | - | - | - | 16106 | - | 16106 | - | 16106 |
| **Balance as of December 31, 2023** | 68255 | 309447 | (7982) | (8335) | 10186 | 11035 | 665981 | 1048587 | 58885 | 1107472 |

---

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

Consolidated Financial Statements 11

**Consolidated Statements of Changes in Equity (NIS thousands)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share** <br> **capital** | **Share premium** | **Treasury**<br> **shares** | **Reserve for adjustments arising from translation of financial statements of foreign operations and cashflow hedge** | **Reserve for transactions between a corporation and a controlling shareholder** | **Reserve for share based payment and transactions with non-controlling interests** | **Retained**<br> **earnings** | **Total attributable to Company shareholders** | **Non-controlling interests** | **Total**<br> **Equity** |
| **Balance as of January 1, 2022** | 67703 | 301445 | (7982) | (55256) | 10186 | 6456 | 502460 | 825012 | 53042 | 878054 |
| Net income | - | - | - | - | - | - | 334669 | 334669 | 19812 | 354481 |
| Adjustments for translation of financial statements of foreign operations and cashflow hedge | - | - | - | 35669 | - | - | - | 35669 | (202) | 35467 |
| Actuarial gain from remeasurement of defined benefit plans | - | - | - | - | - | - | 8923 | 8923 | - | 8923 |
| Total other comprehensive income | - | - | - | 35669 | - | - | 8923 | 44592 | (202) | 44390 |
| Total comprehensive income | - | - | - | 35669 | - | - | 343592 | 379261 | 19610 | 398871 |
| Exercise of options | 299 | 4449 | - | - | - | (4748) | - | - | - | - |
| Derecognition of non-controlling interests in respect of a subsidiary that was disposed of | - | - | - | - | - | - | - | - | (2713) | (2713) |
| Acquisition of rights in a subsidiary | - | - | - | - | - | (1434) | - | (1434) | - | (1434) |
| Transaction with holders of non-controlling interests | - | - | - | - | - | (3065) | - | (3065) | 3065 | - |
| Dividend declared | - | - | - | - | - | - | (284275) | (284275) | - | (284275) |
| Dividend to non-controlling interests | - | - | - | - | - | - | - | - | (24538) | (24538) |
| Share-based payments | - | - | - | - | - | 910 | - | 910 | - | 910 |
| **Balance as of December 31, 2022** | 68002 | 305894 | (7982) | (19587) | 10186 | (1881) | 561777 | 916409 | 48466 | 964875 |

---

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

Consolidated Financial Statements 12

**Consolidated Statements of Cash Flows (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
| | **Year ended December 31,** **2024** | **Year ended December 31,** **2023** | **Year ended December 31,** **2022** |
| **Cash Flows from operating activities:** | | | |
| Net income | 288224 | 246855 | 354481 |
| Adjustments required to reconcile net income to net cash (used in)/provided by operating activities: |  |  |  |
| **Adjustments to profit and loss items:** |  |  |  |
| Depreciation and amortization | 186811 | 203619 | 162225 |
| Taxes on income | 94978 | 78331 | 100285 |
| Change in liabilities for employee benefits | 1553 | 4966 | 671 |
| Other financial expenses, net | 27619 | 39196 | 21745 |
| Revaluation of long-term bank loans | (392) | (535) | (26) |
| Revaluation of liabilities in respect of business combinations | (1741) | (348) | 417 |
| Capital gain from disposal of property, plant, and equipment | (301) | (292) | (197) |
| Share-based payment | 18026 | 16106 | 1330 |
| Gain on disposal of subsidiary | - | - | (150059) |
| Revaluation of liabilities for put options for non-controlling interests | 15321 | 10175 | 12159 |
|  | 341874 | 351218 | 148550 |
| Changes in assets and liabilities items |  |  |  |
| Increase in trade receivables | (245505) | (73925) | (77873) |
| Decrease (increase) in other receivables and prepaid expenses | (15712) | 22029 | (7898) |
| Decrease (increase) in inventories | 44413 | (12424) | (47062) |
| Increase in trade payables | 140568 | 84766 | 65191 |
| Increase in deferred revenues and other accounts payable | 188813 | 24825 | 53083 |
|  | 112577 | 45271 | (14559) |

---

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

Consolidated Financial Statements 13

**Consolidated Statements of Cash Flows (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** **2024** | **Year ended December 31,** **2023** | **Year ended December 31,** **2022** |
| Cash paid and received over the course of the year for: |  |  |  |
| Interest paid | (49375) | (54917) | (28408) |
| Interest received | 20084 | 14505 | - |
| Taxes paid | (124758) | (113262) | (91991) |
| Taxes received | 30595 | 6529 | 19318 |
|  | (123454) | (147145) | (101081) |
| Net cash provided by operating activities | 619221 | 496199 | 387391 |
| **Cash flows from investment activities:** |  |  |  |
| Proceeds from sale of property, plant, and equipment | 1936 | 3398 | 1244 |
| Acquisition of property, plant, and equipment | (41541) | (38866) | (38757) |
| Disposal of a deconsolidated subsidiary<sup>(c)</sup> | - | - | 143641 |
| Tax payment in respect of disposal of a subsidiary | - | - | (28300) |
| Software development costs | - | (2250) | - |
| Payment for acquisition of subsidiaries consolidated in previous period | - | - | (389) |
| Acquisition of initially consolidated subsidiaries<sup>(a)</sup> | (17321) | (38034) | (41005) |
| Net cash from (used for) investment activities | (56926) | (75752) | 36434 |

---

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

Consolidated Financial Statements 14

**Consolidated Statements of Cash Flows (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** **2024** | **Year ended December 31,** **2023** | **Year ended December 31,** **2022** |
| **Cash flows from financing activities:** |  |  |  |
| Short-term credit from banks and other credit providers, net | (24019) | (35626) | (24441) |
| Receipt from the issuing of commercial securities | 100000 | - | - |
| Receipt of long-term loans from banks and other credit providers |  |  | 90000 |
| Repayment of long-term loans from banks and other credit providers | (179003) | (223175) | (233159) |
| Dividend distribution | (184214) | (126409) | (284275) |
| Repayment of liabilities in respect of business combinations | (11561) | (15211) | (3132) |
| Payment of leasing liabilities | (129435) | (137896) | (107135) |
| Distribution of dividends to non-controlling interests | (30271) | (27242) | (45368) |
| Payment of liabilities for options to non-controlling interests | (1124) | (29352) | (3359) |
| Receipt in respect issuance of debentures | - | - | 471476 |
| Acquisition of non-controlling interests | (3899) | - | - |
| Repayment of debentures | (67918) | (33959) | - |
| Net cash used for financing activities | (531444) | (628870) | (139393) |
| **Translation differences for cash and cash-equivalent balances** | (2564) | 9318 | 20749 |
| **Increase (decrease) in cash and cash equivalents** | 28287 | (199105) | 305181 |
| **Balance of cash and cash equivalents at beginning of year** | 640208 | 839313 | 534132 |
| **Balance of cash and cash equivalents at end of year** | 668495 | 640208 | 839313 |

---

Consolidated Financial Statements 15

**Consolidated Statements of Cash Flows (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** **2024** | **Year ended December 31,** **2023** | **Year ended December 31,** **2022** |
| **(a) Acquisition of initially consolidated subsidiaries:** | | | |
| &nbsp;&nbsp; The subsidiaries' assets and liabilities at date of acquisition: |  |  |  |
| &nbsp;&nbsp; Working capital (other than cash and cash equivalents) | 663 | (36212) | (1831) |
| &nbsp;&nbsp; Property, plant, and equipment, net | (270) | (287) | (2315) |
| &nbsp;&nbsp; Long-term deposits | &nbsp;&nbsp;&nbsp;&nbsp;- | - | (2) |
| &nbsp;&nbsp; Deferred tax | (155) | (350) | (2363) |
| &nbsp;&nbsp; Inventories | (185) | (15339) | (8694) |
| &nbsp;&nbsp; Goodwill | (36038) | (20869) | (36322) |
| &nbsp;&nbsp; Intangible assets, net | (13656) | (21158) | (12007) |
| &nbsp;&nbsp; Employee benefit liabilities | - | 129 | 216 |
| &nbsp;&nbsp; Deferred taxes provision | 3224 | 4867 | 2761 |
| &nbsp;&nbsp; Liabilities for put options to holders of non-controlling interests | - | 26104 | - |
| &nbsp;&nbsp; Non-controlling interests | 950 | - | - |
| &nbsp;&nbsp; Short-term liabilities | - | 25081 | 4801 |
| &nbsp;&nbsp; Liabilities in respect of business combinations | 28146 | - | 14751 |
|  | **(17321)** | **(38034)** | **(41005)** |
| **(b) Significant non-cash transactions:** |  |  |  |
| &nbsp;&nbsp; Dividend declared and not yet paid | 48277 | - | - |
| &nbsp;&nbsp; Right-of-use asset recognized with corresponding lease liability | 286695 | 171606 | 143762 |
| &nbsp;&nbsp; Issuing of call options to non-controlling interests | 22400 | - | - |
| **(c) Disposal of consolidated subsidiary:** |  |  |  |
| &nbsp;&nbsp; The subsidiaries' assets and liabilities at date of acquisition: |  |  |  |
| &nbsp;&nbsp; Working capital (other than cash and cash equivalents) | - | - | (24707) |
| &nbsp;&nbsp; Investment in securities | - | - | &nbsp;&nbsp;&nbsp;16745 |
| &nbsp;&nbsp; Property, plant, and equipment, net | - | - | &nbsp;&nbsp;&nbsp;2615 |
| &nbsp;&nbsp; Deferred tax | - | - | &nbsp;&nbsp;&nbsp;223 |
| &nbsp;&nbsp; Goodwill | - | - | &nbsp;&nbsp;&nbsp;1470 |
| &nbsp;&nbsp; Employee benefit liabilities | - | - | (51) |
| &nbsp;&nbsp; Non-controlling interests | - | - | (2713) |
| &nbsp;&nbsp; Gain on disposal of investment in a subsidiary | - | - | &nbsp;&nbsp;&nbsp;150059 |
|  | **-** | **-** | &nbsp;&nbsp;&nbsp;**143641** |

---

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

Consolidated Financial Statements 16

**Notes to the Consolidated Financial Statements**

**Note 1: General**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Matrix
IT Ltd. (the "Company") was incorporated in Israel on 12 September 1989, and started its business operations on
that day. The Company is deemed a resident of Israel. The Company is publicly traded corporation listed on the Tel Aviv Stock Exchange
Ltd.

The address of the Company's registered office is 3 Atir Yeda St, Kfar Saba.

The Company's controlling shareholder is Formula Systems (1985) Ltd. (hereinafter - Formula Systems). According to Formula Systems' reports, Asseco Poland S.A. ("Asseco"), a Polish company whose shares are traded on the Warsaw Stock Exchange, holds 25.8% of Formula Systems' share capital. (For additional details, see Article 21a in the chapter - "Additional Company Details.")

The Company currently operates in four areas of operating segments, as follows (see Note 24 for details):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. IT Solutions and Services, Consulting, and Management in Israel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. IT Solutions and Services in the US;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Marketing and Support of Software Products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Cloud and Computing Infrastructures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **Definitions** 

In these financial statements:

---

| |
|:---|
| The Company – Matrix IT Ltd. |
| The Group – The Company and its investees. |
| Consolidated companies – Companies that are controlled by the Company as defined in IFRS 10. |
| Investee companies – Consolidated companies and investee companies. |
| Parent company – Formula Systems (1985) Ltd. |
| Ultimate parent company – Asseco Poland S.A. |
| Interested parties and controlling shareholder – As defined in the Securities Regulations (Annual Financial Statements), 2010. |
| Related parties – As defined in IAS 24. |

---

Consolidated Financial Statements 17

**Note 2: Significant Accounting Policies**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Basis of Presentation of the Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Preparation format of the financial statements

The financial statements comply with the International Financial Reporting Standards (IFRS Accounting Standards). Similarly, the financial statements are prepared according to the provisions of the Securities Regulations (Annual Financial Statements), 2010.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Measurement basis

The Company's financial statements are prepared on a cost basis except for financial assets and liabilities (including derivative instruments), which are presented at fair value through profit or loss and assets and liabilities for employee benefits.

The Company has elected to present its profit and loss items according to the function of expense method.

The Company classifies the details of the statement of financial position as current or non-current according to the Company's regular operating cycle, which is 12 months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Consistent accounting policies

The accounting policies set forth below have been consistently applied in the financial statements during all of the presented periods unless otherwise stated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Estimates and Assumptions Used in the Preparation of
the Financial Statements

When preparing the financial statements, management is required to make estimates, assessments, and assumptions that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities, revenues, and expenses. In making accounting estimates, Company management relies on past experience, various facts, outside facts, and reasonable assumptions, based on circumstances. The estimates and underlying assumptions are reviewed regularly. Changes in accounting estimates are recognized in the period of the change in estimate.

The key assumptions that were made in the financial statements concerning uncertainties at the reporting date and the critical estimates computed by the Group that may result in a material adjustment to the carrying amounts of assets and liabilities in the financial statements for the following reporting year:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Impairment of goodwill

The Group reviews impairment of goodwill at least once annually. The review requires management to make an estimate of the projected future cash flows from the continuing use of cash-generating units to which the goodwill is allocated, as well as to estimate the appropriate discount rate for these cash flows. The potential consequences are imputation of impairment losses to profit or loss in the period in which they occurred. See Section N for additional information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Determining the fair value of
non-controlling interests Put Option

In a business combination, when the Group measures the liability in respect of a put option to holders of non-controlling interests at fair value, it determines the fair value according to the discounting of cash flows method.

Consolidated Financial Statements 18

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Estimates and Assumptions Used in the Preparation of
the Financial Statements (continued)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Measuring the progress toward
satisfaction of a performance obligation

For each transaction in which the performance obligation is satisfied over time, the Company applies an appropriate method of measuring progress toward satisfaction of the performance obligation using either an input or output method. In determining the appropriate method, the Company considers the nature of the goods or services provided to the customer. In calculating the rate of progress toward satisfaction of a performance obligation in each period, the Company will make various estimates such as expected volume of outputs from the contract, expected volume of inputs used in fulfilling the contract, etc. The Company exercises judgment in establishing the relevant estimates and relies, among others, on market data, the Company's experience, and other facts and assumptions based on the relevant circumstances of each estimate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Lease transactions with extension
and termination options

In order to assess q it is reasonably certain that the Company will exercise an option to extend the lease term or to terminate the lease term, the Company takes into account all of the relevant facts and circumstances that create an economic incentive for the Company to exercise or not to exercise the option, such as: significant sums invested in leasehold improvements, the importance of that underlying asset and its inherent uniqueness for the purpose of the Company's operations, the Company's past experience in similar lease transactions, etc.

After the commencement date, the Company reevaluates whether it is reasonably certain that it will exercise or refrain from exercising an option upon the occurrence of a significant event or significant change in circumstances that may affect the Company's decisions regarding exercising the option, such as significant leasehold improvements not anticipated at the commencement date, the inception of a sublease of the underlying asset for a period beyond the end of the previously determined lease term, etc. Possible consequences are an increase or reduction of the right-of-use asset and the lease liability, and a change in depreciation and financial expenses in the respective subsequent periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Consolidated financial statements

The consolidated financial statements comprise the financial statements of companies that are controlled by the Company (subsidiaries). Control is achieved when the Company has the power to affect the investee, 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. Potential voting rights are considered when assessing whether an entity has control. The consolidation of the financial statements commences on the date on which control is obtained and ends when such control ceases.

Non-controlling interests in subsidiaries represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests.

Consolidated Financial Statements 19

**Note 2: Significant Accounting Policies (Cont.)**

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as a change in equity by adjusting the carrying amount of the non-controlling interests with a corresponding adjustment of the equity attributable to equity holders of the Company less / plus the consideration paid or received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Functional currency, presentation currency, and foreign currency

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Functional currency and presentation currency

The functional and presentation currency of the financial statements is NIS.

The functional currency is the currency of the primary economic environment in which the Company operates.

The Group determines the functional currency of each Group entity, including companies accounted for at equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Index-linked monetary items

Monetary items that are linked, pursuant to their terms, to fluctuations in the Israeli consumer price index (hereinafter: the "Index") are adjusted according to the relevant Index, on each reporting date, pursuant to the terms of the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Cash equivalents

Cash equivalents are considered to be highly liquid investments that form part of the Group's cash management. Such investments include unrestricted short-term bank deposits with an original maturity of three months or less from the date of acquisition or with a maturity of more than three months that are redeemable on demand without .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Short-term deposits

Short-term bank deposits are deposits with an original maturity of more than three months from the date of investment and do not meet the definition of cash equivalents. The deposits are presented according to their terms of deposit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Inventories

Inventories are measured according to the lower between cost and net realizable value. The cost of inventories comprises costs of purchase and costs incurred in bringing the inventories to their present location and condition. The net realizable value represents the estimate of the sale price during the ordinary course of business less an estimate of the completion costs and the costs required to make the sale.

The cost of the inventories of purchased goods and products, computers, peripheral equipment, and replacement parts is determined using the "first in, first-out method" for specific inventories or a weighted average, as applicable.

The Company periodically reviews the condition and age of its inventories and makes provisions for slow inventories accordingly.

Consolidated Financial Statements 20

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. Financial instruments

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Financial assets

Financial assets subject to the standard are measured upon initial recognition at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset, other than a financial asset measured at fair value through profit or loss, regarding which transaction costs are recorded in profit or loss.

The Company measures debt instruments at amortized cost when:

The Company's business model is the holding of financial assets in order to collect their contractual cash flows, and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial recognition, the instruments in this category are measured according to their terms at cost plus direct transaction costs, using the effective interest rate method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Impairment of financial assets

The Company evaluates, at the end of each reporting period, the loss allowance for financial debt instruments that are not measured at fair value through profit or loss.

The Company distinguishes between two types of loss allowances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Debt instruments whose credit risk has not increased
significantly since initial recognition or whose credit risk is low - the loss allowance recognized in respect of this debt instrument
takes into account the expected credit losses ("ECL") within 12 months from the reporting date (12-month ECLs); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Debt instruments whose credit risk has increased
significantly since initial recognition, and whose credit risk is not low - the loss allowance recognized is measured at an amount equal
to the expected credit losses over the instrument's remaining term (lifetime ECLs).

The Company has short-term financial assets such as trade receivables in respect of which the Company applies the simplified approach in and measures the loss allowance in an amount equal to the lifetime expected credit losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Derecognition of financial assets

A financial asset is derecognized only when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The contractual rights to the cash flows from the financial asset have expired; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Company has substantially transferred all of the risks and rewards that derive from the contractual
rights to receive cash flows from the financial asset or has neither substantially transferred nor retained all of the asset's risks
and rewards but has transferred control of the asset.

Consolidated Financial Statements 21

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Financial liabilities

Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of the financial liability, except in the case of a financial liability that is measured at fair value through profit or loss in which transaction costs are charged to profit or loss.

After initial recognition, the Company measures all financial liabilities at amortized cost using the effective interest rate method except for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Financial liabilities measured at fair value through profit or loss, such as derivatives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Contingent consideration recognized by an acquirer
in a business combination, to which IFRS 3 applies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Derecognition of financial liabilities

A financial liability is derecognized only when it is extinguished, that is, when the obligation specified in the contract is discharged, cancelled, or expires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Put option granted to non-controlling interests

The Group has granted non-controlling interests a put option to sell part or all of their holdings in a consolidated company for a certain period. On the day of granting, the non-controlling interests were classified as a financial liability and do not confer on these rights their share in the consolidated company's profits.

The Group remeasures the financial liability at the end of each reporting period based on the estimated present value of the consideration to be transferred upon the exercise of the put option. Changes in the amount of the liability are recorded in the statement of profit and loss. If the option is exercised in subsequent periods, the consideration paid upon exercise is treated as a settlement of the liability. If the option expires, the liability is settled and a portion of the investment in the consolidated company will be disposed of, without loss of control thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. Hedging accounting

The Group at times enters into derivative financial instruments such as forward contracts or options in order to hedge against risks involved in foreign currency exchange rate fluctuations.

Gains or losses that derive from changes in the fair value of derivatives that are not used for hedging purposes are immediately credited to profit or loss.

Hedges qualify for hedge accounting, *inter alia*, when at the hedge is created, there is a designation and formal documentation of the hedging relationship and of the Group's risk management objective and strategy for undertaking the hedge. The hedge is examined on an ongoing basis and is assessed in practice to be highly effective during the financial reporting period for which the hedge is intended.

Consolidated Financial Statements 22

**Note 2: Significant Accounting Policies (Cont.)**

Hedging transactions are handled as follows:

Cash flow hedges:

The effective portion of the changes in fair value of the hedging instrument is recognized in other comprehensive income (loss) whereas the ineffective portion is immediately recognized in profit or loss.

Amounts recognized as other comprehensive income (loss) are reclassified to profit or loss when the hedging transaction results are charged to profit or loss.

Fair value hedges:

Changes in the fair value of derivatives intended to hedge fair value as well as changes in the fair value of the hedged item are recognized in profit or loss and are charged to financial expenses/income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. Leases

The Company accounts for a contract as a lease when the contract terms convey the right to control the use of an identified asset for a period of time in exchange for consideration.

For leases in which the Company is the lessee, the Company recognizes a right-of-use asset and a lease liability on the commencement date of the lease. The Company has elected to apply the practical expedient in the Standard and does not separate the lease components from the non-lease components (such as management and maintenance services, etc.) included in that same transaction.

Leases in which an employee is entitled to a Company car as part of the terms of his/her employment are accounted for by the Company as employee benefits pursuant to the provisions of IAS 19, and not as subleases.

On the commencement date, the lease liability includes all unpaid lease payments discounted at the Company's incremental borrowing interest rate, determined using an outside economic study. After the commencement date, the Company measures the lease liability using the effective interest rate method.

On the commencement date, a right-of-use asset is recognized at the amount of the lease liability plus lease payments that were made on the commencement date or prior thereto, plus the incurred costs of the transaction.

A right-of-use asset is measured according to the cost model and is deducted over the shorter of its useful life using the straight-line method, or the lease period.

Below are the amortization periods of the right-of-use assets by underlying asset class:

---

| | | |
|:---|:---|:---|
| | **Years** | **Mainly** |
| Land and buildings | 3-10 | 10 |
| Vehicles | 3 | 3 |

---

The Company tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36.

Consolidated Financial Statements 23

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K. Business combinations and goodwill

Business combinations are accounted for by applying the acquisition method. The cost of the acquisition is measured at the fair value of the consideration transferred on the acquisition date with the addition of non-controlling interests in the acquiree. In each business combination, the Company elects to measure the non-controlling interests in the acquiree based on their proportionate share in the fair value of the acquiree's net identifiable assets.

Direct acquisition costs are carried to the statement of comprehensive income, at the time they are incurred.

A put option issued by the Group for rights that do not confer control is treated using the expected purchase approach, i.e., the starting assumption underlying the method is that the option will be exercised. Thus, the parent company in practice owns the holding percentage of the subsidiary's shares after the exercise of the put option. A put option issued by the Group to non-controlling interests in exchange for cash or another financial asset is recognized as a liability at the present value of the option's exercise price.

Contingent consideration is recognized at fair value on the acquisition date. Contingent consideration is classified as a financial asset or liability in accordance with IFRS 9. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.

Goodwill is initially measured at cost, which represents the excess of the acquisition consideration and the amount of non-controlling interests over the net identifiable assets acquired and liabilities assumed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;L. Property, plant, and equipment

Property, plant and equipment are measured at cost, plus directly attributable costs, less accumulated depreciation, accumulated impairment losses and any related investment grants, and excluding day-to-day servicing expenses.

An asset is depreciated from the time it is available for use, that is when it has reached the location and condition necessary for it to be able to operate in the manner intended by management.

Depreciation is calculated in equal annual increments using the straight-line method over the asset's useful lifespan, as follows:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;**%** |
| Computers, furniture, and equipment | &nbsp;&nbsp;7-33 |
| Vehicles | &nbsp;&nbsp;15 |
| Leasehold improvements | &nbsp;&nbsp;See below. |

---

Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term (including the extension option held by the Group and intended to be exercised) and the useful life of the improvement.

Consolidated Financial Statements 24

**Note 2: Significant Accounting Policies (Cont.)**

The useful life, depreciation method, and the residual value of an asset are reviewed at least at each year end, and changes are accounted for prospectively as a change in accounting estimate. See Section N below regarding testing impairment of property, plant, and equipment.

Depreciation of an asset ceases at the earlier of the date on which the asset is classified as held for sale and the date on which the asset is derecognized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M. Intangible assets

Separately acquired intangible assets are measured upon initial recognition at cost plus directly attributable costs. Intangible assets that are acquired in a business combination are measured at fair value at the acquisition date.

In management's assessment, intangible assets with a finite useful life are amortized on a straight-line basis over their useful life and reviewed for impairment whenever there is an indication that there has been an impairment. The amortization period and the amortization method for the intangible asset are at least reviewed at the end of each year.

The useful life of the intangible assets is as follows:

---

| | |
|:---|:---|
|  | **Years** |
| Customer base and backlog | 1-10 |
| Licenses and franchises | 2-4 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N. Impairment of non-financial assets

The Company reviews the need for impairment of non-financial assets (property, plant, and equipment, intangible assets, goodwill, investments in investees) when there are indications that result from events or changes in circumstances that suggest that the balance in the financial statements is not recoverable. In cases where the balance in the financial statements for non-financial assets exceeds their recoverable amount, these assets are reduced to their recoverable amount. The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset and the time value of money. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are charted to the statement of comprehensive income.

An asset's impairment loss, other than goodwill, is only cancelled when there are changes in the estimates that were used in determining the asset's recoverable amount since the date on which the loss from impairment was last recognized. Said cancellation of loss, is limited to the lower of the asset's previously recognized impairment amount (less amortization or depreciation) and the asset's recoverable amount. With regard to an asset presented at cost, said loss is recognized in the statement of comprehensive income.

Consolidated Financial Statements 25

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N. Impairment of non-financial assets (Cont.)

The following unique criteria are applied in assessing impairment of these specific assets:

Testing impairment of goodwill in respect of consolidated companies

Goodwill acquired in a business combination is allocated, at the acquisition date, to each of the Group's cash-generating units that are expected to benefit from the synergies of the combination. The goodwill is managed by operating segment.

The Company performs its own tests and uses third-party valuation specialists to test for impairment of goodwill once a year on 31 December or more frequently if events or changes in circumstances indicate that there is an impairment.

Goodwill is tested for impairment by assessing the recoverable amount of the cash-yielding unit (or group of cash-yielding units) to which the goodwill is allocated.

Each cash-generating unit to which goodwill has been allocated presents the lost amount of the entity for which goodwill is monitored for internal management purposes and regardless, is not greater than the operating segment.

When the cash-yielding unit's recoverable amount is lower than the balance in the financial statements for the cash-yielding unit (or group of cash-yielding units) to which the goodwill is allocated, the impairment loss, that is attributed first to goodwill, is recognized. Losses from impairment of goodwill are not reversed in consecutive periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;O. Government grants

Government grants are recognized when it is reasonably certain that the grants will be received and the Company will comply with the conditions for receipt of the grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;P. Taxes on income

Current or deferred taxes are charged to the statement of comprehensive income unless they address items that are attributed to other comprehensive income or to equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Current taxes

Current tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date as well as adjustments that are required in connection with the tax liability in respect of previous years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Deferred taxes

Deferred taxes are computed in respect of temporary differences between the carrying amounts in the financial statements and the amounts attributed for tax purposes.

Deferred taxes are measured at the tax rate that is expected to apply when the asset is realized or the liability is settled based on tax laws that have been enacted or substantively enacted by the reporting date.

Consolidated Financial Statements 26

**Note 2: Significant Accounting Policies (Cont.)**

Taxes that would apply in the event of the disposal of investments in investees are not taken into account in calculating deferred taxes as long as the disposal of the investments in investees is not likely in the foreseeable future. Similarly, deferred taxes that would apply in the event of distribution of earnings by investees as dividends have not been taken into account in computing deferred taxes because the distribution of dividends does not involve an additional tax liability or because it is the Company's policy to not initiate distribution of dividends that would trigger additional tax liability.

Deferred taxes are offset in the balance sheet if there is a legal right to offset a current tax asset against a current tax liability and the deferred taxes are attributed to the same entity that is tax liable and to the same tax authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Q. Share-based payment transactions

Executives are entitled to benefits by way of share-based payments that are settled using equity.

Equity-settled transactions

The of equity-settled transactions with employees is measured at the fair value of the granted equity instruments at the grant date. The fair value is determined using an acceptable option pricing model.

The cost of equity-settled transactions is recognized in the statement of comprehensive income, together with a corresponding increase in equity, during the period in which the performance and/or service conditions are satisfied and ending on the date on which the relevant employees become fully entitled to the award (hereinafter: the "vesting period"). The cumulative expense recognized for equity-settled transactions in each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest (which is assessed based on past experience).

No expense is recognized for awards that do not ultimately vest except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether the market condition is satisfied, provided that all other vesting conditions are satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R. Employee benefit liabilities

The Group has several employee benefits plans:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Short-term employee benefits

Short-term employee benefits are benefits that are expected to be settled in full prior to 12 months after the end of the annual reporting period in which the employees render the related services. These benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognized when the Group has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made. The liability for short-term employee benefits presented in the statement of financial position represents the undiscounted value of the liability.

Consolidated Financial Statements 27

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Post-employment benefits

These plans are normally financed by deposits with insurance companies and are classified as defined contribution plans or defined benefit plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Defined contribution plan

The Group has defined contribution plans pursuant to Section 14 to the Severance Pay Law under which the Group pays fixed contributions but has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient amounts to pay all employee benefits relating to employee service in the current and prior periods. Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense when contributed concurrently with performance of the employee's services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Defined benefit plan

The Group has a defined benefit plan for payment of severance pay pursuant to the Severance Pay Law. According to the Law, employees are entitled to severance pay upon dismissal or retirement. Liability for termination of employment is measured according to the actuarial line method of the forecast entitlement unit. The actuarial calculation takes into account expected salary increases and employee turnover rates based on the estimated timing of payment. These amounts are presented based on discounted expected future cash flows using a discount rate determined by reference to market yields, at the reporting date, on high quality corporate bonds that are linked to the Consumer Price Index with a term that is consistent with the estimated term of the severance pay obligation.

In respect of its severance pay obligations to a portion of its employees, the Company makes ongoing deposits in pension funds and insurance companies (hereinafter: the "plan assets"). Plan assets comprise assets held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available to the Group's own creditors and cannot be returned directly to the Group.

The liability for employee benefits presented in the balance sheet reflects the present value of the defined benefit obligation less the fair value of the plan assets.

Remeasurements of net liability are recognized in other comprehensive income in the period in which they occur.

The Group's net obligation for other long-term employee benefits, which is computed based on outside actuarial assumptions, is for the future benefit due to employees for service rendered in the current period and in prior periods and taking into account expected salary increases. The amount of these benefits is discounted to its present value, less the fair value of the assets relating to these obligations. The discount rate is determined by reference, at the reporting date, to market yields on high quality corporate bonds that are linked to the Consumer Price Index and whose term is consistent with the term of the Group's obligation.

Remeasurements of net liability are charged to the statement of comprehensive income in the period in which they occur.

Consolidated Financial Statements 28

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;S. Recognition of income

Revenues from contracts with customers are recognized in profit and loss when control of the goods or service is transferred to the customer. Revenue is measured and recognized according to the fair value of the proceeds that are expected according to the contract terms less the amounts charged by third parties (such as taxes).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Revenues from contracts according to actual inputs

Revenues from framework agreements for the performance of work according to actual inputs is recognized according to the hours actually invested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Revenues from fixed-price contracts

Revenues from these contracts are recognized according to the completion rate method when all of the following conditions have been met: the revenue is known or can be estimated reliably, the collection of revenue is expected, the costs involved in performing the work are known or can be estimated, there is no material uncertainty about the Group's ability to complete the work and, the customer and the completion rate can be reliably estimated.

The completion rate is determined on the basis of the actual cost versus the projected total cost.

As long as all of the conditions for the recognition of income from works pursuant to a long-term project contract are not met, revenue is recognized in the amount of costs incurred that are likely to be recouped (Probable) ("presentation of zero margin"). When a loss is expected from the contract, the full loss is recognized immediately regardless of the completion rate as part of the cost of revenues.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Revenues from Distribution, and Support of Software Products

The Company recognizes revenues from software licensing transactions at the point in time in which the Company grants the customer the right to use its intellectual property as is at the point in time that the license is granted or over time, where the Company grants the customer a right to access the Company's intellectual property throughout the license period.

In general, revenue from agreements that do not include a general right of return, that include several components such as software, service, and support agreements, is divided into separate performance obligations and recognized separately for each performance obligation. The allocation of the consideration shall be proportionate, based on the stand-alone selling price of each component. Recognition of revenue from the various performance obligations is recognized when the conditions for recognition of income from the components included in that performance obligation have been satisfied accordance to their type, and only up to the amount of the consideration that is not contingent on completion or performance of the remaining components in the contract.

Consolidated Financial Statements 29

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Revenues from maintenance

Revenues from maintenance are recognized on a prorated basis over the term of the maintenance contract that is supposed to be performed in each accounting year.

Revenues received and for which the service has not yet been rendered are charged to deferred revenues.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Revenues from training and implementation services

Revenues from training and implementation services are recognized when the service is provided.

Revenues from training services for public courses that are up to 3 months will be recognized over the course period.

Revenues from training services for commissioned courses and professional retraining courses that are either long or short-term, up to one year, will be recognized over the course period.

Revenues from implementation projects commissioned by organizations will be recognized according to actual inputs (actual working hours invested).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Revenues from infrastructures and computing

Revenues from infrastructure solutions and hardware products are recognized in profit or loss upon the transfer of control of the goods to the customer. Generally, control transfers at the time that the goods are delivered to the customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Revenues on a gross or net basis

In determining how to present the revenues from contracts with customers, the Company evaluates whether it is acting as the principal debtor or as an agent under the contract. The Company is a principal supplier when it controls the promised goods or services prior to their being transferred to the customer, and it bears the risks and rewards deriving from the transaction. In such cases, the Company recognizes revenues in the gross amount of the consideration. In cases where the Company is acting as an agent or intermediary, without bearing the risks and rewards deriving from the transaction (such as in certain transactions for distribution, marketing, or sale of software products or certain transactions for the sale of cloud services), the Company recognizes revenues in the net sum after deducting the sums owed to the principal supplier.

Consolidated Financial Statements 30

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Variable consideration

The Company is required to set the transaction price separately for each customer contract. When exercising its judgment, the Company evaluates the effect of each variable amount in the contract, taking into consideration discounts, penalties, variations, claims, and non-cash consideration. In determining the effect of the variable consideration, the Company normally uses the "most likely amount" method specified in the Standard. According to this method, the transaction price is determined as the single most likely amount in the range of possible consideration amounts in the contract. Variable consideration is included only to the extent that it is highly probable that a significant reversal in the amount of revenues recognized will not occur, where the uncertainty associated with the variable consideration will subsequently be resolved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Allocating the transaction price

For contracts that include more than one performance obligation, the Company allocates the total transaction price in the contract on a relative stand-alone sale price basis at the time of the contractual engagement for each identified performance obligation. The stand-alone selling price is the price at which the Company would have sold the goods or services promised in the contract separately to a customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T. Provisions

A provision pursuant to IAS 37 is recognized when the Group has a (legal or constructive) present obligation that results from a past event, it is expected that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. To the extent the effect is material, provisions are measured according to the estimated future cash flows discounted using a pre-tax interest rate that reflects the market assessments of the time value of money and, where appropriate, those risks specific to the liability.

Legal claims

A provision for claims is recognized when the Group has a present legal or constructive obligation as a result of a past event, it is more likely than not that an outflow of resources embodying economic benefits will be required by the Group to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U. Treasury shares

Company shares held by the Company are recognized at cost of purchase and presented as a deduction from the Company's equity. Any gain or loss arising from a purchase, sale, issuance, or cancellation of treasury shares is recognized directly in equity.

Consolidated Financial Statements 31

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;V. Disclosure of new IFRS standards in the period prior to their implementation

IFRS 18, Presentation and Disclosure in Financial Statements (hereinafter: "IFRS 18" or the "New Standard"), published in April 2024, is intended to improve comparability and transparency in reporting on company performance.

The new standard replaces IAS 1, Presentation of Financial Statements, and does not address the recognition and measurement of items in the financial statements.

Below is an overview of the main changes that will apply to the financial statements with the implementation of the new standard, in relation to the current presentation and disclosure requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The new standard will change the structure of the statement of profit or
loss and will include three new defined categories: operating, investing, and financing. It will also add two new subtotals: operating
income and profit before financial and income tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The new standard includes guidelines for disclosing Management-defined Performance
Measures (MPMs) in financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The new standard provides guidance on the aggregation and disaggregation
of information in the financial statements, on whether information should be included in the primary statements or in the notes, and on
disclosures regarding items classified as "other."

IFRS 18 will be applied retroactively as of the annual reporting periods that commence on 1 January 2027 or thereafter while providing the specific disclosure set forth in the transitional provisions for the new standard. In accordance with the provisions of IFRS 18, early adoption is possible with appropriate disclosure. However, according to Corporate Decision No. 2024-1 on the deferral of early adoption of International Financial Reporting Standard 18, published by the Israel Securities Authority staff on 4 August 2024, early adoption will be deferred and permitted only from 1 January 2025.

The Company is assessing the potential impact of IFRS 18 on the financial statements; however, at this stage, it is unable to estimate such an impact. The impact of the new standard, if any, will affect only presentation and disclosure matters.

Consolidated Financial Statements 32

**Note 2: Significant Accounting Policies (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;W. Below is information about changes in the CPI and relevant exchange rates:

---

| | | | |
|:---|:---|:---|:---|
| | **As of<br> 31.12.24** | **As of<br> 31.12.23** | **As of<br> 31.12.22** |
| **Consumer price index (2020 basis)** | | | |
| In Israel (actual CPI) | 114.8 | 111.2 | 108.0 |
| In Israel (known CPI) | 115.11 | 111.3 | 107.7 |
| **NIS exchange rate** |  |  |  |
| USD | 3.65 | 3.63 | 3.52 |
| EUR | 3.80 | 4.01 | 3.75 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended <br> 31.12.24<br> %** | **Year ended<br> 31.12.23<br> %** | **Year ended<br> 31.12.22<br> %** |
| &nbsp;&nbsp;**Consumer price index (2020 basis)** |  |  |  |
| &nbsp;&nbsp;In Israel (actual CPI) | 3.24% | 2.96% | 5.26% |
| &nbsp;&nbsp;In Israel (known CPI) | 3.43% | 3.34% | 5.28% |
| &nbsp;&nbsp;**NIS exchange rate** |  |  |  |
| &nbsp;&nbsp;USD | 0.55% | 3.07% | 13.15% |
| &nbsp;&nbsp;EUR | (5.36%) | 6.89% | 6.62% |

---

**NOTE 3: Business Combination**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. On 24 April 2022, a transaction was completed in which the Company sold holdings representing
45.2% of the issued share capital of the subsidiary, Infinity Labs R. & D. Ltd. ("Infinity"), such that after completing
the transaction, the Company will be retain 4.9% of Infinity's share capital, for a total of NIS 154.5 million. As a result of the transaction,
the Company recognized a capital gain in its financial statements (before tax) in the gross amount of about NIS 150 million (including
revaluation of the retained balance of 4.9%), as well as recognition of tax expenses in the amount of about NIS 28.5 million.<br>
In light of the above, commencing in the second quarter of 2022, the Company stopped consolidating the results of the subsidiary - Infinity
- in its financial statements. The remaining holding (4.9%) will be measured at fair value after that time. Changes in fair value will
be credited to profit and loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. On 19 June 2022, the Company, through its subsidiary, Matrix IT Integration and Infrastructure
Ltd., purchased 100% of the share capital of RDT Equipment and Systems (1993) Ltd., Asio Vision Ltd., and R.S.A. Test Systems Industry
Ltd. (collectively "**RDT** "), for a total of NIS 44 million. As part of the purchase agreement, the sellers will be entitled
to additional consideration that depends on RDT's future financial results. RDT markets solutions and systems for a wide range
of technologies including control and automation systems, test and measurement equipment, advanced technological solutions for testing
data communication, EMC, and radio frequency (RF) and also serves as a representative in Israel of dozens of international companies.
Pursuant to a Purchase Price Allocation (PPA) report, out of the excess purchase cost of NIS 40.6 million, the Company will allocate NIS
14.4 million to intangible assets and the balance to goodwill.

Consolidated Financial Statements 33

**NOTE 3: Business Combination (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. On 1 January 2023, the Company completed the purchase of 70% of the share capital of Zebra Technologies
Ltd. ("Zebra") for NIS 53 million (including equity). Zebra is engaged in the distribution and marketing of solutions and software
products in the fields of data communication, information security, and cyber protection. Pursuant to the purchase agreement, the Company
and the seller have a mutual option to sell and purchase the seller's remaining shares to the Company. Pursuant to a PPA report, out of
the excess purchase cost of NIS 37.1 million, the Company will allocate NIS 21.1 million to intangible assets and the balance to goodwill.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. On 13 November 2024, the Company, through its subsidiary Matrix Holding US LLC, completed the
acquisition of 51% of the interests in the operations of Alacer, which is engaged in providing advisory services and expert supply in
the field of Governance, Regulation & Compliance within the American financial market, for a total sum of USD 2 million in cash, plus
additional contingent consideration derived from the Company's performance over the next 3 years. In addition, the Company holds a call
option to purchase the remaining rights of the sellers in the operation. As of the report date, the valuation underlying the allocation
of the consideration to assets and liabilities (the PPA) has not yet been completed and accordingly, this allocation is temporary, according
to management's assessment, and may be updated in the coming periods after the valuation is completed. According to the temporary allocation,
of the excess purchase cost in the amount of USD 2.1 million, the sum of USD 0.6 million will be allocated to intangible assets and the
balance will be allocated to goodwill.

As noted above, the Group has recognized, on a provisional basis, the fair value of the assets acquired and liabilities assumed in the business combination. Accordingly, both the purchase consideration and the fair values of the assets acquired and liabilities assumed are subject to final measurement adjustments within a period of up to 12 months from the acquisition date, in accordance with IFRS 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. On 3 December 2024, the Company, through its subsidiary Matrix IT Integration and Infrastructure,
completed the acquisition of 100% of the share capital of Moshe Ort Holdings Ltd. ("Ortec") for the sum of NIS 19.5 million
(including equity) in cash, plus additional consideration that is contingent on the Company's future financial results. Ortec imports,
distributes, sells and provides support and characterization services for automatic manufacturing machines used for component assembly,
as well as automated inspection machines used for assembly processes and components on production lines in the fields of industry equipment,
medical devices, military equipment, lasers, and sensors for civilian and security applications, optical communication systems, radar
systems for cars. Additionally, it serves as a representative in Israel for dozens of international manufacturers. As of the report date,
the valuation underlying the allocation of the consideration to assets and liabilities (the PPA) has not yet been completed and accordingly,
this allocation is temporary, according to management's assessment, and may be updated in the coming periods after the valuation is completed.

Consolidated Financial Statements 34

**NOTE 3: Business Combination (Cont.)**

According to the temporary allocation, of the excess purchase cost in the amount of NIS 38.6 million, the sum of NIS 11.6 million will be allocated to intangible assets and the balance will be allocated to goodwill.

As noted above, the Group has recognized, on a provisional basis, the fair value of the assets acquired and liabilities assumed in the business combination. Accordingly, both the purchase consideration and the fair values of the assets acquired and liabilities assumed are subject to final measurement adjustments within a period of up to 12 months from the acquisition date, in accordance with IFRS 3

**Note 4: Cash and Cash Equivalents (NIS thousands)**

---

| | | |
|:---|:---|:---|
| **NIS:** | **December 31**<br>**2024**<br>| **December 31<br> 2023** |
| Cash | 206596 | 126594 |
| Cash equivalents - short-term deposits | 208262 | 228871 |
|  | 414858 | 355465 |
| **Foreign currency** |  |  |
| Cash | 159905 | 237310 |
| Cash equivalents - short-term deposits | 93732 | 47433 |
|  | 253637 | 284743 |
|  | **668495** | **640208** |

---

Consolidated Financial Statements 35

**Note 5: Trade Receivables and Unbilled Receivables, Net**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Trade receivables, net (NIS thousands):

---

| | | |
|:---|:---|:---|
| | **December 31** <br> **2024**  | **December 31<br> 2023** |
| **Open debts:** | | |
| NIS | 1227037 | 1177829 |
| Foreign currency | 178527 | 155057 |
| Related parties | 16963 | 5052 |
| Checks receivable | 48234 | 51970 |
| Unbilled receivables | 474640 | 304415 |
| Less – provision for doubtful debts | (19211) | (17354) |
| **Trade receivables, net** | **1926190** | **1676969** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Movement in the provision for doubtful debts:

---

| | |
|:---|:---|
| | **NIS thousands** |
| **Balance at January 1, 2023** | **13744** |
| Equity reserve | 11 |
| Additions during the year | 6343 |
| Derecognition of bad debts | (536) |
| Reversal of collected doubtful debts | (2208) |
| **Balance at** **December 1, 2023** | **17354** |
| Equity reserve | - |
| Additions during the year | 5612 |
| Derecognition of bad debts | (1424) |
| Reversal of collected doubtful debts | (2331) |
| **Balance at December 31, 2024** | **19211** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Below is information regarding the Company's exposure to credit risk
exposure in respect of trade receivables, net:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Aging analysis of past due trade receivables** | **Aging analysis of past due trade receivables** | **Aging analysis of past due trade receivables** | **Aging analysis of past due trade receivables** | **Aging analysis of past due trade receivables** | **Aging analysis of past due trade receivables** | **Aging analysis of past due trade receivables** | **Aging analysis of past due trade receivables** |
|  | **Current** | **Up to 30** <br>**days**<br>| **30 - 60 days** | **60 - 90** <br> **days**<br>| **90 - 120 days** | **Over 120** <br> **days**<br>| **Total** |
| 31.12.24 | 1514987 | 256159 | 86275 | 38095 | 18465 | 12209 | 1926190 |
| 31.12.23 | 1232452 | 265301 | 103221 | 35883 | 28422 | 11690 | 1676969 |

---

Consolidated Financial Statements 36

**Note 6: Other Receivables (NIS thousands)**

---

| | | |
|:---|:---|:---|
|  | **31 December<br> 2024** | **31 December<br> 2023** |
| Employees | 961 | 1085 |
| Government authorities | 2849 | 2176 |
| Prepaid expenses | 113522 | 93209 |
| Advances to suppliers | 3356 | 3710 |
| Other accounts receivable | 1585 | 1500 |
| **Total** | **122273** | **101680** |

---

**Note 7: Inventories (NIS thousands)**

---

| | | |
|:---|:---|:---|
|  | **31 December<br> 2024** | **31 December 2023** |
| Inventories of computers and peripherals | **101,861** | **146,089** |

---

<br> The provision for impairment of inventories in 2024 and 2023 amounted to NIS 3,730 thousand and NIS 1,591 thousand, respectively.

Consolidated Financial Statements 37

**Note 8: Property, Plant, and Equipment**

**Composition and movement - 2024 (NIS thousands):**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Assets owned by the Company Computers, furniture, and equipment** | **Assets owned by the Company Motor vehicles** | **Assets owned by the Company Leasehold improvements** | &nbsp;&nbsp;**Assets under operating lease Machines and equipment** | **Total** |
| &nbsp;&nbsp;**Cost** |  |  |  |  |  |
| &nbsp;&nbsp;Balance at January 1, 2024 | 168054 | 13937 | 88390 | 60489 | 330870 |
| &nbsp;&nbsp;Entrance to consolidation | 201 | 788 | - | - | 989 |
| &nbsp;&nbsp;Purchases during the year | 14920 | 939 | 17892 | 7790 | 41541 |
| &nbsp;&nbsp;Disposals during the year | (1172) | (5383) | - | (8806) | (15361) |
| &nbsp;&nbsp;Adjustments for translation of financial statements | 25 | - | (3) | - | 22 |
| &nbsp;&nbsp;Balance at December 31, 2024 | 182028 | 10281 | 106279 | 59473 | 358061 |
| &nbsp;&nbsp;**Accrued depreciation** |  |  |  |  |  |
| &nbsp;&nbsp;Balance at 1 January, 2024 | 123649 | 9271 | 60064 | 42528 | 235512 |
| &nbsp;&nbsp;Entrance to consolidation | 200 | 519 | - | - | 719 |
| &nbsp;&nbsp;Purchases during the year | 17273 | 1323 | 6689 | 8654 | 33939 |
| &nbsp;&nbsp;Disposals during the year | (1225) | (3937) | - | (8564) | (13726) |
| &nbsp;&nbsp;Adjustments for translation of financial statements | 5 | - | (4) | - | 1 |
| &nbsp;&nbsp;Balance at December 31, 2024 | 139902 | 7176 | 66749 | 42618 | 256445 |
| &nbsp;&nbsp;**Depreciated cost at December 31, 2024** | **42126** | **3105** | **39530** | **16855** | **101616** |

---

Consolidated Financial Statements 38

**Note 8: Property, Plant, and Equipment (Cont.)**

**Composition and movement - 2023 (NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Assets owned by the Company Computers, furniture, and equipment** | **Assets owned by the Company Motor vehicles** | **Assets owned by the Company Leasehold improvements** | **Assets under operating lease Machines and equipment** | **Total** |
| **Cost** | | | | | |
| Balance at January 1, 2023 | 152749 | 19571 | 87798 | 63171 | 323289 |
| Entrance to consolidation | 2095 | - | 1418 | - | 3513 |
| Purchases during the year | 17555 | 868 | 10616 | 9837 | 38876 |
| Disposals during the year | (4750) | (6502) | (11442) | (12519) | (35213) |
| Adjustments for translation of financial statements | 405 | - | - | - | 405 |
| Balance at December 31, 2023 | 168054 | 13937 | 88390 | 60489 | 330870 |
| **Accrued depreciation** |  |  |  |  |  |
| Balance at January 1, 2023 | 108580 | 11744 | 58499 | 46301 | 225124 |
| Entrance to consolidation | 1808 | - | 1418 | - | 3226 |
| Purchases during the year | 17668 | 2182 | 10665 | 8481 | 38996 |
| Disposals during the year | (4710) | (4655) | (10518) | (12254) | (32137) |
| Adjustments for translation of financial statements | 303 | - | - | - | 303 |
| Balance at December 31, 2023 | 123649 | 9271 | 60064 | 42528 | 235512 |
| **Depreciated cost at December 31, 2023** | **44405** | **4666** | **28326** | **17961** | **95358** |

---

Consolidated Financial Statements 39

**Note 9: Goodwill and Intangible Assets, Net**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Composition:

**2024 (NIS thousands):**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Customers base and backlog** | **Licenses and franchises** | **R&D intangible assets** | **Goodwill** | **Total** |
| **Cost** | | | | | |
| Balance as of January 1, 2024 | 273085 | 4976 | 2250 | 918829 | 1199140 |
| Entrance to consolidation | 13656 | - | - | 36038 | 49694 |
| Adjustments for translation of financial statements | - | - | - | 1121 | 1121 |
| Balance as of December 31, 2024 | 286741 | 4976 | 2250 | 955988 | 1249955 |
| **Accrued depreciation** |  |  |  |  |  |
| Balance as of January 1, 2024 | 177006 | 4900 | - | - | 181906 |
| Depreciation | 22092 | 76 | - | - | 22168 |
| Balance as of December 31, 2024 | 199098 | 4976 | - | - | 204074 |
| **Net balance** |  |  |  |  |  |
| **as of December 31, 2024** | **87643** | **-** | **2250** | **955988** | **1045881** |

---

**2023 (NIS thousands):**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Customers base and backlog** | **Licenses and franchises** | **R&D intangible assets** | **Goodwill** | **Total** |
| **Cost** | | | | | |
| Balance as of January 1, 2023 | 249466 | 4976 | - | 898516 | 1152958 |
| Entrance to consolidation | 21158 | - | - | 20869 | 42027 |
| Discounting of development costs | - | - | 2250 | - | 2250 |
| Adjustments for translation of financial statements | - | - | - | 6205 | 6205 |
| Adjustments | 2461 | - | - | (6761) | (4300) |
| Balance as of December 31, 2023 | 273085 | 4976 | 2250 | 918829 | 1199140 |
| **Accrued depreciation** |  |  |  |  |  |
| Balance as of January 1, 2023 | 150473 | 4713 | - | - | 155186 |
| Depreciation | 26533 | 187 | - | - | 26720 |
| Balance as of December 31, 2023 | 177006 | 4900 | - | - | 181906 |
| **Net balance** |  |  |  |  |  |
| **as of December 31, 2023** | **96079** | **76** | **2250** | **918829** | **1017234** |

---

Consolidated Financial Statements 40

**Note 9: Goodwill and Intangible Assets, Net (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Amortization of intangible assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The amortization method reflects the future economic benefits that will derive from the asset.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Amortization expenses of intangible assets with indefinite useful lives are credited to selling and marketing
expenses statement of profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Review of impairment of goodwill

In order to test the impairment of goodwill, goodwill was allocated to operating segments that represent five cash-generating units, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. IT Solutions and Services, Consulting, and Management in Israel

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. IT Solutions and Services in the US

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Marketing and Support of Software Products

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Cloud and Computing Infrastructures

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Training and Implementation

As set forth in Note 24, as of its 2024 financial statements, the Company presents its training and implementation operations, which were presented in the past as a separate operating segment, as part of the IT, Consulting, and Management Solutions in Israel segment. At the same time, for the purpose of examining impairment of goodwill, the Company examined its training and implementation operations separately.

Below is the carrying amount of goodwill as at 31 December 2024 allocated to each cash-generating unit (representing a segment) - NIS thousands

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT solutions and Services, Consulting, and Management in Israel** | **Training and Implementation** | **<br> Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Total** |
| Goodwill balance as of January 1, 2024 | 411957 | 82689 | 49453 | 96306 | 278424 | 918829 |
| Entrance to consolidation | - | - | - | 29683 | 6355 | 36038 |
| Adjustments for translation of financial statements | - | - | - | - | 1121 | 1121 |
| Goodwill balance as of December 31, 2024 | **411957** | **82689** | **49453** | **125989** | **285900** | **955988** |

---

Consolidated Financial Statements 41

**Note 9: Goodwill and Intangible Assets, Net (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Data regarding units to which substantial goodwill was allocated in relation to the balance of goodwill
on the books

The recoverable amount of the following cash-generating units was determined based on value in use, calculated from the estimated future cash flows of the unit, based on an external valuation prepared in accordance with the forecast approved by the Company's management.

In each of the cash-generating units, the recoverable value is higher than the book value of the net assets, and therefore no recognition of impairment is required.

Below is the refundable amount and the main key assumptions used to determine that amount as at 31.12.2024 (NIS millions):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **IT Solutions and Services, Consulting, and Management in Israel** | **Training and Implementation** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT solutions and services in the US** |
| &nbsp;&nbsp;Refundable amount | 2792 | 146 | 345 | 1268 | 780 |
| &nbsp;&nbsp;Discount rate | 10.9% | 14% | 14% | 12.4% | 11.1% |
| &nbsp;&nbsp;Growth rate in the permanent year (after 2025-2029) | 3% | 3% | 3% | 4% | 3% |

---

Consolidated Financial Statements 42

**Note 10: Credit from Banks and Others (NIS thousands)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Short-term credit

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Linkage basis** | **Interest rate - fixed or variable** | **Interest rate in %** | **December 31, 2024** | **December 31, 2023** |
| On-call loans | Unlinked | Variable | Linked to the prime rate | - | 24019 |
| Non- commercial securities | Unlinked | Variable | Bank of Israel Interest Rate<sup>\*</sup> + 0.25% | 300000 | 200000 |
| Current maturities of long-term bank loans | Unlinked | Fixed | 1.4-3.98 | 88640 | 179675 |
|  |  |  |  | **388640** | **403694** |

---

<sup>\*</sup> On 18 July 2024, the non-commercial securities interest rate was updated to match the Bank of Israel interest rate plus 0.25% instead of the 0.5% that had applied prior to this date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Long-term credit from banks and others

1) Breakdown (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Linkage basis** | **Interest rate - fixed or variable** | **Interest rate as at 31 December 2024<br> %** | **Total December 31, 2024** | **Current maturities December 31, 2024** | **Total, less current maturities<br> December 31, 2024** | **Total, less current maturities December 31, 2023** |
| Unlinked | Fixed | 1.4-3.98 | 108311 | 88640 | 19671 | 108030 |

---

2) Schedule of payments after the report date (NIS thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| First year (current maturities) | 88640 | 179675 |
| Second year | 17167 | 88349 |
| Third year | 2504 | 17167 |
| Fourth year | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | 2514 |
|  | **108311** | **287705** |

---

Consolidated Financial Statements 43

**Note 10: Credit from Banks and Others (NIS thousands) (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Commercial securities

As of the report date, the Company has a series of non-commercial securities in the amount of NIS 300 million. These securities include an obligation to redeem at the investor's demand with notice of at least 7 business days in advance, and bear interest at an annual rate equal to the Bank of Israel rate plus 0.25% (which as of the report date is 4.75%). On 19 February 2025, the holders' approved to extension of the securities 's maturity until 21 February 2030.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Financial covenants with regard to engagements with banks and others

As part of the Group's engagements with banks to obtain credit, the Group undertook to maintain the financial covenants as expressed in the Company's financial statements, as follows:

1) The ratio of the consolidated net financial debt of the group to financial institutions, including liabilities from debentures issued by the Company (collectively - the "debt") to the total balance ratio according to the Company's consolidated financial statements shall not exceed 40%.

2) The ratio of the Group's debt, net of cash, to the annual EBITDA, shall not exceed 3.5.

3) Its equity shall not fall below NIS 275 million at any time.

4) Cash balances and short-term investments in the balance sheet shall not be less than NIS 50 million. In order to issue the non-commercial securities, the Company had undertaken to maintain liquid balances and available lines of credit, in an amount not less than NIS 450 million, of which at least NIS 200 million is in cash or other signed credit facilities.

5) The Company undertook that the Company's share of ownership and control of Matrix IT Systems Ltd. shall not at any time fall below 50.1 percent.

6) The Company has undertaken not to pledge, charge or otherwise encumber any of its assets, whether current or future, for the benefit of any third party without the bank's prior consent, except for a first-degree fixed lien on an asset acquired with financing from such third party, in which case the fixed lien shall be registered in its favor.

7) The Company undertook not to sell or otherwise transfer any of its assets, in whole or in part, without the prior written consent of the banks, except in the ordinary course of business.

As of the date of the financial statements, the Company is in compliance with the financial covenants.

Consolidated Financial Statements 44

**Note 11: Trade Payables (NIS thousands)**

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **Open accounts** | | |
| NIS | 288356 | 296740 |
| Foreign currency | 252757 | 180593 |
| Checks payable | 49905 | 32479 |
| Accrued expenses | 335120 | 274787 |
| Related parties | 615 | - |
|  | **926753** | **784599** |

---

**Note 12: Other Payables (NIS thousands)**

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| Government authorities | 77107 | 66971 |
| Customer advances | 1484 | 1436 |
| Related parties | 105 | - |
| Dividend payable | 48277 | - |
| Other payables | 6658 | 12558 |
|  | **133631** | **80965** |

---

**Note 13: Leases**

**Disclosures for lease transactions in which the Company is the lessee**

The Company has entered into leases, including of buildings and vehicles, during the ordinary course of the Company's business.

Most leases of buildings have lease terms of between 3 and 10 years, whereas leases of vehicles have lease terms of 3 years.

Some of the lease agreements in which the Company has engaged include extension and/or cancellation options as well as variable lease payments.

For details regarding engagement in material lease agreements, see Note 16c.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Details regarding leases (NIS thousands):

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** |
| Interest expenses for lease liabilities | 11934 | 12254 |
| Lease payments | 129435 | 137896 |

---

Consolidated Financial Statements 45

**Note 13: Leases (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Disclosures regarding right-of-use assets (NIS thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Real property** | **Motor vehicles** | **Total** |
| &nbsp;&nbsp;**Cost** | | | |
| &nbsp;&nbsp;**Balance as of January 1, 2024** | **342003** | **174311** | **516314** |
| &nbsp;&nbsp;Additions during the year: |  |  |  |
| &nbsp;&nbsp;Additions to right-of-use assets for new leases during the period | 206777 | 60924 | 267701 |
| &nbsp;&nbsp;Updates to right-of-use assets in respect of linkage to the CPI | 19684 | 1899 | 21583 |
| &nbsp;&nbsp;Disposals during the year: |  |  |  |
| &nbsp;&nbsp;Disposals of right-of-use assets for leases terminated during the period | (5599) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(48011) | (53610) |
| &nbsp;&nbsp;**Balance as of December 31, 2024** | **562865** | **189123** | **751988** |
| &nbsp;&nbsp;Accrued depreciation: |  |  |  |
| &nbsp;&nbsp;**Balance as of January 1, 2024** | **222891** | **79490** | **302381** |
| &nbsp;&nbsp;Additions during the year: |  |  |  |
| &nbsp;&nbsp;Depreciation and amortization | 67101 | 63603 | 130704 |
| &nbsp;&nbsp;Disposals during the year: |  |  |  |
| &nbsp;&nbsp;Disposals of right-of-use assets | (5619) | (45413) | (51032) |
| &nbsp;&nbsp;**Balance as of December 31, 2024** | **284373** | **97680** | **382053** |
| &nbsp;&nbsp;**Net Balance as of December 31, 2024** | **278492** | **91443** | **369935** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Analysis of payment dates of lease liabilities (NIS thousands):

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** |
| First year | 115574 | 109448 |
| Second year | 75146 | 78701 |
| Third year | 39226 | 27607 |
| Fourth year | 24351 | - |
| Fifth year and thereafter | 118512 | - |
| Total undiscounted lease payments | 372809 | 215756 |
| Current Maturities | 115574 | 109448 |
| Non-current costs | 257235 | 106308 |

---

Consolidated Financial Statements 46

**Note 14: Employee Benefit Liabilities**

Employee benefits include post-employment benefits and other long-term benefits as well as severance benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Post-employment benefits

Labor law and the Israel Severance Pay Law require the Company to pay severance to an employee upon termination or retirement or to make regular deposits in a defined contribution plan pursuant to Section 14 to the Severance Pay Law as described below. The Company's resultant liabilities are recorded as a post-employment benefit. Calculating the Company's liability for employee benefits is done based on a valid employment agreement and based on the employee's salary and duration of employment which together, create the right to compensation.

Post-employment employee benefits are normally financed by contributions classified as defined benefit plans or defined contribution plans as set forth below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Defined contribution plan

Some severance payments are subject to the terms of Section 14 to the Severance Pay Law, 1963, pursuant to which the Group's regular deposits in pension funds and/or insurance policies release it from any additional liability to employees for home said amounts have been deposited. These deposits as well as pension deposits constitute defined contribution plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Defined benefit plans

The Group accounts for that part of the payment of compensation that is not covered by contributions in defined contribution plans as a defined benefit plan for which an employee benefit liability is recognized and for which the Group deposits amounts in central severance pay funds and qualifying insurance policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Composition of defined benefit plans (NIS thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Present value of financed obligations | 238075 | 236510 |
| Fair value of plan assets | (230440) | (227405) |
| Present value of non-financed obligations, net | **7635** | **9105** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Movement in fair value of plan assets (NIS thousands)

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Open year balance | 227405 | 244476 |
| Interest income | 8550 | 8371 |
| Actuarial gains (losses) | 9708 | 2245 |
| Employer contributions | 10976 | 13457 |
| Benefits paid | (26199) | (41144) |
| End of year balance | **230440** | **227405** |

---

Consolidated Financial Statements 47

**Note 14: Employee Benefit Liabilities (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Changes in the present value of defined benefit obligation
(NIS thousands)

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Open year balance | 236510 | 252746 |
| Current service cost | 13530 | 16175 |
| Interest expense | 13590 | 13117 |
| Actuarial losses (gains) | 6258 | (2015) |
| Benefits paid | (31813) | (44890) |
| Business combinations and miscellaneous | - | 1377 |
| End of year balance | **238075** | **236510** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Expenses charged to the statement of comprehensive income
(NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| Current service cost | 13530 | 16175 | 18062 |
| Interest expense | 13590 | 13117 | 7545 |
| Interest income | (5042) | (8371) | (6816) |
| Actuarial gains | (3535) | (4260) | (11588) |
| Total expense recognized in comprehensive income | **18543** | **16661** | **7203** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. The expense is included in the statement of comprehensive
income in the following items (NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended**<br>**31 December 2024**  | **For the year ended** <br> **31 December 2023**  | **For the year ended** <br> **31 December 2022**  |
| Cost of revenues | 16342 | 17055 | 16573 |
| Selling and marketing expenses | 371 | 388 | 376 |
| General and administrative expenses | 1857 | 1938 | 1878 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Principal actuarial assumptions (in %)

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** <br> **31 December 2024**<br>| **For the year ended** <br> **31 December 2023**<br>| **For the year ended** <br> **31 December 2022**<br>|
| Plan liabilities discount rate | 5.75 | 5.35 | 2.69 |
| Expected salary increase rate | 0-4 | 0-4 | 0-4 |

---

Consolidated Financial Statements 48

**Note 14: Employee Benefit Liabilities (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. Amounts, timing, and uncertainty of future cash flows (NIS
thousands)

---

| | |
|:---|:---|
|  | **Defined benefit obligation** |
| As of December 31, 2024: |  |
| **Sensitivity test for changes in expected salary increase amount:** |  |
| The change resulting from: |  |
| Salary increase of 1% | (1732) |
| Salary decrease of 1% | 1488 |
| **Sensitivity test for changes in the plan assets and liabilities discount rate:** |  |
| The change resulting from: |  |
| Increase of 1% in the discount rate | 1404 |
| Decrease of 1% in the discount rate | (1643) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. Expenses in the period in respect of a defined contribution
plan (NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| Expense recognized in respect of defined contribution plans | 129168 | 103162 | 100602 |

---

**Note 15: Taxes on Income**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Tax rates applicable to the Group

1) The corporate tax rate in Israel during 2022-2024 was 23%. Corporations are subject to tax on real capital gains at the corporate tax rate as of the sale year.

2) The principal tax rates applicable to subsidiaries whose place of incorporation is outside Israel are:

Companies incorporated in the US - a weighted tax rate of approximately 27 percent (federal tax, tax of the state and city in which the company operates).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Final tax assessments

The Company and its consolidated subsidiaries have received final tax assessments (or assessments that are deemed final) up to and including the 2019 tax year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Carryforward losses for tax purposes and other temporary
differences

The Group has business losses for tax purposes that are carried forward as at 31 December 2024, amount to a total of NIS 36,981 thousand. Most of these carryforward losses are in respect of companies in Israel, whose utilization period is unlimited.

Deferred tax assets were not recognized in respect of carryforward business losses amounting to NIS 7,192 thousand due to the lack of a forecast for utilization thereof in the foreseeable future.

Consolidated Financial Statements 49

**Note 15: Taxes on Income (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Deferred taxes

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Composition (NIS thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Deferred taxes for employee benefits and provision for vacation** | **Deferred taxes for**<br> **property, plant, and equipment and intangible assets** | **Deferred taxes in respect of losses for tax purposes** | **Deferred taxes for provision for doubtful debts** | **Deferred taxes for options for employees** | **Deferred taxes for lease assets\* (net)** | **Deferred taxes for other temporary differences** | **Total** |
| &nbsp;&nbsp;&nbsp;**Balance as of January 1, 2022** | **21742** | **(27137)** | **15091** | **2504** | **1099** | **489** | **1178** | **14966** |
| &nbsp;&nbsp;&nbsp;Entrance to consolidation | 396 | (2761) | 1987 | 23 | - | - | (44) | (399) |
| &nbsp;&nbsp;&nbsp;Loss of Control in subsidiary | (223) | - | - | - | - | - | - | (223) |
| &nbsp;&nbsp;&nbsp;Adjustments | - | (48) | - | - | - | - | - | (48) |
| &nbsp;&nbsp;&nbsp;Equity reserve | (2665) | - | - | - | (420) | 24 | - | (3061) |
| &nbsp;&nbsp;&nbsp;Change recorded in the statement of profit or loss | 1517 | 4713 | 3840 | 442 | (451) | (219) | (2691) | 7151 |
| &nbsp;&nbsp;&nbsp;**Balance as of January 1, 2023** | **20767** | **(25233)** | **20918** | **2969** | **228** | **294** | **(1557)** | **18386** |
| &nbsp;&nbsp;&nbsp;Entrance to consolidation | 170 | (4866) | - | - | - | - | 180 | (4516) |
| &nbsp;&nbsp;&nbsp;Adjustments | - | (548) | - | - | - | - | - | (548) |
| &nbsp;&nbsp;&nbsp;Equity reserve | (980) | - | - | - | (228) | 380 | - | (828) |
| &nbsp;&nbsp;&nbsp;Change recorded in the statement of profit or loss | 2995 | 6246 | (11631) | 1031 | 2092 | (207) | (230) | 296 |
| &nbsp;&nbsp;&nbsp;**Balance as of December 31, 2023** | **22952** | **(24401)** | **9287** | **4000** | **2092** | **467** | **(1607)** | **12790** |
| &nbsp;&nbsp;&nbsp;Entrance to consolidation | 155 | (3224) | - | - | - | - | - | (3069) |
| &nbsp;&nbsp;&nbsp;Adjustments | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;Equity reserve | (813) | - | - | - | - | (11) | - | (824) |
| &nbsp;&nbsp;&nbsp;Change recorded in the statement of profit or loss | 3758 | 5438 | (2436) | 136 | 2401 | 202 | 202 | 9701 |
| &nbsp;&nbsp;&nbsp;**Balance as of December 31, 2024** | **26052** | **(22187)** | **6851** | **4136** | **4493** | **658** | **(1405)** | **18598** |

---

(\*) The carrying amount as at 31 December 2024 includes deferred tax assets in the sum of NIS 85,534 million against a lease liability as well as deferred tax liabilities in the sum of NIS 84,876 million against right-of-use assets. (As at 31 December 2023, a total of NIS 49,415 million and NIS 48,948 million, respectively.)

Consolidated Financial Statements 50

**Note 15: Taxes on Income (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Deferred taxes

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The deferred taxes are computed at the tax rate of 23% based on the tax rates that
are expected to apply to the Croup upon reversal of the temporary differences in respect of which they were created (2024 - 23% and 2023
- 23%), and approximately 27% on assets in the US.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Taxes on income included in the statement of comprehensive
income (NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| Current taxes | 107854 | 78691 | 108952 |
| Deferred taxes | (9701) | (296) | (7151) |
| Prior year's tax adjustments | (3175) | (64) | (1516) |
|  | **94978** | **78331** | **100285** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Taxes on income relating to other comprehensive income (NIS
thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| Taxes in respect of actuarial gains | **(813)** | **(980)** | **(2665)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Theoretical Tax

The reconciliation between the tax expense, assuming that all the income, expenses, gains and losses in profit or loss were taxed at the statutory tax rate and the taxes on income recorded in comprehensive income is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| Income before taxes on income | 383202 | 325186 | 454766 |
| Statutory tax rate in % | 23 | 23 | 23 |
| Tax computed at the statutory tax rate | 88136 | 74793 | 104596 |
| Increase (decrease) in taxes on income resulting from the following: |  |  |  |
| Temporary differences | - | (345) | (181) |
| Non-deductible expenses (revenues), net and depreciation for tax purposes | 5417 | 3773 | 4365 |
| First time creation of deferred taxes | - | (1493) | (8299) |
| Foreign taxes at different tax rates | 4600 | 1667 | 1320 |
| Prior year's tax adjustments | (3175) | (64) | (1516) |
|  | **94978** | **78331** | **100285** |

---

Consolidated Financial Statements 51

**Note 16: Liens, guarantees, contingent liabilities, and engagements**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Liens

As at 31 December 2024, the Company has no liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Contingent liabilities** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Legal claims

As of the report date, several legal claims have been filed against the Company and is consolidated companies in the ordinary course of business, in the aggregate sum of approximately NIS 6.1 million. In the opinion of the Company's management, which is based, *inter alia*, on the opinions of its legal counsel as to the likelihood of the success of these claims, and taking into account the insurance coverage it has for some of these claims, the provisions included in the financial statements to cover the estimated risk resulting from said claims are sufficient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. On 3 December 2023, the Company received a motion for disclosure of documents pursuant to section
198a of the Companies Law, that was filed with the Economic Division of the Tel Aviv District Court against the Company by a plaintiff
claiming to be a Company shareholder, seeking to file a derivative claim on behalf of the Company against the company's CEO and its directors,
in connection with the compensation approved for the Company's CEO following the general meeting's opposition.

The Company's response to the discovery motion was filed on 18 April 2024. An inquest was held on the disclosure motion on 2 February 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Engagements** 

1) In January 2022, the Company entered into a lease agreement for a new 19-story building in Kfar Saba, with a total area of approx. 30,000 m<sup>2</sup>. The lease agreement is for a period of 10 years in the amount of NIS 200 million (NIS 20 million per year), with two extension options of five years each.

The building includes 14 office floors with an area of approx. 16,000 m<sup>2</sup> and five floors of a parking lot with an area of approx. 14,000 m<sup>2</sup> and is planned to be used by the Company's headquarters and its other branches that will be united under one complex. The move to the new building has been gradual since Q4 2024 and is expected to be completed in July 2025.

2) Further to the contract entered into by the subsidiary, John Bryce, with an unrelated third party dated September 2015, in an agreement to rent a building for eight (8) years and with an option to extend, the Company exercised the option for an additional three (3) years. The expected rental cost is NIS 7 million per year. As part of the agreement, the Company guarantees the fulfillment of John Bryce's obligations.

3) Babcom, a company subsidiary, has lease agreements to rent offices in several sites around the country with an area of approximately 18,000 m<sup>2</sup> for the amount of NIS 14 million per annum.

Consolidated Financial Statements 52

**Note 16: Liens, guarantees, contingent liabilities, and engagements (Cont.)**

4) The Company and its subsidiaries have insurance policies with coverage for bodily injury and property damage, including third party, professional liability, theft of cash, crime, and dedicated cyber insurance policies, including third party cyber insurance.

In addition, the liability of the directors and officers of the Company and its subsidiaries is insured under a D&O policy that includes a D&O Side A DIC policy.

Said insurance coverage is subject to conditions and indemnity periods and subject to the customary exceptions set forth in the various policies. In the Company's management's assessment, based on the opinions of its insurance consultants, the Company is not underinsured.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Engagement with the Company's CEO

During the course of 2022, Mr. Gutman provided management services to the Company pursuant to the Management Services Agreement, approved on 29 October 2015, with Revava Management Ltd. through which Mr. Moti Gutman provides the Company with CEO services, effective 1 January 2018 to 31 December 2022. <br> On December 28, 2022, the Company entered into a new employment agreement with Mr. Gutman for a period of 5 years, from 1 January 2023 to 31 December 2027. According to the new agreement, on February 1, 2023, the Company allocated 375,000 restricted shares (RS) to Mr. Gutman for no consideration. The RSs will vest into shares in four annual tranches starting on 31 December 2024, such that 40% will vest on 31 December 2024, and the remainder in equal portions each year thereafter through 31 December 2027, but in any case, not prior to the publication date of the Company's annual financial statements for the preceding year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Guarantees** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Company and the subsidiaries provided each other with cross guarantees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. As of the report date, the Company and its subsidiaries have provided performance guarantees in favor
of customers in the aggregate amount ofNIS 158.8 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. As of the report date, the Company and its consolidated companies have provided payment guarantees in
the amount of NIS 17.7 million.

Consolidated Financial Statements 53

**Note 17: Equity**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **Composition of share capital (NIS thousands)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **<br> December 31, 2024<br> Authorized** | **December 31, 2024<br> Issued and outstanding** | **<br> December 31, 2023<br> Authorized** | **December 31, 2023<br> Issued and outstanding** |
| Ordinary shares - par value NIS 1 each | 100000 | 64176 | 100000 | 64176 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **Movement in share capital (ordinary shares of NIS 1 par value each)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of shares <br> 2024** | **Number of shares <br> 2023** | **Number of shares <br> 2022** |
| Balance as of January 1 | 64175930 | 63548141 | 63248369 |
| Exercise of options and RSU's into shares | - | 627789 | 299772 |
| Balance as of December 31 | 64175930 | 64175930 | 63548141 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **Rights attached to shares** 

Ordinary shares of NIS 1 par value each confer rights to vote at the general meeting, dividends, and to participate in the distribution of the Company's assets upon liquidation. Similarly, these shares may be traded on the Tel Aviv Stock Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **Treasury shares - Company shares held by the Company and subsidiaries** 

The Company's holdings in the Company's shares are as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Number of shares held | 653860 | 653860 |
| Percentage of issued share capital | 1.018% | 1.018% |

---

Consolidated Financial Statements 54

**Note 17: Equity (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **Dividends to shareholders** 

Below are the dividend distributions in the reporting period

---

| | | | |
|:---|:---|:---|:---|
| **Date of the board of directors' resolution to approve the distribution** | **Actual distribution date** | **Distribution amount per share (in Agorot)** | **Total distribution amount** <br> **(NIS thousands)** |
| &nbsp;&nbsp;&nbsp;12 March 2023 | &nbsp;&nbsp;&nbsp;16 April 2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;59 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37478 |
| &nbsp;&nbsp;&nbsp;10 May 2023 | &nbsp;&nbsp;&nbsp;5 June 2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45101 |
| &nbsp;&nbsp;&nbsp;9 August 2023 | &nbsp;&nbsp;&nbsp;3 September 2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;69 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43830 |
| &nbsp;&nbsp;&nbsp;11 March 2024 | &nbsp;&nbsp;&nbsp;15 April 2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;127 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80673 |
| &nbsp;&nbsp;&nbsp;15 May 2024 | &nbsp;&nbsp;&nbsp;25 July 2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;81 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;51453 |
| &nbsp;&nbsp;&nbsp;8 August 2024 | &nbsp;&nbsp;&nbsp;1 October 2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;82 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;52088 |
| &nbsp;&nbsp;&nbsp;13 November 2024 | &nbsp;&nbsp;&nbsp;6 January 2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;76 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;48277 |

---

The Company's dividend policy is an annual distribution of up to 75% of the net annual profit attributable to shareholders. The dividend will be distributed once per quarter subject to the distribution requirements set by applicable law, which are examined by the Board of Directors at any relevant time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Group capital management** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's primary objective in capital management is to ensure its ability to consistently provide
returns to shareholders through capital growth and/or dividend payments. To achieve this objective, the Group seeks, among other things *,* to maintain a leverage ratio that balances risk and return at a reasonable level, while preserving a financial base that enables the
Group to meet its investment and working capital needs. In making decisions regarding changes to the Group's capital structure in
order to achieve the above objectives, whether through changes in dividend distribution policy, new equity issuances, or reduction of
the Group's debt, the Group considers not only its short-term position but also its long-term goals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. In managing its capital/debt structure, the Company continuously monitors its leverage ratios (such as
net financial debt to total assets). The Company also works to maintain an efficient and appropriate level of leverage that balances the
interests of both shareholders and financial debt holders. In addition, the Company seeks to maintain an appropriate balance between long-term
and short-term financial debt, as well as between fixed and variable interest rates, while maintaining cash balances and available bank
credit facilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Company is obligated to comply with the financial covenants agreed with financial institutions and
bondholders. As of 31 December 2024, and 2023, the Group was in compliance with the financial covenants.

Consolidated Financial Statements 55

**Note 17: Equity (Cont.)**

Below is a summary of quantitative data regarding balance sheet financial ratios managed by the Company (NIS thousands) with respect to:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Cash and cash equivalents | 668495 | 640208 |
| Liabilities to banks and others | (785079) | (956230) |
| Debt, net | (116584) | (316022) |
| Total balance sheet | 4479636 | 4035232 |
| Ratio of debt to total balance sheet | 17.5% | 23.7% |
| Ratio of net debt to balance sheet | 2.6% | 7.8% |
| Total equity | 1144327 | 1107472 |
| Ratio of equity to total balance sheet | 25.5% | 27.4% |

---

**Note 18: Share-based payment**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Expense recognized in the financial statements

The expense recognized in the financial statements for services received from employees is presented in the table below (NIS thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| Equity-settled share-based payment plans | 18026 | 16106 | 1330 |

---

Share-based payment transactions granted by the Company to its employees are described below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Existing share-based payment plans at the Company

1) Grant of Restricted Stock Units (RSUs) and Restricted Shares (RSs) to the CEO of the Company

On 16 January 2018, the Company's engagement in a management services agreement with Revava Management Ltd., through which Mr. Moti Gutman provided CEO services to the Company until 31 December 2022, was approved. Under the agreement*,* among other things*,* Mr. Gutman was granted 256,890 Restricted Stock Units (RSUs), which may be converted into 256,890 ordinary shares of the Company with no exercise price. The RSUs vested into shares in five equal tranches of 51,378 RSUs each on 31 December of each year of the agreement, but not prior to the publication date of the Company's financial statements for the preceding year, and subject to certain conditions. In 2022, 51,378 RSUs vested and were sold. As of the reporting date, all share units under this plan have been exercised.

Consolidated Financial Statements 56

**Note 18: Share-based payment (Cont.)**

On 28 December 2022, the Company entered into a new employment agreement with Mr. Gutman for a period of 5 years, from 1 January 2023 to 31 December 2027. Pursuant to the new agreement, on 1 February 2023 the Company granted Mr. Gutman, at no cost, 375,000 Restricted Shares (RSs), which are held in trust by a trustee. The RSs will vest into shares in four annual tranches starting on 31 December 2024, such that 40% will vest on 31 December 2024, and the remainder in equal portions each year thereafter through 31 December 2027, but in any case, not prior to the publication date of the Company's annual financial statements for the preceding year.

2) Grant of options to executives

On 1 January 2019, the Company's Board of Directors, following approval by the Compensation Committee, approved the grant of 1,440,000 options exercisable for up to 1,440,000 ordinary shares of NIS 1 par value each, at no cost, to 20 office holders and senior employees of the Company or of its controlled entities. The exercise price at the grant date was NIS 41.7. The price is subject to adjustments, including when distributing a dividend.

Pursuant to the terms of the plan, upon actual exercise, shares will be allocated in an amount reflecting only the value of the benefit embedded in the options ("net exercise mechanism"). The expected life of the options is 5 years from the grant date.

On 12 February 2019, the General Meeting approved, following the approvals of the Compensation Committee and the Company's Board of Directors, the grant of 80,000 options exercisable for up to 80,000 ordinary shares of NIS 1 par value each, at no cost, to the Company's former President and Vice Chairman of the Board. The exercise price of the option at the grant date was NIS 43.16. The price is subject to adjustments, including when distributing a dividend.

As of the reporting date, all options under the plan have been exercised.

On 12 March 2023, the Company's Board of Directors, following approval by the Compensation Committee, approved the grant of 920,000 options exercisable for up to 920,000 ordinary shares of NIS 1 par value each, at no cost, to 18 office holders and senior employees of the Company or of its controlled entities. Within the termination of the employment of an officer, 45,000 options were forfeited before they vested. The exercise price for the options at the time they were granted was NIS 71.25. The exercise price is subject to adjustments, including when distributing a dividend. Half of the options will vest on 12 March 2025, one quarter of the remaining options will vest on 12 March 2026, and the balance will vest on 12 March 2027. The term of the options is five years from the date of grant. The fair value of the options is estimated on the grant date at NIS 22.38 per option, based on a risk-free interest rate ranging from 3.34% to 4.53%, an early exercise factor of 130%, and expected volatility of 31%.

Consolidated Financial Statements 57

**Note 18: Share-based payment (Cont.)**

On 9 August 2023, the Company's Board of Directors, following approval by the Compensation Committee, approved the grant of 45,000 options exercisable for up to 45,000 ordinary shares of NIS 1 par value each to an office holder. The exercise price at the grant date was NIS 73.73. The exercise price is subject to adjustments, including when distributing a dividend. Half of the options will vest on 10 August 2025, one quarter of the remaining options will vest on 10 August 2026, and the balance will vest on 10 August 2027. The term of the options is five years from the date of grant. The fair value of the options is estimated on the grant date at NIS 24.4 per option, based on a risk-free interest rate ranging from 3.34% to 4.53%, an early exercise factor of 130%, and expected volatility of 31%.

On 15 May 2024, the Company's Board of Directors, following approval by the Compensation Committee, approved the grant of 20,000 additional options exercisable for up to 20,000 ordinary shares of NIS 1 par value each, to an office holder. The exercise price for the options at the time they were granted was NIS 78.55. The exercise price is subject to adjustments, including when distributing a dividend. Half of the options will be vested on 15 May 2026, a quarter of the remaining options will be vested on 15 May 2027, and the rest will be vested on 15 May 2028. The term of the options is four years from the date of grant. The fair value of the options is estimated on the grant date at NIS 19.05 per option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Movement during the year (NIS thousands)** 

The table below presents the number of share options, the weighted average exercise price, and the changes in employee stock option plans during the current year:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Number of options**<br>**2024**<br>| **Weighted average exercise price**<br> **2024** | **Number of options**<br> **2023** | **Weighted average exercise price**<br> **2023** | **Number of options**<br>**2022**<br>| **Weighted average exercise price**<br> **2022** |
| Balance of options and RSU(RS) at the beginning of the year | 1295000 | 49.34 | 398878 | 36.49 | 862756 | 35.5 |
| Options granted during the year | 20000 | 76.1 | 1340000 | 50.70 | - | - |
| Options forfeited during the year | - | - | (45000) | 69.26 | (12500) | 35.48 |
| Options and RSU exercised during the year | - | - | (398878) | 26.97 | (451378) | 31.54 |
| Balance of options and RSU(RS) at year-end | 1315000 | 47.18 | 1295000 | 49.34 | 398878 | 36.49 |
| RSU exercisable within 12 months from the report date | 150000 | - | - | - | 51378 | - |

---

On 1 January 2023, all outstanding options held by executives as of 31 December 2022 were exercised.

Consolidated Financial Statements 58

**Note 19: Debentures**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Issuance of Debentures (Series B)

On 18 September 2022, the Company issued Debentures (Series B) in a total principal amount of NIS 295,249 thousand, for net proceeds (after deducting fees and direct issuance costs) of NIS 293 million. The principal of the Debentures (Series B) will be repaid in 14 equal semi-annual installments, payable on February 1 and August 1 of each year, starting on 1 August 2023 and through 1 February 2030. The debentures bear annual interest at a rate of 4.1%, payable semi-annually on February 1 and August 1 of each year, from 1 February 2023 through 1 February 2030. The debentures are unsecured, and neither the principal nor the interest is linked to any index or currency.

On 4 December 2022, the Company carried out an issuance of Debentures (Series B) by way of an expansion of the series, in a total principal amount of NIS 180,366 thousand, for net proceeds of NIS 178.4 million.

As of the reporting date, the outstanding interest payable on the debentures amounts to NIS 6,875 thousand.

1) Covenants the breach of which will grant the holders the right to call for immediate repayment of the Debentures:

As part of the issuance of Debentures (Series B), the Company undertook that, for as long as the debentures have not been fully repaid, it will comply with the following financial covenants:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The ratio of **consolidated net financial debt** to total assets, based
on the Company's consolidated financial statements, will not exceed 45% for a period of two consecutive quarters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The ratio of **consolidated net financial debt to adjusted EBITDA**,
based on the Company's consolidated financial statements, will not exceed 5 for a period of two consecutive quarters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The Company's equity, based on its consolidated financial statements,
will not be less than NIS 275 million for a period of two consecutive quarters.

For this purpose, it is clarified that the highlighted terms mentioned above are defined in the deed of trust for the Debentures (Series B) in accordance with the characteristics of the Company.

As of the report date, the Company is in compliance with the financial covenants.

It should be noted that the deed of trust for the Debentures (Series B) sets forth covenants, the breach of which will result in interest rate compensation, covenants relating to the restriction on dividend distribution, and an interest adjustment mechanism in the event of a credit rating downgrade.

Consolidated Financial Statements 59

**Note 19: Debentures (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Issuance of Debentures (Series B) - Continued

2) Main events of default entitling immediate repayment of the debentures:

The Debentures (Series B) include events of default entitling immediate repayment of the debentures, provided that the cure period set for remedying such events (as specified in the terms of the debentures) has elapsed. The main events are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Failure to comply with the financial covenants triggering immediate repayment,
as detailed above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o If control (as defined in Section 268 of the Companies Law) of the Company
is transferred, unless there is no downgrade in the rating of the Debentures (Series B) relative to the lower of: the rating at the time
of issuance or the rating prior to the change of control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o If the debentures are rated below BBB negative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o A material changes in the Company's core business such that the Company's
principal activity (based on the asset test) is no longer in the areas of activity in which the Company was engaged at the time of the
issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Another series of the Company's traded debentures is called for immediate
repayment not at the Company's initiative, or one or more non-traded debenture series or one or more loans, with an outstanding
balance at the time of the acceleration exceeding NIS 275 million, is called for immediate repayment and such demand is not revoked or
repaid within 30 days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Other customary events of default entitling immediate repayment of debentures,
such as liquidation, receivership, cessation of rating, suspension of trading, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Carrying amount versus fair value (NIS thousands)

---

| | |
|:---|:---|
| **Balance of Book Value** <br> **December 31, 2024**<br>| **Fair Value** <br> **December 31, 2024**  |
| 376,768 | 373,888 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The following are the maturity dates of the debentures as of 31 December 2024:

---

| | |
|:---|:---|
|  | **31 December<br> 2024** |
| First year (current maturities) | 81341 |
| Second year | 75197 |
| Third year | 69433 |
| Fourth year | 64017 |
| Fifth year and thereafter | 86780 |
|  | 376768 |

---

Consolidated Financial Statements 60

**Note 20: Financial Instruments**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Classification of financial assets and financial liabilities
(NIS thousands)

The classification of financial assets and financial liabilities in the balance sheet into categories of financial instruments in accordance with IFRS 9 is presented below:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| **Financial assets** | | |
| Financial assets at fair value through profit or loss: |  |  |
| Financial assets | 17105 | 16758 |
| Trade receivables and other receivables\* | 1934982 | 1685482 |
| **Financial liabilities** |  |  |
| Financial liabilities measured at amortized cost | 2727782 | 2483624 |
| Financial liabilities at fair value through profit or loss: | 125687 | 91907 |

---

(\*) Their amortized cost represents a reasonable approximation of their fair value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Financial Risk Factors** 

The Group's activities expose it to various financial risks, such as market risk (including currency risk, fair value interest rate risk, and price risk), credit risk, liquidity risk, and cash flow interest rate risk. The Group's overall risk management plan focuses on actions to restrict to a minimum potential negative impact on the Group's financial performance.

The Board of Directors has not established a specific policy for certain financial risk exposures; however, the Group's Finance Department, headed by the Chief Financial Officer, identifies, assesses, and manages financial risks such as credit risk, foreign exchange risk, and interest rate risk (including the use of derivative and non-derivative financial instruments and the investment of excess liquidity).

1) Market Risks

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Foreign Currency Risk

Foreign exchange risk arises from transactions, recognized assets, and recognized liabilities that are denominated in a foreign currency other than the functional currency, as well as from net investments in foreign operations.

The Group's policy is to enable its entities to settle obligations denominated in their functional currency (primarily NIS) using the cash flows generated from each entity's operations. When Group entities have obligations denominated in a currency other than their functional currency (and the entity does not have sufficient cash balances in that currency to settle the obligation), the Group, where possible, transfers cash balances in that currency from one entity to another within the Group.

Consolidated Financial Statements 61

**Note 20: Financial Instruments (Cont.)**

The Software Product Marketing and implementation segment and the Cloud and Computing Infrastructures segment, are exposed to currency risk in connection with purchases from suppliers located in the US, on an ongoing basis and in the ordinary course of the Company's business. In addition, the Company has engagements in service delivery and development projects with foreign customers, which are denominated in U.S. dollars. The impact of exchange rate fluctuations on the balance of U.S. dollar-denominated liabilities is offset by the balance of U.S. dollar-denominated assets. In addition, the Group evaluates and enters into hedging transactions to protect against foreign currency exposure (as of the reporting date, in volumes that are not material relative to the overall scale of the Company's operations).

As of the report date, the Group had a net asset balance denominated in U.S. dollars in the amount of NIS 140,030 thousand (NIS 217,127 thousand in 2023). This includes an investment in foreign operations, whose net financial assets are exposed to potential changes in the U.S. dollar exchange rate. The foreign currency exposure arising from the net financial assets of the U.S. foreign operations, is also managed mainly by the Chief Financial Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Interest rate risk

The Group's interest rate risk arises primarily from long-term loans received. Loans bearing variable interest rates (including on-call loans and commercial paper) expose the Group to cash flow interest rate risk. Most of the long-term loans obtained by the Company in recent years, including the Debentures (Series B) issued by the Company in 2022, bear fixed interest rates, thereby reducing the Group's exposure to interest rate fluctuations.

The following are details regarding the type of interest applicable to the Group's interest-bearing financial instruments, including lease liabilities (NIS thousands):

---

| | | |
|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2023** |
| **Fixed-rate instruments** | | |
| Financial liabilities | (857888) | (947967) |
| **Variable-rate instruments** |  |  |
| Financial liabilities | (300000) | (224019) |

---

Consolidated Financial Statements 62

**Note 20: Financial Instruments (Cont.)**

2) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to meet its obligation. Credit risk arises primarily from the Group's customers as well as from investments in corporate bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Trade receivables

Before accepting new customers, the Group performs a credit check through a reliable external source. Based on this information, payment terms and credit limits are determined and approved according to the size of the customer. Credit limit overruns are approved (in accordance with procedures) based on the extent of the requested overrun and the Company's past experience with the respective customer. Customers who consistently fail to meet the payment terms are required to pay in advance for additional purchases until their credit rating can be reassessed.

Impairment assessment is performed at each reporting date on a specific basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B) Investment in cash and cash equivalents

The Company holds cash and cash equivalents, short-term and long-term investments, and other financial instruments with various financial institutions. Pursuant to the Company's policies, the relative credit stability of the various financial institutions is evaluated on a regular basis.

As of December 31, 2024, cash and cash equivalents amounted to NIS 668,495 thousand (NIS 640,208 thousand in 2023).

3) Liquidity risk

Liquidity risks arise from the management of the Group's working capital, as well as from financial expenses and principal repayments of the Group's debt instruments. Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they become due.

The Group's policy is to ensure that the cash held is always sufficient to cover obligations as they fall due. To achieve this objective, the Group seeks to maintain cash balances (or appropriate credit lines) sufficient to meet expected requirements. The Company finances business combinations through long-term loans with an average term of 3 to 6 years and through proceeds from the issuance of debentures.

The Company has an issuer rating of Aa3 with a stable rating outlook.

The Company estimates that it will have sufficient liquid resources to cover all of its obligations under reasonable assumptions.

Consolidated Financial Statements 63

**Note 20: Financial Instruments (Cont.)**

The table below presents an analysis of the expected maturity dates of financial liabilities.

December 31, 2024 (NIS thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **First year** | **Second year** | **Third year** | **Fourth year** | **Fifth year and thereafter** | **Total** |
| &nbsp;&nbsp;Trade payable | 926753 | - | - | - | - | 926753 |
| &nbsp;&nbsp;Other payable | 132146 | - | - | - | - | 132146 |
| &nbsp;&nbsp;Employees and payroll accruals | 510995 | - | - | - | - | 510995 |
| &nbsp;&nbsp;Loans from banks and other credit providers<sup>(\*)</sup> | 388640 | 17167 | 2504 | - | - | 408311 |
| &nbsp;&nbsp;Lease liabilities | 115574 | 75146 | 39226 | 24351 | 118512 | 372809 |
| &nbsp;&nbsp;Debentures | 81341 | 75197 | 69433 | 64017 | 86780 | 376768 |
|  | **2155449** | **167510** | **111163** | **88368** | **205292** | **2727782** |

---

December 31, 2023 (NIS thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **First year** | **Second year** | **Third year** | **Fourth year** | **Fifth year and thereafter** | **Total** |
| &nbsp;&nbsp;Trade payable | 784599 | - | - | - | - | 784599 |
| &nbsp;&nbsp;Other payable | 79529 | - | - | - | - | 79529 |
| &nbsp;&nbsp;Employees and payroll accruals | 447510 | - | - | - | - | 447510 |
| &nbsp;&nbsp;Loans from banks and other credit providers<sup>(\*)</sup> | 403694 | 88349 | 17167 | 2514 |  | 511724 |
| &nbsp;&nbsp;Lease liabilities | 109448 | 78701 | 27607 | - | - | 215756 |
| &nbsp;&nbsp;Debentures | 84080 | 77813 | 71935 | 66416 | 144262 | 444506 |
|  | 1908860 | 244863 | 116709 | 68930 | 144262 | 2483624 |

---

The above table does not include liabilities in respect of PUT options granted to non-controlling interest holders and liabilities related to the acquisition of operations.

---

| | |
|:---|:---|
| <sup>(\*)</sup> | As part of the short-term maturities (first year), commercial papers are included, which may be redeemed by the holders at any time and, according to their terms, will reach final maturity in February 2030. |

---

Consolidated Financial Statements 64

**Note 20: Financial Instruments (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Fair value

---

| | | |
|:---|:---|:---|
| Non-marketable short-term interest-bearing assets and liabilities with a fixed maturity date | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | Their carrying amount reflects their fair value as of the report date, since the average interest rate applicable to them does not differ materially from the market interest rate for similar items as of the report date.<br>|
| Assets and liabilities with no fixed maturity date | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | The fair value is determined based on the amount payable on demand as of the report date.<br>|
| Variable interest rate assets and liabilities | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | The fair value of variable interest rate assets and liabilities that are not subject to significant credit risk is based on their book value.<br>|
| Long-term fixed-rate loans | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | The fair value of long-term fixed-rate loans is based on the present value of future cash flows, discounted at an interest rate applicable to similar loans with comparable characteristics.<br>|
| Liabilities for options to holders of non-controlling interests | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | The fair value is based on the market price. In the absence of a market price, the fair value is based on economic models.<br>|
| Guarantees and loan commitments | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | The fair value is based on the payment required as of the report date to enter into similar agreements, taking into account the remaining term of the agreement and the creditworthiness of the parties to the contract. |

---

The balances in the financial statements for cash and cash equivalents, short-term investments, trade receivables, other receivables and debit balances, short-term loans granted, credit from banking corporations and others, liabilities to suppliers and service providers, and payables and credit balances, correspond to or approximate their fair value.

Consolidated Financial Statements 65

**Note 20: Financial Instruments (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Classification of financial instruments according to fair
value hierarchy

The financial instruments presented in the statement of financial position at fair value are classified into groups with similar characteristics, according to the fair value hierarchy as follows, which is determined based on the source of the data used in measuring fair value:

Level 1: Quoted prices (without adjustments) in the active market for identical assets or liabilities.

Level 2: Inputs, other than quoted prices, included within Level 1 that are directly or indirectly observable.

Level 3: Inputs that are not based on observable market data (valuation techniques that do not use observable market inputs).

**Financial assets measured at fair value (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** |
| Financial assets at fair value through profit or loss: |  |  |  |
| Investment in an investee company | - | - | 17105 |
|  | **-** | **-** | **17105** |

---

**31 December 2024**

**Financial liabilities measured at fair value (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** |
| Financial liabilities at fair value through profit or loss: |  |  |  |
| Liabilities for put options for non-controlling interests | - | - | 107072 |
| Liabilities in respect of business combinations | - | - | 18615 |
|  | **-** | **-** | **125687** |

---

**31 December 2023**

**Financial liabilities measured at fair value (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** |
| Financial liabilities at fair value through profit or loss: |  |  |  |
| Liabilities for put options for non-controlling interests | - | - | 88136 |
| Liabilities in respect of business combinations | - | - | 3771 |
|  | **-** | **-** | **91907** |

---

Consolidated Financial Statements 66

**Note 20: Financial Instruments (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Sensitivity tests for changes in market factors (NIS thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| **Sensitivity test for changes in interest rates** | | |
| Gain (loss) from the change |  |  |
| An increase of 1% in interest rates | (3000) | (2240) |
| A decrease of 1% in interest rates | 3000 | 2240 |

---

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| **Sensitivity test to changes in the US dollar exchange rate** | | |
| Gain (loss) from the change |  |  |
| A 5% increase in exchange rates | 7002 | 10856 |
| A 5% decrease in exchange rates | (7002) | (10856) |

---

Sensitivity tests and principal working assumptions

The selected changes in the relevant risk variables were determined based on management's assessments as to reasonable possible changes in these risk variables.

The Company performed sensitivity tests of principal market risk factors that are liable to affect reported operating results or financial position. The sensitivity tests present the profit or loss and/or the change in equity (before tax) in respect of each financial instrument for the relevant risk variable that was selected for that instrument as of each reporting date. The test of risk factors was determined based on the materiality of the exposure of the operating results or financial condition of each risk with reference to the functional currency and assuming that all of the other variables were constant.

Regarding long-term fixed-rate loans (including debentures), the Group is not exposed to interest rate risk.

For long-term variable-rate loans, the sensitivity test for interest rate risk was performed only on the variable interest component.

Consolidated Financial Statements 67

**Note 20: Financial instruments (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Changes in liabilities from financial activities - 2024

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Balance at January 1, 2024** | **Receipt** | **Repayment** | **Effect of changes in exchange rates** | **Effect of changes in fair value** | **Distribution of dividends to non-controlling interests** | **Consolidation** | **Other changes** | **Balance at <br> December 31, 2024** |
| &nbsp;&nbsp;Short-term loans and loans from other credit providers | 224019 | 100000 | (24019) | - | - | - | - | - | 300000 |
| &nbsp;&nbsp;Long-term loans (including current maturities) | 287705 | - | (179003) | - | - | - | - | (391) | 108311 |
| &nbsp;&nbsp;Debentures | 444506 | - | (67918) | - | - | - | - | 180 | 376768 |
| &nbsp;&nbsp;Liabilities for put options for non-controlling interests | 88136 | - | (1124) | - | 15321 | (17505) | - | 22244 | 107072 |
| &nbsp;&nbsp;Liabilities in respect of business combinations | 3771 | - | (11561) | - | (1741) | - | 28146 | - | 18615 |
| &nbsp;&nbsp;Lease liabilities | 215756 | - | (129435) | 5 | - | - | - | 286483 | 372809 |
| &nbsp;&nbsp;**Total liabilities deriving from financial activities** | **1263893** | **100000** | **(413060)** | **5** | **13580** | **(17505)** | **28146** | **308516** | **1283575** |

---

Consolidated Financial Statements 68

**Note 20: Financial instruments (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Changes in liabilities from financial activities - 2023

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Balance at January 1, 2023** | **Receipt** | **Repayment** | **Net** | **Effect of changes in exchange rates** | **Effect of changes in fair value** | **Distribution of dividends to non-controlling interests** | **Consolidation** | **Other changes** | **Balance at December 31, 2023** |
| &nbsp;&nbsp;Short-term loans <br> and other credit providers | 234564 | - | - | (35626) | - | - | - | 25081 | - | 224019 |
| &nbsp;&nbsp;Long-term loans <br> (including current maturities) | 511415 | - | (223175) | - | - | - | - | - | (535) | 287705 |
| &nbsp;&nbsp;Debentures | 475181 | - | (33959) | - | - | - | - | - | 3284 | 444506 |
| &nbsp;&nbsp;Liabilities for put options for non-controlling interests | 100545 | - | (29352) | - | - | 10175 | (15929) | 26104 | (3407) | 88136 |
| &nbsp;&nbsp;Liabilities in respect of business combinations | 24151 | - | (15211) | - | 27 | (348) | - | - | (4848) | 3771 |
| &nbsp;&nbsp;Lease liabilities | 181610 | - | (137896) | - | - | - | - | - | 172042 | 215756 |
| &nbsp;&nbsp;**Total liabilities deriving from financial activities** | **1527466** | **-** | **(439593)** | **(35626)** | **27** | **9827** | **(15929)** | **51185** | **166536** | **1263893** |

---

Consolidated Financial Statements 69

**Note 21: Additional Details on the Statements of Comprehensive Income**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Revenues (NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| IT Solutions and Services, Consulting, and Management in Israel\* | 3227608 | 3028576 | 2642988 |
| IT Solutions and Services in the US | 460024 | 478380 | 434273 |
| Marketing and Support of Software Products | 425971 | 294236 | 249855 |
| Cloud and Computing Infrastructures | 1465935 | 1430913 | 1345573 |
|  | **5579538** | **5232105** | **4672689** |

---

\*The comparative figures have been restated due to the presentation of the training and implementation activity under the segment of IT Solutions and Services, Consulting, and Management in Israel, starting from the 2024 financial statements. See Note 24 for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Cost of revenues and services (NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| Purchases | 1292997 | 1308980 | 1105177 |
| Wages and related expenses | 2596741 | 2410043 | 2263798 |
| Subcontractors | 573348 | 523870 | 451850 |
| Depreciation and amortization | 120491 | 128431 | 102431 |
| Motor vehicles | 53621 | 50186 | 49435 |
| Maintenance and other expenses | 65118 | 74178 | 75053 |
|  | 4702316 | 4495688 | 4047744 |
| Decrease (increase) in inventories | 44228 | (27763) | (47062) |
|  | **4746544** | **4467925** | **4000682** |

---

Consolidated Financial Statements 70

**Note 21: Additional Details on the Statements of Comprehensive Income (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Selling and marketing expenses (NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| Wages and related expenses | 134274 | 124775 | 101895 |
| Amortization | 22168 | 26720 | 20617 |
| Advertising and marketing | 23183 | 22680 | 26875 |
| Subcontractors | 5219 | 6725 | 7042 |
| Other expenses | 11387 | 8798 | 9817 |
|  | **196231** | **189698** | **166246** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. **General and administrative expenses (NIS thousands)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| Wages and related expenses | 116788 | 109588 | 90545 |
| Depreciation and amortization | 44151 | 48468 | 39177 |
| Doubtful accounts and bad debts | 3281 | 4135 | 3329 |
| Capital gain from disposal of property, plant, and equipment | (301) | (322) | (197) |
| Other expenses | 22770 | 19194 | 22419 |
|  | **186689** | **181063** | **155273** |

---

Consolidated Financial Statements 71

**Note 21: Additional Details on the Statements of Comprehensive Income (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Financial income and expenses (NIS thousands)

Composition

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| **Financial expenses** | | | |
| Interest and commission expenses | 45526 | 54035 | 31248 |
| Net foreign exchange differences | 14321 | 1403 | - |
| Expenses related to a liability in connection with the acquisition of operations and the revaluation of PUT options | 15522 | 11965 | 12987 |
| Expenses related to lease and actuarial obligation | 11587 | 15335 | 6566 |
|  | **86956** | **82738** | **50801** |
| **Financial income** |  |  |  |
| Interest income | 20084 | 14505 | 2272 |
| Net foreign exchange gains | - | - | 2748 |
|  | **20084** | **14505** | **5020** |

---

**Note 22: Net earnings per share (NIS thousands)**

The following are the net profit data and the par value of the shares taken into account for the calculation of basic and fully diluted earnings per ordinary share of NIS 1 par value, as well as the adjustments made for the computation of basic and diluted earnings per share:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2023** | **Year ended December 31, 2022** |
| **Calculation of base net earnings per share** | | | |
| Net income attributable to equity holders of the company | 272422 | 227333 | 334669 |
| Weighted number of shares | 63522076 | 63477904 | 62878758 |
| Base net earnings per share | **4.29** | **3.58** | **5.32** |
| **Calculation of diluted net earnings per share** |  |  |  |
| Net income attributable to equity holders of the company | <br> 272422 | 227333 | 334669 |
| Weighted average number of shares for the purpose of calculating base net earnings per share | 63522076 | 63477904 | 62878758 |
| Effect of dilutive potential ordinary shares | - | 44172 | 282431 |
| Adjusted weighted average number of shares | 63522076 | 63522076 | 63131189 |
| Diluted net earnings per share | **4.29** | **3.58** | **5.30** |

---

Consolidated Financial Statements 72

**Note 23: Interested and related parties**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Balances

**December 31, 2024 (NIS thousands)**

---

| | | |
|:---|:---|:---|
|  | **Note** | **The controlling shareholder and its subsidiaries** |
| Trade receivables | 5 | 16963 |
| Trade and other payables | 1112 | 615 |

---

**December 31, 2023 (NIS thousands)**

---

| | | |
|:---|:---|:---|
|  | **Note** | **The controlling shareholder and its subsidiaries** |
| Trade receivables | 5 | 5052 |
| Trade and other payables | 1112 | - |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Benefits to key management personnel

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Compensation to key management personnel<sup>1</sup> (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **No. of key managers** | **NIS thousands** | **No. of key managers** | **NIS thousands** | **No. of key managers** | **NIS thousands** |
| | **Year ended <br> December 31, 2024** | **Year ended <br> December 31, 2024** | **Year ended <br> December 31, 2023** | **Year ended <br> December 31, 2023** | **Year ended <br> December 31, 2022** | **Year ended <br> December 31, 2022** |
| Share-based payment<sup>2</sup> | 18 | 8286 | 18 | 6339 | 20 | 841 |

---

<sup>1</sup> Without the CEO of the Company. For details regarding compensation to the CEO of the Company, see subsection (2) below.

<sup>2</sup> See also Note 18.

Consolidated Financial Statements 73

**Note 23: Interested and related parties (Cont.)**

2. Salary and benefits to related parties (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **No. of key managers** | **NIS thousands** | **No. of key managers** | **NIS thousands** | **No. of key managers** | **NIS thousands** |
|  | **Year ended <br> December 31, 2024** | **Year ended <br> December 31, 2024** | **Year ended <br> December 31, 2023** | **Year ended <br> December 31, 2023** | **Year ended <br> December 31, 2022** | **Year ended <br> December 31, 2022** |
| Salaries and related expenses paid to executives | 1 | 23664 | 1 | 21384 | 1 | 17036 |
| Remuneration for services of a director on behalf of the controlling shareholder | 1 | 107 | 1 | 98 | 1 | 114 |
| Remuneration for services of independent directors | 54 | 744 | 3 | 451 | 3 | 520 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Transactions with related parties and interested parties

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Immaterial transactions

According to the Company's procedures, an immaterial transaction is a transaction conducted in the ordinary course of the Company's business and under market conditions (as determined by comparison to similar transactions between the Company and unrelated parties), and, in the absence of any exceptional qualitative indicator, its financial scope, based on the relevant benchmark for the transaction, is less than 0.5% Such immaterial transactions are approved by the party responsible for the transaction, following a review by the Legal Counsel or the Internal Compliance Officer. During the reporting period, immaterial transactions of the following types were entered into and/or in effect: sale and purchase of software and hardware products, and provision and receipt of various information technology services (such as hardware, training, cloud, development, and testing).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Non-exceptional transactions

A transaction that is not an "exceptional transaction" with a controlling shareholder or in which a controlling shareholder has a personal interest is submitted for classification and approval by the Audit Committee, unless it has been approved pursuant to the procedure titled "Criteria and Procedure for Approval of Non-Exceptional Transactions with Interested Parties".

Consolidated Financial Statements 74

**Note 23: Interested and related parties (Cont.)**

Pursuant to this procedure, it is possible to approve an engagement for the purchase or sale of a product or service with an interested party in the Company or with another party in which the interested party has a personal interest, conducted in the ordinary course of the Company's business (including companies under the Company's control), which, in the absence of special qualitative considerations arising from the overall circumstances, will be deemed a non-material transaction, provided that the relevant benchmarks calculated for the transaction do not exceed 5% ("Materiality Presumption"). For each transaction subject to a materiality assessment, one or more of the relevant benchmarks for the transaction will be calculated based on the relevant figure in the most recent annual financial statements. In accordance with the procedure, such transactions are approved based on a comparison to the terms of similar transactions entered into by the Company with unrelated parties.

Such transactions are approved by the Internal Compliance Officer or the CEO of the Company, following a review by the Legal Counsel or the Internal Compliance Officer.

For the purpose of monitoring the implementation of the procedure, a summary report of all transactions approved pursuant to the provisions of the said procedures is submitted to the Audit Committee for review once every six months. In addition, once a year the Audit Committee holds a discussion regarding the need to update the benchmarks for the approval of non-exceptional transactions and the appendix of criteria for classifying an engagement as an immaterial transaction as described above. On 6 March 2025, the Audit Committee held a discussion on the matter, during which it reviewed the summary report and found no deviation from the provisions of the procedure, and also approved the said procedures.

During 2024, the Company entered into transactions with the controlling shareholder and its subsidiaries, in a total amount of NIS 48,690 thousand (commercial transactions in the ordinary course of business), all of which constitute immaterial transactions.

No exceptional transactions with the controlling shareholder or its subsidiaries were conducted during the year.

Consolidated Financial Statements 75

**Note 23: Interested and related parties (Cont.)**

Year ended December 31, 2024 (NIS thousands)

---

| | | |
|:---|:---|:---|
|  | **Interested parties who are not controlling shareholders<sup>1</sup>** | **The controlling shareholder and its subsidiaries<sup>2</sup>** |
| Training services | 1187 | 80 |
| Cloud services | 21 | 15207 |
| Development and testing services | 67951 | 5874 |
| Software products | 13365 | 2092 |
| Infrastructure (hardware) | 18276 | 22418 |
| Rent | - | 46 |
| Procurement of development services | - | 1976 |
| Procurement of maintenance | - | 98 |
| Procurement of infrastructure | - | 852 |
| Procurement of training services | - | 47 |

---

<sup>1</sup> Migdal, Harel, and Phoenix.

<sup>2</sup> Formula, Sapiens and its companies, Magic and its companies, Zap Michpal, Unique, Shamrad, TSG and Horizon Aerial Photography.

Year ended December 31, 2023 (NIS thousands)

---

| | | |
|:---|:---|:---|
|  | **Interested parties who are not controlling shareholders<sup>1</sup>** | **The controlling shareholder and its subsidiaries<sup>2</sup>** |
| Training services | 767 | 59 |
| Cloud services | 104 | 11646 |
| Development and testing services | 1874 | 2164 |
| Software products | 11461 | 1643 |
| Infrastructure (hardware) | - | 9265 |
| Rent | - | 52 |
| Call center services | - | - |
| Procurement of development services | 14308 | 996 |
| Procurement of maintenance | - | 17 |
| Procurement of consulting services | - | - |

---

<sup>1</sup> Migdal, Meitav

<sup>2</sup> Formula, Sapiens and companies owned by it, Magic and companies owned by it

Consolidated Financial Statements 76

**Note 23: Interested and related parties (Cont.)**

For the year ended 31 December 2022 (NIS thousands)

---

| | | |
|:---|:---|:---|
|  | **Interested parties who are not controlling shareholders** | **The controlling shareholder and its subsidiaries** |
| Training services | 898 | 345 |
| Cloud services | 76 | 8856 |
| Development and testing services | 23252 | 3532 |
| Software products | 3825 | 1661 |
| Infrastructure (hardware) | - | 6689 |
| Rent | - | 28 |
| Call center services | - | - |
| Procurement of development services | 3511 | (4037) |
| Procurement of maintenance | - | (22) |
| Procurement of consulting services | - | (32) |

---

**Note 24: Operating segments**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. General

The operating segments are based on information that is reviewed by the chief operating decision maker (CODM) for the allocation of resources and assessment of performance. Accordingly, for management purposes, the Group is organized into operating segments based on the character of the products and services and on the geographic location of the business units.

The Company operates directly and through its subsidiaries, and it has the following operating segments:

IT Solutions and Services, Consulting, and Management in Israel;

IT Solutions and Services in the US;

Cloud and Computing Infrastructures;

Marketing and Support of Software Products.

As of the 2024 financial statements, the Company presents the training and implementation activity, which was presented in the past as a separate operating segment, and constituted approximately 3.4% and 2.9% of the Company's total revenues and operating income in 2023, as part of the IT, Consulting, and Management Solutions in Israel segment. This is due to changes in the economic environment and, accordingly, changes in the activity mix within the training and implementation segment, such that the economic characteristics, nature of services, and types of clients in the training and implementation segment are similar to those of the Information Technology Solutions and Services, Consulting, and Management segment in Israel.

The comparative figures were restated in order to reflect the change in the structure of the Company's operating segments.

The segment's results are measured based on operating income, as reviewed by the CODM.

Consolidated Financial Statements 77

**Note 24: Operating segments (Cont.)**

The following is a breakdown of the activities included in each of the operating segments:<br>

**IT Solutions and Services, Consulting, and Management in Israel;** 

This activity includes a wide range of technological and other solutions and services in the areas of enterprise core systems, Data and AI, cybersecurity, digital solutions, and more. As part of these solutions, the Company is engaged in the development of large-scale technological systems and the provision of related services; execution of IT and software integration projects; development of operational solutions and C4ISR systems for defense entities in Israel and abroad; outsourcing services and professional services by experts and consultants; offshore/nearshore services; BPO and call center services; software project management; software development; software and QA testing; enhancement and upgrading of existing technological systems; as well as the provision of training and implementation services. In addition, this activity includes management consulting and multidisciplinary engineering and operational consulting services, including supervision of complex engineering projects, particularly infrastructure projects in the transportation sector.

**IT Solutions and Services in the US** 

This activity is carried out through two arms – Matrix US Holding and XTIVIA – each of which holds several subsidiaries in the US. <br> The activity includes the provision of solutions and expert services in the field of GRC – Government Risk & Compliance, fraud prevention, cyber risk, and anti-money laundering, as well as specialized advisory services in this field and specialized IT services for the healthcare sector.

This area of activity also includes the provision of specialized technological solutions and services in the fields of portals, BI, CRM, DBA, and EIM; dedicated solutions for the U.S. Government Contracting market; distribution and marketing services for software products; and the provision of professional services and offshore solutions, including through employees at the Company's operational centers in India. The activity also includes professional services and projects carried out by experts from across the Matrix group, serving as a gateway to the business model of exporting the Company's services and products to the US.

**Marketing and Support of Software Products;** 

This activity primarily includes the sale and distribution of software products (mainly from foreign software manufacturers) across various fields, such as control and monitoring products, cybersecurity, communication solutions, virtualization, knowledge management products, databases and Big Data, open-source systems, and IT management products. It also includes providing professional support services for these products, as well as implementation projects, training, support, and maintenance for integrated products and systems.

Consolidated Financial Statements 78

**Note 24: Operating segments (Cont.)**

**Cloud and Computing Infrastructures**

The Company's activity in this field primarily includes providing a wide range of cloud solutions and services, including sales, service, and support for public cloud (PaaS, SaaS, IaaS) and private cloud at all implementation stages - consulting, architecture, development, deployment, environment management, and support - as well as advanced FinOps services (through the Company's specialized business unit, CloudZone). It also includes computing solutions for IT infrastructure, communication solutions, marketing and sales of hardware, software licenses, and peripheral equipment for business customers, along with related professional services. Additionally, the Company offers multimedia solutions and command-and-control centers for smart offices, office automation and printing solutions, sales and marketing of test and measurement equipment, communication, cybersecurity, and RF solutions, automation projects and integration, advanced calibration services, and industrial video and image processing solutions (through RDT Equipment and Systems and Asio Vision). Furthermore, the Company is engaged in the import, revenues, and service of automated manufacturing machines for component assembly and automated testing machines for assembly processes and components in production lines across various industries, including industrial, medical, military, laser, and sensor applications for civilian and defense purposes, as well as optical communication systems and automotive radar systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Geographic knowledge (NIS thousands)

Revenue reported in the financial statements were generated in the Company's country of residence (Israel) and outside thereof, based on the location of the customers, as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended**<br>**31 December<br> 2024**  | **For the year ended** <br> **31 December 2023**  | **For the year ended** <br> **31 December 2022**  |
| Israel | 5089923 | 4647634 | 4171903 |
| Abroad | 489615 | 584471 | 500786 |
|  | **5579538** | **5232105** | **4672689** |

---

Balances in the financial statements of fixed assets (property, plant, and equipment, right-of-use assets, and intangible assets) by country of domicile (Israel) and abroad, based on the location of the assets (NIS thousands):

---

| | | |
|:---|:---|:---|
| | **31 December 2024** | **31 December 2023** |
| Israel | 1225603 | 1038929 |
| Abroad | 291829 | 287596 |
|  | **1517432** | **1326525** |

---

Consolidated Financial Statements 79

**Note 24: Operating segments (Cont.)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Report on operating segments

For the year ended 31 December 2024 (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT Solutions and Services,** <br> **Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| &nbsp;&nbsp;Revenues from non-related parties | 3227608 | 425971 | 1465935 | 460024 | **-** | 5579538 |
| &nbsp;&nbsp;Intersegmental revenues | 109659 | 30794 | 49996 | 915 | (191364) | - |
| &nbsp;&nbsp;**Total revenues** | 3337267 | 456765 | 1515931 | 460939 | (191364) | 5579538 |
| &nbsp;&nbsp;**Segmental operating results** | 250113 | 45364 | 106405 | 66865 | (18673) | 450074 |
| &nbsp;&nbsp;Financial expenses |  |  |  |  |  | (86956) |
| &nbsp;&nbsp;Financial income |  |  |  |  |  | 20084 |
| &nbsp;&nbsp;Taxes on income |  |  |  |  |  | (94978) |
| &nbsp;&nbsp;Net income |  |  |  |  |  | **288224** |
| &nbsp;&nbsp;**Additional information** |  |  |  |  |  |  |
| &nbsp;&nbsp;Cost of revenues | 2893978 | 374515 | 1357891 | 311524 | &nbsp;&nbsp;&nbsp;&nbsp;(191364) | 4746544 |
| &nbsp;&nbsp;Depreciation and amortization | 148210 | 6640 | 26997 | 4964 | - | 186811 |

---

Consolidated Financial Statements 80

**Note 24: Operating segments (Cont.)**

For the year ended 31 December 2023 (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT Solutions and Services,** <br> **Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| &nbsp;&nbsp;Revenues from non-related parties | 3028576 | 294236 | 1430913 | 478380 | - | 5232105 |
| &nbsp;&nbsp;Intersegmental revenues | 90917 | 35491 | 83106 | 8809 | (218323) | - |
| &nbsp;&nbsp;**Total revenues** | **3119493** | **329727** | **1514019** | **487189** | **(218323)** | **5232105** |
| &nbsp;&nbsp;**Segmental operating results** | **205658** | **36123** | **87957** | **76168** | **(12487)** | **393419** |
| &nbsp;&nbsp;Financial expenses |  |  |  |  |  | (82738) |
| &nbsp;&nbsp;Financial income |  |  |  |  |  | 14505 |
| &nbsp;&nbsp;Taxes on income |  |  |  |  |  | (78331) |
| &nbsp;&nbsp;Net income |  |  |  |  |  | 246855 |
| &nbsp;&nbsp;**Additional information** |  |  |  |  |  |  |
| &nbsp;&nbsp;Cost of revenues | 2736576 | 258425 | 1365533 | 325714 | (218323) | 4467925 |
| &nbsp;&nbsp;Depreciation and amortization | 139659 | 6553 | 52491 | 4916 | - | 203619 |

---

Consolidated Financial Statements 81

**Note 24: Operating segments (Cont.)**

For the year ended 31 December 2022 (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **IT Solutions and Services,** <br> **Consulting, and Management in Israel** | **Marketing and Support of Software Products** | **Cloud and Computing Infrastructures** | **IT Solutions and Services in the US** | **Adjustments** | **Total** |
| Revenues from non-related parties | 2642988 | 249855 | 1345573 | 434273 | - | 4672689 |
| Intersegmental revenues | 73343 | 21174 | 81843 | 628 | (176988) | - |
| **Total revenues** | 2716331 | 271029 | 1427416 | 434901 | (176988) | 4672689 |
| **Segmental operating results** | 199214 | 24200 | 76607 | 60228 | (9761) | 350488 |
| Capital gain from realization of investment |  |  |  |  |  | 150059 |
| Financial expenses |  |  |  |  |  | (50801) |
| Financial income |  |  |  |  |  | 5020 |
| Taxes on income |  |  |  |  |  | (100285) |
| Net income |  |  |  |  |  | 354481 |
| **Additional information** |  |  |  |  |  |  |
| Cost of revenues | 2342656 | 231278 | 1296887 | 306849 | (176988) | 4000682 |
| Depreciation and amortization | 128464 | 3531 | 25573 | 4657 | - | 162225 |

---

**Note 25: Events After the Balance Sheet Date**

On 4 February 2025, the Company, through its subsidiary Matrix IT Systems Ltd., completed the acquisition of 70% of the share capital of Gav Systems Ltd. and Gav Expack Ltd. for a total of approximately NIS 45.5 million (including equity). Pursuant to the agreement, the Company and the seller hold a mutual option for the sale and purchase of the seller's remaining shares to the Company. The Company provides professionalservices, primarily in the fields of computing and software development. Pursuant to the purchase agreement, the Company and the seller have a mutual option to sell and purchase the seller's remaining shares to the Company. The Company is expected to consolidate the operating results of Gav Systems in its financial statements as of the beginning of the first quarter of 2025.

Consolidated Financial Statements 82

![](image_004.jpg)<br>Separate Financial Information<br> pursuant to Regulation 9c<br> Year ended<br> 31.12.2024<br>

The information contained in these financial separate statements published by the Company constitutes a convenience translation of the separate financial statements published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

![](image_008.jpg)

---

| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

---

---

| | | |
|:---|:---|:---|
| Special Report of the Independent Auditor on Separate Financial Information Pursuant to Regulation 9 c` | Special Report of the Independent Auditor on Separate Financial Information Pursuant to Regulation 9 c` | 3 |
| Financial Information from the Company's Consolidated Statements of Financial Position attributable on a separate basis | Financial Information from the Company's Consolidated Statements of Financial Position attributable on a separate basis | 4-5 |
| Financial Information from the Company's Consolidated Statements of Comprehensive Income attributable on a separate basis | Financial Information from the Company's Consolidated Statements of Comprehensive Income attributable on a separate basis | 6 |
| Financial Information from the Consolidated Statements Cash Flows attributable on a separate basis | Financial Information from the Consolidated Statements Cash Flows attributable on a separate basis | 7 |
| Financial Information from the Consolidated Statements Cash Flows attributable on a separate basis | Financial Information from the Consolidated Statements Cash Flows attributable on a separate basis | 8 |
| A. | Balance of cash and cash equivalents attributed to the Company (without amounts in respect of controlled investees) | 10 |
| B. | Disclosure regarding the financial liabilities attributed to the Company (without amounts in respect of controlled investees) | 10 |
| C. | Disclosure regarding the balances of deferred tax assets and deferred tax liabilities attributable to the Company (excluding amounts related to subsidiaries), and disclosure regarding tax income or tax expenses attributable to the Company (excluding amounts related to subsidiaries) | 12 |
| D. | Material engagements and transactions with related parties | 14 |
| E. | Contingent liabilities | 15 |

---

![](image_027.jpg)

**Special report of the independent auditor on Separate Financial Information pursuant to Regulation 9C**

**To the Shareholders of Matrix IT Systems Ltd.**

**Re: Special Report of the Independent Auditor**

**on Separate Financial Information in accordance with Regulation 9C to the Securities Regulations (Periodic and Immediate Reports), 1970**

We have audited the Separate Financial Information disclosed in accordance with Regulation 9C to the Securities Regulations (Periodic and Immediate Reports), 1970 of Matrix IT Ltd. (hereinafter: the "Company") as of 31 December 2024, and for the year then ended. The Separate Financial Information is the responsibility of the Company's Board of Directors and management. Our responsibility is to express an opinion on this Separate Financial Information based on our audit.

The Company's separate financial statements as of 31 December 2023 and for each of the two years then ended on that date were audited by previous auditors whose auditors' report on them dated 10 March 2024 included an unqualified opinion.

We conducted our audit in accordance with generally accepted auditing standards in Israel. These standards require that we plan and perform the audit in order to obtain a reasonable degree of assurance that the Separate Financial Information does not contain material misstatement. An audit involves examining, on a test basis, evidence supporting the amounts and details included in the Separate Financial Information. An audit also involves examining the accounting principles used in preparing the Separate Financial Information and the significant estimates made by the Company's Board of Directors and management, as well as evaluating the overall presentation of financial information. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, based on our audit, the Separate Financial Information has been prepared, in all material respects, in accordance with Regulation 9C of the Securities Regulations (Periodic and Immediate Reports), 1970.

Tel Aviv,Israel 10 March 2025 Zif Haft Certified Public Accountants (Isr.) - BDO Member Firm

![](ex9914_0012.jpg)

**Matrix IT Ltd.**

**Financial Information from the Company's Consolidated Statements of Financial Position attributable on a separate basis (NIS thousands)**

---

| | | |
|:---|:---|:---|
|  | **December 31**<br>**2024** | **December 31**<br>**2023** |
| **Current assets** | | |
| Cash and cash equivalents A | 4727 | 50556 |
| Trade receivables | 103692 | 76261 |
| Related parties debit balances D | 91663 | 85075 |
| Income tax receivable | 12594 | 13336 |
| Other receivables and debit balances | 21787 | 4659 |
|  | **234463** | **229887** |
| **Non-current assets** |  |  |
| Balance in respect of i controlled investees, net | 2561496 | 2301497 |
| Capital notes granted to controlled investees | 24659 | 24659 |
| Right-of-use assets | 178504 | 5493 |
| Deferred taxes C | 6053 | \*3,614 |
|  | 2770712 | 2335263 |
|  | **3005175** | **2565150** |

---

\* Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity.

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**Matrix IT Ltd.**

**Financial Information from the Company's Consolidated Statements of Financial Position attributable on a separate basis (NIS thousands)**

---

| | | |
|:---|:---|:---|
|  | **December 31**<br> **2024** | **December 31**<br> **2023** |
| **Current liabilities** | | |
| &nbsp;&nbsp;Credit from banks and other credit providers | 300000 | 206007 |
| &nbsp;&nbsp;Current maturities of debentures | 81341 | 84080 |
| &nbsp;&nbsp;Current maturities of lease liabilities | 8761 | 2770 |
| &nbsp;&nbsp;Trade payables | 36802 | 21376 |
| &nbsp;&nbsp;Employees and payroll accruals B | 36964 | 35040 |
| &nbsp;&nbsp;Other accounts payable B | 68514 | 24190 |
| &nbsp;&nbsp;Related parties credit balances D | 917845 | 781796 |
|  | 1450227 | 1155259 |
| &nbsp;&nbsp;**Non-current liabilities** |  |  |
| &nbsp;&nbsp;Debentures | 295427 | 360426 |
| &nbsp;&nbsp;Lease liabilities | 170627 | - |
| &nbsp;&nbsp;Deferred taxes C | - | \*626 |
| &nbsp;&nbsp;Employee benefit liabilities, net | 161 | 252 |
|  | 466215 | 361304 |
| &nbsp;&nbsp;**Equity attributable to Company shareholders** |  |  |
| &nbsp;&nbsp;Share capital and capital reserves | 380099 | 382606 |
| &nbsp;&nbsp;Retained earnings | 708634 | 665981 |
|  | 1088733 | 1048587 |
|  | **3005175** | **2565150** |

---

\* Reclassification - The Company reclassified comparative figures to reflect offsetting between deferred tax assets and deferred tax liabilities for right-of-use assets and lease liabilities related to the same tax authority and the same taxable entity.

The additional information provided constitutes an integral part of the financial data and the separate financial information.

<u>10 March 2025</u>       <br> Date of approval of the separate financial information Guy Bernstein Chair of the Board of Directors Moti Gutman Chief Executive Officer Nevo Brenner Chief Financial Officer

**Matrix IT Ltd.**

**Financial Information from the Company's Consolidated Statements of Comprehensive Income attributable on a separate basis (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended**<br> **December 31<br> 2024** | **Year ended**<br> **December 31<br> 2023** | **Year ended**<br> **December 31<br> 2022** |
| Revenues | 197122 | 170455 | 232472 |
| Cost of revenues | 61815 | 52054 | 130941 |
| Gross profit | 135307 | 118401 | 101531 |
| Selling and marketing expenses | 23960 | 37962 | 41241 |
| General and administrative expenses | 54965 | 43267 | 24164 |
| Operating income | 56382 | 37172 | 36126 |
| Financial expenses | 61382 | 40324 | 26756 |
| Financial income | 254 | 1969 | 513 |
| Company`s share of income of companies accounted for at equity, net | 277824 | 230131 | 326788 |
| Income before taxes on income | 273078 | 228948 | 336671 |
| Taxes on income C | 656 | 1615 | 2002 |
| Net income attributable to the Company | 272422 | 227333 | 334669 |
| Actuarial gains from defined benefit plans | 2722 | 3280 | 8923 |
| Adjustments for translation of financial statements | (1340) | 11252 | 35669 |
| Total comprehensive income attributable to the Company | 273804 | 241865 | 379261 |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**Matrix IT Ltd.**

**Financial Information from the Consolidated Statements Cash Flows attributable on a separate basis to the Company (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended**<br>**December 31**<br>**2024** | **Year ended**<br>**December 31<br> 2023** | **Year ended** <br>**December 31**<br>**2022** |
| **Cash Flows from operating activities:** | | | |
| Net income | 272422 | 227333 | 334669 |
| Adjustments required to reconcile net income to net cash (used in)/provided by operating activities: |  |  |  |
| **Adjustments to profit and loss items of the Company** |  |  |  |
| Company`s share of income of companies accounted for at equity, net | (277824) | (230131) | (326788) |
| Taxes on income | 656 | 1615 | 2002 |
| Depreciation and amortization | 9155 | 16087 | 13344 |
| Changes in liabilities for employee benefits | (91) | (112) | (131) |
| Other financial expenses, net | 30384 | 33200 | 6142 |
| Revaluation of long-term bank loans | (7) | (1) | (9) |
| Share based payment | 18026 | 16106 | 1330 |
|  | (219701) | (163236) | (304110) |
| Changes in assets and liabilities items |  |  |  |
| Increase in trade receivables | (27431) | (16548) | (18641) |
| Decrease (increase) in other receivables and prepaid expenses | (17128) | (3227) | 3685 |
| Increase in trade payables | 15426 | 7381 | 1815 |
| Increase (decrease) in accounts payable | (1504) | 11418 | 6835 |
| Increase (decrease) in current balances with related parties, net | 129461 | 68692 | (58394) |
|  | 98824 | 67716 | (64700) |
| Cash paid and received over the course of the year for: |  |  |  |
| Interest paid | (31293) | (30513) | (4644) |
| Interest received | 126 | - | - |
| Taxes paid | (7235) | (14209) | (8723) |
| Taxes received | 3746 | 163 | 1043 |
|  | (34656) | (44559) | (12324) |
| **Net cash provided (used) by operating activities** | 116889 | 87254 | (46465) |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**Matrix IT Ltd.**

**Financial Information from the Consolidated Statements Cash Flows attributable on a separate basis to the Company (NIS thousands)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended**<br>**December 31**<br>**2024** | **Year ended**<br>**December 31<br> 2023** | **Year ended**<br>**December 31**<br>**2022** |
| **Cash flows from the Company's financing activities** | | | |
| Short-term credit from banks and other credit providers, net | 100000 | - | - |
| Repayment of lease liabilities | (5500) | (18135) | (14971) |
| Repayment of long-term loans from banks and credit providers | (6000) | (6000) | (6000) |
| Dividend distribution | (184214) | (126409) | (284275) |
| Dividend distribution from subsidiary | - | 5821 | - |
| Receipt in respect issuance of debentures | - | - | 471476 |
| Repayment of debentures | (67918) | (33959) | - |
| **Net cash provided/(used) in the Company's financing activities** | (163682) | (178682) | 166230 |
| Translation differences for cash and cash equivalents | 964 | 597 | 2207 |
| **Increase (decrease) in cash and cash equivalents** | **(45829)** | **(90831)** | **121972** |
| **Balance of cash and cash equivalents at beginning of year** | **50556** | **141387** | **19415** |
| **Balance of cash and cash equivalents at end of year** | **4727** | **50556** | **141387** |
| **Significant non-cash transactions** |  |  |  |
| Dividend declared and not yet paid | 48277 | **-** | **-** |
| Right-of-use asset recognized with corresponding lease liability | 182166 | **-** | **-** |

---

The additional information provided constitutes an integral part of the financial data and the separate financial information.

**Matrix IT Ltd.**

**General**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Below is financial information from the Group's consolidated reports
as of 31 December 2024, attributable to the Company (hereinafter referred to as the "Separate Financial Information"),
presented in accordance with Article 9 c` of The Securities Regulations (Periodic and immediate reports), 1970 (hereinafter referred to
as the "Regulation") regarding separate financial information of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Definitions

---

| | |
|:---|:---|
| **The Company** | **Matrix IT Ltd.** |
| **Consolidated/controlled investees** | **As defined in Note 1 of the Company's consolidated financial statements.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Significant accounting policies applied in the separate financial information

The separate financial information was prepared in accordance with the accounting policy detailed in Note 2 to the Company's consolidated financial statements, except for the amounts of assets, liabilities, income, expenses, and cash flows relating to controlled investee companies, as detailed below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Balances of controlled investees, net – are presented in the financial
position data based on the Company's share in the net amount of total assets, less total liabilities included in the Company's
consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Data on comprehensive income – the amounts of income and expenses
reflect the income and expenses included in the consolidated financial statements, broken down between profit or loss and other comprehensive
income, attributable to the Company as the parent company (excluding income and expense amounts relating to controlled investees).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Company`s share of income of companies accounted for at equity, net –
is presented in the profit or loss data at the Company's share in the net amount of total income less total expenses included in
the Company's consolidated financial statements, reflecting the operating results of the controlled investees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Data on cash flows – the amounts of cash flows reflect the amounts
included in the consolidated financial statements attributable to the Company as the parent company, including cash flows from transactions
between the Company and the controlled investees that were eliminated in the consolidated financial statements, and excluding cash flow
amounts arising from activities and transactions carried out by the controlled investees, broken down by cash flows from operating activities,
investing activities, and financing activities, with a detailed breakdown of their components.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Balances (including current intercompany balances with controlled investees) and income and expenses from
transactions with controlled investees that were eliminated in the consolidated financial statements
are measured and presented under the relevant items in the statement on financial position and profit or loss, in the same manner as such
transactions would have been measured and presented had they been conducted with third parties.

**Matrix IT Ltd.**

**Additional Information**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. **Balance of cash and cash equivalents attributed to the Company (without amounts in respect of controlled investees) –(NIS thousands)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31<br> 2024** | **December 31<br> 2024** | **December 31<br> 2023** | **December 31<br> 2023** |
| NIS | | 4,168 | | 2,054 |
| Foreign currency | | 559 | | 48,502 |
|  | | **4,727** | | **50,556** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Disclosure regarding the financial liabilities attributed to the Company (without amounts in respect of controlled
investees) –(NIS thousands)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Other accounts payable

---

| | | |
|:---|:---|:---|
|  | **December 31**<br>**2024** | **December 31<br> 2023** |
| Employees and payroll accruals | 36964 | 35040 |
| Other payables | 68514 | 24190 |
|  | **105478** | **59230** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Liquidity risk attributable to the Company

Liquidity risks arise from the management of the Company's working capital, as well as from financial expenses and principal repayments of the Company's debt instruments. Liquidity risk, is the risk that the Company will have difficulty meeting obligations related to financial liabilities.

The Company's policy is to ensure that the cash held is always sufficient to cover obligations as they fall due. To achieve this objective, the Company seeks to maintain cash balances (or suitable credit lines) sufficient to meet expected requirements. In addition, the Company seeks to reduce liquidity risk by fixing the rate of increase of the index, and thereby stabilizing the cash flows related to the bonds it has issued.

The Company reviews cash flow forecasts on a monthly basis, as well as information regarding cash balances and the Group's investments in corporate bonds. On the balance sheet date, these forecasts indicate that the Company can expect to have sufficient liquid resources to cover all of its obligations under reasonable assumptions.

**Matrix IT Ltd.**

**Additional Information**

The table below summarizes the maturity profile of the Company's financial liabilities based on contractual undiscounted payments (including interest payments):

31 December 2024 (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Up to**<br>**Year**  | **1 to**<br>**2 years**  | **From 2**<br>**to 3 years**  | **From 3 to 4 years** | **Over 4**<br>**Years**  | **Total** |
| Loans from banks and other credit providers | 300000 | - | - | - | - | 300000 |
| Trade payables | 36802 | - | - | - | - | 36802 |
| Other payables | 68514 | - | - | - | - | 68514 |
| Employees and payroll accruals | 36964 | - | - | - | - | 36964 |
| Lease liabilities | 8761 | 16014 | 16888 | 19211 | 118512 | 179386 |
| Debentures | 81341 | 75197 | 69433 | 64017 | 86780 | 376768 |
|  | **532382** | **91211** | **86321** | **83228** | **205292** | **998434** |

---

31 December 2023 (NIS thousands)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Up to Year** | **1 to 2 years** | **From 2<br> to three years** | **From 3 to 4 years** | **Over 4 <br> Years** | **Total** |
| Loans from banks and other credit providers | 206007 | - | - | - | - | 206007 |
| Trade payables | 21376 | - | - | - | - | 21376 |
| Other payables | 24190 | - | - | - | - | 24190 |
| Employees and payroll accruals | 35040 | - | - | - | - | 35040 |
| Lease liabilities | 2770 | - | - | - | - | 2770 |
| Debentures | 84080 | 77813 | 71935 | 66416 | 144262 | 444506 |
|  | **373463** | **77813** | **71935** | **66416** | **144262** | **733889** |

---

**Matrix IT Ltd.**

**Additional Information**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Disclosure
 regarding the balances of deferred tax assets and deferred tax liabilities attributable to
 the Company (excluding amounts related to subsidiaries), and disclosure regarding tax income
 or tax expenses attributable to the Company (excluding amounts related to subsidiaries)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Deferred taxes attributable to the Company

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Composition** | | | | | | |
|  |<br>**Provision for vacation** |<br>**Provision for doubtful debts** |<br>**Employee benefits** |<br>**Employee options** |<br>**Taxes related to lease** |<br>**Total** |
| &nbsp;&nbsp;**Balance as of<br> 31 December 2022** | 1210 | 81 | 229 | 43 | (155) | 1408 |
| &nbsp;&nbsp;Employee inter-company mobility | (6) | - | - | - | - | (6) |
| &nbsp;&nbsp;Change during the report year attributed to capital reserve | - | - | - | - | - | - |
| &nbsp;&nbsp;Change recorded in the statement of profit and loss | 18 | 229 | (171) | 2049 | (539) | 1586 |
| &nbsp;&nbsp;**Balance as of<br> 31 December 2023** | **1222** | **310** | **58** | **2092** | **(694)** | **2988** |
| &nbsp;&nbsp;Employee inter-company mobility | 15 | - | 73 | - | - | 88 |
| &nbsp;&nbsp;Change during the report year attributed to capital reserve | - | - | - | - | - | - |
| &nbsp;&nbsp;Change recorded in the statement of profit and loss | (14) | - | (94) | 2401 | 684 | 2977 |
| &nbsp;&nbsp;**Balance as of<br> 31 December 2024** | **1223** | **310** | **37** | **4493** | **(10)** | **6053** |

---

With respect to the tax rates used in calculating the deferred taxes, see Section 2 below.

**Matrix IT Ltd.**

**Additional Information**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Disclosure regarding the balances of deferred tax assets and deferred tax liabilities attributable to
the Company (excluding amounts related to subsidiaries), and disclosure regarding tax income or tax expenses attributable to the Company
(excluding amounts related to subsidiaries) (Continued)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Income taxes\* attributable to the Company relating to items of other comprehensive income (NIS Thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31**<br>**2024** | **Year ended** <br> **December 31 2023** | **Year ended**<br>**December 31 2022** |
| **Adjustments for currency translation of financial statements** | | | |
| &nbsp;&nbsp;Amount before deduction of income taxes | (1740) | 14613 | 46323 |
| &nbsp;&nbsp;Tax benefit | 400 | (3361) | (10654) |
| &nbsp;&nbsp;Net amount after tax | **(1340)** | **11252** | **35669** |

---

\*The Company has final tax assessments through and including the 2019 tax year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Income taxes attributable to the Company relating to items of other comprehensive income (NIS Thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31**<br>**2024** | **Year ended December 31 2023** | **Year ended December 31 2022** |
| Current taxes | 3813 | 3357 | 1404 |
| Deferred taxes | (2977) | (1586) | 711 |
| Taxes in respect of prior years | (180) | (156) | (113) |
|  | **656** | **1615** | **2002** |

---

**Matrix IT Ltd.**

**Additional Information**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Material
 engagements and transactions with related parties

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Details of the ownership and voting rights percentages in the share capital of the companies directly
held by the Company – in percentages

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31**<br>**2024**<br>**Ownership percentage** | **December 31**<br>**2024**<br>**Ownership percentage** | **December 31**<br>**2023<br> Ownership percentage** | **December 31**<br>**2023<br> Ownership percentage** |
|  | **By vote** | **Share capital** | **By vote** | **Share capital** |
| &nbsp;&nbsp;**Company name** |  |  |  |  |
| &nbsp;&nbsp;Matrix IT Integration and Infrastructure Ltd. | **100** | **100** | **100** | **100** |
| &nbsp;&nbsp;Matrix IT Systems Ltd. | **100** | **100** | **100** | **100** |
| &nbsp;&nbsp;Tikshuv Systems in Education (Shaham) Ltd. | **100** | **100** | **100** | **100** |
| &nbsp;&nbsp;Sibam Ltd. | **-** | **-** | **100** | **100** |
| Matrix Defense Ltd. | **100** | **100** | **100** | **100** |
| John Bryce Training Ltd. | **100** | **100** | **100** | **100** |
| Tangram Soft Ltd. | **100** | **100** | **100** | **100** |
| Tact Computers & Systems Ltd. | **100** | **100** | **100** | **100** |
| Matrix Testing & Automation Ltd. | **100** | **100** | **100** | **100** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Financial guarantees

The Company has provided unlimited guarantees to banks in connection with credit granted to subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Current balances with controlled investees

The Company manages cash balances within the Group and with its subsidiaries as a clearinghouse, and therefore, in addition to engagements for the provision of such services, there are outstanding debit (or credit) balances between the subsidiaries and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Engagements for provision of services

By virtue of being part of a group that includes the subsidiaries, the Company is party to agreements and arrangements for the provision and receipt of various services. The parent company has a management fee agreement with most of the subsidiaries in return for ongoing management, administration, financial management, accounting, human resources, recruitment, and legal consulting.

**Matrix IT Ltd.**

**Additional Information**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Material engagements and transactions with related parties (Continued)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The following is a breakdown of the transaction volumes and balance sheet balances included in the Company's
financial statements in respect of these transactions (NIS thousands)

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended** <br>**December 31<br> 2024** | **Year ended**<br>**December 31 <br> 2023** | **Year ended**<br>**December 31 <br> 2022** |
| Revenues |  |  |  |
| Management fees | 182104 | 159432 | 137495 |
| Interest paid | 12284 | 9356 | 16888 |

---

---

| | | |
|:---|:---|:---|
|  | **December 31 <br> 2024** | **December 31<br> 2023** |
| **Balances** | | |
| Related parties, net | (826182) | (696721) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Contingent
 liabilities

See Note 16 to the consolidated financial statements.

**Chapter D**

<br> Additional Information on the Corporation

for the Year 2024

The information contained in this section constitutes a convenience translation of the section published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

Additional Information on the Corporation 1

![](image_003.jpg)

**Table of Contents**

---

| | | |
|:---|:---|:---|
| Article 8b(i) | Very Material Valuation Performed by the Company | 4 |
| Article 10a | Summary of Statements of Comprehensive Income for Each of the Quarters in the Year Ended on December 31, 2024 | 6 |
| Article 10c | Use of Proceeds from Securities, with Reference to the Intended Use of Proceeds Specified in the Prospectus | 6 |
| Article 11 | List of Investments in the Company's Material Subsidiaries as of the Date of the Statement of Financial Position | 6 |
| Article 12 | Changes in Investments in Subsidiaries and Associates During the Report Period | 6 |
| Article 13 | Income of Material Subsidiaries and Associates and the Corporation's Income Therefrom as of the Date of the Statement of Financial Position | 6 |
| Article 20 | Stock Exchange Trading – Securities Listed for Trading | 7 |
| Article 21 | Compensation of Interested Parties and Senior Officers | 8 |
| Article 21a | Control of the Corporation | 12 |
| Article 22 | Transactions with a Controlling Shareholder or in Which the Controlling Shareholder Has a Personal Interest | 12 |
| Article 24 | Holdings of Interested Parties and Senior Officers | 13 |
| Article 24a | Registered Share Capital, Issued Share Capital, and Convertible Securities as of the Date of the Report | 13 |
| Article 24b | Shareholders Register | 13 |
| Article 26 | Directors of the Corporation | 13 |
| Article 26a | Senior Officers of the Company | 14 |
| Article 26b | Authorized Independent Signatories | 16 |
| Article 27 | Auditor of the Corporation | 19 |
| Article 28 | Amendments to the Articles of Association of the Corporation | 19 |
| Article 29 | Recommendations and Resolutions of the Directors and Resolutions of a Special General Meeting | 19 |
| Article 29a | Resolutions of the Company | 20 |
| Corporate Governance Questionnaire  | Corporate Governance Questionnaire | 21 |

---

Additional Information on the Corporation 2

**Additional Information on the Corporation for the Year 2024**

---

| | |
|:---|:---|
| **Name of the Company**: | Matrix IT Ltd. (hereinafter: the "**Company**") |
| **Company No**.: | 520039413 |
| **Address**: | 3 Atir Yeda St., Kfar Saba (Article 25a) |
| **Email Address**: | nevobr@matrix.co.il (Article 25a) |
| **Website**: | www.matrix.co.il |
| **Telephone**: | 09-9598819 (Article 25a) |
| **Fax**: | 077-6070016 (Article 25a) |
| **Statement of Financial Position Date**: | December 31, 2024 (Article 9) |
| **Approval of the Periodic Report Date**: | March 10, 2025 (Article 7) |

---

Additional Information on the Corporation 3

**Article 8(b)(i) – Very Material Valuation Performed by the Company**

Set forth below are details regarding a very material valuation<sup>1</sup>, in accordance with Article 8(b) of the Securities Regulations (Periodic and Immediate Reports), 5730–1970 (the "**Regulations**"):

---

| | |
|:---|:---|
| **Identification of the subject of the valuation** | **Software Services Segment in Israel (Cash-Generating Unit)** |
| Purpose of the valuation | Impairment test of the goodwill attributed to the Software Services Segment in Israel |
| Date of the valuation | December 31, 2024 |
| Book value of the cash-generating unit immediately prior to the valuation | NIS 534,155 thousand |
| Valuation result determined according to the valuation | NIS 2,792,320 thousand |
| Identification and description of the appraiser, including education and experience in performing valuations for accounting purposes in reporting corporations, in scopes similar to or greater than that of the reported valuation | Assayag Consultants Ltd. The firm's partners are academic experts with extensive practical experience in valuations, including valuations for financial reporting purposes. The partner responsible for the valuation is CPA Aviad Cohen. |
| Appraiser's dependence on the party commissioning the valuation, including reference to any indemnification agreements with the appraiser | The appraiser is independent. The appraiser's liability for performing the valuation was limited to up to three times the amount of his fee. |
| Valuation model used by the appraiser | Discounted Cash Flow (DCF) method |
| Key assumptions used by the appraiser in the valuation, in accordance with the valuation model | (1) Weighted Average Cost of Capital (WACC) after tax: 10.90% (nominal discount rate); (2) Perpetual growth rate: 3.00% |

---

<sup>1</sup> This valuation was performed for the purpose of testing impairment of a cash-generating unit. Under any reasonably possible change in the key assumptions used in determining the recoverable amount of the unit, no very material impairment loss would have been recognized; therefore, disclosure only has been provided and the valuation report itself is not attached.

Additional Information on the Corporation 4

**Article 8b(i) – Material Valuations Performed by the Company**

Set forth below are details regarding material valuations, in accordance with Article 8b of the Securities Regulations (Periodic and Immediate Reports), 5730–1970 (the "**Regulations**"):

---

| | | |
|:---|:---|:---|
| **Identification of the Subject of the Valuation** | **Software Services Segment in the U.S. <br> (Cash-Generating Unit)** | **Cloud and Computing Infrastructure Segment<br> (Cash-Generating Unit)** |
| Purpose of the valuation | Impairment test of the goodwill attributed to the Software Services Segment in the U.S. | Impairment test of the goodwill attributed to the Cloud and Computing Infrastructure Segment |
| Date of the valuation | December 31, 2024 | December 31, 2024 |
| Book value of the cash-generating unit immediately prior to the valuation | NIS 305,774 thousand | NIS 354,614 thousand |
| Valuation result determined according to the valuation | NIS 780,422 thousand | NIS 1,267,832 thousand |
| Identification and description of the appraiser, including education and experience in performing valuations for accounting purposes in reporting corporations, in scopes similar to or greater than that of the reported valuation | Assayag Consultants Ltd. The firm's partners are academic experts with extensive practical experience in valuations, including valuations for financial reporting purposes. The partner responsible for the valuation is CPA Aviad Cohen. | Assayag Consultants Ltd. The firm's partners are academic experts with extensive practical experience in valuations, including valuations for financial reporting purposes. The partner responsible for the valuation is CPA Aviad Cohen. |
| Appraiser's dependence on the party commissioning the valuation, including reference to any indemnification agreements with the appraiser | The appraiser is independent. The appraiser's liability for performing the valuation was limited to up to three times the amount of his fee. | The appraiser is independent. The appraiser's liability for performing the valuation was limited to up to three times the amount of his fee. |
| Valuation model used by the appraiser | Discounted Cash Flow (DCF) method | Discounted Cash Flow (DCF) method |
| Key assumptions used by the appraiser in the valuation, in accordance with the valuation model | (1) Weighted Average Cost of Capital (WACC) after tax: 11.10% (nominal discount rate); (2) Perpetual growth rate: 3.00% | (1) Weighted Average Cost of Capital (WACC) after tax: 11.10% (nominal discount rate); (2) Perpetual growth rate: 3.00% |

---

Additional Information on the Corporation 5

**Article 10a – Summary of Statements of Comprehensive Income for Each of the Quarters in the Year Ended on December 31, 2024**<br> See Section 1.2.3 of the Board of Directors' Report.

**Article 10c – Use of Proceeds from Securities, with Reference to the Intended Use of Proceeds Specified in the Prospectus**

The proceeds received by the Company from the issuance of Bonds (Series B), according to the Shelf Offering Report dated September 14, 2022 (Reference No.: 2022-01-117502), are used by the Company for various purposes within the framework of its business activities, in accordance with resolutions of the Board of Directors, as may be adopted from time to time, including for financing the Company's ongoing operations, including the refinancing of existing debt.

**Article 11 – List of Investments in the Company's Material Subsidiaries as of the Date of the Statement of Financial Position**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name of <br> Company<sup>[2]</sup>** | **Type of Share** | **Number of <br> Shares** | **Investment <br> Cost** | **Percentage of <br> Capital, Voting <br> Rights, and <br> Authority to <br> Appoint Directors** | **Value in the <br> Company's <br> Separate Financial <br> Statements (NIS <br> thousands)** |
| Matrix IT Systems Ltd. | Ordinary shares ****<br> NIS 0.15 par value | 16000000 | 35810 | 100% | 1912316 |
| John Bryce Training Ltd. | Ordinary shares ****<br> NIS 1 par value ****<br> Deferred shares ****<br> NIS 1 par value | 112700**<br>** <br> 300 | 8971 | 100% | 163041 |
| Matrix IT Integration and Infrastructure Ltd. | Ordinary shares ****<br> NIS 1 par value****<br> Management shares ****<br> NIS 1 par value | 1500<br>1500 | 57851 | 100% | 311159 |
| Matrix Defense Ltd. | Ordinary shares ****<br> NIS 1 par value | 39100 | – | 100% | 56249 |

---

**Article 12 – Changes in Investments in Subsidiaries and Associates During the Report Period**<br> See Note 3 to the Company's consolidated financial statements as of December 31, 2024, presented in Part C of this Report (the "Financial Statements").

**Article 13 – Income of Material Subsidiaries and Associates and the Corporation's Income Therefrom as of the Date of the Statement of Financial Position (NIS thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name of Company** | **Profit Before <br> Tax** | **Profit After <br> Tax** | **Dividend** | **Management <br> Fees** | **Interest** |
| Matrix IT Systems Ltd. | 268615 | 190118 | – | 25794 | (30172) |
| John Bryce Training Ltd. | 12847 | 9911 | – | – | (3131) |
| Matrix IT Integration and <br> Infrastructure Ltd. | 74630 | 57288 | – | 18317 | 17664 |
| Matrix Defense Ltd. | 16275 | 12481 | – | 19906 | (3631) |

---

\* The total other comprehensive income during the Report Period is immaterial.

<sup>2</sup> The companies are not listed on the Stock Exchange and their shares are not traded on the Stock Exchange.

Additional Information on the Corporation 6

**Article 20 – Stock Exchange Trading – Securities Listed for Trading**

For details regarding share allocations following the exercise of options and restricted share units, see Note 18 to the Financial Statements.

For details regarding the allocation of restricted shares (RS) to the Company's CEO and the allocation of options to officers and senior executives, see Note 18 to the Financial Statements.

On May 15, 2024, a temporary trading halt occurred in trading of the Company's ordinary shares on the stock exchange following the publication of an Immediate Report on the Company's financial position. (For further details, see Immediate Report dated May 15, 2024, Reference No.: 2024-01-049941.)

Additional Information on the Corporation 7

**Article 21 – Compensation of Interested Parties and Senior Officers**

1. Set forth below are details of the compensation, as recognized in the Financial
Statements for 2024, for each of the five most highly compensated senior officers of the Company or of a corporation under its control,
which were granted to them in connection with their service in the Company or a corporation under its control (the data below are presented
on an employer cost basis and on an annual basis):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **Position (\*)** | **Percentage of Holding<br> in the Company<br> (Fully Diluted)** | **Salary** <br> **(NIS)**  | **Share-Based Payment** <br> **(NIS)**  | **Total** <br> **(NIS)**  |
| Mr. Moti Gutman¹ | CEO | 0.58% | 36713178853715<sup>2</sup> | 11138925<sup>3</sup> | 23663957 |
| Mr. Nevo Brenner⁴ | CFO | 0.12% (\*\*\*) | 16067552179376<sup>5</sup> | 708700⁶ | 4494831 |
| Mr. Ziv Mandl⁷ | Executive VP and Cluster Manager | 0.12% (\*\*\*) | 16537272349750<sup>8</sup> | 708700<sup>9</sup> | 4262427 |
| Mr. Avi Goldstein¹⁰ | Head of Cloud and Computing Infrastructure Division | 0.10% (\*\*\*) | 11953152917579<sup>11</sup> | 575819<sup>12</sup> | 4688194 |
| Mr. Dennis Robinson¹³ | CEO of Xtivia | 0.07% (\*\*\*) | 10440001738800<sup>14</sup> | 398644<sup>15</sup> | 3080669 |

---

(\*) All are full-time employees of the Company.

(\*\*) In accordance with the Company's Compensation Policy, eligibility for the cash bonus of all officers is conditional upon achieving an operating profit of at least 75% of 105% of the operating profit of the Company in the year preceding the relevant bonus year ("Normative Profit"). In 2024, the Company met the Normative Profit target. In addition, eligibility for bonuses is evaluated on a three-year basis, such that 20% is contingent upon meeting the average ceiling of the annual operating profit bonus over a three-year period based on the Normative Profit. The annual bonus ceiling equals 250% of the fixed component of the officer's compensation and, in respect of the CEO, 400% of the fixed component.

(\*\*\*) The exercise mechanism is by the "Cashless Exercise" method, such that upon exercise of the options into shares, only shares equivalent to the benefit value embedded in the options will be allotted. The percentage of holdings indicated above was calculated without taking into account the "Cashless Exercise" mechanism.

Additional Information on the Corporation 8

**Moti Gutman**

1) CEO of the Company since February 1, 2001. During 2023, Mr. Gutman served as CEO pursuant to the employment agreement approved on January 1, 2023, between the Company and Mr. Gutman (the "Employment Agreement"), which is valid from January 1, 2023, through December 31, 2027. For details regarding all terms of engagement under the Employment Agreement, see the Company's Immediate Report dated November 10, 2022 (Reference No.: 2022-01-135274).

For completeness, it is noted that the compensation terms of the Company's CEO were approved by the Compensation Committee and the Board of Directors despite the objection of the General Meeting, pursuant to their authority under Section 272(c1)(1)(c). For details, see the Company's Report dated December 29, 2022 (Reference No.: 2022-01-157564).

2) The bonus amount for 2024 as recognized in the Financial Statements for 2024. Mr. Gutman is entitled to a bonus equal to 3.25% of the Company's net profit attributable to equity holders (excluding capital gains), as well as an additional 5% of any capital gains, if generated by the Company (no capital gain was recorded in 2024), based on the Company's Financial Statements.

3) The expense amount as recorded in the Financial Statements for 2024 (non-linear) according to generally accepted accounting principles (the annual expense based on a linear allocation amounts to approximately NIS 5,476,500).

On February 1, 2023, the Company granted Mr. Gutman, without consideration, 375,000 restricted shares (RS) of the Company, with no exercise price (see also Immediate Reports as detailed in Subsection 1 above regarding the CEO Agreement). For further details regarding the restricted shares, see the Company's Immediate Report dated February 2, 2023 (Reference No.: 2023-01-013749). The restricted shares were granted as part of a material private placement within the framework of the Employment Agreement with Mr. Gutman, as detailed in the Immediate Reports dated November 10, 2022 (Reference No.: 2022-01-135280), December 15, 2022 (Reference No.: 2022-01-151651), December 29, 2022 (Reference No.: 2022-01-157564), and February 2, 2023 (Reference No.: 2023-01-013749).

**Ziv Mandl**

4) Mr. Mandl serves as Senior Vice President and Cluster Manager, as detailed in Article 26a below. Mr. Mandl's employment is for an indefinite period and may be terminated by either party with six months' prior notice.

5) The bonus amount for 2024 as recognized in the Financial Statements for 2024. Mr. Mandl is entitled each year to a formula-based bonus composed of meeting the operating profit targets of the business units under his management and a company-wide bonus derived from the Company's annual net profit attributable to shareholders, with certain adjustments, all in accordance with the Company's Compensation Policy.

6) The fair value of share-based payment as recognized in the Financial Statements for 2024 (non-linear) according to generally accepted accounting principles (the expense based on linear allocation amounts to approximately NIS 447,500).

As of the date of the Report, Mr. Mandl holds 80,000 options granted to him on March 12, 2023. For further details, see Immediate Report dated March 13, 2023 (Reference No.: 2023-01-032538). For details regarding the fair value of the options, see Note 18b to the Financial Statements.

Additional Information on the Corporation 9

**Nevo Brenner**

7) Mr. Brenner has served as the Company's Chief Financial Officer since June 2022. His employment agreement is for an indefinite period and may be terminated by either party with six months' prior notice.

8) The bonus amount for 2024 as recognized in the Financial Statements for 2024. Mr. Brenner is entitled to a bonus equal to 0.8% of the Company's net profit attributable to equity holders (excluding capital gains), based on the Company's Financial Statements.

9) The fair value of share-based payment as recognized in the Financial Statements for 2024 (non-linear) according to generally accepted accounting principles (the expense based on linear allocation amounts to approximately NIS 447,500).

As of the date of the Report, Mr. Brenner holds 80,000 options granted to him on March 12, 2023. For further details, see Immediate Report dated March 13, 2023 (Reference No.: 2023-01-032538). For details regarding the fair value of the options, see Note 18b to the Financial Statements.

**Avi Goldstein**

10) Mr. Goldstein has served as Head of the Company's Cloud and Computing Infrastructure Division since 2002. His employment agreement is for an indefinite period and may be terminated by either party with six months' prior notice.

11) The bonus amount for 2024 as recognized in the Financial Statements for 2024. Mr. Goldstein is entitled each year to a formula-based bonus calculated as a percentage of the operating profit of the division under his management.

12) The fair value of share-based payment as recognized in the Financial Statements for 2024 (non-linear) according to generally accepted accounting principles (the expense based on linear allocation amounts to approximately NIS 363,675).

As of the date of the Report, Mr. Goldstein holds 65,000 options granted to him on March 12, 2023. For further details, see Immediate Report dated March 13, 2023 (Reference No.: 2023-01-032538). For details regarding the fair value of the options, see Note 18b to the Financial Statements.

**Dennis Robinson**

13) Mr. Robinson has served as CEO of Xtivia Technologies Inc., a U.S. subsidiary of the Company, since April 2001.

14) The bonus amount for 2024 as recognized in the Financial Statements for 2024. Mr. Robinson is entitled each year to a formula-based bonus calculated as a percentage of the operating profit of Xtivia (including a higher bonus rate for overperformance), as well as bonuses for profits from specific transactions jointly executed by Xtivia and the Company's business units in Israel.

15) The fair value of share-based payment as recognized in the Financial Statements for 2024 (non-linear) according to generally accepted accounting principles (the expense based on linear allocation amounts to approximately NIS 251,775). As of the date of the Report, Mr. Robinson holds 45,000 options granted to him on March 12, 2023. For further details, see Immediate Report dated March 13, 2023 (Reference No.: 2023-01-032538). For details regarding the fair value of the options, see Note 18b to the Financial Statements.

Additional Information on the Corporation 10

**2.** **Details of the compensation granted in 2024 to each of the Company's Interested Parties not included in Section 1 above, if such compensation was granted by the Company or by a corporation under its control, in connection with services provided as an officer in the Company or a corporation under its control, whether or not an employer-employee relationship exists, and even if the Interested Party is not a senior officer.** 

For details regarding compensation to all Company directors entitled to director's fees (external directors and directors not employed by the Company are entitled to compensation), see Note 23b to the Financial Statements, in accordance with the Companies Regulations (Rules Concerning Compensation and Expenses to an External Director), 5760–2000.

3. After December 31, 2024, and until the date of submission of this Report,
no compensation was granted to any of the senior officers mentioned in Section 1 above in connection with their service and employment
in 2024, which was not already recognized in the 2024 Financial Statements.

Additional Information on the Corporation 11

**Article 21(a) – Control of the Corporation**

As of the date of the Report, the controlling shareholder of the Corporation is Formula Systems (1985) Ltd. ("Formula") (holding approximately 48.21% of the equity and voting rights of the Company's issued share capital), a public company whose shares are listed for trading on the Tel Aviv Stock Exchange and on NASDAQ.

According to Formula's reports, Asseco Poland S.A. ("Asseco"), a Polish public company whose shares are listed for trading on the Warsaw Stock Exchange in Poland, holds 25.82% of Formula's issued share capital.

No other entity holds a greater percentage of its issued share capital.

To the best of the Company's knowledge, the Interested Parties in Formula, as listed on the Tel Aviv Stock Exchange website (as of March 5, 2025), are as follows:

---

| | |
|:---|:---|
| **Interested Party** | **Voting Rights (%)** |
| Asseco (see above) | 25.82% |
| Guy Bernstein | 11.73% |
| Harel – Institutional Entities | 8.6% |
| Menora Provident Fund | 7.12% |
| The Phoenix Insurance Company Ltd. | 6.95% |
| Yelin Lapidot Investment House | 6.3% |
| Clal Insurance | 5.38% |

---

According to information received from Asseco and public sources<sup>3</sup>, as of the date of the Report, Asseco does not have a shareholder defined as a controlling shareholder. The Interested Parties in Asseco are as follows<sup>4</sup>:

---

| | |
|:---|:---|
| **Interested Party** | **Voting Rights (%)** |
| Yukon Niebieski Kapital B.V. | 9.99% |
| Allianz OFE | 9.99% |
| Adam Góral | 10.01% |
| Nationale-Nederlanden Otwarty Fundusz Emerytalny | 5.03% |

---

In addition, Asseco holds 17.84% of its own shares.

<sup>3</sup> <u>https://inwestor.asseco.com/en/about-asseco/shareholders</u>

<sup>4</sup> It is noted that no officers of the Company serve as officers of Asseco.

Additional Information on the Corporation 12

**Article 22 – Transactions with a Controlling Shareholder or in Which the Controlling Shareholder Has a Personal Interest**

For details, to the best of the Company's knowledge, regarding any transaction with a controlling shareholder or in which the controlling shareholder of the Company has a personal interest in its approval, which the Company entered into during the reporting year or up to the date of submission of this Report, or which is still in effect as of the date of the Report, see Note 23 to the Financial Statements. All transactions detailed in said note are "**immaterial transactions**" or transactions that are **not "extraordinary transactions,"** as specified in Note 23.

**Article 24 – Holdings of Interested Parties and Senior Officers**

(a) For details regarding the holdings of Interested Parties and Senior Officers, see the Company's Immediate Report dated January 7, 2025 (Reference No.: 2025-01-002504).

(d) The Company holds 653,860 par value NIS shares of the Company, which are dormant shares.

**Article 24(a) – Registered Share Capital, Issued Share Capital, and Convertible Securities as of the Date of the Report**

For details regarding the registered share capital, issued share capital, and convertible securities, see Note 17 to the Financial Statements.

**Article 24(b) – Shareholders Register**

For details regarding the Company's Shareholders Register, see the Company's Immediate Report dated February 3, 2025 (Reference No.: 2025-01-008299).

Additional Information on the Corporation 13

**Article 26 – Directors of the Corporation**

Set forth below are details regarding the directors of the Corporation as of the date of the Report:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Guy Bernstein (Chairman)** | **Tal Barnoach** | **Limor Bar-On** | **Pinhas Greenfield** | **Eliezer Oren** |
| Israeli ID No. | 023578354 | 058379058 | 27716869 | 10758209 | 050700855 |
| Date of Birth | March 9, 1968 | September 11, 1963 | June 9, 1970 | March 23, 1947 | June 21, 1951 |
| Address for Service of Court <br> Documents | 5 HaShalva Street, Savyon | 6 HaNarkisim Street, Kfar Shmaryahu | 4 Reading Street, Tel Aviv | 27 Menachem Begin Street, Givat Shmuel | 26 Zalman Shneur Street, Herzliya |
| Citizenship | Israeli | Israeli and Portuguese | Israeli | Israeli | Israeli |
| Membership in Board <br> Committees |  | Audit Committee, Financial Statements Review Committee, Compensation Committee | Yes | Audit Committee, Financial Statements Review Committee, Compensation Committee |  |
| External / Independent <br> Director | No | External Director | External Director | Independent Director | No |
| Accounting and Financial <br> Expertise or Professional <br> Qualification | Has accounting and financial expertise | Has accounting and financial expertise and professional qualification | Has professional qualification | Has professional qualification | Has accounting and financial expertise |
| Employee of the <br> Corporation, Subsidiary, <br> Related Company, or <br> Interested Party | CEO of Formula Systems (1985) Ltd., the controlling shareholder of the Company; CEO of Magic Software Enterprises Ltd.; Chairman and director of companies as provided below. | No | No | No | Director and Deputy Chairman of the Company's Board of Directors, director of subsidiaries of the Company |
| Date of Commencement of <br> Tenure as Director in the <br> Company | January 11, 2007 | February 19, 2024 | May 27, 2024 | December 21, 2021 | February 23, 2004 |
| Education | Certified Public Accountant; B.A. in Economics and Accounting – The College of Management | B.A. in Economics – Tel Aviv University | LL.B. – Sha'arei Mada and Law College; B.A. in History and General Humanities Studies – Tel Aviv University; Communication Studies – "Ko-Teret" School of Journalism | B.A. in Political Science – University of Haifa; M.A. in Political Science – University of Haifa | B.A. in Mathematics and Computer Science – Tel Aviv University |

---

Additional Information on the Corporation 14

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Guy Bernstein (Chairman)** | **Tal Barnoach** | **Limor Bar-On** | **Pinhas Greenfield** | **Eliezer Oren** |
| Occupation During the Past <br> Five Years | CEO of Formula Systems (1985) Ltd.; CEO of Magic Software Enterprises Ltd.; Chairman of Board of Directors of the Company, Chairman of Sapiens International Corporation; Chairman of Michpal Micro Computers (1983) Ltd.; Chairman of Zap Group; Director in companies as detailed below. | Partner and manager in: Disruptive Technologies L.P.; Disruptive Technologies Opportunity Fund L.P.; Disruptive Technologies I/II/III; Disruptive AI L.P.; Disruptive AI SPV I GP; CEO and director of SpeedUp Ltd.; Director in companies as detailed below. Owner of companies in areas of information security and cyber. | Attorney at Vardi Leshem Ron Law Office; CEO and Editor-in-Chief of "Ascolot" – The Open University. | Independent Director of the Company until 2018; experienced and skilled in information security and cyber. | President of the Company (until January 31, 2022) and Deputy Chairman of the Board of Directors of the Company; experienced and skilled in information security and cyber. |
| Corporations in Which <br> He/She Serves as Director | Magic Software Enterprises Ltd. and its subsidiaries; Chairman of Sapiens International Corporation; Chairman of Michpal Micro Computers (1983) Ltd.;<br>Director in: TSG It Advanced Systems Ltd., InSync Staffing, Zap Group Ltd., Ofek Aerial Photography (1987) Ltd.; Effective Solutions Ltd.; Unique Software Industries Ltd.; Liram Financial Software Ltd.; Shemer Electronics (1977) Ltd.<br>| SpeedUp Ltd.; Disruptive Technologies Ltd.; Anodot Ltd.; Deep IT Ltd.; Tailor Brands Ltd.; Cocycles Ltd.; Beamr Imaging Ltd.; Disruptive AI GP Ltd., Lumen Ltd., Captain Up Ltd., Qwilt Ltd., Idomoo Ltd., Nima Shefa Israel Ltd., Tzur Shamir Holdings Ltd., and Etgar Investments and Development Ltd. | Does not serve as director in other corporations. | Does not serve as director in other corporations. | Director in the Company and its subsidiaries |
| Family Member of an <br> Interested Party | No | No | No | No | No |
| Recognized by the Company <br> as Having Accounting and <br> Financial Expertise for the <br> Purpose of Meeting the <br> Minimum Requirement | Yes | Yes | No | No | Yes |

---

**Directors Whose Tenure Ended During the Report Period:**

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Israeli ID No.** | **Start of Tenure** | **End of Tenure** |
| Yafit Keret | 029497260 | August 27, 2018 | August 26, 2024 |

---

Additional Information on the Corporation 15

**Article 26(a) – Senior Officers of the Company**

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Israeli ID No.** | **Date of Birth** | **Position** | **Commencement of** <br> **Tenure** | **Interested Party or <br> Relative of Another <br> Senior Officer or of <br> an Interested Party** | **Education** | **Occupation During the <br> Past Five Years** |
| Moti Gutman | 057260341 | October 29, 1961 | CEO | February 2001 | No | M.B.A., Hebrew University | CEO of the Company |
| Nevo Brenner | 033741182 | May 1, 1977 | Chief Financial Officer | June 2022 | No | B.A. in Economics and Accounting – Hebrew University of Jerusalem; M.B.A. – Hebrew University of Jerusalem | CFO of the Company; Director in companies within the Matrix Group; Former CFO, Energix – Renewable Energies Ltd.; experience in information security and cyber |
| Ranit Zexer | 057514838 | December 5, 1962 | Chief Technology Officer (CTO) | January 2002 | No | B.A. in Mathematics and Computer Science – Bar-Ilan University | CTO of the Company; skilled and knowledgeable in the establishment of information security and cyber-based solutions |
| Asaf Givati | 028054914 | October 22, 1970 | VP of Strategic Projects | November 2022 | No | B.A. in Economics; M.B.A. – Hebrew University | Head of subsidiary clusters; extensive experience in cyber and information security management |
| Yifat Givol | 029714474 | August 1, 1973 | Head of Legal Department and Corporate Secretary | Head of Legal Department – May 2012; Corporate Secretary – January 2008 | No | LL.B. and B.A. in Business Administration – Reichman University (IDC Herzliya) | Head of the Legal Department and Corporate Secretary; knowledge in legal aspects relating to cyber and information security |
| Ziv Mandl | 059629311 | May 5, 1965 | Senior VP and Cluster Manager overseeing the Business Systems Division, R&D Services Division, Experts and Consultants Division, and other subsidiaries | November 2002 | No | B.A. in Political Science and Computer Science – Bar-Ilan University | Manages divisions and subsidiaries of the Company; Director in companies within the Matrix Group; expertise and experience in the cyber field |

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Additional Information on the Corporation 16

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Israeli ID No.** | **Date of Birth** | **Position** | **Commencement of** <br> **Tenure** | **Interested Party or <br> Relative of Another <br> Senior Officer or of <br> an Interested Party** | **Education** | **Occupation During the <br> Past Five Years** |
| Avi Goldstein | 024123358 | May 6, 1969 | Head of Cloud, Computing, and Integration Infrastructure Division | 2002 | No | Secondary Education | Head of the Cloud, Computing, and Integration Infrastructure Division; Joint Manager of the Infrastructure and Integration Division |
| Yaron Raz | 033365156 | February 19, 1977 | Senior VP and Cluster Manager overseeing the Software Products Division, Matrix Defense (Defense Division), DnA – Data & AI, and Xtivia | April 2011 | No | B.A. in Economics and Business Administration – Bar-Ilan University; LL.M. for Economists – Bar-Ilan University | Manages divisions and subsidiaries of the Company; Director in companies within the Matrix Group |
| Nitsan Alon<sup>[5]</sup> | 059295253 | February 26, 1965 | VP of Strategy and Chairman of Matrix Defense | February 2020 | No | B.Sc. in Physics and M.Sc. in Materials Engineering – Technion | Former Head of Operations Directorate, IDF; CEO of CannDoc Ltd.; VP of Strategy and Chairman of Matrix Defense; experience in information security and cyber |
| Liat Tennenholtz | 039821384 | April 22, 1984 | VP of Mergers and Acquisitions. Director of subsidiaries of the Company. | January 2021 | No | LL.B., Tel Aviv University; B.A. in Accounting, Tel Aviv University | Director at ZIM; Head of Business Development at Matrix; external director at Navitas Baskin Finance; experience in information security and cyber |
| Amir Shary | 029672227 | October 6, 1972 | Head of Fintech and Digital Division | January 2021 | No | B.Sc. in Mechanical Engineering – Technion; M.B.A. – Tel Aviv University | Deputy Head of Fintech and Digital Division |

---

<sup>5</sup> Since the October 7, 2023 attack and throughout 2024, Nitsan has been serving as Commander of the Intelligence Effort in the Hostages and Missing Persons Directorate— a position of immeasurable importance, far exceeding his role in the Company [and the Company hopes he will return to his position soon, with the return of all the hostages].

Additional Information on the Corporation 17

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Israeli ID No.** | **Date of Birth** | **Position** | **Commencement of** <br> **Tenure** | **Interested Party or <br> Relative of Another <br> Senior Officer or of <br> an Interested Party** | **Education** | **Occupation During the <br> Past Five Years** |
| Sigalit Katan | 058888611 | October 10, 1964 | Chief Accountant | January 2002 | No | B.A. in Business Administration | Chief Accountant at Matrix |
| Hila Tal | 024874992 | May 19, 1970 | VP of Human Resources | July 2023 | No | B.A. in Social Work – Tel Aviv University | VP of Human Resources at subsidiaries John Bryce Training Ltd., Matrix Global Services Ltd., and Matrix Testing and Automation Ltd. |
| Yisrael Gerwitz | 33762139 | February 19, 1977 | Internal Auditor | January 2023 | No | B.A. in Economics and Accounting<br>Certified Internal Auditor<br>| Partner at Fahn Kanne Control Management Ltd.; Certified Internal Auditor with experience in information security audits and disaster recovery exercises |

---

**Senior Officers Whose Tenure Ended During the Report Period:**

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Israeli ID No.** | **Start of Tenure** | **End of Tenure** |
| Shira Raz Meisner | 025525692 | January 2021 | July 2024 |

---

Additional Information on the Corporation 18

**Article 26b – Authorized Independent Signatories**

As of the date of the Report and as of its publication, there are no Authorized Independent Signatories in the Company, as defined in the Securities Law.

**Article 27 – Auditor of the Corporation**

BDO, 48 Menachem Begin Road, Tel Aviv, 6618001

**Article 28 – Amendments to the Articles of Association of the Corporation**

None.

**Article 29 – Recommendations and Resolutions of the Directors and Resolutions of a Special General Meeting**

1. Dividend Distribution or Other Distribution as Defined in the Companies
Law, or Bonus Share Distribution:

For details regarding resolutions of the Company's Board of Directors concerning cash dividend distributions, see Note 17(e) to the Financial Statements.

2. On February 19, 2024, the General Meeting of Shareholders approved the appointment
of Tal Barnoach as an External Director of the Company for a three-year term commencing on February 19, 2024.

For further details, see the Company's Immediate Reports dated January 14, 2024 (Reference No.: 2024-01-006231) and February 19, 2024 (Reference No.: 2024-01-017736).

3. On April 3, 2024, the General Meeting of Shareholders approved the termination
of the Company's engagement with the accounting firm E&Y (Ernst & Young) – Kost Forer Gabbay & Kasierer and the
appointment of BDO Israel as the Company's independent auditor, effective from the first quarter of 2024 and until the next Annual
General Meeting. For further details, see the Company's Immediate Reports dated March 11, 2024 (Reference No.: 2024-01-024189) and
April 3, 2024 (Reference No.: 2024-01-032587).

4. On May 27, 2024, the General Meeting of Shareholders approved the appointment
of Limor Bar-On as an External Director of the Company for a three-year term commencing on May 27, 2024. For further details, see the
Company's Immediate Reports dated April 18, 2024 (Reference No.: 2024-01-039460) and May 27, 2024 (Reference No.: 2024-01-052489).

Additional Information on the Corporation 19

**Article 29a – Resolutions of the Company**

**Exemption, Insurance, or Indemnification Undertaking for an Officer in Effect as of the Date of the Report:**

On December 23, 2024, the Company's General Meeting of Shareholders approved the renewal, from time to time, of the Company's engagement in directors' and officers' liability insurance policies (including for the CEO) covering the Company and its subsidiaries and affiliates, as they may exist from time to time, including a SIDE A DIC policy. The insurance coverage provides liability limits of USD 30 million per event and in aggregate, and the coverage under the D&O SIDE A DIC policies provides liability limits of USD 10 million. Under the policy, all Company and subsidiary officers, including directors, past and present, are insured under identical terms. None of the Company's officers is a controlling shareholder. For further details, see the Company's Immediate Report dated November 14, 2024 (Reference No.: 2024-01-0615819).

Indemnification letters have also been granted to the Company's officers.

**Date: March 10, 2025<br>** 

<br> **Matrix IT Ltd.**

---

| | |
|:---|:---|
| **Guy Bernstein** <br> Chairman of the Board of Directors | **Moti Gutman** <br> CEO  |

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Additional Information on the Corporation 20

**Corporate Governance Questionnaire<sup>6</sup>**

---

| | | | |
|:---|:---|:---|:---|
| **Independence of Directors** | **Independence of Directors** | **Correct** | **Incorrect** |
| 1. | Two or more External Directors have served in the Corporation during each Reporting Year.<br>In this question, "correct" can be marked if the time period in which two External Directors did not serve does not exceed 90 days, as stated in Section 363A.(b)(10) of the Companies Law. However, for each answer (correct/incorrect), please note the period of time (in days) in which two or more External Directors did not serve in the Corporation during the Reporting Year (including a term of office approved retrospectively, while distinguishing between the various External Directors):<br>Director A: Tal Barnoach<br>Director B: Limor Bar-On<br>[From Dec. 12, 2024 to Feb. 19, 2025, one External Director served in the Corporation]<br>The number of External Directors serving in the Corporation as of the publication date of this Questionnaire: 2.<br>| ✔ |  |
| 2. | The number<sup>7</sup> of Independent Directors<sup>8</sup> serving in the Corporation as of the publication date of this Questionnaire: 3 (the two External Directors listed in Section 1 and Pinhas Greenfield, Independent Director). The number of Independent Directors determined in the Corporation's<sup>9</sup> articles of association<sup>10</sup>: If no controlling shareholder – majority; if there is a controlling shareholder – one third. | ✔ | _____ |
| 3. | In the Reporting Year, an examination was conducted with External Directors (and the Independent Directors), and it was determined that they have upheld, during the Reporting Year, the provisions of Section 240(b) and (f) of the Companies Law regarding the lack of a Connection of the Outside (and Independent) Directors serving in the Corporation and that they fulfill the terms required for office as Outside (or Independent) Directors. | ✔ |  |
| 4. | None of the directors who served in the Corporation during the Reporting Year are subject<sup>11</sup> to the CEO, directly or indirectly (excluding a director who is an employee representative, if the Corporation has an employee representative).<br>If your answer is "incorrect" (meaning, the director is subject to the CEO as stated) – please list the number of directors who do not meet the said limitation:<br>| ✔ |  |

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<sup>6</sup> Published as part of legislative proposals to improve reports on March 16, 2014.

<sup>7</sup> In this Questionnaire, "**number**" - a certain number of the total. For example, 3/8.

<sup>8</sup> Including "Outside Directors" as defined in the Companies Law.

<sup>9</sup> For the purpose of this question - "articles of association" including under a specific legal provision applicable to the Corporation (for example, in a banking corporation - provisions of the Supervisor of Banks).

<sup>10</sup> A bonds company is not required to respond to this section.

<sup>11</sup> For the purpose of this question - Serving as a director in a held corporation controlled by the Company, shall not be considered to be "subject," yet, a Director in the Company serving as an executive (other than a director) and/or employee in a held corporation controlled by the Company shall be considered "subject" for the purpose of this question.

Additional Information on the Corporation 21

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| | | | |
|:---|:---|:---|:---|
| **Independence Of Directors** | **Independence Of Directors** | **Correct** | **Incorrect** |
| 5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; None of the directors who have provided notice that a Personal Interest exists in an approval of a transaction that is on the agenda of the meeting have attended the meeting, nor did they participate in the voting as stated (excluding a discussion and/or vote in circumstances as stated in Section 278(b) of the Companies Law):<br>If your answer is "Incorrect" -<br>Was it for presentation of a certain issue by the director in accordance to the second part of Section 278(a) of the Companies Law:<br>☐ Yes ☐ No (Please place an X in the appropriate box)<br>The ratio of meetings in which directors attended and/or participated in the voting, apart from the circumstances provided in subsection A above:<br>| ✔ |  |
| 6. | The Controlling Shareholder (including a relative and/or designee), who is not a director or other Senior Officer of the Corporation, was not present in meetings of the Board of Directors occurring during the Reporting Year.<br>If your answer is "incorrect" (meaning, a Controlling Shareholder and/or Relative and/or designee which is not a member of the Board of Directors and/or a Senior Officer in the Corporation was present in the meetings of the Board of Directors as stated) – please provide the following details regarding the presence of any additional person in the meetings of the Board of Directors as stated:<br>Identity: Asaf Bernstein(\*)<br>Corporate officer (if any): None.<br>Description of the connection to the Controlling Shareholder (if the person present was not the Controlling Shareholder himself/herself): CFO of Formula Systems (1985) Ltd., controlling shareholder of the Company.<br>Was it for presentation of a certain issue by him/her: ☐ Yes ✔ No (Please place an X as needed)<br>The rate of presence<sup>[12]</sup> in the meetings of the Board of Directors occurring during the Reporting Year in order to present a specific matter: 55% Other attendance: _______<br>Identity: Maya Solomon (\*)<br>Corporate officer (if any): None.<br>Description of the connection to the Controlling Shareholder (if the person present was not the Controlling Shareholder himself/herself): COO of Formula Systems (1985) Ltd., controlling shareholder of the Company.<br>Was it for presentation of a certain issue by him/her: ☐ Yes ✔ No (Please place an X as needed)<br>The rate of presence<sup>12</sup> in the meetings of the Board of Directors occurring during the Reporting Year in order to present a specific matter: 45% Other attendance: _______<br> Not relevant (there is no Controlling Shareholder of the Corporation).<br>|  | ✔ |

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<sup>12</sup> While distinguishing between the controlling shareholder, relative and/or designee.

(\*) To assist the Chairman of the Company's Board of Directors.

Additional Information on the Corporation 22

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| | | | | |
|:---|:---|:---|:---|:---|
| **Qualifications and Skills of Directors** | **Qualifications and Skills of Directors** | **Qualifications and Skills of Directors** | **Correct** | **Incorrect** |
| 7. | In the Articles of Association of the Corporation, there are no provisions limiting the possibility of immediately terminating the office of all of the directors in the Corporation which are not External Directors (in this regard – a determination with an ordinary majority is not considered to be a limitation).<sup>13</sup><br>If your answer is "Incorrect" (meaning, there is such a limitation), please state -  | In the Articles of Association of the Corporation, there are no provisions limiting the possibility of immediately terminating the office of all of the directors in the Corporation which are not External Directors (in this regard – a determination with an ordinary majority is not considered to be a limitation).<sup>13</sup><br>If your answer is "Incorrect" (meaning, there is such a limitation), please state -  | ✔ |  |
|  | a. | The period of time stipulated in the Articles of Association for the office of director: ______. |  |  |
|  | b. | The majority required in the Articles of Association for the termination of the office of the directors: ___________. |  |  |
|  | c. | The legal quorum determined in the Articles of Association for the general assembly to terminate the office of the directors: _________. |  |  |
|  | d. | The majority required to change these provisions of the Articles of Association: _____. |  |  |
| 8. | The Corporation has a training program for new directors, in the field of the Corporation's business and the field of the law applicable to the Corporation and the directors, as well as a continuing training program for serving directors, adapted, inter alia, for the function that the director fulfills in the Corporation.<br>If you answer is "correct" – please state whether the program was utilized during the Reporting Year: ✔Yes ☐ No (Please place an X in the appropriate box) | The Corporation has a training program for new directors, in the field of the Corporation's business and the field of the law applicable to the Corporation and the directors, as well as a continuing training program for serving directors, adapted, inter alia, for the function that the director fulfills in the Corporation.<br>If you answer is "correct" – please state whether the program was utilized during the Reporting Year: ✔Yes ☐ No (Please place an X in the appropriate box) | ✔ |  |
| 9. | A minimal number of directors of the Board of Directors to have Accounting and Financial Expertise was determined.<br>If your answer is "correct" – please state the minimum determined: 2. | A minimal number of directors of the Board of Directors to have Accounting and Financial Expertise was determined.<br>If your answer is "correct" – please state the minimum determined: 2. | ✔ |  |
| 9. | Number of directors serving in the Corporation during the Reporting Year:<br>Accounting and financial expertise<sup>14</sup>: 3<br>Professionally qualified<sup>15</sup>: 2<br>In the event that there were changes in the number of directors as stated in the Reporting Year, provide the data regarding the lowest number (excluding in a period of 60 days from the occurrence of the change) of directors of each type serving during the Reporting Year. | Number of directors serving in the Corporation during the Reporting Year:<br>Accounting and financial expertise<sup>14</sup>: 3<br>Professionally qualified<sup>15</sup>: 2<br>In the event that there were changes in the number of directors as stated in the Reporting Year, provide the data regarding the lowest number (excluding in a period of 60 days from the occurrence of the change) of directors of each type serving during the Reporting Year. |  |  |

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<sup>13</sup> A bonds company is not required to respond to this section.

<sup>14</sup> After the assessment by the board of directors, in accordance with the provisions of the Companies Regulations (Conditions and Examinations for a Director Possessing Accounting and Financial Expertise as a Director Possessing Professional Ability), 5766-2005.

<sup>15</sup> See footnote 9.

Additional Information on the Corporation 23

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Qualifications and Skills of Directors** | **Qualifications and Skills of Directors** | **Qualifications and Skills of Directors** | **Qualifications and Skills of Directors** | **Correct** | **Incorrect** |
| 10. | a. | In each Reporting Year, the total composition of the Board of Directors included both genders.<br>If your answer is "Incorrect" – state the period of time (in days) in which the above was untrue: ___.<br>You may answer "correct" to this question if the time period in which directors of both genders were not serving does not exceed 60 days. However, for either answer (correct/incorrect), state the period of time (in days) in which directors of both genders were not appointed in the Corporation: ______.<br>| ✔ |  |  |
| 10. | b. | The number of directors of each gender serving in the Board of Directors of the Corporation, as of the publication date of this Questionnaire:<br>Men: 4 Women: 1<br>| _____ | _____ |  |
| 11. | a. | The number of meetings of the Board of Directors which occurred during each quarter of the Reporting Year:<br>First quarter (2024): 2<br>Second quarter: 3<br>Third quarter: 3<br>Fourth quarter: 3<br>| _____ | _____ |  |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Meetings of the Board of Directors (and Convening a General Meeting)** | **Meetings of the Board of Directors (and Convening a General Meeting)** | **Meetings of the Board of Directors (and Convening a General Meeting)** | **Meetings of the Board of Directors (and Convening a General Meeting)** | **Correct** | **Incorrect** |
| 12. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a. During the Reporting Year, the Board of Directors held at least one meeting regarding the business management of the Corporation by the CEO and officers subject to him, in their absence, after they are given the opportunity to express their positions. <br>b. Next to the name of each director who served in the Corporation during the Report Year, the rate of his or her participation<sup>16</sup> in meetings of the Board of Directors (for the purposes of this subsection – including meetings of Board committees of which he or she is a member, as detailed below) that were held during the Report Year (and with reference to his or her term of office) shall be indicated.<br>(Additional rows shall be added according to the number of directors.) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a. During the Reporting Year, the Board of Directors held at least one meeting regarding the business management of the Corporation by the CEO and officers subject to him, in their absence, after they are given the opportunity to express their positions. <br>b. Next to the name of each director who served in the Corporation during the Report Year, the rate of his or her participation<sup>16</sup> in meetings of the Board of Directors (for the purposes of this subsection – including meetings of Board committees of which he or she is a member, as detailed below) that were held during the Report Year (and with reference to his or her term of office) shall be indicated.<br>(Additional rows shall be added according to the number of directors.) | ✔ |  |
| Guy Bernstein | Guy Bernstein | Guy Bernstein | 88% |  |  |
| Eliezer Oren | Eliezer Oren | Eliezer Oren | 100% |  |  |
| Tal Barnoach<sup>17</sup> | Tal Barnoach<sup>17</sup> | Tal Barnoach<sup>17</sup> | 100% | 100% | 100% |
| Limor Bar-On<sup>18</sup> | Limor Bar-On<sup>18</sup> | Limor Bar-On<sup>18</sup> | 100% | 100% | 100% |
| Pinhas Greenfield | Pinhas Greenfield | Pinhas Greenfield | 100% | 100% | 100% |

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<sup>16</sup> See footnote 2.

<sup>17</sup> Appointed as External Director on February 19, 2024. Rate of participation is calculated from total meetings held as of the date of service.

<sup>18</sup> Appointed as External Director on May 27, 2024. Rate of participation is calculated from total meetings held as of the date of service.

Additional Information on the Corporation 24

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| | | | |
|:---|:---|:---|:---|
| **Separation Between the Roles of CEO and Chairman of the Board** | **Separation Between the Roles of CEO and Chairman of the Board** | **Correct** | **Incorrect** |
| 13. | A chairman of the Board served during each Reporting Year.<br>This question can be answered with "correct" if the period of time in which no chairman served on the Board of Directors does not exceed 60 days as stated in Section 363A(2) of the Companies Law. However, for either answer (correct/incorrect), please state the period of time (in days) in which no chairman of the Board as stated served for the Corporation: ___.<br>| ✔ |  |
| 14. | A CEO of the Corporation served during each Reporting Year.<br>This question can be answered with "correct" if the period of time in which no CEO served in the Corporation does not exceed 90 days as stated in Section 363A(6) of the Companies Law. However, for either answer (correct/incorrect), please state the period of time (in days) in which no CEO served for the Corporation as stated: ________.<br>| ✔ |  |

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Additional Information on the Corporation 25

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| | | | |
|:---|:---|:---|:---|
| **Separation Between the Roles of CEO and Chairman of the Board** | **Separation Between the Roles of CEO and Chairman of the Board** | **Correct** | **Incorrect** |
| 15. | For a Corporation in which the chairman of the Board also serves as the CEO of the Corporation and/or utilizes its authorities, the double appointment was approved pursuant to Section 121(c) of the Companies Law.<sup>19</sup><br>🗶 Not relevant (if there is no double appointment as stated in the Corporation).<br>|  |  |
| 16. | The CEO is <u>not</u> a Relative of the Chairman of the Board.<br>If your answer is "incorrect" (meaning, the CEO is a Relative of the Chairman of the Board) - <br>|  |  |

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 a. State the familial relationship between the parties: ________________. _____ _____ <br> b. The office was approved pursuant to Section 121(c) of the Companies Law:<sup>20</sup> ☐ Yes ☐ No *(Please place an X in the appropriate box)* _____ _____

<sup>19</sup> In a bonds company - approval in accordance with Section 121(d) of the Companies Law.

<sup>20</sup> In a bonds company - approval in accordance with Section 121(d) of the Companies Law.

Additional Information on the Corporation 26

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| | | | |
|:---|:---|:---|:---|
| **Separation Between the Roles of CEO and Chairman of the Board** | **Separation Between the Roles of CEO and Chairman of the Board** | **Correct** | **Incorrect** |
| 17. | A Controlling Shareholder or Relative does <u>not</u> serve as CEO or a Senior Officer of the Corporation, except as a director. <br>☐ Not relevant (there is no controlling shareholder of the Corporation). <br>| ✓ |  |
| **Audit Committee** | **Audit Committee** | **Correct** | **Incorrect** |
| 18. | The following did <u>not</u> serve on the Audit Committee during the Reporting Year -<br>| _____ | _____ |

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 a. The Controlling Shareholder or his relative. ☐ Not relevant (there is no controlling shareholder of the Corporation). ✓ b. Chairman of the Board: ✓ c. A director engaged by the Corporation or by the Controlling Shareholder of the Corporation or by a corporation controlled thereby. ✓ Additional Information on the Corporation 27

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| | | | | |
|:---|:---|:---|:---|:---|
| **Audit Committee** | **Audit Committee** | **Audit Committee** | **Correct** | **Incorrect** |
| | d. | A director providing the Corporation or a Controlling Shareholder of the Corporation or a corporation controlled thereby with services on a permanent basis.  | ✓ |  |
| | e. | A director whose main income is from a Controlling Shareholder.<br>☐ Not relevant (there is no controlling shareholder of the Corporation).<br>| ✓ |  |

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Additional Information on the Corporation 28

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| | | | |
|:---|:---|:---|:---|
| **Separation Between the Roles of CEO and Chairman of the Board** | **Separation Between the Roles of CEO and Chairman of the Board** | **Correct** | **Incorrect** |
| 19. | No person who is forbidden to serve on the Audit Committee, including a Controlling Shareholder or Relative thereof, has been present in meetings of the Audit Committee during the Reporting Year, other than pursuant to the provisions of Section 115(e) of the Companies Law.<br>| ✓ |  |
| 20. | The legal quorum for a discussion and passing resolutions in all meetings of the Audit Committee occurring during the Reporting Year was the majority of the members of the Committee, while the majority present was Independent Directors, and at least one was an External Director.<br>| ✓ |  |

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Additional Information on the Corporation 29

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| | | | |
|:---|:---|:---|:---|
| **Separation Between the Roles of CEO and Chairman of the Board** | **Separation Between the Roles of CEO and Chairman of the Board** | **Correct** | **Incorrect** |
| 21. | The Audit Committee held, during the Reporting Year, at least one meeting in the presence of the Internal Auditor and Auditor, as applicable, and without the presence of the officers of the Corporation who are not members of the Committee, regarding deficiencies in the business management of the Corporation<br>| ✓ |  |
| 22. | The legal quorum for a discussion and passing resolutions in all meetings of the Audit Committee occurring during the Reporting Year was the majority of the members of the Committee, while the majority present was Independent Directors, and at least one was an External Director.<br>| ✓ |  |

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Additional Information on the Corporation 30

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| | | | |
|:---|:---|:---|:---|
| **Separation Between the Roles of CEO and Chairman of the Board** | **Separation Between the Roles of CEO and Chairman of the Board** | **Correct** | **Incorrect** |
| 23. | In the Reporting Year, arrangements were in force that were determined by the Audit Committee regarding the manner of handling complaints of employees of the corporation in connection with deficiencies in the management of its business and the protection that will be provided to employees who complain as stated.<br>| ✓ |  |
| 24. | The Audit Committee (and/or the Committee for the Examination of the Financial Statements) is of the opinion that the scope of work of the Auditor and his wages for the financial statements in the Reporting Year are appropriate for the performance of proper audit and review work.<br>| ✓ |  |

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Additional Information on the Corporation 31

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| | | | | |
|:---|:---|:---|:---|:---|
| **Functions of the Committee for the Review of the Financial Statements (hereinafter – the Committee) in its Preliminary Work for the Approval of the Financial Statements** | **Functions of the Committee for the Review of the Financial Statements (hereinafter – the Committee) in its Preliminary Work for the Approval of the Financial Statements** | **Functions of the Committee for the Review of the Financial Statements (hereinafter – the Committee) in its Preliminary Work for the Approval of the Financial Statements** | **Correct** | **Incorrect** |
| 25. | a. | State the period of time (in days) that the Board of Directors determined as the reasonable time for the delivery of recommendations of the Committee prior to the meetings of the Board in which the Financial Statements were approved: <u>72 hours of which at least one was a business day.</u><br>| _____ | _____ |
| 25. | b.<br>| The number of days that have actually transpired between the delivery of the recommendations to the Board and the approval date of the Financial Statements:<br>First Quarterly Report (2024): 3.<br>Second Quarterly Report: 3.<br>Third Quarterly Report: 3.<br>Annual Report: 3.<br>| _____<br>| _____<br>|
|  | c. | The number of days that have actually transpired between the delivery of the draft financial statements to the Board and the approval date of the Financial Statements:<br>First Quarterly Report (2024): 8.<br>Second Quarterly Report: 8.<br>Third Quarterly Report: 7.<br>Annual Report: 8.<br>|  |  |
| 26. | The Auditor of the Corporation attended all meetings of the Committee and the Board of Directors in which the Financial Statements of the Corporation were discussed, related to the periods including during the Reporting Year. If your answer is "Incorrect," please list the participation rate: ______ | The Auditor of the Corporation attended all meetings of the Committee and the Board of Directors in which the Financial Statements of the Corporation were discussed, related to the periods including during the Reporting Year. If your answer is "Incorrect," please list the participation rate: ______ | ✔ |  |

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Additional Information on the Corporation 32

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| | | | | |
|:---|:---|:---|:---|:---|
| **Functions of the Committee for the Review of the Financial Statements (hereinafter – the Committee) in its Preliminary Work for the Approval of the Financial Statements** | **Functions of the Committee for the Review of the Financial Statements (hereinafter – the Committee) in its Preliminary Work for the Approval of the Financial Statements** | **Functions of the Committee for the Review of the Financial Statements (hereinafter – the Committee) in its Preliminary Work for the Approval of the Financial Statements** | **Correct** | **Incorrect** |
| 27. | During each Reporting Year and until the publication of the annual report, all of the conditions detailed below were met in the Committee: | During each Reporting Year and until the publication of the annual report, all of the conditions detailed below were met in the Committee: | _____ | _____ |
|  | a. | The number of its members was not less than three (on the discussion date in the Committee and the approval of the Financial Statements, as stated).<br>| ✔ |  |
|  | b. | All of the conditions set forth in Section 115(b) and (c) of the Companies Law were met in connection therewith (regarding the office of members of the Audit Committee).<br>| ✔ |  |
|  | c. | The Chairman of the Committee is an External Director.<br>| ✔ |  |
|  | d. | All of its members are directors, and the majority of its members are Independent Directors.<br>| ✔ |  |
|  | e. | All of its members have the ability to read and understand financial statements, and at least one of the Independent Directors has financial and accounting expertise. <br>| ✔ |  |
|  | f. | The members of the Committee have provided a declaration prior to their appointment.<br>| ✔ |  |
|  | g. | The legal quorum for the discussion and passing resolutions in the Committee is the majority of its members, provided that the majority present are Independent Directors and include at least one External Director.<br>| ✔ |  |
|  | If your answer is "incorrect" regarding one or more of the subsections of this question, do state in regards to which report (annual/quarterly) the term was not met as well as the term that was not met: ______. | If your answer is "incorrect" regarding one or more of the subsections of this question, do state in regards to which report (annual/quarterly) the term was not met as well as the term that was not met: ______. | _____ | _____ |

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Additional Information on the Corporation 33

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| | | | | |
|:---|:---|:---|:---|:---|
| **Remuneration Committee** | **Remuneration Committee** | **Remuneration Committee** | **Correct** | **Incorrect** |
| 28. | The Committee has appointed, in the Reporting Year, at least three members and the majority was comprised of External Directors (on the date of the discussion in the Committee).<br>☐ Not relevant (no discussion was held). | The Committee has appointed, in the Reporting Year, at least three members and the majority was comprised of External Directors (on the date of the discussion in the Committee).<br>☐ Not relevant (no discussion was held). | ✔ |  |
| 29. | The terms of service and engagement of each of the members of the Remuneration Committee during the Reporting Year are in accordance with the Companies Regulations (Rules Regarding Compensation and Expenses for an External Director), 5760-2000. | The terms of service and engagement of each of the members of the Remuneration Committee during the Reporting Year are in accordance with the Companies Regulations (Rules Regarding Compensation and Expenses for an External Director), 5760-2000. | ✔ |  |
| 30. | The following did not serve on the Remuneration Committee during the Reporting Year - | The following did not serve on the Remuneration Committee during the Reporting Year - | _____ | _____ |
| 30. | · | The Controlling Shareholder or his relative.<br>☐ Not relevant (there is no controlling shareholder of the Corporation).<br>| ✔ |  |
| 30. | · | Chairman of the Board. | ✔ |  |
| 30. | · | A director engaged by the Corporation or by the Controlling Shareholder of the Corporation or by a corporation controlled thereby. | ✔ |  |
| 30. | · | A director providing the Corporation or a Controlling Shareholder of the Corporation or a corporation controlled thereby with services on a permanent basis. | ✔ |  |
| 30. | · | A director whose main income is from a Controlling Shareholder.<br>☐ Not relevant (there is no controlling shareholder of the Corporation).<br>| ✔ |  |
| 31 | A controlling shareholder or his relevant were not present in the Reporting Year in meetings of the Remuneration Committee, unless the chairman of the Committee determines that either of them is required for the presentation of a certain matter. | A controlling shareholder or his relevant were not present in the Reporting Year in meetings of the Remuneration Committee, unless the chairman of the Committee determines that either of them is required for the presentation of a certain matter. | ✔ |  |

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Additional Information on the Corporation 34

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| | | | |
|:---|:---|:---|:---|
| **Internal Auditor** | **Internal Auditor** | **Correct** | **Incorrect** |
| 33. | The chairman of the board of directors or CEO of the Corporation is the organizational supervisor over the internal auditor of the Corporation. | ✔ |  |
| 34. | The chairman of the board of directors or the Audit Committee have approved the work plan in the Reporting Year.<br>In addition, the matters of the audit in which the internal auditor engaged during the Reporting Year will be listed: _____ (place an X in the appropriate place).<br>See Section 3.4(5) of the Board of Directors' Report.<br>| ✔ |  |
| 35. | Scope of the engagement of the internal auditor in the Reporting Year (in hours<sup>21</sup>): See Section 3.4 (6) of the Board of Directors' Report. | _____ | _____ |
| 35. | In the reporting year, a discussion was held (in the Audit Committee or board of directors) as to the findings of the internal audit. | ✔ |  |
| 36. | The internal auditor is not an interested party in the corporation, relative, Auditor or any designee, and has no substantial business relationship with the Corporation, its Controlling Shareholder, a relative thereof, or corporations under their control. <br>| ✔ |  |

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<sup>21</sup> Including working hours invested in investee corporations and audits outside of Israel, and as applicable.

Additional Information on the Corporation 35

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| | | | |
|:---|:---|:---|:---|
| **Transactions with Interested Parties** | **Transactions with Interested Parties** | **Correct** | **Incorrect** |
| 37. | The Controlling Shareholder or a Relative thereof (including a corporation under its control) are not employed by the Corporation or provide management services thereto.<br>If your answer is "incorrect" (meaning, the Controlling Shareholder or a Relative are employed by the Corporation or provide management services thereto), then state –<br>- The number of relatives (including the Controlling Shareholder) employed by the Corporation (including companies under their control and/or management companies): ___<br>- Were the employment agreements and/or management services agreements as stated approved by the organs determined by law:<br>☐ Yes ☐ No<br>(Please place an X in the appropriate box)<br>☐ Not relevant (there is no controlling shareholder of the Corporation).<br>| ✔ |  |
| 38.<br>| To the best of the Corporation's knowledge, the Controlling Shareholder does not have additional businesses in the field of the Corporation's business (in one or more field).<br>If your answer is "incorrect" – please state whether an arrangement was determined to delimit the operations between the Corporation and the Controlling Shareholder thereof:<br>☐ Yes<br>🗷 No<br>(Please place an X in the appropriate box)<br>🗷 Not relevant (there is no controlling shareholder of the Corporation).<br>|  | ✔ |

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Guy Bernstein Chairman of the Board of Directors Limor Bar-On, External Director Chair of the Audit Committee Tal Barnoach, External Director Chair of the Financial Statements Review Committee

**Date of Signature:** March 10, 2025

Additional Information on the Corporation 36

![](image_004.jpg)<br>**CHAPTER E**<br>Annual Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 9b(a) for year 2024<br>

![](image_040.jpg)

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| | |
|:---|:---|
| <br>![](image_007.jpg)<br>| ![](image_004.jpg) |

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Annual report on the effectiveness of internal control over financial reporting and disclosure, pursuant to Regulation 9 b`(a) of the Securities Regulations(Periodic and Immediate Reports), 1970: 3 <br> Certification of CEO 4 <br> Certification of the most senior financial executive officer 6

<br> Hereby attached Annual report on the effectiveness of internal control over financial reporting and disclosure, pursuant to Regulation 9b`(a) of the Securities Regulations (Periodic and Immediate Reports), 1970 ("Reports regulations"):

Management, under the supervision of the Board of Directors of Matrix IT Ltd. (hereby : "the Company"), is responsible for establishing and maintaining appropriate internal control over financial reporting and disclosure in the Company.

For this matter, the members of Management are:

&nbsp;&nbsp;&nbsp;&nbsp;1. Moti Gutman, CEO

&nbsp;&nbsp;&nbsp;&nbsp;2. Nevo Brenner, CFO

&nbsp;&nbsp;&nbsp;&nbsp;3. Gali Katan, Controller

Internal control over financial reporting and disclosure includes controls and procedures in the Company, which were planned by the CEO and the most senior financial officer, or under their supervision, or by whoever fulfills those functions in practice, under the supervision of the Board of Directors of the Company, and were designed to provide reasonable assurance as to the reliability of the financial reporting and the preparation of the reports in accordance with the provisions of the law, and to ensure that information that the Company is required to disclose in the reports it publishes in accordance with the provisions of the law is collected, processed, summarized and reported on the date and in the format laid down in law.

Internal control includes, among other things, controls and procedures planned to ensure that the information the Company is required to disclose as aforesaid, is accumulated and forwarded to the Management of the Company, including to the CEO and to the most senior financial officer, or to whoever fulfills those functions in practice, in order to enable decisions to be made at the appropriate time in relation to the disclosure requirements.

Due to its structural limitations, internal control over financial reporting and disclosure is not intended to provide absolute assurance that misstatement or omission of information from the reports will be prevented or will be detected.

The management, under the supervision of the Board of Directors, conducted an examination and evaluation of the Company's internal control over financial reporting and disclosure and its effectiveness.<br> The assessment of the effectiveness of internal control over financial reporting and disclosure, performed by management under the supervision of the Board of Directors, included: mapping and identifying the accounts and business processes that the Company considers highly material to financial reporting and disclosure; examining key controls and testing their effectiveness.<br> The components of internal control included controls over the accounting closing process, the preparation and drafting of the financial statements and disclosures, entity-level controls, information technology controls, and process-level controls over business cycles such as revenue, payroll, and the impairment testing process of intangible assets.

Based on the assessment of effectiveness carried out by Management under the supervision of the Board of Directors as detailed above, the Board of Directors and Management of the Company reached the conclusion that internal control over financial reporting and disclosure in the Company as of December 31, 2024 is effective.

3 Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 9b(a)

**Management certifications:**

**(a1) CEO Certification pursuant to Regulation 9B(d)(1):**

**Management Certification <br> CEO Certification**

I, Moti Gutman, certify that:

I have reviewed the periodic report of Matrix IT Ltd. ("the Company") for 2024 ("the Reports").

To the best of my knowledge, the Reports do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period of the Reports.

To the best of my knowledge, the financial statements and other financial information in the Reports reflect fairly, in all material respects, the financial position, results of operations and cash flows of the Company as of the dates and for the periods presented in the Reports.

I have disclosed to the Independent Auditor of the Company, to the Company's Board of Directors, and to the Audit and the Financial Statements Review Committees of the Board of Directors of the Company, based on my most recent evaluation of internal control over financial reporting and disclosure:

&nbsp;&nbsp;&nbsp;&nbsp;(a) All the significant
 deficiencies and material weaknesses in the design or operation of internal control over
 financial reporting and disclosure which are reasonably likely to adversely affect the Company's
 ability to collect, process, summarize or report financial information, in a way that could
 cast doubt on the reliability of the financial reporting and the preparation of the financial
 statements in accordance with the provisions of the law;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud,
 whether or not material, that involves the CEO or anyone directly subordinate to the CEO,
 or which involves other employees who have a significant role in the Company's internal
 control over financial reporting and disclosure.

I, alone or together with others in the Company:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to ensure that material information relating to the Company,
 including its subsidiaries as defined in the Securities Regulations (Annual Financial Statements),
 2010, is brought to my attention by others in the Company and in the subsidiaries, particularly
 during the period of preparation of the Reports;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to provide reasonable assurance regarding the reliability
 of the financial reporting and the preparation of the financial statements in accordance
 with the provisions of the law, including in accordance with generally accepted accounting
 principles;

4 Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 9b(a)

&nbsp;&nbsp;&nbsp;&nbsp;(c) Assessed
 the effectiveness of the internal control over financial reporting and disclosure, and presented
 in this Report the conclusions of the Board of Directors and Management concerning the effectiveness
 of said internal control as of the date of the Reports.

Nothing in the foregoing shall derogate from my responsibility or that of anyone else, in law.

March 10, 2025 Moti Gutman CEO

5 Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 9b(a)

**Management certifications:**

**CFO Certification pursuant to Regulation 9b(d)(2):**

**Management certification**

**<br> Certification of the most senior financial executive officer** 

I, Nevo Brenner, certify that:

I have reviewed the periodic report of Matrix IT Ltd. (hereby "the Company") for 2024 (hereby "the Reports").

To the best of my knowledge, the Reports do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period of the Reports.

To the best of my knowledge, the financial statements and other financial information in the Reports reflect fairly, in all material respects, the financial position, results of operations and cash flows of the Company as of the dates and for the periods presented in the Reports.

I have disclosed the following to the Independent Auditor of the Company, to the Company's Board of Directors, and to the Audit and the Financial Statements Review Committees of the Board of Directors of the Company, based on my most recent evaluation of internal control over financial reporting and disclosure:

&nbsp;&nbsp;&nbsp;&nbsp;(a) All the significant
 deficiencies and material weaknesses in the design or operation of internal control over
 financial reporting and disclosure which are reasonably likely to adversely affect the Company's
 ability to collect, process, summarize or report financial information, in a way that could
 cast doubt on the reliability of the financial reporting and the preparation of the financial
 statements in accordance with the provisions of the law;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud,
 whether or not material, that involves the CEO or anyone directly subordinate to the CEO,
 or which involves other employees who have a significant role in the Company's internal
 control over financial reporting and disclosure. <br>

I, alone or together with others in the Company:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Established
 controls and procedures, or ensured the establishment and maintaining of controls and procedures
 under my supervision, designed to ensure that material information relating to the Company,
 including its subsidiaries as defined in the Securities Regulations (Annual Financial Statements),
 2010, is brought to my attention by others in the Company and in the subsidiaries, particularly
 during the period of preparation of the Reports;

6 Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 9b(a)

&nbsp;&nbsp;&nbsp;&nbsp;(b) Established controls and procedures, or ensured the establishment and maintaining of controls
 and procedures under my supervision, designed to provide reasonable assurance regarding the
 reliability of the financial reporting and the preparation of the financial statements in
 accordance with the provisions of the law, including in accordance with generally accepted
 accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Assessed the
 effectiveness of the internal control over financial reporting and disclosure, insofar as
 relevant to the financial statements and other financial information included in the Reports,
 as of the date of the Reports. My conclusions pursuant to my said assessment were reported
 to the Board of Directors Management and are included in this Report.

Nothing in the foregoing shall derogate from my responsibility or that of anyone else, in law.

March 10, 2025 Nevo Brenner CFO

7 Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 9b(a)