Unitronics (1989) (R”G) Ltd Periodic and Annual Report for 2018 The Company is a “Small Corporation” as this term is defined in the Amendment to the Securities Regulations (Periodic and Immediate Reports) (Amendment), 2014 (hereinafter: “the Amendment”). On March 9, 2014 the Board of Directors of the Company adopted all the reliefs prescribed in the Amendment. For additional details see immediate report dated March 9, 2014 (reference no. 2014-01-009177), included herein by reference. Table of Contents Chapter/ Content Page Paragraph Chapter A Description of the Company’s business (Reg. 8A) A-1 Part I- Description of the general development of the Company’s business A-1 1.1 Company’s activity and description of its business development A-1 1.2 Subsidiaries and holding structure diagram A-2 1.3 Operating segments A-4 1.4 Investments in the Company’s capital and transactions with its shares A-6 1.5 Dividend distribution A-7 Part II- Other information A-8 1.6 Financial information on the Company’s business activities A-8 1.7 General environment and impact of external factors on the Company's activity A-10 Part III- Description of the Company’s business by operating segments A-12 1.8 Overview - synergy between the Company’s operating segments A-12 1.9 Products segment A-12 1.10 Automated Solutions segment A-33 1.11 Other Activities A-51 Part IV- Matters Related to the Company’s Overall Operations A-51 1.12 Fixed assets, land, facilities, insurance A-54 1.13 Intangible assets A-52 1.14 Human resources A-55 1.15 Investments A-60 1.16 Financing A-60 1.17 Taxation A-61 1.18 Restrictions on and supervision of Company activities A-61 1.19 Material agreements and cooperation agreements A-61 1.20 Subsidiaries A-64 1.21 Discussion of risk factors A-70 Chapter B Board of Directors Report On the State of Affairs of the Corporation (Reg. 10 - B-1 10A) 2.1 Summarized Description of the Corporate and its business environment B-1 2.2 Analysis of Financial Position B-1 2.3 Liquidity and financing sources B-9 2.4 Exposure to market risk and management thereof B-10 2.5 Projected Cash Flow B-10 2.6 Report on Liabilities by Maturity Dates (Reg. 9D) B-11 2.7 Corporate Governance Aspects B-11 2.8 Disclosure Requirements in Connection with Financial Reporting B-15 2.9 Specific Disclosure to Debenture Holders B-15 2.10 Share buyback B-24 Chapter C Financial Statements December 31, 2017 C-1 3.1 Independent Auditors’ Report C-2 3.2 Consolidated Statements of Financial Position C-3 3.3 Consolidated Statements of Profit or Loss C-5 3.4 Consolidated Statements of comprehensive income C-6 3.5 Consolidated Statements of Changes in Equity C-7 3.6 Consolidated Statements of Cash Flows C-8 3.7 Notes to the Financial Statements C-10 3.8 Financial data from the consolidated financial statements attributed to the company C-53 itself Chapter D Additional Details about the Corporation (Reg. 10C - 29A) D-1 4.1 List of Investments in Active Subsidiaries and Associates (Reg. 11) D-1 4.2 Changes in Investments in Active Subsidiaries and in Associates (Reg. 12) D-1 4.3 Revenues of Active Subsidiaries and Associates (Reg. 13) D-2 4.4 Trading on the Stock Exchange (Reg. 20) D-2 4.5 Compensation of interested parties and senior officers (Reg. 21) D-2 4.5.A Control of the Corporation (Reg. 21a) D-7 4.6 Transaction with a Controlling Shareholder (Reg. 22) D-7 4.7 Holdings of interested parties and Senior Officers (Reg. 24) D-11 4.8 Registered Capital, Issued Capital and Convertible Securities (Reg. 24A) D-11 4.9 Register of Shareholders of the Corporation (Reg. 24b) D-12 4.9.A. Registered address (Reg. 25A) D-12 4.10 Directors of the Corporation (Reg. 26) D-13 4.11 Senior Officers (Reg. 26A) D-16 4.12 Corporation's Independent Auditor (Reg. 27) D-17 4.13 Amendment of the Articles or Memorandum of Association (Reg. 28) D-17 4.14 Recommendations and Resolutions of the Directors and Resolutions of Extraordinary D-17 General meeting (Reg. 29) 4.15 Resolutions of the Company (Reg. 29A) D-18 Chapter E Statements by the CEO and CFO of the Corporation (Reg. 9b) E-1 Chapter A – Description of the Company's Business (Reg. 8A) Part I – Description of the general development of the Company's business 1.1 Company's activity and description of its business development Until March 12, 2019, the Company operated in two main areas of activity, the Products segment and the Automated Solutions segment. As of March 12, 2019, the Company operates in the Products segment only, and its Automated Solutions operation was transferred to a fellow subsidiary Utron Ltd. (hereinafter: "Utron"), as part of a split in the Company activities, as detailed below (hereinafter: "the split"). In the segment products the Company engages in the design, development, manufacture, marketing, sale and support of PLCs (programmable logic controllers) (hereinafter: "PLCs").PLCs are computer-based electronic products (hardware and software) used for command and control of machines performing automated actions, such as production systems and other automated installations in various areas. In the area of automatic solutions, the Company engaged until March 12 2019, also provides design, development, marketing, construction and maintenance services within the framework of projects for mechanized systems for autonomous parking facilities and for the automation, computerization and integration of computerized logistics systems, mainly automated warehouses and mechanized distribution centers and at all the establishment of new systems and / or upgrading existing systems and maintenance services for these systems based on framework arrangements or on call ( "the activity of automated solutions"). The Company was incorporated in August 1989 as a private company according to the Israeli Companies Ordinance (New Version), 1983 (hereinafter: "the Companies Ordinance"). In July 1999 the Company became a public company as defined in the Companies Ordinance. In September 1999 the Company first published a prospectus offering its shares to the public in Belgium, subsequent to which its shares were listed for trading on the Euro.NM Belgium stock exchange in Belgium. In 2000, following the establishment of the Euronext stock exchange in Belgium, trading of the Company’s shares was moved to this stock exchange. In May 2004 the Company published a prospectus in Israel according to which shares and other securities of the Company were listed for trading also on the Tel Aviv Stock Exchange (hereinafter: "the Stock Exchange"). On July 30, 2017 the Company completed the process of delisting its shares from the Euronext Stock Exchange in Brussels, Belgium, and listing said shares on the Tel Aviv Stock Exchange, pursuant to the approval of, and in coordination with, the Euronext Stock Exchange and the Financial Services and Markets Authority (FSMA) in Belgium. Upon the completion of said process, 3,783,995 ordinary shares of the Company of NIS 0.02 par value each were listed on the Tel Aviv Stock Exchange. For details regarding the procedure, the timetables and the Company's undertakings in connection with the foregoing, see immediate report dated June 6, 2017 on an event or matter outside the ordinary course of the corporation's business, Reference No. 2017-01-047806, as amended in immediate report dated June 20, 2017, Reference No. 2017-01-051619, included herein A-1 by reference and from July 31, 2017, Reference No. 2017-01-065935, included herein by reference. During the Report period the Company commenced the split activity, within which the Automated Solutions segment was designated to be transferred to a fellow subsidiary of the Company; on March 12, 2019, the split became effective, as detailed in Section 1.3.2. below. As part of the split completion, the Company's entire operation of Automated Solutions was transferred to Utron; in addition, the Company undertook to repay, at its initiative, all the Debentures (Series 5) registered for trading, as detailed in Section 1.16 below. The Company operates mainly from office and industry buildings in Airport City near the David Ben Gurion Airport (for further details see section 1.12 below). 1.2 Subsidiaries and holding structure diagram For splitting in to the Company has three wholly-owned active subsidiaries and one active second tier subsidiary wholly owned by the Company (hereinafter: "the Subsidiaries"): Unitronics Inc., wholly owned subsidiary of the company, which is incorporated in the United States (Delaware) (hereinafter: "Unitronics Inc.") and engages primarily in coordinating and running the Company’s Products segment marketing and distribution operations in the United States and Canada. Unitronics Building Management & Maintenance (2003) Ltd. (hereinafter: "Unitronics Management"), wholly owned subsidiary of the company, which is primarily engaged in the management and maintenance of the Unitronics Building. Unitronics Automated Solutions Ltd. (hereinafter: "Unitronics Solutions"), wholly owned subsidiary of the company, which coordinates the Company’s automated solutions, including autonomous parking facilities and logistics systems. Unitronics Systems Inc. (a wholly owned subsidiary of Unitronics Solutions), which is incorporated in the United States (Delaware) (hereinafter: "Unitronics Systems") and engages primarily in coordination and management of marketing, distribution and installation activities in the autonomous parking systems business in North America. For further details see section 1.20 below. Below is a diagram of the holding structure of the Company and its active subsidiaries for splitting into: A-2 On March 12, 2019, Unitronics Solutions was transferred to all of its operations and assets, including its holdings in Unitronics Systems, to Utron, within the framework of the split as defined below.