RETALIX LTD.

RETALIX LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of the consolidated financial statements.
F-8
Year ended December 31
(Continued) - 2
2005 2004 2003
U.S. $ in thousands
Net cash provided by operating activities - brought forward 12,496 6,200 11,738
CASH FLOWS FROM INVESTING ACTIVITIES:
Short-term bank deposits - net - - (5)
Maturity of marketable debt securities held to maturity 12,111 10,801 4,757
Investment in marketable debt securities held to maturity (1,876) (20,784) (7,121)
Acquisition of subsidiaries consolidated for the first time (a) (50,312) (13,781) -
Additional investments in subsidiaries (3,764) (2,504) -
Purchase of property, plant, equipment and other assets (3,069) (1,826) (1,008)
Proceeds from sale of property, plant and equipment 25 63 150
Amounts funded in respect of employee rights upon retirement, net (905) (644) (290)
Long-term loans granted to employees (54) (28) (27)
Collection of long-term loans from employees 168 155 297
Net cash used in investing activities (47,676) (28,548) (3,247)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares in a public offering, net of $3,243,000 share issuance costs - 58,857 -
Long-term bank loans received from banks - - 2,278
Proceeds from issuance of shares of subsidiary to a third party - - 2,458
Repayment of long-term bank loans (4,698) (3,467) (10,257)
Issuance of share capital to employees resulting from exercise of options 10,150 10,135 9,157
Short-term bank credit - net (5,809) 1,887 5,556
Minority investment in a subsidiary 34 34 -
Net cash provided by (used in) financing activities (323) 67,446 9,192
EFFECT OF EXCHANGE RATE CHANGES ON CASH (218) 222 -
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (35,721) 45,320 17,683
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 91,413 46,093 28,410
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR 55,692 91,413 46,093