RETALIX LTD.

Our audit committee has adopted a pre-approval policy for the engagement of our independent accountant to perform certain audit and non-audit
services. Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, the audit committee
pre-approves on a specific basis non-audit services in the categories of Audit-Related Services and Tax Services and other services that may be performed
by our independent accountants, and the maximum pre-approved fees that may be paid as compensation for each pre-approved service in those categories.
Any proposed services exceeding the maximum pre-approved fees require specific approval by the Audit Committee.
With respect to each pre-approved service actually requested to be provided, an executive officer is required to notify the audit committee in writing
and state whether, in the executive officer’s view, the provision of such service by the outside auditor would impair its independence. The audit committee
has the ultimate authority to determine which services to pre-approve. All of the services provided by our principal independent public accountants during
2004 and 2005 were pre-approved by our audit committee.
ITEM 16D. EXEMPTION FROM LISTING STANDARDS FOR AUDIT COMMITTEES
None.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
None.
ITEM 17 – FINANCIAL STATEMENTS
We have responded to Item 18 in lieu of this item.
ITEM 18 – FINANCIAL STATEMENTS
The Financial Statements required by this item are found at the end of this annual report, beginning on page F-1.
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