Further to the report of Koor Industries Ltd. ("the Company") on 13 October, 2008 relating to the Company's purchase of SF 1.2 billion ("the Purchase") of the shares of the Credit Suisse Group ("Credit Suisse"), the Company hereby reports as follows:

On 16 October, 2008, 34,000,000 ordinary shares of Credit Suisse were transferred to the Company, against payment of approximately SF 1.2 billion. Accordingly, at the date of this report, the Company holds about 3% of the share capital of Credit Suisse.

As the Company reported, the Purchase was financed mainly from the Company's own resources. Accordingly, approximately SF 900 million was financed from the Company's liquidity balances, while SF 300 million was financed from a recourse credit facility made available to the Company by Goldman Sachs, as stated in Section 12.1.4 of the Company's prospectus of 29 May, 2008 (of which about SF 100 million had been utilized in the past). The Company and Goldman Sachs will negotiate a change in certain terms of the credit facility. It was also agreed that no additional credit will be taken, beyond the above, from the recourse and the non-resource facilities made available as aforesaid.

The Company intends to invest an additional sum in Credit Suisse shares, in excess of the Purchase, so that its total investment at this stage will be up to NIS 4.2 billion (including the Purchase).

The report on the arrangement with Goldman Sachs was delayed since its filing could have had an adverse effect on closing the Purchase and on those arrangements. The report is being filed now, after completing the Purchase and the understandings described above. The impediment to filing was removed on 16 October, 2008 at 14:45.