SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

Dated ~~May~~June 304, 2003

Commission File Number 333-100683

BARAN GROUP LTD.
(Translation of Registrant's name into English)

Baran House
8 Omarim St. Industrial Park
Omer 84965
ISRAEL
(Address of Principal Corporate Offices)

Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.

Form 4020-F ox Form 2040-F xo

Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

~~No x~~ Yes o No x

BARAN GROUP LTD.
Form 6-K

~~BARAN~~ Attached hereto ~~GROUP~~as ~~LTD~~Exhibit 1 and incorporated by reference herein is the Registrant’s (i) Notice of General Annual Meeting of Shareholders, (ii) Proxy for General Meeting of Shareholders, (iii) Invitation to General Annual Meeting of Shareholders. The foregoing documents announce that the Registrant will hold a General Annual Meeting of Shareholders on July 10, 2003 at the Registrant’s offices located at 5 Menachem Begin Avenue, 4th Floor, Beit Dagan, Israel. The meeting will begin at 5 p.m. (Israel time). At the meeting, shareholders will be asked to: (i) elect certain individuals to the Company’s Board of Directors, (ii) ratify the appointment of PriceWaterhouseCoopers as the Company’s independent auditors and (iii) approve remuneration to outside Directors of the Company.

~~INDEX~~ Attached hereto as Exhibit 2 is a statement from the Company that Mr. Israel Gotman, Chief Projects Officer and Director has decreased his holdings in the Company from 301,923 shares to 201,923 shares, effective May 4, 2003.

	Page
Condensed Consolidated Balance Sheet	3
Condensed Consolidated Statement of Operations	5
Condensed Consolidated Statement of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	7
Operating of Financial Review and Prospects	9
Quantitative and Qualitative Disclosure about Market Risks	11
Subsequent Events	11

EXHIBIT INDEX

2Exhibit Number Description

~~BARAN~~1 ~~GROUP~~Registrant's ~~LTD~~(i) Notice of General Special Meeting of Shareholders, (ii) Proxy for General Meeting of Shareholders, (iii) Invitation to General Special Meeting of Shareholders.

~~CONDENSED~~2 ~~CONSOLIDATED BALANCE~~Statement ~~SHEET~~from the Company that Mr. Israel Gotman, Chief Projects Officer and Director has decreased his holdings in the Company from 301,923 shares to 201,923 shares.

Convenience translationBARAN fromGROUP, adjusted NIS into thousands of ULTD.S. dollars

	December 31, 2002	March 31, 2003
	Audited	(Unaudited)
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents	19,784	13,015
Short-term investments	19,203	14,023
Accounts receivable:
Trade and income receivable	56,333	53,661
Other	10,210	10,612
Inventories	2,013	4,176
T o t a l curent assets	107,543	95,487
INVESTMENTS LOANS AND LONG-TERM RECEIVABLES:
Investments in associated companies	5,877	5,892
Other investments loans and long-term receivable	6,106	6,294
Deferred income taxes	341	311
	12,324	12,497
LAND AND BUILDINGS FOR LEASE:
Cost	15,142	15,211
L e s s - accumulated depreciation and amortization	1,617	1,715
	13,525	13,496
FIXED ASSETS:
Cost	32,232	32,877
L e s s - accumulated depreciation	16,412	17,208
	15,820	15,669
GOODWILL, net of accumulated amortization	21,313	20,777
OTHER INTANGIBLE ASSETS,
net of accumulated amortization	1,315	1,176
	171,840	159,102

NOTICE OF GENERAL ANNUAL MEETING OF SHAREHOLDERS

3TO BE HELD ON JULY 10, 2003

~~BARAN~~ NOTICE IS ~~GROUP~~HEREBY ~~LTD~~GIVEN that a general annual meeting of Baran Group, Ltd. (the “Company”) will be held at our executive offices at 5 Menachem Begin Avenue, 4th Floor, Beit Dagan, Israel, on July 10, 2003 at 5 p.m. (Israel time).

~~CONDENSED~~ The purposes ~~CONSOLIDATED~~of the general annual meeting are as set forth in the Company’s Invitation ~~BALANCE~~to ~~SHEET~~General Annual Meeting of Shareholders that accompanies this Notice.

~~Convenience~~ United States ~~translation~~shareholders ~~from~~who ~~adjusted~~are ~~NIS~~unable ~~into~~to ~~thousands~~attend the General Annual Meeting in person are requested to complete, date and sign the enclosed form of Uproxy card and return it promptly, so as to be received not later than forty-eight (48) hours before the meeting.S Shareholders of record as of the close of business on June 10, 2003, will be entitled to notice of and to vote at the meeting. ~~dollars~~

	December 31, 2002	March 31, 2003
	Audited	(Unaudited)
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Short-term bank credit and bank loans	21,727	25,213
Accounts payable and accruals:
Trade	21,287	15,503
Other	34,116	27,770
T o t a l current liabilities	77,130	68,486
LONG-TERM LIABILITIES:
Liability for employee rights upon retirement,
net of amount funded	1,256	988
Bank loans net of current maturities	35,881	30,938
Capital notes issued to minority shareholders	2,399	2,566
of a Subsidiary, net
Deferred income taxes	11	8
T o t a l long-term liabilities	39,547	34,500
T o t a l liabilities	116,677	102,986
MINORITY INTERESTS	1,963	2,180
SHAREHOLDERS' EQUITY
Share capital - ordinary shares of	3,276	3,276
adjusted NIS 1 par value
Capital surplus	15,525	15,525
Differences from translation of foreign
currency financial
statements of subsidiaries	(37)	32
Retained earnings	35,673	36,340
Cost of Company shares held by the
Company and its subsidiaries	(1,237)	(1,237)
T o t a l shareholders' equity	53,200	53,936
T o t a l liabilities and shareholders' equity	171,840	159,102

By order of the Board of Directors,

MEIR DOR
Chairman of the Board of Directors

4PROXY

BARAN GROUP, LTD.

CONDENSEDProxy CONSOLIDATED STATEMENTfor OFGeneral OPERATIONSSpecial Meeting of Shareholder to be held July 10, 2003

~~FOR~~ The undersigned ~~THE~~hereby 3appoints ~~MONTH~~Meir ~~PERIOD~~Dor ~~ENDED~~as attorney in fact and proxy of the undersigned, ~~MARCH~~with 31full power of substitution, for and in the name of the undersigned, to represent the undersigned at the general annual meeting of shareholders of Baran Group, Ltd., an Israeli corporation (the “Company”), to be held on July 10, 2003 at 5 p.m. (Israeli time), and at any adjournment or postponement thereof, and to vote all ordinary shares of the Company held of record by the undersigned as of June 10, 2003, with all of the powers the undersigned would possess if personally present at such meeting.

INTHIS U.S.PROXY DOLLARSIS SOLICITED ON BEHALF OF THE MANAGEMENT OF THE COMPANY (Continued and to be signed on reverse side)

(Unaudited)Please sign, date and return promptly in the enclosed envelope. Please mark your vote in blue or black ink as shown here. “X”

	Convenience translation from adjusted NIS into thousands of U.S. dollars
	Three months period ended March 31,
REVENUES:	2002	2003
Construction projects and services	42,404	25,565
Sale of products	8,507	11,231
Lease of buildings	313	429
Management fees	276	231
T o t a l revenues	51,500	37,456
COST OF REVENUES:
Construction projects and services	35,398	20,894
Sale of products	7,679	10,499
Lease of buildings	92	145
T o t a l cost of	43,169	31,538
GROSS PROFIT	8,331	5,918
RESEARCH AND DEVELOPMENT EXPENSES	594	170
SELLING, MARKETING, GENERAL AND ADMINISTRATIVE
EXPENSES, net:
Selling and marketing, net	689	1,232
General and administrative	3,277	3,609
OPERATING INCOME	3,771	907
FINANCIAL EXPENSES, net	(470)	(157)
OTHER INCOME , net	296	308
INCOME BEFORE TAXES ON INCOME	3,597	1,058
TAXES ON INCOME	1,476	656
INCOME AFTER TAXES ON INCOME	2,121	402
SHARE IN PROFITS OF ASSOCIATED COMPANIES, net	38	187
MINORITY INTERESTS IN LOSSES OF SUBSIDIARIES, net	139	78
NET INCOME FOR THE PERIOD	2,298	667
EARNINGS PER SHARE - basic and diluted	0.29	0.08
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING -
in thousands	7,810	8,143


	For	Against	Abstain
Approval Management's appointment of certain persons as Directors	___	___	___
Ratification of PriceWaterhouseCoopers as the Company's independent auditors	___	___	___
Approval of remuneration to outside Directors of the Company	___	___	___
Signature of shareholder _________________	Date: _________
Signature of shareholder _________________	Date: _________

Note: This proxy must be signed 5exactly as the name appears hereon. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

~~BARAN~~TRANSLATED ~~GROUP~~FROM ~~LTD~~HEBREW. This English translation is for convenience only in the event of any conflict, the Hebrew version will control.

CONDENSEDBaran CONSOLIDATED STATEMENTGroup OFLtd. CASH8 FLOWSHaomarim St., Omer 84965 Israel Tel: +972-8-6200-200 Fax: +972-8-6200-201

~~FOR~~(Hereinafter: ~~THE 3 MONTH PERIOD ENDED~~the ~~MARCH 31, 2003~~ “Company”)

~~(Unaudited)~~June 4, 2003

	Convenience translation from adjusted NIS into thousands of U.S. dollars
	Three months ended March 31,
	2002	2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the period	2,298	667
Adjustments to reconcile net income to net cash
provided by operating activities:
Income and expenses not involving cash flows:	(15,032)	(11,067)
Net cash used in operating activities	(12,734)	(10,400)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets	(933)	(779)
Other investments acquired	(31)
companies consolidated and proportionally
consolidated in previous years		79
Proceeds from sale of fixed assets	103	177
Decrease (increase) in short-term deposits, net	(21,063)	4
Sale (purchase) of short-term marketable securities - net	(4)	5,310
Grant of long-term loan		(247)
Net cash used in investing activities	(21,928)	4,544
Brought forward
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term bank loans received	31,408	80
Repayment of long-term bank loans	(445)	(4,332)
Short-term bank credit - net	3,878	3,399
Short-term bank loans - net	(292)
Net cash provided by (used in) financing activities	34,549	(853)
TRANSLATION DIFFERENCES ON CASH
BALANCES OF SUBSIDIARIES OPERATING
INDEPENDENTLY		(60)
DECREASE IN CASH AND CASH
EQUIVALENTS	(113)	(6,769)
BALANCE OF CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD	47,907	19,784
BALANCE OF CASH AND CASH
EQUIVALENTS AT END OF PERIOD	47,794	13,015

Invitation to a General Annual Meeting

Pursuant to the Israeli Companies 6Act-1999 (hereinafter, the “Israeli Companies Act”), Baran Group, Ltd. hereby announces the convening of a general annual meeting of the Company’s shareholders, which shall take place on July 10, 2003 at 5 P.M. in the Company’s offices at 5 Menachem Begin Ave. 4th, floor. Beit Dagan, Israel. The agenda for the meeting is as follows:

~~Note~~ 1-. ~~Basis~~Discussion of ~~presentation:~~ ~~The accompanying unaudited condensed consolidated financial statements have been prepared on~~ the ~~same~~company’s ~~basis as the annual consolidated~~ financial statements and, inBoard ~~the opinion~~ of ~~management,~~Directors ~~reflect~~analysis all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial condition and results of operation of Baran Group Ltd. (the “Company” or “Baran”). The consolidated financial statements and notes thereto are unaudited and should be read in conjunction with the Company’s audited financial statements included in the Company’s report on Form 20-F for the year ~~ended December~~of ~~31,~~ 2002~~, as filed with the Securities and Exchange Commission~~. ~~The results of operations for the three months ended March 31, 2003 are not necessarily indicative of the results that could be expected for the entire fiscal year.~~

~~The~~2. ~~financial~~Appointment ~~statements~~of ~~are conveniently~~Directors ~~translated~~to ~~into~~the UCompany.S. ~~dollars.~~ The ~~adjusted~~following ~~NIS~~persons ~~figures~~are atthe ~~March~~suggested ~~31,~~directors: ~~2003 translated~~Mr. ~~into~~Meir ~~dollars~~Dor, ~~using~~Mr. ~~representative~~Menachem ~~exchange~~Gal, ~~rate~~Mr. ofYom ~~the~~Tov ~~dollar~~Samia, atMr. ~~March~~Israel 31Gotman, ~~2003 ($1~~Mr. =Aviel ~~NIS~~Raviv, 4Mr.~~687).~~ ~~The~~Isaac ~~translation~~Friedman, ~~was~~Mr. ~~made~~Israel ~~solely~~Scop, ~~for convenience~~Ms. ~~The~~Liora ~~translated dollar figures should not be construed as a representation that the Israeli currency amounts actually represent~~Ofer, orMr. ~~could~~Giora beGotman ~~converted~~and ~~into dollars~~Mr. Shlomo Sharf.

~~Note~~3. 2Re-appointment ~~Earning Per Share Earning per share- which is computed in accordance with the Israeli GAAP has been determined on the basis~~ of ~~the~~PriceWaterhouseCoopers ~~weighted average~~as ~~number of shares outstanding during~~ the ~~three~~Company’s ~~months~~independent ~~ended~~auditors ~~March~~and ~~31,~~empower ~~2003 net of~~ the ~~weighted~~Company’s ~~average~~management ~~number~~to ofdetermine ~~shares~~their ~~held by the Company and its subsidiaries~~fee.

In4. ~~the~~Remuneration ~~three~~to ~~months~~Outside ~~ended~~Directors- ~~March,~~(due ~~31 2002~~to ~~and~~ the ~~three~~fact ~~months~~that ~~ended~~the ~~March,~~Company 31is ~~2003~~dually ~~financial~~registered ~~statements,~~both in the ~~basic~~Nasdaq and ~~diluted earning~~in ~~per~~the ~~share~~Tel-Aviv ~~are~~stock ~~not~~exchange) ~~presented~~remuneration ~~separately,~~for ~~since~~outside ~~there~~directors for the year 2003, which is nothe ~~difference~~exclusive inbenefit ~~their computing.~~received by them, shall be as follows:

~~Note~~a. 3-An ~~Financial information~~annual bycompensation, ~~divisional~~for ~~classification~~each ~~Baran~~outside indirector, ~~2003 operates~~ in aan ~~structure of five divisions. Each division’s relative contribution to the~~ aggregate ~~revenues~~amount of ~~Baran~~ ~~during~~NIS ~~the year 2002~~50,000 ~~the~~including ~~three months ended March 31, 2002 and 2003 was as follows:~~ VAT.

Division	3.2002*	2002*	3.2003*
Communications Division	27%	31%	33%
Civil Engineering Division	5%	12%	13%
Industry Division	27%	20%	18%
Semiconductors Division	22%	14%	2%
Technologies and Services Division	19%	23%	34%
Total	100%	100%	100%

Compensation for each Board of Directors meeting to each of the outside directors, in an aggregate amount of NIS 2,650 including VAT. All payments are linked to the consumer price index (CPI), while the base CPI is the CPI of January 2003 and the CPI according to which the payment will be made is the CPI known at the day of actual payment.

~~(*)The relative contribution ascribed~~About ~~to each division during these years is estimated, based on~~ the ~~assumption~~General ~~that~~Annual ~~the divisional structure of Baran during the year 2002 is similar to the divisional structure in the year of 2003.~~ Meeting

~~(*)~~ The ~~figures~~Company inannounces ~~this~~that ~~table~~anyone ~~represent~~who is a shareholder of the Company’s ~~exclusive~~on ~~share~~June 10, 2003, will be entitled to participate in ~~both~~ the ~~Company’s~~meeting ~~subsidiaries~~and vote either personally or by authorized representative (proxy), in accordance with appointment letter and/or ~~affiliated~~approval ~~companies~~of ~~revenues~~ownership letter.

7The approval of ownership letters shall be submitted to the Company’s representative, Assael Haim Adv., at 5 Menachem Begin Ave., Beit-Dagan 50200 Tel: 972-3-9775533 Fax: 972-3-9775534, until July 8, 2003.

The ~~Note~~voting 4-majority ~~Financial~~required ~~information~~for bythe ~~geographical~~resolutions ~~areas~~of the general annual meeting agenda is an ordinary majority.

~~Geographical breakdown of~~ Baran’s ~~revenues.~~Group Ltd.

Division	3.2002	2002	3.2003
Israel	76%	71%	75%
Europe	23%	21%	7%
USA	1%	4%	15%
The rest of the world	*	4%	3%
Total	100%	100%	100%

Re: Decrease in Holdings
Baran Group Ltd.

Baran Group Ltd. (*) hereinafter, ~~Less~~the ~~than~~“Company”), 1%hereby announces that Mr. Israel Gotman, whose position in the Company is Chief Projects Officer and Director (hereinafter- “Gotman”), has decreased his holdings in the Company from 301,923 shares to 201,923 shares on May 4th, 2003.

~~Baran’s~~Sincerely ~~management adopted a strategic policy to expand the group’s global activities. This policy has been implemented~~yours, among other things, through the merger completed on November 2002, between Baran’s subsidiary and o2wireless Solutions Inc., the acquisition in September 2001 of Westmontage Kable und Netzwerk GmbH and the establishment in March 2002 of Baran Raviv Telecom (Thailand) Ltd.. This worldwide expansion has occurred within Communications division’s field of operation.

~~Baran~~Sasson ~~believes there is substantial potential for growth of its business outside of Israel. In the recent years Baran has taken steps to expend its activities outside of Israel. Today~~Shilo, ~~Baran is a worldwide company, which renders services in Asia, Europe, Africa and North America. Baran intends to continue in expanding its operations and revenues outside Israel.~~ CFO

8SIGNATURE

~~OPERATING~~ Pursuant to ~~AND~~the ~~FINANCIAL~~requirements ~~REVIEW~~of ~~AND~~the ~~PROSPECTS~~Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~The following~~BARAN ~~discussion~~GROUP ~~and~~LTD. ~~analysis~~By:—————————————— ~~should~~Meir beDorChairman ~~read~~of ~~in conjunction with~~ the consolidated financial statements, the related notes to the consolidated financial statements and the Operating and Financial Review and prospects included in Baran’s Annual Report on form 20-F for the fiscal year ended December 31, 2002 and the unaudited interim condensed consolidated financial statements contained in this Report on form 6-K and the related notes to such unauidited interim condensed consolidated financial statements. Board

~~The~~Date: ~~Securities~~June and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Form 6-K contains such “forward-looking statements”. These statements may be made directly in this Form 6-K referring to Baran and it may also be made a part of this Form 6-K by reference to other documents filed with the Securities and Exchange Commission by Baran Group Ltd. 4,~~which~~ is2003 known as “incorporation by reference”. These statements may include statements regarding the future events. Words such as “anticipate,” “estimate”, “expects”, “projects”,“intends”, “plans”, “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance, identify forward-looking statements. All forward-looking statements are management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Baran Group Ltd. is under no obligation, and each expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

Results of Operations

Comparison of Three Months Ended March 31, 2002 to Three Months Ended March 31, 2003

Revenues. Revenues decreased by 27% to $ 37.5 million in the three months ended March 31, 2003, from $ 51.5 million in the three months ended March 31, 2002. The decrease in the Company’s revenues is directly influenced by the local and worldwide recession and economic slow down. A considerable decrease in revenues occurred in the Semiconductors and Industry divisions. Due to that at the end of 2002, a large-scaled semiconductor project had come to final stages, which are characterized by decrease in revenues as opposed to increase in expenses and allowances for the completion of the project. As well as the completion of the Beit — Dagan project and additional other large scaled projects within the Industry division.

Cost of revenues. Cost of revenues decreased by 27% to $31.5 million in the three months ended March 31, 2003 from $ 43.2 million in the three months ended March 31, 2002. This decrease was primarily due to the large turnkey projects performed by the group, which had come to the final stages, as was mentioned in the Revenues paragraph.

Gross profit. Gross profit in the year ended 2002 was 15%, in the three months ended March 31, 2002 it was 16 %, the same as in the three months ended March 31, 2003 In spite of the decline in the Company’s overall profitability, the Company succeeds in maintaining a stable gross profit rate.

Research and development, selling and marketing, general and administrative expenses. Research and development expenses decreased by 71% to $ 0.2 million in the three months ended March 31, 2002 from $ 0.6 million in three months ended March 31, 2002.Selling and marketing expenses increased by 79% to $ 1.2 million in the three months ended March 31, 2003 from $ 0.7 million in the three months ended March 31, 2002. General and administrative expenses increased by 10% to $ 3.6 million in the three months ended March 31, 2003 from $ 3.3 million in the three months ended March 31, 2002.The operating income decrease by 76% to $1 million in the three months ended March 31, 2003 from $ 3.8 million in the three months ended March 31, 2002.

This decrease in the operating income is primarily attributable to a significant increase in the abovementioned expenses, which was resulted from the reduction of o2wireless’s goodwill, consequent to the merger between Baran Telecom Inc. and o2Wireless on November, 2002. Moreover, since the completion of the merger and the registration of Baran’s shares in the Nasdaq, Baran incurred the general and administrative expenses of o2Wireless as well as additional expenses relate to the conformity with Securities and Exchange Commission requirements. Expenses relating to research, development and marketing of Mobipower Ltd. (formerly known as T.P.S. Teleparking Systems Ltd.) increased in the three months ended March, 31 2003 comparing to the respective period in 2002, among other reasons due to the acquisition of Mobipower BV. Additional increase occurred in the selling and marketing expenses, due to the Company’s endeavors to expand its international activities.

Net financing income. Net financing income decreased by 66% to $ 0.16 million in the three months ended March 31, 2003 from $ 0.47 million in the three months ended March 31, 2002. This decrease was primarily due to decline in the purchasing power of the NIS, resulting from increases in the Israeli Consumer Price Index and the devaluation of the NIS in relation to the U.S. dollar as well as due to considerable increase in the use of external financing by the Company for various activities such as acquisitions, real estate development and other projects and ongoing activities.

Tax rate. The rate of tax for the three months ended March, 31 2003 increased to 62% from 41% in the three months ended March, 31 2002 primarily due to the reduction of o2wireless’s goodwill, consequent to the merger between Baran Telecom Inc. and o2Wireless on November, 2002, which are not taxable. Moreover, the higher tax rate in the three months ended March 31, 2003 is due to the inability to offset losses of certain subsidiaries of Baran (mainly Mobipower Ltd.) against profits generate from other subsidiaries, in the Baran’s consolidated financial statements, which includes both profitable and non profitable subsidiaries.

Critical Accounting Policies

The preparation of Baran’s financial statements in conformity with accounting principles generally accepted in Israel requires management to make estimates and assumptions that in certain circumstances affect amounts reported in the accompanying consolidated financial statements. Baran bases its judgments on its experience and various other assumptions that it believes to be reasonable under the circumstances. Please refer to note 1 of Baran’s financial statements included in its Annual Report on Form 20-F for the year ended December 31, 2002 for a summary of Baran’s significant accounting policies as well as to the critical accounting policies included in the abovementioned report.

Liquidity and Capital Resources

Although Baran’s cash flow from current operation improved compared to the respective period in the year of 2002, it was still negative and stands on ($ 10.4) million in the three months ended March 31, 2003 compared to ($ 12.7) million in the three months ended March 31, 2002.

The decline in the cash flow was influenced by few activities, which parts of them are temporary:

• A temporary incline in the Company's reserves at the end of the three months ended March 31, 2003 and an increase in certain activities, (mainly in the Technologies and Services division) which have been financed using credit facilities.

• Completion of payments to the Semiconductors Division's suppliers.

• A delay in payment of a customer within the Communications Division, the payment has been already received however subsequent to March 31, 2003 (for additional information see paragraph "Subsequent Event").

• The activity of Baran's other divisions have been balanced throughout the three months ended March 31, 2003.

The Company’s management has taken considerable measures in order to maintain an appropriate cash flow, to the Company’s activity.

Subsequent Events

During April 2003, the Communications Division has settled open and/or disputed issues with Nokia, relating to the discontinuance of the cellular communication infrastructure erection project in Germany, as was mentioned Baran’s Annual Report for the year ended December 31, 2002. As part of the settlement reached between the parties, Nokia paid a sum of Euro 12 million to the Company’s subsidiary in Germany. This amount will be presented (and influence) in the statements of cash flow of the three months to be ended on June, 30, 2003. Additional, as part of the settlement the Company’s German subsidiary received a warehouse and a supply of equipment. The settlement was reached to both parties satisfaction and completed by the financial aspect, the costumer’s contentment from the Company’s operation in the project.

Quantitative and Qualitative Disclosures about Market Risks

Reference is made to the “Quantitative and Qualitative Disclosures about Market Risks” section (Item 11) in Baran’s Annual Report on Form 20-F for the year ended December 31, 2002.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

BARAN GROUP LTD. By: /s/ Sasson Shilo—————————————— Chief Financial Officer

Date: May 30, 2003

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