----

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| UNITED STATES |
|---------------|

| SECURITIES AND EXCHANGE COMMISSION |
|------------------------------------|

| Washington, D.C. 20549 |
|------------------------|

| Pavel Buber, Chief Financial Officer4 Nahal Harif St. Northern Industrial Zone,Yavne 81106, IsraelTel: 972-8-932-1000 |
|-----------------------------------------------------------------------------------------------------------------------|
| (Name, Telephone, E-mail and/or Facsimile number and Address of Registrant's Contact Person)                          |

| Title of class                                     |   | Name of each exchange on which registered |
|----------------------------------------------------|--------|-------------------------------------------|
| Ordinary Shares, NIS 0.10 par value per share |   | Nasdaq Capital Market                     |
|                                               |   |                                      |

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|                                                            | Page                                                                         |
|-----------------------------------------------------------------|------------------------------------------------------------------------------|
| PRESENTATION OF INFORMATION                                     | 1                                                                            |
| CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS | 1                                                                            |
| PART I                                                          |                                                                         | 2 |
| ITEM 1.                                                         | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                        | 2 |
| ITEM 2.                                                         | OFFER STATISTICS AND EXPECTED TIME TABLE                                     | 2 |
| ITEM 3.                                                         | KEY INFORMATION                                                              | 2 |
| ITEM 4.                                                         | INFORMATION ON THE COMPANY                                                   | 13 |
| ITEM 4A.                                                        | UNRESOLVED STAFF COMMENTS                                                    | 25 |
| ITEM 5.                                                         | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 | 25 |
| ITEM 6.                                                         | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   | 34 |
| ITEM 7.                                                         | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            | 56 |
| ITEM 8.                                                         | FINANCIAL INFORMATION                                                        | 58 |
| ITEM 9.                                                         | THE OFFER AND LISTING                                                        | 60 |
| ITEM 10.                                                        | ADDITIONAL INFORMATION                                                       | 61 |
| ITEM 11.                                                        | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   | 71 |
| ITEM 12.                                                        | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       | 72 |
| PART II                                                         |                                                                         | 73 |
| ITEM 13.                                                        | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              | 73 |
| ITEM 14.                                                        | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 73 |
| ITEM 15.                                                        | CONTROLS AND PROCEDURES                                                      | 73 |
| ITEM 16.                                                        | [RESERVED]                                                                   | 74 |
| ITEM 16A.                                                       | AUDIT COMMITTEE FINANCIAL EXPERT                                             | 74 |
| ITEM 16B.                                                       | CODE OF ETHICS                                                               | 74 |
| ITEM 16C.                                                       | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       | 74 |
| ITEM 16D.                                                       | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   | 74 |
| ITEM 16E.                                                       | PURCHASES OF EQUITY SECURITIES BY THE COMPANY AND AFFILIATED PURCHASERS      | 75 |
| ITEM 16F.                                                       | CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT                                | 75 |
| ITEM 16G.                                                       | CORPORATE GOVERNANCE                                                         | 76 |
| PART III                                                        |                                                                         | 77 |
| ITEM 17.                                                        | FINANCIAL STATEMENTS                                                         | 77 |
| ITEM 18.                                                        | FINANCIAL STATEMENTS                                                         | 77 |
| ITEM 19.                                                        | EXHIBITS                                                                     | 78 |

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PRESENTATION 

CAUTIONARY 

| · | changes affecting currency exchange rates, including the NIS/U.S. Dollar and NIS/Euro exchange rates; |
|--------|-------------------------------------------------------------------------------------------------------|

| · | payment default by, or loss of, one or more of our principal clients; |
|--------|-----------------------------------------------------------------------|

| · | the loss of one or more of our key personnel; |
|--------|-----------------------------------------------|

| · | termination of arrangements with our suppliers, and in particular Arla Foods amba; |
|--------|------------------------------------------------------------------------------------|

| · | increasing levels of competition in Israel and other markets in which we do business; |
|--------|---------------------------------------------------------------------------------------|

| · | increase or decrease in global purchase prices of food products; |
|--------|------------------------------------------------------------------|

| · | interruption to our storage facilities; |
|--------|-----------------------------------------|

| · | our inability to accurately predict consumption of our products or changes in consumer preferences; |
|--------|-----------------------------------------------------------------------------------------------------|

| · | product liability claims and other litigation matters; |
|--------|--------------------------------------------------------|

| · | our insurance coverage may not be sufficient; |
|--------|-----------------------------------------------|

| · | our operating results may be subject to variations from quarter to quarter; |
|--------|-----------------------------------------------------------------------------|

| · | our inability to successfully compete with nationally branded products; |
|--------|-------------------------------------------------------------------------|

| · | our inability to successfully integrate our acquisitions; |
|--------|-----------------------------------------------------------|

| · | our inability to protect our intellectual property rights; |
|--------|------------------------------------------------------------|

| · | significant concentration of our shares are held by one shareholder; |
|--------|----------------------------------------------------------------------|

| · | we are controlled by and have business relations with Willi-Food Investments Ltd. and its management; |
|--------|-------------------------------------------------------------------------------------------------------|

| · | the price of our ordinary shares may be volatile; |
|--------|---------------------------------------------------|

| · | our inability to meet the Nasdaq listing requirements; |
|--------|--------------------------------------------------------|

| · | our inability to maintain an effective system of internal controls; |
|--------|---------------------------------------------------------------------|

| · | all of our assets are pledged to creditors ; |
|--------|----------------------------------------------|

| · | changes in laws and regulations, including those relating to the food distribution industry, and inability to meet and maintain regulatory qualifications and approvals for our products; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | economic conditions in Israel; |
|--------|--------------------------------|

| · | changes in political, economic and military conditions in Israel, including, in particular, economic conditions in the Company’s core markets; and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | our international operations may be adversely affected by risks associated with international business. |
|--------|---------------------------------------------------------------------------------------------------------|

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PART 

ITEM 

ITEM 

ITEM 

|                                |   | High   |   |   | Low    |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|
| November 2015                       |   |   | 3.921  |   |   |   | 3.868 |   |
| December 2015                       |   |   | 3.905  |   |   |   | 3.855 |   |
| January 2016                        |   |   | 3.983  |   |   |   | 3.913 |   |
| February 2016                       |   |   | 3.964  |   |   |   | 3.871 |   |
| March 2016                          |   |   | 3.912  |   |   |   | 3.766 |   |
| April 2016 (through April 25, 2016) |   |   | 3.837  |   |   |   | 3.758 |   |

----

| Income Statement Data: |
|------------------------|

| In accordance with IFRS |
|-------------------------|

|                                                              |   | For the year ended December 31, |       |
|-------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                              |   | 2015                            |       |   | 2014 |   |   | 2013 |   |   | 2012 |   |   | 2011 |   |
|                                                              |   | NIS                             |       |   | USD |   |   | NIS |   |   | NIS |   |   | NIS |   |   | NIS |   |
| Revenue                                                           |   |                            | 312,514    |   |   |   | 80,091 |   |   |   | 328,741 |   |   |   | 336,032 |   |   |   | 286,509 |   |   |   | 264,404 |   |
| Cost of sales                                                     |   |                            | 237,452    |   |   |   | 60,854 |   |   |   | 249,136 |   |   |   | 252,355 |   |   |   | 217,468 |   |   |   | 202,699 |   |
| Gross profit                                                      |   |                            | 75,062     |   |   |   | 19,237 |   |   |   | 79,605 |   |   |   | 83,677 |   |   |   | 69,041 |   |   |   | 61,705 |   |
| Selling expenses                                                  |   |                            | 37,294     |   |   |   | 9,558 |   |   |   | 39,696 |   |   |   | 35,130 |   |   |   | 28,915 |   |   |   | 27,482 |   |
| General and administrative expenses                               |   |                            | 32,926     |   |   |   | 8,438 |   |   |   | 19,231 |   |   |   | 19,408 |   |   |   | 16,715 |   |   |   | 17,375 |   |
| Other Income                                                      |   |                            | (2,182     | ) |   |   | (559 | ) |   |   | (2,943 | ) |   |   | (54 | ) |   |   | (46 | ) |   |   | (240 | ) |
| Total operating expenses                                          |   |                            | 68,038     |   |   |   | 17,437 |   |   |   | 55,984 |   |   |   | 54,484 |   |   |   | 45,584 |   |   |   | 44,617 |   |
| Operating profit                                                  |   |                            | 7,025      |   |   |   | 1,800 |   |   |   | 23,621 |   |   |   | 29,193 |   |   |   | 23,457 |   |   |   | 17,088 |   |
| Finance income                                                    |   |                            | 3,363      |   |   |   | 862 |   |   |   | 2,794 |   |   |   | 13,008 |   |   |   | 8,716 |   |   |   | 1,480 |   |
| Finance expense                                                   |   |                            | 978        |   |   |   | 251 |   |   |   | 375 |   |   |   | 876 |   |   |   | 410 |   |   |   | 313 |   |
| Finance income, net                                               |   |                            | 2,385      |   |   |   | 611 |   |   |   | 2,419 |   |   |   | 12,132 |   |   |   | 8,306 |   |   |   | 1,167 |   |
| Profit before taxes on income                                     |   |                            | 9,410      |   |   |   | 2,412 |   |   |   | 26,040 |   |   |   | 41,325 |   |   |   | 31,763 |   |   |   | 18,255 |   |
| Taxes on income                                                   |   |                            | (2,566     | ) |   |   | (658 | ) |   |   | (7,186 | ) |   |   | (9,517 | ) |   |   | (7,757 | ) |   |   | (3,906 | ) |
| Profit from continuing operations                                 |   |                            | 6,844      |   |   |   | 1,754 |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 24,006 |   |   |   | 14,349 |   |
| Profit from discontinued operations                               |   |                            | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,172 |   |
| Profit for the year                                               |   |                            | 6,844      |   |   |   | 1,754 |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 24,006 |   |   |   | 18,521 |   |
| Attributable to:                                                  |   |                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Owners of the Company                                             |   |                            | 6,844      |   |   |   | 1,754 |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 24,006 |   |   |   | 18,311 |   |
| Non-controlling interest                                          |   |                            | -          |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   | 210 |   |
| Net Income                                                        |   |                            | 6,844      |   |   |   | 1,754 |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 24,006 |   |   |   | 18,521 |   |
| Basic and diluted earnings per Share from continuing operations   |   |                            | 0.52       |   |   |   | 0.13 |   |   |   | 1.45 |   |   |   | 2.45 |   |   |   | 1.85 |   |   |   | 1.06 |   |
| Basic and diluted earnings per Share from discontinued operations |   |                            | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 0.29 |   |
| Basic and diluted earnings  per Share                   |   |                            | 0.52       |   |   |   | 0.13 |   |   |   | 1.45 |   |   |   | 2.45 |   |   |   | 1.85 |   |   |   | 1.35 |   |
| Shares Used in Computing Earnings per Share                       |   |                            | 13,090,729 |   |   |   | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 12,974,245 |   |   |   | 12,977,481 |   |   |   | 13,534,954 |   |

----

| Balance Sheet Data: |
|---------------------|

| In accordance with IFRS |
|-------------------------|

|                 |   | As of December 31, |       |
|----------------------|--------|--------------------|------------|
|                 |   | 2015               |       |   | 2014 |   |   | 2013 |   |   | 2012 |   |   | 2011 |   |
|                 |   | NIS                |       |   | USD |   |   | NIS |   |   | NIS |   |   | NIS |   |   | NIS |   |
| Working capital      |   |               | 352,437    |   |   |   | 90,322 |   |   |   | 340,780 |   |   |   | 325,926 |   |   |   | 292,596 |   |   |   | 267,204 |   |
| Total assets         |   |               | 415,150    |   |   |   | 106,394 |   |   |   | 411,349 |   |   |   | 395,048 |   |   |   | 384,717 |   |   |   | 347,683 |   |
| Short-term bank debt |   |               | 16         |   |   |   | 4 |   |   |   | - |   |   |   | 18 |   |   |   | 9,930 |   |   |   | - |   |
| Shareholders' equity |   |               | 399,712    |   |   |   | 102,438 |   |   |   | 386,066 |   |   |   | 365,843 |   |   |   | 333,761 |   |   |   | 310,317 |   |
| Capital stock        |   |               | 13,240,913 |   |   |   | 13,240,913 |   |   |   | 12,974,245 |   |   |   | 12,974,245 |   |   |   | 12,977,481 |   |   |   | 13,534,954 |   |

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|   | · | varying regulatory restrictions on sales of our products to certain markets and unexpected changes in regulatory requirements; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | tariffs, customs, duties, quotas and other trade barriers; |
|--------|--------|------------------------------------------------------------|

|   | · | difficulties in managing foreign operations and foreign distribution partners; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | longer payment cycles and problems in collecting accounts receivable; |
|--------|--------|-----------------------------------------------------------------------|

|   | · | fluctuations in currency exchange rates; |
|--------|--------|------------------------------------------|

|   | · | political risks; |
|--------|--------|------------------|

|   | · | foreign exchange controls which may restrict or prohibit repatriation of funds; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | export and import restrictions or prohibitions, and delays from customs brokers or government agencies; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | seasonal reductions in business activity in certain parts of the world; and |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | potentially adverse tax consequences. |
|--------|--------|---------------------------------------|

----

ITEM 

|   | A. | HISTORY AND DEVELOPMENT OF THE COMPANY |
|--------|----|----------------------------------------|

----

|   | B. | BUSINESS OVERVIEW |
|--------|----|-------------------|

|   | · | to promote the “Willi-Food” brand name and other brand names used by the Company (such as "Gold Frost" and "Tifeeret") and to increase market penetration of products  through marketing efforts and advertising campaigns; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | to expand its current food product lines and diversify into additional product lines, as well as to respond to market demand ; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | to consider new fields of activity/operating segments; and |
|--------|--------|------------------------------------------------------------|

|   | · | to expand the Company's activity in the international food markets, mainly in the U.S. and Europe. |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | to continue to locate, develop and distribute additional food products, some of which may be new to Israeli consumers; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

----

|   | · | to penetrate new food segments within Israel through the establishment of food manufacturing factories or the establishment of business relationships and cooperation with existing Israeli food manufacturers; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | to increase its inventory levels from time to time both to achieve economies of scale on its purchases from suppliers and to more fully meet its customers’ demands; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | to further expand into international food markets, mainly in the U.S. and Europe, by purchasing food distribution companies, increasing cooperation with local existing distributors and/or exporting products directly to the customer; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | to penetrate new markets through the establishment of business relationships and cooperation with representatives in such markets subject to a positive political climate. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Canned Vegetables and Pickles:  including mushrooms (whole and sliced), artichoke (hearts and bottoms), beans, asparagus, capers, corn kernels, baby corn, palm hearts, vine leaves (including vine leaves stuffed with rice), sour pickles, mixed pickled vegetables, pickled peppers, an assortment of black and green olives, filled olives, garlic, roasted eggplant sun and dried tomatoes. These products are imported primarily from China, Greece, Thailand, Turkey, India, and the Netherlands. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Canned Fish:  including tuna (in oil or water), sardines, anchovies, smoked and pressed cod liver, herring, fish paste and salmon. These products are primarily imported from the Philippines, Thailand, Greece, Germany and Sweden. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Canned Fruit:  including pineapple (sliced or pieces), peaches, apricots, pears, mangos, cherries, litchis and fruit cocktail. These products are primarily imported from China, Monaco, the Philippines, Thailand, Greece and Europe. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Edible Oils:  including olive oil, regular and enriched sunflower oil, soybean oil, corn oil and rapeseed oil. These products are primarily imported from Belgium, Turkey, Italy, the Netherlands and Spain. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Dairy and Dairy Substitute Products:  including hard and semi-hard cheeses (parmesan, edam, kashkaval, gouda, havarti, cheddar, pecorino, manchego, maasdam, rossiysky, iberico and emmental), molded cheeses (brie, camembert and danablu), feta, Bulgarian cubes, goat cheese, fetina, butter, yogurts, butter spreads, margarine, melted cheese, cheese alternatives, condensed milk, whipped cream and others. These products are primarily imported from Greece, France, Latvia, Denmark, Germany, Bulgaria, Italy, the United States and the Netherlands. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Dried Fruit, Nuts and Beans:  including figs, apricots and organic apricots, chestnuts organic chestnuts, sunflower seeds, sesame seeds, walnuts, pine nuts, cashews, banana chips, pistachios and peanuts. These products are primarily imported from Greece, Turkey, India, China, Thailand and the United States. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other Products:  including, among others, instant noodle soup, frozen edamame soybeans, freeze dried instant coffee, bagels, breadstick, coffee creamers, lemon juice, halva, Turkish delight, cookies, vinegar, sweet pastry and crackers, sauces, corn flour, rice, rice sticks, pasta, organic pasta, spaghetti and noodles, frozen pizzas and pastries, breakfast cereals, corn flakes, rusks, couscous, rusks, gnocchi, tortilla, dried apples snacks, chocolate bars and chocolate paste, tea, deserts (such as tiramisu and pastries) and light and alcoholic beverages. These products are primarily imported from the Netherlands, Germany, Romania, Italy, Greece, Belgium, the United States, Scandinavia, Switzerland, China, Thailand, Turkey, India, and South America. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | large retail supermarket chains in the organized market, and |
|--------|--------|--------------------------------------------------------------|

|   | · | private supermarket chains, mini-markets, wholesalers, manufactures, institutional customers, governmental customers and the customers in the Palestinian Authority, referred to herein as the "private sector". |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                             |   | Percentage of Total Sales Year Ended December 31 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
| Customer Groups                                                                                                                                                  |   |                                                  | 2015   |   |   |   | 2014 |   |
| Supermarket chains in the organized market                                                                                                                       |   |                                                  | 25     | % |   |   | 25 | % |
| Private supermarket chains, mini-markets, wholesalers, manufacturers, institutional consumers, governmental customers and customers in the Palestinian Authority |   |                                                  | 75     | % |   |   | 75 | % |
|                                                                                                                                                             |   |                                                  | 100    | % |   |   | 100 | % |

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|   | C. | ORGANIZATIONAL STRUCTURE |
|--------|----|--------------------------|

| Subsidiary                                          |   | Jurisdiction of Organization |   | Company's Ownership Interest |
|-----------------------------------------------------|--------|------------------------------|--------|------------------------------|
| W.F.D. (import, marketing and trading) Ltd. ("WFD") |   | Israel                       |   | 100%                         |
| B.H. W.F.I. Ltd. ("BHWFI")                          |   | Israel                       |   | 100%                         |
| Gold Frost Ltd.                                     |   | Israel                       |   | 100%                         |
| Gold Frost subsidiaries:                            |   |                         |   |                         |
| Willi-Food Quality Cheeses Ltd.                     |   | Israel                       |   | 100%                         |
| Gold Frost Cheeses World Ltd.                       |   | Israel                       |   | 100%                         |
| Gold Cheeses Ltd.                                   |   | Israel                       |   | 100%                         |
| Cheeses Farm Ltd.                                   |   | Israel                       |   | 100%                         |

----

|   | D. | PROPERTY, PLANTS AND EQUIPMENT |
|--------|----|--------------------------------|

----

ITEM 

ITEM 

----

| 1. | Recognition of income |
|----|-----------------------|

|   | a.  | Sale of goods |
|--------|----------|---------------|

| ·   | The Group has transferred to the buyer the significant risks and rewards of ownership of the goods; |
|--------------------|-----------------------------------------------------------------------------------------------------|

| ·   | The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The amount of revenue can be measured reliably; |
|--------------------|-------------------------------------------------|

| ·   | It is probable that the economic benefits associated with the transaction will flow to the entity; and |
|--------------------|--------------------------------------------------------------------------------------------------------|

| ·   | The costs incurred or to be incurred in respect of the transaction can be measured reliably. |
|--------------------|----------------------------------------------------------------------------------------------|

|   | b.  | Customer returns and rebates |
|--------|----------|------------------------------|

----

| 2. | Useful lifespan of property, plant, and equipment |
|----|---------------------------------------------------|

| 3. | Employee benefits |
|----|-------------------|

|   | A. | RESULTS OF OPERATIONS |
|--------|----|-----------------------|

|                                |   | Year EndedDecember 31, 2015 |   |   | Year EndedDecember 31, 2014 |   |   | Year EndedDecember 31, 2013 |   |
|-------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|--------|----------------------------------|--------|
| Revenues                            |   |                        | 100    | %      |                        |   | 100    | %                                |   |   | 100 | % |
| Cost of Sales                       |   |                        | 76     | %      |                        |   | 75.78  | %                                |   |   | 75.10 | % |
| Gross Profit                        |   |                        | 24     | %      |                        |   | 24.22  | %                                |   |   | 24.90 | % |
| Selling Expenses                    |   |                        | 11.93  | %      |                        |   | 12.08  | %                                |   |   | 10.45 | % |
| General and Administrative Expenses |   |                        | 10.54  | %      |                        |   | 5.85   | %                                |   |   | 5.78 | % |
| Other (Income)                      |   |                        | (0.7   | )%     |                        |   | (0.90  | )%                               |   |   | (0.02 | )% |
| Operating profit                    |   |                        | 2.25   | %      |                        |   | 7.19   | %                                |   |   | 8.69 | % |
| Financial Income, Net               |   |                        | 0.76   | %      |                        |   | 0.74   | %                                |   |   | 3.61 | % |
| Profit before taxes on income       |   |                        | 3.01   | %      |                        |   | 7.93   | %                                |   |   | 12.30 | % |
| Taxes on income                     |   |                        | 0.82   | %      |                        |   | 2.19   | %                                |   |   | 2.83 | % |
| Net Income                          |   |                        | 2.19   | %      |                        |   | 5.74   | %                                |   |   | 9.47 | % |

----

----

----

|   | B. | LIQUIDITY AND CAPITAL RESOURCES. |
|--------|----|----------------------------------|

----

|   | C. | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES |
|--------|----|------------------------------------------------|

----

|   | D. | TREND INFORMATION |
|--------|----|-------------------|

----

|   | F. | TABULAR DISCLOSURE OF CONTRACTURAL OBLIGATIONS |
|--------|----|------------------------------------------------|

|                      |   | Payments due by period |
|---------------------------|--------|------------------------|
| Contractual Obligations   |   | Total                  |   | Less than 1 year |   | 1-3 years |   | 3-5 years |   | More than 5 years |
|                      |   | (in thousands)         |
| Totalopen purchase orders |   | NIS 9,236              |   | NIS 9,236 |   | -- |   | -- |   | -- |
|                      |   | (USD 2,375)            |   | (USD 2,375) |   |   |   |   |   |   |

----

ITEM 

|   | A. | DIRECTORS AND SENIOR MANAGEMENT |
|--------|----|---------------------------------|

| Name                       |   | Age |   | Position with the Company    |
|----------------------------|--------|-----|--------|------------------------------|
| Gregory Gurtovoy           |   | 52  |   | Chairman of the Board        |
| Ilan Admon                 |   | 66  |   | Deputy Chairman of the Board |
| Israel Yosef Schneorson    |   | 50  |   | Director                     |
| Gershon Chanoch Winderboim |   | 59  |   | Director                     |
| Shneor Zalman Vigler       |   | 37  |   | Director                     |
| Emil Budilovsky            |   | 46  |   | Director                     |
| Ilan Cohen (1)             |   | 57  |   | Director                     |
| Sigal Grinboim (1)         |   | 51  |   | External Director            |
| Menashe Arnon (1)          |   | 76  |   | External Director            |
| Oleksander Avdyeyev        |   | 37  |   | Director                     |
| Iram Ephraim Graiver       |   | 50  |   | Chief Executive Officer      |
| Pavel Buber                |   | 34  |   | Chief Financial Officer      |

| (1) | Members of the Company’s Audit Committee |
|-----|------------------------------------------------|

----

----

|   | B. | COMPENSATION |
|--------|----|--------------|

|                                                        |   |   |                |   |   |   |       |   |   |   |      |   |   |   | Equity-Based     |   |   |   |   |   |
|-------------------------------------------------------------|--------|--------|---------------------|--------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|--------|------------------|--------|--------|--------|--------|--------|
| Name and Principal Position (1)                             |   |   | Management Fees (2) |   |   |   | Salary (3) |   |   |   | Bonus (4) |   |   |   | Compensation (5) |   |   |   | Total  |   |
|                                                        |   |   | NIS Thousand        |   |
| Zwi Williger – Chairman (former) (6)                  |   |   | 4,435               |   |   |   | -          |   |   |   | 3,670     |   |   |   | 25               |   |   |   | 8,130  |   |
| Joseph Williger – President and director (former) (6) |   |   | 4,435               |   |   |   | -          |   |   |   | 3,670     |   |   |   | 25               |   |   |   | 8,130  |   |
| Gil Hochboim – CEO and CFO (former) (7)               |   |   | -                   |   |   |   | 748        |   |   |   | 279       |   |   |   | 98               |   |   |   | 1,125  |   |
| Eyal Alfasi – VP Trade (former) (8)                   |   |   | -                   |   |   |   | 536        |   |   |   | -         |   |   |   | -                |   |   |   | 536    |   |
| Yoav Izak – COO (former) (9)                          |   |   | -                   |   |   |   | 436        |   |   |   | -         |   |   |   | -                |   |   |   | 436    |   |

|   | (1) | All Covered Executives are employed on a full time (100%) basis. |
|--------|-----|------------------------------------------------------------------|

|   | (2)  | Management fees includes also tax gross-up payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (3)       | Salary includes the Covered Executive’s gross salary plus payment of social benefits made by the Company on behalf of such Covered Executive. Such benefits may include, to the extent applicable to the Covered Executive, payments, contributions and/or allocations for savings funds (e.g., Managers’ Life Insurance Policy), education funds (referred to in Hebrew as “keren hishtalmut”), pension, severance, risk insurances (e.g., life, or work disability insurance), payments for social security, vacation and benefits, convalescence or recreation pay and other benefits and perquisites consistent with the Company’s policies. |

|   | (4) | Represents annual bonuses granted to the Covered Executive based on formulas set forth in the compensation policy of the Company (that was approved by the Compensation Committee, the Board of Directors and shareholders of the Company) and the agreements with each of the Covered Executive. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (5) | Represents the equity-based compensation expenses recoded in the Company's consolidated financial statements for the year ended December 31, 2015, based on the option's fair value on the grant date, calculated in accordance with accounting guidance for equity-based compensation. For a discussion of the assumptions used in reaching this valuation, see Note 15 to our consolidated financial statements for the year ended December 31, 2015. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | On November 13, 2015, the Board of Directors of the Company approved the terms of the termination of the management service agreements between the Company and companies controlled by the Zwi and Joseph Williger. On January 18, 2016, following approval of the termination agreement by Shareholders on January 13, 2016, the Willigers resigned from the Company's Board of Directors and all other positions in the Company, its subsidiaries, and Willi-Food, and were appointed by the Company's Board of Directors as Co-Presidents of the Company. On January 21, 2016, the Company announced that the Willigers were terminated from their services as Co-Presidents of the Company pursuant to the termination agreement.  As a result, they no longer hold any positions with the Company. The termination agreement provides, inter alia, for certain payments to each of two companies controlled by Messrs. Zwi and Joseph Williger, respectively, including an annual bonus for each of the years 2015 and 2016 of NIS 2 million, a retirement bonus of NIS 1.67 million, management fees of NIS 1.67 million during the year following the notice period, management fees during the notice period for 5.5 months of NIS 0.75 million, and the redemption of 90 vacation days to each of the Willigers. In addition, reimbursement was provided for payments made by Mr. Zwi Williger in connection with a car provided by the Company in the amount of NIS 173 thousand. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Mr. Gil Hochboim served as CEO and CFO of the Company and Willi-Food until November 15, 2015, although he continued to serve in other capacities until April 4, 2016. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (8) | Mr. Alfasi served as VP Trade of the Company until September 2015. |
|--------|-----|--------------------------------------------------------------------|

|   | (9) | Mr. Izak served as COO of the Company until September 2015. |
|--------|-----|-------------------------------------------------------------|

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|   | ● | The Company could terminate the agreement at any time, and for any reason, by prior written notice of at least 18 months. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------|

|   | ● | Each Williger Management Company could terminate its agreement at any time, by prior written notice of at least 180 days. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------|

|   | (a) | The monthly service fees according to the Management Services Agreements ceased to be linked to the US Dollar and were to be converted into NIS 102,900 (excluding VAT) linked to changes in the Israeli consumer price index that was known at January 2008. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | The terms of the Management Services Agreements were extended indefinitely, subject to clause (c) below; provided however that in the event the Williger Management Company provides the management services to the Company without the presence of Messrs. Zwi or Joseph Williger, as the case may be, and/or in the case of the death and/or permanent disability of Messrs. Zwi or Joseph Williger, the Company would be entitled to terminate the Management Services Agreement immediately. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Each of the parties to the Management Services Agreements could terminate the agreement at any time, and for any reason, by prior written notice which was to be delivered to the other party as follows: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The Company could terminate the agreement at any time, and for any reason, by prior written notice of at least 36 months. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------|

|   | ● | The Williger Management Company could terminate the agreement at any time, by prior written notice of at least 180 days. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------|

|   | (d) | If a Williger Management Company was to terminate the Management Services Agreement, the Williger Management Company would be entitled to receive the management fees for a period of twelve (12) months, which would begin after the prior notice period, whether or not it provided the Company with any management services during such twelve-month period. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | In addition, the Management Services Agreements contained provisions entitling each of Messrs. Zwi and Joseph Williger to 30 vacation days per year, during which days the applicable Williger Management Company would not provide management services to the Company. Unused vacation days could be accumulated and paid for in lieu of taking such days as vacation. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | ● | During the period between execution of the Termination Agreement and the Termination Date, and upon the appointment of any successor, Messrs. Zwi and Joseph Williger will make their best efforts to accommodate a smooth transition to the successor appointed in their stead pursuant to the provisions of the Termination Agreement to manage the core business of the Company, including but not limited to handing over all contact information, agreements and details being required with regard to the Company customers and suppliers, in addition to making their best efforts for the continuation of the relationship with such customers and suppliers; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Messrs. Zwi and Joseph Williger are restricted from competing with the Company, either directly or indirectly, for a period of 12 months commencing upon expiration of the Notice Period, subject to exceptions as set out in the Termination Agreement; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Subject to the full and timely satisfaction of all of the Company's undertakings and obligations set forth in the Termination Agreement, each of Mr. Zwi Williger, Mr. Joseph Williger and the Williger Management Companies, irrevocably waives, completely releases and forever discharges the Company and its shareholders (includes the Company's controlling shareholders), subsidiaries, affiliates, officers, directors, and others from any and all claims, rights, demands, actions, obligations and causes of action, known or unknown, which they directly or through the Company may now have or may have against such party, including but without limitation also with regard to that certain agreement dated March 2, 2014, by and among B.S.D Drown Ltd., the Williger Management Companies, Y.M. Dekel-Holdings and Investments Ltd., and Mr. Joseph Williger, subject to exceptions as set out in the Termination Agreement (the "Willifood Controlling Stake Purchase Agreement"); |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Subject to the full and timely satisfaction of all of Mr. Zwi Williger, Mr. Joseph Williger and the Williger Management Companies undertakings and obligations set forth in the Termination Agreement and subject to the restrictions, limitations and consents required under any law, regulation including that of the Israeli Companies Law, the Company irrevocably waives, completely releases and forever discharges Mr. Zwi Williger, Mr. Joseph Williger and the Williger Management Companies from any and all claims, rights, demands, actions, obligations and causes of action, known or unknown, which they may now have or may have against such party, subject to exceptions as set out in the Termination Agreement (the "Waiver"); and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The Company shall maintain the effectiveness and validity of its D&O insurance policy in a scope and with coverage at least equal to those existing under the current D&O insurance policy, for a period of at least seven years following the Termination Date, or will purchase run–off insurance coverage with respect to the liability of Mr. Zwi Williger and Mr. Joseph Williger as directors and officers of the Company, subject to the restrictions and consents required under the law. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The payment of a retirement bonus in the amount of NIS 1,670 thousand (excluding VAT) (approximately USD 428 thousand) to each of the Williger Management Companies; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The payment of an Annual Bonus (for 2015 and 2016) in the amount of NIS 2,000 thousand (excluding VAT) (approximately USD 513 thousand) to each of the Williger Management Companies; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The acceleration of the Retirement Payments to the later of December 31, 2015 or three business days following shareholder approval; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The purchase of run–off insurance coverage with respect to the liability of Mr. Zwi Williger and Mr. Joseph Williger as directors and officers of the Company (as detailed in section 7 of the Termination Agreement); and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Obtaining the Waiver. |
|--------|---------|-----------------------|

----

|   | · | Gross monthly payment of NIS 43,000 (approximately USD 10,750) ("Monthly Payment"); |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Additional one monthly payment per year ("Maskoret 13"), payable at the end of each year; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | An annual bonus at a rate of 0.5% of the Company’s operating income before bonuses payable to officers and employees ("Bonus Base") exceeding NIS 8 million, provided that the Bonus Base is higher than NIS 18 million (in which case Mr. Hochboim's bonus will relate to the Bonus Base that exceeds NIS 8 million) ("Annual Bonus"). In accordance with the Compensation Policy, the Annual Bonus is capped at eight Monthly Payments, and if it exceeds 6.5 Monthly Payments the remainder would be carried over to the next year; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Benefits and reimbursement of expenses incurred in the course of his employment (in each case subject to the Company’s policies from time to time), customarily provided by the Company to its senior employees, such as insurance pension, education fund, vehicle for the use of Mr. Hochboim or full payment for the use of his own vehicle, mobile phone, professional development training and professional fees, subscription for a daily financial newspaper, foreign and domestic travel costs, and reimbursement of other expenses incurred by Mr. Hochboim while providing services to the Company, in each case against the provision of receipts; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 22 vacation days per year, during which days Mr. Hochboim would not provide services to the Company. Subject to applicable law, unused vacation days could be accumulated and paid for in lieu of taking such days as vacation; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In the event Mr. Hochboim's employment is terminated, for whatever reason, he would be entitled to the proportional part of the Maskoret 13 and the Annual Bonus for the year in which he is terminated; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Each of the Company and Mr. Hochboim may terminate Mr. Hochboim's employment at any time, and for any reason, by prior written notice delivered to the other party. If termination is being made by the Company, the prior written notice shall be at least four months, if termination is being made by the Mr. Hochboim, the prior written notice shall be at least 45 days. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Options to purchase 30,000 Ordinary Shares of the Company at an exercise price of $6.50 per share. The options vest over three years from November 28, 2013, with one-third of the op­tions (10,000 options) vesting on each of the first three anniversaries of the equity grant date. The options may be exercised immediately upon each stage of periodic vesting, and the last date for exercise of the options is two years after each respective portion of the options has vested, after which the options shall expire. No options may be exercised following the five year anniversary date of the equity grant date. The equity grant to Mr. Hochboim is subject to the terms of the 2013 Option Plan (approved by shareholders on November 28, 2013). For additional information regarding the 2013 Option Plan, see "Item 6. Directors, Senior Management and Employees – E.  Share Ownership – Employee Share Option Plans". |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Annual bonus in accordance with the terms of the Company's Compensation Policy (approved by shareholders on May 19, 2015).  Based on this, the Compensation Committee and the Board of Directors of the Company subsequently approved the payment of NIS 150,000 (approximately $38,440) as an annual bonus for the year 2014. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A retirement bonus in accordance with the terms of the Company's Compensation Policy equal to three months' salary in the amount of NIS 129,000 (approximately $33,059) (approved by shareholders on January 20, 2016), and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Options to purchase 200,000 Ordinary Shares of the Company at an exercise price of $6.50 per share. The options vest over three years from November 28, 2013, with approximately one-third of the op­tions (66,666 options) vesting on each of the first two anniversaries of the equity grant date and 66,668 options vesting upon the third anniversary of the equity grant date. The options may be exercised immediately upon each stage of periodic vesting, and the last date for exercise of the options is two years after each respective portion of the options has vested, after which the options shall expire.  No options may be exercised following the five year anniversary date of the grant of options.  The number of options granted and other terms of the option grant will be adjusted for various corporate events.  The exercise of the options may occur only while Mr. Zwi Williger is still serving as an officer or director of the Company (approved by shareholders on November 28, 2013). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Options to purchase 200,000 Ordinary Shares of the Company at an exercise price of $6.50 per share. The options vest over three years from November 28, 2013, with approximately one-third of the op­tions (66,666 options) vesting on each of the first two anniversaries of the equity grant date and 66,668 options vesting upon the third anniversary of the equity grant date. The options may be exercised immediately upon each stage of periodic vesting, and the last date for exercise of the options is two years after each respective portion of the options has vested, after which the options shall expire.  No options may be exercised following the five year anniversary date of the grant of options.  The number of options granted and other terms of the option grant will be adjusted for various corporate events.  The exercise of the options may occur only while Mr. Joseph Williger is still serving as an officer or director of the Company (approved by shareholders on November 28, 2013). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Service fees of NIS 65,000 (excluding VAT) (approximately USD 16,658) that would be paid to a company controlled by Mr. Ilan Admon (the “Admon Management Company”) against the submission to the Company of a detailed and duly issued invoice; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company will reimburse Admon Management Company for direct and reasonable out-of-pocket expenses incurred by it in the performance of Mr. Admon services; provided, however, that any such expenses in excess of NIS 5,000 (approximately USD 1,281) shall require the prior written approval of the Company. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | o | In the event that the Company achieves the Profit Target, Mr. Graiver will be entitled to receive a bonus in an amount equal to 3% of the Profit Target. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | In the event that the actual profits of the Company are greater than the Profit Target, Mr. Graiver will be entitled to an additional bonus of 1% of the difference between the actual profit and the Profit Target. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Mr. Graiver will not be paid a Profit Related Bonus in the event that the actual profit of the Company for the relevant year is lower than NIS 10 million (approximately USD 2.6 million). Notwithstanding the above,  for the fiscal year 2016, Mr. Graiver will not be paid a Profit Related Bonus if the actual profit of the Company is lower than NIS 5 million (approximately USD 1.3 million). |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Mr. Graiver may also be entitled to an additional annual bonus to be determined by the Company’s Compensation Committee and the Board, taking into consideration his performance during the relevant year. The criteria to be used to determine Mr. Graiver's eligibility for the Discretionary Bonus will be as set forth in the Updated Compensation Policy, subject to its approval. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | The Discretionary Bonus will not exceed an amount equal to six Monthly Payments. |
|--------|---|----------------------------------------------------------------------------------|

----

|   | 1. | Each of the Company and Mr. Graiver may terminate Mr. Graiver's employment at any time, and for any reason, by prior written notice of 60 days delivered to the other party (the "Notice Period"). During the Notice Period Mr. Graiver shall fulfill his duties in order to ensure the continued and smooth operation of the Company, as well as the handing over of Mr. Graiver's duties to such person(s) as shall be designated by the Board, unless the Board decides to conclude his service before the end of the Notice Period. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Provided the Company did not terminate the Mr. Griever's employment in circumstances specified in the agreement, and to the fulfillment of Mr. Griever's duties (unless the Board decides to terminate his service before the end of the Notice Period), upon termination of Mr. Graiver's employment, Mr. Graiver will be entitled to a retirement grant in an amount equal to four Monthly Payments (including all Related Benefits as specified above). |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | The Company may terminate Mr. Graiver's employment immediately, without any advance notice or being obliged to pay any sum as would have been payable to Mr. Graiver in respect of the Notice Period (including retirement grant), if termination is for ‘Cause’. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | ▪ | In the event that the Company achieves the Profit Target, Admon Management Company would be entitled to receive a bonus in an amount equal to 1% of the Profit Target. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ▪ | In the event that the actual profits of the Company are greater than the Profit Target, Admon Management Company would be entitled to an additional bonus of 0.33% of the difference between the actual profit and the Profit Target. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ▪ | Admon Management Company would not be paid a Profit Related Bonus in the event that the actual profit of the Company for the relevant year is lower than NIS 10 million (approximately USD 2.6 million). Notwithstanding the above, for the fiscal year 2016, Admon Management Company would not be paid a Profit Related Bonus if the actual profit of the Company is lower than NIS 5 million (approximately USD 1.3 million). |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Admon Management Company may also be entitled to an additional annual bonus to be determined by the Company’s Compensation Committee and the Board, taking into consideration the employee’s performance during the relevant year. The criteria to be used to determine Admon Management Company's eligibility for the Discretionary Bonus will be as set forth in the Updated Compensation Policy. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | The Discretionary Bonus will not exceed an amount equal to six Monthly Service Fees. |
|--------|---|--------------------------------------------------------------------------------------|

|   | o | Each of the Company and Admon Management Company may terminate Admon Management Company's serviced at any time, and for any reason, by prior written notice of 90 days delivered to the other party (the "Notice Period"). During the Notice Period, Admon Management Company shall fulfill its duties in order to ensure the continued and smooth operation of the Company, as well as the handing over of Admon Management Company duties to such person(s) as shall be designated by the Board, unless the Board decides to conclude his service before the end of the Notice Period. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | The Company may terminate Admon Management Company's services immediately, without any advance notice or being obliged to pay any sum as would have been payable to Admon Management Company in respect of the Notice Period, if termination is for ‘Cause’. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | C. | BOARD PRACTICES |
|--------|----|-----------------|

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|   | · | chairman of the board of directors; |
|--------|--------|-------------------------------------|

|   | · | controlling shareholder or his relative; |
|--------|--------|------------------------------------------|

|   | · | any director employed by or who provides services to the company on a regular basis. |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | any director employed by the controlling shareholder or by any corporation controlled by the controlling shareholder or who provides services to the controlling shareholder on a regular  basis; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | any director who principal livelihood comes from the controlling shareholder. |
|--------|--------|-------------------------------------------------------------------------------|

|   | 1) | to recommend to the board of directors the compensation policy for the company's Office Holders to be adopted by the company and to recommend to the board of directors, once every three years, regarding any extension or modifications of the current compensation policy that had been approved for a period of more than three years; |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2) | from time to time to recommend to the board of directors any updates required to the compensation policy and examine the implementation thereof; |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3) | to determine, with respect to the company's Office Holders, whether to approve their terms of office and employment in situations that require the approval of the compensation committee in accordance with the Companies Law; and |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4) | in certain situations described in the Companies Law, to determine whether to exempt the approval of terms of office of the CEO of the company from the requirement to obtain shareholder approval. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

----

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|   | 1) | the compensation committee and the board of directors have taken into consideration the mandatory considerations and criteria which are specified in the Companies Law for a compensation policy and the respective employment terms include such mandatory considerations and criteria; and |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2) | the company's shareholders approved such terms of employment, subject to a special majority requirement. |
|--------|----|----------------------------------------------------------------------------------------------------------|

|   | 1) | both the compensation committee and the board of directors re-discussed the transaction and decided to approve it despite the shareholders' objection, based on detailed reasons; and |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2) | the company is not a "Public Pyramid Held Company", which is a public company controlled by another public company (including by a company that only issued debentures to the public), which is also controlled by another public company (including a company that only issued debentures to the public) that has a controlling shareholder. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

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|   | · | the terms of an engagement by the company, directly or indirectly, with a controlling shareholder or a controlling shareholder’s relative (including through a corporation controlled by a controlling shareholder), regarding the company’s receipt of services from the controlling shareholder, and if such controlling shareholder is also an office holder of the company, regarding his or her terms of employment. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the majority of the shares of the voting shareholders who have no personal interest in the transaction must vote in favor of the proposal (shares held by abstaining shareholders shall not be considered); or |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the total shareholdings of those who have no personal interest in the transaction and who vote against the transaction must not represent more than 2% of the aggregate voting rights in the company. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1) | such majority includes a majority of the total votes of shareholders who have no personal interest in the approval of the transaction and who participate in the voting, in person, by proxy or by written ballot, at the meeting (abstentions not taken into account); or |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2) | the total number of votes of shareholders mentioned above that vote the transaction do not represent more than 2% of the total voting rights in the company. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | any amendment to the articles of association; |
|--------|--------|-----------------------------------------------|

|   | · | an increase in the company’s authorized share capital; |
|--------|--------|--------------------------------------------------------------|

|   | · | a merger; or |
|--------|--------|--------------|

|   | · | approval of related party transactions that require shareholder approval. |
|--------|--------|---------------------------------------------------------------------------|

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|   | D. | EMPLOYEES |
|--------|----|-----------|

|   | E. | SHARE OWNERSHIP |
|--------|----|-----------------|

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ITEM 

|   | A. | MAJOR SHAREHOLDERS |
|--------|----|--------------------|

| Name and Address                                  |   | Number of Ordinary Shares Beneficially Owned |   | Percentage of Ordinary Shares |
|---------------------------------------------------|--------|----------------------------------------------|--------|-------------------------------|
| Willi-Food Investments Ltd. (1)                   |   | 8,177,453                                    |   | 61.76%                        |
| B.S.D. Crown Ltd. (2) (*)                         |   | 8,948,528                                    |   | 67.58%                        |
| Gregory Gurtovoy (3) (*)                          |   | 8,948,528                                    |   | 67.58%                        |
| All directors and officers as a group (2 persons) |   | 8,948,528                                    |   | 67.58%                        |

| (1) | Willi-Food’s securities are traded on the Tel Aviv Stock Exchange. The principal executive offices of Willi-Food are located at 4 Nahal Harif St., Northern Industrial Zone, Yavne, 8122216 Israel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Includes (i) 8,177,453 Ordinary Shares held by Willi-Food, and (ii) 771,075 Ordinary Shares held by B.S.D. Crown Ltd. ("BSD"). Willi-Food is controlled by its majority shareholder, BSD, and BSD may be deemed to beneficially own all of the shares owned by Willi-Food.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (3) | Includes (i) 8,177,453 Ordinary Shares held by Willi-Food, and (ii) 771,075 Ordinary Shares held by BSD. Willi-Food is controlled by its majority shareholder, BSD.  BSD is controlled by BGI, which directly owns 25.01% of BSD's outstanding shares and holds a power of attorney from its controlling shareholder, Israel 18, to vote an additional 19.01% of BSD's outstanding shares.  BGI is controlled by Israel 18, which owns 71.52% of the outstanding shares in BGI.  Israel 18 is controlled by Gregory Gurtovoy, who owns both regular and preferred shares in Israel 18 which afford him 99.5% of its voting rights and 95% of its issued share capital.  Accordingly, BSD, BGI, Israel 18 and Gregory Gurtovoy may each be deemed to beneficially own 8,948,528 Ordinary Shares. Mr. Yossi Schneorson, a director of the Company who also sits on the boards of directors of BSD and BGI and is CEO of BSD, holds approximately 4.95% of the voting rights in Israel 18. |

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|   | B. | RELATED PARTY TRANSACTIONS |
|--------|----|----------------------------|

----

|   | C. | INTERESTS OF EXPERTS AND COUNSEL |
|--------|----|----------------------------------|

ITEM 

|   | A. | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION |
|--------|----|---------------------------------------------------------|

| (1) | In December 2013 and December 2014, the Company was served with two lawsuits and motions to certify them as class action lawsuits in accordance with Israel's Class Action Claims Law, 5766 – 2006, whose subject matter and cause of action, according to what is claimed, is the improper marketing of products which the Company imports and sells in a manner which allegedly misleads the consumer public.[any time period covered by the lawsuits?] The class which the petitioning plaintiffs wish to represent is every resident of Israel who purchased the above Company products. The amount of the lawsuits, if successful, is estimated by the plaintiffs in the amount of approximately NIS 27.2 million. In light of the preliminary procedural stage of each lawsuit, the Company cannot, based on the position of its legal advisors, evaluate the likelihood of their success or failure and, therefore, no provision has been made in the financial statements of the Company with respect to the aforesaid. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | In October 2013, the Company filed a lawsuit in the Magistrate Court in Rishon Letziyon against the Customs and VAT Division of the State of Israel in which it sought a declaratory judgment in order to cancel a charge notice issued by the Central Customs Office to the Company (hereinafter in this subsection – the "Charge Notice"). In the Charge Notice, it was claimed that the Company did not add costs which it defrayed for kosher certification for the food products to the value for tax purposes of shipments of foodstuffs that it imported. The customs amount demanded in the Charge Notice related to seven years prior to such Charge Notice and was for a total amount of approximately NIS 150,000. According to legal advisors, the Company has a marginal chance of causing the charge to be canceled, and therefore a partial provision has been made in the Company's financial statements. In June 2014 and August 2015, an Israeli District Court denied appeals in similar cases by other food products companies. On December 2, 2015, the Israeli Supreme Court denied motions to appeal those District Court decisions, thus confirming those judgments. In light of this, the chances that the Company's lawsuit will succeed appear to be very low, and the Company reached an agreement with the Tax Authority that its lawsuit would be withdrawn without order for costs. The Company recognized expenditures with respect to the costs of kosher certification in the amount of approximately NIS 0.6 million in its financial statements for 2015.  On February 2, 2016, the Company paid the entire shortfall amount including interest, linkage, and VAT, in the sum of approximately NIS 0.8 million. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (3) | In August 2014, the Ashdod Customs Office sent our subsidiary Gold Frost Ltd. ("Gold Frost") a charge notice claiming that goods imported by Gold Frost were improperly classified (hereinafter in this subsection – the "Charge Notice"). The customs amount demanded in the Charge Notice was approximately NIS 1.9 million. During the course of 2014, the Customs Office provided Gold Frost with a laboratory report on which it based the shortfall notice. After examination by Gold Frost, it was discovered that there was no error by Gold Frost in the classification of the goods which were the subject of the Charge Notice, and the Customs Office was petitioned to immediately cancel the Charge Notice. The Customs Office was also asked, to the extent that the shortfall is not canceled, to provide Gold Frost with specific grounds for the shortfall. In January 2015, the Customs Office rejected the claims made by Gold Frost, after which Gold Frost filed an appeal with the National Classification Unit of the Tax Authority Administration. On January 24, 2016, Gold Frost's claims were accepted and the Customs Office's determinations were canceled. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | On February 25, 2016, a petition was filed with the Tel Aviv-Jaffa District Court by a purported shareholder of Willi-Food for approval of a derivative action against the Company's directors and executive officers.  The Company and Willi-Food have been named as respondents. The claim alleges USD 3 million in damages caused to the applicant due to an alleged breach of fiduciary duties and duty of care of the Company's directors and executive officers to the Company. On April 21 the Tel Aviv-Jaffa District Court granted to the Company's directors and executive officers an extension of 45 days to respond the claim. At this preliminary stage, the Company and Willi-Food are reviewing and evaluating the Company and claims therein. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | On February 18, 2016, trading of the Company's ordinary shares was halted by Nasdaq following announcement by the Company of an investigation by the Israel Securities Authority regarding possible breaches of the Israeli securities laws and criminal offenses. Specifically, according to information in public filings made by the ISA in connection with the investigation, it appears that the investigation concerns a particular investment made by the Company in a certain European bond in the amount of approximately USD 3 million (of which USD 2.2 million was actually invested). Following the public disclosure of this information, trading of the Company's ordinary shares on the Nasdaq Capital Market resumed on April 7, 2016. Since learning of the investigation by the Israel Securities Agency, the Board has reviewed and revised various Company investment practices.  Specifically, the Board has revised the Company's investment policy, replaced the Company's current investment committee members with members of the Audit Committee and additional director. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)  | On February 29, 2016, Willi Food was served with a lawsuit and a motion to certify it is a class action (securities class action) which was filed in the US in the Federal District Court for the Southern District of New York by a shareholder who claims to own shares of Willi Food (the "Plaintiff"), against Willi Food, Mr Gurtovoy, chairman of the Company's and Willi Food's Boards of Directors, and the (ultimate direct) controlling shareholder, and some of the past and present officers  (hereinafter, jointly: the "Defendants"). The lawsuit is a demand for compensation for alleged damages incurred by the Plaintiff because of a violation of Federal securities laws and other laws by the Defendants during the period from April 30, 2014 and until February 18, 2016. In light of the early stage of the lawsuit, the Company cannot, based on the position of its legal advisors, evaluate the risk involved and therefore no provision has been made in the financial statements with respect to the aforesaid. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | SIGNIFICANT CHANGES |
|--------|----|---------------------|

----

ITEM 

|   | A. | OFFER AND LISTING DETAILS |
|--------|----|---------------------------|

| Calendar Period                         |   | Ordinary Shares |   |
|-----------------------------------------|--------|-----------------|--------|
|                                    |   | High            |   |   | Low |   |
| 2016                                    |   |            | 4.35   |   |   |   | 3.43 |   |
| First Quarter (*)                  |   |            | 4.35   |   |   |   | 3.66 |   |
| Second Quarter (through April 25, 2014) |   |            | 3.75   |   |   |   | 3.43 |   |
| 2015                                    |   |            | 7.00   |   |   |   | 3.28 |   |
| First Quarter                           |   |            | 7.00   |   |   |   | 5.55 |   |
| Second Quarter                          |   |            | 6.05   |   |   |   | 4.86 |   |
| Third Quarter                           |   |            | 5.82   |   |   |   | 4.42 |   |
| Fourth Quarter                          |   |            | 4.56   |   |   |   | 3.28 |   |
| 2014                                    |   |            | 8.83   |   |   |   | 6.12 |   |
| First Quarter                           |   |            | 8.83   |   |   |   | 7.25 |   |
| Second Quarter                          |   |            | 7.69   |   |   |   | 6.44 |   |
| Third Quarter                           |   |            | 7.47   |   |   |   | 6.99 |   |
| Fourth Quarter                          |   |            | 7.39   |   |   |   | 6.12 |   |
| 2013                                    |   |            | 8.40   |   |   |   | 4.91 |   |
| First Quarter                           |   |            | 6.67   |   |   |   | 4.91 |   |
| Second Quarter                          |   |            | 7.05   |   |   |   | 6.26 |   |
| Third Quarter                           |   |            | 7.30   |   |   |   | 6.64 |   |
| Fourth Quarter                          |   |            | 8.40   |   |   |   | 7.10 |   |
| 2012                                    |   |            | 5.01   |   |   |   | 4.00 |   |
| 2011                                    |   |            | 7.90   |   |   |   | 4.40 |   |
| April 2016 (through April 25, 2016)     |   |            | 3.75   |   |   |   | 3.43 |   |
| March 2016                              |   |            | 3.75   |   |   |   | 3.75 |   |
| February 2016                           |   |            | 3.75   |   |   |   | 4.17 |   |
| January 2016                            |   |            | 3.66   |   |   |   | 4.35 |   |
| December 2015                           |   |            | 3.81   |   |   |   | 4.56 |   |
| November 2015                           |   |            | 3.28   |   |   |   | 4.26 |   |
| October 2015                            |   |            | 4.14   |   |   |   | 4.54 |   |

----

|   | B. | PLAN OF DISTRIBUTION |
|--------|----|----------------------|

|   | C. | MARKETS |
|--------|----|---------|

|   | D. | SELLING SHAREHOLDERS |
|--------|----|----------------------|

|   | E. | DILUTION |
|--------|----|----------|

|   | F. | EXPENSES ON THE ISSUE |
|--------|----|-----------------------|

ITEM 

|   | A. | SHARE CAPITAL |
|--------|----|---------------|

|   | B. | MEMORANDUM AND ARTICLES OF ASSOCIATION |
|--------|----|----------------------------------------|

----

----

----

|   | C. | MATERIAL CONTRACTS |
|--------|----|--------------------|

----

|   | D. | EXCHANGE CONTROLS |
|--------|----|-------------------|

|   | E. | TAXATION |
|--------|----|----------|

----

----

----

|   | • | financial institutions or insurance companies; |
|--------|---------|------------------------------------------------|

|   | • | real estate investment trusts, regulated investment companies or grantor trusts; |
|--------|---------|----------------------------------------------------------------------------------|

|   | • | dealers or traders in securities or currencies; |
|--------|---------|-------------------------------------------------|

|   | • | tax-exempt entities; |
|--------|---------|----------------------|

|   | • | certain former citizens or long-term residents of the United States; |
|--------|---------|----------------------------------------------------------------------|

|   | • | persons that received our shares as compensation for the performance of services; |
|--------|---------|-----------------------------------------------------------------------------------|

|   | • | persons that will hold our shares as part of a “hedging” or “conversion” transaction or as a position in a “straddle” for United States federal income tax purposes; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | holders that will |
|--------|---------|-------------------|

|   | • | hold our shares through a partnership or other pass-through entity; |
|--------|---------|---------------------------------------------------------------------|

|   | • | U.S. Holders (as defined below) whose “functional currency” is not the U.S. Dollar; or |
|--------|---------|----------------------------------------------------------------------------------------------------|

|   | • | holders that own directly, indirectly or through attribution 10.0% or more, of the voting power or value, of our shares. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------|

----

|   | • | a citizen or resident of the United States; |
|--------|---------|---------------------------------------------|

|   | • | a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | an estate the income of which is subject to United States federal income taxation regardless of its source; or |
|--------|---------|----------------------------------------------------------------------------------------------------------------|

|   | • | a trust if such trust has validly elected to be treated as a United States person for United States federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more United States persons have the authority to control all of the substantial decisions of such trust. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | • | such gain is effectively connected with your conduct of a trade or business in the United States; or |
|--------|---------|------------------------------------------------------------------------------------------------------|

|   | • | you are an individual and have been present in the United States for 183 days or more in the taxable year of such sale or exchange and certain other conditions are met. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | at least 75% of its gross income is “passive income”; or |
|--------|---------|----------------------------------------------------------------------|

|   | • | at least 50% of the average value of its gross assets (which may be determined, in part, by the market value of our ordinary shares, which is subject to change) is attributable to assets that produce “passive income” or are held for the production of passive income. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | F. | DIVIDENDS AND PAYING AGENTS |
|--------|----|-----------------------------|

|   | G. | STATEMENTS BY EXPERTS |
|--------|----|-----------------------|

|   | H. | DOCUMENTS ON DISPLAY |
|--------|----|----------------------|

|   | I. | SUBSIDIARY INFORMATION |
|--------|----|------------------------|

ITEM 

----

|                         |   | Gain (loss) from exchange rate change NIS(000) |   |   | Fair net NIS(000) |   |   | Gain (loss) from exchange rate change NIS(000) |   |
|------------------------------|--------|------------------------------------------------|--------|--------|-------------------|--------|--------|------------------------------------------------|--------|
| Change in exchange rate USD  |   |                                           | (10    | )%     |              |   | (5     | )%                                             |   |   |   |   |   | 5 | % |   |   | 10 | % |
|                         |   |                                           | (4,933 | )      |              |   | (2,466 | )                                              |   |   | 49,330 |   |   |   | 2,466 |   |   |   | 4,399 |   |
| Change in exchange rate EURO |   |                                           | (10    | )%     |              |   | (5     | )%                                             |   |   |   |   |   |   | 5 | % |   |   | 10 | % |
|                         |   |                                           | (874   | )      |              |   | (437   | )                                              |   |   | 8,746 |   |   |   | 437 |   |   |   | 874 |   |

|                                     |   | Gain (loss) from interest change $(000) |   |   | Fair value $(000) |   |   | Gain (loss) from interest change $(000) |   |
|------------------------------------------|--------|-----------------------------------------|--------|--------|-------------------|--------|--------|-----------------------------------------|--------|
| Change in Interest as % of interest rate |   |                                    | (10    | )%     |              |   | (5     | )%                                      |   |   |   |   |   | 5 | % |   |   | 10 | % |
| Increase\decrease in financial Income    |   |                                    | 1,530  |   |              |   | 765    |                                    |   |   | 15,309 |   |   |   | (765 | ) |   |   | (1,530 | ) |

ITEM 

----

PART 

ITEM 

ITEM 

ITEM 

|   | · | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

ITEM 

ITEM16A

ITEM 

ITEM 

|           |   | NIS 2015 |    |   | NIS 2014 |   |    | USD 2015 |   |   | USD 2014 |   |
|----------------|--------|----------|---------|--------|----------|--------|---------|----------|--------|--------|----------|--------|
|           |   |     |    |   |     |   |    |     |   |   |     |   |
| Audit Fees (1) |   |     | 310,000 |   |     |   | 310,000 |     |   |   | 79,446   |   |   |   | 79,446 |   |
| Tax Fees (2)   |   |     | -       |   |     |   | -       |     |   |   | -        |   |   |   | - |   |
|           |   |     |    |   |     |   |    |     |   |   |     |   |   |   |   |   |
| TOTAL          |   |     | 310,000 |   |     |   | 310,000 |     |   |   | 79,446   |   |   |   | 79,446 |   |

ITEM 

----

ITEM 

| Period                                | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs |
|---------------------------------------|----------------------------------|------------------------------|----------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|
| March 1, 2015 to March 31, 2015       | 133,334(1)                       | $12.00                       | 0                                                                                | Not Applicable                                                                                               |
| June 1, 2015 to June 30, 2015         | 396,839                          | $ 5.70                       | 396,839                                                                          | $ 3,447,083                                                                                                  |
| December 1, 2015 to December 31, 2015 | 133,334(2)                       | $12.00                       | 0                                                                                | Not Applicable                                                                                               |

ITEM 

----

ITEM 

|   | · | Executive Sessions – Under Nasdaq rules, U.S. domestic listed companies, must have a regularly scheduled meetings at which only independent directors are present. We do not have such executive sessions. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Compensation of Officers - Under Nasdaq rules, the Company must adopt a formal written compensation committee charter addressing the scope of the compensation committee's responsibilities, including structure, processes and membership requirements, among others. We do not have such a formal written charter. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Nominations of Directors - Under Nasdaq rules, U.S. domestic listed companies, must have a nominations committee comprised solely of independent directors and must have director nominees selected or recommended by a majority of its independent directors. Our directors are not nominated in this manner. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Nominations Committee Charter or Board Resolution - Under Nasdaq rules, U.S. domestic listed companies, must adopt a formal written charter or board resolution, as applicable, addressing the nominations process and such related matters as may be required under the federal securities laws. We do not have such a formal written charter or board resolution. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Quorum - Under Nasdaq rules, U.S. domestic listed companies by-laws provide for a quorum of at least 33 1/3 percent of the outstanding shares of the company’s common voting stock. According to our articles our quorum should be at least 25 percent of the outstanding shares of our common voting stock. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Review of Related Party Transactions: Under Nasdaq Listing Rules, domestic listed companies must conduct an appropriate review and oversight of all related party transactions for potential conflict of interest situations on an ongoing basis by the company’s audit committee or another independent body of the board of directors. Although Israeli law requires us to conduct an appropriate review and maintain oversight of all related-party transactions similar to the Nasdaq Listing Rules, we follow the definitions and requirements of the Companies Law in determining the kind of approval required for a related-party transaction, which tend to be more rigorous than the Nasdaq Listing Rules. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shareholder Approval of Certain Equity Compensation: Under Nasdaq Listing Rules, shareholder approval is required prior to an issuance of securities in connection with equity based compensation of officers, directors, employees or consultants. The Company has indicated that it will receive shareholder approval as required by Israeli law, including upon issuance of options to directors or to controlling shareholders. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

III

ITEM 

ITEM 

----

ITEM 

| Exhibit Number                         | Description                                                                                                                                                   |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| †1.1                             | Memorandum of Association of the Company, as amended (7)                                                                                                      |
| 1.2                                    | Articles of Association of the Company, as amended on March 20, 2014 (7)                                                                                      |
| 2.1                                    | Specimen of Certificate for ordinary shares (1)                                                                                                               |
| 4.1                                    | Share Option Plan (1)                                                                                                                                         |
| †4.2                             | Services Agreement between the Company and Willi-Food, dated April 1, 1997 (2)                                                                                |
| †4.3                             | Transfer Agreement between the Company and Gold Frost dated February 16, 2006 (3)                                                                             |
| †4.4                             | Lease agreement for Logistics Center between the Company and Gold Frost dated February 16, 2006 (3).                                                          |
| 4.5                                    | Placing Agreement between the Company, Gold Frost, certain officers of Gold Frost and Corporate Synergy dated March 2, 2006 (3).                              |
| 4.6                                    | Lock In Agreement, between the Company, Gold Frost, Corporate Synergy and certain officers of Gold Frost, dated March 2, 2006 (3)                             |
| 4.7                                    | Registration Rights Agreement, dated as of October 25, 2006, among the Company and the investors signatory thereto. (4)                                       |
| †4.8                             | Sale Agreement, dated July 24, 2012, between the Company and Willi-Food Investments Ltd. (5)                                                                  |
| 4.9                                    | 2013 Option Plan (6)                                                                                                                                          |
| 4.10                                   | Agreement between G. Willi-Food International Ltd., Zvi V. & Co. Company Ltd. and Yossi Willi Management and Investment Ltd., dated November 12, 2015 (8) |
| 8.1                                    | Subsidiaries of the Company (*)                                                                                                                               |
| 12.1                                   | Certification of CEO of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)                      |
| 12.2                                   | Certification of CFO of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)                      |
| 13.1                                   | Certification of CEO of the Company pursuant to Rule 13a-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)                      |
| 13.2                                   | Certification of CFO of the Company pursuant to Rule 13a-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)                      |
| 15.(a).1      | Consent of Independent Registered Public Accounting Firm (*)                                                                                                  |

| † | English translations from Hebrew original.                                                                                    |
|---------|-------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Incorporated by reference to the Company’s Registration Statement on Form F-1, File No. 333-6314.                  |
| (2)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2001. |
| (3)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2005. |
| (4)     | Incorporated by reference to the Company’s Registration Statement on Form F-3, File No. 333-138200.                |
| (5)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012. |
| (6)     | Incorporated by reference to the Company’s Form 6-K filed October 31, 2013.                                             |
| (7)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013. |
| (8)     | Incorporated by reference to Appendix A to the Company’s Form 6-K filed December 10, 2015.                              |
| (*)     | Filed Herewith                                                                                                                |

----

----

|                                                    | Page      |
|---------------------------------------------------------|-----------|
|                                                    |      |
| Report of Independent Registered Public Accounting Firm | F-2       |
|                                                    |      |
| Financial Statements:                                   |      |
|                                                    |      |
| Statements of financial position                        | F-3-F-4   |
|                                                    |      |
| Statements of Income                                    | F-5       |
|                                                    |      |
| Statements of comprehensive Income                      | F-6       |
|                                                    |      |
| Statements of Changes in Equity                         | F-7       |
|                                                    |      |
| Statements of Cash Flows                                | F-8-F-9   |
|                                                    |      |
| Notes to the Financial Statements                       | F-10-F-67 |

----

REPORT 

----

FOOD 

|                                                  |   |   |   |   | December 31, |    |
|-------------------------------------------------------|--------|--------|--------|--------|--------------|---------|
|                                                  |   | Note   |   |   | 2 0 1 5      |    |   | 2 0 1 4 |   |   |   | 2 0 1 5 (*) |   |
|                                                  |   |   |   |   | NIS          |    |   | NIS |   |   | US Dollars |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |
| Assets                                                |   |   |   |   |         |    |   |   |   |   |   |   |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |
| Current assets                                        |   |   |   |   |         |    |   |   |   |   |   |   |   |
| Cash and cash equivalents                             |   | 4a     |   |   |         | 79,421  |   |   |   | 82,902 |   |   |   | 20,354 |   |
| Financial assets at fair value through profit or loss |   | 4b     |   |   |         | 145,007 |   |   |   | 122,733 |   |   |   | 37,162 |   |
| Short term deposit                                    |   | 4f     |   |   |         | 20,288  |   |   |   | 19,445 |   |   |   | 5,199 |   |
| Trade receivables                                     |   | 4c     |   |   |         | 81,392  |   |   |   | 86,690 |   |   |   | 20,859 |   |
| Other receivables and prepaid expenses                |   | 4d     |   |   |         | 8,451   |   |   |   | 3,700 |   |   |   | 2,160 |   |
| Inventories                                           |   | 4e     |   |   |         | 34,517  |   |   |   | 48,586 |   |   |   | 8,846 |   |
| Current tax assets                                    |   |   |   |   |         | 1,833   |   |   |   | 1,372 |   |   |   | 470 |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Total current assets                                  |   |   |   |   |         | 370,909 |   |   |   | 365,428 |   |   |   | 95,056 |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Non-current assets                                    |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Property, plant and equipment                         |   |   |   |   |         | 76,041  |   |   |   | 73,826 |   |   |   | 19,488 |   |
| Less -accumulated depreciation                        |   |   |   |   |         | 31,874  |   |   |   | 28,579 |   |   |   | 8,169 |   |
|                                                  |   | 6      |   |   |         | 44,167  |   |   |   | 45,247 |   |   |   | 11,319 |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Prepaid expenses                                      |   |   |   |   |         | 137     |   |   |   | 133 |   |   |   | 35 |   |
| Goodwill                                              |   | 7      |   |   |         | 36      |   |   |   | 36 |   |   |   | 9 |   |
| Deferred taxes                                        |   | 12c    |   |   |         | 3,614   |   |   |   | 505 |   |   |   | 926 |   |
| Total non-current assets                              |   |   |   |   |         | 47,954  |   |   |   | 45,921 |   |   |   | 12,290 |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Total assets                                          |   |   |   |   |         | 418,863 |   |   |   | 411,349 |   |   |   | 107,346 |   |

----

|                                                                        |   |   |   |   | December 31, |   |
|-----------------------------------------------------------------------------|--------|--------|--------|--------|--------------|--------|
|                                                                        |   | Note   |   |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   |   | 2 0 1 5 (*) |   |
|                                                                        |   |   |   |   | NIS          |   |   | NIS |   |   | US Dollars |   |
| Equity and liabilities                                                      |   |   |   |   |         |   |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |         |   |   |   |   |   |   |   |   |
| Current liabilities                                                         |   |   |   |   |         |   |   |   |   |   |   |   |   |
| Short-term bank debt                                                        |   |   | 9      |   |         |   | 16 |   |   |   | - |   |   |   | 4 |   |
| Trade payables                                                              |   |   | 8a     |   |         |   | 12,863 |   |   |   | 15,518 |   |   |   | 3,297 |   |
| Employees Benefits                                                          |   |   | 11b    |   |         |   | 1,940 |   |   |   | 2,120 |   |   |   | 497 |   |
| Other payables and accrued expenses                                         |   |   | 8b     |   |         |   | 3,653 |   |   |   | 7,010 |   |   |   | 936 |   |
| Total current liabilities                                                   |   |   |   |   |         |   | 18,472 |   |   |   | 24,648 |   |   |   | 4,734 |   |
|                                                                        |   |   |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Non-current liabilities                                                     |   |   |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Retirement benefit obligation                                               |   |   | 11b    |   |         |   | 679 |   |   |   | 635 |   |   |   | 174 |   |
| Total non-current liabilities                                               |   |   |   |   |         |   | 679 |   |   |   | 635 |   |   |   | 174 |   |
|                                                                        |   |   |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                        |   |   | 14     |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Share capital                                                               |   |   |   |   |         |   | 1,425 |   |   |   | 1,407 |   |   |   | 365 |   |
| Additional paid in capital                                                  |   |   |   |   |         |   | 128,354 |   |   |   | 121,430 |   |   |   | 32,894 |   |
| Capital fund                                                                |   |   |   |   |         |   | 247 |   |   |   | 247 |   |   |   | 63 |   |
| Foreign currency translation reserve                                        |   |   |   |   |         |   | - |   |   |   | - |   |   |   |   |   |
| Retained earnings                                                           |   |   |   |   |         |   | 269,883 |   |   |   | 263,039 |   |   |   | 69,165 |   |
| Capital Fund measurement of the net liability in respect of defined benefit |   |   |   |   |         |   | (197 | ) |   |   | (57 | ) |   |   | (50 | ) |
| Equity attributable to Shareholders' of the Company                         |   |   |   |   |         |   | 399,712 |   |   |   | 386,066 |   |   |   | 102,438 |   |
|                                                                        |   |   |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Total equity and liabilities                                                |   |   |   |   |         |   | 418,863 |   |   |   | 411,349 |   |   |   | 107,346 |   |

----

WILLI

|                                      |   |   |   |   | Year ended December 31, |       |
|-------------------------------------------|--------|--------|--------|--------|-------------------------|------------|
|                                      |   | Note   |   |   | 2 0 1 5                 |       |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   |  2 0 1 5 (*) |   |
|                                      |   |   |   |   | NIS                     |       |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |
| Revenue                                   |   | 16a    |   |   |                    | 312,514    |   |   |   | 328,741 |   |   |   | 336,032 |   |   |   | 80,091 |   |
| Cost of sales                             |   | 16b    |   |   |                    | 237,452    |   |   |   | 249,136 |   |   |   | 252,355 |   |   |   | 60,854 |   |
| Gross profit                              |   |   |   |   |                    | 75,062     |   |   |   | 79,605 |   |   |   | 83,677 |   |   |   | 19,237 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating costs and expenses              |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling expenses                          |   | 16c    |   |   |                    | 37,294     |   |   |   | 39,696 |   |   |   | 35,130 |   |   |   | 9,558 |   |
| General and administrative expenses       |   | 16d    |   |   |                    | 32,926     |   |   |   | 19,231 |   |   |   | 19,408 |   |   |   | 8,438 |   |
| Other Income                              |   | 17     |   |   |                    | (2,182     | )  |   |   | (2,943 | ) |   |   | (54 | ) |   |   | 559 |   |
|                                      |   |   |   |   |                    | 68,038     |   |   |   | 55,984 |   |   |   | 54,484 |   |   |   | 17,437 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating profit                          |   |   |   |   |                    | 7,025      |   |   |   | 23,621 |   |   |   | 29,193 |   |   |   | 1,800 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Finance Income                            |   | 18a    |   |   |                    | 3,363      |   |   |   | 2,794 |   |   |   | 13,008 |   |   |   | 862 |   |
| Finance expense                           |   | 18b    |   |   |                    | 978        |   |   |   | 375 |   |   |   | 876 |   |   |   | 251 |   |
| Finance Income, net                       |   |   |   |   |                    | 2,385      |   |   |   | 2,419 |   |   |   | 12,132 |   |   |   | 611 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit before taxes on Income             |   |   |   |   |                    | 9,410      |   |   |   | 26,040 |   |   |   | 41,325 |   |   |   | 2,412 |   |
| Taxes on Income                           |   | 12a    |   |   |                    | (2,566     | ) |   |   | (7,186 | ) |   |   | (9,517 | ) |   |   | (658 | ) |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                |   |   |   |   |                    | 6,844      |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 1,754 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                       |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per share                  |   |   |   |   |                    | 0.52       |   |   |   | 1.45 |   |   |   | 2.45 |   |   |   | 0.13 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per share                |   |   |   |   |                    | 0.52       |   |   |   | 1.45 |   |   |   | 2.45 |   |   |   | 0.13 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares used in computation of basic EPS   |   |   |   |   |                    | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 12,974,245 |   |   |   | 13,090,729 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares used in computation of diluted EPS |   |   |   |   |                    | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 12,974,245 |   |   |   | 13,090,729 |   |

----

CONSOLIDATED 

|                                                                                                                                                                 |   | Year ended December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                                                                 |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   |  2 0 1 5 (*) |   |
|                                                                                                                                                                 |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                                                                                                                                                 |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                                                                                                                                           |   |                    | 6,844  |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 1754 |   |
|                                                                                                                                                                 |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive Income (Expenses)                                                                                                                                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                 |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Re-measurement of net liabilities with respect to a defined benefit which    will not be classified in the future as profit or  loss, net of tax |   |                    | (139   | ) |   |   | 6 |   |   |   | (63 | ) |   |   | (36 | ) |
| Translation differentials with respect to foreign operations which were    classified as profit or loss, net of tax                                        |   |                    | -      |   |   |   | (786 | ) |   |   | 147 |   |   |   | - |   |
|                                                                                                                                                                 |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive Income for the year                                                                                                                              |   |                    | (139   | ) |   |   | (780 | ) |   |   | 84 |   |   |   | (36 | ) |
|                                                                                                                                                                 |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total comprehensive Income for the year                                                                                                                              |   |                    | 6,705  |   |   |   | 18,074 |   |   |   | 31,892 |   |   |   | 1,718 |   |

----

CONSOLIDATED 

|                                                           |   | Share capital |   |   | Additional paid in capital |   |    | measurement of the net liability in respect of defined benefit |   |   | Capital fund |   |   | Foreign currency translation reserve |   |   | Treasury shares |   |   | Retained earnings |   |   | Total shareholders' equity |   |
|----------------------------------------------------------------|--------|---------------|--------|--------|----------------------------|--------|---------|----------------------------------------------------------------|--------|--------|--------------|--------|--------|--------------------------------------|--------|--------|-----------------|--------|--------|-------------------|--------|--------|----------------------------|--------|
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |            |   |   |              |   |   |                       |   |
| Balance - January 1, 2013                                      |   |          | 1,444  |   |                       |   | 129,897 |                                                           |   |   | -            |   |   |                                 | 247    |   |            |   | 639    |              |   |   | (10,843                    | )      |   |   | 212,377 |   |   |   | 333,761 |   |
| Profit for the year                                            |   |          | -      |   |                       |   | -       |                                                           |   |   | -            |   |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | 31,808 |   |   |   | 31,808 |   |
| Currency translation differences                               |   |          | -      |   |                       |   | -       |                                                           |   |   | -            |   |   |                                 | -      |   |            |   | 147    |              |   |   | -                          |   |   |   | - |   |   |   | 147 |   |
| Measurement of the net liability in respect of defined benefit |   |          | -      |   |                       |   | -       |                                                           |   |   | (63          | )      |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | - |   |   |   | (63 | ) |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |            |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |   |
| Total comprehensive Income for the year                        |   |          | -      |   |                       |   | -       |                                                           |   |   | (63          | )      |   |                                 | -      |   |            |   | 147    |              |   |   | -                          |   |   |   | 31,808 |   |   |   | 31,892 |   |
| Employee benefit                                               |   |          | -      |   |                       |   | 190     |                                                           |   |   | -            |   |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | - |   |   |   | 190 |   |
| Investment in treasury stocks                                  |   |          | (37    | )      |                       |   | (10,806 | )                                                              |   |   | -            |   |   |                                 | -      |   |            |   | -      |              |   |   | 10,843                     |   |   |   | - |   |   |   | - |   |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |            |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2013                                    |   |          | 1,407  |   |                       |   | 119,281 |                                                           |   |   | (63          | )      |   |                                 | 247    |   |            |   | 786    |              |   |   | -                          |   |   |   | 244,185 |   |   |   | 365,843 |   |
| Profit for the year                                            |   |          | -      |   |                       |   | -       |                                                           |   |   | -            |   |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | 18,854 |   |   |   | 18,854 |   |
| Currency translation differences                               |   |          | -      |   |                       |   | -       |                                                           |   |   | -            |   |   |                                 | -      |   |            |   | (786   | )                 |   |   | -                          |   |   |   | - |   |   |   | (786 | ) |
| Measurement of the net liability in respect of defined benefit |   |          | -      |   |                       |   | -       |                                                           |   |   | 6            |   |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | - |   |   |   | 6 |   |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |            |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |   |
| Total comprehensive Income for the year                        |   |          | -      |   |                       |   | -       |                                                           |   |   | 6            |   |   |                                 | -      |   |            |   | (786   | )                 |   |   | -                          |   |   |   | 18,854 |   |   |   | 18,074 |   |
| Employee benefit                                               |   |          | -      |   |                       |   | 2,149   |                                                           |   |   | -            |   |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | - |   |   |   | 2,149 |   |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |            |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2014                                    |   |          | 1,407  |   |                       |   | 121,430 |                                                           |   |   | (57          | )      |   |                                 | 247    |   |            |   | -      |              |   |   | -                          |   |   |   | 263,039 |   |   |   | 386,066 |   |
| Profit for the year                                            |   |          | -      |   |                       |   | -       |                                                           |   |   | -            |   |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | 6,844 |   |   |   | 6,844 |   |
| Measurement of the net liability in respect of defined benefit |   |          | -      |   |                       |   | -       |                                                           |   |   | (140         | )      |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | - |   |   |   | (140 | ) |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |            |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |   |
| Total comprehensive Income for the year                        |   |          |   |   |                       |   |    |                                                           |   |   | (140         | )      |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | 6,844 |   |   |   | 6,704 |   |
| Exercise of options                                            |   |          | 18     |   |                       |   | 6,772   |                                                           |   |   | -            |   |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | - |   |   |   | 6,790 |   |
| Employee benefit                                               |   |          | -      |   |                       |   | 152     |                                                           |   |   | -            |   |   |                                 | -      |   |            |   | -      |              |   |   | -                          |   |   |   | - |   |   |   | 152 |   |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |            |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2015                                    |   |          | 1,425  |   |                       |   | 128,354 |                                                           |   |   | (197         | )      |   |                                 | 247    |   |            |   | -      |              |   |   | -                          |   |   |   | 269,883 |   |   |   | 399,712 |   |

----

WILLI

|                                                                                              |   | Year ended December 31, |    |
|---------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                              |   | 2 0 1 5                 |    |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   |  2 0 1 5 (*) |   |
|                                                                                              |   | NIS                     |    |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |
| Cash flows - operating activities                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |   |
| Profit from continuing operations                                                                 |   |                    | 6,844   |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 1,754 |   |
| Adjustments to reconcile net profit to net cash from continuing operating activities (Appendix A) |   |                    | 7,494   |   |   |   | 799 |   |   |   | (28,078 | ) |   |   | 1,921 |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net cash from continuing operating activities                                                     |   |                    | 14,338  |   |   |   | 19,653 |   |   |   | 3,730 |   |   |   | 3,675 |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows - investing activities                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition of property plant and equipment                                                       |   |                    | (2,994  | ) |   |   | (8,077 | ) |   |   | (6,077 | ) |   |   | (767 | ) |
| Proceeds from sale of property plant and Equipment                                                |   |                    | 456     |   |   |   | 969 |   |   |   | 29 |   |   |   | 117 |   |
| Additions to long term other receivables                                                          |   |                    | -       |   |   |   | - |   |   |   | (445 | ) |   |   | - |   |
| Proceeds from (used in) purchase of marketable securities, net                                    |   |                    | (22,087 | ) |   |   | (11,777 | ) |   |   | 56,309 |   |   |   | 5,660 |   |
| Proceeds from (used in) purchase of  loan carried at fair value through profit or loss  |   |                    | -       |   |   |   | 65,400 |   |   |   | (65,000 | ) |   |   | - |   |
| Proceeds used in purchase of  Short term deposit                                        |   |                    | -       |   |   |   | (19,445 | ) |   |   | - |   |   |   | - |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net cash from (used in) continuing investing activities                                           |   |                    | (24,625 | ) |   |   | 27,070 |   |   |   | (15,184 | ) |   |   | (6,311 | ) |
| Net cash from discontinued investing  activities                                        |   |                    | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows - financing activities                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of options                                                                               |   |                    | 6,790   |   |   |   | - |   |   |   | - |   |   |   | 1,740 |   |
| Short-term bank debt                                                                              |   |                    | 16      |   |   |   | (18 | ) |   |   | (9,912 | ) |   |   | 4 |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net cash from (used in) continuing  financing activities                                |   |                    | 6,806   |   |   |   | (18 | ) |   |   | (9,912 | ) |   |   | 1,744 |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                                  |   |                    | (3,481  | ) |   |   | 46,705 |   |   |   | (21,366 | ) |   |   | (892 | ) |
| Cash and cash equivalents  at the beginning of the financial year                       |   |                    | 82,902  |   |   |   | 36,197 |   |   |   | 57,563 |   |   |   | 21,246 |   |
| Cash and cash equivalents of the end of the financial year                                        |   |                    | 79,421  |   |   |   | 82,902 |   |   |   | 36,197 |   |   |   | 20,354 |   |

----

|                                                                                                                        |   | Year ended December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                        |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   |   | 2 0 1 5 (*) |   |
|                                                                                                                        |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
| Cash flows from operating activities                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| A.        Adjustments to reconcile net profit to net cash from operating activities |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Decrease (Increase) in deferred income taxes                                                                                |   |                    | (3,109 | ) |   |   | (1,004 | ) |   |   | 519 |   |   |   | (797 | ) |
| Unrealized loss (gain) on marketable securities                                                                             |   |                    | (186   | ) |   |   | 1,910 |   |   |   | (10,363 | ) |   |   | (48 | ) |
| Depreciation and amortization                                                                                               |   |                    | 3,723  |   |   |   | 3,634 |   |   |   | 4,459 |   |   |   | 954 |   |
| Gain from short term deposit                                                                                                |   |                    | (843   | ) |   |   | - |   |   |   | - |   |   |   | (216 | ) |
| Capital gain on disposal of property plant and equipment                                                                    |   |                    | (220   | ) |   |   | (188 | ) |   |   | (29 | ) |   |   | (56 | ) |
| Employees benefit, net                                                                                                      |   |                    | (95    | )  |   |   | - |   |   |   | - |   |   |   | (24 | )  |
| Stock based compensation reserve                                                                                            |   |                    | 152    |   |   |   | 2,124 |   |   |   | 190 |   |   |   | 39 |   |
| Unrealized Gain of  loan carried at fair value through profit or loss                                             |   |                    | -      |   |   |   | (100 | ) |   |   | (300 | ) |   |   | - |   |
| Net foreign exchange gain                                                                                                   |   |                    | -      |   |   |   | (786 | ) |   |   | - |   |   |   | - |   |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in assets and liabilities:                                                                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (Decrease) in trade receivables and other receivables                                                              |   |                    | 81     |   |   |   | (6,219 | ) |   |   | (9,046 | ) |   |   | 21 |   |
| Decrease (Increase) in inventories                                                                                          |   |                    | 14,069 |   |   |   | 5,415 |   |   |   | (4,731 | ) |   |   | 3,606 |   |
| Decrease in trade and other payables, and other current liabilities                                                         |   |                    | (6,078 | ) |   |   | (3,987 | ) |   |   | (8,777 | ) |   |   | (1,558 | ) |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |                    | 7,494  |   |   |   | 799 |   |   |   | (28,078 | ) |   |   | 1,921 |   |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| B.         Significant non-cash transactions:                                  |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|              Purchase of property, plant and equipment          |   |                    | 115    |   |   |   | 611 |   |   |   | - |   |   |   | 29 |   |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|              Sale of property, plant and equipment for credit   |   |                    | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|              Supplemental cash flow information:           |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|              Interest paid                                 |   |                    | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|              Income tax paid                                    |   |                    | 6,162  |   |   |   | 9,831 |   |   |   | 8,731 |   |   |   | 1,579 |   |

----

NOTES 

|   | A. | Description of Business: |
|--------|----|--------------------------|

|   | G. Willi-Food International Ltd. ("the Company") was incorporated in Israel in January 1994 and is engaged in the import, export, marketing and distribution of food products. Since May 1997, the Company's shares are registered for trade on the NASDAQ Capital Market. The Company is a subsidiary of Willi-Food Investments Ltd. ("the Parent Company"). The shares of the Parent Company are registered for trade on the Tel-Aviv Stock Exchange. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | Definitions: |
|--------|----|--------------|

| The Company             | -      | G. WILLI-FOOD INTERNATIONAL LTD.                                                                                                   |
|-------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------|
|                    |   |                                                                                                                               |
| The Group               | -      | The Company and its Subsidiaries, a list of which is presented in Note 5.                                                          |
|                    |   |                                                                                                                               |
| Subsidiaries            | -      | Companies that are controlled by the Company (as defined in IAS 27) and whose accounts are consolidated with those of the Company. |
|                    |   |                                                                                                                               |
| Related Parties         | -      | As defined in IAS 24.                                                                                                              |
|                    |   |                                                                                                                               |
| Interested Parties      | -      | As defined in the Israeli Securities Regulations (Annual Financial Statements), 2010.                                              |
|                    |   |                                                                                                                               |
| Controlling Shareholder | -      | As defined in the Israeli Securities Regulations (Annual Financial Statements), 2010.                                              |
|                    |   |                                                                                                                               |
| NIS                     | -      | New Israeli Shekel.                                                                                                                |
|                    |   |                                                                                                                               |
| CPI                     | -      | The Israeli consumer price index.                                                                                                  |
|                    |   |                                                                                                                               |
| US Dollars or $         | -      | The U.S. dollar.                                                                                                                   |
|                    |   |                                                                                                                               |
| Euro                    | -      | The United European currency.                                                                                                      |

|   | A. | Applying international accounting standards (IFRS): Statement of compliance |
|--------|----|----------------------------------------------------------------------------------|

|   | The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The significant accounting policies detailed in the continuation were applied on a consistent basis for all reporting periods presented in the financial statements, except for changes in accounting policies that were due to the application of standards, amendments to standards and interpretations that took effect on the date of the financial statements, and the application of standards, amendments to standards and interpretations that are not in effect and were adopted in early adoption by the Group, as detailed in Note 2v below. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | B. | Format for presentation of Statement of Financial Position: |
|--------|----|-------------------------------------------------------------|

|   | The Group presents assets and liabilities in the Statement of Financial Position divided into current and non-current items. |
|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | C. | Format for analysis recognized in Income Statement: |
|--------|----|-----------------------------------------------------|

|   | (1) | Format for analysis of expenses recognized in Income statement: The Group's expenses in the Income statement are presented based on the nature of the activity of the expenses in the entity. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The Group's operating cycle is 12 months. |
|--------|-----|-------------------------------------------|

|   | D. | Basis of preparation: |
|--------|----|-----------------------|

|   | Until December 31, 2003, Israel was considered a country in which hyper-inflation conditions exist. Therefore, non-monetary balances in the balance sheet were presented on the historical nominal amount and were adjusted to changes in the CPI. As of December 31, 2003 when the economy ceased to be hyper-inflationary and the Company no longer adjusted its financial statements to the ISRAELI CPI, the adjusted amounts as of this date were used as the historical costs. The financial statements were edited on the basis of the historical cost, except for: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Assets and liabilities measured by fair value: financial assets measured by fair value recorded directly as profit or loss. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | § | Inventories are stated at the lower of cost and net realizable value. |
|--------|--------|-----------------------------------------------------------------------|

|   | § | Property, plant and equipment and intangibles assets are presented at the lower of the cost less accumulated amortizations and the recoverable amount. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Liabilities to employees as described in Note 11. |
|--------|--------|---------------------------------------------------|

|   | E. | Foreign currencies: |
|--------|----|---------------------|

|   | (1) | Translation of foreign currency transactions |
|--------|-----|----------------------------------------------|

|   | In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (New Israeli Shekel (NIS)) are recorded at the rates of exchange prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date. (Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined). Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | E. | Foreign currencies: (Cont.) |
|--------|----|-----------------------------|

|   | (2) | Recognition of exchange differences |
|--------|-----|-------------------------------------|

|   | Exchange differences are recognized in profit or loss in the period in which they a arise except for exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive Income and reclassified from equity to profit or loss on disposal of the net investment. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional, currency’). The consolidated financial statements are presented in ‘NIS’, which is the company’s functional and the group’s reporting currency. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Convenience translation |
|--------|-----|-------------------------|

|   | The balance sheet as of December 31, 2015 and statement of Income, statement of other comprehensive Income and statement of cash flows for the year then ended have been translated into US Dollar using the representative exchange rate as of that date (US Dollar 1.0 = NIS 3.902). Such translation was made solely for the convenience of the U.S. readers. The dollar amounts so presented in these financial statements and in their accompanying notes should not be construed as representing amounts receivable or payable in US Dollars or convertible into US Dollars but only a convenience translation of reported NIS amounts into US Dollars, unless otherwise indicated. The convenience translation supplementary financial data is unaudited and is not presented in accordance with IFRSs. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | F. | Cash and cash equivalents: |
|--------|----|----------------------------|

|   | Cash and cash equivalents include demand deposits and term deposits in banks that are not restricted as to usage, with an original period to maturity of not more than three months. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Deposits that are restricted as to usage are classified as pledged deposits. |
|--------|------------------------------------------------------------------------------|

|   | Deposits with an original period to maturity exceeding three months, which as of the statement of financial position does not exceed one year, are classified as short-term investments. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | G. | Basis of consolidation: |
|--------|----|-------------------------|

|   | (1) | General |
|--------|-----|---------|

|   | The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive Income from the effective date of acquisition and up to the effective date of disposal, as appropriate. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | All intra-group transactions, balances, Income and expenses are eliminated in full on consolidation. |
|--------|------------------------------------------------------------------------------------------------------|

|   | (2) | Non-controlling Interest |
|--------|-----|--------------------------|

|   | Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from the Group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-control ling's share of changes in equity since the date of the combination. Losses attributable to non-controlling interest in excess of its share in the subsidiary's equity are charged commencing January 1, 2010 to non-controlling interest in any case, while ignoring its obligations and ability to make additional investments in the subsidiary. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Commencing January 1, 2010, transactions with non-controlling interest shareholders, in the context of which the Company retains control before and after the transaction, are treated as capital transactions. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Changes in the Group's ownership interests in existing subsidiaries |
|--------|-----|---------------------------------------------------------------------|

|   | Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | G. | Basis of consolidation: (Cont.) |
|--------|----|---------------------------------|

|   | (3) | Changes in the Group's ownership interests in existing subsidiaries (Cont.) |
|--------|-----|-----------------------------------------------------------------------------|

|   | When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts previously recognised in other comprehensive income and accumulated in equity are accounted for as if the Group had directly disposed of the relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings as specified by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | H. | Goodwill: |
|--------|----|-----------|

|   | Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Contingent liabilities of the subsidiary or jointly controlled entity recognized at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------|

----

|   | I. | Property, plant and equipment: |
|--------|----|--------------------------------|

|   | Property, plant and equipment are tangible items, which are held for use in the manufacture or supply of goods or services, or leased to others, which are predicted to be used for more than one period. The Company presents its property, plant and equipment items according to the cost model. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Under the cost method - a property, plant and equipment are presented at the balance sheet at cost (net of any investment grants), less any accumulated depreciation and any accumulated impairment losses. The cost includes the cost of the assets acquisition as well as costs that can be directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Depreciation is calculated using the straight-line method at rates considered adequate to depreciate the assets over their estimated useful lives. Amortization of leasehold improvements is computed over the shorter of the term of the lease, including any extension period, where the Company intends to exercise such option, or their useful life. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The annual depreciation and amortization rates are: |
|--------|-----------------------------------------------------|

|                           | Years  |   | %      |         |
|--------------------------------|--------|--------|--------|--------------|
|                           |   |   |   |         |
| Land                           | 50     |   | 2      |         |
| Construction                   | 25     |   | 4      |         |
| Motor vehicles                 | 5      |   | 15-20  | (Mainly 20%) |
| Office furniture and equipment | 6      |   | 6-15   | (Mainly 15%) |
| Computers                      | 3      |   | 20-33  | (Mainly 33%) |
| Machinery and equipment        | 10     |   | 10     |         |

|   | The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Income statement. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | J. | Inventories: |
|--------|----|--------------|

|   | Inventories are assets held for sale in the ordinary course of business, in the process of production for such sale or in the form of materials or supplies to be consumed in the production process or in the rendering of services. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Inventories are stated at the lower of cost and net realizable value. Cost of inventories includes all the cost of purchase, direct labor, fixed and variable production over heads and other cost that are incurred, in bringing the inventories to their present location and condition. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Cost determined as finished products, on the basis of standard cost which approximates actual production cost (materials, labor and indirect manufacturing costs). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | K. | Financial assets: |
|--------|----|-------------------|

|   | (1) | General |
|--------|-----|---------|

|   | All financial assets are recognized and derecognized on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Financial assets are classified into the following specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Financial assets ‘at fair value through profit or loss’ (FVTPL) |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | Loans and receivables |
|--------|--------|-----------------------|

|   | Regarding the amendment to IFRS 9, "Financial Instruments", IFRS 13 " Fair Value Measurement", Amendments to IFRS 7 " Disclosures – Transfers of Financial Assets" see notes 2v. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Financial assets at FVTPL |
|--------|-----|---------------------------|

|   | Financial assets are classified as at FVTPL where the financial asset is either held for trading or it is designated as at FVTPL. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | A financial asset is classified as held for trading if: |
|--------|---------------------------------------------------------|

|   | · | It has been acquired principally for the purpose of selling in the near future; or it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or |   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | · | It is a derivative that is not designated and effective as a hedging instrument. |
|--------|--------|----------------------------------------------------------------------------------|

|   | Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Loans and receivables |
|--------|-----|-----------------------|

|   | Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortized cost using the effective interest method, less any impairment. Interest Income is recognized by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | K. | Financial assets: (Cont.) |
|--------|----|---------------------------|

|   | (4) | Impairment of financial assets |
|--------|-----|--------------------------------|

|   | Financial assets carried at amortized cost: |
|--------|---------------------------------------------|

|   | Objective evidence of impairment exists when one or more events that have occurred after the initial recognition of the asset have a negative impact on the estimated future cash flows. Evidence of impairment may include indications that the debtor is experiencing financial difficulties, including liquidity difficulty and default in interest or principal payments. The amount of the loss recorded in profit or loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not yet been incurred) discounted at the financial asset's original effective interest rate (the effective interest rate computed at initial recognition). If the financial asset has a variable interest rate, the discount rate is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account (see allowance for doubtful accounts above). In a subsequent period, the amount of the impairment loss is reversed if the recovery of the asset can be related objectively to an event occurring after the impairment was recognized. The amount of the reversal, up to the amount of any previous impairment, is recorded in profit or loss. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | L. | Financial liabilities and equity instruments issued by the Group: |
|--------|----|-------------------------------------------------------------------|

|   | (1) | Classification as debt or equity |
|--------|-----|----------------------------------|

|   | Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities. |
|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Consumer price index financial liabilities |
|--------|-----|--------------------------------------------|

|   | The Company has Consumer Price Index ("CPI")-linked financial liabilities that are not measured at fair value through profit or loss. For those liabilities, the Company determines the effective interest rate as a real rate plus linkage differences according to the actual changes in the CPI up to the balance sheet date. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Treasury shares: |
|--------|-----|------------------|

|   | The cost of Company shares held by the Company or its subsidiaries are deducted from shareholders' equity as a separate element. |
|--------|----------------------------------------------------------------------------------------------------------------------------------|

----

|   | M. | Revenue recognition: |
|--------|----|----------------------|

|   | Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (1) | Sale of goods |
|--------|-----|---------------|

|   | Revenue from the sale of goods is recognized when all the following conditions are satisfied: |
|--------|-----------------------------------------------------------------------------------------------|

|   | · | The Group has transferred to the buyer the significant risks and rewards of ownership of the goods; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The amount of revenue can be measured reliably; |
|--------|--------|-------------------------------------------------|

|   | · | It is probable that the economic benefits associated with the transaction will flow to the entity; and |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | The costs incurred or to be incurred in respect of the transaction can be measured reliably. |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | (2) | Customer returns and rebates |
|--------|-----|------------------------------|

|   | The customer returns, rebates and other credits are being deducted from revenues. Although, in general, the Group does not grant rights of return and rebates, its enable for certain customers from time to time to return products. The Group assesses the expected customer returns and rebates according to specific information in its possession and its past experience in similar cases. According to IAS 18, these provisions are reduced from the Company's revenues. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Interest revenue |
|--------|-----|------------------|

|   | Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Dividend revenue |
|--------|-----|------------------|

|   | Dividend revenue from investments is recognized when the shareholder’s right to receive payment has been established. |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

----

|   | N. | Leasing: |
|--------|----|----------|

|   | (1) | General |
|--------|-----|---------|

|   | Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The Group as lessee |
|--------|-----|---------------------|

|   | Operating lease payments are recognized as an expense on a straight-line basis over the lease term. In instance of operating lease agreements where lease payments are not paid at the beginning of the lease period, or where the lease payments are reduced, and the Group is getting additional benefits from the lesser, operating lease payments are recognized as an expense on a straight-line basis over the lease term. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A lease agreement with the ILA with respect to a parcel of land is classified as finance leases. The prepaid lease payments are recognized on the balance sheet as "Property, plant and equipment", and are amortized on a straight-line basis over the lease period (2% per Year). |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | O. | Provisions: |
|--------|----|-------------|

|   | Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | When some or all of the economic benefits to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | P. | Share-based payments: |
|--------|----|-----------------------|

|   | Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date using the Black&Sholts model. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss over the remaining vesting period, with a corresponding adjustment to the equity-settled employee benefits reserve. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | P. | Share-based payments:(Cont.) |
|--------|----|------------------------------|

|   | Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. The accounting for share-based compensation is as follows: The Parent Company initiated and approved the grant, and hence the Company has no obligation to settle the grant in accordance with IFRS 2.43B. This implies that the Company records an expense as if it were granting its own shares. The options fair value determined at the date of grant is recognized over the vesting period of each trench. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Q. | Taxation: |
|--------|----|-----------|

|   | Income tax expense represents the sum of the tax currently payable and deferred tax. |
|--------|--------------------------------------------------------------------------------------|

|   | (1) | Current tax |
|--------|-----|-------------|

|   | The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the Income statement because it excludes items of Income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Deferred tax |
|--------|-----|--------------|

|   | Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to Income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | R. | Employee benefits: |
|--------|----|--------------------|

|   | (1) | Post-Employment Benefits |
|--------|-----|--------------------------|

|   | The Group's post-employment benefits include: benefits to retirees and liabilities for severance benefits. The Group's post-employment benefits are classified as Defined Benefit Plans. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Expenses in respect of a Defined Benefit Plan are carried to the Income statement in accordance with the Projected Unit Credit Method, while using actuarial estimates that are performed at each balance sheet date. The current value of the Group's obligation in respect of the defined benefit plan is determined by discounting the future projected cash flows from the plan by the market yields on high quality corporate bonds (see Accounting Staff Position number 21-1 of the Israeli Securities Authority: Maintaining a Deep Market in High Quality Corporate Bonds in Israel Including Accounting Treatment of the Transfer from a Capitalization Rate Appropriate for Government Bonds Market Yields to a Capitalization Rate Appropriate for Market Yields of High Quality Corporate Bonds as of December 31, 2014), denominated in the currency in which the benefits in respect of the plan will be paid, and whose redemption periods are approximately identical to the projected settlement dates of the plan. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Actuarial profits and losses are recognized in earning when incurred. |
|--------|-----------------------------------------------------------------------|

|   | The Group's liability in respect of the Defined Benefit Plan which is presented in the Group's balance sheet includes the current value of the obligation in respect of the defined benefit, net of the fair value of the Defined Benefit Plan assets. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The amendments to IAS 19 clarify how an entity should account for contributions made by employees or third parties to defined benefit plans, based on whether those contributions are dependent on the number of years of service provided by the employee. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For contributions that are independent of the number of years of service, the entity may either recognize the contributions as a reduction in the service cost in the period in which the related service is rendered, or to attribute them to the employees’ periods of service using the projected unit credit method; whereas for contributions that are dependent on the number of years of service, the entity is required to attribute them to the employees’ periods of service. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The directors of the Company do not anticipate that the application of these amendments to IAS 19 will have a significant impact on the Group's consolidated financial statements. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Short term employee benefits |
|--------|-----|------------------------------|

|   | Short term employee benefits are benefits which it is anticipated will be utilized or which are to be paid during a period that does not exceed 12 months from the end of the period in which the service that creates entitlement to the benefit was provided. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Short term company benefits include the company’s liability for short term absences, payment of grants, bonuses and compensation. These benefits are recorded to the statement of operations when created. The benefits are measured on a non-capitalized basis. The difference between the amount of the short term benefits to which the employee is entitled and the amount paid is therefore recognized as an asset or liability. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | S. | Earnings (loss) per share: |
|--------|----|----------------------------|

|   | Basic earnings (loss) per share is computed with regard to Income or loss attributable to the Company's ordinary shareholders, and is calculated for Income (loss) from continuing operations attributable to the ordinary shareholders of the reported entity, should such be presented. Basic earnings per share is to be computed by dividing Income(loss) attributed to Owners of the Company (numerator), by the weighted average of the outstanding ordinary shares (denominator) during the period. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In the computation of diluted earnings per share, the Company adjusted its Income (loss) attributable to its ordinary shareholders by multiplying their diluted EPS and the weighted average of the outstanding shares for the effects of all the dilutive potential ordinary shares of the Company. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | T. | Exchange Rates and Linkage Basis |
|--------|----|----------------------------------|

|   | (1) | Balances in foreign currency or linked thereto are included in the financial statements based on the representative exchange rates, as published by the Bank of Israel,that were prevailing at the balance sheet date. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Following are the changes in the representative exchange rate of the US dollars vis-a-vis the NIS and in the Israeli CPI: |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------|

|                            |   | Representative exchange rate |   |   | Representative exchange rate |   |   | CPI “in     |   |
|---------------------------------|--------|------------------------------|--------|--------|------------------------------|--------|--------|-------------------|--------|
|                            |   | of the Euro                  |   |   | of the dollar                |   |   | respect of” |   |
|                            |   | (NIS per €1)           |   |   | (NIS per $1)                 |   |   | (in points)       |   |
| As of:                          |   |                         |   |   |                         |   |   |              |   |
| December 31, 2015               |   |                         | 4.25   |   |                         |   | 3.90   |              |   |   | 112.93 |   |
| December 31, 2014               |   |                         | 4.72   |   |                         |   | 3.89   |              |   |   | 113.96 |   |
| December 31, 2013               |   |                         | 4.78   |   |                         |   | 3.47   |              |   |   | 114.18 |   |
|                            |   |                         |   |   |                         |   |   |              |   |   |   |   |
| Increase (decrease) during the: |   | %                            |   |   | %                            |   |   | %                 |   |
| Year ended:                     |   |                         |   |   |                         |   |   |              |   |   |   |   |
| December 31, 2015               |   |                         | (9.95  | )      |                         |   | -      |              |   |   | (0.90 | ) |
| December 31, 2014               |   |                         | (1.26  | )      |                         |   | (12.10 | )                 |   |   | (0.19 | ) |
| December 31, 2013               |   |                         | (2.85  | )      |                         |   | (6.97  | )                 |   |   | 1.81 |   |

|   | U. | Adoption of new and revised Standards and interpretations: Amendments to IFRSs and the new Interpretation that are mandatorily effective for the current year:Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The amendments to IAS 32 clarify the requirements relating to the offset of financial assets and financial liabilities. Specifically, the amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’ and ‘simultaneous realisation and settlement’. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The amendments have been applied retrospectively. The Company has assessed whether certain of its financial assets and financial liabilities qualify for offset based on the criteria set out in the amendments and concluded that the application of the amendments has had no impact on the amounts recognised in the Group's consolidated financial statements. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | U. | Adoption of new and revised Standards and interpretations (Cont.): Amendments to IFRSs and the new Interpretation that are mandatorily effective for the current year (Cont.): Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The amendments to IAS 36 remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives had been allocated when there has been no impairment or reversal of impairment of the related CGU. Furthermore, the amendments introduce additional disclosure requirements applicable to when the recoverable amount of an asset or a CGU is measured at fair value less costs of disposal. These new disclosures include the fair value hierarchy, key assumptions and valuation techniques used which are in line with the disclosure required by IFRS 13 Fair Value Measurements. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  The application of these amendments has had no material impact on the disclosures in the Group's consolidated financial statements. The amendments to IFRS 3 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The amendments to IFRS 3 clarify that contingent consideration that is classified as an asset or a liability should be measured at fair value at each reporting date, irrespective of whether the contingent consideration is a financial instrument within the scope of IFRS 9 or IAS 39 or a non-financial asset or liability. Changes in fair value (other than measurement period adjustments) should be recognised in profit and loss. The amendments to IFRS 3 are effective for business combinations for which the acquisition date is on or after 1 July 2014. New and revised Standards and Interpretations in issue but not yet effective, were not early adopted by the Group and are expected to affect or could affect future periods: IFRS 9, "Financial Instruments": |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In July 2014, the IASB issued the final and complete version of IFRS 9, "Financial Instruments" ("IFRS 9"), which replaces IAS 39, " Financial Instruments: Recognition and Measurement". IFRS 9 mainly focuses on the classification and measurement of financial assets and it applies to all assets in the scope of IAS 39. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | According to IFRS 9, all financial assets are measured at fair value upon initial recognition. In subsequent periods, debt instruments are measured at amortised cost only if both of the following conditions are met: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | the asset is held within a business model whose objective is to hold assets in order to collect the contractual cash flows. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------|

|   | - | the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Subsequent measurement of all other debt instruments and financial assets should be at fair value. IFRS 9 establishes a distinction between debt instruments to be measured at fair value through profit or loss and debt instruments to be measured at fair value through other comprehensive income. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Financial assets that are equity instruments should be measured in subsequent periods at fair value and the changes recognised in profit or loss or in other comprehensive (loss) income, in accordance with the election by the Company on an instrument-by-instrument basis. If equity instruments are held for trading, they should be measured at fair value through profit or loss. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | U. | Adoption of new and revised Standards and interpretations:  (Cont.) New and revised Standards and Interpretations in issue but not yet effective, were not early adopted by the Group and are expected to affect or could affect future periods: IFRS 9, "Financial Instruments": (Cont.) |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | According to IFRS 9, the provisions of IAS 39 will continue to apply to derecognition and to financial liabilities for which the fair value option has not been elected. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | According to IFRS 9, changes in fair values of financial liabilities which are attributable to the change in credit risk should be presented in other comprehensive income. All other changes in fair value should be presented in profit or loss. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | IFRS 9 also prescribes new hedge accounting requirements. |
|--------|-----------------------------------------------------------|

|   | IFRS 9 is to be applied for annual periods beginning on January 1, 2018. Early adoption is permitted. |
|--------|-------------------------------------------------------------------------------------------------------|

|   | The Company is evaluating the possible impact of IFRS 9 but is presently unable to assess its effect, if any, on the financial statements. IFRS 15, "Revenue from Contracts with Customers": |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In May 2014, the IASB issued IFRS 15 ("IFRS 15"). |
|--------|---------------------------------------------------|

|   | IFRS 15 replaces IAS 18, "Revenue", IAS 11, "Construction Contracts", IFRIC 13, "Customer Loyalty Programs", IFRIC 15, "Agreements for the Construction of Real |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Estate", IFRIC 18, "Transfers of Assets from Customers" and SIC-31, "Revenue - Barter Transactions Involving Advertising Services". |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | The IFRS 15 introduces a five-step model that will apply to revenue earned from contracts with customers: |
|--------|-----------------------------------------------------------------------------------------------------------|

|   | Step 1: Identify the contract with a customer, including reference to contract combination and accounting for contract modifications. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | Step 2: Identify the separate performance obligations in the contract |
|--------|-----------------------------------------------------------------------|

|   | Step 3: Determine the transaction price, including reference to variable consideration, financing components that are significant to the contract, non-cash consideration and any consideration payable to the customer. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Step 4: Allocate the transaction price to the separate performance obligations on a relative Stand-alone selling price basis using observable information, if it is available, or using estimates and assessments. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Step 5: Recognise revenue when the entity satisfies a performance obligation over time or at a point in time. |
|--------|---------------------------------------------------------------------------------------------------------------|

|   | IFRS 15 is to be applied retrospectively for annual periods beginning on or after January 1, 2017. Early adoption is permitted. IFRS 15 allows an entity to choose to apply a modified retrospective approach, according to which IFRS 15 will only be applied in the current period presented to existing contracts at the date of initial application. No restatement of the comparative periods will be required as long as the disclosures regarding prior periods required by IFRS 15 are included. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company is evaluating the possible impact of IFRS 15 but is presently unable to assess its effect, if any, on the financial statements. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | U. | Adoption of new and revised Standards and interpretations:  (Cont.) New and revised Standards and Interpretations in issue but not yet effective, were not early adopted by the Group and are expected to affect or could affect future periods:Amendments to IAS 16 and IAS 38 regarding acceptable methods of depreciation and amortisation: |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In May 2014, the IASB issued Amendments to IAS 16 and IAS 38 (the "Amendments") regarding the use of a depreciation and amortisation method based on revenue. According to the Amendments, a revenue-based method is not considered to be an appropriate manifestation of consumption since revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As for intangible assets, the revenue-based amortisation method can only be applied under certain circumstances such as when it can be demonstrated that revenue and the consumption of economic benefits of the intangible asset are highly correlated. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Amendments will be applied prospectively in the financial statements for annual periods beginning on or after January 1, 2016. Earlier application is permitted. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company believes the effect on the financial statements of the adoption of the Amendments will be immaterial. IFRS 8 operating segments (Disclosures about aggregation of operating segments) |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The amendments to IFRS 8 (i) require an entity to disclose the judgements made by management in applying the aggregation criteria to operating segments, including a description of the operating segments aggregated and the economic indicators assessed in determining whether the operating segments have ‘similar economic characteristics’; and (ii) clarify that a reconciliation of the total of the reportable segments’ assets to the entity’s assets should only be provided if the segment assets are regularly provided to the chief operating decision-maker. These amendments are effective for annual periods beginning on or after 1 July 2014. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | A. | General: |
|--------|----|----------|

|   | In the application of the Group's accounting policies, which are described in Note 2 above, the Group management is required, in certain cases, to make broad accounting judgments regarding estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on past experience and other factors that are considered to be relevant. Actual results could differ from these estimates. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Management reviews the estimates and underlying assumptions on an ongoing basis. Changes in accounting estimates are only recognized in the period in which the estimate is changed if the change affects only that period or in the period of change and future periods if the change affects both current and future periods. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company is a basic trader of goods, mostly in the Israeli food markets. All the sales are made in accordance with delivery notes, agreed price lists and invoices. The major assumptions are based on contractual commitments where sensitivity is insignificant. In addition, in the process of applying the Group's accounting policies, management makes various judgments, apart from those involving estimations, that can significantly affect the amounts recognized in the financial statements. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Other estimates\assumptions used in our allowances are based on the Company's rich experience in the food market. Any sensitivity analysis of the effect of changes in critical estimates and assumptions would show negligible effect on the Company's financial position or results of operations. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | Significant judgments in applying accounting policies: |
|--------|----|--------------------------------------------------------|

|   | The following are the significant judgments, apart from those involving estimations (see below), that the management have made in the process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognized in financial statements. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Revenue recognition - the Group has recognized in revenues amounted to NIS 312,514 thousands in the year ended December 31, 2015 (NIS 328,741 thousands in the year ended December 31, 2014) for selling food products. Although, in general, the Group does not grant rights of return, its enable for certain customers from time to time to return products. The Group assesses the expected customer returns according to specific information in its possession and its past experience in similar cases. Any 1% upward or downward change in the Group's estimation will increase\decrease the Group's revenues in the amount of NIS  3,125 thousands (NIS 3,287 thousands in the year ended December 31, 2014). As of December 31, 2015, the provision for returns is insignificant. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Useful lives of property, plant and equipment - the Group reviews the estimated useful life of items of property, plant and equipment at the end of each reporting period. During the current year, there were no changes in the estimates of the useful life of items of property, plant and equipment. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Deferred taxes - the Group recognizes deferred tax assets for all of the deductible temporary differences up to the amount as to which it is anticipated that there will be taxable Income against which the temporary difference will be deductible. During each period, for purposes of calculation of the utilizable temporary difference, management uses estimates and approximations as a basis which it evaluates each period. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| NOTE 3 | - | SIGNIFICANT ACCOUNTING JUDGEMENT AND KEY SOURCES OF ESTIMATION (Cont.) |
|--------|---|------------------------------------------------------------------------|

|   | B. | Significant judgments in applying accounting policies: |
|--------|----|--------------------------------------------------------|

|   | • | Employee benefits - The present value of the Group's liability for retirement and pension plan to its employees is based on a large number of inputs, which are determined on the basis of an actuarial valuation, while using a large number of assumptions, including discount rate. Changes in the actuarial assumptions may affect the carrying amount of the Group's liabilities for retirement and pension payments. The Group estimates the discount rate once a year, based on the discount rate of highly rated corporate bonds with similar terms and similar conditions. Other key assumptions are determined based on market conditions and the Group's past experience. For additional information about the assumptions used by the Group, see Note 11. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A. | Cash and cash equivalents - composition: |
|--------|----|------------------------------------------|

|                     |   | December 31, |   |
|--------------------------|--------|--------------|--------|
|                     |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                     |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                     |   |         |   |   |   |   |   |   |   |
| Cash in bank             |   |         | 19,953 |   |   |   | 27,949 |   |   |   | 5,133 |   |
| Short-term bank deposits |   |         | 59,468 |   |   |   | 54,953 |   |   |   | 15,240 |   |
|                     |   |         | 79,421 |   |   |   | 82,902 |   |   |   | 20,373 |   |

|   | B. | Financial assets at fair value through profit or loss: |
|--------|----|--------------------------------------------------------|

|                                                                   |   | December 31, |    |
|------------------------------------------------------------------------|--------|--------------|---------|
|                                                                   |   | 2 0 1 5      |    |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                                                   |   | NIS          |    |   | NIS |   |   | US Dollars |   |
| Financial assets carried at fair value through profit or loss (FVTPL): |   |         |    |   |   |   |   |   |   |
| Shares                                                                 |   |         | 17,346  |   |   |   | 6,532 |   |   |   | 4,445 |   |
| Governmental loan and other bonds                                      |   |         | 127,661 |   |   |   | 48,501 |   |   |   | 32,712 |   |
| Certificate of participation in mutual fund                            |   |         | -       |   |   |   | 67,700 |   |   |   | - |   |
|                                                                   |   |         | 145,007 |   |   |   | 122,733 |   |   |   | 37,162 |   |

|   | C. | Trade receivables: |
|--------|----|--------------------|

|   | (1) | Composition |
|--------|-----|-------------|

|                                |   | December 31, |   |
|-------------------------------------|--------|--------------|--------|
|                                |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                                |   |         |   |   |   |   |   |   |   |
| Trade receivables(*)                |   |         | 84,840 |   |   |   | 86,735 |   |   |   | 21,743 |   |
| Less - allowance for doubtful debts |   |         | 3,448  |   |   |   | 45 |   |   |   | 884 |   |
|                                |   |         | 81,392 |   |   |   | 86,690 |   |   |   | 20,859 |   |

|   |  (*) | Less provision for returns in the sum of NIS 1,500 (as of December 31, 2014 – NIS 1,500). |
|--------|-----------|-------------------------------------------------------------------------------------------------|

----

|   | C. | Trade receivables (Cont.): |
|--------|----|----------------------------|

|   | (1) | Composition (Cont.): The average credit period on sales of goods is 86 days. Allowance for doubtful debts is based upon factors surrounding the credit risk of specific customers and other information which our management believes adequately covers all anticipated losses in respect of trade receivables.Before accepting any new customer, the Group assesses the potential customer's credit quality and defines credit limits by customer. Credit limits are examined periodically based on the Company's collection experience with each customer and additional external information. 99% of the Company's customers complied with their credit limits.From total trade receivables balances as of December 31, 2015, the sum of NIS 13,213 is with respect to debt owed by a significant customer. The Group does not have additional customers whose debt balance to the Group exceeds 10% of the trade receivables balance as of December 31, 2015 (in 2014 – NIS 12,576). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Movement in the allowance for doubtful debts: |
|--------|-----|-----------------------------------------------|

|                                  |   | December 31, |   |
|---------------------------------------|--------|--------------|--------|
|                                  |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                  |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                                  |   |         |   |   |   |   |   |   |   |
| Balance at beginning of the year      |   |         | 45     |   |   |   | 342 |   |   |   | 12 |   |
| Change in allowance doubtful debts(*) |   |         | 3,403  |   |   |   | 18 |   |   |   | 872 |   |
| Bad and doubtful debts                |   |         | -      |   |   |   | (315 | ) |   |   |   |   |
| Balance at end of the year            |   |         | 3,448  |   |   |   | 45 |   |   |   | 884 |   |

|   | D. | Other receivablesand prepaid expenses: |
|--------|----|----------------------------------------|

|                           |   | December 31, |   |
|--------------------------------|--------|--------------|--------|
|                           |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                           |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                           |   |         |   |   |   |   |   |   |   |
| Prepaid expenses               |   |         | 308    |   |   |   | 346 |   |   |   | 79 |   |
| Income receivables             |   |         | 645    |   |   |   | 475 |   |   |   | 165 |   |
| Advances to suppliers          |   |         | 4,147  |   |   |   | 1,298 |   |   |   | 1,063 |   |
| Government authorities         |   |         | 3,124  |   |   |   | 788 |   |   |   | 801 |   |
| Interested and related parties |   |         | -      |   |   |   | 197 |   |   |   |   |   |
| Others                         |   |         | 226    |   |   |   | 596 |   |   |   | 58 |   |
|                           |   |         | 8,451  |   |   |   | 3,700 |   |   |   | 2,166 |   |

----

|   | E. | Inventories |
|--------|----|-------------|

|                   |   | December 31, |   |
|------------------------|--------|--------------|--------|
|                   |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                   |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                   |   |         |   |   |   |   |   |   |   |
| Finished products      |   |         | 25,128 |   |   |   | 43,639 |   |   |   | 6,440 |   |
| Merchandise in transit |   |         | 9,389  |   |   |   | 4,947 |   |   |   | 2,406 |   |
|                   |   |         | 34,517 |   |   |   | 48,586 |   |   |   | 8,846 |   |

|   | F. | Investment in short term deposits |
|--------|----|-----------------------------------|

|   | There is a deposit in the sum of 5 million US dollars in an Azerbaijani bank for one year, bearing an annual interest of 4.5%. The deposit was repaid in full and transfer to an Israeli bank, after the date of the balance sheet. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Subsidiary                                           |   | Location |   | Jurisdiction of Organization |   | Company's Ownership Interest |   |
|------------------------------------------------------|--------|----------|--------|------------------------------|--------|------------------------------|--------|
|                                                 |   |     |   |                         |   | December 31,                 |   |
|                                                 |   |     |   |                         |   | 2 0 1 5                      |   |   | 2 0 1 4 |   |
|                                                 |   |     |   |                         |   |                         |   |   |   |   |
| Gold Frost Ltd. ("Goldfrost")                        |   | Israel   |   | Israel                       |   |                         | 100.00 | % |   |   | 100.00 | % |
| WF Kosher Food Distributors Ltd. ("WF") - non active |   | USA      |   | USA                          |   |                         | -      |   |   |   | - |   |
| W.F.D. Ltd.                                          |   | Israel   |   | Israel                       |   |                         | 100.00 | % |   |   | 100.00 | % |
| B.H.W.F.I Ltd. ("BHWFI")                             |   | Israel   |   | Israel                       |   |                         | 100.00 | % |   |   | 100.00 | % |

| Scope of investment in investee (*) |   | December 31, |    |
|-------------------------------------|--------|--------------|---------|
|                                |   | 2 0 1 5      |    |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                |   | NIS          |    |   | NIS |   |   | US Dollars |   |
|                                |   |         |    |   |   |   |   |   |   |
| Goldfrost                           |   |         | 169,143 |   |   |   | 153,246 |   |   |   | 43,348 |   |
| BHWFI                               |   |         | 20,068  |   |   |   | 19,446 |   |   |   | 5,143 |   |
| W.F.D. Ltd.                         |   |         | 75      |   |   |   | 75 |   |   |   | 19 |   |
|                                |   |         | 189,286 |   |   |   | 172,767 |   |   |   | 48,510 |   |

|   | (*) | The scope of the direct investment in investee is computed in a net amount based on the consolidated financial statements attributable to the equity holders of the parent, of total assets less total liabilities which present in the Company's consolidated financial statements financial information about the investee, including goodwill. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                   |   |     |   |   | Machinery |   |   |     |   |   | Computers |   |   |      |   |   |   |   |
|----------------------------------------|--------|----------|--------|--------|-----------|--------|--------|----------|--------|--------|-----------|--------|--------|-----------|--------|--------|--------|--------|
|                                   |   | Land and |   |   | and       |   |   | Motor    |   |   | and       |   |   | Office    |   |   |   |   |
|                                   |   | Building |   |   | equipment |   |   | Vehicles |   |   | equipment |   |   | Furniture |   |   | Total  |   |
| Consolidated Cost:                     |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |
| Balance -January 1, 2014               |   |     | 46,646 |   |      |   | 3,262  |     |   |   | 11,744    |   |   |      | 3,796  |   |   |   | 1,215 |   |   |   | 66,663 |   |
| Changes during 2014:                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Additions                              |   |     | 6,662  |   |      |   | 185    |     |   |   | 1,557     |   |   |      | 210    |   |   |   | 74 |   |   |   | 8,688 |   |
| Dispositions                           |   |     | (225   | )      |      |   | -      |     |   |   | (1,300    | )      |   |      | -      |   |   |   | - |   |   |   | (1,525 | ) |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2014            |   |     | 53,083 |   |      |   | 3,447  |     |   |   | 12,001    |   |   |      | 4,006  |   |   |   | 1,289 |   |   |   | 73,826 |   |
| Changes during 2015:                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Additions                              |   |     | 1,328  |   |      |   | 900    |     |   |   | 255       |   |   |      | 376    |   |   |   | 20 |   |   |   | 2,879 |   |
| Dispositions                           |   |     | -      |   |      |   | (68    | )        |   |   | (596      | )      |   |      | -      |   |   |   | - |   |   |   | (664 | ) |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2015            |   |     | 54,411 |   |      |   | 4,279  |     |   |   | 11,660    |   |   |      | 4,382  |   |   |   | 1,309 |   |   |   | 76,041 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Accumulated depreciation:              |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Balance - January 1, 2014              |   |     | 11,846 |   |      |   | 1,166  |     |   |   | 8,658     |   |   |      | 3,235  |   |   |   | 784 |   |   |   | 25,689 |   |
| Changes during 2014:                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Additions                              |   |     | 1,810  |   |      |   | 328    |     |   |   | 1,396     |   |   |      | 88     |   |   |   | 12 |   |   |   | 3,634 |   |
| Dispositions                           |   |     | (3     | )      |      |   | -      |     |   |   | (741      | )      |   |      | -      |   |   |   | - |   |   |   | (744 | ) |
| Balance - December 31, 2014            |   |     | 13,653 |   |      |   | 1,494  |     |   |   | 9,313     |   |   |      | 3,323  |   |   |   | 796 |   |   |   | 28,579 |   |
| Changes during 2015:                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Additions                              |   |     | 1,725  |   |      |   | 493    |     |   |   | 1,437     |   |   |      | 59     |   |   |   | 11 |   |   |   | 3,725 |   |
| Dispositions                           |   |     | -      |   |      |   | (8     | )        |   |   | (421      | )      |   |      | -      |   |   |   | - |   |   |   | (429 | ) |
| Balance  - December 31, 2015 |   |     | 15,378 |   |      |   | 1,979  |     |   |   | 10,329    |   |   |      | 3,382  |   |   |   | 807 |   |   |   | 31,875 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Net book value:                        |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| December 31, 2015                      |   |     | 39,033 |   |      |   | 2,300  |     |   |   | 1,331     |   |   |      | 1,000  |   |   |   | 502 |   |   |   | 44,166 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| December 31, 2014                      |   |     | 39,430 |   |      |   | 1,953  |     |   |   | 2,688     |   |   |      | 683    |   |   |   | 493 |   |   |   | 45,247 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Net book value (Dollars in thousands): |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| December 31, 2015                      |   |     | 10,003 |   |      |   | 589    |     |   |   | 341       |   |   |      | 256    |   |   |   | 129 |   |   |   | 11,319 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| December 31, 2014                      |   |     | 10,105 |   |      |   | 501    |     |   |   | 689       |   |   |      | 175    |   |   |   | 126 |   |   |   | 11,596 |   |

----

|   | A. | Trade payables |
|--------|----|----------------|

|            |   | December 31, |   |
|-----------------|--------|--------------|--------|
|            |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|            |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|            |   |         |   |   |   |   |   |   |   |
| Open accounts   |   |         | 11,147 |   |   |   | 13,500 |   |   |   | 2,857 |   |
| Checks payables |   |         | 1,716  |   |   |   | 2,018 |   |   |   | 440 |   |
|            |   |         | 12,863 |   |   |   | 15,518 |   |   |   | 3,297 |   |

|   | B. | Other payables and accrued expenses |
|--------|----|-------------------------------------|

|                          |   | December 31, |   |
|-------------------------------|--------|--------------|--------|
|                          |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                          |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                          |   |         |   |   |   |   |   |   |   |
| Government authorities        |   |         | 1,166  |   |   |   | 1,290 |   |   |   | 299 |   |
| Customer advances             |   |         | 733    |   |   |   | 1,329 |   |   |   | 188 |   |
| Related parties (see note 23) |   |         | 79     |   |   |   | 3,068 |   |   |   | 20 |   |
| Accrued expenses              |   |         | 1,675  |   |   |   | 1,323 |   |   |   | 429 |   |
|                          |   |         |   |   |   |   |   |   |   |   |   |   |
|                          |   |         | 3,653  |   |   |   | 7,010 |   |   |   | 936 |   |

|        |   | Interest rate |   |   | Liabilities        |   |   |        |   |
|-------------|--------|---------------|--------|--------|--------------------|--------|--------|-------------|--------|
|        |   | As of         |   |   | Current            |   |   | Non-current |   |   | Total |   |
|        |   | December 31   |   |   | As of December 31, |   |
|        |   |  2 0 1 5 |   |   | 2 0 1 5            |   |   | 2 0 1 4     |   |   |  2 0 1 5 |   |   |  2 0 1 4 |   |   | 2 0 1 5 |   |   |  2 0 1 4 |   |
|        |   | annual        |   |   |               |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        |   | %             |   |   |               |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Banks debt: |   |          |   |   |               |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NIS         |   |          | P-0.5% |   |               |   | 16     |        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16 |   |   |   | - |   |

----

|   | 1. | In October 2013, the Company filed a claim with the Rishon Le'Zion Magistrate Court against the Israel Customs and VAT Department in the framework of which it demanded that the Court nullify the charge issued to the Company by the Central Customs House, which argued that, for customs purposes, the Company did not include various costs that it had incurred in order to receive Kosher certification for the food products that it had imported over a seven-year period, thereby underpaying customs duties (in this paragraph, the "Charge Notice"). The Charge Notice requires the payment of total customs duties of approximately NIS 150 thousand (US Dollars 39 thousand). According to the estimate of legal advisers to the Company, there is a small likelihood of cancelling the notice and therefore partial provision was made in the financial statements as of December, 31 2014 in respect of the Charge Notice. In June 2014 and August 2015, a District Court denied appeals in similar cases by other food products companies. On December 2, 2015, the Supreme Court heard motions to appeal in the matter of inclusion of costs of kosher certification in the value of goods imported, for tax purposes, and denied the motions to appeal, and thus confirmed that the judgments rendered by the District Courts. In light of the aforesaid, the chances that the Company's lawsuit will succeed was very low and the Company has reached agreements with the Tax Authority that its lawsuit will be withdrawn without order for costs. The Company recognized expenditures with respect to the costs of kosher certification, in the sum of approximately NIS 0.6 million in the financial statement as of December, 31 2015.  After the date of the balance sheet, the Company paid the entire shortfall amount including interest, linkage, and VAT, in the sum of approximately NIS 0.8 million. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | A. | Defined benefit plans - General: |
|--------|----|----------------------------------|

|   | According to labor laws and the Severance Pay Law in Israel, the Group is required to pay compensation to an employee upon dismissal or retirement (including employees who quit their job under other specific circumstances). The computation of the employee benefit liability is made according to the current employment contract based on the employee's latest salary which, in the opinion of management, establishes the entitlement to receive the compensation and considering the employment term. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The Group accounts for that part of the payment of compensation that is not covered by contributions in defined contribution plans, as a defined benefit plan for which an employee benefit liability is recognized and for which the Group deposits amounts in qualifying insurance policies. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The plan assets, once funded, are outside of the Company's management, which does not make any decisions regarding the composition of the assets nor the allocations to any investment alternatives. The present value of the defined benefit obligation and the related current service cost and past service cost were measured at present value (without deducting plan assets) of future payments expected to settle the obligation in consideration of employee's past and current services. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The current value of the Group's post-employment benefits obligation is based on an actuarial estimation. The actuarial estimation was performed by Mrs. Orit Nir, actuarial, member of Israel Association of Actuaries. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | Composition: |
|--------|----|--------------|

|                                 |   | December 31, |   |
|--------------------------------------|--------|--------------|--------|
|                                 |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                 |   | NIS          |   |   | NIS |   |   | US Dollars |   |
| Post Employment Benefits:            |   |         |   |   |   |   |   |   |   |
| Benefits to retirees                 |   |         | 679    |   |   |   | 635 |   |   |   | 174 |   |
|                                 |   |         |   |   |   |   |   |   |   |   |   |   |
| Short term employee benefits:        |   |         |   |   |   |   |   |   |   |   |   |   |
| Accrued payroll and related expenses |   |         | 1,453  |   |   |   | 1,566 |   |   |   | 372 |   |
| Short term absence compensation      |   |         | 487    |   |   |   | 554 |   |   |   | 125 |   |
|                                 |   |         | 1,940  |   |   |   | 2,120 |   |   |   | 497 |   |

|                               |   | Valuation at |   |
|------------------------------------|--------|--------------|--------|
|                               |   | 2 0 1 5      |   |   | 2 0 1 4 |   |
|                               |   | %            |   |   | % |   |
| Discount rate                      |   |         | 3.28   |   |   |   | 3.25 |   |
| Expected return on the plan assets |   |         | 3.28   |   |   |   | 1.5-3.5 |   |
| Rate of increase in compensation   |   |         | 4      |   |   |   | 4 |   |
|                               |   |         |   |   |   |   |   |   |
| Expected rate of termination:      |   |         |   |   |   |   |   |   |
| 0-1 years                          |   |         | 35     |   |   |   | 35 |   |
| 1-2 years                          |   |         | 30     |   |   |   | 30 |   |
| 2-3 years                          |   |         | 20     |   |   |   | 20 |   |
| 3-4 years                          |   |         | 10     |   |   |   | 10 |   |
| 4-5 years                          |   |         | 10     |   |   |   | 10 |   |
| 5 years and more                   |   |         | 7.5    |   |   |   | 7.5 |   |

----

|   | B. | Composition: (Cont.) |
|--------|----|----------------------|

|   | The assumptions regarding future mortality rates are based on mortality tables published and approved by the Ministry of Finance and updated as of December 31, 2001.  The mortality rate of an active participant at retirement age (67 for men, 64 for women), is 0.6433% for men and 0.3574% for women. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The provisions of Standard 19 stipulate that interest used to capitalize assets and liabilities should reflect risk free interest that is interest on highly rated corporate bonds with similar maturity periods and terms. Until November 2014, absent quality data and information about bonds of this type, what was utilized was the interest on long-term index linked government bonds (index linked Galil)/or long-term shackle government bonds (NIS Dawn - “Shachar”). Following a decision by the Securities Authority, according to which there is a deep market for corporate bonds, and according to the publication of Accounting Staff Position number 12-1, as of this report, the capitalization interest is that of high quality corporate bonds. Use of a quality curve as stated above, is published by quoting companies which specialize in this field. The nominal interest rate for the capitalization appropriate for corporate bonds with high rankings as aforesaid, as of December 31, 2015, is 3.28% per year. Amounts recognized in profit or loss and in other comprehensive income in respect of these defined benefit plans are as follows: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                    |   | Year ended December 31, |   |
|-------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                    |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                                                    |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                                                                    |   |                    |   |   |   |   |   |   |   |
| Current service cost                                                    |   |                    | 790    |   |   |   | 756 |   |   |   | 202 |   |
| Interest cost                                                           |   |                    | 123    |   |   |   | 115 |   |   |   | 32 |   |
| Expected return on the plan assets                                      |   |                    | (108   | ) |   |   | (103 | ) |   |   | (28 | ) |
| Employer contribution                                                   |   |                    | (830   | ) |   |   | (803 | ) |   |   | (213 | ) |
| Interest losses on severance payment allocated to remuneration benefits |   |                    | 21     |   |   |   | 12 |   |   |   | 5 |   |
| Actuarial losses (gains) recognized in the year                         |   |                    | -      |   |   |   | 107 |   |   |   | 0 |   |
| Actuarial gains arising from experience adjustments                     |   |                    | 150    |   |   |   | (256 | ) |   |   | 38 |   |
| Actuarial losses arising from changes in financial assumptions          |   |                    | (11    | ) |   |   | 240 |   |   |   | (3 | ) |
| Benefit paid during the year                                            |   |                    | (92    | ) |   |   | (74 | ) |   |   | (24 | ) |
|                                                                    |   |                    | 43     |   |   |   | (6 | ) |   |   | 11 |   |

----

|   | C. | Defined benefit plans: Movements in the present value of the defined benefit obligation in the current period were as follows: |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------|

|                                                          |   | Year ended December 31, |   |
|---------------------------------------------------------------|--------|-------------------------|--------|
|                                                          |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                                          |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                                                          |   |                    |   |   |   |   |   |   |   |
| Opening defined benefit obligation                            |   |                    | 3,800  |   |   |   | 3,395 |   |   |   | 974 |   |
| Current service cost                                          |   |                    | 789    |   |   |   | 756 |   |   |   | 202 |   |
| Interest cost                                                 |   |                    | 123    |   |   |   | 115 |   |   |   | 32 |   |
| Actuarial gains                                               |   |                    | -      |   |   |   | 107 |   |   |   |   |   |
| Actuarial losses arising from experience adjustments          |   |                    | (13    | ) |   |   | 126 |   |   |   | (3 | ) |
| Actuarial gains arising from changes in financial assumptions |   |                    | 150    |   |   |   | (259 | ) |   |   | 38 |   |
| Benefits paid                                                 |   |                    | (492   | ) |   |   | (440 | ) |   |   | (126 | ) |
| Closing defined benefit obligation                            |   |                    | 4,357  |   |   |   | 3,800 |   |   |   | 1,117 |   |

|                                                                    |   | Year ended December 31, |   |
|-------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                    |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                                                    |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                                                                    |   |                    |   |   |   |   |   |   |   |
| Opening defined benefit assets                                          |   |                    | 3,165  |   |   |   | 2,751 |   |   |   | 811 |   |
| Expected return on the plan assets                                      |   |                    | 108    |   |   |   | 103 |   |   |   | 28 |   |
| Changes in financial assumptions                                        |   |                    | (2     | ) |   |   | (114 | ) |   |   | (1 | ) |
| Employer contribution                                                   |   |                    | 830    |   |   |   | 803 |   |   |   | 213 |   |
| Benefits paid                                                           |   |                    | (402   | ) |   |   | (366 | ) |   |   | (103 | ) |
| Interest losses on severance payment allocated to remuneration benefits |   |                    | (21    | ) |   |   | (12 | ) |   |   | (5 | ) |
| Closing defined benefit assets                                          |   |                    | 3,678  |   |   |   | 3,165 |   |   |   | 943 |   |

|                                                                   |   | Year ended December 31, |   |
|------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                   |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                                                   |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                                                                   |   |                    |   |   |   |   |   |   |   |
| Present value of funded liability                                      |   |                    | 4,357  |   |   |   | 3,800 |   |   |   | 1,117 |   |
| Fair value of plan assets - accumulated deposit in executive insurance |   |                    | 3,678  |   |   |   | 3,165 |   |   |   | 943 |   |
| Net liability deriving from defined benefit obligation                 |   |                    | 679    |   |   |   | 635 |   |   |   | 174 |   |

----

|   | C. | Defined benefit plans: (Cont.) Actual return on the plan's assets and compensation rights: |
|--------|----|-------------------------------------------------------------------------------------------------|

|                           |   | Year ended December 31, |   |
|--------------------------------|--------|-------------------------|--------|
|                           |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                           |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                           |   |                    |   |   |   |   |   |   |   |
| Actual return on plan's assets |   |                    | 108    |   |   |   | 103 |   |   |   | 28 |   |

|   |   | Sensitivity analyzes principal actuarial assumptions:The sensitivity analyzes below have been determined based on reasonably possible changes in actuarial assumptions at the end of the reporting period. Sensitivity analysis does not account for any existing interdependence between assumptions:If the discount rate was increased (decreased) by 0.5%, the defined benefit obligation would have increased / decreased by NIS 203 thousand (Us Dollars 52 thousand).If the rate hikes expected salaries would have increased (small) by 0.5%, the defined benefit obligation would have increased / decreased by NIS 139 thousand (Us Dollars 36 thousand). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | Short term employee benefits: |
|--------|----|-------------------------------|

|   | (1) | Paid Annual Leave In accordance with the Annual Leave Law, 1951, Company employees are entitled to several leave days per each working year. According to the above law (and addendums determined in personal contracts between the Company and several employees), the leave days due to an employee during the year is established based on the number of years of employment of that employee.The employee may use leave days based on the employee's needs and with the Company's consent and to accumulate the remaining unused leave days based on the employee's personal employment contract. Employee who ceases employment before using the balance of leave days is entitled to payment for the above balance of leave days.The balance of the Group's vacation provision is in accordance with the leave entitlement of each individual employee, according to his individual agreement with the company to which the employee belongs and in accordance with the employee's salary.  The balance of the Group’s vacation provision for December 31, 2015, as NIS 365 thousands (NIS 411 thousands, as of December 31, 2014). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Paid Sick Leave In accordance with the Sick Pay Law, 1976, the Company's employees are entitled to 18 sick days per year (1.5 sick days per month). Sick days may be used only with a medical confirmation of an employee's illness. Employee who ceases employment before using the sick days due to the employee is not entitled to payment for the above balance of sick days and, therefore, such provision is not recorded in the Company's books. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | A. | Composition: |
|--------|----|--------------|

|                                     |   | Year ended December 31 |   |
|------------------------------------------|--------|------------------------|--------|
|                                     |   | 2 0 1 5                |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                     |   | NIS                    |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
| Current taxes:                           |   |                   |   |   |   |   |   |   |   |   |   |   |
| Current taxes                            |   |                   | 5,745  |   |   |   | 8,154 |   |   |   | 8,459 |   |   |   | 1,440 |   |
| Taxes in respect of prior years          |   |                   | (69    | ) |   |   | 36 |   |   |   | 539 |   |   |   | (18 | ) |
|                                     |   |                   | 5,676  |   |   |   | 8,190 |   |   |   | 8,998 |   |   |   | 1,422 |   |
|                                     |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred taxes:                          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred taxes from continued operations |   |                   | (3,110 | ) |   |   | (1,004 | ) |   |   | 519 |   |   |   | (764 | ) |
|                                     |   |                   | 2,566  |   |   |   | 7,186 |   |   |   | 9,517 |   |   |   | 658 |   |

|   | B. | Reconciliation of the statutory tax rate to the effective tax rate: |
|--------|----|---------------------------------------------------------------------|

|                                                                                                                   |   | Year ended December 31, |   |
|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                   |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                                                                                                   |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                                                                                                   |   |                    |   |   |   |   |   |   |   |   |   |   |
| Income before Income taxes                                                                                             |   |                    | 9,410  |   |   |   | 26,040 |   |   |   | 41,325 |   |   |   | 2412 |   |
| Statutory tax rate                                                                                                     |   |                    | 26.5   | % |   |   | 26.5 | % |   |   | 25 | % |   |   | 26.5 | % |
| Tax computed by statutory tax rate                                                                                     |   |                    | 2,494  |   |   |   | 6,901 |   |   |   | 10,331 |   |   |   | 639 |   |
|                                                                                                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax increments (savings) due to:                                                                                       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-deductible expenses                                                                                                |   |                    | 29     |   |   |   | 63 |   |   |   | 166 |   |   |   | 7 |   |
| Tax exempt Income                                                                                                      |   |                    | (98    | ) |   |   | (73 | ) |   |   | (224 | ) |   |   | (25 | ) |
| Temporary differences for which deferred taxes were not provided                                                       |   |                    | 170    |   |   |   | (43 | ) |   |   | (1,341 | ) |   |   | 43 |   |
| Differences in the definition of capital and non-monetary items for tax purposes and financial reporting purposes |   |                    | -      |   |   |   | 265 |   |   |   | - |   |   |   |   |   |
| Previous year taxes                                                                                                    |   |                    | (69    | ) |   |   | 36 |   |   |   | 539 |   |   |   | (18 | ) |
| Other                                                                                                                  |   |                    | 40     |   |   |   | 37 |   |   |   | 46 |   |   |   | 10 |   |
|                                                                                                                   |   |                    | 2,566  |   |   |   | 7,186 |   |   |   | 9,517 |   |   |   | 658 |   |

----

|   | C. | Deferred Taxes: |
|--------|----|-----------------|

|                                                          |   |          |   |   | Recognized   |   |   |           |   |   |           |   |
|---------------------------------------------------------------|--------|---------------|--------|--------|--------------|--------|--------|----------------|--------|--------|----------------|--------|
|                                                          |   | January       |   |   | in profit or |   |   | December       |   |   | December       |   |
|                                                          |   |  1, 2015 |   |   | loss         |   |   |  31, 2015 |   |   |  31, 2015 |   |
|                                                          |   | NIS           |   |   | NIS          |   |   | NIS            |   |   | US Dollars     |   |
| Deferred taxes arise from the following:                      |   |          |   |   |         |   |   |           |   |   |           |   |   |   |   |
| Financial assets carried at fair value through profit or loss |   |          | 23     |   |         |   | (111   | )              |   |   | (88            | )      |   |   | (23 | ) |
| Employees benefits                                            |   |          | 317    |   |         |   | (34    | )              |   |   | 283            |   |   |   | 73 |   |
| Allowance for doubtful accounts                               |   |          | 12     |   |         |   | 901    |           |   |   | 913            |   |   |   | 234 |   |
|                                                          |   |          | 352    |   |         |   | 756    |           |   |   | 1,108          |   |   |   | 284 |   |
| Carry forward tax losses                                      |   |          | 153    |   |         |   | 2,354  |           |   |   | 2,507          |   |   |   | 642 |   |
|                                                          |   |          | 505    |   |         |   | 3,110  |           |   |   | 3,615          |   |   |   | 926 |   |

|                                                          |   |          |   |   | Recognized   |   |   |           |   |   |           |   |
|---------------------------------------------------------------|--------|---------------|--------|--------|--------------|--------|--------|----------------|--------|--------|----------------|--------|
|                                                          |   | January       |   |   | in profit or |   |   | December       |   |   | December       |   |
|                                                          |   |  1, 2014 |   |   | loss         |   |   |  31, 2014 |   |   |  31, 2014 |   |
|                                                          |   | NIS           |   |   | NIS          |   |   | NIS            |   |   | US Dollars     |   |
| Deferred taxes arise from the following:                      |   |          |   |   |         |   |   |           |   |   |           |   |   |   |   |
| Financial assets carried at fair value through profit or loss |   |          | (1,130 | )      |         |   | 1,153  |           |   |   | 23             |   |   |   | 6 |   |
| Employees benefits                                            |   |          | 256    |   |         |   | 61     |           |   |   | 317            |   |   |   | 82 |   |
| Allowance for doubtful accounts                               |   |          | 91     |   |         |   | (79    | )              |   |   | 12             |   |   |   | 3 |   |
|                                                          |   |          | (783   | )      |         |   | 1,135  |           |   |   | 352            |   |   |   | 91 |   |
| Carry forward tax losses                                      |   |          | 284    |   |         |   | (131   | )              |   |   | 153            |   |   |   | 39 |   |
|                                                          |   |          | (499   | )      |         |   | 1,004  |           |   |   | 505            |   |   |   | 130 |   |

|   | Deferred taxes were computed at rates of 26.5%. |
|--------|-------------------------------------------------|

|   | D. | Additional Information |
|--------|----|------------------------|

|   | (1) | The company and the consolidated companies have not yet been issued final tax assessments as of the date of their establishment. In accordance with the provisions of Section 145 of the Income Tax Ordinance, assessments up through and including 2011 are considered final, subject to certain restrictions. On September 26, 2011, the recommendations of the Committee for Socio-Economic Change headed by Prof. Manuel Trachtenberg were made public. These recommendations contain several changes in the taxation field which, if accepted, are not expected to have a significant impact on the Group's financial statements and reporting results. The key recommendations of the Committee in the taxation field: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a) | Cancellation of the planned reductions in income tax and corporate tax scheduled for the coming years effective from 2012. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------|

|   | b) | Increase of the corporate tax rate in 2012 to 25%. |
|--------|----|----------------------------------------------------|

|   | c) | Increase of the capital gains tax and betterment tax rates. |
|--------|----|-------------------------------------------------------------|

----

|   | D. | Additional Information (Cont.) |
|--------|----|--------------------------------|

|   | (2) | On July 30, 2013, the "Knesset" approved the third reading of the "Arrangements Law" ("the Law") and on August 5, 2013 it was published in the registry. The relevant provisions to the Company are increase in the corporate tax from the 2014 tax year to 26.5% (increase of 1.5%). As of December 31, 2014, deferred tax balances that are measured according to the corporate tax have been computed according the provisions of the Law. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The Income Tax Ordinance Amendment Law: At the beginning of January 2016, the Income Tax Ordinance Amendment Law was published, which stipulates that the corporate tax rate will be reduced to a rate of 25% (instead of 26.5%). The new corporate tax rate will apply to income produced or generated as of January 1, 2016.In accordance with the provisions of IAS 12 – "Taxes on Income," deferred tax balances as of December 31, 2015 do not take into consideration the provisions of said Law, where as its enactment was completed after the end of the reporting period.Had the enactment of the Law and actually completed by the end of the reporting period, then the deferred tax assets of the Company as of December 31, 2015 would have been reduced by a total of approximately NIS 202 thousands, and to the Company's tax expenditures for the year ending on that same date would have increased by NIS 202 thousands. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | A. | Commitments: |
|--------|----|--------------|

|   | (1) | The Company has agreed to pay to certain of the customers in the private sector incentives calculated as a fixed percentage of the annual sales to such customer. The incentives also includes penetration discounts for sales of our new products, shelves stocking fees and payments for participation in product advertisements. The extent of such incentives calculated as a percentage of the annual sales turnover of each relevant customer (depending on the agreement with each customer) and are usually awarded as part of a written annual framework agreement. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | As of June 1, 1998, the Company entered into certain management services agreements with certain companies controlled by each of Messrs. Joseph and Zwi Williger, respectively (collectively, the “Williger Management Companies”), pursuant to which Messrs. Joseph and Zwi Williger are to provide management services on behalf of the Williger Management Companies to the Company (the “Management Services Agreements”). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   (a) | The current monthly services fees according to the Management Services Agreements will cease to be linked to the US Dollar and will be translated to NIS 102,900 (excluding VAT) linked to changes in the Israeli consumer price index which is NIS 120,476 per month as of December 31, 2015 (US Dollars 30,875). |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   (b) | The terms of the Management Services Agreements are to be extended indefinitely, subject to clause (3) below; provided however that in the event the Williger Management Company provides the management services to the Company without the presence of Messrs. Zwi Williger or Joseph Williger, as the case may be, and/or in the case of the death and/or permanent disability of Messrs. Zwi Williger or Joseph Williger, the Company will be entitled to terminate the Management Services Agreement immediately. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | A.  | Commitments: (Cont.) |
|--------|----------|----------------------|

|   |   (c) | Each of the parties to the Management Services Agreements may terminate the agreement at any time, and for any reason, by prior written notice which will be delivered to the other party as follows: The Company may terminate the agreement at any time, and for any reason, by prior written notice of at least 36 months.The Williger Management Company may terminate the agreement at any time, by prior written notice of at least 180 days. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   (d) | If a Williger Management Company is to terminate the Management Services Agreement, the Williger Management Company would be entitled to receive the management fees for a period of twelve (12) months, which would begin after the prior notice period, whether or not it provides the Company with any management services during such twelve-month period. In addition, the Management Services Agreements contain provisions entitling each of Messrs. Zwi Williger and Joseph Williger to 30 vacation days per year, during which days the applicable Williger Management Company will not provide management services to the Company. Unused vacation days may be accumulated and paid for in lieu of taking such days as vacation. |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | A.  | Commitments: (Cont.) |
|--------|----------|----------------------|

----

|   | A. | Commitments: (Cont.) |
|--------|----|----------------------|

|   | (3) | On April 1, 1997 the Company entered into an agreement to provide the Parent Company administrative services pursuant to which the Company may provide office facilities leased by the Parent Company for a monthly fee of NIS 4,500 to be adjusted annually for changes in the Israeli CPI, which is NIS 6,965 (US Dollars 1,785) per month as of December 31, 2015. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | The Company does not generally enter into written agency or other agreements with its suppliers. However, the Company has written agreements with 24 foreign suppliers that confirm the exclusive appointment of the Company as the sole agent and/or distributor of such suppliers either with respect to a specific product or with respect to a line of products, within the State of Israel. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | The Company signed distribution agreements with distributors that distribute the Company's products all over Israel for a commission that range 7% to 10% of the distributor sales, depending on the product. The Company has no commitment to any of those distributors for ongoing relationship. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | B.  | Contingent liabilities: |
|--------|----------|-------------------------|

|   | (1) | In December 2013 and December 2014, the Company was served with two lawsuits and motions to certify them as class action lawsuits in accordance with Israel's Class Action Claims Law, 5766 – 2006, whose subject matter and cause of action, according to what is claimed, is the improper marketing of products which the Company imports and sells in a manner which allegedly misleads the consumer public. The class which the petitioning plaintiffs wish to represent is every resident of Israel who purchased the above Company products. The amount of the lawsuits, if successful, is estimated by the plaintiffs in the amount of approximately NIS 27.2 million. In light of the preliminary procedural stage of each lawsuit, the Company cannot, based on the position of its legal advisors, evaluate the likelihood of their success or failure and, therefore, no provision has been made in the financial statements of the Company with respect to the aforesaid. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | In August 2008, a lawsuit was filed against the Company to the Supreme Court in New York in the amount of US Dollars 143,000 (the amount of which was adjusted based on the alleged length of the lease and according to the suit the amount reached a total of US Dollars 735,000 on the date of termination of the alleged lease rental period) for an alleged guarantee of the Company for the payment of lease for a warehouse and offices that WF kosher food distributes Ltd., (WF) , a subsidiary of the Company, allegedly hired for its operations from the owner of Laish Israeli Food Products Ltd. ("Laish"), which sold its operations in early 2007 to WF. In September 2008, the Company submitted its statement of defense. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | In August 2014, the Ashdod Customs Office sent our subsidiary Gold Frost Ltd. ("Gold Frost") a charge notice claiming that goods imported by Gold Frost were improperly classified (hereinafter in this subsection – the "Charge Notice"). The customs amount demanded in the Charge Notice was approximately NIS 1.9 million. During the course of 2014, the Customs Office provided Gold Frost with a laboratory report on which it based the shortfall notice. After examination by Gold Frost, it was discovered that there was no error by Gold Frost in the classification of the goods which were the subject of the Charge Notice, and the Customs Office was petitioned to immediately cancel the Charge Notice. The Customs Office was also asked, to the extent that the shortfall is not canceled, to provide Gold Frost with specific grounds for the shortfall. In January 2015, the Customs Office rejected the claims made by Gold Frost, after which Gold Frost filed an appeal with the National Classification Unit of the Tax Authority Administration. On January 24, 2016, Gold Frost's claims were accepted and the Customs Office's determinations were canceled. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                     |   | Ordinary shares          |       |
|--------------------------|--------|--------------------------|------------|
|                     |   | of NIS 0.1 parvalue each |       |
|                     |   | December 31              |       |
|                     |   | 2 0 1 5                  |       |   | 2 0 1 4 |   |
|                     |   |                     |       |   |   |   |
| Authorized share capital |   |                     | 50,000,000 |   |   |   | 50,000,000 |   |
|                     |   |                     |       |   |   |   |   |   |
| Issued and outstanding   |   |                     | 13,240,913 |   |   |   | 12,974,245 |   |

|   | (1) | On March 17, 2010, the Company raised a US Dollars 20.0 million through a public offering of its ordinary shares. The Company issued a total of 3,305,786 ordinary shares at a purchase price of US Dollars 6.05 per share, and the Company also granted to the underwriter an option, exercisable within 30 days from the date of the public offering, to purchase up to an additional 330,579 ordinary shares. This option expired without the underwriter's exercise of such option. After deducting closing costs and fees, the Company received net proceeds of approximately US Dollars 19.0 million. On September 2011, the Company initiated a share repurchase program permitting the Company to repurchase up to US Dollars 5 million of the Company's ordinary shares over the period of twelve months as part of its ongoing consideration of alternative methods to take advantage of the Company's strong cash position. During November - December 2011 and January - February 2012, the Company purchased 599,434 ordinary shares of the Company in accordance with its share repurchase program. In February 2012, in light of the global and Israeli economic situations and the foreseeable recession, the Company terminated its repurchase program in order to focus its resources on developing its core business activity. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | On November 13, 2014, the Board of Directors of the Parent Company authorized the purchase of up to US Dollars 5 million of the Company's Ordinary Shares.  The price per Ordinary Share to be acquired by the Parent Company will not exceed the Company's shareholders' equity per Ordinary Share.  The timing and amount of share purchases by the Parent Company will be determined by management of the Parent Company based on its evaluation of market conditions, the trading price of the Company's shares and other factors.  The purchase program may be increased, suspended or discontinued at any time. During the months of November and December 2014, 233,296 ordinary shares of NIS 0.1 par value were acquired in consideration of the amount of approximately US 1,691 thousand. As a result of these acquisitions, the Parent Company increased its holdings in Company's shares to 59.97% of the issued and paid up equity of the Company. During the course of June 2015, 396,839 ordinary shares of NIS 0.1 par value each of The Company were purchased by the Parent Company in consideration of the sum of approximately NIS 8,751. As of the date of the statements, the Parent Company holds 8,177,453 ordinary shares of The Company, constituting approximately 61.76% of its issued and outstanding share capital and the voting rights therein (and fully diluted, approximately 61.62%). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | On March 4, 2015 and March 11, 2015, Mr. Zwi Williger and Mr. Joseph Williger, respectively, each exercised options to purchase 66,667 Ordinary Shares from the Company at $6.50 per share.  Pursuant to a put option granted to Messrs. Zwi and Joseph Williger and the Williger Management Companies as part of the terms of the Parent Company Controlling Stake Purchase Agreement (see Note 25B), each sold 66,667 Ordinary Shares to BSD on March 24, 2015 for a price of $12 per share. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | A. | Options plans: |
|--------|----|----------------|

|   | (1) | August 2009 series: On January 2008 the Parent Company's Board of Directors adopted a Stock Incentive Plan. The Parent Company was authorized to grant up to 100,000 options to several of the Group's employees. On August 4, 2009 according to a decision of the Parent Company's audit committee and Board of Directors from March 12, 2009, the option plan has been amended - the number of the options that the Parent Company was authorized to grant increased up to 200,000, the expiration dates extended in six months, and the purchase price per share payable upon exercise of an option was determined on NIS 11.5 subject to adjustments and not linked to the changes in the Consumer Price Index (in place of NIS 19 linked to the changes in the Consumer Price Index). 135,000 options were granted to the Group's employees on August 4, 2009. AS of December 2015 there is no exercisable options of August 2009 series. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           | August 2009 series |
|--------------------------------|--------------------|
|                           |               |
| Average share price (NIS)      | 20.13              |
| Exercise price(NIS)            | 11.5               |
| Risk-free interest rate        | 2.5%-3.7%          |
| Expected life of share options | 2-4 years          |
| Expected annual volatility (*) | 45%-51%            |

|   | (2) | June 2011 series. On June 29, 2011, the remaining 65,000 options (out of the 200,000 options approved from August 2009 series) were granted to the Group's employees. During the year, 2015, the remaining 3,334 Options of June series were exercise. As of December 2015 there is no exercisable options of June 2011 series.The Company utilizes the Black-Scholes model. The Company estimated the fair value, utilizing the following assumptions (all in weighted averages): |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           | June 2011 series |
|--------------------------------|------------------|
|                           |             |
| Average share price (NIS)      | 20.13            |
| Exercise price(NIS)            | 10.14            |
| Risk-free interest rate        | 4.4%             |
| Expected annual volatility (*) | 44.1%            |
| Option life (years) (**)       | 0.49             |

|   | (3) | November 2013 series. |
|--------|-----|-----------------------|

|                             | November 2013 series |
|----------------------------------|----------------------|
|                             |                 |
| Average share price (US Dollars) | 8.07                 |
| Exercise price (US Dollars)      | 6.5                  |
| Risk-free interest rate          | 1.57%                |
| Expected annual volatility (*)   | 30%                  |
| Option life (years) (**)         | 5                    |

----

|   | A. | Options plans: (Cont.) |
|--------|----|------------------------|
|   | (3) | November 2013 series. |
|--------|-----|-----------------------|

|   | (*) | The expected volatility was determined on the basis of historical volatility of share prices of the Company and other group companies. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------|

|   | (**) | The average option life is determined according to management estimate as to the holding period of the options by employees taking into account their position at the Company and the Company's past experience. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | Movement during the year June 2011 series.On December 2015, the remaining 3,334 options of the Parent Company exercised for 3,334 regular shares.November 2013 series. On March 4, 2015 and March 11, 2015, each of the offerees exercised 66,667 options in The Company, which were issued to them without consideration, for 66,667 ordinary shares of par value NIS 0.1 each in The Company (hereinafter in this subsection: the “Exercise Shares”). In consideration of the exercise shares, each of the offerees paid The Company the sum of USD 433,000, which reflects the exercise price of USD 6.5 for each exercise share. On December 9 and December 14, 2015, each of the offerees exercised the 66,667 exercise shares. In consideration of the exercise shares, each of the offerees paid The Company the sum of USD 433,000, which reflects the exercise price of USD 6.5 for each exercise share. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | C. | The accounting for share-based compensation: |
|--------|----|----------------------------------------------|

|   | (1) | August 2009 and June 2011 series. The accounting for share-based compensation is as follows: The Parent Company initiated and approved the grant, and hence the Company has no obligation to settle the grant in accordance with IFRS 2.43B. This implies that the Company records an expense as if it were granting its own shares. The options fair value determined at the date of grant is recognized over the vesting period of each trench. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | November 2013 series. The accounting for share-based compensation is as follows: The Company initiated and approved the grant. In accordance with IFRS 2 the options fair value determined at the date of grant is recognized over the vesting period of each trench. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | A. | Revenues: |
|--------|----|-----------|

|             |   | Year ended December 31, |    |
|------------------|--------|-------------------------|---------|
|             |   | 2 0 1 5                 |    |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|             |   | NIS                     |    |   | NIS |   |   | NIS |   |   | US Dollars |   |
|             |   |                    |    |   |   |   |   |   |   |   |   |   |
| Sale of products |   |                    | 312,514 |   |   |   | 328,741 |   |   |   | 336,032 |   |   |   | 80,091 |   |

|   | B. | Cost of sales: |
|--------|----|----------------|

|                          |   | Year ended December 31, |    |
|-------------------------------|--------|-------------------------|---------|
|                          |   | 2 0 1 5                 |    |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                          |   | NIS                     |    |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                          |   |                    |    |   |   |   |   |   |   |   |   |   |
| Purchases                     |   |                    | 209,577 |   |   |   | 241,186 |   |   |   | 243,197 |   |   |   | 53,198 |   |
| Transportation                |   |                    | 1,603   |   |   |   | 1,714 |   |   |   | 1,993 |   |   |   | 411 |   |
| Depreciation and amortization |   |                    | 2,203   |   |   |   | 1,958 |   |   |   | 1,906 |   |   |   | 565 |   |
| Maintenance                   |   |                    | 3,858   |   |   |   | 4,364 |   |   |   | 3,827 |   |   |   | 989 |   |
| Other costs and expenses      |   |                    | 2,107   |   |   |   | 1,565 |   |   |   | 1,754 |   |   |   | 1053 |   |
|                          |   |                    | 219,348 |   |   |   | 250,787 |   |   |   | 252,677 |   |   |   | 56,214 |   |
| Change in finished goods      |   |                    | 18,104  |   |   |   | (1,651 | ) |   |   | (322 | ) |   |   | 4,640 |   |
|                          |   |                    | 237,452 |   |   |   | 249,136 |   |   |   | 252,355 |   |   |   | 60,854 |   |

|   | C. | Selling expenses: |
|--------|----|-------------------|

|                           |   | Year ended December 31, |   |
|--------------------------------|--------|-------------------------|--------|
|                           |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                           |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                           |   |                    |   |   |   |   |   |   |   |   |   |   |
| Salaries and related expenses  |   |                    | 12,532 |   |   |   | 12,146 |   |   |   | 10,979 |   |   |   | 3,212 |   |
| Transportation and maintenance |   |                    | 10,601 |   |   |   | 10,413 |   |   |   | 7,146 |   |   |   | 2,717 |   |
| Vehicles                       |   |                    | 3,989  |   |   |   | 4,610 |   |   |   | 4,591 |   |   |   | 1,022 |   |
| Advertising and promotion      |   |                    | 4,238  |   |   |   | 7,040 |   |   |   | 5,963 |   |   |   | 1,086 |   |
| Depreciation and amortization  |   |                    | 963    |   |   |   | 1,204 |   |   |   | 1,995 |   |   |   | 247 |   |
| Others                         |   |                    | 4,971  |   |   |   | 4,283 |   |   |   | 4,456 |   |   |   | 1,274 |   |
|                           |   |                    | 37,294 |   |   |   | 39,696 |   |   |   | 35,130 |   |   |   | 9,558 |   |

----

|   | D. | General and administrative expenses: |
|--------|----|--------------------------------------|

|                                          |   | Year ended December 31, |   |
|-----------------------------------------------|--------|-------------------------|--------|
|                                          |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                          |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |
| Salaries and related expenses                 |   |                    | 22,062 |   |   |   | 12,471 |   |   |   | 13,210 |   |   |   | 5,654 |   |
| Salary expenses relating Stock Incentive Plan |   |                    | 152    |   |   |   | 2,124 |   |   |   | - |   |   |   | 39 |   |
| Office maintenance                            |   |                    | 1,149  |   |   |   | 1,059 |   |   |   | 1,137 |   |   |   | 294 |   |
| Professional fees                             |   |                    | 3,922  |   |   |   | 1,653 |   |   |   | 2,418 |   |   |   | 1,005 |   |
| Vehicles                                      |   |                    | 415    |   |   |   | 498 |   |   |   | 412 |   |   |   | 106 |   |
| Depreciation and amortization                 |   |                    | 558    |   |   |   | 472 |   |   |   | 558 |   |   |   | 143 |   |
| Bad and doubtful debts                        |   |                    | 3,402  |   |   |   | 18 |   |   |   | 340 |   |   |   | 872 |   |
| Communication                                 |   |                    | 135    |   |   |   | 168 |   |   |   | 181 |   |   |   | 35 |   |
| Other                                         |   |                    | 1,131  |   |   |   | 768 |   |   |   | 1,152 |   |   |   | 290 |   |
|                                          |   |                    | 32,926 |   |   |   | 19,231 |   |   |   | 19,408 |   |   |   | 8,438 |   |

|   | E. | Employees benefit costs: |
|--------|----|--------------------------|

|                                          |   | Year ended December 31, |   |
|-----------------------------------------------|--------|-------------------------|--------|
|                                          |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                          |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |
| Payroll (without payment to related parties)  |   |                    | 18,061 |   |   |   | 15,483 |   |   |   | 15,586 |   |   |   | 4,929 |   |
| Salary expenses relating Stock Incentive Plan |   |                    | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                          |   |                    | 18,061 |   |   |   | 15,483 |   |   |   | 15,586 |   |   |   | 4,929 |   |

|   | F. | Depreciation and amortization: |
|--------|----|--------------------------------|

|                                      |   | Year ended December 31, |   |
|-------------------------------------------|--------|-------------------------|--------|
|                                      |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                      |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                      |   |                    |   |   |   |   |   |   |   |   |   |   |
| Depreciation of fixed assets (see note 6) |   |                    | 3,807  |   |   |   | 3,634 |   |   |   | 4,459 |   |   |   | 376 |   |

----

|                                     |   | Year ended December 31, |   |
|------------------------------------------|--------|-------------------------|--------|
|                                     |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                     |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| Operation Protective Edge                |   |                    | 1,961  |   |   |   | 2,792 |   |   |   | - |   |   |   | 503 |   |
| Capital gain on fixed assets realization |   |                    | 121    |   |   |   | 147 |   |   |   | 29 |   |   |   | 31 |   |
| Other                                    |   |                    | -      |   |   |   | 4 |   |   |   | 25 |   |   |   | - |   |
|                                     |   |                    | 2,082  |   |   |   | 2,943 |   |   |   | 54 |   |   |   | 534 |   |

|   | A. | Financing Income: |
|--------|----|-------------------|

|                                                     |   | Year ended December 31, |   |
|----------------------------------------------------------|--------|-------------------------|--------|
|                                                     |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                                     |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
| Interest Income:                                         |   |                    |   |   |   |   |   |   |   |   |   |   |
| Short-term bank deposits                                 |   |                    | 957    |   |   |   | 291 |   |   |   | 412 |   |   |   | 245 |   |
| Interest Income of debentures held for trading           |   |                    | 1,901  |   |   |   | 1,293 |   |   |   | 1,734 |   |   |   | 487 |   |
| Other                                                    |   |                    | (74    | ) |   |   | 171 |   |   |   | 49 |   |   |   | (19 | ) |
| Total interest Income                                    |   |                    | 2,784  |   |   |   | 1,755 |   |   |   | 2,195 |   |   |   | 713 |   |
| Other:                                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in fair value of financial assets at fair values |   |                    | 186    |   |   |   | (1,995 | ) |   |   | 10,363 |   |   |   | 48 |   |
| Foreign currency differences                             |   |                    | 13     |   |   |   | 2,745 |   |   |   | - |   |   |   | 3 |   |
| Dividends                                                |   |                    | 380    |   |   |   | 289 |   |   |   | 450 |   |   |   | 97 |   |
| Total financing Income                                   |   |                    | 3,363  |   |   |   | 2,794 |   |   |   | 13,008 |   |   |   | 862 |   |

----

|   | B. | Financing expenses: |
|--------|----|---------------------|

|                                |   | Year ended December 31, |   |
|-------------------------------------|--------|-------------------------|--------|
|                                |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
| Interest expenses:                  |   |                    |   |   |   |   |   |   |   |   |   |   |
| Bank credit                         |   |                    | -      |   |   |   | - |   |   |   | - |   |   |   |   |
| Other:                              |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized loss (gain) on derivatives |   |                    | -      |   |   |   | - |   |   |   | 69 |   |   |   |   |
| Foreign currency differences        |   |                    | 627    |   |   |   | - |   |   |   | 351 |   |   |   | 161 |   |
| Bank fees                           |   |                    | 351    |   |   |   | 333 |   |   |   | 455 |   |   |   | 90 |   |
| Other                               |   |                    | -      |   |   |   | 42 |   |   |   | 1 |   |   |   |   |   |
| Total Other costs                   |   |                    | 978    |   |   |   | 375 |   |   |   | 876 |   |   |   | 251 |   |
|                                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total financing costs               |   |                    | 978    |   |   |   | 375 |   |   |   | 876 |   |   |   | 251 |   |

|                                                                                                                   |   | Year ended December 31, |       |
|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                                                   |   | 2 0 1 5                 |       |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                                                                                                   |   | NIS                     |       |   | NIS |   |   | NIS |   |   | US Dollars |   |
| A.             Basic earnings per share:              |   |                    |       |   |   |   |   |   |   |   |   |   |
| Earnings used in the calculation of basic earnings per share to equity holders of the parent                           |   |                    | 6,844      |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 1,754 |   |
|                                                                                                                   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| B.             Diluted earnings per share:            |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit used to compute diluted earnings per share from continuing operations                                           |   |                    | 6,844      |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 1,754 |   |
|                                                                                                                   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of shares used in computing basic earnings per    share from continuing operations   |   |                    | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 12,974,245 |   |   |   | 13,090,729 |   |
| Weighted average number of shares used in computing diluted earnings per    share from continuing operations |   |                    | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 12,974,245 |   |   |   | 13,090,729 |   |

----

|   | A. | Significant accounting policies: Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which Income and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | B. | Categories of financial instruments: |
|--------|----|--------------------------------------|

|                                                  |   | As of December 31, |    |
|-------------------------------------------------------|--------|--------------------|---------|
|                                                  |   | 2 0 1 5            |    |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                                  |   | NIS                |    |   | NIS |   |   | US Dollars |   |
| Financial assets                                      |   |               |    |   |   |   |   |   |   |
| Financial assets at fair value through profit or loss |   |               | 145,007 |   |   |   | 122,733 |   |   |   | 37,162 |   |
| Cash and cash equivalents                             |   |               | 79,421  |   |   |   | 82,902 |   |   |   | 20,354 |   |
| Short term deposit                                    |   |               | 20,288  |   |   |   | 19,445 |   |   |   | 5,199 |   |
| Loan carried at fair value through profit or loss     |   |               | -       |   |   |   | - |   |   |   | - |   |
|                                                  |   |               | 244,716 |   |   |   | 225,080 |   |   |   | 25,715 |   |
|                                                  |   |               |    |   |   |   |   |   |   |   |   |   |
| Financial liabilities                                 |   |               |    |   |   |   |   |   |   |   |   |   |
| Short term bank credit                                |   |               | 16      |   |   |   | - |   |   |   | 4 |   |
| Derivatives designated as hedges                      |   |               | -       |   |   |   | - |   |   |   | - |   |
|                                                  |   |               | 16      |   |   |   | - |   |   |   | 4 |   |

|   | C. | Objectives of managing financial risks: The finance departments of the Group provide services to the business activity, enable access to local and international financial markets, supervise and manage the financial risks relating to the Group's activities using internal report that analyze the extent of the risk exposure according to degree and intensity. These risks include market risks (including currency risk, fair value risk in respect of the interest rates, price risk and cash flow risk in respect of the interest rates), credit risk and liquidity risk.The Group reduces the impact of the aforesaid risks from time to time by using derivative financial instruments in order to hedge the risk exposures, such derivatives are not designated as hedges for accounting purposes. Derivatives are used according to the Group's policy, which was approved by the boards of directors. The policy prescribes principles regarding: management of currency risk, interest rate risk, credit risk, the use of derivatives and of non-derivative financial instruments, and investment of liquidity surplus. The compliance with policy and the exposure levels are reviewed by the internal auditor on a continuing basis.The financial management departments of the Group report to the investment committee of the Group and to the board of directors of the Company about the risks and about implementation of the assimilated policy in order to minimize the risk exposures. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | Market risk: The Group's activity exposes it mainly to financial risks of fluctuations in the exchange rates of foreign currency and/or changes in the prices of the imported products and/or changes in the interest rates. The Group purchases forward foreign-currency swap contracts, as needed, opens documentary credit to suppliers, and carries out orders for imported goods.During the report period, no change occurred in the exposure to market risks or in the way by which the Group manages or measures the risk. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | E. | Other price risks: The Group is exposed to price risks of - shares, certificate of participation in mutual fund and bonds, which are classified as financial assets carried at fair value through profit or loss.The carrying amount of the investments exposed to price risks of shares, certificate of participation in mutual fund and bonds is NIS 145,077 thousands (US Dollars 37,162 thousands).Sensitive analysis in respect to exposure relating to price risks of shares, certificate of participation in mutual fund and bonds.The sensitivity analysis includes only shares, certificate of participation in mutual fund and bonds at the period end for a 10% change in its prices. A positive number below indicates an increase in profit and other equity where the prices strengthen 10% against the actual prices. For a 10% weakening of the prices against the actual prices, there would be an equal and opposite impact on the profit and other equity, and the balances below would be negative. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|           |   | 2 0 1 5 |   |   | 2 0 1 4 |   |
|----------------|--------|---------|--------|--------|---------|--------|
|           |   | NIS     |   |   | NIS     |   |
|           |   |    |   |   |    |   |
| Profit or loss |   |    | 14,007 |   |    |   | 12,273 |   |

|   | F. | Credit risk: Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of investment grade and above. This information is supplied by independent rating agencies where available and, if not available, the Group uses other publicly available financial information and its own trading records to rate its major customers.Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance cover is purchased. Once a month the Group performs credit evaluation of the finance condition of its receivables.Aging of impaired trade receivables are 86 days and in the year 2015 (86 days in the year 2014). |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | G. | Liquidity risk management: The following table presents the Group's outstanding contractual maturity profile for its non-derivative financial liabilities. The analysis presented is based on the undiscounted contractual maturities of the Group's financial liabilities, including any interest that will accrue. Non-interest bearing financial liabilities which are due to be settled in less than 12 months from maturity equal their carrying values, since the impact of the time value of money is immaterial over such a short duration. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | G. | Liquidity risk management: (Cont.): |
|--------|----|-------------------------------------|

|   | (1) | Financial liabilities that do not constitute derivate financial instruments Maturity profile of outstanding financial liabilities consists of: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|                 |   | December 31, |   |
|----------------------|--------|--------------|--------|
|                 |   | 2 0 1 5      |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                 |   | NIS          |   |   | NIS |   |   | US Dollars |   |
| Interest free:       |   |         |   |   |   |   |   |   |   |
| Short term bank debt |   |         | -      |   |   |   | - |   |   |   | - |   |

|   | (2) | Non derivatives financial instruments The following table presents the Group's maturity profile for its non-derivatives financial instruments based on their contractual maturity. These financial instruments include interest relating to these assets, except for cases when the Group anticipates that the cash flow will occur on a different period. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                             |   | 1 month |    |   | 1-3 Months |   |   | 4-12 Months |   |   | 1-5 Years |   |   | More then5 Years |   |   | Total  |   |
|--------------------------------------------------|--------|---------|---------|--------|-----------------|--------|--------|------------------|--------|--------|----------------|--------|--------|-----------------------|--------|--------|--------|--------|
|                                             |   | NIS     |    |   | NIS             |   |   | NIS              |   |   | NIS            |   |   | NIS                   |   |   | NIS    |   |
|                                             |   |    |    |   |            |   |   |             |   |   |           |   |   |                  |   |   |   |   |
| 2015                                             |   |    |    |   |            |   |   |             |   |   |           |   |   |                  |   |   |   |   |
| Financial instruments which bear interest        |   |    | 20,907  |   |            |   | 820    |             |   |   | 20,984         |   |   |                  | 25,897 |   |   |   | 24,921 |   |   |   | 93,529 |   |
| Financial instruments which do not bear interest |   |    | 164,653 |   |            |   | -      |             |   |   | -              |   |   |                  | -      |   |   |   | - |   |   |   | 164,653 |   |
|                                             |   |    | 185,560 |   |            |   | 820    |             |   |   | 20,984         |   |   |                  | 25,897 |   |   |   | 24,921 |   |   |   | 258,182 |   |
|                                             |   |    |    |   |            |   |   |             |   |   |           |   |   |                  |   |   |   |   |   |   |   |   |   |   |
| 2014                                             |   |    |    |   |            |   |   |             |   |   |           |   |   |                  |   |   |   |   |   |   |   |   |   |   |
| Financial instruments which bear interest        |   |    | 987     |   |            |   | 740    |             |   |   | 6,793          |   |   |                  | 38,873 |   |   |   | 25,267 |   |   |   | 72,660 |   |
| Financial instruments which do not bear interest |   |    | 110,419 |   |            |   | 41,685 |             |   |   | 14,173         |   |   |                  | -      |   |   |   | - |   |   |   | 166,277 |   |
|                                             |   |    | 111,406 |   |            |   | 42,425 |             |   |   | 20,966         |   |   |                  | 38,873 |   |   |   | 25,267 |   |   |   | 238,937 |   |

----

|   | G. | Liquidity risk management: (Cont.): |
|--------|----|-------------------------------------|

|   | (2) | Non derivatives financial instruments (Cont.): The Financial instruments in the non-derivatives financial instruments consist of: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------|

|                                                  |   | December 31, |    |
|-------------------------------------------------------|--------|--------------|---------|
|                                                  |   | 2 0 1 5      |    |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                                  |   | NIS          |    |   | NIS |   |   | US Dollars |   |
|                                                  |   |         |    |   |   |   |   |   |   |
| Cash and cash equivalents                             |   |         | 79,421  |   |   |   | 82,902 |   |   |   | 20,354 |   |
| Financial assets at fair value through profit or loss |   |         | 145,007 |   |   |   | 122,733 |   |   |   | 37,162 |   |
| Short term deposit                                    |   |         | 20,288  |   |   |   | 19,445 |   |   |   | 5,199 |   |
| Loan carried at fair value through profit or loss     |   |         | -       |   |   |   | - |   |   |   |   |   |
|                                                  |   |         | 244,716 |   |   |   | 225,080 |   |   |   | 62,716 |   |

|   | H. | Exchange rate risk: The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilizing forward foreign exchange contracts.The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at reporting date are as follows: |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|       |   | Assets  |   |   | Liabilities |   |
|------------|--------|---------|--------|--------|-------------|--------|
|       |   | 2 0 1 5 |   |   | 2 0 1 4     |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |
|       |   | NIS     |   |   | NIS         |   |   | NIS |   |   | NIS |   |
|       |   |    |   |   |        |   |   |   |   |   |   |   |
| US Dollars |   |    | 50,775 |   |        |   | 48,817 |   |   |   | 1,445 |   |   |   | 4,242 |   |
|       |   |    |   |   |        |   |   |   |   |   |   |   |   |   |   |   |
| EUR        |   |    | 11,802 |   |        |   | 7,616 |   |   |   | 3,257 |   |   |   | 3,338 |   |

----

|   | H. | Exchange rate risk: (Cont.): |
|--------|----|------------------------------|

|           |   | US DollarsImpact |   |   | EUR Impact |   |
|----------------|--------|------------------|--------|--------|------------|--------|
|           |   | 2 0 1 5          |   |   | 2 0 1 5    |   |
|           |   | NIS              |   |   | NIS        |   |
|           |   |             |   |   |       |   |
| Profit or loss |   |             | 4,933  |   |       |   | 855 |   |

|           |   | US DollarsImpact |   |   | EUR Impact |   |
|----------------|--------|------------------|--------|--------|------------|--------|
|           |   | 2 0 1 4          |   |   | 2 0 1 4    |   |
|           |   | NIS              |   |   | NIS        |   |
|           |   |             |   |   |       |   |
| Profit or loss |   |             | 4,458  |   |       |   | 428 |   |

|   | I. | Fair value of financial instruments: The financial instruments of the Group consist of derivative and non-derivative assets and liabilities. Non-derivative assets include cash and cash equivalents, receivables and other current assets. Non-derivative liabilities include short-term bank credit, trade payables, other current liabilities and long-term loans from banks and others. Derivative assets and liabilities include mainly foreign exchange forward contracts.  Due to the nature of these financial instruments, their fair value, generally, is identical or close to the value at which they are presented in the financial statements, unless stated otherwise.The fair value of the long-term loans approximates their carrying value, since they bear interest at rates close to the prevailing market rates.Quoted market pricesThe fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices (includes listed redeemable notes, bills of exchange, debentures and perpetual notes).DerivativesForeign currency forward contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts.Fair value of financial instruments carried at amortized costThe management of the group considers that the carrying amounts of financial assets and financial liabilities recognized at amortized cost in the financial statements approximate their fair values. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | I. | Fair value of financial instruments: (Cont.). Fair value measurements recognized in the statement of financial positionThe following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                        |   | December 31, 2015 |    |
|-----------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                        |   | Level 1           |    |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                                                                        |   | NIS               |    |   | NIS |   |   | NIS |   |   | NIS |   |
| financial assets ‘at fair value through profit or loss’ (FVTPL) |   |              |    |   |   |   |   |   |   |   |   |   |
| Marketable securities and derivatives                                       |   |              | 145,007 |   |   |   | - |   |   |   | - |   |   |   | 145,007 |   |

|                                                                        |   | December 31, 2014 |    |
|-----------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                        |   | Level 1           |    |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                                                                        |   | NIS               |    |   | NIS |   |   | NIS |   |   | NIS |   |
| financial assets ‘at fair value through profit or loss’ (FVTPL) |   |              |    |   |   |   |   |   |   |   |   |   |
| Marketable securities and derivatives                                       |   |              | 122,733 |   |   |   | - |   |   |   | - |   |   |   | 122,733 |   |

----

|   | I. | Fair value of financial instruments: (Cont.). Assets and liabilities that are presented in the statement of financial position at fair value within Level 3 (Cont.): According to the loan agreement, this is a "bullet" loan (principal, linkage differences and interest) extended for the shorter of a period of one year from the date of deposit or for a period of six months from the date of completion as determined in the arrangement plan ("the original repayment date"). The loan shall be linked to the Israeli CPI published on November 15, 2013 and shall bear interest at the annual rate of 5% compounded from the date of deposit to the relevant date of repayment. According to the terms of the loan agreement, if the Court does not approve the arrangement plan or if the suspending conditions do not give rise to the arrangement plan, the loan will be paid off and returned to the Company before the original repayment date including linkage differences and interest. Considering the decision of the Tel-Aviv District Court from December 17, 2013 regarding the approval of the creditors' composition of IDB Holdings ("the Court's decision"), the Company addressed the investors trustee and demanded to transfer to its disposal the loan principal in line with the trust agreement and the Court's decision. On December 31, 2013, at the request of the Company, the investors trustee addressed the officer in the capacity of the trust agreement, Adv. Hagai Ullman ("Ullman"), and informed that on December 29, 2013 it received a demand from the Company to immediately transfer to the Company the loan principal of NIS 65 million which the Company made available to Newco and which was deposited in trust with the investors trustee. According to this demand, Ullman is requested to give its written approval to the investors trustee and to the Trust Company of Bank Leumi Le'Israel Ltd. (or, alternatively, not to give the approval) to act to release the above amount that is in trust considering the provisions of section 4.2.2 to the trust agreement, the Court's decision and that December 31, 2013 is the deferred date for presenting the examination report by the observer appointed by Court. On January 12, 2014, the loan principal was returned to the Company. On January 14, 2014, the Company received the interest on the loan. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                 |   | Investment in debt instruments and loans presented at fair value |    |
|------------------------------------------------------|--------|------------------------------------------------------------------|---------|
|                                                 |   | In investees                                                     |    |
|                                                 |   | NIS in thousand                                                  |    |
|                                                 |   |                                                             |    |
| Balance at January 1, 2015                           |   |                                                             | -       |   |
| Gains recognized through profit or loss:             |   |                                                             |    |   |
| Finance income                                       |   |                                                             | -       |   |
| Redemption of the principal and interest of the loan |   |                                                             | -       |   |
| Balance at December 31, 2015                         |   |                                                             | -       |   |
|                                                 |   |                                                             |    |   |
| Balance at January 1, 2014                           |   |                                                             | 65,300  |   |
| Gains recognized through profit or loss:             |   |                                                             |    |   |
| Finance income                                       |   |                                                             | 100     |   |
| Redemption of the principal and interest of the loan |   |                                                             | (65,400 | ) |
| Balance at December 31, 2014                         |   |                                                             | -       |   |

----

|   | A. | Other financial assets: |
|--------|----|-------------------------|

|                                  |   | Current Assets |   |
|---------------------------------------|--------|----------------|--------|
|                                  |   | December 31,   |   |
|                                  |   | 2 0 1 5        |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                                  |   | NIS            |   |   | NIS |   |   | US Dollars |   |
| Derivatives not designated as hedges: |   |           |   |   |   |   |   |   |   |
| Maof call options                     |   |           | -      |   |   |   | - |   |   |   | - |   |
| Maof put options                      |   |           | -      |   |   |   | - |   |   |   | - |   |
| Total                                 |   |           | -      |   |   |   | - |   |   |   | - |   |

|   | B. | Other financial assets and liabilities: |
|--------|----|-----------------------------------------|

|                              |   |       |   |   | Current liabilities |   |
|-----------------------------------|--------|------------|--------|--------|---------------------|--------|
|                              |   |       |   |   | December 31,        |   |
|                              |   | Exchange   |   |   | 2 0 1 5             |   |   | 2 0 1 5 |   |   | 2 0 1 5 |   |
|                              |   | rate       |   |   | Cost Value NIS      |   |   | fair value NIS |   |   | NIS |   |   | US Dollars |   |
| Derivatives designated as hedges: |   |       |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Forward contracts in US Dollars   |   | 3.85-3.902 |   |   |                | 2,890  |   |   |   | 35 |   |   |   | - |   |   |   | 9 |   |
| Forward contracts in Euro         |   | -          |   |   |                | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                             |   |       |   |   |                | 2,890  |   |   |   | 35 |   |   |   | - |   |   |   | 9 |   |

|   | A. | General: The Group has adopted IFRS 8 Operating Segments with effect from January 1, 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance.Since 2012, the Group's operating segment under IFRS 8 is only the import segment. The import segment earns its revenues from importing and marketing food products to retail chains, supermarkets, etc. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | B. | Revenues from the main customers of the Import segment: The following is an analysis of the Group's customers who represent more than 10% of the total sales: |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|       |   | Year ended December 31, |   |
|------------|--------|-------------------------|--------|
|       |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|       |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|       |   |                    |   |   |   |   |   |   |   |   |   |   |
| Customer A |   |                    | -      | (*) |   |   | - | (*) |   |   | 40,099 |   |   |   | - |   |
|       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer B |   |                    | 57,161 |   |   |   | 56,404 |   |   |   | 64,817 |   |   |   | 14,649 |   |

|   | C. | Revenues from the principal products of the Import segment: Revenues from major groups of products that contributed 10% or more to the Group's total revenues in 2013-2015 are as follows: |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   | Year ended December 31, |    |
|-------------------------------------|--------|-------------------------|---------|
|                                |   | 2 0 1 5                 |    |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                |   | NIS                     |    |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                |   |                    |    |   |   |   |   |   |   |   |   |   |
| Canned Vegetables and Pickles       |   |                    | 41,161  |   |   |   | 57,433 |   |   |   | 60,783 |   |   |   | 10,549 |   |
|                                |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dairy and Dairy Substitute Products |   |                    | 100,321 |   |   |   | 82,899 |   |   |   | 86,862 |   |   |   | 25,710 |   |
|                                |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dried fruit, nuts and beans         |   |                    | -       | (*) |   |   | 41,077 |   |   |   | - | (*) |   |   | - |   |

----

|   | A. | Transactions with Related Parties: |
|--------|----|------------------------------------|

|                                          |   | Year ended December 31, |   |
|-----------------------------------------------|--------|-------------------------|--------|
|                                          |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 3 |   |   | 2 0 1 5 |   |
|                                          |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |
| Sales of goods                                |   |                    | 265    |   |   |   | 330 |   |   |   | 316 |   |   |   | 68 |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Participation in expenses with Parent Company |   |                    | 301    |   |   |   | 306 |   |   |   | 290 |   |   |   | 77 |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Management fees (*)                           |   |                    | 8,428  |   |   |   | 3,474 |   |   |   | 3,442 |   |   |   | 2,160 |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bonus (*)                                     |   |                    | 7,340  |   |   |   | 3,094 |   |   |   | 4,655 |   |   |   | 1,881 |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share-based payment (*)                       |   |                    | 152    |   |   |   | 2,124 |   |   |   | 190 |   |   |   | 39 |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Car expenses                                  |   |                    | 1,016  |   |   |   | 443 |   |   |   | 433 |   |   |   | 260 |   |

|   | B. | Balances with Related Parties: |
|--------|----|--------------------------------|

|            |   | Year ended December 31, |   |
|-----------------|--------|-------------------------|--------|
|            |   | 2 0 1 5                 |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|            |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|            |   |                    |   |   |   |   |   |   |   |
| Due to officers |   |                    | -      |   |   |   | (3,334 | ) |   |   | - |   |
|            |   |                    |   |   |   |   |   |   |   |   |   |   |
| Parent Company  |   |                    | 456    |   |   |   | (42 | ) |   |   | 117 |   |

|   | C. | Management Service Agreements: For information regarding Management Services Agreements with Mr. Zwi Williger, Chairman of the Board of Directors of the Company, and Mr. Joseph Williger, a director and President of the Company, through Williger Management Companies, see note 13, "Commitments and Contingent liabilities". |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | Equity Compensation: On November 28, 2013, after receiving the approval of the compensation committee and Board of Directors of The Company, the general meeting of The Company approved an employee option plan (in this paragraph: the “2013 Plan”) in which The Company will grant, pursuant to the provisions of Section 102 of the Income Tax Ordinance under the earned income track, 100,000 nonnegotiable Company options to officers of The Company and to employees of the subsidiaries.  Every option is exercisable for one ordinary share of The Company of NIS 0.1 par value each. According to the 2013 Plan, the options will be allocated to offeree employees for no consideration. The exercise price of each exercise share underlying the option is USD 6.5, subject to various adjustments such as in cases of distribution of bonus shares, rights issue, distribution of a dividend, etc.  According to the plan, each of the offeree employees is entitled to incrementally exercise the options, in consideration of payment of the Aforementioned exercise price, in three equal portions, as follows: |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   |
|--------|--------|

----

|                   |   | As of December 31, |   |
|------------------------|--------|--------------------|--------|
|                   |   | 2 0 1 5            |   |   | 2 0 1 4 |   |   | 2 0 1 5 |   |
|                   |   | NIS                |   |   | NIS |   |   | US Dollars |   |
|                   |   | (in thousands)     |   |
|                   |   |               |   |   |   |   |   |   |   |
| Bank letters of credit |   |               | 16,214 |   |   |   | 4,630 |   |   |   | 4,155 |   |
| Bank overdraft         |   |               | 16     |   |   |   | - |   |   |   | 4 |   |
|                   |   |               | 16,230 |   |   |   | 4,630 |   |   |   | 4,159 |   |

----

|   | A. | A distribution agreement between our wholly-owned subsidiary Gold Frost and Arla grants Gold Frost an exclusive and non-transferable right to market and distribute in Israel cheese and butter products manufactured by Arla and its affiliated companies. Gold Frost's exclusivity is subject to its purchase of certain minimum quotas of Arla products. The agreement was signed in March 2005 for a period of five years commencing June 2005. In July 2007, the agreement was extended for a period of 10 years from June 2005 and is renewable automatically for a further period of five years, unless notice of termination is provided by either party. On April 16, 2015, the agreement was extended for an additional five-year period until June 2020. Arla has the right to terminate the agreement on 18 months' notice if Gold Frost fails to satisfy the minimum purchase requirements under the agreement, or on 30 days' notice under certain circumstances, including but not limited to in the case of the death or permanent incapacity of Zwi Williger or his ceasing to be involved in Gold Frost's business. Zwi Williger no longer held any positions with the Company as of January 21, 2016. After the departure of Mr. Zwi Williger from the Company on January 21, 2016, Arla notified the Company that, among other changes, it is seeking to reduce the period of exclusivity of the contract. The Company and Arla are currently in discussions regarding the length of this period of the exclusivity. As of financial statements' approval date, both companies continue to operate under the terms of the contract extension agreed to on April 16, 2015. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | On March 2, 2014, Mr. Zwi Williger and Mr. Joseph Williger (together, the "Sellers"), the controlling shareholders of the Parent Company, our controlling shareholder, signed an agreement with BSD Crown Ltd. (f/k/a Emblaze Ltd.), a company listed on the London Stock Exchange ("BSD") (the “BSD Agreement”), to sell their controlling stake in the Parent Company (approximately 58% of outstanding shares) to BSD (the “BSD Transaction”). Pursuant to a special tender offer to shareholders on May 1, 2014, BSD acquired shares carrying 5% of the voting rights in the Parent Company. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | C. | On July 15, 2015, the  Parent Company received notice (the “Notice”) from Mr. Alexander Granovsky, the ultimate controlling shareholder in the Parent Company as of the same date by means of Israel 18 B.V (hereinafter – the “Controlling Shareholder's Notice,” “Mr. Granovsky,” and “Israel 18” – respectively and as applicable) and from Mr. Gregory Gurtovoy, who according to the Notice is an Israeli citizen and is a businessman and banker (hereinafter: “Mr. Gurtovoy”), according to which Mr. Granvosky and a philanthropic fund incorporated in the Netherlands, Stichting Chabad Charity Foundation (hereinafter – the “Foundation”) sold all of their holdings in Israel 18, which are detailed below, to Mr. Gurtovoy on July 15, 2015 (hereinafter – the “Transaction”). In accordance with the Notice received at the Parent Company as aforesaid, as of this date, after the Transaction, Mr. Gurtovoy holds preferred shares in Israel 18 which constitute approximately 90% of the voting rights in Israel 18 and which grant him the right to appoint the directors of Israel 18, as well as the ordinary shares of Israel 18 which constitute approximately 9.5% of the voting rights in Israel 18, and approximately 95% of the issued and outstanding share capital in Israel 18. Mr. Yossi Schneorson, director in the Company and the boards of directors of the company's held by Israel 18 (hereinafter, together with the Company: the "Group") and CEO of BSD, hold approximately 4.95% of the rights in Israel 18's equity. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | According to the notice, Mr. Granovsky undertook to Mr. Gurtovoy, inter alia, that within three months of the date of the transfer of control to Mr. Gurtovoy as aforesaid, agreements would be signed between Israel 18 and the creditors of Israel 18, including Fortissimo Capital Management Ltd., the Naftali Shani Group, and three additional entities, for the purpose of settling Israel 18's debts to them with respect to the acquisition of control of BSD. Similarly, according to the notice, Mr. Granovsky undertook to make his best efforts to appoint directors on behalf of Mr. Gurtovoy to the Company's Board of Directors and to the boards of directors of the companies in the Group, subject to all laws.  We note that in the Notice, no details were provided regarding the consideration for the Transaction and the payment schedule for said consideration. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | On June 29, the company – "Mega Retail Ltd." (hereinafter – "Mega"), which is one of the Company's largest customers in the organized retail market, submitted a motion to approve a creditor arrangement with its suppliers. On July 14, 2015, the District Court in Lod (Center District) approved the recovery arrangement. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | The recovery arrangement regulated, inter alia, the manner of repayment of Mega's debts to the Company with respect to the period up until June 30, where Mega's debt to the Company as of that same date stood at approximately NIS 4.9 million, and was not secured. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | According to the provisions of the recovery arrangement, payments of 30% of the amount of Mega's debt to the Company which had accrued up until June 30, 2015 (approximately NIS 1.5 million) would be deferred for two years (hereinafter – the "Deferred Debt") and would be paid in 36 equal monthly payments as of July 15, 2017, and would bear interest (unlinked) at a rate of 2% per year, and as of July 15, 2017, would bear (unlinked) interest at a rate of 3% per year. Similarly, as of the date of the statements, 70% of the amount of the balance of Mega's debt to the Company as of June 30, 2015 (approximately NIS 3.4 million), was paid. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Additionally, it is stipulated in the recovery arrangement that within 4 months from the date of the approval of the recovery arrangement, Alon Blue Square Israel Ltd. (hereinafter – "Blue Square"), which is the controlling shareholder and Mega, would issue rights and within 7 days thereafter, the Company would be given the option to convert the deferred debt, in whole or in part, into shares of Blue Square in consideration of an exercise price stipulated in the arrangement and in accordance with the terms stipulated in the arrangement. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | After Mega met undertakings to repay the arranged debt, and prior to the execution of the rights issue by Blue Square, on January 17, 2016, Mega again applied to the Court with a petition to grant in order to stay proceedings, and on January 18, 2016, the Courts issued in order to stay proceedings regarding Mega. As of the date of the issuing of the order to stay proceedings, Mega's debt to the Company, including the deferred debt, amounts to the sum of approximately NIS 3.9 million. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | On January 12, 2016, Blue Square submitted a motion to the Court to postpone the date of the rights issue, because following regulatory difficulties, it was unable to execute the rights issue on the date stipulated in the arrangement, and that in its assessment, it will be able to execute the rights issue in May 2016. A decision has not yet been rendered on Blue Square's motion. As of the date of the statements, the total amount of Mega's debt to the Company stands at approximately NIS 5.7 million, where on January 1, 2016 (prior to the date of the stay of proceedings), Mega paid the Company the sum of approximately NIS 1.8 million. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   | As of the date of the issuing of the order to stay proceedings regarding Mega, the Company continues to work with Mega and to supply it with merchandise, in accordance with the budget established by the trustees and submitted to the Company. Non-deviation from the budget ensures that the Company will receive payment with respect to the products which it supplies to Mega. The payment with respect to merchandise supplied is paid in cash at the end of each week. On July 9, 2015, Mega filed a petition with the Center District Court to stay proceedings for Eden Briut Teva Market Ltd. ("Eden"), Mega's subsidiary. On August 16, 2015, the District Court for the Center District approved the offer by Tiv Taam Holdings 1 Ltd. (“Tiv Taam”) for the purchase of Eden's operations and rights in connection with eight of the independent branches which Eden operates under the brand “Eden Teva Market” (the “Offer”), whether by Tiv Taam or by a different corporation under its control and subject to fulfillment of the conditions precedent in the Offer. To the best of the Company's knowledge, the purchase agreement took effect on September 2, 2015, after the conditions precedent in the offer were met. Eden’s debt balance in The Company’s books as of the date of the statements and the date of the suspension of proceedings stands at approximately NIS 0.6 million (including VAT). In light of the uncertainty of Mega’s and Eden Briut Teva Market’s status, the Company provided the sum of approximately NIS 2.9 million on its books, for doubtful debts. The total impact on net profits after tax and with the neutralization of the minority's part, is approximately NIS 1.3 million. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | E. | During the course of June 2015, 396,839 ordinary shares of NIS 0.1 par value each of The Company were purchased by the Parent Company in consideration of the sum of approximately NIS 8,751 . the Parent Company holds 8,177,453 ordinary shares of The company, constituting approximately 61.76% of its issued and outstanding share capital and the voting rights therein (and fully dilated, approximately 61.62%), and together with BSD, approximately 67.58% of The company issued and outstanding share capital and voting rights (and fully diluted, approximately 67.43%). |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A. | On February 17, 2016, a search was conducted in the offices of the Company, The Company, BSD, and BGI, by the Israeli Securities Authority (the "Authority"), during which various documents and computers were taken from the Group's offices. Similarly, to the best of the Company's knowledge, a number of executives in the Group are being investigated by the Authority. Similarly, Mr. Gregory Gurtovoy, chairman of the Company's Board of Directors and the boards of the Group's companies (and the direct ultimate controlling shareholder therein) was detained for interrogation by the Authority for three days, and afterwards, was placed under house arrest for a period of two weeks (which ended). According to the exhibit attached to the arrest petition, Mr. Gurtovoy was arrested on the suspicion of the crimes of fraudulent acquisition under aggravating circumstances, falsifying corporate documents, fraud, and a breach of trust in a corporation, money laundering crimes, as well as reporting in order to deceive a reasonable investor. Additionally, Mr. Joseph Israel Schneorson, who serves as deputy chairman of the Company's Board of Directors and a director in The Company, was placed under house arrest for a period of 4 days (which has ended). As far as management is aware, the investigation by the Israeli Securities Authority relates to an investment made during January 2016, of approximately USD 3 million previously held in a bank account of a subsidiary of the Company, in a bonds of a European company, which allegedly served as a collateral to a loan obtained by the controlling shareholder or another individual and which was unrelated to the Company's operations. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | B. | On February 18, 2016, trade was suspended in The Company's securities, whose shares are traded, as aforesaid, on the NASDAQ in the US. From a conversation between the Company's attorney and a representative of NASDAQ Listing Qualifications ("NASDAQ") following the aforementioned suspension of trade, The Company received letters from NASDAQ requesting clarifications with regard to the investigation being conducted by the Authority in connection with the suspicion of the violation of certain sections of the Israeli Securities Law. As of the date of the statements and to the date of their publication, the Company is acting to respond to the questions raised in the letters, under the restrictions of the investigation. As of the date of the publication of the statements, trade in The Company's securities has been renewed. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | C. | On February 25, 2016, a petition was filed with the Tel Aviv-Jaffa District Court by a purported shareholder of the Parent Company for approval of a derivative action against the Company's directors and executive officers.  The Company and Parent Company have been named as respondents. The claim alleges USD 3 million in damages caused to the applicant due to an alleged breach of fiduciary duties and duty of care of the Company's directors and executive officers to the Company. On April 21 the Tel Aviv-Jaffa District Court granted to the Company's directors and executive officers an extension for 45 days to respond the claim. At this preliminary stage, the Company and Parent Company are reviewing and evaluating the Company and claims therein. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | On February 29, 2016, The Company was served with a lawsuit and a motion to certify it as a class action (securities class action) which was filed in the US in the Federal District Court for the Southern District of New York by a shareholder who claims to own shares of The Company (the "Plaintiff"), against The Company, Mr Gurtovoy, chairman of the Parent Company's and The Company's Boards of Directors, and the (ultimate direct) controlling shareholder, and some of the officers (past and present) (hereinafter, jointly: the "Defendants"). The lawsuit is a demand for compensation for alleged damages incurred by the Plaintiff because of a violation of Federal securities Law and other laws by the Defendants during the period from April 30, 2014 and until February 18, 2016. In light of the early stage of the lawsuit, the Company cannot, based on the position of its legal advisors, evaluate the risk involved and therefore, no provision was made in the financial statements with respect to the aforesaid |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | G. WILLI-FOOD INTERNATIONAL LTD. |                         |
|--------|----------------------------------|------------------------------|
|   |                             |                         |   |
|   | By:                              | /s/ Iram Efraim Graiver |   |
|   |                             | Iram Efraim Graiver          |   |
|   |                             | Chief Executive Officer      |   |
|   |                             |                         |   |

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| Exhibit Number                         | Description                                                                                                                                                   |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| †1.1                             | Memorandum of Association of the Company, as amended (7)                                                                                                      |
| 1.2                                    | Articles of Association of the Company, as amended on March 20, 2014 (7)                                                                                      |
| 2.1                                    | Specimen of Certificate for ordinary shares (1)                                                                                                               |
| 4.1                                    | Share Option Plan (1)                                                                                                                                         |
| †4.2                             | Services Agreement between the Company and Willi-Food, dated April 1, 1997 (2)                                                                                |
| †4.3                             | Transfer Agreement between the Company and Gold Frost dated February 16, 2006 (3)                                                                             |
| †4.4                             | Lease agreement for Logistics Center between the Company and Gold Frost dated February 16, 2006 (3).                                                          |
| 4.5                                    | Placing Agreement between the Company, Gold Frost, certain officers of Gold Frost and Corporate Synergy dated March 2, 2006 (3).                              |
| 4.6                                    | Lock In Agreement, between the Company, Gold Frost, Corporate Synergy and certain officers of Gold Frost, dated March 2, 2006 (3)                             |
| 4.7                                    | Registration Rights Agreement, dated as of October 25, 2006, among the Company and the investors signatory thereto. (4)                                       |
| †4.8                             | Sale Agreement, dated July 24, 2012, between the Company and Willi-Food Investments Ltd. (5)                                                                  |
| 4.9                                    | 2013 Option Plan (6)                                                                                                                                          |
| 4.10                                   | Agreement between G. Willi-Food International Ltd., Zvi V. & Co. Company Ltd. and Yossi Willi Management and Investment Ltd., dated November 12, 2015 (8) |
| 8.1                                    | Subsidiaries of the Company (*)                                                                                                                               |
| 12.1                                   | Certification of CEO of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)                      |
| 12.2                                   | Certification of CFO of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)                      |
| 13.1                                   | Certification of CEO of the Company pursuant to Rule 13a-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)                      |
| 13.2                                   | Certification of CFO of the Company pursuant to Rule 13a-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)                      |
| 15.(a).1      | Consent of Independent Registered Public Accounting Firm (*)                                                                                                  |

| † | English translations from Hebrew original.                                                                                    |
|---------|-------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Incorporated by reference to the Company’s Registration Statement on Form F-1, File No. 333-6314.                  |
| (2)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2001. |
| (3)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2005. |
| (4)     | Incorporated by reference to the Company’s Registration Statement on Form F-3, File No. 333-138200.                |
| (5)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012. |
| (6)     | Incorporated by reference to the Company’s Form 6-K filed October 31, 2013.                                             |
| (7)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013. |
| (8)     | Incorporated by reference to Appendix A to the Company’s Form 6-K filed December 10, 2015.                              |
| (*)     | Filed Herewith                                                                                                                |

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