`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 20-F

           [_] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

                [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2008

                                       OR

              [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
          For the transition period from ____________ to ______________

                                       OR

            [_] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
           Date of event requiring this shell company report ________

                          COMMISSION FILE NO. 000-29256

                        G. WILLI-FOOD INTERNATIONAL LTD.
              (Exact name of Registrant as specified in its charter
               and translation of Registrant's name into English)

                                     ISRAEL
                 (Jurisdiction of incorporation or organization)

        4 NAHAL HARIF ST., NORTHERN INDUSTRIAL ZONE, YAVNE, 81106, ISRAEL
                    (Address of principal executive offices)

                                   Ety Sabach
                             Chief Financial Officer
                   4 Nahal Harif St. Norther Industrial Zone,
                               Yavne 81106, Israel
                               Tel: 972-8-932-1000
--------------------------------------------------------------------------------
         (Name, Telephone, E-mail and/or Facsimile number and Address of
                          Registrant's Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

         Title of class                Name of each exchange on which registered
---------------------------------      -----------------------------------------

  ORDINARY SHARES, NIS 0.10 PAR                  NASDAQ CAPITAL MARKET
         VALUE PER SHARE

Securities registered or to be registered pursuant to Section 12(g) of the Act:

                                      NONE

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:

                                      NONE`

`Indicate the number of outstanding shares of each of the issuer's classes
of capital or common stock as of the close of the period covered by the Annual
Report:

     The registrant had 10,267,893 outstanding ordinary shares, NIS 0.10 nominal
value per share as of December 31, 2008.

     Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.

                               Yes [_]     No [X]

     If this report is an annual or transition report, indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or 15(d)
of the Securities Exchange Act 1934.

                               Yes [_]     No [X]

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:

                               Yes [X]     No [_]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large Accelerated filer [_]   Accelerated filer [_]    Non-accelerated filer [X]

     Indicate by check mark which basis of accounting the registrant has used to
prepare the financial statements included in this filing:

     U.S. GAAP [_]

     International Financing Reporting Standards as issued by the International
     Accounting Standards Board [X]

     Other [_]

     If "Other" has been checked in response to the previous question, indicate
by check mark which financial statement item the Registrant has elected to
follow:

                           Item 17 [_]     Item 18 [_]

     If this is an annual report, indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).

                               Yes [_]     No [X]`

`TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

PRESENTATION OF INFORMATION                                                  1

PRESENTATION OF FINANCIAL AND SHARE 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                                          29

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                        29

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                          42

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                   51

ITEM 8. FINANCIAL INFORMATION                                               54

ITEM 9. THE OFFER AND LISTING                                               58

ITEM 10. ADDITIONAL INFORMATION                                             59

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK         74

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES             75

PART II                                                                     76

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                    76

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
         HOLDERS AND USE OF PROCEEDS                                        76

ITEM 15. CONTROLS AND PROCEDURES                                            76

ITEM 15T. CONTROLS AND PROCEDURES                                           76

ITEM 16.  [RESERVED]                                                        77

ITEM 16A. -     AUDIT COMMITTEE FINANCIAL EXPERT                            77

ITEM 16B. -     CODE OF ETHICS                                              77

ITEM 16C. -     PRINCIPAL ACCOUNTANT FEES AND SERVICES                      78`

`ITEM 16D. -     EXEMPTIONS FROM THE LISTING STANDARDS FOR
                AUDIT COMMITTEES                                            78

ITEM 16E. -     PURCHASES OF EQUITY SECURITIES BY THE COMPANY
                AND AFFILIATED PURCHASERS                                   79

ITEM 16F. -     CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT               79

ITEM 16G. -     CORPORATE GOVERNANCE                                        80

PART III                                                                    81

ITEM 17. FINANCIAL STATEMENTS                                               81

ITEM 18. FINANCIAL STATEMENTS                                               81

ITEM 19. EXHIBITS                                                           82`

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`PRESENTATION OF INFORMATION

     In this Annual Report, references to the "Company", "we" and "us" refer to
G. Willi-Food International Ltd. and its consolidated subsidiaries.

     The Company presents its consolidated financial statements in New Israeli
Shekels, the currency of the State of Israel. Unless otherwise specified or the
context otherwise requires, references to "$", "US$", "Dollars", "USD" and "U.S.
Dollars" are to the United States Dollars and references to "NIS" are to New
Israeli Shekels.

     Solely for the convenience of the reader, this Annual Report contains
translations of certain NIS amounts into U.S. Dollars at specified rates. These
translations should not be construed as representations that the translated
amounts actually represent such dollar or NIS amounts, as the case may be, or
could be converted into U.S. Dollars or NIS as the case may be, at the rates
indicated or at any other rate. Therefore, unless otherwise stated, the
translations of NIS into U.S. Dollars have been made at the rate of NIS 3.802 =
$ 1.00, the representative exchange rate on December 31, 2008.

                 PRESENTATION OF FINANCIAL AND SHARE INFORMATION

     We prepare our consolidated financial statements in accordance with
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB"). These are the Company's first
annual consolidated financial statements that were prepared in accordance with
IFRS as issued by the IASB and IFRS 1-"First Time Adoption of International
Financial Reporting Standards". Until and including our financial statements for
the year ended December 31, 2007, we prepared our consolidated financial
statements in accordance with Israeli GAAP. The influence of the transition to
IFRS (from financial statements prepared in accordance with Israeli GAAP) on the
Company's financial statements for the year ended December 31, 2007 and its
results of operations for that year, is detailed in note 30 to our consolidated
annual financial statements included elsewhere in this annual report. Following
the Company's adoption of IFRS, as issued by the IASB, the Company is no longer
required to reconcile its financial statements prepared in accordance with IFRS
to U.S. GAAP.

         CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS

     Certain of the statements contained in this Annual Report that are not
historical facts, including, without limitation, certain statements made in the
sections hereof entitled "Information on the Company," "Dividends," "Operating
and Financial Review and Prospects," and "Quantitative and Qualitative
Disclosures about Market Risk" are statements of future expectations and other
forward-looking statements that are based on management's current views and
assumptions and involve known and unknown risks and uncertainties that could
cause actual results, performance or events to differ materially from those
expressed or implied in such statements. Actual results, performance or events
may differ materially from those in such statements due to, without limitation:

o    changes affecting currency exchange rates, including the NIS/U.S. Dollar
     exchange rate,

o    payment default by any of our major clients,

o    loss of one or more of our principal clients,

o    the loss of one or more of our key personnel,

o    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,

o    termination of arrangements with our suppliers, in particular Arla Foods
     amba,

o    increasing levels of competition in Israel and other markets in which we do
     business,

o    changes in political, economic and military conditions in Israel,
     including, in particular, economic conditions in the Company's core markets,


                                     Page 1`

`o    increase or decrease in global purchase prices of food products,

o    our inability to accurately predict consumption of our products,

o    we may not successfully integrate our prior acquisitions,

o    interruption to our storage facilities,

o    product liability claims,

o    variations from quarter to quarter,

o    our inability to protect our intellectual property rights,

o    Initiation and Enforcement of Legal Action in Israel,

o    our inability to continue to meet the NASDAQ listing requirements,

o    One shareholder owns a large percentage of our shares,

o    We are controlled by and have business relations with Willi-Food and its
     management,

o    Our international operations may be adversely affected by risks associated
     with international business, and

o    The price of our ordinary shares may be volatile.

     The Company is under no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information or for any
other reason. See Item 3: "Key Information-Risk Factors" and Item 5: "Operating
and Financial Review and Prospects - Results of Operations".

                                     PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

     Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIME TABLE

     Not applicable.

ITEM 3. KEY INFORMATION

     A.   SELECTED FINANCIAL DATA

     The following selected consolidated financial data should be read together
with Item 5: "Operating and Financial Review and Prospects" and our audited
consolidated financial statements and related notes included elsewhere in this
Annual Report. The selected consolidated balance sheet data as of December 31,
2008 and 2007 have been derived from our audited consolidated financial
statements included elsewhere in this Form 20-F, which have been prepared in
accordance with IFRS and interpretations as issued by the IASB, and such
accounting policies have been applied retrospectively to the Company's financial
statements as of December 31, 2007 and for the year then ended.

     The selected consolidated balance sheet data as of December 31, 2008 and
2007 and the selected consolidated statements of operations data for each of the
two years in the period ended December 31, 2008 and 2007 have been audited by
Brightman Almagor Zohar & Co., an independent registered public accounting firm,
and a Member Firm of Deloitte Touche Tohmatsu. Their report appears in Item 18
in this Form 20-F. The selected consolidated balance sheet data as of December
31, 2006, 2005, and 2004 and the selected consolidated statements of operations
data for the years ended December 31, 2006, 2005 and 2004 have been derived from
our audited consolidated financial statements which are not included in the Form
20-F. Historical financial results may not be indicative of our future
performance and interim results may not be reflective of the results for the
fiscal year.


                                     Page 2`

`The Company maintains its accounts and presents its financial statements in
New Israeli Shekels. Until December 31, 2003, Israel was considered a country in
which hyper-inflation conditions exist. Therefore, non-monetary balances in the
Company's balance sheet were presented on the historical nominal amount and were
adjusted to changes in the Israeli Consumer Price Index ("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 such date were used as the historical costs. The financial
statements were prepared using the historical cost, except for:

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

     o    Non-current assets are measured at the lower of their previous
          carrying amount and fair value less costs of sale.

     o    Inventories are stated at the lower of cost and net realizable value.

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

     o    Liabilities to employees as described in note 13 to our consolidated
          annual financial statements.

RECENT EXCHANGE RATES OF NIS TO ONE U.S. DOLLAR

The table shows the high and low exchange rate of NIS per one U.S. Dollars for
the last six months:

                                         HIGH         LOW
                                      --------     --------

January 2009                             4.065        3.783
February 2009                            4.191        4.012
March 2009                               4.245        4.024
April 2009                               4.256        4.125
May 2009                                 4.169        3.958
June 2009 (through June 22, 2009)        4.005        3.887

     The representative exchange rate for NIS on December 31, 2008 was NIS 3.802
= $1.00, and the representative exchange rate for NIS on June 22, 2009 was NIS
3.955= $1.00.

     The average exchange rate of NIS 3.5878 = USD 1.00 was for the year ended
December 31, 2008, NIS 4.108 for the year ended December 31, 2007, 4.457 for the
year ended December 31, 2006, 4.489 for the year ended December 31, 2005 and
4.482 for the year ended December 31, 2004.


                                     Page 3`

`INCOME STATEMENT DATA:
IN ACCORDANCE WITH ISRAELI GAAP

                                          2006                       2005                        2004
                                -----------------------     -----------------------     -----------------------
                                   NIS            USD          NIS           USD           NIS           USD
                                ---------     ---------     ---------     ---------     ---------     ---------

Sales                             191,460        50,358       166,282        43,735       170,982        44,971
Cost of sales                     143,581        37,765       128,215        33,723       130,292        34,269
Gross profit                       47,879        12,593        38,067        10,012        40,690        10,702
Sales and Marketing                21,100         5,550        15,771         4,148        15,632         4,112
General and administrative         14,151         3,722        13,544         3,562         9,134         2,402
Total Operating  expenses          35,251         9,272        29,315         7,710        24,766         6,514
Operating Income                   12,628         3,321         8,752         2,302        15,924         4,188
Financial Income
(Expenses), Net                     4,925         1,295         2,501           658         1,121           295
Other Income, Net                  18,248         4,800            35             9            34             9
Pre Tax Income                     35,801         9,416        11,288         2,969        17,079         4,492
Income taxes                        5,379         1,415         3,567           938         5,886         1,548
Income after taxes on
income                             30,422         8,001         7,721         2,031        11,193         2,944
Minority interest                   1,807           475             -             -             -             -
Net Income                         28,615         7,526         7,721         2,031        11,193         2,944
Earnings per Share Basic             3.17          0.83          0.90          0.24          1.30          0.34
Shares Used in Computing
Earnings per Share              9,028,223     9,028,223     8,615,000     8,615,000     8,600,000     8,600,000
Dividend declared per share             -             -          0.55          0.14             -             -

INCOME STATEMENT DATA:
IN ACCORDANCE WITH IFRS

                                            2008                              2007
                                ----------------------------      ----------------------------
                                    NIS              USD              NIS              USD
                                -----------      -----------      -----------      -----------
Revenue                             349,227           91,853          249,693           65,674
Cost of sales                       281,651           74,080          198,961           52,331
Gross profit                         67,576           17,773           50,732           13,343
Selling expenses                     33,759            8,879           24,263            6,382
General and administrative
expenses                             23,127            6,083           18,869            4,963
Other (Income) expenses               2,195              577             (470)            (124)
Goodwill impairment                   1,067              280            3,054              803
Total operating expenses             60,148           15,819           45,716           12,024
Operating profit                      7,428            1,954            5,016            1,319
Finance income                       (4,095)          (1,077)           2,362              621
Finance costs                         1,612              424               88               23
Finance income (costs), net          (5,707)          (1,501)           2,274              598
Profit before tax                     1,721              453            7,290            1,917
Income tax charge                     1,454              382            2,651              697
Profit for the period                   267               71            4,639            1,220
Attributable to:
Equity holders of the
Company                                (786)            (206)           2,342              616
Noncontrolling interest               1,053              277            2,297              604
Net Income                              267               71            4,639            1,220
Basic and diluted earnings
per Share                             (0.08)           (0.02)            0.23             0.06
Shares Used in Computing
Earnings per Share               10,267,893       10,267,893       10,267,893       10,267,893
Dividend declared per share               -                -                -                -


                                     Page 4`

`BALANCE SHEET DATA:
IN ACCORDANCE WITH ISRAELI GAAP

                                  2006                     2005                      2004
                         ---------------------     ---------------------     ---------------------
                            NIS          USD         NIS           USD         NIS           USD
                         --------     --------     --------     --------     --------     --------

Working capital           144,323       37,960       85,419       22,467       95,986       25,246
Total assets              219,971       57,857      137,274       36,106      129,861       34,156
Short-term bank debt            -            -            -            -        2,489          655
Shareholders' equity      171,739       45,171      101,867       26,793       98,900       26,013

BALANCE SHEET DATA:
IN ACCORDANCE WITH IFRS

                                  2008                      2007
                         ---------------------     ---------------------
                           NIS           USD         NIS           USD
                         --------     --------     --------     --------

Working capital           122,523       32,226      142,645       37,518
Total assets              273,342       71,894      239,452       62,981
Short-term bank debt       17,562        4,619        5,978        1,572
Shareholders' equity      185,582       48,812      190,607       50,133

     B.   CAPITALIZATION AND INDEBTEDNESS

     Not applicable.

     C.   REASONS FOR THE OFFER AND USE OF PROCEEDS

     Not applicable.


                                     Page 5`

`D.   RISK FACTORS

OUR RESULTS OF OPERATIONS MAY BE IMPACTED BY MONETARY RISK. OUR PORTFOLIO OF
MARKETABLE SECURITIES IS SUBJECT TO VARIOUS MARKET RISKS.

     We are exposed to fluctuations in the rate of the United States Dollar and
Euro versus the NIS. Most of our income is in NIS, whereas most of our purchases
are in United States Dollars and in Euros. In addition, a significant portion of
our short term bank borrowings, when needed, are in United States Dollars and/or
in Euros. A significant depreciation in the NIS vis-a-vis the United States
Dollar and/or Euro could have a material adverse effect on our results of
operations and financial condition.

     We strive to minimize market risks arising from exchange rate fluctuations
and the cost of imported goods, especially by opening wide documentary credits
for suppliers abroad, holding foreign currency reserves and initiating forward
transactions and foreign currency options.

     As a method of investing cash reserves, we hold from time to time a
portfolio of marketable securities traded on the Tel Aviv Stock Exchange as well
as other stock exchanges and certain bonds traded abroad. This portfolio of
marketable securities is subject to various market risks resulting from
fluctuations in interest rates and foreign currency, exchange rates, price
fluctuations and other market risks in Israel and abroad. We do not utilize
derivative securities for trading purposes, enter into swap arrangements or
otherwise hedge our currency in a manner that we believe could expose us to
significant market risk.

     Our financial instruments consist mainly of cash and cash equivalents,
current accounts receivable, short-term borrowings, current accounts payable and
accruals. In view of their nature, the fair value of the financial instruments,
included in working capital, is usually identical or close to their book value.

OUR BUSINESS MAY BE MATERIALLY AFFECTED IF ANY OF OUR MAJOR CLIENTS DEFAULTS ON
ITS PAYMENT TO US.

     Financial instruments that potentially subject us to concentrations of
credit risk consist principally of trade receivables. Despite our large number
of clients (over 1,500 in Israel and abroad), a major and significant part of
our sales is made to a limited number of customers (mainly the organized
market). Our two largest customers accounted for 20% of our sales in 2008. We
generally do not require and do not receive collateral from those customers,
although we do require and receive collateral from most of the remainder of our
clients in Israel to ensure security of collecting payments. We maintain an
allowance for doubtful debts based upon factors surrounding the credit risk of
specific customers, historical trends and other information which our management
believes adequately covers all anticipated losses in respect of trade
receivables. There can be no assurance that this allowance will be adequate. In
the event that any of our major clients defaults on its payment obligations to
us, we will not possess sufficient security to collect the entire debt.

WE DEPEND ON A SMALL NUMBER OF PRINCIPAL CLIENTS WHO HAVE IN THE PAST BOUGHT OUR
PRODUCTS IN LARGE VOLUMES. WE CANNOT ASSURE THAT THESE CLIENTS OR ANY OTHER
CLIENT WILL CONTINUE TO BUY OUR PRODUCTS IN THE SAME VOLUMES, ON THE SAME TERMS
OR AT ALL.

     Despite our wide dispersion of clients, we have two major clients, both
supermarket chains, who accounted for approximately 16% and 4% respectively of
our revenue during 2008. We do not have long term purchase contracts with our
clients, and our sales arrangements with our clients do not have minimum
purchase requirements. We cannot assure that our major clients will continue to
buy our products at all or in the same volumes or on the same terms as they have
in the past. Their failure to do so may significantly reduce our sales. Losing
one or more of them may adversely affect our business results. In addition, we
cannot assure that we will be able to attract new customers.


                                     Page 6`

`WE ARE DEPENDENT ON OUR KEY PERSONNEL. THE LOSS OF ANY OF OUR KEY PERSONNEL
COULD HAVE A MATERIAL EFFECT ON OUR BUSINESS.

     We depend on a small number of technical staff, managers and directors,
including managing services provided to us by Zwi Williger and Joseph Williger,
through management companies that they control, each of whom holds senior
management positions with us. The loss of one or more of them could have a
material adverse effect on our business and operations.

WE ARE SUBJECT TO REGULATIONS AND OTHER POLICIES OF THE ISRAELI GOVERNMENT AND
OF OTHER COUNTRIES INTO WHICH WE IMPORT AND EXPORT. IF WE ARE UNABLE TO OBTAIN
AND MAINTAIN REGULATORY QUALIFICATIONS OR APPROVALS FOR OUR PRODUCTS, OUR
BUSINESS MAY BE ADVERSELY AFFECTED.

     REGULATORY, LICENSING AND QUOTAS: The import, export, storage, marketing,
manufacturing, distribution and labeling of food products are subject to
extensive regulation and licensing by various Israeli government and municipal
agencies, principally the Ministry of Health, the Ministry of Trade and
Industry, the Ministry of Agriculture and the Ministry of Finance. To the extent
that we have imported and exported, or will import and export, food products
outside of Israel, we may be subject to quotas and other import and export laws
and regulations which may limit our ability to sell certain of our food products
into these countries. We are required to maintain our distribution processes in
conformity with all applicable laws and regulations. In the event that such laws
and regulations change, or we fail to comply with such laws and regulations, we
may be prevented from trading within Israel or another part of the world.

     TARIFFS: The Ministry of Finance and the Ministry of Trade and Industry of
the State of Israel may increase the levels of tariffs on importing goods. This
would have a direct impact on us and our financial performance by increasing our
costs which we may not be able to pass on to our customers.

     KOSHER LICENSES: Under kosher regulations, we are required to ascertain
that the foodstuffs which we offer for sale bear kosher certification approved
by certain authorities such as the Chief Rabbinate of Israel. There is a risk
that the relevant authorities in Israel or other areas of the world responsible
for issuing kosher licenses may change the criteria for obtaining such licenses.
In such circumstances, we may be prohibited from obtaining kosher licenses for
various products that we sell into the various kosher markets. Failure to comply
with such applicable laws and regulations in relation to kosher licenses could
subject us to civil sanctions, including fines, injunctions, recalls or
seizures, as well as potential criminal sanctions, any of which could have a
material adverse effect on us and our financial performance.

WE ARE DEPENDENT ON ARLA FOODS AMBA, OR ARLA, AND WE ALSO WORK WITH A LIMITED
NUMBER OF OTHER KEY SUPPLIERS. IF THESE SUPPLIERS RAISE PRICES OR TERMINATE
THEIR ENGAGEMENT WITH US, OUR OPERATING RESULTS COULD BE ADVERSELY AFFECTED.

     We are dependent on Arla, which supplies a high percentage of our dairy and
dairy substitute products, although we are not dependent on any single supplier
in respect of a majority of our products. Terminating the engagement with any
supplier, in particular Arla, or a material change in the engagement terms for
purchasing products from those suppliers may have an adverse affect on our
results of operations. We have a distribution agreement with Arla pursuant to
which we serve as Arla's sole agent and distributor in Israel of certain
products for a five-year period beginning in March 2005. In July 2007, the
agreement was amended and the exclusivity period was extended to ten years from
March 2005. See "Item 4. Information on the Company - B. Business Overview -
Suppliers". If these suppliers raise their prices, our operating results may be
adversely affected. See "Increases in milk, corn, rice and other product prices
have, and may continue to have, a material adverse effect on our profitability."
We believe that there are alternative suppliers for purchasing our products;
however, we cannot assure that the products of the alternative suppliers will
become immediately available and that the terms of purchase will be similar to
the current ones.


                                     Page 7`

`WE MAY NOT BE ABLE TO SUCCESSFULLY COMPETE WITH LARGER COMPETITORS WHO HAVE
GREATER OPERATIONS, FINANCIAL, MARKETING, HUMAN AND OTHER RESOURCES THAN WE
HAVE.

     The food distribution business in Israel is highly competitive. We face
competition from existing competitors in respect of imported as well as locally
manufactured food products. Local producers are not subject to the financial
risks of importing food products or to governmental policies regarding taxation
of imported food products to which we are subject. We believe that we may also
face competition from potential newcomers to the food business as well as from
existing importers and/or manufacturers not currently involved in the same lines
of products as us. In addition, in the event we further expand our activity in
the international food markets, we will face also competition from manufacturers
and/or distributors from the locations in which we expand our activity. Certain
of our current and potential competitors are substantially more established,
benefit from substantially greater market recognition and have greater
financial, marketing, human and other resources than us. If any of our
competitors materially reduces prices, we may be required to reduce our prices
in order to remain competitive. Such reductions, if effected, could have a
material adverse effect on our financial condition and results of operations.

ECONOMIC CONDITIONS IN ISRAEL AFFECT OUR FINANCIAL PERFORMANCE.

A major part of our sales are made in Israel, and consequently our financial
performance is dependent to a significant extent on the economy of Israel. In
recent quarters, the global economic instability and economic uncertainty have
negatively impacted economic conditions in Israel. A recession has started in
Israel, and the unemployment rates have increased. This has resulted in our
customer base, both in the retail and in the wholesale markets, to reduce their
purchases from us, both in quantities and by purchasing lower cost food
products. A deterioration of the economic situation in Israel may erode the real
wages and lower the buying power of our potential customers. This in turn may
adversely affect our activities and business results.

WE MAY BE AFFECTED BY POLITICAL, ECONOMIC AND MILITARY CONDITIONS IN ISRAEL AND
THE MIDDLE EAST.

     Political, economic and military conditions in Israel have a direct
influence on us because our operations are located there. Any major hostilities
involving Israel or the interruption or curtailment of trade between Israel and
its present trading partners could materially and adversely affect our
operations. Several Arab countries still restrict business with Israeli
companies and these restrictions may have an adverse impact on our operating
results, financial condition or the expansion of our business. We could be
adversely affected by restrictive laws or policies directed towards Israel and
Israeli businesses. The establishment in 2006 of a government in the Palestinian
Authority by representatives of the Hamas militant group has created additional
unrest and uncertainty in the area. In December 2008, Israel was engaged in an
armed conflict with Hamas in the Gaza Strip, in the southern region of Israel.
During the summer of 2006, Israel was engaged in an armed conflict with
Hezbollah, a Lebanese Islamic Shiite militia group, which disrupted most daily
civilian activity in northern Israel. These events have at times caused
considerable damage to the Israeli economy. As a result of the political and
military situation, Israel's economy has at times suffered considerably. Ongoing
or revived hostilities related to Israel may have a material adverse effect on
our business and on our share price.

     Many of our executive officers and employees in Israel are obligated to
perform annual military reserve duty in the Israeli Defense Forces and may be
called to active duty under emergency circumstances at any time. If a military
conflict or war arises, these individuals could be required to serve in the
military for extended periods of time. Our operations could be disrupted by the
absence for a significant period of one or more of our executive officers or key
employees or a significant number of our other employees due to reserve duty.
Any disruption in our operations may harm our business.


                                     Page 8`

`INCREASES OR DECREASES IN GLOBAL PRODUCT PRICES HAVE IN THE PAST, AND IN THE
FUTURE MAY CONTINUE TO, HAVE A MATERIAL ADVERSE EFFECT ON OUR PROFITABILITY.

     In 2007, a number of our suppliers increased their product prices to us due
to increases in milk, wheat, corn and rice prices. This reduced our
profitability during 2007. The cost of food commodities and other food products
is subject to cyclical and other market factors and may fluctuate significantly.
As a result, our cost in securing these products is subject to substantial
increases and decreases over which we have no control. We cannot assure that we
will be able to pass on to customers the increased costs associated with the
procurement of these products. Moreover, there has in the past been, and there
may in the future be, a time lag between the incurrence of such increased costs
and the transfer of such increases to customers. To the extent that increases in
the prices of our products cannot be passed on to customers or there is a delay
in passing on the increased costs to customers, we are likely to experience an
increase in our costs which may materially reduce our margin of profitability.

     In 2008, the global purchase price of a number of our key products
decreased sharply due to the global recession. This reduced our profitability
during 2008 because of the sharp decrease in the selling prices of our products
that we had previously purchased or committed to purchase at higher prices.
Because we purchase many of our products from outside Israel, there is a lag of
time from when we purchase inventory from our suppliers (or commit to purchase
inventory from our suppliers) until the time we sell this inventory to our
customers in Israel. To the extent that the purchase price of products that we
purchase decreases from the time that we purchase our inventory (or commit to
purchase our inventory) until the time we sell the inventory to our customers,
our margin of profitability may be materially reduced if we are not able to sell
our products at prices exceeding the market price.

OUR RESULTS OF OPERATIONS MAY BE ADVERSELY AFFECTED IF WE DO NOT ACCURATELY
PREDICT THE RATE OF CONSUMPTION OF OUR PRODUCTS.

     We hold inventory of basic foodstuffs (such as preserved food, oils and
rice) and other food products, and we accumulate inventories of these products
based on our prediction of the consumption of these products. If actual
consumption does not meet the prediction, and the shelf life of such products
expire or we cannot otherwise sell such products, this may materially and
adversely affect our financial condition and results of operations. On the other
hand, to the extent we do not have adequate inventory of these critical products
(due, for example, to an emergency situation), we will not be able to meet the
needs of our customers and our revenues may be adversely affected.

WE MAY NOT SUCCESSFULLY INTEGRATE OUR RECENT ACQUISITIONS.

     In light of our recent acquisitions of Shamir Salads (2006) Ltd. and
Kirkeby, our success will depend in part on our ability to manage the combined
operations of these companies, to integrate the operations and personnel of
these companies together with our other subsidiaries into a single
organizational structure, and to replace those subsidiary managers who have
departed or may in the future leave our employ. There can be no assurance that
we will be able to effectively integrate the operations of our subsidiaries and
our acquired businesses into a single organizational structure. Integration of
these operations could also place additional pressures on our management as well
as on our key personnel. The failure to successfully manage this integration
could have an adverse material effect on our results of operations.

WE MAY BE ADVERSELY AFFECTED BY ANY INTERRUPTION TO OUR STORAGE FACILITIES.

     We store most of our products in two main locations - a logistics center
warehouse situated in Yavne, Israel and a factory and logistics center situated
in Barkan, Israel save for products being distributed to customers. Any
interruption to these storage facilities, whether by power failure, flooding or
other event, would have a material impact on our ability to trade in the
ordinary course.


                                     Page 9`

`OUR INSURANCE COVERAGE MAY NOT BE SUFFICIENT TO COVER OUR LOSSES IN THE EVENT
OUR PRODUCTS ARE SUBJECT TO PRODUCT LIABILITY CLAIMS OR OUR PRODUCTS ARE SUBJECT
TO RECALL. IN SUCH EVENT, IT WOULD HAVE A MATERIAL ADVERSE EFFECT ON US.

     Our products may become the subject of product liability claims, and there
can be no assurance that our property insurance coverage limits will be adequate
or that all such claims will be covered by insurance. A product recall or a
product liability claim, even one without merit or for which we have substantial
coverage, could result in significant expenses, including legal defense costs,
thereby increasing our expenses, lowering our earnings and, depending on
revenues, potentially resulting in additional losses. A successful product
liability claim or other judgment against us in excess of our insurance coverage
could have a material adverse effect on us and our reputation.

OUR OPERATING RESULTS MAY BE SUBJECT TO VARIATIONS FROM QUARTER TO QUARTER.

     Our operating results may be subject to variations from quarter to quarter
depending on, among other things, the timing of sales campaigns and special
events initiated by both us and our customers, the major Jewish holidays (such
as the Jewish New Year and Passover), our ability to manage future inventory
levels in line with business opportunities and anticipated customers' demand,
competitive developments in the market, changes in the rates of inflation in
Israel and fluctuations in NIS/Dollar exchange rates. There can be no assurance
that our sales or net income (if any) in any particular quarter will not be
lower than the preceding and/or comparable quarter or that its sales or net
income (if any) in a particular quarter will be indicative of our results of
operations for the entire year. The trading prices of our ordinary shares may
fluctuate significantly in response to variations in our operating results.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, OUR COMPETITIVE
POSITION COULD BE COMPROMISED.

     We market certain products under the trademarks "Willi-Food", "Shamir
Salads", "Pizza Top", "Gold Food", "Donna Rozza", "Manchow", "Bloose",
"Krisponim", "Bubles" and "Gold Frost". Although we have registered trademarks
for these brands, we cannot assure that the degree of protection these and other
trademarks offer will be sufficient to protect our rights in these marks.

INITIATION AND ENFORCEMENT OF LEGAL ACTION IN ISRAEL.

     We are organized under the laws of the State of Israel. Most of our
executive officers and Directors and some of the experts named in this Annual
Report are non-residents of the United States, and a substantial portion of the
Company's assets and the assets of these persons are located outside the United
States. Therefore, it may be difficult to enforce a judgment obtained in the
United States against us or any of those persons. It may also be difficult to
enforce civil liabilities under United States federal securities laws in actions
initiated in Israel.

IF OUR ORDINARY SHARES ARE DE-LISTED FROM NASDAQ, THE LIQUIDITY AND PRICE OF OUR
ORDINARY SHARES AND OUR ABILITY TO ISSUE ADDITIONAL SECURITIES MAY BE
SIGNIFICANTLY REDUCED.

     We may in the future fail to comply with the NASDAQ Capital Market
regulations and listing requirements as to minimum net income, minimum number of
shareholders and public float and other requirements, and as a result NASDAQ may
initiate procedures to de-list our ordinary shares from the NASDAQ Capital
Market.

     Since the beginning of 2009, our stock price has been trading in a range
from $0.86 to $2.29 per share. Under NASDAQ's Marketplace Rule 5450(a)(2),
("RULE") any company whose share has a closing bid price less than $1.00 for 30
consecutive business days may be subject to a de-listing proceeding instigated
by the NASDAQ. Due to the current extraordinary market conditions, on October
16, 2008, Nasdaq filed an immediately effective rule change with the SEC
providing that companies will be deemed to be in compliance with the continuing
listing standards related to bid price or market value of publicly held shares.
The relief, as extended in March 2009, is currently in effect through July 19,
2009. If we fail to meet the continued listing criteria defined under the Rule
following the expiration of the relief, our ordinary shares may be delisted from
trading on the Nasdaq Global Market.


                                    Page 10`

`Delisting from the Nasdaq Global Market could have an adverse effect on our
business and on the trading of our ordinary shares. If a delisting of our
ordinary shares were to occur, our shares would trade on the OTC Bulletin Board
or on the "pink sheets". The OTC Bulletin Board and "pink sheets" are generally
considered to be less efficient markets, and this could diminish investors'
interest in our ordinary shares as well as significantly impact our share price
and the liquidity of our ordinary shares. Any such de-listing may also severely
complicate trading of our shares by our shareholders, or prevent them from
re-selling their shares at/or above the price they paid. Furthermore, our
relatively low trading volumes may make it difficult for shareholders to trade
shares or initiate any other transactions. De-listing may also make it more
difficult for us to issue additional securities or secure additional financing.

     In July 2003 and in November 2004, we received letters from the NASDAQ
Stock Market informing us that we had failed to meet a continued listing
requirement, that we have 500,000 publicly held shares, and that our ordinary
shares were therefore subject to de-listing from the NASDAQ Capital Market,
unless a proper plan for complying with the requirement was presented. Following
the receipt of the November 2004 letter, Willi Food Investments Ltd. and Mr.
Joseph Williger sold 75,000 of our shares to the public and at the same time we
distributed a one to one stock dividend to our shareholders. As a result of
these actions, we then complied with the abovementioned listing requirements and
the threat of de-listing was removed.

ONE SHAREHOLDER OWNS A LARGE PERCENTAGE OF OUR SHARES.

     As of the date of this Annual Report, Willi-Food Investments Ltd., which we
refer to as Willi-Food owned approximately 69.36% of our ordinary shares. Mr.
Joseph Williger, who serves as Chief Executive Officer and director of our
company, and serves as Chairman of the Board of Willi-Food, holds approximately
25.07% of the outstanding shares of Willi-Food (approximately 25.17% on a
fully-diluted basis). Mr. Zwi Williger, who serves as Chief Operating Officer
and Chairman of the Board of our company, and serves as a director and Chief
Executive Officer of Willi-Food, holds approximately 37.65% of the outstanding
shares of Willi-Food (approximately 36.62% on a fully-diluted basis).

     Our Articles of Association do not provide for cumulative voting rights
with respect to the election of directors and every resolution of the company in
the general meeting of shareholders is deemed duly passed if passed by a simple
majority of the shareholders present and voting unless another majority is
required by the Israeli Companies Law or by our Articles of Association.

WE ARE CONTROLLED BY AND HAVE BUSINESS RELATIONS WITH WILLI-FOOD AND ITS
MANAGEMENT.

     Willi-Food, our controlling shareholder, is a holding company whose main
asset is the ordinary shares it owns in our company. Willi-Food currently does
not directly conduct any material business.

     Willi-Food, Mr. Zwi Williger, a 37.65% shareholder of Willi-Food, the
Chairman of our Board of Directors and our Chief Operating Officer and a
director and Chief Executive Officer in Willi-Food, and Mr. Joseph Williger, a
25.07% shareholder of Willi-Food, a director and our Chief Executive Officer and
the chairman of the Board of Directors of Willi-Food, have been and continue in
certain cases to be party to certain agreements and arrangements relating to our
operations. Such transactions include service and employment arrangements
between each of Messrs. Joseph and Zwi Williger together with us, and a service
agreement we have with Willi-Food. All such transactions include consideration.


                                    Page 11`

`In addition, certain of our key personnel also serve in management
positions in Willi-Food. By serving in dual capacities, these persons may
experience conflicts of interest involving the two companies. Israeli law
imposes procedures, including, for certain material transactions, a requirement
of shareholder approval, as a precondition to entering into interested party
transactions. These procedures may apply to transactions between Willi-Food and
us. However, we cannot assure that we will be able to avoid the possible
detrimental effects of any such conflicts of interest by complying with the
procedures mandated by Israeli law.

OUR INTERNATIONAL OPERATIONS MAY BE ADVERSELY AFFECTED BY RISKS ASSOCIATED WITH
INTERNATIONAL BUSINESS.

     We purchase food products from over 250 suppliers located around the world.
Therefore, we are subject to certain risks that are inherent in an international
business. These include:

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

     o    tariffs, customs, duties, quotas and other trade barriers;

     o    difficulties in managing foreign operations and foreign distribution
          partners;

     o    longer payment cycles and problems in collecting accounts receivable;

     o    fluctuations in currency exchange rates;

     o    political risks;

     o    foreign exchange controls which may restrict or prohibit repatriation
          of funds;

     o    export and import restrictions or prohibitions, and delays from
          customs brokers or government agencies;

     o    seasonal reductions in business activity in certain parts of the
          world; and

     o    potentially adverse tax consequences.

     Depending on the countries involved, any or all of the foregoing factors
could materially harm our business, financial condition and results of
operations.

THE PRICE OF OUR ORDINARY SHARES MAY BE VOLATILE.

     The market price of our ordinary shares has fluctuated significantly and
may be affected by our operating results, changes in our business, changes in
the products we market and distribute, and general market and economic
conditions which are beyond our control. In addition, the stock markets in
general have, from time to time, experienced significant price and volume
fluctuations that are unrelated or disproportionate to the operating performance
of individual companies. These fluctuations have affected stock prices of many
companies without regard to their specific operating performance. The price of
our ordinary shares may fluctuate significantly in the future.


                                    Page 12`

`ITEM 4. INFORMATION ON THE COMPANY

     A.   HISTORY AND DEVELOPMENT OF THE COMPANY

     The Company was incorporated in Israel in January 1994 under the name G.
Willi-Food Ltd. and commenced operations in February 1994. It changed its name
to G. Willi-Food International Ltd. in June 1996.

     In May 1997, the Company completed an initial offering to the public in the
United States (the "INITIAL PUBLIC OFFERING") of 1,397,500 units, each unit
consisting of one ordinary share and one redeemable ordinary share purchase
warrant.

     In May 2001, the Company acquired all the shares of Gold Frost Ltd., which
we refer to herein as GOLD FROST, for NIS 336 thousand (USD 88 thousand). Gold
Frost, which was registered in 1977 in Israel, is engaged in designing,
developing and distributing frozen and chilled food products.

     In December 2004, the Company declared a stock dividend of 1 ordinary share
for each outstanding ordinary share (an aggregate of 4,307,500 ordinary shares).
All shares and per share amounts set forth in this Annual Report have been
retroactively restated to reflect the aforementioned share dividend for all
periods presented.

     On March 9, 2006, the Company's subsidiary, Gold Frost, completed an
initial issuance to the public on the London AIM market which yielded gross
proceeds of NIS 36.5 million (USD 9.6 million). Following this issuance, as of
May 30, 2006, the Company held approximately 75.7% of Gold Frost's share
capital. See "Item 10. Additional Information - 10C. Material Contracts". During
November 2007- January 2008, the Company purchased on the AIM market an
additional approximately 14.3% of Gold Frost's share capital, reaching an
aggregate holdings of up to 90% of Gold Frost's share capital.

     On October 5, 2006 the Company closed a $10.0 million through private
placement of shares of its ordinary shares and warrants to institutional
investors. The Company issued a total of 1,652,893 ordinary shares at a purchase
price of $6.05 per share, and the Company also issued warrants to purchase
561,982 additional shares at an exercise price of $8.00 per share. After
deducting closing costs and fees, the Company received net proceeds of
approximately $9.6 million. See "Item 10. Additional Information - 10C. Material
Contracts".

     On January 19, 2007, the Company established a fully-owned subsidiary in
the US, WF Kosher Food Distributors LTD. ("WF") in order to acquire the
operations and assets of Laish Israeli Food Products Ltd. ("Laish"), a U.S.
importer and distributor of kosher food products for approximately $3.5 million
in cash. The sources for the purchase price were a bank loan in the amount of
$1.5 million taken by WF and cash on hand from the Company. On July 14, 2008 the
Company announced that WF has ceased the activities of its operations effective
immediately. See "Item 10. Additional Information - 10C. Material Contracts".

     In February 2007, the Company formed a joint global kosher trade and export
company ("BARON") with the Baron family (an unrelated third party), kosher food
exporters located in Israel. The Company holds a 50.1% interest in Baron, and
the Baron family holds the remaining interest. Under the terms of the agreement,
in consideration for the 50.1% interest in Baron, the Company paid $1 million in
owner's loans that were converted into equity on April 1, 2008. Under the terms
of the agreement, all of the food export operations of the Baron family are
executed under the new entity, and Baron is engaged in the food export
activities performed until then by the Baron family, which involves the export
of kosher products from more than 100 suppliers, predominantly from Israel, to
the U.S., Canada, England, Belgium, France, Switzerland, Australia, South
Africa, Mexico, Argentina and Chile. Product categories currently exported
include candies, preserves, cakes and cookies, snacks, cereals, frozen pastries
and ice creams, baby food and general grocery items. See "Item 10. Additional
Information - 10C. Material Contracts".


                                    Page 13`

`Since April 2007, the Company operates from a new logistics center situated
in Yavne, Israel, that replaced the Company's previous logistics center, located
nearby, as well as the Company's use of numerous external warehouse facilities.
The new logistics center was established in an effort to reduce the Company's
operating costs, increase its logistical efficiency and to optimize its overall
operational activity. For more information, see "Item 4D. Property, Plants and
Equipment."

     In January 2008, Willi Food purchased 51% of the interests of Shamir Salads
(2006) Ltd. ("SHAMIR"), an Israeli manufacturer and distributor of pre-packaged
chilled kosher Mediterranean dips and spreads in Israel and abroad. See "Item
10. Additional Information - 10C. Material Contracts".

     In February 2008, the Company's subsidiary Gold Frost purchased a majority
interest from the owners of a dairy distributor in Denmark Kirkeby International
Foods A/S ("KIRKEBY"). Gold Frost currently holds a 51% interest in Kirkeby, and
the former owners of Kirkeby hold the remaining interest. Kirkeby has a U.S.
dairy import license. See "Item 10. Additional Information - 10C. Material
Contracts".

     On May 20, 2008, a Special General Meeting of Gold Frost approved the
cancellation of its ordinary share listing to the AIM Market of the London Stock
Exchange. The cancellation of Gold Frost's AIM admission took place on May 27,
2008.

     On February 5, 2009 the Company launched a tender offer (as extended on
March 5, 2009) to purchase from the holders of shares and/or depositary
interests of Gold Frost all of the issued and outstanding share capital of Gold
Frost which were not already held by the Company for a price of 5 pence per
share or per depositary interest in cash. The proposed tender offer was subject
to, among others, the condition precedent that the number of shares and
depositary interests duly tendered constitute, upon expiration of the offer
period and together with the shares held by the Company at such time, more than
95 percent of the issued and outstanding share capital of Gold Frost. Such
condition was not met. As a result, the Company did not purchase any of the Gold
Frost shares that have been tendered.

     On June 22, 2009, the Company launched a second tender offer to purchase
from the holders of shares and/or depositary interests of Gold Frost all of the
issued and outstanding share capital of Gold Frost which were not already held
by the Company for a price of 7 pence per share or per depositary interest in
cash. The tender offer is scheduled to expire on July 22, 2009, at 3:00 pm
London time. The other conditions of the tender offer remain the same as were in
the first tender offer.

     The Company's principal executive offices are situated at 4 Nahal Harif
St., Northern Industrial Zone, Yavne, 81106 Israel. The Company's telephone
number is 972-8-9321000, its fax number is 972-8-9321001, its e-mail address for
communications is willi@willi-food.co.il and its Web site is
www.willi-food.co.il.

     CAPITAL EXPENDITURES

     Our capital expenditures were $0.9 million, $3.0 million and $6.0 million
for the three years ended December 31, 2008, 2007 and 2006, respectively. See
"Item 4D. Property, Plants and Equipment" for a description of the logistic
center.

     There are no currently material capital expenditure or divestures in
progress.


                                    Page 14`

`B.   BUSINESS OVERVIEW

OVERVIEW

     The Company is an Israeli-based company engaged, directly and through
subsidiaries, in the design, import, export, manufacturing, marketing and
distribution in Israel and around the world of a wide variety of over 2,500 food
products. The Company sells products in Israel with widespread demand in the
Israeli marketplace, as well as products which cater to more select groups. The
Company distributes certain of its products on an exclusive basis. Some products
are currently also sold in insubstantial volumes in the areas administered by
the Palestinian Authority. The Company also sells its products outside Israel to
a variety of customers around the world (U.S., Canada, England, Belgium, France,
Switzerland, Australia, South America, Mexico, Argentina and Chile), mainly by
its subsidiary - Baron. The Company purchases food products from over 250
suppliers located in Israel and around the world, including from the Far East
(China, India, the Philippines and Thailand), Eastern Europe (Hungary, Poland
and Bulgaria), South America (Argentina, Ecuador and Costa Rica), the United
States, Western and Northern Europe (The Netherlands, Belgium, Germany, Sweden,
Denmark and France) and Southern Europe (Spain, Portugal, Italy, Turkey, Greece
and Cyprus).

     The products imported by the Company are marketed and sold to over 1,500
customers in Israel and around the world, including supermarket chains,
wholesalers and institutional consumers. The Company markets most of the
products under the brand name "Willi-Food", the chilled salads under the name
"Shamir Salads" and some of the chilled and frozen products under the brand name
"Gold Frost". Certain products are marketed under brand names of the
manufacturers or under other brand names.

     In addition to its acquisition of the operations and assets of Laish,
Baron, Shamir and Kirkeby, as described in "- A. History and Development of the
Company ", the Company continues to re-evaluate its strategic position and
consider other business opportunities, including acquisitions by and mergers of
the Company. As part of this re-evaluation, the Company is also considering
forming strategic alliances with or entering into different lines of business.

     As of June 22, 2009, the Company's principal shareholder, Willi-Food, holds
approximately 69.36% of the Company's outstanding share capital. The primary
assets of Willi Food are the Company's ordinary shares. See "Item 7. Major
Shareholders and Related Party Transactions". Willi Food's securities are traded
on the Tel Aviv Stock Exchange.

BUSINESS STRATEGY

     The Company's business strategy is:

     o    to promote the "Willi-Food" and "Shamir Salads" brand names and to
          increase market penetration of products that are currently sold by the
          Company through, among other things, marketing efforts and advertising
          campaigns;

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

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

     Utilizing management's expertise in identifying market demand and
preferences, as well as its sourcing abilities, the Company intends:

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


                                    Page 15`

`o    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;

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

     o    to penetrate new markets within the Middle East through the
          establishment of business relationships and cooperation with
          representatives in such markets subject to a positive political
          climate.

     The Company has developed certain trade relationships locally, as well as
in areas administered by the Palestinian Authority, although current sales
volumes to the Palestinian administered areas are low.

     In addition, the Company has:

     o    promoted the value of the "Willi-Food" brand and introduced additional
          food products to the Israeli marketplace under the brand name
          "Willi-Food";

     o    initiated sales in the U.S. and Europe; and

     o    entered into arrangements with recognized manufacturers to market
          their products under their respective brand names, in addition to
          brand names under which the Company currently markets its products.

PRODUCTS

The Company imports, exports, markets and distributes two kinds of line
products: preserved products and non-preserved products.

     PRESERVED PRODUCTS

     The Company imports, exports, markets and distributes a broad variety of
over 200 preserved food products, most of which enjoy a long shelf life (mostly
between two to four years). Sales of preserved products accounted for
approximately 26% of the Company's sales in 2008. These products are sold
principally in tin cans and glass jars in a variety of sizes and are intended
for use by the individual consumer as well as by the institutional consumer food
markets.

     The Company aims at broadening the variety of the preserved products it
distributes. Due to commercial considerations, the Company occasionally stops
importing certain preserved products.

     The principal products in the preserved product line are as follows:

     CANNED VEGETABLES AND PICKLES: including okra, mushrooms (whole and sliced)
and terfess, artichoke (hearts and bottoms), beans, asparagus, capers, corn
kernels, baby corn, palm hearts, bamboo shoots, vine leaves (including vine
leaves stuffed with rice), sour pickles, mixed pickled vegetables, pickled
peppers, an assortment of black and green olives, sun dried tomatoes and edamame
soybeans. These products are primarily imported from China, Spain, Greece,
Thailand, South America, Turkey, France, India, Poland, Morocco and The
Netherlands.

     CANNED FISH: including tuna (in oil or in water), sardines, anchovies,
smoked and pressed cod liver, herring, fish paste and salmon. These products are
primarily imported from the Philippines, Thailand, Portugal, Canada, Spain,
Greece and Sweden.


                                    Page 16`

`CANNED FRUIT: including pineapple (sliced or pieces), peaches, apricot,
pears, cherries, mangos, litchies and fruit cocktail. These products are
primarily imported from the Philippines, Thailand, Greece and Europe.

     NON-PRESERVED PRODUCTS

     The Company imports, exports, manufactures, markets and distributes a broad
variety of over 2,300 non-preserved food products, most of which enjoy a
relatively long shelf life (mostly between ten months and two years). Sales of
non-preserved products accounted for approximately 74% of the Company's sales in
2008. These products are sold in a variety of sizes and types of receptacles,
such as glass jars, plastic and glass bottles and containers and sealed plastic
vacuum packages, and are intended for use by the individual consumer as well as
by the institutional consumer food markets.

     The Company aims at broadening the variety of the non-preserved products it
distributes. Due to commercial considerations, the Company occasionally stops
importing certain non-preserved products.

     The principal products in the non-preserved product line are as follows:

     CHILLED SALADS: including hummus, tchina, avocado, eggplant and ikra. All
of these salads are manufactured in the logistics center of Shamir.

     EDIBLE OILS: including olive oil, sunflower oil, soybean oil, corn oil and
rapeseed oil. These products are primarily imported from Belgium, Argentina,
Turkey, Italy and Spain.

     DAIRY AND DAIRY SUBSTITUTE PRODUCTS: including hard and semi-hard cheeses
(parmesan, edam, kashkaval and emmental), molded cheeses (brie, camembert and
danablu) feta, Bulgarian cheese, butter, butter spreads, margarine, melted
cheese, cheese alternatives, condensed milk and others. These products are
primarily imported from Greece, Denmark, Bulgaria, Italy, The Netherlands and
the United States.

     DRIED FRUIT, NUTS AND BEANS: including figs, apricots, prunes, papaya,
pineapple, sunflower seeds, walnuts, pine nuts, cashew nuts and peanuts. These
products are primarily imported from Greece, Turkey, India, China, Thailand and
the United States.

     OTHER PRODUCTS: including, among others, instant noodle soups, coffee
creamers, Lemon juice, halva, Turkish delight, cookies, vinegar, sweet pastry
and crackers, sauces, corn flour, pastes, rice, rice sticks, pasta, spaghetti
and noodles, breakfast cereals, corn flakes, instant coffee, rusks, coconut
milk, and ouzo. These products are primarily imported from the Netherlands,
Germany, Romania, Italy, Greece, Belgium, the United States, Scandinavia, China,
Thailand, Turkey, India, South America, including Argentina.

     Some of the preserved and non-preserved products listed above as sold by
the Company are imported by Gold Frost. The Company imported some of these
products prior to 2001, but this was done on a small-scale basis aimed at
testing the demand for such products and their profitability. After the purchase
of Gold Frost, the import of these products was expanded by Gold Frost.

     The products (preserved and non-preserved) that generated the largest sales
volume for the year ended December 31, 2008 were chilled salads (20% of sales),
dairy and dairy substitute products (19% of sales) and canned vegetables (14% of
sales).

     The products (preserved and non-preserved) that generated the largest sales
volume for the year ended December 31, 2007 were canned vegetables (22% of
sales), dairy and dairy substitute products (19% of sales), canned fish (12% of
sales) and edible oils (10% of sales).


                                    Page 17`

`The products (preserved and non-preserved) that generated the largest sales
volume for the year ended December 31, 2006 were canned vegetables (22% of
sales), dairy and dairy substitute products (23% of sales), canned fish (17% of
sales) and edible oils (14% of sales).

     Most of the products that the Company imports and markets are approved as
Kosher by, and/or under the supervision of, various supervisory institutions
including the Chief Rabbinate of Israel, Chug Chatam Sofer, certain Jewish
organizations administering Kashrut procedures and certifications (such as the
Union of the Orthodox Jewish Congregation of America (referred to as OU), Badatz
Igud Harabanim Manchester, OK, Circle K and Triangle K) and rabbis of local
Jewish congregations abroad. See "Government Regulation".

     The Company's products are packaged by various manufacturers and suppliers
abroad and labeled with Hebrew, English and, in certain cases, Arabic and
Russian labels, in accordance with the Company's instructions and requirements
and in accordance with applicable law. See "Government Regulation".

SUPPLIERS

     The Company is not a manufacturer of preserved food products and therefore
purchases final preserved food products only. In the case of non-preserved food
products Shamir manufactures all of the chilled salads, and for the other
non-preserved food products, the Company purchases final products only. The
Company purchases preserved food products from over 50 suppliers worldwide,
including suppliers located in Israel, in the Far East (China, India, the
Philippines and Thailand), in Eastern Europe (Poland), in South America (Ecuador
and Costa Rica), in Canada and Western, Northern and Southern Europe (Sweden,
Greece, The Netherlands, Portugal, Spain, France and Turkey). The Company
purchases non preserved food products from over 220 suppliers, including
suppliers located in Israel, in the Far East (China, India, the Philippines and
Thailand), in Eastern Europe (Bulgaria and Latvia), in South America
(Argentina), in the United States and in Western, Northern and Southern Europe
(Sweden, Denmark, Greece, The Netherlands, Italy, Portugal, Spain, Belgium,
Germany, France, Turkey and Cyprus).

     In addition, the Company actively maintains contact with approximately 150
suppliers worldwide through which it assesses on an on-going basis world market
trends, fluctuations in prices and terms internationally available and other
issues relevant to its business. The Company's management and personnel visit
food trade fairs worldwide on a regular basis and endeavor to create new
business relationships with potential suppliers on an ongoing basis.

     In the years 2008 and 2007, no supplier accounted for more than 10% of our
total purchases of preserved products.

     The following table represents the percentage of purchases of non-preserved
products by the Company from suppliers who accounted for more than 10% of the
total purchases in the years 2008 and 2007:

        SUPPLIER                 2008               2007
-------------------------     ----------        ----------

Arla                              *                  13%

     * less than 10%

     We are not dependent on any given supplier for the supply of a majority of
our products. We purchase most of our products from several suppliers. We are
dependent on one source of supply - Arla from Denmark - with respect to a large
part of our dairy and dairy substitute products. A distribution agreement
between the Company and Arla grants the Company exclusive and non-transferable
right to market and distribute cheese and butter products manufactured by Arla
and its affiliated companies in Israel. The exclusivity for the Company is
subject to the purchase by the Company of certain minimum quotas of products.
The agreement was signed in March 2005 for a period of 5 years. In July 2007,
the agreement was extended for a period of 10 years from March 2005 and is
renewable automatically for a further period of five years, unless notice of
termination is provided by either party. Arla has the right to terminate the
agreement on three months notice in certain circumstances, including in the case
of the death or permanent incapacity of Zwi Williger or his ceasing to be
involved in the Company's business or if the Company fails to satisfy its
minimum purchase requirements under the agreement.


                                    Page 18`

`Although we are not dependent on any one supplier with respect to most of
our products, termination of our business relationships with certain suppliers
and/or a material adverse change in the terms at which we purchase such products
from such suppliers could have a material adverse effect on our financial
results. There can be no assurance that alternative sources for such products,
if required, will be readily available nor can we assure the terms of purchase
of such products from such alternative sources.

     We do not generally enter into written agency or other agreements with our
suppliers. However, we have written agreements with one foreign supplier of
preserved products and fifteen foreign suppliers of non-preserved products that
confirm our exclusive appointment 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. These exclusivity rights have generally
been granted for a period of 12-24 months and are automatically extendable
unless terminated by either party upon notice, and in certain cases are
conditioned upon our compliance with certain minimum purchase requirements. The
supplier of the preserved products from which we received such letter of
confirmation accounted for approximately 1% of our purchases in 2008 and less
than 1% of our purchases in 2007. The suppliers of the non-preserved products
from which we received such letters of confirmation accounted for 21% of our
purchases in 2008 and in 2007. In a few instances we did not fulfill our
commitment to the minimum purchase requirements, but since the commencement of
our activities, no supplier has terminated its agreement with us due to our
failure to comply with the minimum purchase requirements. Our purchases are not
motivated by a desire to meet minimum purchase requirements, and the
considerations in purchasing products from these suppliers are identical to
those for purchasing from other suppliers.

     Certain of the preserved products imported by the Company are seasonal
agricultural products, such as artichokes, cherries, mushrooms and peaches. In
order to assure itself a continued supply of these seasonal items, the Company
generally makes arrangements with the producers of such products at the
beginning of the season for the terms of purchase of such items for the upcoming
year.

     A substantial portion of the Company's purchases from suppliers is made in
USD (such as purchases from the Far East, the United States, South America and
certain European countries) with the remaining purchases usually made in Euros
and other foreign currencies (e.g., Swedish Kronas). Supply is generally made to
the Company against letters of credit for a period of up to 90 days. See Item 5:
"Operating And Financial Review and Prospects - B. Liquidity and Capital
Resources - Impact of Inflation and Devaluation on Results of Operations,
Liabilities and Assets".

     The average volume of the Company's credit balance with its suppliers
amounted in 2008 to NIS 48.6 million (USD 12.8 million) consisting of 62 days of
suppliers credit on average, and in 2007 to NIS 31.0 million (USD 8.2 million)
consisting of 58 days of suppliers credit on average.

CUSTOMERS

     The Company's products (preserved and non-preserved) are marketed and sold
to over 1,500 customers throughout Israel (including customers in the areas
administered by the Palestinian Authority) and outside of Israel, mainly by the
Company's two new subsidiaries, Baron and Shamir Salads.

     Customers of the Company typically purchase both preserved and
non-preserved products from the Company. The number of clients who purchase
products from only one of these categories is not material.


                                    Page 19`

`The Company's customers generally fall within one of the following two
groups:

     o    large retail supermarket chains in the organized market, and

     o    private supermarket chains, mini-markets, wholesalers, manufactures,
          institutional customers and the customers in the Palestinian Authority
          referred herein as the PRIVATE SECTOR.

     The first major group includes the largest Israeli supermarket chains in
the organized market in Israel, including: (i) Supersol Ltd. (including the
chains: Supersol Deal, Supersol Big, Supersol Sheli, Supersol, Yesh and Katif);
(ii) Blue Square Israel Ltd. (which also includes MegaCenter, MegaBool and Shefa
Shuk); and (iii) Co-Op Israel (which also includes Co-Op Jerusalem, Mister Zol,
Pashut Zol and M.M.N). The Company contracts with the supermarket chains in the
organized market through the buyers in the head office of the supermarket chain,
and then the Company receives orders from the logistic center or directly from
their stores. Merchandise is then delivered directly to each branch or to the
supermarket's chain distribution center.

     The second major group includes private supermarket chains, mini-markets,
wholesalers, food manufacturers, institutional consumers, such as catering
halls, hotels, hospitals and food service companies and food producers, and
customers in the Palestinian Authority.

     The Company's sales, by customer group, for the years ended December 31,
2008 and 2007 are as follows:

                                                      PERCENTAGE OF TOTAL SALES
                                                        YEAR ENDED DECEMBER 31

CUSTOMER GROUPS                                            2008       2007
---------------                                            ----       ----

Supermarket Chains in the organized market                  23%        24%

Private Supermarket Chains, mini-markets,
wholesalers, manufacturers, institutional
consumers  and  the  customers  in the  Palestinian
Authority                                                   77%        76%
                                                           100%       100%

     The Company's largest customer (a supermarket chain in the organized
market) accounted for 16% of the Company's sales both in 2008 and 2007.

     The loss of this major customer would have a material adverse effect on the
Company's financial condition and results of operations. The Company is seeking
to expand its operations in other areas so as to reduce its dependence on any
single significant customer.

     We agreed to pay the large supermarket retail chains in the organized
market incentives calculated as a fixed percentage of the annual sales to such
customer. Other incentives include penetration discounts for sales of our new
products, limited discounts for opening of new branches that sell our products
and payments for participation in our product advertisements. The above
mentioned incentives vary among customers and are usually awarded as part of a
written annual framework agreement.


                                    Page 20`

`These incentives typically range from 5% to 8.5% of our annual sales to
such customers and are generally paid at the beginning of each year with respect
to the previous year's sales. These arrangements also generally include specific
exclusions, such as direct or joint importing of products that are not
considered for purposes of such incentives. Certain of these commitments are not
evidenced in written agreements. For the years ended December 31, 2008, 2007 and
2006, we paid and/or are obligated to pay approximately NIS 4,686 thousand (USD
1,233 thousand), NIS 3,774 thousand (USD 993 thousand) and NIS 3,370 thousand
(USD 886), respectively, with respect of such incentives.

     Our engagement with private sector customers is not subject to any
exclusivity provisions or framework agreement, and they have no specific term.
Prior to any engagement with a potential private sector customer, we examine the
financial stability of such potential customer and determine the extent of the
credit and period for which credit would be granted. Most of the private sector
customers are required to deposit securities as collateral (personal and/or bank
guarantees as well as post-dated checks). Some of the customers of this sector
(mainly private supermarket chains and wholesalers) are also awarded incentives
based on the increase in volume of sales to such customers in excess of a
certain agreed amount, or incentives calculated as a fixed percentage of the
annual sales to such customer. The extent of such incentives varies between
0.5%-4.5% of the increase in volume of sales to such customers in excess of a
certain agreed amount or of the annual sales turnover of each relevant customer
(depending on the agreement with each customer).

     The average aggregate debit balance of the Company's customers with the
Company amounted in 2008 to NIS 83.3 million (USD 21.9 million) and the average
time period within which our accounts receivable were paid was 81 days and in
2007 the average aggregate debit balance of the Company's customers with the
Company amounted to NIS 67.6 million (USD 17.8 million) and the average time
period within which our accounts receivable were paid was 95 days.

     In the event that a client does not respect its financial commitments, the
Company may elect to foreclose on the collateral or the promissory note given by
customers in the private sector. In 2006-2008, no significant use of this means
was implemented.

     The Company strives to minimize its credit risks by constantly reviewing
the credit it extends to customers versus the security it receives. As a result,
the Company has ceased selling products to certain customers and considerably
reduced sales to other customers, and may continue to do so.

     In July 13, 2005, Club Market Marketing Chains Ltd., one of the three
largest food chains in Israel, owner of 114 stores and a major customer of the
Company, encountered major financial difficulties, announcing that it could not
pay its debts to its creditors. The District Court of Tel Aviv accepted Club
Market's petition for a stay of procedures against it and appointed receivers
for Club Market. On August 28, 2005, the court allowed the sale of Club Market
to Supersol, subject to several conditions. As of September 1, 2005, Club
Market's activities were substantially transferred to Supersol. This merger of
two of the three largest food chains in Israel strengthened Supersol's buying
power with local food suppliers (such as the Company) and the dependency of
local food suppliers on Supersol has grown.

     The Company submitted a claim of debt with the receivers with respect to
Club Market's debt to the Company, amounting to NIS 6.5 million (USD 1.7
million), including VAT (NIS 5.5 million net of VAT (USD 1.4 million), as of
July 13, 2005. As of the date of this Annual Report, the Company has received
approximately NIS 2.1 million (USD 0.55 million). In view of this claim and the
ratification of the creditors' arrangement by the court on December 12, 2005,
the Company is expected to receive a proportional share of its claim of debt.
The Club Market receivers established the rate of payment to be approximately
51% of the total debts. The receivers have approved the Company's claim of debt
in the amount of NIS 5.6 million (USD 1.47 million), including the NIS 2.1
million (USD 0.55 million) already received by the Company. There is no
assurance as to the portion of the debt owed by Club Market that will actually
be paid to the Company.


                                    Page 21`

`The Company's bad debt expenses for the years ended December 31, 2008 and
2007 amounted to NIS 3,161 thousand (USD 831 thousand) and NIS 2,303 thousand
(USD 606 thousand), respectively.

DISTRIBUTION, MARKETING AND SALES

     The Company principally distributes and markets its products on its own.
The Company markets its products via internal sales agents, apart from sales of
certain products to clients situated in Beer Sheva and elsewhere in the south of
Israel, where it distributes products through external distributors, with whom
the Company does not have exclusivity agreements. The sales of these
distributors are not significant.

     The Company generally has no written agreements with its customers, nor are
its arrangements with its customers on an exclusive or binding basis. The
Company generally extends its customers approximately 60-90 days credit
beginning at the end of the month in which the sale took place. The supermarket
chains in the organized market generally effect payment by wire transfers or
cash payments on the due date, while other customers are generally required to
provide post-dated promissory notes at least one month prior to the date of the
expected payment. The Company generally does not require the supermarket chains
in the organized market to provide any kind of security for payments; however,
other customers may be required to provide security, including personal
guarantees.

     Sales in Israel and in the U.S. are made by the placement of customers'
orders (except for part of the dairy and dairy substitute products), which are
directed to the Company's regional office and placed by the sales personnel or
directly by the customers. Orders are delivered by the Company's transport
network (including 15 refrigeration trucks, eight regular trucks and four
combined trucks) and by independent transporters. In certain cases, the Company
transports products directly from port to customers, utilizing the services of
independent transporters. In some instances, the Company transfers the
merchandise to the logistic centers of the supermarket chains, and the
supermarket chains themselves are responsible for the distribution of the
merchandise to their chain stores for a commission charged to the Company.

     The sale of part of the dairy and dairy substitute products is performed by
"van sale" sales agents using small terminals. The sales agents supply these
products immediately from the stock of products in the refrigeration trucks in
which they travel.

     Some of the marketing and distribution to institutional clients in the
private sector (such as hotels, police, prisons, the Ministry of Defense and
"Kibbutz" collective settlements) is done by winning tenders or direct
distribution or by wholesalers.

     The Company generally holds an inventory of products which the Company
believes to be sufficient to meet market requirements for a period of up to 45
days. Occasionally, the Company may take advantage of low priced merchandise and
purchase larger amounts than usual of a product with long shelf life. In those
cases, the inventory quantities may be even higher than 70 days. Products
ordered by customers in full container loads are generally forwarded directly to
the customers' facilities without being stored in the Company's facilities. The
Company does not regularly maintain significant backlog of orders from
customers; orders received by customers are generally filled within one week.

     The Company's inventory as of December 31, 2008 amounted to NIS 34.4
million (USD 9.1 million) compared with NIS 31.0 million (USD 8.2 million) as of
December 31, 2007.

     The Company also participates in various sales campaigns within the
supermarket chains that are intended to stimulate sales volume. Among such
campaigns are food festivals initiated by the supermarket chains and certain
importers, including the Company, in which the import and marketing of products
from a specific country or region are celebrated and promoted. Such festivals
typically involve increased display space as well as enhanced promotional
activities, both with respect to the festival itself and the products. Such
activities are sponsored by the supermarkets in collaboration with the importers
participating in the festival. Within the framework of these festivals, the
Company imports a wide variety of products which include pastries, vegetables,
jams, cheese, fish, and dairy products, as well as certain articles typical to
the culture and/or cuisine of each specific festival.


                                    Page 22`

`The Company maintains close contact with its consumer markets in an effort
to be attentive to market needs, market trends, demand for certain products and
their value to the market. The Company also regularly gathers information on new
products manufactured worldwide, including by attending food exhibitions and
maintaining close relations with manufacturers and suppliers worldwide.

     The Company is responsible for the products it markets in Israel under the
Israeli Law of Defective Products, 1980, and it has also purchased an insurance
policy for product liability.

SEASONALITY

     Each year as the Passover and Rosh Hashana festivals approach, the Company
usually increases its inventories in order to provide a fast response to the
market's demand. Usually there is an increase in the Company's sales prior to
the Rosh Hashanah holiday (celebrated in September-October) and the Pesach
(Passover) holiday (celebrated in March-April). Despite the impact of the
holiday season on the Company's activities, the Company's quarterly sales are
not materially affected as a result of these holiday seasons.

COMPETITION

     The food distribution business in Israel is highly competitive with respect
to imported, as well as locally manufactured, food products. The Company
believes that it presently faces direct competition from both local
manufacturers, as well as from a number of importers of food products. The food
market in Israel is very price sensitive.

     For each of the categories of products distributed by the Company, there
exists competition by dozens of local manufacturers as well as from other
importers. The barriers to entry in the food market are low, and new potential
competitors are constantly joining the market. The Company believes that it may
also face competition from potential new-comers to the food business, as well as
from existing importers and/or manufacturers currently not involved in the same
lines of products as the Company.

     For example, certain of the products imported by the Company such as canned
fish, corn, edible oils, certain pickles, olives, pasta, cereal, sweet pastry
and crackers and certain dairy products are also produced by local manufacturers
in Israel. Local producers are not subject to the financial risks of importing
food products or to governmental policies regarding taxation of imported food
products to which the Company is subject.

     To the Company's knowledge, several of its competitors (Shemen, Tet-Bet and
Solbar with respect to edible oils, Fodor (Starkist and Yona), Posidon and
Williger of the Neto Group, Filtuna and Shastowits with respect to fish
products, Pri HaGalil-Vita, Yachin-Zan laKol, Williger of the Neto Group, Alaska
and Johnson with respect to canned vegetable and canned fruits products, Osem,
Barila, Pri HaGalil-Vita, Williger of the Neto Group and Tomer with respect to
pasta products, Tnuva, Tara, Strauss, Siman, Machlvot Gad and Meshek Zuriel with
respect to dairy and dairy substitute products, Strauss, Osem, Miki's salads and
Yad-Hamelech salads with respect to chilled salads, for example) are
substantially more established, have greater market recognition and have greater
financial, marketing, human and other resources than those of the Company. If
any of the Company's major competitors materially reduces prices, the Company
would experience significantly more competitive pressure and a decrease in
profitability. The Company cannot predict whether it could successfully compete
with these pressures and, if it were unable to do so, the Company's business
would suffer.


                                    Page 23`

`The Company's management does not have precise information regarding the
extent of the import of food products to Israel. However, it believes it is one
of the leading companies in Israel in its line of products.

     The Company endeavors to compete by following the availability of products,
their prices, offers for performing transactions and business opportunities
while diversifying sources of supply as well as following the selling prices of
competing products and setting product prices according to changing market
prices.

INTELLECTUAL PROPERTY RIGHTS

     The Company markets certain products under the trademark "Willi-Food,"
which was approved for registration in Israel in May 1997 for certain uses
relating to the food industry. In 2001, the trademark's validity was extended
for an additional fourteen years (until 2015). The Company markets certain
products under the trademark "Gold-Frost," which was registered in Israel in
February 2002. The Company also markets certain products under the trademark
"Shamir Salads," which was registered in Israel in January 1995.

     The Company also markets cheeses and cheese substitute for pizza under the
trademark "Pizza Top" which was registered in Israel in September 2002. On
February 16, 2006, the Company entered into an agreement with Gold Frost under
which the Company assigned to Gold Frost all its rights, title and interest in
and to the trademark "Pizza Top".

     The Company also markets certain products under the trademark "Gold Food",
which was registered in Israel in November 2002 for different uses in the food
industry.

     The Company also markets cheeses and cheese substitute under the trademark
"Bloose," which was registered in Israel in October 2007, markets breakfast
cereals under the trademark "Bubles," which was registered in Israel in December
2006, markets snacks under the trademark "Krisponim," which was registered in
Israel in January 2007, and markets edamame soybeans under the trademark
"Manchow," which was registered in Israel in June 2007.

     The Company also markets pasta and sauces under the trademark "Donna
Rozza," which was registered in Israel in August 2005 for different uses in the
food industry. Other products marketed by the Company under their original brand
name are "Completa", "Raskas", "Puck", "Nobeleza Gaucha", "Hazer Baba", "Sera",
"Daawat", "Zanetti", "Ferro", "Hahne", "Brillo", "Arla" and "Lurpak". The
Company imports several products for the Supersol chain under the brand name
"Supersol".

     There can be no assurances as to the degree of protection registration of
the Company's trademarks will afford. In 2008 and 2007, the Company applied for
two new trademarks and in relation to one of them the Company received some
objections. There is no certainty that these trademarks will be registered as
the Company requested.

     The Company also owns four trademarks which are not currently used. The
Company's investment in registering these trademarks was insignificant.

EMPLOYEES

     Since December 31, 2008, the Company, including its subsidiaries, employed
a total of 246 persons (most of them are located in Israel), 21 of whom were in
management, 32 of whom were in accounting and importing positions, 45 of whom
were involved in the Company's sales and marketing departments, and 148 of whom
were employed in logistics networks (manufacturing, warehousing and
transportation). This compares with 135 employees as of December 31, 2007, 18 of
whom were in management, 22 of whom were in accounting and importing positions,
37 of whom were involved in the Company's sales and marketing departments, and
58 of whom were employed in logistics networks (warehousing and transportation).


                                    Page 24`

`Since December 31, 2008, 79 additional employees (stewards and sales
people) were engaged on an hourly basis. On December 31, 2007, the number was
24. Other employees were supplied by temporary manpower companies.

     The increase in the number of employees in all of the departments is mainly
due to the expansion of the Group with the addition of two new subsidiaries,
Shamir and Kirkeby.

     Most of the Company's employees are party to written employment contracts.
Regarding the Company's management services agreements with companies controlled
by Messrs. Joseph and Zwi Williger, see "Item 6. Directors, Senior Management
and Employees- Compensation".

     The Company believes that its working relations with its employees are
satisfactory. Israeli labor laws are applicable to most of the Company's
employees, as are certain provisions of the collective bargaining agreements
between the Histadrut (General Federation of Labor in Israel) (the "HISTADRUT")
and the Coordination Bureau of Economic Organizations (including the
Manufacturers' Association of Israel) (the "MAI"), by order of the Israeli
Ministry of Labor. These provisions, along with the Israeli labor laws,
principally concern the length of the work day, minimum daily wages for
professional employees, paid annual sick leave, prohibition of discrimination,
insurance for work-related accidents, social security, procedures for
termination of employment by dismissal, entitlement to and calculation of
severance pay and other terms of employment.

     In addition, Israeli employers, including the Company, are required to
provide certain escalations in wages in relation to the increase in the Israeli
CPI. The specific formula for such escalation varies according to agreements
between the Government of Israel, the MAI and the Histadrut.

     A general practice in Israel followed by the Company is the maintenance of
a pension plan to the benefit of its employees (the "PENSION PLAN"). Each month,
both the Company and its employees allocate sums to the Pension Plan. Types of
Pension Plans may vary, while a commonly used Pension Plan is known as
"Manager's Insurance". Pension Plans provide a combination of savings plan,
insurance and severance pay benefits to participating employees. Some of the
sums allocated monthly by the Company to the employees' Pension Plans are on
account of Severance Pay to which the employees may be entitled, upon
termination of employment. Each month the employee contributes an amount which
equals to 5% to 7.5% of his insured salary, and the Company contributes an
additional sum of between 13.3% to 15.83% to his/her insured salary. In
addition, Israeli law generally requires payment of severance pay upon the
retirement or death of an employee or termination of employment without due
cause. Furthermore, Israeli employees and employers are required to pay
predetermined sums to the National Insurance Institute (which is similar, to
some extent, to the United States Social Security Administration). The payments
thereto amount to 7.35% to 17.43% of wages; the employee's share being 3.5% to
12% (depending on the marginal level of wages) and the employer's share being
3.85% to 5.43%.

GOVERNMENT REGULATION

     The import, export, storage, distribution, manufacturing, marketing and
labeling of food products is subject to extensive regulation and licensing by
various Israeli government and municipal agencies, principally the Ministry of
Health, the Ministry of Finance and the Ministry of Trade and Industry. We are
required to maintain our distribution processes, as well as the products
imported and manufactured by us, in conformity with all applicable laws and
regulations. Failure to comply with these applicable laws and regulations could
subject us to civil sanctions, including fines, injunctions, recalls or
seizures, as well as potential criminal sanctions, any of which could have a
material adverse effect on us. We believe that we comply in all material
respects with the above-mentioned requirements. To the extent that the Company
has imported, or will import, food products outside of Israel, we may be subject
to quotas and other import laws and regulations which may limit our ability to
sell certain of our food products into these countries.


                                    Page 25`

`In 1978, the Israeli government issued the free import decree, which
exempts the import of most food products from the requirement to acquire a
license. However, preliminary permits from the Ministry of Health or the
Ministry of Agriculture are still required. These preliminary permits are
granted based on laboratory analysis reports and other data.

     Customs duties and charges are levied on a portion of the Company's
products. Israeli government policy in favor of exposing the local market to
certain imported products has directly impacted the Company's operations since
September 1991, when certain customs duties levied by category, formerly levied
on products, including those imported by the Company, were canceled.

     The Company is required to obtain import licenses for the import of certain
food products from the Ministry of Trade and Industry of the State of Israel.
The Company has obtained the necessary import licenses for the products imported
by it as required by the import authorities. The Company has also obtained the
necessary authorization required by the Ministry of Health (Food Authority) for
the import of all of its food products to Israel. The Company's products are
packaged by various manufacturers and suppliers abroad and labeled in Hebrew,
English and, in certain cases, Arabic and Russian, according to the Company's
instructions and the requirements of the Israeli authorities. Since the
beginning of the Company's activities, the Company has been found to have
mislabeled packages four times, as a result of which the Company was required to
pay an immaterial amount of fines.

     Most of the products which the Company imports and markets are approved as
Kosher by and/or under the supervision of various supervisory institutions
including, the Chief Rabbinate of Israel, Chug Chatam Sofer, certain Jewish
organizations administering Kashrut procedures and certifications (such as the
Union of the Orthodox Jewish Congregation of America (OU), Badatz Igud Harabanim
Manchester, OK, Circle K, Triangle K, etc.) and rabbis of local Jewish
congregations abroad. Such procedures include, in certain cases, personal
supervision by a Kashrut supervisor sent by such institutions to the
manufacturing facilities from which the Company purchases products, who is
present at the plant during the processing of the product. Under Israeli law,
the Company is required to ascertain that the kosher foodstuffs which it offers
for sale bear kosher certification approved by certain authorities, such as the
Chief Rabbinate of Israel, and also bear the name of the individual authorized
to certify such product. Not all products marketed by the Company have been so
certified, although they do bear certain kosher certification from other
certification bodies. The expenses for obtaining the Kashrut approval are
relatively low.

     Most of the products which the Company manufactures are approved as Kosher
by and/or under the supervision of Badaz Ha'eda Hacharedit (except for "Kosher
to Passover" products) and the Chief Rabbinate of Israel.

     C.   ORGANIZATIONAL STRUCTURE

     The Company's principal shareholder, Willi Food, as of June 22, 2009, held
approximately 69.36% of the Company's outstanding share capital. The primary
assets of Willi Food are the Company's ordinary shares. Willi Food was
established on November 27, 1992 and its securities have been traded on the Tel
Aviv Stock Exchange since January 1993.


                                    Page 26`

`The Company, as of June 22, 2009, had five active subsidiaries:

                                                                COMPANY'S OWNERSHIP
        SUBSIDIARY            JURISDICTION OF ORGANIZATION            INTEREST
--------------------------     --------------------------    --------------------------

        Gold Frost                       Israel                          90%
          Baron                          Israel                         50.1%
          W.F.D.                         Israel                         100%
         Kirkeby                        Denmark                 45.9% indirectly owned
                                                              through Gold Frost's 51.0%
                                                                       holding
          Shamir                         Israel                         51.0%

     The offices of Gold Frost, Baron and W.F.D, are located in Yavne, Israel,
at the offices of the Company.

     The Offices of Kirkeby are located in Svendborg, Denmark.

     The offices of Shamir are located in Barkan, Israel.

     GOLD FROST

     In May 2001, the Company acquired all the shares of Gold Frost in
consideration for NIS 336 thousand (USD 88 thousand). Gold Frost, which was
registered in 1977 in Israel, is engaged in designing, developing and
distributing frozen and chilled food products. The Company purchased Gold Frost
in order to take advantage of Gold Frost's know-how in importing frozen and
chilled products as well as of its well known brand name in the Israeli market.
Gold Frost distributes over 130 products, usually packed for private consumers
(in cans, jars, containers and plastic sealed and vacuumed packages), but also
for institutional consumers and labeled in Hebrew, English, and in certain
cases, Arabic and Russian. Gold Frost markets certain products under the
trademarks "Gold Frost" and "Willi Food" which are registered in Israel. Gold
Frost is working towards broadening the variety of products that it develops and
distributes. The mission of Gold Frost is to develop low fat, low cholesterol
dairy chilled and frozen products aimed at the kosher and health conscious
consumer market.

     On March 9, 2006, Gold Frost completed an initial issuance to the public on
the London AIM market which yielded gross proceeds of NIS 36.5 million (USD 9.6
million). As of June 22, 2009, the Company held approximately 90.0% of Gold
Frost's share capital.

     On February 5, 2009 the Company launched a tender offer (as extended on
March 5, 2009) to purchase from the holders of shares and/or depositary
interests of Gold Frost all of the issued and outstanding share capital of Gold
Frost which were not already held by the Company for a price of 5 pence per
share or per depositary interest in cash. The proposed tender offer was subject
to, among others, the condition precedent that the number of shares and
depositary interests duly tendered constitute, upon expiration of the offer
period and together with the shares held by the Company at such time, more than
95 percent of the issued and outstanding share capital of Gold Frost. Such
condition was not met. As a result, the Company did not purchase any of the Gold
Frost shares that have been tendered.

     On June 22, 2009, the Company launched a second tender offer to purchase
from the holders of shares and/or depositary interests of Gold Frost all of the
issued and outstanding share capital of Gold Frost which were not already held
by the Company for a price of 7 pence per share or per depositary interest in
cash. The tender offer is scheduled to expire on July 22, 2009, at 3:00 pm
London time. The other conditions of the tender offer remain the same as were in
the first tender offer.


                                    Page 27`

`On February 28, 2006, a relationship agreement between Gold Frost, the
Company and others was signed, defining the relationship between the two
companies. See "Item 10. "Additional Information - 10C. Material Contracts".

     BARON

     On February 2007, the Company formed a joint global kosher trade and export
company ("Baron") with the Baron family (an unrelated third party), kosher food
exporters located in Israel. The Company holds a 50.1% interest, and the Baron
family holds the remaining interest. Under the terms of the agreement, all of
the current food export operations of the Baron family are to be executed under
the new entity. For more information see "Item 4. Information on the Company -
4A. History and Development of the Company" and "Item 10. Additional Information
- 10C. Material Contracts."

     SHAMIR

     In January 2008, the Company purchased 51% of the interests of Shamir
Salads (2006) Ltd. ("Shamir"), an Israeli manufacturer and distributor of
pre-packaged chilled kosher Mediterranean dips and spreads in Israel and abroad.

     For more information see "Item 4. Information on the Company - 4A. History
and Development of the Company" and "Item 10. Additional Information - 10C.
Material Contracts."

     WF

     On January 19, 2007, the Company established a wholly-owned subsidiary in
the US, WF in order to acquire the operations and assets of Laish, a U.S.
importer and distributor of kosher food products for approximately $3.5 million
in cash. The sources for the purchase price were through a bank loan in the
amount of $1.5 million taken by WF and cash on hand from the Company.

     On July 14, 2008 the Company announced that WF has ceased the activities of
its operations effective immediately. For more information see "Item 4.
Information on the Company - 4A. History and Development of the Company" and
"Item 10. Additional Information - 10C. Material Contracts."

     KIRKEBY

     In February 2008, the Company's subsidiary, Gold Frost, purchased a
majority interest from the owners of a dairy distributor in Denmark Kirkeby
International Foods A/S ("KIRKEBY"). Gold Frost currently holds a 51% interest
in Kirkeby, and the former owners of Kirkeby hold the remaining interest.
Kirkeby has a U.S. dairy import license. For more information see "Item 4.
Information on the Company - 4A. History and Development of the Company" and
"Item 10. Additional Information - 10C. Material Contracts."

     W.F.D.

     Since November 1995, the Company incorporated a wholly-owned subsidiary,
W.F.D. The Company occasionally imports certain products through this
subsidiary, which then sells these products to the Company. W.F.D. has no
assets, facilities or obligations, other than those amounts owed to suppliers
overseas with respect to products purchased from them. W.F.D. had no sales for
each of the last two years.


                                    Page 28`

`D.   PROPERTY, PLANTS AND EQUIPMENT

     The Company's principal executive offices are situated at a new logistic
center in the northern industrial zone of Yavne, at 4 Nahal Harif St., Israel,
35 km south of Tel-Aviv.The Company purchased the land from Titanic Food Ltd.
("TITANIC"), a private Israeli company controlled by Messrs. Joseph Williger,
the Company's Chief Executive Officer and a director, and Zwi Williger, the
Company's Chief Operating Officer and Chairman of the Board, at the same price
that it was purchased by Titanic, in August 2005, and the Company built on this
land the new logistic center. The new logistic center is 8,600 square meters
(approximately 77,400 square feet) and is located on a plot of 19,000 square
meters (approximately 171,000 square feet). This transaction was approved by the
Company's Board of Directors, Audit Committee of the Board of Directors and
shareholders. The new logistic center replaced the Company's previous logistic
center, located nearby, which the Company leased from Titanic. The new logistic
center, which became operational during the second quarter of 2007, was
established in order to save the Company the expense of using storage services
in free warehouses, as described below, and in order to improve the Company's
operation. The new logistic center was financed mainly by the funds that were
raised in the private placement in October 2006.

     Since January 22, 2008, the Company has been operating the Yavne facility
under a municipal business license as required under Israeli applicable law. The
license has been granted permanently.

     Before the transition to the new logistic center, the Company also utilized
free warehouses services, mainly in the area of the Ashdod seaport. The Company
was charged only for storage per container (I.E., there is no charge for rental
while the Company does not use the free warehouse services). Since the
transition to the new logistic center, the Company has utilized free warehouses
services mainly for the storage of chilled products. The Company's expenses for
usage of free warehouses services were immaterial in the years 2008 and 2007 -
NIS 225 thousand (USD 59 thousand) for the year ended December 31, 2008 and NIS
541 thousand (USD 142 thousand) for the year ended December 31, 2007. The
expenses of these services for the years ended December 31, 2006 were NIS 1,294
thousand (USD 340 thousand).

     As of December 31, 2008, the Company owned 15 refrigeration trucks (each
with capacity of 2.5 to 6.5 tons), eight regular trucks (each with capacity of
10 to 15 tons) and four combined trucks (each with capacity of 5.5 to 8.6 tons).
Pursuant to the Transfer Agreement with Gold Frost, ten of the abovementioned
trucks and one private car were sold as of January 1, 2006 from the Company to
Gold Frost. See Item 7. "Major Shareholders and Related Party Transactions - 7B.
Related Party Transactions - Transfer Agreement". The above mentioned transfer
was implemented in order to allow Gold Frost to market its products on its own
accord.

     The total investment in the new logistics center (including the land which
the Company purchased from Titanic) until December 31, 2008 amounted to NIS
42,267 thousand (USD 11,117 thousand).

ITEM 4A. UNRESOLVED STAFF COMMENTS

     Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

OVERVIEW

     The following discussion and analysis should be read in conjunction with
the consolidated financial statements of the Company and the related Notes
thereto submitted in this Annual Report. The Company's financial statements as
of December 31, 2008 and for the year then ended have been prepared in
accordance with IFRS and interpretations issued by the IASB, and such accounting
policies have been applied retrospectively to the Company's financial statements
as of December 31, 2007 and for the year then ended.


                                    Page 29`

`The Company is engaged in the design, import, manufacture, export,
marketing and distribution of a broad range of food products purchased from over
250 suppliers worldwide and marketed in Israel and internationally, and to a
much lesser extent, the areas administered by the Palestinian Authority. The
Company's products are sold in Israel and around the world to over 1,500
customers, including supermarket chains in the organized market, private
supermarket chains, mini-markets, wholesalers, manufacturers and institutional
consumers. The Company was incorporated in Israel in January 1994 and commenced
operations in February 1994.

     In 2008, we faced challenges pertaining to increases in food commodity
prices that exceeded global inflation rates. Beginning in the fourth quarter of
2008, we were affected by the sharp decrease of global purchase prices of food
products, resulting in the sharp decrease in the selling prices of our products
as well. Because our commitments to purchase food products were based on higher
prices from our vendors, the immediate consequence was a decline in the gross
margin in the fourth quarter of 2008. The decrease of global purchase prices of
food products compounded with the recent strengthening of the U.S. dollar versus
the NIS (a depreciation of more than 11% of the value of the NIS in the fourth
quarter of 2008) and the general effects of the global economic recession and
increasing unemployment rates reduced our gross margin to 7.4% in the fourth
quarter of 2008 from 8.7% in the comparable period in 2007.

     In light of the anticipated continued recession and increasing unemployment
rates, our foreseeable challenges ahead will be in managing our expenses, and in
particular the cost of our products, to an acceptable degree in order to
accommodate our consumers' anticipated desire to acquire lower cost products. We
hope that in these difficult times we will be able to maintain our customer base
both in the retail and in the wholesale markets.

     We also intend to continue to seek to grow our market share in Israel and
abroad through the introduction of additional innovative niche products to give
the customer more choice, healthier and/or less expensive products and, where
permitted, by expanding our relationships with our suppliers. We also intend to
increase expenditures on marketing and sales activities to increase the market
penetration of the products that we currently sell in Israel. We also intend to
expand our business outside of Israel, and in particular, in the U.S. and
Europe.

     For convenience purposes, the financial data for the years ended December
31, 2008, 2007, 2006, 2005 and 2004 has been translated into U.S. Dollars using
the representative exchange rate. This rate as of December 31, 2008 was NIS
3.802 = USD 1.00.

     The Company is not involved in any off balance sheet transactions or
long-term contractual obligations.

CRITICAL ACCOUNTING POLICIES

     Management's discussion and analysis is based upon the consolidated
financial statements, which have been prepared in accordance with IFRS as issued
by the IASB for all reporting periods presented. The use of these International
Financial Reporting Standards requires the management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting accounting periods presented. These estimates include, among other
things, assessing the collectibility of accounts receivable and the use of
recoverability of inventory. Actual results could differ from those estimates.
The markets of the Company's products are characterized by intense competition
and a rapid turnover of products and frequent new introductions of products, all
of which may impact future ability to value the Company's assets.

     The following critical accounting policies may affect significant judgments
and estimates used in the preparation of the consolidated financial statements.


                                    Page 30`

`1.   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 recognised when all the following
          conditions are satisfied:

          o    The Company has transferred to the buyer the significant risks
               and rewards of ownership of the goods;

          o    The Company retains neither continuing managerial involvement to
               the degree usually associated with ownership nor effective
               control over the goods sold

          o    The amount of revenue can be measured reliably;

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

          o    The costs incurred or to be incurred in respect of the
               transaction can be measured reliably.

     This policy is significant because the revenue is a key component of the
     Company's operations, as well as the fact that the revenue recognition
     determines the timing of certain expenses. Revenue results are difficult to
     predict and any shortfall in revenue or delay in recognizing revenue could
     cause the operating results to vary from quarter to quarter and may result
     in operating losses

2.   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 overheads 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 is determined as follows:

Raw material, components and packaging  -    by the "first-in, first-out" method;

Processing goods                        -    cost of materials plus labor

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

Products                                -    weighted average method

3.   USEFUL LIVES OF PROPERTY, PLANT AND EQUIPMENT - the Company reviews the
     estimated useful lives of property, plant and equipment at the end of each
     annual reporting period.

4.   IMPAIRMENT OF GOODWILL - Determining whether goodwill is impaired requires
     an estimation of the value in use of the cash-generating units to which
     goodwill has been allocated. The value in use calculation requires the
     management to estimate the future cash flows expected to arise from the
     cash-generating unit and a suitable discount rate in order to calculate
     present value.


                                    Page 31`

`5.   DEFERRED TAXES- The Company 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.

6.   The current value of the Company's obligation in respect of severance pay
     is based on actuarial assumptions, including discount rate (which is based
     on the discount rate of government bonds), market conditions, etc.
     Differences in the actuarial assumptions may change the book value of the
     Company's obligation in respect of severance pay.

ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

(1)  STANDARDS AND INTERPRETATIONS WHICH ARE EFFECTIVE AND HAVE BEEN APPLIED IN
     THE CONSOLIDATED FINANCIAL STATEMENTS.

     The following three Interpretations issued by the International Financial
     Reporting Interpretations Committee are effective for the current period:

     IFRIC 11          IFRS 2:  Group and Treasury Share Transactions (effective
                       March 1, 2007);

     IFRIC 12          Service Concession Arrangements (effective January 1,
                       2008);

     IFRIC 14          IAS 19 - The Limit on a Defined Benefit Asset, Minimum
                       Funding Requirements and their Interaction (effective
                       January 1, 2008).

     The adoption of the Interpretations has not led to any changes in the
     Company's accounting policies.

(2)  STANDARDS AND INTERPRETATIONS WHICH HAVE NOT BEEN APPLIED IN THE
     CONSOLIDATED FINANCIAL STATEMENTS WERE IN ISSUE BUT NOT YET EFFECTIVE

     As of the date of authorization of these financial statements, other than
     the Standards and Interpretations adopted by the Company in advance of the
     effective date of the financial statements, the following Interpretations
     were in issue but not yet effective:

IAS 1 (AMENDED) "PRESENTATION OF FINANCIAL STATEMENTS"

     The standard stipulates the presentation required in the financial
     statements, and itemizes a general framework for the structure of the
     financial statements and the minimal contents which must be included in the
     context of the report. Changes have been made to the existing presentation
     format of the financial statements, and the presentation and disclosure
     requirements for the financial statements have been broadened, including
     the presentation of an additional report in the framework of the financial
     statements known as the "report of comprehensive income", and the addition
     of a balance sheet as of the beginning of the earliest period that was
     presented in the financial statements, in cases of changes in accounting
     policy by means of retroactive implementation, in cases of restatement and
     in cases of reclassifications.

     The standard will be effective for reporting periods beginning from January
     1, 2009. The standard permits earlier application.


                                    Page 32`

`The implementation of the standard will not have any influence on the
     financial statements of the Company.

IAS 23 (AMENDED) "BORROWING COSTS"

     The standard stipulates the accounting treatment of borrowing costs. In the
     context of the amendment to this standard, the possibility of immediately
     recognizing borrowing costs related to assets with an uncommon period of
     eligibility or construction in the statement of operations was cancelled.
     The standard will apply to borrowing costs that relate to eligible assets
     as to which the capitalization period began from January 1, 2009. The
     standard permits earlier implementation.

     At this stage, the management of the Company estimated that the
     implementation of the standard is not expected to have any influence on the
     financial statements of the Company.

IAS 27 (AMENDED) "CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS"

     The standard prescribes the rules for the accounting treatment of
     consolidated and separate financial statements. Among other things, the
     standard stipulates that transactions with minority shareholders, in the
     context of which the company holds control of the subsidiary before and
     after the transaction, will be treated as capital transactions. In the
     context of transactions, subsequent to which the company loses control in
     the subsidiary, the remaining investment is to be measured as of the date
     that control is lost, at fair value, with the difference as compared to
     book value to be recorded to the statement of operations. The
     noncontrolling interest in the losses of a subsidiary, which exceed its
     share in shareholders' equity, will be allocated to it in every case, while
     ignoring its obligations and ability to make additional investments in the
     subsidiary.

     The provisions of the standard apply to annual financial reporting periods
     which start on January 1, 2010 and thereafter. Earlier adoption is
     permitted, on the condition that it will be done simultaneous with early
     adoption of IFRS 3 (amended). The standard will be implemented
     retrospectively, excluding a number of exceptions, as to which the
     provisions of the standard will be implemented prospectively. At this
     stage, the management of the Company estimated that the implementation of
     the standard is not expected to have any influence on the financial
     statements of the Company.

IFRS 3 (AMENDED) "BUSINESS COMBINATIONS"

     The new standard stipulates the rules for the accounting treatment of
     business combinations. Among other things, the standard determines
     measurement rules for contingent consideration in business combinations
     which is to be measured as a derivative financial instrument. The
     transaction costs directly connected with the business combination will be
     recorded to the statement of operations when incurred. Noncontrolling
     interests will be measured at the time of the business combination to the
     extent of their share in the fair value of the assets, including goodwill,
     liabilities and contingent liabilities of the acquired entity, or to the
     extent of their share in the fair value of the net assets, as
     aforementioned, but excluding their share in goodwill.

     As for business combinations where control is achieved after a number of
     acquisitions (acquisition in stages), the earlier purchases of the acquired
     company will be measured at the time that control is achieved at their fair
     value, while recording the difference to the statement of operations.

     The standard will apply to business combinations that take place from
     January 1, 2010 and thereafter. Earlier adoption is possible, on the
     condition that it will be simultaneous with early adoption of IAS 27
     (amended).

     At this stage, the management of the Company estimated that the
     implementation of the standard is not expected to have any influence on the
     financial statements of the Company.


                                    Page 33`

`IFRIC 13, CUSTOMER LOYALTY PROGRAMS

     The clarification stipulates that transactions for the sale of goods and
     services, for which the company confers reward grants to its customers,
     will be treated as multiple component transactions and the payment received
     from the customer will be allocated between the different components, based
     upon the fair value of the reward grants. The consideration attributed to
     the grant will be recognized as revenue when the reward grants are redeemed
     and the company has made a commitment to provide the grants.

     The directives of the clarification apply to annual reporting periods
     commencing on January 1, 2009. Earlier implementation is permissible.

     At this stage, the management of the Company estimated that the
     implementation of the standard is not expected to have any influence on the
     financial statements of the Company.

AMENDMENT TO IAS 32, FINANCIAL INSTRUMENTS: PRESENTATION, AND IAS 1,
PRESENTATION OF FINANCIAL STATEMENTS

     The amendment to IAS 32 changes the definition of a financial liability,
     financial asset and capital instrument and determines that certain
     financial instruments, which are exercisable by their holder, will be
     classified as capital instruments.

     The provisions of the standard apply to annual financial reporting periods
     which start on January 1, 2009 and thereafter. Earlier adoption is
     permitted.

     At this stage, the management of the Company estimated that the
     implementation of the standard is not expected to have any influence on the
     financial statements of the Company.

IFRS 1 "FIRST TIME ADOPTION OF IFRS" AND IAS 27 "CONSOLIDATED AND SEPARATE
FINANCIAL STATEMENTS"

     The amendment states, among other things, the method in which the
     measurement of the investments in subsidiaries, associated entities and
     joint control entities should be applied at first time adopting IFRS, and
     the method in which income from dividends received should be recognized.

     The amendment is effective for annual periods commencing January 1, 2009.

          At this stage, the management of the Company estimated that the
     implementation of the standard is not expected to have any influence on the
     financial statements of the Company.


                                    Page 34`

`A.   RESULTS OF OPERATIONS

     The following table sets forth for the periods indicated, the correlation
(in percentages) between items from the Company's statements of operations to
its total sales for such periods:

                                           YEAR ENDED           YEAR ENDED
                                       DECEMBER 31, 2008    DECEMBER 31, 2007
                                          ------------         ------------

Sales                                              100%                 100%
Cost of Sales                                    80.65%               79.68%
Gross Profit                                     19.35%               20.32%
Sales and Marketing Expenses                      9.67%                9.72%
General and Administrative Expenses               6.62%                7.56%
Other (Income) expense                            0.63%               (0.19)%
Impairment of Goodwill                            0.31%                1.22%
Operating profit                                  2.12%                2.01%
Financial Income (costs), Net                    (1.63)%               0.91%

Profit before tax                                 0.49%                2.92%
Income Taxes                                      0.42%                1.06%
Profit for the period                             0.08%                1.86%

Attributable to:

Equity holders of the Company                    (0.22)%               0.94%

Non-controlling interest                          0.30%                0.92%

Net Income                                        0.08%                1.86%
                                          ------------         ------------

YEAR ENDED DECEMBER 31, 2008 COMPARED WITH YEAR ENDED DECEMBER 31, 2007

SALES. Sales for the year ended December 31, 2008 increased by approximately NIS
99,534 thousand (USD 26,179 thousand), or 39.86%, to approximately NIS 349,227
thousand (USD 91,853 thousand) from NIS 249,693 thousand (USD 65,674 thousand)
for the year ended December 31, 2007. This increase in sales resulted mainly
from the recent consolidation of the revenues of the two subsidiaries - Shamir
Salads and the Danish dairy distributor.

COST OF SALES. Cost of sales for the year ended December 31, 2008 increased to
approximately NIS 281,651 thousand (USD 74,080 thousand), or 80.65% of sales,
from approximately NIS 198,961 thousand (USD 52,331 thousand), or 79.68% of
sales, for the year ended December 31, 2007. The increase in Cost of sales was
mainly due to the recent strengthening of the U.S. dollar versus the NIS
(devaluation of 13% in the second half of 2008) and due to the sharp decrease in
the global purchase prices of food products in the fourth quarter of 2008.

GROSS PROFIT. Gross profit for the year ended December 31, 2008 increased to NIS
67,576 thousand (USD 17,773 thousand), or 19.35% of sales, in the year ended
December 31, 2008, as compared to a gross profit of approximately NIS 50,732
thousand (USD 13,344 thousand), or 20.32% of sales, in the year ended December
31, 2007. The decrease in the gross profit margin was due to the recent
strengthening of the U.S. dollar versus the NIS (devaluation of 13% in the
second half of 2008) and due to the sharp decrease in the fourth quarter of 2008
in the global purchase prices of food products, resulting in the sharp decrease
in the selling prices of the Company's products as well. Because the Company's
commitments to purchase food products were based on higher prices from its
vendors, the immediate consequence was a decline in the gross margin in the
fourth quarter of 2008.

SALES AND MARKETING EXPENSES. Sales and marketing expenses for the year ended
December 31, 2008 increased to approximately NIS 33,759 thousand (USD 8,879
thousand), or 9.67% of sales, from approximately NIS 24,263 thousand (USD 6,382
thousand), or 9.72% of sales, for the year ended December 31, 2007. This
increase in sales and marketing expenses was mainly due to the sales and
marketing expenses of the Company's two new subsidiaries, Shamir Salads and the
Danish dairy distributor.


                                    Page 35`

`GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses for the
year ended December 31, 2008 increased to approximately NIS 23,127 thousand (USD
6,083 thousand), or 6.62% of sales, from approximately NIS 18,869 thousand (USD
4,963 thousand), or 7.56% of sales, for the year ended December 31, 2007. This
increase of general and administrative expenses was mainly due to the general
and administrative expenses of the Company's two subsidiaries, Shamir Salads and
the Danish dairy distributor, whose results were consolidated with the Company's
results starting in 2008.

OTHER EXPENSE (INCOME). Other expense for the year ended December 31, 2008
amounted to NIS 2,195 thousand (USD 577 thousand) as compared to other income of
NIS 470 thousand (USD 124 thousand) for the year ended December 31, 2007. Other
expense for the year ended December 31, 2008, was mainly due to a final
arbitration award entered against the Company for damages in the amount of NIS
1,981 thousand (USD 521 thousand) in connection with a dispute with the Vitarroz
Corp.

IMPAIRMENT OF GOODWILL. Impairment of Goodwill expense for the year ended
December 31, 2008, was NIS 1,067 thousand (USD 280 thousand) due to impairment
of goodwill relating to the Danish dairy distributor, as compared to Impairment
of Goodwill expense for the year ended December 31, 2007, of NIS 3,054 thousand
(USD 803 thousand), which was due to impairment of goodwill relating to WF
Kosher Food Distributors Ltd.

OPERATING INCOME. Operating income for the year ended December 31, 2008
increased by approximately NIS 2,412 thousand (USD 634 thousand), or by 48.09%,
to approximately NIS 7,428 thousand (USD 1,954 thousand), or 2.13% of sales,
from approximately NIS 5,016 thousand (USD 1,319 thousand), or 2.01% of sales,
for the year ended December 31, 2007.

FINANCING INCOME (COSTS), NET. Financing costs, net, for the year ended December
31, 2008 was approximately NIS 5,707 thousand (USD 1,501 thousand) compared with
Financing income, net, for the year ended December 31, 2007 of approximately NIS
2,274 thousand (USD 598 thousand). The financing costs for the year ended
December 31, 2008 mainly included losses from marketable securities of NIS 4,836
thousand (USD 1,272 thousand) as compared to losses from marketable securities
of NIS 68 thousand (USD 18 thousand) in the year ended December 31, 2007, and
expenses due to rate exchanges of NIS 2,698 thousand (USD 710 thousand) in the
year ended December 31, 2008 as compared to expenses due to rate exchanges of
NIS 229 thousand (USD 60 thousand) in the year ended December 31, 2007. The
financing income for the year ended December 31, 2008 mainly included interest
income from short-term bank deposits of NIS 1,475 thousand (USD 388 thousand) as
compared to NIS 2,251 thousand (USD 592 thousand) in the year ended December 31,
2007.

PRE-TAX INCOME. Income before taxes for the year ended December 31, 2008
decreased by approximately NIS 5,569 thousand (USD 1,465 thousand), or by
76.39%, to approximately NIS 1,721 thousand (USD 453 thousand) from NIS 7,290
thousand (USD 1,917 thousand) for the year ended December 31, 2007.

TAXES ON INCOME. Taxes on income for the year ended December 31, 2008 decreased
to approximately NIS 1,454 thousand (USD 382 thousand) from approximately NIS
2,651 thousand (USD 697 thousand) in the year ended December 31, 2007. The
decrease in taxes on income in 2008 as compared to 2007 was attributable to the
decrease in income before taxes.

NET INCOME. Net income for the year ended December 31, 2008 decreased by
approximately NIS 4,372 thousand (USD 1,150 thousand), or 94.25%, to
approximately NIS 267 thousand (USD 71 thousand), or 0.08% of sales, from
approximately NIS 4,639 thousand (USD 1,220 thousand), equal to 1.86% of sales
for the year ended December 31, 2007.


                                    Page 36`

`B.   LIQUIDITY AND CAPITAL RESOURCES

     The Company's operations are funded mainly through equity and cash flows
from operating activities. The Company's bank indebtedness is secured by certain
liens on its share capital, goodwill and certain other assets.

     For the year ended December 31, 2008, cash and cash equivalents increased
from approximately NIS 61.6 million (USD 16.2 million) at December 31, 2007 to
approximately NIS 78.7 million (USD 20.7 million) at December 31, 2008.

     During the year ended December 31, 2008, marketable securities decreased to
NIS 9.4 million (USD 2.5 million) from NIS 31.3 million (USD 8.2 million) at
December 31, 2007.

     For the year ended December 31, 2008, the Company generated a positive cash
flow from operating activities of approximately NIS 18.9 million (USD 5.0
million) as compared to positive cash flow from operating activities of
approximately NIS 7.9 million (USD 2.1 million) in the year ended December 31,
2007, primarily as a result of an increase in trade and other payables, and
accrued expenses of approximately NIS 11.6 million (USD 3.0 million) and of
unrealized loss on marketable securities of approximately NIS 5.2 million (USD
1.4 million) which was offset by an increase in trade receivables and other
receivables of approximately NIS 4.2 million (USD 1.1 million).

     For the year ended December 31, 2007, the Company generated a positive cash
flow from operating activities of approximately NIS 7.9 million (USD 2.1
million), primarily as a result of an increase in trade and other payables, and
accrued expenses of approximately NIS 13.2 million (USD 3.5 million) which was
offset by an increase in trade receivables and other receivables of
approximately NIS 11.6 million (USD 3.0 million). Our trade receivables and
other receivables increased primarily due to the increase in trade receivables.

     During the year ended December 31, 2008, the Company utilized cash flow of
NIS 3.1 million (USD 0.8 million) for investing activities, mainly for a
purchase of the subsidiaries (Shamir Salads and the Danish dairy distributor)
and purchase of additional shares of Gold Frost in the total amount of NIS 14.9
million (USD 3.9 million) and for additions to fixed assets of NIS 3.3 million
(USD 0.9 million), which was offset by proceeds from realization of marketable
securities, net, in the amount of NIS 16.7 million (USD 4.4 million).

     During the year ended December 31, 2007, the Company utilized cash flow of
NIS 44.3 million (USD 11.7 million) for investing activities, mainly for a
purchase of subsidiary and purchase of additional shares of Gold Frost in the
total amount of NIS 15.6 million (USD 4.1 million), for the purchase of
marketable securities, net, in the amount of NIS 17.4 million (USD 4.6 million),
and for additions to fixed assets of NIS 11.3 million (USD 3.0 million),
consisting mostly of the investments in the Company's new logistics center.

     During the year ended December 31, 2008, the Company generated cash flow
from financing activities of NIS 1.3 million (USD 0.3 million) mainly due to
short term bank borrowings. During the year ended December 31, 2007, the Company
generated cash flow from financing activities of NIS 6.8 million (USD 1.8
million) due to short term bank borrowings.

     The Company's cash requirements, net, during the years ended December 31,
2008 and 2007 were met primarily through its working capital. As of December 31,
2008, the Company had working capital of approximately NIS 122.5 million (USD
32.2 million) compared with working capital of NIS 142.6 million (USD 37.5
million) as of December 31, 2007. The Company believes that its working capital
is sufficient for the Company's present requirements.


                                    Page 37`

`The Company's trade receivables balance as of December 31, 2008 was NIS
79.6 million (USD 20.9 million) as compared to a trade receivables balance as of
December 31, 2007 in the amount of NIS 63.8 million (USD 16.8 million). The
average time period within which our accounts receivable were paid was 81 days
for 2008, compared with 95 days for 2007.

IMPACT OF INFLATION AND DEVALUATION ON RESULTS OF OPERATIONS, LIABILITIES AND
ASSETS

     The rate of inflation in Israel in recent years has been significantly
reduced as compared to previous years. The rate of devaluation of the NIS
against the U.S. Dollar, which was high until 2005, has reversed course and the
representative rate of the U.S. Dollar was NIS 3.802 on December 31, 2008,
compared with NIS 3.846 on December 31, 2007, NIS 4.225 on December 31, 2006,
NIS 4.603 on December 31, 2005, and NIS 4.308 on December 31, 2004. As of June
22, 2009, the representative rate of the U.S. Dollar was NIS 3.955.

     The annual rates of inflation in Israel during the years ended December 31,
2004, 2005, 2006, 2007 and 2008 were approximately 1.6%, 2.4%, (0.1%), 3.4% and
3.8%, respectively, while during such periods the devaluation of the NIS against
the U.S. Dollar was approximately (1.6%), 6.8%, (8.2%), (9.0%) and (1.1%),
respectively. During each of the years ended December 31, 2003, 2004, 2006, 2007
and 2008, the rate of inflation in Israel exceeded the rate of devaluation of
the NIS against the U.S. Dollar, while during the year ended December 31, 2005
the rate of devaluation of the NIS against the U.S. Dollar exceeded the rate of
inflation in Israel.

     A revaluation of the NIS in relation to the U.S. Dollar has the effect of
increasing the U.S. Dollar value of any assets of the Company which consist of
NIS or receivables payable in NIS. Such a revaluation also has the effect of
increasing the U.S. Dollar amount of any liabilities of the Company which are
payable in NIS (unless such payables are linked to the Dollar). Conversely, any
decrease in the value of the NIS in relation to the U.S. Dollar will have the
effect of decreasing the U.S. Dollar value of any linked NIS assets of the
Company and the U.S. Dollar amount of any linked NIS liabilities of the Company.

     The dollar cost of the Company's operations in Israel is influenced by the
extent to which any increase in the rate of inflation in Israel over the rate of
inflation in the United States is offset by the devaluation of the NIS in
relation to the U.S. Dollar.

     The Company's assets are not linked to the Israeli CPI or the U.S. Dollar.
However, some of the Company's liabilities are linked to the Israeli CPI and
various foreign currencies. Consequently, inflation in Israel and currency
fluctuations will have a negative effect on the value to the Company of payments
the Company receives in NIS and on the Company's liabilities linked to foreign
currencies.

GUARANTEES AND PLEDGES

     Principally in connection with letters of credit issued to the Company, the
Company has issued a debenture to each of Bank Leumi Le'Israel, Bank Mizrahi
Ltd. and Bank Hapoalim B.M, pursuant to which the Company has pledged all of its
assets (including its outstanding share capital and goodwill of the Company) in
favor of such banks to secure its obligations or those obligations incurred by
the Company jointly with third parties, including obligations with respect to
letters of credit with the Company's suppliers. Bank Leumi Le'Israel, Bank
Mizrahi Ltd. and Bank Hapoalim B.M have agreed among them that the pledges
subject to such debentures will rank PARI PASSU. The outstanding amount of such
letters of credit as of December 31, 2008 was approximately NIS 19,215 thousand
(USD 5,054 thousand).

     The Company also guarantees, without limitation as to amount and for an
unlimited period of time, 51% of the obligations of its subsidiary, Shamir
Salads, to the United Mizrahi Bank Ltd. and Ben-Leumi Le'Israel. As of December
31, 2008, Shamir Salads obligations to those banks amounted to NIS 13,385
thousand (USD 3,520 thousand).


                                    Page 38`

`The Company also guarantees, without limitation as to amount and for an
unlimited period of time, the obligations of its wholly-owned subsidiary,
W.F.D., to the United Mizrahi Bank Ltd. As of December 31, 2008, W.F.D. had no
obligations to United Mizrahi Bank Ltd.

     The Company also guarantees, without limitation as to amount and for an
unlimited period of time, the obligations of its subsidiary, Gold Frost, both to
Bank Leumi Le'Israel and to the United Mizrahi Bank Ltd. As of December 31,
2008, Gold Frost had no obligations to such banks.

     C.   RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

     Not applicable.

     D.   TREND INFORMATION

     In prior years, there has been an increase in the number of small private
supermarket stores that have opened in Israel, which has resulted in greater
price competition in the stores and in our business. The increased price
competition resulted in an increase in our cost of sales as a percentage of
total sales. In order to maintain our gross margin at its high levels, in the
past we were able to change our product mix and introduce new products with
higher margins to increase our gross profit. In 2007, the global market
experienced steep price increases in agricultural commodities and cost pressures
due to weather-related problems, reduced milk production, cessation of EU dairy
export subsidies at the same time that consumption and demand increased in
growing emerging markets. These factors negatively impacted our near term sales
and gross margins. In 2008, and especially in the fourth quarter of 2008, the
decrease in our gross margin continued due to the sharp decrease of the global
purchase prices of food products, resulting in the sharp decrease in the selling
prices of our products as well. Because our commitments to purchase food
products were based on higher prices from our vendors, the immediate consequence
was a decline in our gross margin in 2008, and a decline in 2009 first quarter
gross margins. The decrease of global purchase prices of food products
compounded with the strengthening of the U.S. dollar versus the NIS (a
devaluation of more than 13% of the NIS in relation to the U.S. Dollar in the
second half of 2008 and further devaluation of 10% in first quarter of 2009) and
the general effects of the global economic recession, led to a gross margin of
19.35% in 2008 as compared to a gross margin of 20.32% in 2007. To the extent
that global purchase prices of food products continue to decline, or the
depreciation of the NIS versus the U.S. dollar continues, our gross margins may
be impacted beyond the second quarter of 2009 because we must continue to
purchase inventory from foreign vendors in advance to take into account the time
for manufacture and shipment of products.

     The Company is operating from a new logistics center starting from the
second quarter of 2007 with the aim of increasing the efficiency of its logistic
process and reducing its operating expenses. The Company is also working towards
increasing its sales to customers outside of Israel.

     The Company's management is evaluating the financial stability of its
customers by entering into agreements with companies for providing business
data, examining bank accounts, investigations, and following negative
publications regarding those customers or other signs indicating financial
difficulties.

     In the U.S., despite the declining Jewish population (due to intermarriage
and lower birth rates), a published report earlier this year concluded that
global demand for kosher products is growing because of demand for kosher
products is not limited to just the Jewish population. Kosher food now commands
attention from a new crop of consumers and not just those who follow traditional
Jewish dietary laws. In a survey referred to in this report, approximately 62%
of respondents who buy kosher foods felt that kosher products are of better
quality than non-kosher items, while approximately 51% of respondents who buy
kosher foods felt that kosher products are healthier than non-kosher items. We
believe that as increasing number of mainstream consumers are becoming concerned
about the integrity of the food they eat for ethical or health reasons, and this
will provide a growth opportunity for the kosher market, in which our
subsidiary, Baron, is currently operating. In addition to the increase in
health-conscious consumers, we believe that other ethnic or religious groups
contribute to the increase in the kosher food market since the dietary
restrictions for certain other religious groups are met by kosher food.


                                    Page 39`

`E.   OFF-BALANCE SHEET ARRANGEMENTS

     Not applicable

     F.   TABULAR DISCLOSURE OF CONTRACTURAL OBLIGATIONS

     The following table of the Company's material contractual obligations as of
December 31, 2008 summarizes the aggregate effect that these obligations are
expected to have on our cash flows in the periods indicated:

                                      2008

                                               Payments due by period
                         ------------------------------------------------------------------
        `                              Less than                                 More than
Contractual Obligations     Total        1 year      1-3 years     3-5 years      5 years
-----------------------  ----------    ----------    ----------    ----------    ----------
                                                   (in thousands)

Open purchase orders     NIS 19,215    NIS 19,215
                         (USD 5,054)   (USD 5,054)            -             -             -

Loans from banks (*)     NIS 17,246    NIS 17,246
                         (USD 4,536)   (USD 4,536)            -             -             -

Lease agreements (**)       NIS 584       NIS 317       NIS 267
                           (USD 153)      (USD 83)      (USD 70)            -             -

Total                    NIS 37,045    NIS 36,778       NIS 267
                         (USD 9,743)   (USD 9,673)      (USD 70)            -             -

(*) Does not include interest. The interest rates are as follows:

Overdraft in the amount of NIS 5,837 thousand (USD 1,535 thousand) bears
interest at an annual rate of prime +1% through prime+6.65%.

Short term bank loans linked to the Israeli CPI in the amount of NIS 456
thousand (USD 120 thousand) bears annual interest of 5.91%.

Short term bank loans in the US dollar in the amount of NIS 3,296 thousand (USD
867 thousand) bears annual interest of Libor+1%.

Short term bank loans in the amount of NIS 7,657 thousand (USD 2,014 thousand)
bears annual interest of prime+1% through 6.95%.

(**) Does not include interest. The annual interest rates are between 3.75% to
9.81%.

     G.   SAFE HARBOR

     This Annual Report contains certain forward-looking statements (as such
term is defined in the Private Securities Litigation Reform Act of 1995). When
used in this report, the words "anticipate," "believe," "estimate," "expect,"
"intend" and similar expressions, as they relate to the Company or the
management of the Company, identify forward-looking statements. Such statements
reflect the current views of the Company with respect to future events, based on
certain assumptions and information currently available to management, all of
which are subject to certain risks and uncertainties including, among others:

     o    changes affecting currency exchange rates, including the NIS/U.S.
          Dollar exchange rate,

     o    payment default by any of our major clients,

     o    loss of one or more of our principal clients,


                                    Page 40`

`o    the loss of one of more of our key personnel,

     o    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,

     o    termination of arrangements with our suppliers, in particular Arla
          Foods amba,

     o    increasing levels of competition in Israel and other markets in which
          we do business,

     o    changes in political, economic and military conditions in Israel,
          including, in particular, economic conditions in the Company's core markets,

     o    increase or decrease in global purchase prices of food products,

     o    our inability to accurately predict consumption of our products,

     o    we may not successfully integrate our prior acquisitions,

     o    interruption to our storage facilities,

     o    product liability claims,

     o    variations from quarter to quarter

     o    our inability to protect our intellectual property rights,

     o    Initiation and Enforcement of Legal Action in Israel,

     o    our inability to continue to meet the NASDAQ listing requirements,

     o    One shareholder owns a large percentage of our shares,

     o    We are controlled by and have business relations with Willi-Food and
          its management,

     o    Our international operations may be adversely affected by risks
          associated with international business, and

     o    The price of our ordinary shares may be volatile.

     Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results of operations may vary
materially from those described herein as anticipated, believed, estimated,
expected or intended.


                                    Page 41`

`ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

     A.   DIRECTORS AND SENIOR MANAGEMENT

     The directors, executive officers and key employees of the Company as of
the date of this Annual Report are as follows:

NAME                     AGE   POSITION WITH THE COMPANY
----                     ---   -------------------------

Joseph Williger          52    Chief Executive Officer and Director

Zwi Williger             54    Chief Operating Officer and Chairman of the Board

Rachel Bar-Ilan (1)      51    Director

Ariel Herzfeld (1)       54    External Director

Etti Cohen (1)           40    External Director

Gil Hochboim             39    Vice President

Ety Sabach               36    Chief Financial Officer

     (1)  Members of the Company's Audit Committee.

     The Directors are elected at the annual general meeting of shareholders and
hold office until the next annual general meeting of shareholders and until
their successors have been elected. Officers serve at the discretion of the
Board, subject to the terms of any agreement between officers and the Company.

     The business experience of each of the Directors, executive officers and
key employees of the Company is set forth below:

     JOSEPH WILLIGER has served as the Chief Executive Officer (or general
manager) and a Director of the Company since its inception in January 1994. He
has also served as a Chairman of the Company's subsidiaries, W.F.D. and Gold
Frost, since November 1996 and April 2001, respectively. Mr. Williger has also
served as a director and as chairman of the Board of Willi Food, the controlling
shareholder of the Company, since December 1992 and June 1994, respectively. Mr.
Williger has served as Director of Titanic, a company he owns together with Mr.
Zwi Williger, since April 1990. Mr. Williger attended Bar-Ilan University in
Israel and Nortrige University in Los Angeles. Mr. Williger is the brother of
Zwi Williger, Chief Operating Officer and Chairman of the Board of Directors of
the Company.

     ZWI WILLIGER has served as the Chief Operating Officer and Chairman of the
Company since January 1997, and from inception of the Company to January 1997 as
a Director and Manager of Marketing Development of the Company. Mr. Williger has
also served as a director of the Company's subsidiaries, W.F.D., Gold Frost and
Shamir, since November 1996, April 2001 and January 2008, respectively. Mr.
Williger has also served as a director of Willi Food since December 1992. Mr.
Williger served as Director of Titanic since April 1990. Mr. Williger attended
Fresno University in California. Zwi Williger is the brother of Joseph Williger,
Chief Executive Officer and a director of the Company.

     RACHEL BAR-ILAN has served as Director of the Company since May 2001. Since
2005, she has been the general manager of ORTHOBAR Company, a privately owned
company established in 2002, which provides medical services and orthopedic
equipment to hospitals, institutes, emergency medical care center and private
clinics and patients. From 1999 to 2004, Ms. Bar-Ilan managed the marketing and
application of medical laboratory instrumentation in medical laboratories of
Medtechnica Ltd., a company publicly traded on the Tel Aviv Stock Exchange. From
1994 to 1999, Ms. Bar-Ilan worked for Agentec Ltd., where she has been in charge
of the marketing and application of medical instrumentation in the chemical
field. Ms. Bar-Ilan received her degree in Medical Science (M.Sc.) from the
Technion - Israel Institute of Technology in Haifa, Israel.


                                    Page 42`

`ARIEL HERZFELD has served as an external director since August 30, 2006.
Mr. Herzfeld is a senior partner in the Israeli CPA firm, M. Herzfeld & Co. and
in Herzfeld-Cohen Management Services where he served in auditing, consulting
and managing services, including in information-systems projects to a wide
variety of private and public organizations. Mr. Herzfeld also served as a
director (including a member of the audit committee) in Crystal Consumer
Products Ltd., a prominent Israeli importer of appliances that is traded in the
Tel-Aviv Stock Exchange. Mr. Herzfeld was the managing partner in charge of the
audit-force nominated by the Israeli Parliamentary Investigation Commission for
locating and restoring of property for Holocaust victims in Bank Hapoalim B.M
(one of the largest banks in Israel). Mr. Herzfeld earned his BA degree from the
University of Denver in Colorado in 1978 and his MBA, majoring in Information
Systems Analysis, from the Ono Academic College, in 2005. Mr. Herzfeld is a
Certified Public Accountant (Isr.) and Certified Systems Analyst (Isr.).

     ETTI COHEN has served as an external director since December 2007. Mrs.
Cohen is an attorney at law in Israel. Mrs. Cohen has served as the Deputy
Manager of Analyst Underwriting & Issue Ltd. since 2007. Prior to that, Mrs.
Cohen served as the VP Marketing & Merchandising of Office Depot. From 2006, Ms.
Cohen also served as a Marketing Manager of Partner Communication Ltd. Mrs.
Cohen was responsible for the Marketing and Tariff Strategy. Mrs. Cohen has an
LL.B from the College of Management, Rishon Lezion, Israel, and a B.A. in
political science from the Hebrew University of Jerusalem, Israel.

     GIL HOCHBOIM returned to the Company as Vice President in June 2007, with
responsibility for mergers and acquisitions and general operations. Mr. Hochboim
served as Chief Financial Officer of the Company between August 2000 and October
2006. Between March 1998 and August 2000, he served as deputy manager of
Ha'menia Goods Transport Corp. Ltd., and between April 1995 and February 1998,
Gil served as Deputy Comptroller of Dan Hotels Corp. Ltd. Mr. Hochboim is a
certified public accountant (Israel). He received his BA in Accounting and
Business Management from the College of Management, Tel Aviv, Israel.

     ETY SABACH has served as Chief Financial Officer since May 29, 2008. Ms.
Sabach has extensive experience in the food retail market. Prior to joining the
Company she was the Chief Financial Officer of Burger Ranch (which was one of
the largest fast food chains in Israel) where she began working in May 2002.
Between January 1998 and April 2002, Ety served as a Senior Manager at
PriceWaterhouseCoopers Israel. Ety is a certified public accountant (Israel),
and she received her BA in Accounting and Business Management and MBA in
Business Management from the College of Management, Rishon Lezion, Israel.

TERMINATION OF OFFICE

     YARON LEVY served as our Chief Financial Officer until May 2008.

     B.   COMPENSATION

COMPENSATION OF DIRECTORS AND OFFICERS

     The aggregate compensation paid by the Company to its directors and
officers as a group for the fiscal year 2008 was approximately NIS 3.6 million
(USD 0.95 million), excluding bonuses in an aggregate amount of approximately
NIS 75 thousand (USD 19.7 thousand) paid to Messrs. Joseph and Zwi Williger.
These amounts include all contingent or deferred compensation payable to
directors or officers during 2008. These amounts also include payments to
non-executive directors in the aggregate amount of approximately NIS 242
thousand (USD 64 thousand) during 2008.


                                    Page 43`

`The foregoing does not include amounts expended by the Company for motor
vehicles made available to its officers, expenses (including business travel,
professional and business association dues and expenses) reimbursed to officers
and other benefits commonly reimbursed and paid for by companies in Israel. The
Company provides motor vehicles to key employees and certain officers, at the
Company's expense.

     See also "Item 7. Major Shareholders and Related Party Transactions -
Related Party Transactions".

MANAGEMENT SERVICE AGREEMENTS

     As of June 1, 1998, the Company entered into management services agreements
with companies controlled by each of Messrs. Joseph and Zwi Williger,
respectively (collectively, the "WILLIGER MANAGEMENT COMPANIES"), pursuant to
which Messrs. Joseph and Zwi Williger provide management services on behalf of
the Williger Management Companies to the Company (the "MANAGEMENT SERVICES
AGREEMENTS").

     The term of the Management Services Agreements were for a period of four
years commencing on June 1, 1998 (the "MANAGEMENT SERVICES PERIOD"), were
automatically renewed on June 1, 2002 for an additional period of two years and
were automatically renewed for an additional period of two years in June 1,
2004. Under these agreements, the Company has the ability to terminate the
Management Services Agreements only upon six months notice prior to the end of
the Management Services Period or any extension thereof as the case may be. In
the event the Company terminates any of the Management Services Agreements prior
to the expiration of the Management Services Period or any extension thereof,
for any reason whatsoever, it is obligated to pay all amounts due under the
respective Management Services Agreements through the expiration of the
Management Services Period or any extension thereof, as the case may be.

     Each of the Management Services Agreements provides for monthly service
fees equal to USD 24,500 (excluding VAT) and an annual bonus at a rate of 3% of
the Company's pre-tax consolidated annual profits, if such profits are equal to
or less than NIS 3.0 million (approximately USD 0.8 million), or at a rate of 5%
if such profits exceed such level. The Management Services Agreements further
provide that benefits in general, including the social benefits of Messrs.
Joseph or Zwi Williger, and income tax payments, national insurance payments and
other payments due by employees with respect of their employment, are to be paid
for at the sole expense of the Williger Management Companies. The Williger
Management Companies undertook to indemnify the Company with respect to any
claims against the Company with respect to employer/employee relations. In
addition, each of the Management Services Agreements includes non-competition
provisions for the duration of the Management Services Period as well as
confidentiality provisions.

     In July 2005, the Management Services Agreements was amended as follows:

(1)  The term of the Management Services Agreements were extended indefinitely,
     subject to clauses (2), (5) and (6) below.

(2)  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:

          o    The Company may terminate the agreement at any time, and for any
               reason, by prior written notice of at least 18 months.


                                    Page 44`

`o    Each Williger Management Company may terminate the agreement at
               any time, by prior written notice of at least 180 days.

(3)  The Company may waive receiving actual management services from the
     Williger Management Company during the prior notice period, but this will
     not eliminate its obligation to continue paying the Williger Management
     Company the management fees owed to the Williger Management Company until
     the termination of the prior notice period.

(4)  If a Williger Management Company terminates the Management Services
     Agreement, the Williger Management Company will be entitled to receive the
     management fees for a period of six (6) months, which shall begin after the
     prior notice period, whether or not it provides the Company with any
     management services during such six-month period.

(5)  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.

(6)  Both Messrs. Zwi Williger and Joseph Williger have agreed with the Company
     that if a liquidation order or receivership order is issued against a
     Williger Management Company which prevents the Williger Management Company
     from continuing to provide the management services according to the
     Management Services Agreement, they will immediately commence working for
     the Company in return for pay and social benefits costing the Company the
     same amount as the monthly management fees that the Company paid the
     Williger Management Company to that date, or alternatively, at their sole
     discretion, shall begin providing the Company with management services via
     another company owned and controlled by them under the conditions of the
     Management Services Agreement.

(7)  In addition, the Management Services Agreements contain provisions
     regarding the Company providing vehicles for the use of Messrs. Zwi
     Williger and Joseph Williger, and regarding full reimbursement of expenses
     incurred by Messrs. Zwi Williger and Joseph Williger while providing the
     management services to the Company, including reasonable lodging and travel
     expenses in Israel and abroad, phone expenses in their home and mobile
     phone expenses, including calls abroad related to providing the management
     services to the Company, subject to providing receipts.

     These amendments were approved unanimously by the Audit Committee and the
Board of Directors on May 4, 2005, and Messrs. Zwi Williger and Joseph Williger
did not participate in the meetings of the Audit Committee and the Board of
Directors. These amendments were approved by the Company's shareholders on July
20, 2005.

     On February 15, 2006, in light of the decision of the Israeli Securities
Authorities to limit the duration of the aforesaid Management Services
Agreements to a period of five (5) years, the Board of Directors decided to
limit the duration of the Management Services Agreements to a period of five (5)
years each, both ending five years after the date of their approval by the
General Meeting of Shareholders (I.E. July 19, 2010).

     On March 16, 2008, the Management Services Agreements with Messrs. Zwi
Williger and Joseph Williger were amended as follows:

     (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 CPI.


                                    Page 45`

`(b) The terms of the Management Services Agreements are to be 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 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.

     (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:

          o    The Company may terminate the agreement at any time, and for any
               reason, by prior written notice of at least 36 months.

          o    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 will
     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.

     The amendments were approved unanimously by the Audit Committee and the
Board of Directors on January 2, 2008, and Messrs. Zwi Williger and Joseph
Williger did not participate in the meetings of the Audit Committee and the
Board of Directors. These amendments were approved by the Company's shareholders
on March 13, 2008.

     Under the Transfer Agreement described in "Item 7. Major Shareholders and
Related Party Transactions - B. Related Party Transactions", 50% of the
Company's rights and obligations stipulated in the management agreement with Mr.
Zwi Williger were transferred to Gold Frost and 20% of the Company's rights and
obligations stipulated in the management agreement with Mr. Joseph Williger were
transferred to Gold Frost.

EMPLOYMENT AGREEMENTS

     In June 2007, the Company entered into an employment agreement with Mr. Gil
Hochboim, pursuant to which Mr. Hochboim agreed to serve as the Vice President
of the Company. The agreement provides for a monthly salary and benefits
customarily provided by the Company to its senior employees, including bonuses
and the use of a vehicle.

     In May 2008, the Company entered into an employment agreement with Ms. Ety
Sabach, pursuant to which Ms. Sabach agreed to serve as the Chief Financial
Officer of the Company. The agreement provides for a monthly salary and benefits
customarily provided by the Company to its senior employees, including bonuses
and the use of a vehicle.

     C.   BOARD PRACTICES

TERMS OF OFFICE

     Directors are elected by the shareholders at the annual general meeting of
the shareholders, except in certain cases where Directors (who are not External
Directors) are appointed by the Board of Directors, and their appointment is
later ratified at the first meeting of the shareholders thereafter. Except for
External Directors (as discussed below), Directors serve until the next annual
general meeting of the shareholders.


                                    Page 46`

`ALTERNATE DIRECTORS

     The Articles of Association of the Company provide that any director may,
by written notice to the Company, appoint another person to serve as an
alternate director. Under the Israeli Companies Law, the directors of the
Company cannot appoint an incumbent director or an incumbent alternate director
as an alternate director. The term of appointment of an alternate director may
be for a specified period, or until notice is given of the termination of the
specified period or of the appointment. A Director on a Board Committee may
appoint anyone to be his Alternate subject to the potential alternate not being
a member of such committee, and if the appointing Director is an External
Director then the alternate must be an External Director having suitable
financial and accountancy expertise or professional qualifications, as those of
the appointing director. Except for the foregoing regarding a committee of the
Board of Directors, an External Director cannot appoint an alternate director.

AUDIT COMMITTEE

     NASDAQ REQUIREMENTS

     Our ordinary shares are listed for quotation on the Nasdaq Capital Market,
and we are subject to the rules of the Nasdaq Capital Market applicable to
listed companies. Under the current Nasdaq rules, a listed company is required
to have an audit committee consisting of at least three independent directors,
all of whom are financially literate and one of whom has accounting or related
financial management expertise. Rachel Bar-Ilan, Etti Cohen and Ariel Herzfeld
qualify as independent directors under the current Nasdaq requirement and are
members of the Audit Committee. The role of the audit committee for Nasdaq
purposes includes assisting the Board of Directors in fulfilling its
responsibility for oversight of the quality and integrity of the Company's
accounting, auditing and reporting practices.

     COMPANIES LAW REQUIREMENTS

     Under the Israeli Companies Law, the board of directors of public company
must appoint an audit committee, comprised of at least three directors including
all of the external directors, but excluding a:

     o    chairman of the board of directors;

     o    controlling shareholder or his relative; and

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

     The responsibilities of the audit committee under the Israeli Companies Law
include identifying irregularities in the management of the company's business
and approving related party transactions as required by law.

INDEPENDENT DIRECTORS

     The Company is a "Controlled Company" within the meaning of the Nasdaq
rules since more than 50% of its voting power is held by Willi Food. As a
Controlled Company, the Company is exempt from certain Nasdaq independence
requirements, such as the requirement that a majority of the Board of Directors
be independent and the rules relating to independence of directors approving
nominations and executive compensation.

EXTERNAL DIRECTORS UNDER THE ISRAELI COMPANIES LAW

     The Israeli Companies Law requires that the Company have at least two
external directors on its Board of Directors. The election of an external
director under the Israeli Companies Law must be approved by a general meeting
of shareholders provided that either: (a) the majority of shares voted at the
meeting, including at least one third of the shares of non-controlling
shareholders voted at the meeting, vote in favor of such arrangement (not
including abstentions) or (b) the total number of shares voted against such
arrangement does not exceed one percent of the aggregate voting rights in the
company.


                                    Page 47`

`A "Controlling Shareholder" is defined in the Israeli Companies Law as a
shareholder with the ability to control the actions of the company, whether by
majority ownership or otherwise, and for the purpose of transactions with
related parties, it may include a shareholder who holds at least 25% of the
voting rights in the Company, provided that there is no other Shareholder who
holds more than 50% of the voting rights in the Company.

     The Israeli Companies Law further requires that at least one external
director have financial and accounting expertise, and that the other external
director(s) have professional competence, as determined by the company's board
of directors. Under recently enacted regulations, a director having financial
and accounting expertise is a person who, due to his or her education,
experience and talents is highly skilled in respect of, and understands,
business-accounting matters and financial reports in a manner that enables him
or her to understand in depth the company's financial statements and to
stimulate discussion regarding the manner in which the financial data is
presented. Under the regulations, a director having professional competence is a
person who has an academic degree in either economics, business administration,
accounting, law or public administration or an academic degree in an area
relevant to the company's business, or has at least five years experience in a
senior position in the business management of a corporation with a substantial
scope of business, in a senior position in the public service or a senior
position in the field of the company's business.

     An External Director is appointed for a period of three consecutive years
and may be re-appointed for one additional three-year period only. Under the
Company's Articles of Association, any committee of the Board of Directors to
which the Board of Directors has delegated its powers in whole or in part, must
include at least one External Director. Under the Israeli Companies Law, the
Audit Committee must include all the External Directors.

     The External Directors of the Company are Mrs. Etti Cohen, who was
appointed as an External Director in December 2007, and Mr. Ariel Herzfeld, who
was appointed as an External Director in August 2006.

FIDUCIARY DUTIES OF AN OFFICER

     The Israeli Companies Law governs the duty of care and duty of loyalty
which an Officer has to the company. An "Officer" is defined in the Israeli
Companies Law as a director, general manager, chief executive officer, executive
vice president, vice president, any other person assuming the responsibilities
of any of the foregoing positions without regard to such person's title and
other managers directly subordinate to the general manager.

     The duty of loyalty and to act in good faith, requires the Officer to avoid
any conflict of interest between the Officer's position in the company and
personal affairs, and proscribes any competition with the company or the
exploitation of any business opportunity of the company in order to receive
personal advantages for him or herself or others. This duty also requires him or
her to reveal to the company any information or documents relating to the
company's affairs that the Officer has received due to his or her position as an
Officer. The duty of care requires an Officer to act in a way that a reasonable
Officer would act in the same position and under the same circumstances. This
includes the duty to utilize reasonable means to obtain information regarding
the advisability of a given action submitted for his or her approval or
performed by virtue of his or her position and all other relevant information.

     The Directors of the Company are entitled to obtain all information
relating to such company's management and assets and to receive assistance, in
special cases, from outside experts at the expense of the company. The law
imposes an obligation on the directors of the company to act to convene a
meeting of a company's board of directors upon becoming aware of matters that
suggest infringements of law, neglect of good business practice or conduct by an
Officer, which may result in a breach of duty of such Officer.


                                    Page 48`

`INTERNAL AUDITOR

     Under the Israeli Companies Law, Israeli companies whose securities are
publicly traded are also required to appoint an internal auditor, in accordance
with the proposal of the audit committee. The role of the internal controller is
to examine, INTER ALIA, whether the Company's actions comply with the law,
integrity and orderly business procedures. Mr. Joshua Freund, CPA (Isr), has
been the internal auditor of the Company since November 1997.

INDEMNIFICATION

     In accordance with the Israeli Companies Law and the Company's Articles of
Association, the Company has undertaken to indemnify and insure its directors
and senior officers, against certain liabilities which they may incur in
connection with the performance of their duties. Under the terms of such
indemnification provisions, the Company may, to the extent permitted by law,
indemnify an Officer for legal expenses incurred by him/her in connection with
such indemnification.

     In 2005, the Company restated its Articles of Association in order to
conform the Company's Articles of Association to the revised provisions of the
Israeli Companies Law. On May 4, 2005, the Board of Directors and Audit
Committee of the Company also approved an exemption in advance to any Director
or Officer from any liability to the Company attributed to damage or loss caused
by breach of the Director's or Officer's duty of care owed to the Company,
except for such breach of duty of care in distribution (as such term is defined
in the Israeli Companies Law).

     Also, the Board of Directors, the Audit Committee and the shareholders
approved an irrevocable indemnification of the Officers by the Company with
respect to any liability or expense paid for by the Officer or that the Officer
may be obligated to pay.

APPROVAL OF RELATED PARTY TRANSACTIONS UNDER THE ISRAELI COMPANIES LAW

     The Israeli Companies Law requires that an Office Holder promptly disclose
any direct or indirect personal interest that he/she or his/her affiliates may
have, and all related material information known to him/her, in connection with
any existing or proposed transaction by the company. If the Office Holder
complies with such disclosure requirements, the company may approve the
transaction in accordance with the provisions of its articles of association and
the Israeli Companies Law. Under the Israeli Companies Law, if the Office Holder
has a personal interest in the transaction, the approval must confirm that the
transaction is not adverse to the company's interest.

     In most circumstances, the Israeli Companies Law restricts Office Holders
who have a personal interest in a matter which is considered at a meeting of the
board or the audit committee from being present at such meeting, participating
in the discussions or voting on any such matter.

     Generally, under the Israeli Companies Law the compensation of an Officer
who is a director, or the compensation of an Officer who holds a controlling
interest in the company, requires the approval of the Audit Committee, the Board
of Directors and the general meeting of the shareholders of the company. The
Israeli Companies Law also requires that a transaction between the company and
its Officer and also a transaction between the company and another person in
which an Officer has a personal interest, requires the approval of the Board of
Directors if such transactions are not extraordinary transactions, although, as
permitted by law and subject to any relevant stock exchange rule. If such
transactions are extraordinary transactions (that is, a transaction other than
in the ordinary course of business, otherwise than on market terms, or is likely
to have a material impact on the company's profitability, assets or
liabilities), in addition to Audit Committee approval, the transaction also must
be approved by the Board of Directors, and, in certain circumstances, the
shareholders of the Company at a general meeting. Under the Israeli Companies
Law, an extraordinary transaction between a public company and a person having
control of the company or an extraordinary transaction between a public company
and another person, in which a controlling member has a personal interest, must
be approved by the Audit Committee, the Board of Directors and a meeting of the
shareholders, provided that either: (a) the majority of shares voted at the
meeting, including at least one third of the shares voted by shareholders who do
not have a personal interest in the matter and who are present at the meeting,
are voted in favor of such arrangement (abstentions shall not be included in the
total of the votes) or (b) the total number of shares of the shareholders
referred to in clause (a) voting against such arrangement does not exceed one
percent of the aggregate voting rights of the company.


                                    Page 49`

`Under the Israeli Companies Law, a private placement to a shareholder
becoming a Controlling Shareholder, or a private placement to a principal
shareholder (a holder of 5% or more of a company's issued share capital or
voting rights) or due to which a shareholder will become a principal shareholder
of at least 20% of the voting rights in the Company before such placement, is
also subject to the approval of the Audit Committee, the Board of Directors and
a meeting of the shareholders, as specified above. Directors with respect to
whom the foregoing matters are brought for Board of Directors or Audit Committee
approval are not entitled to be present during discussions of, nor to
participate in the vote for approval of, such matters at the Board of Directors
and/or Audit Committee meetings, unless a majority of Audit Committee or Board
members, as the case may be, have a personal interest in such matter or the
matter involves non-extraordinary transactions between the company and either a
Director or a third party in which a Director has a personal interest. The
Israeli Companies Law further provides that in the event that a majority of
board members have a personal interest in such a matter, it also requires
shareholder approval.

     D.   EMPLOYEES

     For information regarding the Company's employees see "Item 4".
"Information on the Company - B. Business Overview - Employees".

     E.   SHARE OWNERSHIP

     For information regarding the share ownership of Directors and Officers of
the Company see "Item 7. Major Shareholders and Related Party Transactions".

OPTIONS

     As of June 22, 2009, there were 561,982 outstanding options (warrants) to
purchase ordinary shares of the Company, currently exercisable at a price of
$8.00 per share.

EMPLOYEE SHARE OPTION PLAN

     In May 1997, the Board of Directors of the Company adopted an employee
share option plan (THE "1997 SHARE OPTION PLAN"), pursuant to which the Company
granted options to purchase 180,000 ordinary shares to employees, officers,
Directors and consultants of the Company and the subsidiary (including 160,000
options to related parties).

     Of the above, options to purchase an aggregate of 130,000 ordinary shares
were granted to Mr. Joseph Williger and Mr. Zwi Williger at an exercise price
equal to the nominal value per share of NIS 0.10. The options were exercisable
as to 20% every six-months anniversary from the date of grant, on a cumulative
basis, during a period of five years. These options were exercised in January
2000.


                                    Page 50`

`Options to purchase 35,000 ordinary shares were held by the Company's
Officers and Directors (as a group) and options to purchase 15,000 ordinary
shares were held by other employees. The options, granted as of the effective
date of the Company's initial public offering under the Company's 1997 Share
Option Plan, are generally exercisable during a five-year period commencing on
the 24th month anniversary from the date of grant, at an exercise price equal to
the initial public offering price per share - USD 4.10 per share, which was
equal to the fair market value of the shares on the date of the grant. On April
2004, Zwi Williger and Joseph Williger exercised 15,000 options each at an
exercise price of USD 4.10 per share. The 1997 Share Option Plan was terminated
in May 2004, and the remaining 20,000 options expired unexercised.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

     A.   MAJOR SHAREHOLDERS

     The following table sets forth, as of June 22, 2009, the number of ordinary
shares beneficially owned by (i) each shareholder known to the Company to own
more than 5% of the ordinary shares and (ii) all directors and officers as a
group:

                                       NUMBER OF          PERCENTAGE OF
                                    ORDINARY SHARES          ORDINARY
NAME AND ADDRESS                   BENEFICIALLY OWNED         SHARES
-----------------------------          ----------           ----------

Willi Food (1)                        7,122,137                69.36%

Joseph Williger (1)(2)                7,208,292(2)             70.20%

Zwi Williger (1)(2)                   7,646,648(2)             74.47%

All directors and officers as
 a group (2 persons)                  7,732,803(2)             75.31%

(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, 81106 Israel. The business address of each
     of Messrs. Joseph Williger and Zwi Williger is c/o the Company, 4 Nahal
     Harif St., Northern Industrial Zone, Yavne, 81106 Israel.

(2)  Includes 7,122,137 Ordinary Shares owned by Willi Food. Messrs. Zwi
     Williger and Joseph Williger serve as directors and executive officers of
     Willi Food and of the Company.

     In August 2007, the Company announced the sale by Messrs. Zwi Williger and
Joseph Williger of 42% of the outstanding shares of Willi Food to Mr. Arieh Bar
Lev (Arcadi Gaydamak) ("GAYDAMAK"). On September 24, 2008, each of the Williger
Management Companies exercised its call option rights on shares in Willi Food
and warrants (series 2) certificates to acquire shares in Willi Food that were
held by Gaydamak and were granted by Gaydamak to the Williger Management
Companies as security for loans that each made to Gaydamak. As a result, Zwi
Williger (through his management company Zvi V & Co. Company Ltd.) acquired
2,059,539 additional shares of Willi Food and 150,000 additional warrants
(series 2) certificates of Willi Food, and Joseph Williger (through his
management company Yossi Willi Management & Investments Ltd.) acquired 2,059,538
additional shares of Willi Food and 150,000 additional warrants (series 2)
certificates of Willi Food.


                                    Page 51`

`Loans from the Williger Management Companies to Gaydamak were made under
separate loan and option agreements signed on August 31, 2008 pursuant to which
each of the Williger Management Companies loaned NIS 38 million to Gaydamak.
Each loan was secured by securities in several companies, including a first
priority lien on 2,059,539 (2,059,538 in the case of Yossi Willi Management &
Investments Ltd.) shares of Willi Food (50% of Gaydamak's total Willi Food
shares) and on 150,000 warrants (series 2) certificates (50% of Gaydamak's total
Willi Food warrants (series 2) certificates). Under the loan and option
agreements, the Williger Management Companies were granted call rights to
acquire any or all of the securities on the occurrence of a default.

All of the shareholders of the Company (including Willi Food) have the same
number of votes for each ordinary share held. Accordingly, the major
shareholders of the Company, Willi Food, do not have voting rights that are
different from those of the Company's other shareholders. The Company believes
that 2,535,090 Ordinary Shares (approximately 24.69% of its outstanding Ordinary
Shares) are held by persons who are not officers, directors or the owners of 10%
of the Company's outstanding Ordinary Shares. As of June 22, 2009, there were 17
holders of Ordinary Shares of record registered with a United States mailing
address, including banks, brokers and nominees. These holders of record,
including a part of the Company's shares held by Willi Food through brokers,
represented as of June 22, 2009 approximately 66.9% of the total outstanding
Ordinary Shares. Because these holders of record include banks, brokers and
nominees, the beneficial owners of these Ordinary Shares may include persons who
reside outside the United States.

     B.   RELATED PARTY TRANSACTIONS

MANAGEMENT SERVICE AGREEMENTS.

     In June 1998, the Company entered into management service agreements with
Mr. Zwi Williger, Chairman of the Board of Directors and Chief Operating Officer
of the Company, and Mr. Joseph Williger, a director and Chief Executive Officer
of the Company, through Williger Management Companies. The management service
agreements replaced the employment agreements entered into with each of the
individuals in April 1997. The term of the Management Service Agreements were
for a period of four years commencing June 1998, were renewed in June 2002 for
an additional period of two years and were automatically renewed in June 2004
for an additional period of two years. The management fees are USD 24,500 a
month (excluding VAT) paid to each of the Williger Management Companies. In
addition, according to the management service agreements, each of the Williger
Management Companies is entitled to an annual bonus for 1998 and thereafter of
3% of the Company's consolidated pre-tax annual profits (if such profits are
equal to or less than NIS 3 million, approximately USD 0.8 million), or 5% (if
such profits exceed this level). These agreements include a non-compete
provision for the term of the agreement as well as a confidentiality provision
that applies during the term of the agreement and thereafter.

     In July 2005 and March 2008, the two above-mentioned agreements were
amended following approval of the Audit Committee, the Board of Directors and
the shareholders of the Company. Please refer to "Item 6. Directors, Senior
Management and Employees - B. Compensation - Management Service Agreements" for
more details regarding the amendments.

     Under the Transfer Agreement described below, 50% of the Company's rights
and obligations stipulated in the management agreement with Mr. Zwi Williger
were transferred to Gold Frost and 20% of the Company's rights and obligations
stipulated in the management agreement with Mr. Joseph Williger were transferred
to Gold Frost.

LEASE

     Shamir leases two joined buildings for its operation (factory, logistics
and head office) - the first is 2,512 squared meters, the monthly rent is NIS
40,432 (USD 10,634) (linked to the Israeli CPI from December 2005) and the lease
ends on January 2012. The second is 2,192 squared meters, the monthly rent is
NIS 41,141 (USD 10,821) (linked to the Israeli CPI from December 2005) and the
term of the lease ends on January 2012.


                                    Page 52`

`SERVICES TO WILLI FOOD

     The Company has been providing certain services to Willi Food on an
on-going basis since the Company's commencement of operations, including office
space and certain management, financial and administrative services. On April 1,
1997, the Company entered into a service agreement with Willi Food, which become
effective as of May 19, 1997, the effective date of the Company's initial public
offering. Pursuant to this agreement, Willi Food is entitled to manage its
operations from the Company's executive offices in Yavne, including use of
office facilities.

     The Company also agreed to provide Willi Food with accounting and
secretarial services. In consideration for the use of the Company's facilities
and such other services, Willi Food agreed to pay the Company a monthly fee
equal to NIS 5,480 (USD 1,441) plus VAT. This fee is payable quarterly and is
linked to the Israeli CPI. The agreement is for an unlimited term, and is
mutually terminable upon three months prior notice. The Company believes that
the fees for these services and the terms of such agreement are no less
favorable to it than could be obtained from an unaffiliated third party.

     As of April 1, 1997, the Company and Willi Food entered into an agreement
pertaining to the allocation of corporate opportunities which may arise from
time to time. The agreement provides that Willi Food will make available and
provide a right of first refusal to the Company with regard to any corporate
opportunity offered to Willi Food, which relates to the food business.

     On March 31, 2003, the Board of Directors authorized Willi Food to
participate in the import license lottery of the Israeli Ministry of Industry
and Trade, provided that Willi Food agreed that if it wins an import license it
will: (i) coordinate with the Company the items of merchandise to be imported
using the import license; and (ii) in consideration for the transfer of the
merchandise that is imported using the import license, the Company will sell the
merchandise, retaining 20% of the selling proceeds for itself and transferring
the balance, if any, to Willi Food. The Board of Directors determined that this
arrangement is not an extraordinary transaction. In 2008, the amount retained by
the Company pursuant to this arrangement was NIS 117 thousand (USD 31 thousand).

TRANSFER AGREEMENT

     Pursuant to the provisions of a Transfer Agreement, dated February 16,
2006, and effective as of January 1, 2006, the Company and Gold Frost agree to
cancel their earlier agreement dated May 2001 (as amended in January 2002) under
which the Company was to store and market the food products imported by Gold
Frost through the Company for a commission of 20% (which changed from 15% since
2002) of the total monthly sales of Gold Frost's products, which were sold by
the Company within that month. Because Gold Frost desired to store, market, sell
and distribute its products on its own commencing January 1, 2006, the Company
agreed to transfer to Gold Frost employees, equipment and various rights that
would allow Gold Frost to store, market, sell and distribute its products on its
own. The Company continues to provide certain services to Gold Frost, such as
collection of payments from customers and others. Effective January 1, 2006, the
following were transferred from the Company to Gold Frost:

     EMPLOYEES: Sixteen employees ceased to be employees of the Company and
became employees of Gold Frost. All the employees agreed to such transfer
provided that all the rights to which they are entitled under their employment
with the Company transferred to Gold Frost. The Company paid to Gold Frost the
amount of NIS 47,927 (USD 12,606) with respect of sums due to the employees for
unused vacation days and accumulated recuperation pay. Because the Company did
not make all the required payments to the managers' insurance of certain
employees, the Company agreed to pay any missing amounts to Gold Frost if and
when relevant when the employer-employee relationship between Gold Frost and the
employees terminates.

     EQUIPMENT: The Company sold to Gold Frost the ownership in certain trucks
and other machines.


                                    Page 53`

`LOGISTICS CENTER: The parties agreed to enter into a lease agreement
pursuant to which Gold Frost would lease certain cooling chambers located in the
logistic centers. Please refer to "Lease agreement for Logistics Center" below
for more details regarding the lease agreement.

     SALES ACTIVITIES: The sale personnel of Gold Frost would be responsible for
the sales activities with respect of the Gold Frost products. However, since
until the date of the agreement such sales activities were performed by the
Company and in order to allow Gold Frost to benefit from the Company's
experience and reputation among customers, sales of Gold Frost's products in
Israel will be made through the Company. Gold Frost's products would be sold to
the Company and then sold to customers of Gold Frost. The Company would be
responsible for billing and collecting payments from customers, and will then
transfer all collected payments to Gold Frost. Although the Company would, in
fact, purchase the products from Gold Frost, all risks connected with the
collect of payments from customers would be borne by Gold Frost.

     ADDITIONAL SERVICES: The Company agreed to provide certain services to Gold
Frost including, among others, professional services (such as legal services,
accountants and directors insurance), communication, office maintenance (such as
courier services, electricity and others) and other. In consideration for such
services, Gold Frost would pay the Company a certain amount based on a pro-rata
amount of the management and general expenses of the Company as they appear in
the audited financial statements of the Company.

     THE DIRECTORS: The Company assigned to Gold Frost 50% of its rights and
obligations under its agreement with the management agreement of Mr. Zwi
Williger and 20% of its rights and obligations under the management agreement of
Mr. Joseph Williger. Consequently, the management company of Mr. Zwi Williger
would provide to Gold Frost 50% of its management services that were previously
provided to the Company, and the management company of Mr. Joseph Williger would
provide to Gold Frost 20% of its management services that were previously
provided to the Company. The parties further agreed that Gold Frost would pay
the management company the annual bonus from its pre-tax annual profits, and the
Company would pay the management company its annual bonus after deducting the
annual bonus paid by Gold Frost.

     TERM AND TERMINATION: The agreement is terminable at any time by Gold Frost
by a six-month prior written notice and by the Company by a twelve-month prior
written notice.

LEASE AGREEMENT FOR LOGISTICS CENTER

     The Company and Gold Frost are parties to a lease agreement with respect to
the Company's logistics center, located in Yavne, Israel. The Company agreed to
lease to Gold Frost cooling chambers of 1,445 square meters located in the
aforementioned logistics center for a period of 24 years and 11 months. The
lease period may be shortened by a six-month prior notice from Gold Frost or by
a twelve-month prior notice from the Company. Gold Frost is to pay the Company
rental fees in the amount of USD 18,084 + VAT per month, payable on the first
day of each quarter with respect of the coming three months, and Gold Frost will
also pay all taxes usually imposed on lessees and expenses such as electricity,
water, gas, insurance and others related to its use of the cooling chambers.

     C.   INTERESTS OF EXPERTS AND COUNSEL

     Not applicable.

ITEM 8. FINANCIAL INFORMATION

     A.   CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

     The financial statements required by this item are found at the end of this
report, beginning on page F-1.


                                    Page 54`

`DIVIDEND POLICY

     On November 21, 2005, the Board of Director declared a cash dividend of NIS
0.55 (USD 0.14) per share (or an aggregate of NIS 4,754 thousand (USD 1,250
thousand)) payable to its shareholders of record as of January 11, 2006. The
cash dividend was paid on January 25, 2006. Apart from the abovementioned, the
Company has never declared or paid cash dividends on its ordinary shares. The
Company may declare cash dividends in the future, depending on its financial and
operational condition and on its expansion strategy.

LEGAL PROCEEDINGS

1.   A lawsuit was filed in December 2001 against 29 importers/producers of food
     products, including the Company, for an amount totalling NIS 500 million.
     Concurrently, the plaintiffs filed a request for an exemption from the
     court fee. Following the court's rejection of the plaintiffs' request for
     the noted fee exemption and their failure to pay such fee, the court
     dismissed the case. In January 2004 the abovementioned plaintiffs filed a
     new lawsuit against the 29 noted importers/producers for NIS 1 billion.
     Again, a request was made concurrently for an exemption from the court fee.
     This request was rejected by the registrar of the court, and the action was
     dismissed without prejudice in November 2006.

     The plaintiffs then filed an appeal with the District Court of the
     registrar's November 2006 decision. This request was rejected by the
     registrar of the District court. The plaintiffs then filed an appeal with
     the Supreme Court, and requested an exemption from the court fee for the
     appeal and from the requisite security deposit. In June 2009 the Supreme
     Court dismissed the claim.

2.   In or about October, 2005, Vitarroz Corp. ("VITARROZ" or, the "PLAINTIFF")
     commenced an action in the Superior Court of the State of New Jersey,
     against Willi USA Holdings, Inc. (a subsidiary of the Company), the Company
     and Zwi Williger (collectively, the "DEFENDANTS") due to a dispute
     concerning a press release announcing the termination of the proposed
     acquisition of the Vitarroz business by the Company. In September 2005, the
     Company removed the matter from the Superior Court of New Jersey to the
     United States District Court for the District of New Jersey. The complaint
     was subsequently amended and, as amended, alleged, inter alia, breach of
     contract, defamation, breach of covenants of good faith and fair dealing,
     fraudulent inducement and tortious interference with contractual relations
     and prospective economic advantage. The Defendants did not respond to the
     complaint as an agreement was reached to arbitrate all disputes between the
     parties and certain third parties. The parties agreed to submit to binding
     arbitration (i) the claims which were the subject of the amended complaint,
     (ii) claims that the Defendants have against the Plaintiff and related
     third parties, and (iii) claims which the Company asserted against Vitarroz
     in an action that was then pending in Israel regarding the alleged breach
     of an agreement executed by the Company and Vitarroz, pursuant to which
     Vitarroz was to supply food products to the Company. Vitarroz claimed in
     correspondence to the District Court that it sustained, inter alia, damage:
     to its financial reputation; that suppliers refused to extend favorable
     credit and delivery terms; that there were lost profits of approximately
     USD 500,000; and that its sale to IDT realized a sales price of
     approximately USD 3 million less than what was expected; and that there are
     additional damages resulting from the Defendants' actions which are claimed
     to exceed USD 3.5 million. During the course of discovery, Vitarrozz
     submitted the reports of its financial expert claiming damages in excess of
     USD 6.6 million. The Company submitted the report of its financial expert
     claiming damages in excess of $10 million. The arbitration panel granted an
     award against the Company in the amount of approximately USD 0.6 million.
     Among other things, the panel found that the press release issued by the
     Company announcing the termination of the proposed acquisition of the
     Vitarroz business by the Company constituted a breach of contract and
     violation of the covenant of good faith and fair dealing. In addition, the
     panel rejected the Company's counterclaims. On October 13, 2008 the Company
     filed a motion to the Superior Court of the State of New Jersey New to
     vacate the award. A reserve on the full award is included in the Company's
     2008 financial statements.


                                    Page 55`

`3.   On February 21, 2007, a lawsuit was filed against Gold Frost by Cukierman &
     Co. Investment House Ltd. in the Tel Aviv-Jaffa Magistrates Court in the
     amount of NIS 273,852, claiming non payment of fees for professional
     services rendered. A statement of defense was filed. Given the early stage
     of these proceedings, the Company is unable at this point to assess the
     risks involved.

4.   In September 2007, Thurgeman Construction Co. Ltd. ("THURGEMAN") filed a
     claim against the Company in the District Court of Tel Aviv for the amount
     of NIS 4,449,340 (plus VAT) (USD 1,170,263) regarding a dispute in
     connection with the construction of the Company's logistics center in Yavne
     (the "PROJECT") pursuant to a contract between the parties, dated as of
     September 9, 2005. Under the terms of the contract, Thurgeman was to serve
     as the operating contractor for the construction of the frame and the
     surrounding portions for the construction of the Project.

     During the course of construction on the Project, the parties raised
     several claims against each other in connection with the progress of
     construction on the Project. The Company claimed that Thurgeman grossly
     violated the terms of the contract by continuous delays in the completion
     of the Project, and by performing the construction work in a negligent and
     unprofessional manner and with inferior quality. Thurgeman counterclaimed
     that it performed the construction work according to the terms of the
     contract and that any delays in the work were not caused through any fault
     of Thurgeman. Furthermore, Thurgeman claimed that the Company withheld
     certain payments to which Thurgeman was entitled for additional work on the
     Project, causing Thurgeman damages.

     At the end of November 2007, the Company filed a statement of defense,
     which included a counterclaim against Thurgeman and its executive, Dotan
     Thurgeman, which contained among other things, a claim of defamation, a
     claim for damages caused by the delay in delivery of the completed Project,
     and damages caused by Thurgeman's poor and careless work on the Project.
     The sum of the damages claimed by the Company in the counterclaim was NIS 5
     million (USD 1.3 million). In February 2008, Thurgeman filed a response to
     the counter claim. The parties started performing the preliminary
     proceedings.

          At the current preliminary stage of the dispute, the Company's
     management and legal counsel cannot assess the chances of the parties.

5.   On June 18, 2006, the Company filed a claim against Filiz and Ash-Bar
     ("FILIZ AND ASH-BAR") in the amount of NIS 4,473,878 (USD 1,176,717) for
     breach of contract. The complaint was served on Filiz and Ash-Bar through
     Ash-Bar's chief executive officer. Filiz then filed a request to cancel the
     complaint, claiming that Ash-Bar is not authorized to accept service of
     process on its behalf. The request was denied by the court's registrar.


                                    Page 56`

`On November 4, 2007, Filiz filed an appeal of the registrar's decision and
     requested an extension for filing its defense to the complaint pending a
     decision on the appeal. The appeal was denied and the service of process
     was accepted by the court.

     Notwithstanding the fact that the proceedings are still at a preliminary
     stage, the Company's legal counsel believes that the complaint is based on
     sound legal arguments, and that there is a reasonable possibility that a
     not insignificant portion of the arguments will be sustained by the court.

6.   On July 7, 2008, WF filed a lawsuit in the Supreme Court of the State of
     New York, Country of New York, against Laish Israeli Food Products Ltd.,
     Laish Dairy Ltd., 860 Nostrand Associates Llc., Arie Steiner, Eli Biran
     (WF's former CEO) and others. The plaintiffs assert claims, INTER ALIA, of
     fraud, conversion and breach of contract against the sellers and former
     principal of Laish Israeli Food Products Ltd. and related parties. Certain
     defendants have filed motions to dismiss the claim. On August 27, 2008, 860
     Nostrand Associates Llc. filed a lawsuit against the Company claiming that
     the Company is liable to it as a guarantor of a certain lease that was
     allegedly signed by WF. Damages are being sought These matters are in the
     early stage of discovery.

7.   On September 22, 2008, a lawsuit was filed against the Company, WF and one
     of the Company's officers by several Israeli's WF's vendors in the Tel
     Aviv-Jaffa Magistrates Court in the amount of NIS 1,349,899 (USD 355,050),
     claiming non payment by WF for food products that they allegedly supplied
     to WF. A statement of defense was filed. Even at the early stage of these
     proceedings, the Company's management and legal counsel believe that the
     lawsuit against Company and the Company's officer are without merit, and
     they intend to vigorously defend against such claims.

8.   In November 2008, a purported class action lawsuit was filed by an
     individual against Shamir Salads. The complaint, which has not been
     recognized as a class action, alleges that Shamir Salads misled its
     customers by writing on certain of its products that such products were
     "home production" while those products were manufactured in Shamir Salad's
     industrial factory. The complaint alleges damages of approximately NIS 7.45
     million. Shamir Salads believes that the complaint is without merit and
     intends to vigorously defend against the litigation.

9.   On April 16, 2009, a purported class action lawsuit was filed against the
     Company. The complaint alleges that the Company misled its customers by
     illegal marking of a product that the Company imports and sells as "sugar
     free", according to the Israeli Consumer Protection Law, 1981.

     The group, which the lawsuit desires to represent are any Israeli resident
     who bought this product due to such person's preference for a sugar free or
     a reduced sugar product (the "GROUP"). According to the plaintiff, the
     Group consists of 2,000 customers. The plaintiff appraises its own damages
     at NIS 2,000 (approximately USD 500) and the damages of the entire Group to
     be NIS 4 million (approximately USD 1 million).

     At this preliminary stage, the Company is examining the plaintiff's alleged
     claims, and it will respond and relate to the allegations, to the extent
     necessary, after its examination and after consulting with its legal
     advisors.

     Other than as stated above, there are no pending or, to the Company's
knowledge, threatened legal proceedings, the outcome of which, in the Company's
view, would have a material adverse affect on the Company's consolidated
financial position.


                                    Page 57`

`For information concerning taxes to which stockholders in the United States
may be subject, see "Item 10.Additional Information- Taxes".

     B.   SIGNIFICANT CHANGES

     We are not aware of any significant changes bearing upon our financial
condition since the date of the audited consolidated financial statements
included in this Annual Report.

ITEM 9. THE OFFER AND LISTING

     A.   OFFER AND LISTING DETAILS

     Our ordinary shares have been traded on the Nasdaq Capital Market since May
19, 1997. On March 15, 2006, the ticker symbol of our ordinary shares was
changed from "WILCF" to "WILC". The warrants that were issued as part of our
initial public offering in May 1997 expired in May 2000.

     The following table sets forth for the periods indicated the closing
representative high and low bid quotations of our ordinary shares as reported by
Nasdaq and adjusted according to the split by bonus share which took place on
December 2004. The bid quotations are expressed in United States Dollars and are
not adjusted for retail mark-up, mark-down or commissions and do not necessarily
represent actual transactions.

           CALENDAR PERIOD                        ORDINARY SHARES
           ---------------                  --------------------------
                                               HIGH            LOW
                                            ----------      ----------

              2009
Second Quarter (through June 22, 2009)            2.29            1.26
First Quarter                                     1.63            0.86
              2008                                6.95            1.39
First Quarter                                     6.95            5.32
Second Quarter                                    5.93            4.11
Third Quarter                                      4.3             2.8
Fourth Quarter                                    2.92            1.39
              2007                                 8.9             5.2
First Quarter                                     8.05             5.2
Second Quarter                                    8.64             7.2
Third Quarter                                      8.9            5.35
Fourth Quarter                                    7.19            5.39
             2006                                 8.83            3.22
             2005                                 8.47            3.00
             2004                                 4.24            1.73

June 2009 (through June 22, 2009)                 2.29            2.00
May 2009                                          2.13             1.5
April 2009                                        1.55            1.26
March 2009                                         1.3            0.86
February 2009                                     1.63            1.41
January 2009                                       1.6             1.4
December 2008                                     1.63            1.39


                                    Page 58`

`B.   PLAN OF DISTRIBUTION

     Not applicable.

     C.   MARKETS

     In May 1997, our ordinary shares began trading on the Nasdaq Capital Market
under the symbol "WILCF". On March 15, 2005, the Company's NASDAQ ticker symbol
was changed to "WILC".

     D.   SELLING SHAREHOLDERS

     Not applicable.

     E.   DILUTION

     Not applicable.

     F.   EXPENSES ON THE ISSUE

     Not applicable.

ITEM 10. ADDITIONAL INFORMATION

     A.   SHARE CAPITAL

     Not applicable.

     B.   MEMORANDUM AND ARTICLES OF ASSOCIATION

PURPOSES AND OBJECTS OF THE COMPANY

     We are a public company registered under the Israeli Companies Law as G.
Willi-Food International Ltd., registration number 52-004320-9.

     Pursuant to Article 6 of our articles of association, we were formed for
the purpose of importing, exporting and marketing products and other
commodities. Our Board of Directors is empowered to embark on or withdraw from
any business in which we deal. Under our articles of association, our Board of
Directors is entitled to donate reasonable amounts to worthy causes, even if
such donation is not within the framework of our business considerations.


                                    Page 59`

`THE POWERS OF DIRECTORS

     The powers of a Director to vote on a proposal, arrangement or contract in
which such Director is materially interested is limited by the relevant
provisions of the Israeli Companies Law. In addition, the power of the Directors
to vote compensation to themselves or any members of their body requires the
approval of the Audit Committee and the shareholders at a general meeting, in
addition to the approval of the Board of Directors. Compensation and
indemnification of expenses of External Directors must be in accordance with the
applicable provisions of the Israeli Companies Law.

     The Israeli Companies Law and our Articles of Association require that a
Director or Office Holder promptly disclose, either at a board meeting or by way
of a general notice, any personal interest that he or she may have and all
related material information know to him or her in connection with any existing
or proposed transaction by the Company. In addition, if the transaction is an
extraordinary transaction (as defined in the Israeli Companies Law), the member
of the Board of Directors or Office Holder, must also disclose any personal
interest held by his or her spouse, siblings, parents, grandparents,
descendants, spouse's descendants and the spouses of any of the foregoing.

     Once the Director or Office Holder complies with the above disclosure
requirements, the Company may approve the transaction in accordance with the
provisions of the Articles of Association. If the transaction is with a third
party in which the member of the Board of Directors or Office Holder has a
potential interest, the approval must confirm that the transaction is not
adverse to the Company's interest. Furthermore, if the transaction is an
extraordinary transaction, then, in addition to any approval stipulated by the
Articles of Association, it also must be approved by the Audit Committee and
then by the Board of Directors, and, under certain circumstances, by a meeting
of the shareholders of the Company. See "Item 6. Directors, Senior Management
and Employees - 6C. Board Practices - Approval of Related Party Transactions
under the Israeli Companies Law".

     Directors with respect to whom the foregoing matters are brought for Board
of Directors or Audit Committee approval are not entitled to be present during
discussions of, nor to participate in the vote for approval of, such matters at
Board and/or Audit Committee meetings, unless a majority of Audit Committee or
Board members, as the case may be, have a personal interest in such matter or
the matter involves non-extraordinary transactions between the company and
either a Director or a third party in which a Director has a personal interest.
The Israeli Companies Law further provides that in the event that a majority of
board members have a personal interest in such a matter, shareholder approval is
also required.

     The Articles of Association provide that the Board of Directors, subject to
the Israeli Companies Law, may, at its discretion from time to time in
accordance with the needs of the Company, make decisions to borrow and/or obtain
credit facilities in any amount and to secure the repayment thereof either by
mortgage, charge or other security on the Company's undertakings or on its
property, in whole or in part (both existing and future) including the share
capital of the company which is, at the time, uncalled.

     Subject to applicable provisions of the Israeli Companies Law regarding
matters that the Board of Directors may not delegate to a committee, or matters
for which a committee may only make recommendation to the Board of Directors,
the Board of Directors may delegate its powers to committees consisting of at
least three (3) Directors, including at least one External Director. A
resolution passed or an action taken by a directors' committee has the same
validity as a resolution passed or an action taken by the Board of Directors,
unless otherwise specifically expressed in the resolution of the Board of
Directors that established said committee.


                                    Page 60`

`RIGHTS ATTACHED TO SHARES

     The Company is authorized to issue 49,893,520 Ordinary Shares, par value
NIS 0.10 and 106,480 Preferred Shares, par value NIS 0.10, each ranking pari
passu. The Company may alter the share capital of the Company in accordance with
the provisions of the Israeli Companies Law and the Articles of Association. The
rights attached to the Company's Shares are as follows:

DIVIDEND RIGHTS

     Holders of Ordinary Shares are entitled to participate pari passu with all
other shareholders of the Company's Ordinary Shares in any distribution of a
dividend, whether in cash, assets, or in any other legal form, declared, as well
as the right to participate pari passu with all other holders of our Ordinary
Shares in the distribution of bonus shares resolved by the Company. The Articles
of Association note that a shareholder shall not be entitled to receive a
dividend or bonus shares as above, and shall not be entitled to exercise any
right as a shareholder unless he has paid in full all notices of call delivered
to him, together with linkage differences, interest and expenses owed, as
applicable, on calls which have not been paid by him on time.

VOTING RIGHTS

     Holders of Ordinary Shares of the Company have the right to receive notices
of general meetings of the Company, to be present, and to participate and vote
therein. Each holder of Ordinary Shares in the Company has the right to one vote
per share in the general meetings of the Company on all matters submitted to a
vote of shareholders. A shareholder may vote in person, via proxy, or by means
of a written form ("VOTING INSTRUMENT") described in the Articles of
Association. Any resolution of the Company in a general meeting shall be deemed
duly passed if passed by a simple majority of registered shareholders present
and voting, unless a different majority is required by the Israeli Companies Law
or the Articles of Association.

     Under the Articles of Association, the Directors are elected annually by
the registered shareholders at the annual meeting. Directors hold office until
the conclusion of the next annual meeting or until their earlier removal or
resignation. In addition, at least two (2) External Directors who comply with
the qualifications described in the Israeli Companies Law must serve on the
Board of Directors. External Directors are appointed by a majority vote at a
general meeting, provided that: (i) the majority vote includes at least
one-third of the total number of the voted of the non-controlling shareholders
voting at the meeting, with abstentions not taken into consideration in
calculating the total number of the non-controlling shareholders, and (ii) the
total number of non-controlling shareholders voting against the resolution
appointing an External Director is not more than 1% of the overall voting rights
in the Company. External Directors are appointed for a term of three (3) years
and their office may be extended by a resolution of the general meeting for an
additional three (3) years. An External Director may be removed from office only
in accordance with the relevant provisions of the Israeli Companies Law.

     If no Directors are elected at an annual meeting, then the persons who
served as Directors immediately prior to the annual meeting will continue to
serve as directors unless otherwise determined by the annual meeting or by the
Board of Directors. A Director who has ceased to serve in office is eligible for
reelection. The Board of Directors has the power to appoint additional Directors
to fill a vacancy, so long as the number of directors will not exceed a number
of Directors approved at a general meeting. Any Director so appointed will hold
office until the conclusion of the next annual meeting unless he is removed or
resigns earlier.


                                    Page 61`

`RIGHTS IN THE COMPANY'S PROFITS

     The shareholders of the Company have the right to share in the Company's
profits distributed as a dividend and any other permitted distribution. See
"Dividend Rights" above.

RIGHTS IN THE EVENT OF LIQUIDATION

     Holders of Ordinary Shares are entitled to receive any return of capital,
pari passu, with all other ordinary shareholders, upon the dissolution of the
Company. Holders of Ordinary Shares are also entitled to participate, pari
passu, with all other Ordinary Shareholders in the distribution of the surplus
of the Company's assets available for distribution in the event of dissolution
of the Company which remain after the Company has paid the holders of Ordinary
Shares all amounts payable as return of capital.

LIABILITY TO FURTHER CAPITAL CALLS BY THE COMPANY

     If the terms of allotment of any shares of the Company do not specify a
particular date for the payment of all of the consideration which is to be paid
therefore, or any part thereof, our board of directors may, from time to time,
as it deems fit, make calls on the shareholders in respect of the amounts not
yet paid for their shares, whether on account of the par value of the shares or
on the account of the premium, and each shareholder shall be obligated to pay
the Company the amount so demanded from him not later than the date of payment
set forth in the notice containing the call. Shareholders shall be given prior
notice of at least fourteen (14) days in respect of any call. In the event that
amounts set forth in the call have not been paid in whole or in part as of the
date of payment set forth in the call, the shareholders shall be obligated to
pay linkage differences or interest (or both) on the outstanding amounts, as
determined by the Board of Directors.

CHANGING RIGHTS ATTACHED TO SHARES

     Under the Articles of Association, the Company may, by resolution of a
general meeting, vary the rights attached to any class of shares on the
Company's stamp or its printed name (unless otherwise determined in the terms of
issue of the shares of such class), after obtaining the written consent of the
holders of the majority of the issued shares of said class or with the approval
of a resolution duly passed at a class meeting of the holders of such class of
shares.

ANNUAL AND EXTRAORDINARY MEETINGS

     The Board of Directors must convene an annual meeting at least once every
calendar year, within fifteen months of the preceding general meeting, at a
place prescribed by the board so long as it is in the State of Israel. Per the
Articles of Association and subject to the provisions of the Israeli Companies
Law, notices to shareholders regarding the convocation of a general meeting are
to be published in two daily Hebrew language newspapers circulated in Israel.
Notice need not be served to our shareholders on an individual basis.

     The Board of Directors will convene a special, extraordinary meeting upon
receipt of a written request from either (i) two directors or 25% of the total
number of directors; (ii) one or more shareholders holding at least 5% of the
issued share capital and at least 1% of the shareholders' voting power; or (iii)
one or more shareholders holding no less than 5% of our issued voting shares. If
the Board is required to convene an extraordinary meeting, it shall convene it
at a time which is at least 21 days, but not longer than 35 days after the date
of the notice of convening such meeting. In the event that the board of
directors does not convene an extraordinary meeting within the timeframe set
forth above, those that submitted the request for such meeting, or part of them
representing more than one-half of the voting rights of all of them, may convene
the extraordinary meeting themselves, provided that such meeting is held within
three months of the time when the extraordinary meeting was requested.


                                    Page 62`

`LIMITATIONS ON THE RIGHTS TO OWN SECURITIES

     The Articles of Association do not place limitations on the rights to own
securities. Under the Articles no limitations apply to the transfer of shares in
the Company and the number of shareholders is unlimited.

CHANGES IN THE COMPANY'S CAPITAL

     Changes in the capital of the Company are subject to the approval by
ordinary majority of the shareholders at a general meeting, Shareholders may
resolve to increase the authorized share capital; consolidate our share capital
and divide it into shares of greater value than existing shares; divide existing
shares into shares of lesser value; cancel any authorized share capital which
has not yet been allotted (provided there is no undertaking to allot such share
capital); or reduce the capital by way of a distribution if such distribution
has been approved by a court, in accordance with the relevant provisions of the
Israeli Companies Law. If the shareholders resolve to increase the share
capital, the new shares will be subject to the same provisions applicable to the
shares of the original capital.

     Neither the Memorandum of Association nor Articles of Association of the
Company nor the laws of the State of Israel restrict in any way the ownership or
voting of ordinary shares by non-residents of Israel, except with respect to
citizens of countries which are in a state of war with Israel.

     C.   MATERIAL CONTRACTS

     Set forth below are summaries of our material contracts. Because these are
summaries, they are qualified by reference to the actual agreements, which are
attached as exhibits to this Annual Report.

     RELATIONSHIP AGREEMENT. The Company, Gold Frost, Willi Food, Zwi Williger
and Joseph Williger each are party to a Relationship Agreement, dated February
28, 2006, pursuant to which the Company, as a controlling shareholder, and Willi
Food, the Company's controlling shareholder, and Zwi Williger, and Joseph
Williger have given certain undertakings to Gold Frost. Under the agreement, the
Company undertook to Gold Frost to exercise all voting rights and powers of
control available to it in relation to Gold Frost in order that:

     (i) Gold Frost is capable of carrying on its business independently of the
Company;

     (ii) all transactions, agreements or arrangements entered into between Gold
Frost, the Company and its "associates" (as defined in the agreement) will be
made at arm's length and on a normal commercial basis, or as otherwise approved
in accordance with Israeli law;

     (iii) no variations will be made to Gold Frost's articles of association
which would be contrary to the maintenance of Gold Frost's ability to carry on
its business independently of the Company;

     (iv) each proposed related party transaction between any of the Company,
Willi Food, Zwi Williger, Joseph Williger or any of their associates, on the one
hand, and Gold Frost or any subsidiary thereof, on the other hand, will be
considered on behalf of Gold Frost by its Board of Directors as a whole (or by
committee of the Board that has at least one non-executive director present
throughout) and the Company nor any of its associates will seek to influence the
consideration of such matter by the Board of Directors (or the committee) in
such a way as to further the interests which are or are potentially in conflict
with the interests of Gold Frost or any subsidiary thereof;

     (v) in the event that a conflict of interest or potential conflict of
interest exists or is likely to arise between any of the Company, Willi Food,
Zwi Williger, Joseph Williger or any of their associates, on the one hand, and
Gold Frost or any subsidiary thereof, on the other hand, disclosure of such
conflict shall be made to the board of Gold Frost and any decision by the board
of directors of Gold Frost shall be taken by the board but excluding any
director who is the Company, or Willi Food, or Zwi Williger, or Joseph Williger
or any of their associates or appointed by the Company or Willi Food, or Zwi
Williger, or Joseph Williger,


                                    Page 63`

`(vi) the independence of the board of directors of Gold Frost is maintained
so as to enable independent decisions as to the enforcement of the agreement to
be taken independently of the Company, any of Willi Food, Zwi Williger, Joseph
Williger or any of their associates, and

     (vii) the provisions of the agreement will be observed. The Company had
also undertaken to Gold Frost not to undertake any activity, which would
conflict with Gold Frost and would render Gold Frost incapable of carrying on
its business independently.

     The agreement will terminate if the Company ceases to hold 30% or less of
the share capital of Gold Frost.

     PRIVATE PLACEMENT ON OCTOBER 2006. On October 5, 2006, we completed a
private placement of our ordinary shares pursuant to a Securities Purchase
Agreement entered into between us and certain accredited investors on September
20, 2006. Pursuant to the terms of this purchase agreement, these investors
purchased from us an aggregate of 1,652,893 ordinary shares at a price of $6.05
per share and warrants to purchase 495,866 ordinary shares with an exercise
price of $8.00 per share.

     The warrants can be exercised at any time and from time to time from their
issuance date and through the 3rd anniversary of the issuance date. Following
the one-year anniversary of the issuance date, if the average trading price of
our ordinary shares for any 20 trading day period is equal or greater than
$16.00, we may elect, subject to certain restrictions, to require the exercise
of up to all of the then unexercised portion of the warrants. The exercise price
and the number of shares issuable upon exercise of the warrants are subject to
customary adjustments in the event of stock dividend, splits or fundamental
transactions. The warrants have a cashless exercise provision that allows the
holder to receive a reduced number of ordinary shares without paying the
exercise price in cash. Such option is only available, however, following the
first anniversary of the issuance date and only at a time when the registration
statement of which this prospectus is a part is not effective or this prospectus
is not available to the selling shareholders for the resale of the ordinary
shares issuable upon the exercise of the warrants. In connection with the
private placement, we also granted to the placement agent warrants to purchase
66,166 ordinary shares, with same terms and exercise price.

     We issued these ordinary shares and warrants to purchase our ordinary
shares in reliance on an exemption from registration pursuant to Regulation D
promulgated under the Securities Act of 1933, as amended, or the Securities Act.
In connection with the private placement, we granted the investors registration
rights, pursuant to which we are obligated to file a registration statement on
Form F-3 for the resale of the shares sold in the transaction and the shares
issueable upon exercise of the warrants. We have filed a registration statement
with the Securities and Exchange Commission for the resale of these shares, and
this registration statement was declared effective in the fourth quarter of
2006.

     ACQUISITION OF LAISH ISRAELI FOOD PRODUCTS, LTD. In January 19, 2007, the
Company established a fully-owned subsidiary in the U.S., WF, in order to
acquire the operations and assets (including inventory, account receivables, and
account payables) of Laish, a U.S. importer and distributor of kosher food
products for approximately $3.5 million in cash. The sources for the purchase
price were a bank loan in the amount of $1.5 million taken by WF and cash on
hand from the Company. On July 14, 2008 the Company announced that WF had ceased
the activities of its operations effective immediately.

     AGREEMENT WITH BARON FAMILY TO FORM GLOBAL KOSHER TRADE AND EXPORT COMPANY.
On February 13, 2007, the Company signed an agreement with the Baron family (an
unrelated third party), kosher food exporters located in Israel, to form a joint
global kosher trade and export company - Baron. The Company holds a 50.1%
interest in Baron, and the Baron family holds the remaining interest. Under the
terms of the agreement, all of the current food export operations of the Baron
family will be executed under the new entity.


                                    Page 64`

`Under the terms of the agreement, the new entity is to be managed by Lior
Baron, as CEO, and Yaakov Baron, as Chairman, and the board of directors is to
consist of four members - the CEO, Chairman, Zwi Williger and Joseph Williger.
The parties agreed that in the event of a dispute regarding ordinary course
business matters the representatives of Willi-Food on the board will have three
votes, rather than two. Under the terms of the agreement, in consideration for
the 50.1% interest, the Company paid $1 million in owner's loans that was
converted into equity on April 1, 2008.

     Under the agreement, the Baron family will be engaged in the food export
activities which involved the export of kosher products from more than 100
suppliers, predominantly from Israel, to the U.S., Canada, England, Belgium,
France, Switzerland, Australia, South Africa, Mexico, Argentina and Chile.
Product categories currently exported include candies, preserves, cakes and
cookies, snacks, cereals, frozen pastries and ice creams, baby food and general
grocery items.

     AGREEMENT WITH THE OWNERS OF A MANUFACTURER AND GLOBAL DISTRIBUTOR OF
KOSHER DAIRY PRODUCTS TO FORM A NEW COMPANY. In October 2007, the Company's
subsidiary, Gold Frost, signed a binding letter with the owners of a
manufacturer and global distributor of kosher dairy products (the
"DISTRIBUTOR"), who are based in Denmark, to form a new joint company
("KIRKEBY"). Gold Frost holds a 51% interest in Kirkeby, and the owners of the
distributor hold the remaining interest. A significant aspect of this
transaction is the fact that Kirkeby has a US dairy import license.

     As part of the transaction, the Distributor transferred to Kirkeby $200
thousand as well as 35 customers from 15 countries worldwide, including a US
import license. Kirkeby was granted the exclusive right to use the distributor's
trademarked brand name in sales and marketing of kosher products. The
Distributor retained the right to use its trademarked brand name for non-kosher
dairy products. It is intended that ultimately Kirkeby will seek to broaden its
penetration into the kosher European and North American markets. In
consideration for the 51% interest in Kirkeby, Gold Frost paid at the closing
$400 thousand to the Distributor.

     ACQUISITION OF SHAMIR SALADS (2006) LTD. In November 2007, Willi Food
announced its intention to purchase 51% of the interest of Shamir, an Israeli
manufacturer and distributor of pre-packaged chilled kosher Mediterranean dips
and spreads in Israel and abroad. The acquisition subsequently closed in the
first quarter of fiscal 2008.

     According to the agreement, the acquisition cost of Shamir was contingent
upon the sum of the audited net profit, after neutralizing capital gains that
Shamir was to present in its audited financial statements for the year 2008,
being multiplied by 2.55. As of December 31, 2008, and according to the total
net profit that Shamir presented for the year ended December 31, 2008, the sum
of the compensation was calculated on the sum of the advance that was paid at
the closing of the agreement.

     On May 14, 2009, the Company received from the Sellers of Shamir (the
"SELLERS") a notice cancelling the acquisition agreement of Shamir, and on May
18, 2009, the Company was notified of unilateral actions taken by the Sellers
with respect to a change in Shamir's board composition and signatory rights and
replacement of the articles of association of Shamir in an effort by the Sellers
to deprive the Company of its board representation and signatory rights in
Shamir.

     The Company submitted an urgent application to the district court in Tel
Aviv requesting, among other things, a declaratory judgment that the acquisition
agreement is in full force and effect and various injunctions against the
Sellers. The court issued injunction providing that the Sellers are prohibited
from taking any action not in accordance with the signatory rights in Shamir in
effect prior to May 18, 2009, performing any disposition of the shares of Shamir
held by the Company, taking any action not in accordance with the articles of
association of Shamir as in effect prior to May 18, 2009, and/or interfering
with the functions of Shamir's board of directors as composed prior to May 18,
2009. In addition, pursuant to the injunction, the Sellers are prohibited from
interfering with the functions of the co-CEO of Shamir nominated by the Company
and/or from preventing the deputy CFO of Shamir from participating in the
discussions to approve the financial statements of Shamir. The district court
also required the Sellers to reimburse the Company for its court and attorney
expenses in the amount of NIS 30,000 (USD 7,891) plus VAT.


                                    Page 65`

`For information with respect to the Company's other material contracts, see
"Item 7. Major Shareholders and Related Party Transactions - B. Related Party
Transactions."

     D.   EXCHANGE CONTROLS

     There are currently no Israeli currency control restrictions on payments of
dividends or other distributions with respect to our ordinary shares or the
proceeds from the sale of our ordinary shares, except for the obligation of
Israeli residents to file reports with the Bank of Israel regarding certain
transactions. However, legislation remains in effect, pursuant to which currency
controls can be imposed by administrative action at any time and from time to
time.

     E.   TAXATION

     The following is a summary of the material current tax laws of the State of
Israel as they relate to the Company and its shareholders. This section also
contains a discussion of some Israeli tax consequences to persons who hold or
who will acquire our ordinary shares. This summary does not purport to be a
complete analysis of all potential Israeli tax law consequences that may be
relevant to a particular investor in light of his or her personal investment
circumstances or to some types of investors subject to special treatment under
Israeli law. Examples of this kind of investor include tax-exempt entities,
banks, certain financial companies, broker-dealers, investors that own, directly
or indirectly, 10% or more of our outstanding voting rights, or foreign
companies, if Israeli residents hold 25% or more of their shares or have the
right to 25% or more of their income or profit, all of whom are subject to
special tax regimes not covered in this discussion.

     The discussion is based on legislation yet to be subject to judicial or
administrative interpretation, and there can be no assurance that the views
expressed herein will accord with any such interpretation in the future. This
discussion is not intended and should not be construed as legal or professional
tax advice and does not cover all possible tax considerations.

     Potential investors are urged to consult their own tax advisors as to the
Israeli or other tax consequences of the purchase, ownership and disposition of
the Shares including, in particular, the effect of any foreign, state or local
taxes.

ISRAELI TAX REFORMS

     On July 24, 2002, the Israeli Parliament enacted income tax reform
legislation (the "2003 Tax Reform"). The Tax Reform introduced fundamental and
comprehensive changes to Israeli tax laws. Most of the legislative changes took
effect on January 1, 2003. The 2003 Tax Reform introduced, inter alia, a
transition from a primarily territorial-based tax system to a personal-based
system of taxation with respect to Israeli residents, resulted in significant
amendment of the international taxation provisions, and in new provisions
concerning the taxation of capital markets including the abolishment of formerly
"exempt investment routes" (e.g., capital gain derived by individuals from the
sale of securities traded on the Tel-Aviv Stock Exchange).

     In addition, the Israeli Parliament approved on July 25, 2005 income tax
reform legislation (the "2006 Tax Reform") pursuant to the recommendations of a
committee appointed by the Israeli Minister of Finance, which incorporated
additional fundamental changes to Israeli tax law. The 2006 Tax Reform includes,
INTER ALIA, a gradual reduction of income tax rates for both individuals and
corporations through 2010. The 2006 Tax Reform also outlines a path towards
uniformity in the taxation of interest, dividend and capital gains derived from
securities, which in some cases may result in the increasing of the applicable
tax rate. Most of the amendments under the 2006 Tax Reform are effective as of
January 1, 2006, subject to certain exceptions. Transition rules apply in
certain circumstances.


                                    Page 66`

`IT SHOULD BE NOTED THAT VARIOUS ISSUES RELATED TO THE 2003 TAX REFORM AND
2006 TAX REFORM REMAIN UNCLEAR IN VIEW OF THE LEGISLATIVE LANGUAGE UTILIZED. THE
ANALYSIS BELOW IS THEREFORE BASED ON OUR CURRENT UNDERSTANDING OF THIS
LEGISLATION.

                             CORPORATE TAX STRUCTURE

GENERAL

     In accordance with the 2006 Tax Reform, the corporate tax rate applicable
in 2008 was 27%. This rate was reduced to 26% in 2009 and had been scheduled to
be reduced to 25% in 2010 and beyond.

     Dividend distributed by an Israeli resident corporation to another Israeli
resident corporation is, generally, exempt from Israeli corporate tax.

CORPORATE TAXATION UNDER INFLATIONARY CONDITIONS

     The Income Tax Law (Inflationary Adjustments), 1985 (the Inflationary
Adjustments Law) is designed to neutralize the erosion of capital investments in
businesses and to prevent tax benefits resulting from the deduction of
inflationary financial expenses. The Inflationary Adjustments Law applies a
supplementary set of inflationary adjustments to the normal taxable profit
computed according to regular historic cost principles. Generally, the
Inflationary Adjustments Law provides tax deductions and adjustments to
depreciation deductions and tax loss carry forwards to mitigate the effects
resulting from an inflationary economy. The Inflationary Adjustments Law is
highly complex and its main features can be described as follows:

     o    Where a company's equity, as calculated under the Inflationary
          Adjustments Law, exceeds the depreciated cost of fixed assets, as
          calculated under the Inflationary Adjustments Law, a deduction from
          taxable income is permitted equal to the excess multiplied by the
          applicable annual rate of inflation. The maximum deduction permitted
          in any single tax year is 70% of taxable income, with the unused
          portion permitted to be carried forward linked to the Israeli CPI.

     o    Where a company's depreciated cost of fixed assets exceeds its equity,
          then the excess multiplied by the applicable annual rate of inflation
          is added to taxable income. Note that the cost of fixed assets is also
          calculated under the Inflationary Adjustments Law.

     o    Subject to specified limitations, depreciation deductions on fixed
          assets and losses carried forward are adjusted for inflation based on
          the increase in the Israeli CPI.

     Under the Inflationary Adjustments Law, results for tax purposes are
measured in real terms in accordance with the changes in the Israeli CPI. Since
a portion of our expenses accrues in dollars, the discrepancy between the change
in the Israeli CPI and the change in the currency exchange rate of the NIS to
the dollar, each year and cumulatively, may result in a significant difference
between taxable income and the income denominated in NIS reflected in our
financial statements.

     On February 26, 2008, the Israeli Parliament ratified Amendment No. 20 of
the Inflationary Adjustment Law, pursuant to which the Inflationary Adjustment
Law was repealed as of tax year 2008, subject to transitional provisions.


                                    Page 67`

`TAXATION OF THE COMPANY SHAREHOLDERS

                                    DIVIDENDS

ISRAELI RESIDENT

     o    INDIVIDUAL - The distribution of dividend by an Israeli resident
          company to an Israeli resident individual will generally be subject to
          income tax at a rate of 20%. However, a 25% tax rate will apply if the
          dividend recipient is a "Significant Shareholder" (i.e., a person who
          holds, directly or indirectly, alone or together with other, 10% or
          more of one of the Israeli resident company's means of control at the
          time of distribution or at any time during the preceding 12 months
          period).

     o    CORPORATION - Dividend distributed by an Israeli resident corporation
          to another Israeli resident corporation will be generally exempt from
          income tax provided the income from which such dividend is distributed
          was derived or accrued within Israel.

NON ISRAELI RESIDENT

     Under the Israeli income tax ordinance non-Israeli resident (either
     individual or corporation) is generally subject to an Israeli income tax on
     the receipt of dividends at the rate of 20% (25% if the dividends recipient
     is a "Significant Shareholder" (as defined above), those rates are subject
     to a reduced tax rate under an applicable double tax treaty. Thus, under
     the Double Tax Treaty concluded between the State of Israel and U.S. the
     following rates will apply in respect of dividend distributed by an Israeli
     resident company to a U.S. resident:

     o    If the U.S. resident is a corporation which holds at the taxable year
          which precede the date of payment of the dividend and during the whole
          of its prior taxable year (if any), at least 10% of the outstanding
          shares of the voting stock of the Israeli resident paying corporation
          and not more then 25% of the gross income of the Israeli resident
          paying corporation for such prior taxable year (if any) consists of
          certain type of interest or dividends - the tax rate is 12.5%.

     o    If both the conditions mentioned in section (i) above are met and the
          dividend is paid from an Israeli resident company's income which was
          entitled to a reduced tax rate applicable to an "approved enterprise"
          under the Israeli Law for the Encouragement of Capital Investments of
          1959- the tax rate is 15%.

     o    In all other cases, the tax rate is 25%.

The aforementioned rates under the Israel U.S. Double Tax Treaty will not apply
if the dividend income was derived through a permanent establishment of the U.S.
resident in Israel.

WITHHOLDING TAX AT SOURCE FROM DIVIDEND DISTRIBUTED BY THE COMPANY

An Israeli resident company whose shares are listed in a stock exchange is
obligated to withhold tax, upon the distribution of a dividend, from the amount
distributed, at the following rates:

     o    Israeli resident corporation - 0%.

     o    Israeli resident individual - 20%.

     o    Non-Israeli resident - 20% subject to a reduced tax rate under an
          applicable double tax treaty.


                                    Page 68`

`CAPITAL GAIN TAX

GENERAL

     Capital gain tax is imposed on the disposal of capital assets by an Israeli
resident and on the disposal of such assets by a non- Israel resident if those
assets are either (i) located in Israel; (ii) they are shares or a right to a
share in an Israeli resident corporation (iii) they represent a directly or
indirectly rights to assets located in Israel. The Israeli Tax Ordinance
distinguishes between "Real Gain" and the "Inflationary Surplus". Real Gain is
the excess of the total capital gain over Inflationary Surplus computed
generally on the basis of the increase in the Israeli CPI between the date of
purchase and the date of disposal.

     Inflationary Surplus, that accrued until December 31, 1993, is subject to a
tax rate of 10% while Inflationary Surplus that accrued after this date is
exempt from any tax.

CAPITAL GAIN TAX APPLICABLE TO ISRAELI RESIDENT SHAREHOLDERS

The Capital gain accrued at the sale of an asset purchased on or after January
1, 2003 will be taxed as follows:

     o    Individual - The real capital gain will be subject to tax at the rate
          of 20%. If the shareholder is a Significant Shareholder" (see
          aforementioned). A capital gain derived by an individual claiming
          deduction of financing expenses in respect of such gain will be taxed
          at the rate of 25%.

     o    Corporation - The real capital gain derived by corporation will be
          generally subject to tax at the rate of 25%. However, the real capital
          gain derived from sale of securities, as defined in Section 6 of the
          Inflationary Adjustment Law, by a corporation, which was subject upon
          August 10, 2005 to the provisions of Section 6 of the Inflationary
          Adjustment Law, will be taxed at the corporate tax rate (27% in 2008,
          26% in 2009).

     The Capital gain accrued at the sale of an asset purchased prior to January
1, 2003 will be subject to tax at a blended rate. The marginal tax rate for
individuals (up to 47% in 2008, 46% in 2009) and the regular corporate tax rate
for corporations (27% in 2008, 26% in 2009) will be applied to the gain amount
which bears the same ratio to the total gain realized as the ratio which the
holding period commencing at the acquisition date and terminating on January 1,
2003 bears to the total holding period. The remainder of the gain realized will
be subject to capital gains tax at the rates applicable to an asset purchased
after January 1, 2003 (see aforementioned).

     At the sale of traded securities a detailed return, including a computation
of the tax due, should be filed and an advanced payment should be paid on
January 31 and June 31 of every tax year in respect of sales of securities made
within the previous six months. However, if all tax due was withheld at source
according to applicable provisions of the Israeli Income Tax Ordinance and
regulations promulgated thereunder the aforementioned return should not be filed
and no advance payment should be paid. Capital gain is also reportable on the
annual income tax return.

CAPITAL GAIN TAX APPLICABLE TO NON-ISRAELI RESIDENT SHAREHOLDERS

     Capital gain from the sale of the Shares by a non-Israeli shareholder are
exempt under the Israeli income tax ordinance from Israeli taxation provided the
following cumulative conditions are met: (i) the Shares were purchased upon or
after the registration of the Shares at the stock exchange (ii) the seller
doesn't have a permanent establishment in Israel to which the derived capital
gain is attributed (iii) if the seller is a corporation, less than 25% of its
means of control are held by Israeli resident shareholders. In addition, the
sale of the Shares may be exempt from Israeli capital gain tax under an
applicable tax treaty. Thus, the U.S.-Israel Double Tax Treaty exempts U.S.
resident from Israeli capital gain tax in connection with such sale, provided
(i) the U.S. resident owned, directly or indirectly, less than 10% of an Israeli
resident company's voting power at any time within the 12 - month period
preceding such sale; and (ii) the seller, being an individual, is present in
Israel for a period or periods of less than 183 days at the taxable year; and
(iii) the capital gain from the sale was not derived through a permanent
establishment of the U.S. resident in Israel.


                                    Page 69`

`TAXATION OF INVESTORS ENGAGED IN A BUSINESS OF TRADING SECURITIES

     Individual and corporate shareholder dealing in securities in Israel are
taxed at the tax rates applicable to business income (in 2008 - 27% tax rate for
a corporation and a marginal tax rate of up to 47% for individual. in 2009 - 26%
tax rate for a corporation and a marginal tax rate of up to 46% for individual).
If the shareholder is a non-Israeli resident then such taxation is subject to
the provisions of any applicable double tax treaty.

WITHHOLDING AT SOURCE FROM CAPITAL GAINS UPON THE SALE OF TRADED SECURITIES

     Either the seller, the Israeli stockbrokers and the financial institution
through which the sold securities are held are obliged, subject to the above
mentioned exemptions, to withhold tax upon the sale of securities from the real
capital gain at the rate of 25% in respect of corporation and 20% in respect of
an individual.

U.S. FEDERAL INCOME TAX CONSIDERATIONS

     Subject to the limitations described herein, the following discussion
describes the material U.S. federal income tax consequences to a U.S. holder of
the purchase, ownership and disposition of our ordinary shares where the U.S.
holder will own our ordinary shares as capital assets. A U.S. holder is a holder
of our ordinary shares who is:

o    An individual citizen or resident of the United States for U.S. federal
     income tax purposes;

o    a corporation or partnership (or other entity taxable as a corporation or
     partnership for U.S. federal tax purposes) created or organized in the
     United States or under the laws of the United States or any political
     subdivision thereof;

o    an estate, the income of which is subject to U.S. federal income tax
     regardless of its source; or

o    a trust (i) if, in general, a court within the United States is able to
     exercise primary supervision over its administration and one or more U.S.
     persons have the authority to control all of its substantial decisions, or
     (ii) that has in effect a valid election under applicable U.S. Treasury
     regulations to be treated as a U.S. person.

     Material aspects of U.S. federal income tax relevant to a holder of our
ordinary shares that is not a U.S. holder (a "NON-U.S. HOLDERS") are also
discussed below. This discussion considers only U.S. Holders that will own our
ordinary shares as capital assets and is not a comprehensive description of all
of the tax considerations that may be relevant to each person's decision to
purchase our ordinary shares.

     This discussion is based on current provisions of the Internal Revenue Code
of 1986, as amended (the "CODE"), current and proposed Treasury regulations
promulgated thereunder, and administrative and judicial decisions as of the date
hereof, all of which are subject to change, possibly on a retroactive basis.
This discussion does not address all aspects of U.S. federal income taxation
that may be relevant to any particular U.S. holder in light of such holder's
individual circumstances. In particular, this discussion does not address the
potential application of the alternative minimum tax or the U.S. federal income
tax consequences to U.S. holders that are subject to special treatment,
including U.S. holders that:

o    are broker-dealers or insurance companies;


                                    Page 70`

`o    have elected mark-to-market accounting;

o    are tax-exempt organizations or retirement plans;

o    are financial institutions or financial services entities;

o    hold their shares as part of a straddle, hedge or conversion transaction
     with other investments;

o    acquired their shares upon the exercise of employee stock options or
     otherwise as compensation;

o    are, or hold their shares through, partnerships or other pass-through
     entities;

o    own directly, indirectly or by attribution at least 10% of our voting
     power; or

o    have a functional currency that is not the dollar.

     In addition, this discussion does not address any aspect of state, local or
non-U.S. tax laws or the possible application of United States federal gift or
estate tax.

TAXATION OF DIVIDENDS PAID ON ORDINARY SHARES

     Subject to the discussion below under "Tax Consequences if we were a
Passive Foreign Investment Company," a U.S. holder will be required to include
in gross income as ordinary dividend income the amount of any distribution paid
on our ordinary shares, including any Israeli taxes withheld from the amount
paid, to the extent the distribution is paid out of our current or accumulated
earnings and profits, as determined for U.S. federal income tax purposes.
Distributions in excess of such earnings and profits will be applied against and
will reduce the U.S. holder's basis in our ordinary shares and, to the extent in
excess of such basis, will be treated as gain from the sale or exchange of our
ordinary shares. The dividend portion of such distribution generally will not
qualify for the dividends received deduction otherwise available to
corporations.

     Dividends that are received by U.S. holders that are individuals, estates
or trusts will be taxed at the rate applicable to long-term capital gains (a
maximum rate of 15%), provided that such dividends meet the requirements of
"qualified dividend income." Dividends that fail to meet such requirements, and
dividends received by corporate U.S. holders, are taxed at ordinary income
rates. No dividend received by a U.S. holder will be a qualified dividend (1) if
the U.S. holder held the ordinary share with respect to which the dividend was
paid for less than 61 days during the 121-day period beginning on the date that
is 60 days before the ex-dividend date with respect to such dividend, excluding
for this purpose, under the rules of Code section 246(c), any period during
which the U.S. holder has an option to sell, is under a contractual obligation
to sell, has made and not closed a short sale of, is the grantor of a
deep-in-the-money or otherwise nonqualified option to buy, or has otherwise
diminished its risk of loss by holding other positions with respect to, such
ordinary share (or substantially identical securities); or (2) to the extent
that the U.S. holder is under an obligation (pursuant to a short sale or
otherwise) to make related payments with respect to positions in property
substantially similar or related to the ordinary share with respect to which the
dividend is paid. If we were to be a "passive foreign investment company" (as
such term is defined in the Code) for any year, dividends paid on our ordinary
shares in such year or in the following year would not be qualified dividends.
In addition, a non-corporate U.S. holder will be able to take a qualified
dividend into account in determining its deductible investment interest (which
is generally limited to its net investment income) only if it elects to do; in
such case the dividend will be taxed at ordinary income rates.

     Distributions of current or accumulated earnings and profits paid in
foreign currency to a U.S. holder (including any Israeli taxes withheld
therefrom) will be includible in the income of a U.S. holder in a dollar amount
calculated by reference to the exchange rate on the date of the distribution. A
U.S. holder that receives a foreign currency distribution and converts the
foreign currency into dollars after the date of distribution will have foreign
exchange gain or loss based on any appreciation or depreciation in the value of
the foreign currency against the dollar, which will generally be U.S. source
ordinary income or loss.


                                    Page 71`

`U.S. holders will have the option of claiming the amount of any Israeli
income taxes withheld at source either as a deduction from gross income or as a
dollar-for-dollar credit against their U.S. federal income tax liability.
Individuals who do not claim itemized deductions, but instead utilize the
standard deduction, may not claim a deduction for the amount of the Israeli
income taxes withheld, but the amount may be claimed as a credit against the
individual's U.S. federal income tax liability. The amount of foreign income
taxes that may be claimed as a credit in any year is subject to complex
limitations and restrictions, which must be determined on an individual basis by
each shareholder. These limitations include rules that limit foreign tax credits
allowable for specific classes of income to the U.S. federal income taxes
otherwise payable on each such class of income. The total amount of allowable
foreign tax credits in any year cannot exceed the pre-credit U.S. tax liability
for the year attributable to foreign source taxable income.

     A U.S. holder will be denied a foreign tax credit with respect to Israeli
income tax withheld from dividends received on the ordinary shares:

o    if the U.S. holder has not held the ordinary shares for at least 16 days of
     the 31-day period beginning on the date which is 15 days before the
     ex-dividend date with respect to such dividend; or

o    to the extent the U.S. holder is under an obligation to make related
     payments with respect to positions in substantially similar or related
     property.

     Any days during which a U.S. holder has substantially diminished its risk
of loss on the ordinary shares are not counted toward meeting the 16-day holding
period. Distributions of current or accumulated earnings and profits will be
foreign source passive income for U.S. foreign tax credit purposes.

TAXATION OF THE DISPOSITION OF ORDINARY SHARES

     Subject to the discussion below under "Tax Consequences if we were a
Passive Foreign Investment Company," upon the sale, exchange or other
disposition of our ordinary shares, a U.S. holder will recognize capital gain or
loss in an amount equal to the difference between the U.S. holder's basis in the
ordinary shares, which is usually the cost to the U.S. holder of the shares, and
the amount realized on the disposition. A disposition of shares will be
considered to occur on the trade date, regardless of the holder's method of
accounting. Capital gain from the sale, exchange or other disposition of our
ordinary shares held more than one year will be long-term capital gain, and may,
in the case of individual U.S. holders, be subject to a reduced rate of
taxation. Gain or loss recognized by a U.S. holder on a sale, exchange or other
disposition of ordinary shares will be treated as U.S. source income for U.S.
foreign tax credit purposes. The deductibility of a capital loss recognized on
the sale, exchange or other disposition of ordinary shares is subject to
limitations.

     A U.S. holder that uses the cash method of accounting calculates the dollar
value of the proceeds received on the sale as of the date that the sale settles.
However, a U.S. holder that uses the accrual method of accounting is required to
calculate the value of the proceeds of the sale as of the trade date and may
therefore realize foreign currency gain or loss. A U.S. holder may avoid
realizing foreign currency gain or loss if he or she has elected to use the
settlement date to determine its proceeds of sale for purposes of calculating
the foreign currency gain or loss. In addition, a U.S. holder that receives
foreign currency upon disposition of ordinary shares and converts the foreign
currency into dollars after the settlement date or trade date (whichever date
the U.S. holder is required to use to calculate the value of the proceeds of
sale) will have foreign exchange gain or loss based on any appreciation or
depreciation in the value of the foreign currency against the dollar, which will
generally be U.S. source ordinary income or loss.


                                    Page 72`

`TAX CONSEQUENCES IF WE WERE A PASSIVE FOREIGN INVESTMENT COMPANY

     If we were a Passive Foreign Investment Company ("PFIC"), each U.S. holder
would (unless it timely made an election to be taxed currently as a "qualified
electing fund ("QEF")) be taxable on gain recognized from the disposition of
ordinary shares (including gain deemed recognized if the ordinary shares are
used as security for a loan) and upon receipt of certain distributions with
respect to ordinary shares as if such income had been recognized ratably over
the U.S. holder's holding period for the ordinary shares. Tax would be computed
at the highest ordinary income tax rate in effect for each other period to which
income is allocated, and an interest charge on the tax as so computed would also
apply. Additionally, U.S. holders who acquire our ordinary shares from decedents
(other than nonresident aliens) dying before 2010 would be denied the
normally-available step-up in basis for such shares to fair market value at the
date of death and, instead, would have a tax basis in such shares equal to the
decedent's basis, if lower.

     Generally, we would be a passive foreign investment company, or a "PFIC",
for a taxable year if (taking into account certain "look-through" rules with
respect to the income and assets of our subsidiaries) either 75% or more of our
gross income for such taxable year is passive income or the average percentage
(by value) of our passive assets during such taxable year is at least 50
percent. We believe that because we are and intend to remain an operating
business for the foreseeable future, it is very unlikely that we will be deemed
a PFIC.

TAX CONSEQUENCES FOR NON-U.S. HOLDERS OF ORDINARY SHARES

     Except as described in "Information Reporting and Back-up Withholding"
below, a non-U.S. holder of ordinary shares will not be subject to U.S. federal
income or withholding tax on the payment of dividends on, and the proceeds from
the disposition of, our ordinary shares, unless:

o    the item is effectively connected with the conduct by the non-U.S. holder
     of a trade or business in the United States and, in the case of a resident
     of a country which has a treaty with the United States, the item is
     attributable to a permanent establishment, or in the case of an individual,
     a fixed place of business, in the United States;

o    the non-U.S. holder is an individual who holds the ordinary shares as a
     capital asset and is present in the United States for 183 days or more in
     the taxable year of the disposition and does not qualify for an exemption;
     or

o    the non-U.S. holder is subject to tax under the provisions of U.S. tax law
     applicable to U.S. expatriates.

INFORMATION REPORTING AND BACK-UP WITHHOLDING

     U.S. holders generally are subject to information reporting requirements
with respect to dividends paid in the United States on, or proceeds from the
disposition of, our ordinary shares. In addition, a U.S. holder may be subject,
under certain circumstances, to backup withholding at a rate of up to 28% with
respect to dividends paid on, or proceeds from the disposition of, our ordinary
shares unless the U.S. holder provides proof of an applicable exemption or
correct taxpayer identification number and otherwise complies with applicable
requirements of the backup withholding rules. A holder of our ordinary shares
who provides an incorrect taxpayer identification number may be subject to
penalties imposed by the IRS. Amounts withheld under the backup withholding
rules are not an additional tax and may be refunded or credited against the
holder's federal income tax liability, provided the required information is
furnished to the IRS.

     Non-U.S. holders generally are not subject to information reporting or
back-up withholding with respect to dividends paid on, or proceeds from the
disposition of, our ordinary shares, provided that the non-U.S. holder provides
a taxpayer identification number, certifies to its foreign status, or
establishes another exemption to the information reporting or back-up
withholding requirements.

     F.   DIVIDENDS AND PAYING AGENTS

     Not applicable.


                                    Page 73`

`G.   STATEMENTS BY EXPERTS

     Not applicable.

     H.   DOCUMENTS ON DISPLAY

     The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, applicable to foreign private issuers and
fulfills the obligation with respect to such requirements by filing reports with
the Securities and Exchange Commission. You may read and copy any document we
file with the Securities and Exchange Commission without charge at the
Securities and Exchange Commission's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such material may be obtained by mail
from the Public Reference Branch of the Securities and Exchange Commission at
such address, at prescribed rates. Please call the Securities and Exchange
Commission at l-800-SEC-0330 for further information on the public reference
room.

     As a foreign private issuer, we are exempt from the rules under the
Exchange Act prescribing the furnishing and content of proxy statements, and our
officers, Directors and principal shareholders are exempt from the reporting and
"short-swing" profit recovery provisions contained in Section 16 of the Exchange
Act. In addition, we are not required under the Exchange Act to file periodic
reports and financial statements with the Securities and Exchange Commission as
frequently or as promptly as United States companies whose securities are
registered under the Exchange Act.

     I.   SUBSIDIARY INFORMATION

     Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     EXCHANGE RATE RISK: The Company regularly assesses currency rate risks to
minimize any adverse effects on the Company's business as a result of currency
fluctuations.

     The Company's foreign currency exposure gives rise to market risk
associated with exchange rate movements of the NIS, the Company functional and
reporting currency, against the USD and Euros. Most of the Company's purchases
are denominated in USD and Euros, whereas its income and other expenses are
denominated mostly in NIS. Consequently, devaluation of the NIS against the
other currencies may cause a negative impact on the Company profit margins.

     The Company strives to minimize market risks arising from exchange rates
and the cost of imported goods, especially by opening wide documentary credits
for suppliers abroad and holding foreign currency surpluses, initiates forward
transactions and foreign currency options.

     CREDIT RISK: Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of trade receivables. Despite
the Company's large number of clients (over 1,500 in Israel and around the
world), a major and significant part of its sales are made to only a limited
number of customers (mainly in the organized market). The Company generally does
not require and does not receive collateral from those major customers. However,
it does require and receive collateral from most of the remainder of its clients
to insure security of collecting payments. The Company maintains an allowance
for doubtful debts, based upon factors surrounding the credit risk of specific
customers, historical trends and other information which management believes
adequately covers all anticipated losses in respect of trade receivables. There
can be no assurance that this allowance will be adequate. In the event that any
of the Company's major clients defaults on its payment obligations to us, the
Company will not possess sufficient collateral to collect the entire debt. The
Company strives to minimize the credit risks by constantly reviewing the credit
it extends to customers versus the collateral it receives. As a result, the
Company has ceased selling products to certain customers and considerably
reduced sales to other customers, and may continue to do so in the future.


                                    Page 74`

`INTEREST RATE RISK: The Company Invest part of its cash reserves in
instruments that bear fixed interest rate. The company as part of its investing
policy invests part of its cash reserves in bonds and convertible debentures
that bears fixed interest rate as a result the company is espoused to changes in
interest rates.

     The table below details the sensitive analysis in respect to exposure
relating to investment in instruments with fix interest rate:

                             Gain (loss) from                     Gain (loss) from
                              interest change      Fair value      interest change
                            --------------------     -------    -------------------

Change in Interest as
  % of interest rate         (10)%         (5)%                     5%          10%

 Increase\decrease in
   financial Income           10            5         1,526        (5)         (10)

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable.


                                    Page 75`

`PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     Not applicable.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
         PROCEEDS

     Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

     Not applicable.

ITEM 15T. CONTROLS AND PROCEDURES

     (a) DISCLOSURE CONTROLS AND PROCEDURES

     Our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO,
are responsible for establishing and maintaining our disclosure controls and
procedures (as defined in Rules13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended). These controls and procedures were designed
to ensure that information required to be disclosed in the reports that we file
or submit under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the SEC. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by us in the reports we file or submit under the Securities
Exchange Act of 1934, as amended, is accumulated and communicated to our
management, including our principal executive and principal financial officers,
or persons performing similar functions, as appropriate, to allow timely
decisions regarding required disclosure. We evaluated these disclosure controls
and procedures under the supervision of our CEO and CFO as of December 31, 2008.
Based on this evaluation, our CEO and CFO concluded that our disclosure controls
and procedures were effective to meet these objectives.

     (b) MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING.

     Our management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal
control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles. Our internal control over financial reporting
includes those policies and procedures that:

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

     o    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


                                    Page 76`

`o    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.

     Our management recognizes that there are inherent limitations in the
effectiveness of any system of internal control over financial reporting,
including the possibility of human error and the circumvention or override of
internal control. Accordingly, even effective internal control over financial
reporting can provide only reasonable assurance with respect to financial
statement preparation and presentation, and may not prevent or detect all
misstatements. In addition, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

     Our management (with the participation of the CEO and CFO) assessed the
effectiveness of our internal control over financial reporting as of December
31, 2008. In conducting its assessment of internal control over financial
reporting, management based its evaluation on the framework in "Internal Control
- Integrated Framework" issued by the Committee of Sponsoring Organizations of
the Tread way Commission. Our management has concluded, based on its assessment,
that our internal control over financial reporting was effective as of December
31, 2008 based on these criteria.

     This Annual Report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management's report in this Annual
Report.

     (c) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING. There were no
changes in the Company's internal control over financial reporting that occurred
during the year ended December 31, 2008 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

ITEM 16. [RESERVED]

ITEM 16A. - AUDIT COMMITTEE FINANCIAL EXPERT

     The Company's Board of Directors has determined that Ariel Herzfeld is the
"Audit Committee Financial Expert" for the Company, as such term is defined in
Item 16A of Form 20-F. Mr. Herzfeld serves on the Company's Audit Committee of
the Board of Directors. All the members of the Audit Committee are "Independent
Directors" as defined in the Nasdaq listing standards applicable to us.

ITEM 16B. - CODE OF ETHICS

     On June 23, 2004, the Company's Board of Directors adopted a Code of Ethics
for the Company that applies to all directors, officers and other employees of
the Company. A copy of the Code of Ethics is available for review on the
Company's website at www.willi-food.co.il.


                                    Page 77`

`ITEM 16C. - PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The following table presents the aggregate fees for professional services
and other services rendered by Brightman Almagor Zohar & Co. in Israel, a member
of firm of Deloitte Touche Tomhatsu to the Company in 2008 and 2007.

                    NIS 2008       NIS 2007       USD 2008       USD 2007
                   ----------     ----------     ----------     ----------

Audit Fees (1)        400,000        240,000        105,208         63,125
SOX Fees,(2)                -        154,000              -         40,505
Tax Fees (3)                -         10,000              -          2,630
TOTAL                 400,000        404,000        105,208        106,260

     (1) Audit Fees consist of fees billed for the annual audit services
engagement and other audit services, which are those services that only the
external auditor can reasonably provide, and include the group audit; statutory
audits; comfort letters and consents; attest services; and assistance with and
review of documents filed with the SEC.

     (2) SOX Fees include fees billed for services for Sarbanes Oxley ("SOX")
readiness and compliance including risk assessment and project plan, and process
documentation accordingly to the SOX requirements including gap analysis and
remediation plan.

     (3) Tax Fees include fees billed for tax compliance services, including the
preparation of original and amended tax returns and claims for refund; tax
consultations, such as assistance and representation in connection with tax
audits, tax advice related to mergers and acquisitions, transfer pricing, and
requests for rulings or technical advice from taxing authority.

The non audit fees Brightman Almagor Zohar & Co. charged the Company in 2007
(including tax fees and SOX fees as mentioned above) were approved before by the
Audit Committee of the Company.

ITEM 16D. - EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

     Not applicable.


                                    Page 78`

`ITEM 16E. - PURCHASES OF EQUITY SECURITIES BY THE COMPANY AND AFFILIATED
            PURCHASERS

     Below is a list of purchases of the Company's ordinary shares by affiliated
purchasers during calendar year 2008 and from January 1, 2009 to June 22, 2009.
There were no purchases by the Company of the Company's ordinary shares during
such periods.

                                                  TOTAL NUMBER   MAXIMUM NUMBER
                                                    OF SHARES       OF SHARES
                                                   PURCHASED AS     THAT MAY
                                                     PART OF         YET BE
                     TOTAL NUMBER   AVERAGE PRICE    PUBLICLY       PURCHASED
                      OF SHARES       PAID PER    ANNOUNCED PLANS  UNDER PLANS
    PERIOD            PURCHASED         SHARE      OR PROGRAMS     OR PROGRAMS
-----------------     ----------     ----------     ----------     ----------
                                     WILLI FOOD
-----------------------------------------------------------------------------
January 4, 2008-
January 28, 2008         412,800          5.274            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
October 28, 2008-
October 31, 2008          10,710          1.688            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
November 3, 2008-
November 25, 2008        142,187          1.724            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
December 2, 2008-
December 31, 2008         76,438          1.386            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
January 6, 2008-
January 30, 2008          32,365          1.439            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
February 2, 2008-
February 18, 2008         66,065          1.443            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
                                    ZWI WILLIGER
-----------------------------------------------------------------------------
March 18, 2009           367,000              *            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
April 16, 2009-
April 30, 2009            39,275          1.528            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
May 1, 2009-
May 29, 2009              42,799          1.926            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
June 1, 2009-
June 22, 2009             75,437          2.201            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
                                   JOSEPH WILLIGER
-----------------------------------------------------------------------------
March 17, 2009-
March 24, 2009            39,945          1.028            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
April 6, 2009-
April 20, 2009             1,000          1.378            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
May 4, 2009-
May 29, 2009              27,410          1.974            N/A            N/A
-----------------     ----------     ----------     ----------     ----------
June 1, 2009-
June 22, 2009             17,800          2.179            N/A            N/A
-----------------     ----------     ----------     ----------     ----------

     * According to a loan agreement signed on September 1, 2008, Mr. Zwi
Williger provided a loan to Mr. Arieh Bar Lev (Arcadi Gaydamak) in the amount of
approximately USD 4.5 million. This loan was secured, among others, by a lien on
the 367,000 shares acquired by Mr. Arieh Bar Lev (Arcadi Gaydamak) on May 28,
2008. The maturity date of the loan was October 16, 2008, and it was not repaid.
Under the loan agreement, the shares were foreclosed by Mr. Zwi Williger on
March 18, 2009.

ITEM 16F. - CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT

     Not applicable.


                                    Page 79`

`ITEM 16G. - CORPORATE GOVERNANCE

     The following are the significant ways in which our corporate governance
practices differ from those followed by domestic companies under the listing
standards of the Nasdaq:

     o    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.

     o    COMPENSATION OF OFFICERS - Under Nasdaq rules, executive compensation
          must be determined or recommended to the Board for determination by a
          compensation committee comprised solely of independent directors or by
          independent directors constituting a majority of the Board's
          independent directors. Not all of our executive compensation is
          determined in this manner.

     o    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.

     o    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.

     o    AUDIT COMMITTEE CHARTER - Under Nasdaq rules, U.S. domestic listed
          companies, must adopt a formal written audit committee charter, and
          that the audit committee must review and assess the adequacy of the
          charter on an annual basis. We do not have such an audit committee
          charter, although we expect to adopt one in the near future.

     o    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.


                                    Page 80`

`PART III

ITEM 17. FINANCIAL STATEMENTS

     We have responded to Item 18 in lieu of this Item.

ITEM 18. FINANCIAL STATEMENTS

     The financial statements required by this item are found at the end of this
annual report, beginning on page F-1.


                                    Page 81`

`ITEM 19. EXHIBITS

EXHIBIT
NUMBER         DESCRIPTION

+1.1           Memorandum of Association of the Company, as amended (1)

1.2            Articles of Association of the Company, as amended (4)

2.1            Specimen of Certificate for ordinary shares (2)

4.1            Share Option Plan (2)

+4.2           Management Agreement between the Company and Yossi Willi
               Management Investments Ltd., dated June 1, 1998 (3)

+4.3           Amendment to the Management Agreement between the Company and
               Yossi Willi Management Investments Ltd., dated August 1, 2005 (4)

+4.4           Management Agreement between the Company and Zwi W. & Co. Ltd.,
               dated June 1, 1998 (3)

+4.5           Amendment to the Management Agreement between the Company and Zwi
               W. & Co., Ltd., dated August 1, 2005 (4)

+4.6           Lease of Company's premises with Titanic Food Ltd., dated
               November 23, 1998 (3)

+4.7           Services Agreement between the Company and Willi Food, dated
               April 1, 1997 (3)

+4.8           Transfer Agreement between the Company and Gold Frost dated
               February 16, 2006 (4)

+4.9           Lease agreement for Logistics Center between the Company and Gold
               Frost dated February 16, 2006 (4)

4.10           Relationship Agreement between the Company, Gold Frost, Willi
               Food, Zwi Williger and Joseph Williger dated February 28, 2006
               (4)

4.11           Placing Agreement between the Company, Gold Frost, certain
               officers of Gold Frost and Corporate Synergy dated March 2, 2006
               (4)

4.12           Lock In Agreement, between the Company, Gold Frost, Corporate
               Synergy and certain officers of Gold Frost, dated March 2, 2006
               (4)

4.13           Securities Purchase Agreement, dated as of October 25, 2006,
               among the Company and the investors identified on the signature
               pages thereto. (5)

4.14           Registration Rights Agreement, dated as of October 25, 2006,
               among the Company and the investors signatory thereto. (5)

4.15           Asset Purchase Agreement, dated as of January 19, 2007, by and
               among the Company, WF Kosher Food Distributors, Ltd., Laish
               Israeli Food Products Ltd. and Arie Steiner.(6)

+4.16          Agreement, dated February 11, 2007, between the Company and Mr.
               Ya'acov Baron, Ms. Hedva Baron, Mr. Li'or Baron, Ms. Gozlan Or'na
               and Ms. Michal Baron Sha'hak. (6)

+4.17          Agreement, dated January 2, 2008, between the Company and Mr.
               Jacob Ginsberg, Mr. Amiram Guy and Shamir Salads 2006 Ltd. (7)

4.18           Share Purchase Agreement, dated February 13, 2008, between Gold
               Frost and Kirkeby Cheese Export A/S. (7)

4.19           Shareholders Agreement, dated February 13, 2008, between Gold
               Frost and Kirkeby Cheese Export A/S. (7)

4.20           Co-operation Agreement, dated January 1, 2008, between Kirkeby
               Cheese Export A/S, Haarby Mejeri/Kirkeby Dairy ApS and Kirkeby
               International Foods A/S. (7)


                                    Page 82`

`8              Subsidiaries of the Company (4)

8.1            Subsidiaries of the Company (7)

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 Registrant's Annual Report on
               Form 20-F for the Fiscal year ended December 31, 1997.

(2)            Incorporated by reference to the Company's Registration Statement
               on Form F-1, File No. 333-6314.

(3)            Incorporated by reference to the Company's Annual Report on Form
               20-F for the fiscal year ended December 31, 2001.

(4)            Incorporated by reference to the Company's Annual Report on Form
               20-F for the fiscal year ended December 31, 2005.

(5)            Incorporated by reference to the Company's Registration Statement
               on Form F-3, File No. 333-138200.

(6)            Incorporated by reference to the Company's Annual Report on Form
               20-F for the fiscal year ended December 31, 2006.

(7)            Incorporated by reference to the Company's Annual Report on Form
               20-F for the fiscal year ended December 31, 2007.

*              Filed Herewith


                                    Page 83`

`G. WILLI-FOOD INTERNATIONAL LTD.

                        CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2008`

`G. WILLI-FOOD INTERNATIONAL LTD.

                        CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2008

                                TABLE OF CONTENTS

                                                                PAGE
                                                               ------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM         F - 1

FINANCIAL STATEMENTS:

   Balance Sheets                                               F - 2

   Statements of Operations                                     F - 3

   Statements of Changes in Shareholders' Equity                F - 4

   Statements of Cash Flows                                 F - 5 - F - 6

   Notes to the Financial Statements                        F - 7 - F - 63`

| | Brightman Almagor Zohar
1 Azrieli Center
Tel Aviv 67021
P.O.B. 16593, Tel Aviv 61164
Israel
Tel: +972 (3) 608 5555
Fax: +972 (3) 609 4022
info@deloitte.co.il
www.deloitte.com
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND
SHAREHOLDERS OF G. WILLI-FOOD INTERNATIONAL LTD.

We have audited the accompanying consolidated balance sheets of G. WILLI-FOOD
INTERNATIONAL LTD. ("the Company") and its subsidiaries as of December 31, 2008
and 2007 and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the two years in the period ended December 31,
2008. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. An audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a reasonable
basis for our opinion.

In our opinion, such the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
the Company and its subsidiaries as of December 31, 2008 and 2007 and the
consolidated results of their operations and their consolidated cash flows for
each of the two years in the period ended December 31, 2008, in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board (IASB).

BRIGHTMAN ALMAGOR ZOHAR & CO.
CERTIFIED PUBLIC ACCOUNTANTS
A MEMBER FIRM OF DELOITTE TOUCHE TOMHATSU

Tel-Aviv, Israel
April 30, 2009


                                     F - 1`

`G. WILLI-FOOD INTERNATIONAL LTD. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                               (NIS IN THOUSANDS)

                                                                                                             DECEMBER 31,
                                                                                                 -----------------------------------
                                                                                      NOTE       2 0 0 8       2 0 0 7     2 0 0 8(*)
                                                                                    --------     --------     --------      --------
                                                                                                          NIS              US DOLLARS
                                                                                                 ---------------------      --------
                                                                                                           (IN THOUSANDS)
                                                                                                 -----------------------------------

ASSETS
CURRENT ASSETS
Cash and cash equivalents                                                              4a          78,749       61,649        20,713
Financial assets carried at fair value through profit or loss                          4b           9,367       31,267         2,464
Trade receivables                                                                      4c          79,599       63,798        20,936
Other receivables                                                                      4d           3,987        1,612         1,049
Current tax assets                                                                                  2,456          908           646
Inventories                                                                            4e          34,417       31,020         9,052
                                                                                                 --------     --------      --------
Total current assets                                                                              208,575      190,254        54,860
                                                                                                 --------     --------      --------

NON-CURRENT ASSETS
Property, plant and equipment                                                                      55,574       44,569        14,617
Less -Accumulated depreciation                                                                     13,467        8,355         3,542
                                                                                                 --------     --------      --------
                                                                                       7           42,107       36,214        11,075
                                                                                                 --------     --------      --------

Prepaid expenses                                                                                   12,539       10,815         3,298
Goodwill                                                                               8a           3,829        1,795         1,007
Intangible assets                                                                      9a           5,181          103         1,362
Deferred taxes                                                                                      1,111          271           292
                                                                                                 --------     --------      --------
Total non-current assets                                                                           64,767       49,198        17,034
                                                                                                 ========     ========      ========
TOTAL ASSETS                                                                                      273,342      239,452        71,894
                                                                                                 ========     ========      ========

EQUITY AND LIABILITIES
CURRENT LIABILITIES
Short-term bank credit                                                                11a          17,562        5,978         4,619
Trade payables                                                                        10a          53,728       34,330        14,132
Accruals                                                                                            6,197          308         1,630
Current tax liabilities                                                                             1,050          593           276
Other payables and accrued expenses                                                   10b           4,971        4,992         1,308
Employees Benefits                                                                    13a           2,544        1,408           669
                                                                                                 --------     --------      --------
Total current liabilities                                                                          86,052       47,609        22,634
                                                                                                 --------     --------      --------

NON-CURRENT LIABILITIES
Long-term bank loans                                                                                  267            -            70
Deferred taxes                                                                                        442           33           116
Warrants to issue shares                                                                                5        1,040             1
Employees Benefits                                                                                    994          163           261
                                                                                                 --------     --------      --------
Total non-current liabilities                                                                       1,708        1,236           448
                                                                                                 --------     --------      --------

COMMITMENTS AND CONTINGENT LIABILITIES

SHAREHOLDERS' EQUITY
Share capital                                                                                       1,113        1,113           293
Premium                                                                                            59,056       59,056        15,533
Capital fund                                                                                          247            -            65
Foreign currency translation reserve                                                                  369         (414)           97
Retained earnings                                                                                 111,447      112,233        29,313
Noncontrolling interest                                                                            13,350       18,619         3,511
                                                                                                 --------     --------      --------
                                                                                                  185,582      190,607        48,812
                                                                                                 ========     ========      ========
TOTAL EQUITY AND LIABILITIES                                                                      273,342      239,452        71,894
                                                                                                 ========     ========      ========

(*)  Convenience Translation into U.S. Dollars.


-----------------------    -----------------------    ----------------------------------
CHIEF FINANCIAL OFFICER    CHIEF EXECUTIVE OFFICER    CHAIRMAN OF THE BOARD OF DIRECTORS

Approval date of the financial statements: 30 April, 2009

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                     F - 2`

`G. WILLI-FOOD INTERNATIONAL LTD. AND SUBSIDIARIES
                          CONSOLIDATED INCOME STATEMENT
                               (NIS IN THOUSANDS)

                                                                            YEAR ENDED DECEMBER 31,
                                                                    ----------------------------------------
                                                             NOTE     2 0 0 8        2 0 0 7      2 0 0 8(*)
                                                            ------  ----------     ----------     ----------
                                                                               NIS                US DOLLARS
                                                                    -------------------------     ----------
                                                                                 (IN THOUSANDS)
                                                                    ----------------------------------------

Revenue                                                      19a       349,227        249,693         91,853
Cost of sales                                                19b       281,651        198,961         74,080
                                                                    ----------     ----------     ----------
GROSS PROFIT                                                            67,576         50,732         17,773
                                                                    ----------     ----------     ----------

OPERATING COSTS AND EXPENSES
Selling expenses                                             19c        33,759         24,263          8,879
General and administrative expenses                          19d        23,127         18,869          6,083
Other (income) expenses                                       20         2,195           (470)           577
Goodwill Impairment                                                      1,067          3,054            280
                                                                    ----------     ----------     ----------
                                                                        60,148         45,716         15,819
                                                                    ==========     ==========     ==========

OPERATING PROFIT                                                         7,428          5,016          1,954
Finance income                                                          (4,095)         2,362         (1,077)
Finance costs                                                 21         1,612             88            424
                                                                    ----------     ----------     ----------
Finance income (costs), net                                             (5,707)         2,274         (1,501)
                                                                    ==========     ==========     ==========

PROFIT BEFORE TAX                                                        1,721          7,290            453

Income tax charge                                            14a         1,454          2,651            382
                                                                    ----------     ----------     ----------

PROFIT FOR THE PERIOD                                                      267          4,639             71
                                                                    ==========     ==========     ==========

ATTRIBUTABLE TO:
Equity holders of the Company                                22a          (786)         2,342           (206)
Noncontrolling interest                                                  1,053          2,297            277
                                                                    ----------     ----------     ----------
NET INCOME                                                                 267          4,639             71
                                                                    ==========     ==========     ==========

EARNINGS (LOSS) PER SHARE - (IN NIS)
Basic earnings (loss) per share                                          (0.08)          0.23          (0.02)

Diluted earnings (loss) per share                                        (0.08)          0.23          (0.02)

Shares used in computation of basic EPS                             10,267,893     10,267,893     10,267,893
                                                                    ==========     ==========     ==========

Shares used in computation of diluted EPS                           10,267,893     10,267,893     10,267,893
                                                                    ==========     ==========     ==========

(*)  Convenience translation into U.S. Dollars.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                     F - 3`

`G. WILLI-FOOD INTERNATIONAL LTD. AND SUBSIDIARIES
                  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                               (NIS IN THOUSANDS)

                                                                             FOREIGN
                                                                             CURRENCY                                          TOTAL
                                              SHARE      SHARE     CAPITAL  TRANSLATION   RETAINED     GROSS  NONCONTROLLING SHAREHOLDERS'
                                             CAPITAL    PREMIUM      FUND   ADJUSTMENTS   EARNINGS     AMOUNT     INTEREST     EQUITY
                                             --------   --------   --------   --------    --------    --------    --------    --------

BALANCE - JANUARY 1, 2007                       1,113     59,056          -          -     109,891     170,060      14,750     184,810

Noncontrolling interests in newly acquired
subsidiary                                          -          -          -          -           -           -       1,919       1,919
Purchase of noncontrolling interest                 -          -          -          -           -           -        (146)       (146)
Currency translation differences                    -          -          -       (414)          -        (414)       (201)       (615)
Profit for the year                                 -          -          -          -       2,342       2,342       2,297       4,639
                                             --------   --------   --------   --------    --------    --------    --------    --------

BALANCE - DECEMBER 31, 2007                     1,113     59,056          -       (414)    112,233     171,988      18,619     190,607

Noncontrolling interests in newly acquired
subsidiary                                          -          -          -          -           -           -       3,350       3,350
Purchase of noncontrolling interest                 -          -        247          -           -         247      (9,362)     (9,115)
Currency translation differences                    -          -          -        783           -         783         (41)        742
Dividend paid to noncontrolling interests           -          -          -          -           -           -        (269)       (269)
Profit for the year                                 -          -          -          -        (786)       (786)      1,053         267
                                             --------   --------   --------   --------    --------    --------    --------    --------

BALANCE - DECEMBER 31, 2008                     1,113     59,056        247        369     111,447     172,232      13,350     185,582
                                             ========   ========   ========   ========    ========    ========    ========    ========


                                     F - 4`

`G. WILLI-FOOD INTERNATIONAL LTD. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (NIS IN THOUSANDS)

                                                                             YEAR ENDED DECEMBER 31,
                                                                       ----------------------------------
                                                                        2 0 0 8      2 0 0 7    2 0 0 8(*)
                                                                       --------     --------     --------
                                                                                NIS             US DOLLARS
                                                                       ---------------------     --------
                                                                                 (IN THOUSANDS)
                                                                       ----------------------------------

CASH FLOWS - OPERATING ACTIVITIES
Profit for the year                                                         267        4,639           71
Adjustments to reconcile net profit to net cash used in operating
activities(Appendix A)                                                   18,613        3,303        4,894
                                                                       --------     --------     --------

NET CASH FROM OPERATING ACTIVITIES                                       18,880        7,942        4,965
                                                                       --------     --------     --------

CASH FLOWS - INVESTING ACTIVITIES
Acquisition of property plant and equipment                              (3,315)     (11,259)        (872)
Proceeds from sale of property plant and Equipment                          249           16           65
Additions to intangible assets                                             (300)           -          (79)
Additions to prepaid expenses                                            (1,579)           -         (415)
Long term deposit, net                                                       61         (131)          16
Proceeds from realization (purchase) of marketable securities, net       16,714      (17,378)       4,396
Purchase of additional shares in subsidiary                              (9,250)        (182)      (2,433)
Purchase of subsidiaries                                                 (5,664)     (15,400)      (1,489)
                                                                       --------     --------     --------

NET CASH USED IN INVESTING ACTIVITIES                                    (3,084)     (44,334)        (811)
                                                                       --------     --------     --------

CASH FLOWS - FINANCING ACTIVITIES
Short-term bank credit, net                                                (475)           -         (125)
Repayment of loans                                                       (4,734)           -       (1,245)
Proceeds of loans                                                         6,803        6,781        1,789
Dividend paid to noncontrolling interests                                  (269)           -          (70)
                                                                       --------     --------     --------

NET CASH USED IN FINANCING ACTIVITIES                                     1,325        6,781          349
                                                                       ========     ========     ========

INCREASE IN CASH AND CASH EQUIVALENTS                                    17,121      (29,611)       4,503

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL PERIOD       61,649       91,398       16,215

NET FOREIGN EXCHANGE DIFFERENCE ON CASH AND CASH EQUIVALENTS                (21)        (138)          (5)
                                                                       --------     --------     --------

CASH AND CASH EQUIVALENTS OF THE END OF THE FINANCIAL PERIOD             78,749       61,649       20,713
                                                                       ========     ========     ========

(*)  Convenience Translation into U.S. Dollars.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                     F - 5`

`G. WILLI-FOOD INTERNATIONAL LTD. AND SUBSIDIARIES
              APPENDICES TO CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (NIS IN THOUSANDS)

                                                                                     YEAR ENDED DECEMBER 31,
                                                                                -------------------------------
                                                                                 2008        2007       2008(*)
                                                                                -------     -------     -------
                                                                                        NIS            US DOLLARS
                                                                                -------------------     -------
                                                                                        (IN THOUSANDS)
                                                                                -------------------------------

A.     ADJUSTMENTS TO RECONCILE NET PROFIT TO NET CASH PROVIDED BY (USED IN)
       OPERATING ACTIVITIES

       Revaluation of loans from banks and others                                   963           -         252
       Deferred income taxes                                                       (505)       (433)       (133)
       Unrealized loss (gain) on marketable securities                            5,186          56       1,364
       Depreciation and amortization                                              6,174       5,574       1,624
       Capital loss (gain) on disposal of property
       plant and equipment                                                          264         (16)         69
       Employees benefit, net                                                       545        (122)        143
       Change in value of warrants to issue shares                               (1,035)       (767)       (272)


       CHANGES IN ASSETS AND LIABILITIES:
       Increase in trade receivables and other receivables                       (4,179)    (11,622)     (1,099)
       Increase in inventories                                                     (377)     (2,568)        (99)
       Increase in trade and other payables, and other current liabilities       11,577      13,201       3,045
                                                                                -------     -------     -------

                                                                                 18,613       3,303       4,894
                                                                                =======     =======     =======

SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid                                                                       835         104         220
Income tax paid                                                                   3,736       7,645         983

(*)  Convenience Translation Into U.S. Dollars.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                     F - 6`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 1 - DESCRIPTION OF BUSINESS AND GENERAL

     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.

          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.

          The financial statements are prepared in accordance with the Israeli
          Securities Regulations (Preparation of Annual Financial Statements),
          1993.

     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 in which the Company exercises
                                       control (as defined by IAS 27), and whose
                                       financial statements are fully
                                       consolidated with those of the Company.

          RELATED PARTIES          -   as defined by IAS 24.

          INTERESTED PARTIES       -   as defined in the Israeli Securities law
                                       and Regulations, 1968.

          CONTROLLING SHAREHOLDER  -   as defined in the Israeli Securities law
                                       and Regulations, 1968.

          NIS                      -   New Israeli Shekel.

          CPI                      -   the Israeli consumer price index.

          DOLLAR                   -   the U.S. dollar.

          EURO                     -   the United European currency.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A.   APPLYING INTERNATIONAL ACCOUNTING STANDARDS (IFRS)

          (1)  STATEMENT OF COMPLIANCE

               The consolidated financial statements have been prepared in
               accordance with International Financial Reporting Standards
               ("IFRSs") as issued by the International Accounting Standards
               Board ("IASB").

          (2)  FIRST TIME IFRS STANDARDS ADOPTION

               According to standard No. 29 "Adoption of International Financial
               Reporting Standards" - IFRS ("standard No. 29"), the Company
               applies International Financial Reporting Standards and
               interpretations of the committee of the International Accounting
               Standard Board (IASB) Starting January 1, 2008.


                                     F - 7`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     A.   APPLYING INTERNATIONAL ACCOUNTING STANDARDS (IFRS) (CONT)

          (2)  FIRST TIME IFRS STANDARDS ADOPTION (CONT)

               According to standard No. 29 "Adoption of International Financial
               Reporting Standards" - IFRS ("standard No. 29"), the Company
               applies International Financial Reporting Standards and
               interpretations of the committee of the International Accounting
               Standard Board (IASB) Starting January 1, 2008.

               In compliance with the mentioned above, the financial statements,
               as of December 31, 2008 and for the year then ended, including
               all previous reporting periods have been prepared in accordance
               with International Financial Reporting Standards and
               interpretations published by the International Accounting
               Standard Board (IASB).

               In these financial statements the Company applied IFRS 1 "First
               time Adoption of International Financial Reporting Standards"
               ("IFRS No. 1"), which determines instructions for first time
               implementation of IFRS.

               According to IFRS No. 1 the transition date for the purpose of
               implementing IFRS standards commenced January 1, 2007.

               The Company has applied in a retroactive manner the IFRS
               standards for all reporting periods presented in the financial
               statements. The Company implemented the IFRS standards which have
               been published as of the preparation date of the Financial
               Statements and expected to be effective as of December 31, 2008.
               While applying the said transition instructions the Company chose
               to apply two relieves allowed under IFRS 1. See note 30.

               Until the adoption of IFRS the Company conducted the Financial
               Reporting in accordance with the Israeli GAAP. The annual
               financial statements as of December 31, 2007 and for the periods
               then ended were prepared under the Israeli GAAP standards. The
               comparative financial statements were represented in the
               financial statements in accordance to the IFRS standards. See
               note 30 for the relevant material adjustments between the Israeli
               GAAP and the IFRS.

     B.   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 exchange rate of the U.S. dollar. As
          of December 31, 2003 when the economy ceased to be hyper-inflationary
          and the Company no longer adjusted its financial statements to the
          U.S. dollar, 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:

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

          o    Non-current assets are measured at the lower of their previous
               carrying amount and fair value less costs of sale.

          o    Inventories are stated at the lower of cost and net realizable
               value.

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

          o    Liabilities to employees as described in note 12.


                                     F - 8`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     C.   FOREIGN CURRENCIES

          The individual financial statements of each group entity are presented
          in New Israeli Shekel the currency of the primary economic environment
          in which the entity operates (its functional currency). The
          consolidated financial statements are also presented in the New
          Israeli Shekel ("NIS"), which is the functional currency of the
          Company and the presentation currency for the consolidated financial
          statements.

          In preparing the financial statements of the individual entities,
          transactions in currencies other than the entity's functional currency
          (foreign currencies) 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.

          Exchange differences are recognised in profit or loss in the period in
          which they accrue.

          (1)  FUNCTIONAL AND PRESENTATION CURRENCY

               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
               presentation currency.

          (2)  TRANSACTIONS AND BALANCES

               Foreign currency transactions are translated into the functional
               currency using the exchange rates prevailing at the dates of the
               transactions or valuation where items are remeasured. Foreign
               exchange gains and losses resulting from the settlement of such
               transactions and from the translation at year-end exchange rates
               of monetary assets and liabilities denominated in foreign
               currencies are recognised in the income statement, except when
               deferred in equity as qualifying cash flow hedges and qualifying
               net investment hedges.

     D.   CASH AND CASH EQUIVALENTS

          Cash equivalents include unrestricted liquid deposits, maturity period
          of which, as at the date of investments therein, does not exceed three
          months.


                                     F - 9`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     E.   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.

               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.

               For the effect of the issuance of IAS 27 (revised) "Consolidated
               and Separate Financial Statements" see note 2Y below.

          (2)  NONCONTROLLING INTEREST

               In instances that the Group acquires noncontrolling interest, the
               excess of cost of acquired interest over the carrying value is
               recognized as goodwill In cases of excess of carrying value over
               the cost, such amount is recorded in earnings.

               When the Group interest is reduced, without loss of control
               (either by sale or by issuance of shares by the subsidiary) the
               differences between the consideration received and the book value
               of the Group's sold is recognized in income statements.

               The group applies a policy of treating transactions with
               noncontrolling interests as transactions with parties external to
               the group. Disposals to noncontrolling interests result in gains
               and losses for the group and are recorded in the income
               statement. Purchases from noncontrolling interests result in
               goodwill, being the difference between any consideration paid and
               the relevant share acquired of the carrying value of net assets
               of the subsidiary.

     F.   BUSINESS COMBINATION

          Acquisitions of subsidiaries and businesses are accounted for using
          the purchase method. The cost of the business combination is measured
          as the aggregate of the fair values (at the date of exchange) of
          assets given, liabilities incurred or assumed, and equity instruments
          issued by the Group in exchange for control of the acquiree, plus any
          costs directly attributable to the business combination. The
          acquiree's identifiable assets, liabilities and contingent liabilities
          that meet the conditions for recognition under IFRS 3 Business
          Combinations are recognised at their fair values at the acquisition
          date, except for non-current assets (or disposal groups) that are
          classified as held for sale in accordance with IFRS 5 Non-current
          Assets Held for Sale and Discontinued Operations, which are recognised
          and measured at fair value less costs to sell.

          Goodwill arising on acquisition is recognised as an asset and
          initially measured at cost, being the excess of the cost of the
          business combination over the Group's interest in the net fair value
          of the identifiable assets, liabilities and contingent liabilities
          recognised. If, after reassessment, the Group's interest in the net
          fair value of the acquiree's identifiable assets, liabilities and
          contingent liabilities exceeds the cost of the business combination,
          the excess is recognised immediately in profit or loss.

          The interest of minority shareholders in the acquiree is initially
          measured at the minority's proportion of the net fair value of the
          assets, liabilities and contingent liabilities recognised.


                                     F - 10`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     G.   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 recognised
          at the date of acquisition. Goodwill is initially recognised 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
          recognised 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.

     H.   PROPERTY, PLANT AND EQUIPMENT

          Property, plant and equipments 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 equipments 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 extention period,
          where the Company intends to exercise such option, or their useful
          life.

          The annual depreciation and amortization rates are:

                                                         %
                                                       -----

          construction                                   4
          Motor vehicles                               15-20       (mainly 20%)
          Office furniture and equipment                6-15       (mainly 15%)
          Computers                                    20-33       (mainly 33%)
          Machinery and equipment                        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.


                                     F - 11`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     I.   INTANGIBLE ASSETS ACQUIRED IN A BUSINESS COMBINATION

          An intangible asset is an identifiable non-monetary asset without
          physical substance. Intangible assets acquired in a business
          combination are identified and recognised separately from goodwill
          where they satisfy the definition of an intangible asset and their
          fair values can be measured reliably. The cost of such intangible
          assets is their fair value at the acquisition date.

          Subsequent to initial recognition, intangible assets acquired in a
          business combination are reported at cost less accumulated
          amortization and accumulated impairment losses, on the same basis as
          intangible assets acquired separately.

          An intangible asset with an indefinite useful life shall not be
          amortized.

          In accordance with IAS 36, an entity is required to test an intangible
          asset with an indefinite useful life for impairment by comparing its
          recoverable amount with its carrying amount:

          (a)  annually, and

          (b)  whenever there is an indication that the intangible asset may be
               impaired.

          Intangible assets with a finite useful life are stated at cost less
          accumulated amortization and accumulated impairment losses.
          Amortization is charged according to the straight-line method over
          their estimated useful life. See also Note 9

          Useful lives of Intangible assets:

                                                                        YEARS
                                                                        -----

          INTANGIBLE ASSETS ACQUIRED IN A BUSINESS COMBINATION:
          Technology knowledge                                            10
          Customers relationship                                          15
          Trade name                                                      25
          OTHER INTANGIBLE ASSET:
          Trade name                                                       7

     J.   IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILL

          At each balance sheet date, the Group reviews the carrying amounts of
          its tangible and intangible assets to determine whether there is any
          indication that those assets have suffered an impairment loss. If any
          such indication exists, the recoverable amount of the asset is
          estimated in order to determine the extent of the impairment loss (if
          any). Where it is not possible to estimate the recoverable amount of
          an individual asset, the Group estimates the recoverable amount of the
          cash-generating unit to which the asset belongs. Where a reasonable
          and consistent basis of allocation can be identified, corporate assets
          are also allocated to individual cash-generating units, or otherwise
          they are allocated to the smallest group of cash-generating units for
          which a reasonable and consistent allocation basis can be identified.

          Intangible assets with indefinite useful lives and intangible assets
          not yet available for use are tested for impairment annually, and
          whenever there is an indication that the asset may be impaired.

          Recoverable amount is the higher of fair value less costs to sell and
          value in use. In assessing value in use, the estimated future cash
          flows are discounted to their present value using a pre-tax discount
          rate that reflects current market assessments of the time value of
          money and the risks specific to the asset for which the estimates of
          future cash flows have not been adjusted.


                                     F - 12`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     J.   IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILL
          (CONT.)

          If the recoverable amount of an asset (or cash-generating unit) is
          estimated to be less than its carrying amount, the carrying amount of
          the asset (cash-generating unit) is reduced to its recoverable amount.
          An impairment loss is recognised immediately in profit or loss.

          Where an impairment loss subsequently reverses, the carrying amount of
          the asset (cash-generating unit) is increased to the revised estimate
          of its recoverable amount, but so that the increased carrying amount
          does not exceed the carrying amount that would have been determined
          had no impairment loss been recognised for the asset (cash-generating
          unit) in prior years. A reversal of an impairment loss is recognised
          immediately in profit or loss.

     K.   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 follows:

          Raw material, components and packaging  -  by the "first-in,
                                                     first-out" method;

          Processing goods                        -  cost of materials plus
                                                     labor

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

          Products                                -  weighted average method

     L.   FINANCIAL ASSETS

          (1)  GENERAL

               Investments are recognized and derecognized on trade date where
               the purchase or sale of an investment is under a contract whose
               terms require delivery of the investment 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 fair value through profit or loss, which are
               initially measured at fair value.

               Financial assets are classified into the following specified
               categories:

               o    Financial assets 'at fair value through profit or loss'
                    (FVTPL)

               o    Loans and receivables


                                     F - 13`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     L.   FINANCIAL ASSETS (CONT.)

          (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:

               o    it has been acquired principally for the purpose of selling
                    in the near future; or

               o    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

               o    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.

          (4)  IMPAIRMENT OF FINANCIAL ASSETS

               Financial assets, other than those at FVTPL, are assessed for
               indicators of impairment at each balance sheet date.

               Financial assets are impaired where there is objective evidence
               that, as a result of one or more events that occurred after the
               initial recognition of the financial asset, the estimated future
               cash flows of the investment have been impacted.

               For all other financial assets, an objective evidence of
               impairment could include:

               o    Significant financial difficulty of the issuer or
                    counterparty; or

               o    Default or delinquency in interest or principal payments; or

               o    It becoming probable that the borrower will enter bankruptcy
                    or financial re-organization.

               For financial assets carried at amortized cost, the amount of the
               impairment is the difference between the asset's carrying amount
               and the present value of estimated future cash flows, discounted
               at the financial asset's original effective interest rate.

               The carrying amount of the financial asset is reduced by the
               impairment loss directly for all financial assets with the
               exception of trade receivables, where the carrying amount is
               reduced through the use of an allowance account.

               When a trade receivable is considered uncollectible, it is
               written off against the allowance account. Subsequent recoveries
               of amounts previously written off are credited against the
               allowance account. Changes in the carrying amount of the
               allowance account are recognized in profit or loss.

               In a subsequent period, the amount of the impairment loss
               decreases and the decrease can be related objectively to an event
               occurring after the impairment was recognized, the previously
               recognized impairment loss is reversed through profit or loss to
               the extent that the carrying amount of the investment at the date
               the impairment is reversed does not exceed what the amortized
               cost would have been had the impairment not been recognized.


                                     F - 14`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     M.   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)  Convertible debentures

               The component parts of convertible debentures are classified
               separately as financial liabilities and equity in accordance with
               the substance of the contractual arrangement. At the date of
               issue, the fair value of the liability component is estimated
               using the prevailing market interest rate for a similar
               non-convertible instrument. This amount is recorded as a
               liability on an amortized cost basis until extinguished upon
               conversion or at the instrument's maturity date. The equity
               component is determined by deducting the amount of the liability
               component from the fair value of the convertible debentures as a
               whole. This is recognized and included in equity and is not
               subsequently remeasured.

          (3)  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.

     N.   DERIVATIVE FINANCIAL INSTRUMENTS

          The Group enters into a certain derivative financial instruments to
          manage its exposure to interest rate and foreign exchange rate risk,
          including foreign exchange forward contracts, interest rate swaps and
          cross currency swaps.

          Further details of derivative financial instruments are disclosed in
          note 25.

          Derivatives are initially recognized at fair value at the date a
          derivative contract is entered into and are subsequently remeasured to
          their fair value at each balance sheet date. The resulting gain or
          loss is recognized in profit or loss immediately unless the derivative
          is designated and effective as a hedging instrument, in which event
          the timing of the recognition in profit or loss depends on the nature
          of the hedge relationship. The Group designates certain derivatives as
          either hedges of the fair value of recognized assets or liabilities or
          firm commitments (fair value hedges), hedges of highly probable
          forecast transactions or hedges of foreign currency risk of firm
          commitments(cash flow hedges), or hedges of net investments in foreign
          operations.

          A derivative is presented as a non-current asset or a non-current
          liability if the remaining maturity of the instrument is more than 12
          months and it is not expected to be realized or settled within 12
          months. Other derivatives are presented as current assets or current
          liabilities.


                                     F - 15`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     O.   EMBEDDED DERIVATIVES

          Derivatives embedded in other financial instruments or other host
          contracts are treated as separate derivatives when their risks and
          characteristics are not closely related to those of the host contracts
          and the host contracts are not measured at fair value with changes in
          fair value recognized in profit or loss.

     P.   FORWARDS

          Changes in the fair value of forwards transactions are recorded in
          profit or loss immediately as they occurred.

     Q    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 recognised when all the
               following conditions are satisfied:

               o    The Group has transferred to the buyer the significant risks
                    and rewards of ownership of the goods;

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

               o    The amount of revenue can be measured reliably;

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

               o    The costs incurred or to be incurred in respect of the
                    transaction can be measured reliably.

          (2)  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.

          (3)  DIVIDEND REVENUE

               Dividend revenue from investments is recognised when the
               shareholder's right to receive payment has been established.


                                     F - 16`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     R    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

               Assets held under finance leases are initially recognised as
               assets of the Group at their fair value at the inception of the
               lease or, if lower, at the present value of the minimum lease
               payments. The corresponding liability to the lessor is included
               in the balance sheet as a finance lease obligation.

               Lease payments are apportioned between finance charges and
               reduction of the lease obligation so as to achieve a constant
               rate of interest on the remaining balance of the liability.
               Finance charges are charged directly to profit or loss, unless
               they are directly attributable to qualifying assets, in which
               case they are capitalised in accordance with the Group's general
               policy on borrowing costs.

               Operating lease payments are recognised as an expense on a
               straight-line basis over the lease term, except where another
               systematic basis is more representative of the time pattern in
               which economic benefits from the leased asset are consumed.

               Contingent rentals arising under operating leases are recognised
               as an expense in the period in which they are incurred.

               In the event that lease incentives are received to enter into
               operating leases, such incentives are recognised as a liability.

               The aggregate benefit of incentives is recognised as a reduction
               of rental expense on a straight-line basis, except where another
               systematic basis is more representative of the time pattern in
               which economic benefits from the leased asset are consumed.

          S    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.


                                     F - 17`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     T.   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.

          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 recognised in profit or
          loss over the remaining vesting period, with a corresponding
          adjustment to the equity-settled employee benefits reserve.

          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.

          For cash-settled share-based payments, a liability equal to the
          portion of the goods or services received is recognized at the current
          fair value determined at each balance sheet date.

          Through the liability settlement, the Company shall re-measure the
          fair value of the liability at each reporting date and at the date of
          settlement, with any changes in the fair value is to be recognized in
          profit or loss for the period.

     U.   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 recognised 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 recognised for all
               taxable temporary differences, and deferred tax assets are
               generally recognised 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 recognised
               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.


                                     F - 18`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     U.   TAXATION (CONT.)

          (2)  DEFERRED TAX (CONT.)

               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.

          (3)  CURRENT AND DEFERRED TAX FOR THE PERIOD

               Current and deferred tax are recognized as an expense or income
               in profit or loss, except when they relate to items credited or
               debited directly to equity, in which case the tax is also
               recognized directly in equity, or where they arise from the
               initial accounting for a business combination. In the case of a
               business combination, the tax effect is taken into account in
               calculating goodwill or in determining the excess of the
               acquirer's interest in the net fair value of the acquirer's
               identifiable assets, liabilities and contingent liabilities over
               the cost of the business combination.

     V.   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 government bonds, 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.

          (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.


                                     F - 19`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     W.   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 holders of ordinary shares 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 for its
          share in income (loss) of investees by multiplying their diluted EPS
          by the Company's holding in the investees including its holding in
          dilutive potential ordinary share of the investee and the weighted
          average of the outstanding shares for the effects of all the dilutive
          potential ordinary shares of the Company.

     X.   ECHANGE 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 U.S. dollar vis-a-vis the NIS and in the Israeli CPI:

                                        REPRESENTATIVE    REPRESENTATIVE
                                         EXCHANGE RATE   EXCHANGE RATE OF         CPI
                                         OF THE EURO        THE DOLLAR       "IN RESPECT OF"
AS OF:                                   (NIS PER 1)       (NIS PER $1)       (IN POINTS)
                                          ----------         ----------         ----------

December 31, 2008                          5.2973              3.802             110.44
December 31, 2007                          5.6592              3.846             106.40

INCREASE (DECREASE) DURING THE:               %                  %                  %
                                          ----------         ----------         ----------

Year ended December 31, 2008                 (6.4)             (1.14)               3.8
Year ended December 31, 2007                 1.71              (8.97)               3.4

Y.   ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

     (1)  STANDARDS AND INTERPRETATIONS WHICH ARE EFFECTIVE AND HAVE BEEN
          APPLIED IN THESE FINANCIAL STATEMENTS.

          Three Interpretations issued by the International Financial Reporting
          Interpretations Committee are effective for the current period, these
          are:

          o    IFRIC 11    IFRS 2: Group and Treasury Share Transactions
                           (effective 1 March 2007);

          o    IFRIC 12    Service Concession Arrangements (effective 1 January
                           2008);

          o    IFRIC 14    IAS 19 - The Limit on a Defined Benefit Asset,
                           Minimum Funding Requirements and their Interaction
                           (effective 1 January 2008).

          The adoption of the Interpretations has not led to any changes in the
          Group's accounting policies.


                                     F - 20`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     Y.   ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS (CONT.)

          (2)  STANDARDS AND INTERPRETATIONS WHICH HAVE NOT BEEN APPLIED IN
               THESE FINANCIAL STATEMENTS WERE IN ISSUE BUT NOT YET EFFECTIVE

               At the date of authorization of these financial statements, other
               than the Standards and Interpretations adopted by the Group in
               advance of their effective dates the following Interpretations
               were in issue but not yet effective:

               IAS 1 (AMENDED) "PRESENTATION OF FINANCIAL STATEMENTS"

               The standard stipulates the presentation required in the
               financial statements, and itemizes a general framework for the
               structure of the financial statements and the minimal contents
               which must be included in the context of the report. Changes have
               been made to the existing presentation format of the financial
               statements, and the presentation and disclosure requirements for
               the financial statements have been broadened, including the
               presentation of an additional report in the framework of the
               financial statements known as the "report of comprehensive
               income", and the addition of a balance sheet as of the beginning
               of the earliest period that was presented in the financial
               statements, in cases of changes in accounting policy by means of
               retroactive implementation, in cases of restatement and in cases
               of reclassifications.

               The standard will be effective for reporting periods beginning
               from January 1, 2009. The standard permits earlier application.

               At this stage, the management of the Group is examining the
               influence of this standard on the Company's financial statements.

               IAS 23 (AMENDED) "BORROWING COSTS"

               The standard stipulates the accounting treatment of borrowing
               costs. In the context of the amendment to this standard, the
               possibility of immediately recognizing borrowing costs related to
               assets with an uncommon period of eligibility or construction in
               the statement of operations was cancelled. The standard will
               apply to borrowing costs that relate to eligible assets as to
               which the capitalization period began from January 1, 2009. The
               standard permits earlier implementation. At this stage, the
               management of the Group estimated that the implementation of the
               standard is not expected to have any influence on the financial
               statements of the Group.

               IAS 27 (AMENDED) "CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS"

               The standard prescribes the rules for the accounting treatment of
               consolidated and separate financial statements. Among other
               things, the standard stipulates that transactions with minority
               shareholders, in the context of which the company holds control
               of the subsidiary before and after the transaction, will be
               treated as capital transactions. In the context of transactions,
               subsequent to which the company loses control in the subsidiary,
               the remaining investment is to be measured as of the date that
               control is lost, at fair value, with the difference as compared
               to book value to be recorded to the statement of operations. The
               noncontrolling interest in the losses of a subsidiary, which
               exceed its share in shareholders' equity, will be allocated to it
               in every case, while ignoring its obligations and ability to make
               additional investments in the subsidiary.

               The provisions of the standard apply to annual financial
               reporting periods which start on January 1, 2010 and thereafter.
               Earlier adoption is permitted, on the condition that it will be
               done simultaneous with early adoption of IFRS 3 (amended). The
               standard will be implemented retrospectively, excluding a number
               of exceptions, as to which the provisions of the standard will be
               implemented prospectively. At this stage, the management of the
               Group estimated that the implementation of the standard is not
               expected to have any influence on the financial statements of the
               Group.


                                     F - 21`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

     Y.   ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS (CONT.)

          (2)  STANDARDS AND INTERPRETATIONS WHICH HAVE NOT BEEN APPLIED IN
               THESE FINANCIAL STATEMENTS WERE IN ISSUE BUT NOT YET EFFECTIVE

               IFRS 3 (AMENDED) "BUSINESS COMBINATIONS"

               The new standard stipulates the rules for the accounting
               treatment of business combinations. Among other things, the
               standard determines measurement rules for contingent
               consideration in business combinations which is to be measured as
               a derivative financial instrument. The transaction costs directly
               connected with the business combination will be recorded to the
               statement of operations when incurred. Noncontrolling interests
               will be measured at the time of the business combination to the
               extent of their share in the fair value of the assets, including
               goodwill, liabilities and contingent liabilities of the acquired
               entity, or to the extent of their share in the fair value of the
               net assets, as aforementioned, but excluding their share in
               goodwill.

               As for business combinations where control is achieved after a
               number of acquisitions (acquisition in stages), the earlier
               purchases of the acquired company will be measured at the time
               that control is achieved at their fair value, while recording the
               difference to the statement of operations.

               The standard will apply to business combinations that take place
               from January 1, 2010 and thereafter. Earlier adoption is
               possible, on the condition that it will be simultaneous with
               early adoption of IAS 27 (amended).

               At this stage, the management of the Group estimated that the
               implementation of the standard is not expected to have any
               influence on the financial statements of the Group.

               IFRIC 13, CUSTOMER LOYALTY PROGRAMS

               The clarification stipulates that transactions for the sale of
               goods and services, for which the company confers reward grants
               to its customers, will be treated as multiple component
               transactions and the payment received from the customer will be
               allocated between the different components, based upon the fair
               value of the reward grants. The consideration attributed to the
               grant will be recognized as revenue when the reward grants are
               redeemed and the company has made a commitment to provide the
               grants.

               The directives of the clarification apply to annual reporting
               periods commencing on January 1, 2009. Earlier implementation is
               permissible.

               At this stage, the management of the Group estimated that the
               implementation of the standard is not expected to have any
               influence on the financial statements of the Group.

               AMENDMENT TO IAS 32, FINANCIAL INSTRUMENTS: PRESENTATION, AND IAS
               1, PRESENTATION OF FINANCIAL STATEMENTS

               The amendment to IAS 32 changes the definition of a financial
               liability, financial asset and capital instrument and determines
               that certain financial instruments, which are exercisable by
               their holder, will be classified as capital instruments.

               The provisions of the standard apply to annual financial
               reporting periods which start on January 1, 2009 and thereafter.
               Earlier adoption is permitted.

               At this stage, the management of the Group estimated that the
               implementation of the standard is not expected to have any
               influence on the financial statements of the Group.

               IFRS 1 "FIRST TIME ADOPTION OF IFRS" AND IAS 27 "CONSOLIDATED AND
               SEPARATE FINANCIAL STATEMENTS"

               The amendment states, among other things, the method in which the
               measurement of the investments in subsidiaries, associated
               entities and joint control entities should be applied at first
               time adopting IFRS, and the method in which income from dividends
               received should be recognized.

               The amendment is effective for annual periods commencing January
               1, 2009.

               At this stage, the management of the Group estimated that the
               implementation of the standard is not expected to have any
               influence on the financial statements of the Group.


                                     F - 22`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 3 - SIGNIFICANT ACCOUNTING JUDGEMENT AND KEY SOURCES OF ESTIMATION

     A.   GENERAL

          In the application of the Group's accounting policies, which are
          described in Note 2, the management is required to make judgments,
          estimates and assumptions about the carrying amounts of assets and
          liabilities. The estimates and associated assumptions are based on
          historical experience and other factors that are considered to be
          relevant. Actual results may differ from these estimates.

          The estimates and underlying assumptions are reviewed on an ongoing
          basis. Revisions to accounting estimates are recognized in the period
          in which the estimate is revised if the revision affects only that
          period or in the period of the revision and future periods if the
          revision affects both current and future periods.

     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.

          o    Useful lives of property, plant and equipment - As described at
               2H above, the Group reviews the estimated useful lives of
               property, plant and equipment at the end of each annual reporting
               period.

          o    Impairment of goodwill - Determining whether goodwill is impaired
               requires an estimation of the value in use of the cash-generating
               units to which goodwill has been allocated. The value in use
               calculation requires the management to estimate the future cash
               flows expected to arise from the cash-generating unit and a
               suitable discount rate in order to calculate present value.

               The carrying amount of goodwill at the balance sheet date was NIS
               3,829 thousand (USD 1,007 thousand).

          o    Deferred taxes- the company 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.

          o    Measurement of obligation for employee benefits.

NOTE 4 - CURRENT ASSETS

     A.   CASH AND CASH EQUIVALENTS - COMPOSITION

                                         DECEMBER 31,
                             ----------------------------------
                             2 0 0 8      2 0 0 7      2 0 0 8(*)
                             --------     --------     --------
                                      NIS             US DOLLARS
                             ---------------------     --------
                                       (IN THOUSANDS)
                             ----------------------------------

Cash in bank                    6,611       11,343        1,739
Short-term bank deposits       72,138       50,306       18,974
                             --------     --------     --------

Total cash                     78,749       61,649       20,713
                             ========     ========     ========


                                     F - 23`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 4 - CURRENT ASSETS (CONT.)

     B.   OTHER FINANCIAL ASSETS

                                                                          CURRENT
                                                             ----------------------------------
                                                                         DECEMBER 31,
                                                             ----------------------------------
                                                              2 0 0 8      2 0 0 7    2 0 0 8(*)
                                                             --------     --------     --------
                                                                      NIS             US DOLLARS
                                                             ---------------------     --------
                                                                       (IN THOUSANDS)
                                                             ----------------------------------

FINANCIAL ASSETS CARRIED AT FAIR VALUE THROUGH PROFIT OR
  LOSS (FVTPL)
Non-derivative financial assets designated as at FVTPL
Shares                                                            882        3,726          232
Governmental loan and other bonds                               1,526       11,475          401
Certificate of participation in mutual fund                     6,959       16,066        1,831

DERIVATIVES                                                        77            -           20
                                                             --------     --------     --------
                                                                9,444       31,267        2,484
                                                             --------     --------     --------

     C.   TRADE RECEIVABLES

          (1)  COMPOSITION

                                                                         DECEMBER 31,
                                                             ----------------------------------
                                                              2 0 0 8     2 0 0 7     2 0 0 8(*)
                                                             --------     --------     --------
                                                                      NIS             US DOLLARS
                                                             ---------------------     --------
                                                                       (IN THOUSANDS)
                                                             ----------------------------------

       Open accounts                                           56,655       42,488       14,901
       Credit cards company                                        97          261           26
       Checks receivable                                       24,005       23,731        6,314
                                                             --------     --------     --------
                                                               80,757       66,480       21,241
       Less - allowance for doubtful accounts                   1,158        2,682          305
                                                             --------     --------     --------
                                                               79,599       63,798       20,936
                                                             ========     ========     ========

               The average credit period on sales of goods is 81 days. Trade
               receivables are provided for based on estimated irrecoverable
               amounts from the sale of goods, determined by reference to past
               default experience.

               Before accepting any new customer, the Group asses the potential
               customer's credit quality and defines credit limits by customer.

               Of the trade receivables balance at the end of the year, NIS 8.3
               million (2007: NIS 7.2 million) is due from Company A, the
               Group's largest customer. There are no other customers who
               represent more than 10% of the total balance of trade
               receivables.

               Included in the Group's trade receivable balance are debtors with
               a carrying amount of NIS 0.7 million which are past due at the
               reporting date for which the Group has not provided allowance for
               doubtful accounts as there has not been a significant change in
               credit quality and the amounts are still considered recoverable.
               The Group does not hold any collateral over these balances.


                                     F - 24`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 4 - CURRENT ASSETS (CONT.)

     C.   TRADE RECEIVABLES

          (2)  AGING OF PAST DUE BUT NOT IMPAIRED

                                                                      DECEMBER 31,
                                                         -----------------------------------
                                                          2 0 0 8       2 0 0 7    2 0 0 8(*)
                                                         --------      --------     --------
                                                                  NIS              US DOLLARS
                                                         ----------------------     --------
                                                                    (IN THOUSANDS)
                                                         -----------------------------------

0-120 days                                                    587           447          154
120-150 days                                                  137           395           36
150 days and above                                              -         2,882            -
                                                         --------      --------     --------
Total                                                         724         3,724          190
                                                         ========      ========     ========

          (3)  MOVEMENT IN THE ALLOWANCE FOR DOUBTFUL DEBTS

                                                                      DECEMBER 31,
                                                         -----------------------------------
                                                          2 0 0 8       2 0 0 7    2 0 0 8(*)
                                                         --------      --------     --------
                                                                  NIS              US DOLLARS
                                                         ----------------------     --------
                                                                    (IN THOUSANDS)
                                                         -----------------------------------

Balance at beginning of the year                            2,682           206          705
Increase relating to subsidiary consolidated for
      the first time                                          164             -           43
Amounts written off as uncollectible                       (2,482)            -         (652)
Change in allowance doubtful debts                            794         2,476          209
                                                         --------      --------     --------
Balance at end of the year                                  1,158         2,682          305
                                                         ========      ========     ========

     D.   OTHER RECEIVABLES

                                                                      DECEMBER 31,
                                                         -----------------------------------
                                                          2 0 0 8       2 0 0 7    2 0 0 8(*)
                                                         --------      --------     --------
                                                                  NIS              US DOLLARS
                                                         ----------------------     --------
                                                                    (IN THOUSANDS)
                                                         -----------------------------------

Prepaid expenses                                              438           647          116
Income receivables                                            377            41           99
Derivatives at fair value                                      77             -           20
Government authorities                                        613           554          161
Advances to suppliers                                         597           370          157
Others                                                      1,885             -          496
                                                         --------      --------     --------
                                                            3,987         1,612        1,049
                                                         ========      ========     ========

     E.   INVENTORIES

                                                                      DECEMBER 31,
                                                         -----------------------------------
                                                          2 0 0 8       2 0 0 7    2 0 0 8(*)
                                                         --------      --------     --------
                                                                  NIS              US DOLLARS
                                                         ----------------------     --------
                                                                    (IN THOUSANDS)
                                                         -----------------------------------

Raw and auxiliary materials                                 2,573             -          677
Finished products and goods in process                     29,082        29,166        7,649
                                                         --------      --------     --------
                                                           31,655        29,166        8,326
                                                         ========      ========     ========

Advances to suppliers                                       2,762         1,854          726
                                                         ========      ========     ========

                                                           34,417        31,020        9,052
                                                         ========      ========     ========

          The inventories are presented net of impairment provision.


                                     F - 25`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 4 - CURRENT ASSETS (CONT.)

     F.   OTHER RECEIVABLES

          BREAKDOWN BASED ON LINKAGE CONDITIONS:

                                                          DECEMBER 31,
                                              ----------------------------------
                                               2 0 0 8      2 0 0 7     2 0 0 8(*)
                                              --------     --------     --------
                                                       NIS             US DOLLARS
                                              ---------------------     --------
                                                        (IN THOUSANDS)
                                              ----------------------------------

MONETARY ITEMS:
CPI linked                                       5,349        9,489        1,407
Linked or denominated in foreign currency       22,339       25,051        5,876
Not linked                                     145,435      123,731       38,252
                                              --------     --------     --------

                                               173,123      158,271       45,535
                                              --------     --------     --------
NON-MONETARY ITEMS                              35,452       31,983        9,325
                                               208,575      190,254       54,860
                                              ========     ========     ========

NOTE 5 - INVESTMENTS IN SUBSIDIARIES

     A.   CONSOLIDATED SUBSIDIARIES

          The consolidated financial statements as of December 31, 2008, include
          the financial statements of the following Subsidiaries:

                                                        OWNERSHIP AND CONTROL
                                                         ------------------
                                                          AS OF DECEMBER 31,
                                                               2 0 0 8
                                                         ------------------
                                                                  %
                                                         ------------------

Gold Frost Ltd ("GOLDFROST")                                    89.99
Shamir Salads (2006) Ltd ("SHAMIR SALADS")                      51.00
WF Kosher Food Distributors Ltd. ("WF")                        100.00
Y.L.W. Baron international trading Ltd. ("BARON")               50.10
W.F.D. Ltd.                                                    100.00
Willi-food frozen products Ltd.                                100.00

Goldfrost's subsidiary
Dairy distributor in Denmark ("THE DISTRIBUTOR")                51.00

NOTE 6 - PREPAID LONG-TERM LEASE

     The Company entered into a long term lease agreement with the ILA with
     respect to a parcel of land which its facilities were constructed. The
     prepaid lease payments amounted to NIS 10,741 in thousands, and are
     amortized over the lease period.


                                     F - 26`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 7 - PROPERTY PLANT AND EQUIPMENT

                                                                                                     OFFICE
                                                                                                    FURNITURE,
                                                           MACHINERY                                COMPUTERS
                                                              AND         MOTOR       LEASEHOLD        AND
                                               BUILDING    EQUIPMENT     VEHICLES    IMPROVEMENTS   EQUIPMENT       TOTAL
                                               --------     --------     --------      --------      --------      --------

CONSOLIDATED

COST:
Balance - January 1, 2007                        27,485          755        6,784           311         3,137        38,472
Changes during 2007
   Additions                                      3,431          255        1,891             -           744         6,321
   Dispositions                                       -            -         (105)         (311)            -          (416)
   Balances relating to subsidiary
   consolidated for the first time                    -            -            -             -           208           208
   Effect of foreign currency exchange
   differences                                        -            -            -             -           (16)          (16)
                                               --------     --------     --------      --------      --------      --------
Balance - December 31, 2007                      30,916        1,010        8,570             -         4,073        44,569

Changes during 2008:
   Additions                                        610        1,934          487             8           276         3,315
   Dispositions                                       -            -         (583)            -          (265)         (848)
   Balances relating to subsidiary
   consolidated for the first time                    -        6,142        1,696           348           358         8,544
   Effect of foreign currency exchange
   differences                                        -            -           (6)            -             -            (6)
                                               --------     --------     --------      --------      --------      --------
Balance - December 31, 2008                      31,526        9,086       10,164           356         4,442        55,574
                                               --------     --------     --------      --------      --------      --------

ACCUMULATED DEPRECIATION:
   Balance - January 1, 2007                          -            -        4,104           307         2,031         6,442
   Changes during 2007:
   Additions                                        842           64        1,048             4           371         2,329
   Dispositions                                       -            -         (105)         (311)            -          (416)
                                               --------     --------     --------      --------      --------      --------
Balance - December 31, 2007                         842           64        5,047             -         2,402         8,355

Changes during 2008:
   Additions                                      1,420          763        1,362            36           621         4,202
   Dispositions                                       -            -         (304)            -            (8)         (312)
   Balances relating to subsidiary
   consolidated for the first time                    -          830          251             2           129         1,212
   Effect of foreign currency exchange
   differences                                        -            -           10             -             -            10
                                               --------     --------     --------      --------      --------      --------
Balance - December 31, 2008                       2,262        1,657        6,366            38         3,144        13,467
                                               ========     ========     ========      ========      ========      ========
Net book value:
December 31, 2008                                29,264        7,429        3,798           318         1,298        42,107
                                               ========     ========     ========      ========      ========      ========

December 31, 2007                                30,074          946        3,523             -         1,671        36,214
                                               ========     ========     ========      ========      ========      ========

Net book value (Dollars in thousands):
December 31, 2008                                 7,697        1,954          999            84           341        11,075
                                               ========     ========     ========      ========      ========      ========


                                     F - 27`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 8 - GOODWILL

     A.   COMPOSITION

                                                                        DECEMBER 31,
                                                             ----------------------------------
                                                             2 0 0 8       2 0 0 7    2 0 0 8(*)
                                                             --------     --------     --------
                                                                      NIS             US DOLLARS
                                                             ---------------------     --------
                                                                       (IN THOUSANDS)
                                                             ----------------------------------

COST
Balance at beginning of year                                    4,884            -        1,284
Additional amounts recognised from business combinations
occurring during the year                                       3,101        4,848          815
Additional amounts recognized from acquiring additional
shares in subsidiary                                                -           36            -
                                                             --------     --------     --------
BALANCE AT END OF YEAR                                          7,985        4,884        2,099
                                                             --------     --------     --------

ACCUMULATED IMPAIRMENT LOSSES
Balance at beginning of year                                    3,089            -          812
Impairment losses recognized in the year                        1,067        3,054          280
Effect of foreign currency exchange differences                     -           35            -
                                                             --------     --------     --------
Balance at end of year                                          4,156        3,089        1,092
                                                             --------     --------     --------

CARRYING AMOUNT
At the beginning of the year                                    1,795            -          472
                                                             --------     --------     --------
At the end of the year                                          3,829        1,795        1,007
                                                             ========     ========     ========

     B.   ANNUAL TEST FOR IMPAIRMENT

          During 2008, the Group assessed the recoverability of goodwill, and
          determined that goodwill associated with the Group's overseas
          marketing of refrigerated products activity was not recoverable and
          was written off in the amount of NIS 1,067 thousands. There were no
          other impairments to any of the other cash-generating units in the
          year 2008.

     C.   ALLOCATION OF GOODWILL TO CASH-GENERATING UNITS

          Goodwill has been allocated for impairment testing purposes to the
          following cash-generating units:

          o    Export activity ( Baron that was acquired in the year 2007).

          o    Export activity (WF that was acquired in the year 2007).

          o    Salad production and marketing activity (Shamir Salads that was
               acquired in the year 2008).

          o    Overseas marketing of refrigerated products activity (The
               distributor that was acquired in the year 2008).

          Before recognition of impairment losses, the carrying amount of
          goodwill was allocated to the following cash-generating units:

                                                                        DECEMBER 31,
                                                            ----------------------------------
                                                            2 0 0 8       2 0 0 7    2 0 0 8(*)
                                                            --------     --------     --------
                                                                     NIS             US DOLLARS
                                                            ---------------------     --------
                                                                      (IN THOUSANDS)
                                                            ----------------------------------

Marketing activity of chilled and frozen products
      (Goldfrost)                                                 36           36            9

Export activity (Baron)                                        1,893        1,759          498
Export activity (WF)                                           3,089        3,089          812
Salad production and marketing activity (Shamir salads)        1,900            -          500
Overseas marketing of refrigerated products activity
      (the Distributor)                                        1,067            -          280


                                     F - 28`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 8 - GOODWILL (CONT.)

     D.   ALLOCATION OF GOODWILL TO CASH-GENERATING UNITS

          EXPORT ACTIVITY (BARON)

          The recoverable amount of this cash-generating unit was determined
          based on the projected cash flow forecast approach for the coming
          years, which is based on the activity's budget for the years
          2009-2012. The key assumptions used in calculating the usage value
          are:

          o    Operating profit rate - the operating profit during the years
               2009-2012 should increase by 5% per annum. This assessment is
               based on an increase in the turnover, while the operating
               expenses should remain essentially at the same level. During the
               subsequent period, and during a period of another 15 years, the
               operating profit should increase by 3% per annum.

          o    Changes in the working capital - the working capital at the end
               of each year should represent 7% of the annual operating profit.

          o    Fixed assets and depreciation - the periodic investments in fixed
               assets should approximate the aggregate of the depreciation
               costs.

          o    The period of the estimate - 20 years. The residual value at the
               end of that period should approximate the present value of the
               working capital at that time.

          o    The capitalization rate - the following risk factors were taken
               into account in the determination of the capitalization rate -
               the competition from local manufacturers in the United States,
               which benefit from the advantage of proximity to the market; the
               Jewish population in the United States, which constitutes the
               activity's principal customer base, grew at a very slow pace,
               while the ultra-orthodox Jewish population in the United States
               (to which the activity also sells) increased at a rapid pace,
               however, this community has its own rabbis, who do not always
               trust the kashrut supervision in Israel; as well as a significant
               dependence on the existing management. The composition of the
               financing was also taken into account - 65% equity and 35%
               external financing. According to these assumptions, the weighted
               average interest rate that was taken into account in respect of
               the cash flow is 17%.

          EXPORT ACTIVITY (WF)

          The recoverable amount of this cash-generating unit was determined
          based on the projected cash flow forecast approach for the coming
          years, which is based on the activity's budget for the years
          2008-2012. The key assumptions used in calculating the usage value
          are:

          o    Total sales - the assumption was that in 2008, the sales would
               increase by 25% compared with 2007, by 5% during the years 2009 -
               2012, by 3% during the subsequent five years, while regarding an
               additional ten-year period, a fixed cash flow was assumed at the
               height of the cash flow in 2017.

          o    Operating profit rate - the operating profit rate during the
               years 2009-2012 should be negligible (from a negative rate of
               1.1% in 2008 up to a positive rate of 1.4% in 2012). As of the
               year 2013, an operating profit rate of 4% was assumed. This
               assessment is based on an increase in the turnover, while the
               operating expenses should remain essentially at the same level.
               During the subsequent period, and for an additional period of 15
               years, the operating profit should increase by 3% per annum.

          o    Changes in the working capital - the assumption is that the
               working capital should increase each year at the same rate as the
               rate of the increase in the turnover.

          o    Fixed assets and depreciation - the fixed assets of this activity
               are immaterial, and no significant investments are anticipated in
               the future; therefore, the assumption is that the total
               depreciation costs should be similar to the total periodic
               purchase costs.


                                     F - 29`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 8 - GOODWILL (CONT.)

     D.   ALLOCATION OF GOODWILL TO CASH-GENERATING UNITS (CONT.)

          EXPORT ACTIVITY (WF) (Cont.)

          o    The period of the estimate - 20 years. The residual value at the
               end of that period should approximate the present value of the
               working capital at that time.

          o    The capitalization rate - the following risk factors were taken
               into account in the determination of the capitalization rate -
               the Management's forecast involves significant uncertainty,
               including with regard to the rate of the increase in the volume
               of activity, and the pace of the improvement to profitability. In
               addition, in 2007, the activity suffered heaving losses.
               Furthermore, the sector in which it operates - trade in kosher
               food - is subject to stiff competition, and it is unclear whether
               the activity has a relevant advantage over its competitors,
               especially since the ultra-orthodox population, which the
               activity also targets, is counseled by its own rabbis, and this
               community could have its own marketing channels. In terms of the
               financing structure - the assumption was that the long-term
               financing structure of the activity should include 50%
               shareholders' equity and 50% bank loans. Accordingly, the
               weighted average interest rate that was taken into account
               (excluding the residual value) was 15%. A capitalization rate of
               7% was taken into account in relation to the residual value,
               considering the chance that the activity can be realized as a
               going concern. It should be noted that the goodwill in respect of
               this activity was written off in its entirety in 2007.

          SALAD PRODUCTION AND MARKETING ACTIVITY (SHAMIR SALADS)

          The recoverable amount of this cash-generating unit was determined
          based on the projected cash flow forecast approach for the coming
          years, which is based on the activity's budget for the year 2009. The
          key assumptions used in calculating the usage value are:

          o    The sales turnover - the sales turnover was calculated based on
               the activity's budgeted sales turnover for 2009, with an annual
               increment at the rate of 2.5% during the years 2010-2011, which
               represents mainly the expected increase in the population during
               this period, and 3.5% as of the year 2012 and the subsequent
               years, according to the anticipated long-term rise in the
               standard of living.

          o    Operating profit rate - the operating profit rate was calculated
               based on the operating profit rate budgeted for 2009, which is
               likely to increase concurrent with the increase in the turnover,
               mainly due to the significant proportion of fixed expenses out of
               the total operating expenses. Nonetheless, the competition in the
               sector could lead to a slow improvement in the operating profit.

          o    Changes in the working capital - the assumption is that the
               working capital should increase during the coming years at the
               same rate as the rate of the increase in the turnover.

          o    Fixed assets and depreciation - this activity has material fixed
               assets, the majority being comprised of machinery, equipment and
               vehicles. The assumption is that in the coming years the need for
               significant investments in fixed assets should diminish. The
               assumptions adopted in relation thereto are that the sums of the
               investments in fixed assets will be NIS 1,200 thousand during the
               years 2009 and 2010, while in subsequent years, the total
               investment should increase by some 3% per annum. The balance of
               the activity's fixed assets as on December 31, 2008 shall be
               amortized at equal annual sums over the next seven years. The
               average depreciation in respect of purchases subsequent to
               January 1, 2009 should be at the rate of 12.5% per annum.

          o    The period of the estimate - 20 years. The residual value at the
               end of that period should approximate the present value of the
               working capital at that time.


                                     F - 30`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 8 - GOODWILL (CONT.)

     D.   ALLOCATION OF GOODWILL TO CASH-GENERATING UNITS (CONT.)

          SALAD PRODUCTION AND MARKETING ACTIVITY (SHAMIR SALADS) (CONT.)

          o    The capitalization rate - the following risk factors were taken
               into account in the determination of the capitalization rate -
               the competition in the sector, which is liable to have an impact
               on the profitability; the significant deficit in the Company's
               working capital; and its problematic liquidity situation. The
               composition of the financing was also taken into account - as of
               December 31, 2008, 75% of the Company's financing is from bank
               credit. The assessment is that financing will not continue at
               this ratio in the long term, so that, the financing from bank
               credit in the long-term should be 50% of the activity's total
               financial means. According to these assumptions, the weighted
               average interest rate taken into account in respect of the cash
               flow, including the residual value, is 14%.

          OVERSEAS MARKETING OF REFRIGERATED PRODUCTS ACTIVITY

          The recoverable amount of this cash-generating unit was determined
          based on the projected cash flow forecast approach for the coming
          years, which is based on the activity's budget for the year 2009. The
          key assumptions used in calculating the usage value are:

          o    The sales turnover - the sales turnover was calculated based on
               the activity's budgeted sales turnover for 2009, with an annual
               increment at the rate of 3%, which represents mainly the expected
               increase in the population that generates the demand for the
               activity's products.

          o    Operating profit rate - the operating profit rate was calculated
               based on the operating profit rate budgeted for 2009, which is
               likely to increase concurrent with the increase in the turnover,
               mainly due to the significant proportion of fixed expenses out of
               the total operating expenses. Nonetheless, the competition in the
               sector could lead to a slow improvement in the operating profit.

          o    Fixed assets and depreciation - the fixed assets of this activity
               are immaterial, and no significant investments are anticipated in
               the future; therefore, the assumption is that the total annual
               investments in fixed assets will be similar to the total annual
               depreciation expenses.

          o    The period of the estimate - 20 years. The residual value at the
               end of that period should approximate the present value of the
               working capital at that time.

          o    The capitalization rate - the following risk factors were taken
               into account in the determination of the capitalization rate -
               the competition in the sector, which is liable to have an impact
               on the profitability; the operating results during the report
               year, which indicates poor profitability. The composition of the
               financing was also taken into account, and it was decided that in
               the long-term the basic financing structure of the activity
               should be 60% shareholders' capital and 40% external credit.
               According to these assumptions, the weighted average interest
               rate that was taken into account in respect of the cash flow
               (excluding the residual value) is 17.5%. The capitalization rate
               of 12% was taken into account in relation to the residual value.


                                     F - 31`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 9 - INTANGIBLE ASSETS

     A.   COMPOSITION:

                                                         DECEMBER 31,
                                              ----------------------------------
                                               2 0 0 8      2 0 0 7    2 0 0 8(*)
                                              --------     --------     --------
                                                       NIS             US DOLLARS
                                              ---------------------     --------
                                                        (IN THOUSANDS)
                                              ----------------------------------

COST
Suppliers relationship                             120          120           32
Customers relationship                           1,404           40          369
Brand name                                       3,570            -          938
technological know-how                             439            -          115
                                              --------     --------     --------
                                                 5,533          160        1,454
                                              --------     --------     --------

ACCUMULATED AMORTIZATION AND IMPAIRMENT
Suppliers relationship                              34           17            9
Customers relationship                             131           40           34
Brand name                                         143            -           38
technological know-how                              44            -           11
                                              --------     --------     --------
                                                   352           57           92
                                              --------     --------     --------

AMORTIZED COST                                   5,181          103        1,362
                                              ========     ========     ========

     B.   AMORTIZATION RATES - see note 2J.

NOTE 10 - DETAILS OF CURRENT LIABILITIES

     A.   TRADE PAYABLES

                                                         DECEMBER 31,
                                              ----------------------------------
                                               2 0 0 8      2 0 0 7    2 0 0 8(*)
                                              --------     --------     --------
                                                       NIS             US DOLLARS
                                              ---------------------     --------
                                                        (IN THOUSANDS)
                                              ----------------------------------

Open accounts                                   39,206       30,539       10,312
Accrued expenses                                   832          369          219
Checks payables                                 13,690        3,422        3,601
                                              --------     --------     --------
                                                53,728       34,330       14,132
                                              ========     ========     ========

     (*)  Average days of credit for trade payables are 62 days.

     B.   OTHER PAYABLES AND ACCRUED EXPENSES

                                                         DECEMBER 31,
                                              ----------------------------------
                                               2 0 0 8      2 0 0 7    2 0 0 8(*)
                                              --------     --------     --------
                                                       NIS             US DOLLARS
                                              ---------------------     --------
                                                        (IN THOUSANDS)
                                              ----------------------------------

Derivatives at fair value                            -          166            -
Government authorities                             297            -           78
Customer advances                                  169          188           45
Deferred income                                    346            -           91
Related parties                                  1,690        3,945          445
Accrued expenses                                 1,958          292          515
Other                                              511          401          134
                                              --------     --------     --------
                                                 4,971        4,992        1,308
                                              ========     ========     ========


                                     F - 32`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 10 - DETAILS OF CURRENT LIABILITIES (CONT.)

     C.   CURRENT LIABILITIES - BREAKDOWN BASED ON LINKAGE CONDITIONS:

                                                         DECEMBER 31,
                                              ----------------------------------
                                               2 0 0 8      2 0 0 7    2 0 0 8(*)
                                              --------     --------     --------
                                                       NIS             US DOLLARS
                                              ---------------------     --------
                                                        (IN THOUSANDS)
                                              ----------------------------------

Monetary commitments:
CPI linked                                         456            -          120
Linked or denominated in foreign currency       36,652       28,651        9,640
Not linked                                      48,429       18,770       12,738
                                              --------     --------     --------
                                                85,537       47,421       22,498
                                              ========     ========     ========

Non-monetary commitments:                          515          188          136
                                              ========     ========     ========

                                                86,052       47,609       22,634
                                              ========     ========     ========

NOTE 11 - BANK LOANS AND OTHER CREDIT PROVIDERS

     A.   Loans and other credits Comprised as follows:

                                                            LIABILITIES
                                         --------------------------------------------------
                     INTEREST RATE              CURRENT                   NON-CURRENT                    TOTAL
                    ---------------      ----------------------      ----------------------      ----------------------
                AS OF DECEMBER 31, 2008     AS OF DECEMBER 31,          AS OF DECEMBER 31,          AS OF DECEMBER 31,
                    ---------------      ----------------------      ----------------------      ----------------------
                         ANNUAL           2 0 0 8      2 0 0 7       2 0 0 8        2 0 0 7       2 0 0 8       2 0 0 7
                    ---------------      --------      --------      --------      --------      --------      --------
                           %                 NIS IN THOUSAND             NIS IN THOUSAND            NIS IN THOUSAND
                    ---------------      ----------------------      ----------------------      ----------------------

Banks:
Overdraft           P+1-P+6.65              5,837             -             -             -         5,837             -
Loans:
CPI linked          5.91                      456             -             -             -           456             -
In U.S dollars      L+1                     3,296         5,978             -             -         3,296         5,978
Not linked          P+1-6.95                7,657             -             -             -         7,657             -

Others:
CPI linked          3.75-9.81                 316             -           267             -           583             -
                                         --------      --------      --------      --------      --------      --------

                                           17,562         5,978           267             -        17,829         5,978
                                         ========      ========      ========      ========      ========      ========

     B.   DUE DATES AS OF DECEMBER 31, 2008

                                               THOUSAND NIS
                                                  -----

          First year - Current portion            2,324
                                                  -----

          Second year                               267
                                                  -----
          Total                                   2,591
                                                  =====


                                     F - 33`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 12 - LIABILITIES UNDER FINANCE LEASE ARRANGEMENTS

     A.   CAPITAL LEASES:

          (1)  GENERAL

               The Company's subsidiary entered into several finance leasing
               arrangements of cars for time periods varies between 3 - 3.33
               years with a purchase possibility for a total amount of NIS 81 in
               thousand. The group's commitment for lease payments is assured by
               the legal ownership of the lessor.

          (2)  CAPITAL LEASE ASSETS:

               NET BOOK VALUE OF THE COMPANY'S CAPITAL LEASE ASSETS:

                                                     DECEMBER 31,
                                         ----------------------------------
                                         2 0 0 8       2 0 0 7     2 0 0 8(*)
                                         --------     --------     --------
                                                  NIS             US DOLLARS
                                         ---------------------     --------
                                                   (IN THOUSANDS)
                                         ----------------------------------

Vehicles                                      734            -          193
                                         --------     --------     --------
                                              734            -          193
                                         ========     ========     ========

NOTE 13 - EMPLOYEE BENEFITS

     A.   COMPOSITION

                                                     DECEMBER 31,
                                         ----------------------------------
                                         2 0 0 8       2 0 0 7     2 0 0 8(*)
                                         --------     --------     --------
                                                  NIS             US DOLLARS
                                         ---------------------     --------
                                                   (IN THOUSANDS)
                                         ----------------------------------

POST EMPLOYMENT BENEFITS:
Benefits to retirees                          994          163          261
                                         ========     ========     ========

SHORT TERM EMPLOYEE BENEFITS:
Accrued payroll and related expenses        1,989        1,160          523
Liability for vacation pay                    555          248          146
                                         --------     --------     --------
                                            2,544        1,408          669
                                         ========     ========     ========


                                     F - 34`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 13 - EMPLOYEE BENEFITS (CONT.)

     B.   DEFINED BENEFIT PLANS

          The principal assumptions used for the purposes of the actuarial
          valuations were as follows:

                                              VALUATION AT
                                       --------------------------
                                         2 0 0 8         2 0 0 7
                                       ----------      ----------

Discount rate                           4.2%-4.7%            5.8%
Expected return on the plan assets     1.75%-4.7%       2.6%-5.8%
Rate of increase in compensation               4%              4%
Expected rate of termination:
0-1 years                                 35%-60%             30%
1-2 years                                     30%             20%
2-3 years                                     20%             15%
3-4 years                                 10%-15%              5%
4-5 years                                     10%              5%
5 years and more                             7.5%              5%

          Amounts recognized in profit or loss in respect of these defined
          benefit plans are as follows:

                                                             YEAR ENDED DECEMBER 31,
                                                      ------------------------------------
                                                      2 0 0 8       2 0 0 7       2 0 0 8(*)
                                                      --------      --------      --------
                                                               NIS               US DOLLARS
                                                      ----------------------      --------
                                                                 (IN THOUSANDS)
                                                      ------------------------------------

Current service cost                                       961           502           252
Interest cost                                              126            85            33
Expected return on the plan assets                        (111)          (76)          (29)
Employer contribution                                     (841)         (446)         (221)
Interest losses on severance payment allocated to
remuneration benefits                                       25             -             7
Actuarial losses (gains) recognized in the year            478           (80)          126
Benefit paid during the year                               (93)         (107)          (25)
                                                      --------      --------      --------
                                                           545          (122)          143
                                                      ========      ========      ========

          The expense included in the P&L is as follows:

                                                             YEAR ENDED DECEMBER 31,
                                                      ------------------------------------
                                                      2 0 0 8       2 0 0 7       2 0 0 8(*)
                                                      --------      --------      --------
                                                               NIS               US DOLLARS
                                                      ----------------------      --------
                                                                 (IN THOUSANDS)
                                                      ------------------------------------

Cost of sales                                              155             -            41
Selling expenses                                           224           (60)           59
General and administrative expenses                        166           (62)           43
                                                      --------      --------      --------
                                                           545          (122)          143
                                                      ========      ========      ========


                                     F - 35`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 13 - EMPLOYEE BENEFITS (CONT.)

     B.   DEFINED BENEFIT PLANS (CONT.)

          Movements in the present value of the defined benefit obligation in
          the current period were as follows:

                                                             YEAR ENDED DECEMBER 31,
                                                      ------------------------------------
                                                      2 0 0 8       2 0 0 7       2 0 0 8(*)
                                                      --------      --------      --------
                                                               NIS               US DOLLARS
                                                      ----------------------      --------
                                                                 (IN THOUSANDS)
                                                      ------------------------------------

Opening defined benefit obligation                       1,521         1,002           400
Current service cost                                       961           502           252
Interest cost                                              126            85            33
Actuarial gains (losses)                                  (138)          175           (36)
Benefits paid                                             (268)         (243)          (71)
Change relating to subsidiary consolidated
for the first time                                         604             -           159
                                                      --------      --------      --------
Closing defined benefit obligation                       2,806         1,521           737
                                                      ========      ========      ========

          Movements in the fair value of the defined benefit assets in the
          current period were as follows:

                                                             YEAR ENDED DECEMBER 31,
                                                      ------------------------------------
                                                      2 0 0 8       2 0 0 7       2 0 0 8(*)
                                                      --------      --------      --------
                                                               NIS               US DOLLARS
                                                      ----------------------      --------
                                                                 (IN THOUSANDS)
                                                      ------------------------------------

Opening defined benefit assets                           1,358           717           357
Expected return on the plan assets                         111            76            29
Actuarial gains (losses)                                  (616)          255          (162)
Employer contribution                                      841           446           221
Benefits paid                                             (175)         (136)          (46)
Acquisition of subsidiary consolidated for
the first time                                             318             -            84
Interest losses on severance payment allocated to
remuneration benefits                                      (25)            -            (7)
                                                      --------      --------      --------
Closing defined benefit assets                           1,812         1,358           476
                                                      ========      ========      ========


                                     F - 36`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 14 - INCOME TAXES

     A.   COMPOSITION

                                                             YEAR ENDED DECEMBER 31,
                                                      ------------------------------------
                                                      2 0 0 8       2 0 0 7       2 0 0 8(*)
                                                      --------      --------      --------
                                                               NIS               US DOLLARS
                                                      ----------------------      --------
                                                                 (IN THOUSANDS)
                                                      ------------------------------------

Current taxes                                            1,959         3,422           515
Taxes in respect of prior years                              -          (338)            -
Deferred taxes (D. below)                                 (505)         (433)         (133)
                                                      --------      --------      --------
                                                         1,454         2,651           382
                                                      ========      ========      ========

     B.   RECONCILIATION OF THE STATUTORY TAX RATE TO THE EFFECTIVE TAX RATE

                                                             YEAR ENDED DECEMBER 31,
                                                      ------------------------------------
                                                      2 0 0 8       2 0 0 7       2 0 0 8(*)
                                                      --------      --------      --------
                                                               NIS               US DOLLARS
                                                      ----------------------      --------
                                                                 (IN THOUSANDS)
                                                      ------------------------------------

Income before income taxes                               1,721          7,290            453
                                                      ========       ========       ========

Statutory tax rate                                          27%            29%            27%
Tax computed by statutory tax
rate                                                       465          2,114            122

TAX INCREMENTS (SAVINGS) DUE TO:
Non-deductible expenses                                  1,180            130            310
Deferred tax in respect of losses for which
valuation allowance was provided                         1,110          2,364            292
Tax exempt income                                         (367)          (182)           (96)
Permanent differences                                      329              -             87
Temporary differences for which deferred taxes
were not provided                                       (1,295)             -           (341)
Effect of decrease in tax rate on deferred
taxes assets                                                 5            (13)             1
Differences in the definition of capital and
non-monetary items for tax purposes and financial
reporting purposes                                         (22)        (1,227)            (6)
Previous year taxes                                          -           (338)             -
Other                                                       49           (197)            13
                                                      --------       --------       --------
                                                         1,454          2,651            382
                                                      ========       ========       ========


                                     F - 37`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 14 - INCOME TAXES (CONT.)

     C.   DEFERRED TAXES

                                                             YEAR ENDED DECEMBER 31,
                                                      ------------------------------------
                                                      2 0 0 8       2 0 0 7       2 0 0 8(*)
                                                      --------      --------      --------
                                                               NIS               US DOLLARS
                                                      ----------------------      --------
                                                                 (IN THOUSANDS)
                                                      ------------------------------------

Balance as of beginning of year                            238          (195)           62
Charged to the consolidated income statements              510           420           134
Tax rate changes                                            (5)           13            (1)
Change relating to subsidiary consolidated
for the first time                                         (74)            -           (19)
                                                      --------      --------      --------
Balance as of end of year                                  669           238           176
                                                      ========      ========      ========

DEFERRED TAXES ARISE FROM THE FOLLOWING:
Allowance for doubtful accounts                            294           104            77
Employees benefits                                         391           190           103
Carry forward tax losses                                   747             -           196
Depreciable fixed assets                                  (893)            -          (234)
Unrealized profits                                           -            32             -
Financial assets carried at fair value
through profit or loss                                     130           (88)           34
                                                      --------      --------      --------
                                                           669           238           176
                                                      ========      ========      ========

          For 2008 - Deferred taxes were computed at rates between 26%-25%,
          primarily - 26%.

     D.   REDUCTION OF CORPORATE TAX RATES

          In July 2005, the Israeli Knesset passed the Law for Amending the
          Income Tax Ordinance (No. 147), 2005, according to which commencing in
          2006 the corporate income-tax rate would be gradually reduced, for
          which a 31% tax rate was established, through 2010, in respect of
          which a 25% tax rate was established..

     E.   The Company and its subsidiaries were not assessed for Income Taxes.
          According to section 145 of the Tax Ordinance assessments for the
          years 2001 and backward are considered final.

     F.   On February 26, 2008, the Knesset ratified the third reading of the
          Income Tax Law ("Inflation Adjustments") (Amendment 20) (Limitation of
          Term of Validity) - 2008 (hereinafter: "The Amendment"), pursuant to
          which the application of the inflationary adjustment law will
          terminate in tax year 2007 and as of tax year 2008, the law will no
          longer apply, other than transition regulations whose intention is to
          prevent distortions in tax calculations.

          According to the amendment, in tax year 2008 and thereafter, the
          adjustment of revenues for tax purposes will no longer be considered a
          real-term basis for measurement. Moreover, the linkage to the CPI of
          the depreciated sums of fixed assets and carryover losses for tax
          purposes will be discontinued, in a manner whereby these sums will be
          adjusted until the CPI at the end of 2007 and their linkage to the CPI
          will end as of that date.


                                     F - 38`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 15 - COMMITMENTS AND CONTINGENT LIABILITIES

     1.   Commitments

          a.   The Company has agreed to pay the large supermarket retail chains
               in the organized market and to cretin of the customers in the
               private sector incentives calculated as a fixed percentage of the
               annual sales to such customer or incentives based on the increase
               in volume of sales to such customers in excess of a certain
               agreed amount with respect to the year 2008. The extent of such
               incentives varies between 0.5%-8.5% 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.

          b.   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").

               The Management Services Agreements were for a period of four
               years commencing on June 1, 1998 (the "Management Services
               Period"), were automatically renewed on June 1, 2002 for two
               years and were automatically renewed for an additional period of
               two years in June 2004.

               Each of the Management Services Agreements provided for monthly
               services fees equal to $24,500 (excluding VAT) and an annual
               bonus at a rate of 3% of the Company's consolidated pre-tax
               annual profits, if such profits are equal to or less than NIS 3.0
               million (approximately USD 0.8 million), or at a rate of 5% if
               such profits exceed such level.

               On May 4, 2005 the Company's Audit Committee and Board of
               Directors decided to amend the terms of the abovementioned
               agreements, mainly extending the management services period for
               an unlimited period, with an option to terminate them by the
               Company's advance notice of 18 months and the Management
               Companies' advance notice of 180 days. The General Meeting of the
               Company's shareholders ratified these amendments on July 20,
               2005.

               On February 15, 2006 the Company's board of directors resolved,
               in light of the expressed position of the Israeli Securities
               Authority, to set those agreements for a five-year period
               following ratification by the Company's shareholders General
               Meeting, i.e., until July 19, 2010.

               On January 2, 2008 the Audit Committee and the Board of Directors
               unanimously approved the amendment of the Management Services
               Agreements with Messrs. Zwi Williger and Joseph Williger. In
               accordance to the new Management Services Agreements the terms
               were amended as follows:

               (1)  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.

               (2)  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.


                                     F - 39`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 15 - COMMITMENTS AND CONTINGENT LIABILITIES (CONT.)

     1.   Commitments

          b.   Cont.

               (3)  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.

               (4)  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.

          c.   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 5,480 (USD 1,441) to be
               adjusted annually for changes in the Israeli CPI.

          d.   The Company does not generally enter into written agency or other
               agreements with its suppliers. However, the Company has written
               agreements with sixteen 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.

          e.   Shamir Salads signed distribution agreements with 25
               distributors, that distributes Shamir Salads products all over
               Israel for a commission that range between 6% to 16% of the
               distributor sales, depending of the customer. Shamir Salads has
               no commitment to any of those distributors for ongoing
               relationship.

          f.   Shamir Salads leases two joined buildings for its operation
               (factory, logistics and head office) - the first is 2,512 squared
               meters, the monthly rent is NIS 40,432 (linked to the CPI from
               December 2005) and the lease ends on January 2012. The second is
               2,192 squared meters, the monthly rent is NIS 41,141 (linked to
               the CPI from December 2005) and the lease ends on January 2012.


                                     F - 40`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 15 - COMMITMENTS AND CONTINGENT LIABILITIES (CONT.)

     2.   Contingent liabilities

          1.   On November 24, 2003 the Israeli custom issued the Company and
               Gold Frost a notice for total payment of NIS 381 thousand
               claiming that the tariff on a certain product imported by the
               Company was wrong. The Company and Gold Frost didn't agree to the
               notice and on November 25, 2004 they filed a lawsuit against the
               state of Israel to have the notice be declared void. The
               summaries from both sides have been submitted and the Company is
               waiting for the verdict of the court. A reserve of NIS 308
               thousand is included in the Company's 2008 financial statements.

          2.   A lawsuit was filed in December 2001 against 29
               importers/producers of food products, including the Company, for
               an amount totalling NIS 500 million. Concurrently, the plaintiffs
               filed a request for an exemption from the court fee. Following
               the court's rejection of the plaintiffs' request for the noted
               fee exemption and their failure to pay such fee, the court
               dismissed the case. In January 2004 the abovementioned plaintiffs
               filed a new lawsuit against the 29 noted importers/producers for
               NIS 1 billion. Again, a request was made concurrently for an
               exemption from the court fee. This request was rejected by the
               registrar of the court, and the action was dismissed without
               prejudice in November 2006.

               The plaintiffs then filed an appeal with the District court of
               the registrar's November 2006 decision. This request was rejected
               by the registrar of the District court. The plaintiffs then filed
               an appeal with the Supreme Court, and requested an exemption from
               the court fee for the appeal and from the requisite security
               deposit. The next hearing in this appeal is scheduled for June
               15, 2009.

               Although the proceedings are still at a preliminary stage, the
               Company's management and legal counsel believe that the
               plaintiffs' likelihood of success in the proceedings is low.

          3.   In or about October, 2005, Vitarroz Corp. commenced an action in
               the Superior Court of the State of New Jersey, against Willi USA
               Holdings, Inc. (a subsidiary of the Company), the Company and Zwi
               Williger (collectively, the "Defendants") due to a dispute
               concerning a press release announcing the termination of the
               proposed acquisition of the Vitarroz business by the Company On
               September 2005, the Company removed the matter from the Superior
               Court of New Jersey to the United States District Court for the
               District of New Jersey. The complaint was subsequently amended
               and, as amended, alleged, inter alia, breach of contract,
               defamation, breach of covenants of good faith and fair dealing,
               fraudulent inducement and tortious interference with contractual
               relations and prospective economic advantage. Defendants did not
               respond to the complaint as an agreement was reached to arbitrate
               all disputes between the parties and certain third parties. Not
               only did the parties agree to submit the claims which are the
               subject of the amended complaint to binding arbitration but they
               agreed to submit to arbitration (i) claims that defendants have
               against plaintiff and related third parties, and (ii) claims
               which the Company asserted against Vitarroz in an action that was
               then pending in Israel regarding the alleged breach of an
               agreement executed by the Company and Vitarroz, pursuant to which
               Vitarroz was to supply food products to the Company. Although
               there was no discovery taken in the then pending Court matters,
               Vitarroz claimed in correspondence to the District Court that it
               sustained, inter alia, damage: to its financial reputation; that
               suppliers refused to extend favorable credit and delivery terms;
               that there were lost profits of approximately USD 500,000; and
               that its sale to IDT realized a sales price of approximately USD
               3 million less than what was expected; and that there are
               additional damages resulting from defendants' actions which are
               claimed to exceed USD 3.5 million.. During the course of
               discovery, Vitarrozz submitted the reports of its financial
               expert claiming damages in excess of USD 6.6 million. The Company
               has submitted the report of its financial expert claiming damages
               in excess of $10 million. The attributing hearings were in May
               2008 and the on August 25 2008, the arbitration panel has granted
               an award against the Company in the amount of approximately USD
               0.6 million). Among other things, the panel found that the press
               release issued by the Company announcing the termination of the
               proposed acquisition of the Vitarroz business by the Company
               constituted a breach of contract and violation of the covenant of
               good faith and fair dealing. In addition, the panel rejected the
               Company's counterclaims. On October 13, 2008 the Company filed a
               motion to the Superior Court of the State of New Jersey New to
               vacate the award. A reserve on the full award is included in the
               Company's 2008 financial statements.


                                     F - 41`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 15 - COMMITMENTS AND CONTINGENT LIABILITIES (CONT.)

     2.   Contingent liabilities

          4.   On February 21, 2007, a lawsuit was filed against Gold Frost by
               Cukierman & Co. Investment House Ltd. in the Tel Aviv-Jaffa
               Magistrates Court in the amount of NIS 273,852, claiming non
               payment of fees for professional services rendered. A statement
               of defense was filed. Given the early stage of these proceedings,
               the Company is unable at this point to assess the risks involved.

          5.   In September 2007, Thurgeman Construction Co. Ltd. ("Thurgeman")
               filed a claim against the Company in the District Court of Tel
               Aviv the amount of NIS 4,449,340 (plus VAT) regarding a dispute
               in connection with the construction of the Company's logistics
               center in Yavne (the "Project") pursuant to a contract between
               the parties, dated as of September 9, 2005. Under the terms of
               the contract, Thurgeman was to serve as the operating contractor
               for the construction of the frame and the surrounding portions
               for the construction of the Project.

               During the course of construction on the Project, the parties
               raised several claims against each other in connection with the
               progress of construction on the Project. The Company claimed that
               Thurgeman grossly violated the terms of the contract by
               continuous delays in the completion of the Project, and by
               performing the construction work in a negligent and
               unprofessional manner and with inferior quality. Thurgeman
               counterclaimed that it performed the construction work according
               to the terms of the contract and that any delays in the work were
               not caused through any fault of Thurgeman. Furthermore, Thurgeman
               claimed that the Company withheld certain payments to which
               Thurgeman was entitled for additional work on the Project,
               causing Thurgeman damages.

               At the end of November 2007, the Company filed a statement of
               defense, which included a counterclaim against Thurgeman and its
               executive, Dotan Thurgeman, which contained among other things, a
               claim of defamation, a claim for damages caused by the delay in
               delivery of the completed Project, and damages caused by
               Thurgeman's poor and careless work on the Project. The sum of the
               damages claimed by the Company in the counterclaim was NIS 5
               million. In February 2008, Thurgeman filed a response to the
               counter claim. The parties started performing the preliminary
               proceedings.

               At the current preliminary stage of the dispute, the Company's
               management and legal counsel cannot assess the chances of the
               parties.

          6.   On June 18, 2006, the Company filed a claim against Filiz and
               Ash-Bar in the amount of NIS 4,473,878 for breach of contract.
               The complaint was served on filiz and Ash-Bar through Ash-Bar's
               chief executive officer. Filiz then filed a request to cancel the
               complaint, claiming that Ash-Bar is not authorized to accept
               service of process on its behalf. The request was denied by the
               court's registrar.

               On November 4, 2007, Filiz filed an appeal of the registrar's
               decision and requested an extension for filing its defense to the
               complaint pending a decision on the appeal. The appeal was denied
               and the service of process was accepted by the court.

               Notwithstanding the fact that the proceedings are still at a
               preliminary stage, the Company's legal counsel believes that the
               complaint is based on sound legal arguments, and that there is a
               reasonable possibility that a not insignificant portion of the
               arguments will be sustained by the court.


                                     F - 42`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 15 - COMMITMENTS AND CONTINGENT LIABILITIES (CONT.)

     2.   Contingent liabilities

          7.   On July 7, 2008, WF filed a lawsuit in the Supreme Court of the
               State of New York, Country of New York, against Laish Israeli
               Food Ltd., Laish Dairy Ltd., 860 Nostrand Associates Llc., Arie
               Steiner, Eli Biran (WF's former CEO) and others. The plaintiffs
               assert claims, inter alia, of fraud, conversion and breach of
               contract against the seller and former principal of Laish Israeli
               Food and related parties. Certain defendants have filed motions
               to dismiss the claim. On August 27, 2008, 860 Nostrand Associates
               Llc. Filed a lawsuit against the Company claiming that the
               defendant is liable to it as a guarantor of a certain lease that
               was supposedly signed by WF. Damages are being sought. These
               matters are in the early stage of discovery.

          8.   On September 22, 2008, a lawsuit was filed against the Company,
               WF and one of the Company's officers by several Israeli's WF's
               vendors in the Tel Aviv-Jaffa Magistrates Court in the amount of
               NIS 1,349,899, claiming non payment of WF for food products that
               they allegedly supplied to WF. A statement of defense was filed.
               Even at the early stage of these proceedings, the Company's
               management and legal counsel believe that the lawsuit against
               Company and the Company's officer are without merit, and they
               intend to vigorously defend against such claims.

          9.   On November 2008, a purported class action lawsuit had been filed
               by an individual against Shamir Salads. The complaint, which has
               not been recognized as a class action, alleges that Shamir Salads
               misled its customers by writing on certain of its products that
               such products were "home production" while those products were
               manufactured in Shamir Salad's industrial factory. The complaint
               alleges damages of approximately NIS 7.45 million. Shamir Salads
               believes that the complaint is without merit and intends to
               vigorously defend against the litigation.

NOTE 16 - RECLASSIFICATION

     The Group reclassified the sum of NIS 1,854 thousand (USD 488 thousand)
     from the "Other receivables" item to the "Inventory" item. This
     reclassification derives from an adjustment of the comparative figures to
     the manner by which certain transactions are presented in the Group's
     financial statements as on December 31, 2008.

     The Group reclassified the sum of NIS 369 thousand (USD 97 thousand) from
     the "Other payables and accrued expenses" item to the "Trade payables"
     item. This reclassification derives from an adjustment of the comparative
     figures to the manner by which certain transactions are presented in the
     Group's financial statements as on December 31, 2008.

     The Group reclassified the sum of NIS 238 thousand (USD 63 thousand) from
     the "Other payables and accrued expenses" item and the sum of NIS 70
     thousand (USD 18 thousand) from the "Trade receivables" item to the
     "Accruals" item. This reclassification derives from an adjustment of the
     comparative figures to the manner by which certain transactions are
     presented in the Group's financial statements as on December 31, 2008.

     The Group reclassified the sum of NIS 1,408 thousand (USD 370 thousand)
     from the "Other payables and accrued expenses" item to the "Employees
     benefits" item. This reclassification derives from an adjustment of the
     comparative figures to the manner by which certain transactions are
     presented in the Group's financial statements as on December 31, 2008.

     The Group reclassified the sum of NIS 593 thousand (USD 156 thousand) from
     the "Other payables and accrued expenses" item to the "Current tax
     liabilities" item. This reclassification derives from an adjustment of the
     comparative figures to the manner by which certain transactions are
     presented in the Group's financial statements as on December 31, 2008.


                                     F - 43`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 16 - RECLASSIFICATION (CONT.)

                                                                 AS REPORTED
                                     AS PREVIOUSLY                IN CURRENT
                                        REPORTED   MODIFICATION   STATEMENTS
                                        --------     --------      --------

AS OF DECEMBER 31, 2007

Trade receivables                         63,728           70        63,798
Other receivables                          4,374       (1,854)        2,520
Inventory                                 29,166        1,854        31,020
Trade payables                            33,961          369        34,330
Other payables and accrued expenses        7,600       (2,608)        4,992
Accruals                                       -          308           308
Employees benefits                             -        1,408         1,408
Current tax liabilities                        -          593           593

NOTE 17 - SHAREHOLDERS' EQUITY

     COMPOSITION:

                                  ORDINARY SHARES
                             OF NIS 0.1 PAR VALUE EACH
                             -------------------------
                                     DECEMBER 31
                             -------------------------
                               2 0 0 8        2 0 0 7
                             ----------     ----------

Authorized share capital     50,000,000     50,000,000
Issued and outstanding       10,267,893     10,267,893

NOTE 18 - OPTIONS PLANS

     On January 2005 the Parent Company's audit committee and Board of Directors
     adopted a Stock Incentive Plan. The Parent Company was authorized to grant
     up to 138,000 options to 9 of the Group's employees (93,000 of the options
     to the Company's employees). The issuance of the options was ratified by
     the Parent Company's Board of Directors and the audit committee on February
     27, 2005.

     The options granted vest in three equal annual installments commencing
     January 2006 and will expire in 2.5, 3.5 and 4.5 years, respectively. The
     purchase price per share payable upon exercise of an option is NIS 14 (USD
     3.7) per share, linked to the changes in the Consumer Price Index, and
     subject to adjustments.


                                     F - 44`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 18 - OPTIONS PLANS (CONT.)

     A summary of the status of the Company's stock option plans as of December
     31, 2008, 2007 and changes during the years then ended, is presented below:

                                                        NUMBER OF OPTIONS
                                         -----------------------------------------------
                                                      YEAR ENDED DECEMBER 31
                                         -----------------------------------------------
                                                 2 0 0 8                  2 0 0 7
                                         ---------------------     ---------------------
                                                      WEIGHTED                 WEIGHTED
                                                      AVERAGE                   AVERAGE
                                         NUMBER OF    EXERCISE    NUMBER OF     EXERCISE
                                         OPTIONS        PRICE      OPTIONS       PRICE
                                         --------     --------     --------     --------
                                                       (NIS)                     (NIS)
                                                      --------                  --------

Balance at the beginning of the year       27,000        13.43       42,000        13.55
Exercised                                       -                    11,000        13.10
Forfeited                                   8,000                     4,000
                                         --------     --------     --------
Balance at the end of the year             19,000        14.04       27,000        13.43
                                         ========     ========     ========

Options exercisable at the year end        19,000                     8,000
                                         ========     ========     ========

NOTE 19 - SELECTED CONSOLIDATED STATEMENTS OF OPERATIONS DATA

     A.   REVENUES

                                                            YEAR ENDED DECEMBER 31,
                                                      ----------------------------------
                                                      2 0 0 8       2 0 0 7     2 0 0 8(*)
                                                      --------     --------     --------
                                                               NIS             US DOLLARS
                                                      ---------------------     --------
                                                                (IN THOUSANDS)
                                                      ----------------------------------

Sale of products manufactured by the group              70,248            -       18,477
Sale of other products                                 278,784      249,693       73,325
Income from services provided                               52            -           14
Commissions                                                143            -           37
                                                      --------     --------     --------
                                                       349,227      249,693       91,853
                                                      ========     ========     ========

     B.   COST OF SALES

                                                             YEAR ENDED DECEMBER 31,
                                                      ------------------------------------
                                                      2 0 0 8       2 0 0 7       2 0 0 8(*)
                                                      --------      --------      --------
                                                               NIS               US DOLLARS
                                                      ----------------------      --------
                                                                 (IN THOUSANDS)
                                                      ------------------------------------

Purchases                                              247,418       190,779        65,076
Materials consumed                                       9,123             -         2,400
Salaries and related expenses                            5,673             -         1,492
Loss on firmly committed orders                          3,500             -           921
Transportation                                           2,364         2,866           622
Depreciation and amortization                            2,587         1,020           680
Maintenance and rent                                     8,408         4,066         2,211
Other manufacturing costs
and expenses                                             2,169         2,273           570
                                                      --------      --------      --------
                                                       281,242       201,004        73,972
Change in raw materials                                   (986)            -          (259)
Change in finished goods and in
goods in process,                                        1,395        (2,043)          367
                                                      --------      --------      --------
                                                       281,651       198,961        74,080
                                                      ========      ========      ========


                                     F - 45`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 19 - SELECTED CONSOLIDATED STATEMENTS OF OPERATIONS DATA (CONT.)

     C.   SELLING EXPENSES

                                                            YEAR ENDED DECEMBER 31,
                                                      ----------------------------------
                                                      2 0 0 8       2 0 0 7     2 0 0 8(*)
                                                      --------     --------     --------
                                                               NIS             US DOLLARS
                                                      ---------------------     --------
                                                                (IN THOUSANDS)
                                                      ----------------------------------

Salaries and related expenses                           14,106       12,432        3,710
Sales commissions                                        4,648            -        1,223
Maintenance and rent                                     3,871        3,920        1,018
Vehicles                                                 5,168        3,711        1,359
Advertising and promotion                                2,666        1,983          701
Depreciation and amortization                            1,544          812          406
Others                                                   1,756        1,405          462
                                                      --------     --------     --------
                                                        33,759       24,263        8,879
                                                      ========     ========     ========

     D.   GENERAL AND ADMINISTRATIVE EXPENSES

                                                            YEAR ENDED DECEMBER 31,
                                                      ----------------------------------
                                                      2 0 0 8       2 0 0 7     2 0 0 8(*)
                                                      --------     --------     --------
                                                               NIS             US DOLLARS
                                                      ---------------------     --------
                                                                (IN THOUSANDS)
                                                      ----------------------------------

Salaries and related expenses                           10,769        8,001        2,832
Office maintenance                                       1,812        2,604          477
Professional fees                                        4,059        3,261        1,068
Vehicles                                                   618          442          163
Depreciation and amortization                              976          688          257
Bad and doubtful debts                                   3,161        2,303          831
Communication                                              385          380          101
Other                                                    1,347        1,190          354
                                                      --------     --------     --------
                                                        23,127       18,869        6,083
                                                      ========     ========     ========

     E.   EMPLOYEES BENEFIT COSTS

                                                            YEAR ENDED DECEMBER 31,
                                                      -----------------------------------
                                                      2 0 0 8       2 0 0 7      2 0 0 8(*)
                                                      --------      --------     --------
                                                               NIS              US DOLLARS
                                                      ----------------------     --------
                                                                 (IN THOUSANDS)
                                                      -----------------------------------

Payroll                                                 30,003       20,555         7,891
Employee Benefit Plan expenses                             545         (122)          143
                                                      --------     --------      --------
                                                        30,548       20,433         8,034
                                                      ========     ========      ========

     F.   DEPRECIATION AND AMORTIZATION

                                                            YEAR ENDED DECEMBER 31,
                                                      ----------------------------------
                                                      2 0 0 8       2 0 0 7     2 0 0 8(*)
                                                      --------     --------     --------
                                                               NIS             US DOLLARS
                                                      ---------------------     --------
                                                                (IN THOUSANDS)
                                                      ----------------------------------

Depreciation of fixed assets                             4,202        2,329        1,105
Amortization of Intangible assets                          295           57           78
Amortization of prepaid rental expenses                    610          134          160
Impairment of Goodwill                                   1,067        3,054          280
                                                      --------     --------     --------
                                                         6,174        5,574        1,623
                                                      ========     ========     ========


                                     F - 46`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 20 - OTHER INCOME AND EXPENSES

     A.   OTHER INCOME

                                                            YEAR ENDED DECEMBER 31,
                                                      ----------------------------------
                                                      2 0 0 8       2 0 0 7     2 0 0 8(*)
                                                      --------     --------     --------
                                                               NIS             US DOLLARS
                                                      ---------------------     --------
                                                                (IN THOUSANDS)
                                                      ----------------------------------

Capital gain on fixed assets realization                    85           16           22
Other                                                       50          454           13
                                                      --------     --------     --------
                                                           135          470           35
                                                      ========     ========     ========

     B.   OTHER EXPENSES

                                                            YEAR ENDED DECEMBER 31,
                                                      ----------------------------------
                                                      2 0 0 8       2 0 0 7     2 0 0 8(*)
                                                      --------     --------     --------
                                                               NIS             US DOLLARS
                                                      ---------------------     --------
                                                                (IN THOUSANDS)
                                                      ----------------------------------

Loss from statutory suit                                 1,981            -          521
Capital loss from fix assets realization                   349            -           91
                                                      --------     --------     --------
                                                         2,330            -          612
                                                      ========     ========     ========

NOTE 21     -  FINANCE INCOME AND EXPENSES

                                                            YEAR ENDED DECEMBER 31,
                                                      ------------------------------------
                                                      2 0 0 8       2 0 0 7      2 0 0 8(*)
                                                      --------      --------      --------
                                                               NIS               US DOLLARS
                                                      ----------------------      --------
                                                                 (IN THOUSANDS)
                                                      ------------------------------------

A.    FINANCING INCOME:
      Interest income:
      Short-term bank deposits                           1,475         2,251           388
      Changes in value of debentures held for trading      348           193            92
      Other                                                198            77            52
                                                      --------      --------      --------
      Total interest income                              2,021         2,521           532
      Other:
      Changes in fair value of financial assets
      at fair values                                    (4,836)          (68)       (1,272)
      Realized gain on derivatives                         243             -            64
      Foreign currency differences                      (1,602)         (267)         (421)
      Dividends                                              8           176             2
      Other                                                 71             -            18
                                                      --------      --------      --------
      TOTAL FINANCING INCOME                            (4,095)        2,362        (1,077)
                                                      --------      --------      --------

B.    FINANCING EXPENSES:
      Interest expenses:
      Bank credit                                          343             -            90
      Short-term loans                                     236           366            62
      long-term loans                                      130             -            34
      Lease obligations                                     52             -            14
      Other                                                 82           104            22
                                                      --------      --------      --------
      TOTAL INTEREST EXPENSE                               843           470           222
                                                      --------      --------      --------
      Other:
      Decrease in values of warrants to
      issue shares                                      (1,035)         (767)         (272)
      Realized loss on derivatives                           -           102             -
      Foreign currency differences                       1,096           (38)          288
      Bank fees                                            703           317           185
      Other                                                  5             4             1
                                                      --------      --------      --------
      TOTAL OTHER COSTS                                    769          (382)          202
                                                      ========      ========      ========
      TOTAL FINANCING COSTS                              1,612            88           424
                                                      ========      ========      ========


                                     F - 47`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 22 - EARNING PER SHARE

     A.   BASIC EARNINGS PER SHARE

                                                            YEAR ENDED DECEMBER 31,
                                                      -----------------------------------
                                                      2 0 0 8       2 0 0 7      2 0 0 8(*)
                                                      --------      --------     --------
                                                               NIS              US DOLLARS
                                                      ----------------------     --------
                                                                 (IN THOUSANDS)
                                                      -----------------------------------

Profit (loss) for the year attributable to
equity holders of the parent                              (786)        2,342         (206)
Earnings used in the calculation of total
basic earnings per share                                  (786)        2,342         (206)
                                                      --------      --------     --------
Earnings used in the calculation of basic
earnings per share from continuing operations             (786)        2,342         (206)
                                                      ========      ========     ========

     B.   DILUTED EARNINGS PER SHARE

                                                                  AS OF DECEMBER 31,
                                                      -----------------------------------------
                                                        2 0 0 8        2 0 0 7        2 0 0 8(*)
                                                      ----------      ----------     ----------
                                                                 NIS                 US DOLLARS
                                                      --------------------------     ----------
                                                                    (IN THOUSANDS)
                                                      -----------------------------------------

PROFIT USED TO COMPUTE BASIC EARNING PER SHARE              (786)          2,342           (206)
Adjustments:

Options                                                        -               -              -
                                                      ----------      ----------     ----------

PROFIT USED TO COMPUTE DILUTED EARNING PER SHARE            (786)          2,342           (206)
Weighted average number of shares used in
      computing basic earnings per share              10,267,893      10,267,893     10,267,893
Adjustments:

Options                                                        -               -              -
                                                      ----------      ----------     ----------
Weighted average number of shares used
      in computing diluted earnings per share         10,267,893      10,267,893     10,267,893
                                                      ==========      ==========     ==========

     C.   The following potential ordinary shares are not dilutive and are
          therefore excluded from the weighted average number of ordinary shares
          for the purposes of diluted earnings per share:

          561,982 as of December 31, 2008 and 2007.


                                     F - 48`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 23 - ACQUISITION OF SUBSIDIARIES

     A.   SUBSIDIARIES ACQUIRED

                                                                  PROPORTION OF
                                                        DATE OF       SHARES      COST OF
                          PRINCIPAL ACTIVITY          ACQUISITION    ACQUIRED   ACQUISITION
                    ------------------------------     ---------     --------    --------

2008
Shamir salads       Producing and marketing salads      1/1/2008           51%      5,000
The Distributor     Marketing food products             1/1/2008           51%      1,454
2007
Baron               Marketing food products            13/2/2007         50.1%          -
WF                  Marketing food products            19/1/2007          100%     15,400

     B.   ANALYSIS OF ASSETS AND LIABILITIES ACQUIRED

                                                   SHAMIR SALADS
                                       ------------------------------------
                                                   FAIR VALUE ON  FAIR VALUE ON
                                      BOOK VALUE     ADJUSTMENT    ACQUISITION
                                       -------         -------      -------

CURRENT ASSETS:
Cash & cash equivalents                     31               -           31
Trade & other receivables               15,651               -       15,651
Inventories                              3,099               -        3,099
NON-CURRENT ASSETS:
Property, Plant & equipment              7,331               -        7,331
Prepaid expenses                           818               -          818
Intangible assets                            -           3,373        3,373

CURRENT LIABILITIES:
Bank credit and short term loan        (10,225)              -      (10,225)
Trade & other payables                 (13,640)              -      (13,640)

NON-CURRENT LIABILITIES:
Deferred tax liabilities                   (74)              -          (74)
Severance pay, net                        (286)              -         (286)
                                       -------         -------      -------
                                         2,705           3,373        6,078

NONCONTROLLING INTEREST                                              (2,978)
GOODWILL ON ACQUISITION                                               1,900
                                                                    -------
TOTAL                                                                 5,000
                                                                    =======

                                 THE
                             DISTRIBUTOR
                             BOOK VALUE
                               ------

CURRENT ASSETS:
Cash & cash equivalents           759
                               ------

NONCONTROLLING INTEREST          (372)
GOODWILL ON ACQUISITION         1,067
                               ------
TOTAL                           1,454
                               ======

                                     F - 49`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 23 - ACQUISITION OF SUBSIDIARIES (CONT.)

     B.   ANALYSIS OF ASSETS AND LIABILITIES ACQUIRED (CONT.)

                                      WF KOSHER FOOD DISTRIBUTORS LTD
                                   --------------------------------------
                                                FAIR VALUE ON  FAIR VALUE ON
                                  BOOK VALUE      ADJUSTMENT    ACQUISITION
                                   -------         -------        -------

CURRENT ASSETS:
Trade & other receivables            5,402               -          5,402
Inventories                          8,142               -          8,142
NON-CURRENT ASSETS:
Property, Plant & equipment            208               -            208
Prepaid expenses                        89               -             89

CURRENT LIABILITIES:
Trade & other payables              (1,530)              -         (1,530)
                                   -------         -------        -------

                                    12,311               -         12,311
GOODWILL ON ACQUISITION                                             3,089
                                   -------         -------        -------
TOTAL                               12,311               -         15,400
                                   =======         =======        =======

     C.   FAIR VALUES DETERMINED ON A PROVISIONAL BASIS

          A valuation was performed for the purpose of allocating the
          acquisition cost of Shamir Salads and of the Danish company. The
          valuation determined, inter alia, that the entire excess cost in the
          acquisition of the Danish company should be allocated to goodwill (the
          goodwill was written off entirely in examination of its
          recoverability), while the acquisition cost of Shamir Salads was
          allocated as follows - the value of NIS 1,570 thousand was allocated
          to the brand name, the value of NIS 1,364 thousand was allocated to
          customer relations, and the value of NIS 439 thousand was allocated to
          technological know-how. The value of the goodwill was determined
          accordingly - NIS 1,900 thousand.

     D.   COST OF ACQUISITION

          The cost of the joint establishment of the Danish distribution company
          was paid in cash. The acquisition cost of Shamir Salads was contingent
          upon the sum of the audited net profit, after neutralizing capital
          gains that Shamir Salads shall present in its audited financial
          statements for the year 2008, being multiplied by 2.55. As of December
          31, 2008, and according to the total net profit that Shamir Salads
          presented for the year ended December 31, 2008, the sum of the
          compensation was calculated on the sum of the advance.

     E.   NET CASH OUTFLOW ON ACQUISITION

                                                               YEAR ENDED DECEMBER 31,
                                                        ------------------------------------
                                                        2 0 0 8        2 0 0 7      2 0 0 8(*)
                                                        -------        -------       -------
                                                                  NIS              US DOLLARS
                                                        ----------------------       -------
                                                                    (IN THOUSANDS)
                                                        ------------------------------------

Total purchase consideration                              6,454         15,400         1,698
Compensation paid in cash                                 6,454         15,400         1,698
Less: cash and cash equivalent balances acquired           (790)             -          (208)
                                                        -------        -------       -------
                                                          5,664         15,400         1,490
                                                        =======        =======       =======

                                     F - 50`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 23 - ACQUISITION OF SUBSIDIARIES (CONT.)

     F.   GOODWILL ARISING ON ACQUISITION

          Goodwill was recognized during the acquisition of Shamir Salads,
          because the compensation that was paid within the scope of the
          business combination includes sums relating to the expected benefits
          from the synergy (cooperation), income growth, and future developments
          that are anticipated in the markets of both companies. These benefits
          are not recognized separately from the goodwill, since the future
          economic benefits deriving from them cannot be reliably measured.
          Furthermore, the compensation includes sums relating to benefits
          expected from Shamir Salad's experienced manpower; meaning, the costs
          that Shamir Salads saved (and that Willi-Food saved indirectly) due to
          the fact that Shamir Salads has existing manpower, which eliminated
          the need for a general recruitment of employees and job training
          (assembled workforce).

          Goodwill was recognized during the acquisition of the Danish
          distribution company because the compensation that was paid within the
          scope of the business combination includes sums relating to the
          expected benefits from the synergy (cooperation), increased export
          income, and the receipt of licenses to export to the United States.

NOTE 24 - NON-CASH TRANSACTION

     During 2008 the group has made a commitment to pay royalties for a brand
     name in the amount of NIS 2,000 in thousands over a three years period. As
     of December 31, 2008 the amount not yet paid in cash is NIS 1,700 in
     thousands.

NOTE 25 - FINANCIAL INSTRUMENTS

     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 0 8        2 0 0 7       2 0 0 8(*)
                                                -------        -------        -------
                                                          NIS                US DOLLARS
                                                ----------------------        -------
                                                            (IN THOUSANDS)
                                                -------------------------------------

FINANCIAL ASSETS
Held for trading                                  9,444         31,267          2,484
Trade and other receivables
  (including cash and cash equivalents)         163,679        127,004         43,051

FINANCIAL LIABILITIES
Held for trading                                      5          1,206              1
Amortized cost                                   85,804         47,255         22,568

     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.

                                     F - 51`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 25 - FINANCIAL INSTRUMENTS (CONT.)

     C.   OBJECTIVES OF MANAGING FINANCIAL RISKS (CONT.)

          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.   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.

          MATURITY PROFILE OF OUTSTANDING FINANCIAL LIABILITIES'

                                             1 YEAR       1-5 YEARS       TOTAL
                                             -------       -------       -------
2008
Interest free                                 65,813         2,166        67,979
Lease agreement liability                        333           271           604
Instruments bearing variable interest         17,322             -        17,322
                                             -------       -------       -------
Total                                         83,468         2,437        85,905
                                             =======       =======       =======

2007
Interest free                                 40,565         1,752        42,317
Instruments bearing variable interest              -         5,978         5,978
                                             -------       -------       -------
Total                                         40,565         7,730        48,295
                                             =======       =======       =======

     F.   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:

                  LIABILITIES                   ASSETS
             --------------------        --------------------
            2 0 0 8        2 0 0 7      2 0 0 8       2 0 0 7
             ------        ------        ------        ------
              NIS            NIS           NIS           NIS
             ------        ------        ------        ------

USD          30,464        27,683        17,465        21,400
EUR           2,347           968           870         3,650
DKK           3,841             -         4,004             -
Other             -             -             -             1

                                     F - 52`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 25 - FINANCIAL INSTRUMENTS (CONT.)

     F.   EXCHANGE RATE RISK (CONT.)

          The Group is mainly exposed to USD and EUR.

          The following table details the Group's sensitivity to a 10% increase
          and decrease in the NIS against the relevant foreign currencies. 10%
          is the sensitivity rate used when reporting foreign currency risk
          internally to key management personnel and represents management's
          assessment of the reasonably possible change in foreign exchange
          rates. The sensitivity analysis includes only outstanding foreign
          currency denominated monetary items and adjusts their translation at
          the period end for a 10% change in foreign currency rates. A positive
          number below indicates an increase in profit and other equity where
          the NIS strengthens 10% against the relevant currency. For a 10%
          weakening of the NIS against the relevant currency, there would be an
          equal and opposite impact on the profit and other equity, and the
          balances below would be negative.

                        USD IMPACT   EUR IMPACT
                          ------       ------
                           2008         2008
                          ------       ------
                            NIS          NIS
                          ------       ------

Profit or loss (1)         1,300          148

                        USD IMPACT   EUR IMPACT
                          ------       ------
                           2007         2007
                          ------       ------
                           NIS           NIS
                          ------       ------

Profit or loss (1)           629         (269)

          (1)  This is mainly attributable to the exposure outstanding on
               receivables, cash and payables at year end in the Group, and
               forward foreign exchange contracts.

          FORWARD FOREIGN EXCHANGE CONTRACTS

          The Group enters into forward foreign exchange contracts to manage the
          risk associated with anticipated sales and purchase transactions,
          which are treated as non hedging instruments. The resulting gain or
          loss is recognized in profit or loss immediately.

The following table details the forward foreign currency (FC) contracts
outstanding as at reporting date:

                                AVERAGE EXCHANGE RATE          FOREIGN CURRENCY             CONTRACT VALUE               FAIR VALUE
                                ---------------------        --------------------        --------------------        --------------------
                                 2008           2007          2008          2007          2008          2007          2008          2007
                                ------         ------        ------        ------        ------        ------        ------        ------
                                                            CURRENCY      CURRENCY        NIS           NIS           NIS           NIS
                                  NIS            NIS        THOUSANDS     THOUSANDS     THOUSANDS     THOUSANDS     THOUSANDS     THOUSANDS
                                ------         ------        ------        ------        ------        ------        ------        ------

CASH FLOWS HEDGES

PURCHASE OF USD SELL NIS        3.5878         4.1081           900         6,000         3,349        23,261            77          (184)
PURCHASE OF EUR SELL NIS        5.2585         5.6243             -           300             -         1,680             -            18
                                                                                                                     ------        ------
                                                                                                                         77          (166)
                                                                                                                     ======        ======

     G.   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 (2007 - also included index swap
          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.

                                     F - 53`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 26 - BUSINESS AND GEOGRAPHIC SEGMENTS

     A.   DATA REGARDING BUSINESS SEGMENTS

YEAR ENDED DECEMBER 31, 2008

                                                   NON-PRESERVED    PRESERVED
                                                     PRODUCTS        PRODUCTS        TOTAL
                                                     --------        --------      --------

YEAR ENDED DECEMBER 31, 2008:
REVENUES                                              258,855          90,372       349,227
                                                     ========        ========      ========
OPERATING INCOME (LOSS) BY SEGMENT                     28,690           5,127        33,817
                                                     ========        ========
Less - unallocated general and administrative
expenses                                                                             23,127
Other expense                                                                         2,195
Goodwill impairment                                                                   1,067
Financial costs, net                                                                 (5,707)
                                                                                   --------
PROFIT BEFORE INCOME TAXES                                                            1,721
Income taxes                                                                          1,454
                                                                                   --------
PROFIT FROM CONTINUING OPERATIONS                                                       267

DECEMBER 31, 2008:
TOTAL SEGMENT ASSETS                                   22,215          12,202        34,417
                                                     ========        ========
UNALLOCATED ASSETS                                                                  238,925
                                                                                   --------
                                                                                    273,342
                                                                                   ========

SEGMENT LIABILITIES                                         -               -             -
                                                     ========        ========
UNALLOCATED LIABILITIES                                                              87,760
                                                                                   --------
                                                                                     87,760
                                                                                   ========

YEAR ENDED DECEMBER 31, 2007


                                                   NON-PRESERVED    PRESERVED
                                                     PRODUCTS        PRODUCTS       TOTAL
                                                     --------        --------      --------

YEAR ENDED DECEMBER 31 2007:

REVENUES                                              157,986          91,707       249,693
                                                     ========        ========      ========
OPERATING INCOME (LOSS) BY SEGMENT                     18,544           7,925        26,469
                                                     ========        ========
Less - unallocated general and administrative
expenses                                                                             18,869
Other income                                                                           (470)
Goodwill impairment                                                                   3,054
Financial income, net                                                                 2,274
                                                                                   --------
PROFIT BEFORE INCOME TAXES                                                            7,290
Income taxes                                                                          2,651
                                                                                   --------
PROFIT FROM CONTINUING OPERATIONS                                                     4,639

DECEMBER 31 2007:
TOTAL SEGMENT ASSETS                                   19,625          11,395        31,020
                                                     ========        ========
UNALLOCATED ASSETS                                                                  208,432
                                                                                   --------
                                                                                    239,452
                                                                                   ========
SEGMENT LIABILITIES                                         -               -             -
                                                     ========        ========
UNALLOCATED LIABILITIES                                                              48,845
                                                                                   --------
                                                                                     48,845
                                                                                   ========

                                     F - 54`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)


NOTE 26 - BUSINESS AND GEOGRAPHIC SEGMENTS (CONT.)

     B.   DATA REGARDING GEOGRAPHICAL SEGMENTS

                        REVENUES BY GEOGRAPHICAL MARKETS
                     -------------------------------------
                             YEAR ENDED DECEMBER 31,
                     -------------------------------------
                     2 0 0 8        2 0 0 7       2 0 0 8(*)
                     -------        -------        -------
                              NIS                 US DOLLARS
                     ----------------------        -------
                                (IN THOUSANDS)
                     -------------------------------------

Israel               281,973        199,064         74,164
North America         35,931         41,989          9,451
Europe                29,462          7,158          7,749
Others                 1,861          1,482            489
                     -------        -------        -------
                     349,227        249,693         91,853
                     =======        =======        =======

                            PURCHASE COST OF SEGMENT
                        (TANGIBLE AND INTANGIBLE) ASSETS
                     -------------------------------------
                            YEAR ENDED DECEMBER 31,
                     -------------------------------------
                     2 0 0 8        2 0 0 7       2 0 0 8(*)
                     -------        -------        -------
                               NIS                US DOLLARS
                     ----------------------        -------
                                (IN THOUSANDS)
                     -------------------------------------

Israel                64,623         48,621         16,997
North America              -            577              -
Europe                   144              -             37
                     -------        -------        -------
                      64,767         49,198         17,034
                     =======        =======        =======

                                 SEGMENT ASSETS
                     -------------------------------------
                                  DECEMBER 31,
                     -------------------------------------
                     2 0 0 8        2 0 0 7       2 0 0 8(*)
                     -------        -------        -------
                               NIS                US DOLLARS
                     ----------------------        -------
                                (IN THOUSANDS)
                     -------------------------------------

Israel               269,084        230,546         70,774
North America             46          8,906             12
Europe                 4,212              -          1,108
                     -------        -------        -------
                     273,342        239,452         71,894
                     =======        =======        =======

                                     F - 55`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 27 - RELATED PARTIES

     Transactions between the Company and its subsidiaries, which are related
     parties of the Company, have been eliminated on consolidation and are not
     disclosed in this note. Details of transactions between the group and other
     related parties are disclosed below:

     A.   TRANSACTIONS WITH RELATED PARTIES

                                        YEAR ENDED DECEMBER 31,
                                 ---------------------------------
                                 2 0 0 8      2 0 0 7     2 0 0 8(*)
                                 -------      -------      -------
                                          NIS             US DOLLARS
                                 --------------------      -------
                                           (IN THOUSANDS)
                                 ---------------------------------

Purchases of goods                   586        1,568          154
                                 =======      =======      =======

Participation in expenses             70           67           18
                                 =======      =======      =======

Management fees                    2,650        2,404          697
                                 =======      =======      =======

Bonus                                 75          762           20
                                 =======      =======      =======

     B.   BALANCES WITH RELATED PARTIES

                                       YEAR ENDED DECEMBER 31,
                                 ---------------------------------
                                 2 0 0 8      2 0 0 7     2 0 0 8(*)
                                 -------      -------      -------
                                          NIS             US DOLLARS
                                 --------------------      -------
                                           (IN THOUSANDS)
                                 ---------------------------------

Due to officers                      223          844           59
                                 =======      =======      =======
Parent company                     1,467        3,101          386
                                 =======      =======      =======

                                     F - 56`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 28 - BORROWINGS

          SECURED LIABILITIES

                                                  AS OF DECEMBER 31,
                                           -------------------------------
                                           2 0 0 8     2 0 0 7     2 0 0 8(*)
                                           -------     -------     -------
                                                   NIS            US DOLLARS
                                           -------------------     -------
                                                    (IN THOUSANDS)
                                           -------------------------------

Bank credit                                  4,514           -       1,187
Bank loans                                   8,871           -       2,333
Liability relating to Lease agreement          584           -         154
                                           -------     -------     -------
                                            13,969           -       3,674
                                           =======     =======     =======

NOTE 29 - SUBSEQUENT EVENTS

     1.   The Company the commenced a tender offer on February 5, 2009 (that was
          extended on March 5, 2009) to purchase from the holders of shares
          and/or depositary interests of Gold Frost all of the issued and
          outstanding share capital of Gold Frost not already held by the
          Company for a price of 5 pence per share or per depositary interest in
          cash has expired. The tender offer had been subject to the condition
          that the number of shares and depositary interests duly tendered
          constitute, upon expiration of the offer period and together with the
          shares held by the Company at such time, more than 95 per cent of the
          issued and outstanding share capital of Gold Frost. Such condition was
          not met. As a result, the Company will not purchase any of the Gold
          Frost shares that have been tendered.

     2.   On April 16, 2009 a purported class action lawsuit had been filed
          against the Company. The complaint alleges that the Company misled its
          customers by illegal marking of a product that the Company imports and
          sells as "sugar free", according to The Israeli Consumer Protection
          Law, 1981.

          The group, which the lawsuit desires to represent are any Israeli
          resident who bought this product due to such person's preference for a
          sugar free or a reduced sugar product (the "GROUP"). According to the
          plaintiff, the Group consists of 2,000 customers. The plaintiff
          appraises its own damages at NIS 2,000 (approximately USD 500) and the
          damages of the entire Group to be NIS 4 million (approximately USD 1
          million).

          At this preliminary stage, the Company is examining the plaintiff's
          alleged claims, and it will respond and relate to the allegations, to
          the extent necessary, after its examination and after consulting with
          its legal advisors.

                                     F - 57`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 30 - TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS'S)

     A.   GENERAL

          Following the publication of Accounting Standard No. 29, "the Adoption
          of International Financial Reporting Standards (IFRS)" in July 2006,
          the Company adopted IFRS starting January 1, 2008.

          Pursuant to the provisions of IFRS 1, which deals with the first-time
          adoption of IFRS, and considering the date in which the Company
          elected to adopt these standards for the first time, the financial
          statements which the Company must draw up in accordance with IFRS
          rules, are the consolidated financial statement as of December 31,
          2008, and for the year ended on that date. The date of transition of
          the Company to reporting under IFRS, as it is defined in IFRS 1, is
          January 1, 2007 (hereinafter: "the transition date"), with an opening
          balance sheet as of January 1, 2007 (hereinafter: "Opening Balance").

          Under the opening balance sheet, the Company performed the following
          reconciliations:

          o    Recognition of all assets and liabilities whose recognition is
               required by IFRS.

          o    De-recognition of assets and liabilities if IFRS do not permit
               such recognition.

          o    Classification of assets, liabilities and components of equity
               according to IFRS.

          o    Application of IFRS in the measurement of all recognized assets
               and liabilities.

          IFRS 1 states that all IFRS shall be adopted retroactively for the
          opening balance sheet. At the same time, IFRS 1 includes 14 relieves,
          in respect of which the mandatory retroactive implementation does not
          apply. The Company chose to implement two relieves. See note 29f.

          Changes in the accounting policy which the Company implemented
          retroactively in the opening balance sheet under IFRS, compared to the
          accounting policy in accordance with Generally Accepted Accounting
          Principles in Israel, were recognized directly under Retained Earnings
          or another item of Shareholders' Equity, as the case may be.

          This note is formulated on the basis of International Financial
          Reporting Standards and the notes thereto as they stand today, that
          have been published and entered into force or that may be adopted
          earlier as at the Group's first annual reporting date according to
          IFRS, December 31, 2008.

          Listed below are the Company's consolidated balance sheets as of
          January 1, 2007, and December 31, 2007, and the consolidated statement
          of income and the shareholders' equity for the year ended on December
          31, 2007 prepared in accordance with International Accounting
          Standards. In addition, the table presents the material
          reconciliations required for the transition from reporting under
          Israeli GAAP to reporting under IFRS.

                                     F - 58`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 30 - TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS'S) (CONT.)

     B.   RECONCILIATION OF BALANCE SHEETS FROM ISRAELI GAAP TO IFRS

                                                DECEMBER 31, 2007                                   JANUARY 1, 2007
                                    ------------------------------------------        ------------------------------------------
                                                     EFFECT OF                                         EFFECT OF
                                     ISRAELI       TRANSITION TO                      ISRAELI        TRANSITION TO
                                      GAAP             IFRS             IFRS            GAAP             IFRS             IFRS
                                    --------         --------         --------        --------         --------         --------
                                                 NIS IN THOUSANDS                                   NIS IN THOUSANDS
                                    ------------------------------------------        ------------------------------------------

ASSETS
CURRENT ASSETS
Cash and cash equivalents             61,649                            61,649          91,398                            91,398
Marketable securities                 31,267                            31,267          13,945                            13,945
Trade receivables                     63,798                            63,798          48,233                            48,233
Other receivables                      2,776             (256)           2,520           2,585                             2,585
Inventories                           31,020                            31,020          21,015                            21,015
                                    --------         --------         --------        --------         --------         --------
Total current assets                 190,510             (256)         190,254         177,176                           177,176
                                    --------         --------         --------        --------         --------         --------

NON-CURRENT ASSETS
Property, plant and
  equipment                           55,310          (10,741)          44,569          49,213          (10,741)          38,472
Less -Accumulated
  depreciation                         8,355                             8,355           6,442                             6,442
                                    --------         --------         --------        --------         --------         --------
                                      46,955          (10,741)          36,214          42,771          (10,741)          32,030

Goodwill                               1,795                             1,795               -                                 -
Intangible assets                        103                               103               -                                 -
Prepaid rental expenses                  208           10,607           10,815               -           10,741           10,741
Deferred taxes                           115              156              271              94              (94)               -
                                    --------         --------         --------        --------         --------         --------
Total non-current assets              49,176               22           49,198          42,865              (94)          42,771
                                    ========         ========         ========        ========         ========         ========
TOTAL ASSETS                         239,686             (234)         239,452         220,041              (94)         219,947
                                    ========         ========         ========        ========         ========         ========

EQUITY AND LIABILITIES
CURRENT LIABILITIES
Short-term bank credit                 5,978                             5,978               -                -                -
Trade payables                        34,330                            34,330          20,772                -           20,772
Other payables and accrued
  expenses                             7,013              288            7,301          12,081               (3)          12,078
                                    --------         --------         --------        --------         --------         --------
Total current liabilities             47,321              288           47,609          32,853               (3)          32,850
                                    --------         --------         --------        --------         --------         --------

NON-CURRENT LIABILITIES
Employees Benefits                       460             (297)             163             347              (62)             285
Warrants to issue shares                   -            1,040            1,040             348            1,459            1,807
Deferred taxes                             -               33               33               -              195              195
                                    --------         --------         --------        --------         --------         --------
Total non-current
  liabilities                            460              776            1,236             695            1,592            2,287
                                    --------         --------         --------        --------         --------         --------

Noncontrolling interest               18,613          (18,613)               -          14,754          (14,754)               -
                                    --------         --------         --------        --------         --------         --------

CAPITAL AND RESERVES
Share capital                          1,113                             1,113           1,113                             1,113
Premium                               61,350           (2,294)          59,056          61,350           (2,294)          59,056
Foreign currency
  translation reserve                   (414)                             (414)              -                                 -
Retained earnings                    111,243              990          112,233         109,276              615          109,891
Noncontrolling interest                    -           18,619           18,619               -           14,750           14,750
                                    --------         --------         --------        --------         --------         --------
                                     173,292           17,315          190,607         171,739           13,071          184,810
                                    ========         ========         ========        ========         ========         ========

TOTAL EQUITY AND LIABILITIES         239,686             (234)         239,452         220,041              (94)         219,947
                                    ========         ========         ========        ========         ========         ========

                                     F - 59`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 30 - TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS'S) (CONT.)

     C.   RECONCILIATION OF INCOME STATEMENTS FROM ISRAELI GAAP TO IFRS

                                                  YEAR ENDED DECEMBER 31, 2007
                                           ------------------------------------------
                                                           EFFECT OF
                                                         TRANSITION TO
                                         ISRAELI GAAP         IFRS             IFRS
                                           --------         --------         --------
                                                         NIS IN THOUSANDS
                                           ------------------------------------------

Revenue                                     249,693                           249,693
Cost of sales                               198,827              134          198,961
                                           --------         --------         --------
GROSS PROFIT                                 50,866              134           50,732
                                           --------         --------         --------

OPERATING COSTS AND EXPENSES

Selling expenses                             24,404             (141)          24,263
General and administrative expenses          18,963              (94)          18,869
Other (income) expenses                           -             (470)            (470)
Goodwill Impairment                           3,054                             3,054
                                           --------         --------         --------
                                             46,421             (705)          45,716
                                           --------         --------         --------

OPERATING PROFIT                              4,445              571            5,016
Finance income                                1,856              506            2,362
Finance expenses                                  -               88               88
Other income                                    470             (470)               -
                                           --------         --------         --------

PROFIT BEFORE TAX                             6,771              519            7,290
Income tax charge                             2,517              134            2,651
                                           ========         ========         ========

PROFIT FOR THE PERIOD                         4,254              385            4,639
                                           ========         ========         ========

Attributable to:
Equity holders of the Company                 1,967              375            2,342
Noncontrolling interest                       2,287               10            2,297
                                           --------         --------         --------
NET INCOME                                    4,254              385            4,639
                                           ========         ========         ========

                                     F - 60`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 30 - TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS'S) (CONT.)

     D.   EQUITY RECONCILIATION

                                                            FOREIGN CURRENCY
                                      SHARE                   TRANSLATION    RETAINED
                                     CAPITAL     PREMIUM        RESERVE      EARNINGS        TOTAL
                                    --------     --------       --------     --------      --------

    YEAR ENDED DECEMBER 31, 2007

ISRAELI GAAP                           1,113       61,350           (414)     111,243       173,292
                                    ========     ========       ========     ========      ========
EFFECT OF TRANSITION TO IFRS
UNDER IFRS RULES                           -       (2,294)             -          990        (1,304)
                                    ========     ========       ========     ========      ========

BALANCE - JANUARY 1, 2007
ISRAELI GAAP                           1,113       61,350              -      109,276       171,739
                                    ========     ========       ========     ========      ========
EFFECT OF TRANSITION TO IFRS
UNDER IFRS RULES                           -       (2,294)             -          615        (1,679)
                                    ========     ========       ========     ========      ========

     E.   ADDITIONAL INFORMATION

          1.   DEFERRED TAXES

               In accordance with generally accepted accounting principles in
               Israel, deferred tax assets or liabilities were classified as
               current or non-current assets or liabilities depending on the
               classification of the assets or liabilities in respect of which
               they were created.

               Pursuant to IAS 1, deferred tax assets or liabilities are
               classified as non-current assets or liabilities, respectively.

               Consequently, amounts of NIS 289 thousand and NIS 94 thousand
               which were previously presented under accounts payable and under
               non-current assets, respectively, were reclassified to deferred
               taxes under non-current liabilities as of January 1, 2007.

               As of December 31, 2007, amounts of NIS 256 thousand and NIS 133
               thousand which were previously presented under accounts
               receivable and under accounts payable, respectively, were
               reclassified to deferred taxes under non-current liabilities in
               the amount of NIS 33 thousand and to deferred taxes under
               non-current assets in the amount of NIS 271 thousand.

          2.   LEASE FROM THE ISRAELI LAND AUTHORITY ("ILA")

               Leasehold rights In accordance with Previous GAAP: Though
               December 31, 2006, leasehold rights were presented under
               property, plant and equipments.

               In accordance with IFRSs: Leasehold rights are presented within
               prepaid expenses.

               The effect on the balance sheet as of January 1, 2007 was an
               increase in prepaid expenses of NIS 10,741 thousand against
               decrease of NIS 10,741 thousand in property, plant and
               equipments.

               The effect on the balance sheet as of December 31, 2007 was an
               increase in prepaid expenses of NIS 10,607 thousand and decrease
               in property, plant and equipment in the amount of NIS 10,741
               thousand. The change in the year 2007 of NIS 134 thousand has
               been attributed to the P&L in Cost of sales.

                                     F - 61`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 30 - TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS'S) (CONT.)

     E.   ADDITIONAL INFORMATION (Cont.)

          3.   WARRANTS TO ISSUE SHARES

               Under Israeli GAAP warrants with exercise price linked to the CPI
               can be treated as permanent equity.

               Under IFRS IAS 32, if terms of a derivative financial instrument
               are such that it is not settled by the issuer exchanging a fixed
               amount of cash or another financial asset for a fixed number of
               its own equity instruments it should be classified as liability,
               carried at fair value with changes in fair values recorded in
               earnings.

               Hence, warrants with exercise price linked to the CPI with fair
               values of NIS 1,459 and NIS 1,040 as of January 1, 2007 and
               December 31, 2007 respectively has been recognized as liability.
               As a result of that classification changes in fair values of NIS
               2,294 were recorded in retained earnings balance as of January 1,
               2007 and changes in fair values of NIS 419 were recorded in
               earnings for the year ended December 31, 2007.

          4.   NONCONTROLLING INTEREST

               In accordance with Previous GAAP: Noncontrolling interest was
               presented in the balance sheet between the liabilities and
               shareholders' equity as a quasi- equity item.

               The minority share in results of subsidiary was presented as
               income (expense) within the Group's consolidated income
               statements.

               In accordance with IFRSs: Noncontrolling interest is presented
               within the shareholders' equity. The Minority share in result of
               subsidiaries is not included in the consolidated income
               statements as income (expense) but rather the total profit (loss)
               is attributed to the Company and the minority.

               The effect on the balance sheet as of January 1, 2007 was an
               increase in Shareholders' equity of NIS 13,071 thousand against
               decrease of NIS 14,750 thousand in liabilities.

               The effect on the balance sheet as of December 31, 2007 was an
               increase in Shareholders' equity of NIS 17,315 thousand and
               decrease in liabilities in the amount of NIS 18,619 thousand.

                                     F - 62`

`G. WILLI-FOOD INTERNATIONAL LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               (NIS IN THOUSANDS)

NOTE 30 - TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS'S) (CONT.)

     E.   ADDITIONAL INFORMATION (CONT.)

          5.   EMPLOYEES BENEFITS

               In accordance with generally accepted accounting principles in
               Israel, the Company's liability for severance pay is calculated
               based on the recent salary of the employee multiplied by the
               number of years of employment.

               Pursuant to IAS 19, the provision for severance pay is calculated
               according to an actuarial basis taking into account the
               anticipated duration of employment, the value of time, the
               expected salary increases until retirement and the possible
               retirement under conditions not entitling severance pay.

               Discount rate used in the calculations was based on yields on
               governmental bonds as the Company believes that there is no deep
               market for high quality corporate bonds. The issue of deep market
               is still under consideration and the decision regarding deep
               market may be changed. The use of market yields on highly rated
               corporate bond would have the effect of decreasing the Company's
               obligation since the discount rate would have been higher than
               the governmental bond yields used under the assumption of no deep
               market.

               As of December 31, 2007, the nominal discount rate used in the
               calculations was 5.8% and was determined in reference to Shachar
               governmental bond.

               In addition, under Israeli GAAP, deposits made with regular
               policies or directors' insurance policies which are not in the
               employee's name, but in the name of the employer, were also
               deducted from the Company's liability.

               Under IFRS, regular policies or directors' insurance policies as
               aforesaid, which do not meet the definition of plan assets under
               IAS 19, will be presented in the balance sheet under a separate
               item and will not be deducted from the employer's liability.

               The impact of the aforesaid on the balance sheet is decrease
               employee benefit obligation in the amounts of NIS 62 thousand and
               NIS 297 thousand as of January 1, 2007 and December 31, 2007,
               respectively.

               The Company adopted a policy to recognize actuarial gains and
               losses immediately in earnings.

     F.   RELIEFS WITH RESPECT TO THE RETROACTIVE IMPLEMENTATION OF IFRS ADOPTED
          BY THE COMPANY

          IFRS 1 includes several reliefs, in respect of which the mandatory
          retroactive implementation does not apply. The Company elected to
          adopt in its opening balance sheet under IFRS as of January 1, 2007
          (hereinafter: "the opening balance sheet") the reliefs with regards
          to:

          Business Combinations, in accordance to the relief, the Company chose
          not to retroactively implement the provisions of IFRS 3 regarding to
          business combination which occurred before January 1, 2007.

          Consequently goodwill and adjustments due to fair value of
          subsidiaries that where acquired before January 1, 2007 are treated in
          accordance to generally accepted accounting principles in Israel.

                                     F - 63`

`SIGNATURES

     Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                                G. WILLI-FOOD INTERNATIONAL LTD.


                                                By: /s/ Joseph Williger
                                                -----------------------
                                                Joseph Williger
                                                Chief Executive Officer

Date: June 29, 2009`

`EXHIBITS

EXHIBIT
NUMBER         DESCRIPTION

+1.1           Memorandum of Association of the Company, as amended (1)

1.2            Articles of Association of the Company, as amended (4)

2.1            Specimen of Certificate for ordinary shares (2)

4.1            Share Option Plan (2)

+4.2           Management Agreement between the Company and Yossi Willi
               Management Investments Ltd., dated June 1, 1998 (3)

+4.3           Amendment to the Management Agreement between the Company and
               Yossi Willi Management Investments Ltd., dated August 1, 2005 (4)

+4.4           Management Agreement between the Company and Zwi W. & Co. Ltd.,
               dated June 1, 1998 (3)

+4.5           Amendment to the Management Agreement between the Company and Zwi
               W. & Co., Ltd., dated August 1, 2005 (4)

+4.6           Lease of Company's premises with Titanic Food Ltd., dated
               November 23, 1998 (3)

+4.7           Services Agreement between the Company and Willi Food, dated
               April 1, 1997 (3)

+4.8           Transfer Agreement between the Company and Gold Frost dated
               February 16, 2006 (4)

+4.9           Lease agreement for Logistics Center between the Company and Gold
               Frost dated February 16, 2006 (4)

4.10           Relationship Agreement between the Company, Gold Frost, Willi
               Food, Zwi Williger and Joseph Williger dated February 28, 2006
               (4)

4.11           Placing Agreement between the Company, Gold Frost, certain
               officers of Gold Frost and Corporate Synergy dated March 2, 2006
               (4)

4.12           Lock In Agreement, between the Company, Gold Frost, Corporate
               Synergy and certain officers of Gold Frost, dated March 2, 2006
               (4)

4.13           Securities Purchase Agreement, dated as of October 25, 2006,
               among the Company and the investors identified on the signature
               pages thereto. (5)

4.14           Registration Rights Agreement, dated as of October 25, 2006,
               among the Company and the investors signatory thereto. (5)

4.15           Asset Purchase Agreement, dated as of January 19, 2007, by and
               among the Company, WF Kosher Food Distributors, Ltd., Laish
               Israeli Food Products Ltd. and Arie Steiner.(6)

+4.16          Agreement, dated February 11, 2007, between the Company and Mr.
               Ya'acov Baron, Ms. Hedva Baron, Mr. Li'or Baron, Ms. Gozlan Or'na
               and Ms. Michal Baron Sha'hak. (6)

+4.17          Agreement, dated January 2, 2008, between the Company and Mr.
               Jacob Ginsberg, Mr. Amiram Guy and Shamir Salads 2006 Ltd. (7)

4.18           Share Purchase Agreement, dated February 13, 2008, between Gold
               Frost and Kirkeby Cheese Export A/S. (7)

4.19           Shareholders Agreement, dated February 13, 2008, between Gold
               Frost and Kirkeby Cheese Export A/S. (7)

4.20           Co-operation Agreement, dated January 1, 2008, between Kirkeby
               Cheese Export A/S, Haarby Mejeri/Kirkeby Dairy ApS and Kirkeby
               International Foods A/S. (7)

8              Subsidiaries of the Company (4)`

`8.1            Subsidiaries of the Company (7)

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 Registrant's Annual Report on
               Form 20-F for the Fiscal year ended December 31, 1997.

(2)            Incorporated by reference to the Company's Registration Statement
               on Form F-1, File No. 333-6314.

(3)            Incorporated by reference to the Company's Annual Report on Form
               20-F for the fiscal year ended December 31, 2001.

(4)            Incorporated by reference to the Company's Annual Report on Form
               20-F for the fiscal year ended December 31, 2005.

(5)            Incorporated by reference to the Company's Registration Statement
               on Form F-3, File No. 333-138200.

(6)            Incorporated by reference to the Company's Annual Report on Form
               20-F for the fiscal year ended December 31, 2006.

(7)            Incorporated by reference to the Company's Annual Report on Form
               20-F for the fiscal year ended December 31, 2007.

*              Filed Herewith`