----

| Pavel Buber, Chief Financial Officer4 Nahal Harif St. Northern Industrial Zone,Yavne 81106, IsraelTel: 972-8-932-1000 |
|-----------------------------------------------------------------------------------------------------------------------|
| (Name, Telephone, E-mail and/or Facsimile number and Address of Registrant's Contact Person)                          |
| Title of class                                     |   | Name of each exchange on which registered |
|----------------------------------------------------|--------|-------------------------------------------|
|                                               |   |                                      |
| Ordinary Shares, NIS 0.10 par value per share |   | Nasdaq Capital Market                     |
|                                               |   |                                      |

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|                                                                                             | Page     |
|--------------------------------------------------------------------------------------------------|----------|
| PRESENTATION OF INFORMATION                                                                      | 1        |
| CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS                                  |  1  |
| PART I                                                                                           |  2  |
| ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                                    |  2  |
| ITEM 2. OFFER STATISTICS AND EXPECTED TIME TABLE                                                 | 2        |
| ITEM 3. KEY INFORMATION                                                                          |  2  |
| ITEM 4. INFORMATION ON THE COMPANY                                                               |  13 |
| ITEM 4A. UNRESOLVED STAFF COMMENTS                                                               |  24 |
| ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                             |  25 |
| ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                               | 32       |
| ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                        |  51 |
| ITEM 8. FINANCIAL INFORMATION                                                                    |  57 |
| ITEM 9. THE OFFER AND LISTING                                                                    |  60 |
| ITEM 10. ADDITIONAL INFORMATION                                                                  |  61 |
| ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                              |  73 |
| ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                                  |  74 |
| PART II                                                                                          |  75 |
| ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                         |  75 |
| ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS            |  75 |
| ITEM 15. CONTROLS AND PROCEDURES                                                                 |  75 |
| ITEM 16.  [RESERVED]                                                                        |  76 |
| ITEM 16A. --   AUDIT COMMITTEE FINANCIAL EXPERT                                        | 76       |
| ITEM 16B. --   CODE OF ETHICS                                                     | 76       |
| ITEM 16C. --   PRINCIPAL ACCOUNTANT FEES AND SERVICES                                  | 76       |
| ITEM 16D. --   EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES              | 76       |
| ITEM 16E. --   PURCHASES OF EQUITY SECURITIES BY THE COMPANY AND AFFILIATED PURCHASERS | 77       |
| ITEM 16F. --   CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT                           | 77       |
| ITEM 16G. --   CORPORATE GOVERNANCE                                                    | 77       |
| PART III                                                                                         | 79       |
| ITEM 17.   FINANCIAL STATEMENTS                                                        | 79       |
| ITEM 18.   FINANCIAL STATEMENTS                                                        | 79       |
| ITEM 19.   EXHIBITS                                                                    |  80 |

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

| • | cyber-attacks on the Company's information systems; |
|---------|-----------------------------------------------------|

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

| • | economic conditions in Israel; |
|---------|--------------------------------|

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

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

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|                                |   | High   |   |   | Low    |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|
| November 2016                       |   |   | 3.876  |   |   |   | 3.799 |   |
| December 2016                       |   |   | 3.867  |   |   |   | 3.787 |   |
| January 2017                        |   |   | 3.860  |   |   |   | 3.769 |   |
| February 2017                       |   |   | 3.768  |   |   |   | 3.659 |   |
| March 2017                          |   |   | 3.693  |   |   |   | 3.614 |   |
| April 2017 (through April 24, 2017) |   |   | 3.681  |   |   |   | 3.628 |   |

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|                                        | For the year ended December 31 |   |
|---------------------------------------------|--------------------------------|--------|
|                                        |                           | 2016   |   |   | 2015 |   |   | 2014 |   |   | 2013 |   |   | 2012 |   |
|                                        |                           | NIS    |   |   | USD |   |   | NIS |   |   | NIS |   |   | NIS |   |   | NIS |   |
| Revenue                                     |                           |   | 294,202 |   |   |   | 76,516 |   |   |   | 312,514 |   |   |   | 328,741 |   |   |   | 336,032 |   |   |   | 286,509 |   |
| Cost of sales                               |                           |   | 217,585 |   |   |   | 59,590 |   |   |   | 237,452 |   |   |   | 249,136 |   |   |   | 252,355 |   |   |   | 217,468 |   |
| Gross profit                                |                           |   | 76,617 |   |   |   | 19,926 |   |   |   | 75,062 |   |   |   | 79,605 |   |   |   | 83,677 |   |   |   | 69,041 |   |
| Selling expenses                            |                           |   | 39,405 |   |   |   | 10,249 |   |   |   | 37,294 |   |   |   | 39,696 |   |   |   | 35,130 |   |   |   | 28,915 |   |
| General and administrative expenses         |                           |   | 14,577 |   |   |   | 3,791 |   |   |   | 32,926 |   |   |   | 19,231 |   |   |   | 19,408 |   |   |   | 16,715 |   |
| Other Income                                |                           |   | (112 | ) |   |   | (30 | ) |   |   | (2,182 | ) |   |   | (2,943 | ) |   |   | -54 |   |   |   | (46 | ) |
| Total operating expenses                    |                           |   | 53,870 |   |   |   | 14,010 |   |   |   | 68,038 |   |   |   | 55,984 |   |   |   | 54,484 |   |   |   | 45,584 |   |
| Operating profit                            |                           |   | 22,747 |   |   |   | 5,916 |   |   |   | 7,025 |   |   |   | 23,621 |   |   |   | 29,193 |   |   |   | 23,457 |   |
| Finance income                              |                           |   | (3,425 | ) |   |   | (891 | ) |   |   | 3,363 |   |   |   | 2,794 |   |   |   | 13,008 |   |   |   | 8,716 |   |
| Finance expense                             |                           |   | 3,143 |   |   |   | 817 |   |   |   | 978 |   |   |   | 375 |   |   |   | 876 |   |   |   | 410 |   |
| Finance income, net                         |                           |   | (6,568 | ) |   |   | (1,708 | ) |   |   | 2,385 |   |   |   | 2,419 |   |   |   | 12,132 |   |   |   | 8,306 |   |
| Profit before taxes on income               |                           |   | 16,179 |   |   |   | 4,208 |   |   |   | 9,410 |   |   |   | 26,040 |   |   |   | 41,325 |   |   |   | 31,763 |   |
| Taxes on income                             |                           |   | (5,327 | ) |   |   | (1,385 | ) |   |   | (2,566 | ) |   |   | (7,186 | ) |   |   | (9,517 | ) |   |   | (7,757 | ) |
| Profit from continuing operations           |                           |   |   |   |   |   |   |   |   |   | 6,844 |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 24,006 |   |
| Profit for the year                         |                           |   | 10,852 |   |   |   | 2,823 |   |   |   | 6,844 |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 24,006 |   |
| Attributable to:                            |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Owners of the Company                       |                           |   | 10,852 |   |   |   | 2,823 |   |   |   | 6,844 |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 24,006 |   |
| Net Income                                  |                           |   | 0.82 |   |   |   | 0.21 |   |   |   | 6,844 |   |   |   | 18,854 |   |   |   | 31,808 |   |   |   | 24,006 |   |
| Basic and diluted earnings  per Share  |                           |   | 0.82 |   |   |   | 0.21 |   |   |   | 0.52 |   |   |   | 1.45 |   |   |   | 2.45 |   |   |   | 1.85 |   |
| Shares Used in Computing Earnings per Share |                           |   | 13,240,913 |   |   |   | 13,240,913 |   |   |   | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 12,974,245 |   |   |   | 12,977,481 |   |

----

|                 |   | As of December 31, |       |
|----------------------|--------|--------------------|------------|
|                 |   | 2016               |       |   | 2015 |   |   | 2014 |   |   | 2013 |   |   | 2012 |   |
|                 |   | NIS                |       |   | USD |   |   | NIS |   |   | NIS |   |   | NIS |   |   | NIS |   |
| Working capital      |   |               | 347,222    |   |   |   | 90,305 |   |   |   | 352,437 |   |   |   | 340,780 |   |   |   | 325,926 |   |   |   | 292,596 |   |
| Total assets         |   |               | 411,471    |   |   |   | 107,015 |   |   |   | 415,150 |   |   |   | 411,349 |   |   |   | 395,048 |   |   |   | 384,717 |   |
| Short-term bank debt |   |               | -          |   |   |   | - |   |   |   | 16 |   |   |   | - |   |   |   | 18 |   |   |   | 9,930 |   |
| Shareholders' equity |   |               | 391,004    |   |   |   | 101,692 |   |   |   | 399,712 |   |   |   | 386,066 |   |   |   | 365,843 |   |   |   | 333,761 |   |
| Capital stock        |   |               | 13,240,913 |   |   |   | 13,240,913 |   |   |   | 13,240,913 |   |   |   | 12,974,245 |   |   |   | 12,974,245 |   |   |   | 12,977,481 |   |

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

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

| · | global or regional economic crises; |
|--------|-------------------------------------|

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

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

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

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

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

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

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

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

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

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

----

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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|                                                                                                                                                             |   | Percentage of Total Sales Year Ended December 31 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|
| Customer Groups                                                                                                                                                  |   | 2016                                             |   |   | 2015 |   |
| Supermarket chains in the organized market                                                                                                                       |   |                                             | 21     | % |   |   | 25 | % |
| Private supermarket chains, mini-markets, wholesalers, manufacturers, institutional consumers, governmental customers and customers in the Palestinian Authority |   |                                             | 79     | % |   |   | 75 | % |
|                                                                                                                                                             |   |                                             | 100    | % |   |   | 100 | % |

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

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

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

----

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

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

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

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

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

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

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

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

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

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

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

|                                |   | Year EndedDecember 31, 2016 |   |   | Year EndedDecember 31, 2015 |   |
|-------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|
| Revenues                            |   |                        | 100    | %      |                        |   | 100 | % |
| Cost of Sales                       |   |                        | 73.96  | %      |                        |   | 75.98 | % |
| Gross Profit                        |   |                        | 26.04  | %      |                        |   | 24.02 | % |
| Selling Expenses                    |   |                        | 13.39  | %      |                        |   | 11.93 | % |
| General and Administrative Expenses |   |                        | 4.95   | %      |                        |   | 10.54 | % |
| Other Income                        |   |                        | (0.04  | )%     |                        |   | (0.7 | )% |
| Operating profit                    |   |                        | 7.73   | %      |                        |   | 2.25 | % |
| Financial Income (Loss), Net        |   |                        | (2.23  | )%     |                        |   | 0.76 | % |
| Profit before taxes on income       |   |                        | 5.50   | %      |                        |   | 3.01 | % |
| Taxes on income                     |   |                        | 1.81   | %      |                        |   | 0.82 | % |
| Net Income                          |   |                        | 3.69   | %      |                        |   | 2.19 | % |

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

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

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

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

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

| Name                    | Age                                                  | Position with the Company |   |
|-------------------------|------------------------------------------------------|---------------------------|--------|
|                    |                                                 |                      |   |
| Ilan Admon              | 67                                                   | Chairman of the Board     |   |
| Gregory Gurtovoy        | 53                                                   | Director                  |   |
| Israel Yosef Schneorson | 51                                                   | Director                  |
| Emil Budilovsky         | 47                                                   | Director                  |
| Ilan Cohen (1)          | 58                                                   | Director                  |
| Sigal Grinboim (1)      | 52                                                   | External Director         |
| Menashe Arnon (1)       | 77                                                   | External Director         |   |
| Oleksander Avdyeyev     | 38                                                   | Director                  |   |
| Iram Ephraim Graiver    | 51                                                   | President                 |   |
| Pavel Buber             | 35                                                   | Chief Financial Officer   |   |
|                    |                                                 |                      |   |
| (1)                | Members of the Company’s Audit Committee  |                      |

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

| Name and Principal Position (1)                                                          | Salary(2) | Value of Social Benefits(3) | Bonus(4) |  Total |
|------------------------------------------------------------------------------------------|-----------|-----------------------------|----------|-------------|
| NIS Thousands                                                                            |
| Iram Graiver President of the Company and CEO of Willi-Food                         | 1,188     | 91                          | -        | 1,279       |
| Yair Tzubery Chief Operating, and Supply Chain Officer                              | 658       | 51                          | -        | 709         |
| Pavel Buber Chief Financial Officer and Secretary of the Company and Willi-Food     | 581       | 49                          | 33       | 663         |
| Gil Hochboim CEO and Chief Financial Officer of the Company and Willi-Food (former) | 334       | 106                         | 179      | 619         |
| Mor Atias VP of Commerce and Sales                                                  | 558       | 45                          | -        | 604         |

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

|  | (2) | The aggregate of gross monthly salaries or other payments with respect to the Company's Executive Officers and members of the Board of Directors for 2016. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | Represents payment of social benefits made by the Company on behalf of such Covered Executive. Such benefits may include, to the extent applicable to the Covered Executive, payments, contributions and/or allocations for savings funds (e.g., managers’ life insurance policy), education funds (referred to in Hebrew as “keren hishtalmut”), pension, severance, risk insurances (e.g., life, or work disability insurance), payments for social security, vacation and benefits, convalescence or recreation pay and other benefits and perquisites consistent with the Company’s policies. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | Annual profit-related bonuses for 2016 to Mr. Graiver (NIS 911,240 or USD 236,993), Mr. Tzubery (NIS 66,124 or USD 17,197), Mr. Buber (NIS 71,124 or USD 18,497) and Mr. Atias (NIS 32,000 or USD 8,322) were paid in April 2017 after the approval of the financial statements for December 31, 2016, and therefore are not included in the compensation chart, above. Represents annual bonuses granted to the Covered Executive based on formulas set forth in the Company's compensation policy approved by shareholders in 2013 (the "2013 Compensation Policy") and the agreements with each of the Covered Executive. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

|   | 1. | Each of the Company and Mr. Graiver may terminate Mr. Graiver's employment at any time, and for any reason, by prior written notice of 60 days delivered to the other party (the "Notice Period"). During the Notice Period, Mr. Graiver shall fulfill his duties in order to ensure the continued and smooth operation of the Company, as well as the handing over of Mr. Graiver's duties to such person(s) as shall be designated by the Board, unless the Board decides to conclude his service before the end of the Notice Period. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 2. | Provided the Company did not terminate Mr. Griever's employment in circumstances specified in the agreement (unless the Board decides to terminate his service before the end of the Notice Period), upon termination Mr. Graiver will be entitled to a retirement grant in an amount equal to four Monthly Payments (including all related benefits as specified above). |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 3. | The Company may terminate Mr. Graiver's employment immediately, without any advance notice or being obliged to pay any sum as would have been payable to Mr. Graiver in respect of the Notice Period (including retirement grant), if termination is for ‘Cause’. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

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

----

|   | (a) | The monthly service fees according to the Management Services Agreements ceased to be linked to the US Dollar and were to be converted into NIS 102,900 (excluding VAT) linked to changes in the Israeli consumer price index that was known at January 2008. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | The terms of the Management Services Agreements were extended indefinitely, subject to clause (c) below; provided however that in the event the Williger Management Company provides the management services to the Company without the presence of Messrs. Zwi or Joseph Williger, as the case may be, and/or in the case of the death and/or permanent disability of Messrs. Zwi or Joseph Williger, the Company would be entitled to terminate the Management Services Agreement immediately. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (c) | Each of the parties to the Management Services Agreements could terminate the agreement at any time, and for any reason, by prior written notice which was to be delivered to the other party as follows: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | The Company could terminate the agreement at any time, and for any reason, by prior written notice of at least 36 months. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------|
|   | • | The Williger Management Company could terminate the agreement at any time, by prior written notice of at least 180 days. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------|
|   | (d) | If a Williger Management Company was to terminate the Management Services Agreement, the Williger Management Company would be entitled to receive the management fees for a period of twelve (12) months, which would begin after the prior notice period, whether or not it provided the Company with any management services during such twelve-month period. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (e) | In addition, the Management Services Agreements contained provisions entitling each of Messrs. Zwi and Joseph Williger to 30 vacation days per year, during which days the applicable Williger Management Company would not provide management services to the Company. Unused vacation days could be accumulated and paid for in lieu of taking such days as vacation. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | • | During the period between execution of the Termination Agreement and the Termination Date, and upon the appointment of any successor, Messrs. Zwi and Joseph Williger will make their best efforts to accommodate a smooth transition to the successor appointed in their stead pursuant to the provisions of the Termination Agreement to manage the core business of the Company, including but not limited to handing over all contact information, agreements and details being required with regard to the Company customers and suppliers, in addition to making their best efforts for the continuation of the relationship with such customers and suppliers; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Messrs. Zwi and Joseph Williger are restricted from competing with the Company, either directly or indirectly, for a period of 12 months commencing upon expiration of the Notice Period, subject to exceptions as set out in the Termination Agreement; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Subject to the full and timely satisfaction of all of the Company's undertakings and obligations set forth in the Termination Agreement, each of Mr. Zwi Williger, Mr. Joseph Williger and the Williger Management Companies, irrevocably waives, completely releases and forever discharges the Company and its shareholders (includes the Company's controlling shareholders), subsidiaries, affiliates, officers, directors, and others from any and all claims, rights, demands, actions, obligations and causes of action, known or unknown, which they directly or through the Company may now have or may have against such party, including but without limitation also with regard to that certain agreement dated March 2, 2014, by and among B.S.D Drown Ltd., the Williger Management Companies, Y.M. Dekel-Holdings and Investments Ltd., and Mr. Joseph Williger, subject to exceptions as set out in the Termination Agreement (the "Willifood Controlling Stake Purchase Agreement"); |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Subject to the full and timely satisfaction of all of Mr. Zwi Williger, Mr. Joseph Williger and the Williger Management Companies undertakings and obligations set forth in the Termination Agreement and subject to the restrictions, limitations and consents required under any law, regulation including that of the Israeli Companies Law, the Company irrevocably waives, completely releases and forever discharges Mr. Zwi Williger, Mr. Joseph Williger and the Williger Management Companies from any and all claims, rights, demands, actions, obligations and causes of action, known or unknown, which they may now have or may have against such party, subject to exceptions as set out in the Termination Agreement (the "Waiver"); and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | The Company shall maintain the effectiveness and validity of its D&O insurance policy in a scope and with coverage at least equal to those existing under the current D&O insurance policy, for a period of at least seven years following the Termination Date, or will purchase run–off insurance coverage with respect to the liability of Mr. Zwi Williger and Mr. Joseph Williger as directors and officers of the Company, subject to the restrictions and consents required under the law. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | • | The payment of a retirement bonus in the amount of NIS 1,670 thousand (excluding VAT) (approximately USD 428 thousand) to each of the Williger Management Companies; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | The payment of an Annual Bonus (for 2015 and 2016) in the amount of NIS 2,000 thousand (excluding VAT) (approximately USD 513 thousand) to each of the Williger Management Companies; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | The acceleration of the Retirement Payments to the later of December 31, 2015 or three business days following shareholder approval; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------|
|   | • | The purchase of run–off insurance coverage with respect to the liability of Mr. Zwi Williger and Mr. Joseph Williger as directors and officers of the Company (as detailed in section 7 of the Termination Agreement); and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Obtaining the Waiver. |
|--------|---------|-----------------------|

----

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

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

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

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

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

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

----

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

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

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

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

----

----

----

----

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

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

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

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

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

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

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

----

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

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

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

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

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

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

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

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

----

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

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

----

| Name and Address                |   | Number of Ordinary Shares Beneficially Owned |      |   | Percentage of Ordinary Shares |   |
|---------------------------------|--------|----------------------------------------------|-----------|--------|-------------------------------|--------|
| Willi-Food Investments Ltd. (1) |   |                                         | 8,200,542 |   |                          |   | 61.93 | % |
| B.S.D. Crown Ltd. (2)           |   |                                         | 8,971,617 |   |                          |   | 67.76 | % |
| Gregory Gurtovoy (3)  (4)  |   |                                         | 8,971,617 |   |                          |   | 67.76 | % |
| Brian Gaines (5)                |   |                                         | 883,160   |   |                          |   | 6.67 | % |
| (1) | Willi-Food’s securities are traded on the Tel Aviv Stock Exchange. The principal executive offices of Willi-Food are located at 4 Nahal Harif St., Northern Industrial Zone, Yavne, 8122216 Israel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Includes (i) 8,200,542 Ordinary Shares held by Willi-Food, and (ii) 771,075 Ordinary Shares held by B.S.D. Crown Ltd. ("BSD"). Willi-Food is controlled by its majority shareholder, BSD, and BSD may be deemed to beneficially own all of the shares owned by Willi-Food.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (3) | Includes (i) 8,200,542 Ordinary Shares held by Willi-Food, and (ii) 771,075 Ordinary Shares held by BSD. Willi-Food is controlled by its majority shareholder, BSD.  BSD is controlled by BGI, which directly owns 24.64% of BSD's outstanding shares and holds a power of attorney from its controlling shareholder, Israel 18, to vote an additional 19.01% of BSD's outstanding shares.  BGI is controlled by Israel 18, which owns 71.52% of the outstanding shares in BGI.  Israel 18 is controlled by Gregory Gurtovoy, who owns both regular and preferred shares in Israel 18 which afford him 99.5% of its voting rights and 95% of its issued share capital.  Accordingly, BSD, BGI, Israel 18 and Gregory Gurtovoy may each be deemed to beneficially own 8,971,617 Ordinary Shares. Mr. Yossi Schneorson, a director of the Company who also sits on the boards of directors of BSD and BGI, and in addition is the Deputy Chairman of the Board of Willi-Food and CEO of BSD, holds approximately 4.95% of the voting rights in Israel 18.                                                                                   |
| (4) | Based on information provided to us, all of the Company's directors and officers as a group hold 8,971,617 Ordinary Shares representing 67.76% of our total shares outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (5) | Based on a Schedule 13G filed January 18, 2017, this amount consists of 714,610 Ordinary Shares (representing 5.40% of our total shares outstanding) directly held by Springhouse Capital (Master), L.P. (the "Fund"), and 128,959 Ordinary Shares owned by Mr. Gaines for his own account and an additional 39,951 Ordinary Shares held by immediate family members in accounts Mr. Gaines controls that Mr. Gaines may be deemed to beneficially own. Mr. Gaines serves as managing member of Springhouse Capital Management G.P., LLC ("Springhouse") and as a director of Springhouse Asset Management, Ltd. (the "General Partner") and, as a result, may be deemed to beneficially own shares owned by the Fund. Springhouse is the general partner of Springhouse Capital Management, L.P. ("Management") and, as a result, may be deemed to beneficially own shares owned by the Fund. Management is the investment manager of the Fund and as a result, may be deemed to beneficially own shares owned by the Fund. The General Partner is the general partner of the Fund, and, as a result, may be deemed to beneficially own shares owned by the Fund. |

----

----

|  | · | If Israel 18 does not transfer to the Trustee all of the powers of attorney necessary in order to vote the shares of BSD under its ownership, within the agreed time frame, and will not give the possibility to use these voting rights, such breach which will give Ta'aman the right to sell NewCo’s entire shareholdings and exercise all securities provided to Ta'aman under the loan agreement. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | If Israel 18 will not be able to transfer to the Trustee's account, within 18 months following the execution of the MOU, all of the Israel 18 Holdings that are not shares which cannot be used due to restrictions under the lawsuit of BSD against Israel 18. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | If Israel 18 will not be able to release the entire holdings in the Companies from the restrictions imposed by BSD’s lawsuit, within a period of 36 months. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | If a final judgment is given in BSD’s lawsuit, Israel 18 is required to pay the entire amount as determined in favor of BSD. If Israel 18 does not pay such amount, Ta'aman can pay the debt instead of Israel 18, whereas in order to pay this debt, the entire Israel 18 Holdings will be appraised at USD 10 million. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Israel 18 will have a period of 30 days to correct any violation of the MOU as stated above. |
|--|--------|----------------------------------------------------------------------------------------------|

|  | · | Any payment not within ordinary course of business. |
|--|--------|-----------------------------------------------------|

|  | · | Any loan, fundraising, expansion of company debt that is not within ordinary course of business. |
|--|--------|--------------------------------------------------------------------------------------------------|

|  | · | Providing any loan, credit, collateral or indemnification. |
|--|--------|------------------------------------------------------------|

|  | · | Announcement of any payment of dividend or any other distribution, and any adoption, amendment, implementation or cancellation of any distribution policy. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Any filing, settlement or cancellation of any legal proceeding or administrative proceeding regarding the companies in the group, including the liabilities or claim of any one of the companies. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | A settlement or pledging of any of NewCo’s assets or the assets of any of the other companies in the group. |
|--|--------|-------------------------------------------------------------------------------------------------------------------|

|  | · | Acquisitions. |
|--|--------|---------------|

|  | · | Increase or dilution of company capital. |
|--|--------|------------------------------------------|

|  | · | Appointment of legal advisors and auditors for the companies in the group. |
|--|--------|----------------------------------------------------------------------------|

----

----

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

----

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

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

----

|  | (1) | In December 2013, December 2014 and April 2016, the Company was served with lawsuits and motions to certify them as class action lawsuits in accordance with Israel's Class Action Claims Law, 5766 – 2006, whose subject matter and cause of action, according to what is claimed, is the improper marketing of products which the Company imports and sells in a manner which allegedly misleads the consumer public. The class which the petitioning plaintiffs wish to represent is every resident of Israel who purchased the above Company products. The amount of the lawsuits, if successful, is estimated by the plaintiffs in the amount of approximately NIS 40 million. On September 23, 2016, the parties submitted a stipulation of discontinuance, thereby ending the litigation. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|  | (3) | On November 14, 2016, Green Cola Hellas S.A. (in this section - the “Plaintiff”) filed a claim against Company in the Magistrates Court of Kfar Saba as a summary proceeding. The claim alleges breach of contract by Company, in that, according to the Plaintiff, Company failed to pay consideration for products provided to it by the Plaintiff. The sum of the claim is for NIS 201,025. On March 2, 2017, the court accepted Company’s motion to transfer the matter from an expedited proceeding to an ordinary case proceding. As of the date of this report, the matter is scheduled for a court hearing on September 13, 2017. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | On February 17, 2016, a search was conducted in the offices of the Company, Willi-Food, BSD, and BGI (collectively, the “Group”) by the Israeli Securities Authority (the “ISA”), during which various documents and computers were taken from the Group's offices ("the Investigation"). A number of executives in the Group were investigated by the ISA, and Mr. Gurtovoy, member of the Company's board of directors and the Company's indirect controlling shareholder, was detained for interrogation by the ISA for three days, after which he was placed under house arrest for a period of two weeks (which has since ended) on the suspicion of the crimes of fraudulent acquisitions under aggravating circumstances, falsifying corporate documents, fraud, breach of fiduciary duty in a corporation, money laundering, as well as misleading reporting. On February 18, 2016, trading of the Company's ordinary shares was halted by Nasdaq following announcement by the Company of the ISA investigation. To the best knowledge of Company management, the investigation by the ISA relates to an investment of approximately US$ 2.25 million (the “Investment”) made during January 2016 in the form of bonds of a European company (the "Issuer") which allegedly served as a collateral to a loan obtained by Mr. Gurovoy or another individual, and which was unrelated to the Company's operations. The Investment was carried out by B.H.W.F.I Ltd., a wholly owned subsidiary of the Company (“BHWFI”), pursuant to subscription forms to purchase 300 bonds (225 actually purchased) with a nominal value of US$ 10,000 each (“Subscription Forms”). The Bonds bear an annual interest rate of 6%, payable semi-annually on September 30 and December 31 of each year as of the issue date until the final maturity date of December 31, 2018. The issuer has the right to repay the Bonds with prior notice of 30 days without penalty. Trading of the Company's ordinary shares on the Nasdaq Capital Market resumed on April 7, 2016. On June 30, 2016, the Issuer paid the first interest on account of the bond actually purchased by BHFWI in accordance with the terms thereof. On December 30, 2016, BHWFI and the Issuer signed an agreement (the “Agreement”) for an early redemption of the bonds for a total of US$ 1.8 million that was to be paid by February 15, 2017.  Similarly, as part of the terms of the Agreement, the Issuer waived all its claims against BHWFI, including an alleged obligation to make an additional investment in bonds up to an aggregate amount of $5 million (as stated above, an amount of US$ 2.25 million was invested in the past). On March 21, 2017, a first payment in the amount of USD 200 thousand was received by the Company. Due to uncertainty related to the collection of the remaining US$1.6 million debt, the Company made a non-cash provision in the amount of the unpaid debt as of December 31, 2016. Since learning of the investigation by the ISA, the Board has reviewed and revised various Company investment practices.  Specifically, the Board has revised the Company's investment policy, replaced the Company's current investment committee members with members of the Audit Committee and added Mr. Ilan Admon as an additional director on the investment committee. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (5) | On February 21, 2016, a petition was filed with the Tel Aviv-Jaffa District Court by a purported shareholder of Willi-Food for approval of a derivative action against the Company's directors and executive officers.  The Company and Willi-Food have been named as respondents. The claim alleges USD 3 million in damages caused to the applicant due to an alleged breach of fiduciary duties and duty of care of the Company's directors and executive officers to the Company related to the Investment described in legal proceeding 4, above. On April 21, 2016, the Tel Aviv-Jaffa District Court granted to the Company's directors and executive officers an extension of 45 days to respond the claim. On September 27, 2016, the Israeli Securities Authority (the “ISA” or "Authority") petitioned the court asking that certain restrictions imposed byteh Authority to protect the integrity of the Investigation remain in place for six additional months. On October 5, 2016, the Company filed its response to the Authority’s update, seeking a continuance with respect to the deadline for filing the Company’s response to the Certification Motion until 60 days following the removal of the restrictions placed on it by the Authority. On January 22, 2017, the court determined that, in light of the Authority’s restrictions, the deadline for the filing of the Company’s response should be stayed at this stage, and requested to be updated within 60 days concerning the progression of the Investigation and the restrictions place by the Authority on account thereof. The Company expects that the deadline for the filing of its response will be at least 60 days from the date on which the restrictions imposed by the Authority are removed. On March 27, 2017, the Authority filed an update with the court indicating its position that there remain in place restrictions on carrying out certain actions by the parties involved in the civil proceeding involving the collection of testimony of those involved in the Investigation. Nevertheless, the ISA mentioned that with respect to certain parties who are respondents to the petition and have not been investigated by the ISA, it has no objection if these parties file their response with the court. The court at that time determined that it is doubtful if it would be worthwhile to move forward with only some of the parties to the case, but rather would wait for the parties' response to the Authority update. On April 10, 2017, the Petitioner filed its response to the Authority's update, in which it claimed that all the respondents should file their responses to the petition. The Company is required to file its response to the Authority's update by May 1, 2017. At this preliminary stage, the Company is unable to make a provision for this claim. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (6) | On February 29, 2016, Willi Food was served with a lawsuit and a motion to certify it is a class action (securities class action) which was filed in the US in the Federal District Court for the Southern District of New York by a shareholder who claims to own shares of Willi Food (the "Plaintiff"), against Willi Food, Mr Gurtovoy, chairman of the Company's and Willi Food's Boards of Directors, and the Company's ultimate controlling shareholder, and some of the past and present officers (hereinafter, jointly: the "Defendants"). The lawsuit is a demand for compensation for alleged damages incurred by the Plaintiff because of a violation of Federal securities laws and other laws by the Defendants during the period from April 30, 2014 and until February 18, 2016. In light of the early stage of the lawsuit, the Company cannot, based on the position of its legal advisors, evaluate the risk involved and therefore no provision has been made in the financial statements with respect to the aforesaid. On September 23, 2016, the lead Plaintiff signed a request to file a stipulation dismissing the lawsuit without any cost for the Company. The request was approved by the court. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

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

| Calendar Period                                        |   | Ordinary Shares |   |
|--------------------------------------------------------|--------|-----------------|--------|
|                                                   |   | High            |   |   | Low |   |
| 2017                                                   |   |            | 6.76   |   |   |   | 5.63 |   |
| First Quarter                                          |   |            | 6.76   |   |   |   | 5.63 |   |
| Second Quarter (through April 24, 2017)                |   |            | 6.32   |   |   |   | 5.70 |   |
| 2016                                                   |   |            | 5.91   |   |   |   | 3.22 |   |
| First Quarter (*)                                 |   |            | 4.08   |   |   |   | 3.43 |   |
| Second Quarter                                         |   |            | 4.43   |   |   |   | 3.22 |   |
| Third Quarter                                          |   |            | 5.49   |   |   |   | 3.75 |   |
| Fourth Quarter                                         |   |            | 5.91   |   |   |   | 4.60 |   |
| 2015                                                   |   |            | 7.00   |   |   |   | 3.28 |   |
| First Quarter                                          |   |            | 7.00   |   |   |   | 5.55 |   |
| Second Quarter                                         |   |            | 6.05   |   |   |   | 4.86 |   |
| Third Quarter                                          |   |            | 5.82   |   |   |   | 4.42 |   |
| Fourth Quarter                                         |   |            | 4.56   |   |   |   | 3.28 |   |
| 2014                                                   |   |            | 8.83   |   |   |   | 6.12 |   |
| 2013                                                   |   |            | 8.40   |   |   |   | 4.91 |   |
| 2012                                                   |   |            | 5.01   |   |   |   | 4.00 |   |
|                                                   |   |            |   |   |   |   |   |   |
|     April 2017 (through April 24, 2017) |   |            | 6.32   |   |   |   | 5.70 |   |
| March 2017                                             |   |            | 6.46   |   |   |   | 5.63 |   |
| February 2017                                          |   |            | 6.56   |   |   |   | 6.35 |   |
| January 2017                                           |   |            | 6.76   |   |   |   | 5.89 |   |
| December 2016                                          |   |            | 5.91   |   |   |   | 5.12 |   |
| November 2016                                          |   |            | 5.72   |   |   |   | 4.60 |   |
| October 2016                                           |   |            | 5.35   |   |   |   | 5.12 |   |

----

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

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

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

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

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

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

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

----

----

----

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

----

----

----

----

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

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

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

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

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

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

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

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

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

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

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

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

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

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

----

----

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

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

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

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

----

----

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

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

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

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

----

|                         |   | Gain (loss) from exchange rate change NIS(000) |   |   | Fair net NIS(000) |   |   | Gain (loss) from exchange rate change NIS(000) |   |
|------------------------------|--------|------------------------------------------------|--------|--------|-------------------|--------|--------|------------------------------------------------|--------|
| Change in exchange rate USD  |   |                                           | (10    | )%     |              |   | (5     | )%                                             |   |   |   |   |   | 5 | % |   |   | 10 | % |
|                         |   |                                           | (4,188 | )      |              |   | (2,094 | )                                              |   |   | 41,875 |   |   |   | 2,094 |   |   |   | 4,188 |   |
|                         |   |                                           |   |   |              |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in exchange rate EURO |   |                                           | (10    | )%     |              |   | (5     | )%                                             |   |   |   |   |   |   | 5 | % |   |   | 10 | % |
|                         |   |                                           | (5,173 | )      |              |   | (2,587 | )                                              |   |   | 51,734 |   |   |   | 2,587 |   |   |   | 5,173 |   |

----

|                                     |   | Gain (loss) from interest change $(000) |   |   | Fair value $(000) |   |   | Gain (loss) from interest change $(000) |   |
|------------------------------------------|--------|-----------------------------------------|--------|--------|-------------------|--------|--------|-----------------------------------------|--------|
| Change in Interest as % of interest rate |   |                                    | (10    | )%     |              |   | (5     | )%                                      |   |   |   |   |   | 5 | % |   |   | 10 | % |
| Increase\decrease in financial Income    |   |                                    | (3,252 | )      |              |   | (1,625 | )                                       |   |   | 32,514 |   |   |   | 1,626 |   |   |   | 3,252 |   |

----

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

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

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

----

|           |   | NIS 2016 |    |   | NIS 2015 |   |    | USD 2016 |   |   | USD 2015 |   |
|----------------|--------|----------|---------|--------|----------|--------|---------|----------|--------|--------|----------|--------|
|           |   |     |    |   |     |   |    |     |   |   |     |   |
| Audit Fees (1) |   |     | 330,000 |   |     |   | 310,000 |     |   |   | 85,825   |   |   |   | 79,446 |   |
| Tax Fees (2)   |   |     | -       |   |     |   | -       |     |   |   | -        |   |   |   | - |   |
|           |   |     |    |   |     |   |    |     |   |   |     |   |   |   |   |   |
| TOTAL          |   |     | 330,000 |   |     |   | 310,000 |     |   |   | 85,825   |   |   |   | 79,446 |   |

----

| Period                            |   | Total Number of Shares Purchased |   |   | Average Price Paid Per Share |   |   | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |   |   | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs |   |
|-----------------------------------|--------|----------------------------------|--------|--------|------------------------------|--------|--------|----------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------|--------|
| June 1, 2016 to June 30, 2016     |   |                             | 18,100 |   |                         | $      | 4.59   |                                                                             |   |   | 18,100                                                                                                       |   |   | $ | 5,828,983 |   |
| July 1, 2016 to July 31, 2016     |   |                             | 1,889  |   |                         | $      | 4.36   |                                                                             |   |   | 1,889                                                                                                        |   |   | $ | 5,827,094 |   |
| August 1, 2016 to August 31, 2016 |   |                             | 3,100  |   |                         | $      | 4.85   |                                                                             |   |   | 3,100                                                                                                        |   |   | $ | 5,823,994 |   |

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

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

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

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

----

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

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

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

----

----

| Exhibit Number                         | Description                                                                                                                                                   |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                   |                                                                                                                                                          |
| †1.1                             | Memorandum of Association of the Company, as amended (7)                                                                                                      |
|                                   |                                                                                                                                                          |
| 1.2                                    | Articles of Association of the Company, as amended on March 20, 2014 (7)                                                                                      |
|                                   |                                                                                                                                                          |
| 2.1                                    | Specimen of Certificate for ordinary shares (1)                                                                                                               |
|                                   |                                                                                                                                                          |
| 4.1                                    | Share Option Plan (1)                                                                                                                                         |
|                                   |                                                                                                                                                          |
| †4.2                             | Services Agreement between the Company and Willi-Food, dated April 1, 1997 (2)                                                                                |
|                                   |                                                                                                                                                          |
| †4.3                             | Transfer Agreement between the Company and Gold Frost dated February 16, 2006 (3)                                                                             |
|                                   |                                                                                                                                                          |
| †4.4                             | Lease agreement for Logistics Center between the Company and Gold Frost dated February 16, 2006 (3).                                                          |
|                                   |                                                                                                                                                          |
| 4.5                                    | Placing Agreement between the Company, Gold Frost, certain officers of Gold Frost and Corporate Synergy dated March 2, 2006 (3).                              |
|                                   |                                                                                                                                                          |
| 4.6                                    | Lock In Agreement, between the Company, Gold Frost, Corporate Synergy and certain officers of Gold Frost, dated March 2, 2006 (3)                             |
|                                   |                                                                                                                                                          |
| 4.7                                    | Registration Rights Agreement, dated as of October 25, 2006, among the Company and the investors signatory thereto. (4)                                       |
|                                   |                                                                                                                                                          |
| †4.8                             | Sale Agreement, dated July 24, 2012, between the Company and Willi-Food Investments Ltd. (5)                                                                  |
|                                   |                                                                                                                                                          |
| 4.9                                    | 2013 Option Plan (6)                                                                                                                                          |
|                                   |                                                                                                                                                          |
| 4.10                                   | Agreement between G. Willi-Food International Ltd., Zvi V. & Co. Company Ltd. and Yossi Willi Management and Investment Ltd., dated November 12, 2015 (8) |
|                                   |                                                                                                                                                          |
| 8.1                                    | Subsidiaries of the Company (*)                                                                                                                          |
|                                   |                                                                                                                                                          |
| 12.1                                   | Certification of CEO of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)                      |
|                                   |                                                                                                                                                          |
| 12.2                                   | Certification of CFO of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)                      |
|                                   |                                                                                                                                                          |
| 13.1                                   | Certification of CEO of the Company pursuant to Rule 13a-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)                      |
|                                   |                                                                                                                                                          |
| 13.2                                   | Certification of CFO of the Company pursuant to Rule 13a-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)                      |
|                                   |                                                                                                                                                          |
| 15.(a).1      | Consent of Independent Registered Public Accounting Firm (*)                                                                                                  |
| † | English translations from Hebrew original.                                                                                    |
|---------|-------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                          |
| (1)     | Incorporated by reference to the Company’s Registration Statement on Form F-1, File No. 333-6314.                  |
| (2)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2001. |
| (3)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2005. |
| (4)     | Incorporated by reference to the Company’s Registration Statement on Form F-3, File No. 333-138200.                |
| (5)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012. |
| (6)     | Incorporated by reference to the Company’s Form 6-K filed October 31, 2013.                                             |
| (7)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013. |
| (8)     | Incorporated by reference to Appendix A to the Company’s Form 6-K filed December 10, 2015.                              |
| (*)     | Filed Herewith                                                                                                                |

----

----

|                                                    | Page                 |
|---------------------------------------------------------|----------------------|
|                                                    |                 |
|                                                    |                 |
| Report of Independent Registered Public Accounting Firm | F - 2                |
|                                                    |                 |
| Financial Statements:                                   |                 |
|                                                    |                 |
| Statements of financial position                        | F - 3 - F - 4        |
|                                                    |                 |
| Statements of Income                                    | F - 5                |
|                                                    |                 |
| Statements of comprehensive Income                      | F - 6                |
|                                                    |                 |
| Statements of Changes in Equity                         | F - 7                |
|                                                    |                 |
| Statements of Cash Flows                                | F - 8 - F - 9        |
|                                                    |                 |
| Notes to the Financial Statements                       | F - 10 - F - 65 |

----

----

|                                                  |   |   |   |   | December 31, |    |
|-------------------------------------------------------|--------|--------|--------|--------|--------------|---------|
|                                                  |   | Note   |   |   | 2 0 1 6      |    |   | 2 0 1 5 |   |   |   | 2 0 1 6 (*) |   |
|                                                  |   |   |   |   | NIS          |    |   | NIS |   |   | US Dollars |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |
| Assets                                                |   |   |   |   |         |    |   |   |   |   |   |   |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |
| Current assets                                        |   |   |   |   |         |    |   |   |   |   |   |   |   |
| Cash and cash equivalents                             |   | 4a     |        |   |         | 129,577 |   |   |   | 79,421 |   |   |   | 33,700 |   |
| Financial assets at fair value through profit or loss |   | 4b     |        |   |         | 104,921 |   |   |   | 145,007 |   |   |   | 27,288 |   |
| Short term deposit                                    |   | 4f     |        |   |         | -       |   |   |   | 20,288 |   |   |   | - |   |
| Trade receivables                                     |   | 4c     |        |   |         | 80,227  |   |   |   | 81,392 |   |   |   | 20,865 |   |
| Other receivables and prepaid expenses                |   | 4d     |        |   |         | 4,795   |   |   |   | 8,451 |   |   |   | 1,247 |   |
| Inventories                                           |   | 4e     |        |   |         | 41,877  |   |   |   | 34,517 |   |   |   | 10,891 |   |
| Current tax assets                                    |   |   |   |   |         | 5,443   |   |   |   | 1,833 |   |   |   | 1,416 |   |
| Total current assets                                  |   |   |   |   |         | 366,840 |   |   |   | 370,909 |   |   |   | 95,407 |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Non-current assets                                    |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Property, plant and equipment                         |   |   |   |   |         | 77,204  |   |   |   | 76,041 |   |   |   | 20,079 |   |
| Less -accumulated depreciation                        |   |   |   |   |         | 34,963  |   |   |   | 31,874 |   |   |   | 9,093 |   |
|                                                  |   | 6      |   |   |         | 42,241  |   |   |   | 44,167 |   |   |   | 10,986 |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Prepaid expenses                                      |   |   |   |   |         | -       |   |   |   | 137 |   |   |   | - |   |
| Goodwill                                              |   | 7      |   |   |         | 36      |   |   |   | 36 |   |   |   | 9 |   |
| Deferred taxes                                        |   | 12c    |        |   |         | 2,354   |   |   |   | 3,614 |   |   |   | 613 |   |
| Total non-current assets                              |   |   |   |   |         | 44,631  |   |   |   | 47,954 |   |   |   | 11,608 |   |
|                                                  |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Total assets                                          |   |   |   |   |         | 411,471 |   |   |   | 418,863 |   |   |   | 107,015 |   |

----

|                                                                        |   |   |   |   | December 31, |    |
|-----------------------------------------------------------------------------|--------|--------|--------|--------|--------------|---------|
|                                                                        |   | Note   |   |   | 2 0 1 6      |    |   | 2 0 1 5 |   |   |   | 2 0 1 6 (*) |   |
|                                                                        |   |   |   |   | NIS          |    |   | NIS |   |   | US Dollars |   |
| Equity and liabilities                                                      |   |   |   |   |         |    |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |         |    |   |   |   |   |   |   |   |
| Current liabilities                                                         |   |   |   |   |         |    |   |   |   |   |   |   |   |
| Short-term bank debt                                                        |   | 9      |   |   |         | -       |   |   |   | 16 |   |   |   | - |   |
| Trade payables                                                              |   | 8a     |        |   |         | 14,832  |   |   |   | 12,863 |   |   |   | 3,857 |   |
| Employees Benefits                                                          |   | 11b    |        |   |         | 2,253   |   |   |   | 1,940 |   |   |   | 586 |   |
| Other payables and accrued expenses                                         |   | 8b     |        |   |         | 2,533   |   |   |   | 3,653 |   |   |   | 659 |   |
| Total current liabilities                                                   |   |   |   |   |         | 19,618  |   |   |   | 18,472 |   |   |   | 5,102 |   |
|                                                                        |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Non-current liabilities                                                     |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Retirement benefit obligation                                               |   | 11b    |        |   |         | 849     |   |   |   | 679 |   |   |   | 222 |   |
| Total non-current liabilities                                               |   |   |   |   |         | 849     |   |   |   | 679 |   |   |   | 222 |   |
|                                                                        |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                                        |   | 14     |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Share capital                                                               |   |   |   |   |         | 1,425   |   |   |   | 1,425 |   |   |   | 370 |   |
| Additional paid in capital                                                  |   |   |   |   |         | 128,354 |   |   |   | 128,354 |   |   |   | 33,382 |   |
| Capital fund                                                                |   |   |   |   |         | 247     |   |   |   | 247 |   |   |   | 64 |   |
| Retained earnings                                                           |   |   |   |   |         | 261,486 |   |   |   | 269,883 |   |   |   | 68,007 |   |
| Capital Fund measurement of the net liability in respect of defined benefit |   |   |   |   |         | (508    | ) |   |   | (197 | ) |   |   | (132 | ) |
| Equity attributable to Shareholders' of the Company                         |   |   |   |   |         | 391,004 |   |   |   | 399,712 |   |   |   | 101,691 |   |
|                                                                        |   |   |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Total equity and liabilities                                                |   |   |   |   |         | 411,471 |   |   |   | 418,863 |   |   |   | 107,015 |   |

----

|                                      |   |   |   |   | Year ended December 31, |       |
|-------------------------------------------|--------|--------|--------|--------|-------------------------|------------|
|                                      |   | Note   |   |   | 2 0 1 6                 |       |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   |   | 2 0 1 6 (*) |   |
|                                      |   |   |   |   | NIS                     |       |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |
| Revenue                                   |   | 16a    |        |   |                    | 294,202    |   |   |   | 312,514 |   |   |   | 328,741 |   |   |   | 76,516 |   |
| Cost of sales                             |   | 16b    |        |   |                    | 217,585    |   |   |   | 237,452 |   |   |   | 249,136 |   |   |   | 56,590 |   |
| Gross profit                              |   |   |   |   |                    | 76,617     |   |   |   | 75,062 |   |   |   | 79,605 |   |   |   | 19,926 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating costs and expenses              |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling expenses                          |   | 16c    |        |   |                    | 39,405     |   |   |   | 37,294 |   |   |   | 39,696 |   |   |   | 10,249 |   |
| General and administrative expenses       |   | 16d    |        |   |                    | 14,577     |   |   |   | 32,926 |   |   |   | 19,231 |   |   |   | 3,791 |   |
| Other Income                              |   | 17     |   |   |                    | (112       | ) |   |   | (2,182 | ) |   |   | (2,943 | ) |   |   | (30 | ) |
|                                      |   |   |   |   |                    | 53,870     |   |   |   | 68,038 |   |   |   | 55,984 |   |   |   | 14,010 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating profit                          |   |   |   |   |                    | 22,747     |   |   |   | 7,025 |   |   |   | 23,621 |   |   |   | 5,916 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Finance Income                            |   | 18a    |        |   |                    | (3,425     | ) |   |   | 3,363 |   |   |   | 2,794 |   |   |   | (891 | ) |
| Finance expense                           |   | 18b    |        |   |                    | 3,143      |   |   |   | 978 |   |   |   | 375 |   |   |   | 817 |   |
| Finance Income, net                       |   |   |   |   |                    | (6,568     | ) |   |   | 2,385 |   |   |   | 2,419 |   |   |   | (1,708 | ) |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit before taxes on Income             |   |   |   |   |                    | 16,179     |   |   |   | 9,410 |   |   |   | 26,040 |   |   |   | 4,208 |   |
| Taxes on Income                           |   | 12a    |        |   |                    | (5,327     | ) |   |   | (2,566 | ) |   |   | (7,186 | ) |   |   | (1,385 | ) |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                |   |   |   |   |                    | 10,852     |   |   |   | 6,844 |   |   |   | 18,854 |   |   |   | 2,823 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                       |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per share                  |   |   |   |   |                    | 0.82       |   |   |   | 0.52 |   |   |   | 1.45 |   |   |   | 0.21 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per share                |   |   |   |   |                    | 0.82       |   |   |   | 0.52 |   |   |   | 1.45 |   |   |   | 0.21 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares used in computation of basic EPS   |   |   |   |   |                    | 13,107,579 |   |   |   | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 13,107,579 |   |
|                                      |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares used in computation of diluted EPS |   |   |   |   |                    | 13,107,579 |   |   |   | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 13,107,579 |   |

----

|                                                                                                                                                |   | Year ended December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                                                |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   |   | 2 0 1 6 (*) |   |
|                                                                                                                                                |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                                                                                                                                |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                                                                                                                          |   |                    | 10,852 |   |   |   | 6,844 |   |   |   | 18,854 |   |   |   | 2,823 |   |
|                                                                                                                                                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive Income (Expenses)                                                                                                               |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Re-measurement of net liabilities with respect to a defined benefit which will not be   classified in the future as profit or loss, net of tax |   |                    | (311   | ) |   |   | (139 | ) |   |   | 6 |   |   |   | (81 | ) |
| Translation differentials with respect to foreign operations which were classified as profit or loss, net of tax                                    |   |                    | -      |   |   |   | - |   |   |   | (786 | ) |   |   | - |   |
|                                                                                                                                                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive Income for the year                                                                                                             |   |                    | -      |   |   |   | (139 | ) |   |   | (780 | ) |   |   | - |   |
|                                                                                                                                                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total comprehensive Income for the year                                                                                                             |   |                    | 10,541 |   |   |   | 6,705 |   |   |   | 18,074 |   |   |   | 2,742 |   |

----

|                                                           |   | Share capital |   |   | Additional paid in capital |   |    | measurement of the net liability in respect of defined benefit |   |   | Capital fund |   |   | Foreign currency translation reserve |   |   | Retained earnings |   |   | Total shareholders' equity |   |
|----------------------------------------------------------------|--------|---------------|--------|--------|----------------------------|--------|---------|----------------------------------------------------------------|--------|--------|--------------|--------|--------|--------------------------------------|--------|--------|-------------------|--------|--------|----------------------------|--------|
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |              |   |   |                       |   |
| Balance - January 1, 2014                                      |   |          | 1,407  |   |                       |   | 119,281 |                                                           |   |   | (63          | )      |   |                                 | 247    |   |              |   | 786    |                       |   |   | 244,185 |   |   |   | 365,843 |   |
| Profit for the year                                            |   |          | -      |   |                       |   | -       |                                                           |   |   | -            |   |   |                                 | -      |   |              |   | -      |                       |   |   | 18,854 |   |   |   | 18,854 |   |
| Currency translation differences                               |   |          | -      |   |                       |   | -       |                                                           |   |   | -            |   |   |                                 | -      |   |              |   | (786   | )                          |   |   | - |   |   |   | (786 | ) |
| Measurement of the net liability in respect of defined benefit |   |          | -      |   |                       |   | -       |                                                           |   |   | 6            |   |   |                                 | -      |   |              |   | -      |                       |   |   | - |   |   |   | 6 |   |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |
| Total comprehensive Income for the year                        |   |          | -      |   |                       |   | -       |                                                           |   |   | 6            |   |   |                                 | -      |   |              |   | (786   | )                          |   |   | 18,854 |   |   |   | 18,074 |   |
| Employee benefit                                               |   |          | -      |   |                       |   | 2,149   |                                                           |   |   | -            |   |   |                                 | -      |   |              |   | -      |                       |   |   | - |   |   |   | 2,149 |   |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |
| Balance - December 31, 2014                                    |   |          | 1,407  |   |                       |   | 121,430 |                                                           |   |   | (57          | )      |   |                                 | 247    |   |              |   | -      |                       |   |   | 263,039 |   |   |   | 386,066 |   |
| Profit for the year                                            |   |          | -      |   |                       |   | -       |                                                           |   |   | -            |   |   |                                 | -      |   |              |   | -      |                       |   |   | 6,844 |   |   |   | 6,844 |   |
| Measurement of the net liability in respect of defined benefit |   |          | -      |   |                       |   | -       |                                                           |   |   | (140         | )      |   |                                 | -      |   |              |   | -      |                       |   |   | - |   |   |   | (140 | ) |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |
| Total comprehensive Income for the year                        |   |          | -      |   |                       |   | -       |                                                           |   |   | (140         | )      |   |                                 | -      |   |              |   | -      |                       |   |   | 6,844 |   |   |   | 6,704 |   |
| Exercise of options                                            |   |          | 18     |   |                       |   | 6,772   |                                                           |   |   | -            |   |   |                                 | -      |   |              |   | -      |                       |   |   | - |   |   |   | 6,790 |   |
| Employee benefit                                               |   |          | -      |   |                       |   | 152     |                                                           |   |   | -            |   |   |                                 | -      |   |              |   | -      |                       |   |   | - |   |   |   | 152 |   |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |
| Balance - December 31, 2015                                    |   |          | 1,425  |   |                       |   | 128,354 |                                                           |   |   | (197         | )      |   |                                 | 247    |   |              |   | -      |                       |   |   | 269,883 |   |   |   | 399,712 |   |
| Profit for the year                                            |   |          | -      |   |                       |   | -       |                                                           |   |   |         |   |   |                                 | -      |   |              |   | -      |                       |   |   | 10,852 |   |   |   | 10,852 |   |
| Measurement of the net liability in respect of defined benefit |   |          | -      |   |                       |   | -       |                                                           |   |   | (311         | )      |   |                                 | -      |   |              |   | -      |                       |   |   | - |   |   |   | (311 | ) |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |
| Total comprehensive Income for the year                        |   |          | -      |   |                       |   | -       |                                                           |   |   | (311         | )      |   |                                 | -      |   |              |   | -      |                       |   |   | 10,852 |   |   |   | 10,541 |   |
| Dividend distribution                                          |   |          | -      |   |                       |   | -       |                                                           |   |   | -            |   |   |                                 | -      |   |              |   | -      |                       |   |   | (19,249 | ) |   |   | (19,249 | ) |
|                                                           |   |          |   |   |                       |   |    |                                                           |   |   |         |   |   |                                 |   |   |              |   |   |                       |   |   |   |   |   |   |   |   |
| Balance - December 31, 2016                                    |   |          | 1,425  |   |                       |   | 128,354 |                                                           |   |   | (508         | )      |   |                                 | 247    |   |              |   | -      |                       |   |   | 261,486 |   |   |   | 391,004 |   |

----

|                                                                                              |   | Year ended December 31, |    |
|---------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                              |   | 2 0 1 6                 |    |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   |   | 2 0 1 6 (*) |   |
|                                                                                              |   | NIS                     |    |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |
| Cash flows - operating activities                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |   |
| Profit from continuing operations                                                                 |   |                    | 10,852  |   |   |   | 6,844 |   |   |   | 18,854 |   |   |   | 2,822 |   |
| Adjustments to reconcile net profit to net cash from continuing operating activities (Appendix A) |   |                    | 6,500   |   |   |   | 7,494 |   |   |   | 799 |   |   |   | 1,675 |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net cash from continuing operating activities                                                     |   |                    | 17,352  |   |   |   | 14,338 |   |   |   | 19,653 |   |   |   | 4,497 |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows - investing activities                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition of property plant and equipment                                                       |   |                    | (1,915  | ) |   |   | (2,994 | ) |   |   | (8,077 | ) |   |   | (498 | ) |
| Proceeds from sale of property plant and Equipment                                                |   |                    | 190     |   |   |   | 456 |   |   |   | 969 |   |   |   | 49 |   |
| Acquisition of non-current financial assets                                                       |   |                    | (8,504  | ) |   |   | - |   |   |   | - |   |   |   | (2,212 | ) |
| Proceeds from short term deposit                                                                  |   |                    | 20,288  |   |   |   | - |   |   |   | - |   |   |   | 5,277 |   |
| Proceeds from (used in) purchase of marketable securities, net                                    |   |                    | 42,010  |   |   |   | (22,087 | ) |   |   | (11,777 | ) |   |   | 10,942 |   |
| Proceeds from purchase of  loan carried at fair value through profit or loss                 |   |                    | -       |   |   |   | - |   |   |   | 65,400 |   |   |   | - |   |
| Proceeds used in purchase of  Short term deposit                                             |   |                    | -       |   |   |   | - |   |   |   | (19,445 | ) |   |   | - |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net cash from (used in) continuing investing activities                                           |   |                    | 52,069  |   |   |   | (24,625 | ) |   |   | 27,070 |   |   |   | 13,558 |   |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash flows - financing activities                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of options                                                                               |   |                    | -       |   |   |   | 6,790 |   |   |   | - |   |   |   | - |   |
| Dividend distribution                                                                             |   |                    | (19,249 | ) |   |   | - |   |   |   | - |   |   |   | (5,006 | ) |
| Short-term bank debt                                                                              |   |                    | (16     | ) |   |   | 16 |   |   |   | (18 | ) |   |   | (4 | ) |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net cash from (used in) continuing  financing activities                                     |   |                    | (19,265 | ) |   |   | 6,806 |   |   |   | (18 | ) |   |   | (5,010 | ) |
|                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                                  |   |                    | 50,156  |   |   |   | (3,481 | ) |   |   | 46,705 |   |   |   | 13,045 |   |
| Cash and cash equivalents  at the beginning of the financial year                            |   |                    | 79,421  |   |   |   | 82,902 |   |   |   | 36,197 |   |   |   | 20,656 |   |
| Cash and cash equivalents of the end of the financial year                                        |   |                    | 129,577 |   |   |   | 79,421 |   |   |   | 82,902 |   |   |   | 33,701 |   |

----

|                                                                                                                         |   | Year ended December 31, |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                         |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   |   | 2 0 1 6 (*) |   |
|                                                                                                                         |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
| Cash flows from operating activities                                                                                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| A.         Adjustments to reconcile net profit to net cash from operating activities |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Decrease (Increase) in deferred income taxes                                                                                 |   |                    | 1,260  |   |   |   | (3,109 | ) |   |   | (1,004 | ) |   |   | 328 |   |
| Unrealized loss (gain) on marketable securities                                                                              |   |                    | (1,924 | ) |   |   | (186 | ) |   |   | 1,910 |   |   |   | (590 | ) |
| Depreciation and amortization                                                                                                |   |                    | 3,762  |   |   |   | 3,723 |   |   |   | 3,634 |   |   |   | 978 |   |
| Gain from short term deposit                                                                                                 |   |                    | -      |   |   |   | (843 | ) |   |   | - |   |   |   | - |   |
| Capital gain on disposal of property plant and equipment                                                                     |   |                    | (112   | ) |   |   | (220 | ) |   |   | (188 | ) |   |   | (29 | ) |
| Stock based compensation reserve                                                                                             |   |                    | -      |   |   |   | 152 |   |   |   | 2,124 |   |   |   | - |   |
| Loss from non - tradable financial assets (see note 25H)                                                                     |   |                    | 7,734  |   |   |   | - |   |   |   | - |   |   |   | 2,056 |   |
| Unrealized Gain of  loan carried at fair value through profit or loss                                                   |   |                    | -      |   |   |   | - |   |   |   | (100 | ) |   |   | - |   |
| Net foreign exchange gain                                                                                                    |   |                    | -      |   |   |   | - |   |   |   | (786 | ) |   |   | - |   |
|                                                                                                                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in assets and liabilities:                                                                                           |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (Decrease) in trade receivables and other receivables                                                               |   |                    | 2,120  |   |   |   | 81 |   |   |   | (6,219 | ) |   |   | 580 |   |
| Decrease (Increase) in inventories                                                                                           |   |                    | (7,360 | ) |   |   | 14,069 |   |   |   | 5,415 |   |   |   | (1,914 | ) |
| Decrease (Increase)  in trade and other payables, and other current liabilities                                         |   |                    | 1,020  |   |   |   | (6,173 | ) |   |   | (3,987 | ) |   |   | 266 |   |
|                                                                                                                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                         |   |                    | 6,500  |   |   |   | 7,494 |   |   |   | 799 |   |   |   | 1,675 |   |
|                                                                                                                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| B.         Significant non-cash transactions:                                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase of property, plant and equipment                                                                                    |   |                    | -      |   |   |   | 115 |   |   |   | 611 |   |   |   | - |   |
|                                                                                                                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental cash flow information:                                                                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                         |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax paid                                                                                                              |   |                    | 8,126  |   |   |   | 6,162 |   |   |   | 9,831 |   |   |   | 2,113 |   |

----

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

|  | The Company | -  | G. WILLI‐FOOD INTERNATIONAL LTD. |
|--|-------------|---------|----------------------------------------|

|  | The Group | -  | The Company and its Subsidiaries, a list of which is presented in Note 5. |
|--|-----------|---------|---------------------------------------------------------------------------|

|  | Subsidiaries | - | Companies that are controlled by the Company (as defined in IAS 27) and whose accounts are consolidated with those of the Company. |
|--|--------------|---|------------------------------------------------------------------------------------------------------------------------------------|

|  | Related Parties | - | As defined in IAS 24. |
|--|-----------------|---|-----------------------|

|  | Interested Parties | - | As defined in the Israeli Securities Regulations (Annual Financial Statements), 2010. |
|--|--------------------|---|---------------------------------------------------------------------------------------|

|  | Controlling Shareholder | - | As defined in the Israeli Securities Regulations (Annual Financial Statements), 2010. |
|--|-------------------------|---|---------------------------------------------------------------------------------------|

|  | NIS | - | New Israeli Shekel. |
|--|-----|---|---------------------|

|  | CPI | - | The Israeli consumer price index. |
|--|-----|---|-----------------------------------|

|  | US Dollars or $ | - | The U.S. dollar. |
|--|-----------------|---|------------------|

|  | Euro | - | The United European currency. |
|--|------|---|-------------------------------|

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

----

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

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

|  | (1) | Format for analysis of expenses recognized in Income statement: |
|--|-----|-----------------------------------------------------------------|

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

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

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

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

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

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

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

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

----

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

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

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

----

**            **

----

**            **

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

|   |   | Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and Contingent liabilities of the subsidiary or jointly controlled entity recognized at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

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

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

----

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

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

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

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

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

----

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

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

----

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

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

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

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

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

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

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

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

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

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

----

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

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

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

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

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

----

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

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

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

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

----

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

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

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

----

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

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

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

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

|                            |   | Representative exchange rateof the Euro |   |   | Representative exchange rateof the dollar |   |   | CPI "inrespect of" |   |
|---------------------------------|--------|-----------------------------------------|--------|--------|-------------------------------------------|--------|--------|--------------------|--------|
|                            |   |                                    |   |   |                                      |   |
|                            |   | (NIS per €1)                      |   |   | (NIS per $1)                              |   |   | (in points)        |   |
| As of:                          |   |                                    |   |   |                                      |   |   |               |   |
| December 31, 2016               |   |                                    | 4.04   |   |                                      |   | 3.84   |               |   |   | 112.59 |   |
| December 31, 2015               |   |                                    | 4.25   |   |                                      |   | 3.90   |               |   |   | 112.82 |   |
| December 31, 2014               |   |                                    | 4.72   |   |                                      |   | 3.89   |               |   |   | 113.96 |   |
|                            |   |                                    |   |   |                                      |   |   |               |   |   |   |   |
| Increase (decrease) during the: |   | %                                       |   |   | %                                         |   |   | %                  |   |
| Year ended:                     |   |                                    |   |   |                                      |   |   |               |   |   |   |   |
| December 31, 2016               |   |                                    | (4.9   | )      |                                      |   | (1.5   | )                  |   |   | (0.2 | ) |
| December 31, 2015               |   |                                    | (9.9   | )      |                                      |   | -      |               |   |   | (1.0 | ) |
| December 31, 2014               |   |                                    | (1.26  | )      |                                      |   | (12.10 | )                  |   |   | (0.19 | ) |

----

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

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

----

|  | (1) | IFRS 9, "Financial Instruments": (Cont.) |
|--|-----|------------------------------------------|

|  | (2) | IFRS 15, "Revenue from Contracts with Customers": |
|--|-----|---------------------------------------------------|

|   | 1. | Identify the contract (or contracts) with the customer |
|--------|----|--------------------------------------------------------|

|   | 2. | Identify performance obligations in the contract. |
|--------|----|---------------------------------------------------|

|   | 3. | Determine the transaction price. |
|--------|----|----------------------------------|

|   | 4. | Allocate the transaction price to the performance obligations. |
|--------|----|----------------------------------------------------------------|

|   | 5. | Recognize the revenue when the entity satisfies a performance obligation. |
|--------|----|---------------------------------------------------------------------------|

----

|  | (1) | IFRS 15, "Revenue from Contracts with Customers":(Cont.) |
|--|-----|----------------------------------------------------------|

|  | (2) | IFRS 16 – "Leasing" |
|--|-----|---------------------------|

----

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

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

|  | • | Revenue recognition - the Group has recognized in revenues amounted to NIS 294,202 thousands in the year ended December 31, 2016 (NIS 312,514 thousands in the year ended December 31, 2015) for selling food products. Although, in general, the Group does not grant rights of return, its enable for certain customers from time to time to return products. The Group assesses the expected customer returns according to specific information in its possession and its past experience in similar cases. Any 1% upward or downward change in the Group's estimation will increase\decrease the Group's revenues in the amount of NIS 2,942 thousands (NIS 3,125 thousands in the year ended December 31, 2015). As of December 31, 2016, the provision for returns is insignificant. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

----

**NOTE 3 -  **

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

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

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

|                     |   | December 31, |    |
|--------------------------|--------|--------------|---------|
|                     |   | 2 0 1 6      |    |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                     |   | NIS          |    |   | NIS |   |   | US Dollars |   |
|                     |   |         |    |   |   |   |   |   |   |
| Cash in bank             |   |         | 90,426  |   |   |   | 19,953 |   |   |   | 23,518 |   |
| Short-term bank deposits |   |         | 39,151  |   |   |   | 59,468 |   |   |   | 10,182 |   |
|                     |   |         | 129,577 |   |   |   | 79,421 |   |   |   | 33,700 |   |

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

|                                                                   |   | December 31, |    |
|------------------------------------------------------------------------|--------|--------------|---------|
|                                                                   |   | 2 0 1 6      |    |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                                                   |   | NIS          |    |   | NIS |   |   | US Dollars |   |
| Financial assets carried at fair value through profit or loss (FVTPL): |   |         |    |   |   |   |   |   |   |
| Shares                                                                 |   |         | 35,091  |   |   |   | 17,346 |   |   |   | 9,126 |   |
| Governmental loan and other bonds                                      |   |         | 58,249  |   |   |   | 127,661 |   |   |   | 15,149 |   |
| Certificate of participation in mutual fund                            |   |         | 11,581  |   |   |   | - |   |   |   | 3,012 |   |
|                                                                   |   |         | 104,921 |   |   |   | 145,007 |   |   |   | 27,287 |   |

|  | C. | Investment in short term deposits: |
|--|----|------------------------------------|

|  | D. | Trade receivables: |
|--|----|--------------------|

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

|                                |   | December 31, |   |
|-------------------------------------|--------|--------------|--------|
|                                |   | 2 0 1 6      |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                                |   |         |   |   |   |   |   |   |   |
| Trade receivables(*)                |   |         | 82,382 |   |   |   | 84,840 |   |   |   | 21,425 |   |
| Less - allowance for doubtful debts |   |         | 2,155  |   |   |   | 3,448 |   |   |   | 560 |   |
|                                |   |         | 80,227 |   |   |   | 81,392 |   |   |   | 20,865 |   |

----

|  | (1) | Composition (Cont.): |
|--|-----|----------------------|

|  | (*) | Less provision for returns in the sum of NIS 1,500 (as of December 31, 2015 - NIS 1,500). |
|--|-----|-------------------------------------------------------------------------------------------|

|                                  |   | December 31, |   |
|---------------------------------------|--------|--------------|--------|
|                                  |   | 2 0 1 6      |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                  |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                                  |   |         |   |   |   |   |   |   |   |
| Balance at beginning of the year      |   |         | 3,448  |   |   |   | 45 |   |   |   | 897 |   |
| Change in allowance doubtful debts(*) |   |         | 1,293  |   |   |   | 3,403 |   |   |   | 336 |   |
|                                  |   |         |   |   |   |   |   |   |   |   |   |   |
| Balance at end of the year            |   |         | 2,155  |   |   |   | 3,448 |   |   |   | 560 |   |

|  | E. | Other receivables and prepaid expenses: |
|--|----|----------------------------------------------|

|                                                         |   | December 31, |   |
|--------------------------------------------------------------|--------|--------------|--------|
|                                                         |   | 2 0 1 6      |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                                         |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                                                         |   |         |   |   |   |   |   |   |   |
| Prepaid expenses                                             |   |         | 595    |   |   |   | 308 |   |   |   | 154 |   |
| Income receivables                                           |   |         | 1,039  |   |   |   | 645 |   |   |   | 270 |   |
| Advances to suppliers                                        |   |         | 1,984  |   |   |   | 4,147 |   |   |   | 516 |   |
| Government authorities                                       |   |         | 326    |   |   |   | 3,124 |   |   |   | 85 |   |
| Receivables in respect of investment in a non-current assets |   |         | 770    |   |   |   | - |   |   |   | - |   |
| Others                                                       |   |         | 81     |   |   |   | 226 |   |   |   | 222 |   |
|                                                         |   |         | 4,795  |   |   |   | 8,451 |   |   |   | 1,247 |   |

----

|  | F. | Inventories |
|--|----|-------------|

|                   |   | December 31, |   |
|------------------------|--------|--------------|--------|
|                   |   | 2 0 1 6      |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                   |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                   |   |         |   |   |   |   |   |   |   |
| Finished products      |   |         | 36,818 |   |   |   | 25,128 |   |   |   | 9,575 |   |
| Merchandise in transit |   |         | 5,059  |   |   |   | 9,389 |   |   |   | 1,316 |   |
|                   |   |         | 41,877 |   |   |   | 34,517 |   |   |   | 10,891 |   |

| Subsidiary                    |   | Location |   | Jurisdiction of Organization |   | Company's Ownership Interest |
|-------------------------------|--------|----------|--------|------------------------------|--------|------------------------------|
|                          |   |     |   |                         |   | December 31,                 |
|                          |   |     |   |                         |   | 2 0 1 6                      |   | 2 0 1 5 |
|                          |   |     |   |                         |   |                         |   |   |
| Gold Frost Ltd. ("Goldfrost") |   | Israel   |   | Israel                       |   |   100.00%          |   |   100.00% |
| W.F.D. Ltd.                   |   | Israel   |   | Israel                       |   |   100.00%          |   |   100.00% |
| B.H.W.F.I Ltd. ("BHWFI")      |   | Israel   |   | Israel                       |   | 100.00%                      |   | 100.00% |

----

**NOTE 6**

|                                   |   |     |   |   | Machinery |   |   |     |   |   | Computers |   |   |      |   |   |   |   |
|----------------------------------------|--------|----------|--------|--------|-----------|--------|--------|----------|--------|--------|-----------|--------|--------|-----------|--------|--------|--------|--------|
|                                   |   | Land and |   |   | and       |   |   | Motor    |   |   | and       |   |   | Office    |   |   |   |   |
|                                   |   | Building |   |   | equipment |   |   | Vehicles |   |   | equipment |   |   | Furniture |   |   | Total  |   |
| Consolidated Cost:                     |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |
| Balance -January 1, 2015               |   |     | 53,083 |   |      |   | 3,447  |     |   |   | 12,001    |   |   |      | 4,006  |   |   |   | 1,289 |   |   |   | 73,826 |   |
| Changes during 2015:                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Additions                              |   |     | 1,328  |   |      |   | 900    |     |   |   | 255       |   |   |      | 376    |   |   |   | 20 |   |   |   | 2,879 |   |
| Dispositions                           |   |     | -      |   |      |   | (68    | )        |   |   | (596      | )      |   |      | -      |   |   |   | - |   |   |   | (664 | ) |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2015            |   |     | 54,411 |   |      |   | 4,279  |     |   |   | 11,660    |   |   |      | 4,382  |   |   |   | 1,309 |   |   |   | 76,041 |   |
| Changes during 2016:                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Additions                              |   |     | 66     |   |      |   | 240    |     |   |   | 1,353     |   |   |      | 202    |   |   |   | 54 |   |   |   | 1,915 |   |
| Dispositions                           |   |     | -      |   |      |   | (131   | )        |   |   | (621      | )      |   |      | -      |   |   |   | - |   |   |   | (752 | ) |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2016            |   |     | 54,477 |   |      |   | 4,388  |     |   |   | 12,392    |   |   |      | 4,584  |   |   |   | 1,363 |   |   |   | 77,204 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Accumulated depreciation:              |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Balance - January 1, 2015              |   |     | 13,653 |   |      |   | 1,494  |     |   |   | 9,313     |   |   |      | 3,323  |   |   |   | 796 |   |   |   | 28,579 |   |
| Changes during 2015:                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Additions                              |   |     | 1,725  |   |      |   | 493    |     |   |   | 1,437     |   |   |      | 59     |   |   |   | 11 |   |   |   | 3,725 |   |
| Dispositions                           |   |     | -      |   |      |   | (8     | )        |   |   | (421      | )      |   |      | -      |   |   |   | - |   |   |   | (429 | ) |
| Balance - December 31, 2015            |   |     | 15,378 |   |      |   | 1,979  |     |   |   | 10,329    |   |   |      | 3,382  |   |   |   | 807 |   |   |   | 31,875 |   |
| Changes during 2016:                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Additions                              |   |     | 1,660  |   |      |   | 922    |     |   |   | 874       |   |   |      | 267    |   |   |   | 37 |   |   |   | 3,760 |   |
| Dispositions                           |   |     | -      |   |      |   | (51    | )        |   |   | (621      | )      |   |      | -      |   |   |   | - |   |   |   | (672 | ) |
| Balance  - December 31, 2016      |   |     | 17,038 |   |      |   | 2850   |     |   |   | 10,582    |   |   |      | 3,649  |   |   |   | 844 |   |   |   | 34,963 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Net book value:                        |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| December 31, 2016                      |   |     | 37,439 |   |      |   | 1,538  |     |   |   | 1,810     |   |   |      | 935    |   |   |   | 519 |   |   |   | 42,241 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| December 31, 2015                      |   |     | 39,033 |   |      |   | 2,300  |     |   |   | 1,331     |   |   |      | 1,000  |   |   |   | 502 |   |   |   | 44,166 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Net book value (Dollars in thousands): |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| December 31, 2016                      |   |     | 9,737  |   |      |   | 400    |     |   |   | 471       |   |   |      | 243    |   |   |   | 135 |   |   |   | 10,986 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| December 31, 2015                      |   |     | 10,003 |   |      |   | 589    |     |   |   | 341       |   |   |      | 256    |   |   |   | 129 |   |   |   | 11,319 |   |
|                                   |   |     |   |   |      |   |   |     |   |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |

**NOTE 7**

----

**NOTE 8**

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

|            |   | December 31, |   |
|-----------------|--------|--------------|--------|
|            |   | 2 0 1 6      |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|            |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|            |   |         |   |   |   |   |   |   |   |
| Open accounts   |   |         | 13,401 |   |   |   | 11,147 |   |   |   | 3,485 |   |
| Checks payables |   |         | 1,431  |   |   |   | 1,716 |   |   |   | 372 |   |
|            |   |         | 14,832 |   |   |   | 12,863 |   |   |   | 3,857 |   |
|            |   |         |   |   |   |   |   |   |   |   |   |   |

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

|                          |   | December 31, |   |
|-------------------------------|--------|--------------|--------|
|                          |   | 2 0 1 6      |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                          |   | NIS          |   |   | NIS |   |   | US Dollars |   |
|                          |   |         |   |   |   |   |   |   |   |
| Government authorities        |   |         | -      |   |   |   | 1,166 |   |   |   | - |   |
| Customer advances             |   |         | 351    |   |   |   | 733 |   |   |   | 91 |   |
| Related parties (see note 23) |   |         | -      |   |   |   | 79 |   |   |   | - |   |
| Accrued expenses              |   |         | 2,182  |   |   |   | 1,675 |   |   |   | 568 |   |
|                          |   |         | 2,533  |   |   |   | 3,653 |   |   |   | 659 |   |
|                          |   |         |   |   |   |   |   |   |   |   |   |   |

**NOTE 9**

|        |   | Interest rate |   |   | Liabilities        |    |   |        |   |
|-------------|--------|---------------|--------|--------|--------------------|---------|--------|-------------|--------|
|        |   | As of         |   |   | Current            |    |   | Non-current |   |   | Total |   |
|        |   | December 31   |   |   | As of December 31, |    |
|        |   | 2 0 1 6       |   |   |               | 2 0 1 6 |   |        |   | 2 0 1 5 |   |   |   | 2 0 1 6 |   |   |   | 2 0 1 5 |   |   |   | 2 0 1 6 |   |   |   | 2 0 1 5 |   |
|        |   | annual        |   |   |               |    |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        |   | %             |   |   |               |    |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Banks debt: |   |          |   |   |               |    |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NIS         |   |          | P-0.5% |   |               |    | -      |        |   |   | 16 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16 |   |
|        |   |          |   |   |               |    |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

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

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

|                                 |   | December 31, |   |
|--------------------------------------|--------|--------------|--------|
|                                 |   | 2 0 1 6      |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                 |   | NIS          |   |   | NIS |   |   | US Dollars |   |
| Post-Employment Benefits:            |   |         |   |   |   |   |   |   |   |
| Benefits to retirees                 |   |         | 849    |   |   |   | 679 |   |   |   | 222 |   |
|                                 |   |         |   |   |   |   |   |   |   |   |   |   |
| Short term employee benefits:        |   |         |   |   |   |   |   |   |   |   |   |   |
| Accrued payroll and related expenses |   |         | 1,638  |   |   |   | 1,453 |   |   |   | 426 |   |
| Short term absence compensation      |   |         | 615    |   |   |   | 487 |   |   |   | 160 |   |
|                                 |   |         | 2,253  |   |   |   | 1,940 |   |   |   | 586 |   |
|                                 |   |         |   |   |   |   |   |   |   |   |   |   |

|                               |   | Valuation at |   |
|------------------------------------|--------|--------------|--------|
|                               |   | 2 0 1 6      |   |   | 2 0 1 5 |   |
|                               |   | %            |   |   | % |   |
|                               |   |         |   |   |   |   |
| Discount rate                      |   |         | 3.36   |   |   |   | 3.28 |   |
| Expected return on the plan assets |   |         | 3.36   |   |   |   | 3.28 |   |
| Rate of increase in compensation   |   |         | 4      |   |   |   | 4 |   |
|                               |   |         |   |   |   |   |   |   |
| Expected rate of termination:      |   |         |   |   |   |   |   |   |
| 0-1 years                          |   |         | 35     |   |   |   | 35 |   |
| 1-2 years                          |   |         | 30     |   |   |   | 30 |   |
| 2-3 years                          |   |         | 20     |   |   |   | 20 |   |
| 3-4 years                          |   |         | 15     |   |   |   | 10 |   |
| 4-5 years                          |   |         | 10     |   |   |   | 10 |   |
| 5 years and more                   |   |         | 7.5    |   |   |   | 7.5 |   |

----

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

|                                                                    |   | Year ended December 31, |   |
|-------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                    |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                                                    |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                                                                    |   |                    |   |   |   |   |   |   |   |
| Current service cost                                                    |   |                    | 904    |   |   |   | 790 |   |   |   | 235 |   |
| Interest cost                                                           |   |                    | 148    |   |   |   | 123 |   |   |   | 38 |   |
| Expected return on the plan assets                                      |   |                    | (130   | ) |   |   | (108 | ) |   |   | (34 | ) |
| Employer contribution                                                   |   |                    | (939   | ) |   |   | (830 | ) |   |   | (244 | ) |
| Interest losses on severance payment allocated to remuneration benefits |   |                    | 28     |   |   |   | 21 |   |   |   | 7 |   |
| Actuarial losses (gains) recognized in the year                         |   |                    | (3     | ) |   |   | - |   |   |   | (1 | ) |
| Actuarial gains arising from experience adjustments                     |   |                    | 192    |   |   |   | 150 |   |   |   | 50 |   |
| Actuarial losses arising from changes in financial assumptions          |   |                    | 121    |   |   |   | (11 | ) |   |   | 32 |   |
| Benefit paid during the year                                            |   |                    | (151   | ) |   |   | (92 | ) |   |   | (39 | ) |
|                                                                    |   |                    | 170    |   |   |   | 43 |   |   |   | 44 |   |

----

|  | C. | Defined benefit plans: |
|--|----|------------------------|

|                                                          |   | Year ended December 31, |   |
|---------------------------------------------------------------|--------|-------------------------|--------|
|                                                          |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                                          |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                                                          |   |                    |   |   |   |   |   |   |   |
| Opening defined benefit obligation                            |   |                    | 4,357  |   |   |   | 3,800 |   |   |   | 1,133 |   |
| Current service cost                                          |   |                    | 904    |   |   |   | 789 |   |   |   | 235 |   |
| Interest cost                                                 |   |                    | 148    |   |   |   | 123 |   |   |   | 38 |   |
| Actuarial gains                                               |   |                    | (3     | ) |   |   | - |   |   |   | (1 | ) |
| Actuarial losses arising from experience adjustments          |   |                    | (36    | ) |   |   | (13 | ) |   |   | (9 | ) |
| Actuarial gains arising from changes in financial assumptions |   |                    | 192    |   |   |   | 150 |   |   |   | 50 |   |
| Benefits paid                                                 |   |                    | (814   | ) |   |   | (492 | ) |   |   | (212 | ) |
| Closing defined benefit obligation                            |   |                    | 4,748  |   |   |   | 4,357 |   |   |   | 1,234 |   |

|                                                                    |   | Year ended December 31, |   |
|-------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                    |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                                                    |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                                                                    |   |                    |   |   |   |   |   |   |   |
| Opening defined benefit assets                                          |   |                    | 3,678  |   |   |   | 3,165 |   |   |   | 957 |   |
| Expected return on the plan assets                                      |   |                    | 130    |   |   |   | 108 |   |   |   | 34 |   |
| Changes in financial assumptions                                        |   |                    | (156   | ) |   |   | (2 | ) |   |   | (41 | ) |
| Employer contribution                                                   |   |                    | 939    |   |   |   | 830 |   |   |   | 244 |   |
| Benefits paid                                                           |   |                    | (663   | ) |   |   | (402 | ) |   |   | (172 | ) |
| Interest losses on severance payment allocated to remuneration benefits |   |                    | (29    | ) |   |   | (21 | ) |   |   | (8 | ) |
| Closing defined benefit assets                                          |   |                    | 3,899  |   |   |   | 3,678 |   |   |   | 1,014 |   |

|                                                                   |   | Year ended December 31, |   |
|------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                   |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                                                   |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                                                                   |   |                    |   |   |   |   |   |   |   |
| Present value of funded liability                                      |   |                    | 4,748  |   |   |   | 4,357 |   |   |   | 1,235 |   |
| Fair value of plan assets - accumulated deposit in executive insurance |   |                    | 3,899  |   |   |   | 3,678 |   |   |   | 1,014 |   |
| Net liability deriving from defined benefit obligation                 |   |                    | 849    |   |   |   | 679 |   |   |   | 221 |   |
|                                                                   |   |                    |   |   |   |   |   |   |   |   |   |   |

----

|  | C. | Defined benefit plans: (Cont.) |
|--|----|--------------------------------|

|                           |   | Year ended December 31, |   |
|--------------------------------|--------|-------------------------|--------|
|                           |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                           |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|                           |   |                    |   |   |   |   |   |   |   |
| Actual return on plan's assets |   |                    | 131    |   |   |   | 108 |   |   |   | 34 |   |

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

----

**NOTE 12    -   INCOME TAXES**

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

|                                     |   | Year ended December 31 |   |
|------------------------------------------|--------|------------------------|--------|
|                                     |   | 2 0 1 6                |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                     |   | NIS                    |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
| Current taxes:                           |   |                   |   |   |   |   |   |   |   |   |   |   |
| Current taxes                            |   |                   | 4,067  |   |   |   | 5,745 |   |   |   | 8,154 |   |   |   | 1,057 |   |
| Taxes in respect of prior years          |   |                   | -      |   |   |   | (69 | ) |   |   | 36 |   |   |   | - |   |
|                                     |   |                   | 4,067  |   |   |   | 5,676 |   |   |   | 8,190 |   |   |   | 1,057 |   |
|                                     |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred taxes:                          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred taxes from continued operations |   |                   | 1,260  |   |   |   | (3,110 | ) |   |   | (1,004 | ) |   |   | 327 |   |
|                                     |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |                   | 5,327  |   |   |   | 2,566 |   |   |   | 7,186 |   |   |   | 1,384 |   |

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

|                                                                                                                   |   | Year ended December 31, |   |
|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                   |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                                                                                                   |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                                                                                                   |   |                    |   |   |   |   |   |   |   |   |   |   |
| Income before Income taxes                                                                                             |   |                    | 16,179 |   |   |   | 9,410 |   |   |   | 26,040 |   |   |   | 4,208 |   |
| Statutory tax rate                                                                                                     |   |                    | 25     | % |   |   | 26.5 | % |   |   | 26.5 | % |   |   | 25 | % |
| Tax computed by statutory tax rate                                                                                     |   |                    | 4,044  |   |   |   | 2,494 |   |   |   | 6,901 |   |   |   | 1,052 |   |
|                                                                                                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax increments (savings) due to:                                                                                       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-deductible expenses                                                                                                |   |                    | 70     |   |   |   | 29 |   |   |   | 63 |   |   |   | 18 |   |
| Tax exempt Income                                                                                                      |   |                    | (33    | ) |   |   | (98 | ) |   |   | (73 | ) |   |   | (9 | ) |
| Profit or loss for tax for which deferred taxes were not provided                                                      |   |                    | 1,198  |   |   |   | - |   |   |   | - |   |   |   | 321 |   |
| changes in tax rates                                                                                                   |   |                    | 88     |   |   |   | - |   |   |   | - |   |   |   | 23 |   |
| Temporary differences for which deferred taxes were not provided                                                       |   |                    | -      |   |   |   | 170 |   |   |   | (43 | ) |   |   | - |   |
| Differences in the definition of capital and non-monetary items for tax purposes and financial reporting purposes |   |                    | -      |   |   |   | - |   |   |   | 265 |   |   |   | - |   |
| Previous year taxes                                                                                                    |   |                    | -      |   |   |   | (69 | ) |   |   | 36 |   |   |   | - |   |
| Other                                                                                                                  |   |                    | (40    | ) |   |   | 40 |   |   |   | 37 |   |   |   | (10 | ) |
|                                                                                                                   |   |                    | 5,327  |   |   |   | 2,566 |   |   |   | 7,186 |   |   |   | 1,385 |   |

----

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

|                                                          |   |          |   |   | Recognized   |   |   |     |     |   |       |   |
|---------------------------------------------------------------|--------|---------------|--------|--------|--------------|--------|--------|----------|----------|--------|------------|--------|
|                                                          |   | January       |   |   | in profit or |   |   | December |     |   | December   |   |
|                                                          |   |  1, 2016 |   |   | loss         |   |   |     | 31, 2016 |   |       |   | 31, 2016 |   |
|                                                          |   | NIS           |   |   | NIS          |   |   | NIS      |     |   | US Dollars |   |
| Deferred taxes arise from the following:                      |   |          |   |   |         |   |   |     |     |   |       |   |   |   |   |
| Financial assets carried at fair value through profit or loss |   |          | (88    | )      |         |   | 155    |     |     |   | 67         |   |   |   | 17 |   |
| Employees benefits                                            |   |          | 283    |   |         |   | 69     |     |     |   | 352        |   |   |   | 92 |   |
| Allowance for doubtful accounts                               |   |          | 913    |   |         |   | (397   | )        |     |   | 516        |   |   |   | 134 |   |
|                                                          |   |          | 1,108  |   |         |   | (173   | )        |     |   | 935        |   |   |   | 243 |   |
| Carry forward tax losses                                      |   |          | 2,507  |   |         |   | (1,088 | )        |     |   | 1,419      |   |   |   | 369 |   |
|                                                          |   |          | 3,615  |   |         |   | (1,261 | )        |     |   | 2,354      |   |   |   | 612 |   |

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

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

|   |  (1) | The company and the consolidated companies have not yet been issued final tax assessments as of the date of their establishment. In accordance with the provisions of Section 145 of the Income Tax Ordinance, assessments up through and including 2012 are considered final, subject to certain restrictions. |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (2) | On July 30, 2013, the "Arrangements Law" (hereinafter - the "Law") passed in its third reading in the Knesset, and it was published in the Official Gazette on August 5, 2013. The provisions of the Law that are relevant to the Company involve an increase in the corporate tax, starting from the 2014 tax year, to a rate of 26.5%. As of December 31, 2015, deferred tax assets, which are calculated according to corporate tax, were calculated in accordance with the Law. |
|--------|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (3) | At the beginning of January, 2016, the Law to Amend the Income Tax Ordinance was published, which sets forth that the corporate tax rate will be reduced to a rate of 25% (instead of 26.5%). The new corporate tax rate will apply to income derived or accrued after January 1, 2016. |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|  |  (4) | On December, 2016, the Economic Efficiency Law (Legislative Amendments to Implement the Economic Policy for Budget Years 2017 and 2018), 5776-2016 was approved, including a further reduction of the corporate tax rate as from January 1, 2017, to a rate of 24% (instead of 25%) and as from January 1, 2018, to a rate of 23%. |
|--|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

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

|  | (2) | In August 21, 2014, the general meeting of The Company approved (after approval was received from the compensation committee and the board of directors of The Company, as required by law) a three year extension of the Management Service Agreements that was signed with the companies controlled by each of Messrs. Joseph and Zwi Williger. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|  | (1) | (Cont.) |
|--|-----|---------|

|  | (2) | On April 1, 1997 the Company entered into an agreement to provide the Parent Company administrative services pursuant to which the Company may provide office facilities leased by the Parent Company for a monthly fee of NIS 4,500 to be adjusted annually for changes in the Israeli CPI, which is NIS 6,993 (US Dollars 1,818) per month as of December 31, 2016. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|  | (3) | The Company does not generally enter into written agency or other agreements with its suppliers. However, the Company has written agreements with 24 foreign suppliers that confirm the exclusive appointment of the Company as the sole agent and/or distributor of such suppliers either with respect to a specific product or with respect to a line of products, within the State of Israel. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | The Company signed distribution agreements with distributors that distribute the Company's products all over Israel for a commission that range 7% to 10% of the distributor sales, depending on the product. The Company has no commitment to any of those distributors for ongoing relationship. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (1) | In December 2013, December 2014 and April 2016 the Company was served with 3 lawsuits and motions to certify them as class action lawsuits in accordance with Israel's Class Action Claims Law, 5766 - 2006, whose subject matter and cause of action, according to what is claimed, is the improper marketing of products which the Company imports and sells in a manner which allegedly misleads the consumer public. The class which the petitioning plaintiffs wish to represent is every resident of Israel who purchased the above Company products. The amount of the lawsuits, if successful, is estimated by the plaintiffs in the amount of approximately NIS 40 million. As for the date of the report, the Court approved the plaintiffs' withdrawal in those cases, in immaterial amounts. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | On November 14, 2016, Green Cola Hellas S.A. (in this section - the “Plaintiff”) filed a claim against Company in the Magistrates Court of Kfar Saba as a summary proceeding. The claim alleges breach of contract by Company, in that, according to the Plaintiff, Company failed to pay consideration for products provided to it by the Plaintiff. The sum of the claim is for NIS 201,025. On March 2, 2017, the court accepted Company’s motion to transfer the matter from an expedited proceeding to an ordinary case proceding. As of the date of this report, the matter is scheduled for a court hearing on September 13, 2017. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | In August 2014, the Ashdod Customs Office sent our subsidiary Gold Frost Ltd. ("Gold Frost") a charge notice claiming that goods imported by Gold Frost were improperly classified (hereinafter in this subsection - the "Charge Notice"). The customs amount demanded in the Charge Notice was approximately NIS 1.9 million. During the course of 2014, the Customs Office provided Gold Frost with a laboratory report on which it based the shortfall notice. After examination by Gold Frost, it was discovered that there was no error by Gold Frost in the classification of the goods which were the subject of the Charge Notice, and the Customs Office was petitioned to immediately cancel the Charge Notice. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**G. WILLI-FOOD INTERNATIONAL LTD.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(NIS in thousands)**

**NOTE 14    -   SHAREHOLDERS' EQUITY**

|                     |   | Ordinary shares          |       |
|--------------------------|--------|--------------------------|------------|
|                     |   | of NIS 0.1 parvalue each |       |
|                     |   | December 31              |       |
|                     |   | 2 0 1 6                  |       |   | 2 0 1 5 |   |
|                     |   |                     |       |   |   |   |
| Authorized share capital |   |                     | 50,000,000 |   |   |   | 50,000,000 |   |
|                     |   |                     |       |   |   |   |   |   |
| Issued and outstanding   |   |                     | 13,240,913 |   |   |   | 13,240,913 |   |

|  |  (1) | On November 13, 2014, the Board of Directors of the Parent Company authorized the purchase of up to US Dollars 5 million of the Company's Ordinary Shares.  The price per Ordinary Share to be acquired by the Parent Company will not exceed the Company's shareholders' equity per Ordinary Share.  The timing and amount of share purchases by the Parent Company will be determined by management of the Parent Company based on its evaluation of market conditions, the trading price of the Company's shares and other factors.  The purchase program may be increased, suspended or discontinued at any time. During the months of November and December 2014, 233,296 ordinary shares of NIS 0.1 par value were acquired in consideration of the amount of approximately US 1,691 thousand. As a result of these acquisitions, the Parent Company increased its holdings in Company's shares to 59.97% of the issued and paid up equity of the Company. |
|--|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | On March 4, 2015 and March 11, 2015, Mr. Zwi Williger and Mr. Joseph Williger, respectively, each exercised options to purchase 66,667 Ordinary Shares from the Company at $6.50 per share.  Pursuant to a put option granted to Messrs. Zwi and Joseph Williger and the Williger Management Companies as part of the terms of the Parent Company Controlling Stake Purchase Agreement (see Note 25B), each sold 66,667 Ordinary Shares to BSD on March 24, 2015 for a price of $12 per share. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**NOTE 15    -   SHARE BASED PAYMENT**

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

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

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

----

**NOTE 16    -   SELECTED CONSOLIDATED STATEMENTS OF OPERATIONS DATA**

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

|             |   | Year ended December 31, |    |
|------------------|--------|-------------------------|---------|
|             |   | 2 0 1 6                 |    |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|             |   | NIS                     |    |   | NIS |   |   | NIS |   |   | US Dollars |   |
|             |   |                    |    |   |   |   |   |   |   |   |   |   |
| Sale of products |   |                    | 294,202 |   |   |   | 312,514 |   |   |   | 328,741 |   |   |   | 76,515 |   |

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

|                          |   | Year ended December 31, |    |
|-------------------------------|--------|-------------------------|---------|
|                          |   | 2 0 1 6                 |    |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                          |   | NIS                     |    |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                          |   |                    |    |   |   |   |   |   |   |   |   |   |
| Purchases                     |   |                    | 220,088 |   |   |   | 209,577 |   |   |   | 241,186 |   |   |   | 57,241 |   |
| Transportation                |   |                    | 1,523   |   |   |   | 1,603 |   |   |   | 1,714 |   |   |   | 396 |   |
| Depreciation and amortization |   |                    | 2,287   |   |   |   | 2,203 |   |   |   | 1,958 |   |   |   | 595 |   |
| Maintenance                   |   |                    | 3,881   |   |   |   | 3,858 |   |   |   | 4,364 |   |   |   | 1,009 |   |
| Other costs and expenses      |   |                    | 1,278   |   |   |   | 2,107 |   |   |   | 1,565 |   |   |   | 333 |   |
|                          |   |                    | 229,057 |   |   |   | 219,348 |   |   |   | 250,787 |   |   |   | 59,574 |   |
| Change in finished goods      |   |                    | (11,472 | ) |   |   | 18,104 |   |   |   | (1,651 | ) |   |   | (2,984 | ) |
|                          |   |                    | 217,585 |   |   |   | 237,452 |   |   |   | 249,136 |   |   |   | 56,590 |   |

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

|                           |   | Year ended December 31, |   |
|--------------------------------|--------|-------------------------|--------|
|                           |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                           |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                           |   |                    |   |   |   |   |   |   |   |   |   |   |
| Salaries and related expenses  |   |                    | 12,969 |   |   |   | 12,532 |   |   |   | 12,146 |   |   |   | 3,373 |   |
| Transportation and maintenance |   |                    | 9,555  |   |   |   | 10,601 |   |   |   | 10,413 |   |   |   | 2,485 |   |
| Vehicles                       |   |                    | 3,833  |   |   |   | 3,989 |   |   |   | 4,610 |   |   |   | 997 |   |
| Advertising and promotion      |   |                    | 6,694  |   |   |   | 4,238 |   |   |   | 7,040 |   |   |   | 1,741 |   |
| Depreciation and amortization  |   |                    | 821    |   |   |   | 963 |   |   |   | 1,204 |   |   |   | 213 |   |
| Others                         |   |                    | 5,533  |   |   |   | 4,971 |   |   |   | 4,283 |   |   |   | 1,439 |   |
|                           |   |                    | 39,405 |   |   |   | 37,294 |   |   |   | 39,696 |   |   |   | 10,248 |   |

----

|                                          |   | Year ended December 31, |   |
|-----------------------------------------------|--------|-------------------------|--------|
|                                          |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                          |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |
| Salaries and related expenses                 |   |                    | 9,126  |   |   |   | 22,062 |   |   |   | 12,471 |   |   |   | 2,373 |   |
| Salary expenses relating Stock Incentive Plan |   |                    | -      |   |   |   | 152 |   |   |   | 2,124 |   |   |   | - |   |
| Office maintenance                            |   |                    | 1,106  |   |   |   | 1,149 |   |   |   | 1,059 |   |   |   | 288 |   |
| Professional fees                             |   |                    | 3,230  |   |   |   | 3,922 |   |   |   | 1,653 |   |   |   | 840 |   |
| Vehicles                                      |   |                    | 602    |   |   |   | 415 |   |   |   | 498 |   |   |   | 157 |   |
| Depreciation and amortization                 |   |                    | 652    |   |   |   | 558 |   |   |   | 472 |   |   |   | 169 |   |
| Bad and doubtful debts                        |   |                    | (1,292 | ) |   |   | 3,402 |   |   |   | 18 |   |   |   | (336 | ) |
| Communication                                 |   |                    | 116    |   |   |   | 135 |   |   |   | 168 |   |   |   | 30 |   |
| Other                                         |   |                    | 1,037  |   |   |   | 1,131 |   |   |   | 768 |   |   |   | 270 |   |
|                                          |   |                    | 14,577 |   |   |   | 32,926 |   |   |   | 19,231 |   |   |   | 3,791 |   |

|                                         |   | Year ended December 31, |   |
|----------------------------------------------|--------|-------------------------|--------|
|                                         |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                         |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                         |   |                    |   |   |   |   |   |   |   |   |   |   |
| Payroll (without payment to related parties) |   |                    | 19,184 |   |   |   | 18,061 |   |   |   | 15,483 |   |   |   | 4,989 |   |
|                                         |   |                    | 19,184 |   |   |   | 18,061 |   |   |   | 15,483 |   |   |   | 4,989 |   |

|                                      |   | Year ended December 31, |   |
|-------------------------------------------|--------|-------------------------|--------|
|                                      |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                      |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                      |   |                    |   |   |   |   |   |   |   |   |   |   |
| Depreciation of fixed assets (see note 6) |   |                    | 3,762  |   |   |   | 3,807 |   |   |   | 3,634 |   |   |   | 978 |   |

----

|                                     |   | Year ended December 31, |   |
|------------------------------------------|--------|-------------------------|--------|
|                                     |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                     |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| Operation Protective Edge                |   |                    | -      |   |   |   | 1,961 |   |   |   | 2,792 |   |   |   | - |   |
| Capital gain on fixed assets realization |   |                    | 112    |   |   |   | 121 |   |   |   | 147 |   |   |   | 30 |   |
| Other                                    |   |                    | -      |   |   |   | - |   |   |   | 4 |   |   |   | - |   |
|                                     |   |                    | 112    |   |   |   | 2,082 |   |   |   | 2,943 |   |   |   | 30 |   |

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

|                                                     |   | Year ended December 31, |   |
|----------------------------------------------------------|--------|-------------------------|--------|
|                                                     |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                                     |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
| Interest Income:                                         |   |                    |   |   |   |   |   |   |   |   |   |   |
| Short-term bank deposits                                 |   |                    | 333    |   |   |   | 957 |   |   |   | 291 |   |   |   | 87 |   |
| Interest Income of debentures held for trading           |   |                    | 1,791  |   |   |   | 1,901 |   |   |   | 1,293 |   |   |   | 466 |   |
| Other                                                    |   |                    | (11    | ) |   |   | (74 | ) |   |   | 171 |   |   |   | (3 | ) |
| Total interest Income                                    |   |                    | 2,113  |   |   |   | 2,784 |   |   |   | 1,755 |   |   |   | 550 |   |
| Other:                                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in fair value of financial assets at fair values |   |                    | 1,924  |   |   |   | 186 |   |   |   | (1,995 | ) |   |   | 500 |   |
| Loss from non-tradable financial assets (see note 25H).  |   |                    | (7,734 | ) |   |   | - |   |   |   | - |   |   |   | (2,011 | ) |
| Foreign currency differences                             |   |                    | -      |   |   |   | 13 |   |   |   | 2,745 |   |   |   | - |   |
| Dividends                                                |   |                    | 272    |   |   |   | 380 |   |   |   | 289 |   |   |   | 71 |   |
| Total financing Income                                   |   |                    | (3,425 | ) |   |   | 3,363 |   |   |   | 2,794 |   |   |   | (890 | ) |

----

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

|                                  |   | Year ended December 31, |   |
|---------------------------------------|--------|-------------------------|--------|
|                                  |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                  |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
| Other:                                |   |                    |   |   |   |   |   |   |   |   |   |   |
| Foreign currency differences          |   |                    | 2,222  |   |   |   | 627 |   |   |   | - |   |   |   | 578 |   |
| Bank fees                             |   |                    | 449    |   |   |   | 351 |   |   |   | 333 |   |   |   | 117 |   |
| Management fees for investment houses |   |                    | 300    |   |   |   | - |   |   |   | - |   |   |   | 78 |   |
| Other                                 |   |                    | 172    |   |   |   | - |   |   |   | 42 |   |   |   | 45 |   |
|                                  |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total financing costs                 |   |                    | 3,143  |   |   |   | 978 |   |   |   | 375 |   |   |   | 817 |   |

**NOTE 19    -   EARNING PER SHARE**

|                                                                                                      |   | Year ended December 31, |       |
|-----------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                                      |   | 2 0 1 6                 |       |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                                                                                      |   | NIS                     |       |   | NIS |   |   | NIS |   |   | US Dollars |   |
| A.        Basic earnings per share:                                    |   |                    |       |   |   |   |   |   |   |   |   |   |
| Earnings used in the calculation of basic earnings per share to equity holders of the parent              |   |                    | 10,852     |   |   |   | 6,844 |   |   |   | 18,854 |   |   |   | 2,823 |   |
|                                                                                                      |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| B.        Diluted earnings per share:                                  |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit used to compute diluted earnings per share from continuing operations                              |   |                    | 10,852     |   |   |   | 6,844 |   |   |   | 18,854 |   |   |   | 2,823 |   |
|                                                                                                      |   |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of shares used in computing basic earnings per share from continuing operations   |   |                    | 13,107,579 |   |   |   | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 13,107,579 |   |
| Weighted average number of shares used in computing diluted earnings per share from continuing operations |   |                    | 13,107,579 |   |   |   | 13,090,729 |   |   |   | 12,974,245 |   |   |   | 13,107,579 |   |

----

**NOTE 20    -   FINANCIAL INSTRUMENTS**

|  | A. | Significant accounting policies: |
|--|----|----------------------------------|

|  | B. | Categories of financial instruments: |
|--|----|--------------------------------------|

|                                                  |   | As of December 31, |    |
|-------------------------------------------------------|--------|--------------------|---------|
|                                                  |   | 2 0 1 6            |    |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                                  |   | NIS                |    |   | NIS |   |   | US Dollars |   |
| Financial assets                                      |   |               |    |   |   |   |   |   |   |
| Financial assets at fair value through profit or loss |   |               | 104,921 |   |   |   | 145,007 |   |   |   | 27,288 |   |
| Cash and cash equivalents                             |   |               | 129,577 |   |   |   | 79,421 |   |   |   | 33,700 |   |
| Short term deposit                                    |   |               | -       |   |   |   | 20,288 |   |   |   | - |   |
|                                                  |   |               |    |   |   |   |   |   |   |   |   |   |
|                                                  |   |               | 234,498 |   |   |   | 244,716 |   |   |   | 60,988 |   |
|                                                  |   |               |    |   |   |   |   |   |   |   |   |   |
| Financial liabilities                                 |   |               |    |   |   |   |   |   |   |   |   |   |
| Short term bank credit                                |   |               | -       |   |   |   | 16 |   |   |   | - |   |
|                                                  |   |               |    |   |   |   |   |   |   |   |   |   |
|                                                  |   |               | -       |   |   |   | 16 |   |   |   | - |   |

|  | C. | Objectives of managing financial risks: |
|--|----|-----------------------------------------|

|  | D. | Market risk: |
|--|----|--------------|

----

|  | E. | Other price risks: |
|--|----|--------------------|

|           |   | 2 0 1 6 |   |   | 2 0 1 5 |   |
|----------------|--------|---------|--------|--------|---------|--------|
|           |   | NIS     |   |   | NIS     |   |
|           |   |    |   |   |    |   |
| Profit or loss |   |    | 2,728  |   |    |   | 14,007 |   |
|           |   |    |   |   |    |   |   |   |

|  | F. | Credit risk: |
|--|----|--------------|

|  | G. | Liquidity risk management: |
|--|----|----------------------------|

----

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

|  | (1) | Financial liabilities that do not constitute derivate financial instruments |
|--|-----|-----------------------------------------------------------------------------|

|                 |   | December 31, |   |
|----------------------|--------|--------------|--------|
|                 |   | 2 0 1 6      |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                 |   | NIS          |   |   | NIS |   |   | US Dollars |   |
| Interest free:       |   |         |   |   |   |   |   |   |   |
| Short term bank debt |   |         | -      |   |   |   | 16 |   |   |   | - |   |

|  | (2) | Non derivatives financial instruments |
|--|-----|---------------------------------------|

|                                             |   | 1 month |    |   | 1-3 Months |   |   | 4-12 Months |   |   | 1-5 Years |   |   | More then5 Years |   |   | Total  |   |
|--------------------------------------------------|--------|---------|---------|--------|------------|--------|--------|-------------|--------|--------|-----------|--------|--------|------------------|--------|--------|--------|--------|
|                                             |   | NIS     |    |   | NIS        |   |   | NIS         |   |   | NIS       |   |   | NIS              |   |   | NIS    |   |
|                                             |   |    |    |   |       |   |   |        |   |   |      |   |   |             |   |   |   |   |
| 2016                                             |   |    |    |   |       |   |   |        |   |   |      |   |   |             |   |   |   |   |
| Financial instruments which bear interest        |   |    | 272     |   |       |   | 1,683  |        |   |   | 2,583     |   |   |             | 29,580 |   |   |   | 24,346 |   |   |   | 58,464 |   |
| Financial instruments which do not bear interest |   |    | 176,651 |   |       |   | -      |        |   |   | -         |   |   |             | -      |   |   |   | - |   |   |   | 176,651 |   |
|                                             |   |    | 176,923 |   |       |   | 1,683  |        |   |   | 2,583     |   |   |             | 29,580 |   |   |   | 24,346 |   |   |   | 235,115 |   |
|                                             |   |    |    |   |       |   |   |        |   |   |      |   |   |             |   |   |   |   |   |   |   |   |   |   |
| 2015                                             |   |    |    |   |       |   |   |        |   |   |      |   |   |             |   |   |   |   |   |   |   |   |   |   |
| Financial instruments which bear interest        |   |    | 20,907  |   |       |   | 820    |        |   |   | 20,984    |   |   |             | 25,897 |   |   |   | 24,921 |   |   |   | 93,529 |   |
| Financial instruments which do not bear interest |   |    | 164,653 |   |       |   | -      |        |   |   | -         |   |   |             | -      |   |   |   | - |   |   |   | 164,653 |   |
|                                             |   |    | 185,560 |   |       |   | 820    |        |   |   | 20,984    |   |   |             | 25,897 |   |   |   | 24,921 |   |   |   | 258,182 |   |

----

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

|  | (2) | Non derivatives financial instruments (Cont.): |
|--|-----|------------------------------------------------|

|                                                  |   | December 31, |    |
|-------------------------------------------------------|--------|--------------|---------|
|                                                  |   | 2 0 1 6      |    |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                                                  |   | NIS          |    |   | NIS |   |   | US Dollars |   |
|                                                  |   |         |    |   |   |   |   |   |   |
| Cash and cash equivalents                             |   |         | 129,577 |   |   |   | 79,421 |   |   |   | 33,700 |   |
| Financial assets at fair value through profit or loss |   |         | 104,921 |   |   |   | 145,007 |   |   |   | 27,288 |   |
| Short term deposit                                    |   |         | -       |   |   |   | 20,288 |   |   |   | - |   |
|                                                  |   |         |    |   |   |   |   |   |   |   |   |   |
|                                                  |   |         | 234,498 |   |   |   | 244,716 |   |   |   | 60,988 |   |

|  | H. | Exchange rate risk: |
|--|----|---------------------|

|       |   | Assets  |   |   | Liabilities |   |
|------------|--------|---------|--------|--------|-------------|--------|
|       |   | 2 0 1 6 |   |   | 2 0 1 5     |   |   | 2 0 1 6 |   |   | 2 0 1 5 |   |
|       |   | NIS     |   |   | NIS         |   |   | NIS |   |   | NIS |   |
|       |   |    |   |   |        |   |   |   |   |   |   |   |
| US Dollars |   |    | 43,263 |   |        |   | 50,775 |   |   |   | 1,387 |   |   |   | 1,445 |   |
|       |   |    |   |   |        |   |   |   |   |   |   |   |   |   |   |   |
| EUR        |   |    | 57,805 |   |        |   | 11,802 |   |   |   | 6,071 |   |   |   | 3,257 |   |
|       |   |    |   |   |        |   |   |   |   |   |   |   |   |   |   |   |

----

|           |   | US DollarsImpact |   |   | EUR Impact |   |
|----------------|--------|------------------|--------|--------|-----------------|--------|
|           |   | 2 0 1 6          |   |   | 2 0 1 6         |   |
|           |   | NIS              |   |   | NIS             |   |
|           |   |             |   |   |            |   |
| Profit or loss |   |             | 4,187  |   |            |   | 5,173 |   |

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

|  | I. | Fair value of financial instruments: |
|--|----|--------------------------------------|

----

|  | I. | Fair value of financial instruments: (Cont.). |
|--|----|-----------------------------------------------|

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

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

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

|                                                            |   | December 31, 2016 |    |
|-----------------------------------------------------------------|--------|-------------------|---------|
|                                                            |   | Level 1           |    |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                                                            |   | NIS               |    |   | NIS |   |   | NIS |   |   | NIS |   |
| financial assets 'at fair value through profit or loss' (FVTPL) |   |              |    |   |   |   |   |   |   |   |   |   |
| Marketable securities and derivatives                           |   |              | 104,921 |   |   |   | - |   |   |   | - |   |   |   | 104,921 |   |

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

----

|                              |   |       |   |   | Current liabilities |   |
|-----------------------------------|--------|------------|--------|--------|---------------------|--------|
|                              |   |       |   |   | December 31,        |   |
|                              |   | Exchange   |   |   | 2 0 1 6             |   |   | 2 0 1 6 |   |   | 2 0 1 6 |   |
|                              |   | rate       |   |   | Cost Value NIS      |   |   | fair value NIS |   |   | NIS |   |   | US Dollars |   |
| Derivatives designated as hedges: |   |       |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Forward contracts in US Dollars   |   | 3.85-3.902 |   |   |                | 2,890  |   |   |   | 35 |   |   |   | - |   |   |   | 9 |   |
| Total                             |   |       |   |   |                | 2,890  |   |   |   | 35 |   |   |   | - |   |   |   | 9 |   |

**NOTE 22    -   SEGMENT INFORMATION**

----

|  | B. | Revenues from the main customers of the Import segment: |
|--|----|---------------------------------------------------------|

|       |   | Year ended December 31, |   |
|------------|--------|-------------------------|--------|
|       |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|       |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|       |   |                    |   |   |   |   |   |   |   |   |   |   |
| Customer A |   |                    | 46,171 |   |   |   | 57,161 |   |   |   | 56,404 |   |   |   | 12,008 |   |

|                                |   | Year ended December 31, |    |
|-------------------------------------|--------|-------------------------|---------|
|                                |   | 2 0 1 6                 |    |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                |   | NIS                     |    |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                |   |                    |    |   |   |   |   |   |   |   |   |   |
| Canned Vegetables and Pickles       |   |                    | 41,991  |   |   |   | 41,161 |   |   |   | 57,433 |   |   |   | 10,920 |   |
|                                |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dairy and Dairy Substitute Products |   |                    | 108,250 |   |   |   | 100,321 |   |   |   | 82,899 |   |   |   | 28,153 |   |
|                                |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dried fruit, nuts and beans         |   |                    | -(*     | ) |   |   | -(* | ) |   |   | 41,077 |   |   |   | -(* | ) |

----

**NOTE 23    -   RELATED PARTIES**

|                                          |   | Year ended December 31, |   |
|-----------------------------------------------|--------|-------------------------|--------|
|                                          |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 4 |   |   | 2 0 1 6 |   |
|                                          |   | NIS                     |   |   | NIS |   |   | NIS |   |   | US Dollars |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |
| Sales of goods to the Parent Company          |   |                    | 208    |   |   |   | 265 |   |   |   | 330 |   |   |   | 54 |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Participation in expenses with Parent Company |   |                    | 296    |   |   |   | 301 |   |   |   | 306 |   |   |   | 77 |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Management fees                               |   |                    | 1,609  |   |   |   | 8,428 |   |   |   | 3,474 |   |   |   | 418 |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bonus                                         |   |                    | 1,210  |   |   |   | 7,340 |   |   |   | 3,094 |   |   |   | 315 |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share-based payment                           |   |                    | -      |   |   |   | 152 |   |   |   | 2,124 |   |   |   | - |   |
|                                          |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Car expenses                                  |   |                    | 90     |   |   |   | 1,016 |   |   |   | 443 |   |   |   | 23 |   |

|            |   | Year ended December 31, |   |
|-----------------|--------|-------------------------|--------|
|            |   | 2 0 1 6                 |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|            |   | NIS                     |   |   | NIS |   |   | US Dollars |   |
|            |   |                    |   |   |   |   |   |   |   |
| Due to officers |   |                    | 42     |   |   |   | - |   |   |   | 11 |   |
|            |   |                    |   |   |   |   |   |   |   |   |   |   |
| Parent Company  |   |                    | 361    |   |   |   | 456 |   |   |   | 94 |   |

----

|  | (A) | One third (1/3) - as of the end of 12 months from the date of the allocation of the option statements (hereinafter in this section - the "Effective Date") and until the end of 36 months from the Effective Date. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (B) | One third (1/3) - as of the end of 24 months from the Effective Date and until the end of 48 months from the Effective Date. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------|

|  | (C) | One third (1/3) - as of the end of 36 months from the Effective Date and until the end of 60 months from the Effective Date. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------|

----

**NOTE 24    -   GUARANTEES AND PLEDGES**

|                   |   | As of December 31, |   |
|------------------------|--------|--------------------|--------|
|                   |   | 2 0 1 6            |   |   | 2 0 1 5 |   |   | 2 0 1 6 |   |
|                   |   | NIS                |   |   | NIS |   |   | US Dollars |   |
|                   |   | (in thousands)     |   |
|                   |   |               |   |   |   |   |   |   |   |
| Bank letters of credit |   |               | 1,580  |   |   |   | 16,214 |   |   |   | 411 |   |
| Bank overdraft         |   |               | -      |   |   |   | 16 |   |   |   | - |   |
|                   |   |               | 1,580  |   |   |   | 16,230 |   |   |   | 411 |   |

|  | A. | The Group, through Goldfrost, has an agreement with Arla, under which it is the exclusive agent and distributor of Arla in Israel with respect to certain products (the "Distribution Agreement"). |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | B. | On March 2, 2014, Mr. Zwi Williger and Mr. Joseph Williger (together, the "Sellers"), the controlling shareholders of the Parent Company, our controlling shareholder, signed an agreement with BSD Crown Ltd. (f/k/a Emblaze Ltd.), a company listed on the London Stock Exchange ("BSD") (the "BSD Agreement"), to sell their controlling stake in the Parent Company (approximately 58.04% of outstanding shares) to BSD (the "BSD Transaction"). Pursuant to a special tender offer to shareholders on May 1, 2014, BSD acquired shares carrying 5% of the voting rights in the Parent Company. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | C. | On May 4, 2014, BSD completed its acquisition of 8,200,371 ordinary shares from the Sellers and other the Parent Company shareholders who participated in the tender offer. The ordinary shares of the Parent Company acquired by BSD represented 61.64% of the outstanding ordinary shares of the Parent Company and 62.19% of its voting rights. As of December 31, 2016 BSD is the controlling shareholder in the parent Company on account of its holding 8,200,371 ordinary shares of the parent Company, representing some 61.64% of the issued and paid-up capital of the parent Company, and some 62.19% of the voting rights therein. |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | D. | On July 15, 2015, Mr. Gregory Gurtovoy purchased from Mr. Alexander Granovsky and the Stichting Chabad Charity Foundation in Holland all of their holdings in Israel 18 BV, which is the indirect controlling shareholder of the Company ("Israel 18" and the "Transaction," respectively). Mr. Gurtovoy holds some 95% of the issued and paid up share capital of Israel 18. After the transaction, and as of that date, Mr. Gurtovoy holds preferred shares in Israel 18, representing approximately 90% of the voting rights in Israel 18 and granting him the right to appoint the directors in Israel 18, as well as ordinary shares in Israel 18, comprising about 9.5 % of voting rights in Israel 18 and some 95% of the issued and paid up capital of Israel 18. Mr. Yossi Schneorson, former director in the parent Company and on the board of BSD, holds about 4.95% of the capital rights in Israel 18. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**NOTE 25    -   SAGNIFICANT EVENTS DURING THE REPORTING PERIOD**

|  | E. | On June 29, 2015, "Mega Retail Ltd." ("Mega"), one of the largest customers of the company in the organized retail market, filed a motion to certify a creditor arrangement with its suppliers. On July 14, 2015, the Lod District Court approved a rehabilitation arrangement. |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**NOTE 25    -   SAGNIFICANT EVENTS DURING THE REPORTING PERIOD**

|  | F. | During the course of June-August, 2016, 23,089 ordinary shares of NIS 0.1 par value each of The Company were purchased by the Parent Company in consideration of the sum of approximately NIS 409 thousands. Following this acquisition, and as a result of a combination of the events listed in Note 25 d and e, above, as of the reporting date, the parent Company holds 8,200,542 ordinary shares in the company, representing some 61.93% of the issued and paid up capital and voting rights therein (fully diluted, some 61.93%) and, together with BSD, some 67.76% of the company's issued and paid up share capital and voting rights (fully diluted, some 67.76%). |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | G. | On May 18, 2016, the parent Company contracted with Guest Krieger Limited in a directors' and executives' liability insurance policy for a period that began on May 18, 2016 and ending on May 17, 2017. The insurance policy, in Israel and abroad, is limited to a scope of liability of US $10 million per incident and for the period, with an annual premium of USD 60 thousand. The Company's deductible amounts to US $15 thousand  per event, excepting a deductible of US $50 thousand for claims filed in the United States and Canada, and excepting a deductible amounting to US $250 thousand for claims relating to the securities law in the United States and Canada, and excepting a deductible amounting to US $100 thousand for claims relating to labor law in Israel, and excepting a deductible amounting to US $250 thousand for claims relating to labor law in the US and Canada. Said engagement is based on the employment terms principles, the framework for approval of ongoing transactions approved by the general meeting of the parent Company's shareholders on October 7, 2015, and in accordance with the Company's remuneration policy. |
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**NOTE 25    -   SAGNIFICANT EVENTS DURING THE REPORTING PERIOD**

|  | H. | On February 17, 2016, the offices of the Company, BSD and BGI (collectively in this section: the "Group") were searched by the ISA, in the course of which various documents and computers were collected from the Group's offices. Furthermore, several executives in the Group were interrogated, and Mr. Gregory Gurtovoy, the chairman of the Company's board of directors and its (indirect) controlling shareholder, was detained and interrogated by the Authority for three days, following which he remained under house arrest for two weeks (which then concluded), under suspicion of the crimes of fraudulent acquisition under aggravating circumstances, falsifying corporate documents, fraud, and a breach of trust in a corporation, money laundering crimes, as well as reporting in order to deceive a reasonable investor. |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**NOTE 25    -   SAGNIFICANT EVENTS DURING THE REPORTING PERIOD**

|  | I. | On February 18, 2016, trading in the securities of the company, ceased. From a conversation between the Company's counsel and a representative of the Nasdaq Listing Qualifications ("NASDAQ") following the cessation of trade, the company received letters from NASDAQ seeking clarification in relation to the investigation being conducted by the Authority in connection with suspected violations of certain sections of the Securities Law in Israel. As of the reporting date and the publishing date, the Company has acted to provide answers to the questions arising from the letters, subject to the limitations of the investigation. On April 7, 2016, trading in the Company's shares on NASDAQ resumed. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | J. | On February 21, 2016, a petition was filed with the Tel Aviv-Jaffa District Court by a purported shareholder of Willi-Food for approval of a derivative action against the Company's directors and executive officers.  The Company and Willi-Food have been named as respondents. The claim alleges USD 3 million in damages caused to the applicant due to an alleged breach of fiduciary duties and duty of care of the Company's directors and executive officers to the Company related to the Investment described in legal proceeding 4, above. On April 21, 2016, the Tel Aviv-Jaffa District Court granted to the Company's directors and executive officers an extension of 45 days to respond the claim. On September 27, 2016, the Israeli Securities Authority (the “ISA” or "Authority") petitioned the court asking that certain restrictions imposed byteh Authority to protect the integrity of the Investigation remain in place for six additional months. On October 5, 2016, the Company filed its response to the Authority’s update, seeking a continuance with respect to the deadline for filing the Company’s response to the Certification Motion until 60 days following the removal of the restrictions placed on it by the Authority. On January 22, 2017, the court determined that, in light of the Authority’s restrictions, the deadline for the filing of the Company’s response should be stayed at this stage, and requested to be updated within 60 days concerning the progression of the Investigation and the restrictions place by the Authority on account thereof. The Company expects that the deadline for the filing of its response will be at least 60 days from the date on which the restrictions imposed by the Authority are removed. On March 27, 2017, the Authority filed an update with the court indicating its position that there remain in place restrictions on carrying out certain actions by the parties involved in the civil proceeding involving the collection of testimony of those involved in the Investigation. Nevertheless, the ISA mentioned that with respect to certain parties who are respondents to the petition and have not been investigated by the ISA, it has no objection if these parties file their response with the court. The court at that time determined that it is doubtful if it would be worthwhile to move forward with only some of the parties to the case, but rather would wait for the parties' response to the Authority update. On April 10, 2017, the Petitioner filed its response to the Authority's update, in which it claimed that all the respondents should file their responses to the petition. The Company is required to file its response to the Authority's update by May 1, 2017. At this preliminary stage, the Company is unable to make a provision for this claim. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**NOTE 25    -   SAGNIFICANT EVENTS DURING THE REPORTING PERIOD**

|  | K. | On February 29, 2016, the company was served a claim and motion to certify as a securities class action that was filed in the Southern District of New York by a shareholder claiming to hold shares of the company (the "Plaintiff") against the company, Mr. Gurtovoy, the chairman of the parent Company's board of directors and its (direct) controlling shareholder, and some of its executives (past and present) (collectively: the "Defendants"). |
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|  | L. | On November 22, 2016, the company announced the disbursement of a dividend amounting to US $5 million (approximately NIS 19.25 million) (US $0.38 per share). The effective date for entitlement to the dividend was set at December 8, 2016. The dividend was paid in full on December 21, 2016. |
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|   | **G. WILLI-FOOD INTERNATIONAL LTD.** |                         |
|--------|--------------------------------------|------------------------------|
|   |                                 |                         |   |
|        | By:                                  | /s/ Iram Efraim Graiver |   |
|   |                                 | Iram Efraim Graiver          |   |
|   |                                 | President                    |   |
|   |                                 |                         |   |

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| Exhibit Number                         | Description                                                                                                                                                   |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                   |                                                                                                                                                          |
| †1.1                             | Memorandum of Association of the Company, as amended (7)                                                                                                      |
|                                   |                                                                                                                                                          |
| 1.2                                    | Articles of Association of the Company, as amended on March 20, 2014 (7)                                                                                      |
|                                   |                                                                                                                                                          |
| 2.1                                    | Specimen of Certificate for ordinary shares (1)                                                                                                               |
|                                   |                                                                                                                                                          |
| 4.1                                    | Share Option Plan (1)                                                                                                                                         |
|                                   |                                                                                                                                                          |
| †4.2                             | Services Agreement between the Company and Willi-Food, dated April 1, 1997 (2)                                                                                |
|                                   |                                                                                                                                                          |
| †4.3                             | Transfer Agreement between the Company and Gold Frost dated February 16, 2006 (3)                                                                             |
|                                   |                                                                                                                                                          |
| †4.4                             | Lease agreement for Logistics Center between the Company and Gold Frost dated February 16, 2006 (3).                                                          |
|                                   |                                                                                                                                                          |
| 4.5                                    | Placing Agreement between the Company, Gold Frost, certain officers of Gold Frost and Corporate Synergy dated March 2, 2006 (3).                              |
|                                   |                                                                                                                                                          |
| 4.6                                    | Lock In Agreement, between the Company, Gold Frost, Corporate Synergy and certain officers of Gold Frost, dated March 2, 2006 (3)                             |
|                                   |                                                                                                                                                          |
| 4.7                                    | Registration Rights Agreement, dated as of October 25, 2006, among the Company and the investors signatory thereto. (4)                                       |
|                                   |                                                                                                                                                          |
| †4.8                             | Sale Agreement, dated July 24, 2012, between the Company and Willi-Food Investments Ltd. (5)                                                                  |
|                                   |                                                                                                                                                          |
| 4.9                                    | 2013 Option Plan (6)                                                                                                                                          |
|                                   |                                                                                                                                                          |
| 4.10                                   | Agreement between G. Willi-Food International Ltd., Zvi V. & Co. Company Ltd. and Yossi Willi Management and Investment Ltd., dated November 12, 2015 (8) |
|                                   |                                                                                                                                                          |
| 8.1                                    | Subsidiaries of the Company (*)                                                                                                                          |
|                                   |                                                                                                                                                          |
| 12.1                                   | Certification of CEO of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)                      |
|                                   |                                                                                                                                                          |
| 12.2                                   | Certification of CFO of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)                      |
|                                   |                                                                                                                                                          |
| 13.1                                   | Certification of CEO of the Company pursuant to Rule 13a-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)                      |
|                                   |                                                                                                                                                          |
| 13.2                                   | Certification of CFO of the Company pursuant to Rule 13a-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)                      |
|                                   |                                                                                                                                                          |
| 15.(a).1      | Consent of Independent Registered Public Accounting Firm (*)                                                                                                  |
| † | English translations from Hebrew original.                                                                                    |
|---------|-------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                          |
| (1)     | Incorporated by reference to the Company’s Registration Statement on Form F-1, File No. 333-6314.                  |
| (2)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2001. |
| (3)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2005. |
| (4)     | Incorporated by reference to the Company’s Registration Statement on Form F-3, File No. 333-138200.                |
| (5)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012. |
| (6)     | Incorporated by reference to the Company’s Form 6-K filed October 31, 2013.                                             |
| (7)     | Incorporated by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013. |
| (8)     | Incorporated by reference to Appendix A to the Company’s Form 6-K filed December 10, 2015.                              |
| (*)     | Filed Herewith                                                                                                                |

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