Payton Planar Magnetics Ltd. and its Consolidated Subsidiaries Financial Statements September 30, 2016 (Unaudited)

	Page
Board of Directors Report	2
Review Letter	8
Condensed Consolidated Interim Financial Statements:
Statement of Financial Position	9
Statements of Comprehensive Income	11
Statements of Changes in Equity	12
Statements of Cash Flows	14
Notes to the Consolidated Interim Financial Statements	15

The Board of Directors' Report¹ on Corporate Affairs

We are pleased to present the Board of Directors' report on the affairs of Payton Planar Magnetics Ltd. and its consolidated subsidiaries

for the nine months ended on September 30, 2016.

Notice: This report contains certain forward-looking statements and information relating to the Company that are based on the beliefs of the Management of the Company as well as assumptions made by and information currently available to the Management of the Company. Such statements reflect the current views of the Company with respect to future events. Management emphasizes that the assumptions do not in any way imply commitment towards realization. The outcome of which is subject to certain risks and other factors, which may be outside of the Company's control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein as projected, anticipated, believed, estimated, expected or intended.

Reference in this report to forward looking statement shall be by stating that such information is given by way of estimation, evaluation, assessment, intentions, expectations, beliefs and similar terms, but it is possible that such information shall be given under other phrases.

1. A concise description of the corporation and its business environment

A. The Group

Payton Planar Magnetics Ltd. ("the Company") and its consolidated subsidiaries: Payton America Inc. ("Payton America"), Himag Planar Magnetics Ltd. ("Himag") and Payton Planar Holdings (1996) Ltd. ("Payton Holdings").

B. The Group's main fields of activity and changes that occurred in the period from January to September 2016

The Company, an Israeli high-tech enterprise, develops manufactures and markets Planar and Conventional transformers worldwide. The Company was founded in order to revolutionize the traditional approach to the design and manufacture of transformers through the concept of planar transformers. The Company completed its initial public offering in 1998 on the EuroNext Stock Exchange.

No material changes occurred in the Group's activity during the period from January 1st to September 30, 2016.

C. Principal customers

The consolidated sales revenues include sales to major customers (which make up in excess of 10% of the sales of the Group).

	For the nine-month period ended September 30	For the year ended December 31	For the nine-month period ended September 30
	2016	2015	2015
Customer A	17%	10%	11%
Customer B	11%	10%	*
Customer C	*	11%	12%

* Less than 10% of the Group's consolidated sales.

¹ The financial statements as at September 30, 2016 form an integral part thereof.

D. Marketing

The Group participates in most leading electronic exhibitions. During 2016 the Group participated in

APEC in Long Beach California, USA (April 2016), PCIM Europe 2016 Exhibition, Nuremberg, Germany (May, 2016), New-Tech Exhibition, Tel-Aviv, Israel (May, 2016), Electronica Exhibition, Munich, Germany (November, 2016) and others.
In addition, during 2016, the Company initiated several seminars and conferences in the USA.

E. Order Backlog

Order backlog of the Group as of September 30, 2016 amounted to USD 13,820 thousand (December 31, 2015 - USD 11,010 thousand). The backlog is composed only of firm orders.

Management estimates that most of the backlog as of 30.9.16 will be supplied until June 30, 2017.

2. Financial position

A. Statement of Financial Position as at September 30, 2016

Cash and cash equivalents and Short-term Deposits - these items amounted to a total of USD 19,068 thousand as at September 30, 2016 compared to USD 19,522 thousand as at December 31, 2015 and USD 20,406 thousand as at September 30, 2015.

Teh Company profitability during the first nine months of 2016 attributed to minimize the "cash level" decrease resulted from the dividend payment, at the amount of USD 3,092 thousand, on January 14, 2016.

Trade accounts receivable - amounted to USD 5,546 thousand as at September 30, 2016 compared to USD 4,314 thousand as at December 31, 2015 and USD 4,163 thousand as at September 30, 2015. The increase in this item is in line with the sales increase.

Liabilities to bank and others (Current & Non-current Liabilities) - amounted to a total of USD 91 thousand as at September 30, 2016 compared with USD 240 thousand as at December 31, 2015 and USD 1,823 thousand as at September 30, 2015. The amount of USD 91 thousand as at September 30, 2016 represents the contingent consideration against the purchase of Himag Solutions Ltd.

As at September 30, 2015 these liabilities comprised of an originally 10 year bank loan in the amount of USD 1,600 thousand, paid in full on October 2015. Additional USD 223 thousand represents the contingent consideration against the purchase of Himag Solutions Ltd.

B. Operating results

Summary of Consolidated quarterly Statements of Income US Dollars in thousands

Payton Planar Magnetics Ltd. Consolidated Comprehensive Income Statements

	Quarter 7-9/16	Quarter 4-6/16	Quarter 1-3/16	Quarter 10-12/15	Quarter 7-9/15
Sales revenues	8,306	7,498	6,570	6,930	6,859
Cost of sales	5,060	5,120	4,405	4,490	4,399
Gross profit	3,246	2,378	2,165	2,440	2,460
Development costs	(253)	(273)	(243)	(227)	(236)
Selling & marketing expenses	(532)	(592)	(550)	(565)	(507)
General & administrative expenses	(810)	(790)	(668)	(740)	(707)
Other income (expenses)	-	-	(1)	(10)	5
Operating profit	1,651	723	703	898	1,015
Finance income (expenses), net	15	10	83	9	(25)
Profit before income taxes	1,666	733	786	907	990
Income taxes	(328)	(127)	(149)	(229)	(135)
Profit for the period	1,338	606	637	678	855
Other comprehensive income items that will not be transferred to profit &loss Remeasurement of defined
benefit plan, net of taxes	-	-	1	23	-
Total other comprehensive
income	-	-	1	23	-
Total comprehensive income for the period	1,338	606	638	701	855

General Note: The Group is exposed to abrasion of the USD in relation to the NIS, Euro (€) and the Pound (£). Most of the Group's salaries and other operating costs are fixed in the local currencies. Revaluation of the local currencies drives to an increase or decrease in labor costs and other operating costs, thus, affects the operating results of the Company.

Sales revenues - The Group's sales revenues for the nine-month period ended September 30, 2016 were USD 22,374 thousand compared with USD 20,442 thousand in the nine-month period ended September 30, 2015 (increase of 9%) . Sales revenues in the third quarter of 2016 were USD 8,306 thousand compared with USD 6,859 thousand in the third quarter of 2015 (increase of 21%).

The sales increase in the third quarter of 2016 was mainly attributed to increasing demand in few major projects.

Gross profit - The Group's gross profit for the nine-month period ended September 30, 2016 amounted USD 7,789 thousand (35% of sales) compared with USD 7,597 thousand (37% of sales) in the nine-month period ended September 30, 2015. The Group's gross profit for the three-month period ended September 30, 2016 amounted USD 3,246 thousand (39% of sales) compared with USD 2,460 thousand (36% of sales) in the three-month period ended September 30, 2015.

The changes in the gross profit resulted mainly from different products mix and different production locations of each period sales, as well as from the sales volume increase (since part of the expenses included in the cost of sales did not increase in parallel to the sales increase).

Selling & marketing expenses - The Group's selling & marketing expenses are mainly comprised of: (1) commissions to the Group's reps' and Marketing Personnel, which are calculated as a portion of sales and of (2) other selling expenses (fixed) based on management policy. The Group's marketing efforts are concentrated through participation in major power electronic shows around the world and by collaborating with its worldwide rep's Network.

The Group's selling & marketing expenses for the nine months ended September 30, 2016 amounted to USD 1,674 thousand compared with USD 1,584 thousand in the nine months ended September 30, 2015. The increase in selling & marketing expenses relates mainly to expanding the Group's marketing team worldwide.

General& Administrative expenses - The Group's General & Administrative expenses for the nine-month period ended September 30, 2016 amounted to USD 2,268 thousand compared with USD 2,110 thousand in the nine months ended September 30, 2015. The increase in these expenses relates mainly due to an increase in other nonreoccurring G&A expenses.

Finance income (expenses), net - The Group's net finance income for the nine-month period ended September 30, 2016 amounted USD 108 thousand compared with a net finance expense of USD 5 thousand in the nine-month period ended September 30, 2015. The increase in this income resulted mainly from decrease in interest cost to bank, due to the repayment of the long term loan, and due to increase in profits from finance derivatives transactions.

3. Liquidity

A. Liquidity Ratios

Payton Planar Magnetics Ltd. Consolidated financial ratios
	September 30, 2016	December 31, 2015	September 30, 2015
Current ratio2	5.67	3.60	4.69
Quick ratio3	4.98	3.06	4.08

The following table presents the financial ratios in the Statement of Financial Position:

B. Operating activities

Cash flows generated from operating activities for the nine-month period ended September 30, 2016 amounted USD 3,260 thousand, compared with cash flows of USD 5,461 thousand for the nine-month period ended September 30, 2015. Cash flows generated from operating activities for the three-month period ended September 30, 2016 amounted USD 1,844 thousand, compared with cash flows of USD 2,743 thousand for the three-month period ended September 30, 2015.

The decrease in the cash flows from operating activities resulted mostly from the increase in trade accounts receivable (due to sales increase near the reported dates) as well as from other changes in assets and liabilities.

C. Investing activities

Cash flows generated from investing activities in the nine-month period ended September 30, 2016, amounted USD 3,056 thousand, compared with USD 418 thousand in the nine-month period ended September 30, 2015. Cash flows mostly stemmed from proceeds from bank deposits.

D. Financing activities

Cash flows used for financing activities in the nine-month period ended September 30, 2016, amounted USD 3,251 thousand, compared with USD 329 thousand in the nine-month period ended September 30, 2015. A dividend, at the amount of USD 3,092 thousand, that was announced on November 23, 2015 (USD 0.175 per

share), was paid in full on January 14, 2016.

4. Financing sources

The Group financed its activities during the reported periods from its own resources.

² Current ratio calculation – Current assets / Current liabilities

³ Quick ratio calculation – (Current assets – Inventories) / Current liabilities

5. External factors effects

Revaluation/devaluation of the local currencies, NIS and GBP, in relation to the U.S. Dollar leads to an increase/decrease (respectively) in labor costs and other operating costs. Most of the Group's salaries and other operating costs are fixed in local currencies; therefore, the operating results are affected.

Devaluation of the Euro(€) and Pound(£) in relation to the U.S. Dollar leads to a decrease in Group's assets in those currencies.

To the best of the Board of Directors' and management's knowledge, except the above mentioned, there have been no significant changes in external factors that may materially affect the Company's financial position or results of operations.

6. Statement by senior management in accordance with article 12, § 2 (3°( of the Royal Decree per 14.11.2007

Pursuant to article 12 § 2(3°( of the Royal Decree of 14 November 2007, David Yativ Chairman of the Board of Directors declares, on behalf of and for the account of Payton Planar Magnetics that, as far as is known to him,

a) The financial statements at September 30, 2016 are drawn up in accordance with IFRS and with IAS 34 "Interim Financial Reporting" as adopted by the European Union and present a true and fair view of the equity, financial situation and results of the company.
b) The report gives a true and fair view of the main events of the first nine months of year 2016, their impact on the financial statements, the main risk factors and uncertainties for the remaining months of the financial year, as well as the main transactions with related parties and their possible impact on the abbreviated financial statements.

The Company's Board of Directors wishes to thank our shareholders for their continuance trust and belief.

The Company's Board of Directors wishes to extent its sincere thanks to the entire personnel for their efforts and contribution to the Group's affairs.

Ness Ziona, November 24, 2016.

David Yativ Chairman of the Board of Directors

Doron Yativ Director and C.E.O.

Somekh Chaikin KPMG Millennium Tower 17 Ha'arba'a Street, PO Box 609 Tel Aviv 61006, Israel +972 3 684 8000

Review Report to the Shareholders of Payton Planar Magnetics Ltd.

Introduction

We have reviewed the accompanying financial information of Payton Planar Magnetics Ltd. and its subsidiaries comprising of the condensed consolidated interim statement of financial position as of September 30, 2016 and the related condensed consolidated interim statements of comprehensive income, changes in equity and cash flows for the nine and three-month periods then ended. The Board of Directors and Management are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review nothing has come to our attention that causes us to believe that the accompanying financial information was not prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting".

Somekh Chaikin Certified Public Accountants (Isr.) (A Member of KPMG International)

November 24, 2016

Condensed Consolidated Interim Statements of Financial Position as at

	September 30 2016	September 30 2015	December 31 2015
	(Unaudited)	(Unaudited)	(Audited)
	\$ thousands	\$ thousands	\$ thousands
Current assets
Cash and cash equivalents	9,059	10,222	6,004
Short-term deposits	10,009	10,184	13,518
Trade accounts receivable	5,546	4,163	4,314
Other accounts receivable	448	507	317
Inventory	3,468	3,711	4,149
Total current assets	28,530	28,787	28,302
Non-current assets
Fixed assets	12,018	12,443	12,323
Intangible assets	785	912	880
Deferred taxes	22	33	33
Total non-current assets	12,825	13,388	13,236

Total assets	41,355	42,175	41,538

David Yativ Doron Yativ Michal Lichtenstein Chairman of the Board of Directors Chief Executive Officer V.P. Finance & CFO

Date of approval of the Interim Financial Statements: November 24, 2016

Condensed Consolidated Interim Statements of Financial Position as at (cont'd)

	September 30 2016 (Unaudited)	September 30 2015 (Unaudited)	December 31 2015 (Audited)
	\$ thousands	\$ thousands	\$ thousands

Liabilities and equity
Current liabilities
Liabilities to bank and others	91	1,749	158
Trade payables	2,910	2,751	3,061
Other payables	1,301	1,279	1,174
Dividend payable	-	-	3,092
Current tax liability	354	20	71
Employee benefits	372	341	350
Total current liabilities	5,028	6,140	7,906

Non-current liabilities
Liabilities to others	-	74	82
Employee benefits	377	410	319
Deferred tax liabilities	571	363	434
Total non-current liabilities	948	847	835
Total liabilities	5,976	6,987	8,741
Equity
Share capital	4,836	4,836	4,836
Share premium	8,993	8,993	8,993
Retained earnings	21,550	21,359	18,968
Total equity	35,379	35,188	32,797

Total liabilities and equity	41,355	42,175	41,538

Condensed Consolidated Interim Statements of Comprehensive Income

	For the nine months ended September 30			For the three months ended September 30
	2016	2015	2016	2015	December 31 2015
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)
	\$ thousands	\$ thousands	\$ thousands	\$ thousands	\$ thousands
Revenues Cost of sales	22,374 (14,585)	20,442 (12,845)	8,306 (5,060)	6,859 (4,399)	27,372 (17,335)
Gross profit	7,789	7,597	3,246	2,460	10,037
Development costs Selling and marketing	(769)	(722)	(253)	(236)	(949)
expenses General and administrative	(1,674)	(1,584)	(532)	(507)	(2,149)
expenses Other (expenses) income, net	(2,268) (1)	(2,110) 16	(810) -	(707) 5	(2,850) 6
Operating profit	3,077	3,197	1,651	1,015	4,095
Finance income Finance expenses	177 (69)	102 (107)	77 (62)	45 (70)	160 (156)
Finance income (expenses), net	108	(5)	15	(25)	4
Profit before income taxes	3,185	3,192	1,666	990	4,099
Income taxes	(604)	(566)	(328)	(135)	(795)
Profit for the period	2,581	2,626	1,338	855	3,304
Other comprehensive income items that will not be transferred to profit and loss Remeasurement of defined benefit plan, net of taxes	1	-	-	-	23
Total other comprehensive income	1	-	-	-	23
Total comprehensive income for the period	2,582	2,626	1,338	855	3,327
Basic earnings per share (in \$)	0.15	0.15	0.08	0.05	0.19

Condensed Consolidated Interim Statement of Changes in Equity

	Share capital		Share	Accumulated
	Number of shares	\$ thousands	premium \$ thousands	earnings \$ thousands	Total \$ thousands
For the nine months ended September 30, 2016 (Unaudited) Balance at January 1, 2016 Total comprehensive	17,670,775	4,836	8,993	18,968	32,797
income for the period Profit for the period Other comprehensive income Total comprehensive income for the period	-	-	-	2,581	2,581
	- -	- -	- -	1 2,582	1 2,582
Balance at September 30, 2016	17,670,775	4,836	8,993	21,550	35,379
For the nine months ended September 30, 2015 (Unaudited) Balance at January 1, 2015	17,670,775	4,836	8,993	18,733	32,562
Total comprehensive income for the period Profit for the period	-	-	-	2,626	2,626
Total comprehensive income for the period	-	-	-	2,626	2,626
Balance at September 30, 2015	17,670,775	4,836	8,993	21,359	35,188
For the three months ended September 30, 2016 (Unaudited)
Balance at July 1, 2016 Total comprehensive income for the period	17,670,775	4,836	8,993	20,212	34,041
Profit for the period Total comprehensive income for the period	- -	- -	- -	1,338 1,338	1,338 1,338
Balance at September 30, 2016	17,670,775	4,836	8,993	21,550	35,379

Condensed Consolidated Interim Statement of Changes in Equity (cont'd)

	Share capital		Share	Accumulated
	Number of shares	\$ thousands	premium \$ thousands	earnings \$ thousands	Total \$ thousands
For the three months ended September 30, 2015 (Unaudited)
Balance at July 1, 2015	17,670,775	4,836	8,993	20,504	34,333
Total comprehensive
income for the period Profit for the period	-	-	-	855	855
Total comprehensive
income for the period	-	-	-	855	855
Balance at September 30, 2015	17,670,775	4,836	8,993	21,359	35,188
For the year ended December 31, 2015 (Audited)
Balance at
January 1, 2015 Total comprehensive income for the year	17,670,775	4,836	8,993	18,733	32,562
Profit for the year	-	-	-	3,304	3,304
Other comprehensive income	-	-	-	23	23
Total comprehensive income for the year	-	-	-	3,327	3,327
Transactions with owners, recognized directly in equity
Dividend to owners	-	-	-	(3,092)	(3,092)
Balance at
December 31, 2015	17,670,775	4,836	8,993	18,968	32,797

Condensed Consolidated Interim Statements of Cash Flows

	For the nine months ended September 30		For the three months ended September 30		Year ended December 31
	2016	2015	2016	2015	2015 (Audited)
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	\$ thousands	\$ thousands	\$ thousands	\$ thousands	\$ thousands
Operating activities
Profit for the period	2,581	2,626	1,338	855	3,304
Adjustments to reconcile profit to net
cash generated from operating activities:

Depreciation and amortization	754	788	255	266	1,049
Income taxes	604	566	328	135	795
Capital gain on sale of fixed assets	-	(16)	-	(5)	(16)
Changes in the fair value of contingent
consideration	1	-	-	-	10
Finance (income) expenses, net	(80)	(6)	(32)	15	(22)
Increase (decrease) in employee benefits	80	80	(48)	(118)	27
(Increase) decrease in trade accounts receivable	(1,232)	1,756	(577)	1,617	1,605
(Increase) decrease in other accounts receivable	(131)	(85)	(1)	(189)	105
Decrease (increase) in inventory	681	(178)	242	99	(616)
(Decrease) increase in trade payables	(75)	(225)	209	(60)	15
Increase in other payables	127	204	254	236	99
Interest received	122	103	21	26	140
Interest paid	-	(50)	-	(16)	(55)
Tax paid	(370)	(363)	(145)	(137)	(476)
Tax received	198	261	-	19	261
Cash flows generated from operating activities	3,260	5,461	1,844	2,743	6,225
Investing activities
Proceeds from sale of marketable
securities held for trading	-	205	-	-	205
Proceeds from (investments in) deposits, net	3,486	1,264	(6,002)	230	(2,076)
Investment in fixed assets	(439)	(1,081)	(176)	(92)	(1,120)
Proceeds from sale of fixed assets	9	30	9	12	30

Cash flows generated from (used for)
investing activities	3,056	418	(6,169)	150	(2,961)
Financing activities
Repayment of loan	-	(170)	-	(57)	(1,766)
Payment of contingent consideration	(159)	(159)	-	-	(159)
Dividend paid	(3,092)	-	-	-	-
Cash flows used for financing activities	(3,251)	(329)	-	(57)	(1,925)
Net increase (decrease) in
cash and cash equivalents	3,065	5,550	(4,325)	2,836	1,339
Cash and cash equivalents at beginning of the period	6,004	4,692	13,384	7,409	4,692
Effect of exchange rate fluctuations
on cash and cash equivalents	(10)	(20)	-	(23)	(27)
Cash and cash equivalents
at end of the period	9,059	10,222	9,059	10,222	6,004

Note 1 - General

Payton Planar Magnetics Ltd. ("the Company") was incorporated in December 1992. The address of the Company's registered office is 3 Ha'avoda Street, Ness-Ziona, Israel. The Company is a subsidiary of Payton Industries Ltd. (the "Parent Company"). The securities of the Company are registered for trade on the Euronext stock exchange in Brussels.

The condensed consolidated interim financial statements of the Group as at September 30, 2016 comprise the Company and its subsidiaries (together referred as the "Group").

The Group develops, manufactures and markets planar and conventional transformers and operates abroad through its subsidiaries and distributors.

Note 2 - Basis of Preparation

A. Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting". They do not include all the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements as at December 31, 2015 (hereinafter "annual financial statements"). These condensed consolidated interim financial statements were authorized for issue by the Company's Board of Directors on November 24, 2016.

B. Use of estimates and judgments

The preparation of interim financial statements in accordance to IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual financial statements.

Note 3 - Significant Accounting Policies

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its annual financial statements.

Notes to the Condensed Consolidated Interim Financial Statements

Note 4 - Income Taxes

On January 4, 2016 the Knesset plenum passed the Law for the Amendment of the Income Tax Ordinance (No. 216) - 2016, which provided, inter alia, reduction of the corporate tax rate by 1.5% to a rate of 25% as from 2016.

The deferred tax balances as at September 30, 2016 were calculated according to the new tax rate specified in the Law for the Amendment of the Income Tax Ordinance, at the tax rate expected to apply on the date of reversal. The effect of the change on the financial statements as at September 30, 2016 is reflected in a decrease in the deferred tax liabilities in the amount of USD 12 thousand. The effect of the change in the deferred tax liabilities has been recognized against deferred tax income in the amount of USD 11 thousand and against other comprehensive income in the amount of USD 1 thousand.

Note 5 - Financial Instruments

Fair value

The carrying amounts of financial assets and liabilities, including cash and cash equivalents, trade receivables, other receivables, deposits, trade payables, other payables, derivative instruments and liabilities to bank and others are the same or proximate to their fair value.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1: quoted prices (unadjusted) in active markets for identical instruments.
Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3: inputs that are not based on observable market data (unobservable inputs).

	September 30, 2016
	Level 3	Total
	(Unaudited)	(Unaudited)
	\$ thousands	\$ thousands
Contingent consideration liability	91	91
	September 30, 2015
	Level 3	Total
	(Unaudited)	(Unaudited)
	\$ thousands
		\$ thousands

Note 5 - Financial Instruments (cont'd)

Fair value hierarchy (cont'd)

	December 31, 2015
	Level 3	Total
	(Audited)	(Audited)
	\$ thousands	\$ thousands
Contingent consideration liability	240	240

As at September 30, 2016 the fair value of the contingent consideration liability has decreased to USD 91 thousand, following a payment of USD 159 thousand referring to year 2015. On the other hand, an increase has been recognized in the statement of comprehensive income as follows:

1. An amount of USD 1 thousand for the nine-month period ended September 30, 2016, that reflects the changes related to the expected annual sales turnover increase has been recognized as other expenses.
1. An amount of USD 9 thousand and USD 3 thousand for the nine-month and three-month periods ended September 30, 2016, respectively, that reflects the changes related to the time value of the liability has been recognized as finance expenses.