Payton Planar Magnetics Ltd.
Annual Report 2021

1
Payton Planar Magnetics Ltd.
Financial Statements as at December 31, 2021
Contents
Page
Board of Directors Report
2
Auditors’ Report
15
Consolidated Financial Statements:
Statements of Financial Position
21
Statements of Profit or Loss and Other Comprehensive Income
23
Statements of Changes in Equity
24
Statements of Cash Flows
25
Notes to the Financial Statements
26

2
The Board of Directors' Report
1
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 year ended on December 31, 2021
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
The Group includes Payton Planar Magnetics Ltd. ("the Company"), its consolidated subsidiaries and it’s Investee.
The Company holds two fully owned subsidiaries: (1) Payton America Inc., in Florida, USA, which mainly engages
in the manufacture and marketing of transformers for the US domestic market; and (2) Himag Planar Magnetics
Ltd., in the UK, which mainly engages in the development, manufacture and marketing of transformers and serves
as the Group base for the UK and the European markets. The Company also holds an affiliated company, a
strategic investment of 20% in a Hong-Kong holding company, PCT Industries Limited (PCT) that fully owns a
manufacturing subsidiary in China. The Chinese manufacturing subsidiary mentioned above is engaged in
manufacturing and assembly, serves as one of Payton's major Manufacturing Partners.






     



1
The financial statements as at December 31, 2021 form an integral part thereof.
Payton Planar Magnetics Ltd.
Payton Industries Ltd.
Euronext Brussels
Public
66.2%
33.8%
Payton America Inc.
Himag Planar
Magnetics Ltd.
PCT Industries
Limited

3
B. The Group's main fields of activity and changes that occurred in the period from January to December 2021
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.
- The COVID-19 crisis effect - in the year 2021, similar to year 2020, it seems that, the Group’s flexibility and
global spread, resulted in successfully handling this crisis. The manufacturing lines in Israel operated continuously
while abiding all required distance regulations.
During year 2021, also, the other Group’s members: the subsidiaries in England and United States continued their
business operations in the same manner while keeping all needed measures and abiding with their local regulations.
Payton’s worldwide planning and manufacturing facilities and geographically spread of the Group's production sites
in China, the Philippines, Israel, England and the United States minimized the effect of the COVID-19 epidemic
and has proven itself effective enabling the delivery of most orders on time.
In spite of the recent outbreak of the fifth covid-19 wave, in Israel and in other places over the world, most of the
companies got used to conduct their economic and business activities side by side the COVID-19 epidemic.
As at the date of signing these financial statements, all production sites are fully operational in a “Corona routine”.
- Global business environment changes - During year 2021 the additional global changes noted last year
(2020) continued. Among these global changes are included: a significant global shortage and price increase of raw
materials, a significant increase of materials lead-time, increase in shipping and transportation costs and shortage in
such means, changes in customers’ demands and postponing of delivery dates, lack of manpower and increase in
labor costs and recently also energy shortage in China that might result in production capacity shortage.
Management believes these trends are not going to end in the near future and will continue during year 2022 too.
The Company will continue to follow-up these global trends and update accordingly.
Another factor that affects the Group's activity is the devaluation of the US$ against the local NIS, the Euro and the
Pound, which mainly increases local labor costs and other operating costs in Israel and the United Kingdom. During
year 2021 the significant US$ devaluation become a more significant factor.
The Group continues to follow-up and monitors all the above mentioned global developments trying to minimize
any impact including maintaining its close contacts with its subcontractors, suppliers and customers, all in order to
adjust its operations in the best possible way.
It is noted that the above statement is a forward-looking statement as defined above.
On March 24, 2021 - the Company’s Board of Directors decided to pay the shareholders a dividend for the
financial years 2019 and 2020, at the amount of USD 7,422 thousand (USD 0.42 per share). The dividend was paid
in full on June 2021.
On March 28, 2022 - the Company’s Board of Directors decided to pay the shareholders a dividend, at the amount
of USD 8,023 thousand (USD 0.454 per share, to be paid on June 2022).

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C. Sales
The Group’s main customer base is related to the telecom/datacenter, automotive and power electronic market.
Additional markets the Group aims are Industrial and medical markets. During 2021, the Group kept operating its
activities in: North America, Europe, Japan, China, S. Korea, India and UK.
Sales for the year ended December 31, 2021 amounted to USD 43,980 thousand about the same volume of USD
43,874 thousand for the year ended December 31, 2020.
Revenues for the year ended 2021 consisted of recurring sales to existing customers and sales to new ones.
The Sales were generated primarily from telecom/datacenter, automotive companies and industrial companies.
D. 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 year ended
December 31
For the year ended
December 31
2021
2020
Quanta Computer Inc.



Customer B




Customer related to the Telecom/Datacenter industry.

Customer related to the Automotive industry.
E. Global Environment and External factors effect on the Group’s activity
In 2021 the Group plans to continue investing efforts to expand its production capacity as well as integration of
automation. In addition to its normal course of business the Group will continue its ongoing searching of new
markets as well as other business opportunities in order to keep expanding its core business.
Regarding the COVID-19 crisis effect andother global business environment changes (such as: global shortage and
price increase of raw materials, increase of materials lead-time, increase in shipping and transportation costs, , lack
of manpower etc.) - see paragraph B above and Note 1B to the Consolidated Financial Statements as at December
31, 2021.
Global currencies fluctuations and the devaluation of the US$ against the local NIS, the Euro and the Pound also
affect the Group’s performances. Both, in Israel and in the UK, there are currency fluctuations in the exchange rates
of the main currency (USD) vis-à-vis the NIS and the GBP.
Company’s Management is closely monitoring all above-mentioned market fluctuations and will continue to track
their developments and effects. In addition, Company’s Management is taking necessary actions in order to cope
with the situation, to the greatest extent possible.
As a result of the Company's conservative cash policy, management estimates that the Group is financially strong
and no liquidity problems are expected in the foreseeable future.

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F. Marketing
Normally the Group participates in leading electronic exhibitions. During 2021, due to COVID-19 crisis, there were
no exhibitions the Group participated in.
Company is focusing on serving Key customers with routine visits and latest technology development updates.
The Company strategy, which enables fulfilling the mission of gaining worldwide recognition and market share
growth, is:
* Targeting world leaders in their fields. Having these leaders as our customers is convincing other second tier
companies to adopt the Planar Technology.
* Focusing on wide-growth-potential customers with a need for advanced technology.
* To use the Group’s own sales team as well as its sales representatives’ network as sales channels.
* Expanding our activity in Japan, Europe, North America, India and S. Korea markets.
* Deepening activity with existing customers.
* Maintaining the wide presence and global recognition.
G. Manufacturing
The Group intends to expand and diversify its manufacturing capacity and capabilities, through manufacturing
partners in the Far East in China and the Philippines. This activity objective is to increase flexible production
capacity, to enable mass production quantities, lower products costs and increase competitiveness.
Regarding the COVID-19 crisis effect andother global business environment changes - see paragraph B above and
Note 1B to the Consolidated Financial Statements as at December 31, 2021.
H. Competition
In the recent years there has been an increasing interest of magnetics manufacturers to get into the Planar field. We
can note that there are more and more companies that are trying to design and manufacture the planar components.
However, the Company believes in its technology advantage Know-how and capabilities. It estimates it could
generally benefit from an increasing competition in the market due to greater exposure of the technology.
The Company cannot estimate its future market share. The following companies are considered as its potential
competitors: Pulse, Standex and Coilcraft - from the U.S.A. and Premo - from Spain.

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I. Order Backlog
As at December 31, 2021 this backlog amounted to USD 31,525 thousand, and as at March 13, 2022 to USD 44,032
thousand (December 31, 2020 - USD 18,921 thousand). The backlog is composed of the Company and its two fully
owned subsidiaries firm orders.
Order Backlog
US$ in thousands

March 13, 2022
December 31, 2021



Delivery due date within first quarter of 2022


Delivery due date within second quarter of 2022


Delivery due date within third quarter of 2022


Delivery due date within fourth quarter of 2022


Delivery due date is after 1.1.2023


Total
It is noted that the above statement is a forward-looking statement as defined above.
J. Framework agreements that do not constitute binding orders
At the end of 2018 and at the beginning of 2019, the Company entered into framework agreements with one of its
principle costumers (Customer B, as at 2021 yearly Financial Statements) for the supply of magnetic components to
three (3) different projects in the electric/hybrid vehicle industry (HEV). The nature of the activity in the automotive
industry is characterized by projects with a productive lifespan of about 5 to 7 years.
As of December 31, 2021, and as at the date of signing these financial statements, the Group estimates that only one
of those three projects will proceed to an extent that is not material to the Group’s business activity.
It is noted that the above statement is a forward-looking statement as defined above.
K. Human Resources
A factor of importance to the Company’s success is its ability to attract, train and retain highly-skilled technical, and
more specifically, qualified electronics engineers with experience in high frequency magnetics and with a
comprehensive understanding of high frequency magnetics, managerial, sales and marketing personnel.
Competition for such personnel is intense. The Company constantly betterments its personnel and has so far
succeeded in recruiting the appropriate personnel as required. This personnel is important in maintaining the pace in
research, design and technical customer support. The Company is confident however, that the challenges inherent in
its operations will satisfy its Company’s future recruitment needs. By the end of 2021, the Group employed 179
people. The Company retains employment contracts with most of its key employees and is of the opinion that
relations with its employees are satisfactory.
L. Quality Control
Payton Group has the ISO9001:2015 certification for its quality system. It has UL recognition for the use of several
Electrical Insulation Systems classes B, F and H in its products, also has recognition of the construction of a family
of magnetic components as complying with the requirements of UL and IEC 60950 standards of safety. Payton is
authorized by an accredited testing agency to apply the CE mark to many of its commercial transformers.

7
Payton also meets recognized international safety standards and conforms to MIL.T, CSA VDE and other standards.
The Company is certified with ISO14001:2015 (Environmental standard). Payton is a Lead Free company as
required by the 2015/863/EU RoHS directive.
The Company is certified with two important International Quality Management Standards: for Automotive - IATF
16949:2016 and for Space & Avionic - AS9100 (at Payton America only).
M. Objective and Business Strategy
Since its incorporation, Payton has provided innovative and affordable Planar Magnetic solutions to the Power
Electronic Industry.
By doing so, it has become the undisputable worldwide market leader in the Planar Magnetics Technology, with a
customer base of leading technology-driven OEM's.
Payton plans to maintain its lead and continue to facilitate the transition of the Magnetics market to the Planar
Technology by:
1. Maintaining business efficiency, operational efficiency and constant search for cost saving solutions.
2. Maintaining and strengthening its current customer base. This will enable Payton to build a track record as a
reliable high-volume Planar component supplier to leading OEM's.
3. Selectively developing additional key strategic customers, especially in Japan, North America, India, S. Korea in
order to further propagate Payton Planar unique technology.
4. Aiming and focusing on new high growth segments such as Automotive (EV/HEV) in addition to the present
Telecom and industrial markets.
5. Continuing to educate the Power Electronics industry about Planar technology.
6. Continuing to develop its mass production expertise and capacities to a level that will enable Payton to address
the large price-sensitive segments and mass production quantities segments of the global Magnetics market.
7. Payton is constantly looking for business opportunities to expand its core business with synergetic product lines.
It is noted that the above statement is a forward-looking statement as defined above.
N. Coming year outlook
In the coming year (2022) Payton plans to continue improving efficiency as well as increasing production
capabilities and production automation, all this, as part of the Group’s aim to manufacture and deliver its order
backlog and to conduct its business operations in a controlled manner of “Corona routine”, enlarging its market
share and maximize business challenges to the greatest possible extent.
Regarding the COVID-19 crisis effect and other global business environment changes, mentioned above (see
paragraph B above and Note 1B to the Consolidated Financial Statements as at December 31, 2021), the Group at
this stage, cannot assess their full impact. Company believes its business planning, worldwide manufacturing
facilities and production sites will enable it to successfully cope with the mentioned situations.
The Group will continue its ongoing search for business and M&A opportunities, synergetic to its core business, in
order to expand its activity.
It is noted that the above statement is a forward-looking statement as defined above.

8
O. Risk Factors
Major Impact
Medium Impact
Small Impact
Macro Risks
The COVID-19 crisis and
other global business
environment changes has
many implications
including the following:
- Shortage and increase of
raw material costs.
- Long lead-time.
- Shortage of manpower.
- Difficulties with
production activities at
our subcontractors in
China, in the Philippines
and in our local
production in Israel.
- Cancellation/rejection of
projects by customers.
* See paragraph B above
and Note 1B to the
Consolidated Financial
Statements as at
December 31, 2021
 Chinese currency
evaluation against the USD
increases cost of goods
sold. In addition, the
increase of the minimum
wages in China may
increase the labor costs.
 Evaluation/Devaluation of
the local currencies, NIS
and GBP reflects an
increase/decrease in labor
costs and other operating
costs.
 Changes in regulation and
changes in international
tariffs.
 Increase in shipping and
transportation costs and
shortage in such means
including extension of
delivery time.
 Currency exposure
during credit term period
with regards to invoices
issued in local currency.
 Currency exposure
against the Group's
functional currency
(USD), in relation to
sales priced in other
currencies, mainly, GBP
and Euro.
Market Risks
 Metals prices fluctuations
especially: Copper,
Aluminum, Tin and Silver,
which are part of the
transformers bill of
materials.
 Automotive industry -
alongside the opportunity
for a large growth there is
an Inherent risk since there
is no commitments from
the customer end (the
Frame agreements are non-
binding). In addition, the
growing competition in this
industry creates a constant
pressure to reduce prices
and margins.
Specific Risks
 Manufacturing partners
dependency.
P. Current Shareholders position
Shareholder name
Number of shares
Percentage of the
outstanding shares
Comments
Payton Industries Ltd.
11,694,381
66.2%
Israeli company traded in the Tel
Aviv stock exchange.
Public
5,976,394
33.8%
Listed on the EuroNext since June
1998.
Total
17,670,775
100.0%
Total outstanding shares.

9
2. Financial position
A. Statement of Financial Position as at December 31, 2021
Cash and cash equivalents, Short-term Deposits and marketable securities - these items amounted to a total of
USD 38,625 thousand as at December 31, 2021 compared to USD 44,379 thousand as at December 31, 2020. The
decrease in these items resulted due to the dividend payment made on June 2021, and the classification of USD
5,020 thousand as long-term deposit. However, the profit for the period offset the impact of these two factors.
The Group's management believes, a solid financial position is an important factor in order to successfully
overcome times of crisis.
Other accounts receivable - these amounted to USD 3,226 thousand as at December 31, 2021 compared with USD
2,417 thousand as at December 31, 2020. The changes in this item are due to advance payments made to suppliers
and mainly due to IFRS 15 implementation according to which the Company recognized revenues over time
(instead of upon delivery). Revenues recorded prior to delivery are recorded against "contract assets", which are
presented among "other accounts receivable". As at December 31, 2021 such contract assets amounted to
approximately USD 2.5 million compared to USD 1.9 million as at December 31, 2020.
Long-term deposits - amounted to USD 5,020 thousand as at December 31, 2021. There were no Long-term
deposits as at December 31, 2020.
Trade payables - amounted to USD 4,088 thousand as at December 31, 2021 compared with USD 5,053 thousand
as at December 31, 2020. The changes in this item are influenced mainly from purchases made near the report date
as well as from advance payment and shorter payment terms in favor of subcontractors.
B. Interest rate, Currency and Market exposure - Data and Policy
Interest rate exposure
The Group’s interest rate exposure relates mainly to its balance of cash equivalents and bank deposits. These
balances are mostly held in USD bearing interest rates given by banks (during 2021, about 1%), which changes
from time to time.
Data on linkage terms
The financial statements of the Company reflect the functional currency of the Company, which is the USD.
Most of the Group's sales (92%) in the reported periods were in USD or were linked to the USD. Approximately
3% of the Group’s sales in 2021 were in Euro, 1% were in NIS, and about 4% were in GBP.
During 2021, approximately 94% of the costs of raw material and finished goods purchased by the Group were in
USD or were linked to the USD.
During 2021, approximately 80% of the Group’s salaries were in New Israeli Shekel ("NIS") and about 8% were
in GBP.

10
Currency exposure risks
Since most of the Group's sales and purchases were in USD or linked to the USD, the Group's gross profit was
exposed to the changes in exchange rates of the USD in relation to the Euro, the GBP and to the local New Israeli
Shekel ("NIS") mostly with regards to labor costs and other operating costs (see also Data on linkage terms, above).
The Group is exposed to erosion of the USD in relation to the NIS and the GBP. Most of the Group’s salaries and
other operating costs are fixed in the local currencies. Devaluation of the USD in relation to the NIS and the GBP
increases the Group’s labor costs and thus influences its operating results.
Devaluation of the USD in relation to Euro and the GBP leads to a decrease in Group’s assets held in those
currencies.
The Company is subcontracting in China. Devaluation of the USD with relation to the Chinese currency has an
indirect effect on the Group’s cost of goods sold.
Market risks
During 2021 the Company used, from time to time, some derivatives as a tool for hedging, mainly in order to hedge
its labor costs paid in NIS. With regards to all other operating costs, there is no need to use derivatives, since
hedging is being kept inherently as part of the operational activity.
Regarding the COVID-19 crisis andother global business environment changes effect - see paragraph B above and
Note 1B to the Consolidated Financial Statements as at December 31, 2021.

11
C. Operating results
Summary of Consolidated Statements of Income
US Dollars in thousands
Payton Planar Magnetics Ltd.
Consolidated Comprehensive Income Statements
Total
Total
Quarter
Quarter
Quarter
Quarter
2021
2020
10-12/21
7-9/21
4-6/21
1-3/21
Revenues
43,980
43,874
14,795
9,883
9,217
10,085
Cost of sales
(26,607)
(25,734)
(8,934)
(6,210)
(5,302)
(6,161)
Gross profit
17,373
18,140
5,861
3,673
3,915
3,924
Development costs
(1,481)
(1,365)
(349)
(361)
(425)
(346)
Selling & marketing expenses
(1,791)
(1,759)
(508)
(411)
(419)
(453)
General & administrative expenses
(3,734)
(3,385)
(1,025)
(911)
(943)
(855)
Other income, net
1
20
-
-
1
-
Operating profit
10,368
11,651
3,979
1,990
2,129
2,270
Finance income (expenses), net
25
455
(16)
(38)
42
37
Share of profits (losses) of
equity accounted investee
(52)
(26)
98
(27)
(66)
(57)
Profit before taxes on income
10,341
12,080
4,061
1,925
2,105
2,250
Taxes on income
(1,821)
(2,175)
(751)
(343)
(388)
(339)
Net profit for the period
8,520
9,905
3,310
1,582
1,717
1,911
Other comprehensive income
(loss) items that will not be
transferred to profit &loss
Remeasurement of defined
benefit plan
(12)
56
(12)
-
-
-
Share of other comprehensive
income (loss) of equity
accounted investee
7
20
6
2
1
(2)
Total other comprehensive
income (loss)
(5)
76
(6)
2
1
(2)
Total comprehensive income
for the year/period
8,515
9,981
3,304
1,584
1,718
1,909
General Note: The Group is exposed to abrasion of the USD in relation to the NIS, Euro and the GBP. Most of the
Group’s salaries and other operating costs are fixed in local currencies. Devaluation of the USD in relation to local
currencies drives to an increase in labor costs and other operating costs, thus, affects the operating results of the
Group.
Sales revenues - The Group’s sales revenues for year 2021 were USD 43,980 thousand similar to the amount of
USD 43,874 thousand in year 2020. The Group succeeded to maintain its sales volume in spite of the challenges of
the COVID-19 crisis andother global business environment worldwide effects thanks to its diversity of projects and
its manufacturing geographical spread (see paragraph B above, regarding the COVID-19 crisis and other global
business environment effect, and Note 1B to the Consolidated Financial Statements as at December 31, 2021).

12
Gross profit - The Group’s gross results for the year ended December 31, 2021 were USD 17,373 thousand (40%),
compared with USD 18,140 thousand (41%), in the year ended December 31, 2020. The gross margin was
influenced mainly by the sales products mix and by raw materials prices increase.
Development costs - Payton’s R&D strategy is aimed on maintaining the leadership of the Planar Technology. The
R&D department works in conjunction with R&D departments of the forerunners of today’s global technology, and
together they define tomorrow’s technological needs. Costs were based upon time expended by the department’s
employees. The Group’s development costs for the year ended December 31, 2021 were USD 1,481 thousand
compared with USD 1,365 thousand in the year ended December 31, 2020. The increase is explained mainly by
the local currency (NIS) revaluation against the USD, as well as by an increase in the development team’s labor
cost.
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 It is noted
that not all the sales are subject to reps’ commissions 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 year ended December 31, 2021 amounted to USD 1,791 thousand (4%) compared with
USD 1,759 thousand (4%) in the year ended December 31, 2020. In year 2021 similar to previous year (2020), due
to the COVID-19 Epidemic, other selling expenses, mainly in travel expenses and exhibitions costs were lack.
General & Administrative expenses - The Group’s General & Administrative expenses for the year ended
December 31, 2021 amounted to USD 3,734 thousand compared with USD 3,385 thousand in the year ended
December 31, 2020. The increase is explained mainly by the local currency (NIS and GBP) revaluation against the
USD resulted in increase of labor cost and other general costs.
Finance income, net - The Group’s finance income for the year ended December 31, 2021 amounted USD 25
thousand compared with USD 455 thousand for the year ended December 31, 2020. This decrease is explained
mainly by the decrease of the market interest rate on bank deposits.
Information regarding - Transactions with related parties (pursuant to note 16 G to the Consolidated Financial
Statements as at December 31, 2021)
Compensation and benefits to key management personnel and interested parties (including directors) that are
employed by the Group:
Year ended December 31
December 31
2021
2020
2021
2020
Number of
Number of
People
Amount
People
Amount
Outstanding balance
$ thousands
$ thousands
$ thousands
$ thousands
Short-term employee
benefits
607
538
146
93
Post-employment
benefits
27
49
128
155
5
634
4
587
274
248

13
Compensation to key management personnel (including directors) that are not employed by the Group:
Year ended December 31
December 31
2021
2020
2021
2020
Number of
Number of
People
Amount
People
Amount
Outstanding balance
$ thousands
$ thousands
$ thousands
$ thousands
Total compensation
to directors not employed
by the Group
3
42
4
38
11
10
Total compensation
to key management
personnel not employed
by the Group (*)
2
1,491
2
1,431
621
630
Accounts receivable-
The Parent Company
-
-
-
-
128
125
(*) Management fees and related benefits to Wichita Ltd. (see Note 13A) and to Yaarh-Looking To The Future Ltd. (see Note
13B) include an amount of USD 183 thousand (year ended December 31, 2020: USD 170 thousand) and an amount of
USD 249 thousand (year ended December 31, 2020: USD 231 thousand), respectively, recorded as selling and marketing
expenses.
Inter-company transactions between the Company and its two fully owned subsidiaries (Payton America Inc. and
Himag Planar Magnetics Ltd.) include, inter alia, the following: engineering support, purchasing and
subcontracting, marketing, administrative and management services. All the inter-company transactions are being
eliminated within these consolidated financial statements.
3. Liquidity
A. Operating activities
Cash flows generated from operating activities for the year ended December 31, 2021 amounted USD 7,156
thousand, compared with the cash flows generated from operating activities of USD 11,210 thousand for the year
ended December 31, 2020. The decrease in cash flows from operating activities resulted mostly from decrease in
profit for the year, decrease in trade payable and increase in other accounts receivable.
B. Investing activities
Cash flows used for investing activities in the year ended December 31, 2021 amounted USD 8,914 thousand
compared with cash flows generated from investing activities amounted USD 15,344 thousand in the year ended
December 31, 2020. During year 2021 most of the cash flows used for investing activities used for investments in
bank deposits and in marketable securities.
C. Financing activities
Cash flows used for financing activities for the year ended December 31, 2021, amounted USD 7,422 thousand,
representing a dividend payment (announced March 24, 2021) that was paid on June 2021. There were no cash
flows used for financing activities in the year ended December 31, 2020.
4. Financing sources
The Group financed its activities during the reported periods from its own resources.

14
5. Subsequent Events
On March 28, 2022 the Company's Board of Directors decided to pay the shareholders a dividend at the amount of
USD 8,023 thousand (USD 0.454 per share, to be paid during June 2022). Pursuant to the amendment of the law for
the Encouragement of Capital Investments executed on November 15, 2021 (the temporary order*), per Company’s
decision, this dividend will be subject to a beneficiary corporate tax rate*, at the amount of USD 900 thousands. It is
noted that this dividend is submitted to a tax withholding of 15%.
* see note  A(4) to the Consolidated Financial Statements as at December 31, 2021.
6. External factors effects
- Regarding the COVID-19 crisis andother global business environment effect - see paragraph B above and Note
1B to the Consolidated Financial Statements as at December 31, 2021.
- 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 GBP(£) in relation to the U.S. Dollar leads to a decrease in Group’s assets in
those currencies.
- See also paragraph 1O above (Risk Factors).
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.
7. Statement by senior management in accordance with article 12, § 2 (3°( of the Royal Decree per
14.11.2007
Pursuant to article 13 § 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 December 31, 2021 are drawn up in accordance with IFRS-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 financial year, their impact on the financial
statements, the main risk factors and uncertainties, as well as the main transactions with related parties and their
possible impact on the 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 express its sincere thanks to the entire personnel for their efforts and
contribution to the Group's affairs.
Ness-Ziona, March 28, 2022.
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
15
. KPMG Somekh Chaikin, an Israeli partnership and a member firm of the KPMG global organization of independent member
firms affiliated with KPMG International Limited, a private English company limited by guarantee
Independent Auditors’ Report
To the Shareholders of Payton Planar Magnetics Ltd.
Opinion
We have audited the consolidated financial statements of Payton Planar
Magnetics Ltd. (“the Company”), which comprise the consolidated statement of
financial position as at December 31, 2021, the consolidated statements of profit
or loss and other comprehensive income, changes in equity and cash flows for the
year then ended, and notes to the consolidated financial statements, including a
summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly,
in all material respects, the consolidated financial position of the Company as at
December 31, 2021, and of its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with International
Financial Reporting Standards (IFRS).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing
(ISAs). Our responsibilities under those standards are further described in the
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
section of our report. We are independent of the Company in accordance with the
International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code) and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of
most significance in our audit of the consolidated financial statements of the
current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Revenue recognition
Revenue is a key performance indicator and of importance to the financial
statements users. The Company has issued clear guidelines to its executives not
to take any account of the pressure to meet expectations when preparing the
financial statements. Nevertheless, the pressure to report on high revenues to the
investors form an inherent risk that revenue at year-end may be recognized
prematurely.

16
With respect to this audit matter, our audit procedures included an evaluation of design and
implementation and of operating effectiveness of key internal controls surrounding the recording of
revenues and of the adjustments arising from the implementation of IFRS 15, through performing
test of controls on a sample basis. We extended sampling of transactions recorded close to the end of
the year and checking that such transactions had met all criteria for revenue recognition in 2021, and
therefore were included in the appropriate period. Such sampling included auditing purchase orders
and terms of contracts to obtain evidence that the orders meet the criteria of IFRS 15 to recognize
revenue over time, and therefore should be recognized prior to actual delivery. We also checked if
any credit notes were issued in the subsequent period for revenues that were recognized in 2021, in
order to obtain evidence of proper revenue recognition in 2021.
Other Information
Management is responsible for the other information. The other information comprises the Board of
Directors’ Report on Corporate Affairs.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

17
 Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditors’ report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditors’ report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication
The engagement partner on the audit resulting in this independent auditors’ report is Guy Anavi.
Somekh Chaikin
Certified Public Accountants (Isr.)
Member firm of KPMG International
Tel Aviv, Israel
March 28, 2022

Somekh Chaikin
17 Ha’arba’a Street, PO Box 609
KPMG Millennium Tower
Tel Aviv 6100601, Israel
+972 3 684 8000
KPMG Somekh Chaikin, an Israeli partnership and a member firm of the KPMG global organization of independent member
firms affiliated with KPMG International Limited, a private English company limited by guarantee
Statutory auditor’s report to the shareholders’ meeting, in accordance
with article 4 of the Transparency Directive, in the context of the
compliance of the consolidated financial statements in the form of an
electronic file of Payton Planar Magnetics Ltd as of 31 December 2021
with the ESEF requirements and taxonomy under Delegated Regulation
(EU) 2018/815
Mission
In accordance with article 4 of the Transparency Directive, the statutory auditor’s
mission is to report on the compliance of the XBRL tagging of the consolidated financial
statements in the form of an electronic file ("digital consolidated financial statements")
of Payton Planar Magnetics Ltd ("the company") with the ESEF requirements and
taxonomy, in particular with the provisions stipulated in the ESEF Regulatory Technical
Standard ("ESEF RTS") applicable to the digital consolidated financial statements as of 31
December 2021.
Responsibilities of the board of directors
The board of directors is responsible for the preparation of the digital consolidated
financial statements in accordance with the ESEF requirements and taxonomy (in
particular, the provisions stipulated in the ESEF RTS applicable to the digital consolidated
financial statements as of 31 December 2021).
This responsibility includes the selection and application of the most appropriate
methods for preparing the digital consolidated financial statements. The responsibility of
the board of directors furthermore includes the design, implementation and follow-up of
systems and processes relevant for the preparation of the digital consolidated financial
statements that are free from any material misstatement, whether due to fraud or error.
The board of directors must verify that the digital consolidated financial statements
correspond to consolidated financial statements which are readable by the user.
Responsibility of the statutory auditor
Based on the work we performed, it is our responsibility to express a conclusion as to
whether the XBRL tagging of the company's digital consolidated financial statements as
of 31 December 2021 complies in all material respects with the ESEF RTS.
18

KPMG Somekh Chaikin, an Israeli partnership and a member firm of the KPMG global organization of independent member
firms affiliated with KPMG International Limited, a private English company limited by guarantee
We conducted our work in accordance with the International Standard on Assurance
Engagements (ISAE) 3000 (Revised) "Assurance engagements other than audits or
reviews of historical financial information”. This standard requires that we comply with
all ethical requirements and that we plan and perform this mission in order to obtain
reasonable assurance that nothing has come to our attention that causes us to believe
that the digital consolidated financial statements have not been prepared, in all material
respects, in accordance with the ESEF RTS that have been applied by the company.
The selection of the procedures performed is based on our professional judgment and on
our assessment of the risks of material misstatement in the digital consolidated financial
statements and in the statements made by the board of directors. The work performed
consisted of, amongst others, the following procedures:
 Assessing whether the digital consolidated financial statements as of 31
December 2021 are prepared in the XHTML format in accordance with article 3
of the Delegated Regulation;
 Obtaining an understanding of the processes followed by the company for the
XBRL tagging of the digital consolidated financial statements and of the internal
control relevant to the certification, in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the internal control, which are intended to
provide reasonable assurance that the XBRL tagging of the digital consolidated
financial statements is, in all material respects, in compliance with ESEF RTS;
 Acquiring sufficient and appropriate audit evidence about the operating
effectiveness of controls relevant to the XBRL tagging of the digital consolidated
financial statements of Payton Planar Magnetics Ltd as of 31 December 2021;
 Reconciling the tagged data with the audited consolidated financial statements
of Payton Planar Magnetics Ltd as of 31 December 2021;
 Assessing the completeness of the tagging of the digital consolidated financial
statement prepared by the company;
 Assessing the appropriateness of the use of the XBRL elements of the ESEF
taxonomy by the company and assessing the creation of the extension
taxonomy.
Our independence and quality control
We have complied with all independence and other ethical requirements stipulated by
law and regulations in Belgium that are applicable in the context of our mission. These
requirements are founded on the fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and professional behavior.
Our audit firm applies International Standard on Quality Control (ISQC) 1 and accordingly
maintains a comprehensive system of quality control including documented policies and
procedures regarding compliance with the ethical requirements, professional standards
and applicable legal and regulatory requirements.
Conclusion
Based on the procedures performed, in our opinion, the XBRL tagging of the digital
consolidated financial statements of Payton Planar Magnetics Ltd as of 31 December
2021 is, in all material respects, in compliance with the ESEF requirements and taxonomy
(in particular, the current provisions stipulated in the ESEF RTS applicable to the digital
consolidated financial statements as of 31 December 2021).
The purpose of this report is not to express an audit opinion nor a conclusion of a limited
review or any other assurance conclusion on the consolidated financial statements itself.
Our audit opinion with respect to the consolidated financial statements of the group is
set out in the statutory auditor's report dated March 28, 2022.
19

KPMG Somekh Chaikin, an Israeli partnership and a member firm of the KPMG global organization of independent member
firms affiliated with KPMG International Limited, a private English company limited by guarantee
Other matter
The consolidated financial statements of Payton Planar Magnetics Ltd and its affiliates
(together "the group") have been prepared by the board of directors of the company on
March 28, 2022and have been subject to a statutory audit. Our statutory auditor’s report
signed on March 28, 2022, comprises an unqualified opinion on the true and fair view of
the group’s consolidated financial position as of 31 December 2021 and of its
consolidated results and its consolidated cash flow for the year then ended in
accordance with the International Financial Reporting Standards (IFRS) as adopted by the
European Union.
Signed at Tel Aviv, Israel.
Somekh Chaikin
Certified Public Accountants (Isr.)
Member firm of KPMG International
November 17, 2022
20

21
Payton Planar Magnetics Ltd.
Consolidated Statements of Financial Position as at December 31
2021
2020
Note
$ thousands
$ thousands
Current assets
Cash and cash equivalents
4
22,146
31,325
Short-term deposits and marketable securities held for trading
5
16,479
13,054
Trade accounts receivable
6
9,917
9,665
Other accounts receivable
6
3,226
2,417
Inventory
7
3,772
3,462
Total current assets
55,540
59,923
Non-current assets
Long-term deposits
5
5,020
-
Investment in equity accounted investee
8
974
1,019
Fixed assets
9
10,222
10,636
Intangible assets
22
22
Total non-current assets
16,238
11,677
Total assets
71,778
71,600
The accompanying notes are an integral part of these consolidated financial statements.

22
Payton Planar Magnetics Ltd.
Consolidated Statements of Financial Position as at December 31 (cont'd)
2021
2020
Note
$ thousands
$ thousands
Liabilities and equity
Current liabilities
Trade payables
4,088
5,053
Other payables
10
2,035
1,905
Current tax liability
809
1,116
Employee benefits
11
649
553
Total current liabilities
7,581
8,627
Non-current liabilities
Employee benefits
11
731
689
Deferred tax liabilities
17G
1,141
1,052
Total non-current liabilities
1,872
1,741
Total liabilities
9,453
10,368
Equity
Share capital
15
4,836
4,836
Share premium
8,993
8,993
Retained earnings
48,496
47,403
Total equity
62,325
61,232
Total liabilities and equity
71,778
71,600
David Yativ
Doron Yativ
Michal Lichtenstein
Chairman of the Board of Directors
Chief Executive Officer
V.P. Finance & CFO
Date of approval of the financial statements: March 28, 2022
The accompanying notes are an integral part of these consolidated financial statements.

23
Payton Planar Magnetics Ltd.
Consolidated Statements of Profit or Loss and Other Comprehensive Income for the year ended December 31
2021
2020
Note
$ thousands
$ thousands
Revenues
16A
43,980
43,874
Cost of sales
16B
(26,607)
(25,734)
Gross profit
17,373
18,140
Development costs
(1,481)
(1,365)
Selling and marketing expenses
16C
(1,791)
(1,759)
General and administrative expenses
16D
(3,734)
(3,385)
Other income, net
16E
1
20
Operating profit
10,368
11,651
Finance income
16F
193
566
Finance expenses
16F
(168)
(111)
Finance income, net
25
455
Share of losses of equity accounted investee
(52)
(26)
Profit before taxes on income
10,341
12,080
Taxes on income
17E
(1,821)
(2,175)
Profit for the year
8,520
9,905
Other comprehensive income (loss) items that
will not be transferred to profit and loss
Remeasurement of defined benefit plan
11A
(12)
56
Share of other comprehensive income of equity accounted
investee
7
20
Total other comprehensive income (loss)
(5)
76
Total comprehensive income for the year
8,515
9,981
Earnings per share
Basic and diluted earnings per share (in $)
18
0.48
0.56
The accompanying notes are an integral part of these consolidated financial statements.

24
Payton Planar Magnetics Ltd.
Consolidated Statements of Changes in Equity for the year ended December 31
Share capital
Share
Retained
Number of
premium
earnings
Total
shares
$ thousands
$ thousands
$ thousands
$ thousands
Balance at
January 1, 2020
17,670,775
4,836
8,993
37,422
51,251
Total comprehensive
income for the year
Profit for the year
-
-
-
9,905
9,905
Other comprehensive income
-
-
-
76
76
Total comprehensive
income for the year
-
-
-
9,981
9,981
Balance at
December 31, 2020
17,670,775
4,836
8,993
47,403
61,232
Total comprehensive
income for the year
Profit for the year
-
-
-
8,520
8,520
Other comprehensive loss
-
-
-
(5)
(5)
Total comprehensive
income for the year
-
-
-
8,515
8,515
Transaction with owners,
recognized directly in equity
Dividend to owners
-
-
-
(7,422)
(7,422)
Balance at
December 31, 2021
17,670,775
4,836
8,993
48,496
62,325
The accompanying notes are an integral part of these consolidated financial statements.

25
Payton Planar Magnetics Ltd.
Consolidated Statements of Cash Flows for the year ended December 31
2021
2020
Note
$ thousands
$ thousands
Operating activities
Profit for the year
8,520
9,905
Adjustments:
Depreciation
9
891
898
Taxes on income
17E
1,821
2,175
Share of losses of equity accounted investee
8
52
26
Gain on sale of fixed assets
16E
(1)
(20)
Finance income, net
16F
(144)
(584)
11,139
12,400
Change in employee benefits
11
125
249
Increase in trade accounts receivable
6
(252)
(2,055)
Increase in other accounts receivable
6
(940)
(553)
Decrease (increase) in inventory
7
(310)
47
Increase (decrease) in trade payables
(923)
2,351
Increase in other payables
10
130
186
8,969
12,625
Interest received
16F
134
642
Interest paid
16F
(40)
(9)
Income taxes paid, net
17
(1,907)
(2,048)
Cash flows generated from operating activities
7,156
11,210
Investing activities
Proceeds from (investments in) deposits, net
5
(7,399)
15,967
Investments in marketable securities held for trading
5
(997)
-
Acquisition of fixed assets
9
(523)
(674)
Proceeds from sale of fixed assets
9, 16E
5
51
Cash flows generated from (used for) investing activities
(8,914)
15,344
Financing activities
Dividend paid
15B
(7,422)
-
Cash flows used for financing activities
(7,422)
-
Net increase (decrease) in cash and cash equivalents
(9,180)
26,554
Cash and cash equivalents at beginning of the year
31,325
4,741
Effect of exchange rate fluctuations on cash and cash equivalents
1
30
Cash and cash equivalents at end of the year
22,146
31,325
The accompanying notes are an integral part of these consolidated financial statements.

26
Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
Note 1 - General
A. Reporting entity
Payton Planar Magnetics Ltd. (“the Company”) was incorporated in Israel in December 1992. The
address of the Company’s registered office is 3 Ha’avoda Street, Ness-Ziona.
The Company is a subsidiary of Payton Industries Ltd. (the “Parent Company”) and its ultimate
controlling shareholder is Mr. David Yativ. The securities of the Company are registered for trade on
the Euronext stock exchange in Brussels.
The consolidated financial statements of the Group as at and for the year ended December 31, 2021
comprise the Company and its subsidiaries (together referred to as the “Group”).
The Group develops, manufactures and markets planar and conventional transformers and operates
abroad through its subsidiaries and distributors.
B. Material events in the reporting period
The COVID-19 crisis effect
In the year 2021, similar to year 2020, it seems that, the Group’s flexibility and global spread, resulted
in successfully handling this crisis. The manufacturing lines in Israel operated continuously while
abiding all required distance regulations.
During the year 2021, also, the other Group’s members: the subsidiaries in England and United States
continued their business operations in the same manner while keeping all needed measures and abiding
with their local regulations.
Payton’s worldwide planning and manufacturing facilities and geographically spread of the Group's
production sites in China, the Philippines, Israel, England and the United States minimized the effect of
the COVID-19 epidemic and has proven itself effective enabling the delivery of most orders on time.
In spite of the recent outbreak of the fifth covid-19 wave, in Israel and in other places over the world,
most of the companies got used to conduct their economic and business activities side by side the
COVID-19 epidemic.
As at the date of signing these financial statements, all production sites are fully operational in a
“Corona routine”.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
27
Note 1 - General (cont'd)
C. Definitions
In these financial statements –
1. The Company – Payton Planar Magnetics Ltd.
2. The Group – The Company and its subsidiaries.
3. Payton Industries Ltd. – Parent company, traded on the Tel Aviv Stock Exchange.
4. Subsidiaries – Companies, the financial statements of which are fully consolidated, directly or
indirectly, with the financial statements of the Company.
5. Investee companies – Subsidiaries and companies, the Company's investment in which is
stated, directly or indirectly, on the equity basis.
6. Related party – Within its meaning in IAS 24 (2009), “Related Party Disclosures”.
7. Israeli CPI – The Consumer Price Index as published by the Central Bureau of Statistics in
Israel.
8. NIS – New Israeli Shekel.
9. $ – U.S. Dollar.
10. GBP – Great Britain Pound.
Note 2 - Basis of Preparation
A. Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs) and its interpretations adopted by the International Accounting Standards
Board (“IASB”).
The consolidated financial statements were authorized for issue by the Company’s Board of Directors
on March 28, 2022.
B. Functional and presentation currency
These consolidated financial statements are presented in U.S. dollars, which is the Company’s functional
currency, and have been rounded to the nearest thousand. The U.S. dollar is the currency that represents
the principal economic environment in which the Company operates.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
28
Note 2 - Basis of Preparation (cont’d)
C. Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the
following assets and liabilities:
* Financial instruments, including derivatives, measured at fair value through profit or loss;
* Deferred tax assets and liabilities;
* Employee benefit assets and liabilities;
* Investment in equity accounted investee
For further information regarding the measurement of these assets and liabilities see Note 3 regarding
significant accounting policies.
D. Operating cycle
The operating cycle of the Group is one year. Thus, current assets and current liabilities include items
the realization of which is intended and anticipated to take place within one year.
E. Use of estimates and judgments
The preparation of financial statements in conformity with IFRSs requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The preparation of accounting estimates used in the preparation of the Group’s financial statements
requires management of the Company to make assumptions regarding circumstances and events that
involve considerable uncertainty. Management of the Company prepares the estimates on the basis of
past experience, various facts, external circumstances, and reasonable assumptions according to the
pertinent circumstances of each estimate.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and in any future periods
affected.
Determination of fair value
Preparation of the financial statements requires the Group to determine the fair value of certain assets and
liabilities.
Further information about the assumptions that were used to determine fair value is included in Note 14,
on financial instruments.
When determining the fair value of an asset or liability, the Group uses observable market data as much
as possible. There are three levels of fair value measurements in the fair value hierarchy that are based on
the data used in the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• 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).

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
29
Note 3 - Significant Accounting Policies
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements, and have been applied consistently by Group entities.
A. Basis of consolidation
1. Business combinations
Business combinations, including business combinations under common control, are accounted
for using the acquisition method.
The acquisition date is the date on which the acquirer obtains control over the acquiree. Control
exists when the Group is exposed, or has rights, to variable returns from its involvement with the
acquiree and it has the ability to affect those returns through its power over the acquiree.
Substantive rights held by the Group and others are taken into account when assessing control.
The Group recognizes goodwill on acquisition according to the fair value of the consideration
transferred less the net amount of the identifiable assets acquired and the liabilities assumed.
The consideration transferred includes the fair value of the assets transferred to the previous
owners of the acquiree and the liabilities incurred by the acquirer to the previous owners of the
acquiree. In addition, the consideration transferred includes the fair value of any contingent
consideration. After the acquisition date, the Group recognizes changes in the fair value of
contingent consideration classified as a financial liability in profit or loss.
Costs associated with the acquisition that were incurred by the acquirer in the business
combination such as legal and valuation consulting fees are expensed in the period the services
are received.
2. Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the
date that control ceases. The accounting policies of subsidiaries have been changed when
necessary to align them with the policies adopted by the Group.
3. Investment in associates (equity accounted investees)
Associates are those entities in which the Group has significant influence, but not control or
joint control, over the financial and operating policies. There is a rebuttable presumption that
significant influence exists when the Group holds between 20% and 50% of another entity. In
assessing significant influence, potential voting rights that are currently exercisable or
convertible into shares of the investee are taken into account.
Associates are accounted for using the equity method (equity accounted investees) and are
recognized initially at cost. The cost of the investment includes transaction costs. Transaction
costs that are directly attributable to an acquisition of an associate are added to the cost of the
investment on the acquisition date. The consolidated financial statements include the Group’s
share of the income and expenses in profit or loss and of other comprehensive income of equity
accounted investees, after adjustments to align the accounting policies with those of the Group,
from the date that significant influence or joint control commences until the date that significant
influence or joint control ceases.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
30
Note 3 - Significant Accounting Policies (cont’d)
A. Basis of consolidation (cont’d)
4. Loss of significant influence
Losses recognized under the equity method that exceed the Group's investment in ordinary
shares are attributed to the rest of the Group's interests in the investee in the reverse order of
their seniority. After the Group’s interests are reduced to zero, additional losses of the investee
are recognized only to the extent the Group has a commitment to support the investee or has
made payments on its behalf. If the investee subsequently reports profits, the Group resumes
recognizing its share of those profits only after its share of the profits equals the share of losses
not recognized.
5. Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized income or expenses arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.
Unrealized gains arising from transactions with associates are eliminated against the investment
to the extent of the Group’s interest in these investments. Unrealized losses are eliminated in the
same way as unrealized gains, but only to the extent that there is no evidence of impairment.
B. Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency of the Group at exchange
rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at
the reporting date are translated to the functional currency at the exchange rate at that date. The foreign
currency gain or loss on monetary items is the difference between amortized cost in the functional
currency at the beginning of the year, adjusted for effective interest and payments during the year, and
the amortized cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction.
Foreign currency differences arising on translation are recognized in profit or loss.
C. Financial instruments
1. Non-derivative financial assets
Initial recognition and measurement of financial assets
The Group initially recognizes trade receivables and debt instruments issued on the date that
they are created. All other financial assets are recognized initially on the trade date at which the
Group becomes a party to the contractual provisions of the instrument.
A financial asset is initially measured at fair value plus transaction costs that are directly
attributable to the acquisition or issuance of the financial asset. A trade receivable without a
significant financing component is initially measured at the transaction price.
Derecognition of financial assets
Financial assets are derecognized when the contractual rights of the Group to the cash flows
from the asset expire, or the Group transfers the rights to receive the contractual cash flows on
the financial asset in a transaction in which substantially all the risks and rewards of ownership
of the financial asset are transferred. When the Group retains substantially all of the risks and
rewards of ownership of the financial asset, it continues to recognize the financial asset.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
31
Note 3 - Significant Accounting Policies (cont’d)
C. Financial instruments (cont’d)
1. Non-derivative financial assets (cont’d)
Classification of financial assets into categories and the accounting treatment of each
category
Financial assets are classified at initial recognition to one of the following measurement
categories: amortized cost or fair value through profit or loss.
Financial assets are not reclassified in subsequent periods unless, and only if, the Group
changes its business model for the management of financial debt assets, in which case the
affected financial debt assets are reclassified at the beginning of the period following the change
in the business model.
A financial asset is measured at amortized cost if it meets both of the following conditions and
is not designated at fair value through profit or loss:
- It is held within a business model whose objective is to hold assets so as to collect
contractual cash flows; and
- The contractual terms of the financial asset give rise to cash flows representing solely
payments of principal and interest on the principal amount outstanding on specified dates.
All financial assets not classified as measured at amortized cost are measured at fair value
through profit or loss. On initial recognition, the Group designates financial assets at fair value
through profit or loss if doing so eliminates or significantly reduces an accounting mismatch
that would otherwise arise.
Financial assets that are held for trading and whose performance is evaluated on a fair value
basis, are measured at fair value through profit or loss.
Subsequent measurement and gains and losses
Financial assets at fair value through profit or loss
These assets are subsequently measured at fair value. Net gains and losses, including any
interest income or dividend income, are recognized in profit or loss.
2. Non-derivative financial liabilities
The Group has the following non-derivative financial liabilities: trade and other payables.
Initial recognition of financial liabilities
Financial liabilities are recognized initially on the trade date at which the Group becomes a
party to the contractual provisions of the instrument.
Financial liabilities are recognized initially at fair value less any directly attributable transaction
costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost
using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognized when the contractual obligation of the Group expires or
when it is discharged or cancelled.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
32
Note 3 - Significant Accounting Policies (cont’d)
C. Financial instruments (cont'd)
2. Non-derivative financial liabilities (cont’d)
Offset of financial instruments
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group currently has a legal right to offset the
amounts and intends either to settle on a net basis or to realize the asset and settle the liability
simultaneously.
3. Derivative financial instruments
Economic hedges
Hedge accounting is not applied to derivative instruments that economically hedge financial
assets and liabilities denominated in foreign currencies. Changes in the fair value of such
derivatives are recognized in profit or loss under financing income or expenses.
4. Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of
ordinary shares are recognized as a deduction from equity.
D. Fixed assets
1. Recognition and measurement
Fixed asset items are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset.
Purchased software that is integral to the functionality of the related equipment is capitalized as
part of that equipment.
When major parts of a fixed asset item have different useful lives, they are accounted for as
separate items (major components) of fixed assets.
Gains and losses on disposal of a fixed asset item are determined by comparing the proceeds
from disposal with the carrying amount of the asset, and are recognized net within “other
income” or “other expenses”, as relevant, in profit or loss.
2. Subsequent costs
The cost of replacing part of a fixed asset item and other subsequent expenses are capitalized if
it is probable that the future economic benefits associated with them will flow to the Group and
their cost can be measured reliably. The carrying amount of the replaced part of a fixed asset
item is derecognized. The costs of day-to-day servicing are recognized in profit or loss as
incurred.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
33
Note 3 - Significant Accounting Policies (cont’d)
D. Fixed assets (cont’d)
3. Depreciation
Depreciation is a systematic allocation of the depreciable amount of an asset over its useful life.
The depreciable amount is the cost of the asset, less its residual value.
An asset is depreciated from the date it is ready for use, meaning the date it reaches the location
and condition required for it to operate in the manner intended by management.
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful
lives of each part of fixed asset item, since this most closely reflects the expected pattern of
consumption of the future economic benefits embodied in the assets. Leased assets under lease
agreements including lands are depreciated over the shorter of the lease term and their useful
lives, unless it is reasonably certain that the Group will obtain ownership by the end of the lease
term. Freehold land is not depreciated.
The estimated useful lives for the current and comparative periods are as follows:
Buildings
7-50 years
(mainly 50 years)
Machinery and equipment
3-7 years
(mainly 7 years)
Motor vehicles
7 years
Computers
3-7 years
(mainly 3 years)
Office equipment
3-14 years
(mainly 14 years)
Leased lands
70 years
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting
year and adjusted if appropriate.
E. Intangible assets
Goodwill
Goodwill that arises upon a business acquisition is presented as part of intangible assets. For
information on measurement of goodwill at initial recognition, see Paragraph A(1) of this note.
Goodwill, having an indefinite useful life, is not systematically amortized but is tested for impairment at
least once a year.
In subsequent periods, goodwill is measured at cost less accumulated impairment losses.
F. Inventories
Inventories are measured at the lower of cost and net realizable value. Inventory is based on the first-in
first-out (FIFO) principle and its cost includes expenditure incurred in acquiring the inventories and the
costs incurred in bringing them to their existing location and condition. In the case of manufactured
inventories and work in progress, cost includes an appropriate share of production overheads based on
normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
34
Note 3 - Significant Accounting Policies (cont’d)
G. Impairment
1. Non-derivative financial assets
Financial assets and contract assets
The Group recognizes a provision for expected credit losses in respect of financial assets at
amortized cost and contract assets (as defined in IFRS 15).
The Group has elected to measure the provision for expected credit losses in respect of trade
receivables and contract assets at an amount equal to the full lifetime credit losses of the
instrument.
When determining whether the credit risk of a financial asset has increased significantly since
initial recognition, and when estimating expected credit losses, the Group considers reasonable
and supportable information that is relevant and available with no undue cost or effort. Such
information includes quantitative and qualitative information, and an analysis, based on the
Group’s past experience and informed credit assessment, and it includes forward looking
information.
The Group assumes that the credit risk of a financial asset has increased significantly since initial
recognition when contractual payments are past due for more than 120 days.
The Group considers a financial asset to be in default when the borrower is unlikely to pay its
credit obligations to the Group in full or the contractual payments of the financial asset are past
due for more than 180 days.
Lifetime expected credit losses are expected credit losses that result from all possible default
events over the expected life of the financial asset. 12-month expected credit losses are the
expected credit losses that result from possible default events within the 12 month period after
the reporting date. The maximum period considered when assessing expected credit losses is the
maximum contractual period over which the Group is exposed to credit risk.
Measurement of expected credit losses
Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are
measured as the present value of the difference between the cash flows due to the Group in
accordance with the contract and the cash flows that the Group expects to receive.
Expected credit losses are discounted at the effective interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortized cost are
credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a
detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following events: significant
financial difficulty of the borrower; a breach of contract such as a default or payments being
past due; the restructuring of a payment due to the Group on terms that the Group would not
consider otherwise; or it is probable that the borrower will enter bankruptcy or other financial
reorganization

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
35
Note 3 - Significant Accounting Policies (cont’d)
G. Impairment (cont’d)
1. Non-derivative financial assets (cont’d)
Presentation of provision for expected credit losses in the statement of financial position
Provisions for expected credit losses of financial assets measured at amortized cost are deducted
from the gross carrying amount of the financial assets.
Write-off
The gross carrying amount of a financial asset is written off when the Group does not have
reasonable expectations of recovering a financial asset at its entirety or a portion thereof. This is
usually the case when the Group determines that the debtor does not have assets or sources of
income that may generate sufficient cash flows for paying the amounts being written off.
However, financial assets that are written off could still be subject to enforcement activities in
order to comply with the Group's procedures for recovery of amounts due. Write-off constitutes
a de-recognition event.
2. Non-financial assets
Timing of impairment testing
Once a year and on the same date, or more frequently if there are indications of impairment, the
Group estimates the recoverable amount of each cash generating unit that contains goodwill.
Determining cash-generating units
For the purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups of assets (the “cash-generating
unit”).
Measurement of recoverable amount
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its
fair value less costs of disposal. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects the assessments of
market participants regarding the time value of money and the risks specific to the asset or cash-
generating unit, for which the estimated future cash flows from the asset or cash-generating unit
were not adjusted.
Allocation of goodwill to cash generating units
Goodwill acquired in a business combination is allocated to groups of cash-generating units,
including those existing in the Group before the business combination, that are expected to benefit
from the synergies of the combination.
Recognition of impairment loss
An impairment loss is recognized if the carrying amount of an asset or cash-generating unit
exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. As
regards cash-generating units that include goodwill, an impairment loss is recognized when the
carrying amount of the cash-generating unit, after including the balance of goodwill, exceeds its
recoverable amount. Impairment losses recognized in respect of cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to the units and then to
reduce the carrying amounts of the other assets in the cash-generating unit on a pro rata basis.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
36
Note 3 - Significant Accounting Policies (cont’d)
G. Impairment (cont’d)
2. Non-financial assets (cont’d)
Reversal of impairment loss
An impairment loss in respect of goodwill is not reversed. In respect of other assets, for which
impairment losses were recognized in prior periods, an assessment is performed at each reporting
date for any indications that these losses have decreased or no longer exist. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no
impairment loss had been recognized.
3. Investments in associates
An investment in an associate is tested for impairment when objective evidence indicates there
has been impairment.
If objective evidence indicates that the value of the investment may have been impaired, the
Group estimates the recoverable amount of the investment, which is the greater of its value in use
and its net selling price. In assessing value in use of an investment in an associate, the Group
either estimates its share of the present value of estimated future cash flows that are expected to be
generated by the associate, including cash flows from operations of the associate and the
consideration from the final disposal of the investment, or estimates the present value of the
estimated future cash flows that are expected to be derived from dividends that will be received
and from the final disposal.
An impairment loss is recognized when the carrying amount of the investment, after applying the
equity method, exceeds its recoverable amount, and it is recognized in profit or loss under other
expenses. An impairment loss is not allocated to any asset.
An impairment loss is reversed only if there has been a change in the estimates used to determine
the recoverable amount of the investment after the impairment loss was recognized, and only to
the extent that the investment’s carrying amount, after the reversal of the impairment loss, does
not exceed the carrying amount of the investment that would have been determined by the equity
method if no impairment loss had been recognized.
H. Employee benefits
1. Post-employment benefits
The Group has a number of post-employment benefit plans. The plans are usually financed by
deposits with insurance companies or with funds managed by a trustee, and they are classified as
defined contribution plans and as defined benefit plans.
(a) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity
pays fixed contributions into a separate entity and has no legal or constructive
obligation to pay further amounts.
Obligations for contributions to defined contribution pension plans are recognized as an
expense in profit or loss in the periods during which related services are rendered by
employees.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
37
Note 3 - Significant Accounting Policies (cont’d)
H. Employee benefits (cont’d)
1. Post-employment benefits (cont’d)
(b) Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined
contribution plan.
The Group’s net obligation in respect of defined benefit pension plans is calculated
separately for each plan by estimating the amount of future benefit that employees have
earned in return for their service in the current and prior periods. That benefit is
discounted to determine its present value, and the fair value of any plan assets is
deducted. The Group determines the net interest expense (income) on the net defined
benefit liability (asset) for the period by applying the discount rate used to measure the
defined benefit obligation at the beginning of the annual period to the then-net defined
benefit liability (asset). The discount rate is the yield at the reporting date on high
quality NIS-denominated corporate debentures, that have maturity dates approximating
the terms of the Group’s obligations. The calculation is performed by a qualified
actuary using the projected unit credit method.
Remeasurements of the net defined benefit liability (asset) comprise actuarial gains and
losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if
any, excluding interest). Remeasurements are recognized immediately directly in
retained earnings through other comprehensive income.
Net interest costs on a net defined obligation are presented under salaries expenses.
The Group has executive insurance policies that were issued before 2004 according to
which the profit in real terms accumulated on the severance pay component will be paid
to the employees upon their retirement. In respect of such policies, plan assets include
both the balance of the severance pay component and the balance of the profit in real
terms (if any) on the severance pay deposits that accumulated until the reporting date,
and are presented at fair value.
2. Short term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided or upon the actual absence of the employee when the
benefit is not accumulated (such as maternity leave).
A liability is recognized for the amount expected to be paid under short term cash bonus if the
Group has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be estimated reliably.
The employee benefits are classified, for measurement purposes, as short-term benefits or as
other long-term benefits depending on when the Group expects the benefits to be wholly settled.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
38
Note 3 - Significant Accounting Policies (cont’d)
I. Revenue
The Group applies International Financial Reporting Standard 15 (“IFRS 15” or “the standard”)
which provides guidance on revenue recognition. According to IFRS 15, the Group recognizes
revenue from goods with no alternative use over time.
The standard introduces a new five step model for recognizing revenue from contracts with
customers:
(1) Identifying the contract with the customer.
(2) Identifying distinct performance obligations in the contract.
(3) Determining the transaction price.
(4) Allocating the transaction price to distinct performance obligations.
(5) Recognizing revenue when the performance obligations are satisfied.
Identifying the contract
The Group accounts for a contract with a customer only when the following conditions are met:
(a) The parties to the contract have approved the contract (in writing, orally or according to
other customary business practices) and they are committed to satisfying the obligations
attributable to them;
(b) The Group can identify the rights of each party in relation to the goods that will be
transferred;
(c) The Group can identify the payment terms for the goods that will be transferred;
(d) The contract has a commercial substance (i.e. the risk, timing and amount of the entity’s
future cash flows are expected to change as a result of the contract); and
(e) It is probable that the consideration, to which the Group is entitled to in exchange for the
goods transferred to the customer, will be collected.
Identifying performance obligations
In accordance with the standard, the Group should identify distinct performance obligations in
contract with customers. The Group is characterized by transactions with a one performance
obligation in each contract.
Determining the transaction price
The transaction price is the amount of the consideration to which the Group expects to be
entitled in exchange for the goods promised to the customer.
Satisfaction of performance obligations
Revenue is recognized when the Group satisfies a performance obligation by transferring
control over promised goods to the customer.
The Group’s revenue is generated from the sale of goods manufactured according to customer
specifications and based mainly on NCNR terms (non-cancelable and non-refundable). The
Group is entitled to reimbursement of the costs incurred to date, including a reasonable margin.
Customer-specific goods cannot be sold to any other customer and therefore have no alternative
use.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
39
Note 3 - Significant Accounting Policies (cont’d)
I. Revenue (cont’d)
Contract asset
A contract asset is recognized when the Group may recognize revenue but still has a contractual
obligation to perform, such as delivery, before it can receive consideration for goods sold to the
customer.
Contract assets are classified as receivables when the rights in their respect become
unconditional. In the following year, as the contractual obligation is completed, contract assets
are classified as trade accounts receivable.
J. Development costs
Development costs are mainly incurred to customize products for individual contracts, which provides
the Group with additional knowhow for future potential orders. These development costs are expensed
as incurred.
K. Leases
Determining whether an arrangement contains a lease
On the inception date of the lease, the Group determines whether the arrangement is a lease or contains
a lease, while examining if it conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. In its assessment of whether an arrangement conveys the right to
control the use of an identified asset, the Group assesses whether it has the following two rights
throughout the lease term:
(a) The right to obtain substantially all the economic benefits from use of the identified asset; and
(b) The right to direct the identified asset’s use.
Leased assets and lease liabilities
Contracts that award the Group control over the use of a leased asset for a period of time in exchange
for consideration, are accounted for as leases. Upon initial recognition, the Group recognizes a liability
at the present value of the balance of future lease payments (these payments do not include certain
variable lease payments), and concurrently recognizes a right-of-use asset at the same amount of the
lease liability, adjusted for any prepaid or accrued lease payments, plus initial direct costs incurred in
respect of the lease.
Since the interest rate implicit in the Group's leases is not readily determinable, the incremental
borrowing rate of the lessee is used. Subsequent to initial recognition, the right-of-use asset is accounted
for using the cost model, and depreciated over the shorter of the lease term or useful life of the asset.
A right-of-use asset in respect of leased land is presented under “Fixed assets”.
The lease term
The lease term is the non-cancellable period of the lease plus periods covered by an extension or
termination option if it is reasonably certain that the lessee will or will not exercise the option,
respectively.
Depreciation of right-of-use asset
After lease commencement, a right-of-use asset is measured on a cost basis less accumulated
depreciation and accumulated impairment losses and is adjusted for re-measurements of the lease
liability. Depreciation is calculated on a straight-line basis over the useful life or contractual lease
period, whichever earlier, as follows:
 Leased lands 70 years

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
40
Note 3 - Significant Accounting Policies (cont’d)
L. Finance income and expenses
Finance income comprises interest income on funds invested, dividend income and changes in the fair
value of financial assets at fair value through profit or loss.
Dividend income is recognized on the date that the Group’s right to receive payment is established,
which, in the case of quoted securities, is the ex-dividend date.
Interest income is recognized as it accrues, using the effective interest method.
Finance expenses comprise changes in the fair value of financial assets at fair value through profit or
loss (other than losses on trade receivables that are presented under general and administrative
expenses).
In the statement of cash flows, interest paid, interest received and dividends received are presented as
part of cash flows from operating activities. Dividends paid are presented as part of cash flow used for
financing activities.
Foreign currency gains and losses are reported on a net basis as either finance income or finance
expenses depending on whether foreign currency movements are in a net gain or net loss position.
M. Income tax
Income tax comprises current and deferred tax. Current tax and deferred tax are recognized in profit or
loss, or are recognized directly in other comprehensive income to the extent they relate to items
recognized directly in other comprehensive income.
Current taxes
Current tax is the expected tax payable (or receivable) on the taxable income for the year, using tax
rates enacted or substantively enacted at the reporting date. Current taxes also include taxes in respect of
prior years.
Offset of current tax assets and liabilities
Current tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and there is intent to settle current tax liabilities and assets on a net basis or the tax
assets and liabilities will be realized simultaneously.
Uncertain tax positions
A provision for uncertain tax positions, including additional tax and interest expenses, is recognized
when it is more probable than not that the Group will have to use its economic resources to pay the
obligation.
Deferred taxes
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax
is not recognized for the following temporary differences: the initial recognition of goodwill and
differences relating to investments in subsidiaries, to the extent that it is probable that they will not
reverse in the foreseeable future and to the extent the Group controls the date of reversal.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which
the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its
assets and liabilities.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
41
Note 3 - Significant Accounting Policies (cont’d)
M. Income tax (cont'd)
Deferred taxes (cont’d)
A deferred tax asset is recognized for unused tax losses, tax benefits and deductible temporary
differences, to the extent that it is probable that future taxable profits will be available against which
they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets that were not recognized are reevaluated at each reporting date and recognized if it
has become probable that future taxable profits will be available against which they can be utilized.
Offset of deferred tax assets and liabilities
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same
taxable entity.
N. Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the year, adjusted for treasury shares.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders of the
Company and the weighted average number of ordinary shares outstanding, after adjustment for
treasury shares, for the effects of all dilutive potential ordinary shares, which comprise convertible
debentures, share options and share options granted to employees.
The Company has no dilutive instruments.
O. New standards, amendments to standards and interpretations not yet adopted
IAS 1 Presentation of Financial Statements
Amendment to IAS 1, Presentation of Financial Statements: Classification of Liabilities as Current
or Non-Current (hereinafter - “the Amendment”)
The Amendment replaces certain classification requirements for current or non-current liabilities. Thus,
for example, according to the Amendment, a liability will be classified as non-current when the entity
has the right to defer settlement for at least 12 months after the reporting period, and it "has substance"
and is in existence at the end of the reporting period. A right is in existence at the end of the reporting
period only if the entity complies with conditions for deferring settlement at that date. Furthermore, the
Amendment clarifies that the conversion option of a liability will affect its classification as current or
non-current, other than when the conversion option is recognized as equity.
The Amendment is effective for reporting periods beginning on or after January 1, 2024 and is
applicable retrospectively, including an amendment to comparative data.
The Group is examining the effects of the Amendment on the financial statements with no plans for
early adoption.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
42
Note 4 - Cash and Cash Equivalents
December 31
December 31
2021
2020
$ thousands
$ thousands
Bank balances
22,146
31,325
The Group’s exposure to currency risks concerning cash and cash equivalents is disclosed in Note 14 on
financial instruments.
Note 5 - Deposits and Marketable Securities Held for Trading
December 31
December 31
2021
2020
$ thousands
$ thousands
Current investments
Short-term deposits (*)
15,483
13,054
Marketable securities held for trading:
Stocks
393
-
Mutual funds
603
-
996
-
16,479
13,054
Non-current investments
Long-term deposits (**)
5,020
-
(*) Include mainly, short-term deposits in dollars, bearing interest at an annual rate of
approximately 0.72% - 0.92% (December 31, 2020: 1.05% - 1.50%).
(**) Long term deposits in dollars bearing interest at an annual rate of 0.95%, final maturity in
February 2023.
The Group’s exposure to interest rate risk concerning deposits is disclosed in Note 14 on financial
instruments.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
43
Note 6 - Trade and Other Accounts Receivable
December 31
December 31
2021
2020
$ thousands
$ thousands
Trade accounts receivable
Trade receivables
9,925
9,665
Less provision for doubtful debts
(8)
-
9,917
9,665
Other accounts receivable
Contract assets
2,527
1,889
Current tax assets
-
131
Government institutions
14
-
Related parties
128
125
Other receivables
557
272
3,226
2,417
The Group’s exposure to credit and currency risks concerning trade and other accounts receivable is
disclosed in Note 14 on financial instruments.
Note 7 - Inventory
December 31
December 31
2021
2020
$ thousands
$ thousands
Raw and packing material
2,760
2,525
Work-in-process
353
389
Finished products
659
548
3,772
3,462
Note 8 - Investment in Equity Accounted Investee
In October 2018 the Company acquired 20% of the rights in a Hong-Kong holding company - PCT
Industries Limited (hereinafter - “PCT”), holding a fully owned manufacturing subsidiary in Dongguan,
China, engaging in manufacturing and assembly, which currently serves as one of the Company’s major
manufacturing partners.
In accordance with the investment agreement, the Company was granted an option to increase its share
of the rights in PCT by 15% (up to 35%) (hereinafter - "the option").
The fair value of this option as at December 31, 2021 and 2020, amounted USD 100 thousand, is
presented under “Investment in Equity Accounted Investee”.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
44
Note 9 - Fixed Assets
Computers and
Machinery
Motor
Office
Land and
and equipment
vehicles
equipment
Buildings
Total
$ thousands
December 31, 2021
Cost
Balance as of January 1, 2021
3,993
490
1,974
12,109
18,566
Acquisitions
292
148
41
-
481
Disposals
(5)
-
-
-
(5)
Balance as of December 31, 2021
4,280
638
2,015
12,109
19,042
Accumulated depreciation
Balance as of January 1, 2021
2,933
219
1,396
3,382
7,930
Depreciation for the year
269
72
225
325
891
Disposals
(1)
-
-
-
(1)
Balance as of December 31, 2021
3,201
291
1,621
3,707
8,820
Carrying amounts as of
December 31, 2021
1,079
347
394
8,402
10,222
Carrying amounts as of
January 1, 2021
1,060
271
578
8,727
10,636
Computers and
Machinery
Motor
Office
Land and
and equipment
vehicles
equipment
Buildings
Total
$ thousands
December 31, 2020
Cost
Balance as of January 1, 2020
3,636
453
1,761
12,109
17,959
Acquisitions
357
97
244
-
698
Disposals
-
(60)
(31)
-
(91)
Balance as of December 31, 2020
3,993
490
1,974
12,109
18,566
Accumulated depreciation
Balance as of January 1, 2020
2,673
196
1,180
3,043
7,092
Depreciation for the year
260
68
231
339
898
Disposals
-
(45)
(15)
-
(60)
Balance as of December 31, 2020
2,933
219
1,396
3,382
7,930
Carrying amounts as of
December 31, 2020
1,060
271
578
8,727
10,636
Carrying amounts as of
January 1, 2020
963
257
581
9,066
10,867

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
45
Note 9 - Fixed Assets (cont’d)
A. Details on land rights used as fixed assets by the Group
The land on which the Company’s premises in Israel are built, has a carrying amount of USD 1,225
thousand as at December 31, 2021 (December 31, 2020: USD 1,245 thousand) and is leased from the
Israel Lands Administration under a capital lease ending on June 30, 2032. The Company has the right
to extend the lease period by another 49 years under certain circumstances.
B. Acquisition of fixed assets on credit
As at December 31, 2021, the Company acquired fixed assets on credit in the amount of USD 15
thousand (December 31, 2020: USD 57 thousand). As of the date of signing these financial statements,
the amount had been paid.
C. Advances paid on account of fixed assets
The fixed assets item as at December 31, 2021 includes advances in the amount of USD 36 thousand
that were paid on account of fixed assets.
D. Additional information
The Group has assets that have been fully depreciated and are still in use. As at December 31, 2021 the
original cost of such assets is USD 3,954 thousand (December 31, 2020: USD 3,507 thousand).
Note 10 - Other Payables
December 31
December 31
2021
2020
$ thousands
$ thousands
Employees and related benefits
790
733
Government institutions
-
4
Other payables and accrued expenses
1,245
1,168
2,035
1,905
The Group’s exposure to currency and liquidity risks concerning other payables is disclosed in Note 14
on financial instruments.
Note 11 - Employee Benefits
Employee benefits include post-employment benefits and short-term benefits.
As for post-employment benefits, the Group has defined benefit plans for which it makes contributions
to appropriate insurance policies. In addition the Group has a defined contribution plan in respect of
those of its employees who are subject to section 14 of the Severance Pay Law-1963.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
46
Note 11 - Employee Benefits (cont'd)
Composition of employee benefits:
December 31
December 31
2021
2020
$ thousands
$ thousands
Presented under current liabilities:
Short-term employee benefits
649
553
Presented under non-current liabilities:
Net liability for defined benefit plan
731
689
Total employee benefits
1,380
1,242
A. Post-employment benefit plans - defined benefit plan
Risks affiliated with the Group’s liability for defined benefit obligations refer to deviations in salary
increases, deviations in assets performances from the expectation, as well as change in interest rate
environment.
For sensitivity analyses, reflecting the effect of changes in salary increase assumptions and interest rate,
see 6 hereinafter.
December 31
December 31
2021
2020
$ thousands
$ thousands
Present value of defined benefit obligation
2,478
2,321
Fair value of plan assets
(1,747)
(1,632)
Net recognized liability for defined benefit obligations
731
689
1. Movements in the present value of the defined benefit obligations
2021
2020
$ thousands
$ thousands
Defined benefit obligations as at January 1
2,321
2,060
Benefits paid
(146)
(1)
Current service costs
97
98
Past service cost
5
-
Interest costs
51
60
Changes in respect of foreign exchange differences
83
171
Remeasurement of defined benefit plan
67
(67)
Defined benefit obligation as at December 31
2,478
2,321

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
47
Note 11 - Employee Benefits (cont'd)
A. Post-employment benefit plans - defined benefit plan (cont’d)
2. Movements in plan assets
2021
2020
$ thousands
$ thousands
Fair value of plan assets as at January 1
1,632
1,402
Contributions by employer
81
78
Benefits paid
(125)
-
Past service cost
5
-
Interest income
45
37
Changes in respect of foreign exchange differences
55
114
Remeasurement of defined benefit plan
54
1
Fair value of plan assets as at December 31
1,747
1,632
3. Expenses recognized in profit or loss
For the year ended December 31
2021
2020
$ thousands
$ thousands
Current service costs
97
98
Interest costs
51
60
Interest income
(45)
(37)
Net change in respect of foreign exchange differences
28
57
131
178
4. Recognized in other comprehensive income (loss)
For the year ended December 31
2021
2020
$ thousands
$ thousands
Defined benefit obligation:
Actuarial losses from changes in financial assumptions
(105)
(15)
Actual return less interest income
(17)
(4)
Other actuarial gains
53
77
Changes in respect of foreign exchange differences
2
9
(67)
67
Plan assets:
Actual return less interest income
68
-
Other actuarial gains (losses)
(16)
1
Changes in respect of foreign exchange differences
2
-
54
1
Net actuarial gains (losses) for the year
(13)
68

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
48
Note 11 - Employee Benefits (cont'd)
A. Post-employment benefit plans - defined benefit plan (cont'd)
5. Actual return
For the year ended December 31
2021
2020
%
%
Actual return rate on plan assets
6.59
3.12
6. Actuarial assumptions and sensitivity analyses
Principal actuarial assumptions at the reporting date (expressed as weighted averages):
2021
2020
%
%
Discount rate as at December 31
0.45
0.93
Future salary growth
3
3
Leave rates for employees:
Less than 10 years of service
5
5
10 years of service or more
2
2
Assumptions regarding future mortality are based on published statistics and mortality tables.
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions,
holding other assumptions constant, would have affected the defined benefit obligation by the
amounts shown below:
1% Increase
1% Decrease
December 31
December 31
2021
2020
2021
2020
$ thousands
$ thousands
$ thousands
$ thousands
Future salary growth
226
213
(178)
(185)
Discount rate
(173)
(173)
218
206
7. Effect of the plan on the Group’s future cash flows
The Group expects to pay approximately USD 85 thousand in contributions to the funded
defined benefit plan in 2022.
The Group estimates the plan’s duration (based on weighted average) to be 9.90 years at the end
of the reporting period (2020: 10.05 years).
B. Post-employment benefit plans - defined contribution plan
For the year ended December 31
2021
2020
$ thousands
$ thousands
Amount recognized as expense in respect of defined
contribution plan
476
433

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
49
Note 11 - Employee Benefits (cont'd)
C. Short-term employee benefits
December 31
December 31
2021
2020
$ thousands
$ thousands
Provision for vacation and recreation
636
553
Post-employment benefits
13
-
649
553
Note 12 - Investments in Subsidiaries
Details of the subsidiaries, their activities and the Company's interest therein as at December 31, 2021:
A. Payton America Inc. (hereinafter “Payton America”):
Payton America, a fully owned U.S. subsidiary, located in Florida, manufactures and sells
Planar transformers and inductors.
B. Himag Planar Magnetics Ltd. (hereinafter “Himag Planar”):
Himag Planar, a fully owned UK subsidiary, incorporated for the purpose of the business
activity acquisition of Himag Solutions Ltd. The investment in Himag Planar constitutes capital
notes in USD which do not bear any interest.
Note 13 - Commitments
A. According to a Management Services Agreement signed between the Company and Wichita
Ltd., a management company under the full control of Mr. David Yativ (approved by the
Company's General meeting dated September 30, 2020), David Yativ will continue to provide
management services as the Active Chairman of the Company for a period of 3 years, as of
November 1, 2020. For providing these management services, Wichita Ltd. will be entitled to a
monthly management fee of USD 53 thousand (linked to the Israeli consumer price index
according to the base index known on August 15, 2020) which shall be raised by 3% in April
each year, and an annual bonus calculated as 3.4% of the Company’s annual profit before taxes
on income and before any other profit based bonus.
B. According to a Management Services Agreement signed between the Company and Yaarh -
Looking To The Future Ltd., a management company under the full control of Mr. Doron Yativ
(approved by the Company's General meeting dated September 30, 2020), Doron Yativ will
continue to provide management services as the Company's C.E.O, for a period of 3 years, as of
November 1, 2020. For providing these management services, Yaarh - Looking To The Future
Ltd. will be entitled to a monthly management fee of USD 27 thousand (linked to the Israeli
consumer price index according to the base index known on August 15, 2020) which shall be
raised by 3% in April each year, and an annual bonus calculated as 2% of the Company’s
annual profit before taxes on income and before any other profit based bonus.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
50
Note 14 - Financial Instruments
A. Overview
The Group has exposure to the following risks from its use of financial instruments:
 Credit risk
 Liquidity risk
 Market risk (including currency and interest risks)
This note presents quantitative and qualitative information about the Group’s exposure to each of the
above risks, and the Group’s objectives, policies and processes for measuring and managing risk.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework.
B. Credit risk
The Group’s revenues are derived from sales to customers in Israel, Asia, Europe, America and other
countries around the world. The Company’s Management regularly monitors the customers’ balances
and includes specific provisions for doubtful debts in the financial statements that adequately reflect, in
the opinion of management, the loss inherent in debts the collection of which is doubtful.
The Group has credit risk insurance for most of its Israeli and other customers, whose yearly activity
exceeds USD 5 thousand and USD 10 thousand, respectively.
The Group’s cash surpluses are invested in banks. The Group has a surplus cash investment policy for
the purpose of reducing risk or maintaining liquidity. This policy is reviewed and updated from time to
time according to market changes.
1. Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The
maximum exposure to credit risk at the reporting date was:
December 31
2021
2020
Carrying amount
$ thousands
$ thousands
Cash and cash equivalents
22,146
31,325
Deposits
20,503
13,054
Trade accounts receivable
9,917
9,665
Other accounts receivable
2,655
2,050
55,221
56,094

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
51
Note 14 - Financial Instruments (cont’d)
B. Credit risk (cont’d)
1. Exposure to credit risk (cont’d)
The maximum exposure to credit risk for cash and cash equivalents at the reporting date by
geographic region was:
December 31
2021
2020
Carrying amount
$ thousands
$ thousands
Israel
9,967
24,006
U.S.A.
11,559
6,806
U.K.
610
500
Asia
10
13
22,146
31,325
The maximum exposure to credit risk for deposits at the reporting date by geographic region
was:
December 31
2021
2020
Carrying amount
$ thousands
$ thousands
Israel
20,503
13,054
The maximum exposure to credit risk for trade accounts receivable at the reporting date by
geographic region was:
December 31
2021
2020
Carrying amount
$ thousands
$ thousands
Israel
328
492
Asia
5,092
4,835
Europe
1,751
1,856
U.S.A.
2,736
2,468
Canada
10
14
9,917
9,665

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
52
Note 14 - Financial Instruments (cont’d)
B. Credit risk (cont’d)
1. Exposure to credit risk (cont’d)
Trade accounts receivable in respect of principal customers of the Group at the reporting date:
December 31
2021
2020
Carrying amount
$ thousands
$ thousands
Customer A
3,608
3,213
Customer B
1,367
1,947
2. Aging of debts and impairment losses
The aging of trade accounts receivable at the reporting date was:
December 31
2021
2020
Gross
Impairment
Gross
Impairment
$ thousands
$ thousands
$ thousands
$ thousands
Not past due
8,561
-
7,506
-
Past due 0-30 days
1,177
-
1,666
-
Past due 31-120 days
173
-
473
-
Past due 121 days to one year
6
-
20
-
Past due more than one year
8
(8)
-
-
9,925
(8)
9,665
-
C. Liquidity risk
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
The following are the contractual maturities of financial liabilities based on the actual rates at the
reporting date, including estimated interest payments:
December 31, 2021
Carrying
Contractual
6 months
amount
cash flows
or less
$ thousands
Non-derivative financial liabilities:
Trade payables
4,088
4,088
4,088
Other payables
1,245
1,245
1,245
5,333
5,333
5,333

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
53
Note 14 - Financial Instruments (cont’d)
C. Liquidity risk (cont’d)
December 31, 2020
Carrying
Contractual
6 months
amount
cash flows
or less
$ thousands
Non-derivative financial liabilities:
Trade payables
5,053
5,053
5,053
Other payables
1,168
1,168
1,168
6,221
6,221
6,221
D. Market risk
The Group's normal course of business is being managed in U.S. dollar, thus, most of the market risks
are hedged.
The Group uses, from time to time, derivatives as a tool for hedging, in order to neutralize fluctuations
in profit or loss.
1. Foreign currency risk
Currency risk
Since most of the Group's sales are in U.S. dollar, the Group's gross profit is exposed to the changes in
exchange rates of the U.S. dollar in relation to the NIS and GBP, with regards to local labor costs and
other operating costs, and in relation to the Chinese currency, with regards to costs of raw materials.
The Company uses derivatives, from time to time, as a tool for economic hedging, especially in order to
hedge labor costs and other costs paid in NIS.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
54
Note 14 - Financial Instruments (cont’d)
D. Market risk (cont’d)
1. Foreign currency risk (cont’d)
(a) The exposure to foreign currency risk
The Group’s exposure to foreign currency risk was as follows based on notional amounts:
December 31, 2021
Dollar
NIS
Euro
GBP
Other
Total
$ thousands
Financial assets and
financial liabilities:
Current assets:
Cash and cash equivalents
20,755
851
392
141
7
22,146
Short-term deposits
15,483
-
-
-
-
15,483
Trade and other receivables
11,866
346
106
254
-
12,572
Non-current assets:
Long-term deposits
5,020
-
-
-
-
5,020
Current liabilities:
Trade payables
(3,527)
(432)
(14)
(115)
-
(4,088)
Other payables
(1,042)
(187)
(11)
-
(5)
(1,245)
48,555
578
473
280
2
49,888
December 31, 2020
Dollar
NIS
Euro
GBP
Other
Total
$ thousands
Financial assets and
financial liabilities:
Current assets:
Cash and cash equivalents
31,115
15
37
150
8
31,325
Short-term deposits
13,054
-
-
-
-
13,054
Trade and other receivables
10,844
478
98
295
-
11,715
Current liabilities:
Trade payables
(4,489)
(425)
(33)
(106)
-
(5,053)
Other payables
(965)
(184)
(18)
-
(1)
(1,168)
49,559
(116)
84
339
7
49,873

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
55
Note 14 - Financial Instruments (cont’d)
D. Market risk (cont’d)
1. Foreign currency risk (cont’d)
(a) The exposure to foreign currency risk (cont’d)
Information regarding significant exchange rates:
Year ended December 31
As at December 31
2021
2020
2021
2020
Rate of change
Reporting date spot rate
%
%
NIS
NIS
1 US dollar
(3.27)
(6.97)
3.110
3.215
Year ended December 31
As at December 31
2021
2020
2021
2020
Rate of change
Reporting date spot rate
%
%
Euro
Euro
1 US dollar
8.34
(8.53)
0.883
0.815
Year ended December 31
As at December 31
2021
2020
2021
2020
Rate of change
Reporting date spot rate
%
%
GBP
GBP
1 US dollar
1.09
(3.43)
0.740
0.732
(b) Sensitivity analysis
A weakening of the USD against the following currencies as at December 31 would have
increased (decreased) equity and profit or loss by the amounts shown below. This analysis
assumes that all other variables, in particular interest rates, remain constant. The analysis is
performed on the same basis for 2020.
Profit or loss
December 31
December 31
2021
2020
$ thousands
$ thousands
Increase in the exchange rate of:
5% in the NIS
29
(6)
5% in the Euro
24
4
5% in the GBP
14
17
A strengthening of the USD against the above currencies as at December 31 would have had the
equal but opposite effect on the above currencies to the amounts shown above, on the basis that
all other variables remain constant.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
56
Note 14 - Financial Instruments (cont’d)
D. Market risk (cont’d)
2. Interest rate risk
The Group's exposure to market risk for changes in interest rates relates primarily to deposits (in U.S.
dollars) which bear interest rates given by or affected by banks. The interest rate on deposits at the
reporting date is in the range of 0.72%-0.95%.
(a) Profile
At the reporting date the interest-bearing financial instruments of the Group were:
December 31
2021
2020
Carrying amount
$ thousands
$ thousands
Unlinked fixed rate instruments
Financial assets
20,503
13,054
(b) Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets at fair value through profit or
loss. Therefore a change in interest rates at the reporting date would not affect profit or loss.
E. Fair value
The carrying amounts of financial assets and liabilities, including cash and cash equivalents, trade
receivables, other receivables, deposits, trade payables and other payables are the same or proximate to
their fair value.
As at December 31, 2021 and 2020 the fair value of the option to increase the Company’s share of the
rights in equity accounted investee, is presented in the Statement of Financial Position based on a
valuation (Level 3).
Note 15 - Share Capital and Reserves
A. Share capital - Composition
Number of shares
Authorized
Issued and paid
December 31, 2021 and 2020
Ordinary shares of NIS 1 each
20,000,000
17,670,775
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to Company’s residual assets.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
57
Note 15 - Share Capital and Reserves (cont’d)
B. Dividends
The following dividends were paid by the Company:
For the year ended December 31
2021
2020
$ thousands
$ thousands
USD 0.42 per ordinary share
7,422
-
Note 16 - Statement of Profit or Loss Data
A. Revenues
1. Revenues
For the year ended December 31
2021
2020
$ thousands
$ thousands
Export
43,077
43,071
Israel
903
803
43,980
43,874
2. Principal customers
The revenues include sales to principal customers (which make up in excess of 10% of the sales
of the Group):
For the year ended December 31
2021
2020
%
%
Customer A
21
31
Customer B
17
12

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
58
Note 16 - Statement of Profit or Loss Data (cont’d)
B. Cost of sales
For the year ended December 31
2021
2020
$ thousands
$ thousands
Materials consumed*
19,201
18,333
Salaries and related benefits
5,638
5,348
Depreciation
530
533
Other manufacturing expenses
1,313
1,412
Change in inventory of finished products and work in process
(75)
108
26,607
25,734
* Includes inventory write-off of USD 218 thousand and USD 113 thousand for the years ended
December 31, 2021 and 2020, respectively.
C. Selling and marketing expenses
For the year ended December 31
2021
2020
$ thousands
$ thousands
Salaries and related benefits**
1,022
968
Sales commissions
609
627
Advertising and marketing
45
43
Exhibits and travel abroad
51
47
Other
64
74
1,791
1,759
** Includes expenses related to related parties in the amount of USD 432 thousand and USD 401
thousand for the years ended December 31, 2021 and 2020, respectively (see Note 16G).
D. General and administrative expenses
For the year ended December 31
2021
2020
$ thousands
$ thousands
Salaries and related benefits
1,318
1,151
Maintenance and communications
245
218
Depreciation
361
365
Professional services
257
262
Management fees and related benefits to related parties
1,040
1,017
Other
513
372
3,734
3,385

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
59
Note 16 - Statement of Profit or Loss Data (cont’d)
E. Other income, net
For the year ended December 31
2021
2020
$ thousands
$ thousands
Capital gain on sale of fixed assets
1
20
F. Finance income and expenses
For the year ended December 31
2021
2020
$ thousands
$ thousands
Finance income
Interest income from bank deposits
176
559
Interest income on cash
1
6
Income from marketable securities held for trading
7
-
Other
9
1
193
566
Finance expenses
Bank charges and others
35
35
Interest for delayed tax payments
40
9
Exchange rate differences, net
80
67
Other
13
-
168
111
G. Transactions and balances with related parties
Compensation and benefits to key management personnel and interested parties (including directors)
that are employed by the Group:
Year ended December 31
December 31
2021
2020
2021
2020
Number of
Number of
People
Amount
People
Amount
Outstanding balance
$ thousands
$ thousands
$ thousands
$ thousands
Short-term employee
benefits
607
538
146
93
Post-employment
benefits
27
49
128
155
5
634
4
587
274
248

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
60
Note 16 - Statement of Profit or Loss Data (cont’d)
G. Transactions and balances with related parties (cont’d)
Compensation to key management personnel (including directors) that are not employed by the Group:
Year ended December 31
December 31
2021
2020
2021
2020
Number of
Number of
People
Amount
People
Amount
Outstanding balance
$ thousands
$ thousands
$ thousands
$ thousands
Total compensation
to directors not
employed by the
Group
3
42
4
38
11
10
Total compensation
to key management
personnel not
employed by the
Group (*)
2
1,491
2
1,431
621
630
Accounts receivable-
The Parent
Company
-
-
-
-
128
125
(*) Management fees and related benefits to Wichita Ltd. (see Note 13A) and to Yaarh-Looking To The
Future Ltd. (see Note 13B) include an amount of USD 183 thousand (year ended December 31,
2020: USD 170 thousand) and an amount of USD 249 thousand (year ended December 31, 2020:
USD 231 thousand), respectively, recorded as selling and marketing expenses.
Inter-company transactions between the Company and its two fully owned subsidiaries (Payton America
Inc. and Himag Planar Magnetics Ltd.) include, inter alia, the following: engineering support,
purchasing and subcontracting, marketing, administrative and management services. All the inter-
company transactions are being eliminated within these consolidated financial statements.
Note 17 - Taxes on Income
A. Details regarding the tax environment of the Company
1. Corporate tax rate
The tax rate relevant in the years 2020 - 2021 is 23%.
Current taxes for the reported periods and deferred tax balances as at December 31, 2021 and
2020 are calculated according to the tax rate presented above. See also Note 17A(4) hereunder.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
61
Note 17 - Taxes on Income (cont’d)
A. Details regarding the tax environment of the Company (cont’d)
2. The Dollar regulations
The Company, being a "foreign investment company", elected to be taxed as from the year
2009, based upon its results in dollars and according to applicable income tax regulations
(hereinafter - "the Dollar regulations").
3. Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969
The Company currently qualifies as an “Industrial Company” as defined in the Law for the
Encouragement of Industry (Taxes) - 1969 and accordingly it is entitled to benefits, of which
the most significant one is higher rates of depreciation than those prescribed in the Israeli tax
ordinance.
4. Tax benefits under the Law for the Encouragement of Capital Investments - 1959 ("the
Investment Law")
Amendment to the Law for the Encouragement of Capital Investments - 1959
The Company is subject to the Law for the Encouragement of Capital Investments - 1959 which
was amended last in 2010 (hereinafter - “the Amendment to the Law”). The Amendment to the
Law provisions apply to preferred income derived or accrued in 2011 and thereafter by a
preferred company, per the definition of these terms in the Amendment to the Law.
The Amendment provides that only companies in Development Area A will be entitled to the
grants track and that they will be entitled to receive benefits under this track and under the tax
benefits track at the same time. In addition, a preferred enterprise track was introduced, which
mainly provide a uniform and reduced tax rate for all the company’s income entitled to benefits.
On August 5, 2013 the Knesset passed the Law for Changes in National Priorities (Legislative
Amendments for Achieving Budget Objectives in the Years 2013 and 2014) - 2013, which
raised the tax rates on preferred income as from the 2014 tax year as follows: 9% for
Development Area A and 16% for the rest of the country.
The Amendment to the Law also provides that no tax will apply to a dividend distributed out of
preferred income to a shareholder that is a company, for both the distributing company and the
shareholder. A tax rate of 20% shall apply to a dividend distributed out of preferred income to
an individual shareholder or foreign resident, subject to double taxation prevention treaties.
The Company complies with the conditions provided in the amendment to the Law for the
Encouragement of Capital Investments for inclusion in the scope of the tax benefits track.
On November 15, 2021 the Economic Efficiency Law (Legislative Amendments for the 2021
and 2022 Budget Years) - 2021 (hereinafter: "the Economic Efficiency Law") was published as
well as a Temporary Order to the Law for the Encouragement of Capital Investments - 1959
(hereinafter: "the temporary order"), which offers a reduced tax rate arrangement to companies
that received an exemption from corporate tax under the aforesaid law. The temporary order
provided that companies that choose to apply the temporary order, which is effective until
November 14, 2022, will be entitled to a reduced tax rate on the "release" of exempt profits
(hereinafter: "the beneficiary corporate tax rate"). The release of exempt profits makes it
possible to distribute them at a reduced rate of corporate tax at the company level based on the
rate of the profits being distributed pursuant to the conditions set forth in the Amendment.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
62
Note 17 - Taxes on Income (cont’d)
A. Details regarding the tax environment of the Company (cont’d)
4. Tax benefits under the Law for the Encouragement of Capital Investments - 1959 ("the
Investment Law") (cont’d)
The reduced corporate tax rate will be determined according to the rate of exempt profits the
company chooses to release from its entire exempt profits, and will be between 40% and 70%
of the corporate tax rate that would have applied to the revenue in the year it was produced if it
had not been exempt, but in any event no less than 6%. Furthermore, a company that chooses to
release its exempt profits and pay a beneficiary corporate tax rate will be required to invest in
its enterprise, within a period of 5 years beginning from the tax year it elected, an amount
calculated according to a formula provided in the temporary order (30% of the exempt income
multiplied by the corporate tax rate and multiplied by the release rate). The investment will be
made in productive assets (with the exclusion of buildings), research and development in Israel
and salaries to new employees of the enterprise. Failure to comply with this condition will
require the company to pay additional corporate tax.
In addition, according to the Economic Efficiency Law an amendment was made to Section 74
of the Law for the Encouragement of Capital Investments - 1959 with respect to identifying the
sources of dividend distributions as from August 15, 2021.
Regarding the implications of the temporary order concerning the dividend announced after the
reporting date - see Note 20.
B. Details regarding the tax environment of the subsidiary in U.S.A.
Payton America is subject to the tax rate of its country of domicile.
The primary tax rates applicable to the subsidiary are 21% Federal Tax and 5% State Tax.
C. Details regarding the tax environment of the subsidiary in UK
Himag Planar is subject to the tax rate of its country of domicile.
The primary tax rate applicable to the subsidiary is 19%.
D. Final tax assessments
The Company has final tax assessments up to and including the 2014 tax year.
With few exceptions the U.S. subsidiary is no longer subject to U.S. Federal income tax examinations
by tax authorities for years before 2018.

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
63
Note 17 - Taxes on Income (cont’d)
E. Composition of income tax expense
For the year ended
December 31
2021
2020
$ thousands
$ thousands
Current year taxes
1,731
2,034
Deferred tax expense - creation and
reversal of temporary differences, net
90
159
Adjustments for prior years
-
(18)
1,821
2,175
F. Reconciliation between the theoretical tax on the pre-tax profit and the tax expense
A reconciliation of the statutory tax expense, assuming all income is taxed at the statutory rate
applicable to the income of companies in Israel, and their actual tax expense, is as follows:
For the year ended
December 31
2021
2020
$ thousands
$ thousands
Tax rate
23%
23%
Profit before taxes on income
10,341
12,080
Income tax using the domestic corporations tax rate
2,378
2,778
Additional tax (tax saving) in respect of:
Neutralization of tax calculated in respect of the Company’s share
in losses of equity accounted investee
12
6
Tax saving in respect of foreign subsidiaries
(46)
(23)
Non-deductible expenses and tax exempt income, net
41
10
Tax benefits due to Preferred Enterprise status
(551)
(589)
Taxes in respect of previous years
-
(18)
Others
(13)
11
1,821
2,175

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
64
Note 17 - Taxes on Income (cont’d)
G. Deferred tax assets and liabilities
(1) Recognized deferred tax assets and liabilities
Deferred taxes in respect of companies in Israel are calculated according to the tax rate anticipated to be
in effect on the date of reversal as stated above. Deferred taxes in respect of foreign subsidiary are
calculated according to the relevant tax rates.
Deferred tax assets and liabilities are attributable to the following items:
Investment in
equity
Employee
Fixed
accounted
benefits
assets
investee
Other
Total
$ thousands
Balance as at January 1, 2020
164
(1,257)
(6)
(4)
(1,103)
Changes recognized in profit or loss
77
(46)
-
(190)
(159)
Changes recognized in other
comprehensive income
(12)
-
-
-
(12)
Adjustments for prior years
-
222
-
-
222
Balance as at December 31, 2020
229
(1,081)
(6)
(194)
(1,052)
Changes recognized in profit or loss
26
(74)
-
(42)
(90)
Changes recognized in other
comprehensive income
1
-
-
-
1
Balance as at December 31, 2021
256
(1,155)
(6)
(236)
(1,141)
Investment in
equity
Employee
Fixed
accounted
benefits
assets
investee
Other
Total
$ thousands
Deferred tax assets
256
-
-
-
256
Offset of balances
(256)
Deferred tax asset in statement of financial
position as at December 31, 2021
-
Deferred tax liability
-
(1,155)
(6)
(236)
(1,397)
Offset of balances
256
Deferred tax liability in statement of financial
position as at December 31, 2021
(1,141)

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
65
Note 17 - Taxes on Income (cont’d)
G. Deferred tax assets and liabilities (cont’d)
(1) Recognized deferred tax assets and liabilities (cont’d)
Investment in
equity
Employee
Fixed
accounted
benefits
assets
investee
Other
Total
$ thousands
Deferred tax assets
229
-
-
-
229
Offset of balances
(229)
Deferred tax asset in statement of financial
position as at December 31, 2020
-
Deferred tax liability
-
(1,081)
(6)
(194)
(1,281)
Offset of balances
229
Deferred tax liability in statement of financial
position as at December 31, 2020
(1,052)
(2) Unrecognized deferred tax liabilities
As at December 31, 2021 a deferred tax liability in the amount of USD 636 thousand (2020: USD 586
thousand) for temporary differences in the amount of USD 2,765 thousand (2020: USD 2,548 thousand)
related to an investment in a subsidiary was not recognized because the decision as to whether to incur
the liability rests with the Group and it is satisfied that it will not be incurred in the foreseeable future.
(3) Unrecognized deferred tax assets
As at December 31, 2021 deferred tax assets have not been recognized mainly in respect of tax losses in
the amount of USD 365 thousand (2020: USD 574 thousand) since currently it is not probable that
future taxable profit will be available, against which the Group can utilize the benefits.
Note 18 - Earnings per Share
Basic and diluted earnings per share
For the year ended
December 31
2021
2020
Profit for the year ($ thousands)
8,520
9,905
Issued ordinary shares (in thousands of shares)
17,671
17,671
Basic and diluted earnings per ordinary share (in US$)
0.48
0.56

Payton Planar Magnetics Ltd.
Notes to the Consolidated Financial Statements
66
Note 19 - Entity Wide Disclosures
A. The Group has one operating segment, the transformer segment. The Group’s chief operating
decision maker (hereinafter: "CODM") makes decisions and allocates resources with respect to
all the transformers as a whole.
CODM observes the operating data up to the profit for the year, in consistent of the
consolidated financial reports presented in accordance with IFRS.
In presenting information on the basis of geographical segments, segment revenue is based on
the geographical location of customers and segment non-current assets are based on the
geographical location of these assets.
For the year ended December 31, 2021
Israel
Europe
America
Asia
Total
$ thousands
$ thousands
$ thousands
$ thousands
$ thousands
Revenues
1,259
10,219
11,376
21,126
43,980
Non-current
assets
8,846
775
623
974
11,218
For the year ended December 31, 2020
Israel
Europe
America
Asia
Total
$ thousands
$ thousands
$ thousands
$ thousands
$ thousands
Revenues
1,638
8,766
10,906
22,564
43,874
Non-current
assets
9,195
815
648
1,019
11,677
B. Information about sales to principal customers - see Note 16A(2).
Note 20 - Subsequent Events
On March 28, 2022 the Company's Board of Directors decided to pay the shareholders a dividend at the
amount of USD 8,023 thousand (USD 0.454 per share, to be paid during June 2022). Pursuant to the
amendment of the law for the Encouragement of Capital Investments executed on November 15, 2021
(the temporary order - see Note 17A(4)), per Company’s decision, this dividend will be subject to a
beneficiary corporate tax rate, at the amount of USD 900 thousands.