Israel Canada (T.R) Ltd.

Annual Report • Apr 10, 2025

Israel Canada (T.R) Ltd.

Board of Directors' Report for the Year Ended on

December 31, 2024

This document is an English translation of the Hebrew version of the company's financial statements and the management discussion and analysis for the Year Ended on December 31, 2024, that was published on March 25, 2025 (the "reports" or "Hebrew Version"). The Hebrew version of the reports is the binding version and the only version having legal effect. The English translation has been created for the purpose of convenience only and has no binding force. The approval of the company's board of directors was given to the Hebrew version only and no such approval has been given to the English translation. In the event of any discrepancy between the Hebrew Version and this translation, the Hebrew Version shall prevail.

Board of Directors' Report on the State of the Company's Affairs for the Period Ended on December 31, 2024 A. Summary of Financial Findings for the Reporting Period:

• The total sales of apartments, land, and the inclusion of partners for the Company and its associate companies from the beginning of 2024 and until the Report publication date amounted to approximately NIS 4.2 billion, including VAT (including associate companies–Vertical City, Beit Mars, and ICR), compared to approximately NIS 3.9 billion, including VAT, in the same period last year.
• Below is a summary of the sales data for apartments and offices of the Company's major projects up to the Report publication date:
  • ❖ Sde Dov Project ("Rainbow"), Tel Aviv, as of the Report date, the Company sold 220 apartments for a total consideration of approximately NIS 1.9 billion, including VAT.
  • ❖ Vertical City Project As of the Report date, the associate company sold approximately 25,000 square meters of office space, for a total consideration of approximately NIS 796 million, including VAT.
  • ❖ Midtown Jerusalem Project As of the Report date, the Company sold approximately 214 apartments for a total consideration of approximately NIS 868 million, including VAT.
  • ❖ Lev Bavli, Tel Aviv As of the Report date, the associate company sold 4 apartments for a total consideration of approximately NIS 21 million, including VAT.
• On May 20, 2024, the Company received an initial rating of ilA- with a positive outlook from S&P Maalot for the Company and its Series F and G Bonds. On June 23, 2024, S&P Maalot announced a rating of ilA- for a new bond issuance (Series H). On December 4, 2024, S&P Maalot announced a rating of ilA- for the issue of an expansion of Series H.
• On June 26, 2024, the Company issued Bonds (Series H), totaling approximately NIS 226.5 million at a fixed annual interest rate of 6.95%. On December 10, 2024, the Company expanded its Bonds (Series H) and raised an additional NIS 320 million. For further information, refer to Note 13b(3) in the Company's Consolidated Financial Statements.
• On August 19, 2024, ICR Israel Canada Raam Holdings Ltd. (hereinafter: "ICR"), entered into an investment agreement with companies from the Clal Insurance Enterprises Holdings Ltd. group (hereinafter: "Clal"), under which shares constituting 15% of the issued and outstanding share capital of ICR were allocated to Clal. On September 30, 2024, the transaction was completed, resulting in the Company recording a net profit of approximately NIS 72.5 million in exchange for 7.5% of ICR's shares. For further information, refer to Note 8b(4)(f) in the Company's Consolidated Financial Statements.
• On August 22, 2024, the Company completed the purchase of land on Dubnov Street, Tel Aviv, for a total of approximately NIS 443 million. For further information, refer to Note 15w of the Company's Consolidated Financial Statements.
• On October 10, 2024, a financing agreement was signed for the "Rainbow" Project with two local banks (in equal parts) for the provision of a financing framework not to exceed approximately NIS 3.2 billion (including financial credit). For further information, refer to Note 15(q) in the Company's Consolidated Financial Statements.
• On December 1, 2024, the Company entered into an agreement with a third party for the purchase of rights in real estate in Herzliya, covering an area of approximately 21 dunams designated for agricultural use, in consideration of approximately NIS 120 million (excluding VAT). On December 12, 2024, the Company, together with additional buyers, entered into an agreement for the purchase of rights in additional real estate in Herzliya, covering an area of approximately 8.5 dunams (the Company's share being approximately 4.3 dunams), in consideration of approximately NIS 51 million excluding VAT (the Company's share being approximately NIS 26 million). For further information, refer to Note 15(x) of the Company's Consolidated Financial Statements.

• On January 23, 2025, after the Report date, the Company made a private placement of the Company's shares to institutional entities for a total consideration of approximately NIS 125 million.
• On February 27, 2025, after the Report date, the court approved the Hotel Company's commitment to carry out the acquisition of Brown Hotels' operations in Israel and Greece (which is still subject to conditions precedent that have not yet been met). For further information, refer to Note 15k(10) of the Company's Consolidated Financial Statements.
• On March 19, 2025, after the Report date, a joint bid submitted by the Company, together with Check Point Software Technologies Ltd., won a tender to establish a mixed residential, employment and commercial project for a total of NIS 818 million (the Company's share: approximately NIS 318 million). The award is subject to final approvals from the Tel Aviv Municipality and Israel Electric Corporation.
• As of December 31, 2024, the Company had cash balances, cash equivalents and marketable securities in the amount of approximately NIS 1,105 million (including cash and deposits used in financing accounts).
• As of December 31, 2024, the Company had real estate and buildings under planning and construction inventories totaling approximately NIS 4 billion.
• The Company's total balance sheet as of December 31, 2024, amounted to approximately NIS 11 billion, compared to approximately NIS 8.6 billion on December 31, 2023.
• The Company's equity (including non-controlling interests) as of December 31, 2024, amounted to approximately NIS 3.5 billion, compared to approximately NIS 3 billion on December 31, 2023.
• The equity attributable to the Company's shareholders as of December 31, 2024, amounted to approximately NIS 2.5 billion, compared to approximately NIS 2.2 billion on December 31, 2023.
• The net profit for the year ended on December 31, 2024, amounted to approximately NIS 232 million, compared to a net loss of approximately NIS 26 million in the corresponding period last year.
• The operating profit for the year ended on December 31, 2024, amounted to approximately NIS 260 million, compared to operating profit of approximately NIS 178 million in the corresponding period last year.
• The Company's equity ratio (including non-controlling interests) to the Company's total consolidated balance sheet as of December 31, 2024, was approximately 31.6%, compared to approximately 36% on December 31, 2023.
• The Company's equity ratio, excluding non-controlling interests, to the Company's total consolidated balance sheet as of December 31, 2024, was approximately 22.7%, compared to approximately 26% on December 31, 2023.

Apartments and offices sold during the period in the Company's projects:

Project	During 2024		Data from the start of the Project until December 31, 2024
	Apartments and offices sold	Financial scope including VAT in NIS thousands	Marketing rate	Apartments and offices sold	Financial scope including VAT in NIS thousands
Rainbow, Tel Aviv	97	985,246	46%	220	1,916,782
Lev Bavli, Tel Aviv	4	21,371	3%	4	21,371
Midtown Jerusalem(1)	49	274,411	31%	214	867,517
Pastoral, Jerusalem	80	272,169	28%	80	272,169
North Park Stage A, Ramat Hasharon(2)	26	145,047	70%	386	1,940,926
North Park Stage B (EVE), Ramat Hasharon (3)	94	529,044	30%	122	665,422
Hahistadrut, Givatayim	29	137,595	68%	146	718,055
Hamesila, Herzliya	2	14,784	89%	24	171,535
Ocean Park II, Netanya	5	23,599	100%	60	243,681
Hagefen, Herzliya (Stage B)	2	10,350	98%	94	369,591
Bat Yam Sokolov	2	13,460	98%	161	470,995
Ehad Ha'am, Tel Aviv	4	33,994	91%	63	321,809
Total	394	2,461,070	-	1,574	7,979,853
Midtown Jerusalem Offices (4)	-	90,501	7%	-	90,501
Vertical City, Ramat Gan	-	158,004	33%	-	796,105
Total	-	2,709,575	-	-	8,866,459

(1) Midtown Jerusalem - Out of the 214 apartments sold, approximately 4 registration forms amounting to approximately NIS 72.3 million, including VAT.

(2) North Park Stage A Project - Out of the 386 apartments sold, approximately 3 registration forms amounting to approximately NIS 18.506 million, including VAT.

(3) North Park Stage B Project - Out of the 122 apartments sold during the period, approximately 2 registration forms amounting to approximately NIS 10.450 million, including VAT.

(4) Midtown Jerusalem Offices - Out of the 3,171 sq.m of office space sold, approximately 2 registration forms related to approximately 800 sq.m in a total amount of approximately NIS 23.018 million, including VAT.

(**) Sales in 2024 do not include canceled contracts in various ICR projects.

From the beginning of 2025 until the date of publication of the Financial Statements, the Company sold 70 apartments in a financial scope of approximately NIS 385 million including VAT(*) and approximately 1,700 sq.m of offices in a financial scope of approximately NIS 52 million including VAT.

Update on Apartments Sold in the Company's Project in Russia:

In 2024, 151 units were sold in the project in Russia. The marketing in the project in Russia is conducted by a local developer according to the consideration agreement detailed in Section 7.3 of the 2024 Report.

Registration Forms

For details regarding the method of marketing housing units and signing registration forms, refer to Section 8.1.10 of the 2024 Report.

(*) Approximately 18 registration forms totaling approximately NIS 107 million including VAT.

B. Explanations of the Board of Directors to the State of the Corporation's Business

B.1. Financial condition

As of December 31, 2024, the total assets of the Company amount to approximately NIS 10,956 million, compared to approximately NIS 8,581 million as of December 31, 2023. The increase in the total assets of the Company as of December 31, 2024, is explained below:

	As of	As of
	December 31, 2024	December 31, 2023	Explanations for the main changes that took place compared to December 31, 2023
	NIS thousands	NIS thousands
Current assets
Cash and cash equivalents	410,276	200,389	Refer to Section B.4. Liquidity below.
Cash and deposits used in financing accounts	566,068	-	The increase in the balance stems from receipts acquired in financing accounts in the Rainbow and Midtown Jerusalem projects, which repaid bank loans after the balance sheet date.
Financial assets at fair value through profit and loss	129,192	94,889	The increase in the balance is mainly due to the increase in the fair value of the shares of Norstar Inc. (hereinafter: "Norstar"). For further information, refer to Note 15r to the Company's Consolidated Financial Statements.
Receivables for the sale of real estate inventory and apartments under construction	19,280	62,081	The decrease in the balance is mainly due to recording revenue recognition in accordance with the rate of progress in the Ehad Ha'am project (progress rate for the end of 2024 was 100%, and approximately 86.5% in the corresponding period last year). During August 2024, a Form 4 was granted for the project, and by the end of the year, the Company completed the process of handing over the apartments. For further information, refer to Note 15e to the Company's Consolidated Financial Statements.
Accounts receivable	126,481	98,262	The increase is mainly due to the payment of advance expenses in the Midtown Jerusalem project and the Rainbow project.
Inventory of buildings under planning and construction	2,625,023	2,299,964(*)	The increase in the balance is mainly due to the classification in the Midtown Jerusalem project of approximately NIS 138 million of real estate for investment into office inventory and the capitalization of costs in the Midtown Jerusalem and Rainbow projects. Refer to Note 7 to the Company's Consolidated Financial Statements.
Income tax receivables	5,920	18,538	---
Accounts receivable for hotels	41,233	23,656	The increase in the balance is mainly due to the return of the hotel activity to regular operations (i.e. departure of evacuees) that includes work with agents.
Real estate inventory	320,758	312,472(*)	---
Advances on account of real estate inventory	47,780	-	The increase in the balance stems from a down payment for the purchase of land in the northern district of Herzliya. For further information, refer to Note 15x to the Company's Consolidated Financial Statements.
Total current assets	4,292,011	3,110,251
Non-current assets
Investments and loans in investee companies accounted for using the equity method, net	1,305,859	1,132,153	The increase in the balance is mainly due to the profits of investee companies in the amount of approximately NIS 183 million, net. For further information, refer to Note 8 to the Company's Consolidated Financial Statements.
Long-term real estate inventory	1,145,810	745,280	The increase in the balance is mainly due to an investment in the Dubnov project (residential portion) in the amount of approximately NIS 361 million. For details refer to Note 15w to the Company's Consolidated Financial Statements.
Real estate for investment	2,893,000	2,580,068	The increase in the balance is mainly due to investments made in the Dubnov project (the employment portion) and Sde Dov Offices in Tel Aviv in the amounts of approximately NIS 120 million and NIS 139 million, respectively. For further information, refer to Note 9 to the Company's Consolidated Financial Statements.

	As of	As of
	December 31, 2024 NIS thousands	December 31, 2023 NIS thousands	Explanations for the main changes that took place compared to December 31, 2023
Advances on
account of real	13,486	9,898	---
estate for investment
Fixed assets	807,495	619,035	The increase in the balance results from a revaluation in accordance with the revaluation model of hotels owned by the Group that are presented in fixed assets. For further information, refer to Note 2u to the Company's Consolidated Financial Statements.
Advances on account of fixed assets	1,382	1,166	---
Cash with long-term use restriction	5,266	5,138	---
Right of use asset	425,912	292,518	The source of the balances is from the application of the international accounting standard IFRS 16 regarding rental agreements within the Company's hotel operations. The increase is mainly due to the recording of a lease for the Shalom Hotel. For further information, refer to Note 15k(9) to the Company's Consolidated Financial Statements.
Accounts receivable	7,066	8,170	---
Deferred tax assets	31,771	51,192	Refer to Note 14 to the Company's Consolidated Financial Statements.
Investments and other assets	27,242	26,590	---
Total non-current assets	6,664,289	5,471,208
Total assets	10,956,300	8,581,459
Current liabilities
Credit from bank corporations and current maturities on long-term loans	2,866,946	2,830,418	---
Current maturities of bonds	269,101	88,262	The increase in the balance is due to the recording of a current maturity for Series G short-term bonds.
Current maturities of long-term lease liability	21,060	15,542	The source of the balances is from the application of the international accounting standard IFRS 16 regarding rental agreements within the Company's hotel operations.
Suppliers and service providers	36,345	28,303	--
Accounts payable	163,244	61,291	The increase in the balance is mainly due to the VAT component for funds that buyers paid in the Midtown Jerusalem and Rainbow projects in December 2024 and for which the advances were paid in January 2025.
Liability for provision of construction services	4,360	6,540	---
Current tax liabilities	17,515	10,511	Refer to Note 14 to the Company's Consolidated Financial Statements.
Advances for the sale of real estate inventory and building inventory under planning and construction	421,240	41,480	The increase in the balance is mainly due to payments made by buyers in the Midtown Jerusalem and Rainbow projects. The project companies have not yet recognized income in accordance with International Financial Reporting Standard IFRS15.
Loans from others	2,502	2,841	---
Total current liabilities	3,802,313	3,085,188
Non-current liabilities
Long-term loans from banks	2,001,362	1,119,006	The increase in the balance is mainly due to loans totaling approximately NIS 355 million for the Beit Haneaara project and approximately NIS 210 million for the Lapid project. Following the extension of the loan period and a new loan taken out during the period in the Dubnov project in the amount of approximately NIS 354 million.

	As of December 31, 2024 NIS thousands	As of December 31, 2023 NIS thousands	Explanations for the main changes that took place compared to December 31, 2023
Loans from others and other liabilities	10,175	26,934	---
Bonds	1,055,667	787,948	The increase in the balance is mainly due to the issuance and expansion of Series H bonds during the period. For further information, refer to Note 13b(3) in the Company's Consolidated Financial Statements.
Lease liability	442,578	301,193	The source of the balances is from the application of the international accounting standard IFRS 16 regarding rental agreements within the Company's hotel operations. The increase is mainly due to the recording of a lease for the Shalom Hotel. For further information, refer to Note 15k(9) to the Company's Consolidated Financial Statements.
Liability for provision of construction services long term	855	3,562	---
Other non-current liabilities	11,627	11,685	---
Deferred tax liabilities	169,335	190,185	---
Total non-current liabilities	3,691,599	2,440,513
Total equity (including the non controlling)	3,462,388	3,055,758	The increase in the balance is mainly due to a total profit of approximately NIS 361 million.
Total liabilities and equity	10,956,300	8,581,459

(*) Reclassified

Equity

The total equity of the Company, attributed to the Company's shareholders, amounted to approximately NIS 2,486 million as of December 31, 2024, and approximately NIS 2,229 million as of December 31, 2023, respectively.

Working capital

As of December 31, 2024, the Company had positive working capital of approximately NIS 490 million compared to positive working capital of approximately NIS 25 million as of December 31, 2023. The increase in working capital stems from an increase in current assets that is greater than the increase in current liabilities, all as detailed above. Refer to Section B.7 of this Report.

	For the year ended on December 31	For the year ended on December 31	Explanations of the material changes that occurred compared to the year ended on December 31, 2023
	2024	2023
Revenues:
Rental and management of real estate for investment	80,215	71,822	---
Revenue from the sale of real estate inventory	11,679	29,812	The decrease in revenue compared to the corresponding period last year is mainly due to a decrease in revenue for the sale of land units attributed to the office project in Ramat Hasharon and the sale of rights in Hatzuk Hazfoni during the corresponding period last year.
Revenue from the sale of residential apartments	61,115	85,170	The balance in the period and in the corresponding period last year derives from sales in the Ahad Ha'am project (approximately NIS 61 million and approximately NIS 85 million, respectively), while the marketing rate as of the Report date is approximately 91%.
Revenue from renting real estate inventory	25,344	22,705	---
Revenue from management fees	1,645	3,099	---
Revenue from operation and management of hotels	291,017	309,908	---
Marketing and brokerage revenue	25,714	20,754	---
Revenue from provision of construction services	4,886	4,149	---
Appreciation of fair value of investment real estate and profit from its exercise	66,371	86,892	The income under this item for the period ended on December 31, 2024, is mainly derived from: (1) a fair value adjustment in the Eurocom House Project in the amount of approximately NIS 23 million, following a recommendation by the Local Committee for conditional deposit of a plan to increase building rights; (2) a fair value increase in the amount of approximately NIS 20 million in the Midtown Tel Aviv Project, mainly due to an increase in rental income from the property resulting from a change in the tenant mix, as compared to the income for the period ended on December 31, 2023; (3) appreciation in the amount of approximately NIS 15 million in land in Eilat (Hotel Company); (4) appreciation in the Midtown Jerusalem Project in the amount of approximately NIS 53 million for the commercial, office, and hotel rights, and the increase in the value of the rights also resulted from the value of the rental housing, which is influenced by the sale prices of the apartments in the project.
Company's share in investments accounted for using the equity method, net	200,760	76,291	The increase in profits of investee companies compared to the same period last year is mainly due to equity gains in the Vertical City project and in ICR: in the Vertical City project (a total of approximately NIS 80 million and a loss of approximately NIS 31 million in the corresponding period last year) which mainly results from an increase in the value recorded in light of the local committee's decision to recommend to the district committee a deposit under the terms of a plan to empower rights in the complex from ICR (a total of approximately NIS 90 million and approximately NIS 41 million in the corresponding period last year) arising mainly as a result of a Clal transaction. For further information refer to Note 8b(4)f of the Company's Consolidated Financial Statements.
Other revenues	5,490	152	---
Total revenues	774,236	710,754
Expenses and costs:
Cost of rent	42,961	37,885	---
Cost of sale of real estate inventory	7,848	9,311	---

	For the year ended on December 31	For the year ended on December 31	Explanations of the material changes that occurred compared to the year ended on December 31, 2023
	2024	2023
Cost of sale of residential apartments	45,335	56,409	The decrease in the cost of sales compared to the same period last year is mainly due to the sale of apartments in the Ehad Ha'am project and the pace of progress in the project in light of the receipt of Form 4 in August 2024.
Cost of operating and managing hotels	257,682	277,745	The decrease in hotel operating and management costs is mainly due to a decrease in the cost of hiring employees due to sending some of the employees out on unpaid leave and saving additional operating costs in light of evacuees staying in hotels.
Depreciation of fair value of investment real estate	38,963	23,502	A decrease in the fair value of investment real estate is mainly due to the capitalization of financing costs to assets and a write-down to profit and loss.
Expenses from provision of construction services	4,886	4,149	---
Management and general expenses	59,821	45,938	The increase in management and general expenses is mainly due to an increase in the Company's workforce and an increase in bonuses to the Chairman of the Board of Directors, CEO and Company employees (9 million compared to 0 last year).
Marketing and sale expenses	38,661	34,025	---
Company's share in loss of investments accounted for using the equity method, net of tax	17,827	41,443	---
Other expenses	-	2,185	---
Total costs and expenses	513,984	532,592
Operating profit	260,252	178,162
Changes in financial assets measured at fair value through profit and loss	36,911	(152,595)	The profit is mainly due to an increase in value due to an investment in Norstar shares, while in the same period last year the loss was due to an investment in Norstar shares and Alrov shares (which were sold in the first quarter of 2024).
Financing income	54,114	61,719	---
Financing expenses	(133,280)	(111,059)	Financing expenses for the periods ended on December 31, 2024 and 2023: Derived mainly from expenses for interest on bank loans (a total of approximately NIS 77 million and approximately NIS 61 million, respectively), from the costs of financing the Company's bonds (a total of approximately NIS 19 million and approximately NIS 24 million, respectively), lease liability expenses (a total of approximately NIS 18 million and approximately NIS 14 million, respectively) and bank fees (a total of approximately NIS 6.7 million and approximately NIS 4.7 million, respectively).
Profit (loss) after financing	217,997	(23,773)
Income tax	13,681	(2,420)	For further information, refer to Note 14 to the Company's Consolidated Financial Statements.
Profit (loss) for the year	231,678	(26,193)
Exchange rate differences for translating foreign operations	(6,072)	9,261	The decrease in translation differences compared to the same period last year is mainly due to project activity in Russia and a decrease in the ruble exchange rate.

operations
Gain on revaluation of fixed assets, net of tax	135,539	-	The increase in the revaluation of fixed assets results from the initial revaluation of the hotels owned by the Group in accordance with the revaluation model. For further information, refer to Note 2u(2) in the Company's Consolidated Financial Statements.
Changes in the fair value of a financial obligation designated	-	(856)	---

	For the year ended on December 31 2024	For the year ended on December 31 2023	Explanations of the material changes that occurred compared to the year ended on December 31, 2023
at fair value through profit or loss attributable to changes in credit risk, net of tax
Total comprehensive profit (loss)	361,145	(17,788)

B.3. Iron Swords War

For details regarding the impact of the Iron War on the Company's operations, refer to Note 31 in the Company's Consolidated Financial Statements.

B.4. Liquidity

The Company's cash and cash equivalents as of December 31, 2024, amounted to approximately NIS 410 million compared to approximately NIS 200 million as of December 31, 2023, an increase of approximately NIS 210 million in cash balances as detailed below:

Cash from operating activities

The main changes in cash flow from operating activities stem from purchases and investments in land inventory totaling approximately NIS 692 million and profits of companies accounted for using the equity method, net of tax, totaling approximately NIS 213 million. On the other hand, there was an increase in advances for the sale of real estate inventory totaling approximately NIS 380 million, a net profit totaling approximately NIS 232 million, an increase in payables, credit balances and liabilities for current taxes totaling approximately NIS 111 million, and a decrease in real estate inventory and buildings for sale (before purchases and investments in land) totaling approximately NIS 41 million. The total cash used by the Company for operating activities amounted to approximately NIS 88 million.

Cash from investment activities

The cash flow was used primarily for the purchase and investment in investment property (including investment property under construction), net, in the amount of approximately NIS 402 million; for the provision of loans to companies accounted for using the equity method, net of tax, in the amount of approximately NIS 67 million; and for restricted cash in designated project accounts in the amount of approximately NIS 566 million. On the other hand, there was an inflow from loan repayments by companies accounted for using the equity method, net of tax, in the amount of approximately NIS 73 million. The total cash used by the Company for investing activities amounted to approximately NIS 1,042 million.

Cash from financing activities

The cash flow was primarily generated from the receipt of long-term loans from banking corporations in the amount of approximately NIS 895 million, the issuance of bonds in the amount of approximately NIS 534 million, and net credit from banking corporations in the amount of approximately NIS 223 million. On the other hand, it was used for the repayment of long-term loans from banking corporations in the amount of approximately NIS 244 million and for the repayment and buyback of bonds in the amount of approximately NIS 88 million. The total cash generated by the Company from financing activities amounted to approximately NIS 1,341 million.

B.5. Sources of financing

The Company's main sources of financing:

• 1. Bonds (Series F) of the Company, refer to Section D below.
• 1. Bonds (Series G) of the Company, refer to Section D below.
• 1. Bonds (Series H) of the Company, refer to Section D below.
• 1. Loans periodically taken by the Company for projects and/or lands and/or assets, including for the Rainbow Project in Tel Aviv, Midtown Tel Aviv, Midtown Jerusalem, and Vertical City "Stock Exchange District."
• 1. The Company's average balance of short-term credit includes credit from banking institutions, loans from others, current maturities of bonds, and current maturities of long-term loans, totaling approximately NIS 3,030 million.
• 1. Average balance of long-term liabilities includes credit from banks, loans from others, and bonds, totaling approximately NIS 2,500 million.
• 1. Average balance of liabilities to suppliers totaling approximately NIS 32 million.

For details regarding the Company's compliance with the financial covenants of its material loans¹ , in addition to Company Bonds (Series F, G and H), the terms of which are detailed in Section E below, refer to Section 15.3 of the Description of the Corporation's Business Report for 2024, attached to this Periodic Report in Part A.

B.6 Entering into a letter of financial covenants with the bank

As stated above regarding the Company's obligations to a local bank that provided loans to the Company and its subsidiaries, on October 10, 2024, the Company and the aforementioned bank entered into an agreement updating the Company's obligations to the bank (hereinafter: the "New Covenants Letter"). For details, refer to Section 15.3.2 of the Description of the Corporation's Business Report for 2024 attached to Part A of this Periodic Report.

B.7. Disclosure under Section 10(b)(14) of the Periodic and Immediate Report Regulations, 5730-1970

According to Article 10(b)14 of the Securities Regulations (Periodic and Immediate Reports), 5730-1970 (hereinafter: the "Reporting Regulations"), regarding the disclosure of the projected cash flow for financing the repayment of a corporation's obligations, a reporting corporation whose debt certificates held by the public as of the date of publication of the financial report and for which financial warning signs as listed in the aforementioned regulation exist, is required to disclose a detailed forecast of its obligations and the financial resources from which it expects to repay these obligations (hereinafter: the "Projected Cash Flow Report") over the two years following the publication date of the financial report.

It should be emphasized that, in accordance with the guidance of the Israel Securities Authority under Section 36a(b) of the Securities Law, 5728-1968, regarding the required disclosure in the Projected Cash Flow Report, the sources and uses included in the Projected Cash Flow Report are based on the Company's Consolidated Financial Statements as well as the Separate (Solo) Financial Statements as defined in Article 9c of the Reporting Regulations.

		Consolidated Financial Statements as of December 31, 2024 (NIS millions)	Separate (Solo) Financial Statements as of December 31, 2024 (NIS million)
	Working capital	490	315
Working capital	Working capital for a period of 12 months	115	315
Continuous negative cash flow from operating activities		Yes	Yes

Below are details about the working capital and the continuous cash flow from current activity

As of December 31, 2024, the Company had a continuing negative cash flow from operating activities in the Separate (Solo) Financial Statements and a continuing negative cash flow from operating activities in the Consolidated Financial Statements, alongside a positive working capital in both the Consolidated Financial Statements and the Separate (Solo) Financial Statements, including for a 12-month period (in accordance with Legal Position No. 105-27: "Disclosure Regarding Projected Cash Flow," published by the Israel Securities Authority on April 1, 2014, as amended from time to time).

¹ Material loan agreements for this matter are loan agreements and material loan agreements as defined in Legal Position 104-15: Reportable Credit Event of the Securities Authority as specified in Section 15.3 of the 2024 Report.

It should be noted that the negative cash flow from operating activities in the Company's Consolidated Financial Statements includes land acquisitions, primarily concerning to the acquisition of the Dubnov Project in Tel Aviv in the amount of approximately NIS 437 million (for further details, refer to Note 15w to the Company's Consolidated Financial Statements), and the acquisition of rights in Lot 306 in Sde Dov in the amount of approximately NIS 128 million (for further details, refer to Note 15u to the Company's Consolidated Financial Statements).

Nevertheless, the Company's Board of Directors determined that the continuing negative cash flow from operating activities in the Consolidated Financial Statements, as mentioned above, does not indicate a liquidity problem in the Company and therefore does not constitute a warning sign as defined in Article 10(b)(14) of the Reporting Articles, for the following reasons: the Company has a balance of cash, cash equivalents, and liquid financial assets as of the Report date totaling approximately NIS 539 million; the Company has positive working capital in both the consolidated and solo statements, including positive working capital in the consolidated and solo statements for a 12-month period, based on a review by the Company's management of the projected cash flow, the principal assumptions of which are detailed below:

• The Company entered into actual financing for the "Rainbow" project.
• The Company carried out a share allocation after the Report date for a total consideration of approximately NIS 125 million.
• The Company estimates entering into financing in the Midtown Jerusalem project by the end of the second quarter of 2025.
• The Company estimates signing a voucher arrangement or a financing agreement in the Canada City "SHE" project by the end of 2025.
• In the next two years, no additional equity injection will be required for the Vertical project, and the activities in the Vertical project will be financed from the project company's own resources (for further details regarding the entry of Clal as a partner in the project company, refer to the immediate reports dated April 21, 2024, and June 25, 2024² ).
• Renewal of existing bank credit lines maturing with accepted financing rates for the pledged assets:
  • a. Yielding asset LTV financing of approximately 70%.
  • b. Real estate assets LTV financing of up to 50%.
• The balance of the Company's bond principal (net) balance as of December 31, 2024, by an identical amount over the next two years.
• Sale of land (Ramat Hasharon/Uptown/3700/Sunset/Herzliya northern district) and/or bringing in partners and/or allocation in subsidiaries at an average volume of approximately NIS 267 million per year.
• Dividend distribution at levels similar to the distribution amounts in the last two years.

Given all the above, and considering the sales plan reviewed by the Board of Directors in the Company's various projects and the realizations since the beginning of 2024, the pace of sales in the Company's projects, the Company's ability to raise equity and/or debt in the capital market (the Company has a valid shelf prospectus, rating for existing bonds of ilA-), bank debt raising against assets with an accepted LTV ratio and entering financing for projects promoted by the Company, the Board of Directors has determined (though without any certainty) that there is no evidence of a liquidity problem based on the negative ongoing cash flow from operating activities in the Solo Financial Statements and Consolidated Financial Statements. Therefore, there is no warning sign in the Company.

² Reference no. 2024-01-044592 and Reference no. 2024-01-064083, respectively, included in this Report by way of reference.

The above statements regarding the assumptions of the Company's Board of Directors constitute forwardlooking information, as defined in the Securities Law, 5728-1968, and are subject to the provisions of the forward-looking information disclaimer included in Section 6.3.3.9 of the Description of the Corporation's Business attached in Part A of this Periodic Report, the Company's risk factors as detailed in Section 21 of the Description of the Corporation's Business attached in Part A of this Periodic Report, and the Board of Directors' assessments may change, including as a result of the Iron Swords War as stated above in this Report, and the increase in interest rates and inflation, potentially even materially.

B.8. Discussion of risk factors

During 2024, the Consumer Price Index increased by approximately 3.2%, following an increase of 3% in 2023.

In light of the rising inflationary environment, Bank of Israel raised the interest rate in an effort to curb price increases, and the prime interest rate rose from 1.6% and 4.75% (at the end of 2021 and 2022, respectively) to 6.25% at the end of 2023. In January 2024, due to the decline in the inflationary environment and the Bank of Israel's intention to stabilize the markets and reduce uncertainty, alongside price stability and support for economic activity, Bank of Israel reduced the interest rate to 6%. According to Bank of Israel's announcement, the continuation of the interest rate reduction trend will be determined based on the continued convergence of inflation to its target, the ongoing stability of the financial markets, economic activity, and fiscal policy. According to Bank of Israel's forecast from January 2025, the inflation rate for the next four quarters (ending in the fourth quarter of 2025) is expected to be 2.6%. This forecast was prepared based on the assumption that the direct economic impact of the war will continue until the end of the first quarter of 2025, after which GDP is expected to gradually converge to a lower trend compared to previous years. According to estimates, the inflation rate during 2026 is expected to moderate to 2.3%.

Changes in the inflation and interest rate environment, as well as the impact of the war (refer to also Section B.3), affect the Company's business environment.

Impact of the interest rate increase:

As of the date of this Report, most of the Company's bank loans presented in the Company's Consolidated Financial Statements bear variable interest at the prime rate plus a certain margin. Accordingly, the increase in the prime interest rate had a direct impact on the Company's financing expenses across various projects and a negative impact on the profitability of the projects. For further details regarding the impact of the interest rate increase, refer to Note 26 to the Company's Annual Financial Statements as of December 31, 2024.

As of December 31, 2024, the Group is exposed to market interest rate risk (prime) arising from loans received by the Company from banking corporations in the amount of approximately NIS 4 billion, which bear variable interest (refer also to Note 26 to the Financial Statements as of December 31, 2024). Any further interest rate increase may lead to the following negative effects: (a) An increase in financing costs and a decrease in Company profitability (if sale prices do not rise in response). (b) A negative impact on the ability and feasibility of raising new debt and a deterioration in the credit terms taken by the Group companies. (c) A further increase in mortgage interest rates, which would lead to a decline in real estate market demand. (d) A negative impact on the ability of the Company's customers to meet their obligations to the Company. (e) A change in the capitalization rates used for asset valuations, resulting in a change in the fair value of the Company's investment property. For further information, refer to also Note 26f in the Company's Annual Financial Statements for the year 2024 included in this Periodic Report.

Impact of the inflation rate:

The Group's projects in the area of project establishment are mostly executed through contracts with main contractors for all the work required to establish the project (Turn-Key). The agreements with the main contractors are generally lump-sum contracts indexed to the Construction Input Index. Therefore, an increase in the Construction Input Index (an increase of approximately 4.8% in 2022, approximately 2.0% during 2023, and approximately 2.9% during 2024) impacts project construction costs. However, the engagement with apartment buyers regarding part of the consideration is also indexed to the same index, so the exposure

mentioned is not material to the Company (partially indexed in accordance with Amendment No. 9 to the Sale (Apartments) Law, 5782-2022). Additionally, as of the Report date, the Company has loans linked to the Consumer Price Index. These loans finance income-producing assets whose rental income is also linked to the Consumer Price Index. Therefore, the Company does not have significant exposure in this regard at this stage.

The fair value of the Company's investment property is determined, among other things, by the capitalization rates used to discount future cash flows. If the aforementioned changes impact capitalization rates, it could lead to changes in the fair value of the Company's investment property.

Due to economic, security, and political uncertainty, there may be a return to rising inflation and interest rates, as was the case in the past, and if this trend continues over time, the Israeli economy may return to economic slowdown in general and in the real estate sector in particular. For further information on the rise in interest rates and inflation, refer to also Section 21 of the Description of the Corporation's Business Report attached to this Annual Report.

Housing market³

Although in the initial weeks following the outbreak of the war there was a slowdown in the housing market almost to a complete halt in transactions—in the course of 2024 a revival occurred in the real estate market, supported in part by sales promotions such as extended payment plans (20-80 / 10-90), contractor loans, and exemptions from index-linking. Although the Company seldom offers such financial incentives to its buyers, during the Reporting Year the Company sold apartments and offices in significant volumes. For the Company's sales data in the various projects, refer to the table in Section A above. For details regarding the Bank of Israel's decision to limit such promotions for homebuyers, refer to Section __ of the Description of the Corporation's Business attached in Part A of this Periodic Report.

A comparison of transaction prices in December 2024–January 2025 with those in November–December 2024 indicates that apartment prices increased by 1.2%, and rose by approximately 7.7% compared to the same period last year.

In the central region, and specifically in Tel Aviv, the price changes during December 2024 to January 2025 compared to November–December 2024 were 0.2% and 1.8%, respectively. During those same periods, the prices of new apartments rose by 1.7%, and excluding transactions under government-supported programs, prices increased by 0.9%. In December 2024–January 2025, compared to the same period last year, prices of new apartments rose by approximately 5.4%.

Refer also to the review of the housing market in Israel in Chapter A of this Periodic Report.

It should be noted that as of the signing date of the Report, the Company's estimates as stated in this section above are forward-looking information, as defined in the Securities Law, 5728-1968, based on the Company's management's estimates and understanding of the factors influencing its business activities and the Company's assessments regarding factors beyond its control, as of the Report's signing date. These estimates may not materialize, in whole or in part, or may materialize differently, including materially, from what is expected, due to non-optimal assumptions and analyses, developments that cannot be fully assessed in connection with the war, inflation, and rising interest rates and margins, and/or the realization of some or all of the risk factors detailed in Section 21 of the Description of the Corporation's Business Report. Regarding the rise in inflation and interest rates, it should be noted that if the high-interest environment persists over time and even worsens (i.e., the Bank of Israel's interest rate continues to rise alongside an increase in interest margins and an increase in the equity required from developers by the lending banks), this could lead to a recession and economic slowdown that could result in continued decline in housing demand, a decrease in sale prices, a significant increase in project costs and the Company's financing expenses, and even harm to some of the Company's customers and, consequently, an impact on the Company's operating results. Since these are macroeconomic trends and

³ All of the data in this paragraph below has been taken from press releases published by the Central Bureau of Statistics: "Price Changes in the Apartments Market" published on March 14, 2025.

the state of the economy in Israel, the Company, in this case, cannot assess the full future effects, if any, on the Company's operations, if any. However, in the Company's estimation, and in light of its financial stability and cash balance, the Company will be able to continue its operations and meet all its obligations.

C. Aspects of corporate governance

C.1. Donations

The Company does not have a policy regarding donations. Upon the outbreak of the war (refer to Section B.3. above) and in light of the complex period experienced by Israeli society, the Company made donations to several organizations with the aim of assisting evacuees and security forces. Total donations in 2024 amounted to approximately NIS 1.5 million, of which approximately NIS 1 million was donated to the "Friends of Tel Aviv Medical Center" association, an entity not affiliated with the Company and/or its controlling shareholders and/or any of its officers. In addition, the Company initiates volunteer activities for its employees in various locations.

Name:	CPA Haim Halfon
Commencement of	July 1, 2017
service:
Compliance with the law:	The internal auditor meets the provisions of Section 146(b) of the Companies Law,
	5759-1999 and the provisions of Section 3(a) and the provisions of Section 8 of the
	Internal Audit Law, 5752-1992.
Holdings of securities of	The internal auditor, according to his statement, does not hold securities of the
the Company:	Company or of any entity affiliated with the Company, as defined in the Fourth
	Schedule to the Reporting Articles.
Business/material	The internal auditor has no material business or other material connections with the
relationships with the	Company or with any entity affiliated with the Company, as defined in the Fourth
corporation:	Schedule to the Reporting Articles. The internal auditor provides internal audit
	services as an external service provider. The internal auditor is not an interested
	party in the Company, does not hold an office in the Company, and is not a relative
	of any of the aforementioned. The internal auditor does not hold any position
	outside the Company that creates or may create a conflict of interest with his role
	as the Company's internal auditor, and his sole role within the Company is that of
	internal auditor. To the best of the Company's knowledge, the internal auditor is a
	CPA by profession and a partner at the Amit Halfon CPA firm.
Appointment of the	The appointment of the internal auditor was approved by the Audit Committee and
internal auditor:	the Board of Directors on June 22, 2017, after several candidates were reviewed,
	in light of his qualifications and scope of experience.
Internal auditor's firm:	The internal auditor has been a certified public accountant since 1991, a partner at
	the Amit, Halfon, CPA firm since 1993, and holds a bachelor's degree in economics
	and accounting from the Hebrew University and a master's degree in business
	administration from the Hebrew University.
Organizational supervisor	The organizational supervisor over the internal auditor is the chairman of the board
over the auditor:	of directors of the Company.

C.2. Disclosure regarding the internal auditor

Audit plan:	The annual audit plan is submitted by the internal auditor to the Company's Audit
	Committee and is based, among other things, on a multi-year audit plan. The Audit
	Committee reviews the topics in consultation with the Company's management and
	subsequently recommends the annual audit plan to the Company's Board of
	Directors, which is the body responsible for approving the audit plan. The
	considerations guiding the Audit Committee and the Board of Directors include,
	among others, the exposure to risks of activities and operations, the probability of
	the existence of managerial and administrative deficiencies, matters required by
	law, the frequency with which the topics have been examined in the past, and the
	internal auditor's recommendations. The audit plan allows the internal auditor to
	deviate from it; however, in such a case, he must present his reasoning to the
	Company's Audit Committee and receive its approval.
	The 2024 audit plan included the following topics: (a) project management; (b)
	cash flow management; (c) information systems and cybersecurity; (d) fraud risk
	survey; (e) review of compensation to interested parties, negligible transactions,
	and transactions in which interested parties have a personal interest; (f) audit of the
	activities of the officer in charge of the Company's internal enforcement program.
	The 2025 audit plan includes the following topics: (a) payments; (b) marketing and
	advertising; (c) privacy protection and cybersecurity; (d) corporate governance; (e)
	review of compensation to interested parties, negligible transactions, and
	transactions in which interested parties have a personal interest; (f) audit of the
	activities of the officer in charge of the Company's internal enforcement program.
Reference to investee	The internal auditor's review also included an examination of the issues in investee
corporations:	companies, as applicable.
Scope of employment:	The internal audit budget for 2025 is up to approximately 850 hours (compared to
	approximately 1,000 hours in 2024). To the best of the Company's management's
	knowledge, the scope and nature of the Internal Auditor's work plan are reasonable
	under the circumstances and are sufficient to fulfill the objectives of the internal
	audit.
	The audit plan, the discussions, and the recommendations also relate to the
	Company's held subsidiaries.
Professional standards:	According to the internal auditor's statement, he conducted the audit in accordance
	with the provisions of the Internal Audit Law and the professional standards of the
	Institute of Internal Auditors in Israel. The professional standards under which the
	internal audit process in the Company is conducted include attribute standards such
	as: independence and objectivity, professionalism and due professional care,
	authority and responsibility; as well as performance standards such as: audit
	planning, audit execution, reporting of results, and follow-up on the correction of
	deficiencies. In the opinion of the Board of Directors, the internal auditor meets the
	requirements set out in the aforementioned standards, taking into consideration the
	internal auditor's professionalism, qualifications, familiarity with the Company,
	and the manner in which he conducts, presents, and submits the findings of the audits he performs.
Access to information:	The internal auditor was granted free access as stated in Section 9 of the Internal
	Audit Law, 5752-1992, with continuous and direct freedom of operation to all of
	the Company's information systems, including access to the Company's financial
	data.
Report of the internal	The Audit Committee convened to discuss the auditor's reports on March 21, 2025,
auditor:	and December 25, 2024.
Remuneration:	The internal auditor's fee for 2024 amounted to approximately NIS 275 thousand
	and totaled approximately 1,000 hours (in 2023, the fee amounted to approximately
	NIS 220 thousand and totaled approximately 800 hours). In the opinion of the
	Company's Board of Directors, the compensation is reasonable and does not affect
	the internal auditor's judgment in carrying out audits of the Company.

		2024	2023
Company name	Auditor	Annual fee (NIS thousands)	Annual fee NIS thousands)
Israel Canada (T.R) Ltd. includes fees paid by partnerships and affiliated companies.	Brightman Almagor Zohar & Co., Certified Public Accountants (Deloitte)	1,755 Of which 1,670 is for audit services (including shelf prospectus), ongoing taxation support, tax reports and ISOX	1,682 Of which 1,650 is for audit services, ongoing taxation support, tax reports and ISOX
	Kost Forer Gabbay and Kasierer, Certified Public Accountants (EY).	164	163
Israel Canada Hotels Ltd.	Kost Forer Gabbay and Kasierer, Certified Public Accountants (EY).	944	545
The Company's three Cypriot subsidiaries: Graniak Invest, Teise Holdings, Abelie Holdings	MGI Gregoriou & Co. Ltd.	13	13

C.3. Disclosure regarding the Company's auditor

D. Disclosure provisions in connection with the Company's financial reporting:

D.1. Material events in the reporting period and thereafter

Refer to Notes 32 and 33 of the Company's Financial Statements, attached in Part C of this Periodic Report.

D.2. Use of critical estimates

Refer to Note 27 of the Company's Financial Statements attached to Chapter C of this Periodic Report.

E. Special disclosure to Bondholders

E.1. Data regarding the Company's bonds as of December 31, 2024:

	The Bonds (Series F)	The Bonds (Series G)	The Bonds (Series H)
Issuance date	June 2019	January 2021 April 2021	June 2024 December 2024
Nominal value at the time of issue	NIS 196,587,000 nominal value issued on the issued date (June 2019)	NIS 200,000,000 nominal value (January 2021) NIS 206,754,000 nominal value (April 2021) NIS 277,143,000 nominal value (August 2021) NIS 154,521,000 nominal value (January 2022)	NIS 228,962,000 nominal value (June 2024) NIS 300,000,000 nominal value (December 2024)
Nominal value as of December 31, 2024	NIS 19,658,700 (a total of approximately NIS 50,004 held by a wholly owned subsidiary of the Company)	NIS 838,418,000 (a total of approximately NIS 63,681,339 held by a wholly owned subsidiary of the Company)	NIS 528,962,000
Amount of interested accrued	NIS 78,259	-	-
Balance in the Financial Statements as of December 31, 2024	NIS 19,710,031 (equal to the total balance, minus NIS 48,767 held by a wholly owned subsidiary of the Company)	NIS 770,894,545 (equal to the total balance, minus NIS 57,415,440 held by a wholly owned subsidiary of the Company)	NIS 534,241,488
Stock Exchange value as of December 31, 2024	NIS 19,637,075	NIS 822,236,533	NIS 554,669,553

	The Bonds (Series F)	The Bonds (Series G)	The Bonds (Series H)
Interest type and rate	Fixed annual interest in the rate of 4.7%	Fixed annual interest in the rate of 3.95%	Fixed annual interest in the rate of 6.95%
Undertaking for additional payment as of December 31, 2024	None	None	None
Principal payment dates	Principal of Bonds (Series D) is set to be repaid in five (5) unequal annual payments on May 31 of each of the years 2021-2025, as follows: On May 31 of each of the years 2021 and 2022, 7.5% of the total principal amount will be paid. On May 31, 2023, 30% of the total principal amount will be paid. On May 31, 2024, 45% of the total principal amount will be paid. On May 31, 2025, 10% of the total principal amount will be paid.	The principal of Bonds (Series G) is set to be repaid in three (3) annual installments on June 30 of each of the years 2025 to 2027. The first payment will constitute 30% of the total nominal value of the principal of Bonds (Series G), and each of the second and third payments will constitute 35% of the total nominal value of the principal of Bonds (Series G). The first principal payment will be made on June 30, 2025, and the final principal payment will be made on June 30, 2027.	The principal of Bonds (Series H) is set to be repaid in four (4) equal annual installments on June 30 of each of the years 2028 to 2031, with 25% of the total nominal value of the principal of Bonds (Series H) being paid on each date. The first principal payment will be made on June 30, 2028, and the final principal payment will be made on June 30, 2031.
Interest payment dates	The interest is paid in semi-annual installments every May 31 and November 30 of each calendar year from November 30, 2019 until the final repayment date on May 31, 2025.	The interest is paid in semi annual installments every June 30 and December 31 of each calendar year from 2021 to 2026 and on June 30, 2027 (inclusive)	The interest is paid in equal semi-annual installments, on December 31, 2024 and every June 30 and December 31 in each of the years 2025 to 2030 and the last interest payment is on June 30, 2031.
Linkage basis (principal and interest)	No linkage.	No linkage.	No linkage.
Are they convertible	No	No	No
The Company's right for early redemption or forced conversion	Yes	Yes	Yes
Rating company	S&P Maalot	S&P Maalot	S&P Maalot
Has a guarantee been given for the payment of the Company's obligations according to the trust deed	---	---	---
Details of trustee	Reznik Paz Nevo Trusts Ltd., 14 Yad Haruzim St., Tel Aviv, Tel: 03-6389200; Fax: 03-6389222. Contact: Adv. Michal Avtalion Rishony, email: michal@rpn.co.il.	Reznik Paz Nevo Trusts Ltd., 14 Yad Haruzim St., Tel Aviv, Tel: 03-6389200; Fax: 03- 6389222. Contact: Adv. Michal Avtalion-Rishony, email: michal@rpn.co.il.	Reznik Paz Nevo Trusts Ltd., 14 Yad Haruzim St., Tel Aviv, Tel: 03-6389200; Fax: 03- 6389222. Contact: Adv. Michal Avtalion-Rishony, email: michal@rpn.co.il.

E.2. Compliance with obligations

As of December 31, 2024, and the date of this Report's publication, to the best of the Company's knowledge, the Company has met all the material terms and obligations under the trust deed for Bonds (Series F), Bonds (Series G), and Bonds (Series H). To the best of the Company's knowledge, no conditions have arisen that would constitute grounds for the immediate repayment of the obligations. For details regarding the Company's compliance with its financial obligations towards the holders of Bonds (Series F), Bonds (Series G), and Bonds (Series H), refer to details below. For further details about the terms of the Bonds (Series F), Bonds (Series G), and Bonds (Series H), refer to details below.

Series	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of December 31, 2024 (NIS thousands)	Financial liabilities	Manner of calculation of financial covenants and their results as of December 31, 2024 according to the Company's audited Financial Statements	Manner of calculation of financial covenants and their results near the Report publication date
The Bonds (Series F)	The Company (June 2019)	196,587	19,659 (of this, an amount of 50 is held by a wholly owned subsidiary of the Company)	•Equity to solo balance sheet ratio will not fall below 35%. •The Company's equity will not fall below NIS 350 million. The bond's interest rate will be adjusted due to deviation in one or more of the financial covenants described below: •Equity to solo balance sheet ratio will not fall below 40%. •The Company's equity will not fall below NIS 375 million. "Equity" means the equity as presented in the Company's Separate (Solo) Financial Statements (audited or reviewed, as applicable), plus shareholder loans that are subordinated to the Bonds (Series F), equity instruments invested after the issuance of the bonds, and less intangible assets (such as goodwill, copyrights, patents, trademarks, and trade names). "Balance Sheet" means the Company's balance sheet as presented in the Separate (Solo) Financial Statements of the Company (audited or reviewed, as the case may be).	Equity as defined above: approximately NIS 2,486 million. Solo balance sheet as defined above is approximately NIS 3,968 million Therefore, the ratio is approximately 63%.	N/A
The Bonds (Series G)	The Company (January 2021)	838,418	838,418 (of this, an amount of 63,681 is held by a wholly owned subsidiary of the Company)	•Equity to balance sheet ratio will not fall below 37.5%. •The Company's equity will not fall below NIS 475 million. The bond's interest rate will be adjusted due to deviation in one or more of the financial covenants described below: Equity to solo balance sheet ratio will not fall below 42%. The Company's equity will not fall below NIS 500 million. "Equity" means the equity as presented in the Company's Separate (Solo) Financial Statements (audited or reviewed, as applicable), plus shareholder loans that are subordinated to the Bonds (Series F), equity instruments invested after the issuance of the bonds, and less intangible assets (such as goodwill, copyrights, patents, trademarks, and trade names). "Balance Sheet" means the Company's balance	Equity as defined above: approximately NIS 2,486 million. Solo balance sheet as defined above is approximately NIS 3,968 million Therefore the ratio is approximately 63%.	N/A

sheet as presented in the Separate (Solo) Financial Statements of the Company (audited or reviewed, as the case may be). •Equity to solo balance sheet ratio will not fall below 37.5%. •The Company's equity will not fall below NIS 1.2 billion. •The ratio between consolidated equity and the consolidated balance Equity as defined above: approximately sheet according to the Company's Consolidated Financial Statements NIS 2,486 million. will not fall below 15%. Solo balance sheet as The bond's interest rate will be adjusted due to deviation in one or defined above is more of the financial covenants described below: approximately NIS Equity to solo balance sheet ratio will not fall below 42%. 3,968 million. The Company's equity will not fall below NIS 1.25 billion. Therefore the ratio is Equity to balance sheet ratio on a consolidated basis will not fall approximately 63%. below 17%. The Bonds The Company The consolidated equity 528,962 534,241 "Equity" means equity as presented in the Company's Separate (Series H) (June 2026) (including non H) (Solo) Financial Statements (audited or reviewed, as the case may controlling rights) as be), plus subordinated owner loans. "Subordinated Owner Loans" defined above: means owner loans (principal only) provided up to the relevant approximately NIS 3,462 million. review date, where it has been stipulated in their terms (principal and interest) that they are subordinated to the Bonds (Series H), including Consolidated balance that their repayment date is after the final repayment date of the sheet as defined above: Bonds. In the event of the Company's liquidation, these loans NIS 9,990 million. (principal and interest) will be repaid after the full repayment of the	Series	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of December 31, 2024 (NIS thousands)	Financial liabilities	Manner of calculation of financial covenants and their results as of December 31, 2024 according to the Company's audited Financial Statements	Manner of calculation of financial covenants and their results near the Report publication date
of the Bonds, which are subordinated to the Bonds (Series H), approximately 34.7%. including that their repayment date is after the final repayment date of the Bonds and that in the event of the Company's liquidation, these					Bonds. This also applies to capital notes provided after the issuance	Therefore, the ratio is	The Bonds (Series

Series	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of December 31, 2024 (NIS thousands)	Financial liabilities	Manner of calculation of financial covenants and their results as of December 31, 2024 according to the Company's audited Financial Statements	Manner of calculation of financial covenants and their results near the Report publication date
				Bonds. "Balance Sheet" means the Company's balance sheet as
				presented in the Separate (Solo) Financial Statements of the
				Company (audited or reviewed, as the case may be).
				"Consolidated Equity" means equity, including non-controlling
				interests, as presented in the Company's Consolidated Financial
				Statements (audited or reviewed, as the case may be), plus
				subordinated owner loans (as defined above).
				"Consolidated Balance Sheet" means the Company's balance sheet
				as presented in the Company's Consolidated Financial Statements
				(audited or reviewed, as the case may be), excluding unrestricted cash
				and cash equivalents, deposits, and investments classified as
				unrestricted current assets, marketable securities that are unrestricted
				current assets, and deducting advances from apartment purchasers,
				liabilities for providing construction services, liabilities related to
				consideration transactions, and liabilities for contracts with
				customers, as defined in generally accepted accounting principles.

E.3. Rating

▪ On May 20, 2024, the Company received an initial ilA- rating with a positive outlook from Ma'alot S&P as well as an ilA- rating for the Company's Series F and G bonds. On June 23, 2024, the Company received an initial rating of ilA- from S&P Maalot for the Series H bonds, and on December 4, 2024, S&P Maalot announced an ilA- rating for the Series H expansion issuance.

E.4 Details regarding the Company's obligations granted by the Company for the benefit of its bondholders in accordance with the trust deeds:

The Bonds (Series F)

Negative charge	Series expansion limitation	Equity limitation	Equity to balance sheet ratio	Company distribution limitation	Interested party transactions	Interest adjustment mechanism	Retention of control clause	Special grounds to call for immediate repayment
The Company has undertaken not to create a floating charge on all of its assets in favor of any third party to secure any debt or obligation, without the prior consent of the Bondholders (Series F), by special resolution. For further details, refer to Section 6 of the F Bond deed.4	Series expansion is permitted in accordance with the conditions set forth in Section 7 of the F Bond Deed.	The Company's equity will not fall below NIS 350 million.5	Equity to balance sheet ratio will not fall below 35%.	Subject to the following cumulative limitations: (1) Following the distribution, the Company's equity shall not fall below NIS 400 million; (2) Following the distribution, the equity-to balance sheet ratio shall not fall below 42.5%; (3) The Company complies with its material obligations under F Bond Deed; (4) The distribution amount shall not exceed 50% of the profit for the period, as per the Company's most recent annual audited Separate (Solo) Financial Statements, all in accordance with and subject to the provisions of F Bond Deed.	In the event that the Company ceases to be a public company and remains solely a bond company (as such terms are defined in the Companies Law), and in such case only, then extraordinary transactions of the Company (as defined in the Companies Law) with its controlling shareholders, or extraordinary transactions of the Company with another person in which the controlling shareholders have a personal interest, or engagements of the Company with the controlling shareholders or their relatives, directly or indirectly, including through a company under their control, in connection with the provision of services to the Company, as well as in cases where such person also serves as an officer of the Company—in regard to the terms of his office and employment, and if he is an employee of the Company but not an officer—in regard to his employment with the Company, shall be subject, in addition to the approvals required under Section 275 of the Companies Law, to the consent of the holders of the Bonds (Series F) by ordinary resolution, all subject to the exceptions set forth in F Bond Deed.	Exists in the event that the equity to balance sheet ratio is less than 40% and/or the Company's equity is less than NIS 375 million in accordance with Section 8.3 of the F Bond Deed.	If control in the Company is transferred directly or indirectly, and the consent of the Bondholders (Series F) is not obtained for the special resolution, before the transfer of control. Transfer of control and control as defined in Section 10.1.26 of the F Bond Deed.	If the Company violates its obligations in connection with the negative pledge, equity, equity to balance sheet ratio, distribution limit, activity delimitation, transactions with interested parties, etc., all as stated in Section 10 of F Bond Deed.

⁴ "F Bond Deed" - The trust deed between the Company and Trustee for the Bondholders (Series F) dated May 28, 2019.

⁵ "Equity" - Equity as presented in the Company's Separate (Solo) Financial Statements (audited or reviewed, as applicable), plus shareholders' loans that were provided up to the relevant inspection date and whose terms specify that they are subordinated to the Bonds (Series F), including that their repayment date is after the final repayment date of the bonds and that, in the event of the Company's liquidation, they shall be repaid only after full repayment of the bonds; including capital notes provided after the issuance of the bonds and up to the relevant inspection date; and less intangible assets (goodwill, copyrights, patents, trademarks, trade names). "Balance Sheet" means the Company's balance sheet as presented in the Company's Separate (Solo) Financial Statements (audited or reviewed, as the case may be).

The Bonds (Series G)

Negative charge	Series expansion limitation	Equity limitation	Equity to balance sheet ratio	Company distribution limitation	Interested party transactions	Interest adjustment mechanism	Retention of control clause	Special grounds to call for immediate repayment
The Company has undertaken not to create a floating charge on all of its assets in favor of any third party to secure any debt or obligation, without the prior consent of the Bondholders (Series G), by special resolution. For further details, refer to Section 6 of the G Bond deed.6	Series expansion is permitted in accordance with the conditions set forth in Section 7 of the G Bond Deed.	The Company's equity will not fall below NIS 475 million.	Equity to balance sheet ratio will not fall below 37.5%.	Subject to the following cumulative limitations: (1) The Company meets all of the financial covenants and following the distribution, the Company's equity shall not fall below NIS 525 million; (2) Following the distribution, the equity-to-balance sheet ratio shall not fall below 44%; (3) The Company complies with its material obligations under F Bond Deed; (4) The distribution amount shall not exceed 50% of the profit for the period, as per the Company's most recent annual audited Separate (Solo) Financial Statements, all in accordance with and subject to the provisions of G Bond Deed; (5) There are no grounds to call for immediate repayment (the distribution will not affect solvency).	In the event that the Company ceases to be a public company and remains solely a bond company (as such terms are defined in the Companies Law), and in such case only, then extraordinary transactions of the Company (as defined in the Companies Law) with its controlling shareholders, or extraordinary transactions of the Company with another person in which the controlling shareholders have a personal interest, or engagements of the Company with the controlling shareholders or their relatives, directly or indirectly, including through a company under their control, in connection with the provision of services to the Company, as well as in cases where such person also serves as an officer of the Company—in regard to the terms of his office and employment, and if he is an employee of the Company but not an officer—in regard to his employment with the Company, shall be subject, in addition to the approvals required under Section 275 of the Companies Law, to the consent of the holders of the Bonds (Series F) by ordinary resolution, all subject to the exceptions set forth in G Bond Deed.	Exists in the event that the equity to balance sheet ratio is less than 42% and/or the Company's equity is less than NIS 500 million in accordance with Section 8.3 of the G Bond Deed.	If control in the Company is transferred directly or indirectly, and the consent of the Bondholders (Series F) is not obtained for the special resolution, before the transfer of control. Transfer of control and control as defined in Section 10.1.25 of the F Bond Deed.	If the Company violates its obligations in connection with the negative pledge, equity, equity to balance sheet ratio, distribution limit, activity delimitation, transactions with interested parties, etc., all as stated in Section 10 of F Bond Deed.

6

^"G Bond Deed" - The trust deed between the Company and Trustee for the Bondholders (Series G) dated December 31, 2020.

The Bonds (Series H)

Negative charge	Series expansion limitation	Equity limitation	Equity to balance sheet ratio	Company distribution limitation	Interested party transactions	Interest adjustment mechanism	Retention of control clause	Special grounds to call for immediate repayment
The Company has undertaken not to create a floating charge on all of its assets in favor of any third party to secure any debt or obligation, without the prior consent of the Bondholders (Series H), by special resolution. For further details, refer to Section 6 of the H Bond deed.7	Series expansion is permitted in accordance with the conditions set forth in Section 7 of the H Bond Deed.	The Company's equity will not fall below NIS 1.2 billion.	Equity to balance sheet ratio will not fall below 37.5%.	The Company shall be entitled to make a distribution at any time, subject to the following cumulative limitations: (1) The Company complies with each of the financial covenants, and following the distribution, the Company's equity shall not fall below NIS 1.4 billion; (2) Following the distribution, the equity-to-balance sheet ratio, according to the Company's most recent Separate (Solo) Financial Statements (audited or reviewed, as applicable), shall not fall below 44%, all in accordance with and subject to the provisions of H Bond Deed; (3) Following the distribution, the equity-to balance sheet ratio on a consolidated basis, according to the Company's most recent Consolidated Financial Statements (audited or reviewed, as applicable), shall not fall below 20%, all in accordance with and subject to the provisions of H Bond Deed; (4) The Company complies with its material obligations under H Bond Deed; (5) The amount of the distribution shall not exceed 50% of the profit for the period, as accumulated from January 1, 2022, according to the Company's most recent annual audited or quarterly reviewed Separate (Solo) Financial Statements, as applicable, all in accordance with and subject to the provisions of H Bond Deed; (6) No grounds exist for immediate repayment; (7) The distribution does not impair the Company's ability to meet its obligations under the bonds.	No limitation.	The interest rate borne by the Bonds (Series H) will be adjusted due to deviation in one or more of the financial covenants described below: (1) Equity to balance sheet ratio decreased by 42%; (2) The Company's equity decreased by NIS 1.25 billion; (3) Consolidated equity to balance sheet ratio decreased by 17%, all as stated in Section 8.3 of H Bond Deed. In addition, the H Bond Deed also includes an interest rate adjustment mechanism for a change in the rating of the Bonds (Series H), all as detailed in Section 8.4 of the H Bond Deed.	If control in the Company is transferred, directly or indirectly, and the consent of the Bondholders (Series H) is not obtained for the special resolution, before the transfer of control. Transfer of control and control as defined in Section 10.1.25 of the H Bond Deed.	If the Company violates its obligations in connection with the financial criteria to which it has committed, or fails to meet the distribution limit or the activity delimitation limit, etc., all as stated in Section 10 of the H Bond Deed.

^"H Bond Deed" - The trust deed between the Company and Trustee for the Bondholders (Series G) dated June 23, 2024.

7

Report signing date:

March 24, 2025

_______________________________________________ ____________________________

Asaf Touchmair, Chair of the Board of Directors Barak Rosen, CEO and Director

Israel Canada (T.R.) Ltd.

Consolidated Financial Statements as of December 31, 2024

Israel Canada (T.R.) Ltd.

Consolidated Financial Statements as of December 31, 2024

Table of Contents

	Page
Auditor's Report	2-4
Consolidated Statements of Financial Position	5-6
Consolidated Statements of Comprehensive Income	7-8
Consolidated Statements of Changes to Equity	9-11
Consolidated Statements of Cash Flows	12-15
Notes to the Consolidated Financial Statements	16-140

Auditors' Report to the Shareholders of Israel Canada (T.R.) Ltd.

Regarding the Audit of Components of Internal Control over Financial Reporting Pursuant to Section 9B(c) of the Securities Law (Periodic and Immediate Reports) 5730-1970

We audited the components of internal control over financial reporting of Israel Canada (T.R.) Ltd. and its subsidiaries (hereinafter jointly: the "Company") as of December 31, 2024 and 2023. These components of internal control were determined as explained in the following paragraph. The Board of Directors and management of the Company are responsible for maintaining effective internal control over financial reporting and for their assessment of the effectiveness of the components of internal control over financial reporting, which is attached to the Periodic Report as of said date. Our responsibility is to express an opinion on the components of internal control over financial reporting of the Company based on our audit.

The components of internal control over financial reporting that were audited were determined in accordance with Israeli Auditing Standard 911 issued by the Institute of Certified Public Accountants in Israel, "Audit of Components of Internal Control Over Financial Reporting" (hereinafter: "Israeli Auditing Standard 911"). These components are: (1) entity-level controls, including controls over the financial reporting closing and consolidation process, and general information systems controls; (2) controls over the real estate inventory process; (3) controls over the investment property process; (4) controls over the revenue process; (5) controls over the investment and loan process (including bonds) (all of the above together, hereinafter: the "Audited Control Components").

We conducted our audit in accordance with Israeli Auditing Standard 911. According to this standard, we are required to plan and perform the audit to identify the Audited Control Components and to obtain reasonable assurance as to whether these components were maintained effectively, in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, identifying the Audited Control Components, assessing the risk that a material weakness exists in the Audited Control Components, and testing and evaluating the design and operating effectiveness of those control components based on the assessed risk. Our audit with respect to those control components also included performing such other procedures as we deemed necessary under the circumstances. Our audit addressed only the Audited Control Components, and not internal control over all material processes related to financial reporting; therefore, our opinion pertains solely to the Audited Control Components. In addition, our audit did not address the interactions between the Audited Control Components and other components not subject to audit, and accordingly, our opinion does not consider any possible effects of such interactions. We believe that our audit provides a reasonable basis for our opinion as described above.

Due to inherent limitations, internal control over financial reporting in general, and the components thereof in particular, may not prevent or detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in circumstances, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, based on our audit, the Company maintained, in all material respects, effective Audited Control Components as of December 31, 2024.

We also audited, in accordance with generally accepted auditing standards in Israel, the consolidated financial statements of the Company as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024, and our report dated March 24, 2025 included an unqualified opinion on those financial statements based on our audit and the audit reports of the other independent auditors.

Brightman Almagor Zohar & Co. Certified Public Accountants A Firm in the Deloitte Global Network Tel Aviv, March 24, 2025

Tel Aviv – Head Office
Azrieli Center, 1 Tel Aviv, P.O. Box 16593, Tel Aviv 6116402			Phone: +972 (3) 6085555 Email: info@deloitte.co.il
Jerusalem Office	Haifa Office	Eilat Office	Nazareth Office
3 Kiryat HaMada, Har Hotzvim Tower, P.O.	5 Ma'ale HaShichrur, P.O. Box 5648	City Center, P.O. Box 538	9 Marj Ibn Amer
Box 45396 Jerusalem, 914510	Haifa, 3105502	Eilat, 88104002	Nazareth, 16100
Phone: +972 (2) 501 8888 Fax: +972 (2)	Phone: +972 (4) 860 7333 Fax:	Phone: +972 (8) 637 5676 Fax:	Phone: +972 (73) 399 4455
537 4173	+972 (2) 867 2528	+972 (2) 637 1628	Fax: +972 (73) 637 4455
Email: info-jer@deloitte.co.il	Email: info-haifa@deloitte.co.il	Email: info-eilat@deloitte.co.il	Email:
Beit Shemesh Office	Ra'anana Office – Infiniti Complex	Rishon LeZion Office – Millennium	nazareth@deloitte.co.il
1 Gal Alon, Beit Shemesh, 9906201	8 HaPnina, Ra'anana	Complex 23 Rashonim Boulevard,

Eilat Office City Center, P.O. Box 538 Eilat, 88104002 Phone: +972 (8) 637 5676 | Fax: +972 (2) 637 1628 Email: info-eilat@deloitte.co.il Nazareth Office 9 Marj Ibn Amer Nazareth, 16100 Phone: +972 (73) 399 4455 | Fax: +972 (73) 637 4455 Email: Rishon LeZion Office – Millennium Complex 23 Rashonim Boulevard, Rishon LeZion

Auditors' Report to the Shareholders of Israel Canada (T.R.) Ltd.

We have audited the accompanying consolidated statements of financial position of Israel Canada (T.R.) Ltd. (hereinafter: the "Company") as of December 31, 2024 and 2023, and the consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2024. These financial statements are the responsibility of the Company's Board of Directors and management. Our responsibility is to express an opinion on these financial statements based on our audit.

We did not audit the financial statements of certain consolidated companies whose assets included in the consolidation constitute approximately 11.98% and 11.58% of the total consolidated assets as of December 31, 2024 and 2023, respectively, and whose revenues included in the consolidation constitute approximately 37.59%, 43.60%, and 13.70% of the total consolidated revenues for the years ended December 31, 2024, 2023, and 2022, respectively. We also did not audit the financial statements of certain companies accounted for by the equity method, whose total investment as of December 31, 2024 and 2023 amounted to approximately NIS 263,860 thousand and NIS 143,494 thousand, respectively, and the Company's share of their results for the years ended December 31, 2024, 2023, and 2022 amounted to profits of approximately NIS 40,236 thousand, NIS 44,752 thousand, and NIS 45,456 thousand, respectively. The financial statements of those companies were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to amounts included for those companies, is based solely on the reports of the other auditors.

We conducted our audit in accordance with generally accepted auditing standards in Israel, including standards prescribed by the Certified Public Accountants Regulations (Mode of Performance), 5733-1973. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Company's Board of Directors and management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audit and the reports of the other auditors, the above consolidated financial statements fairly present, in all material respects, the financial position of the Company and its consolidated companies as of December 31, 2024 and 2023, and their results of operations, changes in equity and cash flows for each of the three years in the period ended December 31, 2024, in accordance with International Financial Reporting Standards (IFRS Accounting Standards) and the provisions of the Securities Law (Annual Financial Statements), 5770-2010.

We also audited, in accordance with Israeli Auditing Standard 911 of the Institute of Certified Public Accountants in Israel, "Audit of Components of Internal Control Over Financial Reporting," the components of internal control over financial reporting of the Company as of December 31, 2024, and our report dated March 24, 2025 included an unqualified opinion on the effective maintenance of those components.

Key Audit Matters:

The Key Audit Matters detailed below are matters that were communicated, or were required to be communicated, to the Company's Board of Directors, and which, in our professional judgment, were of most significance in our audit of the consolidated financial statements for 2024. These matters include, among others, any matter that: (1) relates to, or may relate to, material line items or disclosures in the financial statements, and (2) required particularly challenging, subjective, or complex auditor judgment. These matters were addressed in the context of our audit and in forming our opinion on the consolidated financial statements as a whole. The communication of these matters does not alter our opinion on the consolidated financial statements as a whole and we do not provide a separate opinion on these matters or on the line items or disclosures to which they relate.

Tel Aviv – Head Office

Azrieli Center, 1 Tel Aviv, P.O. Box 16593, Tel Aviv 6116402		Phone: +972 (3) 6085555 Email: info@deloitte.co.il
Jerusalem Office	Haifa Office	Eilat Office	Nazareth Office
3 Kiryat HaMada, Har Hotzvim Tower, P.O.	5 Ma'ale HaShichrur, P.O. Box 5648	City Center, P.O. Box 538	9 Marj Ibn Amer
Box 45396 Jerusalem, 914510	Haifa, 3105502	Eilat, 88104002	Nazareth, 16100
Phone: +972 (2) 501 8888 Fax: +972 (2)	Phone: +972 (4) 860 7333 Fax:	Phone: +972 (8) 637 5676 Fax:	Phone: +972 (73) 399 4455
537 4173	+972 (2) 867 2528	+972 (2) 637 1628	Fax: +972 (73) 637 4455
Email: info-jer@deloitte.co.il	Email: info-haifa@deloitte.co.il	Email: info-eilat@deloitte.co.il	Email:
Beit Shemesh Office	Ra'anana Office – Infiniti Complex	Rishon LeZion Office – Millennium	nazareth@deloitte.co.il
1 Gal Alon, Beit Shemesh, 9906201	8 HaPnina, Ra'anana	Complex 23 Rashonim Boulevard,
		Rishon LeZion

Fair Value of Investment Property

As stated in Notes 2(j), 4(c)(3), and 9 to the consolidated financial statements as of December 31, 2024, the Company and the entities accounted for using the equity method hold investment properties measured at fair value as of that date in accordance with the accounting policy described in Note 2. The fair value of all investment properties of the Company and its consolidated entities as of December 31, 2024 amounted to NIS 2,893 million, and that of the entities accounted for using the equity method amounted to NIS 1,021 million (Company's share). In 2024, an increase of NIS 27 million in the fair value of investment properties of the Company and its consolidated entities was recorded, as well as an increase of NIS 110 million in the fair value of investment properties of the entities accounted for using the equity method (Company's share).

As described in Note 2(j) to the consolidated financial statements, the determination of fair value of investment property is a material estimate involving uncertainty and is based on valuations that include certain estimates, some of which are subjective, made under the circumstances and using the best information available as of December 31, 2024, and were conducted by independent external appraisers. These estimates include, primarily, the most appropriate yield rate, comparable transactions of similar properties, estimated value per built square meter, the forecasted Net Operating Income (NOI) of the properties, and market prices for comparable units. For the determination of fair value of land not yet under development, location, comparable transactions of similar lands, and adjustments required to such baseline assumptions were considered. The selection of the most appropriate appraisal approach, as well as the determination of the overall fair value estimate of the Group's investment properties, involves subjective judgment in an environment of uncertainty, sometimes significantly so. Therefore, changes in the aforementioned estimates may result in material changes in the fair value of the investment properties and, consequently, may materially impact the Company's financial position as of December 31, 2024 and its operating results for that year, as detailed in Note 9.

We determined, based on our professional judgment, that the estimates and assumptions used by management in measuring the fair value of the investment properties—particularly the reasonableness of the capitalization rates used—constitute a Key Audit Matter. Auditing the fair value of investment properties requires auditor judgment in assessing how management supported the appropriateness of the assumptions and estimates used in determining the fair value of investment property.

Audit Procedures Performed in Response to the Key Audit Matter:

To address the uncertainties involved in determining the fair value of the Group's investment properties, we performed, among others, the following procedures, focusing on assessing the reasonableness of the capitalization rates used in the property valuations:

• (1) Gained an understanding of the internal control environment regarding the determination of the fair value of investment properties and tested the effectiveness of relevant internal controls over their fair value determination;
• (2) Examined and analyzed fair value presentations, primarily valuation reports, prepared by the Company through its external appraisers, based on a sample selected using both quantitative and qualitative criteria;
• (3) Evaluated the experience, qualifications, and independence of the Company's appraisers;
• (4) Examined the baseline assumptions used in the valuation reports, selected on a sample basis, with emphasis on assessing the capitalization rates, forecasted NOI, comparable transactions, value per built square meter, and the valuation approach applied;
• (5) Reviewed, on a sample basis, valuations prepared by our own independent expert appraisers;
• (6) Maintained ongoing communication with the Company's appraisers;
• (7) Involved senior members of the engagement team and held consultations;
• (8) Assessed the adequacy of disclosures regarding the valuation methodologies and assumptions used by the appraisers.

Tel Aviv – Head Office

Azrieli Center, 1 Tel Aviv, P.O. Box 16593, Tel Aviv 6116402			Phone: +972 (3) 6085555 Email: info@deloitte.co.il
Jerusalem Office	Haifa Office	Eilat Office	Nazareth Office
3 Kiryat HaMada, Har Hotzvim Tower, P.O.	5 Ma'ale HaShichrur, P.O. Box 5648	City Center, P.O. Box 538	9 Marj Ibn Amer
Box 45396 Jerusalem, 914510	Haifa, 3105502	Eilat, 88104002	Nazareth, 16100
Phone: +972 (2) 501 8888 Fax: +972 (2)	Phone: +972 (4) 860 7333 Fax:	Phone: +972 (8) 637 5676 Fax:	Phone: +972 (73) 399 4455
537 4173	+972 (2) 867 2528	+972 (2) 637 1628	Fax: +972 (73) 637 4455
Email: info-jer@deloitte.co.il	Email: info-haifa@deloitte.co.il	Email: info-eilat@deloitte.co.il	Email:
Beit Shemesh Office	Ra'anana Office – Infiniti Complex	Rishon LeZion Office – Millennium	nazareth@deloitte.co.il
1 Gal Alon, Beit Shemesh, 9906201	8 HaPnina, Ra'anana	Complex 23 Rashonim Boulevard,

Eilat Office City Center, P.O. Box 538 Eilat, 88104002 Phone: +972 (8) 637 5676 | Fax: +972 (2) 637 1628 Email: info-eilat@deloitte.co.il Nazareth Office 9 Marj Ibn Amer Nazareth, 16100 Phone: +972 (73) 399 4455 | Fax: +972 (73) 637 4455 Email: Rishon LeZion Office – Millennium Complex 23 Rashonim Boulevard, Rishon LeZion

Fair Value of Fixed Assets Measured Using the Revaluation Model

As stated in Notes 2(i), 4(c)(4), and 10 to the consolidated financial statements as of December 31, 2024, the Company holds fixed assets, including hotels measured using the revaluation model, presented at their fair value as of that date in accordance with the accounting policy described in Note 2. Out of the Company's total fixed assets balance of NIS 807 million as of December 31, 2024, a balance of NIS 572 million is presented under the revaluation model.

We did not audit a consolidated company whose assets include hotel properties measured using the revaluation model in the amount of NIS 492 million as of December 31, 2024. The financial statements of that company were audited by other independent auditors, whose reports have been submitted to us. Our opinion, to the extent it relates to amounts included for that company, is based on the reports of the other auditors.

As described in Note 2(i) to the consolidated financial statements, the determination of the fair value of hotel buildings within fixed assets is a material estimate involving uncertainty and is based on valuations conducted by independent external appraisers not affiliated with the Company. These valuations include assumptions, some of which are subjective, based on the circumstances and best information available as of December 31, 2024, and were carried out with the assistance of independent real estate appraisers. These assumptions include primarily the most appropriate capitalization rate, comparable transactions for similar assets in terms of location, characteristics, and risk profile, the forecasted operating income of the properties, and estimated renovation and maintenance costs. The overall determination of the fair value estimate of the Group's hotels, including the selection of the most appropriate appraisal approach, involves the application of subjective judgment in an environment of uncertainty, sometimes significantly so. Consequently, changes in the aforementioned baseline assumptions may result in material changes to the fair value of the hotels, which may also affect the Company's financial position as of December 31, 2024 and its comprehensive income for that year, as detailed in Note 10.

We determined, based on our professional judgment, that the estimates and assumptions used by management in measuring the fair value of the hotels—particularly the reasonableness of the yield rates and forecasted operating income used in such valuations—constitute a Key Audit Matter. Auditing the fair value of the hotels requires auditor judgment to assess how management substantiated the appropriateness of the assumptions and estimates used in determining the fair value of the investment property.

Audit Procedures Performed in Response to the Key Audit Matter:

In response to the uncertainties involved in determining the fair value of the Group's hotels, we and the auditors of the consolidated company primarily performed the following procedures, with emphasis on assessing the reasonableness of the yield rates and forecasted operating income used in the asset valuations:

• (1) Gained an understanding of the control environment regarding the determination of the fair value of the hotels;
• (2) Examined and analyzed the fair value presentations, primarily valuations, prepared by the Group through its external appraisers, based on a sample involving both quantitative and qualitative considerations;
• (3) Examined the baseline assumptions used in the valuations, selected on a sample basis, with emphasis on the yield rates, forecasted operating income, comparable transactions, and the valuation approach applied;
• (4) Assessed the experience, qualifications, and independence of the Company's appraisers;
• (5) Reviewed, on a sample basis, valuations performed by our expert appraisers and by the auditors of other companies;
• (6) Maintained ongoing communication with the Group's appraisers;
• (7) Involved senior members of the engagement team and held consultations;
• (8) Assessed the adequacy of disclosures related to the valuation methods and the estimates used by the appraisers.

Brightman Almagor Zohar & Co. Certified Public Accountants A Firm in the Deloitte Global Network Tel Aviv, March 24, 2025

Tel Aviv – Head Office

Jerusalem Office
3 Kiryat HaMada, Har Hotzvim Tower, P.O.
Box 45396 Jerusalem, 914510
Phone: +972 (2) 501 8888 Fax: +972 (2)
537 4173
Email: info-jer@deloitte.co.il
1 Gal Alon, Beit Shemesh, 9906201

Haifa Office 5 Ma'ale HaShichrur, P.O. Box 5648 Haifa, 3105502 Phone: +972 (4) 860 7333 | Fax: +972 (2) 867 2528 Email: info-haifa@deloitte.co.il Ra'anana Office – Infiniti Complex 8 HaPnina, Ra'anana

Azrieli Center, 1 Tel Aviv, P.O. Box 16593, Tel Aviv 6116402 Phone: +972 (3) 6085555 | Email: info@deloitte.co.il Eilat Office City Center, P.O. Box 538 Eilat, 88104002 Phone: +972 (8) 637 5676 | Fax: +972 (2) 637 1628 Email: info-eilat@deloitte.co.il Nazareth Office 9 Marj Ibn Amer Nazareth, 16100 Phone: +972 (73) 399 4455 | Fax: +972 (73) 637 4455 Email: Beit Shemesh Office nazareth@deloitte.co.il Rishon LeZion Office – Millennium Complex 23 Rashonim Boulevard, Rishon LeZion

Israel Canada (T.R.) Ltd. Consolidated Statements of Financial Position

		As of December 31
		2024	2023 NIS
		NIS
	Note	thousands	thousands
Current assets
Cash and cash equivalents	5a	410,276	200,389
Cash and deposits used in financing accounts	5b	566,068	-
Financial assets at fair value through profit and loss	15n	129,192	94,889
Receivables for the sale of real estate inventory and apartments
under construction	6c	19,280	62,081
Accounts receivable	6a	126,481	98,262
Income tax receivables		5,920	18,538
Accounts receivable for hotels	6b	41,233	23,656
Real estate inventory	7a	320,758	(*)312,472
Inventory of buildings under planning and construction	7a	2,625,023	(*)2,299,964
Advances on account of real estate inventory	7a	47,780	-
Total current assets		4,292,011	3,110,251
Non-current assets
Investments and loans in investee companies accounted for using
the equity method, net	8a	1,305,859	1,132,153
Long-term real estate inventory	7a	1,145,810	745,280
Investment property	9	2,893,000	2,580,068
Advances on account of investment property		13,486	9,898
Fixed assets	10	807,495	619,035
Advances on account of fixed assets		1,382	1,166
Cash with long-term use restriction	5b	5,266	5,138
Right of use asset	17	425,912	292,518
Accounts receivable	6a	7,066	8,170
Deferred tax assets	14a	31,771	51,192
Investments and other assets	15p	27,242	26,590
Total non-current assets		6,664,289	5,471,208
Total assets		10,956,300	8,581,459

(*) Reclassified

Israel Canada (T.R.) Ltd. Consolidated Statements of Financial Position (continued)

			As of December 31
			2024	2023
		Note	NIS thousands	NIS thousands
Current liabilities
Credit from bank corporations and current maturities of	long-term
loans		12	2,866,946	2,830,418
Current maturities of bonds		13	269,101	88,262
Current maturities of lease liability			21,060	15,542
Suppliers and service providers			36,345	28,303
Accounts payable		11	163,244	61,291
Current tax liability		14	17,515	10,511
Advances for the sale of real estate inventory and building
inventory under planning and construction			421,240	41,480
Liability for provision of construction services			4,360	6,540
Loans from others		12	2,502	2,841
Total current liabilities			3,802,313	3,085,188
Non-current liabilities
Long-term loans from banks		12	2,001,362	1,119,006
Loans from others and other liabilities		12	10,175	26,934
Bonds		13	1,055,667	787,948
Lease liability			442,578	301,193
Deferred tax liabilities		14a	169,335	190,185
Liability for provision of construction services long term			855	3,562
Other non-current liabilities			11,627	11,685
Total non-current liabilities			3,691,599	2,440,513
Capital attributed to the Company's shareholders		16
Share capital			3,226	3,226
Premium on shares			1,110,527	1,110,527
Fund for operations between a corporation and its controlling
owner			30,491	30,491
Surplus			1,334,498	1,153,125
Capital fund from exchange rate differences for translation of
foreign activities			(71,544)	(66,792)
Revaluation fund			94,385	-
Other capital funds			(15,588)	(1,427)
Total capital attributed to the Company's shareholders			2,485,995	2,229,150
Non-controlling interests			976,393	826,608
Total capital			3,462,388	3,055,758
Total liabilities and capital			10,956,300	8,581,459
March 24, 2025
Date of approval of the financial statements	Asaf Touchmair Chairman of the Board	Barak Rosen CEO and Director	Nir Bodaga Bar CFO

Israel Canada (T.R.) Ltd. Consolidated Statements of Comprehensive Income

		For the year ended on December 31
		2024	2023	2022
	Note	NIS thousands	NIS thousands	NIS thousands
Revenue:
Revenue from rental and management of investment property	9b	80,215	71,822	53,348
Revenue from the sale of real estate inventory	19a	11,679	29,812	1,024,529
Revenue from the sale of residential apartments		61,115	85,170	137,664
Revenue from renting real estate inventory		25,344	22,705	19,354
Revenue from management fees		1,645	3,099	2,210
Revenue from operation and management of hotels	19b	291,017	309,908	263,084
Revenue from marketing and brokerage		25,714	20,754	17,770
Revenue from provision of construction services		4,886	4,149	-
Appreciation of fair value of investment property and income from its exercise	9	66,371	86,892	316,391
Company's share in investment income accounted for using the equity method,
net		200,760	76,291	80,322
		5,490	152	5,945
Other revenues
Total revenues		774,236	710,754	1,920,617
Expenses and costs:
Cost of rent		42,961	37,885	22,420
Cost of sale of real estate inventory		7,848	9,311	622,388
Cost of sale of residential apartments		45,335	56,409	92,707
Cost of operating and managing hotels	20	257,682	277,745	252,948
Depreciation of fair value of investment property	9	38,963	23,502	13,655
Expenses from provision of construction services		4,886	4,149	-
Management and general expenses	21	59,821	45,938	48,921
Marketing and sale expenses	22	38,661	34,025	42,244
Company's share in loss of investments accounted for using the equity method,
net of tax		17,827	41,443	43,415
Other expenses		-	2,185	3,493
Total expenses and costs		513,984	532,592	1,142,191
Operating profit	2u	260,252	(*)178,162	(*)778,426
Changes in financial assets measured at fair value through profit and loss		36,911	(152,595)	(269,020)
Financing income	23	54,114	61,719	28,546
Financing expenses	24	(133,280)	(111,059)	(116,966)
Profit (loss) before income taxes		217,997	(23,773)	420,986
Income taxes	14c, d	13,681	(2,420)	(71,314)
Profit (loss) for the year		231,678	(26,193)	349,672
Other comprehensive profit (loss) - amounts that will be classified in the
future in profit or loss:
Exchange rate differences for translating foreign operations		(6,072)	9,261	(3,313)
Other comprehensive profit (loss) - amounts that will not be classified in the future in profit or loss:
Gain on revaluation of fixed assets, net of tax	2u	135,539	-	-
Changes in the fair value of a financial obligation designated at fair value
through profit or loss attributable to changes in credit risk, net of tax		-	(856)	7,295
Total comprehensive profit (loss)		361,145	(17,788)	353,654

(*) Voluntary change in accounting policy.

Israel Canada (T.R.) Ltd. Consolidated Statements of Comprehensive Income (continued)

			For the year ended on December 31
		2024	2023	2022 NIS
		NIS	NIS
	Note	thousands	thousands	thousands
Profit (loss) for the year attributed to:
Company's shareholders		206,373	(55,738)	268,758
Non-controlling interests		25,305	29,545	80,914
		231,678	(26,193)	349,672
Total comprehensive profit (loss) attributable to:
Company's shareholders		296,006	(49,006)	271,733
Non-controlling interests		65,139	31,218	81,921
		361,145	(17,788)	353,654
Net profit (loss) per share attributed to the Company's shareholders (in NIS):
Net basic profit (loss) per share	25	0.6398	(0.1826)	0.91
Diluted net profit (loss):
Diluted net profit (loss) per share		0.6398	(0.1826)	0.91
Weighted average of share capital used in calculating profit		322,566	305,266	295,340
per share
Weighted average share capital used in calculating diluted profit per share		322,566	305,266	295,340

Israel Canada (T.R.) Ltd. Consolidated Statements of Changes in Equity

	For the year ended on December 31, 2024
	Share capital NIS thousands	Premium on shares NIS thousands	Fund for activities between a corporation and its controlling owner NIS thousands	Revaluation fund NIS thousands	Other capital funds NIS thousands	Capital fund from exchange rate differences for translation of foreign activities NIS thousands	Retained earnings NIS thousands	Total attributed to the owner of the parent company NIS thousands	Non controlling interests NIS thousands	Total capital NIS thousands
Balance as of January 1, 2024	3,226	1,110,527	30,491	-	(1,427)	(66,792)	1,153,125	2,229,150	826,608	3,055,758
Profit for the year Exchange rate losses due to translation of foreign activity Gain on revaluation of fixed assets, net of tax	- - -	- - -	- - -	- - 94,385	- - -	- (4,752) -	206,373 - -	206,373 (4,752) 94,385	25,305 (1,320) 41,154	231,678 (6,072) 135,539
Total comprehensive profit (loss) for the year	-	-	-	94,385	-	(4,752)	206,373	296,006	65,139	361,145
Dividend paid	-	-	-	-	-	-	(25,000)	(25,000)	-	(25,000)
Transactions with non-controlling interest holders	-	-	-	-	(14,161)	-	-	(14,161)	(1,722)	(15,883)
Capital investments with non controlling interest holders	-	-	-	-	-	-	-	-	92,254	92,254
Distributions for non-controlling interests	-	-	-	-	-	-	-	-	(5,886)	(5,886)
Balance as of December 31, 2024	3,226	1,110,527	30,491	94,385	(15,588)	(71,544)	1,334,498	2,485,995	976,393	3,462,388

For the year ended on December 31, 2023
Share capital NIS thousands	Premium on shares NIS thousands	Fund for activities between a corporation and its controlling owner NIS thousands	Other capital funds NIS thousands	Capital fund from exchange rate differences for translation of foreign activities NIS thousands	Retained earnings NIS thousands	Total attributed to the owner of the parent company NIS thousands	Non controlling interests NIS thousands	Total capital NIS thousands
3,026	941,186	30,491	1,606	(74,306)	1,233,863	2,135,866	826,125	2,961,991
- -	- -	- -	- -	- 7,514	(55,738) -	(55,738) 7,514	29,545 1,747	(26,193) 9,261
								(856)
-	-	-	(782)	7,514	(55,738)	(49,006)	31,218	(17,788)
-	-	-	-	-	(25,000)	(25,000)	-	(25,000)
200	169,341	-	-	-	-	169,541	-	169,541
-	-	-	(2,252)	-	-	(2,252)	867	(1,385)
-	-	-	-	-	-	-	4,065	4,065
-	-	-	-	-	-	-	(35,667)	(35,667)
3,226	1,110,527	30,491	(1,427)	(66,792)	1,153,125	2,229,150	826,608	3,055,758
	-	-	-	(782)	-	-	(782)	(74)

Israel Canada (T.R.) Ltd. Consolidated Statements of Changes in Equity (continued)

	For the year ended on December 31, 2022
	Share capital NIS thousands	Premium on shares NIS thousands	Fund for activities between a corporation and its controlling owner NIS thousands	Other capital funds NIS thousands	Capital fund from exchange rate differences for translation of foreign activities NIS thousands	Retained earnings NIS thousands	Total attributed to the owner of the parent company NIS thousands	Non controlling interests NIS thousands	Total capital NIS thousands
Balance as of January 1, 2022	2,922	801,153	30,491	(10,052)	(72,293)	1,001,105	1,753,326	705,263	2,458,589
Profit (loss) for the year Exchange rate profits (losses) due to translation of foreign activity	- -	- -	- -	- -	- (2,013)	268,758 -	268,758 (2,013)	80,914 (1,300)	349,672 (3,313)
Changes in the fair value of a financial liability, net of tax	-	-	-	4,988	-	-	4,988	2,307	7,295
Total comprehensive profit (loss) for the year	-	-	-	4,988	(2,013)	268,758	271,733	81,921	353,654
Dividend paid	-	-	-	-	-	(36,000)	(36,000)	-	(36,000)
Issue of shares	104	140,033	-	-	-	-	140,137	-	140,137
Transition from fixed assets to investment property	-	-	-	1,285	-	-	1,285	296	1,581
Transactions with non-controlling interest holders	-	-	-	5,385	-	-	5,385	6,567	11,952
Capital investments with non-controlling interest holders	-	-	-	-	-	-	-	86,942	86,942
Distributions for non-controlling interests	-	-	-	-	-	-	-	(54,864)	(54,864)
Balance as of December 31, 2022	3,026	941,186	30,491	1,606	(74,306)	1,233,863	2,135,866	826,125	2,961,991

Israel Canada (T.R.) Ltd. Consolidated Statements of Changes in Equity (continued)

Israel Canada (T.R.) Ltd. Consolidated Statements of Cash Flows

	For the year ended on December 31
	2024	2023	2022 NIS thousands
	NIS	NIS
	thousands	thousands
Cash flows from current activities
Net cash (used for) arising from current activities (Appendix A)	(88,419)	(169,147)	435,517
Cash flows from investment activities
Provision of loans to companies accounted for using the equity
method, net of tax	(66,787)	(105,958)	(73,412)
Repayment of loans from companies accounted for using the equity
method, net of tax	73,494	101,202	41,380
Purchases and investments in investment property (including
investment property under construction), net	(402,200)	(182,058)	(235,041)
Proceeds from the sale of investment real estate	-	-	254,267
Advances on account of investment property	(22,730)	(9,559)	(12,187)
Sale (purchase) of financial instruments at fair value through profit and
loss, net	2,608	492,706	(367,611)
Acquisition of assets and subsidiaries – refer to Appendix C	-	-	(4,377)
Purchase and investments of fixed assets	(59,964)	(71,377)	(218,288)
Acquisition of other assets	(652)	(1,847)	(11,898)
Change in cash and deposits used in financing accounts	(566,196)	55,368	(54,047)
Net cash (used for) arising frominvestment activities	(1,042,427)	278,477	(681,214)

Israel Canada (T.R.) Ltd. Consolidated Statements of Cash Flows (continued)

	For the year ended on December 31
	2024	2023	2022 NIS
	NIS	NIS
	thousands	thousands	thousands
Cash flows from financing activities
Credit from banks, net	222,903	71,956	226,808
Long-term loan from banks	895,355	286,600	597,733
Repayment of long-term loan from banks	(244,473)	(467,629)	(700,861)
Repayment of bonds and buyback	(88,464)	(86,306)	(48,404)
Issue of bonds	533,933	-	152,357
Issue of shares, net Receipt of a loan from others	- 435	169,541 5,896	140,137 5,853
Repayment of loan from others	(672)	(21,203)	(55,129)
Repayment of lease liability	(23,247)	(14,348)	(12,433)
Distributions for non-controlling interests	(5,886)	(35,667)	(54,864)
Transactions with non-controlling interest holders	(15,883)	(1,385)	11,370
Dividend paid	(25,000)	(25,000)	(36,000)
Capital investments with non-controlling interest holders	92,254	4,065	86,942
Net cash deriving (used in) from financing activities	1,341,255	(113,480)	313,509
Exchange rate differences for balances of cash and cash
equivalents	(522)	(12)	1,553
Increase (decrease) in cash and cash equivalents	209,887	(4,162)	69,365
Balance of cash and cash equivalents at beginning of year	200,389	204,551	135,186
Balance of cash and cash equivalents at end of year	410,276	200,389	204,551

Israel Canada (T.R.) Ltd. Consolidated Statements of Cash Flows (continued)

Appendix A – Net Cash Arising from (Used in) Operating Activities:

	For the year ended on December 31
	2024	2023	2022
	NIS	NIS	NIS
	thousands	thousands	thousands
Net profit (loss)	231,678	(26,193)	349,672
Adjustments to profit or loss sections:
Profits of companies and entities treated according to the equity
method (including financing income, net), net of tax	(212,998)	(79,076)	(51,686)
Increase in fair value of investment property, net	(27,408)	(63,390)	(302,733)
(Profit) loss from fair value adjustment of financial instruments at fair
value through profit or loss, net	(36,911)	152,595	269,020
Revaluation of bonds	3,089	(102)	2,315
Revaluation of loan from banking corporations	45,116	19,956	33,941
Depreciation of fixed assets and assets for lease	66,496	45,284	37,506
Revaluation of loan from others	537	1,146	1,333
Deferred taxes. net	(15,937)	22,671	(51,880)
	(178,016)	99,084	(62,184)
Changes in assets and liabilities sections:
Increase (decrease) in advances for the sale of real estate inventory and
building inventory under planning and construction	379,760	(3,995)	(330,639)
(Increase) decrease in accounts receivable	(44,692)	9,434	47,164
Decrease (increase) in income tax receivables	12,618	(8,348)	(5,506)
Decrease (increase) in receivables for the sale of real estate and
apartments under construction	42,801	(3,979)	4,993
Increase (decrease) in suppliers and service providers	8,042	(22,369)	8,582
Increase (decrease) in accounts payable and liabilities for current taxes	110,819	(26,458)	4,028
Decrease in inventory of real estate and buildings for sale due to sales
(before purchase and investment in land)	41,034	60,700	700,250
	550,382	4,985	428,872
Net cash arising from current activities (before purchase and investment in land)	604,044	77,876	716,360
	(692,463)	(247,023)	(280,843)
Land purchases and investments (including capitalized financing costs)
Net cash (used for) arising from investment activities	(88,419)	(169,147)	435,517

Israel Canada (T.R.) Ltd. Consolidated Statements of Cash Flows (continued)

Appendix B – Additional Information on Cash Flows from Operating Activities:

	For the year ended on December 31
	2024	2023	2022
	NIS thousands	NIS thousands	NIS thousands
Cash paid during the period for:
Interest	277,509	268,176	134,620
Income tax	39,135	15,833	90,620
Cash received during the period for:
Interest	6,228	4,084	3,265
Income tax	21,927	7,367	-

Appendix C – Acquisition of Assets and Consolidated Companies (including Gaining Control):

	For the year ended on December 31
	2024	2023 NIS thousands	2022 NIS thousands
	NIS thousands
Cash paid during the period for:
Working capital (less cash and cash equivalents)	-	-	12,462
Fixed assets, net	-	-	(15,767)
Right of use asset	-	-	(81,611)
Other property	-	-	(12,570)
Loans from banks and financial corporations	-	-	11,497
Lease liability	-	-	81,611
	-	-	(4,378)

Note 1 – General

A. Israel Canada (T.R.) Ltd. (hereinafter: the "Company") was incorporated in Israel and its registered office is located in Herzliya Pituach. The Company is controlled by Barak Rosen and Asaf Touchmair.

The Company is engaged, both directly and through subsidiaries, in identifying and executing real estate investments, including initiating and constructing projects in Israel, initiating and managing purchasing groups in Israel, selling land in Israel, investing in and holding income-producing real estate, investing in innovation-related corporations with a connection to the real estate sector, and investing and operating in the hotel sector, primarily in Israel.

For information regarding the Company's operating segments, refer to Note 28.

B. The Company's securities are listed for trading on the Tel Aviv Stock Exchange.

For further information regarding the Company's bonds, refer to Note 13.

C. For the impact of the "Iron Swords" war on the Company, refer to Note 31.

Note 2 – Principal Accounting Policies

A. Statement Regarding Application of IFRS Accounting Standards and Presentation Format of the Financial Statements

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS Accounting Standards) and interpretations issued by the International Accounting Standards Board (IASB®). The accounting policies described below were applied consistently throughout all reporting periods presented in these consolidated financial statements, except for changes in accounting policy due to the adoption of new standards, amendments to standards, and interpretations that became effective as of the financial statement date, as described in Note 3A, and except for a voluntary change in accounting policy regarding the presentation of the Company's share in results of investments accounted for using the equity method and the implementation of the revaluation model for hotels owned by the Company in Israel (land component leased from the Israel Land Authority), as described in Note 2(u).

The financial statements were prepared in accordance with the Securities Regulations (Annual Financial Statements), 5770-2010 (hereinafter: the "Financial Statements Regulations").

Operating Cycle and Presentation of the Statement of Financial Position:

The Group has two operating cycles. Regarding construction and development projects, the operating cycle ranges from three to five years and may extend up to seven years, depending on the size and scope of the project. For other activities, the operating cycle is one year. Accordingly, when the operating cycle exceeds one year, the assets and liabilities related to that activity are classified as current assets and liabilities in the statement of financial position in accordance with the operating cycle. Items not specifically linked to a particular line of activity, such as bonds, are classified according to a 12-month operating cycle.

The Group's policy is to reclassify land inventory from non-current to current assets when there is a high likelihood that permits will be obtained within 12 months from the end of the reporting period.

B. Format of Expense Classification in the Statement of Profit or Loss:

The Company's expenses in the statement of profit or loss and other comprehensive income are presented based on the function of the expense. The Group believes that, given the Group's organizational structure, this classification provides more reliable and relevant information.

Note 2 – Principal Accounting Policies (continued):

C. Foreign Currency:

(1) Functional and Presentation Currency:

The financial statements of each of the Group's companies are prepared in the currency of the primary economic environment in which it operates (hereinafter: the "Functional Currency"). For the purpose of consolidating the financial statements, the results and financial position of each of the Group's companies are translated into NIS, which is the Functional Currency of the Company. For information regarding exchange rates and changes therein during the reporting periods, refer to Section U below.

(2) Transactions in a Currency Other than the Functional Currency:

In preparing the financial statements of each of the Group's companies, transactions in currencies other than the respective company's Functional Currency (hereinafter: "Foreign Currency") are recorded at the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in Foreign Currency are translated at the exchange rates prevailing at that date; non-monetary items measured at fair value and denominated in Foreign Currency are translated at the exchange rates at the date when the fair value was determined; non-monetary items measured in terms of historical cost are translated at the exchange rate at the date of the transaction related to the non-monetary item.

(3) Recognition of Exchange Differences:

Exchange differences are recognized in profit or loss in the period in which they arise, except in the following cases:

Exchange differences relating to assets under construction for sale are included in the cost of such assets when they represent an adjustment to interest costs on Foreign Currency borrowings (regarding the Group's accounting policy for capitalization of borrowing costs, refer to Section K below).

• Exchange differences arising on monetary items receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely to occur and thus form part of the net investment in the foreign operation, are recognized in other comprehensive income under "Exchange Differences Arising from Translation of Foreign Operations."

(4) Translation of Financial Statements of Subsidiaries Whose Functional Currency is Different from the NIS:

For the purpose of presenting the consolidated financial statements, the assets and liabilities of foreign operations are translated at the exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates during the reporting period unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Translation differences are recognized in other comprehensive income under "Exchange Differences Arising from Translation of Foreign Operations."

D. Cash and Cash Equivalents:

Cash and cash equivalents include cash on hand, demand deposits, and short-term deposits that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value, with original maturities of three months or less at the date of investment.

E. Restricted Cash and Cash Equivalents:

Cash restricted for use by the Group under credit agreements, or which is designated for use solely for specific projects in accompanying bank accounts for such projects and cannot be withdrawn by the Company without bank approval, is classified as restricted cash. In addition, deposits that are restricted in use or have original maturities of more than three months at the date of investment are classified under restricted cash. Classification between current and non-current assets is based on the term of the deposit/restriction period and the applicable operating cycle.

Note 2 – Principal Accounting Policies (continued):

F. Consolidated Financial Statements:

(1) General:

The consolidated financial statements of the Group include the financial statements of the Company and entities controlled by the Company, directly or indirectly. An investing entity controls an investee when it is exposed to, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The results of operations of subsidiaries acquired or disposed of during the reporting period are included in the consolidated statement of profit or loss from the date control is obtained or until the date control ceases, as applicable.

(2) Non-Controlling Interests:

Non-controlling interests in the net assets of consolidated subsidiaries are presented separately within the Group's equity. Non-controlling interests include the amount of those interests at the date of the business combination (refer below) and their share in changes in equity subsequent to the business combination date.

In cases where the Company has contractual arrangements that include "waterfall" mechanisms for profit distribution—meaning the distribution rates differ from the equity ownership percentages (Members) in the subsidiaries (based on the cumulative return on equity investments)—the Company applies the Hypothetical Liquidation at Book Value method.

Under this method, the share of the Company and the non-controlling interests in the results of the subsidiary is determined based on a hypothetical liquidation of the subsidiary at the end of the reporting period, assuming the subsidiary sells or distributes its assets and settles its liabilities at carrying amount, taking into account additional contributions or distributions made by other equity holders.

G. Joint Arrangements:

A "joint arrangement" is a contractual arrangement whereby the Group and other parties undertake an economic activity subject to joint control. Joint control exists when the contractual arrangement requires unanimous consent of the parties sharing control over decisions regarding the relevant activities.

There are two types of joint arrangements. The classification depends on the rights and obligations of the parties:

A "joint venture" is a joint arrangement whereby the parties have rights to the net assets of the arrangement.

In joint arrangements classified as joint ventures, the Group accounts for the joint venture as an investment and applies the equity method. For details on the equity method, refer to Note 2(H) below.

The Company holds a 55.9% interest in Vertical City Ltd., which is accounted for using the equity method since the agreement with the partner grants them joint control over the decision-making related to the relevant activities that affect the investee's returns. For more information, refer to Note 8b(4)g.

A "joint operation" is a joint arrangement in which the parties to it have rights in the assets and obligations regarding the liabilities that relate to the arrangement, in proportion to their share in the assets and liabilities of the joint operation, including assets held and liabilities incurred jointly. The balance sheet includes the Group's proportional share in the assets and liabilities of the joint operation. The profit and loss statement includes the Group's proportional share in the income and expenses of the joint operation, including income generated and expenses incurred jointly.

Transactions between Group companies and jointly controlled operations held by the Company are recognized only to the extent of the other parties' interests in the joint operation.

Note 2 – Principal Accounting Policies (continued):

H. Investments in Companies Accounted for Using the Equity Method (Associates and Joint Ventures):

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor a joint arrangement.

The results, assets, and liabilities of associates and joint ventures are included in these financial statements using the equity method.

Under the equity method, investments in associates and joint ventures are recognized in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group's share of the investee's net assets, including capital reserves, less any impairment in the value of the associate or joint venture, if any.

I. Fixed Assets:

(1) General:

Items of fixed assets of the Group are presented in the statement of financial position at cost less accumulated depreciation, except for the Group's hotels (land component under lease agreement), as described below, and less accumulated impairment losses. Cost includes the purchase price of the asset and directly attributable costs necessary to bring the asset to the location and condition for the operation as intended by management.

Items of fixed assets within the Group's hotel segment (land component under lease agreement) are presented in the statement of financial position at revalued amounts. The revalued amounts represent the fair value of those assets at the date of the revaluation, determined based on market-based evidence through valuation by qualified appraisers, less any subsequent accumulated depreciation.

Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from the fair value at the end of the reporting period. Increases in the carrying amount of revalued items of fixed assets are recognized in other comprehensive income, except for increases that reverse a previous revaluation decrease recognized in profit or loss, which are recognized in profit or loss. Decreases in the carrying amount resulting from a revaluation are first recognized in other comprehensive income to the extent of any revaluation surplus for that asset, and any remaining decrease is recognized in profit or loss. When a revalued asset is sold or retired, the related revaluation surplus is transferred directly to retained earnings or is transferred during the use of the asset by the entity in an amount equal to the difference between depreciation based on the revalued carrying amount and depreciation based on the original cost.

(2) Depreciation of Fixed Assets:

Depreciation of fixed assets is performed separately for each significant depreciable component of a fixed assets item. Depreciation is calculated using the straight-line method over the estimated useful lives of each component from the date the asset is ready for its intended use, considering the expected residual value at the end of its useful life. The cost of fixed assets includes the initial estimate of the cost of dismantling and removing the asset and restoring the site on which it is located.

The estimated useful lives and depreciation rates used in the calculation are as follows:

	Useful life	Depreciation rates
Buildings (including hotels and right-of-use properties)	25 years	1%-4%
Office furniture and equipment	6-17 years	6% - 15%
Installations and leasehold improvements	10 years	10%
Computers and software	3 years	33%

Note 2 – Principal Accounting Policies (continued):

I. Fixed Assets (continued):

(2) Depreciation of Fixed Assets (continued):

Residual values, depreciation methods, and useful lives are reviewed by the Company's management at each financial year-end. Any changes are accounted for as changes in estimates on a prospective basis.

Gains or losses arising from the sale or disposal of an item of fixed assets are determined as the difference between the proceeds from the sale and the carrying amount at the time of sale or disposal and are recognized in profit or loss.

(3) Subsequent Costs:

The cost of replacing a part of an item of fixed assets is recognized in the carrying amount of the item if it is probable that the future economic benefits associated with the item will flow to the entity and its cost can be measured reliably. Routine maintenance costs are recognized in profit or loss as incurred.

J. Investment Property:

Investment property is property (land or a building—or part of a building—or both) held by the Group to earn rental income, for capital appreciation, or both, and not for use in the production or supply of goods or services or for administrative purposes, or for sale in the ordinary course of business. Investment property also includes properties under construction or development for future use as investment property.

The Group's investment property includes land owned or held under long-term lease from the Israel Land Authority. Investment property is initially measured at cost and subsequently measured at fair value at each reporting date. Gains or losses arising from changes in the fair value of investment property, including those due to changes in exchange rates, are recognized in profit or loss in the period in which they arise under "Increase in Fair Value of Investment Property" or "Decrease in Fair Value of Investment Property," respectively.

Investment property under development intended for future use as investment property is also measured at fair value as described above, provided the fair value can be reliably measured. The cost basis of investment property under development includes the cost of the land plus directly attributable planning and development costs and borrowing costs incurred for the construction.

Direct costs incurred in the realization of investment property are recognized in profit or loss at the time of sale and offset against the realized gain.

When a property previously classified as investment property is reclassified to inventory, its deemed cost is the fair value at the date of the change in use.

K. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction, or production of qualifying assets assets that necessarily take a substantial period of time to get ready for their intended use or sale (including investment property measured at fair value)—are capitalized as part of the cost of those assets until the assets are substantially ready for their intended use or sale.

Borrowing costs relating to general borrowings are capitalized to qualifying assets using a capitalization rate. The capitalization rate is the weighted average of the borrowing costs applicable to the Company's general borrowings during the period, excluding specific borrowings.

In the area of real estate development in Israel, the Group ceases capitalizing borrowing costs to inventory at the point when non-conditional sales can be made, representing the time when substantially all activities required for the sale have been completed.

All other borrowing costs are recognized in profit or loss when incurred.

The Group stops capitalizing borrowing costs to inventory when unconditional sales can be carried out, which constitutes the date on which all actions required for the sale have substantively ended.

Note 2 – Principal Accounting Policies (continued):

L. Inventory of Land, Buildings, and Apartments for Sale:

Inventory of land, buildings, and apartments for sale includes land and buildings under construction by the Group for the purpose of sale in the ordinary course of business. The cost of inventory includes direct costs of land acquisition (including purchase taxes), materials, subcontractor work, and capitalized borrowing costs as detailed in Note 2K. Fees for sale law guarantees are considered part of inventory costs (including fees for related credit lines).

Inventory of residential land, buildings, and apartments is measured at the lower of cost and net realizable value. In subsequent periods, for sold apartments, the residential apartment inventory is charged to cost of sales based on the percentage of completion.

The Group allocates costs to each sales contract individually to reflect the contract's cost pricing relative to the customer, as described below: land costs (including fees, levies, and land financing) and other shared construction costs that cannot be attributed to a specific apartment are allocated to each contract in proportion to the apartment's sale price relative to the total sales of the entire building.

Net realizable value represents the estimated selling price in the ordinary course of business less the estimated costs of completion, estimated costs necessary to make the sale, and estimated project-specific financing costs not yet charged to the statement of profit or loss.

The Group reclassifies land inventory from non-current assets to current assets when excavation and shoring permits and/or a building permit are expected to be obtained within 12 months from the reporting date.

The Group allocates costs in mixed-use properties based on relative fair value.

M. Financial Assets:

(1) General:

Investments in financial assets are initially recognized at fair value plus transaction costs, except for those financial assets classified at fair value through profit or loss, which are initially recognized at fair value.

(2) Classification of Financial Assets:

Debt instruments are measured at amortized cost when both of the following conditions are met:

• The Group's business model is to hold the assets in order to collect contractual cash flows; and
• The contractual terms of the asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All other financial assets are measured at fair value through profit or loss.

(3) Financial Assets Measured at Amortized Cost and the Effective Interest Method:

The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition less principal repayments, plus or minus the cumulative amortization, using the effective interest method, of any difference between the initial amount and the maturity amount, adjusted for any loss allowance.

The effective interest method is a method of calculating the amortized cost of a debt instrument and allocating and recognizing interest income in profit or loss over the relevant period. Interest income is calculated using the effective interest method.

Note 2 – Principal Accounting Policies (continued):

M. Financial Assets (continued):

(4) Financial Assets at Fair Value Through Profit or Loss:

Financial assets at fair value through profit or loss are measured at fair value at the end of each reporting period. Any gain or loss resulting from changes in fair value is recognized in profit or loss in the period in which the change occurs. The net gain or loss recognized in profit or loss includes any dividend or interest income earned on the financial asset.

Interest income from debt instruments measured at fair value through profit or loss is included in the finance income section.

N. Financial Liabilities and Equity Instruments Issued by the Group:

(1) Classification as Financial Liability or Equity Instrument:

Liabilities and equity instruments issued by the Group are classified as either financial liabilities or equity instruments based on the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

(2) Equity Instruments:

An equity instrument is any contract that evidences a residual interest in the Group's assets after deducting all its liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issuance costs.

In transactions where non-controlling interests transfer their investments into a partnership controlled by the Company, and the redemption date is at the sole discretion of the general partner, such interests are classified as non-controlling interests.

(3) Financial Liabilities:

Financial Liabilities at Amortized Cost:

Financial liabilities not measured at fair value through profit or loss are initially recognized at fair value less transaction costs. After initial recognition, such financial liabilities are measured at amortized cost using the effective interest rate method.

O. Revenue Recognition:

Revenue is measured at the fair value of the consideration received or receivable for the sale of goods or the rendering of services in the ordinary course of business. Revenue is presented net of estimated discounts and similar adjustments. Sales that include credit terms with a financing component are presented at their present value, calculated using a discount rate that reflects the difference between the nominal sale price and the cash sale price of the goods or services.

(1) Revenue from Brokerage and Marketing Fees:

Revenue from real estate brokerage and marketing services is recognized based on the entitlement to income according to the brokerage or marketing contracts in the transaction. Revenue is recognized when the Company satisfies a performance obligation by transferring the promised services to the customer. Revenue is recognized over time during the reporting period in which the brokerage and marketing services are provided.

Note 2 – Principal Accounting Policies (continued):

O. Revenue Recognition (continued):

(2) Revenue from Management Fees:

The Group is entitled to receive management fee income from purchasing groups in accordance with management agreements signed with group members, which define, among other things, the distribution of management fees according to specific project milestones. Revenue from management fees is recognized no earlier than when a milestone is achieved in accordance with the management agreement. Upon achievement of a milestone and fulfillment of the related performance obligation entitling the Group to management fees for a specific project, the Group determines the portion of the management fee income to be recognized based on the ratio between the investment and expenses incurred to date in managing the purchasing group and the estimated total investment and expenses required to manage the group until the project's completion.

(3) Dividend Revenue:

Dividend revenue from investments is recognized when the right to receive the dividend is established.

(4) Rental Revenue:

Rental revenue is recognized on a straight-line basis over the lease term. Any fixed increase in rent over the lease period is recognized as revenue on a straight-line basis over the lease term.

(5) Revenue Recognition from Sale of Land Inventory:

The Group recognizes revenue from the sale of land inventory when control over the land is transferred to the customer.

For the judgment applied by the Company regarding revenue recognition, refer to Note 4(b).

(6) Revenue Recognition from the Sale of Apartments:

The Group engages in residential real estate development for the construction and sale of residential apartments in Israel. Upon signing a contract with a customer, and in accordance with its terms, the Group identifies the residential units as performance obligations.

The Group has concluded, based on the applicable legal and regulatory framework in Israel's real estate development sector, and supported by legal opinions, that under its customer contracts, the asset does not have an alternative use to the Group, and that it has an enforceable right to payment for performance completed to date. Accordingly, the Group recognizes revenue from such contracts over time, based on the progress of contract performance.

Determination of the Transaction Price:

The Group is required to determine the transaction price separately for each customer contract. In applying this judgment, the Group evaluates the impact of any variable consideration in the contract, considering discounts, penalties, variations, claims, the existence of a significant financing component, and any non-cash consideration.

In determining the impact of variable consideration, the Group typically uses the "most likely amount" method, as stated in the standard, whereby the transaction price is determined based on the single most likely amount within the range of possible consideration amounts under the contract.

Note 2 – Principal Accounting Policies (continued):

O. Revenue Recognition (continued):

(6) Revenue Recognition from the Sale of Apartments (continued):

Measurement of Progress Toward Completion:

The Company applies the input method to measure progress when performance obligations are satisfied over time. The Company believes that using the input method (incurred costs), which recognizes revenue based on the inputs invested to fulfill the performance obligation, most appropriately reflects the revenue earned. To apply the input method, the Company estimates the cost necessary to complete the project to determine the amount of revenue to be recognized. These estimates include the cost of providing infrastructure (such as materials, labor hours, equipment, etc.), potential contractor claims as assessed by the project consultant, and the cost of fulfilling other contractual performance obligations to customers. The Company does not include in the calculation of "percentage of completion" any costs that do not reflect progress in performance, such as land cost, fees and levies, and borrowing costs.

Revenue Recognition for Contracts Signed After Progress Has Begun:

In cases where the Company begins work related to an expected contract before a binding contract has been signed with the customer, or before the contract reaches the stage at which revenue can be recognized under the revenue recognition model, upon contract signing, the Company recognizes cumulative revenue ("Catch Up") reflecting the performance obligations that have been partially or fully completed as of the contract signing date.

Warranty Obligations:

To assess whether a warranty provides a separate service to the customer, the Group considers, among other factors: whether the customer can purchase the warranty separately; whether the warranty is required by law; the duration of the warranty period; and the nature of the tasks the Group undertakes to perform.

In real estate development contracts, the Group provides warranties to customers according to the contract, applicable laws, or industry practices. When the warranty is intended solely to ensure the quality of the work and compliance with the agreed-upon specifications, it does not constitute a separate service to the customer. Accordingly, in such cases, the Group does not recognize the warranty as a separate performance obligation but accounts for it in accordance with IAS 37 and recognizes a provision for warranty based on an estimate of the related service costs. The provision for warranty is recognized even if the contractor is contractually obligated to provide warranty services to the Company's customers.

Contract Asset and Contract Liability:

A contract asset (receivable revenue) is recognized when the Group has a right to consideration for goods or services transferred to the customer and the right is conditional on something other than the passage of time, such as future performance by the Group. Contract assets are classified as receivables when the rights become unconditional.

A contract liability (advance payments) is recognized when the Group is obligated to transfer goods or services to a customer for which it has received consideration from the customer (or when the amount is due).

An asset and a liability relating to the same contract are presented on a net basis in the statement of financial position. However, contract assets and contract liabilities arising from different contracts are presented on a gross basis in the statement of financial position.

(7) Revenue from Hotel Operation and Management:

Revenue from hotel operations and hotel services is recognized in the reporting period in which the services are provided, as the customer simultaneously receives and consumes the benefits provided by the Group.

In addition, the Group is entitled to management fee income under management agreements for ongoing management and consulting services in the hotel and tourism sectors.

Note 2 – Principal Accounting Policies (continued):

O. Revenue Recognition (continued):

(8) Revenue Recognition on a Gross or Net Basis:

In transactions where the Group acts as an agent or intermediary without bearing the risks and rewards of the transaction, the Group's revenues are presented on a net basis. Revenue from transactions in which the Group is the principal and bears the associated risks and rewards is presented on a gross basis.

The Group assesses that in real estate management service transactions, it controls the service before it is transferred to the customer, and therefore revenue from such services is presented on a gross basis. The Group has determined that it controls the services because it is primarily responsible for fulfilling the promise to provide the service and has discretion in setting the price charged to the end customer.

P. Leases:

The Group as Lessee:

The Group assesses whether a contract is (or contains) a lease at the contract engagement date. The Group recognizes a right-of-use asset and a lease liability for all lease contracts in which it is the lessee (primarily in the hotel segment), except for short-term leases (up to 12 months) and leases of low-value assets. For such leases, the Group recognizes lease payments as an operating expense on a straight-line basis over the lease term, unless another systematic basis better represents the Group's pattern of consumption of economic benefits from the leased assets.

The lease term is defined as the non-cancellable period during which the lessee has the right to use the underlying asset, together with:

• Periods covered by an option to extend the lease if it is reasonably certain the lessee will exercise that option; and
• Periods covered by an option to terminate the lease if it is reasonably certain the lessee will not exercise that option.

In determining the lease term, the Group considers extension options that are reasonably certain to be exercised at lease commencement. The likelihood of exercising extension options is evaluated considering factors such as lease payments during extension periods versus market rates, significant improvements made by the Group expected to provide substantial economic benefit during the extension period, costs related to terminating the lease (negotiation, relocation, finding a replacement asset), the asset's importance to the Group's operations, the leased asset's location, and the availability of suitable alternatives.

The lease liability is initially measured at the present value of lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Group uses its incremental borrowing rate. The lessee's incremental borrowing rate is defined as the interest rate the lessee would have to pay to borrow over a similar term and with similar security the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment.

Lease payments included in the measurement of the lease liability comprise:

• Fixed lease payments (including substantively fixed payments), less any lease incentives received;
• Variable lease payments that depend on an index or rate, measured initially using the index or rate as of the commencement date;
• Amounts expected to be payable by the lessee under residual value guarantees;
• The exercise price of a purchase option if it is reasonably certain the lessee will exercise that option;
• Penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

Note 2 – Principal Accounting Policies (continued):

P. Leases (continued):

The Group as Lessee (continued):

The lease liability is presented as a separate item in the statement of financial position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability using the effective interest method and by reducing the carrying amount to reflect lease payments made. Foreign exchange differences on a lease liability denominated in a foreign currency are recorded in finance expenses in the statement of profit or loss when incurred.

The Group remeasures the lease liability (with a corresponding adjustment to the right-of-use asset) when:

• The lease term changes or there is a change in the assessment of an option to purchase the underlying asset. In this case, the lease liability is remeasured by discounting the revised lease payments using an updated discount rate.
• Future lease payments change due to a change in an index or rate used to determine those payments (e.g., CPI-linked leases) or when there is a change in expected payments under a residual value guarantee. In such cases, the lease liability is remeasured using the original discount rate, unless the lease payments change due to changes in variable interest rates, in which case an updated discount rate is used.
• A lease modification occurs that is not accounted for as a separate lease. In such a case, the lease liability is remeasured by discounting the updated lease payments using a revised discount rate. If the lease modification reduces the lease scope, a gain or loss is recognized reflecting the full or partial termination of the lease.

The Group did not make any such adjustments during the presented reporting periods.

The cost of the right-of-use asset comprises the initial measurement of the lease liability, any lease payments made on or before the commencement date, and initial direct costs. Subsequently, the right-of-use asset is measured at cost less accumulated depreciation and impairment losses.

The right-of-use asset is measured under the cost model and depreciated on a straight-line basis over the shorter of the lease term and the useful life of the asset. If the lease transfers ownership of the underlying asset to the Group or if the cost of the right-of-use asset reflects the exercise of a purchase option, the right-of-use asset is depreciated on a straight-line or output basis over the useful life of the underlying asset. Depreciation begins at the commencement date of the lease.

The Group applies the provisions of IAS 36 Impairment of Assets to assess whether the right-of-use asset is impaired and to account for any identified impairment losses.

The right-of-use asset is presented as a separate item in the statement of financial position.

Variable lease payments that are not based on an index or rate (e.g., payments based on a percentage of sales or output) are not included in the measurement of the lease liability or the right-of-use asset. These lease payments are recognized as an operating expense in the period in which the event or condition that triggers those payments occurs and are presented under "Other Expenses" in the statement of profit or loss and other comprehensive income.

Q. Provisions:

Provisions are recognized when the Group has a legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision represents the best estimate by management of the expenditure required to settle the present obligation at the date of the statement of financial position, considering risks and uncertainties of the obligation. Where a provision is measured using estimated future cash flows, the provision's carrying amount is the present value of those cash flows. Changes due to the time value are recognized in profit or loss.

Where the Group expects some or all of the expenditure required to settle a provision to be reimbursed by another party, it recognizes an asset for the reimbursement only when it is virtually certain that the reimbursement will be received and the amount can be reliably measured.

Note 2 – Principal Accounting Policies (continued):

R. Income Taxes:

(1) General:

Income tax expenses (income) include both current taxes and changes in deferred tax balances, excluding deferred taxes related to transactions recognized directly in equity.

(2) Current Taxes:

Current tax expenses are calculated based on the taxable income of the Company and its consolidated subsidiaries during the reporting period. Taxable income differs from profit before taxes on income due to the inclusion or exclusion of income and expense items that are taxable or deductible in different reporting periods, or not taxable/deductible at all. Current tax assets and liabilities are calculated based on enacted or substantively enacted tax rates and tax laws as of the date of the statement of financial position.

(3) Deferred Taxes:

The Group's companies create deferred taxes for temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax balances (asset or liability) are calculated based on the tax rates expected to apply when the temporary differences reverse, using tax rates and laws that have been enacted or substantively enacted by the date of the statement of financial position. Deferred tax liabilities are generally recognized for all temporary differences between the tax value of assets and liabilities and their value in the financial statements. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable income will be available against which the deductible temporary difference can be utilized.

In calculating deferred taxes, taxes that would apply in the event of realization of investments in subsidiaries are not taken into account, as the Group intends to hold and develop those investments. Likewise, deferred taxes on dividend distributions from such entities are not recognized if the dividends are tax-exempt or if there is a decision not to distribute taxable dividends in the foreseeable future.

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

Deferred taxes on temporary differences related to investment property are determined based on the tax rate expected upon reversal of the temporary difference, assuming the reversal will occur through sale of the asset.

S. Employee Benefits:

Short-Term Employee Benefits:

Short-term employee benefits are those expected to be settled in full within 12 months after the end of the reporting year in which the employee has rendered the related service.

Short-term employee benefits in the Group include the Group's obligation for salaries, vacation days, sick leave, recreation pay, and employer contributions to National Insurance. These benefits are recognized in profit or loss when they are incurred. The benefits are measured on an undiscounted basis at the amount the Company expects to pay. The difference between the short term benefits to which the employee is entitled and the amounts paid is recognized as an asset or a liability.

Note 2 – Principal Accounting Policies (continued):

T. Classification of Interest, Dividends, and Taxes Paid or Received in the Statement of Cash Flows:

The Group classifies cash flows from interest and dividends received and interest paid as cash flows from operating activities. Cash flows related to capitalized interest on qualifying assets are classified consistently with other payments made for those assets. Dividends paid by the Group are classified as cash flows from financing activities.

Cash flows related to income taxes are generally classified as cash flows used in operating activities, except for those which can be clearly associated with investing or financing activities.

U. Voluntary Change in Accounting Policy:

(1) Presentation of the Company's Share in in Results of Investments Under the Equity Method:

The Company has elected to classify its share in the results of investments accounted for under the equity method as part of operating profit, rather than presenting it after operating profit and finance expenses. Management believes this presentation provides more reliable and relevant information regarding the Company's operating profit, which now includes the results of companies accounted for under the equity method, operating in the same business segments as the Group.

(2) Adoption of the Revaluation Model for Hotels Owned by the Company:

As of December 31, 2024, the Company changed its accounting policy for measuring hotels it owns (land component under lease agreement) from the cost model to the revaluation model. Management believes that measurement under the revaluation model provides more reliable and relevant information regarding the Company's financial position and equity, and improves comparability with financial statements of other companies operating in the same field.

The change to the revaluation model for hotels will be applied prospectively. Accordingly, until this date, the Company's hotels were presented under the cost model, net of accumulated depreciation.

In light of this, the Company remeasured the carrying amount of its owned hotels to their fair value as of December 31, 2024, in a total amount of approximately NIS 175 million. The revaluation was recorded to the revaluation reserve in equity, net of tax effect in the amount of approximately NIS 135 million. In subsequent periods, the fixed assets will be presented at fair value less accumulated depreciation and less impairment. Revaluations will be performed regularly to ensure that the carrying amount in the financial statements does not differ materially from fair value at the reporting date.

V. Exchange Rates and Indexation Basis:

Balances in or linked to foreign currencies are included in the financial statements based on the representative exchange rates published by the Bank of Israel and valid as of the end of the reporting period.

	Representative exchange rate of		Known	Known
	Dollar (NIS to USD 1)	Euro (NIS to EUR 1)	Ruble (NIS to RUB 1)	Consumer Price Index Points	Construction Inputs Index Points
Date of the financial statements:
As of December 31, 2024	3.647	3.7964	0.03	108.4	133.6
As of December 31, 2023	3.627	4.0116	0.04	105	129.8
As of December 31, 2022	3.519	3.753	0.048	107.9	127.3
Change rates:	%	%	%	%	%
For year ended on:
On December 31, 2024	0.55	(5.36)	(25)	3.24	2.93
On December 31, 2023	3	6.89	(16.67)	(2.68)	1.96
On December 31, 2022	13	6.6	14.29	5.28	5.03

Note 3 – New Financial Reporting Standards, Published Interpretations, and Amendments to Standards

• A. New standards, new interpretations, and amendments to standards affecting the current period and/or prior reporting periods:
  • Amendments to IAS 1 "Presentation of Financial Statements" (regarding the classification of liabilities as current or non-current):

In 2020, an amendment to IAS 1 was published regarding the classification of liabilities as current or noncurrent (hereinafter: the "2020 Amendment"). The amendment clarified that the classification of liabilities as current or non-current is based on the rights existing to the entity as of the end of the reporting period and is not affected by the entity's expectations regarding the exercise of such rights.

The amendment removed the reference to the existence of an "unconditional right" to defer settlement of a liability for at least 12 months after the reporting period and clarified that if the right to defer settlement is subject to meeting financial covenants, the right exists if the entity meets the covenants as of the reporting date, even if compliance is assessed by the lender at a later date.

Additionally, the amendment introduced a definition for the term "settlement," clarifying that settlement may include the transfer of cash, goods, services, or the entity's own equity instruments to the counterparty. In this context, it was clarified that if, according to the terms of the liability, the counterparty has an option to demand settlement in the entity's own equity instruments, such a condition does not affect the classification of the liability as current or non-current if the option is classified as a separate equity component under IAS 32 "Financial Instruments: Presentation."

The amendment affects only the classification of liabilities as current or non-current in the statement of financial position, not the amount or timing of recognition of such liabilities or related income and expenses.

In October 2022, an additional amendment regarding the classification of liabilities with financial covenants was published (hereinafter: the "2022 Amendment"), which clarified that only financial covenants that the entity must comply with as of or before the end of the reporting period affect the entity's right to defer settlement of a liability for at least 12 months after the reporting period, even if compliance is actually assessed after the reporting date. In contrast, financial covenants required to be met after the reporting date do not affect the existence of such a right as of the end of the reporting period.

Additionally, the 2022 Amendment requires that the entity's right to postpone the settlement of the liability for at least 12 months after the reporting period is subject to the entity meeting the financial criteria within 12 months after the reporting period, the entity is required to provide disclosure that will allow the users of the financial statements to understand the involved risks.

All other changes introduced in the 2020 Amendment remain unchanged. The 2020 and 2022 Amendments became mandatorily effective for annual reporting periods beginning on or after January 1, 2024.

The amendment did not have a material impact on the financial statements.

• IFRS IC Decision regarding Disclosure of Income and Expenses for Reportable Segments:

In July 2024, the IASB approved the IFRS Interpretations Committee's (IFRS IC) decision regarding disclosure of income and expenses for reportable segments (hereinafter: the "Decision").

The Decision addresses the application of the disclosure requirements under Section 23 of IFRS 8 "Operating Segments" and clarifies that disclosure must include "material items of income and expense" if they are included in the measure of profit or loss reviewed by the Chief Operating Decision Maker (CODM), even if not separately provided to them. Additionally, it was clarified that "material items of income and expense" are not limited only to unusual or one-time items.

The Decision also clarified that judgment is required in determining the extent of disclosure to be included in segment reporting, considering the entity's specific facts and circumstances, the core principle of IFRS 8, and the materiality principles in IAS 1 "Presentation of Financial Statements."

The Company implemented the Decision in these financial statements retrospectively. As a result, the Company added information regarding material expense items in the segment note, refer to Note 28.

Note 3 – New Financial Reporting Standards, Published Interpretations, and Amendments to Standards (continued):

• A. New standards, new interpretations, and amendments to standards affecting the current period and/or prior reporting periods (continued):
  • Amendment to IFRS 10 "Consolidated Financial Statements" and IAS 28 "Investments in Associates and Joint Ventures" (regarding the sale or transfer of assets between an investor and its associate or joint venture):

The amendment states that when assets that constitute a "business" are sold or transferred to an associate or joint venture, or when control is lost over a subsidiary that constitutes a "business" while retaining joint control/significant influence, the full gain or loss from the transaction should be recognized, including the loss of control. Conversely, if the sold/transferred assets do not constitute a "business," or the subsidiary does not constitute a "business," only the portion of gain or loss attributable to the other investors in the associate or joint venture should be recognized. No effective date has been set for the amendment. Early adoption is permitted.

• B. Standards, interpretations, and amendments to standards that have been published but are not yet effective and have not been early adopted by the Group, and which are expected or may have an impact on future periods:
  • Amendment to IAS 21 "The Effects of Changes in Foreign Exchange Rates" (regarding lack of exchangeability):

The amendment defines that exchangeability exists when a currency can be exchanged into another currency and the entity can obtain the other currency through a market mechanism or exchange that creates enforceable rights and obligations within a reasonable timeframe (administrative delays do not impair exchangeability).

If the entity can obtain no more than an insignificant amount of the other currency at the measurement date for a specific purpose, exchangeability does not exist. Note that the assessment of whether exchangeability exists depends on the entity's ability to obtain the other currency, not on its intention or decision to do so.

The amendment further stipulates that when exchangeability does not exist, an entity must estimate the spot exchange rate at the measurement date to reflect the rate at which a typical exchange transaction would occur on that date between market participants under current economic conditions.

The amendment does not prescribe how the entity should estimate the spot exchange rate to meet this objective but notes that the entity may use an observable exchange rate without adjustments (e.g., the first subsequent exchange rate available) or another estimation technique that includes necessary adjustments to meet the objective.

Additionally, the amendment requires disclosure when exchangeability does not exist and the entity estimates the spot exchange rate. This disclosure should enable users of the financial statements to understand how the currency that lacks exchangeability affects, or is expected to affect, the entity's financial performance, financial position, and cash flows.

The amendment is effective for annual reporting periods beginning on or after January 1, 2025. Early adoption is permitted, provided the entity discloses such adoption. Comparative information need not be restated upon adoption. Alternatively, if the translation relates to the entity's functional currency where exchangeability does not exist, upon initial adoption, the entity must translate monetary items affected by the foreign currency and non-monetary items measured at fair value in the foreign currency using an estimated spot exchange rate at that date, with the adjustments recognized in the opening balance of retained earnings.

If the translation relates to the entity's presentation currency where exchangeability does not exist, the entity must translate the affected assets and liabilities at the estimated spot exchange rate on that date. Additionally, if the entity's functional currency is hyperinflationary, the capital items affected must also be translated at the estimated spot exchange rate on that date, with any resulting adjustments recorded in the opening balance of the translation reserve in equity.

Note 3 – New Financial Reporting Standards, Published Interpretations, and Amendments to Standards (continued):

• B. Standards, interpretations, and amendments to standards that have been published but are not yet effective and have not been early adopted by the Group, and which are expected or may have an impact on future periods (continued):
  • IFRS 18 "Presentation and Disclosure in Financial Statements":

On April 9, 2024, IFRS 18 was issued, replacing IAS 1 "Presentation of Financial Statements." The objective of the standard is to enhance how entities communicate information to users of their financial statements.

Key changes introduced by the standard focus on the following areas:

• 1. Structure of the Statement of Profit or Loss introducing defined subtotals and categorization of items.
• 1. Requirements to improve aggregation and disaggregation of information in financial statements and notes.
• 1. Disclosure of management-defined performance measures (MPMs) which are non-GAAP performance metrics, in the notes to the financial statements.

Additionally, with the adoption of IFRS 18, amendments to other IFRS standards will come into effect, including amendments to IAS 7 "Statement of Cash Flows" aimed at improving comparability across entities. These changes mainly include: using operating profit as a uniform starting point for the indirect method in reporting cash flows from operating activities, and eliminating options for policy choice on the classification of interest and dividends. Accordingly, unless in specific cases, interest and dividends received will be included in investing cash flows, while interest and dividends paid will be included in financing cash flows.

The standard becomes effective for annual reporting periods beginning on or after January 1, 2027. It is to be applied retrospectively, with specific transition provisions. Early adoption is permitted but, according to the Israel Securities Authority, will be allowed only from periods beginning January 1, 2025 (Q1 2025 financial statements).

The Company is evaluating the impact of IFRS 18, including the amendments to other IFRS standards resulting from its adoption, on its financial statements.

• Amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" (regarding classification and measurement of financial instruments and additional disclosure requirements):

Key amendments to IFRS 9:

• A. Introduction of an option to derecognize a financial liability that has been settled through an electronic payment system before the settlement date, provided the following criteria are met:
  • The entity has no practical ability to withdraw, stop, or cancel the payment instruction;
  • The entity has no practical access to the cash used for the settlement due to the payment instruction;
  • Settlement risk related to the electronic payment system is not significant.

An entity electing this option must apply it to all liabilities settled using the same electronic payment system.

• B. Addition of application guidance and examples to assess whether the contractual cash flows of a financial asset represent solely payments of principal and interest on the principal amount outstanding for classification purposes of the financial asset.
• C. Clarification that a financial asset has "non-recourse" features if the entity's ultimate right to receive cash flows is contractually limited to those generated by specified assets.
• D. Clarification of the characteristics of contractually linked instruments (CLIs) that distinguish them from other arrangements.

Note 3 – New Financial Reporting Standards, Published Interpretations, and Amendments to Standards (continued):

B. Standards, interpretations, and amendments to standards that have been published but are not yet effective, and have not been early adopted by the Group, which are expected or may have an effect on future periods (continued):

Key amendments to IFRS 7:

• A. Update of disclosure requirements regarding investments in equity instruments designated at fair value through other comprehensive income.
• B. Addition of disclosure requirements regarding contractual terms that may change the timing or amount of contractual cash flows of financial instruments due to the occurrence (or non-occurrence) of a contingent event (e.g., achieving greenhouse gas emission reduction targets), which does not relate directly to changes in the basic loan agreement risks and costs (such as time value of money or credit risk).

The amendments will be effective for annual reporting periods beginning on or after January 1, 2026. Early adoption is permitted provided that either all amendments are applied simultaneously or only the amendments related to classification of financial assets are applied.

Entities must apply the amendments retrospectively. They are not required to restate prior periods upon initial application unless and only if it can be done without the use of hindsight.

Note 4 – Judgments in Applying Accounting Policy and Key Sources of Estimation Uncertainty

A. General:

In applying the Group's accounting policies, as described in Note 2 above, the Company's management is, in certain cases, required to exercise significant accounting judgment regarding estimates and assumptions related to the carrying amounts of assets and liabilities that are not necessarily readily available from other sources. It should be noted that actual results may differ from these estimates.

The estimates and assumptions on which they are based are reviewed by management on an ongoing basis. Changes in accounting estimates are recognized only in the period of the change if the change affects only that period, or in the period of the change and future periods if the change affects both current and future periods.

B. Judgments in Applying Accounting Policies:

The following refers to critical judgments, excluding those involving estimates, made by management in the process of applying the Group's accounting policies, which have the most significant effect on the amounts recognized in the financial statements.

Revenue Recognition:

Transfer of Control in the Sale of Land:

Revenue recognition from the sale of rights in land involves judgment in determining whether the Company has transferred control of the land.

This determination is primarily based on the following parameters:

• The Company does not guarantee the purchaser any return on investment or profit from the land.
• The Company does not guarantee the purchaser the achievement of a change in zoning (i.e., the land is sold on an "AS IS" basis).
• The Company can specifically identify the rights sold to each customer.

Note 4 – Judgments in Applying Accounting Policy and Key Sources of Estimation Uncertainty (continued)

B. Judgments in Applying Accounting Policies (continued):

Revenue Recognition (continued):

Transfer of Control in the Sale of Land (continued):

• The purchaser cannot cancel the sales agreement and return the rights in the land to the Company after the fulfillment of the agreement's conditions precedent.
• The Company does not control decision-making in the management entities after the transfer of control in the land.
• The land purchasers have the ability to replace the Company in providing land enhancement services after the sale.

During the reporting period, the Group recognized revenue from the sale of land inventory in the amount of approximately NIS 12 million attributed to the sale of rights in land. (In 2023 – the Group recognized revenue from the sale of land inventory in the amount of approximately NIS 30 million attributed to the sale of rights in land.)

C. Key Sources of Estimation Uncertainty:

(1) Impairment Testing of Land Inventory Balances:

Inventory is measured at the lower of cost or net realizable value. Net realizable value is determined based on the Company's assessment and, in some cases, external expert opinions, including the use of valuation reports that incorporate forecasts and estimates of expected proceeds from the sale of the inventory in the project and the development costs required to bring the inventory to a saleable state, net of financing (as detailed in Note 2L).

As of December 31, 2024, the carrying amount of short- and long-term land inventory balances totaled approximately NIS 4 billion at the end of the reporting period.

(2) Expected Costs Under Contract – The Group estimates progress toward completion using an input-based method, measuring execution progress based on the estimated total costs required to fulfill the performance obligation, in order to determine the completion percentage used to calculate the amount of revenue to be recognized per period. The Group believes that this method most appropriately reflects the transfer of control to the customer.

(3) Fair Value of Investment Property:

As noted in Note 2J, the Group's investment property is presented at fair value, with changes in fair value recognized in profit or loss as income or expenses.

To determine the fair value of investment property, the Company's management primarily relies on annual valuation reports prepared by independent, external real estate appraisers with the requisite knowledge, experience, and expertise. The Company's management generally determines fair value using standard valuation methods for real estate, such as discounted cash flow and comparable sales of similar assets or the Group's assets in nearby areas. When using the discounted cash flow method, the discount rate applied to the net expected cash flows from the asset has a significant impact on its fair value.

The fair value assessment considers, among other things and as applicable, the property's location and physical condition, the quality and fitness of tenants, lease terms, rental rates of comparable properties, necessary adjustments to current rents, and actual and projected occupancy levels. A change in one or more of these elements may significantly impact the fair value of the asset as estimated by Company management.

Note 4 – Judgments in Applying Accounting Policy and Key Sources of Estimation Uncertainty (continued):

(3) Fair Value of Investment Property (continued):

In determining the fair value of investment property under construction, considerations include, among others and as applicable, the project's construction period, rental income, additional costs required for construction through operation, the developer's profit margin, and the applicable discount rate. In assessing the fair value of land that the Company has not yet begun to develop, factors include location and comparable transactions of similar land (and sometimes the asset itself), with appropriate adjustments. Changes in the assumptions used in measuring investment property may lead to changes in fair value.

The Group strives to determine the most objective fair value possible; however, the fair value estimation process for investment property also includes subjective elements, partly based on the management's past experience and its understanding of expected market developments at the time the fair value estimate is made. Therefore, and as described above, the determination of fair value for the Group's investment property requires judgment. Changes in the assumptions used to determine fair value may significantly affect the Group's financial position and results of operations.

The carrying amount of investment property assets measured at fair value as of December 31, 2024, totaled approximately NIS 2,893 million (compared to approximately NIS 2,580 million in 2023), and for companies measured under the equity method, totaled approximately NIS 1,021 million (Company's share). In 2024, a net increase in the fair value of the Company's investment property was recorded in the amount of approximately NIS 27 million, and a net increase in the fair value of investment property of entities accounted for using the equity method was recorded in the amount of approximately NIS 110 million (Company's share).

For further details regarding the assumptions used by the Group in estimating the fair value of investment property, refer to Note 9C.

(4) Revaluation Model of Fixed Assets:

The Hotels are measured and presented in the Statement of Financial Position under the revaluation model. The revalued amounts represent the fair value of these assets at the date of the revaluation, determined based on market-based evidence through valuations performed by certified appraisers, less accumulated depreciation thereafter and less any accumulated impairment losses. In determining fair value, the Company takes into account, among other things and as applicable, discount rates for cash flows, estimates of projected net operating income (which are primarily affected by the expected annual growth rate in room revenues and occupancy rates, as well as the hotel's operating expense levels). The valuation also considers the estimated capital investments in the hotel. Any change in the value of one or more of these components and/or assumptions may materially affect the fair value of the hotel as estimated by the Company's management. These valuations are generally supported by a review of comparable transactions for indication purposes. Revaluations are carried out with sufficient regularity so that the carrying amount of the Hotels does not differ materially from the fair value that would have been determined at the end of each reporting period.

The Group strives to determine the most objective fair value possible; however, the process of estimating the fair value of the Hotel includes subjective elements, partially based on the Company management's understanding of expected developments in the hotel market at the time the fair value estimate is made. Accordingly, and in line with the above, determining the fair value of the Group's Hotels requires the exercise of judgment. Changes in the assumptions used in determining fair value may have a material impact on the Group's financial position and results of operations.

Note 5 – Cash and Cash Equivalents

A. Composition:

	As of December 31
	2024	2023 NIS thousands
	NIS thousands
Cash and cash equivalents	46,653	39,688
Cash equivalents - Shorts term deposits (1)	363,623	160,701
	410,276	200,389

(1) The average annual interest rate on short-term deposits of the Company is approximately Prime minus 1.7%.

B. Cash and Deposits in Use in Support Accounts:

	As of December 31
	2024	2023
	NIS thousands	NIS thousands
Shorts term:
For Project Rainbow (1), refer to Note 12b(1)	287,189	-
For the Midtown Jerusalem project(1), refer to Note 12b(2)	278,284	-
For the sale of apartment inventory in Israel	595	-
	566,068	-
Long-term:
For a commitment to a lender	5,266	5,138

(1) Within the framework of financing agreements, projects signed with financial institutions, cash received in projects for the construction of inventory of apartments under the Sale (Apartments) Law guarantee and therefore restricted (according to the terms set in the financing agreement) for use toward the development of the projects and/or repayment of specific bank credit in the projects.

Note 6 – Accounts Receivable

A. Accounts Receivable:

	As of December 31
	2024	2023
	NIS	NIS
	thousands	thousands
Current assets:
Expenses in advance	43,808	(*)30,844
Asset for contract costs	26,926	(*)8,830
Revenue received for marketing fees from an associate company	7,865	7,338
Institutes	7,063	7,830
Loans and partner balances	5,965	759
Loan for the manager in the Blue Atlit project	5,459	7,792
Revenue receivable from rental fees	5,310	4,648
Revenue received for marketing fees in WEM project – refer to Note 29a5	4,718	4,813
Revenue receivable for option trading	3,750	866
Deposits / funds in trust	3,332	1,845
Revenue receivable from marketing fees from investee companies	1,885	-
Revenue receivable for project management fees	1,642	6,600
Current maturities of lessee loans	968	1,152
Revenue receivable for marketing fees of Bereshit project	270	608
Open debts	96	4,262
Payments on account of purchase of an investee company	-	5,234
Provision for doubtful debts	(116)	(116)
Other accounts receivable	7,540	4,957
(*) Reclassified	126,481	98,262
Non-current assets:
Revenue receivable from rental fees	3,100	2,979
Loans to tenants	2,857	4,748
Long term deposits	859	-
Other	250	443
	7,066	8,170

B. Accounts Receivable in Respect of Hotels:

	As of December 31
	2024 NIS thousands	2023 NIS thousands
Current assets:
Expenses in advance	2,407	5,960
Receivables and customers for operating and managing hotels (including credit cards)	34,787	12,448
Loans and partner balances	-	177
Food and beverage inventory	415	261
Institutes	1,151	2,131
Deposits from tenants	-	296
Other accounts receivable	2,473	2,383
	41,233	23,656

Note 6 – Accounts Receivable (continued):

C. Receivables in Respect of Sale of Inventory of Land and Apartments under Construction:

	As of December 31
	2024	2023
	NIS thousands	NIS thousands
For real estate inventory:
In the "Ramat Hasharon Office" Project – refer to Note 15d	8,286	7,184
In the "Hod Hasharon West" Project	2,550	1,869
In the "Shvil Hatapuzim" Project	1,826	2,800
In the "Harakevet" Project – refer to Note 15l	1,096	1,064
In the "Uptown" Project – refer to Note 15c	389	381
In the "Turquoise" Project	279	276
In the "Sunset" Project	38	37
In the "Hatzuk Hazfoni" Project	-	4,144
Other	414	438
For inventory of buildings under construction:
Asset for a contract with customers in the "Ehad Ha'am" project – refer to Note 15e	4,402	43,888
	19,280	62,081

Note 7 – Inventory of Land, Buildings in Planning and Construction, and Advances on Account of Inventory of Land

A. Composition:

		As of December 31
		2024	2023
		NIS	NIS thousands
		thousands
	Inventory of real estate and buildings under planning and construction in short term:
(1)	Inventory of projects under planning and construction:
	"Rainbow" Project – refer to Note 15q	1,598,959	1,474,237
	"Midtown Jerusalem" Project – refer to Note 15m	610,450	400,261
	"Ehad Ha'am" Project – refer to Note 15e	25,158	55,908
	"SHE" Project – refer to Note 15h	390,456	369,558
(2)	Land inventory:
	"Business Village" Netanya Project - refer also to Note 15j	91,541	90,986
	Sunset Project	72,972	72,972
	Hatzuk Hazfoni Project	63,509	60,230
	"Turquoise" Project	42,069	40,962
	"Uptown" Project – refer also to Note 15c	25,527	25,527
	"Ramat Hasharon" Project - refer also to Note 15d	8,206	6,282
	"Shvil Hatapuzim" Project	4,552	4,686
	"Atlit" Project	2,308	2,292
	"Hod Hasharon West" Project	2,128	2,578
	Other	7,946	5,957
		2,945,781	2,612,436

Note 7 – Inventory of Land, Buildings in Planning and Construction, and Advances on Account of Inventory of Land (continued):

A. Composition (continued):

	As of December 31
	2024	2023
	NIS thousands	NIS thousands
Land inventory:
"Beit Hanaara" Project, Hod Hasharon - refer also to Note 15o	424,746	399,004
"Lapid" Project - refer also to Note 15g	306,150	295,457
"Dubnov" Project - refer also to Note 15x	361,375	-
"Emek Bracha" Project – refer to Note 15t	53,539	50,819
	1,145,810	745,280
Land inventory:
Rainbow Project	223,068	131,411
"Lapid" Project	61,856	51,169
"SHE" Project	57,558	40,242
"Beit Hanaara" Hod Hasharon Project	63,944	38,533
"Midtown Jerusalem" Project	62,208	33,275
"Dubnov" Project	6,423	-
"Ehad Ha'am" Project	2,639	5,244
	5,536	2,814
	483,232	302,688
Advances on account of real estate inventory: Current assets:
	47,780	-
	47,780	-
	Long-term real estate inventory: Financing costs capitalized in the real estate inventory (aggregate): "Emek Bracha" Project Advances on account of inventory of the "Northern Quarter" Project

B. Additional Information:

	As of December 31
	2024	2023
	NIS	NIS
	thousands	thousands
Carrying amount of inventory pledged as collateral for a liability	3,852,010	3,124,498

C. Assets Expected to Be Realized After Over 12 Months:

Below is information regarding assets expected to be realized over 12 months after the end of the reporting period and which are classified under the Group's current assets:

As of December 31
2024	2023
NIS	NIS
thousands	thousands
1,598,958	2,198,289

Note 8 – Investments and Loans in Subsidiaries, Net

A. Consolidated Companies – Details of the Consolidated Companies Held by the Company:

Subsidiary name		Country of incorporation	Area of activity	Holding rate of rights in the equity of a consolidated company
					As of December 31
				2024	2023
				%	%
Pangaea Israel (T.R.) Ltd.	(1)	Israel	Real estate in Israel	100	100
Hasharon Success Ltd.	(2)	Israel	Real estate in Israel	100	100
Plantograd Ltd.	(3)	Israel	Real estate in Russia	89	89
Uptown Glilot Complex Limited Partnership	(4)	Israel	Real estate in Israel	64	64
Canada Israel Shvil Hatapuzim Limited Partnership	(5)	Israel	Real estate in Israel	80	80
Israel Canada (T.R.) Lapid Ltd.	(6)	Israel	Real estate in Israel	60.1	50.1
Israel Canada Sunset Limited Partnership	(7)	Israel	Real estate in Israel	100	100
Israel Canada Holdings (T.R.) in Netanya Ltd.	(8)	Israel	Real estate in Israel	75	75
BWB Madaph 83 Ltd.		Israel	Real estate in Israel	100	100
Israel Canada Hotels Ltd.	(9)	Israel	Hotels	68.5	68.5
BWB Madaph 14 Ltd.	(10)	Israel	Real estate in Israel	95	95
Israel Canada in the City Limited Partnership ("SHE"
Project)	(11)	Israel	Real estate in Israel	81	81
Midtown Jerusalem (Israel Canada) Ltd.	(12)	Israel	Real estate in Israel	74	74
Israel Canada Beit Hanaara Ltd.	(13)	Israel	Real estate in Israel	100	100
Israel Canada Sde Dov Ltd.	(14)	Israel	Real estate in Israel	100	100
G.S. Madaph 13 Ltd.		Israel	Real estate in Israel	100	100
Israel Canada (T.R.) Urban Renewal Ltd.		Israel	Real estate in Israel	100	100
Israel Canada Beit Mars Ltd.			Real estate in Israel	96	96
Pangaea Real Estate Bond (2009), Limited Partnership		Israel	Investing in real estate companies	100	100
W Prime		Israel	Real estate in Israel Income-producing real estate in	100	100
Graniak Invest Limited		Cyprus	Germany	100	100
Abelie Holding Limited		Cyprus	Real estate in Poland Assisted living in	100	100
Israel Canada Assisted Living Ltd.	(15)	Israel	Israel	100	100
Dubnov Tower Residential, Limited Partnership	(16)	Israel	Real estate in Israel	80	-

Note 8 – Investments and Loans in Subsidiaries, Net (continued):

A. Consolidated Companies – Details of the Consolidated Companies Held by the Company (continued):

• (1) Pangaea Israel Ltd. holds the following companies:
  • (a) Israel Canada Cities Junction Tower Ltd. (50.1%) holds the Cities Junction Tower project.
  • (b) Israel Canada (T.R) Beit America Ltd. (97.3%) holds 36% of the share capital of Rem Canada Beit America Ltd.
  • (c) Herzliya Pituach Al Hayam Limited Partnership (92%) holds 50% of the rights in A.C.M. Da Vinci Partnership in Kanarit.
  • (d) Israel Canada in the City Limited Partnership (50%) holds the Bank Leumi building (hereinafter: the "SHE Project"). For the remaining holdings, refer to Section 8A(11).

Note 8 – Investments and Loans in Subsidiaries, Net (continued):

• A. Consolidated Companies – Details of the Consolidated Companies Held by the Company (continued):
  • (e) Live TLV Ltd. (100%).
  • (f) Aviv in Elifelet Ltd. (50%) holds 100% of the share capital of Ahuzat Semel Ltd.
  • (g) G.S. Madaph 15 Ltd. (95%) held office rights in the HaRakevet project in Tel Aviv. Refer to Note 15L.
  • (h) G.S. Madaph 18 Ltd. (95%) held the commercial and hotel rights in the HaRakevet project in Tel Aviv. Refer to Note 15L.
  • (i) G.S. Madaph 4 Ltd. (100%) holds 25% of the share capital of Midtown Ltd.
  • (j) Israel Canada Holdings in Midtown Ltd. (70%) holds 37.5% of the share capital of Midtown Ltd.
  • (k) Israel Canada Holdings (T.R.) in Midtown (2011) Ltd. (80%) holds 37.5% of the share capital of Midtown Ltd.
  • (l) B.W.B. Madaph 56 Ltd. (100%) holds approximately 24% of the Sea Tower (Microsoft) project.
  • (m) Midtown Jerusalem (Israel Canada) is held at approximately 37%, and together with the Company's direct holdings, the Company holds approximately 74% (indirectly). Its main activity is the development of the Midtown Jerusalem project.
  • (n) Israel Canada Bursa Triangle Area Ltd. (100%) holds approximately 55.9% of the share capital of Vertical City Ltd., which holds the rights in the Stock Exchange Triangle project.
  • (o) Pangaea Israel (T.R.) Emek HaBracha Project Ltd. (100%) holds 63% of the share capital of Israel Canada Emek HaBracha (2022) Ltd.
  • (p) Pangaea Sde Dov Offices Ltd. (100%).
  • (q) Dubnov Tower Employment Limited Partnership holds 25% of the Joint Project Dubnov Tower Employment and Residential, and together with the Company's direct holdings in the Joint Project Dubnov Tower Employment and Residential, the Company holds approximately 80%.
  • (2) Hatzlachat HaSharon Ltd. holds the following companies:
    • (a) Blue Atlit Coast Ltd. (100%) its main activity is the development of a project near Atlit.
    • (b) Ramat HaSharon HaTzeira Development Partnership (81%) holds land in Ramat HaSharon.
    • (c) Israel Canada (T.R.) 13 Ehad Ha'am Ltd. (95%) holds the Ehad Ha'am project.
  • (3) Morgal Investments LLC (hereinafter "Morgal") (44.5%) holds land in St. Petersburg, Russia.
  • (4) Uptown Glilot Complex Partnership (64%) owns land in the Pi Glilot complex and holds 27.3% of the share capital of Pinat Glilot Ltd.

Note 8 – Investments and Loans in Subsidiaries, Net (continued):

A. Subsidiaries – Details of the Subsidiaries Held by the Company (continued):

• (5) Israel Canada for Bishvil HaTapuzim Partnership (80%) holds real estate in Hod HaSharon.
• (6) Israel Canada (T.R.) Lapid Ltd. (60.1%) holds real estate in the Lapid complex in Tel Aviv. Refer to Note 15g.
• (7) Israel Canada Sunset Partnership (100%) holds the "Sunset" project in northwest Tel Aviv.
• (8) Israel Canada Holdings (T.R.) in Netanya Ltd. (75%), holds 80% of the share capital of Israel Canada Business Village Ltd., which holds real estate in Netanya. Refer to Note 15j.
• (9) Israel Canada Hotels Ltd. holds 100% of the following companies:
  • (a) Israel Canada Hotels Eilat Ltd., which operates the Soleil Eilat Hotel.
  • (b) Israel Canada Hotels Kinneret Ltd., which operates the Galei Kinneret Hotel in Tiberias.
  • (c) Gonen Holiday Village Ltd., which operates the Gonen Holiday Village Hotel.
  • (d) Israel Canada Hotels Holdings Ltd. (formerly: "Pride Dead Sea Ltd.") which operates the Pride Dead Sea Hotel, the Port and Blue Hotel, the Levontin Hotel, and the Shalom Hotel.
  • (e) Tamares Resorts Ltd. which operates the West Ashdod and West Tel Aviv hotels.
  • (f) Aran Hotels Ltd. which operates the Lake House Hotel in Tiberias.
  • (g) L.A.L. Red Mountain Eilat Ltd.
  • (h) Israel Canada Hotels Universal, Limited Partnership which holds several companies operating hotels in Greece.
• (10) G.S. Madaph 14 Ltd. (95%) held the residential rights in the "HaRakevet" project in Tel Aviv. Refer to Note 15L.
• (11) Israel Canada in the City Partnership is held by the Company at a holding rate of 31%, and together with the holdings of its subsidiary Pangaea Israel (T.R.) Ltd. in Israel Canada in the City Partnership, the Company holds 81% (indirectly).
• (12) Midtown Jerusalem (Israel Canada) Ltd. is held by the Company at a holding rate of approximately 37%, and together with the holdings of its subsidiary Pangaea Israel (T.R.) Ltd. in Midtown Jerusalem Ltd., the Company holds approximately 74% (indirectly). Its main activity is the development of the Midtown Jerusalem project.
• (13) Israel Canada Beit Hanaara Ltd. holds 50% of real estate in the area known as the "Beit Hanaara" complex in Hod HaSharon. Refer to Note 15o.
• (14) Israel Canada Sde Dov Ltd. (100%) holds lease rights in the complex known as "Sde Dov" in Tel Aviv (hereinafter: the "Rainbow Project"). Refer to Note 15q.
• (15) Israel Canada Assisted Living Ltd. holds 80% of Israel Canada HaBayit B'Kfar Shmaryahu Ltd., which owns an assisted living home in Kfar Shmaryahu. Refer to Note 15s.
• (16) Dubnov Tower Residential Limited Partnership holds 75% of a joint venture Dubnov Tower Commercial and Residential, and together with the holdings of its subsidiary Pangaea Israel (T.R.) Ltd. in the joint venture Dubnov Tower – Commercial and Residential, the Company holds approximately 80% (indirectly). Refer to Note 15w.

Note 8 – Investments and Loans in Subsidiaries, Net (continued):

B. Joint Arrangements:

• (1) Investment in Associates:
  • (a) Details of the Group's associates (excluding joint ventures):

Name of associate	Country of incorporation	Holding rate of capital rights
		As of December 31
		2024	2023
		%	%
Pinat Glilot Ltd.	Israel	27.4	27.4
A.K.A. Beit Mars Ltd.	Israel	40	50

(b) Information regarding the associates:

Name of associate	Note	Measurement base		Scope of investment in the joint venture in the consolidated report As of December 31
				2024	2023
				NIS thousands	NIS thousands
Pinat Glilot Ltd.	8b(4)(a)	Balance value	sheet	62,342	71,522
A.K.A. Beit Mars Ltd.	8b(4)(h)	Balance value	sheet	96,359	105,832

(c) Loan balances provided to associates:

Loan amounts provided for the associate
	As of December 31
2024	2023 NIS
thousands	thousands
82,043	80,122
96,978	96,968
	NIS

• (1) The loan has no repayment date and will be repaid from the free surpluses of the projects. The annual interest rate on the loan is Prime + 4%. The Company measures the loan at fair value in accordance with IFRS 9. Based on an economic valuation performed by an external appraiser, the annual interest rate for the loan for a period of one year is approximately 10.16% (in 2023 – 12.96%).
• (2) In accordance with IFRS, the loans are measured at fair value at an annual interest rate between 7.35%-7.57% (in 2023 – 7.95%-8.59%).

Note 8 – Investments and Loans in Subsidiaries, Net (continued):

B. Joint Arrangements (continued):

(1) Investment in Associates (continued):

(d) Details regarding guarantees provided to associates:

Name of associate	provided	Amounts of guarantees for associates
	As of December 31
	2024	2023
	NIS thousands	NIS thousands
Pinat Glilot	57,615	57,540

(2) Joint Ventures:

(a) Details of the Group's joint ventures:

Name of joint venture	Note	Country of incorporation	Holding rate of capital rights As of December 31
			2024	2023
			%	%
Not directly held:
A.C.M Da Vinci in Kinneret
Limited Partnership	8b(4)(c)	Israel	50	50
Morgal Investments Limited	8b(4)(d)	Cyprus	50	50
Rem Canada Beit America Ltd.	8b(4)(e)	Israel	36	36
Israel Canada Rem Projects Ltd.	8b(4)(f)	Israel	42.5	50
Vertical City Ltd.	8b(4)(g)	Israel	55.9	74
Lev Bavli Ltd. (formerly: Urban
Bavli TA Ltd.)	8b(4)(b)	Israel	50	24.5
Aviv Be'elifelet Ltd.		Israel	50	50

Note 8 – Investments and Loans in Subsidiaries, Net (continued):

(2) Joint Ventures (continued):

(b) Information regarding the joint ventures:

Investment and loan balances included in the Group's consolidated financial statements:

Name of joint venture	Measurement base	Scope of investment in the joint venture in the consolidated report
		As of December 31
		2024 NIS	2023 NIS
		thousands	thousands
A.C.M Da Vinci in Kinneret
Limited Partnership	Balance sheet value	91,953	86,325
Morgal Investments Limited	Balance sheet value	136,029	144,291
Rem Canada Beit America Ltd.	Balance sheet value	34,741	34,373
Israel Canada Rem Projects Ltd.	Balance sheet value	333,514	283,717
Vertical City Ltd.	Balance sheet value	474,475	372,906
Aviv Be'elifelet Ltd.	Balance sheet value	3,834	2,577
Lev Bavli Ltd.	Balance sheet value	59,100	18,465
Going Dutch Ltd.	Balance sheet value	13,578	-

(c) Loan balances provided to joint ventures held directly by the Company:

Name of joint venture	Loan amounts and/or capital notes provided for the benefit of the joint venture
	As of December 31 2024 2023
	NIS thousands	NIS thousands
Morgal Investments Limited	16,732	27,290
Rem Canada Beit America Ltd.	12,362	14,976
Israel Canada Rem Projects Ltd.	79,750	147,394
Vertical City Ltd.	265,921	301,437
Lev Bavli Ltd.	59,100	18,465
Aviv Be'elifelet Ltd.	1,596	207

Note 8 – Investments and Loans in Subsidiaries, Net (continued):

B. Joint Arrangements (continued):

(2) Joint Ventures (continued):

(c) Loan balances provided to joint ventures held directly by the Company (continued):

	Weighted annual interest rates
	As of December 31 2024	As of December 31
		2024
		NIS	NIS
	%	thousands	thousands
Balances in or linked to foreign
currency (1)	9	16,732	27,290
Linked to the consumer price index	4	10,807	30,000
Unlinked (2)	Prime + 2.5	265,921	301,437
Unlinked (3)	-	81,305	132,370
		473,339	588,272

• (1) The Company measures the ruble-denominated loan to Morgal at fair value in accordance with IFRS 9. Based on an economic valuation performed by an external appraiser, the annual interest rate for the loan for a period of 7 years is approximately 24.72% (in 2023 – 25.9%).
• (2) In accordance with IFRS, the loan is measured at fair value at an annual interest rate of approximately 10.43% (in 2023 – approximately 10.67%).
• (3) In accordance with IFRS, the loans are measured at fair value at an annual interest rate of 7.92% (in 2023 – approximately 8.35%).
• (d) Details regarding guarantees provided to joint ventures held directly by the Company:

Name of joint venture	Amounts of guarantees provided for joint ventures As of December 31
			2024 NIS thousands
	Israel Canada Rem Projects Ltd.	145,925
	A.C.M Da Vinci in Kinneret Limited Partnership	141,569	142,843
Vertical City Ltd.	442,394	602,063

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

(2) Joint Ventures (continued):

(e) Summary Financial Information Regarding a Material Joint Venture of the Company (continued):

1) Morgal Investments Limited:

	As of December 31
	2024	2023
	NIS	NIS
	thousands	thousands
Current assets	25,198	43,390
Non-current assets	237,306	289,411
Current liabilities	(26,626)	(*)(65,389)
Non-current liability	(50,984)	(*)(93,982)
Equity attributable to the Company's shareholders	(184,894)	(173,430)
Company's share of the equity, net	92,447	86,715
Loans and other adjustments	43,582	57,576
Book value of the investment in the joint venture	136,029	144,291

(*) Reclassified

	For the year ended on December 31
	2024	2023	2022
	NIS thousands	NIS thousands	NIS thousands
Income	98,556	61,824	32,510
Gross profit	98,556	38,651	32,510
Operating profit (loss)	101,852	(*)(23,610)	2,510
Profit (loss) after tax	33,048	(35,253)	110,443
Profit (loss) belonging to the Company's shareholders	33,048	(35,253)	110,443
Company's share of profit (loss)	16,524	(17,626)	55,222

Note 8 – Investments and Loans in Held Companies, Net (continued):

• B. Joint Arrangements (continued):
  • (2) Joint Ventures (continued):

(e) Summary Financial Information Regarding a Material Joint Venture of the Company (continued):

2) Vertical City Ltd.:

	As of December 31
	2024	2023
	NIS thousands	NIS thousands
Current assets	726,612	587,167
Non-current assets	1,021,636	744,218
Current liabilities	(800,674)	(817,617)
Non-current liability	(565,528)	(431,619)
Equity attributable to the Company's shareholders	(382,046)	(82,149)
Company's share of the equity, net	213,564	49,100
Loans and other adjustments	260,911	323,806
Book value of the investment in the joint venture	474,475	372,906

For the year ended on December 31

	2024	2023	2022
	NIS thousands	NIS thousands	NIS thousands
Income	-	-	-
Gross profit	-	-	-
Operating loss	(165)	(398)	(194)
Profit (loss) after tax	146,738	(41,807)	(51,988)
Profit (loss) belonging to the Company's shareholders	146,738	(41,807)	(51,988)
Company's share of profit (loss)	82,027	(30,937)	(38,471)

Note 8 – Investments and Loans in Held Companies, Net (continued):

• B. Joint Arrangements (continued):
  • (2) Joint Ventures (continued):

(e) Summary Financial Information Regarding a Material Joint Venture of the Company (continued):

3) Israel Canada Rem Projects Ltd. (ICR):

	As of December 31
	2024	2023
	NIS thousands	NIS thousands
Current assets	3,217,275	3,086,014
Non-current assets	112,207	151,218
Current liabilities	(2,410,600)	(2,511,876)
Non-current liability	(375,464)	(474,607)
Capital	(543,418)	(250,749)
Company's share of the equity, net	230,952	125,374
Loans and other adjustments	102,562	158,343
Book value of the investment in the joint venture	333,514	283,717

	For the year ended on December 31
	2024	2023	2022
	NIS thousands	NIS thousands	NIS thousands
Income	841,662	1,616,783	569,324
Gross profit	132,737	198,463	130,054
Operating profit	121,224	157,745	98,826
Profit after tax	35,608	86,310	49,258
Profit attributed to the Company's shareholders	37,831	86,310	49,258
Company's share of profit	20,013	43,155	24,629

(3) Joint Operations:

Details of the Group's joint operations:

Name of joint operation	Country of incorporation		Holding rate of capital rights
			As of December 31
		2024	2023
		%	%
Acro Pangaea Registered Partnership	Israel	60	60
Acro 2 Pangaea Registered Partnership	Israel	50.5	50.5
Sea Tower joint venture	Israel	24	24
Joint ventures in Herzliya	Israel	23.6-33	23.6-33

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details:
  • (a) Associate – Pinat Glilot:

As of the date of the Report, a limited partnership (hereinafter: "Uptown") held by the Company at a rate of 64%, holds approximately 27.3% of the shares of Pinat Glilot Ltd. (hereinafter: "Pinat Glilot"), which held shares in Pi Glilot Oil Terminals Ltd. (hereinafter: "Pi Glilot"). On May 3, 2020, upon the dissolution of Pi Glilot, the leasehold rights in the Pi Glilot complex land were transferred to the shareholders. At that time, Pi Glilot paid betterment levies to the Ramat Hasharon Municipality in the amount of approximately NIS 120 million (Pinat Glilot's share is NIS 48 million). Pinat Glilot paid purchase tax in the amount of approximately NIS 23 million and received municipal approval for the transfer of rights in the real estate to the shareholders. Additionally, the shareholders transferred to a trustee a total of approximately NIS 66 million pro rata (Pinat Glilot's share is NIS 26 million) to guarantee their relative share in the exposure amount to existing liabilities in Pi Glilot, pursuant to the liquidator's determination and fulfillment of their obligations under the agreement.

As of the date of the Report, Pinat Glilot holds approximately 65 dunams of land in the Pi Glilot complex (the partnership's indirect share: approximately 17 dunams).

Simultaneously, Pinat Glilot took out a loan from a banking corporation to finance the payments detailed above. The credit facility granted amounts to NIS 210 million, which was fully utilized, and the final repayment date was June 2023.

In June 2023, the loan was extended, and the final repayment date was set for June 2025. The loan bears interest of Prime + 1.5%. As part of the loan agreement, Pinat Glilot is required to deposit, in a restricted deposit, an amount equal to the annual interest payable in the current year. The Company has guaranteed the repayment of the credit facility in accordance with Uptown's ownership rate in Pinat Glilot, namely 27.34%, as detailed above.

(b) Associate – Lev Bavli Ltd. (formerly: "Urban Bavli Tel Aviv Ltd."):

On February 1, 2021, the Company (through a wholly owned subsidiary) together with a subsidiary of B.S.R. Engineering and Development Ltd. (together hereinafter: the "Purchasers") entered into an agreement to purchase 100% of the issued and paid-up share capital (Company's share: 50%) of Lev Bavli Ltd. (formerly: "Urban Bavli Tel Aviv Ltd.") (the "Bavli Project Company" or "Lev Bavli"), which had signed tenants on an urban renewal agreement under the National Outline Plan 38/2 licensing track in a complex located in the Bavli neighborhood in Tel Aviv (parcel located in Block 6101, part of Parcel 301, on Haknesset Hagdola 2-6, Tosefta 3-13, Bavli 28-36 streets, in Bavli, Tel Aviv).

The Bavli Project Company signed a memorandum of understanding for joint planning with Hachsharat HaYishuv (approximately 18%) (hereinafter: "Hachsharat HaYishuv"), which entered into National Outline Plan 38/2 agreements with apartment owners in buildings on Yerushalmi 1-5 Street in Bavli, Tel Aviv. A cooperation agreement was also signed between the Purchasers and Hachsharat HaYishuv for the construction of a joint project in the area between the aforementioned streets, through engagement with a single construction contractor for the entire project and the obtaining of joint financing for the construction or part thereof (hereinafter: the "Project").

In consideration for the purchased shares, the Purchasers undertook to pay Urban Real Estate Y.D. Ltd. (hereinafter: "Urban Real Estate") a sum of NIS 8 million, and also to assume repayment of a shareholder loan extended by Urban Real Estate to Lev Bavli for expenses, in an amount not exceeding an additional NIS 5 million plus VAT, if applicable.

Under the agreement, the Purchasers acquired 49% of the purchased shares, and the acquisition of the remaining 51% was subject to a condition precedent – obtaining the consent of more than 75% of the apartment owners who signed agreements with Lev Bavli at the time of signing the share purchase agreement (calculated separately with respect to Bavli buildings, Haknesset Hagdola buildings, and Tosefta buildings), for the transfer of 51% of the shares to the Purchasers. As of the date of publication of the financial statements, the condition has been fulfilled.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

(4) Additional Details (continued):

(b) Associate – Lev Bavli Ltd. (formerly: "Urban Bavli Tel Aviv Ltd.") (continued):

An agreement was signed between Lev Bavli Ltd. and the company Urban Real Estate, pursuant to which Urban Real Estate shall provide management and initiation services to Lev Bavli, for which Urban Real Estate shall be entitled to total consideration of approximately NIS 80 million.

On January 24, 2024, the Purchasers completed full payment of the consideration for the purchase of the issued and paid-up share capital of the Bavli Project Company, and simultaneously the remaining 51% of the issued and paid-up share capital of the Bavli Project Company was transferred to them. In addition, the Bavli Project Company paid Urban Real Estate the full consideration for the management services Urban Real Estate had committed to provide to the Bavli Project Company.

For the execution of the above, the Purchasers jointly obtained credit from an Israeli bank in the amount of NIS 50 million (hereinafter: the "Credit"), for which they are jointly and severally liable to the bank. The Subsidiary's share in the Credit amounts to NIS 25 million. According to the agreements between the Purchasers, each of them shall bear responsibility for repayment of its share of the Credit and the related costs, without derogating from their joint and several liability to the bank.

The project is an urban renewal project under licensing route National Outline Plan 38/2, within the framework of which 299 residential units are expected to be constructed. According to the plan, the total above-ground construction area will amount to approximately 37,200 sqm and approximately 14,500 sqm of underground construction area. The Bavli Project Company's share in the project is approximately 82%, and accordingly – the number of residential units for marketing by the Bavli Project Company: approximately 134.

Starting from the fourth quarter of 2024, the Company began marketing residential units in the project, and as of the end of 2024, 4 residential units had been marketed under a conditional agreement for total consideration of approximately NIS 21 million including VAT. According to the Company's revenue recognition policy, as detailed in Note 2o(6) above, the Company has not yet recognized income.

On December 31, 2024, an agreement was signed with a contractor for the project. For further information regarding the receipt of the building permit, refer to Note 33(a).

(c) Joint Venture – A.C.M. Da Vinci in Kinneret:

The A.C.M. Da Vinci partnership (hereinafter: "Da Vinci") is presented using the equity method. The partnership is held 46% by the Company (indirectly through a Subsidiary Partnership (hereinafter: the "Subsidiary Partnership")), which holds rights to offices and commercial areas in the Da Vinci project, namely approximately 9,000 sqm and approximately 1,200 sqm, respectively, which are designated for long-term lease and are presented in the partnership's statements under Investment Property. Based on a valuation as of December 31, 2024, Da Vinci recorded an appreciation for the office and commercial rights in the amount of approximately NIS 7 million. The increase in the asset's value is mainly due to lease agreements signed during the reporting period with the partnership regarding the office rights it owns and improvements made to the leased premises. As of the balance sheet date, the asset's balance after construction costs during the construction period amounts to approximately NIS 449 million (100% basis). Additionally, Da Vinci holds inventory of one apartment.

On March 14, 2023, the partnership signed a financing agreement for its rights in the offices and commercial areas as aforesaid, in a total loan amount of approximately NIS 286 million. The loan was used to repay the credit that would be outstanding at the time of project completion (hereinafter: the "Replacement Loan"), and the balance of the amount was provided to the partnership as a credit facility for a period of up to one year. The repayment date of the Replacement Loan amount and any additional amount utilized by the partnership from the facility amount shall be approximately four and a half years from the date of signing the financing agreement. On August 6, 2023, the full Replacement Loan was provided, and a distribution to the partners was made, with each partner's share in the distribution amounting to NIS 75 million.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

(4) Additional Details (continued):

(c) Joint Venture – A.C.M. Da Vinci in Kineret (continued):

On October 31, 2024, an agreement was signed with a partner in the Subsidiary Partnership (hereinafter: the "Partner") for the purchase of 4% of its holdings in the partnership. According to the agreement, the Subsidiary Partnership undertook to transfer to the Partner the amount of approximately NIS 16.2 million, representing its share in the profits of the Subsidiary Partnership plus VAT as required by law. As of the date of the financial statements, approximately NIS 2 million was paid. The date of transfer of the rights in the Subsidiary Partnership shall be November 30, 2025.

It should be noted that the partnership was entitled to management fees for the management services provided to the project and for overall coordination of the purchasers' activities, in accordance with the joint venture agreement. Until the end of 2023, the partnership recognized 100% of the total management fees for the project based on milestone achievement (of which approximately NIS 19 million was recognized in 2023, representing approximately 5% of the management fees).

(d) Joint Venture – St. Petersburg Project, Russia:

(1) In May 2007, Plantograd Ltd. (a subsidiary held 89% by the Company, hereinafter: "Plantograd") and Electra Investments (1998) Ltd. (hereinafter: "Electra") signed a memorandum of understanding for cooperation in purchasing a land tract of 2,400 dunams in St. Petersburg, Russia, and for continued business operations regarding the land. According to the agreement, Plantograd and Electra each purchased 50% of a Cypriot company (hereinafter: the "Cypriot Company") which, in turn, holds 100% of a Russian company (hereinafter: "Morgal Russia"). In September 2007, Morgal Russia signed a final agreement with the land seller for the purchase of the land for approximately USD 105 million.

At the time of the land purchase, the Cypriot Company, which held 100% of the Russian company's shares – Morgal Investments LLC (an entity held indirectly by the Company and presented in the financial statements as an associate at 50% holding) (hereinafter: "Morgal") – provided the funds required for the investment in a total amount of approximately USD 110 million via shareholder loans, with 35% by Plantograd and 65% by Electra. The loans bear variable interest and/or LIBOR +4%, depending on the lender.

During the reporting year, the Cypriot Company was dissolved and the investment is now recorded directly against Morgal Russia.

The shareholder loans are repaid from Morgal's cash surplus in a manner such that excess financing provided to the Group is repaid first, and the remainder is repaid in equal parts between the partners. Until December 31, 2020, financing costs and exchange rate differences for the above-mentioned loans were capitalized.

During the reporting period, Morgal repaid shareholder loans in a total amount of approximately USD 30.8 million, according to the priority order of the loans (Company's share: approximately NIS 26 million). As part of the repayment, Electra's excess portion was fully repaid.

During the reporting period, Morgal received approximately NIS 26 million in quarterly payments (via bank letters of credit) on account of the minimum consideration for the lots of the second block (paid in quarterly installments via bank letters of credit), based on the updated consideration for the second block lots according to the actual apartment sale prices in the project, as well as approximately USD 1.2 million as final payment of the full consideration for the lots in the first block.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (d) Joint Venture – St. Petersburg Project, Russia (continued):

(2) The Land and Planning and Construction Procedures:

Morgal holds ownership rights in real estate with an area of approximately 2,400 dunams in the Moskovsky District, St. Petersburg, Russia (hereinafter: the "Land" and/or the "Project" and/or the "Plantograd Project," as applicable). As part of the transaction with the Buyer described below, the ownership of part of the real estate was transferred to the Buyer.

Morgal and the Buyer are working to update the PPT in light of the above changes and to update the building rights accordingly. However, with regard to the first and second blocks of the Project (hereinafter: the "First Block" and/or the "Second Block," as applicable), the aforementioned legislative changes had no impact on the building rights (with respect to the residential construction areas and the internal commercial areas in the residential complexes), and accordingly, apartments and internal commercial areas with a total area of approximately 315,000 sqm were constructed and sold in these blocks.

(3) Infrastructure and Public Building Agreements:

Morgal signed agreements for the supply of water, sewage, and heating infrastructure for the First and Second Blocks (hereinafter: the "Infrastructure Agreements"). The rights and obligations under these agreements were assigned to the Buyer, as defined below, and Morgal is not involved in their implementation or enforcement.

The total payments made under the Infrastructure Agreements as of December 31, 2024, amounted to approximately USD 5.3 million (hereinafter: the "Infrastructure Payments Made"), which were borne by the Buyer, as defined below, in accordance with the agreements signed with it.

(4) Framework Agreement:

On May 21, 2015, a set of agreements was signed, including a Framework Agreement and additional agreements (hereinafter: the "Framework Agreement"), subject to a termination condition, between Morgal (in this section hereinafter: the "Seller"), and a local third party (above and hereinafter: the "Buyer"), according to which the Buyer shall purchase from the Seller the Property (as defined below), in a staged consideration transaction (hereinafter: the "Transaction").

According to the Framework Agreement, for the purposes of the Transaction only, the Land was divided into eight blocks composed of lots, with each block including lots for the construction of residential buildings, public buildings, roads, and various infrastructures (hereinafter: the "Blocks," "Lots," "Residential Lots," "Public Building Lots," and "Infrastructure Lots," respectively, and hereinafter collectively: the "Property"). Each Block will be purchased at the times agreed upon between the parties by signing sale agreements, the wording of most of which was agreed upon between the parties and were attached to the Framework Agreement.

(5) Transfer of Ownership:

As of December 31, 2024, the ownership of the Residential Lots and Public Building Lots included in the first and second Blocks was transferred. It should be noted that a small number of lots in Blocks 3–8 of the Project are occasionally leased to the Buyer under short-term lease agreements in order to enable it to advance planning in the said blocks and for various temporary uses for the promotion of the Project (such as temporary access roads, storage areas, etc.).

Note 8 – Investments and Loans in Held Companies, Net (continued):

• B. Joint Arrangements (continued):
  • (4) Additional Details (continued):
    • (d) Joint Venture – St. Petersburg Project, Russia (continued):
      • (6) The following are the main details of the Framework Agreement and the additional agreements signed between the parties in 2015, including developments and updated understandings between the parties that have been agreed upon over the years since:

(a) Description of the Transaction and the Consideration Therefor:

(1) Timetables for signing the sale agreements were established in the Framework Agreement, over a period of 11 years from the signing date of the Framework Agreement, subject to provisions regulating the Buyer's right to request extensions in the cases specified in the Framework Agreement. These dates were extended pursuant to postponements and extensions agreed upon by the parties from time to time, according to the actual progress of the Project. Refer below regarding the amendment to the Framework Agreement.

(b) Payments and Guarantees:

• (1) The total payments made by the Buyer pursuant to the Framework Agreement and its appendices as of December 31, 2024, amounted to approximately USD 98.3 million. This amount includes Infrastructure Payments, as defined above, which were paid directly to the relevant infrastructure companies and not to Morgal, as well as advance payments made to Morgal and received through December 31, 2024.
• (2) In addition, the Buyer Group signed, at the time of the signing of the Framework Agreement, a guarantee to secure the Buyer's obligations to Morgal in the amount of up to approximately USD 600 million.

(c) Termination Condition:

The Buyer has the right to cancel the agreement (or parts thereof) if certain conditions set forth in the agreement are met, related, among other things, to obtaining building permits (hereinafter: the "Termination Condition" and the "Evaluation Dates for Fulfillment of the Termination Condition").

If the Buyer exercises the right to cancel with respect to parts of the Framework Agreement or the entire agreement, the Buyer will be reimbursed for all expenses it incurred in connection with the relevant agreements, it will be exempt from the actual purchase of the relevant lots, and it will be refunded, accordingly, its proportionate share of the advance payment.

During the first quarter of 2024, an occupancy permit was obtained for all the apartments, parking, and commercial areas constructed on the Second Block's lots. Accordingly, the abovementioned Termination Condition in relation to the First and Second Blocks has ceased to exist.

(7) Legislative Changes:

At the beginning of July 2017, legislative procedures were completed which affected (except with regard to the First and Second Blocks), among other things, the scope of the building rights. Accordingly, Morgal and the Buyer agreed to update the PPT and the employment terms between them.

Note 8 – Investments and Loans in Held Companies, Net (continued):

• B. Joint Arrangements (continued):
  • (4) Additional Details (continued):
    • (d) Joint Venture – St. Petersburg Project, Russia (continued):

(8) Implications of the War Between Russia and Ukraine:

• (a) During the month of February 2022, Russia launched a large-scale military invasion of Ukraine. In light of the impact of the war, various restrictions were imposed in Russia regarding business operations with entities connected to the European Union, including, among others, restrictions on renewing agreements and transferring certain funds. The Company is working to minimize the effects of these restrictions on its activity in the Project, in order to enable continued execution of the agreement with the Buyer and continued withdrawal of cash surpluses accumulated in Morgal's accounts in Russia.
• (b) Despite the above restrictions, the Russian authorities allow foreign companies to operate business activities on a small scale, in a manner that enables Morgal to continue managing its regular operations in Russia.
• (c) The Buyer continues to honor the agreements between the parties, including regular updates.
• (d) The parties are cooperating fully to obtain regulatory approvals that would enable them to resume the regular financial and contractual conduct that existed between them since 2015, prior to the imposition of the above-mentioned restrictions.
• (e) The sale of apartments in the First District continues. During the year 2024, approximately 151 apartments were sold. (In the year 2023 – approximately 837 apartments were sold). As of the Report Date, only a negligible number of apartments remain for sale.

In the year 2023, a modification to the Framework Agreement was signed between Morgal and the Buyer. The main points are as follows:

• (a) The parties formulated a new preliminary plan for construction in Blocks 3–8, which takes into account the requirements arising from the legislative changes described above (hereinafter: the "New Preliminary Plan").
• (b) The parties agreed that implementation of the New Preliminary Plan requires an update to the PPT (zoning plan) applicable to the project land, including a new parcelization of the plots (hereinafter: the "PPT Update"), and also requires the receipt of the appropriate approvals from the authorities, including the necessary approval from the Airports Authority (hereinafter: the "Airport Approval"). The amendment also sets forth the continuation of the relationship between the parties in the event the above approvals are not obtained.
• (c) The process of implementing the New Preliminary Plan is expected to take approximately three years, and its outcome is uncertain. Its purpose is to obtain building permits and continue the sale of apartments in the Project.
• (d) The parties will examine the possibility of submitting requests for rezoning/change of use of the land in order to increase the building rights.

(9) Book Value:

• (a) The amount of the investment and the loan as of December 31, 2024, in the Company's books is approximately NIS 136 million.
• (b) During the Reporting Period, Morgal conducted a valuation of the realizable value of the land in Russia using an independent external appraiser, and as a result of the change in the exchange rate, the Company updated the carrying amount.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

(4) Additional Details (continued):

(e) Joint Venture – Rem Canada Beit America Ltd.:

The company Rem Canada Beit America Ltd. (hereinafter: the "Project Company") is presented using the equity method. The Company holds approximately 36% of the Project Company (indirectly). During the year 2019, the Project Company entered into an agreement to purchase full ownership rights in a 13-story building above a ground floor designated for office and commercial use, known as "Beit America" located at 35 Shaul Hamelech Street in Tel Aviv, with a gross built area (above and below ground) currently of approximately 11,160 square meters, within the scope of Zoning Plan 1059D, in its current condition (As-Is), free and clear of any third-party rights, for a total consideration of NIS 140 million plus VAT as required by law, which was paid in full.

(f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR):

On February 13, 2020, Israel Canada Rem Projects Ltd. (the "Acquirer"), a company equally owned by the Company (indirectly) and by Rem Projects (hereinafter: the "Partner"), as well as Israel Canada Rem Projects (Special Purpose) Ltd., a private company wholly owned by the Acquirer (hereinafter: the "Target Company"), entered into a merger agreement with ICR Israel Canada Rem Holdings Ltd. (formerly: Minrav Projects Ltd.) (hereinafter: the "Merger Agreement" and "ICR," respectively).

On May 18, 2020, the general meeting of ICR shareholders approved the Merger Agreement. On July 14, 2020, all conditions for the completion of the merger transaction were fulfilled or waived, and the merger was registered with the Registrar of Companies. As a result, trading of ICR shares on the Tel Aviv Stock Exchange was discontinued. On July 15, 2020, the merger transaction was completed. The final merger consideration was approximately NIS 574 million.

It should be noted that as part of the completion of the merger transaction, Mr. Barak Rosen (a controlling shareholder in the Company, serving as a director and CEO of the Company) and Mr. Raz Oded were appointed as joint Chairmen of the Board of the acquired company (hereinafter: the "Parties"). In return for this service and for additional services, each of the Parties or their representatives is entitled to a fixed monthly management fee of approximately NIS 75 thousand (hereinafter: the "Fixed Management Fees"). In addition, each of the Parties or their representatives is entitled to 2% of ICR's annual net profit, subject to ICR's cash flow and its ability to meet its applicable payments and obligations (hereinafter: the "Variable Management Fees"). It is noted that Mr. Barak Rosen irrevocably assigned the Fixed and Variable Management Fees to the Company.

On August 19, 2024, ICR entered into an investment agreement with the Clal Insurance Company Ltd. group (hereinafter: the "Investor"), whereby, subject to the fulfillment of certain conditions precedent, ICR will allocate to Clal shares constituting 15% of the issued and paid-up share capital of ICR (hereinafter: the "Allocated Shares"), in exchange for an investment of approximately NIS 258 million.

Completion of the transaction was subject to the fulfillment of standard conditions precedent within 90 days from the date of signing the agreement, including the receipt of third-party consents.

On September 30, 2024, all conditions precedent for the transaction were met, and the transaction was completed. According to the investment agreement, the Allocated Shares were issued to the Investor in consideration for the investment by Clal in ICR, and shareholders' agreements were signed. The investment proceeds were also used to repay shareholders' loans extended by the Company to ICR in the amount of approximately NIS 50 million.

Upon completion of the transaction, the Company (indirectly) holds approximately 42.5% of ICR's issued and paid-up share capital and voting rights (including on a fully diluted basis). The Company recorded a net gain of approximately NIS 72.5 million as a result of the transaction's impact.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

(4) Additional Details (continued):

(f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

The Company and ICR entered into marketing agreements, pursuant to which the Company will market residential units to ICR in several projects, and in return will be entitled to a commission at a rate of between 1% to 3% of the apartment price before VAT.

In accordance with the criteria for consolidation of an associate, the Company consolidates into these financial statements the financial statements of Israel Canada Rem Projects Ltd.

Below are material projects of the associate ICR:

(1) ICR – Neve Gan Project (North Park) – Phase A (Plots 28 to 30):

On January 26, 2021, ICR won a tender conducted by the Israel Land Authority (hereinafter: the "Tender" and "ILA", respectively) for the acquisition of lease rights in Plot 29 in the Neve Gan neighborhood in Ramat Hasharon, north of the Tel Baruch neighborhood (hereinafter: the "Land"), designated for the construction of 79 residential units in high-density construction and approximately 180 square meters of commercial space. In consideration for the acquisition of the rights, ICR paid ILA a total amount of NIS 136 million before VAT, plus approximately NIS 15 million for development costs.

On April 22, 2021, ICR entered into an agreement with ZMH Hammerman Ltd. (hereinafter: "ZMH", and together with ICR hereinafter: the "Parties"), which won Plots 28 and 30 in the aforementioned tender, for the construction of 299 residential units and approximately 560 square meters of commercial space over an area of approximately 9.5 dunams (for a total consideration of approximately NIS 563 million including development costs to ILA), under a cooperation and joint venture agreement between the Parties.

Concurrently with the signing of the aforementioned agreement, ICR and ZMH each separately entered into agreements with a banking corporation to obtain loan facilities of approximately NIS 321.6 million each, for the purpose of making the payments required by ILA for the acquisition of all rights in the project land. In addition, on September 14, 2021, the banking corporation increased the credit facility under the same terms, for a total amount of approximately NIS 54 million (ICR's portion being approximately NIS 27 million).

On August 3, 2021, the transfer of rights from ZMH to ICR was completed and the conditions precedent to the transaction were fulfilled.

For the purpose of financing ICR's equity investment in the acquisition, ICR's shareholders injected shareholder loans in a total amount of approximately NIS 60 million. The outstanding balance of the loans as of December 31, 2024, is approximately NIS 20 million.

In July 2021, marketing began for Plots 28 and 30 in the project.

On May 4, 2023, ICR and ZMH (the "Borrowers") entered into a financing agreement with a banking corporation regarding Plots 28 and 30 to finance the project (the "Banking Corporation" and the "Financing Agreement", as applicable), pursuant to which the banking corporation provided credit facilities in the following total amounts – credit facilities for guarantees under the Sale Law (Apartments) (Protection of Investments of Apartment Purchasers), 5735-1974, in a total amount not exceeding NIS 1,320 million, which will be repaid no later than November 30, 2026, and financial credit facilities (to be used for short-term loans, current account overdrafts, or non-Sale Law guarantees) totaling NIS 385 million, for a period of 42 months (beginning July 2023). In any case, the credit facilities for Sale Law guarantees and the financial credit facilities overlap and are not cumulative, so that the amount of financial credit and the amount of Sale Law guarantees utilized together from the credit facilities shall not exceed the facility for Sale Law guarantees.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

Below are material projects of the associate ICR (continued):

(1) ICR – Neve Gan Project (North Park) – Phase A (Plots 28 to 30) (continued):

On May 1, 2023, ICR and ZMH (the "Borrowers") entered into a financing agreement with a banking corporation for Plot 29 to finance the project (the "Banking Corporation" and the "Financing Agreement," as applicable), under which the bank provided credit facilities totaling: up to NIS 350 million in guarantees under the Sale Law (Apartments) (Protection of Investments of Apartment Purchasers), 5735-1974, repayable by July 1, 2027; and NIS 145 million in financial credit (for short-term loans, overdrafts, or non-Sale Law guarantees). These facilities are not cumulative, and the combined use of Sale Law guarantees and financial credit cannot exceed the Sale Law guarantees cap. The Financing Agreements includes standard provisions and conditions.

In December 2023, a full building permit was obtained for Plots 28+30. As of December 31, 2024, the project is under construction, with a completion rate of 29.1%. Approximately 259 sale contracts (roughly 68% of the apartments) were signed, totaling approximately NIS 1,085 million (ICR's share: NIS 543 million).

The project's commercial areas are treated as investment property. During the Report Period, ICR recognized revaluation income of approximately NIS 0.5 million for these areas, based on a valuation.

(2) ICR – Neve Gan Project (North Park) – Phase A, Complex V (Plot 27):

On June 30, 2021, ICR, through a wholly owned subsidiary, and ZMH (together: the "Parties") won a tender to acquire lease rights in Complex F, designated for 170 residential units and 400 square meters of commercial space (classified as investment property). ICR's share in the complex is 75%.

As of September 19, 2021, the Parties paid the full consideration for the plot. To finance the acquisition, they entered into an agreement with a banking corporation for a loan of approximately NIS 334 million, plus a VAT loan of approximately NIS 59 million.

In June 2023, a permit for excavation and shoring was received, and in December 2024, a full building permit for the project was obtained.

On June 11, 2023, the Parties signed a financing agreement with a banking corporation (the "Banking Corporation" and the "Financing Agreement," as applicable), under which the bank will provide credit facilities as follows: up to NIS 807 million in Sale Law guarantees (Apartments) (Protection of Investments of Apartment Purchasers), 5735-1974, repayable by March 31, 2027, and NIS 325 million in financial credit (for short-term loans, current accounts, or non-Sale Law guarantees), valid from signing until March 31, 2027. These facilities overlap and are not cumulative—the combined use of financial credit and Sale Law guarantees may not exceed the cap for Sale Law guarantees. The Financing Agreement includes standard provisions and terms.

As of December 31, 2024, the project is under construction, with a completion rate of 8%. Approximately 125 sale contracts were signed (approximately 74% of the apartments), totaling around NIS 561 million (ICR's share: NIS 420 million).

It is noted that the commercial areas in the project are classified as investment property. During the Report Period, ICR recognized revaluation income of approximately NIS 1.5 million for these areas, based on a valuation.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

Below are material projects of the associate ICR (continued):

(3) ICR – Neve Gan Project (North Park) – Phase B, Complexes D–E (Plots 23–26):

On June 30, 2021, ICR won a tender for the acquisition of lease rights in Complexes D–E, designated for the construction of 401 residential units and approximately 520 square meters of commercial space (classified as investment property).

For the purpose of financing the acquisition, ICR entered into an agreement with a banking corporation to obtain a loan in the amount of approximately NIS 929 million. The credit facility was valid until December 31, 2023 (on that date, the credit facility was extended until April 7, 2024, and/or until the signing of a financing agreement, whichever occurs first). As a condition for receiving the credit, the shareholders of ICR provided a guarantee for the current interest payments. In addition, commitments were made regarding the project's planning timetable. ICR committed to the bank to create various securities.

In February 2023, ICR entered into an agreement with a third party (hereinafter: the "Third Party") not related to the Company for the sale of 50% of its rights in the land for a total amount of approximately NIS 510 million, consisting of repayment of a loan of approximately NIS 465 million, which represents half of the loan taken by ICR from the bank to acquire the land, and approximately NIS 45 million to be paid as follows:

• (1) An amount of approximately NIS 10 million was paid by the buyer upon signing the agreement.
• (2) NIS 10 million, plus linkage differentials, was paid on May 14, 2023.
• (3) An amount of approximately NIS 25 million (hereinafter: the "Remaining Consideration"), plus cumulative annual interest at a rate of Prime + 1% (hereinafter: the "Interest"), will be paid by the buyer, in accordance with the mechanism set out in the agreement.

As of the date of ICR's engagement with the buyer (hereinafter: the "Parties"), the Parties bear the construction costs of the project equally (50% each), and as of the date of legal delivery, the buyer entered into the shoes of ICR in respect of half of its obligations and rights toward third parties regarding the land and the project.

During 2023, the Parties entered into a joint operations agreement which governs the relationship between them as co-owners of the land (hereinafter: the "Joint Operations Agreement") and which entered into force subject to fulfillment of a condition precedent.

On May 4, 2023, the date of legal delivery occurred and the transaction was completed.

In the second quarter of 2023, the project marketing began. The sale contracts in the project are conditional upon fulfillment of conditions precedent, which include, inter alia, obtaining bank financing and receiving a building permit. The contracts are cancellable if the conditions precedent are not fulfilled within 24 months from the date of signing the sale contract. As of December 31, 2024, approximately 119 sale contracts were signed for a total consideration of approximately NIS 553 million before VAT (ICR's share is approximately NIS 276 million).

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

Below are material projects of the associate ICR (continued):

(3) ICR – Neve Gan Project (North Park) – Phase B, Complexes D–E (Plots 23–26):

On April 4, 2024, ICR and the Third Party (the "Borrowers") entered into a financing agreement regarding Plots 24–26 with a banking corporation to finance the project (the "Banking Corporation" and the "Financing Agreement", as applicable), pursuant to which the banking corporation provided credit facilities in the following total amounts – facilities for Sale Law guarantees (apartments) (Protection of Investments of Apartment Purchasers) 5735-1974, in a total amount not to exceed NIS 865 million, which will be repaid no later than June 30, 2028, and financial credit facilities (to be used for short-term loans, current accounts, or non-Sale Law guarantees) in a total amount of NIS 780 million, for a period of 50 months (beginning April 2024). In the event that the total amount of Sale Law guarantees issued exceeds the credit limit for Sale Law guarantees, the Sale Law guarantee facility shall be increased accordingly and the financial credit facilities will be reduced by such amount (the Company's share in the facilities is 50%). In addition, the maturity date of the loan for Plot 23 was set for April 30, 2026. The provisions of the financing agreement include customary terms and conditions.

In December 2023, a permit for excavation was received for Plots 24–26, and in the second quarter of 2023, the project marketing began. The sale contracts in the project are conditional upon fulfillment of conditions precedent, which include, inter alia, obtaining bank financing and receiving a building permit. The contracts are cancellable if the conditions precedent are not fulfilled within 24 months from the date of signing the sale contract. As of December 31, 2024, approximately 119 sale contracts were signed for a total consideration of approximately NIS 553 million before VAT (ICR's share is approximately NIS 276 million).

(4) ICR – Neve Gan Project (North Park) – Phase C, Complexes B and C (Plots 18–20):

On June 30, 2021, ICR won a tender of the Israel Land Authority (hereinafter: "ILA") for the acquisition of lease rights in Complexes B–C, Plots 18–20, designated for the construction of 256 residential units and approximately 490 square meters of commercial space (classified as investment property) in high-density construction, located in the Neve Gan neighborhood in Ramat Hasharon, north of the Tel Baruch neighborhood.

For the purpose of financing the acquisition, ICR entered into an agreement with a banking corporation, with respect to Complex B (Plots 18–19, 156 residential units), for obtaining loans, with an outstanding balance as of the date of the statement of financial position of approximately NIS 267 million. The credit facility is valid for two years. To obtain the credit, ICR committed to the bank to create various securities. During 2024, the loan was extended until June 2025.

With respect to Complex C (Plot 20, 100 residential units), ICR entered into an agreement with a banking corporation to obtain a loan in the amount of approximately NIS 230 million, with an outstanding balance as of December 31, 2023, of NIS 185 million. The credit facility is valid for two years. To obtain the credit, the Company committed to provide various securities in favor of the bank. During 2024, the loan was extended until October 2025.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

Below are material projects of the associate ICR (continued):

(5) Urban Renewal on Bar Kochva Street, Neve Israel Neighborhood – "Gefen" Project, Herzliya:

ICR is carrying out an urban renewal project ("vacate and build") on Bar Kochva Street in the Neve Israel neighborhood in Herzliya. The urban development plan for the project has been approved and the complex has been declared a tax-track urban renewal area. The project will include the construction of 400 residential units, of which 276 are designated for sale, and approximately 1,000 sqm of commercial space, classified as investment property.

The project is being executed in two phases. In Phase A, 84 tenants were vacated and 264 residential units are being built in 6 buildings, of which 180 units are designated for sale. In Phase B, 40 tenants were vacated and 136 residential units are being built, of which 96 units are designated for sale.

Phase A:

On July 28, 2020, a demolition and excavation permit was received for Phase A of the project. In May 2021, all Phase A tenants vacated and ICR began demolition of the buildings.

On May 25, 2021, ICR entered into a financing agreement with a banking corporation for a total credit facility of up to NIS 678 million, whereby approximately NIS 145 million was provided as a financial credit facility for financing part of the project construction costs, and the remainder was provided as a guarantee facility. The expiry date of the facilities and the final repayment date is March 31, 2025. To secure the Company's obligations toward the lender, the Company committed to creating liens, including on its rights in the project and the land.

On January 19, 2025, after the balance sheet date, the Company received Form 4 for the project and the project is in the occupancy phase. Additionally, as of the date of the Report, all apartments have been sold for a total of approximately NIS 476 million (excluding VAT).

Phase B:

On July 8, 2021, a permit for excavation and foundation work was received for Phase B of the project. In March 2022, all Phase B tenants vacated and ICR began demolition of the buildings.

In February 2022, ICR entered into a financing agreement with a banking corporation for a total credit facility of up to NIS 372 million, whereby approximately NIS 82 million was provided as a financial credit facility for financing part of the project construction costs, and the remainder was provided as a guarantee facility. The expiry date of the facilities and the final repayment date is April 30, 2026, while the Sale Law guarantees will remain valid until April 30, 2027. To secure the Company's obligations toward the lender, the Company committed to creating liens, including on its rights in the project and the land, including a lien on surpluses from Phase A of the Gefen Project.

In December 2022, a building permit for the project was received.

As of December 31, 2024, the project is under construction and the completion rate is 87.14%. Additionally, 94 apartments have been sold for a total of approximately NIS 316 million (approximately 98% of the units designated for sale in the project).

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

Below are material projects of the associate ICR (continued):

(6) The French Hill Project:

On September 3, 2019, ICR entered into an agreement with third parties (hereinafter: the "Sellers") for the acquisition of the Sellers' lease rights in land of approximately 12,000 sqm, located on Bar Kochva Street in the French Hill neighborhood in Jerusalem, on which, according to the existing urban building plan, approximately 170 residential units may be constructed (hereinafter: the "Project"), for consideration of NIS 100.5 million plus reimbursement of expenses in the amount of approximately NIS 20 million, plus VAT.

To finance the acquisition, ICR received a loan from a banking corporation, with a balance of approximately NIS 124 million as of December 31, 2024.

To secure the Company's obligations and liabilities toward the lender, ICR created liens, including on its rights in the land. In addition, the agreement includes events of default and immediate repayment clauses, as customary in agreements of this type, including change of control in the Company and cross-default clauses.

ICR submitted, together with the municipality, an amended urban building plan to increase the permitted number of residential units on the land to 500 units, comprising 3 towers of 22 to 26 floors, including approximately 500 apartments and approximately 5,000 sqm of employment and commercial space, to the local and district committees. During the third quarter of 2024, the plan was published for public objections in accordance with Section 106(b).

On November 25, 2024, ICR entered into an agreement with a third party not related to the Company (hereinafter: the "Buyer") (hereinafter: the "Agreement") for the sale of all of ICR's holdings in the Project for total consideration of NIS 300 million plus VAT (hereinafter: the "Consideration").

Below are the dates and terms of the Consideration:

• (1) NIS 5 million was received on the date of signing the Agreement.
• (2) NIS 25 million plus VAT was received on December 12, 2024.
• (3) NIS 20 million plus VAT within 45 days from the date of signing the Agreement. After the balance sheet date, on January 22, 2025, this amount was received.
• (4) NIS 250 million plus VAT within 90 days from the date on which the promoted TABA receives legal effect.

The Agreement includes standard provisions regarding the registration of the buyer's rights, tax approval escrow arrangements, and the like. The Agreement also includes an adjustment/cancellation mechanism in the event of changes to the permitted building areas or the scope of public obligations included in the provisions of the approved urban building plan. As of the signing date of the financial statements, the conditions precedent for completion of the transaction had not yet been fulfilled, and therefore control of the land has not yet been transferred.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

Below are material projects of the associate ICR (continued):

(7) Residential Project in Netanya, Lot 1013 – "Ocean 1" Project:

During 2019, ICR entered into transactions regarding a lot measuring approximately 4,540 sqm in Netanya (hereinafter: the "Lot"), on which a residential project comprising 117 housing units may be built (hereinafter: the "Project"), as detailed below:

For 29% of the Project (constituting approximately 34 residential units), ICR purchased the ownership rights in cash for consideration of approximately NIS 23.5 million.

For the remaining rights in the Lot, ICR entered into a combination and construction services agreement, whereby, in consideration for the sale of their rights in the combination land, the landowners are entitled to receive from the Company approximately 18% of the housing units (approximately 21 units). Regarding up to 24% of the housing units in the Project (approximately 28 units), ICR will provide construction services as per the agreed-upon compensation. Additionally, one pool apartment was agreed upon, the proceeds of which will be split between ICR and the landowners. The total number of units for marketing in the Project is approximately 67 units (excluding the pool apartment).

On August 31, 2021, a full building permit was received for the Project. On October 1, 2024, Form 4 was received, and the occupancy phase began.

Additionally, all apartments were sold for total consideration of approximately NIS 190.3 million (the Company's share is approximately NIS 81 million).

(8) Residential Project in Netanya, Lot 1009 – "Ocean 2" Project:

On February 6, 2020, ICR entered into a transaction for a lot measuring approximately 4,916 sqm, near the intersection of Avrahams, Ben-Gurion, and Masada Streets in Netanya (hereinafter: the "Lot"), on which a residential project comprising 117 residential units may be constructed (hereinafter: the "Project").

ICR entered into a combination and construction services agreement with the owners of the full rights to the Lot (hereinafter: the "Agreement"), whereby, in consideration for the sale of 62.5% of the owners' rights in the Lot, the owners are entitled to receive 37.5% of the residential units to be constructed by ICR in the Project. Regarding up to 22 of the housing units in the Project, ICR will provide construction services according to the agreed consideration. In practice, ICR will provide construction services for 17 housing units, and 39 housing units will be allocated to the owners in the combination transaction. Additionally, one pool apartment was agreed upon, the proceeds of which will be shared between ICR and the landowners. The remaining 60 housing units will be marketed by ICR (excluding the pool apartment).

On March 22, 2022, a full building permit was received for the Project.

In April 2022, ICR entered into an agreement with a banking corporation (hereinafter: the "Lender") under which the Lender provided credit facilities and guarantees for the development of the Project in a total amount not to exceed NIS 330 million, of which NIS 65 million is a financial credit facility. The expiry date of the credit facilities and the final repayment date is October 30, 2025.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

Below are material projects of the associate ICR (continued):

(8) Residential Project in Netanya, Lot 1009 – "Ocean 2" Project (continued):

To secure ICR's obligations toward the Lender, ICR created liens, including on its rights in the land. In addition, the Agreement includes customary default and immediate repayment events, including a change of control in ICR and cross-default in relation to other projects financed by the Lender.

As of December 31, 2024, the Project is under construction and the completion rate is 88.29%.

Additionally, all apartments in the Project have been sold for total consideration of approximately NIS 208 million (the Company's share is approximately NIS 88 million).

(9) Urban Renewal Project on Histadrut Street, Givatayim:

ICR is advancing an urban renewal project in the area known as Parcel 159 in Block 6162, in buildings located on Histadrut and HaMaavak Streets, at the corner of 23rd of Sivan and Menorah Streets in Givatayim, currently comprising 117 residential units (hereinafter: the "Complex"). According to the regional outline plan GAV/431, three residential buildings including 333 residential units and approximately 1,000 sqm of commercial space may be constructed on the Complex (hereinafter: the "Project").

In June 2024, ICR entered into a financing agreement with a banking corporation for the funding of the Project, under which the banking corporation provided credit facilities in the following amounts – facilities for Sale Law (Apartments) guarantees (Securing Buyers' Investments) 5735-1974 in a total amount not to exceed NIS 800 million; facilities for issuance of landowner guarantees up to NIS 530 million; and financial credit facilities (to be used as short-term loans, current accounts, or non-Sale Law guarantees) totaling NIS 250 million, which will mature no later than June 10, 2029. In the event the total amount of Sale Law guarantees issued exceeds the Sale Law guarantee facility, the facility will be increased accordingly and the financial credit facility will be reduced by the same amount. The financing agreement includes customary provisions and terms.

ICR began marketing the Project during the third quarter of 2022. As of December 31, 2024, 146 apartments have been sold (approximately 68% of the units designated for sale in the Project) for a total consideration of approximately NIS 614 million before VAT (the Company's share is approximately NIS 261 million).

In December 2023, an excavation and foundation permit for the Project was received, and in January 2025, after the balance sheet date, a full building permit was received for the Project.

In November 2024, all tenants in the Complex vacated the premises, and in January 2025, ICR began demolition, excavation, and foundation work.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

Below are material projects of the associate ICR (continued):

(10) ICR – Sale of Holdings in Rem HaYarkon Ltd.:

On February 25, 2024, ICR (hereinafter: "ICR") entered into an agreement to sell its entire holdings (50%) in ICR Rem HaYarkon Ltd. (hereinafter: the "HaYarkon Company") to its partner in the HaYarkon Company, who is also a related party to ICR. The total consideration in the transaction is approximately NIS 55 million (of which approximately NIS 25 million constitutes repayment of shareholder loans provided by ICR to the HaYarkon Company).

As of the date of the Report, amounts totaling approximately NIS 53.9 million have been paid pursuant to the agreement, and ICR recognized a profit of approximately NIS 26 million before tax (Company's share: approximately NIS 13 million).

(11) The HaMesila Project:

On December 27, 2018, ICR entered into a combination agreement with third parties (the "Owners") regarding their rights in a property measuring approximately 5,378 sqm located at the corner of HaMesila, Nof Shadmot, and Herzliya B Streets in Herzliya (hereinafter: the "Property"), for the purpose of constructing a residential project comprising 54 units (hereinafter: the "Project" and the "Agreement"). Under the Agreement, ICR will develop the Project for the Owners in consideration for ownership rights in the Property and in the Project, constituting 49.25% of the Project's value.

In January 2022, ICR entered into a financing agreement with a banking corporation (hereinafter: the "Lender"), under which the Lender provided credit facilities and guarantees for the development of the HaMesila Project in a total amount not to exceed NIS 262 million, including a financial credit facility of NIS 40 million. The maturity date of the facilities and full loan repayment is June 30, 2025. In October 2022, an amendment to the financing agreement was signed, increasing the financial credit and guarantees facility to approximately NIS 299 million.

In April 2022, a building permit was obtained for all buildings in the Project.

As of December 31, 2024, the Project is under construction, with a completion rate of 80.68%.

In addition, 24 apartments were sold (approximately 89% of the units designated for marketing in the Project) for total consideration of approximately NIS 147 million.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (f) Joint Venture – Israel Canada Rem Projects Ltd. (ICR) (continued):

Below are material projects of the associate ICR (continued):

(12) Idmit Project:

ICR is promoting an eviction and reconstruction project in the area known as Parcels 600–602 in Block 6156, in the buildings located at 13, 15, and 17 Idmit Street in Givatayim, currently comprising 42 residential units. As part of the project, ICR advanced an urban building plan for replotting and consolidation to build a single residential building expected to include 118 housing units. The area is one of several complexes that have been approved for statutory validity by the Tel Aviv District Planning Committee.

The Project includes the following main stages: Signing agreements with all rights holders in the existing buildings within the complex; Approval of the urban building plan for consolidation and division by the local committee and issuance of building permits pursuant thereto – in May 2022, the plan was approved for statutory validity.

Evacuation of residents from their current units; demolition of the buildings; and construction of a new residential building, in which each resident will be entitled to a new apartment in the new building and the remaining new apartments will be sold to third parties.

Execution of the Project is contingent upon several conditions precedent, including: Declaration of the project as an "urban renewal area" under the tax track – in December 2019, a preliminary decision was received to declare the area as such; Approval of a specific new urban building plan – already received; Entry into a financing agreement to fund the development; and economic feasibility conditions.

In December 2024, an excavation permit was received for the Project.

As of the date of signing the Statement of Financial Position, approximately 100% of the rights holders representing all of the units have signed. During the Report Period, apartments were allocated to the rights holders in the Project.

The Company intends to enter into a bank financing agreement to fund the development of the Project. In February 2025, after the balance sheet date, the Company began marketing the Project.

(13) Urban Renewal Project on HaNataka Street, Jerusalem:

ICR is promoting an urban renewal project on HaNataka Street in Jerusalem (hereinafter: the "Complex"), in the area known as Parcels 32–35 in Block 30399, in the buildings located at 78–84 HaNataka Street (even numbers) in the Kiryat Yovel neighborhood, Jerusalem, which currently comprise 138 residential units (hereinafter: the "Complex"). As part of the project, ICR is initiating the construction of 4 residential buildings that will include approximately 425 housing units and approximately 1,000 sqm of commercial space (hereinafter: the "Project").

In December 2022, an excavation permit was received for the Project, and in December 2024, a full building permit was issued.

As of the date of signing the Report, agreements have been signed with 138 rights holders, representing approximately 100% of the total units.

During 2024, apartments were allocated to the rights holders in the Complex, and during the third quarter of 2024, ICR began marketing the Project. As of the balance sheet date, 80 apartments were sold for total consideration of approximately NIS 272 million. ICR intends to enter into a bank financing agreement for the funding of the Project.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (g) Joint Venture – Vertical City Ltd.:

On August 19, 2021, Vertical City Ltd.—owned (indirectly) 74% by the Company and 26% by B.S.R. Engineering & Development Ltd. (hereinafter: "BSR") (together: the "Project Company")—received official notice that it had won a tender managed by "Apartment for Rent – Rental Housing Governmental Company Ltd.," along with the Israel Land Authority and Ayalon Highways Ltd. (together: the "Tendering Entities"), for the purchase of direct leasehold rights (without a development agreement), capitalized for 98 years with an option for another 98 years, for a site known as the "Stock Exchange Triangle" in Ramat Gan. The plot covers approximately 9,590 sqm (sold portion only) and is designated for office towers, residential units, and commercial spaces totaling approximately 176,000 gross sqm above ground, including 400 long-term rental residential units, 350 student dormitories, and public buildings and institutions (together: the "Property") (it is noted that dormitory rights will not be transferred to any public entity). The Project Company committed to managing the leasing of the residential units and dormitories throughout the entire 20-year rental period.

For the leasehold rights, the purchasers paid the Sellers approximately NIS 937 million plus VAT (Company's share: approximately NIS 693 million), plus around NIS 11.5 million for development expenses to the Israel Land Authority. As part of the tender conditions, the Company provided a bank guarantee of approximately NIS 66 million (the "Guarantee"). According to the tender terms, the Guarantee was forfeited immediately upon confirmation of the Company's tender win.

The Project Company operates based on mutual understandings regulating, in principle, the relationship between the Company and BSR within the Project Company, whereby the Project Company is managed by a joint board of directors composed of representatives from the Company and BSR. All decisions of the board of directors are made jointly by directors from both parties. As part of these understandings, each of the Company and BSR undertook to provide shareholder loans to the Project Company in proportion to their respective holdings in order to finance the acquisition of the Property and the construction of the project thereon and/or any other payment and guarantees.

Accordingly, the Project Company is presented under the equity method in the line item for investment in investee companies accounted for using the equity method.

On November 11, 2021, the purchasers completed the payment of the full balance of the consideration. The balance was paid from equity and a bank loan provided to the Project Company (hereinafter also: the "Borrower"), from a local bank (hereinafter: the "Bank"), in the amount of approximately NIS 838 million, plus a bridge loan of NIS 121 million for the payment of VAT (hereinafter and respectively: the "Financing" or the "Loan" or the "VAT Bridge Loan," as applicable) under the following terms. As part of the loan agreement, the Bank also provided a guarantee facility required under the tender conditions in the amount of approximately NIS 95 million.

The main terms of the Loan are as follows:

• (1) A credit facility of up to NIS 838 million was made available for use from November 15, 2021, until November 15, 2024. The facility decreases quarterly by NIS 4 million, to be repaid by the Borrower on a pro-rata basis.
• (2) A VAT Bridge Loan of NIS 121 million was to be repaid within 90 days. This bridge loan has been fully repaid.
• (3) The utilized credit facility bears a variable annual interest rate of Prime + 0.2% (from November 2024 – Prime + 0.4%).
• (4) First-ranking fixed liens were registered in favor of the Bank to secure repayment of the Loan.

In November 2024, the maturity of the remaining balance of the Loan in the amount of approximately NIS 791 million was extended by an additional year until November 2025, at an interest rate of Prime + 0.4%.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (g) Joint Venture – Vertical City Ltd. (continued):

The Company also agreed that the Loan would be subject to the following financial covenants:

• (1) The equity attributable to the shareholders of the Company as a percentage of the consolidated balance sheet total shall not be less than 17%;
• (2) The equity-to-balance ratio in the solo financial statements shall not be less than 30%;
• (3) The equity-to-consolidated-balance ratio shall not be less than 22% at any time;
• (4) The total equity in the solo financial statements shall not be less than NIS 475 million at any time.

As of December 31, 2024, the Company is in compliance with the above financial covenants. For further details, refer to Note 12c.

The purchasers intend to advance permits for the construction of residential buildings, student dormitories, and commercial and office spaces according to the existing zoning plan for the Property (hereinafter: the "Urban Building Plan"). As of the date of the Report, the purchasers have not yet received the permits required for construction of the project. The Company plans to develop and market the project as an income-generating asset. At the beginning of 2023, the Company began submitting purchase requests and signing sale agreements for the sale of portions of one of the office towers.

On February 16, 2022, a master plan for the Stock Exchange area (RG/1800) was approved for statutory validity. To the best of the Company's knowledge, the Municipality of Ramat Gan intends to promote a plan under local committee authority to add office space in accordance with the approved master plan.

On July 28, 2024, the local committee decided to recommend to the district committee the conditional deposit of a plan to increase building rights in the complex to a land construction ratio of 30, such that upon plan approval, total building rights in the complex would amount to approximately 354,000 sqm, of which 277,000 sqm would be for office and commercial use, 24,000 sqm for public buildings, and 53,000 sqm for residential rental and student dormitories. As a result, during 2024, the Project Company recorded appreciation of approximately NIS 187 million (Company's share: approximately NIS 105 million). The appreciation was primarily due to the rights approved for deposit, net of development levies, betterment levies, and appropriate time and risk coefficients, in accordance with the external appraiser's valuation. (In 2023, the Project Company recorded an impairment of approximately NIS 54 million, of which the Company's share was approximately NIS 40 million, mainly due to capitalized financing costs, a decrease in the value component of rental housing, and an increase in construction costs, partially offset by an increase in the value per square meter of office space).

On April 18, 2024, the Company, BSR, and the Project Company entered into an agreement with Clal Insurance Company Ltd. and Clal Pension and Provident Ltd. (together: "Clal"), whereby Clal will invest approximately NIS 160 million in consideration for an allotment of shares (including a shareholder loan) (hereinafter: the "Consideration"), which will constitute approximately 24.5% of the issued and paid-up share capital of the Project Company, free and clear, to be paid to the Project Company upon completion and subject to the fulfillment of the following main conditions precedent:

• (1) Receipt of the Bank's approval (which provided the land acquisition financing) for entering into the agreement and the allotment of shares to Clal;
• (2) Receipt of approval from the Competition Authority for entering into the agreement.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

• (4) Additional Details (continued):
  • (g) Joint Venture – Vertical City Ltd. (continued):

On June 25, 2024, the conditions precedent to the Vertical transaction were fulfilled, and accordingly, 24.5% of the issued and paid-up share capital of the Project Company was allotted to Clal. On June 27, 2024, the full Consideration was received.

The transaction was carried out at a valuation similar to the carrying amount of the land in the books of the associate; therefore, it had no impact on the Company's financial statements. Upon completion of the transaction, the Company holds approximately 55.9% of the issued and paid-up share capital and voting rights in the Project Company.

The Project Company signed memoranda of understanding for an urban renewal ("evacuation and reconstruction") transaction with the owners of the properties on 1–3 Ta'as Street in Ramat Gan, which borders the area of the "Vertical" project. These memoranda will serve as a basis for combination agreements expected to be signed between the parties, whereby the owners will vacate the parcel and transfer it to the Project Company, which will construct the "Vertical" project on the parcel (and on additional land). In exchange for vacating the parcel, the owners will receive built-up space in the project, as detailed in the memoranda. During the Report Period, a combination agreement was signed with the rights holders at 1 Ta'as Street.

In light of significant sales agreements signed during 2023 (22%), the Company decided that 75,000 sqm of office construction rights, out of the total investment property, would be reclassified as real estate inventory, effective October 2023, replacing their previous classification as investment property since the date of land acquisition.

As of the end of 2024, the Company had sold approximately 25,000 sqm of office space for total consideration of approximately NIS 796 million including VAT.

In accordance with the criteria for inclusion of an associate, the Company consolidates the financial statements of Vertical City Ltd. in these financial statements.

For further details regarding the signing of a contract with a contractor for excavation, shoring, and foundation work, refer to Note 33c.

(h) Joint Venture – A.K.A. Beit Mars Ltd.:

On September 2, 2021, A.K.A. Beit Mars Ltd. (hereinafter: the "Project Company" or the "Purchaser"), which as of December 31, 2024 is held by the Company (final indirect holding of 38.4%), Yossi Avrahami Civil Engineering Works Ltd. (24%), Almogim Holdings Ltd. (16%), and Alma Fortress 1 Initiatives 2023 (20%), respectively (together: the "Partners"), won a tender to purchase a plot of approximately 12.4 dunams located at 156, 158, and 160 Herzl Street in Tel Aviv, in its "As-Is" condition, from the rights holders, which include, among others, Discount Bank Ltd. and Reality Fund (hereinafter: the "Sellers" and the "Property," respectively), for total consideration of approximately NIS 685 million plus lawful VAT and linkage differentials (hereinafter: the "Consideration").

Under the sale agreement, the Purchaser acquired all of the Sellers' rights and obligations in the Property, including all built structures, as well as rights and obligations towards existing tenants under third-party lease agreements and under a lease agreement with the Israel Electric Corporation (hereinafter: the "Sale Asset").

As part of the sale agreement, the Purchaser undertook to release the Sellers from an undertaking to the Tel Aviv Municipality and to sign a new undertaking with the Municipality in lieu of the Sellers, under which the Purchaser would bear the costs of vacating occupants on Parcel 7 of the Property and provide a suitable guarantee in favor of the Municipality, the amount of which is considered immaterial by the Partners.

Note 8 – Investments and Loans in Held Companies, Net (continued):

B. Joint Arrangements (continued):

(4) Additional Details (continued):

(h) Joint Venture – A.K.A. Beit Mars Ltd. (continued):

A total of approximately NIS 240 million, plus VAT and lawful linkage differentials, was paid in equity at the time of signing the sale agreements. The Company's share of the first payment amounted to approximately NIS 120 million, plus VAT and linkage differentials, paid from its own sources.

On February 28, 2022 (the "Completion Date"), the Purchaser completed the full payment of the Consideration. The purchase was financed with a bank loan totaling NIS 550 million (Company's share: NIS 275 million), and the remainder from the Company's own resources on a pro rata basis to its holding.

The Company provided unlimited guarantees to the financing banks for the repayment of the loan in accordance with its proportional holding in the Project Company (50%).

On March 16, 2023, Discount Bank, which was the main tenant, notified of termination of the lease and vacated the premises effective June 30, 2023. Accordingly, the property company leased and is continuing to lease the property or parts of it to third parties.

An agreement was signed among the Partners regulating the management and decision-making in the Project Company. Under the agreement, unanimous consent of the Project Company's board of directors is required for material decisions. Accordingly, the Project Company is presented as a joint arrangement and accounted for under the equity method in the line item "Investment in Associates."

On August 24, 2023, the Project Company and its shareholders entered into an allotment agreement with a third party, under which shares representing 20% of the issued and paid-up share capital of the Project Company were allotted to the partner, based on a property valuation of approximately NIS 770 million. The transaction was completed on February 25, 2024. As a result, the Company's holding in the project was reduced to approximately 38% on a final indirect basis.

The Partners intend to develop the site as a residential and commercial project as described above, subject to the approval of a detailed plan under which building permits may be issued (above and hereinafter: the "Project"). It should also be noted that the developers intend to sell the residential portions by constructing and marketing residential units. On February 19, 2025, after the reporting date, the City Engineer Forum was held, in which a recommendation was made to promote a plan under the authority of the local committee for approximately 61,000 sqm designated for residential, employment, and commercial use.

In accordance with the Group's accounting policy, the asset is presented under inventory in the Project Company.

For additional details regarding the extension of the Purchaser's bank loan, refer to Note 33b.

Note 9 – Investment Property

A. Composition and Movement of Investment Property and Investment Property Under Construction Measured at Fair Value:

	For the year ended on December 31, 2024
	Lands	Buildings for lease	Investment property under construction	Total
	NIS thousands	NIS thousands	NIS thousands	NIS thousands
Balance as of January 1, 2024	434,784	1,296,126	849,158	2,580,068
Additions during the year:
Construction purchases/costs	273,363	72,278	68,547	414,188
From advances to investment property	-	2,600	-	2,600
Fair value adjustment	(27,109)	27,562	26,955	27,408
From inventory to investment property	-	8,586	-	8,586
Net exchange rate differences arising from the translation of financial statements of
foreign operations	(874)	-	-	(874)
Total additions Disposals and classifications during the year:	245,380	111,026	95,502	451,908
From investment property to inventory	-	(165)	(138,811)	(138,976)
Classification from land to investment property under construction	(88,295)	-	88,295	-
Balance as of December 31, 2024	591,869	1,406,987	894,144	2,893,000

For the year ended on December 31, 2023

	Lands	Buildings for lease	Investment property under construction	Total
	NIS thousands	NIS thousands	NIS thousands	NIS thousands
Balance as of January 1, 2023	344,251	1,136,832	839,338	2,320,421
Additions during the year:
Construction purchases/costs	65,972	66,500	34,726	167,198
From advances to investment property	25,221	3,023	-	28,244
Fair value adjustment	(1,474)	29,512	35,353	63,391
Net exchange rate differences arising from the translation of financial statements of
foreign operations	814	-	-	814
Total additions	90,533	99,035	70,079	259,647
Disposals during the year:
Sorting	-	60,259	(60,259)	-
Sales	-	-	-	-
Balance as of December 31, 2023	434,784	1,296,126	849,158	2,580,068

Note 9 – Investment Property (continued):

B. Amounts Recognized in Profit and Loss:

		For the year ended on December 31
	2024	2023	2022
	NIS thousands	NIS thousands	NIS thousands
Lease revenue from investment property	80,215	71,822	53,348
Cost of rent	42,961	37,885	22,420
Appreciation of investment property	66,371	86,892	316,391
Depreciation of investment property	38,963	23,502	13,655

C. Determination of the Fair Value of the Group's Investment Property:

Investment property is presented at fair value as determined in valuations conducted by external appraisers who possess recognized professional qualifications and extensive experience regarding the location and type of the appraised property. The fair value represents the price that would be received in an ordinary transaction conducted at arm's length between market participants at the measurement date. Fair value is determined based on market transactions involving similar property in similar locations to the Company's properties during the Report Period, including the second half of 2024, as well as estimates of the expected future cash flows from the properties. The inherent risk of the cash flows was taken into account in estimating them.

• (1) Cities Junction Tower Project During 2024, the Company recorded appreciation in the amount of approximately NIS 23.2 million, resulting from a recommendation by the local committee for conditional deposit of a plan to increase rights. (In 2023, the Company recorded a depreciation in the amount of approximately NIS 17 million). The fair value of the asset as of the balance sheet date is approximately NIS 421 million. Refer to Note 15i.
• (2) Midtown Jerusalem Project At the end of 2024, the Company revalued the asset and recorded an appreciation in the amount of approximately NIS 8.2 million regarding commercial, employment, rental residential, and hotel rights in the project. The main appreciation stemmed from the rise in value per built square meter of the rental residential areas and commercial spaces in the project. (In 2023, an appreciation of approximately NIS 53 million was recorded, primarily due to the value of rental housing affected by apartment sales in the project). The value of the asset as of the balance sheet date is approximately NIS 371 million. During 2024, approximately NIS 138 million of office space was reclassified to inventory and is presented under the item "Inventory – Buildings in Planning and Construction." Refer to Note 15m
• (3) Sea Tower Microsoft Project At the end of 2024, the Company revalued the asset using the income capitalization approach and residual method and recorded an appreciation of approximately NIS 9.6 million. The main appreciation resulted from Lot 4004 under the Comprehensive Plan HR/2440, which allocates areas for residential marketing. (In 2023, an appreciation of approximately NIS 3.8 million was recorded). The value of the asset as of the balance sheet date is approximately NIS 315 million. Refer to Note 15f.
• (4) Midtown Tel Aviv Commercial At the end of 2024, the Company revalued the asset using the income capitalization approach and recorded an appreciation of approximately NIS 20 million, mainly due to an increase in rental income from the commercial spaces resulting from changes in the tenant mix and new leases. (In 2023, an appreciation of approximately NIS 6.3 million). The value of the asset as of the balance sheet date is approximately NIS 494 million. Refer to Note 15b.
• (5) Lands in Herzliya Between 2016 and 2024, the Company, together with partners, acquired portions of land known as Lots 1002, 4001, 4006, and 4009 in Herzliya. According to the valuation as of the end of 2024, the Company recorded an appreciation of approximately NIS 1.7 million (in 2023, an appreciation of approximately NIS 0.3 million was recorded), and their balance as of the balance sheet date amounted to approximately NIS 113.5 million.
• (6) "SHE" Project At the end of 2024, the Company revalued the asset and recorded a depreciation of approximately NIS 7.6 million regarding the commercial and office rights in the project, mainly due to financing costs capitalized to the asset. (In 2023, the Company recorded a depreciation of approximately NIS 2.6 million). The value of the rights as of the balance sheet date is approximately NIS 160 million. Refer to Note 15h.

Note 9 – Investment Property (continued):

C. Determination of the Fair Value of the Group's Investment Property (continued):

• (7) Assisted Living Project in Kfar Shmaryahu At the end of 2024, the Company recorded a depreciation of approximately NIS 1.2 million (in 2023, an appreciation of approximately NIS 2.6 million). The value of the asset as of the balance sheet date is approximately NIS 266 million. Refer to Note 15s.
• (8) Emek Bracha Project Based on a transaction carried out after the balance sheet date, no change in value occurred, and the Company recorded a depreciation of approximately NIS 5 million, mainly due to financing costs capitalized to the asset. The fair value of the asset as of the balance sheet date is approximately NIS 100 million. Refer to Note 15t.
• (9) Dubnov Project In May 2024, the Company won a tender by the Israel Land Authority (ILA) for the purchase of land on Dubnov Street in Tel Aviv, and in August the transaction was completed. At the end of 2024, the Company recorded a depreciation of approximately NIS 9 million, mainly due to financing costs and purchase tax capitalized to the asset. The fair value of the asset as of the balance sheet date is approximately NIS 111 million. Refer to Note 15w.
• (10) Sde Dov Offices Lot 306 In August 2024, the Company won a tender managed by the Tel Aviv-Yafo Municipality for the purchase of leasehold rights in Lot 306, zoned for commercial and employment use. At the end of 2024, the Company recorded a depreciation of approximately NIS 10 million, mainly due to financing costs and purchase tax capitalized to the asset. The value of the asset as of the balance sheet date is approximately NIS 129 million. Refer to Note 15u.
• (11) The Company owns 12 additional projects with a total value of approximately NIS 411 million, for which it recorded a net depreciation totaling approximately NIS 2 million.
• (12) For the main assumptions used in the fair value of the investment property, refer to Note 27b.

D. Ownership and Leasehold Rights:

A consolidated subsidiary, Hatzlachat Hasharon, holds capitalized leasehold rights from the Israel Land Authority on an area of approximately 73.1 thousand square meters in Tzoran, Kadima. The lease term ends in 2042, with an option for an additional 49 years. The lease rights are registered under the Company's name in the Land Registry. The remaining property rights classified as investment property in the Company are ownership rights.

E. Minimum Future Rental Income:

The aggregate amount of minimum future rental income based on signed lease agreements in effect as of December 31, 2024 and 2023, which are non-cancellable, is as follows:

	As of December 31
	2024	2023
	NIS	NIS
	thousands	thousands
Revenue from lease and management fees based on agreements for less than a year	70,046	65,932
Revenue from lease and management fees based on agreements for between one and four years		136,566
Revenue from lease and management fees based on agreements above four years	175,151	167,823

Note 10 – Fixed Assets

Composition as of December 31, 2024:

	Vehicles, furniture, equipment and computers	Land, structure and leasehold improvements	Hotels - furniture, equipment and computers	Hotels (***)	Total
	NIS thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands
Cost:
As of January 1, 2024	12,471	28,738	(*)76,793	(*)634,651	752,653
Additions	1,494	1,142	8,574	30,977	42,187
Revaluation of fixed assets in the revaluation model credited to capital reserve	-	-	-	176,025	176,025
As of December 31, 2024	13,965	29,880	85,367	841,653	970,865
Accumulated depreciation:
As of January 1, 2024	(*)9,476	4,706	(*)43,520	(*)75,916	133,619
Additions	1,109	646	9,540	18,457	29,751
As of December 31, 2024	10,585	5,352	53,060	94,373	163,370
Reduced balance:
As of December 31, 2024	3,380	24,528	32,307	747,280	807,495
As of December 31, 2023	2,995	24,032	(*)33,273	(*)558,735	619,035
Depreciation rates in percentages	6%-33%	0%-25%	7%-33%	1.5%-5.5%

(*) Reclassified

(**) This balance includes hotels presented under the revaluation model (refer to Note 27) and investments in hotels for which the Company holds right-of-use assets.

Composition as of December 31, 2023:

	Furniture, equipment and computers	Land, structure and leasehold improvements	Vehicles	Hotels	Total
	NIS				NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands	thousands
Cost:
As of January 1, 2023 (*)	12,048	28,792	548	642,976	684,365
Additions	663	2,210	-	66,495	69,368
Transition from fixed assets to investment property	(788)	(2,264)	-	1,973	(1,079)
As of December 31, 2023	11,923	28,738	548	711,444	752,654
Accumulated depreciation:
As of January 1, 2023 (*)	7,038	4,119	527	97,742	109,427
Additions	1,900	615	11	21,694	24,220
Sorting	-	(28)	-	-	(28)
As of December 31, 2023	8,938	4,706	538	119,436	133,619
Reduced balance:
As of December 31, 2023	2,985	24,032	10	592,008	619,035
As of December 31, 2022	5,010	24,673	21	545,234	574,938
Depreciation rates in percentages	6%-33%	0%-25%	15%	6%-33%

Note 11 – Accounts payable

Composition:

	As of December 31
	2024	2023
	NIS	NIS
	thousands	thousands
Institutes	57,933	10,413
Expenses payable	32,521	20,460
Income in advance	20,247	1,414
Deposits	16,880	5,970
Liabilities to employees and other liabilities for wages	9,778	9,171
Provision for bonus for the Chairman of the Board of Directors and CEO (1)	6,490	-
Provision for vacation	4,584	2,606
Loans and partner balances	4,488	5,340
Provision for employee bonuses	2,800	2,000
Liabilities for the improvement levy	1,261	1,261
Directors	187	158
Interest payable for bonds	78	432
Related party (1)	3	78
Other	5,994	1,988
	163,244	61,291

(1) Transactions with Controlling Shareholders – for further details refer to Note 29.

Note 12 – Credit and Loans from Banking Corporations and Other Lenders, Including Current Maturities

A. Composition:

		Annual interest rate	Current liabilities As of December 31		Non-current liabilities As of December 31		Total As of December 31
		As of December 31
		2024	2024	2023	2024	2023	2024	2023
			NIS	NIS	NIS	NIS	NIS	NIS
		%	thousands	thousands	thousands	thousands	thousands	thousands
Bank loan - "Rainbow"	b(1)	Prime + 0.2%	1,103,943	1,210,700	-	-	1,103,943	1,210,700
Bank loam - "Midtown Jerusalem" Project	b(2)	Prime + 0.84%	831,396	538,171	-	-	831,396	538,171
Loans from corporations in Israel - Israel Canada Hotels		Prime, Prime+0.8-2.3, 4.02-7.5, Bond+ 2.7	104,815	178,390	337,569	213,514	442,384	391,904
Bank loan - "Beit Hanaara"	b(3)	Prime+0.25%, Prime+1%	-	356,527	355,558	-	355,558	356,527
Bank loan - "Dubnov" project	b(4)	Prime + 0.15%	-	-	354,178	-	354,178	-
Bank loan - "Midtown Tel Aviv" project	b(5)	Index linked + 3.8%-4.09%	15,242	11,200	329,319	245,667	344,561	256,867
Bank loan - "SHE" Project	b(6)	Prime + 1%	284,431	175,921	-	103,976	284,431	279,897
Bank loan - "Lapid" Project	b(7)	Prime + 1%	-	137,318	211,245	-	211,245	137,318
Loan from institutional entities - "Sea Tower" lien	b(8)	1.29%, Bank of Israel interest + 1.75%	14,957	7,252	191,917	193,102	206,874	200,354
Bank loan - "Kfar Shmaryahu"	b(9)	Prime + 1%	151,547	-	-	123,532	151,547	123,532
Bank loan - "Cities Junction Tower" Project	b(10)	Prime + 0.55%	120,091	121,636	-	-	120,091	121,636
Bank loan - "Emek Bracha" Project	b(11)	Prime + 0.5%, Prime + 0.95%	95,828	-	-	96,220	95,828	96,220
Bank loan "Sde Dov Office" Project	b(12)	Prime + 0.3%	-	-	95,114	-	95,114	-
Bank loan - "Sunset" Project		Prime + 0.5%	59,859		-	59,895	59,859	59,895
Bank loans for various projects		Prime+ 2.15%-1.2%	42,581	41,892	-	7,380	42,581	49,272
Bank loans - Da Vinci Offices		Index linked + 4.22%	1,624	1,624	39,448	39,793	41,072	41,417
Loans from corporations in Israel - Midtown Offices		3.3%	1,520	38,714	36,085	-	37,605	38,714
Bank loan - land in Herzliya		Prime + 1.5%	4,833	-	25,062	12,325	29,895	12,325
Bank loan for "Hahoshlim" property		Prime + 0.5%, index linked + 3.6% Index linked + 0.94%, Index linked +	3,954	-	17,882		21,836	-
Bank loan - lien on "Elifelet" property		2.55%	15,373	640	-	14,927	15,373	15,567
Bank loan - Ramat Hasharon		Prime + 1.65%	11,411	-	-	-	11,411	-
Bank loan - lien on "Hahoshlim" property		Prime + 1.1%	686	663	7,985	8,675	8,671	9,338
Financing loan - "Ehad Ha'am" Project		Prime + 0.9%	2,855	9,770	-	-	2,855	9,770
Total credit and loans from bank corporations			2,866,946	2,830,418	2,001,362	1,119,006	4,868,308	3,949,424
Loans from others in NIS		Prime+ 1%-2.6%	58	2,841	1,700	19,996	1,758	22,837
Loans from others in NIS without interest			2,444	-	8,475	6,938	10,919	6,938
Total loans from others			2,502	2,841	10,175	26,934	12,677	29,775

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

B. Additional Information:

(1) Bank Loan – "Rainbow" Tel Aviv Project:

On November 18, 2021, Israel Canada Sde Dov Ltd., a wholly owned and controlled subsidiary of the Company (hereinafter: the "Subsidiary"), completed the full payment for the property, as detailed in Note 15q below. For the purpose of completing the payment, the Subsidiary entered into a loan agreement (hereinafter: the "Agreement") with two local banks (hereinafter together: the "Lenders"), for a total financing framework not to exceed approximately NIS 1,449 million, of which approximately NIS 1,202 million was designated for the purchase of the property, and approximately NIS 206 million for the payment of VAT and ancillary needs relating to the property purchase (hereinafter: the "Financing" or the "Loan").

During 2023, the Company entered into a voucher arrangement with the lending banks, under which the banks would issue voucher booklets to apartment buyers in accordance with the Sale Law, and buyers would pay via vouchers. The proceeds received would be used to repay the credit.

On October 10, 2024, the borrower entered into a financing agreement with the two local banks (in equal parts) for a financing framework not to exceed approximately NIS 3.2 billion, including financial credit (hereinafter: the "Financial Credit") and a framework for Sale Law guarantees (hereinafter: the "Sale Law Guarantee Framework"). Under the agreement, the financial credit shall not exceed approximately NIS 1.23 billion and will be used to finance the construction costs of the project as well as to repay the outstanding land loan.

The credit utilized from the framework will be repaid within three months from the completion of the project, i.e., on December 30, 2029.

The credit framework bears an annual interest rate of Prime + 0.2%.

To secure the repayment of the loan, first-ranking fixed charges were registered in favor of the banks, as agreed with the bank. In addition, the Company provided the banks with unlimited guarantees to secure the repayment of the credit framework.

It should be noted that the loan is subject to the Company meeting the financial ratios and conditions detailed in Note 12(C) below.

As of the date of the financial statements, the outstanding balance of the loan is approximately NIS 1,103 million. After the balance sheet date, the outstanding financial credit amounted to approximately NIS 900 million.

(2) Bank Loan – Midtown Jerusalem Project:

On October 1, 2020, Midtown Jerusalem (Israel Canada) Ltd., a company approximately 74% held by the Company (indirectly) (hereinafter: the "Borrower"), entered into a financing agreement with a local bank (hereinafter: the "Bank") for a credit facility of up to approximately NIS 457 million (hereinafter: the "Credit Facility") to finance the outstanding purchase price, development levies, payment for the preserved building, advancement of the new urban building plan, and additional VAT payments (hereinafter: the "Financing Agreement").

Between January 31, 2023 and April 21, 2024, several additional amendments to the Financing Agreement were signed with the Bank, providing an additional credit facility of approximately NIS 180 million. Following this increase, the total credit facility amounted to approximately NIS 650 million. The credit facility bears a variable annual interest rate of Prime + 0.84%. The updated maturity date of the loan is March 30, 2025.

On October 10, 2024, the borrower signed an addendum to the financing agreement (hereinafter: the "Land Financing Agreement Addendum") and a voucher arrangement, as detailed below:

A. An increase of the credit facility by an additional NIS 350 million, so that following the increase, the total credit facility will amount to approximately NIS 1 billion.

B. A postponement of the final maturity date of the credit facility and interest to March 31, 2025.

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

B. Additional Information (continued):

(2) Bank Loan – Midtown Jerusalem Project (continued):

C. Entry into a voucher arrangement for the issuance of payment vouchers to buyers, whereby buyers (residential and office) in the project will be provided with bank guarantees under the Sale Law for the proceeds deposited into the account via vouchers (excluding VAT components), not as part of construction financing under the Sale Law, up to a maximum amount of NIS 250 million. All proceeds will be paid using payment vouchers and used for partial repayment of the total credit facility.

To secure the repayment of the loan, first-ranking fixed charges were registered in favor of the bank. In addition, the Company, together with its subsidiary Pangaea Israel, provided the bank with unlimited guarantees to secure the repayment of the credit facility.

The utilized balance as of December 31, 2024, amounts to approximately NIS 831 million.

For details regarding the extension of the loan maturity date, refer to Note 32l.

It should be noted that the voucher agreement is subject to the Company meeting the financial ratios and conditions detailed in Note 12(C) below.

(3) Bank Loan – Beit Hanaara Project, Hod HaSharon:

On June 29, 2021, Israel Canada Beit Hanaara Ltd., a wholly owned and controlled subsidiary of the Company (hereinafter: the "Borrower" or the "Project Company"), entered into a loan agreement with a local bank (hereinafter: the "Bank") for a credit facility to finance the acquisition of the property and related needs, with a total obligation of up to approximately NIS 598 million (hereinafter: the "Loan Agreement" and the "Loan," as applicable), as detailed below: of which approximately NIS 511 million was used for the payment of the purchase price of the property and was provided to the Borrower, and an additional amount of approximately NIS 87 million was used for the VAT payment related to the property purchase. The VAT loan was fully repaid on September 22, 2021. The loan bears a variable annual interest rate of Prime + 0.25% and was originally due on June 30, 2023.

On January 24, 2022, the Project Company entered into an agreement to sell 50% (in co-ownership) of the land to Yossi Avrahami Civil Engineering Works Ltd. (hereinafter: the "Partner"). As a result of the sale transaction, in February 2022 the Company repaid 50% of the outstanding loan.

On February 10, 2022, the Project Company entered into an agreement with the Bank for an additional credit facility of approximately NIS 74.5 million under terms identical to the financing agreement.

On May 11, 2023, an agreement was signed to extend the maturity date of the bank loans until June 30, 2024.

On May 1, 2022, the Company and the Partner received official notification from the Tel Aviv-Yafo Municipality that they had won an additional tender for purchasing further rights in the property. On August 4, 2022, the Project Company entered into an agreement with the Bank for a credit facility to finance the purchase of the additional property and related needs in an amount not to exceed approximately NIS 70 million, as detailed below: of which approximately NIS 57 million was used to pay the purchase price and was provided to the Borrower, and an additional amount of approximately NIS 6 million was used to pay VAT for the acquisition. The VAT loan was fully repaid on December 1, 2022. The loan bears a variable annual interest rate of Prime + 1% and is due for repayment on June 30, 2026.

To secure the repayment of the loans, first-ranking fixed charges were registered in favor of the bank, as agreed. In addition, the Company provided the bank with unlimited guarantees to secure the repayment of the loan.

As of the date of the financial statements, the total outstanding loan balance is approximately NIS 355 million, which is classified as long-term.

It should be noted that the loan is subject to the Company meeting the financial ratios and conditions detailed in Note 12(C) below.

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

B. Additional Information (continued):

(4) Bank Loan – "Dubnov" Project:

On August 22, 2024, two designated partnerships of the Company, each held 80% by the Company on a final indirect basis (hereinafter: the "Designated Partnerships"), jointly received a loan from a local bank in the amount of approximately NIS 354 million under financing terms of Prime + 0.15% for a period of approximately 12 months. The loan will be reissued as needed and will be repaid no later than 36 months from the original drawdown date. In addition, a VAT loan in the amount of approximately NIS 75 million was provided, bearing an annual interest rate of Prime + 0.15% for approximately 4 months. The VAT loan was repaid on October 8, 2024.

As of the date of the financial statements, the loan balance is approximately NIS 354 million.

(5) Bank Loan – Midtown Tel Aviv Commercial:

On May 1, 2024, a subsidiary held approximately 81% by the Company (indirectly) (hereinafter: the "Borrower"), signed with a local bank a credit facility totaling approximately NIS 260 million, which replaced an existing loan as of that date, with repayment no later than March 14, 2030. The loan bears a variable annual interest rate of 4.09%, linked to the Consumer Price Index. Until final repayment, the Company shall repay 4% of the principal annually, and the remainder of the loan will be repaid at the final maturity date. The utilized portion of the facility as of the reporting date is approximately NIS 254 million.

On May 6, 2024, the Borrower signed with a local bank an additional credit facility of NIS 90 million, to be repaid no later than May 6, 2027. This loan bears a variable annual interest rate of 3.8%, linked to the Consumer Price Index. The utilized portion of this facility as of the reporting date is approximately NIS 90 million.

The total outstanding loan balance as of the reporting date is approximately NIS 344 million.

The Borrower undertook to meet the following financial covenants:

• An existing obligation for annual Net Operating Income (NOI) of NIS 28 million.

• A loan-to-value (LTV) ratio not exceeding 70% of the property value.

As of the financial statement date, the Company is in compliance with the above financial covenants.

To secure the credit received by the Company as described above, the Borrower registered a mortgage in favor of the bank over its rights in the investment property and pledged all its rights to rental income from the investment property. Additionally, the shareholders provided guarantees for the full credit amount, pro rata to their holdings.

(6) Bank Loan – "SHE" Project:

On August 30, 2017, Israel Canada in the City Partnership, a partnership approximately 81% held by the Company (indirectly) (hereinafter: the "Borrower"), entered into an agreement with a local bank (hereinafter: the "Bank") for a credit facility of approximately NIS 194 million (hereinafter and respectively: the "Financing Agreement") to be used for the payment of the remaining consideration for the purchase. The financing bears a variable annual interest rate of Prime + 0.8%, with quarterly payments, for a period of 36 months until August 31, 2020, with a single repayment of principal on the final maturity date. During 2020, an agreement was signed to extend the loan maturity to July 6, 2023.

Between 2019 and 2022, the partnership entered into additional agreements with the Bank for further credit facilities totaling approximately NIS 84 million at a margin of approximately 0.9% above Prime.

On July 5, 2023, an agreement was signed to extend the existing project loan of approximately NIS 275 million and an additional facility (hereinafter: the "Remaining Facility") of approximately NIS 74 million was made available.

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

B. Additional Information (continued):

(6) Bank Loan – "SHE" Project (continued):

The loan bears an annual interest rate of Prime + 1%, and is due for repayment on March 31, 2025. The outstanding loan balance as of the reporting date is approximately NIS 284 million.

The partnership registered a fixed charge over the limited partnership's rights as per the agreements with the Bank, and the Company provided the Bank with unconditional and unlimited guarantees to secure all obligations of the partnership to the Bank.

(7) Bank Loan – "Lapid" Project:

As of the date of the financial statements, a subsidiary held approximately 60.1% by the Company has a loan from a bank with an outstanding balance of approximately NIS 211 million. The loan bears an annual interest rate of Prime + 1%. The original loan maturity date was October 2024. To secure repayment of the loan, first ranking fixed liens were recorded in favor of the Bank, as agreed. On September 30, 2024, the loan maturity was extended to September 30, 2026.

Additionally, the Company provided the Bank with an index-linked guarantee in the amount of NIS 73 million (a guarantee for 100% of the amount, not in proportion to its holding in the subsidiary).

(8) Loan from Institutional Entities – "Sea Tower" Lien:

On October 1, 2020, the partners in the project entered into a loan agreement with institutional entities from the Harel Insurance Investments and Financial Services Ltd. group and the Amitim – Veterans Pension Funds group, organized by the Harel group. The agreement provided for a non-recourse loan to the partners, secured by the project, in the total amount of NIS 830 million for a period of 15 years and with a duration (average life) of approximately 10 years (hereinafter and respectively: the "Loan") (the subsidiary's share: approximately NIS 200 million). The Loan repaid the project's construction financing in the amount of approximately NIS 652 million. Of the total Loan, NIS 780 million is index-linked. The remaining NIS 50 million bears an interest rate equal to the Bank of Israel rate plus 1.75%.

The Loan amount was disbursed on December 30, 2020. As part of receiving the Loan, the partnership undertook to meet the following financial covenants:

(1) Annual NOI shall not be less than NIS 41.4 million.

(2) Historical debt service coverage ratio (the ratio between NOI and principal, interest, and linkage adjustments during the same period) shall not be less than 1.15.

(3) Projected debt service coverage ratio (ratio between forecast NOI for the upcoming year and the expected loan principal and interest payments for that period) shall not be less than 1.1.

(4) LTV ratio shall not exceed, as of any testing date:

• (a) Up to 3 years from closing 85%.
• (b) From the end of 3 years to the end of 6 years from closing 80%.
• (c) From the end of 6 years to the end of 9 years from closing 75%.
• (d) From the end of 9 years to the end of 12 years from closing 70%.
• (e) From the end of 13 years until full repayment 65%.

The financial covenants are tested quarterly. As of December 31, 2024, the partners are in compliance with the financial covenants.

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

B. Additional Information (continued):

(9) Bank Loan – Acquisition of the House in Kfar Shmaryahu:

A subsidiary held approximately 80% by the Company (indirectly) was granted a credit facility in 2022 from a local bank (hereinafter: the "Bank") in the amount of approximately NIS 88 million. Pursuant to the agreement with the Bank, this credit facility shall be renewed from time to time upon request of the subsidiary, provided that the final repayment date shall be no later than November 30, 2023. The loan bears a variable annual interest rate of Prime + 1%.

On July 6, 2023, an agreement was signed with a banking corporation for a credit facility of approximately NIS 165 million, which includes the outstanding balance of the previous loan in the amount of approximately NIS 88 million. The loan bears an annual interest rate of Prime + 1% and is due for repayment on July 1, 2025. The loan balance as of the reporting date is approximately NIS 151 million.

To secure the repayment of the credit facility, fixed first-ranking charges were registered in favor of the Bank as agreed. In addition, the Company provided the Bank with unlimited guarantees to secure the repayment of the loans.

For further details regarding the expansion of the credit facility, reefer to Note 32(g).

(10) Bank Loan – "Cities Junction Tower" Project:

As of the date of the financial statements, a subsidiary held approximately 51.1% by the Company (indirectly) has a credit facility from a local bank (hereinafter: the "Bank") in the amount of approximately NIS 120 million. Pursuant to the agreement with the Bank, this credit facility shall be renewed from time to time upon request of the subsidiary, provided that the final repayment date shall be no later than November 30, 2024. The loan bears a variable annual interest rate of Prime + 0.55%. The maturity date of the loan for the project was extended to January 30, 2025.

For further details regarding the loan maturity extension, refer to Note 32(b).

To secure repayment of the credit facility, fixed first-ranking charges were registered in favor of the Bank. In addition, the Company provided the Bank with unlimited guarantees to secure the repayment of the loans.

It should be noted that the loan is subject to financial covenants as detailed in Section 12(c) below.

(11) Bank Loan – "Emek Bracha" Project, Tel Aviv:

On May 23, 2022, Pangaea Israel (T.R.) Emek Bracha Project Ltd., a company 100% held by the Company (indirectly) (hereinafter: the "Borrower" or the "Project Company"), entered into an agreement with a local bank (hereinafter: the "Bank") to provide financing to the Borrower for the acquisition of real estate rights in the project, in a total amount not to exceed approximately NIS 29 million. Pursuant to the agreement with the Bank, this credit facility shall be renewed from time to time upon request of the subsidiary, provided that the final repayment date shall be no later than May 23, 2025. The loan bears a variable annual interest rate of Prime + 0.5%.

On February 12, 2023, Israel Canada Emek Bracha (2022) Ltd., a company 63% held by the Company (indirectly) (hereinafter: the "Borrower" or the "Project Company"), entered into an agreement with a local bank (hereinafter: the "Bank") to provide financing for the acquisition of real estate rights in the project, in a total amount not to exceed approximately NIS 65 million (hereinafter and respectively: the "Loan"). Pursuant to the agreement with the Bank, this credit facility shall be renewed from time to time upon request of the subsidiary, provided that the final repayment date shall be no later than May 17, 2025. The loan bears a variable annual interest rate of Prime + 0.95%.

To secure repayment of the bank financing, fixed first-ranking charges were registered in favor of the Bank as agreed. Additionally, the Company provided the Bank with unlimited guarantees to secure all debts and obligations of the Project Companies to the Bank (a guarantee for 100%).

It should be noted that the loan is subject to financial covenants as detailed in Section 12(c) below.

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

B. Additional Information (continued):

(12) Bank Loan – "Sde Dov Offices" Project, Tel Aviv:

On September 24, 2024, Pangaea Sde Dov Offices Partnership, a partnership 100% held by the Company, entered into a loan agreement with a local bank (hereinafter: the "Bank") (hereinafter: the "Agreement") for a financing facility in the amount of approximately NIS 95 million for the subsidiary for the purpose of acquiring the real estate in the project, paying VAT, and meeting other related expenses (hereinafter: the "Financing" or the "Loan"), under the following principal terms:

(1) The credit facility shall be renewed from time to time upon request of the subsidiary, provided that the final repayment date shall be no later than September 24, 2026.

(2) A bridge loan in the amount of approximately NIS 22 million for payment of VAT, which was repaid on December 5, 2024.

(3) The loan bears a variable annual interest rate of Prime + 0.3%.

C. Financial Covenants in Connection with Loans from a Local Bank:

In connection with the receipt of several loans from a local bank (hereinafter: the "Bank") listed in Section B above and totaling approximately NIS 2,549 million as of December 31, 2024, the Company has undertaken to the Bank since 2018 to comply with financial covenants, which were updated during 2024, as detailed below:

• (1) The Company's consolidated shareholders' equity, excluding non-controlling interests, shall not fall below NIS 1,200 million at any time.
• (2) The Company's consolidated shareholders' equity, excluding non-controlling interests, shall not fall below 17% of the Company's total balance sheet (per the consolidated financial statements).
• (3) The Company's consolidated shareholders' equity, excluding non-controlling interests (but including loans granted to the Company that are included in the consolidated equity), shall not fall below 22% of the Company's total balance sheet (per the consolidated financial statements).
• (4) The ratio of shareholders' equity (excluding non-controlling interests) to the Company's total balance sheet per the Company's separate (solo) financial information shall not be less than 37.5%.
• (5) There shall be no change in the controlling shareholders such that Asaf Touchmair and Barak Rosen both cease to be controlling shareholders. In addition, there shall be no other shareholders in the Company whose holdings exceed 32% of the Company's shares.

Additionally, the Company undertook not to distribute any dividends if such distribution would reduce the solo equity ratio below 35%, based on the most recently published separate (solo) quarterly or annual financial statements prior to the decision to distribute. Furthermore, the distribution amount shall not exceed 50% of the net profit for the period (excluding gains/losses from asset revaluation) based on the latest audited annual separate (solo) financial statements.

As of the date of the financial statements, the Company is in compliance with all of the above requirements in accordance with the undertaking to the Bank.

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

C. Financial Covenants in Connection with Loans from a Local Bank (continued):

The following provides details on the Company's compliance with the financial covenants relating to its material loans:

	Loan	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of December 31, 2024 (NIS thousands)	Financial conditions / commitment to no changes of control	Manner of calculation of financial covenants and their results as of December 31, 2024
1.	Local bank	The Company and subsidiaries held at a rate of between 60%- 100%	Refers to all the loans given by the local bank to the companies in the Group (including the Rainbow project, Tel Aviv)	2,549,157	(a)The Company's consolidated equity, excluding non-controlling interests, must not at any time be less than an amount equal to 17% of the Company's total balance sheet (according to consolidated financial statements). (b) The ratio of the Company's equity capital (excluding non-controlling rights) to the total balance sheet of the Company separately (solo) shall not be less than 37.5%. (c) The consolidated equity of the Company, excluding non-controlling interests, must not at any time be less than NIS 1,200 million. (d) The consolidated equity of the Company does not include rights that do not confer control (but includes loans given to the Company which are included in the consolidated equity), shall not be reduced at any time by an amount equal to 22% of the total balance sheet of the Company (according to consolidated financial statements). (e) There shall be no change in the controlling shareholders from the current situation, whereby both Asaf Touchmair and Barak Rosen cease to be controlling shareholders of the Company. Additionally, no other shareholders in the Company will hold more than 32% of the Company's shares.	(a) The ratio of the Company's equity to the total consolidated balance sheet as of December 31, 2024 is approximately 22.7% - compliant. (b) The ratio of the Company's equity to the total solo balance sheet as of December 31, 2024, is approximately 63% - compliant. (c) The amount of equity in the consolidated balance sheet as of December 31, 2024, is approximately NIS 2,486 million - Compliant. (d) The ratio of the Company's consolidated equity, excluding non controlling interests (but including loans provided to the Company that are included in consolidated equity), to total balance sheet is approximately 28.7% - Compliant. (e) No such change has occurred.

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

C. Financial Covenants in Connection with Loans from a Local Bank (continued):

The following provides further details on the Company's compliance with the financial covenants relating to its material loans (continued):

Loan	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of December 31, 2024 (NIS thousands)	Financial conditions / commitment to no changes of control	Manner of calculation of financial covenants and their results as of December 31, 2024
Local 2. bank	A 55.9% owned company that owns the Vertical City project	838,310	791,404	(a) The Company's consolidated equity, excluding non-controlling interests, must not at any time be less than an amount equal to 17% of the Company's total balance sheet (according to consolidated financial statements). (b) The ratio of the Company's equity (excluding non-controlling rights) to the total balance sheet of the Company separately (solo) shall not be less than 37.5%. (c) The consolidated equity amount of the Company, excluding non controlling interests, must not at any time be less than NIS 1,200 million. (d) The consolidated equity of the Company does not include rights that do not confer control (but includes loans given to the Company which are included in the consolidated equity), shall not be reduced at any time by an amount equal to 22% of the total balance sheet of the Company (according to consolidated financial statements). (e) There will not be any structural change in relation to the borrower, compared to the situation existing at the time of signing the loan agreement, without the prior consent of the bank.	(a) The ratio of the Company's equity to the total consolidated balance sheet as of December 31, 2024 is approximately 22.7% - compliant. (b) The ratio of the Company's equity to the total solo balance sheet as of December 31, 2024, is approximately 63% - compliant. (c) The amount of equity in the consolidated balance sheet as of December 31, 2024, is approximately NIS 2,486 million - Compliant. (d) The ratio of the Company's consolidated equity, excluding non controlling interests (but including loans provided to the Company that are included in consolidated equity), to total balance sheet is approximately 28.7% - Compliant. (e) There was a change with the entry of Clal Insurance into the Vertical City project, with the consent of the bank.

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

C. Financial Covenants in Connection with Loans from a Local Bank (continued):

The following provides additional details on the Company's compliance with the financial covenants relating to its material loans (continued):

	Loan	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of December 31, 2024 (NIS thousands)	Financial conditions / commitment to no changes of control	Manner of calculation of financial covenants and their results as of December 31, 2024
3.	Local bank	An 80% owned company that owns the Midtown Jerusalem project	827,700	831,396	There will be no change of control without obtaining the bank's prior written consent. "Control" for this matter as the term is defined in the Securities Law, 5778-1968 including holding together with others. Notwithstanding the above, it is agreed that: A reduction in the combined holdings of Asaf Touchmair and Barak Rosen in the Company to a level not lower than 32% of the control means, as long as they remain the controlling shareholders of Israel Canada at all times, will not constitute a breach of the agreement, and no bank consent will be required for this. A reduction in the combined holdings of the Company and Pangaea in the project company to a level not lower than 70% of the control means in the project company, provided that the Company and Pangaea remain the controlling shareholders of the project company at all times, will not constitute a breach of the agreement, and no bank consent will be required for this.	Compliant

D. Amounts Expected to be Repaid After More Than 12 Months:

The following provides information regarding amounts that are expected to be repaid more than 12 months after the end of the reporting period and which are classified under the Group's current liabilities:

	As of December 31
	2024	2023
	NIS	NIS
	thousands	thousands
Credit from banks	1,224,034	2,140,958

Note 12 – Credit and Loans from Banking Corporations and Other Lenders (continued):

E. Changes in Liabilities Arising from Financing Activities:

Balance as of January 1, 2024 NIS thousands	Cash flows from financing activities NIS thousands	Other changes NIS thousands	Balance as of December 31, 2024 NIS thousands
(3,949,424)	(873,785)	(45,009)	(4,868,218)
(876,210)	(445,469)	(3,089)	(1,324,768)
(29,775)	237	16,861	(12,677)
(316,735)	23,247	(170,150)	(463,638) (6,669,301)
	(5,172,144)	(1,295,770)	(201,387)

Note 13 – Bonds

A. Composition:

		Current liabilities As of December 31		Non-current liabilities	Total
				As of December 31		As of December 31
	2024	2023	2024	2023	2024	2023
	NIS	NIS	NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands	thousands	thousands
Not convertible:
Series F Bonds (b(1))	19,632	88,262	-	19,356	19,632	107,618
Series G Bonds (b(2))	249,469	-	521,426	768,592	770,895	768,592
Series H Bonds (b(3))	-		534,241	-	534,241	-
	269,101	88,262	1,055,667	787,948	1,324,768	872,210

Note 13 – Bonds (continued):

B. Additional Information:

(1) Bonds – Series F:

On May 30, 2019, following a public and institutional tender, the Company raised a total of NIS 196,587,000 nominal value of bonds (Series F) at an annual interest rate of 4.7%, with an effective annual interest rate of 5.13%.

The NIS 196,587,000 nominal value of bonds (Series F), registered by name, with a nominal value of NIS 1 each (hereinafter: the "Bonds (Series F)"), were offered to the public at their nominal value and will be repaid (principal) in 5 annual installments on May 31 of each of the years 2021 through 2025, such that the first and second payments will each constitute 7.5% of the total nominal value of the Bonds (Series F), the third payment will constitute 30%, the fourth payment will constitute 45%, and the final payment will constitute 10%. The first principal payment was made on May 31, 2021, and the final payment will be made on May 31, 2025.

On May 24, 2023, the Company's Board of Directors approved a plan to purchase up to NIS 50 million of the Company's Bonds (Series F) by the subsidiary for a period of up to one year, starting on May 24, 2023. The Board's rationale for the repurchase plan was primarily the trading price of the Company's Bonds (Series F) (hereinafter: the "Bonds") at the time of the decision, which was considered attractive and a sound business opportunity for the Company.

Purchases, if made, will be subject to the Company's cash flow, liquidity, and the goal of reducing its leverage, as well as the generation of capital gains for the Company resulting from the difference between the liability value of the Bonds and the actual purchase cost. The repurchase of the Bonds under this plan is not expected to impair the Company's ability to meet its current and future obligations upon their due date.

As of December 31, 2024, the outstanding carrying amount of the Bonds is approximately NIS 19.6 million.

The Company has committed to comply with the following financial covenants:

• The equity-to-balance-sheet ratio (solo) shall not fall below 35%.
• The Company's equity shall not fall below NIS 350 million.

Additionally, the Company has committed not to distribute dividends if as a result of such distribution: The Company's equity falls below NIS 400 million, or the Company's solo equity ratio falls below 42.5%, based on the most recent separate (solo) quarterly or annual financial statements published prior to the decision to distribute. It was further established that the distribution amount shall not exceed 50% of the net profit for the period (excluding gains/losses from asset revaluation) as per the Company's most recent audited annual or quarterly solo financial statements, as applicable.

Non-compliance with the above financial covenants for two consecutive quarters shall constitute grounds for declaring the remaining balance of the Bonds immediately payable.

In addition, the Company committed that for as long as the Bonds (Series F) are in circulation (i.e., not fully repaid or redeemed by any means, including self-purchase and/or early redemption), it will not create a floating charge over all its assets in favor of any third party to secure any debt or obligation, without prior approval of the Bondholders (Series F) by special resolution.

The trust deed includes a tiered mechanism for adjusting the bond interest rate due to non-compliance with financial covenants, specifically if the equity-to-balance-sheet ratio (solo) falls below 40% or if the equity falls below NIS 375 million.

The financial covenants are tested quarterly. As of the date of the financial statements, the Company is in compliance with the above financial covenants.

As of December 31, 2024, approximately NIS 0.05 million nominal value of Bonds was repurchased for a total consideration of approximately NIS 0.05 million.

Note 13 – Bonds (continued):

B. Additional Information (continued):

(2) Bonds – Series G:

On January 4, 2021, following a public and institutional tender, the Company raised a total of NIS 200,000,000 nominal value of bonds (Series G) at an annual interest rate of 3.95%, with an effective annual interest rate of 4.21%.

On April 19, 2021, following another public and institutional tender, the Company expanded Series G and raised an additional approximately NIS 209.2 million in consideration for the issuance of 206,754 Series G bonds, at a unit price of NIS 1,012 and an effective interest rate of approximately 4.17%.

On August 31, 2021, following another public and institutional tender, the Company further expanded Series G and raised an additional approximately NIS 277.4 million in consideration for the issuance of 277,143 Series G bonds, at a unit price of NIS 1,001 and an effective interest rate of approximately 4.33%.

On December 26, 2021, the Company's Board of Directors approved a private placement to classified investors through the expansion of Series G bonds and raised an additional approximately NIS 152 million in consideration for the issuance of 154,521 Series G bonds, at a unit price of NIS 986 and an effective interest rate of approximately 4.3%. The issuance proceeds were received on January 4, 2022.

The principal of the Series G bonds will be repaid in 3 unequal annual installments on June 30 of each of the years 2025 through 2027, such that the first payment will constitute 30% of the total nominal value of the Series G bonds, and each of the second and third payments will constitute 35% of the total nominal value of the Series G bonds.

Interest on the outstanding principal of the Series G bonds will be paid semi-annually, on the following dates: June 30 and December 31 of each of the years 2021 through 2026, and on June 30, 2027.

On May 17, 2022, the Company's Board of Directors approved a plan to purchase up to NIS 100 million of the Company's Bonds (Series G) by the subsidiary for a period of up to one year, commencing on May 25, 2022. The Board's rationale for executing the repurchase plan was mainly the trading price of the Company's Bonds (Series G) (hereinafter: the "Bonds") at the time of the decision, which was considered attractive and a sound business opportunity for the Company.

On May 24, 2023, the Board of Directors approved a new plan to purchase up to NIS 100 million of the Company's Bonds (Series G) by the subsidiary for up to one year, commencing on May 24, 2023.

The Board's rationale for executing the repurchase plan was primarily the trading price of the Company's Bonds (Series G) at the time of the decision, which was considered attractive and a sound business opportunity for the Company.

Purchases under the plan, if made, will be subject to the Company's cash flow and liquidity status, with the aim of reducing leverage and generating capital gains arising from the difference between the liability value of the Bonds and their actual purchase cost. The repurchase of the Bonds under the plan is not expected to impair the Company's ability to meet its current and future obligations upon their due dates.

The Company committed to comply with the following financial covenants:

• The equity-to-balance-sheet ratio (solo) shall not fall below 37.5%.
• The Company's equity shall not fall below NIS 475 million.

Note 13 – Bonds (continued):

B. Additional Information (continued):

(2) Bonds – Series G (continued):

Additionally, the Company has committed not to distribute dividends if, as a result of such distribution, the Company's equity would fall below NIS 525 million or the solo equity ratio would fall below 44%, based on the latest separate (solo) quarterly or annual financial statements published prior to the decision to distribute. It was also established that the distribution amount shall not exceed 50% of the net profit for the period (excluding asset revaluation gains/losses), as per the Company's most recent audited annual or quarterly solo financial statements, as applicable.

Moreover, the Company undertook that for as long as the Bonds (Series G) remain in circulation (i.e., not fully repaid or redeemed in any way, including through self-purchase and/or early redemption), it shall not create a floating charge over all its assets in favor of any third party to secure any debt or obligation, without the prior consent of the Bondholders (Series G) by special resolution.

The deed of trust stipulates a tiered mechanism for adjusting the interest rate on the bonds in the event of noncompliance with financial covenants, specifically if the solo equity-to-balance-sheet ratio falls below 42% or equity falls below NIS 500 million.

The financial covenants are tested quarterly. As of the date of the financial statements, the Company is in compliance with the aforementioned financial covenants.

As of the report date of December 31, 2024, approximately NIS 64 million nominal value [of Bonds] was purchased for a total consideration of approximately NIS 62 million.

(3) Bonds – Series H:

On June 26, 2024, the Company raised a total of approximately NIS 228.9 million nominal value of Bonds (Series H) at an annual interest rate of 6.95%, for total proceeds of approximately NIS 226.5 million, with an effective annual interest rate of 7.19%.

On December 10, 2024, following a public and institutional tender, the Company expanded Series H and raised an additional approximately NIS 320 million in consideration for the issuance of 300,000 Series H bonds, at a unit price of NIS 1,066 and an effective interest rate of approximately 6.34%.

The principal of the Bonds will be repaid in four equal annual installments on June 30 of each of the years 2028 through 2031, such that each installment will constitute 25% of the total nominal value of the Bonds. The first principal payment will be made on June 30, 2028, and the final principal payment will be made on June 30, 2031.

Interest will be paid in equal semi-annual payments, on December 31, 2024, and on every June 30 and December 31 of the years 2025 through 2030. The final interest payment will be made on June 30, 2031.

The Company committed to comply with the following financial covenants:

• The equity-to-balance-sheet ratio (solo) shall not fall below 37.5%.
• The Company's equity shall not fall below NIS 1.2 billion.
• The ratio between the consolidated equity and consolidated balance sheet, according to the Company's consolidated financial statements, shall not fall below 15%.

Note 13 – Bonds (continued):

B. Additional Information (continued):

(2) Bonds – Series H (continued):

The interest rate borne by the bonds will be adjusted in the event of a breach of one or more of the following financial covenants:

• The equity-to-balance-sheet ratio (solo) shall not fall below 42%.
• The Company's equity shall not fall below NIS 1.25 billion.
• The consolidated equity-to-balance-sheet ratio shall not fall below 17%.

The financial covenants are tested quarterly. As of the date of the financial statements, the Company is in compliance with the above financial covenants.

C. Rating:

On May 20, 2024, the Company received an initial rating of ilA- with a positive outlook from S&P Maalot for the Company and for its Bonds (Series F and Series G). On June 23, 2024, S&P Maalot announced a rating of ilA- for the issuance of a new series (Series H) as detailed above.

Note 14 – Income Taxes

A. Deferred Tax Balances:

	Balance as of January 1 2024	Sorting	Recognized in profit and loss	Recognized in other comprehens ive income	Other	Balance as of December 31, 2024
	NIS	thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands
Temporary differences:
Investment property	(204,175)	11,011	(14,699)	120	-	(207,743)
Real estate inventory	(27,573)	(11,011)	15,125	-	-	(23,459)
Financial assets at fair value through profit and loss	15,125	-	(7,677)	-	-	7,448
Fixed assets	-	-	(295)	(40,486)	-	(40,781)
Loans granted to companies using the equity method	-	-	-	-	26,761	26,761
Other	11	-	(2,276)	-	-	(2,265)
Unused tax losses	77,619	-	24,856	-	-	102,475
	(138,993)	-	15,034	(40,366)	26,761	(137,564)

Note 14 – Income Taxes (continued):

A. Deferred Tax Balances (continued):

	Balance as of January 1, 2023	Recognized in profit and loss	Recognized directly in equity	Balance as of December 31, 2023
	NIS thousands	NIS thousands	NIS thousands	NIS thousands
Temporary differences:
Investment property	(184,463)	(19,612)	(100)	(204,175)
Real estate inventory	(23,198)	(4,375)	-	(27,573)
Financial assets at fair value
through profit and loss	(24,930)	40,055	-	15,125
Other	19	(118)	110	11
Unused tax losses	116,250	(38,631)	-	77,619
	(116,322)	(22,681)	10	(138,993)

Deferred taxes are presented in the statement of financial position as follows:

		As of December 31
	2024	2023 NIS thousands
	NIS thousands
Deferred tax assets	31,771	51,192
Deferred tax liabilities	(169,335)	(190,185)
	(137,564)	(138,993)

B. Temporary Differences in Respect of Investments in Subsidiaries for Which No Deferred Tax Liability Was Recognized:

The Group did not recognize deferred tax liabilities for investees, as it intends to hold and develop the investments, and since dividends between companies in Israel are not subject to tax.

C. Income Tax Expenses (Income) Recognized in Profit or Loss:

	For the year ended on December 31
	2024	2023	2022 NIS thousands
	NIS thousands	NIS thousands
Current taxes:
Current tax (revenue) expenses	4,608	(24,946)	119,212
Taxes for previous years	(3,255)	4,685	8
Total current taxes	1,353	(20,261)	123,220
Deferred taxes:
Deferred tax expenses (revenue) for the creation and reversal
of temporary differences	(15,034)	22,681	(47,906)
Total deferred taxes	(15,034)	22,681	(47,906)
Total tax expenses	(13,681)	2,420	71,314

Note 14 – Income Taxes (continued):

D. Adjustment of Tax Expenses (Revenue) to Profit (Loss):

	For the year ended on December 31
	2024	2023 NIS thousands	2022 NIS thousands
	NIS
	thousands
Total profit (loss) before taxes on income and before equity gains	35,063	(58,621)	384,079
Statutory tax rate	23%	23%	23%
Tax expenses at statutory tax rate	8,064	(13,483)	88,338
Addition (savings) in tax for:
Creation of deferred tax for the first time and losses and benefits for tax
purposes for which deferred taxes were not recognized	(4,373)	(2,476)	(25,347)
Current losses for which deferred tax is not incurred	(13,255)	2,834	11,923
Profits for which no tax provision was created	6	2,168	-
Measurement differences of assets and liabilities for tax purposes	(4,939)	(4,296)	(4,961)
Tax expenses for Company's share of profits of partnerships accounted
for using the equity method	965	10,838	2,187
Tax expenses for rights that do not confer control in partnerships that
are transparent for tax purposes	386	195	(1,411)
Other	2,720	1,955	104
Adjustments made during the year for current taxes from previous years	(3,255)	4,685	481
Total income taxes as presented in profit and loss	(13,681)	2,420	71,314

E. Additional Information:

(1) Tax Aspects in Israel:

The applicable corporate tax rate in Israel is 23%.

(2) Tax Aspects for Holding Companies in Cyprus:

The corporate tax rate in Cyprus is 12.5%.

According to the applicable treaty, there is no tax liability in Cyprus upon distribution of dividends from the Cypriot company to its shareholders.

(3) Tax Aspects in Poland:

The corporate tax rate in Poland is approximately 19%.

(4) Tax Aspects in Russia:

The corporate tax rate is 20%, and in certain regions of Russia, a reduced corporate tax rate of 15.5% may apply.

(5) Income Tax Assessment of the Subsidiary Hatzlachat Hasharon:

On February 15, 2022, Hatzlachat Hasharon signed a Stage B tax assessment agreement regarding tax years 2015–2018, in which it was agreed to recognize income earlier, offset by attributable costs, for tax purposes in the amount of approximately NIS 65 million (Hatzlachat Hasharon's portion). As a result of the agreement, the Company paid tax in the amount of approximately NIS 15 million, and an additional amount of approximately NIS 3 million in linkage differentials and interest, which were paid during 2022–2023. In the Company's financial statements as of December 31, 2022, an expense was recorded for the payment made, due to the timing of recognition of the residential rights in Ramat HaSharon. For further details, refer to Note 15(d).

Note 14 – Income Taxes (continued):

E. Additional Information (continued):

(6) Request for Approval of Share Transfer in Subsidiary Hatzlachat Hasharon:

On February 21, 2024, the Company submitted a request to the Israel Tax Authority for pre-approval to transfer rights of the Ramat HaSharon Youth Development Partnership from the subsidiary Hatzlachat Hasharon to the Company, all subject to Section 104(c) and Part E2 of the Income Tax Ordinance.

On March 20, 2025, after the balance sheet date, the Company received approval from the Tax Authority.

(7) Income Tax Assessment for the "HaRakevet" Project:

The Company has final tax assessments up to and including the 2019 tax year.

On December 5, 2023, the subsidiary received best-judgment income tax assessments for the 2022 tax year, primarily concerning the non-deductibility of development and management expenses charged by the parent company in the amount of approximately NIS 40 million, of which approximately NIS 20 million was received by the subsidiary.

The subsidiary disagrees with the tax officer's assessment and believes it has strong arguments in its favor and intends to assert its full rights as reflected in the objection submitted.

In the opinion of the Company and its professional advisors, the companies' claims are valid.

Note 15 – Agreements:

A. Operating Lease of Investment Property and the Kadima-Tzoran Project:

On November 16, 2006, Hatzlachat Hasharon Ltd. (a wholly-owned and controlled subsidiary, hereinafter: the "Subsidiary") signed an agreement under which it purchased capitalized leasehold rights in a land parcel located in the Kadima-Tzoran area under an operating lease agreement from the Israel Land Authority. As stated in Note 2j, the Group treats these rights as investment property presented, in accordance with the Company's accounting policy, at fair value.

Between 2007–2013, the Subsidiary entered into a series of agreements with numerous third parties for the sale of portions of the land.

As of December 31, 2024, the investment property balance includes an amount of approximately NIS 19 million for the Subsidiary's leasehold rights in the Kadima-Tzoran complex, reflecting, as noted above, rights to approximately 73.1 thousand square meters.

For further details on land rights acquisitions, refer to Note 32(h).

B. "Midtown Tel Aviv" Project:

Over the years, the Company acquired, through its subsidiaries and in several transactions, approximately 81% of the shares of Midtown Ltd. (hereinafter: "Midtown") (indirectly). Midtown purchased a 13.6-dunam lot located near the Azrieli Center in Tel Aviv and constructed a project consisting of a residential tower with 338 apartments and an office tower with a total area of approximately 75 thousand square meters, as well as commercial areas totaling approximately 17 thousand square meters (gross). By the end of 2022, Midtown had sold and delivered all the office and residential areas in the project. To date, Midtown owns approximately 16,192 square meters of commercial space (gross) and a parking lot with approximately 632 parking spaces.

As of the date of the Report, all of the assets owned by Midtown are leased under market rental agreements to third parties.

Note 15 – Agreements (continued):

C. "Uptown" Project:

During 2015, a limited partnership (hereinafter: "Uptown"), held 64% by the Company and 36% by third parties, purchased rights in real estate located in the "Pi Glilot" complex in Ramat HaSharon, covering approximately 34 dunams (hereinafter together: "Paz Properties"), including all building rights on the Paz Properties (if any), as well as all rights (if any) under existing lease agreements of the seller regarding the said properties, for a total consideration of approximately NIS 131 million. The Paz Properties also include approximately 6 dunams not included within the boundaries of the planning scheme being promoted for the land.

Following the acquisition, the Company began marketing the land, and as of December 31, 2024, the Company had marketed approximately 23.5 dunams of the land for a total amount of approximately NIS 217 million.

D. "New Ramat HaSharon" Project:

A limited partnership (hereinafter: the "Limited Partnership"), held indirectly by the Company at a rate of 81%, purchased in 2015 all the lease rights in the land known as Parcel 130 in Block 6547, covering an area of approximately 64,839 square meters, located in Ramat HaSharon (hereinafter: the "Complex"), including the buildings on it, for a total consideration of approximately NIS 160 million plus VAT. The consideration included the land cost of approximately NIS 135 million and permit fees to the Israel Land Authority.

The Limited Partnership is working to rezone the land (currently designated for industry and employment) to a mixed-use area including residential and commercial (retail and office) use.

Planning Procedures for the Project:

The plan will allow the construction of a project with a total built-up area of approximately 206 thousand square meters above underground levels of approximately 90 thousand square meters. According to the plan, areas may be built for commercial and employment use totaling approximately 150 thousand square meters across four towers, each up to 20 stories, interconnected at the lower levels where the commercial spaces will be located. Additionally, ten residential buildings of nine stories each will be constructed, containing 600 small residential units (of which 120 will be designated as rental apartments). Furthermore, space will be allocated for the construction of a school and other public areas for local residents, as well as an area of approximately 7.5 dunams for a transportation terminal and urban storage uses.

In November 2022, the Tel Aviv District Planning and Building Committee decided to approve the deposit, with conditions, of the Morasha Employment Zone Plan in Ramat HaSharon, for the development of a complex combining residential, commercial, employment, and public buildings (hereinafter: the "Plan").

The Plan will enable the construction of a project with a total above-ground area of approximately 206 thousand square meters, above basements with an area of approximately 90 thousand square meters. Pursuant to the Plan, the construction of areas for commercial and employment uses will be permitted, in a scope of approximately 150 thousand square meters, in four towers of up to 20 stories each, which will be connected at the lower floors where the commercial uses will be allocated. In addition, ten residential buildings of nine stories will be constructed, containing 600 small residential units (of which 120 will be allocated for rental apartments). Pursuant to the Plan, an area will be designated for the establishment of a school, additional public areas for local residents, and an area of approximately 7.5 dunams for a transportation terminal and urban storage uses.

On February 29, 2024, the District Committee resolved to approve the Plan, in respect of which an appeal was filed by the Ramat HaSharon Municipality. A hearing on the appeal was held in July 2024. The Company is awaiting a decision regarding the appeal.

Marketing of Residential Rights in the Project:

Based on a preliminary inquiry submitted by the Company in 2017 and discussions held with the staff of the Israel Securities Authority, the Company did not recognize revenue from the sale of residential rights in prior reporting periods, as it was not yet possible to specifically identify the rights in connection with each customer agreement.

Note 15 – Agreements (continued):

D. "New Ramat HaSharon" Project (continued):

Marketing of Residential Rights in the Project (continued):

Following the decision of the District Committee as mentioned above, the Company reassessed the timing of revenue recognition from the residential rights sold. It should be noted that the Company's timing and accounting treatment were conducted after discussions with the Israel Securities Authority staff, which informed the Company it would not intervene in the accounting treatment adopted. Accordingly, in 2022, the Company recognized revenue from the sale of 588 rights in residential land units against the removal of the full cost of the inventory related to the Ramat HaSharon Project from its financial statements.

For any future sale of rights in the Project after December 31, 2022, the full revenue from such sale will be recognized in the financial statements with no associated cost of sale.

Marketing of Office Rights in the Project:

Beginning in March 2018, the Company commenced marketing the office areas to be constructed on the property.

As of December 31, 2024, the Company had marketed approximately 182 land units representing rights to offices totaling approximately 250 square meters (hereinafter: "Generation A"), and approximately 83 land units representing rights to offices totaling approximately 129 square meters (hereinafter: "Generation B").

Co-ownership Agreements:

As part of the sale agreements (for both residential and office land rights), the parties also enter into a Coownership Agreement and a Management Agreement, pursuant to which, subject to approval of the proposed rezoning, the managing company, which will be a company from the Group, shall be entitled to management fees from all purchasers, who will proceed with construction on the property as a buyers' group. Under the Coownership Agreements, the Company (including via a designated entity) shall be entitled, subject to receipt of a building permit (if granted), to management fees of NIS 40,000 plus VAT for each average residential land unit sold, and for each Generation A and Generation B office land unit.

E. "Ehad Ha'am" Project, Tel Aviv:

On September 16, 2015, Hatzlachat HaSharon Ltd. (a wholly-owned and controlled subsidiary of the Company, hereinafter: the "Subsidiary"), through a company held 75% by it and 25% by various partners (hereinafter respectively: the "Project Company" and the "Partners"), entered into an agreement with a third party for the purchase of all leasehold rights in Parcel 38 in Block 6920 (13 Ehad Ha'am Street) in Tel Aviv, with an area of approximately 1,470 square meters on which there exists a five-story office/retail building, as well as all rights and obligations associated therewith, for a total consideration of approximately NIS 77 million plus VAT. The consideration was financed through a shareholder loan to the Project Company and bank financing. In addition, during 2018–2020, the Subsidiary increased its holdings in the Project Company and acquired an additional 20% (cumulative) from other partners, such that as of the reporting date the Subsidiary holds 95% of the Project Company's share capital.

On August 30, 2020, a full building permit was received for the project, and construction began on a five-story residential building containing 69 residential units above a commercial floor.

On August 14, 2024, Form 4 was received for the project. By the end of 2024, the Company had completed the process of delivering the apartments.

As of the end of 2024, 63 residential units (out of 69) had been sold for a total of approximately NIS 322 million including VAT.

In accordance with the Company's revenue recognition policy, as detailed in Note 2r(6) above, the Company recorded revenues from the sale of residential apartments in the amount of approximately NIS 61 million in 2024 and approximately NIS 85 million in 2023.

After the balance sheet date, an additional apartment was sold for a total of approximately NIS 9 million including VAT.

Note 15 – Agreements (continued):

F. "Sea Tower" Project:

General:

On May 6, 2016, a wholly-owned and controlled subsidiary of the Company (indirectly) (hereinafter: the "Subsidiary") (30%), Acro S.A.A.S Projects Limited Partnership (hereinafter: "Acro") (30%), Tidhar Investment Limited Partnership (hereinafter: "Tidhar") (30%), and an additional third party (hereinafter: the "Partner") (10%) purchased ownership rights in Parcels 4003 and 4005 in Herzliya Pituach and concurrently entered into a term sheet regulating the cooperation between them as co-owners of the land for the purposes of regulating the relationships between them, planning, operation, and management of the project (hereinafter: "Joint Venture 1").

Entry of a Partner into the Subsidiary:

On July 10, 2016, the Subsidiary entered into an agreement with a partner for the allocation of approximately 26.67% of the ordinary share capital and rights of the Subsidiary in consideration for approximately NIS 18 million.

In February 2022, the Company purchased from the partner its shares in the Subsidiary for approximately NIS 34 million. Upon completion of the purchase, the Company holds 100% of the shares in the Subsidiary.

Engagement with an Additional Partner:

In March 2018, Joint Venture 1 entered into an agreement with additional third parties (hereinafter: "Hof HaTchelet Group"), who are the full owners of Parcel 4004, whereby Joint Venture 1 and Hof HaTchelet Group (together: the "New Joint Venture") will consolidate Parcels 4003, 4004, and 4005 into a single unified parcel, to be jointly owned in undivided shares based on the following ownership proportions: each of the Subsidiary, Acro, and Tidhar will hold approximately 24% of the unified parcel, the Partner will hold approximately 8%, and Hof HaTchelet Group will hold approximately 20%. The parties will jointly construct the project and lease the property to Microsoft as detailed below.

Agreement Between the Partners and Microsoft Israel R&D:

On December 21, 2020, the New Joint Venture and Microsoft signed an addendum to the lease agreement whereby Microsoft would lease an additional area of approximately 2,500 square meters, including the ground floor, gallery level, storage areas, and basement floor, along with 53 parking spaces, for an annual consideration of approximately NIS 3,870 thousand.

On February 11, 2021, a permit was received for a change of use from retail to office for the ground floor for a period of five years. Most areas originally designated for retail were converted to office use, leaving only a limited retail frontage.

G. "Lapid Complex" Project, Tel Aviv:

A company (hereinafter: the "Project Company") held approximately 60% by the Company holds the leasehold rights in the "Lapid" complex on Eilat Street, Tel Aviv–Jaffa, for a term of 49 years with an option to extend the lease for an additional 49 years.

On June 14, 2023, the Company purchased from one of the partners in the project their entire stake (9.9%) in the Project Company for approximately NIS 8.6 million. In addition, the Project Company repaid the full balance of the shareholder loan granted by the seller. As a result, as of the balance sheet date, the Company holds approximately 60% of the Project Company.

Eviction of Tenants from the Property:

At the time of purchase, there were 27 protected tenants and six free-market tenants on the property. In accordance with the tender terms under which the Project Company was selected, the Project Company is responsible for the eviction of the protected tenants. As of the date of publication of this Report, most tenants have been vacated, and the Company is working through legal proceedings and/or negotiated agreements for the eviction of the remaining occupants.

Note 15 – Agreements (continued):

G. "Lapid Complex" Project, Tel Aviv (continued):

Project Company Plans Regarding the Property:

The Project Company intends to construct a residential and commercial project on the Lapid Complex as detailed above, subject to the approval of a detailed plan from which building permits can be obtained.

It should also be noted that the Project Company intends to market residential rights in the land either as undeveloped land parcels (As-Is), by constructing and selling units as a developer, by executing combination transactions, or by organizing a buyers' group. For the employment-designated rights, the Company intends to retain ownership as an income-producing asset. As of December 31, 2024, the full conditions required by acceptable accounting standards to support the reclassification from inventory to investment property have not yet been met.

On April 7, 2021, the Tel Aviv Local Planning Committee approved the plan under which the total rights in the Complex, covering an area of 20 dunams near Neve Tzedek and Herbert Samuel Promenade in Tel Aviv (hereinafter: the "Complex"), will amount to approximately 120 thousand square meters, of which Lapid Ltd. (a subsidiary held 50% by the Company) will hold approximately 33 thousand square meters, divided as 55% residential and 45% hotel (hereinafter: the "Plan"). It is noted that Lapid holds approximately 7.5 dunams in the Complex, with the remaining area held by third parties (together: the "Developers").

Since the Plan is under the jurisdiction of the District Committee, the Developers intend to submit and promote the Plan for deposit and approval by the District Committee.

H. SHE Project (formerly: "Israel Canada in the City"):

A limited partnership held by the Company (indirectly) at a rate of approximately 81% (hereinafter: the "Project Partnership") owns a property located at 24 Yehuda Halevi Street, corner of 19 Herzl Street, Tel Aviv, also known as part of Parcels 10 and 16 in the block, which formerly served as the main branch of Bank Leumi Le-Israel Ltd.

On September 9, 2020, a decision was issued to approve the proposed zoning plan under Tel Aviv Plan 5000, permitting the construction of a 40-story tower with a total area of 38,192 square meters (main and service areas), divided as follows: (a) 102 residential units with a total area of 10,775 square meters; (b) office and/or hotel and commercial areas totaling 25,047 square meters; and (c) public buildings with an area of 2,370 square meters.

The Partnership intends to develop a residential and office project on the Complex as detailed above. It is further noted that the Partnership intends to retain the employment-designated space as a wholly or partially incomeproducing property, and to market the residential units through construction and sales.

Accordingly, the Partnership separated the investment property component from inventory based on the ratio between the fair value as of the acquisition date of the employment-designated land areas and the total project value.

A demolition permit was received for the Partnership's rights in the property, and demolition work was carried out during 2023. On February 18, 2024, the architectural design plan for the project was approved. On December 1, 2024, a permit for excavation and shoring was received.

The Company began marketing in the fourth quarter of 2024, and as of the date of publication of the Report, one residential unit had been marketed for total consideration of approximately NIS 32 million, including VAT and registration documents.

For further details on the contractor agreement for excavation and shoring works, refer to Note 32(j).

Note 15 – Agreements (continued):

I. "Cities Junction" Project (Acquisition of the "Eurocom Building"):

Between 2018 and 2020, a second-tier subsidiary of the Company (100%) (hereinafter: the "Project Company") entered into several agreements with various sellers to purchase full rights in the property known as Parcel 895 in Block 6128, located at 2 and 4 Dov Friedman Street, Ramat Gan, with a total area of approximately 2,056 square meters (hereinafter: the "Eurocom Building" and the "Land," respectively) for aggregate consideration of approximately NIS 160 million (including purchase taxes).

During 2021, a subsidiary (100%) of the Company entered into agreements with Mor Provident Funds Ltd., Menora Mivtachim Insurance Ltd., and Menora Mivtachim Pension and Provident Ltd. (together: "Menora"), and with third parties unrelated to the Company and/or its controlling shareholders (hereinafter: the "Additional Purchasers"), for the sale of approximately 19.9%, 20%, and 9% of the issued and paid-up share capital of the Project Company on an As-Is basis, free and clear, for a total consideration of approximately NIS 140 million plus VAT as required by law, paid in a single installment. The consideration included payment for the sold shares as well as for the acquisition of 48.9% of the balance of shareholders' loans previously extended to the Project Company.

Simultaneously, all parties entered into a shareholders' agreement regulating their relationship as shareholders in the Project Company. Upon completion of the transactions, the Company holds approximately 51% (indirectly) of the shares of the Project Company.

On December 2, 2021, a demolition permit was issued for the existing structure, and the work was completed.

On May 7, 2024, the Local Committee decided to recommend to the District Committee the conditional deposit of a plan to increase building rights in the complex, allowing for the construction of a 65-story tower with mixeduse purposes: employment, residential, and commercial. The tradable building rights under the plan amount to approximately 91 thousand square meters, of which approximately 23 thousand are designated for employment, 400 square meters for commerce, and an additional 7 thousand square meters for public buildings. The Company fulfilled the conditions, and the plan will be submitted to the District Committee.

As of December 31, 2024, the property was valued at approximately NIS 421 million (as of December 31, 2023: approximately NIS 388.5 million).

As of the date of this Report, a wholly-owned subsidiary of the Company is operating a parking lot on the premises and pays monthly lease payments to the Project Company.

J. "Business Village" Project, Netanya:

On November 1, 2018, the Company, through a company held 60% by the Company (indirectly) and 40% by third parties (hereinafter: the "Project Company"), entered into an agreement with a third party unrelated to the Company and/or its controlling shareholders to purchase ownership rights in real estate located in Netanya on an As-Is basis for consideration of approximately NIS 134 million plus VAT.

Under the agreement, the Project Company acquired ownership rights to land located in the northern industrial zone of Netanya, known as Block 8236, Parcel 175, with a registered area of approximately 72 dunams, subject to long-term leases in favor of third parties over approximately 18 dunams. On the remaining 54 dunams, which are not subject to such leases, there are buildings designated for industrial use, leased to a third party for annual lease payments of USD 1.35 million until 2025. On May 9, 2024, the tenant exercised an additional option to extend the lease until 2030.

Since February 2019, the Project Company has been marketing the land. As of the end of 2024, it recognized cumulative gross profit of approximately NIS 83 million (Company's share: NIS 49.8 million) from the sale of approximately 20 dunams of the land. Sale proceeds were used to fully repay bank financing and part of the shareholders' loans.

The Company intends to continue marketing the remaining land in its current condition (As-Is) and/or development rights derived from the future enhancement plan.

The Company is advancing a plan under the jurisdiction of the Local Committee for a mixed-use project with approximately 200 thousand square meters of construction, according to the planning alternative preferred by the municipality. On March 24, 2025, a deposit hearing was held by the Local Committee, and to the best of the Company's knowledge, a decision was made to deposit the plan subject to conditions.

Note 15 – Agreements (continued):

K. "Israel Canada Hotels":

(1) Establishment of Israel Canada Hotels:

During 2019, the Company, through a subsidiary, together with Mr. Reuven Elkes (hereinafter: "Elkes") and Mr. Ofer Feldman (hereinafter: "Feldman"), established a new company named Israel Canada Hotels Ltd. (hereinafter: the "Hotels Company"), which would serve as the Company's hotel arm in Israel, and the parties entered into a founders' agreement.

In July 2022, an agreement was signed between the Hotels Company and a company wholly owned by Elkes. Under this agreement, the Hotels Company acquired all shares of Aran Hotels Ltd. and became the owner of 100% of the issued share capital of Aran Hotels Ltd.

According to the founders' agreement, the subsidiary, Elkes, and Feldman hold shares in the Hotels Company in the following proportions: 75%, 20%, and 5%, respectively. Elkes serves as CEO of the Hotels Company in return for monthly management fees. It was also agreed that Elkes would transfer his existing hotel management operations in Israel to the Hotels Company.

(2) Lease Agreement for "Galei Kinneret" Hotel:

On September 4, 2019, the Hotels Company entered into an unprotected lease agreement (hereinafter: the "Lease Agreement") with a third party not affiliated with the Company or its controlling shareholders (hereinafter: the "Lessor"), under which the Hotels Company would lease and operate the hotel known as the "Galei Kinneret" Hotel in Tiberias. The hotel includes approximately 120 rooms and suites, a private beach, a spa, and a swimming pool (hereinafter: the "Hotel").

The Lease Agreement is for a term of 10 years starting January 1, 2020 (hereinafter: the "Initial Lease Term"), with two optional renewal periods of 10 and 4 years, respectively (a total of 24 years).

The Hotels Company will pay annual base rent of approximately NIS 7 million (plus VAT), except for the first 24 months of the lease during which rent reductions were granted. In 2020, reduced rent of approximately NIS 3 million was paid (hereinafter: the "Base Rent"), and in 2021, reduced rent of approximately NIS 2.8 million was paid. The Hotels Company will also pay, in addition to the Base Rent, variable rent based on the hotel's revenue, as stipulated in the Lease Agreement.

Under the Lease Agreement, the Lessor financed renovations in the Hotel totaling NIS 20 million. The Hotels Company will repay this investment in installments over the period specified in the Lease Agreement, unless the lease is terminated, in which case the entire investment must be repaid within 30 days of such termination. However, the Company is not required to repay this investment amount if the termination results from a breach by the Lessor.

(3) Acquisition of Pride Dead Sea and Tamares Resort:

On February 1, 2021, Tamares Resort Ltd. and Israel Canada Hotels Holdings Ltd. (formerly Pride Dead Sea Ltd.) were acquired by the Company as part of the "Pride Dead Sea and Tamares Resort Acquisition Transaction."

Details of the acquired entities will follow in the next section.

Note 15 – Agreements (continued):

• K. "Israel Canada Hotels" (continued):
  • (3) Acquisition of Pride Dead Sea and Tamares Resort (continued):

Name of the acquired corporation	City	Hotel name	Rights in hotel (ownership / lease / management / rental)	No. rooms	Holding rate (%)	Date of purchase of the hotel / commencement of lease / management	Lease / rental / management / opening period
Pride Dead Sea	Dead Sea	Daniel	Management and ownership	302	100%	Completion Date	Lease period with ILA will be in accordance with agreement with it until 2042
Tamaris Resort	Ashdod	West	Management and rental	113	100%	Completion Date	Lease until January 31, 2033
Tamaris Resort	Tel Aviv	West	Management and rental	65	100%	Completion Date	Lease until July 2022 (*)

(*) During 2022, the hotel was acquired by the Company (refer to Section 4), excluding 11 rooms that are leased from the unit owners.

(4) Acquisition of the West Tel Aviv Hotel:

On November 2, 2021 (hereinafter: the "Agreement Signing Date"), Israel Canada Hotel Holdings Ltd. (formerly Pride Dead Sea Ltd.), a wholly owned and controlled subsidiary of the Hotels Company (hereinafter: the "Purchaser"), entered into a sale agreement with Ashdar Building Company Ltd. (hereinafter: "Ashdar") and Reality Real Estate Investment Fund III, Limited Partnership (hereinafter: "Reality Fund") (Ashdar and Reality Fund, collectively: the "Sellers"), for the acquisition of 52 vacation apartments out of 65 that comprise the West Tel Aviv Hotel (hereinafter: the "Agreement" and the "Hotel," respectively), built on the property known as Parcel 10 in Block 6621 in Tel Aviv.

Completion of the transaction was conditional upon receiving approval from the Ministry of Tourism within 60 days from the Agreement Signing Date.

In consideration for the sale, the Purchaser paid the Sellers a total of approximately NIS 82 million plus VAT (hereinafter: the "Consideration").

On July 6, 2022, after the fulfillment of the condition precedent, the Purchaser paid the full Consideration to the Sellers, thereby completing the acquisition of the Hotel.

On November 24, 2022, the Purchaser entered into an agreement for the acquisition of an additional unit for NIS 1.7 million.

On December 27, 2022, the Purchaser entered into another agreement for the acquisition of an additional unit for NIS 1.72 million.

(5) Acquisition of Part of the Land Comprising the Gonen Holiday Village:

On January 3, 2022, Israel Canada Hotel Holdings Ltd. (formerly: Pride Dead Sea Ltd.) (hereinafter: the "Purchaser"), a wholly owned and controlled subsidiary of the Hotels Company, entered into a purchase agreement for hotel areas in Kibbutz Gonen Holiday Village by acquiring 74% of the rights in a joint cooperative association while Kibbutz Gonen retains the remaining 26%.

The agreement is conditional upon the receipt of Israel Land Authority (ILA) approval to transfer some of the regulated land to the cooperative association (hereinafter: the "Cooperative"), under which a lease contract or contracts will be issued in the name of the Cooperative.

Note 15 – Agreements (continued):

K. "Israel Canada Hotels" (continued):

The contractual consideration for the acquisition of the Cooperative's participation units totals approximately NIS 10 million and is to be paid as follows:

• (a) 10% of the contractual consideration was paid to a trustee upon signing the agreement.
• (b) All taxes (capital gains, ILA payments, etc.) required from the Kibbutz until the condition precedent is fulfilled will be paid by the Purchaser on account of the Consideration.
• (c) The remaining balance of the contractual Consideration will be paid to the Kibbutz upon fulfillment of the condition precedent.

An additional amount of approximately NIS 3 million will be paid by the Cooperative for the unregulated land when it is regularized and allocated to the Cooperative. This amount will be paid partly directly to the ILA (as required), and the remaining portion will be paid directly to the Kibbutz as additional consideration.

It was also agreed that the existing lease agreement with the Company would remain in effect throughout the original lease period (5 years beginning in November 2020). During this period, the Kibbutz will be entitled to receive 100% of the lease income due to the Cooperative. Afterward, lease income will be distributed according to the respective ownership percentages in the Cooperative.

Following the real estate purchase agreement, on January 3, 2022, an addendum was signed to the lease agreement between the Hotels Company, Kibbutz Gonen Cooperative Ltd., and Nofei Gonen Cooperative Ltd. According to the addendum, starting from the signing date, the base lease payments stipulated in the lease agreement will be reduced by a total of NIS 900,000 over five years, effectively reducing the base rent by NIS 15,000 each month. At the end of this period, the base lease payments will revert to the amounts originally stated in the lease agreement.

On March 5, 2025, the Company received notification that the condition precedent had been fulfilled and is working toward completing the transaction.

(6) Acquisition of a Plot of Approximately Six Dunams in Eilat:

On March 29, 2022, Israel Canada Hotel Holdings Ltd. (formerly: Pride Dead Sea Ltd.), a wholly owned and controlled subsidiary of the Hotels Company (hereinafter: the "Purchaser"), entered into a conditional sale agreement to acquire the full share capital of a company that holds capitalized leasehold rights to a plot of approximately six dunams, known as Parcel 20D under Plan 02/41/114/03, located at 1 Kamen Street, Eilat (hereinafter: the "Selling Company" and the "Eilat Asset Company," respectively), for NIS 50 million (hereinafter: the "Consideration"). The completion date was set for 30 days following the fulfillment of the conditions precedent as defined below.

Completion of the transaction was subject to the receipt of approval from the ILA for the share transfer by September 29, 2022. On July 12, 2022, the Selling Company and the Purchaser signed an addendum to the sale agreement whereby they decided to waive the condition precedent and set the completion date as August 15, 2022 (hereinafter: the "Addendum").

Upon signing the Addendum, the loan of NIS 22 million previously extended by the Purchaser to the Selling Company was repaid and constitutes the first installment of the transaction.

On August 15, 2022, the Purchaser paid the balance of the Consideration and received all shares of the Selling Company, thereby completing the transaction.

In February 2023, purchase tax in the amount of approximately NIS 3.3 million was paid.

Note 15 – Agreements (continued):

K. "Israel Canada Hotels" (continued):

(7) Allocation of 15% of the Shares of the Hotels Company to Menora:

On July 3, 2022 (hereinafter: the "Signing Date"), the Hotels Company entered into an agreement with companies from the "Menora Mivtachim Insurance" group (hereinafter: "Menora" or the "Investor"), for the allocation of 290,122 ordinary shares of the Hotels Company (hereinafter: the "Investment Agreement"), which, upon their issuance, will constitute 15% of the issued and paid-up share capital of the Hotels Company (on a fully diluted basis) (hereinafter: the "Allocated Shares"), as well as 91,138 options convertible into additional shares of the Hotels Company, constituting 4.50% of the issued and paid-up share capital of the Hotels Company (on a fully diluted basis including the Allocated Shares), with an exercise price of NIS 304 per share (hereinafter: the "Options"), all in consideration of a total amount of approximately NIS 88 million, reflecting a post-money valuation of approximately NIS 590 million for the Hotels Company.

Additionally, under the agreement, on the Signing Date, the shareholders of the Company and Menora entered into a new shareholders' agreement (hereinafter: the "Shareholders' Agreement"), which includes, inter alia, provisions regarding the composition of the Company's board of directors, confirmation of the appointment of Mr. Reuven Elkes as CEO of the Company for a period of not less than 48 months, and additional mechanisms such as restrictions on the issuance and transfer of shares, restrictions on the sale of the Hotels Company's shares by the Company, limitations on changes in control, provisions regarding the provision of additional financing to the Company by the shareholders, indemnification and compensation in case of damage to Menora, and an arrangement regarding buyback by the Company should it become an operating entity.

Prior to the transaction, the Company (through its subsidiary) held 75% of the share capital of the Hotels Company, and within the framework of the transaction, converted shareholder loans in an aggregate amount of approximately NIS 85 million into equity of the Hotels Company.

Upon completion of the transaction and following the aforementioned conversion of the shareholder loan, the Company, through its subsidiary, holds 68.5% of the share capital and voting rights in the Hotels Company.

(8) Expansion of Hotels Activity to Greece and Acquisition of a Hotel in Athens:

On April 4, 2022, the Hotels Company entered into a memorandum of understanding signed between Aeolus Ltd. (hereinafter: "Aeolus") and a corporation wholly owned by Tohar Haimovich and/or Tohar Haimovich personally (hereinafter: "Pema", and together with Aeolus: "Aeolus Pema") regarding joint operation in Greece (Athens, Paros, and other areas) and Cyprus.

According to the memorandum of understanding, the parties shall be partners in hotel activity in Greece based on the principles detailed therein, as follows:

Aeolus Pema (through a designated Cypriot company (hereinafter: "ICH Europe Ltd"), jointly owned) (hereinafter: the "New Aeolus Corporation") and the Hotels Company established a jointly owned company incorporated by the parties in Greece named "ICH Greece SA" (the "Joint Company"), held as follows:

• (a) 90% of the issued share capital of the Joint Company is held by the Hotels Company through the Cypriot company;
• (b) 10% of the issued share capital of the Joint Company is held by the New Aeolus Corporation.

The Hotels Company shall provide hotel management services for hotels owned by the Joint Company. Management activities will be carried out by the Hotels Company, which will provide all necessary resources. The decision-making authority shall rest solely with Israel Canada Hotels Holdings Ltd.

On September 8, 2022, the Hotels Company acquired the hotel "Play Theatrou (SOUL)" in Athens for approximately EUR 7.3 million. The hotel comprises 50 rooms and is operational.

Note 15 – Agreements (continued):

K. "Israel Canada Hotels" (continued):

(8) Expansion of Hotels Activity to Greece and Acquisition of a Hotel in Athens (continued):

On October 6, 2022, the Hotels Company acquired the hotel "ANARGIRON" in Athens for approximately EUR 1 million. The hotel comprises 8 rooms.

On March 14, 2023, the Hotels Company completed the acquisition of a hotel with 43 rooms on the island of Paros, named "Argo Paros" (hereinafter: the "Paros Hotel"), for a consideration of approximately EUR 3 million. In addition, the Company renovated the hotel with an investment of approximately EUR 2 million. The hotel opened for operation in Q3 2023.

(9) Shalom Hotel:

In September 2023, Israel Canada Hotels Holdings Ltd. (hereinafter: the "Lessee"), a company owned (100%) by the Hotels Company, entered into a lease agreement with Shalom Hotels Ltd. and S.R.I. Management Ltd. (hereinafter: the "Lessor"), concerning the lease of the "Shalom" hotel located in Jerusalem for a total period of 20 years. The hotel comprises 288 rooms, a swimming pool, spa, dining room, event halls, as well as common areas and parking spaces.

The annual lease fees amount to approximately NIS 12 million, linked to the Consumer Price Index with a 1% increase per year. Additionally, there is a turnover-based rent mechanism as provided in the agreement between the parties.

As of the Report date, the hotel is entirely closed for renovations in public areas and rooms.

On March 31, 2024, the Israel Competition Authority approved the agreement, and it entered into effect on that date.

(10)Negotiations for the Acquisition of 100% of the Operations of Brown Hotels:

On September 19, 2024, the Hotels Company entered into a series of agreements for the acquisition of the operations of Brown Hotels.

As part of the engagement, two memoranda of understanding were signed: one for the acquisition of the Brown Hotels operations in Israel and another for the acquisition of the Brown operations in Greece (hereinafter: the "MOUs").

According to the MOUs, the Hotels Company will enter into lease agreements with the current lessors of existing Brown hotels in Tel Aviv and Jerusalem, and will acquire the Brown Hotels operations in Greece for no consideration. As part of the transaction, the Hotels Company will acquire the business operations of 10 hotels in Israel, comprising 984 rooms, in their current condition ("As Is"), including furniture, investments, and improvements made to the leased properties, delivered clear and free. It will also acquire the intellectual property of Brown Hotels Ltd. (hereinafter: the "Brown Group"), including, inter alia, the group's brands ("Brown," "Lighthouse," etc.), reservation systems, website, digital assets, and customer loyalty club, for a total consideration of NIS 131 million, to be paid in cash at closing and financed through internal resources and external financing.

Additionally, the Hotels Company will acquire the operations of Brown Hotels in Greece, including lease and management agreements relating to 9 hotels across Greece comprising 1,076 rooms. The transactions in Israel and Greece are interdependent and subject to additional conditions precedent.

On December 16, 2024, Brown Hotels Ltd. (hereinafter: "Brown Hotels"), the Brown Group, filed a debt arrangement request with the Tel Aviv Court under Chapter J of the Insolvency and Economic Rehabilitation Law, 5778–2018 (which to the best of the Company's knowledge also includes other companies whose activities are not acquired by the Hotel Company). Attached to the request was the Hotels Company's commitment to acquire a portion of the Brown Group's business operations as described above. On February 5, 2025, the Hotels Company's undertaking was amended as part of a revised arrangement submitted by Brown Hotels to the Tel Aviv Court. It is emphasized that the Hotels Company is acquiring the business operations of the companies, and not the shares of the companies.

On February 27, 2025, the Court approved the amended debt arrangement, including the Hotels Company's commitment to proceed with the acquisition, subject to outstanding conditions precedent.

Note 15 – Agreements (continued):

K. "Israel Canada Hotels" (continued):

(11)Hotels Lawsuit:

On August 15, 2024, the Hotels Company received a lawsuit in the amount of approximately NIS 33.4 million filed against Israel Canada Hotels Ltd. and the CEO of the Hotels Company, Mr. Reuven Elkes, regarding negotiations conducted by the Company with a third party that did not result in a binding agreement. At this preliminary stage, the Company is reviewing the claim. It should be noted that the statement of claim does not challenge the Company's rights in the Shalom Hotel under the existing lease agreement. According to a letter from legal counsel, the chances of the claim being accepted are below 50%.

(12)Negotiations for a Merger Transaction Between Israel Canada Hotels and the DNA Group:

The Company and shareholders of Canada Hotels began negotiating with D.N.A. (T.R.) Ltd. (hereinafter: "DNA"), a public company traded on the Tel Aviv Stock Exchange and, to the best of the Company's knowledge, controlled by Barak Rosen and Asaf Touchmair, the controlling shareholders of the Company, for executing a share-swap transaction between DNA and Canada Hotels. Subject to reaching agreements between the parties, entering into a binding agreement, and receiving all legally required approvals, DNA will become a publicly traded subsidiary of the Company and will engage in hotel operations.

L. Sale of the "HaRakevet" Project, Tel Aviv:

On July 30, 2019, three companies held by the Company (95% through indirect holdings) and partners (5%) (the "Held Companies") entered into a series of agreements with third parties unrelated to the Company or its controlling shareholders for the purchase of approximately 2.6 dunams on HaRakevet and HaGra Streets in Tel Aviv, and an assignment of rights and obligations by some of the sellers under agreements to develop the property for the rights holders and other agreements, for a total amount of approximately NIS 216.4 million plus VAT, which was paid in full.

On April 3, 2022, the Held Companies entered into an agreement with Effi Capital Shoval Ltd., a party unrelated to the Company and/or its controlling shareholders, for the sale of all their rights in the project, in its as-is condition, free and clear, for a total consideration of approximately NIS 486 million plus VAT (hereinafter: the "Consideration"), to be paid in accordance with the terms and payment schedule set forth in the agreement and its addendum dated July 14, 2022. The Consideration was fully paid on September 8, 2022, and possession of the property was transferred to the purchaser.

M. "Midtown Jerusalem" Project:

On July 8, 2020, a wholly owned subsidiary of the Company (hereinafter: the "Project Company") won a tender by the Israel Land Authority for the acquisition of leasehold rights for a period of 98 years with an option for an additional 98-years, for a plot of approximately 17 dunams in Jerusalem, in the area known as "Old Shaarei Tzedek," between Shmuel Baruch Street and Jaffa Road (hereinafter: the "Complex"), for a sum of approximately NIS 512 million plus VAT, and an additional amount of approximately NIS 25.5 million for development expenses payable to the Israel Land Authority and for a preservation building, all of which were paid in full.

As part of the tender conditions, the winning bidder was required to carry out, at its own expense, public obligations including the construction of a public building with a total area of approximately 4,000 square meters for the benefit of the Jerusalem Municipality. The consideration for the transaction was mainly financed through equity and bank financing, as detailed in Note 12b(2) above.

On September 24, 2020, the Company entered into an agreement with Mor Provident Funds Ltd. (hereinafter: the "Partner"), whereby the Partner would invest in the Project Company by way of a non-recourse shareholder loan to the Company in the amount of NIS 90 million, concurrently with the allocation of shares in the Project Company to the Partner, which would represent, after the allocation, 15% of the share capital and voting rights in the Project Company, and the Company would indirectly hold 85% of the share capital of the Project Company.

It should be noted that in addition to the above, third parties (hereinafter: the "Additional Partners") signed binding registration forms for additional investments in the Project Company, in the form of shareholder loans totaling approximately NIS 70 million, in exchange for an allocation of 12% of the share capital and voting rights in the Project Company. The Additional Partners signed the same shareholders' agreement. (The investment by the Partner and the Additional Partners shall hereinafter be referred to jointly as: the "Partner Investments").

Note 15 – Agreements (continued):

M. "Midtown Jerusalem" Project (continued):

At the beginning of 2021, approval was received from the Israel Land Authority for the allocation of shares to the Partners, and accordingly, the shares were issued and the Partner Investments were injected into the Project Company. Following the allocation, the Company (indirectly) holds approximately 73% of the share capital of the Project Company. The Partner Investments are presented in the item "Non-controlling Interests."

Company Plans Regarding the Shaarei Tzedek Complex:

As of the date of acquisition of the rights, the building rights existing in the property included rights for 240 residential units in two towers of 24 floors each, with a total area of approximately 37,000 square meters, commercial and office space totaling approximately 70,000 square meters in two towers of 24 floors each, and a preservation building designated for hotel use with an area of approximately 4,830 square meters.

The Company worked to increase the rights to approximately 1,000 residential units (of which 200 units are designated for rental) in two towers of 40 floors each, with a total area of approximately 41,000 square meters for marketing, commercial, office, and hotel use with a total gross area of approximately 75,000 square meters in two 40-floor towers, a preservation building for hotel use with a gross area of approximately 5,250 square meters, and approximately 12,000 square meters of public buildings.

On May 7, 2023, Plan No. 101-0958025 "Midtown Jerusalem" for the project was approved and published for validation.

The Company intends to construct approximately 895 apartments in the project, including 200 long-term rental units, fully utilizing the permitted building areas under the urban building plan (instead of approximately 1,000 apartments approved over the same total area).

On December 25, 2024, a permit for basement construction was received for the entire project.

For more information regarding events after the balance sheet date, refer to Note 32d.

On October 10, 2024, the Project Company entered into an addendum to the land financing agreement and a voucher arrangement, as detailed in Note 12b(2) above.

Due to the stage of development of the project, the process of obtaining bank credit reflecting sales over the construction period, signing sales agreements for the sale of office space in the project, and the Company's decision to market a portion of the office space totaling 44,607 square meters from the total investment property for an amount of approximately NIS 139 million, these areas were reclassified beginning in July 2024 as real estate inventory instead of investment property, as previously presented from the date of acquisition of these lands.

For a portion of the property classified in the Company's financial statements under investment property, the Company recognized a revaluation gain of approximately NIS 8 million for the period ended December 31, 2024 (compared to a revaluation gain of approximately NIS 53 million as of December 31, 2023).

In determining the estimated value of the property classified as investment property, the Company relied on an appraiser's valuation.

Project Marketing:

Beginning in Q3 2023, the Company began marketing residential units in the project through a "developer sale" process. As of the end of 2024, 214 sales agreements and registration forms were signed for a total consideration of approximately NIS 868 million including VAT. In accordance with the Company's revenue recognition policy, as detailed in Note 2o(6) above, no revenue has yet been recognized.

As of the end of 2024, 3,171 square meters of office space had been marketed for total consideration of approximately NIS 90 million including VAT and registration forms.

Note 15 – Agreements (continued):

N. Acquisition of Shares in Alrov Real Estate (continued):

On March 18, 2021, the Company entered into an agreement with Clal Israeli Equities Index – General Partnership and Atudot Pension Fund for Employees and Independents Ltd. (hereinafter: the "Sellers"), which together hold 2,983,435 ordinary shares of Alrov Real Estate and Hotels Ltd. (hereinafter: "Alrov"), constituting approximately 12.9% of Alrov's issued and paid-up share capital and voting rights, for the purchase of all of their holdings in Alrov for a total amount of approximately NIS 382 million, reflecting a price per share of NIS 128, on an As-Is basis and subject to the fulfillment of conditions precedent. The transaction was subject to the approval of the general meeting of the Company's Series E bondholders, which was received on April 8, 2021. On April 22, 2021, the transaction for the purchase of the shares was completed. The Company financed the consideration under the agreement from its own sources and through bank financing.

Between March and December 2022, the Company purchased approximately 418,287 ordinary shares of Alrov on the stock exchange for a total consideration of approximately NIS 75 million. As of December 31, 2022, the Company held approximately 14.76% of Alrov's issued and paid-up share capital.

The Company sold its holdings in 2023 in Alrov shares in several transactions for a total of approximately NIS 487 million. From the acquisition until the realization, the Company recorded a pre-tax profit of approximately NIS 47 million.

O. Winning the Tender for the "Beit Hanaara" Complex in Hod Hasharon and Sale of 50% in the Project:

On May 3, 2021, a wholly owned and controlled subsidiary of the Company was notified that it had won a tender conducted by the Tel Aviv-Jaffa Municipality for the purchase of ownership rights in six plots totaling approximately 34 dunams, designated for the construction of approximately 440 housing units in the "Beit Hanaara" complex in Hod Hasharon, for approximately NIS 511 million plus VAT.

On July 19, 2021, the subsidiary completed full payment for the land, in exchange for possession. Shortly beforehand, the subsidiary signed a loan agreement with a local bank (hereinafter: the "Bank") for a credit facility to finance the purchase and related needs, with total exposure of up to approximately NIS 598 million, as detailed in Note 12B(3).

On January 24, 2022, the subsidiary entered into a conditional agreement with Yossi Avrahami Civil Engineering Works Ltd. (hereinafter: the "Partner") to sell 50% (in equal ownership) of the land in its As-Is condition for approximately NIS 441 million plus VAT.

At the same time, the parties entered into a joint venture agreement governing their relationship as co-owners of the land, under which they will jointly develop and sell the apartments, with profits to be shared equally. Each party's interest is 50%, and decisions require mutual agreement.

On April 13, 2022, all conditions precedent were met, the sale was completed, full consideration was received, and approximately NIS 182 million was used to repay the existing loan for the land. Upon completion, the Beit Hanaara joint venture was established. The transaction generated a pre-tax profit of approximately NIS 162 million for the Company in 2022.

On May 1, 2022, the Company and the Partner were notified by the Tel Aviv-Jaffa Municipality that they had won an additional tender for the purchase of ownership rights in plot 260, covering approximately 5.7 dunams, designated for 94 additional housing units (hereinafter: the "Additional Complex"), for approximately NIS 153 million plus VAT. The first payment of approximately NIS 76.5 million was made on August 10, 2022; the second, also approximately NIS 76.5 million, on September 28, 2022. Following this win, the Company and the Partner's total rights in the project increased to approximately 534 housing units. The Company's share was funded through equity and a bank loan of NIS 57.3 million.

The Company, through the subsidiary and the Partner, is advancing planning and permitting for residential buildings in accordance with the approved city building plan and with plans promoted by the Hod Hasharon Municipality (hereinafter: the "Approved Plan", the "Promoted Plan", and the "Municipality", respectively). The Promoted Plan was published for objections under Section 106B, after which the District Committee approved an increased density of 130 residential units (without additional floor area), for a total of 570 units. The subsidiary is also advancing permits on two additional plots for the construction of 94 housing units.

Note 15 – Agreements (continued):

P. Investment in Innovation Corporations Related to Real Estate:

On April 27, 2021, the Company's Board of Directors approved an update to the Company's strategy whereby the Company, through a designated corporation to be established by it, would invest in corporations engaged in innovation related to real estate, including in the fields of renewable energy and property technology (hereinafter: the "Investment Corporation" and the "Innovation Investment", respectively).

According to the Board's resolution, the Company's commitments to innovation investment transactions will be made through the Investment Corporation, such that the Company will invest (through the Investment Corporation) in innovation corporations with a total investment not exceeding 2% of the Company's total assets attributable to the Company's shareholders, based on the Company's most recently published consolidated financial statements prior to making the investment.

As of the Report date, the Company has invested approximately NIS 10.6 million in innovation corporations, recorded under the item "Investments and Other Assets" within non-current assets.

Q. Winning the Tender for the "Sde Dov" Complex, "Rainbow" Project:

On August 23, 2021, Israel Canada Sde Dov Ltd. (hereinafter: the "Project Company"), a wholly owned and controlled subsidiary of the Company, received official notice that it had won a tender conducted by the Israel Land Authority (hereinafter: "ILA") for the purchase of direct capitalized leasehold rights (without a development agreement) for a period of 98 years with an option for an additional 98 years, in land known as parts of parcels 15, 164, 169, 208, 209, 312, 314, and 324 in Block 6634, in the complex known as "Sde Dov" in Tel Aviv, with a total area of approximately 8,647 square meters, designated for the construction of 480 housing units over approximately 51,000 square meters for marketing, and approximately 2,000 square meters of commercial areas gross (hereinafter collectively: the "Land"), for approximately NIS 1,253 million plus VAT, and an additional NIS 54 million (including VAT) for development costs to the ILA. At the time of acquisition, the Company separated the commercial rights component, which is presented under investment property.

An amount equal to approximately NIS 69 million was paid immediately upon approval of the Project Company's win in the tender. The remaining consideration of approximately NIS 1,184 million and the development costs were paid on November 18, 2021. The purchase price was paid by the Company from its own funds and bank financing, as detailed in Note 12B(1) above.

On October 10, 2024, the borrower entered into a financing agreement with two local banks (in equal parts) to provide a financing facility as detailed in Note 12B(1) above.

On March 21, 2024, the Project Company received a permit for excavation and retention works for the project, pursuant to the decision of the Tel Aviv Local Planning and Building Committee. In April 2024, the excavation and retention contractor commenced work.

Since 2023, the Company began marketing residential units in the project through "developer" sales, and as of the end of 2024, 220 residential units were marketed for a total consideration of approximately NIS 1,917 million including VAT. As of the Report publication date, the Project Company has not yet received a full construction permit for the project. In accordance with the Company's revenue recognition policy, as detailed in Note 2o(6) above, the Company has not yet recognized revenue.

R. Acquisition of Norstar Shares:

As of the date of this Report, the Company holds approximately 9 million Norstar shares, which constitute approximately 14.64% of the voting rights in Norstar and approximately 14.75% of Norstar's issued and paid-up share capital. The value of the shares as of December 31, 2024, is approximately NIS 122.6 million.

Note 15 – Agreements (continued):

S. Entry into the Assisted Living Sector:

On January 24, 2022, the Company's Board of Directors resolved to enter a new field of activity, to engage in, operate, and initiate assisted living homes for the senior population, characterized by a high level of finish and the provision of high-level ancillary services (hereinafter: the "Assisted Living Sector"), with the intention to purchase assisted living homes or lands with existing zoning for assisted living, and among other things, to initiate and maximize additional rights. The activity will be carried out through a wholly owned and controlled subsidiary (100%) that will concentrate the activity in the Assisted Living Sector (hereinafter: the "Assisted Living Company").

As part of the resolution, the Assisted Living Company, through a subsidiary of the Assisted Living Company (hereinafter: the "Granddaughter Company"), entered into a conditional agreement with Neve Aviv Club in Kfar Shmaryahu Ltd., owned by a third party unrelated to the Company and/or its controlling shareholders (hereinafter: the "Seller"), for the purchase of all of the Seller's rights in land in Kfar Shmaryahu, covering approximately 8.4 dunams on which the assisted living home operates (the "Agreement," the "Land," and the "Assisted Living Home," respectively) (the Land and Assisted Living Home, collectively: the "Asset").

As consideration for the purchase of the Asset, the Granddaughter Company paid the Seller the sum of NIS 125 million, linked to the index, plus VAT as required by law (hereinafter: the "Consideration").

On May 3, 2022, the condition precedent of obtaining the approval of the Supervisor of Assisted Living Homes was fulfilled, and accordingly, possession of the Assisted Living Home was transferred on July 1, 2022.

It should be noted that the Assisted Living Company and the Granddaughter Company (80% owned by the Assisted Living Company) entered into a set of agreements with third parties who will hold 20% of the Granddaughter Company (hereinafter: the "Partners"), which regulate the relationship between the parties as shareholders of the Granddaughter Company. Shortly after the date of signing the agreements, the Partners injected a total amount of NIS 40 million into the Granddaughter Company.

At the end of 2022, the Company began renovation and upgrading works on the home in Kfar Shmaryahu, so that upon completion, it will include new residential units, most of which are at least 2-room units and feature a high level of finish. In addition, all parts of the home, including the common areas, were upgraded and new shared facilities were established, such as a gym, library, and hobby rooms. The renovation of the home in Kfar Shmaryahu is expected to be completed during the upcoming year.

Based on a valuation conducted as of December 31, 2024, the Company recorded an impairment loss in the amount of approximately NIS 1.2 million for the Asset (in 2023, the Company recorded an appreciation of NIS 6.2 million for the Asset).

T. Purchase of Real Estate on Emek Bracha Street, Tel Aviv:

On September 1, 2022, the Company, through a private company held (indirectly) 63% by the Company and 37% by various third parties (hereinafter: the "Purchaser"), entered into an agreement with third parties unrelated to the Company and/or its controlling shareholders (hereinafter together: the "Sellers"), to purchase approximately 54% undivided shares in land with an area of approximately 1.2 dunams, known as Parcel 553 in Block 7093 on Emek Bracha Street in Tel Aviv-Jaffa, for a total consideration of approximately NIS 95 million plus VAT as required by law. On February 15, 2023, the remaining consideration was paid and the purchase was completed.

It should be noted that concurrently with entering into the agreement, the Company (through a wholly owned subsidiary) entered into an agreement with the partners in the Purchaser (approximately 37%) regulating their relationship as shareholders in the Purchaser. As part of the understandings, each party undertook to provide the Purchaser with shareholder loans in proportion to their holdings in the Purchaser for financing the purchase of the land and the development of the project, as well as for any other payments or guarantees.

Note 15 – Agreements (continued):

T. Purchase of Real Estate on Emek Bracha Street, Tel Aviv (continued):

The Company's engagement (indirectly, through the Purchaser) in the aforementioned agreement is in addition to the Company's existing rights (indirectly) in the land, which were acquired in February 2022 through Pangaea Israel (T.R.) Emek Bracha Project Ltd., a wholly owned subsidiary (100%) (hereinafter: the "Subsidiary"), representing approximately 26% undivided shares in the land.

As of the date of this Report, the Company holds (through the Purchaser and through a Granddaughter Company) approximately 80% undivided shares in the land, and as of the Report date, the remaining 20% is held by other private owners unrelated to the Company.

The land is subject to an approved urban building plan 3401/A which permits building rights of approximately 20,000 square meters for residential and commercial use. The Company intends to submit a request to amend the plan to increase building rights for residential/hotel and office use.

For additional details regarding the purchase of additional land shares, refer to Note 32E.

U. Winning a Tender for the Purchase of Rights in Lot 306, Sde Dov Complex, Tel Aviv:

On August 6, 2024, the Tel Aviv-Jaffa Municipality Council approved the Company's (indirectly, through Pangaea Sde Dov Offices, a limited partnership wholly owned and controlled by the Company, hereinafter: the "Project Partnership") winning of a tender managed by the Tel Aviv Municipality for the purchase of leasehold rights in Lot 306 under Plan TAMAL 3001 – Eshkol Neighborhood, Sde Dov, covering approximately 4.5 dunams designated for commercial and office use, for a total consideration of approximately NIS 128 million plus VAT (hereinafter: the "Consideration"), which was paid on September 24, 2024, and therefore was recognized as investment property in the Company's books.

The Consideration was financed by a loan obtained by the Company from a local bank, as detailed in Note 12B(12).

V. "HaHoshlim" Project:

On August 22, 2024, a wholly owned and controlled subsidiary of the Company, together with a third-party partner in equal parts, completed the acquisition of rights in an office floor in a project located on HaHoshlim Street in Herzliya for a total consideration of approximately NIS 46.2 million (the Company's share – NIS 23.1 million). The transaction was completed using bank financing obtained by the Company from a local bank. It should be noted that the acquired office floor is in addition to part of another office floor already owned by the same subsidiary.

The spaces are fully leased, and the rental income has been pledged in favor of the financing bank.

Note 15 – Agreements (continued):

W. "Dubnov" Project:

On May 27, 2024, the Company (indirectly), through two designated partnerships each held 80% by the Company (indirectly) (hereinafter: the "Designated Partnerships") and 20% by an investor (hereinafter: the "Investor"), won a tender conducted by the Israel Land Authority (hereinafter: the "Tender" and "ILA," respectively) for leasehold rights in land covering approximately 2.4 dunams at 4-6 Dubnov Street, Tel Aviv, designated for the construction of a tower up to 45 floors including 170 residential units, approximately 17,500 sqm (above ground) of retail and commercial areas, and approximately 1,500 sqm (net) of public areas, for approximately NIS 437 million plus VAT.

According to the Tender terms, the purchasers are required to carry out preservation work and additional obligations in the building known as the "Hakibbutz Ha'artzi House in Tel Aviv," located on a parcel adjacent to the land with an area of 989 sqm and owned by Keren Kayemeth LeIsrael, as well as construct approximately 1,500 sqm of public areas for the Tel Aviv–Yafo Municipality (together: the "Additional Obligations").

To guarantee fulfillment of the Additional Obligations, the purchasers deposited performance guarantees totaling approximately NIS 5 million, to be replaced upon project completion with post-construction warranties in accordance with the Tender terms.

In addition, under the Tender, the construction must be completed within 72 months from the award notification.

The Consideration was paid as follows:

• 1. Approximately NIS 46 million was paid by exercising the guarantee submitted as part of the Tender requirements.
• 1. The remaining consideration of approximately NIS 391 million plus VAT and expenses was paid on August 22, 2024. The remainder was financed jointly by the Designated Partnerships through a local bank, as detailed in Note 12b(4).

The Company and the Investor incorporated the two Designated Partnerships and formalized their relationship, under which the project will be managed exclusively by the Company. The Investor provided a shareholder loan of approximately NIS 80 million to finance the land acquisition.

The purchasers intend to promote permits for the project in accordance with the existing urban building plan. At the time of acquisition, the Company separated the commercial and employment rights component, which is presented under investment property.

X. "Northern Quarter" Project, Herzliya:

On December 1, 2024, the Company entered into an agreement with a third party unrelated to the Company and/or its controlling shareholders (hereinafter: the "Seller") to acquire all of the Seller's rights in a parcel of land known as Parcel 18 in Block 6663 in Herzliya, covering approximately 21 dunams, zoned agricultural and within the TAMAL 3006 plan, free and clear and in its As-Is condition, for a total of NIS 120 million excluding VAT (hereinafter: the "Consideration"). Upon signing, the Company paid NIS 40 million from its own resources. The remaining NIS 80 million was paid on February 20, 2025, using bank financing obtained after the balance sheet date.

On December 12, 2024, the Company, together with other buyers, entered into an agreement with a third party unrelated to the Company and/or its controlling shareholders, to acquire full rights in Parcel 4 and Parcel 63 in Block 6663 in Herzliya, totaling approximately 8.5 dunams, of which the Company's share is approximately 4.3 dunams. These are zoned agricultural and fall within the TAMAL 3006 plan, free and clear and in As-Is condition, for a total of approximately NIS 51 million excluding VAT (the Company's share: approximately NIS 26 million). Upon signing, the Company paid approximately NIS 8 million, with the remaining NIS 18 million paid on March 11, 2025, funded from the Company's own resources.

Note 16 – Share Capital

A. Registered Share Capital:

	As of December 31
	2024	2023 in
	in
	thousands	thousands
Ordinary shares nominal value NIS 0.01 each	1,500,000	1,500,000

B. Issued Share Capital:

	Number of shares As of December 31		Share capital As of December 31		Share premium As of December 31
	2024 in	2023 in	2024 NIS	2023 NIS	2024 NIS	2023 NIS
	thousands	thousands	thousands	thousands	thousands	thousands
Ordinary shares nominal value NIS 0.01 each, fully paid	322,566	322,566	3,226	3,226	1,110,527	1,110,527

C. Rights Attached to the Shares:

The Company's shares, each with a nominal value of NIS 0.01, confer voting rights at the general meeting, the right to dividends, rights upon the liquidation of the Company, and the right to appoint the Company's directors. The shares are traded on the Tel Aviv Stock Exchange.

D. Private Placement of Shares to Investors:

On September 4, 2022, the Company's Board of Directors approved the allocation of shares of the Company to the investors Menorah Mivtachim Holdings Ltd., which is an Interested Party in the Company, Migdal Israel Equity Index Fund Ltd., Mor Pension and Provident Funds Ltd., and Sphera Master Fund Limited Partnership (collectively: the "Investors"), in a private placement pursuant to the Private Placement Articles. Under this allocation, the Company issued 10,368,862 shares at a price of NIS 13.52 per share, for total consideration of approximately NIS 140 million.

On November 7, 2023, the Company's Board of Directors approved the allocation of shares to the investors Menorah Mivtachim Holdings Ltd. and Clal Insurance Enterprises Holdings Ltd., which are Interested Parties in the Company, as well as to The Phoenix Insurance Company Ltd., Meitav Pension and Provident Funds Ltd., Sphera, Noked Group, Mor Group, Alpha Opportunities Ltd., Chatzavim, and Total Fund (collectively: the "Investors"), in a private placement pursuant to the Private Placement Articles. Under this allocation, the Company issued 19,981,410 shares at a price of NIS 8.5 per share, for total consideration of approximately NIS 170 million. The allocation was completed on November 12, 2023, upon receipt of full payment for the private placement.

For additional details regarding an allocation after the balance sheet date, refer to Note 32F.

E. Adoption of Dividend Distribution Policy:

On May 25, 2017, the Company's Board of Directors resolved to adopt a distribution policy, as defined in the Companies Law, 5759-1999 (hereinafter: the "Companies Law"), under which the Company shall distribute each year to its shareholders, subject to legal limitations including the distribution tests and subject to the limitations under any agreement, a cash dividend in an amount of at least 25% of the Company's annual net profit attributable to the Company's shareholders, based on the Company's audited annual financial statements for the year preceding the resolution to distribute the dividend (hereinafter: the "Distribution Policy"). It is clarified that the timing of the distribution, if any, will not necessarily be immediately following publication of the Company's annual financial statements. It is further clarified and emphasized that actual distribution of dividends shall be subject to the Company's needs and obligations at the relevant time and to the receipt of a specific resolution in accordance with applicable law and any agreement. Additionally, it is emphasized that the Company's Board of Directors may, from time to time, modify the Distribution Policy at its sole discretion.

F. Dividend Distributions:

On April 3, 2022, the Company distributed a dividend of NIS 0.1232 per share, totaling NIS 36 million.

On April 13, 2023, the Company distributed a dividend of approximately NIS 0.0826 per share, totaling NIS 25 million.

On April 9, 2024, the Company distributed a dividend of approximately NIS 0.0775 per share, totaling NIS 25 million.

Note 17 – Leases (the Group as Lessee)

A. General:

The Group entered into agreements for the lease of hotels for periods of ten years each, with an option to extend each agreement for an additional 10–14 years. The incremental interest rate determined by the Company with the assistance of an external appraiser at the date of recognition of the lease liabilities ranged between 6% and 7%.

B. Right-of-Use Assets:

	Hotels
	NIS
	thousands
Cost:
As of January 1, 2024	350,908
Additions	158,721
As of December 31, 2024	509,629
Accumulated depreciation:
As of January 1, 2024	58,389
Depreciation expenses	25,328
As of December 31, 2024	83,717
Depreciated cost as of December 31, 2024	425,912

C. Amounts Recognized in Profit or Loss and the Statement of Cash Flows:

	For the year ended on December 31
	2024 NIS thousands	2023 NIS thousands
Depreciation expenses for right-of-use assets	25,328	21,078
Depreciation expenses capitalized for an asset under construction	1,236	581
Interest expenses in respect of lease obligations	26,141	13,894

Note 18 – Statement of Changes in Equity

A. Capital Reserve from Translation Differences of Foreign Operations:

	As of December 31
	2024 NIS thousands	2023 NIS thousands	2022 NIS thousands
Balance at beginning of year	(66,792)	(74,306)	(72,293)
Exchange rate differences for translating foreign operations	(4,752)	7,513	(2,013)
Balance at end of year	(71,544)	(66,792)	(74,306)

The capital reserve from translation differences arises from the translation of financial statement items of the Group's foreign operations into NIS.

B. Non-Controlling Interests:

As of December 31, 2024 and 2023, non-controlling interests include balances of NIS 657 million and NIS 540 million, respectively, in respect of equity investments bearing an average annual yield ranging between 3%–8%. The investments and their accumulated yields will be repaid at the sole discretion of the Group.

It was also determined that such equity investments will be repaid to the partners (including interest on the repaid principal) on a pro rata basis according to the share of each shareholder's equity investment, and at the discretion of the Company only.

Note 19 – Revenues

A. Revenues from Sale of Real Estate Inventory:

	For the year ended on December 31
	2024	2023
	NIS thousands	NIS thousands	NIS thousands
In the "Ramat Hasharon" Project – refer to Note 15e	8,765	22,160	314,978
In the "Hod Hasharon West" Project	3,674	1,061	2,902
In the "Kiryat Bialik" Project	1,664	1,470	-
In the "Shvil Hatapuzim" Project – refer to Note 15g	505	(345)	12,194
In the "Hatzuk Hazfoni" Project	(2,946)	6,216	-
In the "Atlit" Project – refer to Note 15c	-	2,000	4,256
"Beit Hanaara" Project Hod Hasharon - refer also to Note 15r	-	-	440,800
In the "Business Village" Project – refer to Note 15m	-	(1,000)	-
In the "Harakevet" Project – refer to Note 15p	-	(1,750)	244,782
Other	17	-	4,617
	11,679	29,812	1,024,529

B. Revenues from Operation and Management of Hotels:

	For the year ended on December 31
	2024	2023	2022
	NIS thousands	NIS thousands	NIS thousands
Rooms revenue	188,909	200,427	180,887
Food and beverage revenue	74,818	83,264	62,925
Revenue from operating Hamei Tiberias complex	17,603	15,651	7,657
Other revenues (*)	9,687	10,566	11,615
	291,017	309,908	263,084

(*) Includes revenues from management fees.

Note 20 – Cost of Operation and Management of Hotels

Composition:

	For the year ended on December 31
	2024 NIS	2023 NIS	2022 NIS
	thousands	thousands	thousands
Salaries and accompanying costs	89,559	113,084	107,328
Rent and maintenance of office	11,090	12,741	13,593
Hotel maintenance and hotel	83,136	79,447	71,730
Depreciation and amortization	46,975	42,829	36,347
Marketing, promotion, and advertisement	12,386	13,626	11,778
Office and other	4,661	5,312	5,009
Management fees	74	556	1,442
Maintenance of Hamei Tiberias Complex and College	5,321	5,498	2,453
Professional services	2,428	4,652	3,268
Other	2,052	-	-
	257,682	277,745	252,948

Note 21 – General and Administrative Expenses

Composition:

	For the year ended on December 31
	2024	2023	2022
	NIS	NIS	NIS
	thousands	thousands	thousands
Salaries and accompanying costs	23,530	18,388	17,840
Management fees and bonus for the Chairman of the Board of Directors and CEO	11,272	4,782	11,182
Professional services	8,336	10,412	7,523
Office	3,264	4,441	4,064
Asset maintenance	2,771	1,432	1,110
Company events	2,357	-	-
Doubtful debts	2,181	800	-
Donations and gifts	1,965	733	1,485
Depreciation of fixed assets	1,674	2,465	2,521
Insurance	1,093	1,325	1,090
Stock Exchange and Securities Authority fees	422	188	88
Surcharges and fees	117	241	329
Travel abroad	98	168	538
Other	741	563	1,151
	59,821	45,938	48,921

Note 22 – Sales and Marketing Expenses

Composition:

	For the year ended on December 31
	2024 NIS	2023 NIS	2022 NIS
	thousands	thousands	thousands
Marketing land in Israel	7,381	8,974	19,992
Marketing of purchasing groups	-	118	-
Marketing of offices and apartments in development projects	15,892	13,189	6,970
General project brokerage	631	2,064	3,387
General advertising	14,757	9,680	11,895
	38,661	34,025	42,244

Note 23 – Finance Income

Composition:

	For the year ended on December 31
	2024	2023	2022 NIS
	NIS	NIS
	thousands	thousands	thousands
Interest for loans to associates	43,648	49,434	25,524
Interest and net exchange rate differences for loans to others	211	3,232	641
Interest to institutions	407	2,121	451
Deposit interest	9,848	6,932	1,850
Other	-	-	80
	54,114	61,719	28,546

Note 24 – Finance Expenses

Composition:

	For the year ended on December 31
	2024	2023	2022 NIS
	NIS	NIS
	thousands	thousands	thousands
Financing for loans from banks (*)	76,739	61,498	56,700
Interest and exchange rate differences, net, for loans from others	3,017	3,536	7,813
Financing for bonds	19,535	23,738	32,790
Financing for lease liability	18,327	13,894	11,058
Changes to fair value of loans to associates	8,942	3,633	3,674
Bank fees	6,720	4,758	2,326
Interest to institutions	-	2	2,605
	133,280	111,059	116,966

(*) As detailed in Note 2k – borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets which necessarily take a substantial period of time to get ready for their intended use or sale are capitalized to the cost of such assets. All other borrowing costs are recognized in profit or loss under interest on bank borrowings.

Note 25 – Earnings per Share

A. Basic Earnings per Share:

	For the year ended on December 31
	2024	2023 NIS	2022 NIS
	NIS
	thousands	thousands	thousands
Profit (loss) used for calculation of basic profit per share:
From continuing activity	206,373	(55,738)	268,758
The weighted average of the number of ordinary shares used
for calculated base profit per share	322,566	305,266	295,340

B. Diluted Earnings per Share:

	For the year ended on December 31
	2024	2023	2022 NIS
	NIS	NIS
	thousands	thousands	thousands
Profit (loss) used for calculating diluted profit per share:
From continuing activity	206,373	(55,738)	268,758
The weighted average of the number of ordinary shares used for calculated base profit per share	322,566	305,266	295,340
Adjustments:
Options for shares in circulation	-	-	-
The weighted average of the number of ordinary shares used for calculating diluted profit per share	322,566	305,266	295,340

C. There are no instruments that could potentially dilute the basic earnings per share in the future.

Note 26 – Financial Instruments

A. General:

The Group's activities expose it to financial risks arising from the use of financial instruments:

• Market risk (including foreign currency risk, interest rate risk, traded share price risk, and consumer price index risk).
• Credit risk.
• Liquidity risk.

B. Risk Management Framework:

The Group's finance department provides services to the business operations, facilitates access to local financial markets, monitors and manages the financial risks related to the Group's operations. Overall responsibility for establishing and overseeing the Group's risk management framework lies with the CFO.

Note 26 – Financial Instruments (continued)

C. Categories of Financial Instruments:

	As of December 31
	2024	2023
	NIS	NIS
	thousands	thousands
Financial assets:
Cash and cash equivalents, and restricted use cash	981,610	205,527
Financial assets at fair value	129,192	94,889
Loans and receivables	969,212	919,035
	2,080,014	1,219,451
Financial liabilities:
Financial liabilities measurements at depreciated cost	6,669,391	5,172,144
Accounts payable	217,104	100,105
	6,886,495	5,272,249

D. Foreign Currency Risk:

The Group also operates abroad (primarily in Russia) and is exposed to exchange rate risk arising primarily from exposure to the ruble and dollar currencies. Exchange rate risk stems from net investments in foreign operations. In 2024, there was no change in the exposure to currency risk or in the way the Group manages or measures the risk.

The carrying amounts of the Group's monetary assets and liabilities denominated in foreign currencies are as follows:

	Assets As of December 31		Liabilities As of December 31
	2024	2023	2024	2023
	NIS thousands	NIS thousands	NIS thousands	NIS thousands
Euro	419	-	4,212	91
Ruble	26,746	27,920	-	-
Dollar	5,797	717	-	-
Pound	4,718	4,813	-	-

Note 26 – Financial Instruments (continued)

D. Foreign Currency Risk (continued):

Sensitivity Analysis of Foreign Currency:

The Group's main foreign currency exposure is to the ruble.

The following table details the sensitivity to a 10% increase or decrease in the relevant exchange rate. The sensitivity analysis includes current balances of monetary items denominated in foreign currency and adjusts their translation at the end of the period to reflect a 10% and 20% change in the foreign currency rates.

Impact on comprehensive income and equity from a 10% and 20% appreciation and depreciation in the ruble versus the shekel before tax effects:

	Impact of Ruble As of December 31
	2024	2023
	NIS thousands	NIS thousands
Profit from continuing operations, comprehensive income and equity - an increase of 10% in foreign exchange	13,603	2,625
Profit from continuing operations, comprehensive income and equity - an increase of 20% in foreign exchange	27,206	5,250
Loss from continuing operations, comprehensive income and equity - a 10% decrease in foreign exchange	(13,603)	(2,625)
Loss from continuing operations, comprehensive income and equity - a 20% decrease in foreign exchange	(27,206)	(5,250)

E. Interest Rate Risk:

As of December 31, 2024, the Group is exposed to market interest rate risk (prime) arising from bank borrowings in Israel totaling approximately NIS 4,077 million (as of December 31, 2023: approximately NIS 3,543 million), bearing variable interest.

F. Sensitivity Analysis of Interest Rates:

The sensitivity analysis regarding variable rate liabilities was prepared under the assumption that the outstanding liability amount remained constant throughout the reporting year.

The following shows the cash flow impact of a 1% increase in the relevant interest rates as of the reporting date, assuming all other parameters remain unchanged and before tax effects:

	Impact of change in shekel interest rate As of December 31
	2024	2023
	NIS thousands	NIS thousands
Cash flow impact	(40,770)	(35,430)

As of December 31, 2024

Note 26 – Financial Instruments (continued)

G. Analysis of Financial Instruments by Linkage Bases and Currency Types:

	In NIS, linked to CPI	In EUR or linked	In RUB or linked	In GBP or linked	In USD or linked	Unlinked NIS	Total
	NIS thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands
Financial assets:
Cash and cash equivalents	-	169	-	-	5,797	969,783	975,749
Restricted use cash	-	-	-	-	-	5,861	5,861
Financial assets at fair value	-	-	-	-	-	129,192	129,192
Receivables for the sale of real estate	3,659	-	-	-	-	15,621	19,280
Accounts receivable	20,339	250	-	4,718	-	155,393	180,700
Loans to associates	-	-	26,746	-	-	633,204	659,950
	23,998	419	26,746	4,718	5,797	1,909,054	1,970,732
Financial liabilities:
Suppliers	-	112	-	-	-	36,233	36,345
Accounts payable	75,448	735	-	-	-	104,576	180,759
Credit and loans from bank
corporations	664,186	3,365	-	-	-	4,200,757	4,868,308
Liability in respect of leases	442,578	-	-	-	-	21,060	463,638
Bonds	-	-	-	-	-	1,324,768	1,324,768
Loans from others	-	-	-	-	-	12,677	12,677
	1,182,212	4,212	-	-	-	5,700,071	6,886,495

Note 26 – Financial Instruments (continued)

G. Analysis of Financial Instruments by Linkage Bases and Currency Types (continued):

	As of December 31, 2023
	In NIS, linked to CPI NIS	In EUR or linked NIS	In RUB or linked NIS	In GBP or linked NIS	In USD or linked NIS	Unlinked NIS NIS	Total NIS
	thousands	thousands	thousands	thousands	thousands	thousands	thousands
Financial assets:
Cash and cash
equivalents	-	-	-	-	717	199,672	200,389
Restricted use cash	-	-	-	-	-	5,138	5,138
Financial assets at fair
value	-	-	-	-	-	94,889	94,889
Receivables for the sale
of real estate	43,888	-	-	-	-	18,193	62,081
Accounts receivable	35,305	-	-	4,813	-	108,508	148,626
Loans to investee	-	-	27,920	-	-	564,038	591,958
companies
	79,193	-	27,920	4,813	717	990,438	1,103,081
Financial liabilities:
Suppliers	-	87	-	-	-	28,216	28,303
Accounts payable	19,229	4	-	-	-	52,569	71,802
Credit and loans from
bank corporations	191,255	-	-	-	-	3,758,169	3,949,424
Liability in respect of
leases	301,193	-	-	-	-	15,542	316,735
Bonds	-	-	-	-	-	876,210	876,210
Loans from others	-	-	-	-	-	29,775	29,775
	511,677	91	-	-	-	4,760,481	5,272,249

Note 26 – Financial Instruments (continued)

H. Credit Risk:

The Group has no material concentrations of significant credit risk in its operations in Israel, as detailed below:

Regarding the Group's revenues from real estate and property sales, the Company occasionally grants payment terms to customers and is thus exposed to credit risk. The Company regularly evaluates customer credit ratings and includes specific provisions for doubtful debts in the financial statements where necessary. In most cases, it is agreed by the parties in the sale agreements that the legal title to the property does not transfer before full payment is received under the agreement. Management believes that credit risk related to such sale receivables is not significant.

Regarding the Group's revenues from hotel customers, the Hotel Company reviews customer credit quality. Specific risk limits are set for each customer, including the collateral to be received. In addition, most of the Company's sales are broadly diversified across many customers, and as such, the Company's customer balance as of December 31, 2024 does not represent a significant concentration of credit risk.

Regarding revenues from management fees of purchasing groups – payments are made by the purchasers to the Group companies, and group members must meet credit standards set by the bank financing the project to obtain significant bank financing. Credit facility agreements for such purchasing groups typically include payment of the applicable management fees to the Group.

The Group also has no significant concentrations of credit risk abroad.

Due to the ongoing war between Russia and Ukraine (refer to details in Note 8B(4)2(1)) and the mutual sanctions in effect, there are significant restrictions on the transfer of funds out of Russia. It is noted that as of the date of this Report, the Company does not hold material cash balances in Russia. Refer also to Note 8B(4)D regarding fund withdrawals.

Management is unable to estimate when, or if, these sanctions will be lifted.

Note 26 – Financial Instruments (continued):

I. Liquidity Risk:

The Group's objective is to maintain the existing ratio between ongoing financing and the flexibility provided by the use of overdrafts and short-term bank credit. The Company also regularly reviews sources of financing to support its ongoing operations. The primary sources for repayment of the Group's financial liabilities are proceeds from the sale of real estate inventory and revenues from management and marketing fees.

The table below presents the maturity dates of the Group's financial liabilities based on contractual terms (principal and interest payable) at undiscounted amounts:

	Up to one year	One to two years	Two to three years	Three to four years	Over four years	Total
As of December 31, 2024:
Credit and loans from bank corporations	(*)2,212,672	1,130,231	539,795	201,723	1,341,711	5,426,132
Accounts payable (including suppliers)	199,589	-	-	-	-	199,589
Lease liability	43,802	43,982	43,100	43,306	498,793	672,983
Bonds	352,160	347,380	335,901	164,421	437,966	1,637,828
Loans from others	2,787	4,877	672	672	4,724	13,732
	2,811,010	1,526,470	919,468	410,122	2,283,194	7,950,264

	Up to one year	One to two years	Two to three years	Three to four years	Over four years	Total
As of December 31,
2023:
Credit and loans from
bank corporations	2,817,188	922,769	83,874	36,122	372,947	4,232,900
Accounts payable
(including suppliers)	89,594	-	-	-	-	89,594
Lease liability	28,663	29,293	29,376	28,373	264,665	380,370
Bonds	118,563	293,650	301,915	298,934	-	1,013,063
Loans from others	4,162	6,012	2,109	2,077	22,624	36,984
	3,058,170	1,251,724	417,274	365,506	660,236	5,725,911

(*) The balance as of December 31, 2024 includes loans for the financing of real estate acquisitions (inventory or investment property), in the amount of NIS 2,340 million, which are due for repayment during 2025. The Company estimates that it will be able to extend the terms of the financing agreements for land acquisitions and/or enter into construction financing agreements with the banking institutions prior to the contractual repayment dates, as of the date of the Report.

Note 27 – Fair Value

A. Disclosure of Assets and Liabilities Measured at Fair Value in the Statement of Financial Position:

For the purpose of measuring the fair value of assets or liabilities, the Group classifies them according to a hierarchy that includes the following three levels:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

The classification of assets or liabilities measured at fair value is based on the lowest level of significant use for measuring the fair value of the entire asset or liability.

Below is a breakdown of the Group's assets and liabilities measured at fair value in the Company's statement of financial position as of December 31, 2024, according to their respective levels of measurement:

	Level 1	Level 2	Level 3	Total
	NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands
As of December 31, 2024:
Financial assets at fair value through profit and loss	129,192	-	-	129,192
Hotels:
In Israel	-	-	565,703	565,703
In Greece	-	-	48,900	48,900
Total hotels	-	-	614,603	614,603
Real estate for investment:
In Israel	-	340,675	2,536,836	2,877,511
In Poland	-	-	15,489	15,489
Total real estate for investment	-	340,675	2,552,325	2,893,000
Total fair value of assets and liabilities measured at
fair value on a timing basis	129,192	-	-	129,192
	Level 1	Level 2	Level 3	Total
	NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands
As of December 31, 2023:
Financial assets at fair value through profit and loss	94,889	-	-	94,889
Real estate for investment:
In Israel	-	-	2,565,706	2,565,706
In Poland	-	-	14,362	14,362
Total real estate for investment	-	-	2,580,068	2,580,068
Total fair value of assets and liabilities measured at
fair value on a timing basis	94,889	-	2,580,068	2,674,957

Note 27 – Fair Value (continued):

B. Assets and Liabilities Measured at Fair Value in the Statement of Financial Position According to Level 3:

Real estate for investment
In Israel	In Greece	In Poland	Total
NIS	NIS	NIS	NIS
thousands	thousands	thousands	thousands
2,565,706	-	14,362	2,580,068
149,375	-	-	149,375
(100,200)	-	-	(100,200)
(138,811)	-	-	(138,811)
8,586	-	-	8,586
(165)	-	-	(165)
2,600	-	-	2,600
49,745	-	2,001	51,746
389,678	48,900	-	438,578
	-	(874)	(874)
			176,025
3,102,539	48,900	15,489	3,166,928
	- 176,025	-	-

	Real estate for investment
	In Israel In Poland		Total
	NIS	NIS	NIS
	thousands	thousands	thousands
Balance as of January 1, 2023	2,250,988	11,634	2,262,622
From Level 2 to Level 3	24,060	-	24,060
Purchases and sales	167,198	-	167,198
From advances of investment property	26,263	-	26,263
Transition from fixed assets to investment property	35,721	-	35,721
In profit or loss	61,476	1,914	63,390
In other comprehensive profit - amounts that will be classified in the future in the profit or loss statement:
Adjustments arising from transaction of financial statements	-	814	814
Balance as of December 31, 2023	2,565,706	14,362	2,580,068

Note 27 – Fair Value (continued):

B. Assets and Liabilities Measured at Fair Value in the Statement of Financial Position According to Level 3 (continued):

	Fair value As of December 31
Description of measured instrument
	2024	2023	Assessment technique	Description of unobserved data	Range (weighted average)
Real estate for investment:
Land in Israel:
Kadima Zoren land Land in Herzliya Pituach	19,600 55,496	19,400 51,827	Comparison method Comparison and extraction method	Price per dunam Price per construction sq.m	NIS 280 thousand per dunam Offices – NIS 6,300-7,900 per sq.m Commercial – NIS 12,200-14,400 per sq.m
SHE, Herzl Yehuda Halevy	160,610	160,700	Comparison and extraction method	Price per construction sq.m	Paldelet Residences - NIS 18,600-21,900 per sq.m Commercial - NIS 22,000 per sq.m Employment: NIS 9,500 per sq.m
Land abroad:
Land in Poland	15,489	14,362	Comparison method	Average price per sq.m	PLN 50 per sq.m
Offices for lease:
Offices for rent in Israel	569,474	527,548	Income capitalization method for property and the comparison approach for land, offices and commerce	Rent per square meter % Capitalization Comparison price per constructed sq.m	NIS 92-201 per sq.m 5.55% -7.5% NIS 16,500-25,500 per sq.m
Commercial space for rent:
Commercial for rent in Israel	506,191	481,453	Comparison and method and/or revenue capitalization	Rent per square meter % Capitalization	Commercial – NIS 84-242 per sq.m (basement/ground) Restaurants – NIS 276 per sq.m Office - NIS 165 per sq.m 6.75% -7.5%
Real estate for investment under construction:
In Israel:
Cities Junction	421,000	388,500	Comparison method	Average price per constructed sq.m	Commercial – NIS 10,000-20,000 per sq.m Employment - NIS 4,000 - 8,000 per sq.m Hotel - NIS 10,000 per sq.m Residential - NIS 28,000 per sq.m
Land in Herzliya Pituach	58,047	46,295	Extraction method	Average price per constructed sq.m	Commercial - NIS 13,600 per sq.m Employment - NIS 6,900 per sq.m
Rainbow	43,150	42,000	Comparison and	Average price per	Commercial - NIS 25,000 per sq.m
Midtown Jerusalem	370,828	460,100	extraction method Comparison method	constructed sq.m Price per construction sq.m	Commercial - NIS 20,000 per sq.m Employment - NIS 4,500 per sq.m Housing for rent - NIS 17,000 per sq.m Hotel - NIS 6,500 per sq.m

Note 27 – Fair Value (continued):

B. Assets and Liabilities Measured at Fair Value in the Statement of Financial Position According to Level 3 (continued):

	Fair value As of December 31
Description of measured instrument	2024	2023	Assessment technique	Description of unobserved data	Range (weighted average)
Hotels: Real estate for investment	48,960	48,960	Revenue capitalization method	Expected rent	Existing commercial – NIS 300 per sq.m Commercial building rights - NIS 18,000 per sq.m Hotel building rights – NIS 4,800
West Tel Aviv Play Tel Aviv	102,000 121,641	- -	Comparison method Discounting method for projected operating profit from the hotel	Average value per unit Room value	per sq.m NIS 1,961,538 NIS 1,057,745
Dead Sea Enjoy	321,000	-	Capitalization of operating profit	Expected operating profit	NIS 23,455,000
Assisted living in Israel:
Kfar Shmaryahu	266,200	222,000	Discounting cash flow forecast	Capitalization rate Annual tenant turnover rate Rate of developer profit for	7.75%-8% 10%
				project completion	2.5%
	Fair value As of December 31
Description of measured instrument	2023	2022	Assessment technique	Description of unobserved data	Range (weighted average)
Real estate for investment:
Land in Israel:
Kadima Zoren land	19,400	17,800	Comparison method	Price per dunam	NIS 280 thousand per dunam
Land in Herzliya Pituach	98,122	93,326	Comparison method	Average price per constructed sq.m	NIS 8,500 per sq.m (weighted average)
Israel Canada in the City	160,700	157,360	Comparison method	Price per construction sq.m	Commercial - NIS 22,000 per sq.m Employment - NIS 10,000 per sq.m
Sde Dov Cities Junction	42,000 388,500	40,250 397,300	Comparison method Comparison method	Price per construction sq.m Price per construction sq.m	Commercial - NIS 25,000 per sq.m Commercial - NIS 20,000 per sq.m Office - NIS 8,000 per sq.m, Hotel - NIS 12,000 per sq.m Residential - NIS 26,000 per sq.m
Land abroad:
Land in Poland	14,362	11,634	Comparison method	Average price per sq.m	PLN 45 per sq.m
Offices for lease:
Offices for rent in Israel	462,414	460,370	Income capitalization method for an asset and a comparative approach to land, offices and commerce	Rent per square meter % Capitalization Comparison price per sq.m from a land developer	NIS 40-197 per sq.m (including warehouses) 5.35% -7.5% NIS 8,500 per sq.m
Commercial space for rent: Commercial for rent in Israel	481,453	474,444	Comparison and method and/or revenue capitalization	Rent per square meter % Capitalization	NIS 65-266 per sq.m (including warehouses) 6.75% -10%

Note 27 – Fair Value (continued):

B. Assets and Liabilities Measured at Fair Value in the Statement of Financial Position According to Level 3 (continued):

	Fair value As of December 31
Description of measured instrument
	2023	2022	Assessment technique	Description of unobserved data	Range (weighted average)
Real estate for investment under construction:
In Israel:
Da Vinci Offices	65,133	60,438	Revenue capitalization approach	Rent per square meter % Capitalization	NIS 175-200 per sq.m 7.5%-7%
Midtown Jerusalem	460,100	381,600	Comparison method	Price per construction sq.m	Commercial - NIS 10,000 per sq.m Employment - NIS 4,500 per sq.m Housing for rent - NIS 15,000 per sq.m Constructed hotels - NIS 10,500 per sq.m Hotel rights - NIS 7,000 per sq.m
Assisted living in Israel:
Kfar Shmaryahu	222,000	168,100	Discounting cash flow forecast	Capitalization rate Annual tenant turnover rate	7.75%-8% 10%
				Rate of developer profit for project completion	10%

For investment property, the fair value was determined based on valuations performed by independent appraisers who possess recognized professional qualifications and extensive experience regarding the location and type of property being appraised.

Description of the Valuation Processes Used to Determine Fair Value:

The individual responsible within the Company for overseeing the fair value valuation process of items classified as Level 3 is the Company's CFO. The CFO reports the fair value findings to the Company's management, which then reviews, together with the Company's financial reporting committee, the appropriateness of the data and valuation methodology used in determining fair value.

The Company's pricing model is reviewed annually and calibrated as necessary to estimate fair value as accurately as possible, in the Company's opinion.

D. Fair Value of Items Not Measured at Fair Value in the Statement of Financial Position:

Except as detailed in the table below, the Group believes that the carrying amounts of the financial assets and liabilities presented at amortized cost in the financial statements approximate their fair value:

	Carrying amount As of December 31		Fair value As of December 31
	2024 NIS thousands	2023 NIS thousands	2024 NIS thousands	2023 NIS thousands
Financial liabilities:
Series F Bonds and interest payable (1)	19,710	108,050	19,587	107,236
Series G Bonds and interest payable (1)	770,895	768,592	759,784	776,543
Series H Bonds and interest payable (1)	534,242	-	554,670	-
	1,324,847	876,642	1,334,041	883,779

(1) The change in carrying amount as well as in the fair value of bonds is due to principal repayments and does not result from significant changes in the Company's credit risk during the reporting period.

Note 28 – Segment Reporting

A. General:

Operating segments are identified based on internal reporting regarding the components of the Group, which is regularly reviewed by the Group's Chief Operating Decision Maker for the purpose of resource allocation and assessment of segment performance. The reporting system provided to the Group's CODM for these purposes is based on geographic areas, the method of project marketing, as well as the manner of revenue and operating profit generation from the project. For projects managed in held companies in which the Company is a partner and which are presented using the equity method, data is reviewed based on the Company's proportional share in the project. General and administrative expenses are not attributed to the Company's segments and therefore appear under unallocated expenses. The segment of investment property in Israel includes changes in fair value of investment property.

The activity of initiating and managing purchasing groups in Israel previously constituted a reportable segment. As of the end of 2021, this segment no longer constitutes a reportable segment and accordingly, its data is presented under "Other."

The following are the Company's operating segments in accordance with IFRS 8:

Segment A - Project construction in Israel: Segment B - Real estate in Israel:	Generates its revenue from projects in Israel where the Group develops and sells commercial spaces and/or offices and/or apartments under the Sale Law Guarantee, as well as from the sale of land at opportunistic prices. Generates its revenue from the Company's activities in selling and/or marketing land in Israel.
Segment C - Investment property in Israel:	Generates its revenue from the Company's activities in leasing and/or holding land in Israel designated for development for leasing purposes.
Segment D - Hotel Segment:	Represents the Company's activities in the hotel sector.
Segment E - Real Estate in Russia:	Represents the Company's activities in the project in Russia.
Segment F - Other:	Mainly represents the Company's activities in initiating and managing purchase groups in Israel, investing in innovation corporations related to real estate, senior living, parking management, and a project in Poland.

Note 28 – Segment Reporting (continued):

B. Details:

	For the year ended on December 31, 2024
	Establishing projects in Israel NIS	Land in Israel NIS	Investment property in Israel NIS	Hotels NIS	Land in Russia NIS	Other NIS	Adjustments for consolidated NIS	Total NIS
	thousands	thousands	thousands	thousands	thousands	thousands	thousands	thousands
Revenue	465,575	54,310	88,619	291,017	57,088	19,982	(202,355)	774,236
Sector's results	51,797	30,775	205,539	33,333	56,020	(3,334)	(38,675)	335,456
Unattributed expenses								(75,204)
Financing expenses								(133,280)
Financing income								91,025
Profit before income tax								217,997
Sector assets	5,073,846	1,179,779	3,506,612	1,291,253	181,305	290,621	(567,116)	10,956,300
Sector liabilities	(4,096,135)	(598,434)	(1,879,255)	(931,172)	(84,179)	(156,414)	251,677	(7,493,912)
Additional information:
Appreciation of investment property, net	-	-	146,787	-	-	725	(120,104)	27,408
Cost of sales	(383,434)	(17,077)	(21,009)	(257,682)	-	(23,982)	344,471	(358,712)
Depreciation and amortization	-	(10)	(997)	(53,324)	-	(71)	(676)	(55,079)
Financing expenses	(236,370)	(36,073)	(107,578)	(51,122)	(36,073)	(10,398)	345,012	(133,280)

Note 28 – Segment Reporting (continued):

B. Details (continued):

	For the year ended on December 31, 2023
	Establishing projects in Israel NIS thousands	Land in Israel NIS thousands	Investment property in Israel NIS thousands	Hotels NIS thousands	Land in Russia NIS thousands	Other NIS thousands	Adjustments for consolidated NIS thousands	Total NIS thousands
Revenue	893,562	79,785	65,707	309,908	34,177	27,754	(700,139)	710,754
Sector's results	99,797	51,562	115,100	31,374	21,935	6,335	(91,724)	234,379
Unattributed expenses Financing expenses Financing income Profit before income tax	(29,224)	(31,031)	(38,171)	(42,731)	(14,226)	(9)	(108,262)	(56,217) (263,654) 61,719 (23,773)
Sector assets	4,618,497	1,217,400	3,203,803	958,434	202,920	249,640	(1,869,235)	8,581,459
Sector liabilities	(3,602,063)	(587,811)	(1,646,202)	(744,827)	(84,179)	(125,272)	1,264,653	(5,525,701)
Additional information:
Appreciation of investment property, net	-	-	67,045	-	-	4,556	(8,211)	63,390
Cost of sales	(765,569)	(19,407)	(8,673)	(278,534)	(11,589)	(25,259)	723,531	(385,499)
Depreciation and amortization	-	(11)	(985)	(42,771)	-	-	(1,503)	(45,270)
Financing expenses	(203,921)	(36,869)	(108,284)	(42,731)	(14,226)	(4,666)	147,043	(263,654)

Note 28 – Segment Reporting (continued):

B. Details (continued):

	For the year ended on December 31, 2022
	Establishing projects in Israel NIS thousands	Land in Israel NIS thousands	Investment property in Israel NIS thousands	Hotels NIS thousands	Land in Russia NIS thousands	Other NIS thousands	Adjustments NIS thousands	Total NIS thousands
Revenue	850,126	611,832	68,225	263,084	30,993	4,964	91,393	1,920,617
Sector's results	249,024	239,605	277,095	13,839	22,235	27,813	17,345	846,956
Unattributed expenses Financing expenses Financing income Profit before income tax	(11,551)	(26,434)	(29,758)	(27,199)	(13,077)	(485)	(277,482)	(68,529) (385,986) 28,545 420,986
Sector assets	4,486,902	1,159,739	3,404,498	887,312	209,757	207,798	(1,643,840)	8,712,166
Sector liabilities	(3,877,957)	(522,717)	(1,680,484)	(719,829)	(84,179)	(90,129)	1,225,120	(5,750,175)
Additional information:
Appreciation of investment property, net	-	-	234,651	-	-	32,449	35,635	302,736
Cost of sales	(581,077)	(350,380)	(21,984)	(252,947)	(7,270)	(6,870)	230,067	(990,463)
Depreciation and amortization	-	(12)	(1,050)	(34,455)	-	(41)	(1,418)	(36,976)
Financing expenses	(90,459)	(29,241)	(63,966)	(27,199)	(13,077)	(4,840)	(157,204)	(385,986)

Note 29 – Transactions with Interested and Related Parties

A. Balances with Interested and Related Parties:

	Book Value
	As of December 31
	2024	2023 NIS thousands
	NIS
	thousands
Accounts receivable:
Revenue receivable for marketing fees of WEM project (5)	4,718	4,813
Revenue receivable for marketing fees of Bereshit project (6)	270	608
	4,988	5,421
Accounts payable:
Shareholders (2)	(3)	(78)
Directors (29b)	(187)	(158)
	(190)	(236)

(1) For details regarding shareholders' loans and bonds granted to associate companies and joint ventures, as detailed in Note 8.

(2) Management Agreements:

On December 22, 2022, the members of the Remuneration Committee, and on March 2, 2023, the General Meeting of Shareholders of the Company, approved the continuation of the management agreements with Rosen and Touchmair, which shall be effective as of January 1, 2023. According to the management agreements, Rosen and Touchmair will serve as the CEO and Chairman of the Board of Directors of the Company, at a minimum employment scope of 95% and 90%, respectively.

On February 22, 2023, the members of the Remuneration Committee and the Board of Directors of the Company, and on March 2, 2023, the General Meeting of Shareholders of the Company, approved the continuation of the engagement of the Company in management agreements with a company wholly owned and controlled by Mr. Asaf Touchmair and with a company wholly owned and controlled by Mr. Barak Rosen, the controlling shareholders of the Company and serving as the Chairman of the Board and CEO of the Company, respectively (above and hereinafter – "Touchmair," "Rosen," "the Management Agreements," "Touchmair's Company," and "Rosen's Company," respectively), for the provision of CEO services and Chairman services to the Company through Touchmair and Rosen only, respectively (hereinafter – "CEO Services" and "Chairman Services," respectively). The Management Agreements include immaterial changes compared to the terms of office and employment as previously approved by the General Meeting in 2020, and shall apply as of January 1, 2023. According to the Management Agreements, Rosen and Touchmair will serve as CEO and Chairman of the Board of Directors of the Company at a minimum employment scope of 95% and 90%, respectively.

Below are the terms of office determined in the engagements with the companies owned by Touchmair and Rosen, respectively:

• (a) Fixed Compensation In consideration for the provision of management services by Asaf Touchmair, the private company under his ownership shall be entitled to fixed compensation from January 1, 2023, through the end of the agreement period on December 31, 2025, in the amount of approximately NIS 180 thousand per month (compared to approximately NIS 173 thousand per month before the approval of the new Management Agreement).
• (b) Fixed Compensation In consideration for the provision of management services by Barak Rosen, the private company under his ownership shall be entitled to fixed compensation from January 1, 2023, through the end of the agreement period on December 31, 2025, in the amount of approximately NIS 219 thousand per month (similar to the compensation in effect prior to that date).

Note 29 – Transactions with Interested and Related Parties (continued):

A. Balances with Interested and Related Parties (continued):

• (2) Management Agreements (continued):
  • (c) Variable Compensation In addition to the monthly compensation mentioned above, each of Touchmair's and Rosen's private companies shall be entitled to an annual bonus subject to the cumulative threshold targets detailed below (hereinafter – the "Threshold Targets"):
    • 1) Profit Test Each of Touchmair's and Rosen's private companies shall be entitled to the variable compensation only if the Company presents in its financial statements for the relevant compensation year a net profit attributable to the shareholders of the Company (excluding noncontrolling interests), based on the audited consolidated financial statements of the Company.
    • 2) Repayment Test During the relevant calendar year, the Company must fully meet the repayment conditions of principal, interest, and linkage differentials with respect to bonds issued and loans received from banking institutions, excluding debt specifically related to new and/or existing projects (Non-Recourse).
  • (d) Minimum Compliance Threshold The variable compensation is conditional upon achieving a minimum threshold of profit before tax, as defined below, in the amount of NIS 65 million. "Profit before Tax" for the purposes of this section means the Company's profit for the relevant year before income taxes according to the (consolidated) financial statements for that year, before bonuses to controlling shareholders, and net of the non-controlling interest's share in the profit of consolidated companies before tax (or added in case of losses before tax), neutralizing fair value gains/losses to shareholders of the Company, including one-time gains/losses not in the ordinary course of business, provided the result is positive. From the equity-accounted investees' results, tax income/expenses shall be neutralized, as well as revaluation gains/losses. If the result is negative, no bonus shall be paid and such negative result will be taken into account for the bonus calculation in the following year(s). If the result is positive, the surplus amount will be carried forward to subsequent years.
  • (e) Annual Bonus Rate To the extent the Threshold Targets and the minimum profit before tax threshold are met, Touchmair's and Rosen's private companies shall be entitled, respectively, to a progressive rate of the profit before tax (hereinafter – the "Annual Bonus"). The calculation shall be performed progressively.

Profit before tax	From profit before tax	Maximum bonus per rank for each position	Cumulative bonus for each position
NIS millions	NIS millions	NIS millions	NIS millions
	Not eligible for a
0	grant	-	-
	Not eligible for a
65 =>	grant	-	-
65-80	2.0%	0.3	0.3
80-95	2.75%	0.4125	0.7125
95-110	3.5%	0.525	1.2375
110-120	3.75%	0.375	1.6125
120-140	4.0%	0.8	2.4125
			3.2405
			(Subject to the
			variable bonus limit
140-160	4.14%	0.828	as detailed below)

Below is a breakdown of the bonus rate based on profit before tax:

In any event, the Annual Bonus for each of Touchmair's and Rosen's private companies shall not exceed the amount of approximately NIS 3,240.5 thousand each.

Note 29 – Transactions with Interested and Related Parties (continued):

A. Balances with Interested and Related Parties (continued):

(3) Lease Agreement and Participation in Company Expenses:

Since 2017, the Company annually engages the services of an independent external consultant to propose an appropriate mechanism for charging the controlling shareholders and their privately held companies for rent, employee-related costs, and participation in fixed expenses directly related to office space (e.g., municipal taxes, office maintenance, cleaning expenses, etc.). The consultant's assessment is primarily based on the ratio of working hours attributed to the private company's employees to the total working hours of all employees, and the ratio of office space allocated to the private company's employees in rooms to the total number of rooms in the office.

• (4) On February 10, 2019, the Audit Committee members approved, as a non-extraordinary transaction, the Company's engagement with a company owned and controlled by Messrs. Asaf Touchmair and Barak Rosen in a lease agreement, whereby the controlling shareholders would lease from the Company an area of 130 square meters on the 33rd floor of the Midtown office tower. The rent was set at NIS 103 per square meter, i.e., approximately NIS 13.4 thousand per month. The terms of the lease agreement are more favorable than those of a third-party tenant leasing the remaining space on the same floor (except for the monthly rent), as the Company typically leases real estate as part of its regular business. The rent is considered at market terms based on comparable transactions in the Midtown project and does not materially affect the Company's assets, profitability, or liabilities.
• (5) On July 22, 2018, the Company's Audit Committee and Board of Directors approved the Company's engagement with a project company (held indirectly by Mr. Barak Rosen, one of the controlling shareholders and serving as CEO and Director of the Company; hereinafter – "Rosen" and the "Project Company," respectively) in a service agreement for the exclusive marketing of units in a project in London (hereinafter – the "London Project"), fully owned (100%) by the Project Company. Compensation includes a 3% marketing commission on the total sales, plus VAT (hereinafter – the "Marketing Commission" and the "Engagement," respectively). Sales commissions to the Company's external marketers will be paid from the Marketing Commission, and are estimated to average approximately 1% of total sales plus VAT. It should also be noted that as of the date of this Report, Rosen has transferred 50% of his rights in the Project Company to Asaf Touchmair, another controlling shareholder and Chairman of the Company.

The Engagement was approved by the Audit Committee and the Board of Directors pursuant to Article 1(5) of the Companies Regulations (Reliefs in Transactions with Interested Parties), 5760-2000 (hereinafter – the "Relief Regulations") on the grounds that marketing real estate units is in the ordinary course of business of the Company, and that the Marketing Commission is at market terms and to the benefit of the Company.

(6) On February 25, 2020, the Audit Committee members approved the Company's engagement with a Project Company (indirectly) held 75% by Messrs. Asaf Touchmair and Barak Rosen (hereinafter – the "Project Company") in a service agreement for the exclusive marketing of land parcels in Rishon LeZion (hereinafter – the "Land"), fully owned (100%) by the Project Company, in return for a 3% commission on each sale, plus VAT.

This Engagement was approved by the Audit Committee and the Board of Directors pursuant to Article 1(5) of the Relief Regulations on the grounds that real estate marketing is in the ordinary course of the Company's business and the Marketing Commission is at market terms and to the benefit of the Company.

As of the date of this Report, the Company recognized revenues in 2024 from the marketing of the project in the amount of approximately NIS 0 million (compared to approximately NIS 0.1 million in 2023).

Note 29 – Transactions with Interested and Related Parties (continued):

A. Balances with Interested and Related Parties (continued):

(7) An agreement was signed between the Company and Pangaea Israel (T.R.) Ltd. (hereinafter – "Pangaea"), a wholly owned subsidiary of the Company, under which, between 2022 and 2024, the Company converted a loan into a bond in a total cumulative amount of approximately NIS 534 million. According to the terms of the bond, it bears annual interest of 4% and linkage differentials. The bonds were repaid on December 31 of each respective year, and were renewed under the same terms (totaling approximately NIS 657 million).

B. Compensation and Benefits Granted to Interested and Related Parties:

	For the year ended on December 31
	2024 NIS thousands	2023 NIS thousands	2022 NIS thousands
Management fees, bonus and reimbursement of expenses to controlling shareholders (A)	11,272	4,782	11,182
The number of people to whom the payment relates	2	2	2
Remuneration of directors who are not employed by the company	646	655	689
The number of people to whom the payment relates	3	3	3

(1) Refer to Note 29A(2) above.

Note 30 – Pledges and Guarantees

To secure the Group's obligations related to the following residential projects: "Ehad Ha'am," "Sunset," "Emek Bracha" (residential portion), "Lapid," "Midtown Jerusalem" (residential portion), "SHE" (residential portion), "Ramat Hasharon," "Rainbow" (residential portion), "Dubnov" (residential portion), and "Beit Hanaara," all rights of the Company related to these projects have been pledged.

The outstanding balances of secured obligations are as follows:

As of December 31
2024 2023
NIS NIS
thousands	thousands
2,871,740 2,289,368

To secure the Group's obligations related to income-producing real estate properties in the following projects: "HaHoshalim" in Herzliya, "Elifelet" in Tel Aviv, "Midtown" in Tel Aviv, "Sea Tower" in Herzliya, "Midtown Jerusalem" (income-producing portion), "SHE" (income-producing portion), "Da Vinci" (income-producing portion), "Rainbow" (income-producing portion), "Emek Bracha" (income-producing portion), "Dubnov" (income-producing portion), "Kfar Shmaryahu," "Sde Dov Offices," and "Cities Junction Tower," the relevant assets and associated rights have been pledged to the financing banks.

The outstanding balances of secured obligations are as follows:

		As of December 31
	2024	2023
	NIS thousands	NIS thousands
Credit from banks	1,511,603	1,250,874

Note 31 – "Iron Swords" War

On October 7, 2023, the "Iron Swords" war (hereinafter – the "War") broke out in Israel following a coordinated attack by the Hamas terrorist organization, resulting in the murder of approximately 1,400 people, the injury of thousands, and the abduction of approximately 240 people. Simultaneously, security escalations occurred along Israel's northern border with the Hezbollah terrorist organization, as well as in other arenas. Consequently, Israel initiated a wide-scale call-up of reserve personnel, declared a special situation on the home front, and evacuated many communities both in the Gaza envelope and along the northern border.

The immediate impacts of the War on the Israeli economy included, among others: the temporary closure and/or disruption of many businesses, limitations on civilian movement, restrictions on gatherings (depending on proximity to conflict zones), a reduction in school hours, labor shortages (due to the departure of foreign workers, limitations on Palestinian workers entering Israel, and the mass call-up of reservists), the suspension of flights to Israel by most international airlines, and additional ramifications, as well as an overall depressed public sentiment. These circumstances led to a decrease in economic activity and significant volatility in the financial markets and the exchange rate of the shekel against foreign currencies, resulting from increased risk levels and uncertainty. These developments were also reflected in the credit rating of Israel: In October 2023, shortly after the outbreak of the War, rating agencies Moody's and Fitch announced that Israel's credit rating was under review for downgrade. S&P also downgraded Israel's credit outlook from stable to negative, though it left the rating unchanged. In February 2024, Moody's downgraded Israel's credit rating by one notch to A2, and on September 27, 2024, it downgraded the rating a second time, by two notches, to Baa1.

Immediate Impacts of the War:

With respect to the Company's development projects in execution, after a two-week period from the start of the War during which the Company's construction sites were shut down, all of the Company's sites resumed operations (subject to the restrictions imposed by the Home Front Command and local authorities), and as of the date of this Report, all of the Company's sites are operating at full capacity. It is clarified that sites which did not operate at full capacity during this period may lead to increased financing costs and construction cost inflation (correspondingly reducing project surpluses), as well as increased expenses for rental payments to owners of existing residential units in urban renewal projects. However, as of the date of this Report, this has not had a material impact on the progress of the Company's projects.

Regarding the Company's planned projects (including land reserves), during the first week of the War, planning bodies ceased all operations. However, within a few days, they resumed operations almost fully, and therefore, this had no material impact on the Company's activities.

As for marketing aspects, immediately following the outbreak of the War, the residential real estate market experienced a significant slowdown in demand for purchasing apartments (as the War exacerbated the existing uncertainty in the real estate market, mainly due to interest rate increases during the past year). However, beginning in December 2023, demand for apartments began to increase. It is noted that despite the slowdown, the Company marketed hundreds of apartments in the Rainbow and Midtown Jerusalem projects during the period.

As of the date of this Report, the impact of the War on the Company's operating results exists but is not material and is expected to remain so in the immediate term, provided the War does not escalate further. This assessment is based on the Company's financial strength, business condition, cash flows, and the various stages of its projects.

Nevertheless, the Iron Swords War has led to a shortage of skilled labor at construction sites and to an increase in the cost of raw materials required for construction, which may increase execution costs in projects where a construction contract has not yet been signed or in projects where the construction contract is linked to the Construction Input Index. This may also result in extended construction timelines and delays in project completions. In addition, the War has led to increased inflation, sustaining a high-interest-rate environment. Due to the rise in construction costs, the Company updated the execution costs of projects in marketing that had not yet entered into an agreement with a contractor. On the other hand, revenue estimates for these projects were also updated due to increased sale prices, based on actual apartment sales in the various projects. Therefore, despite the aforementioned cost increases, the expected impact on gross profit is not material.

Note 31 – "Iron Swords" War (continued):

With respect to the Company's income-producing properties, beginning in early 2024, as business activity increased, most tenants resumed paying rent in full without relief (such as payment deferrals), which had been granted on a caseby-case basis in 2023. The Company currently does not expect a significant impact on its revenues as a result, and occupancy rates in its income-producing properties appear to remain stable.

Regarding the Company's hotel operations – as of December 31, 2024, and the date of this Report, the War has not had a material impact on the Company's 2024 financial results, given that the Company's hotels were operating at high occupancy rates due to the accommodation of evacuees from the south and north, in accordance with necessity and governmental orders. The Company adjusted its expenses (including placing employees on unpaid leave and vacation as needed) to match the activity level during this period. However, following the date of the Report, most evacuees have left the Company's hotels, and as of the date of this Report, the Company is working to return the hotels to full operations and is awaiting updates regarding government participation in the renovation costs of hotels that hosted evacuees. It is likely that this will be reflected in the hotel company's financial statements for the first quarter of 2025. Additionally, it should be noted that the prolongation and/or intensification of the Iron Swords War and its impact on the tourism sector in general (both domestic and incoming tourism) may affect demand for the Company's hotels and impact the performance of the Company's hotel operations in the upcoming quarters, the extent of which cannot currently be assessed.

Potential Impacts of Prolongation or Escalation of the War:

A further prolongation of the fighting and/or an expansion of the war on additional fronts at high intensity may materially affect the Company's operations, as they may lead to: (1) the cancellation/reduction of projects and a delay in the pace of initiation processes and entry into new projects; (2) a delay in planning, permitting, and execution processes of the projects in a manner that may lead to delays in the completion of the projects and their delivery to buyers; (3) a decline in the financial resilience of key subcontractors and suppliers; (4) an increase in construction costs; (5) a material decline in demand for residential units/office spaces/commercial areas marketed by the Company (due to a harm to the economic ability of potential buyers/tenants, general low morale, and the uncertainty involved in a time of war); (6) a decline in sale/rental prices and/or tenants leaving; (7) a limitation on the scope of bank credit to the real estate sector, raising of minimum requirements for financing (including requirements for increasing the equity capital provided by the Company in the projects), tightening of financing terms, and delays in the dates for provision of the financing required by the Company for its operations (as this is also conditioned, among other things, on the pace of marketing of the apartments/offices/renting of the areas in the projects); (8) an oversupply of areas for rent; (9) non-fulfillment by buyers/tenants of their obligations toward the Company; (10) an impact on domestic tourism and inbound tourism in a manner that will affect occupancy in the hotels managed by the Company and, accordingly, the revenue and profitability of this sector.

Note 32 – Events After the Report Period

A. Decision Regarding Dividend Distribution:

On March 24, 2025, the Company's Board of Directors approved a cash dividend distribution in the amount of NIS 25,000 thousand to the Company's shareholders.

B. Bank Loan – "Cities Junction Tower" Project:

Further to the provisions of Note 12(B)(10), in February 2025, after the balance sheet date, the loan was extended and its final maturity date was set for November 23, 2026 (instead of January 30, 2025). The loan terms remained unchanged.

C. Operating Lease of Investment Property and Kadima Tzoran Project:

Further to the provisions of Note 15A, on January 6, 2025, after the balance sheet date, the Subsidiary, together with an unrelated third-party partner (the Subsidiary's share in the transaction – 50%), purchased approximately 162 additional undivided dunams of land for a total consideration of approximately NIS 73 million plus VAT as required by law. The purchase is subject to the fulfillment of certain conditions precedent.

D. "Midtown Jerusalem" Project:

Further to the provisions of Note 15M, on February 25, 2025, after the balance sheet date, a full building permit was obtained for the residential towers in the "Midtown Jerusalem" project. On the same date, an agreement was signed with Tidhar Construction Ltd. for the performance of contracting works in the residential section and the main office section for a total consideration of approximately NIS 1.5 billion.

On February 2, 2025, the Project Company paid betterment levies in the amount of approximately NIS 199 million in order to obtain the full permit. The payment was made through bank financing, and bank guarantees totaling NIS 199 million were provided. An appeal was submitted regarding the amount of the betterment levies in the project.

E. Acquisition of Real Estate on Emek Bracha Street, Tel Aviv:

Further to the provisions of Note 15T, on January 9, 2025, after the balance sheet date, the Subsidiary entered into an agreement with a third party unrelated to the Company and/or its controlling shareholders for the purchase of approximately 20% undivided shares in the real estate (hereinafter: the "Remaining Property").

In consideration for the acquisition of the Remaining Property, the Subsidiary will pay approximately NIS 36 million plus VAT as required by law (hereinafter – the "Consideration"), to be paid in three installments as follows:

• 1. NIS 12 million plus VAT was paid upon signing the agreement against registration of a cautionary note in favor of the Granddaughter Company.
• 1. Approximately NIS 2.7 million plus VAT will be paid by April 9, 2025.
• 1. The balance of NIS 21.3 million plus VAT will be paid by April 9, 2025.

F. Private Share Allocation to Investors:

Further to the provisions of Note 16D, on January 26, 2025, after the balance sheet date, the Company's Board of Directors approved the allocation of Company shares to the following investors: Migdal Sal Menayot Israel Ltd., which is a related party of the Company, Mor Mutual Fund Management (2013) Ltd., Phoenix Israel Provident Partnership, and an additional investor (hereinafter collectively: the "Investors"), in a private allocation pursuant to the Private Placement Articles. Under this allocation, the Company allocated to the Investors 8,333,334 Company shares at a price of NIS 15 per share, for total consideration of approximately NIS 125 million. The allocation was completed on January 27, 2025, upon receipt of the full private placement consideration by the Company.

G. Bank Loan for the Acquisition of the House in Kfar Shmaryahu:

Further to the provisions of Note 12B(9), on February 6, 2025, after the balance sheet date, an amendment was signed to the agreement with the banking corporation whereby the credit facility was increased to NIS 187 million. All other terms remained unchanged.

Note 32 – Events After the Report Period (continued):

H. Herzliya 4006 Joint Venture:

During the years 2016–2021, the Company, through a wholly controlled Subsidiary (hereinafter: the "Subsidiary"), together with partners, purchased portions of blocks 6590 and 6591, which form part of the plot known as Parcel 4006 in Herzliya. The Subsidiary's share in the joint venture is approximately 23%. On March 6, 2025, after the balance sheet date, the Subsidiary, together with an unrelated third party, entered into an agreement for the purchase of the full ownership rights of another partner in the joint venture (approximately 23%) for a total consideration of approximately NIS 82 million (Company's share – approximately NIS 68 million).

The partners are working to establish an office and commercial building on the property. Construction on Plot 4006 began in 2022.

I. Kremenetski, Tel Aviv:

On March 18, 2025, a partnership 10%-owned by the Company, together with Check Point Software Technologies Ltd. ("Check Point"), submitted a bid in a tender conducted by the Tel Aviv-Jaffa Municipality in collaboration with the Israel Electric Corporation for capitalized lease rights in Plot 201 under Plan TA/MK/4784 (the "Property"), known as the IEC Technical Center on Kremenetski Street in Tel Aviv-Jaffa. The 13.5-dunam plot allows for approximately 302 residential units, 1,500 sqm of retail space attached to the residential buildings, 60,000 sqm of employment space, and 2,700 sqm of additional commercial space, for a total consideration of approximately NIS 818 million plus VAT. To the Company's knowledge, the joint bid was the winning one, subject to approval by the tender committee, municipal council, and relevant IEC authorities (the "Approvals"), which have not yet been received as of the date of this Report.

Under the agreement between the Company and Check Point, the Company will receive the residential rights, and Check Point the employment and commercial rights (the "Joint Venture"). It was agreed that the Company will pay approximately NIS 318 million for the residential rights, and Check Point will pay the remaining NIS 500 million. The parties have arranged terms for the Joint Venture, which will be disclosed by the Company if and when the Approvals are granted.

J. "SHE" Project:

Further to the provisions of Note 15H, on March 20, 2025, after the balance sheet date, the Project Partnership entered into a contract for excavation and shoring works with Cementcal Solel Boneh, a limited partnership, for a total contract value of NIS 35 million.

K. Investment in Norstar Shares:

After the balance sheet date and until the publication date of the financial statements, the share price of Norstar declined by approximately 30%. Unless there are material changes in the share price, the Company is expected to record a post-tax loss of approximately NIS 28 million in the first quarter due to this investment.

L. Midtown Jerusalem – Bank Loan:

Further to Note 12(B)(2), on March 24, 2024, after the balance sheet date, the Company signed an agreement with the bank to extend the loan repayment date to September 30, 2025 (instead of March 31, 2025). Additionally, the credit facility was increased from NIS 1 billion to NIS 1.125 billion. The Company is working with the bank and other institutional entities to sign a financing agreement for the project's construction.

M. Legislative Updates:

On March 23, 2025, after the balance sheet date, the Bank of Israel issued a statement that it is closely and continuously monitoring housing market developments, particularly various financing mechanisms offered by real estate developers. Consequently, the Bank of Israel published a draft temporary directive, including guidelines for banks aimed at reducing risk for all parties in the market by strengthening risk management, monitoring capabilities, and consumer protection. These guidelines are expected to remain in effect until the end of 2026, as follows: (a) An additional capital allocation requirement for residential construction projects where more than 25% of the sale price is deferred to the delivery date; (b) A cap on the proportion of bullet or balloon loan disbursements with contractor subsidies, such that it may not exceed 10% of total monthly disbursements for residential loans. The Company will examine the impact of the final directive on its business operations.

Note 33 – Events After the Report Period in Associates

A. Associate – Lev Bavli Ltd. (formerly: Urban Bavli Tel Aviv Ltd.):

Further to the provisions of Note 8(B)(4)(b), on January 6, 2025, after the balance sheet date, a building permit was obtained for the project.

B. Joint Venture – A.K.A. Beit Mars Ltd.:

Further to the provisions of Note 8(B)(4)(h), in February 2025, after the balance sheet date, the loan maturity for the land financing was extended until February 28, 2027.

C. Joint Venture – Vertical City Ltd.:

Further to the provisions of Note 8(B)(4)(g), in February 2025, after the balance sheet date, the Project Company signed an agreement with Electra Construction Ltd. (hereinafter: the "Contractor") for excavation, shoring, and foundation works solely on the public plot (along Begin Street). The Contractor is responsible for constructing a six-level underground parking garage under a design-build format. The scope of work includes excavation, shoring, foundations, structural framework, system installations, and all finishing works until full operational readiness, for a total consideration of approximately NIS 390 million plus VAT as required by law.