Israel Canada (T.R) Ltd.

Annual Report • Dec 17, 2024

Israel Canada (T.R) Ltd.

Board of Directors' Report for the Periods of Nine and Three Months Ended on

September 30, 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 third quarter of 2024, that was published on November 27, 2024 (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 September 30, 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 3.5 billion, including VAT (including associate companies–Vertical City, Beit Mars, and ICR), compared to approximately NIS 3 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:
  • Rainbow Project–Sde Dov: As of the Report date, the Company sold 218¹ apartments for a total consideration of approximately NIS 1.9 billion, including VAT.
  • Vertical City Project: In the associate company holding the Vertical City project in Ramat Gan, a decision was made to market an office building (approximately 75,000 square meters). As of the Report date, approximately 25,000 square meters of office space have been sold for a total consideration of approximately NIS 796 million, including VAT.
  • Midtown Jerusalem Project: As of the Report date, the Company sold approximately 210¹ apartments for a total consideration of approximately NIS 866 million, including VAT, and office spaces totaling approximately 2,000 square meters for a total amount of approximately NIS 55 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 June 26, 2024, the Company issued Bonds Series H, totaling approximately NIS 228.9 million par value, for consideration of approximately NIS 226.5 million at a fixed annual interest rate of 6.95%.
• On October 10, 2024, a financing agreement was signed for the Sde Dov project with two local banks (in equal parts) to provide a financing framework not exceeding approximately NIS 3.2 billion, including financial credit. For further information, refer to Note 5(c) in the Company's consolidated financial statements as of September 30, 2024.
• 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 4(z) in the Company's consolidated financial statements as of September 30, 2024.
• On August 22, the Company completed the purchase of land on Dubnov Street, Tel Aviv, for a total of approximately NIS 443 million.
• The net profit for the nine months ended September 30, 2024, amounted to approximately NIS 216 million, compared to a net loss of approximately NIS 126 million in the same period last year.
• As of September 30, 2024, the Company had cash, cash equivalents, and marketable securities totaling approximately NIS 315 million.
• As of September 30, 2024, the Company had real estate and buildings under planning and construction inventories totaling approximately NIS 4 billion.
• The Company's total balance as of September 30, 2024, amounted to approximately NIS 10 billion, compared to approximately NIS 8.6 billion on December 31, 2023.
• The Company's equity (including non-controlling interests) as of September 30, 2024, amounted to approximately NIS 3.3 billion, compared to approximately NIS 3.3 billion on December 31, 2023.

^* Including subscription agreements Refer to table below.¹

• The equity attributable to the Company's shareholders as of September 30, 2024, amounted to approximately NIS 2.4 billion, compared to approximately NIS 2.2 billion on December 31, 2023.
• The Company's equity ratio (including non-controlling interests) to the Company's total consolidated balance as of September 30, 2024, was approximately 33%, compared to approximately 36% on December 31, 2023.
• The Company's equity ratio, excluding non-controlling interests, to the Company's total consolidated balance as of September 30, 2024, was approximately 23.8%, compared to approximately 26% on December 31, 2023.

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

(1) Rainbow Project–Of the 218 apartments sold, approximately three registration forms amounting to approximately NIS 28.680 million, including VAT.

Project	During the nine months ended on Sept. 30, 2024		After balance sheet date until near the Report publication		Total from Jan. 1, 2024, until near the Report publication		Data from project start until near the Report publication
	Apartments sold	Financial scope including VAT in NIS thousands	Apartments sold	Financial scope including VAT in NIS thousands	Apartments sold	Financial scope including VAT in NIS thousands	Marketing rate	Apartments sold	Financial scope including VAT in NIS thousands
Rainbow, Tel Aviv (1)	89	916,482	6	46,766	95	963,248	45%	218	1,894,784
Midtown Jerusalem(2)	32	154,506	13	118,502	45	273,008	30%	210	866,114
Pastoral, Jerusalem(6)	60	200,784	20	86,828	80	287,612	28%	80	287,612
North Park Stage A, Ramat Hasharon (3)	19	98,061	5	32,805	24	130,866	71%	389	1,958,871
North Park Stage B (EVE), Ramat Hasharon (4)	72	407,168	8	51,387	80	458,555	27%	108	594,933
Histadrut, Givatayim (5)	27	127,921	3	14,924	30	142,845	72%	155	757,454
Hamesila, Herzliya (6)	2	14,784	-	-	2	14,784	89%	24	171,535
Ocean Park II, Netanya	5	23,599	-	-	5	23,599	100%	60	243,536
Hagefen, Herzliya (Stage B)	2	10,350	-	-	2	10,350	98%	94	369,590
Bat Yam Sokolov	1	6,760	1	6,700	2	13,460	98%	161	470,995
Ehad Ha'am, Tel Aviv	4	33,994	-	-	4	33,994	91%	63	321,708
Total	313	1,994,409	56	357,912	369	2,352,321	-	1,562	7,937,132
Midtown Jerusalem Offices	-	43,921	-	11,466	-	55,387	5%	-	55,387
Vertical City, Ramat Gan(7)	-	53,242	-	104,762	-	158,004	33%	-	796,105
Total	-	2,091,572	-	474,140	-	2,565,712	-	-	8,788,624

(2) Midtown Jerusalem–Of the 210 apartments sold, approximately seven registration forms amounting to approximately NIS 93.516 million, including VAT.

(3) Park Tzafon Stage A Project–Of the 389 apartments sold during the period, approximately two registration forms amounting to approximately NIS 9.625 million, including VAT.

(4) Park Tzafon Stage B Project–Of the 108 apartments sold during the period, approximately four registration forms amounting to approximately NIS 27.215 million including VAT.

(5) Histadrut project–Of 155 apartments sold during the period, approximately two registration forms amounting to approximately NIS 10.334 million, including VAT.

(6) Pastoral Project (Hantaka)–Of the 80 apartments sold during the period, approximately 10 registration forms amounting to approximately NIS 43.414 million, including VAT.

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

In the first nine months of 2024, 145 units were sold in the project in Russia. The project in Russia is marketed by a local developer according to the consideration transaction detailed in Section 7.3 of the 2023 Report.

Registration Forms

The process of marketing residential units/offices by the Company consists of two stages. In the first stage, after the commercial details are agreed upon with the buyer, the buyer signs a registration form / subscription form that includes the main commercial details agreed upon (unit details, attachments, consideration, and payment schedule), as well as general legal details regarding the property. For the registration form to become effective, the buyer must deposit a registration fee of between NIS 50,000 and NIS 100,000 (depending on the project) into the project's trust account (hereinafter and accordingly: "Registration Fee" and "Registration Form"). In the second stage, according to the instructions of the Registration Form, the buyer must complete the acquisition of rights and sign a binding sale agreement within approximately 7-14 days from the signing date, and the earnest money will be credited toward the first payment on account of the consideration under the sale agreement. The Registration Form also stipulates that if the buyer does not sign a sale agreement and decides not to complete the transaction, the Registration Fee will not be refunded and will be forfeited to the benefit of the project company. It should be noted that sometimes, at the buyer's request, the Company approves the refund of the Registration Fee if the purchase is not completed due to legal disputes concerning the sale agreement.

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

The Company's Board of Directors is pleased to submit the consolidated financial statements of the Company for the nine and three month periods ended September 30, 2024 (hereinafter: the "Period" or the "Reporting Period"), in accordance with the Securities Regulations (Periodic and Immediate Reports), 5730-1970 (hereinafter: the "Reporting Regulations").

The review presented below is limited in scope and refers to events and changes that occurred in the Company's situation during the Reporting Period, which have a material impact. It should be reviewed together with the Company's periodic report for the year ended December 31, 2023, which includes the Description of the Company's Business Report for 2023 and the Company's consolidated financial statements as of December 31, 2023 (hereinafter: the "Periodic Report," "2023 Report," and the "Annual Financial Statements," respectively).

All the data presented in the Board of Directors Report are based on the reviewed interim consolidated financial statements of the Company as of September 30, 2024, unless stated otherwise.

General Background of the Company

As of the Report date, the Company has eight areas of activity as detailed below:

• 1. Real estate development (investment in land)
• 1. Real estate development in Russia
• 1. Project development in Israel
• 1. Initiation and management of purchasing groups in Israel (not a reportable segment according to Generally Accepted Accounting Principles)
• 1. Income generating real estate in Israel
• 1. Hotel management in Israel
• 1. Senior living in Israel (not a reportable segment according to Generally Accepted Accounting Principles). For details, refer to the Company's Immediate Report dated March 16, 2022 (Reference No. 2022-01-026103), referenced in this Report.
• 1. Operation of properties and parking lots in Israel (not a reportable segment according to Generally Accepted Accounting Principles)

For more details on the segmentation of the Group's areas of activity, refer to Section 1 of Part A of the Periodic Report for 2023.

Below is an update on the status of the Company's major projects in Israel (where significant changes have occurred):

Project development in Israel
Project name	Status update
Ehad Ha'am Project, Tel Aviv	As of the publication date of the reports, 63 units have been sold in the project (of 69 units) for a total
	amount of approximately NIS 322 million, including VAT. Form 4 was received on August 14, 2024,
	and the Company expects to complete the process of handing over the apartments by the end of 2024.
	On November 21, 2022, the Tel Aviv District Planning and Building Committee decided on the
New Ramat Hasharon Project	conditional deposit of the Morasha Employment Area Plan in Ramat Hasharon, for the establishment
	of a complex that will integrate residential, commercial, employment, and public buildings (hereinafter:
	the "Plan"). The Plan will allow for the development of a project with a total above-ground area of

Project development in Israel
Project name	Status update
	approximately 206,000 square meters, above basements totaling approximately 90,000 square meters. According to the Plan, the construction of four towers, each up to 20 floors high and connected at the lower floors where approximately 150,000 square meters will be allocated for commercial and employment uses, will be permitted. Additionally, eight residential buildings, each nine floors high, will be constructed, containing 600 small residential units (of which 120 will be allocated for rental apartments). According to the Plan, an area will be allocated for the construction of a school, additional public spaces for local residents, and an area of approximately 7.5 dunams for a transportation terminal and urban storage uses. On June 30, 2023, the Plan was deposited for objections. A date for the hearing on the objections submitted was set for December 2023. On February 29, 2024, the committee decided to approve the Employment Area Plan according to the rights approved prior to the approval of the Plan's deposit, regarding which the municipality filed an appeal. For more information, refer to Note 4(h) in the Company's consolidated financial statements as of September 30, 2024. In 2024 and until the publication of the Report, the Company sold 25 land units attributed to the office project in consideration for a total amount of NIS 20 million. The Company's assessments regarding the scope of the rights are forward-looking information based on the Company's experience and the status of discussions with the authorities as of this Report's date. This information may not materialize, may materialize partially, or may differ significantly from the above.
Midtown Jerusalem Project	On May 7, 2023, the project's City Building Plan was approved. The project will include areas totaling approximately 166,000 square meters above ground, above basements with a total area of approximately 90,000 square meters, which will be constructed in four towers, each 40 floors high, comprising a total of approximately 6921 apartments and 200 rental apartments, approximately 70,000 square meters of employment and hotel space, approximately 5,500 square meters of commercial space in a block building style, the preservation of the "Old Shaare Zedek Hospital" building to be used as a hotel building with approximately 50 rooms, and public tasks totaling approximately 10,000 square meters for the establishment of a school/sports hall, community center, etc. The Company received a foundation permit and submitted an application for a basement permit. As of the publication date of the reports, 210 residential units have been sold for a total amount of approximately NIS 866 million including VAT (of which approximately seven subscription forms amounted to approximately NIS 93 million, including VAT) and 2,000 square meters of office space for approximately NIS 55 million, including VAT. After the Report date, on October 10, 2024, the project company entered into an addendum to the land financing agreement and voucher arrangement. For additional information, refer to Note 5b of the Company's consolidated financial statements as of September 30, 2024. Receipts from buyers totaling approximately NIS 53 million (approximately 7% of the consideration for the sale agreements) are deposited in a designated trust account, which will be transferred to a loan account after the buyers sign to receive the vouchers booklets.
Rainbow Project (Sde Dov), Tel Aviv(2)	A project to build 480 residential units and commercial areas totaling approximately 2,000 square meters gross. The design plan was conditionally approved in May 2024. As of the Report publication date, 218 residential units have been sold for a total amount of approximately NIS 1.9 billion (including approximately three subscription forms totaling approximately NIS 28.6 million). Proceeds from buyers amounting to approximately NIS 102 million (approximately 7% of the consideration for the sale agreements to be transferred to the loan account after the buyers sign upon receipt of voucher booklets) are deposited in a designated trust account. The loan taken by the Company for the purchase of the land in Sde Dov, with a remaining balance of approximately NIS 1.11 billion, was classified in the Company's financial statements as of September 30, 2024, under current liabilities due to the fact that its repayment is due in December 2024. After the Report date, on October 10, 2024, the project company engaged with two local banks in a financing agreement for the provision of a financing facility not to exceed NIS 3.2 billion, including financial credit. For additional information, refer to Note 5c of the Company's consolidated financial statements as of September 30, 2024. On March 21, 2024, the Company received a permit for excavation and shoring, and during April 2024, the excavation and shoring contractor commenced work.
Beit Eurocom Project	On May 7, 2024, the local committee decided to recommend to the district committee a deposit under the terms of a plan to strengthen building rights in the complex for the construction of a 65-story tower with mixed uses for employment, residence and commerce. The scope of the tradable building rights according to the plan is approximately 91 thousand square meters, of which approximately 23,000

Project development in Israel
Project name	Status update
	square meters are for employment, 400 square meters for commerce and in addition approximately 7,000 square meters for public buildings. Following this recommendation and in light of the increase in the construction rights compared to the existing plan, the project company recorded appreciation in the second quarter of approximately NIS 25 million (the Company's share–50%). For more information, refer to Note 4L in the Company's consolidated financial statements as of September 30, 2024.
Vertical City, Ramat Gan Project	As of the publication date of the reports, approximately 25,000 square meters of office space have been sold in the project. Due to the signing of sales contracts in significant volumes and rates (33%), including signed contracts, the associate company decided that the building rights for offices totaling approximately 75,000 square meters out of the total investment real estate will be classified as long-term real estate inventory starting from October 2023, replacing investment real estate as it was presented from the date of purchase of these properties. On April 18, 2024, the Company, along with BSR Engineering and Development Ltd. (hereinafter: the "Main Shareholders") and Vertical City Ltd. (hereinafter: the "Seller"), entered into an agreement with Clal Insurance Company Ltd. and Clal Pension Provident Fund Ltd. (together: the "Buyer"), which stipulates that the Buyer will invest a total of approximately NIS 160 million in exchange for an allocation of shares (including the provision of a shareholder loan) representing approximately 24.5% of the issued and outstanding share capital of Vertical. On June 25, 2024, the conditions precedent have been met, and the transaction has been completed. For more information, refer to Note 4(w) in the consolidated financial statements as of September 30, 2024. After the completion of the transaction with Clal, the Company (indirectly) holds the project company at a rate of approximately 55.9%. 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 LIR 30 complex. Upon approval of the plan, the total building rights in the complex will amount to approximately 354,000 square meters, of which 277,000 square meters will be designated for commercial and employment use, 24,000 square meters for public buildings, and 53,000 square meters for residential rental and student dormitories. As a result of this, Vertical recorded appreciation net of tax of approximately NIS 155 million (Company's share is approximately NIS 86 million).
Minrav Yam (Sokolov), Bat Yam (under ICR Israel Canada Ram Holdings Ltd. (42.5%))	A redevelopment project to build two residential towers, including 220 units, of which 165 are for sale, and approximately 300 square meters for commercial use. In May 2021, a company wholly owned by ICR Israel Canada Ram Holdings Ltd. (42.5%) (hereinafter: "ICR") received a building permit for the project. As of the publication date of the Report, approximately 161 units have been sold in the project (out of 165 units) for a total amount of approximately NIS 471 million, including VAT.
Hagefen, Bar Kochba, Herzliya (under ICR Israel Canada Ram Holdings Ltd. (42.5%))	A redevelopment project to build eight residential towers, including 400 apartments (276 for sale) and 1,000 square meters of commercial space. Stage A includes six buildings with 264 units (180 of which are for marketing). In December 2021, ICR received a building permit for Stage A of the project. As of the publication date of the Report, all the units, 180 units (100% of the units for sale), have been sold for a total amount of approximately NIS 557 million, including VAT. Stage B includes two buildings with 136 units (96 of which are for sale). In December 2022, ICR received a building permit for Stage B of the project. As of the Report publication date, 94 units (approximately 98% of the units for sale) are sold for a total amount of approximately NIS 370 million, including VAT.
Ocean Park II, Netanya–(under ICR Israel Canada Ram Holdings Ltd. (42.5%))	A project to build a residential tower with 117 apartments (60 for sale). In March 2022, ICR received a building permit for the project. As of the publication date of the Report, all the units, 60 units (approximately 100% of the units for sale), have been sold for a total amount of approximately NIS 244 million, including VAT.
Hamesila, Herzliya (under ICR Israel Canada Ram Holdings Ltd. (42.5%))	A boutique project to build seven residential buildings, including 54 apartments (27 for sale). In April 2022, ICR received a building permit for the project. As of the publication date of the Report, 24 units (89% of the units for sale) have been sold for a total amount of approximately NIS 172 million, including VAT.
North Park (under ICR Israel Canada Ram Holdings Ltd. (42.5%))	A residential project in the Neve Gan neighborhood in Ramat Hasharon, executed in three stages and including 1,205 housing units. Stage A–A joint project between ICR and Tzemach Hamerman Ltd. and includes the construction of 14 residential buildings with a total of 548 apartments. In June 2023, an excavation permit was granted for Plot 27. ICR's share in the plot is 75%. In September 2023, a building permit was received for Plot 28. In December 2023, a building permit was received for Plot 30. ICR's share in the plots is 50%.

	Project development in Israel
Project name	Status update
	As of the publication date of the Report, 389 units (approximately 71% of the units for sale) have been sold for a total amount of approximately NIS 1,959 million, including VAT (of which approximately two registration forms amounting to a total of NIS 9 million, including VAT). Stage B (2) - A joint project between ICR and Nof Ironi Yizum Ltd., in equal parts (50% each), including the construction of seven residential buildings with a total of 401 apartments. In December 2023, an excavation and shoring permit was received for some of the plots included in Stage B (Plots 24-26), with a total of 331 units. On April 4, 2024, the companies entered into a financing agreement for Plots 24-26 with a banking corporation for project financing, according to which the banking corporation provided credit facilities as follows: Facilities for sales law guarantees totaling up to NIS 865 million and financial credit facilities totaling NIS 780 million (ICR's share in the facilities is 50%). As of the publication date of the Report, 108 units (approximately 27% of the units for sale) have been sold for a total amount of approximately NIS 595 million, including VAT (of which approximately four registration forms in the amount of approximately NIS 27 million, including VAT). Stage C–Includes approximately 256 housing units for which marketing has not yet started.
Pastroal (Hantaka), Jerusalem (under ICR Israel Canada Ram Holdings Ltd. (42.5%)) (2)	A project to build four 25-story residential towers above six commercial floors. A total of 425 units (287 for sale) and 1,100 square meters of commercial space. As of the publication date of the Report, 80 units (28% of the units for sale) have been sold for a total amount of approximately NIS 288 million, including VAT (of which approximately 10 registration forms in a total amount of approximately NIS 43 million including VAT).
Histadrut, Givatayim– (under ICR Israel Canada Ram Holdings Ltd. (42.5%))(2)	A project to build three residential buildings, including 333 apartments (216 for sale). As of the publication date of the Report, 155 units (72% of the units for sale) have been sold for a total amount of approximately NIS 757 million, including VAT (of which approximately two registration forms in the amount of approximately NIS 10 million including VAT). On June 9, 2024, the Company entered into a financing agreement for the project with a banking corporation for project financing, according to which the banking corporation provided credit facilities as follows: Facilities for sales law guarantees totaling up to NIS 800 million, facilities for land owner guarantees in the amount of approximately NIS 530 million, and financial credit facilities totaling NIS 250 million. In September 2024, eviction letters were issued for tenants and as of the publication of the Report, all of the residents of the complex were vacated, a demolition permit was received, as well as excavation, and organization works for the complex's demolition began.

(1) Midtown Jerusalem–In light of the optimization of the apartments and their marketing, the number of units for marketing was updated to 692 apartments (instead of 800), with no change in the areas for marketing. As the planning progresses, there may be further changes in the number of units for marketing, without a change in the areas for marketing.

(2) The sale contracts in the project are conditional upon the fulfillment of certain conditions precedent, including, among others, obtaining bank financing and receiving a building permit within 24 months from the date of signing the sale agreement.

Expected main management fees (in NIS thousands); the Company's share, assuming the sale of the entire inventory:

Project	Management Fees		Entitlement date
	100%	Balance of Company's share in recording income receivable from management fees
Blue Beach Project, Atlit	13,400	9,800	The eligibility date for receiving the funds has been met, and will actually be collected from the Group's bank financing. As of the date of this Report, financing agreements have been signed concerning the real estate, and the Company estimates that the receipts not yet received will be received during 2025.
Turquoise Project, Tel Aviv	8,320	8,320	According to the sharing agreement, after approval of a detailed construction agreement, a construction sharing agreement will be signed, including milestones for receiving the management fees
Blue Beach Project, Herzliya2	14,000	14,000	According to the sharing agreement, after approval of a detailed construction agreement, a construction sharing agreement will be signed, including milestones for receiving the management fees
Hod Hasharon (Orange Trail)	24,000	24,000	14 days from sending a notification on the plan approval plan to change the designation of the land as detailed in the table in Section 6.3.2.1
Netanya Project, Business Village	21,600	21,600	At the time of issuing the first building permit for each of the buildings
Hatzuk Hazfoni, Tel Aviv	15,700	15,700	According to the sharing agreement, after approval of a detailed construction agreement, a construction sharing agreement will be signed, which will include, among other things, milestones for receiving the management fees
Project Sunset	7,680	7,680	According to the sharing agreement, after approval of a detailed construction agreement, a construction sharing agreement will be signed, which will include, among other things, milestones for receiving the management fees
Pi Glilot Complex	28,000	28,000	According to the sharing agreement, after approval of a detailed construction agreement, a construction sharing agreement will be signed, that includes milestones for receipt of management fees
Total	132,700	129,100

² In this regard, it should be noted that apart from the buyers who entered into sharing and management agreements with the Company in the management agreements, other third parties who own about 4 dunams of the land have entered into sharing and management agreements with the Company in relation to the land.

Summary of data estimate in main projects in Israel (NIS thousands):

	Project name (3)	Company's share in project	Status	Scope of marketing as of Sept. 30, 2024– %	Current scope of marketing– %	Contract date for cash flow withdrawal from Project (2)	Book value (Company's share) Sept. 30, 2024	Expected income balance (100%) as of Sept. 30, 2024	Expected income balance (Company's share) as of Sept. 30, 2024	Unrecognized gross profit balance (Company's share) (1)	Expected gross profit rate %	Expected surplus balance at project end (Company's share) after tax
										NIS thousands
	New Ramat Hasharon residential rights	81%	Planning / zoning change	98%	98%	Not yet determined	5,027	526,506	426,469	422,398	Approximate	325,246
	(4) 1 New Ramat Hasharon office rights	81%	Planning / zoning change	34%	36%						ly 100%
	2 Tzamarot Hod Hasharon–Orange Trail	80%	Planning / zoning change	95%	95%	On plan approval date	802	37,702	30,162	29,359	97%	23,409
	3 Hatzuk Hazfoni	100%	In planning	-	-	Not yet determined	63,514	156,500	156,500	96,194	61%	120,505
	4 Turquoise	100%	In planning	91%	91%	Not yet determined	16,583	29,380	29,380	12,797	44%	26,437
	5 Glilot Complex Land and Shares (Uptown)	64%	In planning	61%	61%	Not yet determined	56,483	226,154	144,738	88,256	61%	124,440
	6 Hod Hasharon West	100%	In planning	90%	90%	Not yet determined	2,159	7,535	7,535	5,300	70%	6,316
7	(5) Lapid compound, Jaffa	60%	In planning	0%	0%	Not yet determined	181,472	2,454,255	1,472,553	548,298	37%	472,442
8	(10) Beit Mars, Tel Aviv	38%	In planning	0%	0%	Not yet determined	306,334	2,310,453	877,972	189,242	22%	216,593
	9 13 Ehad Ha'am	95%	In construction	91%	91%	By 2025	25,550	59,106	56,151	18,150	32%	31,307
	10 Sunset Project (North Tel Aviv)	100%	In planning	44%	44%	Not yet determined	72,971	126,480	126,480	45,829	36%	115,939
	11 Canada Business Village Netanya	60%	In planning	37%	37%	Not yet determined	54,592	256,275	153,765	99,373	65%	121,328
	12 Blue Herzliya beach	0%	In planning	100%	100%	On plan approval date	177	14,000	14,000	14,000	100%	14,000
13	(6) Yehuda Halevy, Leumi Building Tel Aviv	81%	City building plan in force	0%	0%	By 2029	443,039	1,932,644	1,565,442	522,819	33%	463,213
14	(7) Midtown (Shaarei Zedek), Jerusalem	73%	City building plan in force	28%	29%	By 2029	687,868	5,181,203	3,782,278	692,530	18%	552,662
15	(8) Beit Haneaara Complex, Hod Hasharon	50%	City building plan in force	0%	0%	Not yet determined	417,971	2,969,903	1,484,951	324,688	22%	250,010
16	(9) Sde Dov, Tel Aviv	100%	City building plan in force	44%	45%	By 2029	1,545,606	3,453,841	3,453,841	634,641	18%	957,129
17	(11) Vertical City, Ramat Gan	56%	City building plan in force	29%	33%	By 2031	356,498	2,093,224	1,170,112	267,851	23%	359,840
18	(12) Dubnov, Tel Aviv	80%	City building plan in force	0%	0%	Not yet determined	373,824	1,702,659	1,362,127	393,393	29%	338,092
	Total						11,464,149	23,537,819	16,314,457	5,344,229		4,518,909

(1) Assuming full realization of the inventory at prices corresponding to actual sales. Insofar as there are no actual sales, the Company relies on market prices or subscriptions.

(2) The date does not refer to the date of receiving the management fees included in the respective projects.

(3) Beit Mars and Vertical City are projects presented in the Company's financial statements under the investment in affiliated companies section.

(4) Ramat Hasharon, For details, refer to Section B of the Board of Director's Report.

(5) Lapid, Tel Aviv, the above table includes all the expected rights of the project. For the purpose of calculating the gross profit, a residential sales price of approximately NIS 110 thousand per square meter was taken, the interest rate was updated according to the prime interest rate known at the time of publication of the reports.

• (6) Yehuda Halevy, Leumi Building, Tel Aviv, the above table includes all the expected rights of the project. For the purpose of calculating the gross profit, residential sales prices were taken that are identical to the estimates in the Periodic Report for December 31, 2023, published on March 26, 2024. The interest rate was updated according to the prime interest rate known at the time of publication of the reports. It is noted that the office and commercial rights are presented in the section of investment real estate in the Company's financial statements.
• (7) Midtown Jerusalem–the above table includes all the expected rights of the project. The sales prices of the residential rights are based on the actual sales prices, the remaining prices of the other rights are identical to the estimates in the Periodic Report for December 31, 2023, published on March 26, 2024. The interest rate was updated according to the prime interest rate known at the time of publication of the reports. It should be noted that the residential rental space, office and commercial space rights are presented in the investment real estate section of the Company's financial statements.
• (8) Beit Haneaara, Hod Hasharon–For the purpose of calculating the gross profit, a residential sales price of approximately NIS 42 thousand per square meter was used, the interest rate was updated according to the prime interest rate known at the time of publication of the reports.
• (9) Sde Dov (Rainbow), Tel Aviv–The above table includes all the expected rights of the project. For the purpose of calculating the gross profit, sales prices were used that are identical to the estimates in the Periodic Report for December 31, 2023, published on March 26, 2024. It should be noted that the commercial rights are presented in the investment real estate section of the Company's financial statements.

(10) Beit Mars, Tel Aviv–The above table includes the expected rights in the project according to Urban Plan 5.

(11) Vertical City, Ramat Gan–Starting from the fourth quarter for a period ended on Dec. 31, 2023, the associated company transferred 75,000 square meters of offices from the investment real estate section to the inventory section.

(12) Dubnov, Tel Aviv–the table above includes all the expected data of the project, the transaction was completed at the end of August 2024, in order to calculate the gross profit, the residential sale price of NIS 90 thousand per square meter was used.

(13) Regarding ICR's main projects, refer to the following tables.

ICR(1)–Summary of data estimate in main projects in Israel (NIS thousands):

Projects under construction/marketing

Project name	ICR's share in the project	Purchase date	Construction completion date	Units for marketing in the project	Scope of marketing as of Sept. 30, 2024	Scope of marketing as the Report date	Inventory balance in books Sept. 30, 2024	Unrecognized gross profit balance (2)	Surplus balance expected at project end, including equity invested (3)
								(ICR's share)
								NIS thousands

Projects under construction / marketing

Yam, Bat Yam	100%	Demolition and reconstruction	2025	165	97%	98%	42,170	13,824	30,361
Jerusalem Blvd., Jaffa	100%	2018	2025	117	100%	100%	3,165	4,297	16,556
Hagefen, Bar Kochba, Herzliya–Stage A6	100%	Demolition and reconstruction	2025	180	100%	100%	0	9,013	119,5156
Stage B6 Hagefen, Bar Kochba, Herzliya -	100%	Demolition and reconstruction	2025	96	98%	98%	9,249	32,166	92,1166
Ocean Park I, Netanya	100%	2019	2024	67	100%	100%	522	4,277	7,091
Ocean Park II, Netanya	100%	2019	2025	60	100%	100%	13,258	11,810	44,348
Hamesila, Herzliya	100%	2018	2025	27	89%	89%	13,223	11,328	33,494
Histadrut, Givatayim8	100%	Demolition and reconstruction	2028	216	70%	71%	47,071	294,704	190,671
Neve Gan, North Park, Ramat Hasharon (Stage A)4	57.8%	2021	2027	548	70%	71%	736,384	180,846	269,4487
North Park, Ramat Hasharon (Stage B) 5 8 ,	50%	2021	2028	401	25%	26%	573,486	128,702	184,716
Hantaka, Jerusalem8	100%	Demolition and reconstruction	2029	287	21%	24%	18,590	258,497	187,627
Total projects under construction							1,457,118	949,464	1,175,943

(1) ICR is held by the Company at a rate of 42.5% indirectly, and appears in the financial statements under investment in associates. After the purchase of ICR, a purchase cost allocation of approximately NIS 92 million was attributed to the cost of work-in-progress inventory and land inventory (the Company's share is 50%). As of September 30, 2024, the balance of the purchase cost allocation is approximately NIS 11 million (after deductions).

(2) The gross profit does not include the advertising and marketing costs of the project and includes both the income from the sale of inventory and the income from the significant financing component (as defined in Accounting Staff Position 11-5 of the Israel Securities Authority). Additionally, the income does not include revenue from commercial areas.

(3) The project surplus balance represents the equity invested and the expected profit after tax (less capital supplementing loans (mezzanine) if taken), net of amounts released and drawn from the financing account.

(4) ICR's share in the project is 50% in three out of the four plots, and in another plot, ICR holds 75%. In total, ICR has a weighted holding of approximately 58% in the project.

(5) ICR's share in the project is 50%.

(6) It should be noted that ICR's surpluses in the Hagafen project, Bar Kochba, Stage A and Stage B are liened to an institutional body for the benefit of a loan received, whose balance as of September 30, 2024 is NIS 190 million. After the Report date, ICR repaid an amount of NIS 50 million from this loan.

(7) It should be noted that ICR's surplus in the Park North Stage A project is liened to an institutional body for the benefit of a loan received, whose balance as of September 30, 2024, is NIS 141 million.

(8) The sale contracts in the project are conditional upon the fulfillment of certain conditions precedent, including, among others, obtaining bank financing and receiving a building permit within 24 months from the date of signing the sale agreement.

ICR–Summary of data estimate in main projects in Israel (cont.)

Planning projects/land reserves

Purchase Project name ICR share date			Construction rights in the project	Book cost as of Sept. 30, 2024	Expected gross profit	Balance of surplus expected at project completion after tax in NIS thousands3
			Current planning status	Requested planning status	(ICR's share)
					NIS thousands
Tel Hashomer, Ramat Gan1	100%	2017	58 residential units	58 residential units	2,497	27,273	20,314
French Hill, Jerusalem	100%	2019	172 residential units	500 residential units	162,184	286,516	180,567
Herbert Samuel, Tel Aviv	33%	2016	Approximately 3,600 square meters	Approximately 12,000 square meters for residential, commercial, and hotel	81,117	TBD	TBD
Salame Blvd., Tel Aviv	50%	2016	35 apartments and approximately 500 square meters. commercial and employment	47 apartments and approximately 500 square meters. commercial and employment	28,669	24,206	27,513
Complex 12, Netanya (combination deal)	100%	2023	Approximately 200 residential units and public spaces	-	77	54,522	33,633
Ha'ari, Netanya (combination deal)	100%	2023	Agricultural land	225 residential units and approximately 575 square meters of commercial and employment space	0	65,652	39,822
North Park, Neve Gan, Ramat Hasharon (Stage C)2	100%	2021	256 residential units and 820 square meters commercial	-	673,555	311,760	325,142
Total projects in planning/land reserves					948,099	769,929	626,991

1 A combination transaction, where ICR's share in the building is 57%. 2

The data does not include commercial areas. 3

The project surplus balance represents the equity invested and the expected gross profit after tax (less capital supplementing loans (mezzanine), if taken), net of amounts released and drawn from the financing account.

Urban renewal
Projects over 67% signatures
Project name	Project description			Main contingencies for the start of the project	Percentage of tenants who agreed and signed as of the balance sheet date	Planning status	Expected construc tion start	Expected revenue	Expected gross profit	Tenant signing start date	Balance of surplus expected at the completion of the project (Company's share) after tax in thousands of (Share of ICR) (3) NIS thousands
	Housing Housing Square units in units for meters the marketing project							(ICR's share)
			commercial						NIS thousands
Idmit, Givatayim	118	76	-		100%	The decisions of the local committee were made to approve excavation and disposal permits and a full permit, subject to completion of conditions.	2025	319,470	70,497	June 2018	51,575
Gapnov Complex, Ashdod	756	588	5,000		84%	An application was submitted to the Urban Renewal Authority to join as the plan submitter along with current plan documents.	-	1,285,352	212,138	August 2013	130,626
Rothschild, Bat Yam*	560	397	10,000 hotels + 1,650		98%	The plan for consolidation and division was deposited for public objections. At the same time, the design plan for the complex is being promoted.	-	699,677	129,312	May 2012	95,846
Hatzofim Compound, Lod	310	262	1,582		92%	City building plan in force The design plan was discussed by the local committee and approved under the conditions.	-	523,929	93,017	August 2021	60,591
Dizengoff Hameyasdim, Netanya	191	129	165		93%	An application for an excavation and disposal permit has been opened.	-	386,498	68,629	October 2020	45,083
Katamonim, Jerusalem	440	295	800	100% agreement from the tenants, approval of new city building plan and construction permit	96%	An excavation and disposal permit was submitted. A full building permit is being prepared. At the same time, ICR submitted an amended city building plan for the addition of units for the capital maintenance fund and for the addition of floors for the purpose of improving the construction.	-	1,096,220	251,643	July 2021	170,283
86 Bar-Kochva Street, Herzliya	72	48	175		73%	The local committee discussed the plan and decided to deposit it with conditions.	-	170,759	35,014	March 2021	22,725
33-39 Brodetsky Street, Tel Aviv	166	70	-		94%	The application for the permit was approved by the committee and moved to the design control Stage.	2025	402,503	79,535	January 2022	55,097
Rabbi Akiva (Gordon), Herzliya	170	114	-		77%	The plan was approved.	-	338,991	59,883	June 2017	37,842
Kukis, Bat Yam	171	114	2,348		96%	The plan was submitted for review of threshold conditions in the district committee after a joint submission with Bat Yam Municipality.	-	382,741	72,524	September 2016	46,717
Katznelson, Yehud (including commercial)	894	622	450		84%	A publication version was received for validation.	-	1,541,327		240,919 September 2015	147,470

Project name	Project description			Main contingencies for the start of the project	Percentage of tenants who agreed and signed as of the balance sheet date	Planning status	Expected construc tion start	Expected revenue	Expected gross profit	Tenant signing start date	Balance of surplus expected at the completion of the project (Company's share) after tax in thousands of (Share of ICR) (3) NIS thousands
	Housing	Housing	Square						(ICR's share)
	units in the project	units for marketing	meters commercial					NIS thousands
Salomon, Netanya (including commercial)	325	213	367		87%	Editing plan documents for submission.	-	580,526	92,364	October 2022	57,017
Abba Hillel Rashi, Ramat Gan (including commercial)	200	128	370		78%	The plan was approved and published for validation.	-	454,653	70,832	September 2014	44,396
Somken, Tel Aviv	454	292	400		73%	ICR works in coordination with the tenants to prepare plan documents and submit them to the planning institutions for the purpose of checking threshold conditions.	-	764,623		139,036 December 2022	87,564
Pininat Ayalon, Tel Aviv	137	68	44,410		73%	ICR works in coordination with the land owners to prepare plan documents and submit them to the planning institutions for the purpose of checking threshold conditions.	-	798,533		198,780 May 2023	133,100
Frug, Ramat Gan	345	207	-		76%	Planning pre-ruling with the District Committee.	-	679,551		137,801 April 2023	89,688
Meonot Sarah, Herzliya	645	401	1,026		70%	City building plan in force ICR is correcting the plan documents for consolidation and division, for the purpose of meeting threshold conditions and holding a discussion in the local committee.	-	1,291,650	222,097	February 2023	137,826
Hara-Negba, Ramat Gan (including commercial)	258	159	191		68%	Planning pre-ruling with the District Committee.	-	485,537	83,675	March 2023	51,878
Haifa Struma (Stage A)	776	572	620		72%	The city building plan was approved for deposit. ICR is working to complete the conditions for depositing the plan.	-	1,192,735	154,741	March 2018	89,792
Haifa Struma (Stage C)	672	512	(795)		69%	The city building plan was approved for deposit. ICR is working to complete the conditions for depositing the plan.	-	1,039,882	147,543	July 2023	86,448
Hagana Road, Tel Aviv	346	218	500		67%	Pre-ruling of local committee.	-	642,863	121,655	January 2024	77,120
Total Urban Renewal	8,006	5,485	60,849					15,078,020	2,681,635		1,718,684

* ICR owns 50% of the project

(3)The project surplus balance represents the equity invested and the expected profit after tax, net of amounts released and drawn from the financing account.

Project name		Project description		Main contingencies for the start of the project	Percentage of tenants who agreed and signed as of the balance sheet date	Planning status	Expected construction start	Expected revenue	Expected gross profit	Tenant signing start date	Balance of surplus expected at the completion of the project (Company's share) after tax in thousands of (Share of ICR) (3) NIS thousands
	Residential	Residential	Square						(ICR's share)
	units in in the project	unit for marketing	meters commercial						NIS thousands
Havered A, Or Yehuda	312	224	-		66%	An application was submitted to the Urban Renewal Authority to join as the plan submitter along with current plan documents.	-	556,419	99,159	August 2021	61,976
Havered B, Or Yehuda	312	224	-	100% agreement	48%	An application was submitted to the Urban Renewal Authority to join as the plan submitter along with current plan documents.	-	556,419	99,159	December 2021	61,976
Enzo Sarni, Givatayim*	736	424	12,137	from the tenants,	11%	A detailed city building plan has been approved.	-	887,279	157,073	April 2023	98,014
Rabbi Akiva, Holon (including commercial) (4)	492	309	330	approval of new city building plan	62%	The plan was approved for deposit by the local committee.	-	938,412	146,995	August 2021	88,784
Haifa Struma (Stage B)	959	766	1,630	and construction	58%	ICR is working to complete the conditions for depositing the plan.	-	1,532,539	285,923	March 2020	180,665
Har Zion/Ha'amel, Tel Aviv	140	60	8,658	permit	29%	Pre-planning.	-	360,821	55,684	June 2024	33,488
Pinkas, Tel Aviv	60	33	-		42%	Early planning to initiate a permit application.	-	157,316	28,776	March 2023	18,099
Tel Aviv, De Haas	29	19	288		61%	Pre-planning for the permit.	-	116,504	29,161	July 2023	19,510
Pirchei Aviv, Tel Aviv	215	129	36		30%	ICR intends to promote a detailed plan for the project in coordination with the Tel Aviv Municipality.	-	478,678	80,553	April 2024	49,622
Hagibor Ha'almoni, Tel Aviv	180	100	383		50%	Pre-ruling of local committee.	-	344,700	57,594	April 2024	35,412
Total Urban Renewal	3,435	2,288	23,462					5,929,087	1,040,077		647,546

Projects below 67% signatures

* ICR owns 50% of the project

(3) The project surplus balance represents the equity invested and the expected profit after tax, net of amounts released and drawn from the financing account.

(4) The number of units included in the plan that was approved for deposit has increased compared to the number of units reported in the previous quarterly report. The Company's estimates regarding revenues, gross profit, and retained earnings have been adjusted to reflect the updated number of units.

Forward-looking information

It should be emphasized that the Company's above assessments, including, among other things, forecasts and estimates regarding obtaining land use changes and/or the extent of building rights on the land and/or obtaining building permits, timelines for starting and completing construction projects, including the expected timing for cash flow withdrawals from the project, the total expected revenues, the total expected gross profit from projects, the surplus balance, estimated cash flow to be received (the Company's share), and management fees in the Company's various projects, which are conditional on the conditions detailed in the table above, constitute 'forward-looking information' (as defined in the Securities Law, 5728-1968), based on the experience of the Company and its partners in various projects and on the full realization of the inventory at prices consistent with actual sales. These parameters largely depend on external factors, such as obtaining the necessary permits for carrying out the projects, including land use changes for the Company's lands (both in their receipt and in their receipt on the timeline projected by the Company and its project partners), including urban planning changes for urban renewal projects, meeting the requirements of various authorities and the issuance of relevant permits by them; cooperation among the partners, decisions made by them during the project establishment Stage, and the provision of the required equity by them (including by the Company) according to the agreements signed; compliance of the partners with the terms of the financing agreements signed in connection with the relevant projects (including the provision of equity) and the non-existence of grounds for immediate repayment stipulated therein; entering into financing agreements for projects whose execution has not yet commenced; contracting with contractors and other suppliers for the execution of projects whose execution has not yet commenced and costs projected by the Company, based on current market conditions; impacts due to the Iron Swords War as detailed in Section B.3 below; regulations that may apply to urban renewal projects and/or changes and/or tightening of regulations in the various areas of the Company's operations; actual construction and financing costs at the time they arise compared to the costs projected by the Company (including following a shortage in workforce and an increase in raw material costs, which may be subject to changes, including significant changes), maintaining current sales price levels in the real estate market (which may change, including significant changes, among other things, due to changes in the economic environment in which the Company operates, including interest rate increases and inflation, as detailed in Section B.8 below, and among other things, due to frequent changes in tax regulations), as well as decisions by authorities regarding the approval of land use plans—and there is no certainty that this will be the actual situation. These factors may significantly alter the Company's assessments outlined above.

According to the Company's assessment, as of this date, the main factors that may prevent the realization of the forward-looking information include: No change in the land use of the Company's lands and/or no change in urban planning according to the intentions of the Company and its partners; the inability to construct projects or delays in their construction due to various reasons such as the Company not meeting the authorities' requirements for obtaining permits and/or not receiving appropriate permits for the projects or receiving them later than anticipated by the Company; failure of the partners to comply with the financing agreements signed in connection with the relevant projects (including the provision of equity) or the occurrence of any grounds for immediate repayment stipulated in these agreements, which could lead to a request to immediately repay the loans provided; failure of the Company to enter into financing agreements for the relevant projects; financial difficulties encountered by the executing contractor or other suppliers involved in the projects; financial difficulties encountered by any of the investors and/or partners of the Company in the relevant projects that prevent them from continuing to finance their share in the projects; deviations from the expected project scope that may result from increased construction costs (including following a shortage in workforce and/or an increase in the cost of raw materials), taxes, and/or levies imposed on land acquisition and development, etc.; impacts of the Iron Swords War as detailed in Section B.3 below; a deterioration in the economic environment, including the consequences of rising interest rates and inflation as mentioned in this Board of Directors Report below, which would adversely affect the price environment in which the Company operates, leading to a reduction in the volume of sales anticipated by the Company, as well as a reduction in the gross profit stated by the Company above. Thus, there is no certainty that the above information will be realized and it may even be materially different from the above.

As of September 30, 2024, the total assets of the Company amount to approximately NIS 10,021 million, compared to approximately NIS 8,581 million as of December 31, 2023. The increase in the total assets of the Company as of September 30, 2024, is explained below:

	As of	As of	As of	Explanations for the main changes that took place
	Sept. 30, 2024	Sept. 30, 2023	Dec. 31, 2023	compared to Dec. 31, 2023
	NIS thousands	NIS thousands	NIS thousands
		Current assets
Cash and cash equivalents	207,763	144,062	200,389	Refer to Section b.4. liquidity below.
Financial assets at fair value through profit and loss	107,159	87,853	94,889	---
Receivables for the sale of real estate inventory and apartments under construction	32,048	71,453	62,081	---
Accounts receivable	273,804	81,576	98,262	The increase in the balance is mainly due to the VAT receivable on the Dubnov projects and 306 Sde Dov lot, the purchase of which was completed during the Reporting Period. The VAT amounts were received after the balance sheet date.
Real estate inventory	703,972	1,058,624	682,030	---
Income tax receivables	10,096	6,888	18,538	---
Accounts receivable for hotels	52,933	46,793	23,656	The increase in the balance is mainly due to the return of the hotel activity to activity that is also with agencies, following the opening of some of the hotels to the public (after the end of responding to part of the evacuees who stayed in the Company's hotels in light of the Iron Swords War).
Inventory of buildings under planning and construction	2,169,012	58,351	1,930,406	The balance increase is primarily due to investments in the Midtown Jerusalem project under construction, totaling approximately NIS 22 million. Additionally, the Company decided to market part of the office space, reclassifying 44,607 square meters (about 70% of the office space) in the Midtown Jerusalem project from investment property to real estate inventory, amounting to approximately NIS 139 million. For further details, see Note 4n of the Company's consolidated financial statements as of September 30, 2024.
Advances on account of real estate inventory	-	3,516	-	---
Total current assets	3,556,787	1,559,116	3,110,251
		Non-current assets
Investments and loans in investee companies accounted for using the equity method, net	1,318,696	1,058,230	1,132,153	The increase in the balance is mainly due to the profits of investee companies, see below, in the amount of approximately NIS 219 million.
Long-term real estate inventory	1,129,299	2,193,548	745,280	The increase in the balance is mainly due to an investment in the Dubnov project in the amount of approximately NIS 356 million, for details refer to Note 4t to the Company's consolidated financial statements as of September 30, 2024.
Real estate for investment	2,827,055	2,467,198	2,580,068	The balance increase is primarily due to investments in land purchases: approximately NIS 114 million for the Dubnov property and approximately NIS 137 million for the 306 Sde Dov lot. For details, see Notes 4t and 4o in the Company's consolidated financial statements as of September 30, 2024., respectively.
Advances on real estate for	16,237	5,153	9,898	---
investment Fixed assets	635,512	608,694	619,035	---
Advances on account of	1,113	1,107	1,166	---
fixed assets Cash with long-term use
restriction	5,266	5,133	5,138	---
Right of use asset	414,449	297,857	292,518	The balances reflect the application of IFRS 16 on rental agreements in the Company's hotel operations, primarily increasing due to the operation of the new Shalom Hotel in Jerusalem during the period.
Accounts receivable	8,428	11,175	8,170	---
Deferred tax assets	46,098	66,208	51,192	---
Investments and other assets	26,775	37,934	26,590	---
Total non-current assets	6,428,928	6,752,237	5,471,208
Total assets	9,985,715	8,311,353	8,581,459

	As of Sept. 30, 2024 NIS thousands	As of Sept. 30, 2023 NIS thousands	As of Dec. 31, 2023 NIS thousands	Explanations for the main changes that took place compared to Dec. 31, 2023
	Current liabilities
Credit from bank corporations and current maturities on long-term loans	2,782,422	2,669,943	2,830,418	---
Current maturities of bonds	268,899	88,183	88,262	The increase in the balance is mainly due to the classification of Series G Bonds for the short term, due to the repayment of 30% of the series set for June 30, 2025.
Current maturities of long term lease liability	19,716	15,703	15,542
Suppliers	41,790	51,017	28,303	---
Accounts payable	128,989	70,413	61,291	The increase in payables is mainly due to rents from tenants in Kfar Shmariahu protected housing, from an increase in the interest to be paid in respect of the Company's Series H Bonds and Series G Bonds, and from an increase in respect of the registration of a provision for the controlling shareholders' grant in accordance with the terms of office of the controlling owners and the Company's remuneration policy.
Liability for provision of construction services	4,415	6,045	6,540	---
Current tax liabilities	11,951	14,209	10,511	---
Advances for the sale of real estate inventory and building inventory under planning and construction	74,832	23,818	41,480	The increase is mainly due to an increase due to advances from customers in the Sde Dov project.
Loans from others	3,411	2,826	2,841	---
Total current liabilities	3,336,425	2,942,157	3,085,188
	Non-current liabilities
Long-term loans from banks	1,958,817	1,270,343	1,119,006	The increase in the balance is mainly due to the sorting of a loan in the amount of approximately NIS 355 million in respect of the Beit Haneaara Project from a short-term to a long-term following the extension of the loan repayment date, from a loan sorting of approximately NIS 210 million in respect of the Lapid project from short-term to a long-term following a deadline extension for repayment of the loan and a new loan in the amount of approximately NIS 356 million for the Dubnov project.
Loans from others and other liabilities	25,802	21,925	26,934	---
Bonds	747,502	791,317	787,948	---
Lease liability	429,632	303,852	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 operation of a new hotel, the Shalom Hotel in Jerusalem.
Liability for provision of construction services long term	2,565	15,600	3,562	---
Other non-current liabilities	9,713	10,819	11,685	---
Deferred tax liabilities	164,695	170,055	190,185	---
Total non-current liabilities	3,338,726	2,583,911	2,440,513
Total equity (including the minority)	3,310,564	2,785,285	3,055,758	---
Total liabilities and equity	9,985,715	8,311,353	8,581,459

Equity

The Company's total equity attributed to the Company's shareholders amounted to approximately NIS 2,376 million as of September 30, 2024, and approximately NIS 2,229 million as of December 31, 2023.

Working capital

As of September 30, 2024, the Company had positive working capital in the consolidated report of approximately NIS 220 thousand compared to positive working capital of approximately NIS 25 million as of December 31, 2023. The increase in working capital is due to an increase in current assets as detailed above. In the solo report, the Company has positive working capital; refer to Section B.5 of this Report.

B.2. Results of operations

		For the nine months ended on Sept. 30,		For the three months ended on Sept. 30,	For the year ended on Dec. 31	Explanations for the significant changes that occurred compared to the nine months ended on Sept. 30, 2023
	2024	2023	2024	2023	2023
Income:
Rental and management of real estate for investment	59,215	52,725	20,362	19,789	71,822	---
Income from the sale of real estate inventory	6,192	26,540	1,074	3,070	29,812	The decrease in revenues compared to the corresponding period last year is mainly due to a decrease in revenues 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.
Income from the sale of residential apartments	59,332	72,134	17,859	17,903	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 59 million and approximately NIS 72 million, respectively).
Income from renting real estate inventory	19,055	16,393	6,369	5,141	22,705	---
Income from management fees	-	-	-	-	3,099	---
Income from operation and management of hotel	229,523	232,079	85,563	85,084	309,908	---
Marketing and brokerage income	18,014	15,425	10,578	2,284	20,754	---
Income from provision of construction services	3,123	3,328	1,334	1,280	4,149	---
Appreciation of fair value of investment real estate and profit from its exercise	32,012	22,928	845	6,703	86,892	The increase during the relevant period was mainly due to a value increase of approximately NIS 25 million, following a recommendation by the local committee to conditionally approve a plan to enhance building rights in the Eurocom House project. In contrast, the income for the period ended on September 30, 2023, was primarily due to a value increase of approximately NIS 15 million from Hamaam Eilat.
Other income	706	172	-	-	152	---
Total income	427,172	441,724	143,984	141,254	634,463
Expenses and costs:
The cost of rent	31,003	27,949	12,490	9,942	37,885	---
Cost of sale of apartment inventory	6,118	8,215	3,623	1,317	9,311	---
Cost of sale of residential apartments	42,812	47,645	13,433	10,419	56,409	---
Cost of operating and managing hotels	190,297	225,752	76,783	79,563	277,745	The decrease in operating costs compared to the same period last year is mainly due to a decrease in the cost of hiring employees due to sending some of the employees out on sick leave and saving additional operating costs in light of evacuees staying in hotels.
Depreciation of fair value of investment real estate	37,776	33,302	23,449	8,830	23,502	A decrease in the value of investment real estate for the relevant period is mainly due to the capitalization of financing costs that were capitalized into assets and a reduction to profit and loss.
Expenses for construction services	3,123	3,328	1,334	1,280	4,149	---
Management and general expenses	45,272	34,547	12,953	12,342	45,938	The increase in management and general expenses is mainly due to the provision for an expected bonus for the chair and CEO in accordance with the Company's terms of service and compensation policy (approximately NIS 6 million compared to approximately NIS 0 million last year).
Marketing and sale expenses	28,165	26,460	9,984	9,186	34,025	---
Other expenses	395	-	395	(197)	2,185	---

		For the nine months ended on Sept. 30,		For the three months ended on Sept. 30,	For the year ended on Dec. 31	Explanations for the significant changes that occurred compared to the nine months ended on Sept. 30, 2023
	2024	2023	2024	2023	2023
Total expenses and costs	384,961	407,198	154,444	132,682	491,149
Operating profit	42,211	34,526	(10,460)	8,572	143,314
Loss for financial assets measured at fair value	13,620	(162,383)	36,334	5,749	(152,595)	The profit from revaluation of investments at fair value through profit and loss is mainly due to an increase in value due to an investment in Norstar shares, 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 for 2024).
Financing income	25,363	43,303	5,974	20,848	61,719	---
Financing expenses	(86,773)	(84,846)	(29,103)	(30,138)	(111,059)	---
(Loss) profit after financing	(5,579)	(169,400)	2,745	5,031	(58,621)
Company's share in investments accounted for using the equity method, net	219,595	21,318	172,442	4,648	34,848	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 86 million and a loss of approximately NIS 24 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 and from ICR (a total of approximately NIS 99 million and approximately NIS 32 million in the corresponding period last year) arising mainly as a result of a Clal transaction. For more information refer to Note 4z. to the Company's consolidated financial statements for September 30, 2024.
Profit (loss) before income taxes	214,016	(148,082)	175,187	9,679	(23,773)
Income tax	2,203	22,549	(2,954)	(1,437)	(2,420)	---
Profit (loss) for period	216,219	(125,533)	172,233	8,242	(26,193)
Exchange differences on translating foreign operations	(7,138)	6,796	(7,938)	3,954	9,261	The decrease in translation differences compared to the same period last year is mainly due to project activity in Russia.
Profit (loss) due to changes in the fair value of a financial liability, net of tax	-	(669)	-	(669)	(856)	---
Total comprehensive profit (loss)	209,081	(119,406)	164,295	11,527	(17,788)

B.3. Iron Swords War

Further to the provisions of Note 31 in the Company's consolidated financial statements as of December 31, 2023:

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 there is no further escalation in the war. This assessment takes into account the Company's financial strength, its business condition, its cash flow, and the stages of its various projects. As of the date of this Report, there has been no deterioration in the sales pace of the Company's projects, nor has there been any deterioration in the credit terms offered to the Company and/or the willingness of various financing entities to provide credit to the Company.

However, the Iron Swords War has led to a shortage of skilled labor at construction sites and an increase in the cost of raw materials required for project execution. This may result in higher execution costs for projects for which no contractor execution agreement has been signed, or for projects where the execution agreement is linked to the Construction Input Index, potentially delaying project completion timelines. Additionally, the Iron Swords War has caused an increase in inflation, which sustains a high-interest-rate environment. Due to the increased execution costs, the Company has updated the execution costs for projects currently in the marketing stage that have not yet been contracted with a performing contractor. Conversely, the Company's revenue estimates for these projects have also been updated, reflecting the rise in selling prices based on actual sales of residential units in various projects (refer also to Section A above). Consequently, despite the aforementioned cost increases, the impact on the expected gross profit is not material.

Given the uncertainty regarding the duration of the Iron Swords War and its potential expansion to additional fronts, as of the date of this Report, it is not possible to fully assess the future effects of the Iron Swords War on Israel's economic situation in general and on the Company's operations in particular. Regarding the Company's hotel sector, as of September 30, 2024, and the date of the Report's publication, there was no material impact of the Iron Swords War on the Company's results during 2024, given that the Company's hotels have high occupancy rates, among other reasons due to hosting residents of the south and north evacuated as needed and per the circumstances, and while adjusting the expense levels to the volume of activity during this period. After the balance sheet date, there was a decrease in the number of evacuees residing in the hotels. Accordingly, some of the Company's hotels are expected to return to routine operations in lieu of hosting evacuees, and in such a case, the prolongation and/or escalation of the Iron Swords War and its impact on the tourism industry as a whole (both domestic and international tourism) could affect the demand for the Company's hotels and impact the business results of the Company's hotel operations in the coming quarters, which at this stage cannot be estimated. Additionally, the Hotel Company is awaiting updates regarding the State's participation in renovations costs of the hotels that hosted evacuees, and it is likely that this will be expressed in the following reports of the Hotel Company.

Regarding the field of the Company's income generating assets–as of September 30, 2024, and as of the Report publication date, there was no material impact of the Iron Swords War on the occupancy rates and/or performance of ongoing lease payments by the property tenants.

Further extension of the fighting and/or expansion of the war on additional fronts with high intensity could have a significant impact on the Company's operations, as they may lead to: (1) the cancellation/reduction of projects and delays in the pace of initiation processes and entry into new projects; (2) delays in the planning, licensing, and execution procedures of projects in a manner that might lead to delay in the conclusion of the projects and their handover to buyers; (3) a decline in the financial stability of key subcontractors and suppliers; (4) increased construction costs; (5) a significant decrease in demand for residential units/office spaces/commercial areas marketed by the Company (due to a decrease in the economic capability of potential buyers/tenants, a generally low morale, and the uncertainty associated with a wartime period); (6) a decrease in sale/rental prices and/or tenants leaving; (7) a restriction on the volume of bank credit available to the real estate sector, increased requirements for financing (including requirements for increased equity provided by the Company in projects), tougher financing conditions, and delays in the provision of the necessary financing to the Company for its operations (as this is also dependent, among other things, on the pace of marketing apartments/offices/renting spaces in projects); (8) an excess supply of rental spaces; (9) non-compliance of buyers/tenants with their obligations to the Company; (10) an impact on domestic and incoming tourism in a manner that affects occupancy in hotels managed by the Company, and accordingly, the income and profitability of this sector.

It should be noted that despite the Iron Swords War and the aforementioned, from the beginning of the year until near the Report publication, sale agreements and subscription forms were signed in the Company's projects and those of ICR for 369 residential units, with a total volume of approximately NIS 2.3 billion, including VAT. Additionally, additional office spaces were sold in the Vertical City and Midtown Jerusalem projects, amounting to approximately NIS 213 million, including VAT.

B.4. Liquidity

The Company's cash and cash equivalents as of September 30, 2024, amounted to approximately NIS 208 million compared to approximately NIS 200 million as of December 31, 2023, an increase of approximately NIS 8 million in cash balances as detailed below:

Cash from current operations

The primary changes in cash flow from operating activities stem from purchases and investments in land inventory amounting to approximately NIS 595 million and an increase in profits from equity-accounted investees amounting to approximately NIS 240 million. Offsetting these are a net profit of approximately NIS 216 million, revaluation of loans from others totaling approximately NIS 50 million, an increase in payables and credit balances amounting to approximately NIS 51 million, and depreciation of fixed assets and leased assets totaling approximately NIS 42 million. The total cash used by the Company for operating activities amounted to approximately NIS 402 million.

Cash from investment activities

The cash flow primarily resulted from the purchase and investment in investment property, net, amounting to approximately NIS 412 million, the granting of loans to equity-accounted investees, net of tax, amounting to approximately NIS 55 million, and the acquisition of fixed assets totaling approximately NIS 38 million. The total cash used by the Company for investment activities amounted to approximately NIS 504 million.

Cash from financing activities

The cash flow mainly resulted from the receipt of a long-term loan from bank corporations in the amount of approximately NIS 798 million, the issuance of Bonds (Series H) amounting to approximately NIS 226.5 million, credit from banking institutions amounting, net, to approximately NIS 127 million, and equity investments by noncontrolling interest holders amounting to approximately NIS 92 million (mainly related to the cash injection by the investor in the Dubnov project). Conversely, the cash flow was used for the repayment of bonds amounting to approximately NIS 88 million, dividend payment of approximately NIS 25 million, and repayment of long-term loans amounting to approximately NIS 183 million. The total cash generated by the Company from financing activities amounted to approximately NIS 914 million.

B.5. Sources of financing

The corporation's main funding sources:

• 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. The Company periodically takes out loans for projects and/or lands and/or assets, including for the Sde Dov 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 2,988 million.
• 1. Average balance of long-term liabilities includes credit from banks, loans from others, and bonds, totaling approximately NIS 2,333 million.
• 1. Average Balance of Liabilities to Suppliers: Totaling approximately NIS 34 million. Private placement of shares issued to institutional entities totaling approximately NIS 170 million, as detailed in Note 16(d) to the Company's financial statements as of December 31, 2023.

	Loan	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of Sept. 30, 2024 (NIS thousands)	Financial conditions / commitment to no changes of control	Manner of calculation of financial covenants and their results as of Sept. 30, 2024
1.	Local bank4	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)	2,354,449	(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 minority rights) to the total balance sheet of the Company separately (solo) shall not be less than 30%. (c) The consolidated equity of the Company, excluding non-controlling interests, must not at any time be less than NIS 700 million (refer to footnote 23). (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 Sept. 30, 2024 is approximately 23.8%–compliant. (b) The ratio of the Company's equity to the total solo balance sheet as of Sept.30, 2024, is approximately 67%–compliant. (c) The amount of equity in the consolidated balance sheet as of Sept. 30, 2024, is approximately NIS 2,376 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 30.3%- compliant. (e) No such change has occurred.
2.	Local bank	A 55.9% owned company that owns the Vertical City project	838,310	801,510	(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 minority rights) to the total balance sheet of the Company separately (solo) shall not be less than 30%. (c) The consolidated equity of the Company, excluding non-controlling interests, must not at any time be less than NIS 700 million (refer to footnote 23). (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 Sept. 30, 2024 is approximately 23.8% - compliant. (b) The ratio of the Company's equity to the total solo balance sheet as of Sept. 30, 2024, is approximately 67% - compliant. (c) The amount of equity in the consolidated balance sheet as of Sept. 30, 2024, is approximately NIS 2,376 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 30.3% - compliant. (e) There was a change with the entry of Clal Insurance into the Vertical City project, with the consent of the bank.

Below are details regarding the Company's3 compliance with the financial covenants of its material loans, in addition to Company Bonds (Series F), Bonds (Series G), and Bonds (Series H), the terms of which are detailed in Section D below.

³ The material loan agreements for this matter are the loan agreements and the material loan agreements as defined in Legal Position 104-15: Reportable Credit Event of the Israel Securities Authority, as detailed in Section 15.2 of the 2021 Report. 4

On October 10, 2024, the Company entered into a new covenants letter with the local bank, as detailed in the Company's Immediate Report dated October 13, 2024 (Reference No. 2024-01610154), which is incorporated into this Report by way of reference. The financial covenants detailed in the table are in accordance with the new covenants letter. For a summary of the changes compared to the benchmarks that were in place prior to the signing, refer to the details below.

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. An 80% Notwithstanding the above, it is agreed that: owned A reduction in the combined holdings of Asaf Touchmair and Barak Rosen in the Company to a company level not lower than 32% of the control means, as long as they remain the controlling Compliant Local that owns 3. 650,000 638,442 bank the shareholders of Israel Canada at all times, will not constitute a breach of the agreement, and no Midtown bank consent will be required for this. Jerusalem A reduction in the combined holdings of the Company and Pangaea in the project company to a project level not lower than 70% of the control means in the project company, provided that the	Loan	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of Sept. 30, 2024 (NIS thousands)	Financial conditions / commitment to no changes of control	Manner of calculation of financial covenants and their results as of Sept. 30, 2024
					Company and Pangaea remain the controlling shareholders of the project company at all times,

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"). The main changes compared to the covenants that existed prior to the signing are detailed below:

Previous Financial/Other Obligations (i.e., prior to entering into the New Covenants Letter)	New Financial/Other Obligations (i.e., further to entering into the New Covenants Letter)	Notes
The consolidated equity of the Company, excluding	The consolidated equity of the Company,	The assessment
non-controlling interests, must not at any time less	excluding non-controlling interests, must not at	will be
than NIS 700 million.	any time be less than NIS 1,200 million.	conducted based
The Company's consolidated equity, excluding non		on the
controlling interests, must not at any time be less than		quarterly/annual
an amount equal to 17% of the Company's total	Unchanged.	financial
balance sheet (according to consolidated financial		statements, either
statements).		standalone or
The equity ratio (excluding non-controlling interests)	The equity ratio (excluding non-controlling	consolidated (as
to total balance sheet assets according to the	interests) to total balance sheet assets according	applicable);
Company's separate (solo) financial information	to the Company's separate (solo) financial	failure to meet
shall not fall below 30%.	information shall not fall below 37.5%.	the specified
The consolidated equity of the Company does not		covenants for
include rights that do not confer control (but includes		two consecutive
loans given to the Company which are included in the		quarters will
consolidated equity), shall not be reduced at any time	Unchanged.	constitute
by an amount equal to 22% of the total balance sheet		grounds for
of the Company (according to consolidated financial		immediate
statements).		repayment.

B.7. Disclosure under Section 10(b)(14) of 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 information as well as the separate financial information (solo) as defined in Article 9c of the Reporting Regulations.

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

		Consolidated Financial Statements as of Sept. 30, 2024 (NIS millions)	Separate Financial Information (solo) as of Sept. 30, 2024 (in NIS million)
	Working capital	220	25
Working capital	Working capital for 12 month period	220	25
	Continuous cash flow from current operations	(402)	1

Below are details about the working capital and the working capital for a period of 12 months in the consolidated reports of the Company as of September 30, 2024

	Amount included in the financial statements	Adjustments (for a 12 month	Total (NIS
	as of Sept. 30, 2024 (NIS millions)	period) (NIS millions)	millions)
Current assets	3,556	-	3,556
Current liabilities	3,336	-	3,336
Surplus current assets over current liabilities	220	-	220

As of September 30, 2024, the Company has a continuous negative cash flow from current activities in the separate financial information report (solo) and a continuous negative cash flow from current activities in the consolidated financial statements, and positive working capital in the consolidated financial statements and the separate financial information report (solo), as well as positive working capital for a period of 12 months in the consolidated financial statements and the separate financial information report (solo) (in accordance with Legal Position No. 105-27: "Disclosure Regarding Projected Cash Flow" published by the Israel Securities Authority on April 1, 2014, as updated from time to time).

However, the Company's Board of Directors determined that the negative ongoing cash flow from operating activities in the consolidated financial statements, as mentioned above, do not indicate a liquidity problem for the corporation. Therefore, no warning sign exists as defined in Article 10(b)(14) of the Reporting Regulations, for the following reasons: The Company has cash and cash equivalents, and liquid financial assets totaling approximately NIS 315 million as of the Report date. The Company has positive working capital in the consolidated report, as well as positive working capital in the solo report for the 12-month period. In light of the review of the Company's management of the Company's projected cash flow whose main assumptions are detailed below:

• The Company estimates entering the Canada City projects, Tel Aviv and the Midtown project, Jerusalem until the end of the first quarter of 2025.
• The Company estimates that 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 more 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, 2024⁵ ).
• 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%.
• Balance of the Company's bond principal (net) as of September 30, 2024, by an identical amount over the next two years.
• Sale of land (Ramat Hasharon/Uptown/3700/Sunset) and/or bringing in partners and/or allocation in subsidiaries at an average volume of approximately NIS 150 million on average 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 low 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.

The above statement regarding the assumptions of the Company's Board of Directors is forward-looking information, as defined in the Securities Law, 5728-1968, subject to the provisions of the forward-looking information paragraph included in Section 6.3.3.9 of the 2023 Report to the Company's risk factors as set forth in Section 21 of the 2023 Report, and the Board's estimates may change, including due to the Iron Swords War mentioned in this Report and the rise in interest rates and inflation, even materially.

B.8. Discussion of risk factors

During 2023, the Consumer Price Index increased by a rate of 3.0%. Since the beginning of 2024 and until the publication date of the Report, the Consumer Price Index has increased at a rate of 4%.

Due to the increase in the inflationary environment, the Bank of Israel raised the interest rate to counter price increases, and the prime interest rate increased from 1.6% and 4.75% (at the end of 2021 and the end of 2022, respectively) to 6.25% at the end of 2023. In January 2024, due to a decrease in the inflation environment and the desire of the Bank of Israel to stabilize markets and reduce uncertainty while maintaining price stability and supporting economic activity, the Bank of Israel lowered the interest rate by 0.25%. According to the Bank of Israel announcement, the continuation of the trend of lowering interest rates will be determined based on the continued convergence of inflation to its target, the continued stability in financial markets, economic activity, and fiscal policy. According to the Bank of Israel forecast from October 2024, the inflation rate for the next four quarters (ending in the third quarter of 2025) is expected to be 3.2%, reflecting a more inflationary local environment compared to the July 2024 estimate. This adjustment is

partly due to revised Bank of Israel assumptions regarding the intensity of the war. The inflation rate for 2024 is projected to be 3.8% (compared to 3.0% in the July 2024 forecast), while in 2025, it is expected to moderate to 2.8%. In light of geopolitical uncertainty and an increased probability of significant security scenarios, the risks to the growth forecast lean downward, while the risks to the inflation, interest rate, and government deficit forecasts lean upward.

These changes in the inflation and interest rate environment, as well as the impact of the war (refer to Section B.3), have an impact on the corporation's business environment.

The effect of the interest rate increase:

As of the Report date, most of the Company's bank loans presented in the Company's consolidated financial statements bear a variable interest rate at the prime rate plus a certain margin. Therefore, the increase in the prime interest rate has had a direct impact on the Company's financing expenses in various projects and a negative impact on project profitability. For more details regarding the impact of the interest rate increase, refer to Note 26 in the Company's Annual Financial Statements as of December 31, 2023.

Following the provisions of Section 5.1 of the Business Description Report, during the Reporting Period, due to the increase in the inflation environment, interest rates continued to rise in Israel in 2023. As of September 30, 2024, the Group is exposed to risk due to changes in the market interest rate (prime) arising from loans received by the Company from banking institutions in the amount of approximately NIS 3.9 billion (as of December 31, 2023–NIS 3.3 billion) bearing a variable interest rate (refer also to Note 26 in the financial statement as of December 31, 2023). If interest rates continue to rise, it could 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 continued 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 also to Note 26 in the Company's Annual Financial Statements for the year 2023.

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 2.3% in the nine months ended on September 30, 2024) impacts project construction costs. However, the engagement with apartment buyers is also indexed to the same index, so the exposure mentioned is not material to the Company (whether fully or partially indexed in accordance with Amendment No. 9 to the Sale Law (Apartments), 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.

The expectation for continued interest rate increases has diminished. However, 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 more details on the rise in interest rates and inflation, refer also to Section 21 of the Description of the Corporation's Business Report attached to this Annual Report.

Israeli housing market⁶

In the first few weeks following the outbreak of the Iron Swords War, there was a slowdown in the housing market, almost to the point of a complete halt in transactions, due to the great uncertainty and low national morale. The Company's assessment is that the market's ability to return to normal activity levels will depend mainly on the duration of the fighting, its intensity, the question of its expansion to additional fronts, and the interest rate environment in Israel.

However, after several weeks from the outbreak of the war and until the period close to the publication of this Report, the Company sold apartments and offices in significant volumes. For the Company's sales data in various projects, refer to the table in Section A above.

Comparing real estate transaction prices in August-September 2024 compared to the prices of transactions made during July-August 2024, it was found that the apartment prices decreased by approximately 0.1%.

Compared to the transactions in the real estate market made in August-September 2024, compared to the same period last year, shows that apartment prices have risen by approximately 6.1%.

In the central region and specifically in Tel Aviv, price changes in August-September 2024 compared to July-August 2024 decreased by approximately (-0.7%) and (-1%) in Tel Aviv specifically.

It should be noted that as of the signing date of the Report, the Company's estimates as stated in Section B.8 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 despite the above, 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 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.

B.9 Details regarding the material and very material valuations in accordance with Article 8b(i) of the Securities Regulations (Periodic and Immediate

Reports), 5730-1970 (the "Reporting Regulations"):

Below are details regarding the material valuations in accordance with Article 8b(i) of the Reporting Regulations:

Identification of the assessment topic	Description	Company's indirectly held share	Valuation date	Value of the assessment subject before the valuation date if the generally accepted accounting rules, including depreciation and amortization, did not require the change in value under the valuation (Company's share):	Value of the assessment topic determined in accordance with the valuation (Company's share) NIS thousands	The change in the value of the property recorded in the profit and loss statement for the year (the Company's part) less tax	Identity of appraiser and characteristics	Valuation model used by appraiser	The assumptions under which the assessor carried out the valuation (NIS)
Vertical City Ltd. (Stock Exchange Triangle)	A project for the construction of employment, residential and commercial towers in a total scope of approximately 175,000 square meters above-ground (207,000 square meters including underground area), of which 400 residential units are for saturated construction for long-term rental purposes, 350 units for student dormitories, public buildings and institutions, and structural construction for employment and commerce Additional rights for construction and employment of approximately 154,440 square meters, additional construction rights for commerce of approximately 5,724 square meters and additional construction rights for public buildings of approximately 13,449 square meters.	55.9%	30/09/2024	454,353	566,826	86,604	Kamil Tarshansky Rafael–Real Estate Appraisal and Real Estate Services	Comparison method	Employment: NIS 8,000 per square meter and for the addition of building rights for employment NIS 6,250 per square meter Commercial: NIS 20,000 per square meter for ground floors and NIS 14,000 per square meter for upper floors Housing for rent (free market): NIS 10,650 per square meter Housing for rent (supervised): NIS 8,520 per square meter Student dormitories (free market): NIS 10,100 per square meter Student dormitories (supervised): NIS 5,600 per square meter The VAT component for the rental housing was added to the value

C. Disclosure Provisions in connection with the Financial Reporting of the Corporation

C.1 Material events after the Report Date

For events and additional details, refer to Note 5 in the Company's financial statements for September 30, 2024. C.2. Use of critical estimates

Refer to Note 2 in the Company's financial statements for September 30, 2024.

D. Special Disclosure to the Company's Bondholders

D.1. Data regarding the Company's bonds as of Sept. 30, 2024:

	Bonds (Series F)	Bonds (Series G)	Bonds (Series H)
Issuance date	June 2019	January 2021 April 2021	June 2024
Nominal value at the time of issue	NIS 196,587,000 par value issued on the issued date (June 2019)	NIS 200,000,000 par value. (January 2021) NIS 206,754,000 par value. (April 2021) NIS 277,143,000 par value. (August 2021) NIS 154,521,000 par value. (January 2022)	NIS 228,962,000
Nominal value as of Sept. 30, 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 228,962,000
Amount of interested accrued	NIS 307,986	NIS 8,324,620	NIS 4,217,342
Balance in the financial statements as of Sept. 30, 2024	NIS 19,922,598 (equal to the total balance, minus NIS 45,167 held by a wholly owned subsidiary of the Company)	NIS 778,521,072 (equal to the total balance, minus NIS 57,415,440 held by a wholly owned subsidiary of the Company)	NIS 230,806,829
Stock Exchange value as of Sept. 30, 2024	NIS 19,951,615	NIS 815,613,000	NIS 235,098,182
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 Sept. 30, 2024	None	None	None
Principal payment dates	Principal of Bonds (Series F) is payable 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 payable 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 payable 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.

	Bonds (Series F)	Bonds (Series G)	Bonds (Series H)
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	---	---	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 Ma'alot S&P for the Series H Bonds.
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 Harutz 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 Harutz 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 Harutz St., Tel Aviv, Tel: 03-6389200; Fax: 03- 6389222. Contact: Adv. Michal Avtalion-Rishony, email: michal@rpn.co.il.

D.2. Compliance with obligations

As of September 30, 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 toward the holders of Bonds (Series F), Bonds (Series G), and Bonds (Series H), see below.

Series	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of Sept. 30, 2024 (NIS thousands)	Financial liabilities	Manner of calculation of financial covenants and their results as of Sept. 30, 2024 according to the Company's reviewed financial statements
Bonds (Series F)	The Company (June 2019)	196,587	19,922 (of which an amount of 50 is wholly owned by a 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 information of the Company (audited or reviewed, as the case may be).	Equity as defined above is approximately NIS 2,376 million. Solo balance sheet as defined above is approximately NIS 3,535 million. Therefore, the ratio is approximately 67%.
Bonds (Series G)	The Company (January 2021)	838,418	842,249 (equal to the total balance, minus 63,681held 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 sheet as presented in the separate (solo) financial information of the Company (audited or reviewed, as the case may be).	Equity as defined above is approximately NIS 2,376 million. Solo balance sheet as defined above is approximately NIS 3,535 million. Therefore, the ratio is approximately 67%.
Bonds (Series H)	The Company (June 2026)	228,962	230,807	 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 sheet according to the Company's consolidated financial statements will not fall below 15%. 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 1.25 billion. Equity to balance sheet ratio on a consolidated basis will not fall below 17%.	Equity as defined above is approximately NIS 2,376 million. Solo balance sheet as defined above is approximately NIS 3,535 million. Therefore, the ratio is approximately 67%. Consolidated equity (including minority rights) as defined above is approximately NIS 3,310 million.

"Equity" means equity as presented in the Company's separate (solo) financial Consolidated balance sheet as defined above is approximately information (audited or reviewed, as the case may be), plus subordinated owner loans. NIS 9,589 million. "Subordinated Owner Loans" means owner loans (principal only) provided up to the Therefore, the ratio is relevant review date, where it has been stipulated in their terms (principal and interest) that approximately 34.5%. they are subordinated to the Bonds (Series H), including that their repayment date is after the final repayment date of the Bonds. In the event of the Company's liquidation, these loans (principal and interest) will be repaid after the full repayment of the Bonds. This also applies to capital notes provided after the issuance of the Bonds, which are subordinated to the Bonds (Series H), 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 will be repaid (principal and interest) after the full repayment of the Bonds. "Balance Sheet" means the Company's balance sheet as presented in the separate (solo) financial information of the Company (audited or reviewed, as the case may be). "Consolidated Equity" means equity, including minority 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 buyers, liabilities for providing construction services, liabilities for consideration transactions, and liabilities for customer contracts, as defined	Series	Borrower corporation (loan provision date)	Original loan framework amount (NIS thousands)	Principal balance as of Sept. 30, 2024 (NIS thousands)	Financial liabilities	Manner of calculation of financial covenants and their results as of Sept. 30, 2024 according to the Company's reviewed financial statements
in the GAAP.

D.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 Ma'alot S&P for the Series H Bonds.

Report Signing Date:

November 26, 2024

____________________________________________ _____________________________

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

Appendix A

In accordance with the requirements of Article 39A of the Securities Regulations (Periodic and Immediate Reports), 5730-1970, below is a summary of the significant changes or new developments that have occurred in the Company's business during the nine-month period ended September 30, 2024, and up to the date of the publication of this report. It should be noted that the following terms will have the meanings attributed to them in the Description of the Corporation's Business Report for the year 2023, which was attached to the 2023 Periodic Report (hereinafter: the "2023 Report"), unless expressly stated otherwise.

1. New Ramat Hasharon (Elco Complex)

a. Costs invested and that will be invested in the project (NIS thousands):

	Year 2024		Year	Year
New Ramat Hasharon Project (Elco Complex)	Q3	Q2	Q1	2023	2022
Data based on 100%, Company's share in the	Financial data in functional currency
project 81%	Costs invested (NIS millions)
Total aggregate costs for land at the end of the period	169.7	169.7	169.7	169.7	169.7
Total aggregate costs for development, taxes, fees and other	44.1	44.1	44.1	44.1	44.1
Total aggregate costs for construction	---	---	---	---	---
Deduction of costs recognized in the profit and loss statement	(207.5)	(207.5)	(207.5)	(207.5)	(213.8)
Total aggregate costs for financing (capitalized)	---	---	---	---
Total aggregate cost	6	6	6	6	---
	Costs not yet invested and completion rate
Total costs for land not yet invested (estimate)	---	---	---	---	---
Total costs for development, taxes and fees, not yet invested (estimate)	---	---	---	---	---
Total costs for construction not yet invested (estimate)	---	---	---	---	---
Total aggregate for financing not yet invested (estimate)	---	---	---	---	---
Completion rate [engineering/financial] (excluding land) (%)	---	---	---	---	---
Expected completion date	N/A	N/A	N/A	N/A	N/A

b. Below are details about the marketing of the areas in the project:

	New Ramat Hasharon Project (Elco Complex)
	Data based on 100%, Company's share in the project 81%
	Year 2024 Year				Year
	Q3 Q2 Q1			2023	2022
	Financial data in NIS thousands
		Contracts signed during the current period:
Sold units (residential)1	---	---	---	---	---
Sold units (office) - Stage A2	---	---	---	---	---
Sold units (office) - Stage B3	---	-	7	37 (*)	---
		Average price per square meter in contracts signed during the
			current period (functional currency):
Average price in NIS thousands (without VAT) - residential	---	---	---	---	--
Average price in NIS thousands (without VAT) - offices	---	---	600	600	--
	Aggregate agreements by end of period:

¹ "The Residential Units Sold" - Each purchaser will be entitled to land for a whole (average) residential unit, and not less, regardless of the result of the arithmetic calculation in the sale agreement and without any additional payment required from them. For further details, see Note 15e to the Consolidated Financial Statements for 2023.

² "The Stage A Office Units Sold" - Land units, each of which is expected to yield, according to the Company's forecasts regarding the change of designation as described in Section 6.3.3.2 of the 2023 Report, and in accordance with the mechanisms in the sale agreements, a right to land for an office unit of 250 square meters gross.

³ "The "Stage B Office Units Sold" - Land units, each of which is expected to yield, according to the Company's forecasts regarding the change of designation as described in Section 6.3.3.2 of the 2023 Report, and in accordance with the mechanisms in the sale agreements, a right to land for an office unit of 129.2 square meters gross.

⁴ As mentioned, the Company has not yet recorded income for the sale of land rights for residential units.

	New Ramat Hasharon Project (Elco Complex) Data based on 100%, Company's share in the project 81%
	Year 2024			Year	Year
	Q3	Q2	Q1	2023	2022
		Financial data in NIS thousands
Sold residential units	587	587	587	587	588
Sold office units (Stage A)	182	182	182	182	191
Sold office units (Stage B)	44	44	44	37	--
				Marketing rate of the sold rights (%):
Total income expected from the entire project (including management fees and commercial and office units)	972,905	972,905	1,005,257	1,005,257	1,012,705
Total income expected from contracts signed in the aggregate	450,590	450,590	450,590	446,400	430,745
Marketing rate as of last day of the period of residential units sold (%)	98%	98%	98%	98%	98%
Marketing rate as of last day of the period of office and commercial units (%)	34%	34%	34%	34%	32%
		Areas for which agreements have not yet been
		signed*:
Unsold units from the residential sold units (#)*	13	13	13	13	12
Unsold units from the sold office units (Stage B only) (#)*	730	730	730	737	774
Total aggregate cost (inventory balance) attributed to areas for which binding contracts are not yet signed in the Statement of Financial Position (consolidated)4	6,258	6,258	6,258	6,283	---
***	***	***	***	***	***
Number of units sold from the end of the period until near the Report publication	Residence: -- Offices Stage B: 18	Residence: -- Offices Stage B:-	Residence: -- Offices Stage B:-	Residence: -- Offices Stage B: 7	N/A
Average price for units sold from the end of the period until near the publication date of the Report (excluding VAT)	Residence: -- Offices Stage B: 694	Residence: -- Offices: --	Residence: -- Offices: --	Residence: -- Offices: 600	N/A

* The said units are in accordance with the plan which was approved as detailed in Section 6.3.3.2 above.

2. Residential rights in Sde Dov (Tel Aviv)

a. Costs invested and that will be invested in the project (NIS thousands):

Sde Dov Project		Year 2024			Year	Year
	(Data based on 100%. Company's effective share is 100%)		Q2	Q1	2023	2022
	Aggregate costs for land at the end of the period	1,262,262	1,262,262	1,262,262	1,262,262	1,262,262
	Aggregate costs for development, taxes and fees	87,884	84,850	82,870	81,015	76,013
	Aggregate costs for construction	---	---	---	---	---
	Aggregate costs for financing (capitalized)	195,457	173,550	152,604	130,960	47,917
	Other aggregate costs	---	---	---	---	---
Costs invested	Total aggregate cost	1,545,603	1,520,662	1,497,736	1,474,237	1,386,192
	Total aggregate book cost (*) including liability for construction service	1,545,603	1,520,915	1,497,736	1,474,237	1,386,192
	Costs for land not yet invested	N/A	N/A	N/A	N/A	N/A
	Costs for development, taxes and fees, not yet invested (estimate)	64,137	56,820	57,384	57,384	49,993
	Costs for construction, not yet invested (estimate)	824,845	820,945	820,945	820,945	775,650
Costs that will be invested	Aggregate costs for financing, expected to be capitalized in the future (estimate)	190,260	137,801	137,801	137,801	217,735
	Other aggregate costs not yet incurred	134,044	113,648	113,648	113,648	130,099
	Total cost remaining for completion	1,213,286	1,129,777	1,129,777	1,129,777	1,173,476
	Completion rate [engineering/financial] excluding land	8%	8%	8%	8%	7%

Sde Dov Project		Year 2024			Year	Year
(Data based on 100%. Company's effective share is 100%)	Q3	Q2	Q1	2023	2022
Contracts signed during	Residential units (#)	18	37	35	121	---
the current period	Residential units (sq.m)	2,229	4,454	4,489	11,785	---
Average price per square meter in contracts signed during the current period (including VAT)	Residential units	82,575	82,933	82,206	77,703	---
Aggregate agreements by	Residential units (#)	211	193	156	121	---
end of period	Residential units (sq.m)	22,957	20,728	16,274	11,785	---
Average price per square meter in aggregate in contracts signed until the period end (including VAT)	Residential units	80,070	79,800	78,946	77,703	---
	Total expected income from the entire project (in commercial currency) including VAT	3,919,812	3,827,581	3,827,581	3,827,581	---
Marketing rate of the project	Total expected income from contracts signed in the aggregate (commercial currency) including VAT	1,838,163	1,654,103	1,284,720	915,696	---
	Marketing rate as of last day of the period (%)	44%	40%	32.5%	25%	---
Areas for which	Residential units (#)	269	287	324	359	---
agreements have not yet	Residential units (sq.m)	23,158	25,387	29,841	34,330	---
been signed	Commercial spaces (sq.m)	1,610	1,610	1,610	1,610	---
Total aggregate cost (inventory balance as of Sept. 30, 2024) attributed to areas for which binding contracts are not yet signed in the Statement of Financial Position		866,182	909,380	995,109	1,097,505	---
Number of contracts signed from end of the period up to the publication date of the Report (#)		4	8	12	27	---
Average price per sq.m in contracts signed from the end of the period until the publication date of the Report (including VAT)		95,855	86,529	82,456	82,379	---

b. Below are details about the marketing of the areas in the project:

The data refer to signed contracts and do not include registration documents.

3. Residential rights classified as inventory in Midtown Jerusalem

a. Costs invested and that will be invested in the project (NIS thousands):

Midtown Jerusalem project (formerly Shaare Tzedek) Planning state of the project		Year 2024			Year 2023	Year 2022
	(Data based on 100%. Company's effective share is 73%)	Q3	Q2	Q1
	Aggregate costs for land at the end of the period	306,650	306,650	306,650	306,650	306,650
	Aggregate costs for development, taxes and fees	39,544	39,486	26,309	25,606	25,291
	Aggregate costs for construction	54,929	47,865	38,987	34,730	17,274
	Aggregate costs for financing (capitalized)	53,768	45,618	38,791	33,275	15,219
	Other aggregate costs	--	--	--	--	--
Costs invested	Total aggregate cost	454,891	439,619	410,737	400,261	364,434
	Total aggregate book cost (*) including liability for construction service	454,891	439,619	410,737	400,261	N/A
	Costs for land not yet invested	-	-	-	-	N/A
	Costs for development, taxes and fees, not yet invested (estimate)	199,248	179,890	193,067	193,770	N/A
	Costs for construction, not yet invested (estimate)	815,305	717,951	726,829	731,086	N/A
Costs that will be invested	Aggregate costs for financing, expected to be capitalized in the future (estimate)	140,314	95,388	95,388	95,388	N/A
	Other aggregate costs not yet incurred	150,316	196,617	196,617	196,617	N/A
	Total cost remaining for completion	1,305,183	1,189,845	1,211,901	1,216,861	N/A
	Completion rate [engineering/financial] excluding land	8%	7%	6%	5%	N/A

Midtown Jerusalem project - residential rights			Year 2024
(Data based on 100%. Company's effective share is 73%)	Q3	Q2	Q1	Year 2023	Year 2022
Contracts signed during	Residential units (#)	12	28	31	125*	---
the current period	Residential units (sq.m)	648	1,672	1,791	6,768	---
Average price per square meter in contracts signed during the current period (including VAT)	Residential units	77,244	70,617	67,927	64,808	---
Aggregate agreements	Residential units (#)	195	183	155	125*	---
by end of period:	Residential units (sq.m)	10,829	10,181	8,509	6,768	---
Average price per square meter in aggregate in contracts signed until the period end (including VAT)	Residential units	66,976	66,325	65,482	64,808	---
	Total expected revenues from the entire project (in commercial currency) including VAT	2,875,640	2,777,543	2,777,543	2,777,543	---
Marketing rate of the project	Total income expected from contracts signed in the aggregate (commercial currency) including VAT	725,312	675,223	557,186	438,619	---
	Marketing rate as of last day of the period (%)	28%	26%	22.4%	18%	---
Areas for which	Residential units (#)	497	509	537	567	---
agreements have not yet	Residential units (sq.m)	32,106	32,754	34,426	36,167	---
been signed:	Commercial spaces (sq.m)	---	---	---	---	---
Total aggregate cost (inventory balance as of Sept. 30, 2024) attributed to areas for which binding contracts are not yet signed in the Statement of Financial Position		326,707	321,961	318,143	327,959**	---
Number of contracts signed from end of the period up to the publication date of the Report (#)		8	9	10	27	---
Average price per sq.m in contracts signed from the end of the period until the publication date of the report (including VAT)		77,543	73,649	68,130	67,470	---

b. Below are details about the marketing of the areas in the project⁵ :

*Includes one contract canceled during the first quarter of 2024.

** Reclassified.

The data refer to signed contracts and do not include registration documents.

⁵ In light of the optimization of the planning of the apartments and their marketing, the number of units for marketing was updated to 692 apartments (instead of 800), with no change in the areas for marketing. As the planning progresses, there may be further changes in the number of units for marketing, without a change in the areas for marketing.

4. Residential rights in the Canada in the City project (former Leumi Building), Tel Aviv

Canada in the City (formerly Leumi Building), Tel Aviv Planning state of the project (Data based on 100%. Company's effective share is 81%)		Year 2024
		Q3	Q2	Q1	Year 2023	Year 2022
	Aggregate costs for land at the end of the period	297,340	297,340	297,340	297,340*	297,340*
	Aggregate costs for development, taxes and fees	22,343	22,343	22,243	22,243	22,243
	Aggregate costs for construction	13,811	12,473	10,196	9,734	5,428
	Aggregate costs for financing (capitalized)	51,565	47,225	43,736	40,241	25,125
	Other aggregate costs	--	--	--	--	--
Costs invested	Total aggregate cost	385,059	379,381	375,515	369,558*	350,135*
	Total aggregate book cost (*) including liability for construction service	--	--	--	--	--
Costs that will be invested	Costs for land not yet invested	N/A	N/A	N/A	N/A	N/A
	Costs for development, taxes and fees, not yet invested (estimate)	N/A	N/A	N/A	N/A	N/A
	Costs for construction, not yet invested (estimate)	N/A	N/A	N/A	N/A	N/A
	Aggregate costs for financing, expected to be capitalized in the future (estimate)	N/A	N/A	N/A	N/A	N/A
	Other aggregate costs not yet incurred	N/A	N/A	N/A	N/A	N/A
	Total cost remaining for completion	N/A	N/A	N/A	N/A	N/A
	Completion rate [engineering/financial] excluding land	N/A	N/A	N/A	N/A	N/A

a. Costs invested and that will be invested in the project (NIS thousands):

* Reclassified.

b. As of the date of this report, the Company has not yet started marketing the project.

Forward-looking information

The information described above in connection with the costs expected in the project (not yet invested) is "forward-looking information" (as the term is defined in the Securities Law), which are not under the full control of the Company and the realization of which is not certain. The realization of the aforementioned information largely depends on the cooperation between the Company and the partners in the projects, on the decisions made by them during the establishment of the project; on the relevant project company's engagement in financing agreements for the support and establishment of the project and compliance with the terms that will be set forth in these agreements (if set); on external factors, such as obtaining the necessary permits for the execution of the project (both in terms of their actual receipt and their receipt within the timeframe anticipated by the Company and the relevant project partners), on the project companies' compliance with the requirements of various authorities and their issuance of the relevant permits; on the actual costs of establishment and financing at the time they arise, which may change, including significantly, among other things, due to changes in the economic environment in which the Company operates. It should be emphasized that there is no certainty that this will be the actual state of affairs. These factors may significantly alter the Company's assessments outlined above. According to the Company's assessment, as of this date, the main factors that may cause the forward-looking information not to materialize are: (a) the required permits for the construction of the projects, which have not yet been granted, may not be obtained (both in terms of their actual receipt and the anticipated timing of their receipt by the Company); (b) the construction of the relevant project may be delayed due to various reasons, such as the failure of the relevant project company to meet the authorities' requirements for obtaining permits and/or the failure to obtain suitable permits for the project or obtaining them later than anticipated by the Company; (c) difficulties in contracting with a contractor or the contractor or other suppliers involved in the relevant project encountering financial difficulties; (d) any of the partners in the project encountering financial difficulties that prevent them from continuing to finance their share in the project (as applicable); (e) deviation from the expected scope of the project, which could result from increases in construction costs, taxes, and/or levies imposed on the purchase and development of the land, from the economic situation in the market, including inflation, interest rate increases, and the like. Thus, there is no certainty that the above information will materialize and it may even be significantly different from the above.

Israel Canada (T.R) Ltd.

Condensed Consolidated Financial Statements As of September 30, 2024

(Unaudited)

Israel Canada (T.R) Ltd.

Condensed Consolidated Financial Statements As of September 30, 2024

(Unaudited)

Table of Contents

	Page
Review Report by Accountants	2
Condensed Consolidated Financial Statements (Unaudited):
Condensed Consolidated Statements of Financial Position	3-4
Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Profit	5-6
Condensed Consolidated Statements of Changes to Equity	7-11
Condensed Consolidated Statements of Cash Flows	12-14
Notes to the Condensed Consolidated Financial Statements	15-38

Review Report of the Auditors to the Shareholders of Israel Canada (T.R) Ltd.

Introduction:

We have reviewed the accompanying financial information of Israel Canada (T.R) Ltd., and consolidated companies (hereinafter: the "Company"), including the condensed consolidated statement of financial position as of September 30, 2024, as well as the condensed consolidated statements of profit or loss, other comprehensive profit, changes to equity and cash flows for the periods of nine months and three months ended on the same date. The board of directors and management are responsible for the preparation and presentation of financial information for these interim periods, pursuant to International Accounting Standard IAS 34, "Interim Financial Reporting," and are responsible for the preparation of financial information for these interim periods under Chapter D of the Securities Regulations (Periodic and Immediate Reports), 5730-1970. Our responsibility is to express a conclusion regarding the financial information for these interim periods based on our review.

We did not review the condensed interim financial information of consolidated companies whose assets included in the consolidation constitute approximately 11.59% of the total consolidated assets as of September 30, 2024, and whose revenues included in the consolidation constitute approximately 53.68% and 59.46%, respectively, of the total consolidated revenues for the nine-month and three-month periods ended on the same date. Additionally, we did not review the condensed interim financial information of investments accounted for using the equity method, where the investment amounts to approximately NIS 280,963 thousand as of September 30, 2024, and the Company's share in their results amounts to approximately NIS 68,013 thousand and NIS 10,691 thousand, respectively, for the nine-month and three-month periods ended on the same date. The financial information for the condensed interim periods of the same companies was reviewed by other accountants, whose review reports were provided to us, and our conclusion, inasmuch as it relates to the financial information in respect of the same companies, is based on the review reports prepared by the other accountants.

Scope of the Review:

We conducted our review in accordance with Review Standard No. 2410 (Israel) of the Institute of Certified Public Accountants in Israel, "Review of Financial Information for Interim Periods Prepared by the Entity's Auditor." A review of interim financial information includes making inquiries, particularly with the people responsible for financial and accounting matters, and performing analytic and other review procedures. A review is significantly limited in scope in comparison to an audit conducted in accordance with generally accepted accounting standards in Israel, and therefore does not allow us to reach an assurance that we have become aware of all material issues which may have been identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion:

Based on our review and on the review reports provided by other accountants, nothing has come to our attention which would lead us to believe that the above financial information was not prepared, in all material respects, in accordance with IAS 34.

In addition to the contents of the preceding paragraph, based on our review and on the review reports provided by other accountants, nothing has come to our attention that would lead us to believe that the above financial information does not fulfill, in all material respects, the disclosure requirements set forth in Section D of the Securities Regulations (Periodic and Immediate Reports), 5730-1970.

Brightman Almagor Zohar & Co. Certified Public Accountants A Firm in the Deloitte Global Network

Tel Aviv, November 26, 2024

2 Tel Aviv – Main Office 1 Azrieli Center, POB 16593, Tel Aviv 6116402 | Telephone: 03-608-5555 | info@deloitte.co.il

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Telephone: 08-637-5676 Fax: 08-637-1628

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Telephone : 04-860-7333 Fax : 04-867-2528 info-haifa@deloitte.co.il info-eilat@deloitte.co.il

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

As of September 30 2024	2023	As of December 31
		2023
NIS	NIS	NIS
thousands	thousands	thousands
		(Audited)
		200,389
		94,889
		62,081
		98,262
		682,030
		18,538
		23,656
		1,930,406
		-
		3,110,251
		1,132,153
		745,280
		2,580,068
		9,898
		619,035
		1,166
		5,138
		292,518
		8,170
		-
		51,192
		26,590
6,428,928		5,471,208
9,985,715		8,581,459
	207,763 107,159 32,048 273,804 703,972 10,096 52,933 2,169,012 - 3,556,787 1,318,696 1,129,299 2,827,055 16,237 635,512 1,113 5,266 414,449 8,428 - 46,098 26,775	(Unaudited) 144,062 87,853 71,453 81,576 1,058,624 6,888 46,793 58,351 3,516 1,559,116 1,058,230 2,193,548 2,467,198 5,153 608,694 1,107 5,133 297,857 11,175 - 66,208 37,934 6,752,237 8,311,353

The notes attached to the Condensed Consolidated Financial Statements form an integral part of them.

Israel Canada (T.R) Ltd.

Condensed Consolidated Statements of Financial Position

(Cont.)

	As of September 30		As of December 31
	2024	2023	2023
	NIS	NIS	NIS
	thousands	thousands	thousands
	(Unaudited)		(Audited)
Current liabilities
Credit from bank corporations and current maturities of long-term loans	2,782,422	2,669,943	2,830,418
Current maturities of bonds	268,899	88,183	88,262
Current maturities of long-term lease liability	19,716	15,703	15,542
Suppliers	41,790	51,017	28,303
Accounts payable	128,989	70,413	61,291
Current tax liability	11,951	14,209	10,511
Liability for provision of construction services	4,415	6,045	6,540
Advances for the sale of real estate inventory and building inventory
under planning and construction	74,832	23,818	41,480
Loans from others	3,411	2,826	2,841
Total current liabilities	3,336,425	2,942,157	3,085,188
Non-current liabilities
Long-term loans from banks	1,958,817	1,270,343	1,119,006
Loans from others and other liabilities	25,802	21,925	26,934
Bonds	747,502	791,317	787,948
Lease liability	429,632	303,852	301,193
Deferred tax liabilities	164,695	170,055	190,185
Liability for provision of long-term construction services	2,565	15,600	3,562
Other non-current liabilities	9,713	10,819	11,685
Total non-current liabilities	3,338,726	2,583,911	2,440,513
Capital attributed to shareholders of the Company
Share capital	3,226	3,026	3,226
Premium on shares	1,110,527	941,186	1,110,527
Reserve for operations between a corporation and its controlling owner	30,491	30,491	30,491
Surplus	1,322,605	1,071,166	1,153,125
Capital reserve from exchange rate differences for translation of foreign
activities	) (73,164	( 68,954)	(66,792 )
Other capital reserves	(17,081)	(1,240)	(1,427)
Total capital attributed to the Company's shareholders	2,376,604	1,975,675	2,229,150
Non-controlling interests	933,960	809,610	826,608
Total capital	3,310,564	2,785,285	3,055,758
Total liabilities and capital	9,985,715	8,311,353	8,581,459
November 26, 2024
Date of Approval of the Asaf Touchmair Financial Statements Chair of the Board	Barak Rosen CEO and Director		Nir Bodaga Bar CFO

The notes attached to the Condensed Consolidated Financial Statements form an integral part of them.

Israel Canada (T.R) Ltd. Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Profit

	For the nine month period ended on Sept. 30		For the three month period ended on Sept. 30	For the year ended on Dec. 31
	2024 2023		2024	2023	2023
	NIS	NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands	thousands
	(Unaudited)		(Unaudited)		(Audited)
Income:
Rental and management of investment real estate	59,215	52,725	20,362	19,789	71,822
Income from the sale of real estate inventory	6,192	26,540	1,074	3,070	29,812
Income from the sale of residential apartments	59,332	72,134	17,859	17,903	85,170
Income from renting real estate inventory	19,055	16,393	6,369	5,141	22,705
Income from management fees	-	-	-	-	3,099
Income from operation and management of hotels	229,523	232,079	85,563	85,084	309,908
Marketing and brokerage income	18,014	15,425	10,578	2,284	20,754
Income from provision of construction services	3,123	3,328	1,334	1,280	4,149
Appreciation of fair value of investment real estate	32,012	22,928	845	6,703	86,892
Other income	706	172	-	-	152
Total income	427,172	441,724	143,984	141,254	634,463
Expenses and costs:
Cost of rent	31,003	27,949	12,490	9,942	37,885
Cost of sale of land inventory	6,118	8,215	3,623	1,317	9,311
Cost of sale of residential apartments	42,812	47,645	13,433	10,419	56,409
Cost of operating and managing hotels	190,297	225,752	76,783	79,563	277,745
Depreciation of fair value of investment real estate	37,776	33,302	23,449	8,830	23,502
Expenses from provision of construction services	3,123	3,328	1,334	1,280	4,149
Management and general expenses	45,272	34,547	12,953	12,342	45,938
Marketing and sale expenses	28,165	26,460	9,984	9,186	34,025
Other expenses	395	-	395	(197)	2,185
Total costs and expenses	384,961	407,198	154,444	132,682	491,149
Operating profit (loss)	42,211	34,526	) (10,460	8,572	143,314
Changes in financial assets measured at fair value
through profit and loss	13,620	) (162,383	36,334	5,749	(152,595)
Financing income	25,363	43,303	5,974	20,848	61,719
Financing expenses	(86,773)	(84,846)	(29,103)	(30,138)	(111,059)
Profit (loss) after financing	(5,579)	(169,400)	2,745	5,031	(58,621)
Company's share in investments accounted for using the
equity method, net of tax	219,595	21,318	172,442	4,648	34,848
Profit (loss) before income taxes	214,016	) (148,082	175,187	9,679	(23,773)
	2,203	22,549	(2,954)	(1,437)	(2,420)
Income taxes				8,242
Profit (loss) for period Other comprehensive profit (loss) - amounts that will	216,219	) (125,533	172,233		(26,193)
be classified in the future in the income statement:
Exchange rate differences on translating foreign
operations	) (7,138	6,796	) (7,938	3,954	9,261
Other comprehensive profit (loss) - amounts that will
not be classified in the future in the profit or loss
statement: Profit for changes in fair value of a financial obligation
designated at fair value through profit or loss
attributable to changes in credit risk, net of tax	-	(669)	-	(669)	(856)
Total comprehensive profit (loss)	209,081	(119,406)	164,295	11,527	(17,788)

The notes attached to the Condensed Consolidated Financial Statements form an integral part of them.

Israel Canada (T.R) Ltd.

Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Profit

(Cont.)

		For the nine month period ended on Sept. 30		For the three month period ended on Sept. 30	For the year ended on Dec. 31
	2024	2023	2024	2023	2023
	NIS	NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands	thousands
	(Unaudited)			(Unaudited)	(Audited)
Net profit (loss) attributed to:
Shareholders of the Company	194,480	) (137,697	170,870	4,100	) (55,738
Non-controlling interests	21,739	12,164	1,363	4,142	29,545
	216,219	(125,533)	172,233	8,242	(26,193)
Total comprehensive profit (loss) attributable to:
Shareholders of the Company	188,108	) (132,940	163,513	6,845	) (49,006
Non-controlling interests	20,973	13,534	782	4,682	31,218
	209,081	(119,406)	164,295	11,527	(17,788)
Net profit (loss) per share attributed to the Company's shareholders (in NIS):
Net basic profit (loss):
Net basic profit (loss) per share	0.6029	(0.4551)	0.5297	0.0136	(0.1826)
Diluted net profit (loss): Diluted net profit (loss) per share	0.6029	(0.4551)	0.5297	0.0136	(0.1826)
Weighted average shares capital used in calculating profit per share	322,566	302,584	322,566	302,584	305,266
Weighted average shares capital used in calculating diluted profit per share	322,566	302,584	322,566	302,584	305,266

	For the nine month period ended on Sept. 30, 2024 (unaudited)
	Share capital NIS thousands	Premium on shares NIS thousands	Reserve for activities between a corporation and its controlling owner NIS thousands	Other capital reserves NIS thousands	Capital reserve from exchange rate differences for translation of foreign activities NIS thousands	Retained earnings NIS thousands	Total attributed to owners 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 period	-	-		- -	-	194,480	194,480	21,739	216,219
Capital reserve for translation differences	-	-		- -	(6,372)	-	(6,372)	(766)	(7,138)
Total comprehensive profit (loss) for the period	-	-		- -	(6,372)	194,480	188,108	20,973	209,081
Dividend paid	-	-		- -	-	(25,000)	(25,000)	-	(25,000)
Capital investments with holders of non controlling interests	-	-		- -	-	-	-	91,972	91,972
Transactions with holders of non-controlling interests	-	-		- (15,654)	-	-	(15,654)	(283)	(15,937)
Distributions for non-controlling interests	-	-		- -	-	-	-	(5,310)	(5,310)
Balance as of Sept. 30, 2024		3,226 1,110,527	30,491	(17,081)	(73,164)	1,322,605	2,376,604	933,960	3,310,564

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

The notes attached to the Condensed Consolidated Financial Statements form an integral part of them.

Israel Canada (T.R) Ltd. Condensed Consolidated Statements of Changes to Equity (Cont.)

	For the nine month period ended on Sept. 30, 2023 (unaudited)
	Share capital NIS thousands	Premium on shares NIS thousands	Reserve for activities between a corporation and its controlling owner NIS thousands	Other capital reserves NIS thousands	Capital reserve from exchange rate differences for translation of foreign activities NIS thousands	Retained earnings NIS thousands	Total attributed to owners of the parent company NIS thousands	Non controlling interests NIS thousands	Total capital NIS thousands
Balance as of January 1, 2023	3,026	941,186	30,491	1,606	(74,306 )	1,233,863	2,135,866		826,125 2,961,991
Profit (loss) for the period	-	-	-	-	-	(137,697 )	(137,697)	12,164	(125,533 )
Capital reserve due to translation differences Changes in the fair value of a financial liability,	-	-	-	-	5,352	-	5,352	1,444	6,796
net of tax	-	-	-	(595)	-	-	(595)	(74)	(669)
Total comprehensive profit (loss) for the period	-	-	-	(595)		5,352 (137,697)	(132,940)		13,534 (119,406)
Dividend paid	-	-	-	-	-	(25,000)	(25,000)	-	(25,000)
Capital investments with holders of non controlling interests	-	-	-	-	-	-	-	4,065	4,065
Transactions with holders of non-controlling interests	-	-	-	(2,251)	-	-	(2,251)	767	(1,484)
Distributions for non-controlling interests	-	-	-	-	-	-	-	(34,881)	(34,881)
Balance as of Sept. 30, 2023	3,026	941,186	30,491	(1,240)	(68,954)	1,071,166	1,975,675	809,610	2,785,285

The notes attached to the Condensed Consolidated Financial Statements form an integral part of them.

Israel Canada (T.R) Ltd. Condensed Consolidated Statements of Changes to Equity (Cont.)

	For the three month period ended on Sept. 30, 2024 (unaudited)
	Share capital NIS thousands	Premium on shares NIS thousands	Reserve for activities between a corporation and its controlling owner NIS thousands	Other capital reserves NIS thousands	Capital reserve from exchange rate differences for translation of foreign activities NIS thousands	Retained earnings NIS thousands	Total attributed to owners of the parent company NIS thousands	Non controlling interests NIS thousands	Total capital NIS thousands
Balance as of July 1, 2024		3,226 1,110,527	30,491	(12,699 )	(65,807)	1,151,735	2,217,472		921,601 3,139,073
Profit for the period	-	-	-	-	-	170,870	170,870	1,363	172,233
Capital reserve for translation differences	-	-	-	-	(7,357)	-	(7,357)	(581)	(7,938)
Total comprehensive profit (loss) for the period	-	-	-		(7,357)	170,870	163,513	782	164,295
Capital investments with holders of non controlling interests	-	-	-	-	-	-	-	11,972	11,972
Transactions with holders of non-controlling interests	-	-	-	(4,383)	-	-	(4,383)	(283)	(4,666)
Distributions for non-controlling interests	-	-	-	-	-	-	-	(114)	(114)
Balance as of Sept. 30, 2024		3,226 1,110,527	30,491	(17,081)	(73,164)	1,322,605	2,376,604	933,960	3,310,564

The notes attached to the Condensed Consolidated Financial Statements form an integral part of them.

	For the three month period ended on Sept. 30, 2024 (unaudited)
	Share capital NIS thousands	Premium on shares NIS thousands	Reserve for activities between a corporation and its controlling owner NIS thousands	Other capital reserves NIS thousands	Capital reserve from exchange rate differences for translation of foreign activities NIS thousands	Retained earnings NIS thousands	Total attributed to owners of the parent company NIS thousands	Non controlling interests NIS thousands	Total capital NIS thousands
Balance as of July 1, 2023	3,026	941,186	30,491	(646)	(72,294)	1,067,066	1,968,830	824,826	2,793,657
Profit for the period	-	-	-	-	-	4,100	4,100	4,142	8,242
Capital reserve for translation differences Changes in the fair value of a financial liability,	-	-	-	-	3,340	-	3,340	614	3,954
net of tax	-	-	-	(595)	-	-	(595)	(74)	(669)
Total comprehensive profit for the period	-	-	-	(595)	3,340	4,100	6,845	4,682	11,527
Capital investments with non-controlling right holders	-	-	-	-	-	-	-	897	897
Transactions with non-controlling right holders	-	-	-	-	-	-	-	193	193
Distributions for non-controlling interests	-	-	-	-	-	-	-	(20,988)	(20,988)
Balance as of September 30, 2023	3,026	941,186	30,491	(1,240)	(68,954)	1,071,166	1,975,675	809,610	2,785,285

Israel Canada (T.R) Ltd. Condensed Consolidated Statements of Changes to Equity (Cont.)

The notes attached to the Condensed Consolidated Financial Statements form an integral part of them.

	For the year ended Dec. 31, 2023 (audited)
	Share capital NIS	Premium on shares NIS	Reserve for activities between a corporation and its controlling owner NIS	Other capital reserves NIS	Capital reserve from exchange rate differences for translation of foreign activities NIS	Retained earnings NIS	Total attributed to owners of the parent company NIS	Non controlling interests NIS	Total capital NIS
	thousands	thousands	thousands	thousands	thousands	thousands	thousands	thousands	thousands
Balance as of January 1, 2023	3,026	941,186	30,491	1,606	(74,306)	1,233,863	2,135,866	826,125	2,961,991
Profit (loss) for the year	-	-	-	-	-	(55,738)	(55,738)	29,545	(26,193)
Capital reserve for translation differences	-	-	-	-	7,514	-	7,514	1,747	9,261
Changes in the fair value of a financial liability, net of tax	-	-	-	(782)	-	-	(782)	(74)	(856)
Total comprehensive profit (loss) for the year	-	-	-	(782)	7,514	(55,738)	(49,006)	31,218	(17,788)
Dividend paid	-	-	-	-	-	(25,000)	(25,000)	-	(25,000)
Issue of shares	200	169,341	-	-	-	-	169,541	-	169,541
Transactions with non-controlling right holders	-	-	-	(2,252)	-	-	(2,252)	867	(1,385)
Capital investments with non-controlling right holders	-	-	-	-	-	-	-	4,065	4,065
Distributions for non-controlling interests	-	-	-	-	-	-	-	(35,667)	(35,667)
Balance as of December 31, 2023	3,226	1,110,527	30,491	(1,427)	(66,792)	1,153,125	2,229,150	826,608	3,055,758

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

(Cont.)

The notes attached to the Condensed Consolidated Financial Statements form an integral part of them.

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

		For the nine month period ended on Sept. 30	For the three month period ended on Sept. 30		For the year ended on Dec. 31
	2024	2023	2024	2023	2023
	NIS	NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands	thousands
		(Unaudited)		(Unaudited)	(Audited)
Cash flows from current activities
Net cash used for current activities (Appendix A)	(401,696)	(145,814)	(306,142)	(50,342)	(169,147)
Cash flows from investment activities
Provision of loans to companies accounted for using the equity method, net of tax	(55,343)	(80,583)	(1,743)	(28,222)	(105,958)
Repayment of loans from companies accounted for using the equity method, net of tax	24,287	101,202	2,357	73,982	101,202
Purchase and investments in investment real estate (including investment real estate under construction), net	(412,636)	(132,069)	(343,903)	(33,663)	(182,058)
Advances on investment real estate	) (22,881	(4,814)	-	) (1,938	(9,559)
Sale of financial instruments at fair value through profit and loss, net	1,350	489,955	44	407	492,706
Purchase and investment of fixed assets	) (38,077	(55,843)	(19,758)	(11,302)	(71,377)
Acquisition of other assets	) (185	(1,048)	(185)	-	) (1,847
Change in restricted cash in use	(126)	55,373	(61)	(25)	55,368
Net cash (used for) arising from investment
activity	(503,611)		372,173 (363,249)	(761)	278,477
Cash flows from financing activity
Issue of bonds, net	226,517	-	-	-	-
Transactions with holders of non-controlling	(15,936)
interests		(1,484)	(4,664)	193	) (1,385
Credit from banks, net	126,920	38,581	6,207	51,034	71,956
Repayment of bonds and buyback	) (88,262	(82,636)	-	) (1,382	(86,306)
Issuance of shares, net	-	-	-	-	169,541
Distributions for non-controlling interests	) (5,310	(34,880)	(112)	(20,988)	(35,667)
Receipt of a loan from others	-	-	-	-	5,896
Dividend paid	) (25,000	(25,000)	-	-	) (25,000
Repayment of loan from others	) (2,214	(20,189)	( 168)	(526 )	(21,203)
Repayment of lease liability	) (9,694	(10,538)	(1,211)	(3,395)	(14,348)
Capital investments with non-controlling right holders	91,972	4,065	11,972	897	4,065
Receipt of long-term loan from banks	798,305	289,742	628,306	199,358	286,600
Repayment of long-term loans from banks	(183,459)	(444,179)	(53,037)	(122,478)	(467,629)
Net cash deriving from (used in) financing activity		913,839 (286,518)	587,293	102,713	(113,480)
Exchange rate differences for balances of cash and cash equivalents	(1,158)	(330)	(1,029)	17	12) (
Increase (decrease) in cash and cash equivalents	7,374	) (60,489	(83,127)	51,627	) (4,162
Balance of cash and cash equivalents at beginning of period	200,389	204,551	290,890	92,435	204,551
Balance of cash and cash equivalents at end of period	207,763	144,062	207,763	144,062	200,389

The notes attached to the Condensed Consolidated Financial Statements form an integral part of them.

Israel Canada (T.R) Ltd.

Condensed Consolidated Statements of Cash Flows

(Cont.)

Appendix A–Net cash used for current activity:
------------------------------------------------	--	--	--	--	--

	For the nine month period ended on Sept. 30		For the three month period ended on Sept. 30	For the year ended on Dec. 31
	2024	2023	2024	2023	2023
	NIS	NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands	thousands
		(Unaudited)		(Unaudited)	(Audited)
Net profit (loss) for the period	216,219	(125,533)	172,233	8,242	(26,193)
Adjustments to profit or loss sections: Profits of companies accounted for using the equity method (including financing income,
net), net of tax Profit (loss) from adjustment of fair value of	) (240,262	(45,423)	(177,138)	(14,216)	(79,076)
investment real estate, net Adjustment of fair value of financial instruments	5,764	10,374	22,604	2,127	) (63,390
at fair value through profit or loss	) (13,620	162,383	) (36,334	(4,958)	152,595
Revaluation of bonds	1,931	) (482	589	) (5,319	102) (
Revaluation of loan from banking corporations	50,072	17,577	26,109	1,085	19,956
Depreciation of fixed assets and assets for lease	42,030	35,292	16,307	12,320	45,284
Revaluation of loan from others	1,652	339	) (298	(538)	1,146
Deferred taxes, net	5,582	(12,475)	2,951	21,984	22,671
	(146,851)		167,585 (145,210)	12,485	99,084
Changes in sections of assets and liabilities: Decrease (increase) in income tax receivables Increase (decrease) in advances for the sale of real	8,442 33,352	3,280	1,478 5,639	) (11,311	(8,348)
estate inventory		) (21,657		) (4,640	(3,995)
Increase (decrease) in accounts receivable Decrease (increase) in receivables for the sale of real estate and buildings under planning and	) (50,741	-	(16,018)	-	9,434
construction	30,033	) (13,351	44,298	) (3,244	(3,979)
Increase (decrease) in suppliers Increase (decrease) in accounts payable and other	13,487	345	8,207	) (2,378	(22,369)
liabilities for current taxes Decrease in inventory of real estate and buildings for sale due to sales (before purchase and	51,488	) (13,840	39,892	) (967	(26,458)
investment in land)	38,471	51,484	13,033	10,234	60,700
	124,532	6,261	96,529	(12,306)	4,985
Net cash arising from current activity (before purchase and investment in land)	193,900	48,313	123,552	8,421	77,876
Purchases and investments in land inventory	(595,596)	(194,127)	(429,694)	(58,763)	(247,023)
Net cash used for current activity	(401,696)	(145,814)	(306,142)	(50,342)	(169,147)

Israel Canada (T.R) Ltd.

Condensed Consolidated Statements of Cash Flows

(Cont.)

Appendix B–Additional information on cash flows from current activity:

		For the nine month period ended on Sept. 30		For the three month period ended on Sept. 30
	2024 NIS thousands	2023 NIS thousands	2024 NIS thousands	2023 NIS thousands	Dec. 31 2023 NIS thousands
		(Unaudited)		(Unaudited)
Cash paid during the period for:
Interest	194,861	194,383	63,804	75,123	268,176
Income tax	3,539	5,582	549	(6,698)	8,466
Cash received during the period for:
Interest	2,958	3,081	419	822	4,084
Income tax	19,828	-	-	-	-

Note 1 - General

Israel Canada (T.R) Ltd. (hereinafter - the "Company" or "Group") is engaged through consolidated companies in the development, marketing, and management of real estate projects in Israel and abroad. Further information about the Group's operating segments is presented in Note 6.

These condensed consolidated reports should be read in conjunction with the annual financial statements of the Company as of December 31, 2023, and for the year then ended, and the accompanying notes, except for new standards.

Note 2 - Significant Accounting Policies

A. Basis of Preparation of the Financial Statements

The Group's condensed consolidated financial statements (hereinafter–"Interim Financial Statements") have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" (hereinafter–"IAS 34").

In preparing these Interim Financial Statements, the Group applied accounting policies, presentation rules, and calculation methods identical with those applied in the preparation of its financial statements as of December 31, 2023, and for the year then ended.

The condensed consolidated financial statements were prepared in accordance with the disclosure provisions in Chapter D of the Securities Regulations (Periodic and Immediate Reports), 5730-1970.

B. Determining Fair Value of Investment Property and Investment Property Under Construction in Interim Reports

To determine the fair value of investment property, the Company relies on an appraisal conducted by an independent appraiser once a year or at the initial recognition of the investment property. Additionally, at each interim reporting date, the Company assesses the need to update the estimated fair value of its investment property relative to the fair value determined at the last appraisal date to verify whether this estimate represents a reliable estimate of fair value as of the interim reporting date. This assessment is conducted by reviewing changes in the relevant real estate market, lease agreements for the property, the macroeconomic environment of the property, as well as new information regarding significant transactions conducted in the vicinity of the property and similar properties, and any other information that may indicate changes in the property's fair value. If the Company assesses that certain properties' fair value as of the interim reporting date is materially different from the fair value estimated at the last appraisal date, the Company estimates the fair value of these properties as of the interim reporting date.

As of September 30, 2024, the Company, with the assistance of external appraisers, examined whether there were indications that the fair value of the investment property materially differed from the value estimated by an external appraiser on December 31, 2023. In the review conducted during the reporting period, which included economic impact factors such as capitalization rates, occupancy rates, and rent levels for the Company's properties, planning changes to the property, and real estate transactions, the Company recognized a net decrease in fair value of investment property in the amount of approximately NIS 6 million (excluding investments accounted for using the equity method).

C. Income Tax in Interim Reports

The income tax expenses (income) for the periods presented include the total current taxes and the total change in deferred tax balances, except for deferred taxes arising from transactions charged directly to equity and business combination transactions.

Current tax expenses (income) in interim periods are accrued using the average annual effective income tax rate. For calculating the effective income tax rate, tax losses for which deferred tax assets have not been recognized, expected to reduce tax liability in the reporting year, are deducted.

Note 2 - Significant Accounting Policies (cont.):

D. Exchange Rates and Linkage Basis

(1) Balances in foreign currency or linked to it are included in the financial statements according to the representative exchange rates published by Bank of Israel and in effect at the end of the reporting period.

• (2) Balances linked to the Consumer Price Index are presented according to the latest known index at the end of the reporting period (the index of the month preceding the month of the financial report date).
• (3) Below is data on the exchange rate of the dollar and the index:

		Exchange rate of	Known consumer	Known construction
	Dollar	Euro	Ruble	price index	inputs index
	(NIS to USD 1)		(NIS to EUR 1) (NIS to RUB 1)	(Points)	Points
Date of the financial
statements:
As of September 30, 2024	3.710	4.1524	0.040	108.6	132.5
As of September 30, 2023	3.824	4.0531 0.042		111.4	129.5
As of December 31, 2023	3.627	4.0116	0.040	105	129.8
Change rates:	%	%	%	%	%
For the nine month period ended on:
September 30, 2024	2.29	3.51	) (6.97	3.043	2.08
September 30, 2023	8.67	7.99	) (12.5	3.24	1.72
For the three month period ended on:
September 30, 2024	) (1.30	3.29	(6.98)	1.31	0.99
September 30, 2023	3.35	0.86	-	0.91	) (0.07
For the year ended on:
December 31, 2023	3	6.89	(16.67)	(2.68)	1.96

Note 2 - Significant Accounting Policies (cont.):

E. New Financial Reporting Standards and Interpretations Published

International Financial Reporting Standard 18 "Presentation and Disclosure in Financial Statements" ("IFRS 18")

On April 9, 2024, IFRS 18 was published, replacing International Accounting Standard 1 "Presentation of Financial Statements" ("IAS 1"). The purpose of this standard is to enhance how entities communicate information to users of their financial statements.

The standard focuses on the following areas:

• (1) Structure of the profit or loss statement: Presentation of defined subtotals and categorization in the profit or loss statement.
• (2) Requirements for improved information grouping and splitting in financial statements and notes.
• (3) Disclosure of information regarding performance measures defined by management ("MPM"): These measures are not based on accounting standards (non-GAAP) in the notes to the financial statements.

Additionally, upon the application of IFRS 18, amendments to other IFRS standards will come into effect, including amendments to International Accounting Standard 7 "Statement of Cash Flows," intended to enhance comparability between entities. The changes primarily include the use of operating profit subtotal as a single starting point in applying the indirect method for reporting cash flows from operating activities, and the elimination of options for selecting accounting policies regarding the presentation of interest and dividends. As a result, except in certain cases, interest and dividends received will be included under cash flows from investment activity, while interest paid and dividends paid will be included under financing activity.

The standard will take effect for annual reporting periods beginning on or after January 1, 2027. It is applied retrospectively, with specific transition provisions. Early adoption is permitted; however, according to the Securities Authority's decision, early adoption will only be allowed starting from the period beginning January 1, 2025 (financial statements for the first quarter of 2025).

The Company is examining the impact of IFRS 18, including the impact of amendments to other IFRS standards resulting from its application, on the 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:

• Addition of the option to derecognize a financial liability that has been settled through a transfer in an electronic payment system before the settlement date, if the following criteria are met:
  • The entity has no practical ability to withdraw, stop, or cancel the payment instruction;
  • The entity has no practical ability to access the cash used for settlement as a result of the payment instruction; and
  • The clearing risk associated with the electronic payment system is not significant.

An entity that chooses this option is required to apply it to all liabilities settled in the same electronic payment system.

• Adding implementation guidance and examples for assessing whether the contractual cash flows of a financial asset are solely payments of principal and interest on the principal amount outstanding for the purpose of classifying the financial asset.
• Clarification that a financial asset has characteristics of a non-recourse asset if the entity's ultimate right to receive cash flows is contractually limited to the cash flows generated from specified assets.
• Clarifying characteristics of contractually linked instruments that distinguish them from other transactions.

Note 2 - Significant Accounting Policies (cont.):

E. New Financial Reporting Standards and Interpretations Published (cont.)

Main Amendments to IFRS 7

• Update of disclosure requirements regarding investments in equity instruments designated for fair value through other comprehensive profit.

• Addition of disclosure requirements regarding contractual terms that may change the timing or amount of contractual cash flows of financial instruments upon the occurrence (or non-occurrence) of a contingent event (e.g., achieving greenhouse gas emission reduction targets) that does not directly relate to changes in the risks and costs of basic loan agreements (such as the time value of money or credit risk).

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

An entity is required to apply the amendments retrospectively. The entity is not required to restate prior periods at the date of initial application but may do so if, and only if, it can be done without the use of hindsight.

The Company is considering the impact of the amendments to IFRS7, including the impact of the amendments to additional IFRS standards as a result of its application to the financial statements.

Annual Improvements to IFRS Accounting Standards (Volume 11)

As part of the annual improvement process, several amendments to IFRS standards were published in July 2024, including:

• Limited scope amendments to IFRS 1 "First-time Adoption of International Financial Reporting Standards," IFRS 10 "Consolidated Financial Statements," and IAS 7 "Statement of Cash Flows."
• Amendments to IFRS 9 "Financial Instruments" clarifying that when a lease liability is "extinguished" in accordance with IFRS 9, the lessee is required to apply the provisions of Section 3.3.3 of IFRS 9 such that the profit or loss arising from the derecognition is recognized in profit or loss. It is also clarified that trade receivables are measured at initial recognition in accordance with the amount determined by applying IFRS 15 and not according to the transaction price.

The amendments will take effect for annual reporting periods beginning on January 1, 2026, or later. Early adoption is possible with disclosure of this fact.

The amendment to IFRS 9 regarding the derecognition of lease liabilities will apply to lease liabilities extinguished at the beginning of the annual reporting period in which the amendment is first applied.

The Company is considering the impact of the annual improvements to the IFRS accounting standards, including the impact of the amendments to additional IFRS standards as a result of its application on the financial statements.

Note 3 - Financial Instruments

Financial Instruments Not Measured at Fair Value

Excluding what is detailed in the following table, the Group belies that the book value of the financial assets and undertakings presented at an amortized cost in the financial statements is roughly similar to their fair value:

		As of Sept. 30
	2024	2023	2023
	NIS thousands	NIS thousands
	(Unaudited)	(Audited)
Financial liabilities:
Bonds (Series F) and interest payable	19,923	109,496	107,618
Bonds (Series G) and interest payable	778,521	780,049	768,592
Bonds (Series H) and interest payable	230,807	-	-
	1,029,251	889,545	876,210

	Fair value
	As of Sept. 30	As of Dec. 31
	2024	2023	2023
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)	(Audited)
Financial liabilities:
Bonds (Series F) and interest payable	19,672	107,853	107,236
Bonds (Series G) and interest payable	753,664	756,756	717,561
Bonds (Series H) and interest payable	235,098	-	-
	1,008,434	864,609	824,797

Note 4 - Material Events and Transactions in the Reporting Period

A. Midtown Commerce

Further to Note 12b(4) of the Company's consolidated financial statements as of December 31, 2023, Midtown Ltd. (hereinafter: "Midtown") signed a credit facility agreement with a local bank on May 7, 2024, for a total amount of approximately NIS 348 million, to be repaid no later than 2030. Until full repayment, the Company will repay the principal at a rate of 4% annually, with the remaining loan balance to be repaid on the loan's final maturity date. During May 2024, Midtown utilized an additional NIS 90 million from the facility. The loan balance as of September 30, 2024, stands at approximately NIS 348 million.

B. 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 its Series F and Series G Bonds. On June 23, 2024, S&P Maalot announced a rating of ilA- for a new bond issuance (Series H), as set forth in Note 4e.

C. Sde Dov Project

Further to Note 15t of the Company's consolidated financial statements as of December 31, 2023, on March 21, 2024, Israel Canada Sde Dov Ltd., a wholly owned subsidiary of the Company (hereinafter: the "Project Company"), received an excavating and shoring permit for the project pursuant to Tel Aviv Local Planning and Building Committee's decision. In April 2024, the excavation and shoring contractor began work.

Additionally, as of September 30, 2024, the loan balance on the land amounts to approximately NIS 1.1 billion, and its repayment date was extended until December 31, 2024. For further details regarding the Project Company's engagement in the financing agreement, refer to Note 5c.

D. Negotiations for the Acquisition of 100% of Brown Hotels' Operations

Further to Note 15n of the Company's consolidated financial statements as of December 31, 2023, the hotel company is negotiating to acquire 100% of the Brown Hotels' operations. On September 18, 2023, Israel Canada Hotels entered into two memoranda of understanding with third parties: one for the acquisition of Brown Hotels' operations in Israel, and the other for the acquisition of Brown Hotels' operations in Greece (hereinafter jointly: the "Memoranda of Understanding"), as detailed below:

a. Memorandum of Understanding for Agreements to Lease Hotels in Israel and Greece and the Acquisition of the Brown Brand in Greece

A memorandum of understanding between Israel Canada Hotels and third parties (jointly and severally: the "Seller(s)" or "Lessor(s)"), pursuant to which, subject to the fulfillment of conditions precedent and entry into binding agreements, Israel Canada Hotels will enter into lease agreements with the Lessors regarding hotels in Tel Aviv and Jerusalem (included in the rooms specified in the business operations memorandum for Israel detailed below). Israel Canada Hotels will acquire, at no cost, the operations of Brown Hotels in Greece, including the hotel operating companies, as well as signing lease/management agreements related to eight hotels across Greece, comprising approximately 1,076 rooms.

It will also acquire from the Sellers, at no cost, the existing management company of "Brown Hotels" in Greece, which also holds the rights to the Brown brand in Greece and Germany.

It was further agreed that, subject to the signing of binding agreements, standard restrictions on the transfer of control of Israel Canada Hotels and the operating companies will apply.

Note 4 - Material Events and Transactions in the Reporting Period (cont.)

D. Negotiations for the Acquisition of 100% of Brown Hotels' Operations (cont.)

b. Memorandum of Understanding for the Acquisition of Business Operations in Israel

A memorandum of understanding between Israel Canada Hotels and Brown Hotels Ltd. (hereinafter: "Brown Hotels") (hereinafter: the "Business Operations Memorandum in Israel"), pursuant to which, subject to the fulfillment of conditions precedent and the signing of binding agreements, Israel Canada Hotels will acquire from Brown Hotels and its subsidiaries the business operations related to ten hotels in the Brown Hotels chain in Tel Aviv and Jerusalem (only in relation to these specific hotels), comprising approximately 779 rooms, in their as-is condition, including furniture, investments, and improvements made to them, free and clear of any encumbrances. Israel Canada Hotels will also acquire Brown Hotels' intellectual property, which includes, among other things, the chain's brands ("Brown," "Lighthouse," and others), a reservation system, website, digital assets, and a customer loyalty program, for a total consideration of approximately NIS 100 million, of which approximately NIS 27 million will be paid in cash and the remaining balance will be settled via the assumption/transfer of debt to Israel Canada Hotels (hereinafter: the "Consideration").

The transaction will be subject to standard conditions precedent for transactions of this type, including the signing of binding agreements; court approval; approvals from additional parties, including the approval of the Competition Authority; agreements with an institutional entity holding 20% of Brown Hotels' shares; and the completion of the transactions outlined in the memorandum of understanding regarding the operations in Greece detailed below.

It should be noted that the Memoranda of Understanding include a management mechanism (in lieu of rent payments) for the duration of the Iron Swords War, based on a mechanism agreed upon between the parties for the hotels in Israel. Furthermore, Israel Canada Hotels, together with Brown Hotels, intends to reach agreements on standard protective mechanisms with the remaining lessors in Israel.

The transactions outlined in the two Memoranda of Understanding are interdependent and are also contingent on completing due diligence, reaching commercial agreements, and signing detailed and comprehensive agreements as required.

According to the Memoranda of Understanding, from the date of signing the memoranda until the execution of binding agreements or 45 days, whichever is earlier, Brown Hotels and its representatives, including the lessors, committed not to engage in negotiations regarding the transactions covered by the memoranda. Subject to the completion of the transactions outlined in these memoranda, Israel Canada Hotels will include approximately 3,600 hotel rooms in Israel and Greece.

Despite the 45-day period outlined in the memoranda having passed, due diligence and negotiations are ongoing at this stage without a formal extension.

E. Bonds (Series H)

On June 25, 2024, the Company raised approximately NIS 228.9 million par value Bonds (Series H) at an annual interest rate of 6.95%, for consideration of approximately NIS 226.5 million. The effective annual interest rate is 7.32%.

The bond principal will be repaid in four annual installments on June 30 of each year from 2028 to 2031, equally such that on each date, 25% of the total par value of the bonds will be paid. The first principal payment will be made on June 30, 2028, and the last principal payment will be made on June 30, 2031.

The interest is paid in equal semi-annual installments on December 31, 2024, and on each June 30 and December 31 of each year from 2025 to 2030, while the last interest payment will be on June 30, 2031.

The Company has committed to maintaining the following financial covenants:

• 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 sheet according to the Company's consolidated financial statements will not fall below 15%.

Note 4 - Material Events and Transactions in the Reporting Period (cont.)

E. Bonds (Series H) (cont.)

The interest rate of the bonds 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 1.25 billion.
• Equity to balance sheet ratio on a consolidated basis will not fall below 17%.

As of September 30, 2024, the Company complies with the above financial covenants.

F. Changes in the status of employees and officers of the Company

From March 26, 2024, Mr. Guy Kende was appointed Deputy CEO of the Company.

From May 23, 2024, Mr. Nir Bodaga Bar was appointed CFO of the Company.

As of April 1, 2024, Ms. Meirav Segal ended her role as Deputy CEO and CEO of subsidiaries, and serves as an external adviser to the Company.

From April 1, 2024, Mr. Eran Shani ended his role as Deputy CEO and began serving as CEO of Midtown Jerusalem (Israel Canada) Ltd., which is held by the Company at a holding rate of approximately 74% (indirectly).

From February 28, 2024, Mr. Shlomo Broaris ended his role as VP of Planning and Licensing at the Company.

As of February 15, 2024, Mr. Eldad Avraham ended his role as external director of the Company and was replaced with Ms. Drorit Vilnai as external director.

G. Beit Haneara Project

Further to Note 12b8 of the Company's consolidated financial statements as of December 31, 2023, the repayment date of the loan for the project was extended until June 30, 2026.

H. Purchase of Lease Rights on Real Estate in Ramat Hasharon

Further to Note 32a in the Company's consolidated financial statements as of December 31, 2023, on February 29, 2024, the Company received the committee's protocol, according to which the committee decided to approve the Morasha Employment Zone plan in Ramat Hasharon for the establishment of a complex that will integrate residential, commercial, employment, and public buildings according to the rights approved prior to the plan's deposit approval, regarding which the municipality filed an appeal.

I. Shalom Hotel

Further to Note 32(b) of the Company's consolidated financial statements as of December 31, 2023, on March 21, 2024, the Hotel Company signed a lease and management agreement for the Shalom Hotel in Jerusalem, which includes 288 rooms. The lease period begins on April 1, 2024.

J. Decision on the Distribution of Dividends

Further to Note 32c of the Company's consolidated financial statements as of December 31, 2023, on April 10, 2024, the Company distributed dividend in an amount of approximately 7.75 agorot per share, in a total amount of NIS 25 million.

Note 4 - Material Events and Transactions in the Reporting Period (cont.)

K. Bank Loan Midtown Jerusalem

Further to Note 12b(6) in the Company's consolidated financial statements as of December 31, 2023, on April 21, 2024, an additional amendment to the land financing agreement was signed with the bank to provide an additional credit facility of approximately NIS 80 million. Following this increase, the total credit facility amounted to approximately NIS 650 million. The utilized balance as of September 30, 2024, stands at approximately NIS 639 million. The credit facility bears a variable annual interest rate of Prime + 0.84%.

Refer also to Note 5b regarding the engagement in a vouchers arrangement as well as the addendum to the land financing agreement after the balance sheet date.

L. Beit Eurocom Project

Further to Note 15(l) of the Company's consolidated financial statements as of December 31, 2023, on May 7, 2024, the local committee decided to recommend to the district committee a deposit under the terms of a plan to strengthen building rights in the complex for the construction of a 65-story tower with mixed uses for employment, residence, and commerce. The scope of tradable building rights under the plan is about 91,000 square meters, of which about 23,000 square meters are for employment, 400 square meters for commerce and in addition about 7,000 square meters for public buildings. Following this recommendation, and in light of the increased construction rights relative to the existing plan, the project company recorded appreciation of approximately NIS 25 million (Company's share–50%). The Company has met the conditions and the plan will be transferred to a district committee.

M. Lapid Complex, Tel Aviv Project

Further to Note 15(i) in the Company's consolidated financial statements for December 31, 2023, during the reporting period, the Company completed the purchase of all the shares of the partner in the project.

Additionally, further to Note 12b(2) of the Company's consolidated financial statements as of December 31, 2023, the loan repayment date for the project was extended until September 30, 2026.

N. Midtown Jerusalem

Given the initial development phase of the project, the process of obtaining credit from the bank reflects sales during the construction period and the Company's decision to market a portion of the office spaces totaling 44,607 square meters from the total investment property valued at approximately NIS 139 million. Consequently, these areas were reclassified as real estate inventory starting July 2024, replacing their previous classification as investment property since the acquisition of these properties.

O. Winning a Tender for the Acquisition of Rights to Lot 306, Sde Dov Complex, Tel Aviv

On August 6, 2024, the Tel Aviv-Yafo Municipality Council decided that the Company (through its ultimate ownership), via Pangaea Sde Dov Offices, a limited partnership wholly owned and controlled by the Company (hereinafter: the "Project Partnership"), won a tender managed by the Tel Aviv Municipality for acquiring leasehold rights to Lot 306 under the Tamal 3001 Plan–Eshkol Sde Dov Neighborhood, an area of approximately 4.5 dunams designated for commerce and employment, for a total of approximately NIS 128 million plus VAT (hereinafter: the "Consideration"), which was paid on September 24, 2024, and was thus recognized as investment property in the Company's books.

To pay the Consideration, the Project Partnership entered into a loan agreement (hereinafter: the "Agreement") with a local bank (hereinafter: the "Local Bank") to provide financing for the subsidiary company to acquire the property, pay the VAT, and cover associated expenses related to the acquisition of the land (hereinafter: the "Financing" or "Loan"), under the main terms as follows:

• 1) According to the Agreement with the Bank, the credit facility will be renewed periodically upon the subsidiary company's request, provided that the final repayment date is no later than September 24, 2026.
• 2) A bridge loan of approximately NIS 22 million to pay the VAT amount will be repaid by December 23, 2024.
• 3) The Loan carries a variable annual interest rate of Prime + 0.3%.

Note 4 - Material Events and Transactions in the Reporting Period (cont.)

P. Hotel Litigation

On August 15, 2024, the Hotel Company received a lawsuit amounting to approximately NIS 33.4 million filed against Israel Canada Hotels Ltd. and the CEO of the Hotel Company, Mr. Reuven Elkes, regarding negotiations conducted by the Company with a third party that did not culminate in a binding agreement. At this preliminary stage, the Company is studying the lawsuit. It is noted that the lawsuit does not contest the Company's rights to the Shalom Hotel under its existing lease agreement. According to a legal opinion, the likelihood of the claim being accepted is below 50%.

Q. HaHoshlim Project

On August 22, 2024, a wholly owned and controlled subsidiary of the Company, together with a third party partner in equal shares, completed the acquisition of rights to an office floor in a built project on HaHoshlim Street in Herzliya for approximately NIS 46.2 million (Company's share is NIS 23.1 million). The transaction was completed through bank financing obtained by the Company from a local bank.

The purchased spaces are fully leased, and the rental income has been pledged to the financing bank.

R. Ahad Ha'am Project

As stated in Note 15(f) of the Company's consolidated financial statements as of December 31, 2023, on August 14, 2024, a Form 4 [certificate of occupancy] was issued for the Ahad Ha'am project, and the Company is expected to complete the apartment handover process by the end of 2024.

S. Merger Negotiations Between Israel Canada Hotels and DNA Group

The Company and shareholders of Israel Canada Hotels began negotiations with DNA Group (T.R.) Ltd. (hereinafter: "DNA"), a public company with shares traded on the Tel Aviv Stock Exchange, which to the best of the Company's knowledge is controlled by Barak Rosen and Asaf Touchmair, the Company's controlling shareholders, to execute a share swap between DNA and Israel Canada Hotels. Subject to reaching agreements by the parties, entering into a binding agreement, and obtaining all necessary legal approvals, DNA will become a public subsidiary controlled by the Company and engaged in the hotel sector.

T. Dubnov Project

On May 27, 2024, the Company (via ultimate ownership), through two dedicated subsidiaries, each 80% owned by the Company (hereinafter: the "Dedicated Partnerships") and the remaining 20% by an investor (hereinafter: the "Investor"), won a tender managed by the Israel Land Authority (hereinafter: the "Tender" and "ILA," respectively) to acquire leasehold rights to a plot of approximately 2.4 dunams located at 4–6 Dubnov Street, Tel Aviv (hereinafter: the "Property"). The land is designated for constructing a tower of up to 45 floors, including 170 residential units covering approximately 17,500 square meters (above ground) commercial and office spaces, and approximately 1,500 square meters (net) of public areas, for a total consideration of approximately NIS 437 million plus VAT as required by law.

The consideration for the acquisition was paid as follows:

• 1. An amount equivalent to approximately NIS 46 million was paid by exercising the guarantee provided as part of the tender conditions.
• 1. The remaining consideration of approximately NIS 391 million plus VAT and development expenses (hereinafter: the "Remaining Consideration") was paid on August 22, 2024.

Under the agreement with the Investor, it contributed approximately NIS 80 million to the project.

As mentioned, on August 22, 2024, the Company completed the acquisition of the rights under the Tender. The Remaining Consideration was paid using financing obtained jointly by the Dedicated Partnerships from a local bank in the amount of approximately NIS 354 million, with financing terms of Prime + 0.15% for a period of approximately 12 months. The loan will be renewed as needed and repaid no later than 36 months from its initial drawdown. Additionally, financing for VAT payments of approximately NIS 75 million was obtained under terms of an annual interest rate of Prime + 0.15% for approximately four months.

The acquirers intend to advance permits for the construction of the project per the zoning plan applicable to the Property. It should be noted that, upon acquisition, the Company separated the commercial rights component, which is presented under the investment property section.

Note 4 - Material Events and Transactions in the Reporting Period (cont.)

U. Iron Swords War

Further to Note 31 of the Company's consolidated financial statements as of December 31, 2023:

As of the report's publication date, the impact of the Iron Swords War (hereinafter: the "War") on the Company's operating results exists but is not material and is expected to remain so in the near term unless the conflict escalates. This assessment considers the Company's financial resilience, business condition, cash flow, and project stages. As of the report publication date, there has been no decline in the sales pace of the Company's projects, nor any worsening in the credit terms offered to the Company and/or the willingness of financing entities to provide credit to the Company.

However, the War has caused a shortage of professional labor at construction sites and increased raw material prices, potentially raising execution costs for projects without contractor agreements or those tied to the construction input index. This may also delay project completion dates. The War has also contributed to rising inflation, sustaining a high interest rate environment. Due to rising execution costs, the Company has updated execution costs for projects under marketing without signed contractor agreements. Conversely, the Company's projects revenue estimates have also been updated due to higher housing unit sale prices in various projects (refer to Section A above). Therefore, despite the aforementioned increases in execution costs, the impact on expected gross profit is not material.

Given the uncertainty of the duration of the War and its potential expansion, as of the publication date of the report, it is not possible to fully assess its future effects on Israel's economy generally and the Company's operations in particular. Regarding the hotel sector, as of September 30, 2024, and the Report's publication date, the War did not significantly impact the Company's 2024 results, due to high hotel occupancy, including hosting evacuates from the south and north as needed, while adjusting expenses to the operational scope during this period. After the balance sheet date, the number of evacuees in hotels declined and some of the Company's hotels are expected to return to routine operations. In this case, the prolongation and/or escalation of the War and its impact on the tourism industry (both domestic and international) could affect demand for the Company's hotels and business results of the Company's hotel operations in the coming quarters, which at this stage cannot be estimated. The Hotels Company is also awaiting updates regarding the State's contribution to the renovation costs of hotels that hosted evacuees, and it is likely that this will be expressed in the Hotel Company's subsequent reports.

Regarding the field of income-generating assets of the Company–as of September 30, 2024, and as of the report publication date, there has been no material impact of the War on the occupancy rate and/or execution of ongoing lease payments by the property tenants.

Further prolongation of the conflict and/or expansion of the War on other fronts with great intensity could significantly impact on Company's operations, as they may lead to: (1) the cancellation/reduction of projects and delays in the pace of initiation processes and entry into new projects; (2) delays in the planning, licensing, and execution procedures of projects in a manner that can lead to a delay in the conclusion of the projects and their transfer to buyers; (3) a decline in the financial stability of key subcontractors and suppliers; (4) increased construction costs; (5) a significant decrease in demand for residential units/office spaces/commercial areas marketed by the Company (due to decreased economic capability of potential buyers/tenants, low morale, and uncertainty associated with wartime); (6) decrease in sale/rental prices and/or tenants leaving; (7) restriction on the volume of bank credit available to the real estate sector, increased financing requirements (including requirements for increased equity provided by the Company in projects), tougher financing conditions, and delays in providing the necessary financing to the Company for operations (also dependent, among other things, on the marketing pace apartments/offices/renting spaces in projects); (8) an excess supply of rental spaces; (9) non-compliance of buyers/tenants with obligations to the Company; (10) impact on domestic and incoming tourism in a manner that affects occupancy in hotels managed by the Company, and accordingly, the income and profitability of this sector.

It should be noted that despite the War and the above, from the beginning of the year until shortly before the publication of the report, sales contracts and commitment letters were signed in the Company's projects and in ICR projects for 369 housing units, totaling approximately NIS 2.3 billion, including VAT. Additionally, additional office spaces were sold in the Vertical City and Midtown Jerusalem projects, amounting to approximately NIS 213 million, including VAT.

Note 4 - Material Events and Transactions in the Reporting Period (cont.)

Material Events and Transactions in the Reporting Period in Investee Companies

V. Joint Transaction–A.K.A. Beit Mars Ltd.

Further to Note 8b(4)h of the Company's consolidated financial statements as of December 31, 2023, regarding the engagement of the project company and its shareholders with a third party in an allotment agreement, shares constituting 20% of the issued and paid-up share capital of the project company were allotted to the partner based on an asset value of approximately NIS 770 million. The transaction was completed on February 25, 2024.

W. Vertical City Ltd.

On April 18, 2024, the Company, together with B.S.R. Engineering and Development Ltd. (hereinafter: the "Main Shareholders") and Vertical City Ltd. (hereinafter: the "Seller"), entered into an agreement with Clal Insurance Company Ltd. and Clal Pension and Provident Ltd. (hereinafter jointly: the "Purchaser") whereby the Purchaser will invest a total amount of approximately NIS 160 million in exchange for the allotment of shares (including the provision of a shareholder loan) (hereinafter: the "Consideration") constituting approximately 24.5% of the issued and outstanding share capital of Vertical City Ltd., free and clear of any encumbrances, to be paid to the Seller upon completion of the transaction and subject to the fulfillment of suspensive conditions.

The suspensive conditions for the completion of the transaction, within a period of 120 days from the signing of the agreement, include the following main conditions:

• 1) Approval from the bank that provided financing for the purchase of the land for entering into the agreement and for allocating the shares to the Purchaser .
• 2) Approval from the Competition Authority for entering into the agreement.

Upon completion of the transaction and subject to the fulfillment of the suspensive conditions and the allotment of the shares, the Company will hold approximately 55.9% of the issued and outstanding share capital and voting rights in Vertical City Ltd.

The transaction was carried out at a valuation similar to the value of the land recorded in the books of the associated company, and therefore has no impact on the Company's financial statements.

On June 25, 2024, the suspensive conditions for the Vertical City transaction were fulfilled, and accordingly, 24.5% of the issued and outstanding share capital of Vertical City Ltd. was allotted to Clal, and on June 27, 2024, the full consideration was received.

Furthermore, following the details provided in Note 8b(4)(g) of the Company's consolidated financial statements as of December 31, 2023, on July 28, 2024, the local committee decided to recommend to the district committee the conditional deposit of a plan to increase development rights in the complex to an area of approximately 354,000 square meters, including 277,000 square meters for employment and commerce, 24,000 square meters for public buildings, and 53,000 square meters for residential rental units and student housing. As a result, Vertical City Ltd. recorded an increase in value, net of tax, of approximately NIS 155 million (while the Company's share is approximately NIS 86 million).

X. Joint transaction–St. Petersburg project, Russia:

Further to Note 8b(4)d of the Company's consolidated financial statements as of December 31, 2023, during the nine months ended on September 30, 2024, Morgal received a total of approximately USD 26 million for quarterly payments (through bank letters of credit) on account of the minimum consideration for the second block plots (paid in quarterly payments by way of bank letters of credit) for the updated consideration for the second block plots based on the actual sale prices of the apartments in the project.

Also, during the first quarter, an occupancy permit was received for all the apartments, parking lots, and commercial areas built on the plots of the second block. In this way, in fact, the suspension condition as defined in Note 8b(4)d in the Company's consolidated financial statements for December 31, 2023, in connection with the first and second block plots, has ceased to exist.

After the balance sheet date, Morgal repaid the shareholder loans, while the Company's share is approximately USD 5 million.

Note 4 - Material Events and Transactions in the Reporting Period (cont.)

Material Events and Transactions in the Reporting Period in Investee Companies (cont.)

Y. ICR–Sale of Holdings in Ram Hayarkon

On February 25, 2024, ICR (hereinafter: "ICR") entered into an agreement to sell its holdings (50%) in ICR Ram HaYarkon Ltd. (hereinafter: "HaYarkon Ltd.") to a partner in ICR HaYarkon Ltd., 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 is the return on shareholder loans provided by ICR to Hayarkon).

The sale will be carried out in three stages. Below are the main points of the sale agreement:

• 1) First Stage–Sale of 48% of ICR's holdings in HaYarkon Ltd. (representing 24% of HaYarkon Ltd.'s shares) for a total of NIS 26.4 million, of which approximately NIS 12 million represents the repayment of shareholder loans provided by ICR to HaYarkon Ltd.
• 2) Second Stage–ICR was given an option to require the partner to purchase 50% of ICR's holdings in Hayarkon (constitutes 25% of the shares in the ICR Hayarkon) in exchange for a total of NIS 27.5 million, of which approximately NIS 12.5 million is a repayment of shareholder loans given by ICR to Hayarkon. The option is exercisable as of July 15, 2024, for 30 days. The payment for the option exercise will be made no later than 14 days from the delivery date of the exercise notice. A condition precedent to the transaction is approval from the financing bank of the Hayarkon project for the transfer of the shares and the release of ICR from all its obligations and guarantees in connection with Hayarkon.

On March 19, 2024, the Bank's approval was received for the transfer of the shares and release of ICR from all of its liabilities and guarantees.

On July 15, 2024, the investee company notified the partner that it wishes to exercise the option granted in the second stage to require the partner to purchase 50% of the investee company's holdings in HaYarkon Ltd.

On August 20, 2024, the proceeds of the second stage were received in the amount of approximately NIS 27.5 million.

3) Third Stage–If the option mentioned above is exercised, ICR has the right to require the partner, and the partner has the right to require ICR, to sell the remaining share held by ICR, which constitutes 1% of the Company and 2% of ICR's holdings in the Company, as well as the relevant portion of the owner loan, at a price reflecting the price of the option shares, which is NIS 1.1 million. This amount is linked to the Consumer Price Index from the date of exercise of the second tranche until actual payment, including owner loans provided up to that date, along with interest. The option in the third stage is until the end of the project.

From the signing of the agreement until the end of the exercise of the option, the partner will disburse 99% of the owner's loans that will be required by ICR for its operation.

On March 31, 2024, and July 1, 2024, the first stage and second stage, respectively, were completed and ICR recorded a profit during the reporting period in the amount of approximately NIS 17.5 million (approximately NIS 8.5 million in the three month period ended on September 30, 2024) before tax as part of the other income section.

ICR is accounted for using the equity method.

Note 4– Material Events and Transactions in the Reporting Period (cont.)

Material Events and Transactions in the Reporting Period in Investee Companies (cont.)

Z. Clal transaction in ICR

On August 19, 2024, ICR Israel Canada Ram Holdings Ltd. (hereinafter: "ICR"), a significant associate company held indirectly by the Company at a rate of 50%, entered into an investment agreement with Clal Insurance Company Ltd. (hereinafter: the "Investor"). Subject to the fulfillment of preconditions, ICR will allocate to Clal shares that will constitute 15% of the issued and paid-up share capital of ICR (hereinafter: the "Allotted Shares"), in exchange for an investment of approximately NIS 258 million.

The completion of the transaction is subject to the fulfillment of standard conditions precedent within 90 days from the signing date of the Agreement, including obtaining approvals from third parties. The investment proceeds will also be used to repay owner loans provided to ICR (the Company's share is approximately NIS 67 million). After the balance sheet date, loans were repaid in the amount of approximately NIS 50 million.

On September 30, 2024, all of the conditions precedent for the fulfillment of the transaction were met and the transaction was completed. According to the investment agreement, the Investor was allotted the Allotted Shares in consideration for the investment of Clal in ICR, and shareholder agreements were signed. Upon completion of the transaction, the Company will indirectly hold 42.5% of the issued and paid-up share capital of ICR and the voting rights therein (including on a fully diluted basis).

Upon the completion of the transaction, the Company recorded net profit of approximately NIS 72.5 million.

On September 30, 2024, an addendum was signed to the management and consulting agreement of the shareholders of ICR.

Note 5 - Transactions and Events After the End of the Reporting Period:

A. Investment in Norstar Shares

As of September 30, 2024, the Company has profit before tax of approximately NIS 13 million for the nine months ended September 30, 2024. After the balance sheet date and up to the date of publication of the financial statements, the share price of Norstar increased by approximately 23.5%. If there are no further significant changes in the share price, the Company is expected to record a pre-tax profit of approximately NIS 24 million in the fourth quarter from this investment in these shares.

B. Midtown Jerusalem Bank Loan

Further to the disclosure in Note 4(k), after the balance sheet date, on October 10, 2024, the borrower entered into an addendum to the land financing agreement (hereinafter: the "Land Financing Addendum") and into a voucher arrangement, as detailed below:

• 1. The credit facility was increased by an additional amount of approximately NIS 350 million, bringing the total credit facility to approximately NIS 1 billion .
• 1. The final repayment date for the credit facility and interest was extended to March 31, 2025 (previously October 1, 2024).
• 1. A voucher arrangement was established to issue payment vouchers to buyers in accordance with the Sale (Apartments) Law, 5733-1973 (hereinafter: the "Sale Law"). Under this arrangement, bank guarantees for the buyers of apartments (residential and office) in the project will be provided against receipts deposited into the account via payment vouchers (excluding VAT), up to a maximum amount of NIS 250 million (hereinafter: the "Sale Law Guarantee Facility"). All receipts will be processed via payment vouchers and used for partial repayment of the total credit facility.

Note 5 - Transactions and Events after the End of the Reporting Period (cont.):

C. Sde Dov Project

Further to Note 4(c), after the balance sheet date, on October 10, 2024, the borrower signed a project financing agreement with two local banks (in equal shares) to establish a financing framework of up to NIS 3.2 billion, including financial credit (hereinafter: the "Financial Credit Facility") and guarantees under the Sale Law (hereinafter: the "Sale Law Guarantee Facility"). According to the project financing agreement:

The Financial Credit Facility, up to a total of approximately NIS 1.23 billion, will be used for financing the project's construction costs and repaying the remaining land loan balance.

The credit utilized under the framework will be repaid three months after the project's completion, by December 30, 2029.

The Financial Credit Facility will bear an annual interest rate of Prime + 0.2%.

To secure loan repayment, fixed first-priority liens agreed with the banks were recorded. Additionally, the Company provided the bank with unlimited guarantees to ensure repayment of the Financial Credit Facility.

Additionally, after the balance sheet date, on October 10, 2024, the Company entered into an amendment to the financial covenant compliance commitment letter signed between the Company and a local bank (which is one of the banks as defined above) on November 23, 2021, which constitutes part of the terms of the project financing agreement.

D. Vertical City Bank Loan

Further to Note 8(b)4g in the Company's consolidated financial statements as of December 31, 2023, after the balance sheet date, the repayment date for the remaining loan balance of approximately NIS 791 million was extended by an additional year to November 2025, at an interest rate of Prime + 0.4%.

E. ICR–Bar Kochba Street Land, French Hill, Jerusalem

On November 25, 2024, after the balance sheet date, ICR entered into an agreement (hereinafter: the "Agreement") with a third party unrelated to the Company (hereinafter: the "Purchaser") for the sale of its entire holdings in the French Hill land located on Bar Kochba Street, Jerusalem, for a total consideration of NIS 300 million plus VAT (hereinafter: the "Land" and the "Consideration," respectively).

The details and terms of the Consideration are as follows:

• 1. NIS 5 million was received upon signing the Agreement.
• 1. NIS 25 million plus VAT, along with payment for VAT on the first installment, will be paid within 14 days of signing the Agreement.
• 1. NIS 20 million plus VAT will be paid within 45 days of signing the Agreement.
• 1. NIS 250 million plus VAT will be paid within 90 days of the approval of the urban building plan (hereinafter: the "UBP"), which is currently at the objections stage.

The Agreement includes standard provisions regarding the registration of the Purchaser's rights, tax clearance, and other conditions. It also contains an adjustment/cancellation mechanism in the event of changes in the scope of construction or public obligations included in the approved UBP.

As of the signing date of the Agreement, the remaining loan balance recorded in ICR's books, taken from a financial institution for the purpose of financing the Land acquisition, is approximately NIS 124 million.

Note 6 - Sector Reporting

A. General

Operating segments are identified based on internal reports regarding the Group's components, which are regularly reviewed by the Group's chief operating decision maker for the purpose of resource allocation and evaluating the performance of the operating segments. The reporting system provided to the Group's chief operating decision maker for resource allocation and assessing the performance of various segments is based on geographic regions, the method of marketing the projects, and the way revenue and operating profit are generated from the project. For projects managed in an investee company in which the Company is a partner and which are presented in the financial statements using the equity method, data is reviewed based on the Company's relative share in the project. General and administrative expenses are not attributed to the Company's segments and therefore appear under unallocated expenses.

The following are the Company's operating segments in accordance with IFRS 8:

Segment A–Project development 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.
Segment B–Real estate in Israel:	Generates its revenue from the Company's activities in selling and/or marketing land in Israel.
Segment C–Investment Real Estate 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 6 - Sector Reporting (cont.)

B. Analysis of Income and Expenses Based on Sector of Activity:

	For the nine month period ended on Sept. 30, 2024 (unaudited)
	Establishing projects in Israel NIS	Real property in Russia NIS	Real property in Israel NIS	Investment real estate in Israel NIS	Hotels NIS	Other NIS	Adjustments NIS	Total NIS
	thousands	thousands	thousands	thousands	thousands	thousands	thousands	thousands
Income	371,020	49,212	37,508	57,903	229,523	14,365	(332,359)	427,172
Sector's results	57,969	48,432	20,393	160,276	38,831	(2,748)	(221,521)	101,632
Unattributed expenses								(59,420)
Profits of investee companies								219,595
Financing expenses								(86,773)
Financing income								38,982
Profit (loss) before income tax								214,016
Sector assets	5,007,023	230,540	1,215,825	3,446,862	1,125,893	285,373	(1,325,801)	9,985,715
Sector liabilities	(3,759,771)	(84,179)	(588,777)	(1,870,199)	(907,945)	(154,667)	690,387	(6,675,151)

Note 6 - Sector Reporting (cont.)

B. Analysis of Income and Expenses Based on Sector of Activity (cont.):

	For the nine month period ended on Sept. 30, 2023 (unaudited)
	Establishing projects in Israel NIS	Real property in Israel NIS	Investment real estate in Israel NIS	Hotels NIS	Real property in Russia NIS	Other NIS	Adjustments for consolidated NIS	Total NIS
	thousands	thousands	thousands	thousands	thousands	thousands	thousands	thousands
Income	496,349	65,957	49,427	232,079	32,710	19,935	(454,733)	441,724
Sector's results	72,573	42,987	11,811	6,327	20,048	5,319	(83,377)	75,688
Unattributed expenses Profits of investee companies Financing expenses Financing income								(41,162) 21,318 (247,229) 43,303
Profit (loss) before income tax								(148,082)
Sector assets	4,092,735	1,223,333	3,501,139	976,262	198,280	239,634	(1,920,030)	8,311,353
Sector liabilities	(3,326,564)	(588,068)	(1,855,870)	(775,083)	(84,179)	(111,731)	1,215,427	(5,526,068)

Note 6 - Sector Reporting (cont.)

B. Analysis of Income and Expenses Based on Sector of Activity (cont.):

	For the three month period ended on Sept. 30, 2024 (unaudited)
	Establishing projects in Israel NIS thousands	Real property in Russia NIS thousands	Real property in Israel NIS thousands	Investment real estate in Israel NIS thousands	Hotels NIS thousands	Other NIS thousands	Adjustments NIS thousands	Total NIS thousands
Income	111,838	503	14,590	20,543	85,578	5,121	(94,189)	143,984
Sector's results	18,831	242	7,631	113,561	8,400	(2,549)	(140,164)	5,952
Unattributed expenses Profits of investee companies Financing expenses Financing income								(16,412) 172,442 (6,389) 19,594
Profit (loss) before income tax								175,187

Note 6 - Sector Reporting (cont.)

B. Analysis of Income and Expenses Based on Sector of Activity (cont.):

	For the three month period ended on Sept. 30, 2023 (unaudited)
	Establishing projects in Israel NIS thousands	Real property in Israel NIS thousands	Investment real estate in Israel NIS thousands	Hotels NIS thousands	Real property in Russia NIS thousands	Other NIS thousands	Adjustments for consolidated NIS thousands	Total NIS thousands
Income	161,361	10,527	15,513	85,084	915	3,227	(135,373)	141,254
Sector's results	23,550	5,624	20,598	5,913	(11,340)	2,314	(24,116)	22,543
Unattributed expenses Profits of investee companies Financing expenses Financing income								(13,971) 4,648 (24,389) 20,848
Profit (loss) before income tax								9,679

Note 6 - Sector Reporting (cont.)

B. Analysis of Income and Expenses Based on Sector of Activity (cont.):

		For the year ended Dec. 31, 2023 (audited)
	Establishing projects in Israel NIS thousands	Real property in Israel NIS thousands	Investment real estate in Israel NIS thousands	Hotels NIS thousands	Real property in Russia NIS thousands	Other NIS thousands	Adjustments for consolidated NIS thousands	Total NIS thousands
Income	893,562	79,785	65,707	309,908	34,177	27,754	(776,430)	634,463
Sector's results	99,797	51,562	115,100	31,374	21,935	6,335	(126,572)	199,531
Unattributed expenses Profits of investee companies Financing expenses Financing income								(56,217) 34,848 (263,654) 61,719
Profit (loss) before income tax								(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)

Note 7 - Investments Accounted for Using the Equity Method

A. Summary Financial Information for a Material Associate Company–Morgal Investments LLC

The amounts below are as they appear in the reports of the associate company:

		As of Sept. 30
	2024	2023	2023
	NIS	NIS	NIS
	thousands	thousands	thousands
		(Unaudited)	(Audited)
Current assets	150,061	31,360	43,390
Non-current assets	258,745	293,318	289,411
Current liabilities	(108,885)	(67,180)	(65,389)
Non-current liability	(58,457)	(96,878)	(93,982)
Equity attributable to the Company's shareholders	(241,465)	(160,620)	(173,430)
Company's net share of the equity	120,732	80,310	86,715
Loans and other adjustments	57,869	(59,976)	57,576
Book value of the investment in the associate company	178,601	140,286	144,291

		For the nine month period ended as of Sept. 30		For the three month period ended as of Sept. 30	For the year ended on Dec. 31 2023 NIS thousands
	2024	2023	2024	2023
	NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands
	(Unaudited)			(Unaudited)
Income	98,423	61,824	1,005	-	61,824
Gross profit	98,423	37,602	1,005	-	38,651
Operating profit (loss)	96,983	(20,122)	(6,189)	537	(21,778)
Profit (loss) after tax	71,321	(25,241)	(5,604)	22,156	(35,253)
Profit (loss) belonging to the Company's shareholders	71,321	(25,241)	(5,604)	22,156	(35,253)
Company's share of profit (loss)	35,660	(12,620)	(2,802)	11,078	(17,626)

Note 7 - Investments Accounted for Using the Equity Method (cont.):

B. Summary Financial Information for a Material Associate Company–Israel Canada Ram Projects Ltd. (ICR)

The amounts below are as they appear in the reports of the associate company: The financial statements of the associate company are attached to the Company's reports in accordance with Article 23(a).

	As of Sept. 30	As of Dec. 31
	2024	2023	2023 NIS
	NIS	NIS
	thousands	thousands	thousands
	(Unaudited)		(Audited)
Current assets	3,464,188	2,974,970	3,086,014
Non-current assets	105,813	160,911	151,218
Current liabilities	(2,593,936)	(2,446,861)	(2,511,876)
Non-current liability	(415,782)	(279,220)	(474,607)
Equity attributable to the Company's shareholders	(560,283)	(409,800)	(250,749)
Company's net share of the equity	238,120	204,900	125,374
	100,565	66,842	158,343
Loans and other adjustments
Book value of the investment in the associate
company	338,685	271,742	283,717

	For the nine month period ended on Sept. 30		For the three month period ended on Sept. 30		For the year ended on Dec. 31
	2024	2023	2024	2023	2023
	NIS	NIS	NIS	NIS	NIS
	thousands	thousands	thousands	thousands	thousands
		(Unaudited)	(Unaudited)		(Audited)
Income	623,375	848,430	187,963	286,917	1,616,783
Gross profit	132,415	148,255	44,761	52,223	198,463
Operating profit	121,913	112,566	44,466	41,612	157,745
Profit after tax	52,473	65,741	21,183	22,264	86,310
Profit belonging to partners	52,473	65,741	21,183	22,264	86,310
Company's share of profit	26,237	32,870	10,592	11,132	43,155

Note 7 - Investments Accounted for Using the Equity Method (cont.):

C. Summary Financial Information for a Material Associate Company–Vertical City Ltd.

The amounts below are as they appear in the reports of the associate company:

The financial statements of the associate company are attached to the Company's reports in accordance with Article 23(a).

	As of Sept. 30		As of Dec. 31
	2024	2023	2023
	NIS	NIS thousands	NIS thousands
	thousands
	(Unaudited)		(Audited)
Current assets	737,860	2,511	587,167
	1,014,861	1,308,113	744,218
Non-current assets
Current liabilities	(803,431)	(27,041)	(817,617)
Non-current liability	(557,448)	(1,199,643)	(431,619)
Equity attributable to the Company's shareholders	(391,842)	(83,940)	(82,149)
Company's net share of the equity	219,000	62,116	60,790
Loans and other adjustments	257,946	289,142	312,116
Book value of the investment in the associate company	476,946	351,258	372,906

	For the nine month period ended on Sept. 30		For the three month period ended on Sept. 30		For the year ended on Dec. 31
	2024 NIS	2023 NIS	2024 NIS	2023 NIS	2023 NIS
	thousands thousands (Unaudited)		thousands thousands (Unaudited)		thousands (Audited)
Income	-	-	-	-	-
Gross profit	-	-	-	-	-
Operating profit (loss)	201,063	(43,261)	213,073	(6,474)	(54,893)
Profit (loss) after tax	156,534	(33,028)	165,095	(4,814)	(41,807)
Profit (loss) belonging to the partners	156,534	(33,028)	165,095	(4,814)	(41,807)
Company's share of profit (loss)	86,007	(24,441)	92,288	(3,563)	(30,937)

Note 8–Approval of the Reports:

The financial statements were approved for publication on November 26, 2024 by the Company's Board of Directors.