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Azorim Investment, Development and Construction Co. Ltd.

Board of Directors' Report on the State of the Company's Affairs

Board of Directors' Report for the three-month period ended March 31, 2026
Condensed interim financial statements as of March 31, 2026
Condensed interim separate financial information as of March 31, 2026
Quarterly report on the effectiveness of internal control over financial reporting and disclosure as of March 31, 2026

Below is a link to the accessible version of the financial report for the first quarter of 2026, which will be uploaded to the company's website shortly after the publication of the report on Magna, as early as possible. /https://ir.azorim.co.il/. For the avoidance of doubt, in any case of inconsistency between the information appearing in this report and the information in the report published on the Magna website, the binding version shall be the version published on the Magna website.

Azorim Investment, Development and Construction Co. Ltd.

Board of Directors' Report on the State of the Company's Business
For the three-month period ended March 31, 2026

The Board of Directors of Azorim Investment, Development and Construction Co. Ltd. ("the Company") is pleased to submit herewith the Board of Directors' Report on the Company's activities for the three-month period ended March 31, 2026, and its explanations to the consolidated interim financial statements of the Company as of March 31, 2026 ("the Report Period" and "the Financial Statements", respectively), pursuant to the Securities Regulations (Periodic and Immediate Reports), 1970 ("the Report Regulations"). As of the date of this report ("the Report Date"), the Company's business activities are carried out mainly through its wholly-owned subsidiary - Azorim Construction (1965) Ltd. ("Azorim Construction"). The Company and its subsidiaries shall be referred to collectively in this report as the "Group".

The description of the Group and its business environment within this report includes a limited overview of the matters in which it is engaged and is prepared on the assumption that the reader also has the Company's Periodic report for the year 2025, published on March 27, 2026 (reference number: 2026-01-028342) (together: "the 2025 Periodic report"), including the 2025 Board of Directors' Report which was included in the 2025 Periodic report ("the 2025 Board of Directors' Report"). This report also includes updates to Chapter A (Description of the Company's Business) of the 2025 Periodic report ("the Company's Business Description Chapter").

It is clarified that generally, the description included in this report, in all its parts, includes information that in the Group's opinion is material information; however, in some cases, the Group included a detailed description beyond what is required, which also includes information that in its opinion is not necessarily material, for the sake of completeness.

It should be emphasized that the description in this report includes forward-looking information, as defined in the Securities Law, 1968 ("Securities Law"). Forward-looking information is uncertain information about the future, including forecasts, assessments, estimates, or other information, relating to a future event or matter whose realization is uncertain and/or is not within the Company's control. The forward-looking information included in this report is based on information or assessments existing in the Company as of the date of this report, which may not materialize or may materialize differently than expected, including due to circumstances that are not within the Company's control or are not under its exclusive control and/or the occurrence of any of the risk factors to which the Company is exposed as detailed in Section 19 of the Company's Business Description Chapter.

Part A - Board of Directors' Explanations on the State of the Company's Business

Update of information regarding main projects of the Company in which a change occurred during and after the report period
1.1 Halav U'Dvash, Jerusalem (Combination)

As part of the project, in which performance work began based on a shoring and excavation permit, 207 housing units will be established (of which 108 housing units are for marketing by the Company) in four buildings, of which one building is 18 stories and 3 additional residential buildings are 9 stories, above a commercial floor with an area of approximately 2,200 square meters and 3 basement parking levels, as well as public buildings. In February and March 2026, construction permits were received and the Company began the construction work of the project which is expected to last about 46 months. According to the Company's assessment, revenues from the project (including the combination component and excluding the commercial component) are expected to total approximately NIS 459 million (excluding VAT) and the gross profit is expected to total approximately NIS 72 million.

1.2 N HaHistadrut, Netanya (Urban Renewal)¹

As part of the project, 4 old buildings will be demolished, including 56 housing units of the rights holders in the land, and in their place 2 residential buildings of 18 stories and another residential building of 9 stories will be established above a ground floor and 4 basement parking levels, including 182 housing units (of which 126 housing units are for marketing by the Company). In December 2025, a construction permit for the project was received and in May 2026, evacuation notices were sent to the rights holders in the compound. According to the Company's assessment, construction work, which is expected to last about 44 months, will begin during the third quarter of 2026, after completion of the evacuation of existing residents. According to the Company's assessment, revenues (in 100% terms) from the project are expected to total approximately NIS 457 million (excluding VAT) and the gross profit (in 100% terms) is expected to total approximately NIS 69 million.

1.3 Yitzhak Elhanan (Urban Renewal)²

As part of the project, 4 buildings including 108 housing units will be demolished, and in their place 5 residential buildings of 6-7 stories are expected to be established above a ground floor and 2 basement parking levels, including 220 housing units (of which 112 housing units are for marketing by the Company). The construction permit for the project was received in November 2025 and in May 2026, evacuation notices were sent to the rights holders in the compound. According to the Company's assessment, construction work, which is expected to last about 39 months, will begin during the third quarter of 2026, after completion of the evacuation of existing residents. According to the Company's assessment, revenues (in 100% terms) from the project are expected to total approximately NIS 742 million (excluding VAT) and the gross profit (in 100% terms) is expected to total approximately NIS 135 million.

¹ This project is expected to be included within the framework of the cooperation agreement with The Phoenix Insurance Company as detailed in Section 1H.1 of the 2025 Board of Directors' Report.

² In May 2026, an allocation of 22.5% of the rights in the project was completed in accordance with the cooperation agreement with The Phoenix Insurance Company as detailed in Section 1H.1 of the 2025 Board of Directors' Report.

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1.4 Completion of construction of projects

During the report period, the company completed the construction and began the occupancy of the Exchange project in Ramat Gan³ which includes 355 residential units and Shaar Ha'ir (Phase A) in Givat Shmuel which includes 157 residential units (including 55 residential units of the landowners).

For additional disclosure regarding projects classified as very material - see Part VII of this report.

2. Update regarding planning progress of urban renewal projects

2.1 HaRav Pardes/Shalem 35 Ramat Gan [Company's share - 50%]

On May 19, 2024, the Tel Aviv District Planning and Construction Committee approved for validation plan no. 506-1004522 - an urban renewal plan at 35 Shalem St., HaRav Pardes Square, RG/1856. The approved plan applies, among other things, to the lands of the company's Shalem 35 project located in the Ramat Shikma neighborhood in Ramat Gan, and includes the demolition of a building comprising 36 residential units and 12 stores and the construction of a residential building of 25 floors above the entrance level, including 122 residential units with a total residential area of approximately 15,000 sqm, approximately 500 sqm of commercial areas, and approximately 500 sqm to be used for public buildings. The company intends to act as soon as possible to issue a building permit for the project.

2.2 Yeda Am/Bialik Ramat Gan

In April 2024, the Tel Aviv District Planning and Construction Committee decided to approve plan 506-0961169 Bialik - Yeda Am Renewal RG/1677, subject to several corrections, and after completion of the publication process of the allocation and balance tables according to Section 106 (b) of the Planning and Building Law. According to the provisions of the plan, 5 residential buildings containing 50 residential units will be demolished and replaced by 150 residential units in a 38-story tower with an area of 17,900 sqm above 4 levels of parking basements, as well as commerce in an area of 500 sqm and a public building in an area of 500 sqm.

The information included in sections 1-2 above regarding the projects, including regarding the project plan, expected revenues, expected gross profit volumes, the number of residential units to be built, and project marketing start dates, is information based on assessments, forecasts, estimates, goals, and economic calculations made by the company whose realization is uncertain and not under the company's control and constitutes forward-looking information, as this term is defined in the Securities Law. Forward-looking information is uncertain information regarding the future, including forecasts, estimates, or other information relating to a future event or matter whose realization is uncertain and/or not under the company's control.

The forward-looking information was prepared, among other things, considering the following factors: (a) current sales prices; (b) construction costs prepared based on work calculations; (c) projected sales pace based on the company's experience; (d) expected dates for receiving building permits; (e) expected proceedings with authorities, including planning and construction authorities, according to the company's experience and (f) expected timing of signing individual contracts with each of the tenants in the vacate-and-build projects and approval of a suitable city building plan. The company's assessments and plans may not be realized or may be realized in a different manner than the company's plans, including in the event that one or more of the following factors occur: (a) an adverse change occurs in the demand for apartments or in the state of the economy and/or in the state of the real estate market in general and in the area where the relevant project is located in particular; (b) changes occur in the expected costs of construction and/or in raw material prices and/or in their availability and/or in construction input prices and/or in personnel availability; (c) non-fulfillment of any of the conditions required for the establishment of the relevant project; (d) the implications of the security situation on the Israeli economy in general and on the company's activity in particular; (e) any of the risk factors to which the company is exposed as detailed in Section 19 of the description of the company's business chapter occur.

³ 75 residential units that were affected by blast damage following a missile that fell near the building were excluded from the occupancy permit until the completion of the repair work. It should be noted that the company has begun performing the necessary repairs which, to the best of the company's assessment, are expected to take several months.

3. Details and update regarding major transactions and engagements performed during and after the report period

3.1 Acquisition of a yield-generating property (under construction) in Ramat Efal

On February 15, 2026, Azorim Building entered into a sales agreement for the purchase of approximately 4,500 gross sqm of commercial space plus 103 parking spaces and associated warehouses ("the Acquired Property"), for a total of approximately 136.4 million NIS plus VAT as required by law. The Acquired Property constitutes the commercial boulevard in a mixed-use project under construction located in Ramat Efal (Ramat Gan) along Rafael Eitan Road, adjacent to the "Mesubim" and "Efal South" light rail stations of the Purple Line. $15\%$ of the consideration was paid upon signing the agreement. The balance of the consideration will be paid to the seller while linked to the construction input index in accordance with the provisions of the Sale Law at the following times: (a) $20\%$ will be paid 12 months after the signing date of the agreement; and (b) $65\%$ will be paid upon receipt of the seller's notice that the construction of the Acquired Property has been completed. According to the terms of the agreement, the seller committed to deliver the Acquired Property to the company at shell level by December 31, 2028. In the event of a change in the area of the Acquired Property at a rate exceeding $5\%$ of the total commercial areas, the company shall be entitled to give notice of cancellation of the agreement.

3.2 Winning a tender for land purchase in Rishon LeZion

On March 9, 2026, the company received a notification from the Rishon LeZion Municipality that Azorim Building won a tender for the purchase of ownership rights in plot no. 104 according to plan 413-1275783, block 3947 in part of plot 108 in Rishon LeZion ("the Plot"). The plot has an area of approximately 4,861 sqm and according to the provisions of the current city building plan, 226 residential units can be built on it. During March 2026, the company completed the payment of the consideration totaling approximately 306.5 million NIS (plus VAT as required by law) for the acquisition of the ownership rights in the plot. As of the date of approval of this report, all approvals constituting a condition precedent for the entry into force of the real estate purchase agreement have not yet been received. For further details, see the company's immediate reports from February 24, 2026 (Ref. No.: 2026-01-017154) and March 9, 2026 (Ref. No.: 2026-01-020953) included in this report by way of reference.

4. Information update regarding other events that occurred during and after the report period

4.1 Private placement of shares and warrants

On February 25, 2026, the company completed a private placement of 8,658,010 ordinary shares of the company, registered in name, with a par value of 1 NIS each, as well as an allocation of 4,329,005 warrants not listed for trading, exercisable into 4,329,005 company shares, for a total (gross) consideration of 200 million NIS. The warrants are exercisable on any trading day on the stock exchange, starting from their allocation date and for a period of two years against cash payment of the exercise price in the amount of 30 NIS for each warrant. The exercise price of the warrants and/or the quantity of shares resulting from the exercise of the warrants will be subject to customary adjustments such as capital consolidation, capital split, distribution of bonus shares, rights issuance, and dividend distribution. For further details, see the report from February 20, 2026 (Ref. No.: 2026-01-016437) brought in this report by way of reference.

Approval of the purchase of a directors' and officers' liability insurance policy in the company

On March 2, 2026, the company's Compensation Committee approved the purchase of a directors' and officers' liability insurance policy, under terms similar but not identical to the existing policy's terms, for the period from March 10, 2026 (the end of the existing insurance policy period) until September 9, 2027 (a period of 18 months), with a liability coverage limit of up to $35 million (per case and in aggregate for the insurance period), with a deductible in an amount not exceeding a total of $125 thousand, for a premium totaling $198.8 thousand (annual premium totaling $132.5 thousand) to cover claims received during this period. In addition, the company entered into a directors' and officers' liability insurance policy of the SIDE A DIC (Difference in Conditions) type for the same period, with a liability coverage limit of up to $5 million, for a premium totaling $31.8 thousand (annual premium totaling $21.2 thousand). The approval of the engagement in the company's Compensation Committee was made in accordance with the company's compensation policy and in accordance with Regulation 1B1 of the Companies Regulations (Reliefs in Transactions with Interested Parties), 5760-2000. For further details, see the company's immediate report from March 10, 2026 (Ref. No.: 2026-01-021127), included in this report by way of reference.

4.3 Partial arbitration award in the proceedings against Geha Buildings and Investments Ltd.

On April 13, 2026, a partial arbitration award was received regarding the issue of liability in the lawsuit filed by Geha Buildings and Investments Ltd. ("Geha" and/or "the Plaintiff"), a company that jointly holds with a consolidated company of the company, Azorim Properties Ltd. ("the Consolidated Company"), a land parcel at the Geha Junction ("the Land"), against the Consolidated Company and against the company, and also regarding a counterclaim filed by the Consolidated Company against Geha. For the main points of the partial arbitration award, see the immediate report from April 14, 2026 (Ref. No.: 2026-01-034114) brought in this report by way of reference.

4.4 Dividend distribution

On April 13, 2026, a dividend in-kind distribution was performed of approximately 7,000,000 Azorim Living shares whose value as of that date totaled 36.38 million NIS, and on April 16, 2026, a cash dividend distribution was performed in a total amount of 20 million NIS, in accordance with the decision of the company's board of directors from March 26, 2026. The total dividend distributed to the company's shareholders as of that date represented 0.2565 NIS per ordinary share of 1 NIS par value of the company. For further details, see the immediate reports from March 27, 2026 (Ref. Nos.: 2026-01-028345 and 2026-01-028346) brought in this report by way of reference.

4.5 Special general meeting of the company's shareholders

On May 4, 2026, the Special General Meeting of the company's shareholders made a decision to approve the granting of a bonus of two months' salary to Mr. Adi Dana, the company's CEO. For further details, see the meeting invitation report and its results from March 30, 2026, and May 4, 2026 (Ref. Nos.: 2026-01-029861 and 2026-01-041138) included in this report by way of reference.

4.6 Intention to issue BONDS by Azorim Miroza Ltd. ("Miroza")

During the report period, the company's board of directors decided on the issuance of BONDS on the Tel Aviv Stock Exchange ("the Stock Exchange") by Miroza, a private company incorporated in Israel wholly owned by the company which holds (through a subsidiary in the USA) operations in the USA. The BONDS are expected to be secured by a first charge on

the Miroza Tower residential rental project in Yonkers, USA, and on the shares of the company holding the asset. The proceeds of the issuance (totaling up to 300 million NIS) are primarily intended to be used by the company in the USA for the repayment of the construction loan provided to it. Miroza submitted an application for an authorization to publish a prospectus based on its 2025 financial reports, which is expected to be received shortly after the approval of this report. For further details, see the company's immediate report from April 14, 2026 (Ref. No.: 2026-01-034351), brought in this report by way of reference.

4.7 The impact of the security situation on the company's activity

As stated in section 8 of the Board of Directors' report for the year 2025, and as of the date of approval of this report, uncertainty still exists regarding the renewed development of the war, its scope, its duration, and especially regarding the extent of its future impacts on economic activity in the market, on the financial markets, and on the company's fields of activity in Israel, and as a result, among other things, regarding the ability to meet the timelines for the delivery of residential units to which the company committed, regarding the timing of its revenue receipt and their volume, regarding the demand volumes in the short and medium term, regarding the impact on existing customers' ability to meet contractual payments, regarding the group's costs including in connection with contractors' requirements to bear part of the increase in construction costs, and also the implications for financing sources that will be provided to finance its activity. Therefore, at this stage, the company cannot evaluate the full extent of the war's impact on the company's activities, its business, and its results.

On February 28, 2026, Operation "Lion's Roar" began, a large-scale campaign by the United States and Israel against Iran that developed into confrontations in additional arenas in the Middle East, including a confrontation against Hezbollah on the northern border. These events, alongside the closure of the Strait of Hormuz by Iran, led to disruptions in the global energy supply, which may affect the macro-economic situation and inflation globally and in Israel. As of the date of this report, negotiations are taking place between the US and Iran under a temporary ceasefire framework. Also with Lebanon, there is a ceasefire framework, but in practice, only a tense calm prevails that includes mutual attacks.

It should be noted that from the outbreak of Operation "Lion's Roar" until the publication date of this report, a decrease in apartment sale transactions was recorded, among other things, due to the company's sales offices being partially closed to the public (during the operation period) and also (according to the company's assessment) due to the sense of uncertainty on the part of buyers resulting from the security situation (during the ceasefire period). Furthermore, as a general rule, the impact of Operation "Lion's Roar" on activity at the company's construction sites is not material (however, notices were received from certain contractors regarding an increase in the shortage of personnel and potential implications of the operation).

It should be emphasized that the aforementioned information includes forward-looking information as defined in the Securities Law. Forward-looking information is uncertain information regarding the future, including forecasts, assessments, estimates, or other information relating to a future event or matter whose realization is uncertain and/or not under the company's control. The forward-looking information detailed above is based on the information available to the company and on the company's assessments as of this date, which, as stated, may not be realized and/or may be realized differently, among other things, due to factors unknown to the company as of this date and also not under its control, including the risk factors to which the company is exposed, as detailed in Section 19 of the Corporate Business Description chapter.

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5. Projects in Israel

Projects under construction or marketing:

Project Name	Location	Corp. Share in Project (%)	Completion Rate 31.3.2026 (%)^{4}	Estimated Construction Completion Date	Total Units in Project	Units for Marketing	Total Units Sold as of 31.3.2026	Cumulative Sales Volume as of 31.3.2026^{5}	Total Expected Revenue in Project^{6}	Total Expected Revenue from Signed Contracts - Excluding Combination Component	Average Sale Price per SQR on which Expected Revenue were Calculated^{7}	Unrecognized Revenue as of 31.3.2026	Total Expected Gross Profit in Project	Unrecognized Gross Profit as of 31.3.2026	Recognized Gross Profit in Period	Recognized Gross Profit in Period	Expected Surplus Balance^{8}
Woman Bar Yarn^{9}	Bat Yarn	100%	92%	03 2026	714	572	549	1,226,453	1,475,686	1,297,661	24	181,156	223,395	21,764	50,147	9,596	146,589
N Sokotov^{10}	Natanya	100%	90%	03 2026	264	202	156	374,280	582,354	517,184	25	185,624	128,418	44,352	24,107	5,608	134,565
Boutique Hallouvin^{11}	Jerusalem	100%	84%	03 2026	16	16	16	128,205	128,205	128,205	72	20,641	3,596	579	9,617	(330)	-
Nafid Amara	Jerusalem	100%	82%	04 2026	48	48	22	80,650	148,855	148,855	33	82,349	37,193	19,011	4,410	1,247	39,326
Symphony	Helen	100%	93%	04 2026	100	100	54	138,743	249,173	249,173	30	121,589	60,761	26,370	10,167	1,092	66,973
Tramart Nahariya - Phase C	Nahariya	100%	85%	04 2026	195	195	186	271,736	287,266	287,266	15	56,402	65,058	13,396	16,919	4,130	87,019
N Weizmann^{12}	Natanya	100%	87%	01 2027	292	221	135	330,263	655,212	572,374	27	296,009	137,175	66,334	41,257	8,625	168,374
Nass Kredal - Boutique Building^{13}	Tel Aviv	33%	52%	02 2027	56	56	35	70,272	108,330	108,330	50	71,853	29,664	20,092	9,695	2,563	20,260
Ramas B^{14}	Tel Aviv	100%	72%	02 2027	23	9	0	19	104,489	74,493	75	83,004	11,386	9,401	2,111	224	39,547
Hafim East	Natanya	100%	66%	03 2027	202	202	154	391,320	539,998	539,998	28	283,624	226,971	116,368	44,970	19,223	208,655
Central Park Phase C - Building 5	Beer Shena	50%	57%	04 2027	135	135	67	52,828	112,809	112,809	17	82,855	21,703	17,853	5,006	616	80,515
U Harbin - Phase A^{15}	Haifa	100%	48%	01 2028	368	258	179	389,093	687,110	560,741	22	439,890	110,811	73,072	32,408	3,306	165,258
Vita Handiya, Complex 5^{16}	Handiya	100%	22%	02 2028	186	122	56	234,658	641,969	544,820	42	568,136	163,626	146,008	14,329	3,208	160,588
Central Park Phase C - Building 6+7	Beer Shena	50%	14%	04 2028	270	270	4	4,321	204,433	204,433	15	203,830	20,761	20,664	602	97	-^{4}
Amora Residence^{17}	Jerusalem	100%	9%	01 2029	144	96	69	261,021	468,249	384,825	38	435,841	105,246	98,039	15,956	3,545	79,975
Melaos Hakata	Jerusalem	50%	12%	02 2029	374	374	82	144,611	668,126	668,126	42	650,364	157,202	152,511	4,552	1,223	206,334
Shaar Haji - Phase B^{18}	Ossat Shinyat	100%	8%	03 2029	210	153	48	138,093	532,521	464,292	30	515,789	112,647	108,961	5,123	1,246	100,351
Har Nef Miki and Haray^{19}	Jerusalem	100%	7%	01 2030	207	108	12	39,197	460,866	337,174	40	460,866	73,368	73,368	-	-	59,869
Hamid adrul	Natanya	100%	9%	01 2030	182	126	3	6,786	454,254	378,845	23	454,254	74,325	74,325	-	-	87,314
Vishak Elchanan	Ramat HaSharon	75.69%	9%	01 2030	220	112	2	11,417	741,765	572,213	51	741,765	135,169	135,169	-	-	99,962
Vita Handiya, Complex 2^{20}	Handiya	100%	1%	02 2030	392	258	45	180,520	1,199,940	1,041,196	40	1,199,940	231,219	231,219	-	-	326,439
Pashifor Boulevard^{21}	Tel Aviv	38%	9%	02 2030	178	98	15	27,595	216,456	172,144	49	216,456	22,910	22,910	-	-	24,089
Bell Hallorem 22^{8}	Jerusalem	75%	1%	04 2031	165	165	27	40,645	430,655	430,655	50	430,655	129,997	129,997	-	-	133,403
Total					4,941	3,896	1,910	4,538,725	11,098,723	9,795,813	837	7,782,892	2,282,601	1,621,763	291,375	65,220	2,435,403

() Projects where land was purchased under a combination transaction or urban renewal projects. Total revenues presented for these projects include revenues from construction services to land owners (combination component).
() Financial data for the expected surplus balance shown in the table are for residential units only and do not include revenues, profits and additional surpluses that will arise from commercial and employment areas built within the projects.
(**) Data regarding the volume of housing units in this table refer to the entire project (including partner's share). The financial data refer to the company's share only.
4 Completion rate is determined according to the ratio of actual execution costs to the total expected execution costs in the project. These costs do not include land cost and other costs that do not indicate work progress.
5 Includes considerations for upgrade agreements of rights holders in urban renewal projects and performance of balancing payments to rights holders in a combination transaction.
6 Total expected revenues in the project and total revenues recognized in the period include revenues from construction services to the land rights holders (combination component) as well as the impact of various financing benefits provided under the sale agreements.
7 Average selling price per SQR was calculated as the division of the volume of expected revenues from the sale of apartments in the project (including VAT) by the volume of built square meters for sale.
8 The expected surplus balance presented is in accordance with the supervisory reports as of the date of the report, prepared for the project's financing entity, deducting the surpluses attributed to the commercial and employment areas established within the project (as applicable). It should be clarified that the company does not perform a weighting in this framework, an update of the value of the unpaid inventory to current market prices. It should also be noted that the company tends to deposit in some of the project escort accounts amounts exceeding the equity requirement set in the framework of the escort agreements, as part of actions to save on financing costs of the company. As detailed in section 10.1 - the company has the ability to withdraw these excess amounts from the escort accounts in the short term and the company tends to do so according to its liquidity needs. The main changes that occurred in the surplus balance result from deposits made by the company or withdrawals made by the company as stated above.
9 Surplus balance is included in the Central Park Phase C - Building 5 project.
10 In May 2026, an allocation of 22.5% of the rights in the project was completed in accordance with the cooperation agreement with Phoenix Insurance Company as detailed in section 1.1 of the board of directors report for 2025.

Projects whose construction has been completed:

Project Name	Location	Corp. Share in Project (%)	Housing Units in Project	Units for Marketing	Total Units Sold as of 31.3.2026	Unrecognized Revenue as of 31.3.2026	Unrecognized Gross Profit as of 31.3.2026	Recognized Revenue in Period	Recognized Gross Profit in Period	Expected Surplus Balance
Exchange Ramat Gan	Ramat Gan	100%	355	355	287	345,608	126,081	49,656	13,840	129,701

Project Name	Location	Corp. Share in Project (%)	Housing Units in Project	Units for Marketing	Total Units Sold as of 31.3.2026	Unrecognized Revenue as of 31.3.2026	Unrecognized Gross Profit as of 31.3.2026	Recognized Revenue in Period	Recognized Gross Profit in Period	Expected Surplus Balance
Shaar Hair - Phase A (*)	Givat Shmuel	100%	157	102	78	73,255	13,510	49,937	16,387	-11
Hofim (*)	Netanya	100%	115	63	34	99,912	28,910	3,343	690	57,576
Oliver	Tel Aviv	50%	58	48	39	12,892	4,225	(1,648)	(650)	13,325
HaNarkis - Urban Complex	Rishon LeZion	100%	99	99	97	9,266	2,996	-	-	8,452
HaNarkis - Park Complex	Rishon LeZion	100%	152	152	151	5,155	2,332	-	-	3,702
HaNarkis - Avenue Complex	Rishon LeZion	100%	212	212	210	5,594	1,499	14	14	1,499
Others						-	-	88	771	-
Total			1,148	1,031	896	551,682	179,553	101,390	31,051	214,255

(*) Projects where land was purchased under a combination transaction or urban renewal projects. Revenues presented for these projects include revenues from construction services to land owners (combination component).

(**) Data regarding the volume of housing units in this table refer to the entire project (including partner's share). The financial data refer to the company's share only.

The information included in the tables above regarding projects concerning expected revenues, expected gross profit, completion dates and expected surplus balance, is information based on estimates, forecasts, targets and calculations made by the company whose realization is uncertain and not under the company's control and is forward-looking information, as this term is defined in the Securities Law. Forward-looking information is uncertain information about the future, including forecasts, estimates or other information relating to a future event or matter whose realization is uncertain and/or not under the company's control. The forward-looking information was prepared, among other things, taking into account: (a) current sale prices; (b) construction costs prepared based on work calculations; (c) the projected sales rate based on the company's experience; (d) dates for receiving building permits and (e) the progress rate of the establishment works and receipt of the completion form.

Company estimates and plans may not occur or may occur differently from company plans, including if one or more of the following factors occurs: (a) an adverse change occurs in demand for apartments or the state of the economy and/or the state of the real estate market in general and in the area where the project is located in particular; (b) changes occur in expected construction costs and/or raw material prices and/or their availability and/or construction input prices and/or workforce availability; (c) non-fulfillment of any of the conditions required for establishing the project; (d) the consequences of the security situation on the Israeli economy in general and on company activity in particular; (e) any of the risk factors to which the company is exposed occur as detailed in section 20 in the Company's Business Description chapter in the periodic report for 2025 of the company.

11 Surplus balance included in the Shaar Hair - Phase B project.

6. Financial Position Analysis

Following are data (in NIS millions) from the financial statements items and explanations for the main developments that occurred in the period:

6.1 Company Assets

Below is a breakdown of the company's assets for March 31, 2026 and December 31, 2025:

31.12.2025
מש"ח 8,409

31.3.2026
מש"ח 9,264

Detail of main changes regarding company assets

6.1.1 Cash and cash equivalents

The balance of cash and cash equivalents as of March 31, 2026 amounted to approximately NIS 173 million compared to a total of approximately NIS 136 million as of December 31, 2025. For details regarding changes in the balance of cash and cash equivalents, see section 10 below.

6.1.2 Inventory of buildings for sale

The inventory of buildings for sale increased by approximately NIS 167 million during the report period. The increase in inventory of buildings for sale resulted mainly from charging construction costs of approximately NIS 465 million (including combination costs of approximately NIS 113 million) to the projects' inventory. On the other hand, costs for projects in construction stages and projects that were completed in the amount of approximately NIS 298 million were deducted to profit and loss.

6.1.3 Lands

The increase in the land balance by approximately NIS 488 million stems mainly from land purchases in Beer Yaakov and Rishon LeZion made during the report period.

6.1.4 Investment property

The main increase in investment property of approximately NIS 56 million results from investment in residential projects intended for rental under construction in the United States and projects in Israel that include commercial and employment areas in the amount of approximately NIS 65 million (including capitalized financing and combination costs of approximately NIS 12 million). On the other hand, during the report period, there was a decrease in the balance of assets in the United States by approximately NIS 10 million following the decrease in the exchange rate of the Dollar.

6.2 Liabilities and Equity

Following is a breakdown of the main liabilities and equity of the company for March 31, 2026 and December 31, 2025:

31.12.2025
8,409

31.3.2026
9,264

Detail of main changes in company liabilities and equity

6.2.1 Company financial liabilities

The company's main debt components include credit taken for the benefit of project financing, land acquisition and income-producing real estate as well as BONDS issued to the public.

Following is a breakdown of the company's debt components as of March 31, 2026 compared to December 31, 2025 $(^{*})$ :

* BONDS (Series 15) in a total of approximately NIS 179 million (as of December 31, 2025 - NIS 179 million) secured by a lien on the rights in the Herzliya Hills project are presented under investment property financing.
** Loans taken for the purpose of purchasing land in mixed-use destinations were attributed according to the land classification.
*** The increase in land credit during the report period stems from the purchase of land in Beer Yaakov and Rishon LeZion.

Credit from banking and other corporations (long term and short term)

During the report period, credit from banking and other corporations increased by approximately NIS 677 million. The change results from receiving credit (net) as part of escorting projects under construction in the amount of approximately NIS 208 million as well as receiving credit to finance land acquisition in the amount of approximately NIS 446 million and additionally credit to finance construction of an asset in the US in the amount of approximately NIS 28 million. On the other hand, a decrease was recorded in the credit balance in the United States of approximately NIS 5 million, following the decrease in the exchange rate of the Dollar.

6.2.2 BONDS including current maturities of BONDS

During the report period, the balance of BONDS remained without material change.

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6.2.3 Liabilities in respect of contracts (and contract assets)

Below are the changes in the balance sheet items relating to contracts with apartment buyers during the report period:

Item	31.3.26	31.12.25	Change	Item	Movement
Liabilities in respect of contracts	105	263	(158)	Receipts from apartment buyers	191
Assets in respect of contracts with customers	(1,298)	(1,301)	3	Recognition of income from sale of apartments	(346)
Total, net	(1,193)	(1,038)	(155)	Total change	(155)

Equity

The increase in the company's equity during the report period, totaling approximately NIS 160 million, stems mainly from capital raising by way of private allocation of shares and warrants (net of issuance expenses) in a net amount of approximately NIS 198 million, as well as from the profit for the period in the amount of approximately NIS 21 million. Conversely, the company's equity decreased following the declaration of a dividend in the amount of NIS 55 million and due to a decrease in the capital reserve from translation differences in the amount of approximately NIS 4 million as a result of the decline in the US dollar exchange rate.

Key Financial Ratios

During the report period, a slight decrease occurred in the equity to balance sheet ratio, following a $10\%$ increase in the company's assets, mainly against the background of land purchases in Be'er Ya'akov and Rishon LeZion, compared to a $6.5\%$ increase in the company's equity (as detailed above). The slight increase in the net financial debt to net CAP ratio was mainly due to the taking of financial credit to finance land purchases and due to credit consumption within projects under construction.

7. results of Business Operations

Below are the profit and loss statement items for the three-month periods ended March 31, 2026 and 2025, and for the year ended December 31, 2025.

	For a period of three months ended on March 31		For the year ended on December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)		(Audited)
Revenues
From sale of buildings, land and construction services	387,766	485,292	1,769,693
Rental income, usage fees and management services	29,349	26,450	109,701
	417,115	511,742	1,879,394
Costs
Cost of buildings, land sold and works performed	296,493	381,471	1,379,296
Cost of services and maintenance expenses	8,994	7,668	28,335
	305,487	389,139	1,407,631
Gross profit	111,628	122,603	471,763
Increase in fair value and realization of investment real estate, net	-	-	107,085
	111,628	122,603	578,848
Selling and marketing expenses	(17,131)	(16,194)	(64,745)
General and administrative expenses	(16,180)	(14,805)	(54,581)
Initial initiation expenses and other expenses, net	508	(3,848)	(5,072)
Profit from operations	78,825	87,756	454,450
Financing income	14,263	11,858	63,173
Financing expenses	(70,814)	(52,502)	(212,528)
Financing expenses, net	(56,551)	(40,644)	(56,551)
Group's share in profits (losses) of held companies treated according to the equity method, net	3,634	(5,717)	(1,357)
Profit before income taxes	25,908	41,395	303,738
Income taxes	(5,240)	(8,949)	(63,563)
Profit for the period attributable to the owners of the company	20,668	32,446	240,175

7.1 Company Revenues

7.1.1 Revenues from sale of apartments and land and construction services

Revenues from the sale of apartments, land and construction services during the three months ended March 31, 2026 amounted to approximately NIS 393 million compared to approximately NIS 493 million in the corresponding period last year. Approximately NIS 5 million was offset from the company's revenues in the report period (NIS 8 million in the corresponding period last year) to reflect the impact of the adjustment of the consideration amount in the sale contracts due to the effects of the time value of money created by the timing of payment terms in the 20:80 mechanism, which grant the customer a financing benefit. The financing component is recognized as interest income (or expense) during the construction period. For further information, see Note 3.9 in the consolidated financial statements for 2025. Below is a breakdown of the composition of revenues from the sale of apartments, land and construction services:

	For a period of three months ended March 31
(Unaudited)	2026	2025
	NIS thousands	NIS thousands
From sale of apartments	345,761	438,748
From providing construction services12	47,004	54,513
Total	392,765	493,261

The data in the table above are before the effect of the adjustment of the consideration amount in the sale contracts for the effects of the time value of money, created due to the payment terms in the 20:80 mechanism that grant the customer a financing benefit [as detailed above].

The volume of revenues from the sale of apartments recognized in the period is affected by the sale of apartments in projects under construction and the pace of execution progress during the report period.

During the report period, there was a decrease in the volume of revenues from the sale of apartments, land and construction services recognized by the company compared to the corresponding period last year, due to the direct link between the pace of revenue recognition and the volume of apartment sales in projects under construction (some of which are in the initial construction stage) and the pace of execution progress. It should be noted that the company has not yet begun to recognize revenue in projects whose construction began by virtue of an excavation and shoring permit (Herzliya Ville, Complex 2; Beit HaKerem JLM and Har Nof Chalav U'Dvash) because the sale agreements are contingent upon receipt of a building permit.

For the segmentation of revenues from the sale of apartments and construction services by projects recognized in the three-month period ended March 31, 2026, see tables in section 5 above.

Engagement in sale agreements for the sale of apartments during the report period

During the report period, the company sold 35 housing units in a total financial volume of approximately NIS 120 million (excluding VAT). In the corresponding period last year, the company sold 75 housing units in a total financial volume of approximately NIS 215 million (excluding VAT).

It should be noted that during the report period, 11 sale transactions $^{13}$ were canceled in a total financial volume of approximately NIS 37 million (excluding VAT) (6 sale contracts were canceled in the Frankfurt Blvd project where purchasers were given a right to cancel the contract in the event that a building permit was not received by the date stipulated in the agreement $^{14}$ ). Net of the canceled transactions, net sales amounted to 24 housing units in a total financial volume of approximately NIS 83 million (excluding VAT).

Land inventory purchased by the group in a combination transaction (including in urban renewal projects) in exchange for providing construction services, is recognized as an asset in the financial statement concurrently with the recognition of a liability for providing construction services. The liability for providing construction services and the land inventory are recorded as revenues and cost of sales, respectively, according to the progress rate of the project as a whole.

13 In 2025, the company sold 345 housing units and 14 sale contracts were canceled, so that net of the canceled contracts, 331 housing units were sold.
14 Following the report date, the building permit for this project was received.

Average sale price

The average price (including VAT) of a housing unit in the report period amounted to approximately NIS 4.07 million per housing unit, compared to a price of approximately NIS 3.39 million per housing unit in the corresponding period last year (excluding VAT: NIS 3.45 million and NIS 2.87 million respectively).

Engagement in sale agreements for the sale of apartments after the report period

After March 31, 2026 and until the date of approval of this report, the company sold an additional 21 housing units in a total financial volume of approximately NIS 77 million (excluding VAT) and one sale contract in a financial volume of approximately NIS 2 million was canceled. In addition, as of the date of approval of this report, the company has early engagements (registrations) for the purchase of 42 additional housing units (in a volume of approximately NIS 150 million, excluding VAT) which have not yet matured into binding signed sale contracts, among other things due to delays resulting from the consequences of the security situation.

Inventory of unsold apartments

As of the report date, the company has 2,216 unsold housing units in projects where marketing of the housing units has begun, of which 1,598 (72%) housing units are in projects whose completion of construction is expected in the first quarter of 2028 and thereafter.

7.1.2 Revenues from rental income, usage fees and management services

Revenues from rental income in the report period amounted to approximately NIS 23 million, similar to the amount for the corresponding period last year.

Revenues from management services during the report period amounted to approximately NIS 6 million compared to approximately NIS 4 million in the corresponding period last year.

7.1.3Gross profit

Below is a breakdown of the composition of gross profit from the sale of apartments, land and construction services (excluding gross profit from rental income and other expenses included in the company's overall gross profit) $^{15}$ :

	For a period of three months ended on March 31
(Unaudited)	2026	2025
	NIS thousands	NIS thousands
Gross profit:
From sale of apartments	89,154	105,566
From providing construction services16	7,118	6,224
Total	91,273	111,790
Gross profit margin:
From sale of apartments	25.8%	24.1%

	For a period of three months ended on March 31
(Unaudited)	2026	2025
	NIS thousands	NIS thousands
From providing construction services	15.1%	11.4%
Total	24.5%	22.7%

The gross profit margin from the sale of apartments in the report period was approximately 25.8% compared to approximately 24.1% in the corresponding period last year. During the report period, there was an increase in the gross profit margin from the sale of apartments compared to the corresponding period last year, influenced mainly by the mix of inventory available for sale in projects under marketing.

The gross profit from the activity of income-producing properties and management services amounted to approximately NIS 20 million in the report period, while in the corresponding period last year it was approximately NIS 19 million.

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7.2 Company Expenses

7.2.1 Selling and Marketing Expenses

Selling and marketing expenses amounted in the report period to a total of approx. NIS 17 million compared to a total of approx. NIS 16 million in the corresponding period last year. The increase in selling and marketing expenses stemmed from an increase in advertising costs following the launch of significant projects (Beit HaKerem and Herzliya Ville).

7.2.2 General and Administrative Expenses

General and administrative expenses amounted in the report period to a total of approx. NIS 16 million compared to a total of approx. NIS 15 million in the corresponding period last year.

7.2.3 Financing expenses, net

Financing expenses, net amounted in the report period to a total of approx. NIS 57 million compared to a total of approx. NIS 41 million in the corresponding period last year. Most of the increase in financing expenses in a total of approx. NIS 12 million stems from the expansion of credit the company took within projects under supervision and for the purpose of financing land purchases. Additionally, in the report period there was a decrease in a total of approx. NIS 6 million in the volume of financing costs capitalized to investment property compared to the corresponding period last year.

7.2.4 Group's share in profits of investees accounted for using the equity method, net

This item includes the company's share in the results of Azorim Living. The company's share in the profits of Azorim Living amounted in the report period to a total of approx. NIS 3.6 million (compared to a loss in a total of approx. NIS 6 million in the results of Azorim Living in the corresponding period last year).

7.3 Benefits and payment arrangements in apartment sales transactions

Further to what is stated in section 4.3.4 in the description of the company's business chapter in the Periodic report for the year 2025 regarding the execution of apartment sale transactions in an 80:20 payment format (as opposed to payment in parallel with the construction progress rate as was common in the past), it should be noted that in most apartment unit sales agreements signed during the last two years, the company granted buyers a deferred payment benefit, however the payment date for the majority of the consideration (meaning - a cumulative payment exceeding 60% of the total consideration in the sale agreement) set in the sale agreements is prior to the delivery date. Therefore, in the company's estimation, most of the company's projects (or all of them) are not expected to be classified by the banks at a 150% risk.

In the report period, a rate of approx. 69% of the sales agreements signed with buyers included beneficial payment terms (a non-linear payment distribution as was practiced in the past). However, the volume of sales agreements in which the payment of a significant component of the consideration (40% and above) will be performed close to (according to the guidelines of the banking system) the delivery date is approx. 21% only. It should also be noted that a rate of approx. 29% of the sales agreements signed in the report period included interest subsidies as part of granting contractor loans. It will be clarified that the financing benefits derived from the beneficial payment terms or from the contractor loan subsidies are offset from the company's income.

The company's estimates detailed above regarding the classification of project risk and the inclusion of limitations regarding the ability to perform sales in a non-linear format within the framework of accompaniment agreements include forward-looking information, as defined in the Securities Law, which is uncertain and based on information or estimates existing in the company as of the date of this report, which may not materialize or may materialize in a different way than expected, including due to circumstances that are not under the company's control or not under its exclusive control and/or the materialization of any of the risk factors to which the company is exposed as detailed in section 19 in the description of the company's business chapter.

8. Cash Flows, Net

8.1 Cash flows from operating activities

In the report period, the company generated a negative cash flow from operating activities in a total of approx. NIS 713 million compared to a negative cash flow in a total of approx. NIS 256 million in the corresponding period last year. The negative flow from operating activity stemmed mainly from a decrease in operational working capital in a total of approx. NIS 298 million (compared to a total of NIS 326 million in the corresponding period last year) and from investments in land inventory in a total of NIS 489 million (total of NIS 17 million in the corresponding period last year) net of the cash profit after tax in the period (net profit after adjustments) in a total of approx. NIS 74 million (approx. NIS 87 million in the corresponding period last year).

8.2 Cash flows from investing activities

In the report period, the company generated a negative cash flow from investing activities in a total of approx. NIS 79 million compared to a positive cash flow in a total of approx. NIS 345 million in the corresponding period last year. The negative flow stemmed mainly from an increase in cash in accompaniment accounts in a total of approx. NIS 12 million and from investments in a total of approx. NIS 69 million in mixed-use projects that include commercial and employment areas.

On the other hand, an advance was received on account of an income-producing asset under construction in a total of approx. NIS 2 million and interest was received in cash in a total of approx. NIS 3 million.

8.3 Cash flows from financing activities

In the report period, the company recorded a positive cash flow from financing activities in a total of approx. NIS 829 million, compared to a negative flow in a total of approx. NIS 144 million in the corresponding period last year. The positive flow stemmed mainly from receiving long-term loans in a total of approx. NIS 369 million and increasing short-term bank credit, net, in a total of approx. NIS 314 million, as well as from the issuance of shares and warrants in a private placement for a net consideration of approx. NIS 198 million. On the other hand, the company paid interest in a total of approx. NIS 52 million.

9. Working Capital

As of March 31, 2026, the company has a positive working capital which amounts to a total of approx. NIS 604 million, compared to a positive working capital in a total of approx. NIS 45 million as of March 31, 2025, and compared to a positive working capital in a total of approx. NIS 194 million as of December 31, 2025. The increase in working capital stems mainly from taking long-term loans instead of loans that were classified in previous periods as current maturities.

10. Liquidity and Financing Sources

10.1 As of March 31, 2026, the company has a balance of cash and cash equivalents in a total of approx. NIS 173 million. In addition, as of the report date, the company has unutilized credit facilities (which are not within project accompaniment) in a total of NIS 170 million. It should also be noted that as of the report date, the company has equity surpluses invested in accompanied projects (beyond the equity required according to the accompaniment agreements) in a total of approx. NIS 280 million, which the company has the possibility to withdraw from the accompaniment accounts in the short term.

10.2 Rating of the Company and traded securities

On March 23, 2026, the rating company Midroog Ltd. ("Midroog") announced the confirmation of the company's rating and the confirmation of the rating for the BONDS (Series 13, 14 and 16) at a rating of A1.il and also confirmation of the rating for the BONDS (Series 15) at a rating of Aa3.il, with a stable rating outlook. Also, Midroog left the P-1.il rating for commercial papers (Series 1) issued by the company unchanged. For further details, see the immediate report dated March 23, 2026 (Reference No.: 2026-01-025984), which is brought in this report by way of reference.

10.3 Capital Means

The equity attributable to the company's shareholders as of March 31, 2026, amounted to a total of NIS 2,528 million.

10.4 Credit extended to the company

The balance of short-term loans from banking corporations and other credit providers as of March 31, 2026 (including current maturities), amounts to a total of NIS 2,687 million (including current maturities of BONDS in a total of NIS 327 million) and long-term in a total of NIS 2,454 million (including BONDS in a total of NIS 780 million).

From the total credit from banking and other corporations presented within the current liabilities (approx. NIS 2,361 million), approx. NIS 1,332 million is within project accompaniment. The balance also includes solo credit (in the volume of NIS 425 million) as well as loans in a total of approx. NIS 529 million that were provided for financing real estate and investment property. The company estimates that these loans will be re-extended until the project matures and accompaniment agreements are entered into (some were re-extended until the date of approval of this report).

Generally, loans that the company takes from banks in Israel are not linked and bear prime-based interest at an annual rate of 4.33%-6.65%. A total of NIS 712 million originates from loans from banks in the USA denominated in US dollars and bearing weighted interest at an annual rate of 6.79%.

For further details regarding the company's BONDS, see the disclosure in Part E of this report below.

10.5 Main liabilities of the group to financing entities

The company has committed to banking corporations and to the holders of BONDS (Series 14-16) to comply with financial covenants. For details regarding these financial covenants, the manner of the company's compliance with them and agreements with said banks, see section 10 of the description of the company's business chapter, in Note 17 to the consolidated financial statements of the company as of December 31, 2025 and also section 21 below.

10.6 Cross-default clause

As of March 31, 2026, the company and/or the group companies have loans from banking and other corporations in Israel in a total volume of approx. NIS 3 billion, which have a cross-default clause between them and which each of them does not constitute in itself a material loan. For further details regarding the cross-default clause - see section 10.10.1 of the description of the company's business chapter in the annual report for the year 2025.

11. Cash flows from operating activities

According to the financial statements data, the company has a continuous negative cash flow from operating activities in the consolidated financial statements and negative working capital and a continuous positive cash flow in the separate financial statements as this term is defined in Regulation 10(b)(14) of the Securities Regulations (Periodic and Immediate Reports), 1970 ("Regulation 10(b)(14)") which concerns disclosure of projected cash flow for financing the repayment of the corporation's liabilities. After the company's board of directors examined, among other things, the circumstances for the existence of a continuous negative cash flow from operating activities, the company's projected cash flow, the assumptions used in its preparation and the likelihood of their materialization, the company's ability to respond to various scenarios, the ability to raise debt in the banking and extra-bank system and taking into account the balance of liquidity and financial sources of the company (as detailed above), the company's board of directors determined that the continuous negative cash flow from operating activities does not indicate a liquidity problem and that the company is able to meet its obligations.

In accordance with the company's financial statement data and with reference to the provisions of Regulation 10(b) (14), the warning signs established in Regulation 10(b)(14) do not exist regarding the company.

The information as stated above constitutes forward-looking information, as this term is defined in the Securities Law. The group's estimates are based, among other things, on information existing in the company, as of the date of this report, and include estimates of the company or its intentions as of the date of this report. However, there is no certainty that the company's estimates regarding any of the factors detailed below or their effects on the company's activities and business will materialize, in full or in part. The actual effect may be materially different from that predicted as stated. Among the potential factors for the non-materialization of the company's estimates and forecasts are, among others, a slowdown, recession or damage to the economy and including in the real estate field in Israel, changes in economic, political and security conditions, including as a result of the "Swords of Iron" war and the rounds of fighting against Iran, regulatory changes, a variety of factors which are not under the company's control, and from the set of risk factors the group is exposed to, as detailed in section 20 in the description of the company's business chapter in the periodic report for the year 2025 of the company.

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Part B - Corporate Governance Aspects

12. Donations

During the report period and up to the date of this report, there has been no material change¹⁷ in relation to the corporation's policy regarding the provision of donations, the volume of donations, and commitments to provide donations in future periods, relative to what was stated in the Board of Directors' Report for 2025.

13. Directors with Accounting and Financial Expertise

During the report period and up to the date of this report, there has been no change in relation to what was stated in Part B of the Board of Directors' Report for 2025.

14. Independent Directors

During the report period and up to the date of this report, there has been no change in relation to the number and identity of the independent directors as stated in Part B of the Board of Directors' Report for 2025.

15. Internal Auditor

For details regarding the Company's internal auditor, including the audit work plan, see Section 12 of Part B of the Board of Directors' Report for 2025.

Part C - Disclosure in Connection with the Company's Financial Reporting

16. Events After the Date of the Statement of Financial Position

For details regarding events that occurred after the date of the financial statements, see Section 00 above.

17. Effectiveness of Internal Control over Reporting and Disclosure (iSOX)

For the report regarding the evaluation by the Board of Directors and management of the effectiveness of internal control over financial reporting and disclosure, executive statements by the Company's CEO and the most senior officer in the finance field regarding the effectiveness of internal control over financial reporting and disclosure, see the Quarterly Report regarding the effectiveness of internal control over financial reporting and disclosure as of March 31, 2025, included in this report.

Part D - Valuations

The Company has no material or very material valuations that were used to determine data in the financial statements as of March 31, 2026.
The valuation in connection with the Herzliya Hills project, which was used to determine the fair value of this asset in the financial statements, was attached to the Company's financial statements as of June 30, 2025, although it is not material, due to the pledge of the asset for the benefit of the trustee for the BONDS (Series 15) of the Company for the holders of BONDS of this series. For details, see Part F of this report.

¹⁷ In May 2026, the Company's Board of Directors approved a minor change to the Company's donation policy, such that 60% (instead of 80%) of the donations will be allocated to educational institutions.

Part E - Disclosure regarding the Company's BONDS

Details regarding outstanding series of debt certificates issued by the Company

Series Name	Series 13	Series 14	Series 15	Series 16
Material Series18	No	Yes	No	No
Security No.	7150410	7150444	7150451	1223486
Issuance Date	25.7.2019
21.6.2020 (Series expansion)
15.1.2023 (Series expansion)	8.12.2020
29.8.2021 (Series expansion)
9.1.2024 (Series expansion)	15.6.2021	16.6.2025
Total par value at issuance date (in NIS thousands)	477,410
(Including series expansion)	768,804
(Including series expansion)	192,038	259,906
par value as of 31.3.2026 (in NIS thousands)	138,743	538,163	153,630	259,906
Estimated par value balance according to linkage terms as of 31.3.2026 (in NIS thousands)	138,743	538,163	179,237	259,906
Value in the financial statements as of 31.3.2026 (in NIS thousands)	137,328	532,468	179,194	257,783
Amount of accrued interest as of 31.3.2026 (in NIS thousands)	1,023	3,431	45	3,749
Market value as of 31.3.2026 (in NIS thousands)	137,661	523,040	168,148	273,707
Interest type and rate	Fixed annual interest of 2.95%	Fixed annual interest of 2.55%	Fixed annual interest of 0.1%	Fixed annual interest of 5.77%
Effective interest as of the issuance date	3.3% (Including series expansion)	2.76%	0.1%	6.05%
Principal payment dates	(a) On December 31 of each of the years 2020 and 2021, 5% of the total principal; (b) On December 31 of each of the years 2022 to 2025, 16% of the total principal; (c) On December 31, 2026, 26% of the total principal.	(a) On December 31 of each of the years 2024 and 2025, 15% of the total principal; (b) On December 31, 2026, 23% of the total principal; (c) On December 31, 2027, 35% of the total principal and (d) On December 31, 2028, 12% of the total principal.	(a) On June 30 of each of the years 2022 to 2028, 5% of the total principal, in each payment; (b) On June 30, 2029, 65% of the total principal	(a) On June 30 of each of the years 2028 and 2029, 10% of the total principal in each payment; (b) On June 30, 2030, 20% of the total principal; (c) On June 30, 2031 and 30% of the total principal 2032
Linkage base and terms	None	None	Principal and interest are linked to the Consumer Price Index published on May 14, 2021, for April 2021 ("the Base Index"). If it turns out, at the time of payment of any sum on account of principal and/or interest, that the known index on the day set for any payment on account of principal and/or interest ("the Payment Index") has risen compared to the Base Index, the Company will pay that payment of principal and/or interest, increased proportionally to the rate of increase of the Payment Index compared to the Base Index. If it turns out, at the time of any payment on account of principal and/or interest, that the Payment Index is identical to or lower than the Base Index, then the Payment Index will be the Base Index ("Linkage Differentials"). Said linkage method is unchangeable.	None

Series Name	Series 13	Series 14	Series 15	Series 16
Convertible BONDS	No	No	No	No
Company's right to early redemption or forced conversion	No	Yes - The Company shall be entitled, at its sole discretion, to redeem the BONDS in early redemption, starting thirty trading days after the registration of the BONDS for trading, subject to the provisions of the trust deeds regarding the price at which the early redemption will be performed.	No	No
Guarantee provided for the BONDS	No	No	No	No

18 A series is material if the Company's total liabilities under it, in the consolidated financial statements, constitute five percent or more of the Company's total liabilities.

Series Name	Series 13	Series 14	Series 15	Series 16
Details regarding the Trustee	Mishmeret, the person responsible for the series at the Trustee is Mr. Rami Sabti. Contact details: Phone: 03-6374344; Fax: 03-6374352; Email: [email protected]; Address: 48 Menachem Begin Road, Tel Aviv 6618001.	Mishmeret, the person responsible for the series at the Trustee is Mr. Rami Sabti. Contact details: Phone: 03-6374344; Fax: 03-6374352; Email: [email protected]; Address: 48 Menachem Begin Road, Tel Aviv 6618001.	Mishmeret, the person responsible for the series at the Trustee is Adv. Shlomy Ilani. Contact details: Phone: 03-6374826; Fax: 03-6374344; Email: [email protected]; Address: 48 Menachem Begin Road, Tel Aviv 6618001.	Mishmeret, the person responsible for the series at the Trustee is Adv. Shlomy Ilani. Contact details: Phone: 03-6374826; Fax: 03-6374344; Email: [email protected]; Address: 48 Menachem Begin Road, Tel Aviv 6618001.
Name of the Rating Company	Midroog Ltd.	Midroog Ltd.	Midroog Ltd.	Midroog Ltd.
Rating on Issuance Date	A2/Stable	A2/Stable	A1.il/Stable	A1.il / Stable
Current Rating	A1/Stable	A1/Stable	Aa3/Stable	A1.il / Stable
Compliance with all terms and obligations under the Trust Deed	Yes	Yes	Yes	Yes
Occurrence of conditions constituting grounds for immediate repayment/realization of collateral	No	No	No	No

Series Name	Series 13	Series 14	Series 15	Series 16
Trustee notice that the Company is not meeting terms and obligations or that grounds for immediate repayment/realization of collateral have occurred	No	No	No	No
Trustee's demand to perform various actions, including convening the holders of the BONDS	No	No	No	No
Change or proposal for change of the BONDS' terms	No	No	No	No

Series Name	Series 13	Series 14	Series 15
Pledged assets^{19}	None	None	1. First-ranking fixed charge, unlimited in amount, on all the Company's rights in a bank account in the name of the Trustee in trust for the holders of the BONDS (Series 15) ("Trustee Account"), including all funds, deposits, and securities to be deposited in the Trustee Account from time to time as specified in Section 7 of the Trust Deed.
2. First-degree mortgage as well as a first-ranking fixed charge, unlimited in amount, on all the rights of the Pledging Company in real estate (as defined in Section 7.1 of the Trust Deed for the BONDS (Series 15)).
3. Fixed charge and assignment of rights by way of a first-ranking fixed charge, unlimited in amount, on all the rights of the Pledging Company under the joint operation agreement and the partnership agreement as specified in Section 7 of the Trust Deed for the BONDS (Series 15).
4. Fixed charge and assignment of rights by way of a first-ranking fixed charge, unlimited in amount, on all the rights of the Pledging Company in the pledged income, including a charge on the	None

Series Name	Series 13	Series 14	Series 15	Series 16
			Company's rights under existing lease agreements in the project as of the date of the creation of the charge as specified in Section 7 of the Trust Deed for the BONDS (Series 15).5. Fixed charge and assignment of rights by way of a first-ranking fixed charge, unlimited in amount, on all the rights of the Pledging Company to receive property insurance benefits for

19 For additional details regarding the rights and assets pledged by the Company to the Trustee for the benefit of the holders of the BONDS (Series 15) of the Company, see Section 7 of the Trust Deed for the holders of BONDS (Series 15) of the Company dated June 14, 2021, between Mishmeret - Trust Services Company Ltd. and the Company, the final version of which was published by the Company on June 17, 2021 (Reference No.: 2021-01-102753), which is included in this report by way of reference.

Series Name	Series 13	Series 14	Series 15	Series 16
			the project as detailed in Section 7 of the Trust Deed for BONDS (Series 15).
Restriction applicable to the Company regarding the creation of additional pledges on its assets or regarding its authority to issue additional BONDS	Negative Pledge undertaking – not to pledge, mortgage, or assign by way of pledge to any third party or provide any other security of any type and degree or any other guarantee, shares of the subsidiary Azorim Binyan without the consent of the holders of the BONDS, as well as restrictions on the expansion of BOND series concerning rating and meeting financial covenants for the purpose of the expansion.

Series Name	Series 13	Series 14	Series 15	Series 16
Immediate repayment mechanism for cross-default	- Cross-Default for material financial debt, defined as a financial debt or several financial debts in aggregate, higher than a total of 10% of the Company's net financial debt according to the last published consolidated financial statements. Non-Recourse debts shall not be considered as material debt for the purpose of this section.
- Cross-Default in a case where another series of Company BONDS was called for immediate repayment.	- Cross-Default for material financial debt, defined as a financial debt or several financial debts in aggregate (of the Company or of Azorim Binyan), higher than a total of 10% of the Company's net financial debt according to the last published consolidated financial statements. Non-Recourse debts shall not be considered as material debt for the purpose of this section.
- Cross-Default in a case where another series of Company BONDS was called for immediate repayment.	- Cross-Default for material financial debt, defined as a financial debt or several financial debts in aggregate (of the Company or of Azorim Binyan), higher than a total of 10% of the Company's net financial debt according to the last published consolidated financial statements. Non-Recourse debts shall not be considered as material debt for the purpose of this section.
- Cross-Default in a case where another series of Company BONDS was called for immediate repayment.	- Cross-Default for material financial debt, defined as a financial debt or several financial debts in aggregate of the Company or of Azorim Binyan whose aggregate liability value, as the case may be, at the time of calling for immediate repayment is higher than a total of 10% of the Company's net financial debt according to the Company's last published consolidated financial statements. Non-Recourse debts shall not be considered as material debt for the purpose of this section.
- Cross-Default in a case where another series of Company BONDS was called for immediate repayment.

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21. Details regarding the company's compliance with financial covenants established in the trust deeds for the company's outstanding series of BONDS

	Financial covenants undertaken	Calculation of financial covenants as of 31.3.2024	Compliance with financial covenants exists/does not exist		Actions taken by the company to cure the breach
			31.3.2024	Close to report approval date
Series 13-16	Net financial debt to net CAP ratio shall not exceed 78%.	Net financial debt to net CAP ratio - 66%	Complies	Complies	N/A
	Undertaking for minimum equity not less than: Regarding Series 13: 700 million NIS. Regarding Series 14 and 15: 850 million NIS. Regarding Series 16: 1,100 million NIS.	Accounting Equity - 2,524 million NIS	Complies	Complies	N/A
	Undertaking that the Solo Cross Debt20 scope of Azorim Binyan shall not exceed 10% of the total consolidated company balance sheet according to its consolidated financial statements (the undertaking does not apply to Series 13 and 16).	Ratio of Solo Cross Debt of Azorim Binyan to the total consolidated company balance sheet according to its consolidated financial statements - 0.3%	Complies	Complies	N/A
	Undertaking that the net debt to collateral ratio21 shall not exceed: 80% (the undertaking applies only to Series 15)	Net debt to collateral ratio - 53%	Complies	Complies	N/A

The company's undertaking regarding BONDS rating - The company undertook to the BONDS (Series 13-16) holders that it will act to ensure the BONDS are rated by an approved rating company by the Commissioner of Capital Markets at the Ministry of Finance until the full repayment date of all the company's obligations under the BONDS. In accordance with the Trust Deed for BONDS (Series 13), the Trust Deed for BONDS (Series 14), the Trust Deed for BONDS (Series 15) and the Trust Deed for BONDS (Series 16), in the event that the rating of the relevant series of BONDS falls below Baa3, the holders of the relevant series of BONDS shall be entitled to demand early repayment of the outstanding balance of the relevant series of BONDS in accordance with the other terms specified in the relevant Trust Deed and the BONDS.

20 According to section 3.1.2.7a of the Trust Deed for BONDS (Series 14) holders of the company dated December 6, 2020, and section 8.1.3 of the Trust Deed for BONDS (Series 15) holders of the company dated June 14, 2021, Solo Cross Debt means financial credit that will be imposed on Azorim Binyan by a financial entity not within the framework of a project support agreement and/or not for the purchase of real estate or rights in real estate and which is secured by a specific lien, and including a right to be repaid from project surplus liens, given in favor of the same financial entity, by virtue of a support framework agreement for that project.
21 According to section 8.3.1 of the Trust Deed for BONDS (Series 15) holders of the company dated June 14, 2021, the final version of which was published by the company on June 17, 2021 (Reference No.: 2021-01-102753) ("Trust Deed for BONDS (Series 15)"), net debt to collateral ratio means the ratio between (1) the principal balance of the BONDS (Series 15) plus interest and linkage differences accrued and unpaid until the publication date of the company's financial statements, and deducting cash deposits (as defined in section 8.3.2 of the Trust Deed) in the trust account, as presented in a balance report issued by the bank where the trust account is managed, and deducting guarantee amounts provided to the trustee (as provided in section 8.3.2 of the Trust Deed), and (2) the security value of the encumbered real estate assets calculated in accordance with the provisions of section 7.10 of the Trust Deed.

Part VI - Disclosure regarding assets used as collateral for outstanding BONDS

22. Disclosure regarding the Herzliya Hills project used as collateral for BONDS (Series 15) holders

In accordance with the company's undertaking under section 7.10.1(h) of the Trust Deed for BONDS (Series 15) of the company dated June 14, 2021, between Mishmeret - Trust Services Company Ltd. and the company, the final version of which was published by the company on June 17, 2021 (Reference No.: 2021-01-102753) ("Trust Deed for BONDS (Series 15)"), included in this report by way of reference, below are details regarding the property known as "Herzliya Hills" ("Herzliya Hills Project"), in light of the liens created by the company and its subsidiaries regarding the Herzliya Hills project to secure the company's obligations to the company's BONDS (Series 15) holders:

Data according to the company's share in the asset (Financial data in NIS thousands)	Current year (2026) for the period of three months ended March 31, 2026	Comparison figures for the year ended December 31, 2025
Asset Value	336,621	336,621

Data according to the company's share in the asset (Financial data in NIS thousands)	Current year (2026) for the period of three months ended March 31, 2026	Comparison figures for the year ended December 31, 2025
NOI in period	6,860	25,989
Revaluation profits in period	-	13,650
Average occupancy rate in period (%)	Offices - 100% Commercial - 100%	Offices - 100% Commercial - 100%
Annual yield rate (%)	8.2%	7.7%
Average rent per sqm [monthly] (in NIS) (*)	Offices - 126 Commercial - 216	Offices - 126 Commercial - 216
Average rent per sqm in contracts signed in the period [monthly] (in NIS)	N/A	N/A

(*) Average rent per sqm includes additional income for the lessor's participation in finishing works.

22.1 Below are details regarding the valuation used by the company to prepare its financial statements as of 31.03.2026 regarding the "Herzliya Hills" project, income-generating real estate in Israel encumbered in favor of BONDS (Series 15) holders:

Data according to the company's share in the asset - 45.92%	March 31, 2026	December 31, 2025
The determined value (in NIS thousands)	336,620	336,620
Identity of the valuer (*)	Yaron Spector Real Estate Appraisal Ltd.	Yaron Spector Real Estate Appraisal Ltd.
Is the valuer independent?	Yes	Yes
Is there an indemnity agreement?	Yes	Yes
Effective date of the valuation (the date the valuation is intended for)	Reliance on the value determined in the valuation as of 30.06.2025	Reliance on the value determined in the valuation as of 30.06.2025
Valuation model (comparison/income/cost/other)	Income Approach	Income Approach
Valuation using the Income Approach (DCF):
Gross Leasable Area (GLA) taken into account in the calculation (sqm)	Gross office space: 28,357 sqm Gross commercial space: 2,769 sqm Parking: 651 parking spaces	Gross office space: 28,357 sqm Gross commercial space: 2,769 sqm Parking: 651 parking spaces
Occupancy rate in year 1 + (%)	100%	100%
Occupancy rate in year 2 + (%)	100%	100%
Representative occupancy rate out of the GLA for valuation (%)	100%	100%
Average annual rent per leased sqm for valuation in year 1 + (**)	Offices: 126 NIS per sqm Commercial: 216 NIS per sqm Parking spaces: 931 NIS per space	Offices: 126 NIS per sqm Commercial: 216 NIS per sqm Parking spaces: 931 NIS per space
Average annual rent per leased sqm for valuation in year 2 + (**)	Offices: 126 NIS per sqm Commercial: 216 NIS per sqm Parking spaces: 931 NIS per space	Offices: 126 NIS per sqm Commercial: 216 NIS per sqm Parking spaces: 931 NIS per space

Data according to the company's share in the asset - 45.92%	March 31, 2026	December 31, 2025
Average representative annual rent per leased sqm for valuation (**)	Offices: 126 NIS per sqm Commercial: 216 NIS per sqm Parking spaces: 931 NIS per space	Offices: 126 NIS per sqm Commercial: 216 NIS per sqm Parking spaces: 931 NIS per space
Representative cash flow / Representative NOI for valuation (**) (in NIS thousands)	26,454	26,454
Average periodic maintenance expenses	-	-
Discount Rate taken for valuation (%)	6.5-9%	6.5-9%
Sensitivity analyses for the value (according to the chosen approach):
Change in value (in NIS thousands) - 0.5% increase in discount rate	(20,810)	(20,810)
Change in value (in NIS thousands) - 0.5% decrease in discount rate	24,120	24,120

() According to the company's assessment, it is not dependent on the valuer. There is an indemnity agreement that leaves the valuer with exposure of three times his fee. The rate of assets valued by the valuer constitutes about $16\%$ of the value of the real estate assets in the report on the financial position of the company as of June 30, 2025. Therefore, the valuer does not meet the definition of a "highly significant valuer" in accordance with the legal staff position 105-30 of the Securities Authority. For details about the valuer as required in legal staff position 105-30 of the Securities Authority, see pages 3-4 of the valuation attached to the report.
(*) Average rent per sqm relative to offices includes additional income for the lessor's participation in finishing works.

Part VII - Disclosure regarding projects classified as very material22

23. Exchange Ramat Gan Project

Costs invested and to be invested in the project (in NIS thousands):

		2026 Quarter 1	For the year ended December 31 2025
Costs invested	Cumulative land costs at the end of the period	222,023	222,023
	Cumulative costs for development, taxes, and fees	17,086	17,086
	Cumulative costs for planning, construction, and ancillary	541,038	537,839
	Cumulative financing costs (capitalized)	25,224	25,224
	Other costs	84,828	31,188
	Total cumulative cost	890,199	833,360
	Total cumulative book cost (*)	219,475	199,024
Costs not yet invested (estimate) and completion rate	Land costs not yet invested	-	1
	Costs for development, taxes, and fees not yet invested	-	-
	Costs for planning, construction, and ancillary not yet invested	-	45,693
	Cumulative financing costs expected to be capitalized in the future	-	-
	Other costs	-	8,631
	Total cost remaining for completion	-	54,325
	Completion rate [financial] (excluding land) (%)	100%	95%
	Expected construction completion date	Quarter 1 2026	Quarter 1 2026

(*) After cumulative deduction to profit and loss within the framework of revenue recognition.

Project marketing:

		2026 Quarter 1	For the year ended December 31 2025
Contracts signed in the current period	Residential units (net of cancellations)	-	8
	Residential units (sqm)	-	680
Average price per sqm (excl. VAT) in contracts signed in the current period	Residential units (in NIS thousands)	-	46.8
Cumulative contracts until the end of the period:	Residential units	287	287
	Residential units (sqm)	26,295	26,295
Average price per sqm (excl. VAT) cumulatively in contracts signed until the end of the period	Residential units (in NIS thousands)	33.7	33.7
Project marketing rate	Total expected revenues from the entire project	1,314,581	1,314,656
	Total expected revenues from contracts signed cumulatively	970,047	969,047
	Marketing rate as of the last day of the period (%)	74%	74%
Areas for which contracts have not yet been signed:	Residential units	68	68
	Residential units (sqm)	7,103	7,103
Total cumulative cost (inventory balance) attributed to areas for which binding contracts have not yet been signed in the statement of financial position		233,173	233,362
Number of contracts signed from the end of the period until the date of the report		-	-
Average price per sqm (excl. VAT) in contracts signed from the end of the period until the date of the report		-	-

22 Regarding the existence of a material financing component in transactions for the sale of apartments and benefits to buyers (sale in the format of 20:80 and contractor loans), see section 3 of the financial report for 2025.

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24. Moment Project Bat Yam

Costs invested and to be invested in the project (in NIS thousands):

		Q1 2026	For the year ended December 31, 2025
Invested costs	Cumulative costs for land at end of period (*)	300,378	300,721
	Cumulative costs for development, taxes and fees	34,002	33,821
	Cumulative costs for planning, construction and related	761,179	729,219
	Cumulative costs for financing (capitalized)	1,147	1,147
	Other costs	67,864	65,698
	Total cumulative cost	1,164,570	1,130,606
	Total cumulative cost in books (**)	70,060	81,098

		Q1 2026	For the year ended December 31, 2025
Costs not yet invested (estimate) and completion rate	Costs for land not yet invested	807	1,413
	Costs for development, taxes and fees not yet invested	101	275
	Costs for planning, construction and related not yet invested	78,149	97,506
	Cumulative costs for financing expected to be capitalized in the future	-	-
	Other costs	4,876	19,619
	Total cost remaining for completion	83,933	118,813
	Completion rate [financial] (excluding land) (%)	92%	89%
	Expected construction completion date	Q3 2026	Q1 2026

() Costs for land include a combination component and liabilities to landowners.
(*) After cumulative deduction to profit and loss as part of revenue recognition.

Project Marketing:

		Q1 2026	For the year ended December 31, 2025
Contracts signed during the current period	Housing units (net of cancellations)	(1)	4
	Housing units (sqm)	(137)	512

		Q1 2026	For the year ended December 31, 2025
Average price per sqm (excl. VAT) in contracts signed during the current period	Housing units (NIS thousands)	-	23
Cumulative contracts until end of period:	Housing units	549	550
	Housing units (sqm)	60,504	60,641
Cumulative average price per sqm (excl. VAT) in contracts signed until end of period	Housing units (NIS thousands)	18.8	19
Project marketing rate	Total expected income from the entire project	1,297,661	1,295,387
	Total expected income from cumulative signed contracts	1,216,890	1,227,219
	Marketing rate for the last day of the period (%)	94%	95%
Areas for which contracts have not yet been signed:	Housing units	23	22
	Housing units (sqm)	3,104	2,967
Total cumulative cost (inventory balance) attributed to areas for which binding contracts have not yet been signed in the statement of financial position		67,310	56,756
Number of contracts signed from the end of the period until the report date		1	-
Average price per sqm (excl. VAT) in contracts signed from the end of the period until the report date		22	-

25. N Weizmann Project, Netanya

Costs invested and to be invested in the project (in NIS thousands):

		Q1 2026	For the year ended December 31, 2025
Invested costs	Cumulative costs for land at end of period (*)	143,386	145,082
	Cumulative costs for development, taxes and fees	25,774	25,774
	Cumulative costs for planning, construction and related	259,916	231,277
	Cumulative costs for financing (capitalized)	859	859
	Other costs	12,681	12,484
	Total cumulative cost	442,616	415,476
	Total cumulative cost in books (**)	153,722	164,737
Costs not yet invested (est.) and completion rate	Costs for land not yet invested	18,672	21,400
	Costs for development, taxes and fees not yet invested	102	102
	Costs for planning, construction and related not yet invested	49,329	74,538
	Cumulative costs for financing expected to be capitalized in the future	-	-
	Other costs	7,321	623
	Total cost remaining for completion	75,424	96,663
	Completion rate [financial] (excluding land) (%)	87%	78%
	Expected construction completion date	Q1 2027	Q1 2027

() Costs for land include a combination component and liabilities to landowners.
(*) After cumulative deduction to profit and loss as part of revenue recognition.

Project Marketing:

		Q1 2026	For the year ended December 31, 2025
Contracts signed during the current period	Housing units (net of cancellations)	2	12
	Housing units (sqm)	238	1,371
Average price per sqm (excl. VAT) in contracts signed during the current period	Housing units (NIS thousands)	35.8	23
Cumulative contracts until end of period:	Housing units	135	133
	Housing units (sqm)	15,158	14,920
Average price per sqm (excl. VAT) in cumulative contracts signed until end of period	Housing units (NIS thousands)	20.6	21

		Q1 2026	For the year ended December 31, 2025
Project marketing rate	Total expected income from the entire project	572,374	571,288
	Total expected income from cumulative signed contracts	330,180	324,612
	Marketing rate for the last day of the period (%)	58%	57%
Areas for which contracts have not yet been signed:	Housing units	86	88
	Housing units (sqm)	10,185	10,423
Total cumulative cost (inventory balance) attributed to areas for which binding contracts have not yet been signed in the statement of financial position		187,198	186,322
Number of contracts signed from the end of the period until the report date		(1)-	3
Average price per sqm (excl. VAT) in contracts signed from the end of the period until the report date		19	23

26. N Sokolov Project, Netanya

Costs invested and to be invested in the project (in NIS thousands):

		Q1 2026	For the year ended December 31, 2025
Invested costs	Cumulative costs for land at end of period (*)	116,220	115,365
	Cumulative costs for development, taxes and fees	20,410	20,410
	Cumulative costs for planning, construction and related	249,401	233,639
	Cumulative costs for financing (capitalized)	583	583
	Other costs	16,000	13,429
	Total cumulative cost	402,614	383,426
	Total cumulative cost in books (**)	89,811	93,515
Costs not yet invested (estimate) and completion rate	Costs for land not yet invested	17,669	17,576
	Costs for development, taxes and fees not yet invested	159	159
	Costs for planning, construction and related not yet invested	30,757	45,970
	Cumulative costs for financing expected to be capitalized in the future	-	-
	Other costs	2,757	24
	Total cost remaining for completion	51,342	63,729
	Completion rate [financial] (excluding land) (%)	90%	84%
Expected construction completion date		Q3 2026	Q3 2026

() Costs for land include a combination component and liabilities to landowners.
(*) After cumulative deduction to profit and loss as part of revenue recognition.

Project Marketing:

		Q1 2026	For the year ended December 31, 2025
Contracts signed during the current period	Housing units (net of cancellations)	(1)	8
	Housing units (sqm)	(127)	1,021
Average price per sqm (excl. VAT) in contracts signed during the current period	Housing units (NIS thousands)	-	21.2
Cumulative contracts until end of period:	Housing units	150	151
	Housing units (sqm)	17,502	17,629
Cumulative average price per sqm (excl. VAT) in contracts signed until end of period	Housing units (NIS thousands)	20.1	20.1
Project marketing rate	Total expected income from the entire project	517,184	513,398
	Total expected income from cumulative signed contracts	391,845	376,273
	Marketing rate for the last day of the period (%)	76%	73%
Areas for which contracts have not yet been signed:	Housing units	52	51
	Housing units (sqm)	6,604	6,477
Total cumulative cost (inventory balance) attributed to areas for which binding contracts have not yet been signed in the statement of financial position		95,787	103,756
Number of contracts signed from the end of the period until the report date		1	-
Average price per sqm (excl. VAT) in contracts signed from the end of the period until the report date		20	-

27. Hofim East Project, Netanya

Costs invested and to be invested in the project (in NIS thousands):

Invested costs		Q1 2026	For the year ended December 31, 2025
Invested costs	Cumulative costs for land at end of period	35,835	35,835
	Cumulative costs for development, taxes and fees	20,664	20,664
	Cumulative costs for planning, construction and related	150,329	124,041
	Cumulative costs for financing (capitalized)	958	958
	Other costs	6,374	6,261
	Total cumulative cost	214,160	187,759
	Total cumulative cost in books (*)	68,388	67,735
Costs not yet invested (estimate) and completion rate	Costs for land not yet invested	7	7
	Costs for development, taxes and fees not yet invested	504	504
	Costs for planning, construction and related not yet invested	87,340	112,709
	Cumulative costs for financing expected to be capitalized in the future	-	-
	Other costs	11,015	11,128
	Total cost remaining for completion	98,866	124,348
	Completion rate [financial] (excluding land) (%)	66%	54%
	Expected construction completion date	Q3 2027	Q2 2027

(*) After cumulative deduction to profit and loss as part of revenue recognition.

Project Marketing:

Contracts signed during the current period		Q1 2026	For the year ended December 31, 2025
Contracts signed during the current period	Housing units (net of cancellations)	(1)	5
	Housing units (sqm)	(106)	573
Average price per sqm (excl. VAT) in contracts signed during current period	Housing units (NIS thousands)	-	24
Cumulative contracts until end of period:	Housing units	154	155
	Housing units (sqm)	16,599	16,705
Average price per sqm (excl. VAT) cumulative in contracts signed until period end	Housing units (NIS thousands)	23	23
Project marketing rate	Total expected income from the entire project	539,998	551,328
	Total expected income from cumulative signed contracts	391,184	393,305
	Marketing rate for the last day of the period (%)	72%	71%

Contracts signed during the current period		Q1 2026	For the year ended December 31, 2025
Areas for which contracts have not yet been signed:	Housing units	48	47
	Housing units (sqm)	6,391	6,286
	Total cumulative cost (inventory balance) attributed to areas for which binding contracts have not yet been signed in the statement of financial position	86,265	89,457
	Number of contracts signed from the end of the period until the report date	-	-
	Average price per sqm (excl. VAT) in contracts signed from the end of the period until the report date	-	-

5/28/2026 | 7:31:48 AM | v1.2.5

28. Herzliya Ville Project, Complex 2

Costs invested and to be invested in the project (in thousands of NIS):

		2026 Quarter 1	For the year ended December 31, 2025
Costs invested	Cumulative costs regarding land at the end of the period (*)	193,447	191,622
	Cumulative costs regarding development, taxes and fees	990	990
	Cumulative costs regarding planning, construction and related expenses	18,699	17,555
	Cumulative costs regarding financing (capitalized)	759	496
	Other costs	7,144	265
	Total cumulative cost	221,039	210,928
	Total cumulative cost in the books (**)	221,403	177,933
Costs not yet invested (estimate) and completion rate	Costs regarding land not yet invested	88,934	98,444
	Costs regarding development, taxes and fees not yet invested	23,719	22,116
	Costs regarding planning, construction and related expenses not yet invested	589,539	590,621
	Cumulative costs regarding financing expected to be capitalized in the future	-	-
	Other costs	34,243	43,760
	Total cost remaining for completion	736,435	754,941
	Completion rate [financial] (excluding land) (%)	1%	1%
	Expected construction completion date	Q2 2030	Q2 2030

() Land costs include a combination component and obligations to the landowners.
(*) After cumulative deduction to profit and loss within the framework of revenue recognition.

Project Marketing:

		2026 Quarter 1	For the year ended December 31, 2025
Contracts signed during the current period	Housing units (net of cancellations)	2	43
	Housing units (sqm)	177	4,823
Average price per sqm (excluding VAT) in contracts signed during the current period	Housing units (in thousands of NIS)	34.4	34.5

		2026 Quarter 1	For the year ended December 31, 2025
Cumulative contracts until the end of the period:	Housing units	45	43
	Housing units (sqm)	5,000	4,823
Average price per sqm (excluding VAT) cumulative in contracts signed until the end of the period	Housing units (in thousands of NIS)	35.0	35.0
Project marketing rate	Total expected income from the entire project (in commercial currency)	1,041,196	1,041,196
	Total expected income from contracts signed cumulatively (in commercial currency)	174,989	168,902
	Marketing rate as of the last day of the period (%)	17%	16%
Areas for which contracts have not yet been signed:	Housing units	223	225
	Housing units (sqm)	25,343	25,520
Total cumulative cost (inventory balance) attributed to areas for which binding contracts have not yet been signed in the statement of financial position		692,067	696,930
Number of contracts signed from the end of the period until the report date/sqm		2	1
Average price per sqm (excluding VAT) in contracts signed from the end of the period until the report date		32	36

29. Herzliya Ville Project, Complex 5

Costs invested and to be invested in the project (in thousands of NIS):

		2026 Quarter 1	For the year ended December 31, 2025
Costs invested	Cumulative costs regarding land at the end of the period (*)	154,133	154,066
	Cumulative costs regarding development, taxes and fees	10,087	10,087
	Cumulative costs regarding planning, construction and related expenses	70,688	57,810
	Cumulative costs regarding financing (capitalized)	-	-
	Other costs	6,724	6,454
	Total cumulative cost	241,632	228,417
	Total cumulative cost in the books (**)	183,619	183,323

		2026 Quarter 1	For the year ended December 31, 2025
Costs not yet invested (estimate) and completion rate	Costs regarding land not yet invested	-7,288	-7,388
	Costs regarding development, taxes and fees not yet invested	3,505	3,505
	Costs regarding planning, construction and related expenses not yet invested	233,605	244,672
	Cumulative costs regarding financing expected to be capitalized in the future	-	-
	Other costs	6,822	5,696
	Total cost remaining for completion	236,644	246,485
	Completion rate [financial] (excluding land) (%)	22%	18%
	Expected construction completion date	Q2 2028	Q2 2028

() Land costs include a combination component and obligations to the landowners.
(*) After cumulative deduction to profit and loss within the framework of revenue recognition.

Project Marketing:

		2026 Quarter 1	For the year ended December 31, 2025
Contracts signed during the current period	Housing units (net of cancellations)	-	2
	Housing units (sqm)	-	485
	Average price per sqm (excluding VAT) in contracts signed during the current period: Housing units (in thousands of NIS)	-	35
Cumulative contracts until the end of the period:	Housing units	56	56
	Housing units (sqm)	6,913	6,913
	Average price per sqm (excluding VAT) cumulative in contracts signed until the end of the period: Housing units (in thousands of NIS)	32.4	32
Project marketing rate	Total expected income from the entire project (in commercial currency)	544,820	542,894
	Total expected income from contracts signed cumulatively (in commercial currency)	234,665	234,347
	Marketing rate as of the last day of the period (%)	43%	43%
Areas for which contracts have not yet been signed:	Housing units	66	66
	Housing units (sqm)	8,569	8,569
Total cumulative cost (inventory balance) attributed to areas for which binding contracts have not yet been signed in the statement of financial position		223,846	221,520
Number of contracts signed from the end of the period until the report date/sqm		-	-
Average price per sqm (excluding VAT) in contracts signed from the end of the period until the report date		-	-

The information in the tables in this Part G above includes forward-looking information, as defined in the Securities Law, based, among other things, on the company's experience and assumptions regarding the pace of establishment and the realization of obligations received from buyers. It is clarified that the aforementioned information may not materialize or may materialize in a materially different way than expected, among other things, due to changes in the data detailed above, which are not under the company's control, including the consequences of the security situation, as detailed in Section 4.7 above, on the Israeli economy in general and on the company's activities in particular and the materialization of any of the risk factors to which the Group is exposed, as detailed in Section 20 in the chapter describing the company's business.

The Board of Directors and the company's management hereby express their appreciation to the company's employees and managers for their contribution to the Group's achievements.

Haim (Hersh) Friedman
Chairman of the Board of Directors

Adi Dana
General Manager

Date: May 27, 2026

Azorim Investment, Development and Construction Co. Ltd.

Summary Condensed Consolidated Interim Statement of Financial Position

As of March 31, 2026

5/28/2026 | 7:31:49 AM | v1.2.5

Azorim Investment, Development and Construction Co. Ltd. and its Subsidiaries

Report for the first quarter of the year 2025

Table of Contents	Page
Review report of the Auditors	1
Condensed consolidated interim statements of financial position	2-3
Condensed consolidated interim statements of profit and loss	4
Condensed consolidated interim statements of comprehensive income (loss)	5
Condensed consolidated interim statements of changes in equity	6-8
Condensed consolidated interim statements of cash flows	9-10
Notes to the condensed consolidated interim financial statements	11-16

Review Report of the Auditors to the Shareholders of Azorim Investment, Development and Construction Co. Ltd.

Introduction

We have reviewed the accompanying condensed consolidated interim financial information of Azorim Investment, Development and Construction Co. Ltd. and its subsidiaries (hereinafter: "the Company"), which includes the condensed consolidated interim statement of financial position as of March 31, 2026, and the condensed consolidated interim statements of comprehensive income, changes in equity, and cash flows for the three-month period then ended. The Board of Directors and management are responsible for the preparation and presentation of financial information for this interim period in accordance with International Accounting Standard 34 "Interim Financial Reporting", and are also responsible for the preparation of financial information for this interim period according to Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of Review

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

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the aforementioned financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 IAS.

In addition to the statement in the preceding paragraph, based on our review, nothing has come to our attention that causes us to believe that the aforementioned financial information does not comply, in all material respects, with the disclosure requirements under Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970.

Brightman Almagor Zohar & Co.

Accountants

A Firm in the Deloitte Global Network

Tel Aviv, May 27, 2026

Tel Aviv - Head Office

1 Azrieli Center, Tel Aviv, P.O.B. 16593 Tel Aviv 6116402 | Telephone: 03-6085555 | [email protected]

Jerusalem Office	Haifa Office	Eilat Office	Nazareth Office
3 Kiryat HaMada	5 Ma'ale HaShihrur	City Center	9 Marj Ibn Amer
Har Hotzvim Tower	P.O.B. 5648	P.O.B. 583	Nazareth, 16100
Jerusalem, 914510	Haifa, 3105502	Eilat, 8810402	Telephone: 073-3994455
P.O.B. 45396	Telephone: 04-8607333	Telephone: 08-6375676	Fax: 073-3994445
Telephone: 02-5018888	Fax: 04-8672528	Fax: 08-6371628	[email protected]
Fax: 02-5374173	[email protected]	[email protected]
[email protected]
Beit Shemesh Office	Ra'anana Office - Infinity Campus	Rishon LeZion Office - Millennia Campus
---	---	---
1 Yigal Allon	8 HaPnina,	23 Rishonim Blvd
Beit Shemesh, 9906201	Ra'anana	Rishon LeZion

Azorim Investment, Development and Construction Co. Ltd. and its Subsidiaries Condensed consolidated interim statement of financial position as of

	March 31 2026 NIS in thousands (Unaudited)	2025 NIS in thousands (Unaudited)	December 31 2025 NIS in thousands (Audited)
Current Assets
Cash and cash equivalents	173,244	137,046	135,564
Restricted cash and deposits in project escort accounts	240,882	266,310	228,786
Short-term loans and deposits	104,378	95,330	77,920
Trade receivables and income receivable	1,312,918	1,010,656	1,312,849
Other receivables and debit balances	248,137	134,647	157,437
Inventory of buildings and land for sale	2,600,889	(*) 2,128,242	2,434,204
Investment property held for sale	12,409	-	11,441
Total Current Assets	4,692,857	3,772,231	4,358,201
Non-current Assets
Land inventory	1,755,864	(*) 1,242,628	1,267,702
Long-term investments, loans, receivables and deposits	151,594	155,423	179,505
Investments in associates accounted for using the equity method	327,838	318,141	323,724
Assets for employee benefits	13,300	12,528	13,300
Investment property	2,295,543	(*) 2,082,235	2,239,536
Fixed assets, net	17,032	15,623	17,432
Right-of-use assets	10,387	10,460	10,387
Total Non-current Assets	4,571,558	3,837,038	4,050,586
Total Assets	9,264,415	7,609,269	8,408,787

(*) Adjustment due to retrospective application of a change in accounting policy - see Note 3

The accompanying notes to the condensed interim financial statements form an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd. and its Subsidiaries Condensed consolidated interim statement of financial position as of

	March 31		December 31
	2026	2025	2025
	NIS in thousands	NIS in thousands	NIS in thousands
	(Unaudited)		(Audited)
Current Liabilities
Credit from banking corporations and others	2,360,580	1,860,599	2,454,693
Current maturities of BONDS	326,813	268,671	326,781
Trade payables, contractors and service providers	235,163	325,894	262,532
Other payables	349,763	222,465	217,004
Current tax liabilities	5,480	23,545	5,696
Provisions	16,353	14,837	15,687
Liabilities for land acquisition in combination transactions	688,955	(*) 519,595	618,790
Contract liabilities	105,305	491,415	263,329
Total Current Liabilities	4,088,412	3,727,021	4,164,512
Non-current Liabilities
BONDS	779,959	839,117	778,629
Long-term loans, credit balances and deposits received	1,674,437	659,698	902,685
Deferred tax liabilities	193,324	(*) 143,541	194,386
Employee benefit liability	780	1,350	780
Total Non-current Liabilities	2,648,500	1,643,706	1,876,480
Equity
Share capital	444,332	435,674	435,674
Capital reserves and others	1,181,437	1,074,919	996,258
Retained earnings	901,734	(*) 727,949	935,863
Total Equity attributable to the owners of the Company	2,527,503	2,238,542	2,367,795
Total Liabilities and Equity	9,264,415	7,609,269	8,408,787

(*) Adjustment due to retrospective application of a change in accounting policy - see Note 3

Chaim (Hersh) Friedman

Chairman of the Board

Adi Dana

CEO

Levi Strassler

CFO

The accompanying notes to the condensed interim financial statements form an integral part thereof.

5/28/2026 | 7:31:50 AM | v1.2.5

Azorim Investment, Development and Construction Co. Ltd. and its subsidiaries

Condensed Consolidated Interim Statement of Profit or Loss

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)	(Unaudited)	(Audited)
Income
From sale of buildings, land and construction services	387,766	485,292	1,769,693
Rent, usage fees and management services	29,349	26,450	109,701
	417,115	511,742	1,879,394
Costs
Cost of buildings, land sold and works performed	296,493	381,471	1,379,296
Cost of services and maintenance expenses	8,994	7,668	28,335
	305,487	389,139	1,407,631
Gross profit	111,628	122,603	471,763
Increase (decrease) in fair value and realization of investment property, net	-	-	107,085
	111,628	122,603	578,848
Selling and marketing expenses	(17,131)	(16,194)	(64,745)
General and administrative expenses	(16,180)	(14,805)	(54,581)
Initial initiation expenses and other income (expenses), net	508	(3,848)	(5,072)
Profit from operations	78,825	87,756	454,450
Financing income	14,263	11,858	63,173
Financing expenses	(70,814)	(52,502)	(212,528)
Financing expenses, net	(56,551)	(40,644)	(149,355)
Group's share in profits (losses) of companies accounted for using the equity method, net	3,634	(5,717)	(1,357)
Profit before taxes on income	25,908	41,395	303,738
Taxes on income	(5,240)	(8,949)	(63,563)
Profit for the period attributable to the owners of the company	20,668	32,446	240,175
Basic and diluted earnings per share (in NIS)	0.1	0.15	1.14

The accompanying notes to the condensed consolidated interim financial statements form an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd. and its subsidiaries
Condensed Consolidated Interim Statement of Comprehensive Income

	For the three-month period ended March 31		For the year ended December 31
	2026
NIS thousands
(Unaudited)	2025
NIS thousands
(Unaudited)	2025
NIS thousands
(Audited)
Profit for the period	20,668	32,446	240,175
Other components of comprehensive income:
Items that will not be reclassified in the future to the statement of profit or loss, net of tax:
Remeasurement of net liability for defined employee benefit, net of tax	-	-	185
Items that were previously classified and/or will be reclassified in the future to the statement of profit or loss, net of tax:
Foreign currency translation differences for foreign operations, net of tax	(4,457)	9,667	(69,615)
Total other comprehensive income (loss)	(4,457)	9,667	(69,430)
Total comprehensive income for the period, net of tax	16,211	42,113	170,745
Total comprehensive income attributable to:
Owners of the company	16,211	42,113	170,745

The accompanying notes to the condensed consolidated interim financial statements form an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd. and its subsidiaries
Condensed Consolidated Interim Statement of Changes in Equity

	Attributable to owners of the company
	Share capital NIS thousands	Share premium NIS thousands	Adjustments from translation of financial statements of foreign operations NIS thousands	Capital reserve from transactions with controlling shareholders NIS thousands	Other capital reserves NIS thousands	Receipts on account of warrants NIS thousands	Retained earnings NIS thousands	Total equity attributable to owners of the company NIS thousands
For the three-month period ended March 31, 2026 (Unaudited)
Balance as of January 1, 2026	435,674	1,088,200	(108,198)	6,076	10,180	-	935,863	2,367,795
Profit for the period	-	-	-	-	-	-	20,668	20,668
Other components of other comprehensive income:
Foreign currency translation differences for continuing foreign operations, net of tax	-	-	(4,457)	-	-	-	-	(4,457)
Total comprehensive income for the period	-	-	(4,457)	-	-	-	20,668	16,211
Share-based payment	-	-	-	-	256	-	-	256
Issuance of ordinary shares and warrants (*)	8,658	173,912	-	-	-	15,468	-	198,038
Dividend declared	-	-	-	-	-	-	(54,797)	(54,797)
Balance as of March 31, 2026 (Unaudited)	444,332	1,262,112	(112,655)	6,076	10,436	15,468	901,734	2,527,503

(*) Net of issuance expenses.

The accompanying notes to the condensed consolidated interim financial statements form an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd. and its subsidiaries Condensed Consolidated Interim Statement of Changes in Equity

	Attributable to owners of the company
	Share capital NIS thousands	Share premium NIS thousands	Adjustments from translation of financial statements of foreign operations NIS thousands	Capital reserve from transactions with controlling shareholders NIS thousands	Other capital reserves NIS thousands	Retained earnings NIS thousands	Total equity attributable to owners of the company NIS thousands
For the three-month period ended March 31, 2025 (Unaudited)
Balance as of January 1, 2025	435,674	1,088,200	(38,583)	6,076	9,559	728,905	2,229,831
Cumulative effect of retrospective application of accounting policy (*)	-	-	-	-	-	6.598	6.598

	Attributable to owners of the company
	Share capital NIS thousands	Share premium NIS thousands	Adjustments from translation of financial statements of foreign operations NIS thousands	Capital reserve from transactions with controlling shareholders NIS thousands	Other capital reserves NIS thousands	Retained earnings NIS thousands	Total equity attributable to owners of the company NIS thousands
Balance as of January 1, 2025 after cumulative effect of retrospective application of accounting policy	435,674	1,088,200	(38,583)	6,076	9,559	735.503	2.236.429
Profit for the period	-	-	-	-	-	32.446	32.446
Other components of other comprehensive income:
Foreign currency translation differences for continuing foreign operations, net of tax	-	-	9.667	-	-	-	9.667
Total comprehensive income for the period	-	-	9.667	-	-	32.446	42.113
Dividend declared	-	-	-	-	-	(40.000)	(40.000)
Balance as of March 31, 2025 (Unaudited)	435,674	1,088,200	(28,916)	6,076	9,559	727.949	2.238.542

(*) Adjustment for retrospective application of change in accounting policy - see Note 3

The accompanying notes to the condensed consolidated interim financial statements form an integral part thereof.

5/28/2026 | 7:31:52 AM | v1.2.5

Azorim Investment, Development and Construction Co. Ltd. and its consolidated companies Condensed Consolidated Interim Statement of Changes in Equity

Attributable to the owners of the Company
For the year ended December 31, 2025	Share capital	Share premium	Adjustments arising from translation of financial statements of foreign operations	Capital reserve from transactions with controlling shareholders	Other capital reserves	Retained earnings	Total equity attributable to the owners of the Company
	NIS thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands	NIS thousands
Balance as of January 1, 2025	435,674	1,088,200	(38,583)	6,076	9,559	728,905	2,229,831
Cumulative effect of retrospective application of an accounting policy (*)	-	-	-	-	-	6,598	6,598
Balance as of January 1, 2025 after the cumulative effect of retrospective application of an accounting policy	435,674	1,088,200	(38,583)	6,076	9,559	735,503	2,236,429
Profit for the year	-	-	-	-	-	240,175	240,175
Other components of other comprehensive loss:
Foreign currency translation differences for continuing foreign operations, net of tax	-	-	(69,615)	-	-	-	(69,615)
Remeasurement of net liability for defined benefit for employees	-	-	-	-	-	185	185
Total comprehensive income (loss) for the year	-	-	(69,615)	-	-	240,360	170,745
Share-based payment	-	-	-	-	621	-	621
Dividend paid	-	-	-	-	-	(40,000)	(40,000)
Balance as of December 31, 2025 (Audited)	435,674	1,088,200	(108,198)	6,076	10,180	935,863	2,367,795

(*) Adjustment regarding retrospective application of a change in accounting policy - see Note 3J
The accompanying notes to the condensed consolidated interim financial statements form an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd. and its consolidated companies

Condensed Consolidated Interim Statement of Cash Flows

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)	(Unaudited)	(Audited)
Cash flows from operating activities
Net profit for the period	20,668	32,446	240,175
Adjustments
Group's share in results of associates accounted for using the equity method	(3,634)	5,717	1,357

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)	(Unaudited)	(Audited)
Change regarding employee benefits	-	-	346
Depreciation and amortization	364	599	1,930
Impairment of investment in an associate accounted for using the equity method	-	3,932	3,932
Gain from change in fair value and realization of investment property, net	-	-	(107,085)
Equity-based compensation for management services	(359)	(315)	(1,537)
Share-based payment	256	-	621
Finance costs, net	56,551	40,644	149,355
Provisions for impairment of financial assets, net	161	289	1,117
Income tax expenses	5,240	8,949	63,563
Income taxes paid in cash, net	(5,707)	(5,253)	(19,655)
Decrease (increase) in other customers and income receivable	9,404	(655)	15,851
Decrease (increase) in debtors and debit balances	(91,175)	12,662	(16,723)
Increase in inventory of buildings for sale, contract assets and liabilities, net	(322,082)	(*) (379,380)	(1,188,152)
Increase (decrease) in liabilities to suppliers and service providers	(11,383)	(*) 21,838	(21,354)
Increase in other payables and liabilities regarding land acquisition in combination transactions	117,695	19,690	120,906
Net cash used for operating activities (before changes in lands)	(224,001)	(238,836)	(755,353)
Change in lands, net	(488,610)	(17,099)	(53,712)
Net cash used for operating activities	(712,611)	(255,935)	(809,065)
Cash flows from investing activities
Acquisition and investment in investment property and fixed assets	(69,151)	(52,344)	(253,937)
Change in short-term bank deposits, net	(1,180)	8,755	38,847
Interest received in cash	2,854	4,339	12,888
Change in short-term loans and deposits to others, net	128	(663)	(13,839)
Change in cash and other financial assets restricted in use in support accounts	(12,096)	199,971	237,495
Consideration and advances from sale of investment property	2,482	196,976	203,245
Taxes paid for sale of investment property	(400)	(7,703)	(7,703)
Long-term loans granted	(1,527)	(4,533)	(10,452)
Net cash provided by (used for) investing activities	(78,890)	344,799	206,544

The accompanying notes to the condensed consolidated interim financial statements form an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd. and its consolidated companies Condensed Consolidated Interim Statement of Cash Flows

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)		(Audited)
Cash flows from financing activities
Receipt (repayment) of short-term credit from banks and others, net	314,133	(147,602)	477,091
Receipt of long-term loans from banks	368,655	39,006	782,531
Consideration from issuance of BONDS less issuance expenses	-	-	257,390
Consideration from issuance of shares, less issuance expenses	198,038	-	-
Repayment of long-term liabilities to banks, BONDS and others	-	-	(703,645)
Interest paid	(51,439)	(35,810)	(224,088)
Dividend paid	-	-	(40,000)
Net cash provided by (used for) financing activities	829,387	(144,405)	549,279
Increase (decrease) in cash and cash equivalents	37,886	(55,541)	(53,242)
Cash and cash equivalents at beginning of period	135,564	192,079	192,079
Effect of exchange rate fluctuations on cash and cash equivalent balances	(206)	508	(3,273)
Cash and cash equivalents at end of period	173,244	137,046	135,564

Appendix A - Financing and investing activity not involving cash flows

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)		(Audited)
Investment in investment property on credit	10,150	23,911	26,145
Dividend declared and not yet paid	54,797	40,000	-

For the three-month period ended March 31		For the year ended December 31
2026	2025	2025
NIS thousands	NIS thousands	NIS thousands
(Unaudited)		(Audited)
64,947	63,911	26,145

The accompanying notes to the condensed consolidated interim financial statements form an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd. and its consolidated companies

Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

1. General

Azorim Investment, Development and Construction Co. Ltd. (hereinafter: "the Company") is an Israeli resident company incorporated in Israel, located at 32 Aranya St., Tel Aviv. The consolidated financial statements of the Group as of March 31, 2026, include those of the Company and its consolidated companies (hereinafter together: "the Group"), as well as the Group's rights in associates, joint ventures and joint operations. The Company is a company controlled by Mr. Chaim (Hersh) Friedman and his family members, through Adarim Star Ltd. The Group operates in four fields of activity, including residential construction entrepreneurship in Israel, non-residential investment property in Israel, residential investment property in Israel, and residential investment property in the USA. The Company's securities are listed for trading on the Tel Aviv Stock Exchange.

2. Basis of Preparation of the Financial Statements

A. Statement of compliance with International Financial Reporting Standards

The condensed consolidated interim financial statements were prepared in accordance with IAS 34, "Interim Financial Reporting," and do not include all the information required in full annual financial statements. They should be read together with the financial statements for the year ended December 31, 2025 (hereinafter: "the Annual Reports"). Furthermore, these reports were prepared in accordance with the disclosure requirements in Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970.

The consolidated reports were approved for publication by the Company's Board of Directors on May 27, 2026.

B. Use of estimates and judgment

In preparing the condensed consolidated interim financial statements in accordance with IFRS, the Company's management is required to use judgment in evaluations, estimates, and assumptions that affect the application of policies and the amounts of assets and liabilities, income and expenses. It should be clarified that actual results may differ from these estimates.

Management's judgment when applying the Group's accounting policy and the primary assumptions used in assessments involving uncertainty are consistent with those used in preparing the annual financial statements.

C. Determination of fair value of investment property and investment property under construction in interim reports

For the purpose of determining the fair value of investment property, the Company relies on a valuation performed by an independent appraiser once a year. Additionally, at each interim reporting date, the Company examines the need to update the estimate of the fair value of its investment property relative to its fair value determined on the last date a valuation was performed, to examine whether this estimate represents a reliable estimate of fair value as of the interim reporting date. This examination is done by reviewing changes in the relevant real estate market, in the property's lease agreements, in the macro-economic environment of the property, and new information regarding material transactions made in the property's vicinity and similar properties and any other information that may indicate changes in the fair value of the property. If, in the Company's estimation, there are signs for a particular property that the fair value at the interim reporting date is materially different from the fair value estimated on the last date a valuation was performed, the Company estimates the fair value of these assets as of the interim reporting date using an external appraiser.

The Company examined the need for updating the value of its assets for the report date. In the examination performed during the report period, which included economic impact factors such as capitalization rates, occupancy rate, and rent on the Company's assets, it was found that as of the record date, no material change occurred in the working assumptions that formed the basis for the valuations of the Company's assets as of December 31, 2025.

3. Significant Accounting Policies

A. The Group's accounting policy in these condensed consolidated interim financial statements is the policy that was applied in the Group's annual reports for the year 2025.

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Azorim Investment, Development and Construction Co. Ltd. and its consolidated companies

Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

3. Summary of Significant Accounting Policies (Continued)

B. Cumulative effect of retrospective application due to a change in accounting policy for urban renewal transactions

On July 7, 2025, the staff of the Israel Securities Authority published Staff Accounting Position 11-6 regarding the accounting treatment of urban renewal transactions, which includes references to various issues including: alternatives for land measurement at the date of initial recognition (based on fair value. However, as a practical relief and practical method, the land can be measured based on the value of the liability to provide construction services plus the value of the liability to pay rent to the evacuated landowners (hereinafter: "the indirect approach"), provided that this measurement method does not lead to an unreasonable valuation that significantly deviates from the land's value. Furthermore, when a component of the project is classified in the financial statements as investment property, the indirect approach cannot be used), timing of land value measurement, date of initial recognition of land, measurement of the liability to pay rent, date of initial recognition of an asset for pre-execution costs, allocation of pre-execution costs, and measurement of the significant financing component. The staff position was published with the aim of bringing uniform accounting treatment to combination transactions in return for providing apartments and does not determine that other interpretations implemented before its publication date were erroneous. The implementation of the staff position is treated as a change in accounting policy applied retrospectively.

Below are the effects of applying the staff position on the consolidated statement of financial position as of March 31, 2025:

	Effect of Change	As reported in these financial statements	As previously reported
			Audited
	NIS thousands	NIS thousands	NIS thousands
Inventory of buildings and land for sale	2,134,694	(6,452)	2,128,242
Land inventory	1,235,513	7,115	1,242,628
Investment property	2,084,836	(2,601)	2,082,235
Liabilities for land acquisition in combination transactions	532,561	(12,966)	519,595
Deferred tax liabilities	139,111	4,430	143,541
Retained earnings	721,351	6,598	727,949
Total equity	2,231,944	6,598	2,238,542

4. Private placement of shares and warrants

On February 25, 2026, the Company completed a private placement of 8,658,010 ordinary shares of the Company, registered by name, of NIS 1 par value each, as well as an allocation of 4,329,005 warrants not registered for trading, exercisable for 4,329,005 Company shares, for a total consideration (gross) of NIS 200 million.

warrants are exercisable on any trading day on the TASE, starting from their allocation date and for a period of two years ("the exercise period") against a cash payment of the exercise price of NIS 30 per warrant. The exercise price of the warrants and/or the number of shares resulting from the exercise of the warrants will be subject to standard adjustments such as share consolidation, share split, bonus shares distribution, rights offering, and dividend distribution.

5. Dividend distribution

On March 26, 2026, the Company's Board of Directors approved a dividend in kind of 6,999,648 shares of Azorim Living whose value as of the distribution date totaled NIS 33.6 million, as well as a cash dividend distribution in a total amount of NIS 20 million. After the report date, on April 13, 2026, the dividend in kind was distributed and on April 16, 2026, the cash dividend was distributed. The total dividend distributed to the Company's shareholders represented as of that date 0.2565 NIS per ordinary share of NIS 1 par value of the Company.

Azorim Investment, Development and Construction Co. Ltd. and its consolidated companies

Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

6. Acquisition of Commercial Avenue in Ramat Efal

On February 15, 2026, Azorim Binyan entered into an agreement to acquire approximately 4,500 gross sqm of commercial space plus 103 parking spaces and associated storage rooms ("the Acquired Property"), for a total consideration of approximately NIS 136.4 million, plus VAT as required by law. According to the provisions of the agreement, the seller committed to deliver the Acquired Property to the Company at a shell level by December 31, 2028. 15% of the consideration was paid on the date of signing the agreement. The balance of the consideration will be paid to the seller adjusted to the Construction Input Price Index in accordance with the provisions of the Sale Law on the following dates: (a) 20% will be paid 12 months after the date of signing the agreement; and (b) 65% will be paid upon receipt of the seller's notice that construction of the Acquired Property has been completed. In the event of a change in the area of the Acquired Property exceeding 5% of the total commercial space, the Company will be entitled to notify the cancellation of the agreement.

7. Winning a Tender for Land Acquisition in Rishon LeZion

On March 9, 2026, a notice was received from the Rishon LeZion Municipality that Azorim Binyan won a tender for the acquisition of ownership rights in lot no. 104 and according to plan 413-1275783 block 3947 in part of parcel 108 in Rishon LeZion. The lot area is approximately 4,861 sqm and according to the provisions of the updated Urban Building Plan (TABA), 226 housing units can be established on it. The proposal submitted by the Company for the acquisition of ownership rights in the lot stood at a total of approximately NIS 306.5 million plus VAT as required by law.

During March 2026, the Company completed the payment of the consideration for the land; however, as of the date of approval of this report, all approvals constituting a suspensive condition for the land acquisition agreement to come into effect have not yet been received.

8. Shareholding Limit in REIT Azorim - H.P. Living Ltd. ("Azorim Living") and Classification of Dormant Shares

The Company's (indirect) holdings exceeding 30% of the means of control in Azorim Living were classified as dormant shares as defined in Section 308 of the Companies Law (and therefore do not grant the Company the right to vote at the General Meeting of Azorim Living, receive a dividend, bonus shares or rights), this is in accordance with the restrictions applicable to Azorim Living as a real estate investment trust according to the provisions of the Income Tax Ordinance and Azorim Living's bylaws. As of the date of this report, the Company holds 39,272,291 shares of Azorim Living, of which 9,865,693 are dormant shares classified as an investment in a financial asset measured at fair value based on a quoted share price. During the reporting period, the Company recorded a loss from fair value adjustment of these shares totaling approximately NIS 6.5 million. After the dividend in kind distribution of 6,999,648 shares of Azorim Living on April 13, 2026 (as detailed in section 5 above), the Company holds 32,345,296 shares, of which 1,841,855 are dormant shares.

9. Intention to Issue Subsidiary Azorim Miroza Ltd.

During the reporting period, the Company's Board of Directors decided on the issuance of BONDS on the Tel Aviv Stock Exchange ("the TASE") by Miroza, a private company incorporated in Israel wholly owned by the Company that holds (through a subsidiary in the USA) operations in the USA. The BONDS are expected to be secured by a first lien on the residential rental project Miroza Tower in Yonkers, USA and on the shares of the company holding the asset. The issuance proceeds (totaling up to NIS 300 million) are primarily intended to be used by the company in the USA for the repayment of the construction loan provided to it. Miroza submitted an application for a permit to publish a prospectus based on its financial statements for the year 2025, which is expected to be received shortly after the approval of this report.

10. Company Rating and Traded Securities

On March 23, 2026, the rating company Midroog Ltd. ("Midroog") announced the approval of the Company's rating and the approval of the rating for the BONDS (Series 13, 14, and 16) at a rating of A1.il and also the approval of the rating for the BONDS (Series 15) at a rating of Aa3.il, with a stable rating outlook. Additionally, Midroog left the P-1.il rating unchanged for commercial papers (Series 1) issued by the Company.

11. Special General Meeting of the Company's Shareholders

On May 4, 2026, the Special General Meeting of the Company's shareholders passed a resolution to approve the granting of a bonus of two salaries to Mr. Adi Dana, the Company's CEO.

Azorim Investment, Development and Construction Co. Ltd. and its consolidated companies

Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

12. Approval of Purchase of Insurance Policy for Directors' and Officers' Liability in the Company

On March 2, 2026, the Company's Compensation Committee approved the purchase of a directors' and officers' liability insurance policy, under terms similar but not identical to the terms of the existing policy, for the period from March 10, 2026 (end of the existing insurance policy period) until September 9, 2027 (a period of 18 months), with a liability coverage limit of up to 35 million dollars (per occurrence and in aggregate for the insurance period), with a deductible in an amount not exceeding a total of 125 thousand dollars, for a premium of 198.8 thousand dollars (annual premium of 132.5 thousand dollars) to cover claims received during this period. In addition, the Company entered into a directors' and officers' insurance policy of type SIDE A DIC (Difference in Conditions) for the same period, with a liability coverage limit of up to 5 million dollars, for a premium of 31.8 thousand dollars (annual premium of 21.2 thousand dollars). The approval of the engagement in the Company's Compensation Committee was done in accordance with the Company's compensation policy, and in accordance with Regulation 1B1 of the Companies Regulations (Reliefs in Transactions with Interested Parties), 2000.

13. Contingent Liabilities

Following Note 19 to the Company's financial statement for the period ended December 31, 2025 regarding the Geha claim, on April 13, 2026, a partial arbitration award was received regarding the liability issue, within which the arbitrator rejected a series of material claims and remedies sought by Geha, including the claim for unjust enrichment in the amount of approximately NIS 297 million; the claim for piercing the corporate veil between the consolidated company and the Company; the personal claim of the shareholders in Geha against the Company in the amount of NIS 20 million; and the claim for "benefits" in the amount of NIS 75 million. Alongside this, the Company's and the consolidated company's claim regarding the statute of limitations of the procedure was rejected. Furthermore, the arbitrator determined that the temporary suspension of the project in 2008, against the backdrop of the global financial crisis, was a legitimate business decision of the consolidated company and that Geha agreed to this suspension at that time. However, it was determined that from March 25, 2012, there were no longer agreements from Geha to continue the project suspension, and from this date until the outbreak of the conflict between the parties in 2017, the consolidated company should have resumed work on the project, and in failing to do so, the consolidated company committed a fundamental breach of the contractual system between the parties. Nevertheless, the arbitrator determined that Geha's conduct was tainted by heavy and unreasonable delay and a breach of its obligation to mitigate its damages, and that a significant contributory fault should be attributed to Geha. The arbitrator further determined that the issue of the rate of contributory fault, the obligation to mitigate the damage and their implications on the scope of the monetary liability, if any is determined, will be decided in the second stage of the procedure. The question of the alleged damage has also not yet been decided by the arbitrator at this stage of the procedure.

Within the counterclaim filed by the consolidated company, the arbitrator accepted the consolidated company's claim that a deadlock was created between the parties, and ordered the separation of the parties, the cancellation of the joint venture agreement and the dissolution of the partnership in the land. The arbitrator determined that the manner of land realization will be determined later in the procedure, after receiving further clarifications regarding National Infrastructure Plan (TTL) 121 and the expected expropriation of the land.

Regarding the loans provided to Geha, the arbitrator determined, among other things, that regarding the loan provided by the consolidated company to Geha intended to settle Geha's previous debts to third parties and remove liens that encumbered the land, Geha is obligated to pay the principal of the loan and interest and linkage payments for it, until March 25, 2012. The arbitrator also determined that starting from the said date, Geha will bear linkage differences (while examining the liability for contractual interest later in the procedure, such that the arbitrator may exempt Geha entirely from contractual interest payments, exempt it partially or charge it fully). Loans provided to finance project expenses and additional financing components created until March 25, 2012 will bear interest and linkage. Amounts created from this date onwards and the monetary accounting between the parties will be discussed in the second stage of the procedure. A further hearing before the arbitrator was set for June 4, 2026.

According to the assessment of the Company's management and Board of Directors, based on the opinions of the Company's legal advisors, as well as an appraisal opinion and an economic opinion submitted in the arbitration procedure, the amount claimed by Geha from the Company and the consolidated company has no basis and the chances of the claim in this amount being accepted are, at most, very low. In addition, the chance that a liability will be imposed on the consolidated company beyond the loans provided by the consolidated company to Geha is 50%, while the consolidated company has the right to offset any compensation (if awarded against it) against the amounts it gave as loans to Geha. These interim financial statements reflect the assessment of the Company's management and Board of Directors, based on the opinions of the Company's and the consolidated company's legal advisors, regarding the impact of the possible consequences of the amended claim and the partial award of the arbitrator on the Company's financial position and results of operations.

Azorim Investment, Development and Construction Co. Ltd. and its consolidated companies Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

14. Segment Reporting

A. General

The Group's ongoing operations include four reportable segments. These segments include projects and assets for which information is managed separately and reviewed by the Group's chief operating decision-maker.

Residential construction in Israel.
Residential rental investment property in Israel - through an associate. This segment includes the data of the REIT Azorim Living (an associate), and the management activities of the fund by the Company.
Income-producing properties - non-residential investment property in Israel.
Residential rental investment property in the USA.

Segment results are measured based on the segment's gross profit, including the increase (decrease) in the fair value of investment property and other income (expenses), net resulting from the realization of segment assets. Segment results include the Company's proportionate share in the financial data of certain associates (in the residential construction segment) or full consolidation (in the residential rental segment in Israel) of companies treated according to the equity method and eliminated as part of the adjustments.

B. Information about reportable segments

For the three-month period ended March 31, 2026 (Unaudited)
	Residential construction	Income-producing properties	Residential rental		Adjustments	Total
	Israel	Israel	Israel	USA
NIS thousands
Segment revenue	387,766	10,650	25,240	12,811	(19,352)	417,115
Segment results	91,384	9,570	25,044	6,829	(21,360)	111,467
Included in segment results:
Change in fair value of investment property, net	-	-	3,913		(3,913)	-
For the three-month period ended March 31, 2025 (Unaudited)
---	---	---	---	---	---	---
	Residential construction	Income-producing properties	Residential rental		Adjustments	Total
	Israel	Israel	Israel	USA
NIS thousands
Segment revenue	486,185	9,613	20,107	12,248	(16,411)	511,742
Segment results	104,688	8,450	1,304	7,734	138	122,314
Included in segment results:
Change in fair value of investment property, net	-	-	(14,884)		14,884	-

For the year ended December 31, 2025
	Residential construction	Income-producing properties	Residential rental		Adjustments	Total
	Israel	Israel	Israel	USA
NIS thousands
Segment revenue	1,769,693	41,804	84,310	51,342	(67,755)	1,879,394
Segment results	390,915	88,528	85,000	89,889	(76,601)	577,731
Included in segment results:
Change in fair value of investment property, net	-	50,596	15,665	56,489	(15,665)	107,085
Depreciation, amortization and impairment	-	209	-	-	-	209

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Azorim Investment, Development and Construction Co. Ltd. and its consolidated companies

Notes to the Summary Consolidated Interim Financial Statements (Unaudited)

14. Segment Reporting (Continued)

C. Adjustments regarding reportable segment of profit and loss

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS in thousands
	(Unaudited)	(Unaudited)	(Audited)
Total profit and loss for reportable segments	111,467	122,314	577,731
Unattributed amounts:
Selling expenses	(17,131)	(16,194)	(64,745)
General and administrative expenses	(16,180)	(14,805)	(54,581)
Other income (expenses), net	669	(3,559)	(3,955)
Financing income	14,263	11,858	63,173
Financing expenses	(70,814)	(52,502)	(212,528)
Group's share in profits (losses) of held companies accounted for using the equity method	3,634	(5,717)	(1,357)
Profit before income taxes	25,908	41,395	303,738

15. Financial Instruments

Except as detailed in the following table, the Group believes that the carrying amount of financial assets and liabilities presented at amortized cost in the interim financial statements is approximately equal to their fair value:

	As of March 31				As of December 31
	2026		2025		2025
	NIS in thousands
	Carrying amount	Fair value	Carrying amount	Fair value	Carrying amount	Fair value
Tradable BONDS	1,115,655	1,102,556	1,114,103	1,063,701	1,105,410	1,095,454

The fair value of traded BONDS is measured in accordance with Level 1 and is based on quoted prices in an active market as of the reporting date (the Tel Aviv Stock Exchange).

Azorim Investment, Development and Construction Co. Ltd.

Summary of separate financial information presented according to Regulation 38D of the Securities Regulations

(Periodic and immediate reports), 1970 - financial data from the summary of the consolidated interim financial statements attributed to the company itself

As of March 31, 2026

Separate financial information as of March 31, 2026

Section	Page
Auditors' special report	1
Separate financial information:
Summary data on the interim financial position	2-3
Summary data on the interim profit and loss	4
Summary data on the interim comprehensive income	5
Summary data on the interim cash flows	6-7
Summary additional information for the interim financial statements	8

The Shareholders of Azorim Investment, Development and Construction Co. Ltd.

Auditor's special report for the review of the separate interim financial information under Regulation 38D of the Securities Regulations (Periodic and immediate reports), 1970

Introduction

We have reviewed the separate interim financial information presented in accordance with Regulation 38D of the Securities Regulations (Periodic and immediate reports), 1970 of Azorim Investment, Development and Construction Co. Ltd. as of March 31, 2026, and for the three-month period then ended. The Company's Board of Directors and Management are responsible for the preparation and presentation of this separate interim financial information in accordance with Regulation 38D of the Securities Regulations (Periodic and immediate reports), 1970. Our responsibility is to express a conclusion on this separate interim financial information based on our review.

Scope of Review

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the abovementioned separate interim financial information is not prepared, in all material respects, in accordance with the provisions of Regulation 38D of the Securities Regulations (Periodic and immediate reports), 1970.

Brightman Almagor Zohar & Co.

Certified Public Accountants

A Firm in the Deloitte Global Network

Tel Aviv, May 27, 2026

Tel Aviv - Head Office

Azrieli Center 1 Tel Aviv, P.O.B. 16593 Tel Aviv 6116402 | Phone: 03-6085555 | [email protected]

Jerusalem Office	Haifa Office	Eilat Office	Nazareth Office
3 Kiryat HaMada	5 Ma'ale HaShihrur	The City Center	9 Marj Ibn Amer
Har Hotzvim Tower	P.O.B 5648	P.O.B 583	Nazareth, 16100
Jerusalem, 914510	Haifa, 3105502	Eilat, 8810402

P.O.B 45396

Phone: 02-5018888

Fax: 02-5374173

[email protected]

Phone: 04-8607333

Fax: 04-8672528

[email protected]

Phone: 08-6375676

Fax: 08-6371628

[email protected]

Phone: 073-3994455

Fax: 073-3994445

[email protected]

Beit Shemesh Office

1 Yigal Allon

Beit Shemesh, 9906201

Ra'anana Office - Infinity Complex

8 HaPnina,

Ra'anana

Rishon LeZion Office - Milonia Complex

23 Rishonim Blvd.

Rishon LeZion

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Azorim Investment, Development and Construction Co. Ltd.

Separate Interim Financial Information

Summary of Data on the Interim Financial Position

	As of March 31		As of December 31
	2026	2025	2025
	NIS thousands
	(Unaudited)		(Audited)
Assets
Cash and cash equivalents	2,590	1,012	69
Short-term loans and deposits	-	1	1
Short-term loans and current maturities of long-term loans to investee companies	526,813	468,671	526,781
Related companies receivables	63,725	26,781	18,432
Other receivables	2,093	1,156	1,158
Total current assets	595,221	497,621	546,441
Loans to investee companies	979,960	839,117	978,629
Loans and capital notes of investee companies	208,038	24,390	10,000
Investments in investee companies	2,332,191	2,240,562	2,350,550
Total non-current assets	3,520,189	3,104,069	3,339,179

Total assets	4,115,410	3,601,690	3,885,620

The additional information attached to the summary of separate interim financial information constitutes an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd.

Separate Interim Financial Information

Summary of Data on the Interim Financial Position

	As of March 31		As of December 31
	2026	2025	2025
	NIS thousands
	(Unaudited)		(Audited)
Liabilities
Short-term credit from banks and others	200,000	200,000	200,000
Current maturities of BONDS	326,813	268,671	326,781
Suppliers and service providers	3,315	1,981	611
Other payables	77,820	59,977	11,804
Total current liabilities	607,948	530,629	539,196

BONDS	779,959	839,117	778,629
Long-term financial liability	200,000	-	200,000
Total non-current liabilities	979,959	839,117	978,629

Equity
Share capital	444,332	435,674	435,674
Capital reserves and others	1,181,437	1,074,919	996,258
Retained earnings	901,734	721,351	935,863
Total equity attributable to owners of the company	2,527,503	2,231,944	2,367,795

Total liabilities and equity	4,115,411	3,601,690	3,885,620

Haim (Hersh) Friedman

Chairman of the Board

Adi Dana

CEO

Levi Strassler

CFO

Date of approval of the separate financial information: May 27, 2026

The additional information attached to the summary of separate interim financial information constitutes an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd.

Separate Interim Financial Information

Summary of Data on Interim Profit and Loss

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)	(Unaudited)	(Audited)
Revenues
From sale of buildings and lands	-	-	356
Gross profit	-	-	356
General and administrative expenses	(256)	241	(621)
Other income (expenses), net	-	-	4
Operating profit (loss)	(256)	241	(261)
Finance income	15,300	11,446	55,889
Finance expenses	(15,271)	(11,455)	(55,764)
Finance income (expenses), net	29	(9)	125
Company's share in results of investee companies, net of tax	20,895	32,214	240,311
Profit before income taxes	20,668	32,446	240,175
Income taxes	-	-	-
Profit for the period attributable to owners of the company	20,668	32,446	240,175

The additional information attached to the summary of separate interim financial information constitutes an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd. Separate Interim Financial Information

Summary of Data on Interim Comprehensive Income

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)	(Unaudited)	(Audited)

Profit for the period	20,668	32,446	240,175

Other components of comprehensive income
Amounts that will not be reclassified subsequently to profit or loss, net of tax:
Remeasurement of net liability for defined benefit plan for employees in investee companies, net of tax	-	-	185
Amounts that were reclassified in the past or will be reclassified subsequently to profit or loss, net of tax:
Foreign currency translation differences for foreign operations, net of tax	(4,457)	9,667	(69,615)
Total other comprehensive income (loss)	(4,457)	9,667	(69,430)

Total comprehensive income for the period, net of tax	16,211	42,113	170,745

Total comprehensive income attributable to:
Owners of the company	16,211	42,113	170,745

The additional information attached to the summary of separate interim financial information constitutes an integral part thereof.

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Azorim Investment, Development and Construction Co. Ltd. Interim Separate Financial Information

Condensed Interim Statements of Cash Flows

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)	(Unaudited)	(Audited)
Cash flows from operating activities
Net profit for the period	20,668	32,446	240,175
Adjustments
Company's share in results of investees, net of tax	(20,895)	(32,214)	(240,311)
Share-based payment	256	-	621
Financing expenses (income), net	(29)	9	(125)
Decrease (increase) in debtors and debit balances	191	(3,051)	(12,408)
Increase (decrease) in trade payables	2,704	948	(422)
Increase (decrease) in other payables	(403)	1,137	10,668
Net cash provided by (used in) operating activities	2,492	(725)	(1,802)

Cash flows from investing activities
Repayment of (granting) loans from investees, net	-	-	(188,579)
Change in short-term deposits to others, net	-	1	1
Dividend received from investees	-	-	25,610
Capital notes and promissory notes of investees	(198,038)	-	14,390
Interest received in cash	2,315	-	44,070
Net cash used in (provided by) investing activities	(195,723)	1	(104,508)

The additional information attached to the condensed interim separate financial information forms an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd. Interim Separate Financial Information

Condensed Interim Statements of Cash Flows

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)		(Audited)
Cash flows from financing activities
Receipt of long-term loan from banking corporations and others	-	-	200,000
Repayment of BONDS	-	-	(268,811)
Proceeds from issuance of BONDS, net of issuance expenses	-	-	257,390
Proceeds from issuance of shares and warrants, net of issuance expenses	198,038	-	-
Interest paid	(2,286)	(9)	(43,945)
Dividend payment	-	-	(40,000)
Net cash provided by (used in) financing activities	195,752	(9)	104,634
Increase (decrease) in cash and cash equivalents	2,521	(733)	(1,676)
Cash and cash equivalents at the beginning of the period	69	1,745	1,745
Cash and cash equivalents at the end of the period	2,590	1,012	69

Appendix A - Financing and investing activity not involving cash flows

	For the three-month period ended March 31		For the year ended December 31
	2026	2025	2025
	NIS thousands	NIS thousands	NIS thousands
	(Unaudited)		(Audited)
Declared dividend	54,797	40,000	-

The additional information attached to the condensed interim separate financial information forms an integral part thereof.

Azorim Investment, Development and Construction Co. Ltd.
Financial data from the condensed interim consolidated financial statements attributed to the Company itself

Summary of additional information to the interim financial statements

General

Below is a summary of financial data from the summary of the Group's interim consolidated financial statements as of March 31, 2026 (hereinafter - "Consolidated Reports"), published within the Periodic reports, attributed to the Company itself (hereinafter - "Condensed Interim Separate Financial Information"), presented in accordance with the provisions of Regulation 38D (hereinafter - "the Regulation") and the Tenth Schedule to the Securities Regulations (Periodic and Immediate Reports) 5730-1970 (hereinafter - "the Tenth Schedule") regarding the condensed interim separate financial information of the corporation. This condensed interim separate financial information should be read in conjunction with the separate financial information as of December 31, 2025 and in conjunction with the Consolidated Reports.

In this summary of separate interim financial information -

(1) The Company - Azorim Investment, Development and Construction Co. Ltd.
(2) Consolidated companies/subsidiaries - Companies, including partnerships, whose reports are fully consolidated, directly or indirectly, with the Company's reports.
(3) Investees - Consolidated companies and companies, including a partnership or joint venture, in which the Company's investment is included, directly or indirectly, in the financial statements on an equity basis.

Main accounting policies applied in the interim separate financial information

The accounting policies in this summary of separate interim financial information are in accordance with the accounting policy rules detailed in the separate financial information as of December 31, 2025.

Contingent liabilities

a. Regarding the Geha claim, see Note 13 to the interim consolidated financial statements.

Private placement of shares and warrants

Regarding the private placement of shares and warrants on February 25, 2026, see Note 4 to the interim consolidated financial statements.

Dividend distribution

Regarding the declaration and distribution of dividend, see Note 5 to the interim consolidated financial statements.

Rating of the Company and traded securities

Regarding the announcement of the rating company Midroog Ltd. on the confirmation of the Company's rating and confirmation of the rating for BONDS, see Note 10 to the interim consolidated financial statements.

7. Approval of purchase of directors' and officers' liability insurance policy in the Company

Regarding the approval of the Company's Compensation Committee for the purchase of a directors' and officers' liability insurance policy on March 2, 2026, see Note 11 to the interim consolidated financial statements.

8. Special General Meeting of the Company's shareholders

Regarding the resolution of the Special General Meeting of shareholders regarding the approval of a grant to Mr. Adi Dana, the Company's CEO, see Note 12 to the interim consolidated financial statements.

Azorim Investment, Development and Construction Co. Ltd.

Quarterly Report on the Effectiveness of Internal Control

Over Financial Reporting and Disclosure

As of March 31, 2026

5/28/2026 | 7:31:58 AM | v1.2.5

Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure

According to Regulation 38C(a) of the Securities Regulations (Periodic and Immediate Reports), 5730-1970

Management, under the supervision of the Board of Directors of Azorim Investment, Development and Construction Co. Ltd. ("the Company"), is responsible for determining and maintaining adequate internal control over financial reporting and disclosure in the Company.

In this regard, the members of management are:

Adi Dana, CEO.
Levi Strassler, CFO.

Internal control over financial reporting and disclosure includes controls and procedures existing in the Company, which were designed by the CEO and the most senior officer in the field of finance or under their supervision, or by those who actually perform the said roles, under the supervision of the Company's Board of Directors, which are intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the reports in accordance with the provisions of the law, and to ensure that information that the Company is required to disclose in the reports it publishes according to the provisions of the law is collected, processed, summarized, and reported at the time and in the format set by law.

Internal control includes, among other things, controls and procedures designed to ensure that information the Company is required to disclose as stated, is accumulated and transferred to the Company's management, including to the CEO and the most senior officer in the field of finance or to whoever actually performs the said roles, and this is to allow decisions to be made at the appropriate time, with respect to the disclosure requirement.

Due to its structural limitations, internal control over financial reporting and disclosure is not intended to provide absolute assurance that a misleading presentation or omission of information in the reports will be prevented or discovered.

In the Periodic report regarding the effectiveness of internal control over financial reporting and disclosure which was attached to the periodic report for the period ended December 31, 2025 ("the Last Periodic Report on Internal Control"), the internal control was found to be effective.

Until the date of the report, no event or matter has been brought to the attention of the Board of Directors and management that would change the assessment of the effectiveness of the internal control, as found in the Last Periodic Report on Internal Control.

As of the date of this report, based on the assessment of the effectiveness of the internal control in the Last Periodic Report on Internal Control, and based on information brought to the attention of management and the Board of Directors as stated above, the internal control as of March 31, 2026, is effective.

Executive Certifications

Certification of Acting Chief Executive Officer

According to Regulation 38C(d)(1) of the Securities Regulations (Periodic and Immediate Reports), 5730-1970:

I, Adi Dana, declare that :

(1) I have reviewed the quarterly report of Azorim Investment, Development and Construction Co. Ltd. ("the Company") for the first quarter of 2026 ("the Reports").

(2)

To my knowledge, the Reports do not include any misrepresentation of a material fact and do not lack a representation of a material fact necessary so that the representations included in them, in light of the circumstances in which those representations were included, will not be misleading with respect to the period of the Reports;

(3) To my knowledge, the financial statements and other financial information included in the Reports fairly reflect, in all material respects, the financial position, results of operations, and cash flows of the Company for the dates and periods to which the Reports relate ;

(4) I have disclosed to the Company's auditing accountant, to the Board of Directors and to the Audit Committee of the Company's Board of Directors, based on my most recent assessment of internal control over financial reporting and disclosure :

a. All significant deficiencies and material weaknesses in the determination or operation of internal control over financial reporting and disclosure that are reasonably likely to adversely affect the Company's ability to collect, process, summarize, or report financial information in a manner that casts doubt on the reliability of the financial reporting and the preparation of the financial statements in accordance with the provisions of law; and -

b. Any fraud, whether material or immaterial, involving the CEO or those directly subordinate to him or involving other employees who have a significant role in internal control over financial reporting and disclosure.

(5) I, alone or together with others in the Company :

a. Established controls and procedures, or ensured the establishment and existence of controls and procedures under my supervision, designed to ensure that material information relating to the Company, including its consolidated companies as defined in the Securities Regulations (Annual Financial Statements), 5770 - 2010, is brought to my attention by others in the Company and in the consolidated companies, particularly during the preparation period of the Reports; and -

b. Established controls and procedures, or ensured the establishment and existence of controls and procedures under my supervision, designed to provide reasonable assurance as to the reliability of financial reporting and the preparation of financial statements in accordance with the provisions of law, including in accordance with generally accepted accounting principles;

c. No event or matter occurring during the period between the date of the last periodic report on internal control submitted by the Company for December 31, 2025, and the date of this report has been brought to my attention, which would change the conclusion of the Board of Directors and management regarding the effectiveness of the internal control over financial reporting and disclosure of the Company.

Nothing in the above shall derogate from my responsibility or the responsibility of any other person, under any law.

May 27, 2026

Date

Adi Dana, CEO

Certification of the most senior officer in the field of finance

According to Regulation 38(c)(2) of the Securities Regulations (Periodic and Immediate Reports),

5730-1970

I, Levi Strassler, declare that:

(1) I have reviewed the financial reports and other financial information included in the reports of Azorim Investment, Development and Construction Co. Ltd. ("the Company") for the first quarter of 2026 ("the Reports").

(2) To my knowledge, the financial statements and other financial information included in the Reports do not include any misrepresentation of a material fact and do not lack a representation of a material fact necessary so that the representations included in them, in light of the circumstances in which those representations were included, will not be misleading with respect to the period of the Reports.

a. All significant deficiencies and material weaknesses in the determination or operation of internal control over financial reporting and disclosure as it relates to the financial statements and other financial information included in the reports, that are reasonably likely to adversely affect the Company's ability to collect, process, summarize, or report financial information in a manner that casts doubt on the reliability of the financial reporting and the preparation of the financial statements in accordance with the provisions of law, and -

(5) I, alone or together with others in the Company:

a. Established controls and procedures, or ensured the establishment and existence of controls and procedures under my supervision, designed to ensure that material information relating to the Company, including its consolidated companies as defined in the Securities Regulations (Annual Financial Statements), 5770 - 2010, as far as it is relevant to the financial statements and other financial information included in the reports, is brought to my attention by others in the Company and in the consolidated companies, particularly during the preparation period of the Reports; and

c. No event or matter occurring during the period between the date of the last periodic report on internal control submitted by the Company for December 31, 2025 and the date of this report has been brought to my attention, which would change the conclusion of the Board of Directors and management regarding the effectiveness of the internal control over financial reporting and disclosure of the Company.

Nothing in the above shall derogate from my responsibility or the responsibility of any other person, under any law.

May 27, 2026

Levi Strassler, CFO

Date

5/28/2026 | 7:31:59 AM | v1.2.5

AI assistant

Azorim Investment Development & Construction Co Ltd. — Interim / Quarterly Report 2026

6674_rns_2026-05-28_771fa580-acef-42b1-81b3-f2bbda95818b.pdf

Table of Contents

Azorim Investment, Development and Construction Co. Ltd.

Part A - Board of Directors' Explanations on the State of the Company's Business

1.2 N HaHistadrut, Netanya (Urban Renewal)¹

1.3 Yitzhak Elhanan (Urban Renewal)²

1.4 Completion of construction of projects

2. Update regarding planning progress of urban renewal projects

2.1 HaRav Pardes/Shalem 35 Ramat Gan [Company's share - 50%]

2.2 Yeda Am/Bialik Ramat Gan

3. Details and update regarding major transactions and engagements performed during and after the report period

3.1 Acquisition of a yield-generating property (under construction) in Ramat Efal

3.2 Winning a tender for land purchase in Rishon LeZion

4. Information update regarding other events that occurred during and after the report period

4.1 Private placement of shares and warrants

4.3 Partial arbitration award in the proceedings against Geha Buildings and Investments Ltd.

4.4 Dividend distribution

4.5 Special general meeting of the company's shareholders

4.6 Intention to issue BONDS by Azorim Miroza Ltd. ("Miroza")

4.7 The impact of the security situation on the company's activity

5. Projects in Israel

Projects whose construction has been completed:

6. Financial Position Analysis

6.1 Company Assets

Detail of main changes regarding company assets

6.1.1 Cash and cash equivalents

6.1.2 Inventory of buildings for sale

6.1.3 Lands

6.1.4 Investment property

6.2 Liabilities and Equity

Detail of main changes in company liabilities and equity

6.2.1 Company financial liabilities

Credit from banking and other corporations (long term and short term)

6.2.2 BONDS including current maturities of BONDS

6.2.3 Liabilities in respect of contracts (and contract assets)

Equity

Key Financial Ratios

7. results of Business Operations

7.1 Company Revenues

7.1.1 Revenues from sale of apartments and land and construction services

Engagement in sale agreements for the sale of apartments during the report period

Average sale price

Engagement in sale agreements for the sale of apartments after the report period

Inventory of unsold apartments

7.1.2 Revenues from rental income, usage fees and management services

7.1.3Gross profit

7.2 Company Expenses

7.2.1 Selling and Marketing Expenses

7.2.2 General and Administrative Expenses

7.2.3 Financing expenses, net

7.2.4 Group's share in profits of investees accounted for using the equity method, net

7.3 Benefits and payment arrangements in apartment sales transactions

8. Cash Flows, Net

8.1 Cash flows from operating activities

8.2 Cash flows from investing activities

8.3 Cash flows from financing activities

9. Working Capital

10. Liquidity and Financing Sources

10.2 Rating of the Company and traded securities

10.3 Capital Means

10.4 Credit extended to the company

10.5 Main liabilities of the group to financing entities

10.6 Cross-default clause

11. Cash flows from operating activities

Part B - Corporate Governance Aspects

12. Donations

13. Directors with Accounting and Financial Expertise

14. Independent Directors

15. Internal Auditor

Part C - Disclosure in Connection with the Company's Financial Reporting

16. Events After the Date of the Statement of Financial Position

17. Effectiveness of Internal Control over Reporting and Disclosure (iSOX)

Part D - Valuations

Part E - Disclosure regarding the Company's BONDS

21. Details regarding the company's compliance with financial covenants established in the trust deeds for the company's outstanding series of BONDS

Part VI - Disclosure regarding assets used as collateral for outstanding BONDS

22. Disclosure regarding the Herzliya Hills project used as collateral for BONDS (Series 15) holders

Part VII - Disclosure regarding projects classified as very material22

Azorim Investment Development & Construction Co Ltd. Interim / Quarterly Report 2026