v3.25.4
EMPLOYEE BENEFITS
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
EMPLOYEE BENEFITS

11. EMPLOYEE BENEFITS

 

Defined benefit plans

 

The following tables set out the funded status of the end-of-service indemnities employees receive under one of the five benefit structures the Company and its subsidiaries offer to its employees and the amounts recognized in the Company’s financial statements as of December 31, 2025, and 2024 (in thousands):

 

  

December 31,

2025

  

December 31,

2024

 
Change in benefit obligations          
Benefit obligations at the beginning of the year  $38,723   $33,661 
Actuarial (gain) / loss   1,526    287 
Service cost   5,659    5,274 
Interest cost   2,224    1,784 
Benefits paid   (4,501)   (2,283)
Benefit obligations at the end of the year   43,631    38,723 
Current benefit obligation (within Other current liabilities)   7,310    6,917 
Non-current benefit obligation   36,321    31,806 
Benefit obligation at the end of the year   43,631    38,723 
Change in plan assets          
Fair value of plan assets at the beginning of the year   -    - 
Employer contributions   4,501    2,283 
Benefits paid   (4,501)   (2,283)
Plan assets at the end of the year   -    - 
Unfunded status  $43,631   $38,723 

 

Net cost for the years ended December 31, 2025, 2024, and 2023, comprises the following components (in thousands):

 

   December 31,
2025		   December 31,
2024		   December 31,
2023		 
   Year ended 
   December 31,
2025		   December 31,
2024		   December 31,
2023		 
Service cost  $5,659   $5,274   $4,979 
Interest cost   2,224    1,784    1,522 
Actuarial (gain)/loss   1,526    287    1,344 
Other   -    -    - 
Net cost  $9,409   $7,345   $7,845 

 

The weighted-average assumptions used to determine benefit obligations as of December 31, 2025, and 2024 are set out below:

 

   

December 31,

2025

    

December 31,

2024

  
Discount rate    

5.0

 %     5.50 %
Rate of increase in compensation levels:    

4.5-5

 %     4.5-5 %

 

 

The discount rate has been set with regard to market yields on high quality corporate bonds as of December 31, 2025, for the measurements as of December 31, 2025 (and as of December 31, 2024 for the measurements as of December 31, 2024) of duration broadly consistent with the duration of the benefit obligations. The primary yield curve for the purpose of this comparison has been the ‘FTSE Above Median Double-A Curve’.

 

The weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2025, and 2024, are set out below:

 

  

December 31,

2025

   December 31,
2024		 
Discount rate   

5.50

%   5.00%
Rate of increase in compensation levels:   

4.5-5

%   4.5-5%

 

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards.

 

The following illustrates the sensitivity to changes in discount rate, holding all other assumptions constant, for in the Company’s benefit obligations (in thousands):

 

Change in assumption:  Benefit obligation
at the end of the year		 
100 basis point decrease in discount rate  $

2,620

 
100 basis point increase in discount rate  $

(2,336

)

 

The Company has no regulatory requirement to fund these benefits in advance and intends to pay benefits directly as they fall due. As of December 31, 2025, the Company has no plan assets to invest.

 

Accumulated benefit obligation was $25.4 million and $22.7 million as of December 31, 2025, and 2024, respectively.

 

The following reflect expected future benefit payments (in thousands):

 

   Year ended 
   December 31, 2025 
2026  $

8,027

 
2027  $

7,016

 
2028  $

6,896

 
2029  $

6,944

 
2030  $

6,727

 
2031 through 2035  $30,878 

 

The expected benefits are based materially on the same assumptions used to measure the Company’s benefit obligations as of December 31, 2024.