| NOTE 19 – |
NET EMPLOYEE DEFINED
BENEFIT LIABILITIES |
Employee
benefits consist of post-employment benefits and other long-term benefits.
Post-employment
benefits:
According
to the labor laws and Severance Pay Law in Israel, the Company is required to pay compensation to an employee upon dismissal or retirement
or to make current contributions in defined contribution plans pursuant to Section 14 to the Severance Pay Law, as specified below. The
Company’s liability is accounted for as a post-employment benefit. The computation of the Company’s employee benefit liability
is made according to the current employment contract based on the employee’s salary and employment term which establish the entitlement
to receive the compensation.
The
post-employment employee benefits are normally financed by contributions classified as defined benefit plan or as defined contribution
plan, as detailed below.
| |
a. |
Defined contribution plans: |
Section
14 to the Severance Pay Law, 1963 applies to part of the compensation payments, pursuant to which the fixed contributions paid by the
Group into severance pay funds and/or policies of insurance companies release the Group from any additional liability to employees for
whom said contributions were made. These contributions and contributions for benefits represent defined contribution plans.
| | |
Year ended December 31, | |
| | |
2025 | | |
2024 | |
| | |
USD in thousands | |
| | |
| | | |
| | |
| Expenses in respect of defined contribution plans | |
| 1,641 | | |
| 1,632 | |
| |
b. |
Defined benefit plans: |
The
Group accounts for that part of the payment of compensation that is not covered by contributions in defined contribution plans, as above,
as a defined benefit plan for which an employee benefit liability is recognized and for which the Group deposits amount in central severance
pay funds or accrue for such provision (when the deposits are not made on time) in qualifying insurance policies. | | c. | Changes in the defined benefit obligation and fair value of plan assets |
2025
| | |
Expenses
recognized in profit or loss | | |
Gain
(loss) from remeasurement
in
other comprehensive income | | |
Contributions | | |
| |
| | |
Balance as
of January 1, 2025 | | |
Current service cost | | |
Net interest expense | | |
Past service cost
and effect
of settlements | | |
Total expense recognized in
profit or
loss for
the period | | |
Payments from
the plan | | |
Return on
plan assets (excluding amounts included in
net interest expenses) | | |
Actuarial gain
(loss) arising from changes
in demographic assumptions | | |
Actuarial gain
(loss) arising from changes
in financial assumptions | | |
Actuarial gain
(loss) arising from experience adjustments | | |
Total effect on
other comprehensive income for
the period | | |
Effect
of changes
in foreign exchange rates | | |
by employer | | |
by plan’s participants | | |
Balance as
of December 31, 2025 | |
| | |
USD
in thousands | |
| Defined
benefit obligation | |
| 2,876 | | |
| 101 | | |
| 138 | | |
| - | | |
| 239 | | |
| (899 | ) | |
| - | | |
| - | | |
| 27 | | |
| (58 | ) | |
| (32 | ) | |
| (692 | ) | |
| - | | |
| - | | |
| 2,539 | |
| Fair
value of plan assets | |
| (2,225 | ) | |
| - | | |
| (109 | ) | |
| 31 | | |
| (79 | ) | |
| 623 | | |
| (14 | ) | |
| - | | |
| - | | |
| - | | |
| (14 | ) | |
| (423 | ) | |
| (107 | ) | |
| - | | |
| (2,085 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net
defined benefit liability (asset) | |
| 651 | | |
| 101 | | |
| 29 | | |
| 31 | | |
| 160 | | |
| (277 | ) | |
| (14 | ) | |
| - | | |
| 27 | | |
| (58 | ) | |
| (46 | ) | |
| 269 | | |
| (107 | ) | |
| - | | |
| 454 | |
2024
| | |
Expenses
recognized in profit or loss | | |
Gain
(loss) from remeasurement
in
other comprehensive income | | |
Contributions | | |
| |
| | |
Balance as
of January 1, 2024 | | |
Current service cost | | |
Net interest expense | | |
Past service cost
and effect
of settlements | | |
Total expense recognized in
profit or
loss for
the period | | |
Payments from
the plan | | |
Return on
plan assets (excluding amounts included in
net interest expenses) | | |
Actuarial gain
(loss) arising from changes
in demographic assumptions | | |
Actuarial gain
(loss) arising from changes
in financial assumptions | | |
Actuarial gain
(loss) arising from experience adjustments | | |
Total effect on
other comprehensive income for
the period | | |
Effect
of changes
in foreign exchange rates | | |
by employer | | |
by plan’s participants | | |
Balance as
of December 31, 2024 | |
| | |
USD
in thousands | |
| Defined benefit obligation | |
| 3,135 | | |
| 126 | | |
| 150 | | |
| - | | |
| 276 | | |
| (537 | ) | |
| - | | |
| - | | |
| (13 | ) | |
| 36 | | |
| 23 | | |
| (21 | ) | |
| - | | |
| - | | |
| 2,876 | |
| Fair value of plan assets | |
| (2,266 | ) | |
| - | | |
| (108 | ) | |
| 28 | | |
| (80 | ) | |
| 424 | | |
| (191 | ) | |
| - | | |
| - | | |
| - | | |
| (191 | ) | |
| 13 | | |
| (125 | ) | |
| - | | |
| (2,225 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net defined benefit liability (asset) | |
| 869 | | |
| 126 | | |
| 42 | | |
| 28 | | |
| 196 | | |
| (113 | ) | |
| (191 | ) | |
| - | | |
| (13 | ) | |
| 36 | | |
| (168 | ) | |
| (8 | ) | |
| (125 | ) | |
| - | | |
| 651 | |
| |
d. |
The principal assumptions underlying the defined benefit plans: |
| | |
2025 | | |
2024 | |
| | |
% | |
| | |
| | |
| |
| Discount rate (1) | |
| 4.75-4.8 | | |
| 5.32 | |
| Expected rate of salary increase | |
| 2.5 | | |
| 3.18 | |
| (1) | The discount rate is based on high-quality CPI-linked corporate bonds. |
| | e. | Amount, timing and uncertainty of future cash flows: |
| | |
Change in defined benefit obligation | |
| | |
USD in thousands | |
| December 31, 2025 | |
| |
| | |
| |
| Sensitivity test for changes in the expected rate of salary increase: | |
| |
| | |
| |
| The change as a result of: | |
| |
| 1% salary increase | |
| (175 | ) |
| 1% salary decrease | |
| 138 | |
| | |
| | |
| Sensitivity test for changes in the discount rate of the plan assets and liability: | |
| | |
| | |
| | |
| The change as a result of: | |
| | |
| 1% increase in discount rate | |
| 145 | |
| 1% decrease in discount rate | |
| (183 | ) |
|