Elco : Q1 2023 financial report - translated version

ELCO LIMITED

Interim Consolidated Financial Information

As of March 31, 2023

Convenience Translation into U.S. Dollars

(Unaudited)

This is an English translation of parts of the information included in the full Hebrew report of the company, that was published on May 31, 2023 (reference No. 2023-01-050998) at the ISA reporting website (magna.isa.gov.il) (hereafter: "the Hebrew Version"). The English version is Voluntary and only for convenience purposes. This is not an official translation and has no binding force. The translation in any case cannot perfectly reflect the Hebrew Version. In the event of any discrepancy between the Hebrew Version and this translation, the Hebrew Version shall prevail.

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ELCO LIMITED

Contents
Review of Interim Information	3
Financial Information as of March 31, 2023 (Unaudited)
Consolidated Information of Financial Position	5
Consolidated Information of Profit or Loss	7
Consolidated Information of Comprehensive Income	8
Consolidated Information of Changes in Equity	9
Consolidated Information of Cash Flows	12
Notes to the Consolidated Financial Information	15

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Kost Forer Gabbay & Kasierer	Tel: [phone]
144 Menachem Begin Road, Building A,	Fax: [phone]
Tel-Aviv 6492102, Israel	ey.com

To: Elco LTD.

Re: Convenience Translation of Interim Financial Information

Per your request, we have reviewed the accompanying interim consolidated financial information of Elco Ltd. ("the Company") as of March 31, 2023 and for the period of three months then ended ("the Interim Financial Information"). The Interim Financial Information is the responsibility of the Company's Board of Directors and management. Our responsibility is to express a conclusion regarding the Interim Financial Information based on our review.

We did not review the interim financial information of certain subsidiaries, whose assets constitute approximately 0.6% of the total consolidated assets as of March 31, 2023 and whose revenues constitute approximately 0.96% of the total consolidated revenue for period of the three months ended on March 31, 2023. Furthermore, we did not review the interim financial information of certain companies accounted for at equity, the investment in which amounted to approximately 150,040 thousand dollars as of March 31, 2023, and the Company's share of their profits amounted to approximately 7,313 thousand dollars for the period of three months ended on March 31, 2023. The interim financial information for those companies were reviewed by other auditors, whose reports have been furnished to us, and our conclusion, insofar as it relates to amounts included for those companies, is based on the reports of the other auditors.

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.

The accompanying Interim Financial Information in US Dollars are a convenience translation of the interim consolidated financial statements as prepared in New Israeli Shekels at the rate of exchange of the Shekel into US Dollars prevailing on March 31, 2023, as described in note 3 of the Interim Financial Information.

Based on our review and the reports of the other auditors, we concluded an unqualified conclusion on the Company's consolidated interim financial statements in our report dated May 31, 2023.

The accompanying interim financial information, which are derived from the company's interim consolidated financial statements, are condensed interim financial information and do not include the disclosures required by International Financial Reporting Standards (IFRS). If the omitted disclosures were included in the accompanying interim financial information, it might influence the user's conclusions about the consolidated financial position, results of operations, changes in equity and cash flows of the company. Accordingly, the accompanying interim financial information are not designated for those who are not informed about such matters.

Based on our review and the reports of other auditors, nothing has come to our attention that causes us to believe that the accompanying Interim Financial Information is not present fairly, in all material respects, the information contained in it.

Tel-Aviv, Israel	KOST FORER GABBAY & KASIERER
May 31, 2023	A Member of Ernst & Young Global
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ELCO LIMITED

CONSOLIDATED INFORMATION OF FINANCIAL POSITION CONVENIENCE TRANSLATION INTO US DOLLARS (in thousands)

	March 31		March 31		December 31
	2023	2022		2022
Section	Unaudited		Unaudited		Audited
Current assets
Cash and cash equivalents	301,264	305,460		366,596
Short-term investments	126,185	119,939		112,541
Trade receivables	697,183	606,643		638,288
Other accounts receivables	752,771	591,571		664,329
Inventory, inventory of land, buildings and apartments
for sale	642,945	594,514		601,790
Assets held for sale	117,018		106,185			117,392
	2,637,366	2,324,312		2,500,936
Non-current assets
Long-term receivables	65,434	52,808	*)	57,783
Receivables for concession arrangement for the
provision of services	42,466	30,082		37,269
Investment in entities accounted for at equity	998,717	675,801		945,226
Long-term inventory of land	335,292	175,713		274,608
Investment property and investment property
under construction	119,016	109,287		118,612
Fixed assets	469,309	368,076		415,254
Right-of-use assets	646,090	613,207	*)	639,452
Goodwill and other intangible assets	1,304,619	1,233,034	*)	1,302,906
Intangible asset for a concession project	-	111,118		-
Deferred taxes	30,916		32,842			29,456
	4,011,859		3,401,968			3,820,566
	6,649,225		5,726,280			6,321,502

*) Reclassified.

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ELCO LIMITED

CONSOLIDATED INFORMATION OF FINANCIAL POSITION CONVENIENCE TRANSLATION INTO US DOLLARS (in thousands)

	March 31			March 31			December 31
	2023	2022		2022
Section	Unaudited			Unaudited			Audited
Current Liabilities
Credit from banking institutions and others	621,264	517,669		563,387
Bonds - current maturities	111,786	72,698		95,092
Current maturities of leasing liabilities	96,221	87,685		95,627
Suppliers and providers of services	1,075,793	940,174		1,008,483
Other payables	748,071	714,641	*)	741,758
Dividend payable to shareholders in the company	13,831	13,831		-
Liabilities attributed to assets held for sale	120,416	-		119,547
	2,787,382	2,346,698		2,623,894
Long-Term Liabilities
Credit from banking institutions and others	690,409	598,077		631,993
Bonds	682,543	551,170		591,510
Leasing liabilities	612,736	584,242		606,687
Other liabilities	168,576	170,946	*)	166,065
Employee benefit liabilities, net	24,231	25,048		24,262
Deferred taxes	173,775		138,565			170,018
	2,352,270	2,068,048		2,190,535
Equity
Equity attributable to equity holders of the Company	719,982	644,429		713,977
Non-controlling interests	789,591		667,105	*)		793,096
Total equity	1,509,573		1,311,534			1,507,073
	6,649,225		5,726,280			6,321,502

*) Reclassified.

May 31, 2023		Chief Financial Officer		Joint General Manager		Chairman of the Board
	sig		sign		of Directors signture
Date of approval of		E. Vessely		D. Salkind		M. Fridman
financial statements		Chief Financial Officer		Joint General Manager		Chairman of the Board
						of Directors

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