Elco : Q2 2023 financial report - translated version

ELCO LIMITED

Interim Consolidated Financial Information

As of June 30, 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 August 31, 2023 (reference No. 2023-01-082720) 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 June 30, 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	14
Notes to the Consolidated Financial Information	18

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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 June 30, 2023 and for the periods of six months and 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 1.08% of the total consolidated assets as of June 30, 2023 and whose revenues constitute approximately 0.9% and approximately 0.8% of the total consolidated revenue for periods of six months and of the three months ended on June 30, 2023. Furthermore, we did not review the interim financial information of certain companies accounted for at equity, the investment in which amounted to approximately 120,097 thousand dollars as of June 30, 2023, and the Company's share of their profits (loss) amounted to approximately 4,549 thousand dollars and approximately (2,317) thousand dollars for the periods of six months and of three months ended on June 30, 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 June 30, 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 August 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
August 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)

	June 30		June 30		December 31
	2023	2022	2022
Section	Unaudited		Unaudited		Audited
Current assets
Cash and cash equivalents	241,210	380,830	358,174
Short-term investments	130,860	132,656	109,956
Trade receivables	683,556	566,141	623,624
Other accounts receivables	744,643	603,008	649,067
Inventory, inventory of land, buildings and apartments
for sale	622,372	566,476	587,965
Assets held for sale	114,439		123,566		114,695
	2,537,080	2,372,677	2,443,481
Non-current assets
Long-term receivables	79,972	44,956	56,456
Receivables for concession arrangement for the
provision of services	46,593	31,014	36,413
Investment in entities accounted for at equity	979,986	787,586	923,511
Long-term inventory of land	362,679	243,412	268,300
Investment property and investment property
under construction	116,669	118,928	115,887
Fixed assets	504,582	376,476	405,714
Right-of-use assets	635,267	599,443	624,762
Goodwill and other intangible assets	1,264,091	1,205,961	1,272,975
Intangible asset for a concession project	-	113,118	-
Deferred taxes	30,229		29,231		28,779
	4,020,068		3,550,125		3,732,797
	6,557,148		5,922,802		6,176,278

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ELCO LIMITED

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

	June 30			June 30			December 31
	2023	2022	2022
Section	Unaudited			Unaudited			Audited
Current Liabilities
Credit from banking institutions and others	680,100	514,596	550,444
Bonds - current maturities	115,198	70,634	92,907
Current maturities of leasing liabilities	99,254	90,082	93,430
Suppliers and providers of services	1,063,833	933,866	985,315
Other payables	749,051	752,490	724,718
Liabilities attributed to assets held for sale	118,438	-	116,800
	2,825,874	2,361,668	2,563,614
Long-Term Liabilities
Credit from banking institutions and others	685,471	667,814	617,474
Bonds	631,900	531,225	577,921
Leasing liabilities	600,097	567,949	592,750
Other liabilities	171,542	174,033	162,250
Employee benefit liabilities, net	23,335	23,624	23,705
Deferred taxes	169,199		157,239		166,112
	2,281,544	2,121,884	2,140,212
Equity
Equity attributable to equity holders of the Company	677,129	719,129	697,575
Non-controlling interests	772,601		720,121		774,877
Total equity	1,449,730		1,439,250		1,472,452
	6,557,148		5,922,802		6,176,278

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

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