TIDMSEFA
RNS Number : 7779E
Shefa Gems Ltd
31 October 2022
B"H
SHEFA GEMS LTD.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2022
(UNAUDITED)
SHEFA GEMS LTD.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2022
(Unaudited)
INDEX
Page
-------
Review Report of Independent Auditors 2
Condensed Interim Consolidated Financial Statements:
Condensed Interim Consolidated Statements of Financial
Position 3
Condensed Interim Consolidated Statements of Comprehensive
Loss 4
Condensed Interim Consolidated Statements of Changes in
Shareholders' Equity 5
Condensed Interim Consolidated Statements of Cash Flows 6 - 7
Notes to the Condensed Interim Consolidated Financial
Statements 8 - 10
Jerusalem, October 31, 2022
REVIEW REPORT OF INDEPENT AUDITORS
To the Shareholders of
SHEFA GEMS LTD.
Introduction
We have reviewed the accompanying condensed interim consolidated
financial statements of SHEFA GEMS LTD. (hereinafter - "the
Company") comprising the condensed interim consolidated statements
of financial position as of June 30, 2022 and the related condensed
interim consolidated statements of comprehensive loss, consolidated
changes in shareholders' equity and consolidated cash flows for the
six month period then ended. The board of directors and management
are responsible for the preparation and presentation of these
condensed interim consolidated financial statements in accordance
with IAS 34, "Interim Financial Reporting". Our responsibility is
to express a conclusion on these interim consolidated financial
statements based on our review.
Scope of the Review
We conducted our review in accordance with the Israeli Review
Standard (Israel) 2410, "Review of Financial Information for
Interim Periods Performed by the Independent Auditor of the Entity"
of the Association of Certified Public Accountants in Israel. A
review of financial information for interim periods 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 International Auditing Standards
accepted in Israel. Consequently, it does not enable us to obtain
assurance that we would become aware of all the significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Basis for the Qualified Conclusion
We were not satisfied in regard to the approximately NIS 58
million amount of impairment of the exploration assets that was
included in expenses in the Company statements of comprehensive
loss for the year 2021, and in accordance, in regard to the amount
of dividend in kind presented in the financial statements.
Conclusion
Based on our review, except for the abovementioned item, nothing has come
to our attention that causes us to suspect that the financial information
abovementioned was not prepared, from all significant aspects, in accordance
with International Accounting Standard 34.
We draw attention to: Note 1d of the condensed interim financial statements - the Company has accumulated
losses since its inception and does not have any operations that yield revenues.
Financing of its operations has, until now, been performed by infusions of
capital and/or loans. The Company has plans of installation of new operations,
but there is uncertainty in this regard. These facts raise significant doubt
as to the continued existence of the Company as a "going concern."
These condensed interim financial statements do not include any adjustments
to the value of the assets and liabilities and their classifications that
would possibly be necessary in the event that the Company cannot continue
as a "going concern."
Barzily & Co.
Certified Public Accountants
A Member of MSI Worldwide
SHEFA GEMS LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
(In NIS in thousands)
June 30 , December
31,
2022 2021 2021
------ -----------
Note (Unaudited) (Audited)
------------ ----------------------- ----------
ASSETS
Current Assets:
Cash and cash equivalents 228 11 853
Other accounts receivable 181 109 8
Total current assets 409 120 861
------ ----------- ----------
Assets for distribution to - 41,620 -
shareholders
------ ----------- ----------
Total Assets 409 41,740 861
====== =========== ==========
EQUITY AND LIABILITIES
Capital
Share Capital (7,412) 23,421 (6,573)
---------- --------- -----------
Non-current Liabilities:
Options convertible to shares - 8 -
---------- --------- -----------
Total Non-current Liabilities - 8 -
---------- --------- -----------
Current Liabilities:
Short-term credit from bank and - 358 -
others
Trade payables 13 310 9
Other accounts payable 81 507 94
Loans convertible to shares - 181 -
Liabilities at fair value 7,727 7,570 7,331
Total current liabilities 7,821 8,926 7,434
---------- --------- -----------
Liabilities for distribution to - 9,385 -
shareholders
---------- --------- -----------
Total Equity and Liabilities 409 41,740 861
========== ========= ===========
The accompanying notes to these condensed interim consolidated financial
statements are an integral part thereof.
October 31, 2022
--------------------------------------------------- ------------------------ --------------------------
Date of Approval Alon Shani David Ben David,
of the Financial CEO Acct. Director
Statements Controller
SHEFA GEMS LTD. [Formerly Shefa Yamim (A.T.M.) LTD.]
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
In NIS in thousands [except for loss per share]
For the Period of For the Year
Six Months Ended Ended
June 30 December
31
2022 2021 2021
------- ---------------- ----------------------
(Unaudited) (Audited)
-------------------------- ----------------------
General and administrative
expenses (includes NIS 120
to related party) (495) (1,412) (2,816)
Impairment of exploratory
assets - (29,047) (58,565)
Operating loss (495) (30,459) (61,381)
Other income (expenses), net - - 103
-------- ----------- ----------------------
Loss prior to financing (495) (30,459) (61,278)
-------- ----------- ----------------------
Financial income 55 64 35
Financial expenses (399) (1,793) (1,429)
-------- ----------- ----------------------
Financial costs, net (344) (1,729) (1,394)
-------- ----------- ----------------------
Comprehensive loss for the
period (839) (32,188) (62,672)
======== =========== ======================
Basic and diluted loss per
share (in NIS) (0.000) (0.000) (0.000)
======== =========== ======================
The accompanying notes to these condensed interim consolidated
financial statements are an integral part thereof.
SHEFA GEMS LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY
(In NIS in thousands)
Capital
Reserve
Capital for Total
Reserve Transactions Equity
Dividend for Payment with Attributed
Premium for on Account Interested Accumulated to Company
on Shares Distribution of Shares Parties Deficit Shareholders
------------ -------------- -------------- -------------- -------------- -------------
Unaudited
Balance as of
January 1,
2022 119,826 (2,838) 5,762 6,312 (135,634) (6,573)
Comprehensive
loss for the
period - - - - (839) (839)
------------ -------------- -------------- -------------- -------------- -------------
Balance as of
June 30, 2022 119,826 (2,838) 5,762 6,312 (136,473) (7,412)
============ ============== ============== ============== ============== =============
Unaudited
Balance as of
January 1,
2021 116,497 - 5,762 6,312 (72,962) 55,609
Comprehensive
loss for the
period - - - . - - (32,188) (32,188)
------------ -------------- -------------- -------------- -------------- -------------
Balance as of
June 30, 2021 116,497 - 5,762 6,312 (105,150) 23,421
============ ============== ============== ============== ============== =============
Audited
Balance as of January 1,
2021 116,497 - 55,609
Comprehensive loss for the
year - - 5,762 6,312 (72,962) (62,672)
Issuance of shares 3,329 - - - (62,672) 3,329
- - -
Dividend for distribution
(see Note 3a) - (2,838) - - - (2,838)
--------- ---------- -------- -------- ------------ --------------
Balance as of December 31,
2021 119,826 (2,838) 5,762 6,312 (135,634) (6,573)
========= ========== ======== ======== ============ ==============
The accompanying notes to these condensed interim consolidated
financial statements are an integral part thereof.
SHEFA GEMS LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(In NIS in thousands)
For the Period For the Year
of Six Months Ended Ended December
June 30, 31,
2022 2021 2021
------- -------------- -----------------
(Unaudited) (Audited)
------------------------------------ -----------------
Cash Flows for Operating Activities:
Loss for the period (839) (32,188) (62,672)
Adjustments Required to Show
Cash Flows
Used in Operating Activities
(Appendix A): 162 31,065 59,531
------- --------------
Net Cash Used in Operating Activities (677) (1,123) (3,141)
------- -------------- -----------------
Cash Flows from Investing Activities:
Exit from consolidation (see
Appendix B) - - (3,775)
Consideration from redemption
of securities - 1,200 1,200
Acquisition of fixed assets - (5) (5)
Investment in assets for exploration
and evaluation of precious stones - (1,006) (1,024)
Net Cash Provided by (Used in)
Investing Activities - 189 (3,604)
------- -------------- -----------------
Cash Flows from Financing Activities:
Receipt (repayment) of loans
from banks and others, net - 182 (176)
Loans received (repaid) from
interested parties, net - 4,443 4,443
Repayment of a loan from related
parties - (31) (16)
Repayment of fund in regard
to leasing - (254) (255)
Investment in Company shares 3,283
Receipts on account of loans - - -
convertible to shares
Interest paid (3) (103) (164)
------- -------------- -----------------
Net Cash Provided by (Used in)
Financing Activities (3) 4,237 7,115
------- -------------- -----------------
Cash for distribution to shareholders - (3,775) -
------- -------------- -----------------
Exchange rate differences in
regard to cash and cash equivalents 55 - -
------- -------------- -----------------
Increase (Decrease) in Cash
and Cash Equivalents (625) (472) 370
Cash and cash equivalents at
the beginning
of the period 853 483 483
------- -------------- -----------------
Cash and cash equivalents at
the end of the period 228 11 853
======= ============== =================
The accompanying notes to these condensed interim consolidated
financial statements are an integral part thereof.
SHEFA GEMS LTD. [Formerly Shefa Yamim (A.T.M.) LTD.]
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(In NIS in thousands)
Appendix A
For the Period
of Six Months For the Year
Ended Ended December
June 30, 31,
2022 2021 2021
------- ---------- -----------------
(Unaudited) (Audited)
------------------- -----------------
Adjustments Required to Show
Cash Flows
Provided by (Used in) Operating
Activities:
Expenses (income) not involving
cash flows:
Depreciation * - 15 15
Capital gains - (274) (274)
Impairment of assets for exploration
and evaluation of precious stones - 29,150 58,565
Financing expenses (income),
net 344 1,729 1,394
Changes in Assets and Liabilities:
Decrease (Increase) in other
accounts receivable (173) (2) 99
Increase (Decrease) in trade
payables 4 167 (135)
Increase (Decrease) in other
accounts payable (13) 280 (133)
------- ---------- -----------------
162 31,065 59,531
======= ========== =================
Appendix B
Exit from consolidation :
Receivables - - (112)
Assets for exploration and evaluation
of precious stones and assets (6,128)
Fixed assets - - (831)
Usage rights - - 136
Loans from related and interested
parties - - 6,576
Trade payables and credit balances - - 1,006
Liability for severance pay - - 290
Detraction of a dividend for
distribution - - 2,838
-------------- ----------- -------------------------
- - 3,775
Appendix C
Significant Operations Not Involving
Cash Flows:
Fixed assets in regard to exploration
and evaluation of precious stones 166
Usage rights assets for exploration
and evaluation of precious stones - 166
Liability for severance pay - (269)
- (269) 46
136
The accompanying notes to these condensed interim consolidated
financial statements are an integral part thereof.
SHEFA GEMS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
(In NIS in thousands)
NOTE 1:- GENERAL
a. 1. The reported entity -
Shefa Gems Ltd. [previously: Shefa Yamim (A.T.M.)
LTD.] (hereinafter - "the Company") is an Israeli
company who was engaged in exploration for diamonds,
gold and precious stones in the northern area of
Israel.
As of December 31, 2021 the controlling interest
in the Company was changed and the company ceased
its exploration operation (see b below).
2. These condensed interim consolidated financial
statements are to be viewed together with the annual
financial statements of the Company as of December
31, 2021 and their accompanying Notes.
b. During November 2020 the Company's board of directors
decided to make organizational changes within the
Company. In the framework of these changes, the prospecting
and exploration operations in search for precious
stones and gold, performed by the Company from its
inception until March 2022, would be transferred to
its subsidiary (Shefa in Israel (G.M) Ltd., hereinafter
- "the subsidiary").
c. On August 9, 2021 the special meeting of the Company's
shareholder approved the agreement signed between
the Company and Shani group (hereinafter "the agreement".
This agreement includes:
Distribution of shares of Shefa Israel (formerly
"the subsidiary)", directly to the Company's
shareholders, as a dividend in kind-
During January 2021, all exploration assets
and their attributed operations were transferred
to Shefa Israel. As consideration, Shefa Israel
allocated shares to the Company. As part as
the agreement, the shares were transferred to
an agreed trustee (Mr. Nathan Druckman, Adv.)
in order to enable him to allocate the Subsidiary's
shares on a pro-rata basis, to all the company's
shareholders at the determination date (August
10, 2021). Distribution will take place as part
of a dividend in-kind subject to and subsequent
to approval by the Court.
This distribution was recorded as a dividend
for distribution in the Company's financial
statements.
d. The Company has accumulated losses since its inception
and does not have any operations that yield revenues.
Financing of its operations has, until now, been performed
by infusions of capital and/or loans. The Company
has plans of installation of new operations, but there
is uncertainty in this regard. These facts raise significant
doubt as to the continued existence of the Company
as a "going concern."
These condensed interim financial statements do not
include any adjustments to the value of the assets
and liabilities and their classifications that would
possibly be necessary in the event that the Company
cannot continue as a "going concern.
SHEFA GEMS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
(In NIS in thousands)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
Declaration in regard to Implementation of International a.
Financial Reporting Standards (IFRS)
The condensed interim financial statements have been
prepared in accordance with IAS 34, "Interim Financial
Reporting." The financial statements do not include
all the information and disclosures required in the
annual financial statements, and should be read in
conjunction with the Company's annual financial statements
as at and for the year ended December 31, 2021 (hereinafter:
"the Annual Financial Statements"). However, selected
explanatory notes are included to explain events and
transactions that are significant for an understanding
of the changes in the Company's financial position
and performance since the Annual Financial Statements.
These financial statements were authorized by the Company's
board of directors on October 31, 2022.
Foreign Currency and Linkage Basis b.
Detail in regard to the change in the Consumer Price
Index and the exchange rate of the foreign currency:
For the Period For the Year
of Six Months Ended December
Ended June 31,
30,
2022 2021 2021
-------- ------ -----------------
Change in CPI (applicable) 3.22% 1.59% 2.8%
Change in CPI (known) 3.13% 1.41% 2.4%
Change in rate of exchange 7.9% 1.4% 0.9%
- U.S. $
Change in rate of exchange (6.3%) 2.9% 2.9%
- GBP - GBP
c. Judgments and Estimates
In preparing these Interim Financial Statements in accordance
with the IFRS, management is required to make judgments,
estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets
and liabilities as well as income and expenses. We clarify
that actual results may differ from these estimates.
The significant judgments made by management in applying
the Company's accounting policies and the key sources
of estimation that served for estimates that are bound
up with uncertainty were consistent with those that were
applied in the Annual Financial Statements.
SHEFA GEMS LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
(In NIS in thousands)
NOTE 3:- SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE SHEET DATE
a. On August 22, 2022 the Court approved for the Company an actual distribution
in kind of the shares of Shefa in Israel (G.M.) Ltd. The distribution
of the dividend in kind will be to all the registered shareholders of
the company.
In accordance with the ruling of the Court, this distribution is to
occur within six months after receiving the approval of the Court.
b, On October 31, 2022 the board of directors approved remuneration
to Mr.Alon Shani, currently serving as the Company CEO and Chairman
of the board of the directors. The remuneration approved regarding salary
and expenses is in the amount of NIS 120 thousand and equivalent to
the amount that was withdrawn by Alon during the financial statements
period. These salary payments were approved for the period commencing
January 2022 and ending June 2022.
The financial statements contain expenses recorded in regard to this
approval. The approval of the Board of directors will be presented to
the Company shareholders for approval at the next A.G.M.
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