REG - Shefa Gems Ltd - Half-year Report
31/10/2022 14:15
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RNS Number : 7779E Shefa Gems Ltd 31 October 2022
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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 INDEPENDENT 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 shareholders - 41,620 -
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 others - 358 -
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 shareholders - 9,385 -
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 of the Financial Statements Alon Shani David Ben David, Acct.
CEO Controller Director
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 Six Months Ended For the Year 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 for Transactions with Interested Parties Total
Equity Attributed to Company Shareholders
Capital Reserve for Payment on Account of Shares
Dividend for Distribution Accumulated
Deficit
Premium on Shares
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, 116,497 - 55,609
2021
- - 5,762 6,312 (72,962) (62,672)
Comprehensive loss for the year
3,329 - - - (62,672) 3,329
Issuance of shares
- - -
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 of Six Months Ended For the Year Ended December 31,
June 30,
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 (1,024)
stones
- (1,006)
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 Ended
June 30, For the Year Ended December 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
Fixed assets - -
(6,128)
(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 (269)
pay
- (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 Financial Reporting a.
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 of Six Months Ended June 30, For the Year Ended December 31,
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 - U.S. $ 7.9% 1.4% 0.9%
Change in rate of exchange - GBP - £ (6.3%) 2.9% 2.9%
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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