/Equities/XLON/SEFA/RNS

Half-year Report

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 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 CEO		David Ben David, Acct. 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) Impairment of exploratory assets	(495) -		(1,412) (29,047)	(2,816) (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)

	Premium on Shares	Dividend for Distribution	Capital Reserve for Payment on Account of Shares	Capital Reserve for Transactions with Interested Parties	Accumulated Deficit	Total Equity Attributed to Company 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 Comprehensive loss for the year Issuance of shares	116,497 - 3,329	- - -	5,762 - -	6,312 - -	(72,962) (62,672) -	55,609 (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 of Six Months Ended June 30,			For the Year Ended December 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 Investment in Company shares		-	(254)		(255) 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 Assets for exploration and evaluation of precious stones and assets Fixed assets	- -			- -		(112) (6,128) (831)
Usage rights	-				-	136
Loans from related and interested parties	-			-		6,576
Trade payables and credit balances Liability for severance pay	- -			- -		1,006 290
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 Usage rights assets for exploration and evaluation of precious stones Liability for severance pay		- - -	166 (269) 136				166 (269) 46

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 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

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. $ Change in rate of exchange - GBP - £	7.9% (6.3%)	1.4% 2.9%	0.9% 2.9%

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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END

IR MBBITMTBJBMT

TIDM	SEFA
Share Price	0.13p-60.00%

Date	31 Oct 2022
Time	14:14:44
Category	Results
ID	7779E

TIDM	SEFA
Share Price	0.13p-60.00%

Date	31 Oct 2022
Time	14:14:44
Category	Results
ID	7779E

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Half-year Report

AS OF JUNE 30, 2022

AS OF JUNE 30, 2022

Note