TIDMSEFA

RNS Number : 5420N

Shefa Gems Ltd

30 September 2021

B"H

30 September 2021

Shefa Gems Ltd.

("Shefa Gems" or the "Company")

   Interim Financial Results for the 6 months ended June 30, 2021   ( " IFR " ) 

Shefa Gems (LSE: SEFA), is pleased to announce its results for the six months ended June 30, 2021. These reports were prepared considering the reorganization of the assets that the Company is currently implementing, following the approval of the combined transaction as approved by the special general meeting of the Company's shareholders (the "Combined Transaction"; "SGM") held on August 9, 2021 (and reported on August 10, 2021).

Corporate and Financial - Highlights

-- As of March 1, 2021, all the Company's mining activity was transferred to its fully owned Subsidiary - Shefa in Israel (G.M.) Ltd. (the "Subsidiary"). As of that date, the subsidiary is solely responsible for covering the expenses related to the mining activity (See Note 3A to the IFR). The Subsidiary received loans from 2 of Shefa's old shareholders, in the amount of approximately GBP 983,000 for the benefit of continued financing and promotion of mining activities.

-- The Company financed its limited operations (excluding the mining business) through the realization of shares of Nala Digital it owned in the amount of approximately GBP 266,000.

Post Period - In accordance with the provisions of the Combined Transaction, and following the approval of the SGM on August 9, 2021, the Company performed the following actions:

-- Mr. Alon Shany (Executive Chairman), Mr. Jacques Abitbol (Non-Executive Director), Ms. Eva Abittan (Non-Executive Director) have been appointed to the Board. Michael Rosenberg, David Nachshon, Gershon Frenkel, Zvi Nemeth, James Campbell and Natan Drukman have stepped down from the Board. Mr. Yossef Taub remains on the board as a Non-Executive Director, and Ms. Nathalie Schwarz remains on the board as an independent Non-Executive Director.

-- Ms. Irit Ben Ami, who was appointed to serve as an Independent Director on the Company's Board (subject to shareholders approval), has a BA in Economy and Accounting from the Haifa University in Israeli and an LLM in Law from the IDC Herzliya in Israel. She is qualified under the Israeli Companies Law as an expert director and possesses financial and accounting expertise. She serves as an external director in two Israeli publicly traded companies in the fields of clean energy and medical cannabis, Medivie Therapeutic Ltd. and Together Pharma Ltd. Until 2019, she also served as a director in Nano Dimension, a public company in the field of 3D printing.

-- Mr. Avi Levin, who was appointed to serve as an Independent Director on the Company's Board (subject to shareholders approval), has a BA in Economy and Accounting from the Ben Gurion University in Israeli and an MBA in Finance and Global Business from the New York University. He holds a chartered accountant license in Israel and a CPA in the U.S. In addition to his appointment in the Company, he also serves as a CFO in Blackswan Technologies, a company in the field of cloud computing and artificial intelligence. He is qualified under the Israeli Companies Law as an expert director and possesses financial and accounting expertise.

-- On September 6, 2021, the Company announced the conclusion of the equity subscription of 2,123,543,065 new ordinary shares of the Company at a price of USD 0.0005 per share raising a total of USD 1,050,000 ("Investment Funds") by new investors. The Company is aware of its obligation to publish a prospectus in connection with the foregoing equity subscription and is progressing it.

-- Out of the Investment Funds, USD 700,000 was used to pay liabilities related to the exploration assets. As a result, the Company has no further liabilities in relation to the mining activity (except for share-related liabilities). The balance of USD 350,000 will be used by the Company to finance the limited activity (excluding mining activity) until the implementation of the acquisition strategy in the web technology and software space (See Note 4H to the IFR).

-- The Company intends shortly to apply to the Israeli Registrar of Companies to approve to change of its name to "Alef Bet Advanced Technologies (2021)". The purpose of the name change is to more closely reflect the Company's strategy to make an acquisition in the web technology and software space. Subject to the approval of the Israeli Registrar of Companies to the change of name, the Company will make application to the London Stock Exchange to change its TDIM symbol from "SEFA" to "ALEF". Shareholders should note that their shareholdings will be unaffected by the change of name, although new share certificates will be issued to Shareholders following the name change. The Company will notify the market of when the change of name and TIDM will be effective.

-- In accordance with Israeli law, the Company has appointed attorney Natan Drukman as a trustee to hold the shares of the Subsidiary (the owner of the mining business) - and will be progressing with the disposal of the mining business by way of a dividend in specie to existing shareholders. This is expected to be completed subject to the schedule to be determined by the court in Israel. On the basis of the attached IFR and the independent valuation of the transferred assets (for tax purposes) - an application for approval of the dividend in specie process will be submitted in the coming days. The trustee will update on the schedule and progress of the process and any matter concerning the disposal of the mining business - through the RNS reporting system.

Alon Shany, Executive Chairman of Shefa Gems, said:

"We are excited about the new direction the Company is taking and are pleased to welcome new shareholders to the Company.

We believe that this Company as a cash shell is exceptional for itself, in terms that allow a common ground between Israel and London - so we expect interesting opportunities in the future, in the web technology and software space, and aim for acquiring a company with a strong potential for profitability and benefit for the Company and its shareholders. We are working hard to find the best company for the future of the Company as we see it.

We hope and know that all of new and existing shareholders will be excited as we are."

-Ends -

Enquiries

 
 Shefa Gems Ltd 
 Alon Shany - Executive Chairman 
  www.shefagems.com                 +972 52 586 8616 
                                   ----------------- 
 
 

B"H

SHEFA GEMS LTD.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

   AS OF   JUNE 30, 2021 

(UNAUDITED)

SHEFA GEMS LTD.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

   AS OF   JUNE 30, 20 2 1 

(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 - 13 
 

Jerusalem, September 2, 2021

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, 2021 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 NIS 29 million amount of impairment of the exploration assets that is included in other expenses in the Company statements of comprehensive loss, and in accordance in regard to the amount that is shown for the assets held for distribution to shareholders. See Note 3 in regard to uncertainty in the value estimation of the exploration assets.

 
 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 as follows: 1. 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 and the continued operations are dependent 
    on further mobilizations. The Company plans to continue the existing operations 
    is by distributing a dividend in kind and to introduce new operations, but 
    this is uncertain. 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." 
 2. We draw attention to Note 3 of the condensed interim financial statements 
  in regard to a transaction for realization of the exploration assets by 
  declaring a dividend in kind to its shareholders, subsequent to authorization 
  by the Court, that will reduce the Company capital in the amount of approximately 
  NIS 35 million and will introduce new operations. 
 
 
 
 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, 
                                                      2021          2020         2020 
                                                  ------------  ------------  ---------- 
                                      Note                (Unaudited)          (Audited) 
                                ----------------  --------------------------  ---------- 
  ASSETS 
 
  Non-Current Assets: 
  Fixed assets                                               -         1,244       1,007 
  Assets in regard to usage rights                           -         1,569       1,645 
  Assets for exploration and 
   evaluation 
   of precious stones                                        -        62,270      63,098 
  Total non-current assets                                   -        65,083      65,750 
                                                  ------------  ------------  ---------- 
 
  Current Assets: 
  Cash in foreign currency                                  11         1,034         483 
  Securities                                                 -         - . -         926 
  Trade receivables                                          -            33           - 
  Interested party                                           -            77           - 
  Other accounts receivable                                109            78         220 
  Loans to the past parent company                           -         1,055           - 
  Total current assets                                     120         2,277       1,629 
                                                  ------------  ------------  ---------- 
 
  Assets for distribution to 
   shareholders                         3(c)            41,620             -           - 
                                                  ------------  ------------  ---------- 
 
  Total Assets                                          41,740        67,360      67,379 
                                                  ============  ============  ========== 
 
 EQUITY AND LIABILITIES 
 
 Equity attributed to Company 
  shareholders                                          23,421        57,447      55,609 
                                                  ------------  ------------  ---------- 
 
 Non-current Liabilities: 
 Long-term loans from 
  interested 
  parties and others                                         -             -         433 
 Long-term liability at fair 
  value                                                      -         5,550       6,187 
 Liability in regard to usage 
  rights                                                     -         1,305       1,302 
 Liability for severance pay                                 -           139         154 
 Warrants convertible to 
  shares                                                     8           195           6 
                                                  ------------  ------------  ---------- 
 Total Non-current Liabilities                               8         7,189       8,082 
                                                  ------------  ------------  ---------- 
 
 Current Liabilities: 
  Short-term credit from bank 
   and 
   others                                                  358           591       1,789 
  Trade payables                                           310           536         681 
  Interested parties                                         -           148          88 
  Other accounts payable                                   507         1,016         670 
  Loans convertible to shares                              181           162         181 
  Liabilities at fair value                              7,570           271         279 
  Total current liabilities                              8,926         2,724       3,688 
                                                  ------------  ------------  ---------- 
 
 Liability for distribution to 
  shareholders                        3(d)               9,385             -           - 
                                                  ------------  ------------  ---------- 
 
 Total Equity and Liabilities                           41,740        67,360      67,379 
                                                  ============  ============  ========== 
 
                   The accompanying notes to these condensed interim consolidated 
                          financial statements are an integral part thereof. 
 
    Date of       Tali Shalem,           David Ben David,                Josef Yitzchak 
    Approval           CEO                      CFO                            Taub 
     of the                                                                  Director 
    Financial 
   Statements 
 
 
   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 
                                            2021        2020              2020 
                                         ---------  -----------  --------------------- 
                                   Note         (Unaudited)            (Audited) 
                                  -----  ----------------------  --------------------- 
 
 General and administrative 
  expenses                                 (1,412)        (407)                (1,915) 
 
 Operating loss                            (1,412)        (407)                (1,915) 
 Other income (expenses), net      3(b)   (29,047)         (28)                  1,195 
                                         ---------  -----------  --------------------- 
 Loss prior to financing                  (30,459)        (435)                  (720) 
                                         ---------  -----------  --------------------- 
 
 Financial income                               64        - . -                 1,114 
 Financial expenses                        (1,793)      (1,694)                (4,382) 
                                         ---------  -----------  --------------------- 
 
 Financial costs, net                      (1,729)      (1,694)               (3,268) 
                                         ---------  -----------  --------------------- 
 
 
 Comprehensive loss for the 
  period                                  (32,188)      (2,129)                (3,988) 
                                         =========  ===========  ===================== 
 
 Basic and diluted loss per 
  share (in NIS)                           (0.160)      (0.012)                (0.021) 
                                         =========  ===========  ===================== 
 
 
 

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       Reserve 
                                                            Payment       for                                 Total 
                                                              on      Transactions                            Equity 
                               Additional    Receivables    Account       with                              Attributed 
                     Share      Paid-in      on Account       of       Interested         Accumulated       to Company 
                    Capital     Capital       of Shares     Shares      Parties             Deficit        Shareholders 
                  ---------  ------------  -------------  ---------  -------------  --------------------  ------------- 
 Unaudited 
 Balance as of 
  January 
  1, 2021            20,120        96,377          - . -      5,762          6,312              (72,962)         55,609 
  Comprehensive 
   Loss for 
   the period         - . -         - . -          - . -      - . -                             (32,188)       (32,188) 
 
 Balance as of 
  June 30, 
  2021               20,120        96,377          - . -      5,762          6,312             (105,150)         23,421 
                  =========  ============  =============  =========  =============  ====================  ============= 
 
 Unaudited 
 Balance as of 
  January 
  1, 2020            17,230        96,297          (205)      5,762          6,312              (68,974)         56,422 
  Comprehensive 
   Loss for 
   the period         - . -         - . -          - . -      - . -          - . -               (2,129)        (2,129) 
  Issuance of 
   shares               289         2,679            186      - . -          - . -         - . -                  3,154 
 
 Balance as of 
  June 30, 
  2020               17,519        98,976           (19)      5,762          6,312              (71,103)         57,447 
                  =========  ============  =============  =========  =============  ====================  ============= 
 
 

Audited

 
   Balance as of January 
    1, 2020                  17,230    96,297   (205)    5,762    6,312    (68,974)           56,422 
  Comprehensive loss for 
   the Year                   - . -     - . -   - . -    - . -    - . -     (3,988)          (3,988) 
  Issuance of shares          2,890        80     205    - . -    - . -       - . -            3,175 
 
 Balance as of December 
  31, 2020                   20,120    96,377   - . -    5,762    6,312    (72,962)           55,609 
                           ========  ========  ======  =======  =======  ==========  =============== 
 

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, 
                                                  2021                    2020                  2020 
                                            ---------------          --------------  ------------------------- 
                                                           (Unaudited)                        (Audited) 
                                           ----------------------------------------  ------------------------- 
 Cash Flows for Operating Activities: 
 Loss for the period                               (32,188)                 (2,129)                    (3,988) 
 Adjustments Required to Show 
  Cash Flows 
  Used in Operating Activities 
  (Appendix A):                                      31,065                 (2,457)                        767 
                                            ---------------      ------------------ 
 Net Cash Used in Operating Activities              (1,123)                 (4,586)                    (3,221) 
                                            ---------------      ------------------  ------------------------- 
 
 Cash Flows from Investing Activities: 
 Deposits, net                                        - . -                      14                         14 
 Sale of fixed assets                                 - . -                   - . -                        111 
 Redemption of shares held for                        1,200                   - . -                      - . - 
  trading 
 Acquisition of fixed assets                            (5)                   - . -                        (8) 
 Investment in exploration and 
  evaluation of precious stones                     (1,006)                   (106)                    (1,361) 
 Receipts, net from the past 
  parent company                                      - . -              - . -                             330 
 Net Cash Provided by (Used in) 
  Investing Activities                                  189                    (92)                      (914) 
                                            ---------------      ------------------  ------------------------- 
 
 Cash Flows from Financing Activities: 
 Proceeds from share and option 
  issue (includes premium), net                       - . -              2,170                             205 
 Receipt (Repayment) of loans 
  from banks and others, net                            182                   - . -                      (130) 
 Loans received (repaid) from 
  interested parties, net                             4,443                   (211)                      1,431 
 Repayment of a loan from a related                                           - . -                      - . - 
  party                                                (31) 
 Repayment of fund in regard 
  to leasing                                          (254)                   (147)                      (393) 
 Receipts on account of loans 
  convertible to shares                               - . -                3,894                         3,804 
 Interest received (paid)                             (103)                    72                        (226) 
                                            ---------------      ------------------  ------------------------- 
 Net Cash Provided by Financing 
  Activities                                          4,237                5,778                         4,691 
                                            ---------------      ------------------  ------------------------- 
 
   Cash for distribution to shareholders            (3,775)                   - . -                      - . - 
                                            ---------------      ------------------  ------------------------- 
 
   Exchange rate differences in 
   regard to cash and cash equivalents                - . -              (72)                             (79) 
                                            ---------------      ------------------  ------------------------- 
 
 Increase (Decrease) in Cash 
  and Cash Equivalents                                (472)                1,028                           477 
 Cash and cash equivalents at 
  the beginning 
  of the period                                         483                6                                 6 
                                            ---------------      ------------------  ------------------------- 
 
   Cash and cash equivalents at 
   the end of the period                                 11              1,034                             483 
                                            ===============      ==================  ========================= 
 
 

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, 
                                              2021        2020           2020 
                                           ---------  ----------  ----------------- 
                                                (Unaudited)           (Audited) 
                                           ---------------------  ----------------- 
 Adjustments Required to Show 
  Cash Flows 
  Provided by (Used in) Operating 
  Activities: 
 Expenses (income) not involving 
  cash flows: 
 Depreciation *                                   15          24                 48 
                                                             - . 
 Capital gains                                 (274)           -               (75) 
 Amortization of assets for exploration 
  and evaluation of precious stones           29,150         - .              - . - 
                                                               - 
 Amortization of a loan to an 
  interested party                             - . -          61            (1,091) 
 Financing expenses (income), 
  net                                          1,729     (1,197)              3,268 
 
 
 
 Changes in Assets and Liabilities: 
 Decrease in trade receivables                 - . -          18                 51 
 Decrease (Increase) in other 
  accounts receivable                            (2)          67               (75) 
 Increase (Decrease) in trade 
  payables                                       167       (512)              (391) 
 Decrease in liability to an interested 
  party                                        - . -       (332)              (316) 
 Increase (Decrease) in other 
  accounts payable                               280       (586)              (652) 
                                           ---------  ----------  ----------------- 
 
                                              31,065     (2,457)                767 
                                           =========  ==========  ================= 
 

* Net of depreciation encumbered on the exploration and evaluation for precious stones assets.

 
 
   Appendix B                                 For the Period       For the Year 
                                              of Six Months       Ended December 
                                                  Ended                31, 
                                                 June 30, 
                                             2021       2020          2020 
                                          ---------  --------  ----------------- 
                                              (Unaudited)           (Audited) 
                                         --------------------  ----------------- 
 Significant Operations Not Involving 
  Cash Flows: 
 Payables in regard to exploration 
  and evaluation of precious stones 
  assets                                      - . -       676                248 
                                          =========  ========  ================= 
 Fixed assets in regard to exploration 
  and evaluation of precious stones 
  assets                                        166       226                413 
                                          =========  ========  ================= 
 Usage rights assets in regard 
  to exploration and evaluation 
  of precious stones assets                     269       182                450 
                                          =========  ========  ================= 
 Liability for severance pay in 
  regard to exploration and evaluation          136     - . -              - . - 
  of precious stones assets 
                                          =========  ========  ================= 
 Loans assigned to capital                    - . -     1,125              3,381 
                                          =========  ========  ================= 
 

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 engaged in exploration for diamond, gold 
             and precious stones in the northern area of Israel. 
            As of December 31, 2020 the controlling interest 
             in the Company is Nela Digital Ltd. (previously 
             known as Shefa Yamim LTD.) that held 33.77%. During 
             April 2020 as part of an arrangement of a debt 
             owed by Nela Digital LTD., its holdings in the 
             Company were transferred to a trustee who was appointed 
             by the Court and the two companies did not consolidate 
             their financial statements. 
            The shareholders of Nela Digital were given an 
             option to directly hold these shares, as detailed 
             in the agreement. 
 
      2.    These condensed interim consolidated financial 
             statements are to be viewed together with the annual 
             financial statements of the Company as of December 
             31, 2020 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 2021, would be transferred to 
       its subsidiary (Shefa in Israel (G.M) Ltd., hereinafter 
       - "the subsidiary"). We note that the financial statements 
       include adjustments in regard to the value of the 
       assets and liabilities in view of the transfer of 
       the exploration assets to the subsidiary. As of the 
       date of approval of the consolidated financial statements, 
       the subsidiary is continuing to perform the exploration 
       and prospecting operations in accordance with the 
       valid permits (see note 3(a)). 
 
 C.   On August 9, 2021 the special meeting of shareholders 
       approved the joint transaction signed between the 
       Company and the third party. Please see Note 4. 
 
 D.   The Company has suffered losses since its inception 
       and, does not have any revenues from operations. Financing 
       of its operations has been performed until now by 
       infusions of capital and/ or by loans received by 
       a shareholding company and its continued operation 
       is contingent upon further infusions of capital. In 
       view of the agreement signed between the Company and 
       a third party, as detailed in Note 4, the company's 
       management believes that it can mobilize the money 
       resources in order to complete the explorations, but 
       there remains uncertainty in this regard since the 
       mobilizations are dependent on other parties. These 
       factors create significant doubts in regard to continued 
       operation of the Company as a "going concern." 
      These condensed interim consolidated financial statements 
       do not contain any adjustments for valuation of assets 
       and liabilities or their classifications that would 
       likely be necessary in the event that the Company 
       is unable to continue its operation as a "going concern." 
 
 

SHEFA GEMS LTD.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

 
 a. 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, 2020 (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 September 9, 2021. 
 
 
 b. 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       For the Year 
                                     of Six Months       Ended December 
                                       Ended June             31, 
                                          30, 
                                   2021       2020           2020 
                                 --------  ---------  ----------------- 
 Change in CPI (applicable)        1.59%    (0.79%)         (0.7%) 
 Change in CPI (known)             1.41%    (0.69%)         (0.6%) 
 Change in rate of exchange 
  - U.S. $                         1.4%      0.29%          (7.0%) 
 Change in rate of exchange 
  - GBP GBP                        2.9%      (6.7%)         (3.7%) 
 
 
   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:- COMPOSITION OF ASSETS FOR DISRIBUTION TO SHAREHOLDERS

 
   a.   Agreement between the Company and its subsidiary for 
         transfer of ownership in regard to exploration assets 
        On November 29, 2020 an agreement was signed between 
         the Company and the subsidiary, in the framework of which 
         the Company obligated to transfer to the subsidiary the 
         ownership of all exploration assets by January 1, 2021. 
         Concurrently, all business operations that are related 
         to exploration assets, including officers, employees, 
         agreements, advisors, suppliers, etc. were transferred 
         to the subsidiary. In addition, it was agreed that, commencing 
         March 1, 2021, all expenses in regard to operations related 
         to the exploration assets will belong to the subsidiary. 
        In accordance with the aforementioned, all exploration 
         assets were actually transferred, including: the Discovery 
         permit for the Kishon area, the exploration permit for 
         the Carmel, the search permit for the Carmel and the 
         exploration license for Bat Shlomo. We note that this 
         transfer of ownership received final validation also 
         from the Mining Inspector and from the Legal Department 
         of the Energy Ministry as of August 9, 2021. Concurrently, 
         the transfer includes all the agreements, trademarks, 
         machinery and professional equipment, goodwill and all 
         the related information accumulated during exploration 
         operations performed until now. 
        Commencing March 1, 2021, the subsidiary started to bear 
         the operating expenses related to exploratory assets, 
         as agreed, by loans from interested parties that were 
         rendered to the subsidiary. 
        Commencing June 1, 2021 all the professional employees, 
         (including professional management, but not the Company 
         directors) ,were transferred for direct employment by 
         the subsidiary, including the continuity of their rights. 
         All exploratory operations are performed currently by 
         the subsidiary using the same professional management 
         and standards that were utilized beforehand. 
        As consideration for transfer of the abovementioned assets, 
         the subsidiary allocated to the Company during the half 
         years an amount of 201,347,822 Ordinary shares and with 
         this adjustment the Company now owns 100% of the subsidiary. 
        As of the date of the financial statements and commencing 
         with August, the subsidiary's shares that were allocated 
         to the Company are held in trust, until the process of 
         new operations will be completed (see Note 4). 
 
   b.   Impairment of the exploration assets 
        Further to the Company's intention to transfer its exploration 
         and evaluation assets to its shareholders, the Company 
         examined the exploration and evaluation assets for precious 
         stones to determine whether there are signs that determine 
         a decrement. In the framework of this examination, the 
         Company received an evaluation from an independent assessor. 
         The pitfalls that were confronting the assessor in this 
         regard included the uncertainty from a regulatory viewpoint, 
         as well as the uncertainty in regard to the actual market 
         value of precious stones (including exclusive precious 
         stones in Israel that as yet do not have an open market), 
         uncertainty in regard to assets that have not as yet 
         been determined as a discovery, whether because the exploration 
         in certain areas has not been completed or whether there 
         is not complete certainty in regard to their economic 
         feasibility. 
        The amount of amortization in regard to exploration assets 
         was approximately NIS 29 million and is included in other 
         expenses in the Company's statements of operations. 
 

SHEFA GEMS LTD.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

NOTE 3:- COMPOSITION OF ASSETS FOR DISRIBUTION TO SHAREHOLDERS (cont.)

 
  b.                           Impairment of the exploration assets (cont.) 
                               As of June 30, as a result of the Company's decision to realize 
                                the operations of the exploration assets by a dividend in 
                                kind to its shareholders (see details in Note 4), the Company 
                                showed in its financial statements the abovementioned operations 
                                as operations for distribution to shareholders in accordance 
                                with its fair value, net of sale costs. 
 
  c.                           Composition of assets for distribution to shareholders 
 
 
                                             For the Period                       For the Year 
                                           of Six Months Ended                   Ended December 
                                                June 30,                               31, 
                                            2021                2020                  2020 
                                ---------------------------  ---------  ------------------------------ 
                                               (Unaudited)                         (Audited) 
                               ---------------------------------------  ------------------------------ 
  Cash                                                3,775 
  Accounts receivables                                  113          -                               - 
  Discovery and exploration                          35,525          -                               - 
   assets * 
  Fixed assets                                          831          -                               - 
  Assets in regard to                                 1,376          -                               - 
   usage rights 
                                ---------------------------  ---------  ------------------------------ 
                                                     41,620          -                               - 
                                ===========================  =========  ============================== 
 
  * Includes inventory of precious stones of approximately 
   NIS 4 million. 
 
 
 
   d.   Composition of liabilities for distribution to shareholders 
 
 
 
 
 
                                      For the Period              For the Year 
                                   of Six Months Ended           Ended December 
                                         June 30,                     31, 
                                     2021               2020         2020 
                           ----------------------      -----  ----------------- 
                                        (Unaudited)                (Audited) 
                           ---------------------------------  ----------------- 
 Suppliers                                    475          -                  - 
 Credit from a bank and 
  others                                      979 
 Accounts payable                             531          -                  - 
 Loans from interested 
  parties                                   5,598 
 Liability in regard to                     1,512          -                  - 
  usage rights 
 Liability in regard to                       290          -                  - 
  severance pay 
                           ----------------------  ---------  ----------------- 
                                            9,385          -                  - 
                           ======================  =========  ================= 
 
 
 

SHEFA GEMS LTD.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

NOTE 4:- SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE SHEET DATE

 
   On August 9, 2021 the special meeting of the Company shareholders 
    approved the joint transaction signed between the Company 
    and a third party (The Shani Group), and accordingly the 
    Company commenced actualization of the terms of the transaction, 
    that include: 
 
   a.   Distribution of the shares of the subsidiary, direct 
         to the company's shareholders, as a dividend in kind 
         - 
        As noted in Note 3a, the subsidiary received all the 
         exploration assets and the related operations. As consideration, 
         the subsidiary allocated shares to the Company. As part 
         of the terms of the joint transaction with the Shani 
         Group, the subsidiary's shares were transferred to an 
         agreed agent (Mr. Nathan Druckman, Adv.) in order that 
         he will handle the distribution of these shares and pro-rate 
         them accordingly to every shareholder who held shares 
         of the Company on the determined date, August 10, 2021. 
         The distribution will be performed by a dividend in kind 
         subject to and subsequent to approval by the Court in 
         the framework of a request that will be presented subsequent 
         to presentation of the financial statements. This distribution 
         will reduce the Company share capital in the amount of 
         an additional NIS 35 million. 
 
   b.   Strategic advancement of the acquisition of new operations 
         - 
        Subsequent to distribution of the mining transactions 
         shares, the Company will become an envelope of cash that 
         is looking for opportunities to buy, in the field of 
         technology for the internet and the software. In the 
         event that this acquisition will be completed, it will 
         constitute a reverse control, according to the regulations 
         for listing, and the Company will request that its shares 
         be reinstated on the official listing and the main market 
         of the London Stock Exchange. The Company did not identify 
         at the moment a proper acquisition goal but will emphasize 
         especially the key growth areas offered by digital services 
         to clients such as leisure, finance, electronic trade, 
         gaming. Concurrently, the technologies that disturb, 
         such as blockchain and Crypto currency. In addition, 
         the Company is examining potential targets in software. 
        If the Company will identify a proper target, it will 
         publicize, in accordance with all the listing regulations, 
         a prospectus that will contain all the information necessary 
         to approve the reverse acquisition. As of now, we cannot 
         guarantee that the Company will be able to identify a 
         proper acquisition target or that it will be able to 
         complete any transaction that is foreseen. As a result, 
         the trade in Company shares at the main market of the 
         London Stock Exchange for marketable securities might 
         be nullified. 
 
   c.   Company's change of name - 
        The Company will present to the Companies Authority in 
         Israel a request to change its name from Shefa Gems Ltd. 
         to "Aleph Beit Progressive Technologies (2021) Ltd." 
         or to a similar name, as will be approved by the Israeli 
         Companies Authority. The goal of this name change is 
         to reflect closely the Company's strategy for development 
         of its transactions in the fields of Internet technology 
         and related software. 
        Subsequent to the name change, the Company will request 
         from the London stock market to change its trading symbol 
         (TDIM) from SEFA to ALEPH. Holdings of the shareholders 
         on the date of the symbol change will not be affected 
         by the change, although new share certificates will be 
         issued to the shareholders as a result of the name change 
         and completion of the proposed joint transaction. The 
         Company will report in regard to approval of the name 
         change and the new TIDM being valid. 
 
 
 

SHEFA GEMS LTD.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(In NIS in thousands)

NOTE 4:- SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE SHEET DATE (cont.)

 
   d.   Increase in registered capital 
        The Company will present to the Israeli Companies Authority 
         a request to increase the Company's registered share 
         capital to 1,000,000,000,000 Ordinary shares, to nullify 
         the par value of the Ordinary shares and to amend the 
         Company's charter accordingly. 
 
   e.   Allocation of shares 
        The Company will allocate to the Shani Group and other 
         unrelated parties Ordinary shares at a price of $ 0.0005 
         (GBP 0.00031) per Ordinary share, for a consideration 
         in the amount of $ 1,050,000 (GBP 756,000). 
        For the purpose of this allocation, that will reflect 
         85% of the issued share capital after allocation and 
         full dilution, the Company will be requested by the London 
         Stock Market to publish a prospectus in regard to those 
         shares. Those allocated shares will be registered for 
         trade on the main London Stock Market only subsequent 
         to publication of the prospectus. The Company intends 
         to advance with the prospectus as soon as possible and 
         not later than 12 months from the date of approval of 
         the meeting of shareholders. 
        During August, the Shani Group transferred half of the 
         abovementioned amount to the subsidiary. 
 
   f.   Change in the composition of the Company directors 
        In accordance with the approval of the meeting, the Company 
         agreed to and appointed a new chairman of the board of 
         directors and two directors. The six former directors 
         resigned, as agreed. One director remained on the job 
         and the external directors also remained (hereinafter: 
         "the new directors"). 
        On August 23, 2021, the new directors appointed two external 
         directors,that will serve on the balance sheet and audit 
         committees of the Company. In accordance with Section 
         57 (4) of the Israel Companies Law, 1999, the appointment 
         of new external directors is dependent on the approval 
         of the annual meeting of the Company shareholders that 
         is scheduled for October 2021. 
 
 
 
 
 

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IR WPUACBUPGURU

(END) Dow Jones Newswires

September 30, 2021 04:49 ET (08:49 GMT)

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