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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Shefa Gems Ltd | LSE:SEFA | London | Ordinary Share | IL0011101057 | ORD NIS0.10 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.142 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Misc Retail Stores, Nec | 5.35M | -12.3M | -0.0053 | -286.79 | 3.54B |
From Apr 2019 to Apr 2024
TIDMSEFA
RNS Number : 3293J
Shefa Yamim (A.T.M.) Ltd
29 March 2018
B"H
29 March 2018
Shefa Yamim (A.T.M.) Ltd
("Shefa Yamim" or the "Company")
Final Results for the year ended 31st December 2017
Shefa Yamim (LSE: SEFA), a precious stones exploration Company in Northern Israel, is pleased to announce final results for the year ended 31st December 2017.
2017 Highlights
Hot Features
Premium
-- Kishon Mid-Reach ("the Project")
-- New bulk sampling programme in Zone 1 and 2 started in August 2017 with a total of 8 bulk samples and 4,107.86 tonnes of gravel collected during the period
-- Successfully treated 2,990 tonnes of gravel at its operational site in Akko, Northern Israel
-- Total Target Mineral Assemblage Suite ("TMA") found in the treatment during the period is 1,096.39 carats containing the Heavy Industrial Minerals ("HIM"); zircon, rutile, ilmenite and garnet and the DMCH Suite; diamond, natural moissanite and the gem corundum varieties of sapphire, ruby, Carmel Sapphire and Hibonite ("DMCH")
-- Applied and subsequently been granted exploration permit 869B7
-- Competent Persons Report ("CPR") updated and published in October 2017
-- Presence of Hibonite, an incredibly rare gemstone found only in limited locations globally, confirmed by work carried out by Shefa Yamim in collaboration with Prof. Griffin from Macquarie University, Australia. The Hibonite added to the DMC Suite of minerals and the geological models have been updated accordingly to DMCH
-- Corporate -- Successful IPO on the Official List of the London Stock Exchange on 18th December 2017 -- Raised gross proceeds of GBP4.15 million, before expenses -- Significantly strengthened the Board with the appointment of four Non-Executive Directors
-- Received a trade mark from the Israeli Government for the Carmel Sapphire(TM), a unique gemstone only found in Mt. Carmel, in Northern Israel
-- Post Period Highlights
-- Macquarie University results find Permo-Triassic-Jurassic rocks deep beneath Mount Carmel, refining the geological history of the region and expanding the exploration potential with a view to discover the primary source rock for the mineral suites
-- Upgrade of jigging system to expand sample processing facility
-- Announced bulk sample results for BS-1212, BS-1227 and BS-1226, which included the recovery of a 5.52ct Sapphire and a 4.86ct Carmel Sapphire(TM)
Avi Taub, CEO of Shefa Yamim, said: "We are pleased to announce our maiden results following our listing on the Official List of the London Stock Exchange. In 2017 we made great progress with our operations and bulk samplings which has kept the Company on track to commence technical studies during the course of 2018. During the year, the total target mineral assemblage found amounted to 1,096.39 carats primarily of natural moissanite and gem corundum of sapphire, rubies, Carmel Sapphire(TM) and Hibonite as the Company conducted bulk samplings on the Kishon Mid-Reach Zone 1 area.
"In 2018, the Company has made good progress in upgrading our sample treatment facility and moving towards increasing our processing capacity to approximately 50 tonnes a day. We remain on track to achieve our targets for the year of concluding our bulk sampling in Kishon Mid-Reach Zone 1 and commencing technical studies for this area. We are also on track to progress with conducting our bulk sampling in the Kishon Mid-Reach Zone 2 and look forward to reporting on achieving our key milestones as we progress through the year."
- Ends -
Enquiries
Shefa Yamim (A.T. M.) Ltd --------------------------------- ----------------- Avi Taub, Chief Executive Officer +44 20 7618 9100 --------------------------------- ----------------- VSA Capital Limited - Financial Adviser and Broker --------------------------------- ----------------- Andrew Raca, Stephanie Jury +44 20 3005 5000 --------------------------------- ----------------- Luther Pendragon --------------------------------- ----------------- Harry Chathli, Ana Ribeiro, Alexis Gore +44 20 7618 9100 --------------------------------- -----------------
A full audited report, including the consolidated Financial Statements is available on the Company's website at www.shefayamim.com
Operational Review
Kishon Mid-Reach
Zone 1 Bulk Sampling
In September 2017, Shefa Yamim completed a total of 3 new bulk samples in Zone 1 - BS-1226, 1227, 1228 in Zone 1. The 3 bulk samples carried out in August in the Kishon Mid-Reach Zone are the last bulk samples planned for Zone 1.
Zone 2 Bulk Sampling
In August, the Company completed 5 bulk samples in the Kishon Mid-Reach Zone 2 including: BS-1223, BS-1224, BS-1225, BS-1229 and BS-1330. In addition, 3 new bulk samples were excavated (BS-1223, BS-1224 and BS-1225) and 2 new bulk samples were done across the valley opposite to bulk samples BS-1223, BS-1224 and BS-1225 samples BS-1229 and BS-1230.
In all, a total of 8 bulk samples and 4,107.86 tonnes of gravels were collected and 2,990 tonnes of gravels were successfully treated at its operational site in Akko, Northern Israel. Total Target Mineral Assemblage Suite ("TMA") found in the treatment during the period is 1,096.39 carats containing the Heavy Industrial Minerals ("HIM"); zircon, rutile, ilmenite and garnet and the DMCH Suite; diamond, natural moissanite and the gem corundum varieties of sapphire, ruby, Carmel Sapphire and Hibonite.
Bulk sample results announced post period, on the 20th March 2018, covering some of the bulk samples treated during the period, saw a shift from findings to date where the Carmel Sapphire(TM) has been the dominant gem mineral in most of Zone 1. The southernmost bulk samples of BS-1226 and BS-1227 have returned higher sapphire values than the Carmel Sapphire(TM). In BS-1227 the recovery of 55.3ct of sapphire was the highest for a single bulk sample to date, whilst the individual sapphire recovered weighing 5.52ct was close to the largest ever discovered by Shefa Yamim which was 5.72ct.
Processing and exploration
During 2017, the Company treated a total of 2,990 tonnes of gravel and is in the process of collecting the last two bulk samples from Zone 1 (BS-1228, BS-1208). The Company will then start processing historical bulk samples gravels collected from the Kishon Mid Reach zone 2. Historical bulk samples to note in this area include BS-9820 which yielded a 6 carat natural moissanite, the largest found in our license areas to date.
During the period, the Company applied for and received a new exploration permit from the inspector of mines - Exploration permit 869B7 covering 173,888 Dunams and published an updated Competent Person's Report in October 2017.
In addition, and following a review by Macquarie University, led by Professor Griffin, and Shefa Yamim, the Company has confirmed the presence of hibonite in some of its bulk samples. Hibonite, is an incredibly rare gemstone only found in a few locations worldwide. Shefa Yamim has discovered examples intergrown with grossite, fluorite, spinel and native vanadium of varying quality and size; the largest of which was 2.83ct stone in historical bulk sample BS-1214 (Zone 1). Whilst quantitative data is not yet available, the Company believes that the discoveries to date indicate a further potentially valuable addition to the mineral assemblage.
Corporate Review
During the year Shefa has achieved many important milestones, but one of the highlights of the year was the Company's successful listing on the Official List of the London Stock Exchange on the 18th December 2017, raising gross proceeds of GBP4.15 million, before expenses, through the conversion of existing loans and a placing and subscription at 110p per Ordinary Share ("Placing Price"). The funds raised will be used to advance exploration in the Kishon Mid-Reach Project, its priority target, it towards the completion of a pre-feasibility and defining a resource.
As part of the listing process the Company also took steps to strengthen its Board with the appointment of James AH Campbell, Michael Rosenberg, Nathalie Schwarz and Hanoch Ehrlich, as Non-Executive Directors.
On the 5 of November 2017, the Company applied and received a trade mark from the Israeli Government for the Carmel Sapphire(TM), a newly discovered corundum similar in appearance to a sapphire, but unlike any other gem corundum previous found. The Company intends to market the Carmel Sapphire(TM) as a precious stone to be used in jewellery.
Post period, the Company announced the results of studies conducted by Macquarie University, Australia, that provide a clearer understanding of why Shefa Yamim has been able to find a suite of gemstones in its exploration area, including natural moissanite and Carmel Sapphire(TM). The findings allow the Company to make more informed decisions with regards to future exploration.
Financial Review
Over the last 12 months, the Company recorded a loss of TNIS (in thousands) 16,258 (2016: TNIS 549), equating to a loss of NIS 1.703 (2016: 0.058) per share. TNIS15,717 are attributed to financial expenses, including the fair market value of the Options/ Warrants granted to the convertible loan providers, pre-IPO. In addition, the Company paid fees and commission costs associated with the loans. All loans were converted to Company shares at the day of the IPO. At the end of the year, the Company's cash and cash equivalents stood at TNIS 6,489.
Outlook
The Company's strategy for 2018 is to continue its exploration programme at the Kishon Mid Reach placer with the aim of delineating a mineral resource that is compliant with the South African Code for Reporting Exploration Results, Mineral Resources and Mineral Reserves (the "SAMREC"). To this end the Company plans to:
-- Conclude bulk sampling in the Kishon Mid-Reach Zone 1 -- Start technical studies of Zone 1 in Kishon Mid-Reach -- Establish grade estimations & resource definition -- Conduct bulk sampling in the Kishon Mid-Reach Zone 2
SHEFA YAMIM (A.T.M.) LTD.
STATEMENTS OF FINANCIAL POSITION
NIS in thousands
December 31,
Note 2017 2016
----- ----------------------- ----------
ASSETS
Non-Current Assets:
Fixed assets 6 2,130 1,946
Loans to Shefa-Yamim 7 2,342 1,116
Interested party 77 77
Assets for exploration
and evaluation of precious
stones 8 55,259 51,500
- .
Deferred issuance expenses - 905
----------------------- ----------
Total non-current assets 59,808 55,544
----------------------- ----------
Current Assets:
Cash and cash equivalents 6,489 1
Deposit in bank 4 173 192
Receivables 5 368 288
Total current assets 7,030 481
----------------------- ----------
Total Assets 66,838 56,025
======================= ==========
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' Equity 17 52,488 48,820
------- --------------
Non-current Liabilities:
Long-term loans from interested
party and others 14 800 778
Financiel lease 15 49 91
Liability for severance
pay 3i 118 120
- .
Warrants 16 9,834 -
------- --------------
Total Non-current Liabilities 10,801 989
------- --------------
Current Liabilities:
Short-term credit from
bank and others 9 467 696
Trade payables 10 1,766 649
Interested parties 11 110 2,308
Other accounts payable 12 1,206 1,835
- .
Loans convertible to shares 13 - 728
Total current liabilities 3,549 6,216
------- --------------
Total Shareholders' Equity
and Liabilities 66,838 56,025
======= ==============
The accompanying notes are an integral part
of the financial statements.
March 28,
2018
---------------------------------------------- ------------------------------ ------------
Date of Approval Avraham (Avi) David Ben
of the Financial Taub David
Statements CEO CFO
SHEFA YAMIM (A.T.M.) LTD.
STATEMENTS OF COMPREHENSIVE LOSS
NIS in thousands (except for per share loss)
For the Year Ended
December 31,
Note 2017 2016 2015
----- ----------- ---------- ----------
Costs and expenses
-
General and administrative
expenses 18 (541) (914) (1,028)
- .
Capital gain - 178 37
----------- ---------- ----------
Operating loss (541) (736) (991)
Financial expenses (15,954) (383) (153)
Financial income 237 570 834
----------- ---------- ----------
Financial income (expenses),
net 19 (15,717) 187 681
----------- ---------- ----------
Loss for the year and comprehensive
loss attributed to the
Company shareholders (16,258) (549) (310)
=========== ========== ==========
Basic and diluted
loss per share (in
NIS)
attributed to the
Company shareholders 23 (1.703) (0.058) (0.033)
=========== ========== ==========
The accompanying notes are an integral part of the financial statements.
SHEFA YAMIM (A.T.M.) LTD.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
NIS in thousands
Capital Total
Capital Reserve Shareholders'
Reserve from Equity
Additional for Transactions Accumulated Attributed
Share Paid-in Share- with Deficit to
Capital Capital based Interested Shareholders
Payments Party
---------- ------------- ----------- --------------- -------------- ----------------
Balance as of
January 1, 2015 9,387 70,743 4,416 6,312 (49,937) 40,921
Comprehensive
Loss for the - . - . - .
year - - . - - - (310) (310)
Receipts for
issue
of shares
during - . - . - .
2012 * - 5,089 - - - 5,089
Balance as of
December 31,
2015 9,387 75,832 4,416 6,312 (50,247) 45,700
Comprehensive
Loss for the - . - . - .
year - - . - - - (549) (549)
Share based - . - . - .
compensation - - . - 875 - - 875
Receipts for
issue
of shares
during - . - . - . - .
2012 * - 2,794 - - - 2,794
Balance as of
December 31,
2016 9,387 78,626 5,291 6,312 (50,796) 48,820
Comprehensive
Loss for the - . - . - .
year - - . - - - (16,258) (16,258)
Issuance of - . - . - .
shares **4,518 ** 14,339 - - - 18,857
Share based - . - . - .
compensation - - . - 292 - - 292
Receipts for
issue
of shares
during - . - . - . - .
2012 * - 777 - - - 777
Balance as of
December 31,
2017 13,905 93,742 5,583 6,312 (67,054) 52,488
========== ============= =========== =============== ============== ================
* See Note 1d, 17c.
** Net of issuance expenses and fees in the amount of approximately
NIS 4,470 thousand.
The accompanying notes are an integral part of the financial
statements.
SHEFA YAMIM (A.T.M.) LTD.
S0TATEMENTS OF CASH FLOWS
NIS in thousands
For the Year Ended
December 31,
2017 2016 2015
------------- ------------ --------------
Cash flows from operating activities:
Loss for the year (16,258) (549) (310)
Appendix A - Adjustments required
to reconcile loss for the year
to net cash provided by (used
in) operating activities 17,114 (151) (503)
Net cash provided by (used in)
operating activities 856 (700) (813)
------------- ------------ --------------
Cash flows from investing activities:
Purchase of fixed assets (531) (305) (1,346)
Consideration from sale of fixed - .
assets - 180 91
Investment in exploration and
evaluation assets (4,375) (2,638) (3,233)
Loan rendered to Shefa Yamim (1,177) - . - .
- -
Interest received 188 530 794
Net cash used in investing activities (5,895) (2,233) (3,694)
------------- ------------ --------------
Cash flows from financing activities:
Consideration received for issuance
of share capital (including additional
capital) 137 2,794 4,680
Increase in deferred issuance
expenses (4,707) (239) (56)
Receipt (Repayment) of credits
from banks and others, net (205) 168 (51)
Repayment of loans from interested
parties, net 446 (101) (95)
Receipt of loans convertible - .
to shares 16,611 504 -
- . - .
Receipt of long-term loans - - 200
Repayment of long-term loans (40) (46) (70)
Interest paid (458) (157) (101)
Net cash provided by financing
activities 11,784 2,923 4,507
------------- ------------ --------------
Linkage differences in regard - .
to cash and cash equivalents (257) 10 -
------------- ------------ --------------
Increase in cash and cash equivalents 6,488 - . - .
- -
Cash and cash equivalents at
the beginning of the year 1 1 1
------------- ------------ --------------
Cash and cash equivalents at
the end of the year 6,489 1 1
============= ============ ==============
The accompanying notes are an integral part of the financial statements.
SHEFA YAMIM (A.T.M.) LTD.
STATEMENTS OF CASH FLOWS
NIS in thousands
APPIX A For the Year Ended
December 31,
Adjustments necessary to show 2017 2016 2015
the cash flows from current operations:
------- ------ ------
Expenses (Income) not involving
cash flows:
Depreciation * 60 72 88
- .
Capital gain - (178) (37)
- .
Share based compensation 46 152 -
Finance expenses (income), net 15,717 (187) (681)
------- ------ ------
15,823 (141) (630)
------- ------ ------
Changes in asset and liability
items:
Increase in receivables (64) (174) (60)
Increase (Decrease) in trade
payables 1,403 (95) 116
Increase in liability to an - .
interested party - 297 16
Increase (Decrease) in other
accounts payable (48) (38) 55
------- ------ ------
1,291 (10) 127
------- ------ ------
17,114 (151) (503)
======= ====== ======
* Net of depreciation encumbered on the research and evaluation assets for precious stones.
APPIX B For the Year Ended
December 31,
Significant non-cash flow operations: 2017 2016 2015
-------- -------- -----------
Accounts payable in regard to
exploration and evaluation assets
for precious stones 1,550 1,024 949
======== ======== ===========
Loan for acquisition of fixed - .
assets 240 - 266
======== ======== ===========
- .
Loans assigned to capital 20,518 - 409
======== ======== ===========
Loan assigned to an interested - .
party 1,659 - 71
======== ======== ===========
Balance from a supplier assigned - .
to capital 1,152 - 50
======== ======== ===========
Payables in regard to deferred - .
issuance expenses 742 610 -
======== ======== ===========
Assignment of the receivable
balance from the chairman of 640 - . - .
the board of directors to Shefa - -
-Yamim
======== ======== ===========
The accompanying notes are an integral part of the financial statements.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 1:- GENERAL
1. a. The reported entity -
Shefa Yamim (A.T.M.) Ltd. (hereinafter
- "the Company") is an Israeli Company.
The Company is held by Shefa Yamim Ltd.
(hereinafter - "the top-co"). Until
December 2017 the Company was held 75%
by the top-co. As a result of the Company
issuing shares on the London Stock Exchange
on December 18, 2017, (see Note 17b)
the top-co holdings were reduced. The
top-co is a public company whose securities
are registered for trade on the Tel
Aviv Stock Exchange.
b. The Company engages in prospecting and
exploration for diamonds, precious stones
and gold ("precious stones") along the
length of the Nahal Kishon riverbed
in the Zevulun Valley, in Emek Yizrael,
on designated slopes of Mount Carmel
and in the Ramot Menashe and Migdal
Haemek areas based on prospecting and
exploration permits received from the
Superintendent of Mining in the Office
of National Infrastructure of the Government
of Israel, in accordance with the Mines
Ordinance.
Proximate to date of approval of the
financial statements, the Company continues
to conduct prospecting and explorations
in accordance with current valid permits
granted for an inclusive area of approximately
614 thousand dunam.
The Company has exclusive Prospecting
Permit No. 869-B7 that is valid until
June 5, 2018 and covers an inclusive
area of 173,888 dunam. Concurrently,
the Company has two additional Exploration
Permits: Exploration Permit No. 837-A10,
for an inclusive area of 327,551 dunam,
that is valid until December 20, 2017,
and Exploration Permit No. 899-A5, for
an inclusive area of approximately 112,904
dunam, that is also valid until December
20, 2017. The Company is actively engaged
in extending the validity of the Exploration
Permits.
The Company's goal is finding precious
stones in the existing permitted areas
and/or future areas in sufficient quantities
to obtain exclusive mining rights and/or
a mining contract. In the event of positive
exploration and prospecting results,
the Company will receive a "Discovery
Certificate" and will be eligible to
receive an exclusive mining license
from the Government of Israel regarding
diamonds, gold and precious stones.
In accordance with the Mining Ordinance,
subsequent to exposure of the mine and
quarry of precious minerals, the Company
will be required to pay royalties to
the Israeli Government at the rate of
at least 5% of the value of the mined
minerals or their value while still
unmined.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 1:- GENERAL (cont.)
c. Since the operations of the Company are
prospecting and exploration for gold,
precious stones and diamond deposits and
the Company has not yet commenced commercial
mining, as a result, the Company does
not as yet have revenues, rather only
expenses. Financing of its operations
has been performed until now by infusions
of capital and/ or by loans and convertible
loans received by the Company from third
parties and from the Shefa Yamim and transferred
in parts to the Company in accordance
with the agreement between them (see Note
1d) and its continued operation is contingent
upon the further similar infusions of
capital. In view of past experience, the
Company's management believes that it
can mobilize the sources for money 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 financial statements do not contain
any adjustments for valuation of assets
and liabilities or their classification
that would likely be necessary in the
event that the Company is unable to continue
its operations as a "going concern."
d. On February 22, 2012 the Tel Aviv-Yafo
District Court approved the top-co request
for a creditors arrangement in accordance
with Sections 350 and 303 of the Corporate
Ordinance - 1999.
In the framework of the creditors arrangement,
the top-co allocated 23,817,790,260 new
shares without par value that constitute,
subsequent to their allocation, 99% of
the issued and outstanding top-co fully
diluted share capital. 9% of this allocation
was allocated to Pareto Mergers and Acquisitions
Ltd. (hereinafter: "Pareto") and 90% (fully
diluted) was allocated to shareholders
of the Company.
As consideration for the allocation of
new shares, shareholders of the Company
and Pareto invested an amount of NIS 1,250
thousand in the top-co (NIS 1,125 thousand
from the Company's shareholders and NIS
125 thousand from Pareto).
These amounts were transferred to the
trustee's fund wherein all assets and
liabilities of the top-co company have
been assigned in the framework of the
creditors arrangement.
On April 4, 2012, in accordance with allocation
of the shares to Pareto and to the Company
shareholders as abovementioned, the Company
allocated 7,040,700 ordinary shares to
the top-co company so that upon completion
of the transaction, the top-co held shares
that constitute 75% of the Company's issued
and outstanding share capital subsequent
to the allocation (fully diluted).
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 1:- GENERAL (cont.)
d. (cont.)
The Company is entitled to payment of
NIS 280 million for this shares allocation
(hereinafter: "the debt"). Amount of
the debt is linked to the Consumer Price
Index and bears interest of 4% per annum.
The debt will be paid exclusively from
future top-co mobilizations of capital,
with the Company entitled to 85% of any
future mobilized capital (net after expenses)
until repayment of the entire debt.
Until December 31, 2017, the Company
received NIS 23,912 thousand (including
NIS 2,637 thousand in interest) from
mobilizations of capital. See Note 17.
In the event that future mobilizations
of capital will not complete repayment
of the debt, this does not constitute
grounds for nullification of the agreement
or a change in its terms and the Company
will have no recourse to collect from
the top-co in any other manner.
In view of the uncertainties in regard
to the future mobilizations of capital
of the top-co, the Company recorded the
proceeds from the abovementioned issue
in accordance with actual mobilizations
of the top-co.
e. On December 18, 2017 the Company completed
its IPO on the Stock Market in London.
In this framework, the Company registered
for trade 4,517,456 Ordinary shares in
consideration of approximately NIS 18
Million that were transferred mainly
through convertible loans.
f. Definitions -
In these financial statements:
International Financial Reporting Standards
(IFRS) - Standards and interpretations
adopted by the International Accounting
Standards Board (IASB) that include international
financial reporting standards (IFRS)
and international accounting standards
(IAS), and interpretations of these standards
as determined by the International Financial
Reporting Interpretations Committee (IFRIC)
or interpretations determined by the
Standards Interpretation Committee (SIC),
respectively.
"The Company" - Shefa Yamim (A.T.M.)
Ltd.
"top-co Company" - Shefa Yamim Ltd.
"Related Party" - As defined in IAS 24
and by the International Accounting Standards
Board (IASB).
"Interested Party" - as defined in the
Securities Act - 1968, and its Amendments.
"101" - One Hundred One - Gold Holdings
Ltd. - An interested party (hereinafter:
"101").
"808" - Eight O Eight Global Corp. -
An interested party (hereinafter: "808").
"Index" - The Consumer Price Index published
by the Central Bureau of Statistics.
"Dollar" or $ - The U.S. dollar.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 2:- BASIS FOR PREPARATION OF THE FINANCIAL STATEMENTS
a. Declaration in regard to Implementation
of International Financial Reporting Standards
(IFRS)
The Company's financial statements were
prepared in accordance with International
Financial Reporting Standards (hereinafter
- "IFRS") and related clarifications published
by the International Accounting Standards
Board ("IASB").
The significant accounting principles
detailed below were consistently implemented
for all reporting periods presented in
these financial statements except for
changes in the accounting policies that
derive from application of standards,
amendments to standards and clarifications
that became effective at the date of the
financial statements.
The financial statements were approved
by the board of directors on March 28,
2018.
b. Functional Currency and Presentation Currency
The financial statements are presented
in New Israel Shekels (NIS), that is the
functional currency of the Company, and
are rounded to the nearest thousand. The
Shekel is the currency of the main economic
environment wherein the Company operates.
c. Basis for preparation of financial statements
These financial statements are prepared
on the basis of historical cost. The statement
of comprehensive loss was included according
to characteristics of operations.
Value of non-cash assets and detail of
share capital measured on the basis of
historical cost, were adjusted to changes
in the Consumer Price Index until December
31, 2003, since until that date the Israeli
economy was considered to be hyper-inflationary.
d. The operating turnover cycle
The ordinary operating turnover cycle
for the Company is one year. The assets
and liabilities attributed to this operation
and that are intended to be realized during
the operating period are shown in the
framework of current assets and current
liabilities.
e. Foreign currency and linkage basis
Balances stated in foreign currency are
translated into the functional currency
of the Company at dates of transactions,
using the representative exchange rate.
Financial assets and liabilities designated
in foreign currency at reported date have
been included in the financial statements
according to the prevailing representative
exchange rates as published by the Bank
of Israel at the balance sheet date. Non-monetary
items designated in foreign currency and
measured at fair value are translated
into the functional currency at the exchange
rate prevailing when the fair value was
determined. Non-monetary items measured
at cost are translated into the effective
exchange rate at transaction date for
the non-monetary item.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 2:- BASIS FOR PREPARATION OF THE FINANCIAL STATEMENTS (cont.)
e. Foreign currency and linkage basis (cont.)
Detail in regard to the Consumer Price Index
and the exchange rate of the U.S. dollar:
December 31,
2017 2016 2015
CPI in points
(applicable) * 123.33 122.84 123.08
CPI in points
(known) * 123.21 122.84 123.21
Exchange Rate
of U.S. $ in NIS 3.467 3.845 3.902
Exchange Rate
of British GBP
in NIS 4.682 4.725 5.784
* Base Index 2002
= 100.
Year ended December
31,
-----------------------------
2017 2016 2015
Change in CPI (applicable) 0.40% (0.20%) (1.00%)
Change in CPI (known) 0.30% (0.30%) (0.90%)
Change in rate
of exchange - U.S.
$ (9.83%) (1.46%) 0.33%
Change in rate
of exchange - Brit.
GBP (0.91%) (18.31%) (4.62%)
f. Critical accounting decisions
Implementation of accounting policies adopted
by the Company requires Company management,
in certain instances, to implement broad
accounting decisions (as opposed to accounting
decisions that related to determination of
estimates and valuations as detailed in Section
g. below). These broad decisions relate mainly
to adoption of the accounting principle most
suitable to the circumstances, or rendering
of an acceptable interpretation under circumstances
where the accounting regulation does not
render a full or clear response for the specific
circumstances. A critical accounting decision
is such that the results may have a significant
effect on the financial situation and results
of operations of the Company as reflected
in the financial statements and with other
basic assumptions could lead to an accounting
result significantly different than the one
presented therein. By its nature, an accounting
decision as such is partially subjective.
Concurrently, by implementing a critical
accounting decision, Company management bases
its conclusion on understanding of the accounting
principles for implementation of its operations
and, where relevant, the Company consults
with external experts in the relevant field.
g. Essential estimates and uncertainties
Upon preparation of the financial statements,
Company management is required to utilize
estimates or valuations in regard to transactions
or matters that their final effect on the
financial statements cannot be accurately
determined at the time. The main basis for
determination of the quantitative value of
these estimates is assumptions adopted by
Company management, taking into account the
circumstances for the estimate, as well as
the best of knowledge available at the time.
It is natural, since these estimates and
valuations are a result of decisions during
uncertainty, that during significant moments,
changes in the basic assumptions derived
from changes that are not absolutely dependent
on Company management, as well as additional
information at a future date that was unavailable
to the Company management at the time when
the estimate was formulated, will result
in changes in the quantitative value of the
estimate. Thus, this will also influence
the financial position of the Company and
the results of its operations.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 2:- BASIS FOR PREPARATION OF THE FINANCIAL STATEMENTS (cont.)
g. Essential estimates and uncertainties
(cont.)
Therefore, though these estimates and
valuations were concluded using the best
of knowledge available to management,
based on past experience and taking into
account the singular circumstances, and,
where relevant, reliance on external consultants,
the final quantitative effect of transactions
or circumstances requiring estimate can
only be clarified when these transactions
or circumstances reach their conclusions.
Therefore, the actual results, upon final
clarification of the results for an event
that requires determination of estimates
and valuations, may differ, sometimes
significantly, from estimates and valuations
that were determined initially and are
updated over the period of the related
events.
Following are areas where the valuation
for the financial statements requires
estimation and valuation that, in the
opinion of management, will have a very
significant effect:
1) valuation of prospecting assets; 2)
valuation of financial instruments;
3) fair value of Options.
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES
a. Cash and Cash Equivalents
Cash and cash equivalents include highly
liquid investments that are immediately
realizable. This includes short-term bank
deposits for immediate withdrawal and
deposits with maturities of three months
or less that are not limited in any way
and no charges are placed thereon.
Deposits that are limited or that their
maturity dates are in excess of three
months but not in excess of one year are
classified as deposits in the current
assets section of the statements of financial
position.
b. Fixed assets
Fixed assets are stated at cost net of
accumulated depreciation and any losses
in value that may have occurred.
The cost includes acquisition cost of
the fixed assets as well as all costs
that can be attributed directly to bringing
the asset to its place and to its current
situation that are necessary for operations,
using the methodology intended by management.
Vehicles purchased under financial lease
agreements are presented at cost computed
by estimated capitalization of the leasing
costs in accordance with the leasing agreement.
Depreciation included in the statement
of operations is calculated using the
straight-line method over the estimated
useful lives of the assets, at the following
annual rates:
%
-------
Office furniture and equipment 6-15
Laboratory machinery and
equipment 10-15
Leasehold improvements -
Establishment of a Laboratory 10
Vehicles 15
Computers 33
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
b. Fixed assets (cont.)
Depreciation expense for vehicles and laboratory
equipment used during explorations are charged
to cost of assets for exploration and valuation
of precious stones. Profit or loss arising
from sale or decrement of a fixed asset
item is determined as the difference between
receipts from its sale and its book value
at decrement date, and is included in operations.
c. Assets for prospecting and evaluation of
precious stones
1. The Company has adopted the "Successful
Efforts Method" in regard to the accounting
treatment of expenses incurred in exploration,
mining and extraction of precious stones.
In accordance with this Method:
a) Expenses for participation in geologic
tests and scans that occur prior to
the exploration and valuation stage
and prior to receiving a permit are
charged immediately to the statements
of comprehensive loss when incurred.
b) Investments in explorations for precious
stones during the exploration and
valuation
stages, relating to areas that it is
as yet unproven whether they will indeed
yield precious stones or are
unprofitable
are shown in the statements of financial
position at cost, as exploration and
valuation assets that are stated as
tangible or intangible assets in
accordance
with the essence of the asset. These
investments include, inter alia, costs
incurred for performance of geological
research, drilling costs, operations
relating to evaluation of technical
ability for commercial existence of
resources to be yielded as well as
general and administrative costs of
a headquarters (mainly to a related
company) related to direct costs for
mining and extraction assets.
c) Investments in prospecting for precious
stones that have an existing technical
plan and the resource has a commercial
existence will be restated and included
as "investments in precious stones."
Prior to their restatement, these items
will be examined for decrease in value.
In the event that a loss has been
created,
this will be recognized and included
in the statements of comprehensive
loss. Investments in precious stones
are amortized in the statements of
comprehensive loss on the basis of
amounts extracted in relation to total
reserves for the precious stones asset,
as valuated by an external assessor
with expertise in this area.
d) Prospecting and evaluation assets will
be examined for decrease in value when
events and occurrences would lead one
to believe that their book value exceeds
their attributed realization value.
Such events and occurrences include,
inter alia: expiration of exploration
rights in a specified area or
predictions
that these rights will expire in the
near future and renewal is not foreseen;
prospecting for precious stones in
a specific area have not resulted in
proven commercial quantities of reserves
of precious stones. In the event that
there are signs of an impairment in
value, as abovementioned, the
realization
value is estimated for the asset in
accordance with IAS 36 (see Section
3f).
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
c. Assets for prospecting and valuation of
precious stones (cont.)
2. "Investments in Precious Stones" in the
statements of financial information will
include, also, accumulated costs for
development of infrastructures for the
necessary bases in order to yield resources.
These costs are capitalized and can include
headquarters costs that are directly
attributable to establishment of the
assets and other direct overhead costs.
They are shown in the statements of financial
information at cost and are amortized
in the statements of comprehensive loss
on the basis of quantity yielded in proportion
to total proven reserves as evaluated
by an external expert assessor, as stated
in 1c abovementioned.
3. Investments in precious stones that have
an existing technical plan are examined
at each reporting period for any signs
of a reduction in value. In the event
that such signs exist, the realization
value is computed in accordance with
IAS 36 (see Sect. 3f).
4. The Group will recognize the liability
and, correspondingly, the asset in regard
to obligation of the Company to disassemble,
clear and rehabilitate the site where
the asset was established. The liability
is initially measured at its present
value and the expenses derived from its
increase are depreciated over a period
of time in the statement of comprehensive
loss. The asset is initially measured
at its present value and is depreciated
over a period of time in the statement
of comprehensive loss in accordance with
the useful life of the removed asset.
Changes in timing and in the amount of
the economic resources that are necessary
for the removal of the liability as well
as the change in the capitalization rate
are added to or deducted from the asset
during the current period corresponding
to a change in the liability.
Changes in the obligation to disassemble
and clear items and rehabilitation of
the site where they were established,
except for changes deriving from timing,
are added to or deducted from the asset
cost during the period when incurred.
The amount deducted from the asset cost
will not exceed the book value of the
asset and the balance, if any, is immediately
recognized in the statements of comprehensive
loss.
The Company examines its projected obligations
to rehabilitate and renew excavation
sites and includes a provision, when
necessary, in accordance with the current
value of projected costs.
d. Issue of a package of securities
When securities are issued as a package,
the consideration received is allotted (prior
to issue expenses) to securities issued
as a package in conjunction with the following
order of allocation: financial derivatives
and other financial items that are presented
at fair value periodically. Subsequently,
the fair value of the financial liabilities
is determined, with the allotted consideration
for capital instruments determined as the
remaining value. Issue costs are allotted
to each component in accordance with the
ratio of amounts determined for each component
of the package.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
e. Impairment in value of assets
At the close of every reporting period,
the Company examines the book value of
its tangible assets to determine any
signs of loss from impairment in value
of these assets. In the event that there
are signs of impairment, the Company
examines the realization value of the
designated asset in order to determine
the loss from impairment, if any.
The realization value is the higher of
net fair value of the asset as compared
with its useful life that is determined
by the present value of projected cash
flows to be realized from this asset
using a rate prior to taxes that reflects
the present book value of the time span
for the money and the specific risks
for the asset that the estimated future
cash flows were not adjusted for in this
regard.
In the event that the book value of the
asset or cash-yielding unit is greater
than its realization value, a devaluation
of the asset has occurred in the amount
of the difference between its book value
and its realization value. This amount
is recognized immediately in the statements
of comprehensive loss.
Prior devaluation of an asset is nullified,
partially or completely, only when changes
in the determinants of realization value
of the asset have occurred. In the event
of such an occurrence, the book value
of the asset is increased to the estimated
current fair value, but not in excess
of the asset book value that would have
existed had there not been devaluation
and subsequent to deduction of any relevant
depreciation. Such nullification is recognized
immediately in the statements of comprehensive
loss.
f. Financial instruments
1. Non-derivative financial instruments
Non-derivative financial instruments
comprise various accounts receivable
and cash and cash equivalents.
Non-derivative financial instruments
are recognized initially on the trade
date at which the Group becomes a party
to the contractual provisions allowing
the Group to receive the financial
instrument. Investments in these instruments
are initially presented at their fair
value with the addition of transaction
costs.
The Company classifies its financial
assets as loans and receivables. This
classification is determined in accordance
with the purpose for holding the financial
asset, when initial recognition of
the financial asset occurs.
2. Loss from impairment in value and write-off
of non-derivative financial instruments
Financial instruments not classified
at fair value through profit and loss
are examined at each reporting period
as to whether there are signs of impairment
in value. Impairment occurs when there
is objective evidence that as a result
of a specific incident or occurrences,
occurring subsequent to initial recognition
date of the financial asset, a negative
effect exists on the projected cash
flows for the investment in this asset.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
f. Financial instruments (cont.)
2. Loss from impairment in value and write-off
of non-derivative financial instruments
(cont.)
In regard to financial assets that
are included at amortized cost (mainly
loans and receivables), the amount
of impairment in value is the difference
between the book value of the financial
asset and the present value of the
estimated future cash flows projected
to derive from the asset, discounted
at the original effective interest
rate for the asset. This amount is
charged to the statement of comprehensive
loss.
In the event that during a parallel
period to that when a loss was recorded
for impairment in value for a financial
asset included at amortized cost there
are indications that the amount of
the loss from impairment in value is
less and is objectively related to
an event occurring subsequent to recognition
of the impairment, then the prior impairment
loss will be written off, in part or
completely, to profit and loss. The
amount written off is limited so that
the book value of the investment in
the financial asset at the time of
write-off of the loss from impairment
in value does not exceed the amortized
cost of the asset at the cancellation
date had there not been a prior recognition
of impairment in value.
3. Non-derivative financial liabilities
The Company initially recognizes debt
securities issued on the date that
they originated. All other financial
liabilities (including financial liabilities
designated at fair value through profit
and loss) are recognized initially
on the trade date at which the Company
becomes a party to the contractual
provisions of the instrument.
Financial liabilities are reduced when
the obligation of the Company, as specified
in the agreement, expires or when it
is discharged or written off.
Financial obligations are initially
recognized in accordance with their
fair value and transaction costs that
can be attributed. Subsequent measurement
of financial liabilities is mainly
on the basis of amortized cost using
the effective interest method.
The Company has the following non-derivative
financial liabilities: loans and credit
from banks and others, and trade and
other payables.
Financial assets and liabilities are
offset and the net amounts are presented
in the statement of financial position
when the Company currently has a legal
enforceable right to offset the amounts
and intends either to settle on a net
basis or to realize the asset and settle
the liability simultaneously.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
g. Leases
The criteria for determining whether leases
are financial or operating are based on
the essence of the agreements, examined
at the time when contracted in accordance
with the regulations determined in IAS 17.
Leases that transfer all risks and benefits
contained in ownership of the leased property
are classified as financial leases.
Other leases are classified as operating
leases and leasing payments are recognized
as an expense in the statements of comprehensive
loss and are prorated currently using the
straight line method over the lease period.
Financial lease payments are divided between
financing expense and amortization of the
remaining liability.
h. Provisions
Provisions are recognized when the Company
has a current obligation (legal or derived)
as a result of a past occurrence that can
be reliably measured, that will in all probability
result in the Company being required to
provide additional benefits in order to
settle this obligation. The amount recognized
as a provision reflects the best estimate
by management of the amount that will be
required to settle the obligation currently
at financial statements date, while taking
into account the risks and uncertainties
related to obligations. When provisions
are determined by capitalization of projected
cash flows in order to settle the obligation,
the provision is the current value of the
projected cash flows. Changes in projected
time periods are charged to comprehensive
income or loss. When the entire sum or a
portion thereof necessary for current settlement
of the liability will likely be repaid by
a third party, the Company recognizes an
asset for the return, up to the amount of
the recognized provision, only when there
is virtual certainty that the amount will
be received and it can be reliably estimated.
i. Liability in regard to employee benefits
The Company has several benefit plans for
its employees:
1. Short-term employee benefits -
Short-term employee benefits include
salaries, vacation days, recreation and
employer deposits to the National Insurance
Institute that are recognized as expenses
when rendered. A liability for a cash
bonus or a plan for participation in
Company earnings is recognized when the
Company has a legal or derived responsibility
for payment of the amount for services
rendered in the past by the employee
and the amount can be reliably measured.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
i. Liability in regard to employee benefits
(cont.)
2. Benefits upon retirement -
These plans generally are funded by deposits
to insurance companies and pension funds
and are classified as restricted deposit
plans or as restricted benefits plans.
Some Company employees have restricted
deposit plans, in accordance with Section
14 of the Severance Pay Law, whereby
the Company pays fixed amounts without
bearing any legal or derived responsibility
to pay additional amounts thereto even
if the fund did not accumulate enough
amounts to pay the entire benefit amount
to the employee that relates to the services
he rendered during the current and prior
periods. Deposits to the restricted plan
are classified for benefits or for compensation,
and are recognized as an expense upon
deposit to the plan concurrent with receiving
services from the employee and no additional
provision is required in the financial
statements.
Concurrently, the Company operates a restricted
benefit plan for severance pay as required
by the Severance Pay Law. In accordance
with the Severance Pay Law, employees are
entitled to compensation upon retirement
or upon termination of their employment.
The financial statements include a provision
in the amount of the difference that the
Company would be required to pay in the
event that the employees would be entitled
to severance pay at balance sheet date.
No actuarial computations of possible obligation
and actual value of deposits with the restricted
benefits plan were made since, in the opinion
of Company management, such computation
would not have a material effect on the
Company's financial statements.
j. Financial income and expenses
Financial income includes interest in regard
to invested amounts, revenues from exchange
rate differences that are recognized in
the statements of comprehensive loss and
interest income that is recognized upon
accumulation, using the effective interest
method.
Financial expenses include interest on
loans received and changes in the time
estimates of provisions.
Gains and losses from exchange rate differences
are reported net. Costs of credit are recognized
as an expense during the period of their
inception, in accordance with the effective
interest methodology.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
k. Deferred Taxes
The Company creates deferred taxes in regard
to temporary differences of value for tax
purposes of assets and liabilities and
their value in the financial statements.
These deferred tax balances (asset or liability)
are computed according to the projected
tax rates occurring upon realization, based
on tax rates and regulations in force or
legislated fully at the date of the statements
of financial position. Deferred tax liabilities
are recognized, generally, for all temporary
differences between the carrying amounts
of assets and liabilities for financial
reporting purposes and the amounts used
for taxation purposes.
A deferred tax asset is recognized on the
books for carryforward losses, tax benefits
and temporary differences that are deductible
to the extent that it is probable that
future taxable profit will be available
against which the temporary differences
can be offset. Deferred tax assets are
reviewed at every reporting date and, in
the event that the related tax benefits
will not be utilized, they are deducted.
In the absence of certainty regarding taxable
income in the future, there was no recording
of a tax deferred asset in regard to carryforward
losses on the Company books of account.
l. Statement of cash flows
The statement of cash flows from current
operations is presented using the indirect
method, whereby interest amounts paid and
received by the Company are included in
the cash flows in the framework of finance
operations.
m. Loss per Share
The Company computes the basic revenue
or loss per share in regard to gain or
loss that is attributed to the Company
shareholders by dividing the income or
loss, attributable to ordinary shareholders
of the Company, by the weighted average
of ordinary shares that exist in the volume
during the reported period. The Company
does not have any securities that are convertible
to shares that would have a potential effect
on the diluted income per share.
o. Share Based Compensation
In share based compensation, transactions with employees
(including officers and others who provide similar
services) that are cleared by Group capital instruments,
the costed benefit of capital instruments granted is
based on their fair value at grant date. The costed
fair value upon granting of Options is measured on
the basis of the Black-Sholes model. The abovementioned
benefit is attributed to expenses in the profit and
loss against a growth in share capital, straight-line
over the vesting period of the capital instrument that
was granted, so that every sub-granting is considered
as a graded vesting. In transactions involving share
based compensation with renderers of services, the
Group measures the expense in accordance with the value
of the services received. In share based compensation
transactions cleared by cash payment, the Group measures
the services acquired and the liability that was created,
in accordance with the fair value of the liability.
Until the liability is cleared, the Group remeasures
the fair value of the liability at every reported period
and upon clearance, so that any changes are recognized
in the statement of comprehensive loss for the period.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
p. Initial Implementation of New Amendments
During January 2016 the International Accounting
Standards Board (IASB) published amendments
to IAS 7 for the statement of cash flows
(hereinafter: "the Amendments") that require
additional disclosures regarding the financial
liabilities. These amendments require showing
the activity between the opening balance
and the closing balance of financial liabilities,
including changes that derive from the
cash flow financial operations, from the
acquisition or the loss of control in regard
to held companies, from changes in the
exchange rates and from changes in fair
value.
The Amendments will be applicable commencing
with the annual periods that start on January
1, 2017 or thereafter. It is not necessary
to include disclosures as abovementioned
in regard to the comparative figures for
prior periods. Early adoption of the Amendments
is permissible.
For disclosures in regard to changes in
the liabilities that derive from Company
financial operations, see Note 24f.
q. Amendments, Interpretations and Corrections
Applicable to Standards that have been
published and are no longer valid, that
were not adopted early by the Group, and
that are expected to have an effect on
future periods
(1) IFRS 9 (2014) "Financial Instruments"
IFRS 9 (2014) "Financial Instruments"
(hereinafter: "the Standard" is the
final Standard of the Financial Instruments
package. This Standard includes classification
and measurement instructions for financial
instruments as published in the first
stage during 2009 and that were amended
in this version. It also includes the
classification and measurement regulations
for financial liabilities, suggests
an updated model that is based on principles
in regard to hedging and presents a
new model for examining a projected
loss from decrement as detailed hereinafter.
The Standard determines that all financial
instruments shall be handled as follows:
-- Debit instruments will be classified
and measured subsequent to initial
recognition under one of the following
alternatives: depreciated cost, fair
value through profit and loss or fair
value through other comprehensive income.
Determination of the measurement model
will take into account the business
model of the entity in regard to management
of financial assets and in accordance
with the characteristics of the projected
cash flows that derive from those financial
assets.
-- A debit instrument that was measured
by depreciated cost or by fair value
through other comprehensive income
may be designated for fair value through
profit and loss, but only if the designation
will nullify lack of consistency in
recognition and measurement that would
be created if the asset was measured
by depreciated cost or by fair value
through other comprehensive income.
-- As a rule, the financial instruments
will be measured at fair value through
profit and loss.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
q. Amendments, Interpretations and Corrections
Applicable to Standards that have been
published and are no longer valid, that
were not adopted early by the Group, and
that are expected to have an effect on
future periods (cont.)
-- Upon initial recognition, one may designate
financial instruments at fair value
through other comprehensive income.
These instruments that will be designated
in that manner, will not be subject
any longer to the test of decrement,
and profit or loss in their regard
will not be transferred to profit or
loss, including upon realization.
-- Embedded derivatives will not be separated
from the existing contract found at
the beginning of the Amendment. Alternatively,
mixed contracts will be measured generally
at depreciated cost or at fair value,
in accordance with the testers of the
business model and the projected cash
flows.
-- Debt instruments will be reclassified
only when the entity changes its business
model to management of financial assets.
-- Investments in capital instruments
that do not have a quoted price on
a functioning market, including the
derivatives of these instruments, will
be measured at fair value. The alternative
measurement according to cost under
certain circumstances is hereby nullified.
However, the Standard declares that
under certain circumstances the cost
should be a proper measure of the fair
value.
Financial Obligations
The Standard determines also the following
procedures in regard to financial obligations:
-- The change in fair value of financial
liabilities that is intended, upon
initial recognition, to be fair value
through profit or loss, which is attributed
to changes in the credit risk of the
liability, will be directly charged
to other comprehensive income unless
such attribution will create or increase
lack of consistency - an accounting
mismatch.
-- When a financial liability is paid
or cleared, the amounts charged to
other comprehensive income will not
be classified to profit or loss.
-- All the derivatives, whether they are
assets or liabilities, will be measured
at fair value through profit or loss,
including a derived financial instrument
that constitutes a liability related
to an unquoted capital instrument that
we are unable to measure its fair value
in a reliable manner.
Hedging
The Standard determines new hedging procedures
and provides the possibility to choose
as an accounting policy whether to implement
the new procedures detailed summarily below,
or alternatively, those that exist in IAS
39. When the hedging project will be completed
at a future date, the International Accounting
Standards Board (IASB) will reexamine the
possibility of choosing the abovementioned
procedure.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
q. Amendments, Interpretations and Corrections
Applicable to Standards that have been
published and are no longer valid, that
were not adopted early by the Group, and
that are expected to have an effect on
future periods (cont.)
In the framework of the Standard, the three
hedging types of accounting remain in place:
hedging of cash flows, fair value, and
net investment in foreign activities.
Notwithstanding, significant changes were
instituted in regard to the types of transactions
appropriate for hedging accounts, especially
expansion of the risks related to hedging
accounts for non-financial items. Concurrently,
changes also occurred in how to handle
futures contracts and derivative Options
when they constitute hedged instruments.
In addition, some of the effective hedging
examinations were changed in the basic
examination that is based on "economic
relationships."
The exposure requirements in regard to
Company risk management operations were
expanded in the framework of the new Standard.
Decrements
The new model for decrement is based on
projected credit losses and will be implemented
for the debit instruments that are measured
at depreciated cost or at fair value through
other comprehensive income, receivables
in regard to leasing, contract assets that
are recognized according to IFRS 15 and
written obligations for rendering loans
and financial guarantee contracts.
The provision for decrement will be in
regard to reasonable projected losses within
the following twelve months (the coming
year), or reasonable failure to repay during
the entire lifetime of the financial instrument.
Examination for the entire lifetime of
the instrument is necessary in the event
that the credit risk for the asset rose
significantly since the date of initial
recognition. An alternative approach will
be enforced if the financial asset was
created or acquired when it was already
credit impaired. The Standard adds policies
for disclosure and presentation in regard
to decrement of financial instruments.
Starting Date
The Standard will take effect in accordance
with the annual reporting periods commencing
January 1, 2018. The Company does not foresee
a significant effect from implementation
of this Standard on its financial situation
or on the results of its operations.
(2) IFRS 16 "Leasing"
In January 2016 the IASB published IFRS
16 in regard to leasing (hereinafter: "the
new Standard").
In accordance with the new Standard, a
lease is defined as a contract, or part
of a contract, that transfers the right
to use the asset for a defined period of
time in return for a consideration. Following
are the terms of the new Standard:
-- The new Standard requires all lessees
to recognize an asset against a liability
in the statement of financial position
(except for certain circumstances) so
that the treatment will be similar to
a financial lease, in accordance with
the existing IAS 17 - "leases."
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (cont.)
q. Amendments, Interpretations and Corrections
Applicable to Standards that have been
published and are no longer valid, that
were not adopted early by the Group, and
that are expected to have an effect on
future periods (cont.)
-- Lessees will recognize a liability in
regard to lease payments and will recognize
an asset that is the right of usage.
Concurrently, the lessees will recognize
related interest and depreciation expenses,
separately.
-- Variable lease payments that are not
dependent on the Consumer Price Index
(CPI) or on interest but are based on
performance or usage (e.g., a percentage
of the redemption) will be recognized
as an expense by the lessees or as income
by the lessor upon occurrence.
-- In the event of a change in variable
lease payments that are linked to the
CPI, the lessee must recalculate the
liability in regard to leasing with
the effect of the change being attributed
to the asset - right of usage.
-- The new Standard includes two exceptions
wherein the lessees are permitted to
handle the leases in accordance with
the accounting treatment for operating
leases; in the event that the leasing
is for assets that have small monetary
value or in the event that the leasing
is for a period up to one year.
-- The accounting treatment for the lessor
remains without significant change as
compared with the existing Standard,
that is, classification as financial
or operating leasing.
The new Standard will be applicable commencing
with the annual periods that start on January
1, 2019 or thereafter. Early adoption is
possible, as long as IFRS 15 - "Recognition
of Revenues from Contracts with Clients"
is applied concurrently.
The new Standard allows lessees to choose
a retroactive approach for implementation,
either completely or partially, with certain
allowances in regard to leases that exist
during the transfer period, which will not
require reclassification of the comparative
figures.
The Company is examining the possible effects
of the new Standard. At this stage, the
Company has not yet completed its evaluation
of the possible effects on its financial
position and the results of its operations,
but it does not expect a significant effect.
NOTE 4:- DEPOSIT IN BANK
A short-term deposit in foreign currency,
bearing interest at 0.11% (December 31,
2016 - 0.03%). See also Note 9b.
NOTE RECEIVABLES
5:-
December 31,
---------------
2017 2016
----- --------
Interested parties 16 - . -
Prepaid expenses 84 18
Advances to suppliers
and others 268 270
368 288
===== ========
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE FIXED ASSETS
6:-
Machines
and Office Leasehold
Laboratory Furniture Improvements
Equipment Vehicles and Computers - Laboratory Total
* ** Equipment
-------------- ----------- ------------ ------------ -------------- --------
Cost:
As of January
1, 2016 3,088 599 330 342 436 4,795
- .
Additions 157 - 8 11 - . - 176
- . - .
Decrements (317) (247) - - - . - (564)
As of December
31, 2016 2,928 352 338 353 436 4,407
- .
Additions 603 23 - 8 - . - 634
Decrements -
- . - . - . - . .
- - - - - . - -
As of December
31, 2017 3,531 375 338 361 436 5,041
-------------- ----------- ------------ ------------ -------------- --------
Accumulated
Depreciation:
As of January
1, 2016 1,413 310 275 325 232 2,555
Depreciation
for the
year 345 51 20 14 38 468
- . - .
Decrements (317) (245) - - - . - (562)
As of December
31, 2016 1,441 116 295 339 270 2,461
Depreciation
for the
year 339 51 15 8 37 450
-
- . - . - . - . .
Decrements - - - - - . - -
As of December
31, 2017 1,780 167 310 347 307 2,911
-------------- ----------- ------------ ------------ -------------- --------
Depreciated
Cost:
As of December
31, 2017 1,751 208 28 14 129 2,130
============== =========== ============ ============ ============== ========
As of December
31, 2016 1,487 236 43 14 166 1,946
============== =========== ============ ============ ============== ========
* In regard to equipment with liens, see Note 22b4.
** Includes a vehicle that was given to the Company under financial leasing terms and a lien in favor of the leasing company was placed on the vehicle as part of the leasing terms. See also Note 22b5.
NOTE 7:- LOANS TO THE TOP-CO
A loan that is linked to the Consumer Price
Index and bears annual interest at the rate
of 4%. Terms of repayment are as yet undetermined.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE ASSETS FOR EXPLORATION AND EVALUATION OF
8:- PRECIOUS STONES
a. The Company is the first and only company
in Israel that is engaged in exploration
(prospecting and exploration) related to
precious stones (diamonds, gemstones and
gold) since 1999, in the northern area
of Israel.
The exploration operation performed by
the Company is, actually, exploration and
examination of the primary deposit in targeted
entities and performance of work plans
that are managed by a professional work
team, expert and competent in the technical
aspects necessary for implementation of
exploration operations that include, inter
alia: mapping, sampling, geophysical, geochemical
and geological surveys, visual and mineral
examination in the laboratory (established
in the operating area of the Company in
Acco) of the various findings using the
most advanced methods known worldwide in
order to assess the economic potential
of the findings at each site that is part
of the permit areas in order to raise expectations
and reduce the risk level, and to identify
the exact location where it will be possible
to open a "mineralogical resource" and
a commercial mine.
The Company's operating area is along the
southern Acco industrial zone (Barbour
Junction) that stretches over an area of
approximately 6,000 sq. m. The area handles,
currently, earth and rock samples ranging
in size from 1 kg. up to 600 tons and more,
that includes rinsing, straining, identification
of minerals and their classification. The
potential for storage of earth samples
in the operating area that is adjacent
to the exploration areas reaches approximately
3,500 tons in total (approximately 500
tons for each sample).
The exploration operations of the Company
are performed in parallel to the original
sources for finding precious minerals that
are located in the volcanic areas of the
Carmel mountain range, the Ramot Menashe
area and the Lower Galilee area (primary
source) and also in the alluvial secondary
deposit area canals located in the Zevulun
Valley and in Emek Yizrael.
The exploration procedures are in accordance
with international specifications, as is
customary in this field and, for this purpose,
the Company is assisted with a wealth of
progressive methods that are performed
worldwide by other exploratory companies.
The exploratory Company operations are
accompanied by a staff of geologists from
abroad who are experts in their fields
(hereinafter: "Company advisors from abroad")
who have proven expertise in the fields
of earth sciences, geology, geochemistry
and geophysics, especially within the field
of dynamic special explorations wherein
the Company operates - prospecting for
precious stones. At the beginning of 2014,
the Company advisors from abroad developed
a dynamic geologic module that is from
Source to Sink in order to guide further
Company procedures for identifying precious
minerals that are known by the Company
as the TMA (Target Mineral Assemblage)
and to find a link between the Primary
Sources and the Secondary Deposits.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE ASSETS FOR EXPLORATION AND EVALUATION OF
8:- PRECIOUS STONES (cont.)
The module is based on geologic guidelines
as well as on data and Company findings
and it points to areas that will, logically,
contain concentrations of precious minerals.
Since the work is performed parallel to
the volcanic areas (Primary Sources) as
well as in the drainage canals and their
seams (Secondary Sources), the module allows
for a three dimensional encompassing approach
to the findings and to the mining of material
from the source to the areas of accumulation.
During the last few years, the Company
is progressing with bulk samples gathered
in the Kishon area known as the "Mid-Reach
Area." The strata in this area have yielded
TMA samples, which are shallow and close
to the surface being explored. As a result
of the unique construction of this area,
it was chosen as a preferred exploration
area that is defined as an approachable
Transient Deposit.
During the first quarter of 2015 and on
the basis of the geological module, the
Mid-Reach area of the Kishon riverbed constitutes
an Exploration Target that is approachable
for heavy and precious minerals. Analysis
of initial results performed to date shows
that the Mid-Reach area of the Kishon stretches
over approximately 4.5 km. length and approximately
150 m. width (minimal) with a thickness
of 0.5 - 4 m. of mineralized basal gravel.
The exploration target in the Kishon area
has been to potentially and conservatively
mine approximately 1.1 million tons of
potentially mineralized gravel.
The Company has founded the TMA based on
two leading mineral suites. These minerals,
all or partially, were found initially
by the Company at their primary sources
of volcanoes on the Carmel mountain range,
Ramot Menashe and the secondary sources,
the alluvial drainage basin areas of the
Kishon Mid-Reach area.
1. The precious minerals package known
as the HDMC Suite includes: diamond, sapphire,
ruby as well as the rare natural mineral
known as moissanite, hibonite and the Carmel
Sapphire(TM), a mineral that to the best
of Company's knowledge, exists only in
Israel.
2. The heavy industrial minerals include
minerals that have a high specific gravity
that can be used in manufacturing, such
as Zarconite, rotil, ilmenite and granite.
Exploration of the volcanic sources on
the Carmel mountain range (that constitute
a Primary Source) shows that some of the
sources have a constitution similar to
kimberlite (a rock that is a source of
diamonds) based on indicators of kimberlite
sources. Moreover, a positive identification
of a micro-diamond by the team of geologists
from De Beers, in a sample found and handled
by them from one of the volcanic entities
of the Carmel (Rakefet) shows that these,
at least in part, contain diamonds.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE ASSETS FOR EXPLORATION AND EVALUATION OF
8:- PRECIOUS STONES (cont.)
The existence of indicators for kimberlite
and for diamonds in the alluvial Kishon
riverbed (Secondary Source) shows the existence
of local primary sources in the Kishon
riverbed and its seams. Thus, the erosion
of rivers that sank in the streams of the
Northern valleys contains material that
is thin and sandy whose source is the Carmel
mountains, valleys and its ranges. The
map of ranging found by the Company guides
the exploration in the direction of favored
places, mainly in accordance with the mineral
findings of the kimberlites. (we note that
the diamonds were found mainly in the distal
segment - the erosions of the Kishon river
area in accordance with the Company's geological
module).
During 2015, scientific discoveries were
uncovered in regard to the in-depth construction
of the earth where the Company is operating.
These discoveries relate to the Company's
findings (heavy and precious minerals)
that were crystallized under the earth's
surface and were raised by outbursts of
lava (volcanic outbursts) to the surface.
A scientific exploration for the past two
years that has been conducted by Prof.
Bill Griffin, who is an expert on the earth's
geology at Macquarie University, Australia,
centers around the crystallization of the
corundum and the derivation of the precious
stones therefrom, the ruby and the sapphire,
as sampled from primary sources on the
Carmel mountain and logically related to
the rare natural mineral, moissanite. The
exploration and the results contribute
to the key question in regard to the geologic
makeup of the deep earth's area in the
zones where the Company operates. Results
of the exploration and its conclusions
were shown by Prof. Griffin during January
2016 and in that framework it was determined,
inter alia, that in view of the fact that
the corundum stones found by the Company
contain rare minerals, these stones are
really gemstones. Upon the recommendation
of Prof. Griffin, the corundum gemstones
found by the Company were recorded and
renamed by the Israel Patents Office as
"the Carmel Diamond."
On February 2, 2017, subsequent to completion
of the annual work plan and presentation
of the summary report thereto, the Company
received two Exploration Permits from the
Superintendent of Mining at the Natural
Resources Authority in the Energy Ministry
of the Government of Israel for prospecting
and exploration in regard to diamonds,
gemstones and gold, as follows:
Exploration Permit 837A10 - the Carmel
area - that stretches over 327,551 dunam;
Exploration Permit 899A5 - the Ramot Menashe
area - that stretches over 112,904 dunam
(hereinafter: "the Extended Permits").
The Extended Permits are for a one year
period that ends on December 20, 2017 and
they replace the expired permits (Exploration
Permit 837A9 and Exploration Permit 899A4)
and relate to the same areas of exploration
as the expired Permits.
In December 2017, the Company presented
summary reports for the abovementioned
Permits in accordance with and subsequent
to completion of the work plans that were
attached to the Permits, and requested
an extension for an additional year. We
note that the Company chose not to reduce
the work areas of the Permits in view of
a survey that was performed by Prof. Bill
Griffin, with results that show that these
areas contain the greatest potential for
the Company's goals. As of the date of
these financial statements, approval was
not yet received from the Superintendent
in regard to extension of the Permits for
an additional year.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE ASSETS FOR EXPLORATION AND EVALUATION OF
8:- PRECIOUS STONES (cont.)
a. (cont.)
On July 30, 2017, subsequent to completion
of the annual work plan and presentation
of a report, the Company received from
the Superintendent Prospecting Permit 869B7
for identification of precious stone deposits,
diamonds and gold. Prospecting Permit 869B7
(that replaces Permit 869B6) is valid until
June 5, 2018. The prospecting area of the
Permit is 173,888 dunam and includes, inter
alia, the Zevulun Valley areas, the
northern part of Emek Yizrael and the eastern
area of the Mount Carmel slopes.
Subsequent to balance sheet date, and after
infusion of capital from the issue of shares,
the Company updated the machinery and the
equipment in use for handling and straining
samples. In this framework, the Company
also updated the jigs used for classification
so that one classifies samples from 1 mm.
to 8 mm. while a second one classifies
those that are from 8 mm. to 25 mm. This
change has already proven its efficiency
and raised the level of exactitude for
examinations. Concurrently, the Company
is engaged in additional updates for the
exploration systems in order to raise the
quantity of treated material per day from
20 tons to 50 tons.
In the framework of explorations performed
in the abovementioned permitted areas,
the Company is supposed to complete the
treatment of the latest samples that were
collected from the Kishon Mid-Reach Zone
1 and, upon completion, the Company plans
to start examination of the economic worth
of this deposit.
For additional detail in regard to the
Prospecting and Exploration Permits, see
Note 22c.
b. Composition:
December 31,
-------------------------------------
2017 2016
------------------ -----------------
Purchase of exploration
rights, fees and planning 4,496 4,164
Geologic research and
laboratory maintenance
* 17,627 15,479
Drilling for exploratory
purposes 5,352 5,124
Headquarters operations
expenses directly attributable
to the asset (mainly
to a related company)
** 23,000 22,231
Other expenses 4,784 4,502
------------------ -----------------
55,259 51,500
================== =================
* Includes share based compensation in 2017 and 2016, in the amounts of approximately NIS 371 thousand and approximately NIS 266 thousand, respectively.
** Includes share based compensation in 2017 and 2016, in the amounts of approximately NIS 597 thousand and approximately NIS 457 thousand, respectively.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE SHORT - TERM CREDIT FROM BANK AND
9:- OTHERS
December 31,
----------------------
a. Composition: 2017 2016
------------- -----
Short-term bank credits 205 330
- .
Short-term bank loan * - 80
Short-term loan from shareholder
** 109 109
Current maturities of
long-term liabilities 153 177
------------- ------
467 696
============= ======
* As of December 31, 2016, includes an
unlinked loan that bears annual interest
at the rate of 7.75% (Prime + 6.15%).
** A loan that is linked to the U.S. dollar
and bears annual interest at the rate
of 10%.
b. As of December 31, 2017, the Company
has a steady bank credit framework of
NIS 200 thousand (December 31, 2016 -
in the amount of NIS 300 thousand). The
overdraft account is secured by the personal
guarantee of interested parties. Concurrently,
the Company deposited an amount in a foreign
currency account, as a guarantee for repayment
of the credit framework. (See also Note
4).
NOTE TRADE PAYABLES
10:-
December 31,
---------------
2017 2016
-------- -----
Checks payable 689 389
Open balances * 1,077 260
1,766 649
======== =====
* In 2017, Includes an amount of approximately NIS 683 thousand in regard to suppliers related to the issue on the London Stock Exchange.
NOTE INTERESTED PARTIES
11:-
December 31,
-------------
a. Composition: 2017 2016
------------- ------
- .
Current debt - 1,866
Current debt linked - .
to the U.S. dollar - 336
Current maturities of
long-term loan 110 106
110 2,308
============= ======
b. During December 2017 the Company converted debt to interested parties in the amount of NIS 1,365 thousand against the issuance of 320,856 Ordinary Company shares and 962,568 warrants, in the framework of a Pre - IPO on the Stock Exchange in London. See also Note 17b.
c. In regard to covenants with "101" and with "808" - see Note 22a.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 12:- OTHER ACCOUNTS PAYABLE
December 31,
---------------
2017 2016
------- ------
Accrued expenses
* 663 1,351
Salaries and related
items 205 219
Liability in regard
to severance pay 338 265
1,206 1,835
======= ======
* As of December 31, 2016 - Includes to an interested party in the amount of NIS 640 thousand (see Note 22a3).
NOTE LOANS CONVERTIBLE TO SHARES
13:-
a. During December 2016 to October 2017, the
Company contracted ten loan agreements,
in a scope of approximately NIS 17 million
(GBP3,641 thousand) that are convertible
to shares on the date of completion of
an issuance that is planned in London.
The loans bear annual interest at the rate
of 5% and are scheduled for repayment,
in the event that the issuance will not
be completed, with the addition of interest
at the end of a year from the date of signing
the agreement.
In the event that the issuance will be
completed, then the loans will be converted
to shares at a price that is 15% lower
than the issuance share price. In addition,
the lenders will be issued non-marketable
Options for each share, exercisable in
accordance with the following timetable:
For seven lenders, in a scope of approximately
NIS 1 million (GBP251 thousand), one Option
for each lender commencing with the issuance
date for a period of 18 months at the share
price upon issuance.
For three lenders, in a scope of approximately
NIS 16 million (GBP3,390 thousand), three
Options for each lender that are exercisable:
- One Option for each lender commencing
with the issuance date for a period
of 18 months at 15% less than the share
price upon issuance.
- A second Option commencing with the
issuance date for a period of 24 months
at the share price upon issuance.
- A third Option commencing with the issuance
date for a period of 36 months at the
share price upon issuance with the addition
of 25%.
On December 18, 2017 the Company completed
its issuance of shares on the main London
Stock Market, see Note 17b.
b. Until December 31, 2016, an amount of NIS
504 thousand ($131 thousand) was received
on account of the loan agreements. In accordance
with a valuation by an independent external
assessor, it was determined that the fair
value of the financial liability at fair
value through profit and loss as of December
31, 2016 is in the amount of NIS 728 thousand
($183 thousand).
During the reported year, the rest of the
amount in respect of the aforementioned
agreements was received, the value of the
benefit in respect to conversion of the
loans at a price that is 15% lower than
the issuance price amounted to NIS 2.9
million and was recorded in financing expenses.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE LOANS CONVERTIBLE TO SHARES (cont.)
13:-
c.
Activity (NIS in thousands):
Balance as of January - .
1, 2016 -
Receipt of loans convertible
to Company shares 504
Revaluation 224
---------
Balance as of December
31, 2016 728
Receipt of loans convertible
to Company shares 16,247
Revaluation (including
exchange rate differences) 3,196
Interest 347
Conversion to shares (20,518)
---------
Balance as of December - .
31, 2017 -
=========
NOTE 14:- LONG-TERM LOANS FROM INTERESTED PARTY AND
OTHERS
Composition: December 31,
-------------------------------------
2017 2016
----------------- ------------------
Loan from interested
party (1) 781 883
Loan from supplier
(2) 240 137
----------------- ------------------
1,021 1,020
Net of current
maturities (221) (242)
----------------- ------------------
800 778
================= ==================
(1) Loan from an interested party -
(1)
a. A loan in NIS bearing annual interest
of Prime + 3.6%.
b. Payment dates of the As of December
loan: 31, 2017
-------------------------------------
Principal
and Interest
Principal
----------------- ------------------
First year - current
installment 110 146
Second year 116 146
Third year 122 146
Fourth year 128 146
Fifth year and beyond 305 340
781 924
================= ==================
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 14:- LONG-TERM LOANS FROM INTERESTED PARTY AND
OTHERS (cont.)
(2) Loan from a supplier -
a. A loan for purchase of a tractor
(Shovel), that was received during
December 2017 and is payable in 24
equal monthly installments. The loan
is in NIS and bears annual interest
of 5%.
b. Payment dates of the loan:
As of December
31, 2017
----------------------------
Principal
and Interest
Principal
------------ --------------
First year - current
installment 111 120
Second year 129 133
------------ --------------
240 253
============ ==============
NOTE FINANCE LEASE
15:-
December 31,
---------------------------
2017 2016
------------- ------------
a. Composition:
Liability 91 131
Net of current maturities (42) (40)
49 91
============= ============
b. The amount of the liability was computed
by capitalization of the leasehold payments
for the payments period at an annual interest
rate of 6.9%. The amounts are linked to
the Consumer Price Index.
NOTE WARRANTS CONVERTIBLE TO SHARES
16:-
a. On December 18, 2017, the Company completed
its Initial Public Offering (IPO) on the
London Stock Exchange in the framework of
which convertible loans (see Note 13) were
converted to 3,973,461 shares and an amount
of 6,589,331 non-marketable Options. In
accordance with the valuation of an independent
external assessor, the Options have a fair
value of approximately NIS 11 million as
of December 18, 2017 and, they have a value
as of December 31, 2017 of approximately
NIS 10 million.
b. Parameters used in the fair value valuation:
December 31,
2017
Projected fluctuations
(in percentages) 53 - 61
Life of the Option
(in years) 1.5 - 3
Rate of non-risk interest 0.45 - 0.55
(in percentages)
Fair value (in GBP) 1.1
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE OPTIONS CONVERTIBLE TO SHARES (cont.)
16:-
c. Fair value hierarchy -
Measurement of fair value of financial instruments
is performed using a fair value hierarchy
that reflects the data that was used in
performance of a measurement of fair value.
The hierarchy of fair value is based on
the following three levels:
Level Quoted prices (unadjusted) on the
1 - active markets for identical assets
or liabilities.
Level Data that are not price quotes included
2 - in Level 1 abovementioned, that may
be seen directly (that is, price quotes)
or indirectly (that is, derivatives
of price quotes).
Level Data in regard to an asset or liability
3 - that are not based on market information
that may be seen (unseen data).
As of December 31, 2017 the liability in
regard to allocation agreements and the
liability in regard to convertible loans
were measured using a valuation technique
based on Level 2 while basing itself on
visual market data.
NOTE SHARE CAPITAL December 31, December 31,
17:- 2017 2016
Number of Number of
Ordinary Shares Ordinary Shares
---------------------------- -----------------------------
a. Composition:
Issued Issued
Authorized and Authorized and
Outstanding Outstanding
------------- ------------- ------------- --------------
Ordinary shares
of NIS 1 par
value. 100,000,000 13,905,056 10,000,000 9,387,600
============= ==============
b. On December 18, 2017 the Company completed
its IPO on the London Stock Exchange in
the framework of which 4,517,456 Ordinary
Company shares were registered for trade
as follows:
3,973,461 shares were allocated as a result
of loan conversions to shares (see Note
13c).
320,856 shares were allocated to an interested
party in the framework of a debt conversion
(see Note 11b).
202,230 shares were allocated in consideration
for payment of debts to issuance advisors.
20,909 shares were allocated to subscribers
on the issuance date.
4,294,317 shares were allocated at a 15%
discount from the basic issuance price -
GBP 1.10.
The inclusive amount attributed to capital
in accordance with the basic price per share
is NIS 18,857 thousand (net of issuance
expenses and fees in the amount of approximately
NIS 4,470 thousand).
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE SHARE CAPITAL (cont.)
17:-
c. On April 4, 2012 the Company allocated to
the top-co, Shefa Yamim Ltd., 7,040,700
shares that constituted, subsequent to issuance,
75% of the Company share capital. In accordance
with the agreement (see Note 1d), the amount
received in consideration of the issuance
from the agreement date until the balance
sheet date is NIS 21,275 thousand.
d. The shares render to their owners the right
to vote and to participate in meetings of
the shareholders, the right to receive revenues
and to participate in surplus assets upon
dissolution of the Company.
e. In regard to agreements with interested
parties - see Note 22a.
f. On August 26, 2015 the general meeting of the
top-co approved the decision of the board of
directors that was rendered on July 16, 2015
in regard to granting 2,160,000 Options convertible
to shares of the top-co to officers, directors
and Company employees. As of the date of approval
of the financial statements, the Options were
not yet allocated.
1) Division of Options by Offerees -
Number of
Options
------------
Officer
- CFO 360,000
Officer
- Project
Manager 195,000
4 Directors 408,000 (102,000 Options each)
(6 employees, 195,000
7 Employees 1,197,000 Options each + one
employee 27,000 Options)
------------
2,160,000
============
2) Each Option may be exercised to one Company
share. Price per share as of date of approval
by the general meeting is NIS 1.18.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE SHARE CAPITAL (cont.)
17:-
f. (cont.)
3) Maturation Dates -
The right to receive Options will crystallize
in three rounds of 33.33% each. The first
round was on July 19, 2016, the second
round will occur on July 19, 2017 and
the third round on July 19, 2018.
The right to exercise each round of Options
will be available to every offeree for
a one year period from the date of formulation
of the entitlement to obtain the relevant
round.
4) Exercise price -
Exercise price for the first round -
NIS 3.
Exercise price for the second round -
NIS 4.
Exercise price for the third round -
NIS 6.
However, the exercised Options will be
without payment of the exercise price.
Rather, they will be allocated to the
offerees of allocated shares in an amount
that will reflect the component benefit
grossed up within those Options that
are exercised, as will be computed on
the exercise date.
5) Fair Value -
In accordance with the valuation by an
independent external assessor, it was
determined that the fair value of the
Options is in the amount of NIS 561 thousand.
Fair value of the first round - NIS 70
thousand.
Fair value of the second round - NIS
243 thousand.
Fair value of the third round - NIS 248
thousand.
NOTE 18:- GENERAL AND ADMINISTRATIVE EXPENSES
Year Ended December 31,
----------------------------
2016 2016 2015
-------- -------- --------
Management fees to
interested party (see 389 * 467 * 315
Note 21a, 22a) **
Other items 157 96 85
Depreciation 60 71 88
Office maintenance
and office expenses 53 33 31
Office services to
an interested party
(see Note21a, 22a2) 32 35 36
Salaries and related
items - . - - . - 194
Participation in expenses
of the top-co (150) 212 279
541 914 1,028
======== ======== ========
* Net of participation
by the top-co in expenses - . - 105 105
======== ======== ========
** Includes share
based compensation 46 152 - . -
======== ======== ========
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 19:- FINANCING (EXPENSES) INCOME, NET
Year Ended December 31,
2017 2016 2015
---------- ------ --------
Finance expense -
Adjustment of the
value of a financial
liability according
to fair value 12,867 223 - . -
Issuance and fees
expenses in regard
to Options 1,884 24 - . -
Exchange rate differentials 702 - . - - . -
Interest on convertible 347 - . - - . -
loans
Other expenses 111 91 66
Interest to a company
that is an interested
party 43 45 50
Interest to interested
parties - .- - . - 37
15,954 383 153
========== ====== ========
Finance income -
Interest income from
the top-co 237 570 834
==== ==== =================
NOTE TAXES ON INCOME
20:-
a. Data in regard to the tax environment wherein
the Company operates:
Tax rates
Corporate tax rate in Israel for 2017
was 24%. For 2016, the rate was 25%
and during 2015 it was 26.5%.
At the end of December 2016, the Knesset
passed the Economic Efficiency Law (Amendments
in order to achieve Budget Goals for
the Budgeted Years 2017 and 2018) -
2016, (hereinafter: "the Law"). In the
framework of the legislation, the corporate
tax rate was reduced to 24% for the
year 2017 and to 23% for 2018 and thereafter.
b. The Company received final assessments
from the Income Tax Authorities through
2012.
c. The Company has a carryforward loss for
tax purposes as of December 31, 2017 in
the amount of approximately NIS 68 million.
The tax benefit in this regard will be
included in the financial statements at
the time when realization is expected.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 21:- TRANSACTIONS WITH INTERESTED AND RELATED
PARTIES
a. Transactions with interested parties:
Year Ended December 31,
----------------------------
2017 2016 2015
-------- -------- --------
Charged to statements
of comprehensive
loss:
Management fees
paid to "101" 389 467 315
======== ======== ========
Fees for office
services paid
to "808" 32 35 36
======== ======== ========
Finance expenses
paid to "101" 43 45 50
======== ======== ========
Interest income
received from
the top-co 237 570 834
======== ======== ========
Finance expenses
to an interested
party 249 - . - 37
======== ======== ========
Charged to the
statement of financial
position:
Capitalized management
fees and participation
in expenses to
"101" 630 1,724 1,034
======== ======== ========
b. Transactions with interested and related
parties:
December 31,
--------------------------------
2017 2016
-------------- -----------------
In the framework
of current assets:
Receivables 16 - . -
============== =================
In the framework
of long-term assets:
Interested parties 77 77
============== =================
Loan to the top-co 2,342 1,116
==============
In the framework
of short-term
liabilities:
Interested parties 110 2,308
============== =================
Expenses payable
to the Chairman
of the Board of
Directors - . - 640
============== =================
In the framework
of non-current
liabilities:
Loan from interested
parties 671 883
============== =================
c. Commitments:
See Note 22a.
d. Guarantees from interested parties for
the Company's benefit:
See Note 22b.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 22:- COMMITMENTS AND LIENS
a. Commitments with interested parties:
1. Commitment regarding "101":
Since 1999, when the Company was established,
it has been managed by 101 Gold Holdings
(hereinafter - "101"), an interested company,
that holds at balance sheet date 3.39%
of the Company shares and 5.91% fully
diluted, in the framework of management
agreements.
In view of the issuance of Company shares
in London, the Company had to separate
the general administration and the financial
management between the Company and the
top-co. Therefore, on December 6, 2017
a new management agreement was signed
between "101" and the Company only (without
the management of the top-co), for a new
period of thirty six months commencing
January 1, 2017 until December 31, 2019.
In accordance with the new agreement,
"101" will provide for the Company management
services that will include a Chairman,
a CEO, secretarial services for management
as well as office space that is owned
by "101". These services will be rendered
for a consideration of NIS 85 thousand
per month with the addition of Value Added
Tax (VAT) in accordance with the prevailing
law (not including refund of expenses
for maintaining a vehicle and a telephone
for the CEO and refund of expenses for
travel abroad in order to locate potential
investors. Concurrently, the Company is
obligated to cover insurance for "101"
employees who engage in rendering the
abovementioned services to the Company.
On December 18, 2017, date of the London
IPO, the Company converted a debt to "101"
in the amount of approximately $300 thousand
(approximately GBP231 thousand) into 247,059
shares and 741,177 Options.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 22:- COMMITMENTS AND LIENS (cont.)
a. Commitments with interested parties (cont.):
2. Commitments regarding
"808":
On January 1, 2005, the Company signed
an agreement with "808", an interested
party in the Company, whereby "808" will
assist in finding potential investors.
In addition, "808" will provide collection
services regarding the investment money
of investors for a consideration of 2%
of the total gross investment by each
investor in the Company that was found
by "808".
In addition, "808" will provide office
services to Company representatives in
the United States for a fixed monthly
retainer in the amount of $770. The Company
and "808" agreed that the agreement will
be valid until December 31, 2015. Each
party has the right to bring the agreement
to an early termination upon written notification
six months in advance. The agreement was
extended until December 31, 2017 under
the same terms.
On December 18, 2017, the IPO date in
London, the Company converted a debt to
"808" in the amount of approximately $90
thousand (approximately GBP69 thousand)
into 73,797 shares and 221,391 Options.
3. Commitment with the chairman of the
board of directors:
In accordance with the approval of the
board of directors and a meeting of
the shareholders in August 2010, the
Company signed an agreement on December
7, 2011, with a corporation (hereinafter:
"the corporation") owned entirely by
the chairman of the board of directors.
In accordance with this agreement, the
corporation will offer management and
supervisory services for the Company
businesses that are mainly in regard
to the chairman serving as an active
director of the Company.
The following are the main points
of the agreement:
a) Engagement period is for five years,
commencing May 1, 2010 until May 31,
2015.
b) In consideration for performance of
these services, the corporation will
be entitled to monthly management
fees in the amount of NIS 20
thousand
+ VAT. In addition, the chairman of
the board of directors will be
entitled
to a refund of reasonable expenses.
c) In addition, the agreement requires
the Company to provide an Options
plan for its employees in the
framework
therein the chairman will be
entitled
to untraded convertible Company
Options
at a rate that will provide him with
1.5% of the Company share capital
at the date the agreement is signed.
These Options will have identical
terms as the Options initially to
be issued to the public on one of
the worldwide stock exchanges.
During April 2012, the Company assigned
the agreement to the top-co. On June
30, 2017, the Company assigned to the
top-co a debt of NIS 640 thousand in
regard to the abovementioned agreement
to be offset by 240 thousand shares
of the Company held by the top-co. This
amount was charged on account of a payment
in regard to shares - see Note 17c.
In September 2017, the chairman of the
board of directors resigned from the
Company.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 22:- COMMITMENTS AND LIENS (cont.)
b. Guarantees and Liens:
1. The Company gave a guarantee through
a bank in the amount of approximately
NIS 7 thousand to a third party.
2. The interested parties are personal
guarantors (for an unlimited amount)
to a bank in order to guarantee the
Company's liabilities. Balance of the
Company's liabilities as of December
31, 2017 that is guaranteed by the interested
parties is in the amount of approximately
NIS 205 thousand. See also Note 9b.
3. A lien in favor of the bank was placed
on a foreign currency deposit of the
Company. See also Note 9b.
4. Engineering equipment at a cost of NIS
775 thousand had a charge placed on
it in favor of the supplier of the equipment.
5. A lien in favor of the leasing company
was placed on a vehicle that was rendered
to the Company under financial leasing
terms - see Note 6. As of the date of
the financial statements, Mr. Avraham
Taub, Company CEO, personally guaranteed
the Company's liability to the leasing
company.
c. Information in Regard to Exploration
and Prospecting Permits:
The Company received exploration and
prospecting permits from the mining
Inspector at the Government of Israel
National Infrastructures Ministry. These
exploration permits grant exclusive
rights to perform geological explorations
in specific areas of northern Israel.
Prospecting and discovery of minerals
in Israel is subject to the statutes
detailed in the Mining Ordinance and
Mining Amendments added thereto as well
as the Mining Regulations subsequently
appended.
Since commencement of the Company's
operations in January 1999, the Company
has acquired all necessary permits and
licenses and maintains its schedule
of operations determined in accordance
with these licenses by the mining Inspector
in the National Infrastructures Ministry.
Prospecting permit:
A prospecting permit grants to its holder
the right to enter any area included
in the permit, in order to verify the
presence or absence of minerals in the
area and to dig up to two meters and
tunnel up to a depth of ten meters.
A prospecting permit holder is not allowed
to drill or perform any other actions
that have the intent or directly result
in removal of minerals, unless other
special terms were designated by the
Inspector. The prospecting permit is
also limited in regard to the exploration
area and to the minerals that may be
prospected. The permit does not grant
exclusive rights to its holder in regard
to the area and to the minerals that
are permitted to be prospected. The
prospecting permit is for an initial
twelve month period and may then be
renewed for an unlimited amount of months,
subject to terms and conditions to be
determined. Concurrently, the prospecting
permit is not transferable.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 22:- COMMITMENTS AND LIENS (cont.)
c. Information in Regard to Exploration
and Prospecting Permits (cont.):
Exploration permit:
An exploration permit grants exclusive
rights to its holder for exploring in
the area designated in the permit. An
exploration permit may cover an area
up to 500 sq. km. and is valid for a
two-year period. The holder of an exploration
permit is required to employ expert
geologists and other trained individuals
who are approved by the Inspector and
have been hired to explore in accordance
with the general guidelines published
periodically by the Inspector. In addition,
these individuals explore the rocks,
minerals, quarries, ground and water
supply in the area in accordance with
the Inspector's opinion and they furnish
reports, maps or other information as
requested.
The Inspector has the right to nullify
an exploration permit, completely or
partially, without any compensation
to the holder of the permit, in the
event that the Inspector determines
that the holder of the exploration permit
is not conducting a survey of the area
with proper expertise, as required by
the Ordinance and instructions of the
Inspector.
Prospecting License:
Subject to the limitations designated
in the Ordinance and in the event that
the prospecting that is conducted in
accordance with the prospecting permit
is completed satisfactorily, the holder
of a prospecting permit may request
a "prospecting license" for certain
areas that he chooses from those areas
designated in the prospecting permit.
The Inspector may choose to grant a
prospecting license to an individual,
subject, inter alia, to the fact that
this person holds an exploration permit
or a prospecting permit for the area
that he requested and that this individual
presented sufficient proofs that the
minerals for which he wants to explore
do exist in the requested license area.
In the event that the prospecting is
for non-precious quarries, the prospecting
license area will not exceed 1% of the
prospecting permit area granted to the
holder. In the event that the prospecting
is for precious stones, then the prospecting
license area will not exceed 0.5% of
the prospecting permit area. (Precious
stones are defined in the Ordinance
as including gems, as well as diamonds,
precious metals and metal ores.) In
the event that the requestor does not
hold a prospecting permit, then the
area requested will not exceed 50 hectares
(0.5 sq. km) for exploration of non-precious
minerals; and will not exceed 20 hectares
(0.2 sq. km.) if the individual wishes
to explore for precious minerals in
the determined area.
A prospecting license is granted for
a period from one up to five years.
However, in the event that the license
is granted for a period of less than
one year, then the Inspector may decide
to renew the license for a period of
up to five years.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 22:- COMMITMENTS AND LIENS (cont.)
c. Information in Regard to Exploration
and Prospecting Permits (cont.):
A prospecting license grants to its holder
the exclusive right to explore the designated
area and for this purpose, he is permitted,
inter alia, to dig, drill or perform
other work required to determine whether
the area contains "sufficient quantities"
of minerals for which the license was
granted (that would enable continued
operations on a commercial level) and
to establish and maintain machinery and
equipment and pave roads necessary for
performance of the exploration.
The holder of a prospecting license is
required to operate efficiently and with
proper expertise. Failure to conform
to these requirements can result in the
nullification of the license. The transfer
to a third party of the license or any
other right granted therein is subject
to obtainment of written consent from
the Inspector.
d. Consultation agreements:
On November 27, 2016 the Company contracted
with GEM Global Yield Investment Fund
(hereinafter - "GEM") in order to receive
a framework for capital withdrawals in
a scope that is not in excess of GBP
7 million subject to completion of the
stock issuance in London.
As compensation for each withdrawal,
the Company will issue to GEM ordinary
shares at a price per share that is equivalent
to 90% of the average market price for
the shares during the 15 days subsequent
to notice of the withdrawal. In addition,
the Company is obligated to pay GEM a
commission in the amount of GBP140 thousand
that will be paid subsequent to a year
from the issuance date, in the event
that the Company will decide that it
is interested in bringing to fruition
the contract and subject to signing of
a detailed contract, as abovementioned.
NOTE 23:- LOSS PER SHARE
Year Ended December 31,
--------------------------------------
2017 2016 2015
------------ ------------ ----------
Comprehensive
loss for the
year (NIS in
thousands) (16,258) (549) (310)
============ ============ ==========
Weighted number
of Ordinary shares 9,548,938 9,387,600 9,387,600
============ ============ ==========
Basic and diluted
loss per share
(in NIS) (1.703) (0.058) (0.033)
============ ============ ==========
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 24:- FINANCIAL INSTRUMENTS
a. Financial risk management
1) General
The Company is exposed to the following
main risks arising from the use of
financial instruments:
-- Credit risk
-- Liquidity risk
-- Market risk
This Note will render information in
regard to Company exposure for each
of the risks abovementioned, Company
goals, policies and procedures regarding
gauging and management of these risks.
Additional quantitative disclosure
is included throughout these financial
statements.
2) Framework for risk management
Company policy for risk management
was formulated in order to identify
and analyze the risks confronting the
Company, to determine sufficient limitations
to the risks and control while supervising
the risks and compliance with limitations.
The policies and methods for risk management
are surveyed currently in order to
reflect changes in the market conditions
and the Company operations. The Company
utilizes training and management procedures
in order to develop a control environment
that is efficient, wherein all employees
understand their roles and responsibilities.
3) Credit risk
Credit risks arise from cash and cash
equivalents, deposits in banks and
receivable balances that are as yet
unpaid. Company balances of cash and
cash equivalents are deposited in a
bank. The Company considers credit
risks for unpaid receivable balances
to be insignificant.
4) Liquidity risk
Liquidity risk is the danger that the
Company will not be able to pay its
obligations related to its financial
liabilities that are cleared by cash
payments or payment of another financial
asset. The Company's approach to management
of its liquidity risks is to assure,
as much as possible, the necessary
liquidity to meet its obligations on
time, under ordinary terms and when
pressured, without encountering undesired
losses or damage to its reputation.
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 24:- FINANCIAL INSTRUMENTS (cont.)
a. Financial risk management (cont.)
Hitherto, the Company's financing has
been supplied by issuance of share
capital, receipt of loans and use of
credit from interested parties (management
fees have been paid in accordance with
the Company's abilities).
5) Market risks
Market risks include the risk that
changes in market prices, such as the
exchange rates of foreign currencies,
the Consumer Price Index, interest
rates, and prices of capital instruments
will have an effect on the value of
Company holdings of financial instruments.
The intent of market risk management
is to manage and supervise exposure
to market risks in the framework of
accepted parameters, while maximizing
yields.
The Company is exposed to the following
risks:
Exchange rate risks:
Part of the Company's liabilities and
mobilizations of capital are measured
in dollars. Therefore, the Company
is exposed to changes in the exchange
rate of the U.S. dollar. The Company
has not utilized any protective measures
against this exposure.
Risks of falling market prices for
diamonds, gold and precious stones:
The Company is exposed to changes in
market prices for diamonds, gold and
precious stones. Despite the fact that
the Company is still in the pre-production
stage for the minerals, significant
changes in the future market prices
can and may have an effect on the preparation
to repay investments in exploration
and mining.
b. Interest rate risks
Exposures to interest rate risks and
average weighted interest rates for financial
assets and liabilities are detailed as
follows:
NIS Foreign Currency
-------------------------------------------- ----------------------
Linked
to Fixed Variable Non- Fixed Non-
the Interest Interest Interest Interest Interest
CPI Total
------- ---------- ----------- ---------- ---------- ---------- ------
NIS in thousands
----------------------------------------------------------------------------
31.12.2017
Financial
Assets:
Cash and
cash equivalents 6,489 6,489
------- ---------- ---------- ---------- ---------- ---------- ------
Deposit
in bank 173 173
------- ---------- ---------- ---------- ---------- ---------- ------
Receivables 284 284
------- ---------- ---------- ---------- ---------- ---------- ------
Interested
party 77 77
------- ---------- ---------- ---------- ---------- ---------- ------
top-co 2,342 2,342
------- ---------- ---------- ---------- ---------- ---------- ------
Financial
Liabilities:
Short-term
credit from
banks and others 205 109 314
---------- ---------- ---------- ---------- ---------- ------
Trade and other
accounts payable 1,858 776 2,634
---------- ---------- ---------- ---------- ---------- ------
Long-term
loans from
bank and
others 240 781 1,021
---------- ---------- ---------- ---------- ---------- ------
Financial
leasing 91 91
---------- ---------- ---------- ---------- ---------- ------
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 24:- FINANCIAL INSTRUMENTS (cont.)
b. Interest rate risks (cont.)
NIS Foreign Currency
-------------------------------------------- ----------------------
Linked
to Fixed Variable Non- Fixed Non-
the Interest Interest Interest Interest Interest
CPI Total
------- ---------- ----------- ---------- ---------- ---------- ------
NIS in thousands
----------------------------------------------------------------------------
31.12.2016
Financial
Assets:
Cash and
cash equivalents 1 1
------- ---------- ---------- ---------- ---------- ---------- ------
Deposit
in bank 192 192
------- ---------- ---------- ---------- ---------- ---------- ------
Receivables 270 270
------- ---------- ---------- ---------- ---------- ---------- ------
Interested
party 77 77
------- ---------- ---------- ---------- ---------- ---------- ------
top-co 1,116 1,116
------- ---------- ---------- ---------- ---------- ---------- ------
Financial
Liabilities:
Short-term
credit from
banks and others 410 109 519
---------- ---------- ---------- ---------- ---------- ------
Trade and other
accounts payable 2,219 2,219
---------- ---------- ---------- ---------- ---------- ------
Interested
parties 1,866 336 2,202
----------
Long-term
loans from
bank and
others 137 883 1,020
---------- ---------- ---------- ---------- ---------- ------
Financial
leasing 131 131
---------- ---------- ---------- ---------- ---------- ------
c. Analysis of sensitivity
1) As of December 31, 2017 and 2016, the
Company has net liabilities with variable
interest rates in the amounts of NIS
986 thousand and NIS 1,293 thousand,
respectively.
An increase in the market annual interest
rate of 50% for the year ended December
31, 2017 is likely to increase interest
expense in the amount of approximately
NIS 8 thousand; to decrease net profit
and shareholders' equity in the amounts
of approximately NIS 8 thousand. A
decrease in the market interest rate
of 50% would decrease the interest
and increase net profit and shareholders'
equity by identical amounts. This analysis
was performed assuming that there will
not be any changes in other factors.
2) A stronger New Israel Shekel (NIS)
against the U.S. dollar would increase
(decrease) the shareholders' equity
and net income or loss as follows.
This analysis was performed assuming
that all other variables, especially
interest rates, will remain fixed.
5% Increase 5% Decrease
Date in Exchange in Exchange
Rate Rate
---------------- ----------------- -----------------
December 31,
2017 289 (289)
================= ===================
December 31,
2016 (13) 13
================= ===================
SHEFA YAMIM (A.T.M.) LTD.
NOTES TO THE FINANCIAL STATEMENTS
NIS in thousands
NOTE 24:- FINANCIAL INSTRUMENTS (cont.)
d. Fair value
Book value of financial assets and liabilities,
including cash and cash equivalents, other
receivables, deposits, bank short-term
credits, loans and overdrafts, trade payable
and other payables is proximate to or equivalent
to their fair value.
e. Liquidity risk
The Company has liabilities bearing interest
at variable rates and is, therefore, exposed
to changes in the market interest rate.
See Section c.2 above. Information regarding
repayment dates of long-term loans is shown
in Note 14.
f. Changes in the liabilities resulting from
financing operations
Receipts
Financial on Total
Bank Deferred Obligations Loans Account Flow
and Issuance at from Financial of from
Other Expenses Fair Interested Leasing Shares Other Financing
Credits Value Parties Operations
--------- ---------- ------------- ------------ ----------- --------- ------- ------------
-
Balance . - .
1.1.2017 (519) 905 (504) (3,086) (131) (20,498) - -
Consideration
from issue
of shares
and Options
(including
additional
paid-in -
capital), .
net (777) - (777)
Increase
in deferred -
issuance .
expenses 4,707 - 4,707
Repayment
of loans -
from banks .
and others 205 - 205
Receipt
of loans -
from interested .
party, net (446) - (446)
Receipt
of loans -
convertible .
to shares (16,611) - (16,611)
Repayment -
of long-term .
loans 40 - 40
Interest
paid 347 111 458
--------- ---------- ------------- ------------ ----------- --------- ------- ------------
205 4,707 (16,264) (446) 40 (137) 111 (11,784)
Issue expenses
attributable
to P&L (1,884)
Issue expenses
attributable
to paid-in capital (4,470)
Increase
in suppliers
in regard
to issue
expenses 683
Increase
in payables
in regard
to issue
expenses 59
Conversion
of convertible
shares 20,518
Revaluation
of finance
obligations (3,750)
Finance
paid to
interested
parties (292)
Conversion of a
debit balance to
shares 1,659
Reduction of a
debit balance attributable
to exploration
assets 1,400
Conversion of a
debit balance to
the chairman of
the board of directors
of the top-co (640)
---------- ------------- ------------ ----------- --------- ------- ------------
-
Balance as - . - . . - .
of 31.12.2017 (314) - - (765) (91) (21,275) - -
========= ========== ============= ============ =========== ========= ======= ============
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEIEFAFASEID
(END) Dow Jones Newswires
March 29, 2018 02:01 ET (06:01 GMT)
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