UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
OR
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report ____________
For the transition period from ____________ to ____________
Commission File No.
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
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(Name, Telephone, E-mail and/or Facsimile number and Address of Registrant's Contact Person)
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Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered |
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Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
The registrant had
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to besubmitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files):
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.:
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Large accelerated filer ☐ |
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Accelerated filer ☐ |
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Emerging growth company |
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow:
Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ☐ No ☒
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• |
payment default by, or loss of, one or more of our principal clients; the loss of
one or more of our key personnel; |
• |
termination of, or changes in, arrangements
with our key customers; |
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market risks of our portfolio of marketable securities, such as changes affecting
currency exchange rates; |
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termination of arrangements with our suppliers; |
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increasing levels of competition in Israel and other markets in which we do business;
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increase or decrease in global purchase
prices of food products; |
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our inability to accurately predict consumption of our products or changes in consumer
preferences; |
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product liability claims and other litigation
matters; |
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interruption to our storage facilities; |
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our insurance coverage may not be sufficient; |
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our operating results may be subject to variations from quarter to quarter;
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our inability to successfully compete with nationally branded products; |
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our inability to successfully integrate our acquisitions; |
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our inability to protect our intellectual property rights; |
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significant concentration of our shares are held by one shareholder; |
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we are controlled by and have business relations with Willi-Food Investments Ltd.
and its management; |
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the price of our ordinary shares may be volatile; |
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our inability to meet the Nasdaq Capital Market (“Nasdaq”) and the TASE
listing requirements; |
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our inability to maintain an effective system of internal controls; |
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cyber-attacks on the Company's information systems; |
• |
changes in laws and regulations, including those relating to the food distribution
industry, and inability to meet and maintain regulatory qualifications and approvals for our products; |
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economic conditions in Israel; |
• |
changes in political, economic and military conditions in Israel, including, in particular,
economic conditions in the Company’s core markets; |
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our international operations may be adversely affected by risks associated with international
business; and |
• |
the COVID-19 pandemic. |
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to promote the “Willi-Food” brand name and other brand names used by the
Company (such as " Euro European Dairies") and to increase market penetration of products through marketing efforts and advertising campaigns;
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to expand our current food product lines and diversify into additional product lines,
as well as to respond to market demand; |
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to increase our refrigerated and frozen storage space by expanding our refrigerated
and frozen logistic center; |
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to enter new fields of activity/operating segments; |
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to expand the Company's activity in the international food markets; and |
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utilizing management’s expertise in identifying market demand and preferences,
as well as its supplier sourcing abilities to: |
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continue to locate, develop and distribute additional food products, some of which
may be new to Israeli consumers; |
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penetrate new food segments within Israel through the establishment of food manufacturing
factories or the establishment of business relationships and cooperation with existing Israeli food manufacturers; |
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increase its inventory levels from time to time both to achieve economies of scale
on its purchases from suppliers and to more fully meet its customers’ demands; |
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further expand into international food markets, mainly in the U.S. and Europe, by
purchasing food distribution companies, increasing cooperation with local existing distributors and/or exporting products directly to
customers; and |
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penetrate new markets in other countries through the establishment of business relationships
and cooperation with representatives in such markets, subject to a positive political climate. |
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Canned Vegetables and Pickles: including mushrooms (whole and sliced), artichoke (hearts
and bottoms), beans, asparagus, capers, corn kernels, baby corn, palm hearts, vine leaves (including vine leaves stuffed with rice), sour
pickles, mixed pickled vegetables, pickled peppers, an assortment of olives, garlic, roasted eggplant sun and dried tomatoes. These products
are imported primarily from China, Greece, Thailand, Turkey, India, and the Netherlands. |
• |
Canned Fish: including tuna (in oil or water), sardines, anchovies, smoked and pressed
cod liver, herring, fish paste and salmon. These products are primarily imported from the Philippines, Thailand, Greece, Germany and Sweden.
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Canned Fruit: including pineapple (sliced or pieces), peaches, apricots, pears, mangos,
cherries, litchis and fruit cocktail. These products are primarily imported from China, Monaco, the Philippines, Thailand, Greece and
Europe. |
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Edible Oils: including olive oil, regular and enriched sunflower oil, soybean oil,
corn oil and rapeseed oil. These products are primarily imported from Belgium, Turkey, Italy, the Netherlands and Spain. |
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Dairy and Dairy Substitute Products: including hard and semi-hard cheeses (parmesan,
edam, kashkaval, gouda, havarti, cheddar, pecorino, manchego, maasdam, rossiysky, iberico and emmental), molded cheeses (Brie, Camembert
and Bloose), feta, Bulgarian cubes, goat cheese, fetina, butter, butter spreads, margarine, melted cheese, cheese alternatives, condensed
milk, whipped cream, yogurt, frozen pizza and others. These products are primarily imported from Greece, France, Lithuania, Denmark, Germany,
Italy and the Netherlands. |
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Dried Fruit, Nuts and Beans: including figs, apricots and organic apricots, chestnuts
organic chestnuts, sunflower seeds, walnuts, pine nuts, cashews, banana chips, pistachios and peanuts. These products are primarily imported
from Greece, Turkey, India, China, Thailand and the United States. |
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Other Products: including, among others, instant noodle soup, frozen edamame soybeans,
freeze dried instant coffee, bagels, breadstick, coffee creamers, lemon juice, halva, Turkish delight, cookies, vinegar, sweet pastry
and crackers, sauces, corn flour, rice, rice sticks, pasta, organic pasta, spaghetti and noodles, breakfast cereals, corn flakes, rusks,
rusks, tortilla, dried apples snacks, deserts (such as tiramisu and pastries), ice cream and light and alcoholic beverages. These products
are primarily imported from the Netherlands, Germany, Italy, Greece, Belgium, the United States, Scandinavia, Switzerland, China, Thailand,
Turkey, India, and South America. |
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large retail supermarket chains, |
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small retail supermarket chains, and |
• |
other customers, including small private grocery shops, government institutions, wholesalers,
restaurants, hotels, and hospitals. |
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Percentage of Total Sales Year Ended December 31 |
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Customer Group |
2022 |
2021 |
2020 |
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Large retail supermarket chains |
54 |
% |
50 |
% |
53 |
% | ||||||
Other customers |
46 |
% |
50 |
% |
47 |
% | ||||||
|
100 |
% |
100 |
% |
100 |
% |
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Year ended December 31, |
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2022 |
2021 |
2020 |
2022 |
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NIS |
NIS |
NIS |
US Dollars |
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Canned Vegetables and Pickles |
70,398 |
59,844 |
67,275 |
19,999 |
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Dairy and Dairy Substitute Products |
188,738 |
196,589 |
188,675 |
53,619 |
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Canned Fish |
62,270 |
56,064 |
53,547 |
17,690 |
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Cereals, rice and pastas |
61,350 |
62,712 |
63,514 |
17,429 |
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Non-banking credit |
- |
276 |
719 |
- |
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Oils |
44,241 |
23,025 |
16,216 |
12,568 |
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Other |
71,328 |
55,703 |
64,148 |
20,265 |
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70,398 |
59,844 |
67,275 |
19,999 |
• |
W.F.D. (Import, Marketing and Trading) Ltd. ("WFD") |
• |
W. Capital Ltd. (“W. Capital”) |
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Euro European Dairies Ltd. |
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Year Ended
December 31,
2022 |
Year Ended
December 31, 2021
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Revenues |
498,325 |
454,213 |
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Cost of Sales |
355,228 |
315,920 |
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Gross Profit |
143,097 |
138,293 |
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Selling Expenses |
74,106 |
65,869 |
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General and Administrative Expenses
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24,117 |
23,299 |
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Other Income |
(222 |
) |
(230 |
) | ||||
Operating profit
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45,096 |
49,355 |
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Financial Income, Net |
8,878 |
8,465 |
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Profit before taxes on
income |
53,974 |
57,820 |
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Taxes on income |
(12,410 |
) |
(12,719 |
) | ||||
Net Income |
41,564 |
45,101 |
Name |
Age
|
Position with the Company
|
Joseph Williger |
66 |
Director, and Chief Executive Officer |
Zwi Williger |
68 |
Director, Chairman of the Board |
Victor Bar (1) (2) |
58 |
Director |
Erez Winner |
54 |
Senior Officer (business development logistic operation and building) |
Yitschak Barabi |
38 |
Chief Financial Officer |
Ran Asulin |
39 |
Chief Trade and Selling Officer |
Lior Laser |
48 |
Deputy Chief Executive Officer |
Einav Bar (1) (2) |
51 |
External Director |
Idan Ben-Shitrit (1) (2) |
48 |
External Director |
(1)
(2) |
Member of the Audit Committee
Member of the Compensation Committee |
Name and Principal Position |
Salary
(1) |
Management
Fees
(2) |
Bonus
(3) |
Options
(4) |
Total |
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NIS thousands | ||||
Zwi Williger (4)
Chairman of the Board |
311 |
1,200 |
2,065 |
- |
3,576 |
Joseph Williger (4)
CEO and Former Co-Chairman of the Board |
244 |
1,200 |
2,065 |
- |
3,509 |
Yitschak Barabi
Chief Financial Officer |
669 |
- |
125
|
161 |
955 |
Ran Asulin
Chief Trade and Selling Officer |
642 |
- |
135 |
161 |
938 |
Erez Winner
Senior officer (business development logistic operation and building)
and Former CEO |
648 |
- |
273 |
- |
921 |
(1) |
Includes car and mobile phone benefits.
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(2) |
Includes tax gross-up payments. |
(3) |
Represents annual bonuses granted to the Covered Executive based on formulas set forth
in the Company's compensation policy approved by shareholders in June 2021 (the "Amended Compensation Policy") and the agreements with
each of the Covered Executives which was replaced by the Company's current compensation policy in March 2023. |
• |
The Chairman of the board of directors;
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A controlling shareholder or his relative;
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Any director employed by or who provides
services to the company on a regular basis. |
• |
Any director employed by the controlling
shareholder or by any corporation controlled by the controlling shareholder or who provides services to the controlling shareholder on
a regular basis; and |
• |
Any director whose principal livelihood
comes from the controlling shareholder. |
• |
Recommending the board of directors, the compensation policy for the company's office
holders to be adopted by the company and to recommend to the board of directors, once every three years, regarding any extension or modification
of the current compensation policy which had been approved for a period of more than three years; |
• |
From time to time, recommending to the board of directors regarding updates required
to the compensation policy and examining the implementation thereof; |
• |
Determining whether to approve the company’s office holders’ terms of
office and employment in situations that require the approval of the compensation committee in accordance with the Israeli Companies Law;
and |
1) |
the compensation committee and the board of directors have taken into consideration
the mandatory considerations and criteria which are specified in the Israeli Companies Law for a compensation policy and the respective
employment terms include such mandatory considerations and criteria; and |
2) |
the company's shareholders approved such terms of employment, subject to a special
majority requirement. |
1) |
both the compensation committee and the board of directors re-discussed the transaction
and decided to approve it despite the shareholders' objection, based on detailed reasons; and |
2) |
the Israeli company is not a "Public Pyramid Held Company", which is a public company
controlled by another public company (including by a company that only issued debentures to the public), which is also controlled by another
public company (including a company that only issued debentures to the public) that has a controlling shareholder. |
• |
extraordinary transactions with a controlling shareholder or in which a controlling
shareholder has a personal interest; and |
• |
the terms of an engagement by the company, directly or indirectly, with a controlling
shareholder or a controlling shareholder’s relative (including through a corporation controlled by a controlling shareholder), regarding
the company’s receipt of services from the controlling shareholder, and if such controlling shareholder is also an office holder
of the company, regarding his or her terms of employment. |
• |
the majority of the shares of the voting shareholders who have no personal interest
in the transaction must vote in favor of the proposal (shares held by abstaining shareholders shall not be considered); or |
• |
the total shareholdings of those who have no personal interest in the transaction
and who vote against the transaction must not represent more than 2% of the aggregate voting rights in the company. |
1) |
such majority includes a majority of the total votes of shareholders who have no personal
interest in the approval of the transaction (and in case of a CEO, who are not a controlling shareholder) and who participate in the voting,
in person, by proxy or by written ballot, at the meeting (abstentions not taken into account); or |
2) |
the total number of votes of shareholders mentioned above that vote the transaction
do not represent more than 2% of the total voting rights in the company. |
• |
any amendment to the articles of association; |
• |
an increase in the company’s authorized share capital; |
• |
a merger; or |
• |
approval of actions and transactions that require shareholder approval. |
• |
each person known by the Company to beneficially own more than 5% of the outstanding shares of ordinary
shares; |
• |
each of the Company’s named executive officers and directors; and |
• |
all of the Company’s named executive officers and directors as a group. |
Name and Address |
Number of Ordinary Shares Beneficially Owned |
Percentage of Ordinary Shares |
||||||
Willi-Food Investments Ltd. |
8,200,542 |
59.14 |
% | |||||
B.S.D. Crown Ltd. (1) |
8,971,617 |
64.7 |
% | |||||
Joseph and Zwi Williger (2) |
9,788,830 |
70.59 |
% | |||||
Brian Gaines (3) |
806,604 |
5.82 |
% | |||||
The Phoenix Holdings Ltd. (4) |
1,047,312 |
7.55 |
% |
(1) |
Includes (i) 8,200,542 Ordinary Shares held by Willi-Food, and (ii) 771,075 Ordinary
Shares held by B.S.D. Crown Ltd. (“BSD”). Willi-Food is controlled by its majority shareholder, BSD, and BSD may be deemed
to beneficially own all of the shares owned by Willi-Food. |
(2) |
As of the date hereof, JW directly owns though a wholly-owned company 13,251 Ordinary
Shares and ZW directly owns though a wholly-owned company 803,962 Ordinary Shares. JW and ZW together own 100% of B.S.D shares and each
be deemed to beneficially own 9,788,830 Ordinary Shares (comprised of 8,200,542 Ordinary Shares held directly by WIL, 771,075 Ordinary
Shares held directly by B.S.D, 13,251 Ordinary Shares held directly by JW and 803,962 Ordinary Shares held directly by ZW), or approximately
70.59% of the outstanding Ordinary Shares. Thus, as of the date hereof, each of JW and ZW may be deemed to have the shared power to vote,
or direct the voting of, and the shared power to dispose of, or direct the disposition of, all such shares. |
(3) |
Based on a Schedule 13G filed February 13, 2023, this amount consists of 638,054 Ordinary
Shares (representing approximately 4.6% of our total shares outstanding) directly held by Springhouse Capital (Master), L.P. (the “Fund”),
and 128,959 Ordinary Shares owned by Mr. Gaines for his own account and an additional 39,951 Ordinary Shares held by immediate family
members in accounts Mr. Gaines controls, and that Mr. Gaines may be deemed to beneficially own (in total representing approximately 1.2%
of our total shares outstanding). Mr. Gaines serves as managing member of Springhouse Capital Management G.P., LLC (“Springhouse”)
and as a director of Springhouse Asset Management, Ltd. (the “General Partner”) and, as a result, may be deemed to beneficially
own shares owned by the Fund. Springhouse is the general partner of Springhouse Capital Management, L.P. (“Management”) and,
as a result, may be deemed to beneficially own shares owned by the Fund. Management is the investment manager of the Fund and as a result,
may be deemed to beneficially own shares owned by the Fund. The General Partner is the general partner of the Fund, and, as a result,
may be deemed to beneficially own shares owned by the Fund. |
(4) |
Based on a Schedule 13G filed February 14, 2023, these shares are beneficially owned
by various direct or indirect, majority or wholly-owned subsidiaries of the Phoenix Holdings Ltd. (the “Subsidiaries”). The
Subsidiaries manage their own funds and/or the funds of others, including for holders of exchange-traded notes or various insurance policies,
members of pension or provident funds, unit holders of mutual funds, and portfolio management clients. Each of the Subsidiaries operates
under independent management and makes its own independent voting and investment decisions. |
• |
financial institutions or insurance companies; |
• |
real estate investment trusts, regulated investment companies or grantor trusts;
|
• |
dealers or traders in securities or currencies; |
• |
tax-exempt entities; |
• |
certain former citizens or long-term residents of the United States; |
• |
persons that received our shares as compensation for the performance of services;
|
• |
persons that will hold our shares as part of a “hedging” or “conversion”
transaction or as a position in a “straddle” for United States federal income tax purposes; |
• |
holders that will hold our shares through a partnership or other pass-through entity;
|
• |
U.S. Holders (as defined below) whose “functional currency” is not the
U.S. Dollar; or |
• |
holders that own directly, indirectly or through attribution 10.0% or more, of the
voting power or value, of our shares. |
• |
a citizen or resident of the United States; |
• |
a corporation (or other entity treated as a corporation for United States federal
income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia;
|
• |
an estate the income of which is subject to United States federal income taxation
regardless of its source; or |
• |
a trust if such trust has validly elected to be treated as a United States person
for United States federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over
its administration and (2) one or more United States persons have the authority to control all of the substantial decisions of such trust.
|
• |
such gain is effectively connected with your conduct of a trade or business in the
United States; or |
• |
you are an individual and have been present in the United States for 183 days or more
in the taxable year of such sale or exchange and certain other conditions are met. |
• |
at least 75% of its gross income is “passive income”; or |
• |
at least 50% of the average value of its gross assets (which may be determined, in part, by the market
value of our ordinary shares, which is subject to change) is attributable to assets that produce “passive income” or are held
for the production of passive income. |
|
Gain (loss) from exchange rate change NIS
thousands |
Fair net NIS thousands |
Gain (loss) from exchange rate change NIS
thousands | ||
Change in exchange rate
USD |
(10%)
(2,694) |
(5%)
(1,347) |
26,939 |
5%
1,347 |
10%
2,694 |
Change in exchange rate
EURO |
(10%)
640 |
(5%)
320 |
(6,399) |
5%
(320) |
10%
(640) |
|
Gain (loss) from interest change NIS thousands
|
Fair value NIS thousands |
Gain (loss) from interest change NIS thousands
| ||
Change in Interest as % of interest rate
|
(10%) |
(5%) |
|
5% |
10% |
Increase\decrease in financial Income
|
(9,036) |
(4,518) |
90,360 |
4,518 |
9,036 |
(a) |
Disclosure Controls and Procedures |
(b) |
Management’s
Annual Report on Internal Control over Financial Reporting. |
• |
pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of our assets; |
• |
provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures
are being made only in accordance with authorizations of our management and directors; and |
• |
provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
|
NIS 2022 |
USD 2022 |
NIS 2021 |
USD 2021 |
Audit Fees and Tax Fees (1)(2) |
441,909 |
125,542 |
343,715 |
97,646 |
All Other Fees (3) |
- |
- |
3,110 |
884 |
TOTAL |
441,909 |
125,542 |
346,825 |
98,530 |
• |
Executive Sessions – Under Nasdaq rules,
U.S. domestic listed companies, must have a regularly scheduled meeting at which only independent directors are present. We do not have
such executive sessions. |
• |
Compensation of Officers - Under Nasdaq rules,
the Company must adopt a formal written compensation committee charter addressing the scope of the compensation committee's responsibilities,
including structure, processes and membership requirements, among others. We do not have such a formal written charter. |
• |
Nominations of Directors - Under Nasdaq rules,
U.S. domestic listed companies, must have a nominations committee comprised solely of independent directors and must have director nominees
selected or recommended by a majority of its independent directors. Our directors are not nominated in this manner. |
• |
Nominations Committee Charter or Board Resolution
- Under Nasdaq rules, U.S. domestic listed companies, must adopt a formal written charter or board resolution, as applicable, addressing
the nominations process and such related matters as may be required under the federal securities laws. We do not have such a formal written
charter or board resolution. |
• |
Quorum - Under Nasdaq rules, U.S. domestic
listed company's by-laws provide for a quorum of at least 33 1/3 percent of the outstanding shares of the company’s common voting
stock. According to our articles our quorum should be at least 25 percent of the outstanding shares of our common voting stock.
|
• |
Review of Related Party Transactions: Under
Nasdaq Listing Rules, domestic listed companies must conduct an appropriate review and oversight of all related party transactions for
potential conflict of interest situations on an ongoing basis by the company’s audit committee or another independent body of the
board of directors. Although Israeli law requires us to conduct an appropriate review and maintain oversight of all related-party transactions
similar to the Nasdaq Listing Rules, we follow the definitions and requirements of the Companies Law in determining the kind of approval
required for a related-party transaction, which tend to be more rigorous than the Nasdaq Listing Rules. |
• |
Shareholder Approval of Certain Equity Compensation:
Under Nasdaq Listing Rules, shareholder approval is required prior to an issuance of securities in connection with equity-based compensation
of officers, directors, employees or consultants. The Company has indicated that it will receive shareholder approval as required by Israeli
law, including upon issuance of options to directors or to controlling shareholders. |
Exhibit
Number |
Description
|
2.1 |
Specimen of Certificate for ordinary shares (1) |
2.2 |
|
101.INS |
XBRL Instance Document |
101.SCH |
XBRL Taxonomy Extension Schema Document |
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document |
101.INS |
XBRL Instance Document |
† |
Informal English translations from Hebrew original. |
(1) |
Incorporated by reference to the Company’s Registration Statement on Form F-1,
File No. 333-6314. |
(2) |
Incorporated by reference to the Company’s Annual Report on Form 20-F for the
fiscal year ended December 31, 2005. |
(3) |
Incorporated by reference to the Company’s Registration Statement on Form F-3,
File No. 333-138200. |
(4) |
Incorporated by reference to the Company’s Annual Report on Form 20-F for the
fiscal year ended December 31, 2013. |
(5) |
Incorporated by reference to the Company’s Annual Report on Form 20-F for the
fiscal year ended December 31, 2019. |
(6) |
Incorporated by reference to the Company’s Annual Report on Form 20-F for the
fiscal year ended December 31, 2020 |
(7) |
Incorporated by reference to Form 6-K disseminated with the Securities and Exchange
Commission, dated February 7, 2023. |
(8) |
Incorporated by reference to the Company’s Registration Statement on Form S-8,
File No. 333-266312. |
(*) |
Filed Herewith |
G. WILLI-FOOD INTERNATIONAL LTD.
By: /s/ Joseph Williger
Joseph Williger
Chief Executive Officer |
G. WILLI-FOOD INTERNATIONAL LTD.
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2022
G. WILLI-FOOD INTERNATIONAL LTD.
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2022
TABLE OF CONTENTS
Page |
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F - 2 - F - 3 |
(PCAOB Name: Ziv Haft Certified Public Accountants (Isr.) (#
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F - 4 - F - 5 |
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F - 6 |
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F - 7 |
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F - 8 |
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F - 9 - F - 10 |
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F - 11 - F - 50 |
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Report of Independent Registered Public Accounting Firm
|
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Shareholders and Board of Directors of G. Willi-Food International Ltd. Yavne, Israel |
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of G. Willi-Food International Ltd (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income and comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with International Financial Reporting standards as issued by the International Accounting Standards Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters |
Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
We have served as the Company's auditor since 2018.
/s/ Ziv Haft
Certified Public Accountants (Isr)
BDO Member Firm
March 22, 2023
F - 3
December 31,
|
||||||||||||||||
Note
|
2 0 2 2
|
2 0 2 1
|
2 0 2 2 (*)
|
|
||||||||||||
NIS
|
NIS
|
US Dollars
|
||||||||||||||
Assets
|
||||||||||||||||
Current assets
|
||||||||||||||||
Cash and cash equivalents
|
12
|
|
|
|
||||||||||||
Financial assets at fair value through profit or loss
|
3
|
|
|
|
||||||||||||
Trade receivables, Net
|
14
|
|
|
|
||||||||||||
Other receivables and prepaid expenses
|
15
|
|
|
|
||||||||||||
Inventories
|
16
|
|
|
|
||||||||||||
Current tax assets
|
10
|
|
|
|
||||||||||||
Total current assets
|
|
|
|
|||||||||||||
Non-current assets
|
||||||||||||||||
Property, plant, and equipment
|
|
|
|
|||||||||||||
Less -accumulated depreciation
|
|
|
|
|||||||||||||
17
|
|
|
|
|||||||||||||
Right to use asset, net
|
18
|
|
|
|
||||||||||||
Financial assets at fair value through profit or loss
|
3
|
|
|
|
||||||||||||
Goodwill
|
|
|
|
|||||||||||||
Total non-current assets
|
|
|
|
|||||||||||||
Total assets
|
|
|
|
December 31,
|
|||||||||||||||
Note
|
2 0 2 2
|
2 0 2 1
|
2 0 2 2 (*)
|
|
|||||||||||
NIS
|
NIS
|
US Dollars
|
|||||||||||||
Equity and liabilities
|
|||||||||||||||
Current liabilities
|
|||||||||||||||
Current maturities of lease liabilities
|
18
|
|
|
|
|||||||||||
Trade payables
|
20
|
|
|
|
|||||||||||
Employees Benefits
|
21
|
|
|
|
|||||||||||
Financial liabilities at fair value through profit or loss
|
3
|
|
|
|
|||||||||||
Other payables and accrued expenses
|
22
|
|
|
|
|||||||||||
Total current liabilities
|
|
|
|
||||||||||||
Non-current liabilities
|
|||||||||||||||
Lease liabilities, net
|
18
|
|
|
|
|||||||||||
Deferred taxes
|
10
|
|
|
|
|||||||||||
Retirement benefit obligation
|
21, 24
|
|
|
|
|||||||||||
Total non-current liabilities
|
|
|
|
||||||||||||
Shareholders' equity
|
|||||||||||||||
Share capital
|
23
|
|
|
|
|||||||||||
Additional paid in capital
|
|
|
|
||||||||||||
Re-measurement of the net liability in respect of defined benefit
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Capital fund
|
|
|
|
||||||||||||
Retained earnings
|
|
|
|
||||||||||||
Treasury shares
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Equity attributable to Shareholders of the Company
|
|
|
|
||||||||||||
Total equity and liabilities
|
|
|
|
Year ended December 31,
|
|||||||||||||||||||
Note
|
2 0 2 2
|
2 0 2 1
|
2 0 2 0
|
2 0 2 2 (*)
|
|
||||||||||||||
NIS
|
NIS
|
NIS
|
US Dollars
|
||||||||||||||||
Revenue
|
4 |
|
|
|
|
||||||||||||||
Cost of sales
|
5
|
|
|
|
|
||||||||||||||
Gross profit
|
|
|
|
|
|||||||||||||||
Operating costs and expenses
|
|||||||||||||||||||
Selling expenses
|
6
|
|
|
|
|
||||||||||||||
General and administrative expenses
|
7
|
|
|
|
|
||||||||||||||
Other Income
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||
|
|
|
|
||||||||||||||||
Operating profit
|
|
|
|
|
|||||||||||||||
Finance Income
|
9
|
|
|
|
|
||||||||||||||
Finance expense
|
9
|
|
|
|
|
||||||||||||||
Finance Income, net
|
|
|
|
|
|||||||||||||||
Profit before taxes on Income
|
|
|
|
|
|||||||||||||||
Taxes on Income
|
10
|
|
|
|
|
||||||||||||||
Net Income
|
|
|
|
|
|||||||||||||||
Earnings per share:
|
|||||||||||||||||||
Basic/ diluted earnings per share
|
|
|
|
|
|||||||||||||||
Shares used in computation of basic/ diluted EPS
|
|
|
|
|
|||||||||||||||
Actual number of shares
|
|
|
|
|
Year ended December 31,
|
||||||||||||||||
2 0 2 2
|
2 0 2 1
|
2 0 2 0
|
2 0 2 2 (*)
|
|
||||||||||||
NIS
|
NIS
|
NIS
|
US Dollars
|
|||||||||||||
Net Income
|
|
|
|
|
||||||||||||
Other comprehensive Income (Expenses)
|
||||||||||||||||
Re-measurement of net liabilities with respect to a defined benefit which will not be classified in the future as profit or loss, net of tax
|
|
|
(
|
)
|
|
|||||||||||
Other comprehensive Income (Expenses) for the year
|
|
|
(
|
)
|
|
|||||||||||
Total comprehensive Income for the year
|
|
|
|
|
Share capital
|
Additional paid in capital
|
Measurement of the net liability in respect of defined benefit
|
Capital fund
|
Retained earnings
|
Treasury
shares
|
Total shareholders' equity
|
||||||||||||||||||||||
Balance – January 1, 2020
|
|
|
(
|
)
|
|
|
(
|
)
|
|
|||||||||||||||||||
Profit for the year
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Measurement of the net liability in respect of defined benefit
|
|
|
(
|
)
|
|
|
|
(
|
)
|
|||||||||||||||||||
Total comprehensive Income for the year
|
|
|
(
|
)
|
|
|
|
|
||||||||||||||||||||
Issue of shares
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance – December 31, 2020
|
|
|
(
|
)
|
|
|
(
|
)
|
|
|||||||||||||||||||
Profit for the year
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Measurement of the net liability in respect of defined benefit
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total comprehensive Income for the year
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Dividend distribution
|
|
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Balance – December 31, 2021
|
|
|
(
|
)
|
|
|
(
|
)
|
|
|||||||||||||||||||
Profit for the year
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Measurement of the net liability in respect of defined benefit
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total comprehensive Income for the year
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Share based payment |
|
|
||||||||||||||||||||||||||
Dividend distribution
|
|
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Balance – December 31, 2022
|
|
|
(
|
)
|
|
|
(
|
)
|
|
Year ended December 31,
|
||||||||||||||||
2 0 2 2
|
2 0 2 1
|
2 0 2 0
|
2 0 2 2 (*)
|
|
||||||||||||
NIS
|
NIS
|
NIS
|
US Dollars
|
|||||||||||||
CASH FLOWS – OPERATING ACTIVITIES
|
||||||||||||||||
Profit from continuing operations
|
|
|
|
|
||||||||||||
Adjustments to reconcile net profit to net cash provided (used in) continuing operating activities (Appendix A)
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Net cash provided by (used in) operating activities
|
|
|
|
|
||||||||||||
Cash flows – investing activities
|
||||||||||||||||
Acquisition of property plant and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Proceeds from sale of property plant and Equipment
|
|
|
|
|
||||||||||||
Loans granted to others
|
|
|
(
|
)
|
|
|||||||||||
Proceeds from loans granted to others
|
|
|
|
|
||||||||||||
Proceeds from sale (purchase) of marketable securities, net
|
|
|
(
|
)
|
|
|||||||||||
Net cash provided by (used in) investing activities |
|
|
(
|
)
|
|
|||||||||||
Cash flows – financing activities
|
||||||||||||||||
Lease liability payments
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Shares issue
|
|
|
|
|
||||||||||||
Dividend distribution
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
Net cash provided by (used in) financing activities
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
Increase (decrease) in cash and cash equivalents
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
Cash and cash equivalents at the beginning of the financial year
|
|
|
|
|
||||||||||||
Exchange losses on cash and cash equivalents
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Cash and cash equivalents of the end of the financial year
|
|
|
|
|
Year ended December 31,
|
||||||||||||||||
2 0 2 2
|
2 0 2 1
|
2 0 2 0
|
2 0 2 2 (*)
|
|
||||||||||||
NIS
|
NIS
|
NIS
|
US Dollars
|
|||||||||||||
Cash flows from/(used in) operating activities
|
||||||||||||||||
A. Adjustments to reconcile net profit to net cash from operating activities
|
||||||||||||||||
Decrease in deferred income taxes
|
|
|
|
|
||||||||||||
Unrealized loss (gain) on marketable securities
|
|
(
|
)
|
(
|
)
|
|
||||||||||
Loss (gain) from financial liabilities at fair value through profit or loss
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Depreciation and amortization
|
|
|
|
|
||||||||||||
Capital gain on disposal of property plant and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Exchange losses on cash and cash equivalents
|
|
|
|
|
||||||||||||
Share based payment
|
|
|
|
|
||||||||||||
Changes in assets and liabilities:
|
||||||||||||||||
Decrease (increase) in trade receivables and other receivables
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Decrease (Increase) in inventories
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
Increase (decrease) in trade and other payables, and other current liabilities
|
|
(
|
)
|
(
|
)
|
|
||||||||||
Cash generated from operations
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Income tax paid
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Net cash provided by (used in) operating activities
|
(
|
)
|
|
|
(
|
)
|
Note 1 - Basis of preparation
|
The Company was incorporated in Israel in January 1994 under the name G. Willi-Food Ltd. and commenced operations in February 1994. It changed its name to G. Willi-Food International Ltd. in June 1996. The Company's corporate headquarters and principal executive offices are located at 4 Nahal Harif Street, Northern Industrial Zone, Yavne 81106, Israel. The Company's telephone number in Israel is +972 8-9321000 and its e-mail address is willi@willi-food.co.il. The Company’s website address is www.willi-food.com. The information contained in its website, or that can be accessed therefrom, does not constitute a part of this Annual Report and is not incorporated by reference herein.
The Company completed its IPO in the United States in May 1997, at which time its ordinary shares began trading on the Nasdaq Capital Market, where they currently trade under the symbol “WILC”. On June 15, 2020, our ordinary shares began trading on the Tel Aviv Stock Exchange under the symbol “WILC”.
The Company is an Israeli-based company specializing in high-quality, great-tasting kosher food products. The Company is engaged, directly and through subsidiaries, in the design, import, marketing and distribution of a wide variety of over 650 food products world-wide. In the year ended December 31, 2022, substantially all of our revenue was generated in Israel, with less than 1% of our revenue resulting from exports outside Israel.
The Company purchases food products from over 150 suppliers located in Israel and throughout the world, including from the Far East (China, India, the Philippines and Thailand), Eastern Europe (Poland, Lithuania and Latvia), South America (Ecuador), the United States, Canada, Western and Central Europe (the Netherlands, Belgium, Monaco, Germany, Sweden, Switzerland, Denmark, and France) and Southern Europe (Spain, Portugal, Italy, Turkey and Greece) and more.
The Company's products are marketed and sold to approximately 1,500 customers and 3,000 selling points in Israel, including to supermarket chains, wholesalers and institutional consumers. The Company markets most of its products under the brand name “Willi-Food,” and some of its chilled and frozen products under the brand name “Euro European Dairies”. Certain products are marketed under brand names of other manufacturers or under other brand names. In addition, the Company distributes some of its products on an exclusive basis, as described further below. Less than 1% of the Company’s sales come from product sales in countries other than Israel.
|
F - 11
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 1 - Basis of preparation (continued)
|
Following changes in management in recent years, the Company continues to re-evaluate its strategic position and consider other business opportunities. As part of this re-evaluation, the Company is considering forming strategic alliances with or entering into different lines of business, expanding its product lines, and increasing product sales with existing customers while adding new customers. In addition, the Company is examining M&A opportunities to further increase its market presence.
As of March, 22, 2023, the Company’s principal shareholder, Willi-Food, held approximately
|
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out in note 27. The policies have been consistently applied to all the years presented, unless otherwise stated.
|
The consolidated financial statements are presented in New Israeli Shekels (NIS), which is also the Company functional currency.
|
The conversion from New Israeli Shekels (NIS) into U.S. dollars was made at the exchange rate as of December 31, 2022, on which USD
|
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards and International Accounting Standards as issued by the International Accounting Standards Board (IASB) and Interpretations (collectively IFRSs).
|
The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates. It also requires Company management to exercise judgment in applying the Company's accounting policies. The areas where significant judgments and estimates have been made in preparing the consolidated financial statements and their effect are disclosed in note 2.
|
Basis of measurement
|
The consolidated financial statements have been prepared on a historical cost basis, except for the following items (refer to individual accounting policies for details):
|
- Financial instruments – fair value through profit or loss
|
- Net defined benefit liability
|
F - 12
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 2 - Critical accounting estimates and assumptions
|
The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
|
Estimates and assumptions: |
- Revenue recognition – provision of rights to return goods
|
- Defined benefit scheme – actuarial assumptions
|
- The determination of the incremental borrowing rate used to measure lease liabilities
|
- Legal proceedings – estimates of claims and legal processes
|
- Inventory – provision of slow-moving inventory
|
- Fair value measurement
several assets and liabilities included in the Company’s financial and non-financial assets and liabilities utilizes market observables inputs and data as far as possible. Inputs used in determining fair value measurement are categorized into different levels based on how observable the inputs used in the valuation technique utilized are (the 'fair value hierarchy'):
• Level 1: Quoted priced in active markets for identical items (unadjusted)
• Level 2: Observable direct or indirect inputs other than level 1 inputs.
• Level 3: Unobservable inputs (i.e., not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognized in the period they occur
|
The Company measures several items at fair value:
|
- Current financial assets at fair value through profit or loss (see note 3)
|
- Non-current financial assets at fair value through profit or loss (see note 3)
- Financial liabilities at fair value through profit or loss (see note 3)
|
For more detailed information in relation to the fair value measurement of the items above, please refer to the applicable notes.
|
Note 3 - Financial instruments risk management
|
The Company is exposed through its operations to the following financial risks:
|
- Credit risk
|
- Other market price risk
|
- Foreign exchange risk
|
- Global changes in raw-material prices
|
F - 13
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 3 - Financial instruments risk management (continued) |
In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. This note describes the Company's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.
|
There have been no substantive changes in the Company's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.
|
(i) Principal financial instruments
|
The principal financial instruments used by the Company, from which financial instrument risk arises, are as follows:
|
- Cash and cash equivalents
|
- Trade receivables
|
- Financial assets at fair value through profit or loss
|
- Trade payables
- Financial liabilities at fair value through profit or loss
|
(ii) Financial instruments by category
|
Financial assets:
|
Fair value through profit or loss
|
Amortized cost
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
NIS in thousands
|
||||||||||||||||
Cash and cash equivalents
|
|
|
|
|
||||||||||||
Financial assets at fair value through profit or loss
|
|
|
|
|
||||||||||||
Trade and other receivables
|
|
|
|
|
||||||||||||
Total financial assets
|
|
|
|
|
F - 14
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 3 - Financial instruments risk management (continued)
|
(ii) Financial instruments by category (continued)
|
Financial liabilities:
|
Fair value through profit or loss
|
Amortized cost
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
NIS in thousands
|
||||||||||||||||
Trade payables
|
|
|
|
|
||||||||||||
Financial liabilities at fair value through profit or loss
|
|
|
|
|
||||||||||||
Total financial liabilities
|
|
|
|
|
(iii) Financial instruments not measured at fair value
|
Financial instruments not measured at fair value includes cash and cash equivalents, loans to others, trade and other receivables and trade payables.
|
Due to their short-term nature, the carrying value of cash and cash equivalents, loans to others, trade and other receivables, and trade payables approximates their fair value.
|
(iv) Financial instruments measured at fair value
|
The fair value hierarchy of financial instruments measured at fair value is provided below
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||||||||
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||||||||
NIS in thousands
|
||||||||||||||||||||||||
Financial assets at fair value through profit or loss
|
|
|
|
|
|
|
||||||||||||||||||
Financial liabilities at fair value through profit or loss
|
|
|
|
|
|
|
There were no transfers between levels during the period.
|
The valuation techniques and significant unobservable inputs used in determining the fair value.
|
There were no changes to the valuation techniques during the period.
|
F - 15
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 3 - Financial instruments risk management (continued)
(iv) Financial instruments measured at fair value (continued)
|
The reconciliation of the opening and closing fair value balance of financial instruments is provided below:
|
Financial assets at fair value through profit or loss:
|
Level 1
|
Level 3
|
||||||
NIS in thousands
|
||||||||
January 1, 2022
|
|
|
||||||
Purchases
|
|
|
||||||
Disposals
|
(
|
)
|
|
|||||
Gain (Loss)
|
(
|
)
|
|
|||||
December 31, 2022
|
|
|
Financial liabilities at fair value through profit or loss:
|
Level 1
|
Level 3
|
||||||
NIS in thousands
|
||||||||
January 1, 2022
|
|
(
|
)
|
|||||
Gain
|
|
|
||||||
December 31, 2022
|
|
|
The fair value measurement of the forward exchange contracts using the "Monte Carlo" model is based on significant unobservable inputs and thus represent a level 3 measurement within the fair value hierarchy. changes in fair value are recognized in financial expenses.
"Monte Carlo" simulation was used to calculate the forward exchange contracts value using the Forward Options method, which is a stochastic model used in currency exchange scenarios.
|
General objectives, policies and processes
|
Credit risk
|
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company is mainly exposed to credit risk from credit sales. It is Company policy, implemented locally, to assess the credit risk of new customers before entering contracts. Such credit ratings are taken into account by local business practices.
|
The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer, which represents the maximum open amount.
|
F - 16
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 3 - Financial instruments risk management (continued)
|
Other market price risk
|
The Company is exposed to price risks of shares, certificate of participation in mutual fund and bonds, which are classified as financial assets carried at fair value through profit or loss.
|
The effect of a 10% increase in the value of the portfolio securities investment held at the reporting date would, if all other variables held constant, have resulted in an increase in the fair value through profit or loss and net assets of NIS
|
Foreign exchange risk
|
Foreign exchange risk arises when the Company enters into transactions denominated in a currency other than its functional currency. The Company buys its inventories mostly in USD and EURO and sells its products in NIS. Foreign exchange exposures are managed within utilizing forward foreign exchange contracts.
|
As of December 31 the Company's net exposure to foreign exchange risk was as follows:
|
2022
|
2021
|
|||||||
Net foreign currency financial assets/(liabilities)
|
NIS in thousands
|
|||||||
USD
|
|
|
||||||
EURO
|
(
|
)
|
(
|
)
|
||||
Total net exposure
|
|
|
The following table details the Company's sensitivity to a 10% increase and decrease in the NIS against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit and other equity where the NIS strengthens 10% against the relevant currency. For a 10% weakening of the NIS against the relevant currency, there would be opposite impact on the profit and other equity, and the balances below would be negative.
|
USD
|
EURO
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
NIS in thousands
|
||||||||||||||||
10% increase
|
|
|
|
|
||||||||||||
10% decrease
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
F - 17
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 3 - Financial instruments risk management (continued)
|
Global changes in raw-material prices
|
Raw material prices are mainly affected by extreme weather fluctuations affecting agricultural crops, crude oil prices, accelerated growth and growing demand in China and India affecting world consumption, rise in living standards mainly in developing countries and speculative transaction in the commodity market. A possible rise in the price of raw materials may lead to higher prices for products by suppliers. Sharp price increases in commodity prices may have a material adverse effect on the Company's operations and business results.
|
Note 4 - segment information
|
The Company has one reportable segment:
|
- Import- export, marketing and distribution of food products.
|
Factors that management used to identify the Company's reportable segments
|
The Company's reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different marketing strategies.
|
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team including the Chief Executive Officer, and the co-chairman of the board of directors.
|
The table below shows the Company's revenues from major groups of products that contributed 10% or more to the Company's total revenues in the years 2020 to 2022:
|
Year ended December 31,
|
||||||||||||||||
2 0 2 2
|
2 0 2 1
|
2 0 2 0
|
2 0 2 2
|
|||||||||||||
NIS
|
NIS
|
NIS
|
USD
|
|||||||||||||
Canned Vegetables and Pickles
|
|
|
|
|
||||||||||||
Dairy and Dairy Substitute Products
|
|
|
|
|
||||||||||||
Canned Fish
|
|
|
|
|
||||||||||||
Cereals, rice and pastas
|
|
|
|
|
||||||||||||
Non-banking credit
|
|
|
|
|
||||||||||||
Oils
|
|
|
*)
|
|
*)
|
|
||||||||||
Other
|
|
|
*)
|
|
*)
|
|
||||||||||
|
|
|
|
F - 18
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 4 - segment information (continued)
Percentage of Total Sales
Year ended December 31,
|
||||||||||||
2 0 2 2
|
2 0 2 1
|
2 0 2 0
|
||||||||||
Large retail supermarket chains
|
|
%
|
|
%
|
|
%
|
||||||
Other customers
|
|
%
|
|
%
|
|
%
|
||||||
|
%
|
|
%
|
|
%
|
Note 5 - Cost of sales
|
Year ended December 31,
|
||||||||||||||||
2 0 2 2
|
2 0 2 1
|
2 0 2 0
|
2 0 2 2
|
|||||||||||||
NIS
|
NIS
|
NIS
|
US Dollars
|
|||||||||||||
Purchases
|
|
|
|
|
||||||||||||
Marine transportation
|
|
|
|
|
||||||||||||
Transportation
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
|
|
|
||||||||||||
Maintenance
|
|
|
|
|
||||||||||||
Other costs and expenses
|
|
|
|
|
||||||||||||
|
|
|
|
|||||||||||||
Changes in inventories of finished goods
|
(
|
)
|
|
|
(
|
)
|
||||||||||
|
|
|
|
F - 19
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 6 - Selling expenses
|
Year ended December 31, |
||||||||||||||||
2 0 2 2
|
2 0 2 1
|
2 0 2 0
|
2 0 2 2
|
|||||||||||||
NIS
|
NIS
|
NIS
|
US Dollars
|
|||||||||||||
Salaries and related expenses
|
|
|
|
|
||||||||||||
Personnel services
|
|
(*)
|
|
(*)
|
|
|
||||||||||
Transportation and maintenance
|
|
|
|
|
||||||||||||
Vehicles
|
|
|
|
|
||||||||||||
Advertising and promotion
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
|
|
|
||||||||||||
Share based payment expense
|
|
|
|
|
||||||||||||
Others
|
|
(*)
|
|
(*)
|
|
|
||||||||||
|
|
|
|
|
(*) Reclassified
Note 7 - General and administrative expenses
Year ended December 31, |
||||||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 0 |
2 0 2 2 |
|||||||||||||
NIS |
NIS |
NIS |
US Dollars |
|||||||||||||
|
||||||||||||||||
Salaries and related expenses |
|
|
|
|
||||||||||||
Office maintenance |
|
|
|
|
||||||||||||
Professional fees |
|
|
|
|
||||||||||||
Vehicles |
|
|
|
|
||||||||||||
Depreciation and amortization |
|
|
|
|
||||||||||||
Bad and doubtful debts |
|
|
( |
) |
( |
) |
|
|
||||||||
Communication |
|
|
|
|
||||||||||||
Share based payment expense |
||||||||||||||||
Other |
|
|
|
|
||||||||||||
|
|
|
|
Note 8 - Employee benefit expenses
Employee benefit expenses (not including directors remuneration) comprise:
Year ended December 31, |
||||||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 0 |
2 0 2 2 |
|||||||||||||
NIS |
NIS |
NIS |
US Dollars |
|||||||||||||
Salary |
|
|
|
|
||||||||||||
Bonus |
|
|
|
|
||||||||||||
|
|
|
|
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including the directors of the company, Chief executive officer, Chief finance officer, Chief operation officer and Chief sales officer.
Key management personnel expenses comprise:
F - 20
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 8 - Employee benefit expenses (continued)
Year ended December 31, |
||||||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 0 |
2 0 2 2 |
|||||||||||||
NIS |
NIS |
NIS |
US Dollars |
|||||||||||||
Salary and management fees |
|
|
|
|
||||||||||||
Bonus |
|
|
|
|
||||||||||||
Share based payment expense |
||||||||||||||||
Directors remuneration |
|
|
|
|
||||||||||||
|
|
|
|
Note 9 - Finance income and expenses
Year ended December 31, |
||||||||||||||||
Finance income: |
2 0 2 2 |
2 0 2 1 |
2 0 2 0 |
2 0 2 2 |
||||||||||||
NIS |
NIS |
NIS |
US Dollars |
|||||||||||||
|
||||||||||||||||
Income from revaluation of a long-term financial asset |
|
|
|
|
||||||||||||
Interest from Short-term bank deposits |
|
|
|
|
||||||||||||
Interest Income of debentures held for trading |
|
|
|
|
||||||||||||
Other interest |
|
|
|
|
||||||||||||
Changes in fair value of financial assets at fair values |
|
|
|
|
||||||||||||
Dividends |
|
|
|
|
||||||||||||
Foreign currency differences |
|
|
||||||||||||||
Income from forward transaction |
|
|
|
|
||||||||||||
Total finance income |
|
|
|
|
|
Year ended December 31, |
|||||||||||||||
Finance expenses: |
2 0 2 2 |
2 0 2 1 |
2 0 2 0 |
2 0 2 2 |
||||||||||||
NIS |
NIS |
NIS |
US Dollars |
|||||||||||||
|
||||||||||||||||
Foreign currency differences |
|
|
|
|
||||||||||||
Expenses from forward transaction |
|
|
|
|
||||||||||||
Changes in fair value of financial assets at fair values |
|
|
||||||||||||||
Bank fees |
|
|
|
|
||||||||||||
Portfolio management fees |
|
|
|
|
||||||||||||
Other |
|
|
|
|
||||||||||||
Total finance expenses |
|
|
|
|
F - 21
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 10 - Tax expenses
Tax balances presented in the statement of financial position:
Year ended December 31, |
||||||||||||
2022 |
2021 |
2022 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Current tax assets |
|
|
|
|||||||||
Deferred tax assets (liabilities) |
( |
) |
( |
) |
( |
) |
January |
December |
December |
||||||||||||||
1, 2022 |
Change |
31, 2022 |
31, 2022 |
|||||||||||||
NIS |
NIS |
NIS |
US Dollars |
|||||||||||||
Deferred taxes arise from the following: |
||||||||||||||||
Financial assets carried at fair value through profit or loss |
( |
) |
|
|
( |
) |
( |
) |
||||||||
Financial liabilities carried at fair value through profit or loss |
|
( |
) |
|
|
|||||||||||
Employees benefits |
|
( |
) |
|
|
|||||||||||
Allowance of credit loss |
|
|
|
|
|
|||||||||||
Carry forward tax losses |
|
( |
) |
|
|
|||||||||||
( |
) |
( |
) |
( |
) |
( |
) |
January |
December |
December |
||||||||||||||
1, 2021 |
Change |
31, 2021 |
31, 2021 |
|||||||||||||
NIS |
NIS |
NIS |
US Dollars |
|||||||||||||
Deferred taxes arise from the following: |
||||||||||||||||
Financial assets carried at fair value through profit or loss |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Financial liabilities carried at fair value through profit or loss |
||||||||||||||||
Employees benefits |
|
( |
) |
|
|
|||||||||||
Allowance of credit loss |
( |
) |
||||||||||||||
Carry forward tax losses |
|
|
|
|
|
|||||||||||
( |
) |
( |
) |
( |
) |
( |
) |
Taxes on income recognized in profit or loss: |
||||||||||||||||
Year ended December 31 |
||||||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 0 |
2 0 2 2 |
|||||||||||||
NIS |
NIS |
NIS |
US Dollars |
|||||||||||||
Current taxes: |
||||||||||||||||
Current taxes |
|
|
|
|
||||||||||||
|
|
|
|
|||||||||||||
|
||||||||||||||||
Deferred taxes |
|
|
|
|
||||||||||||
|
|
|
|
F - 22
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 10 - Tax expenses (continued)
Reconciliation of the statutory tax rate to the effective tax rate:
Year ended December 31, |
|||||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 0 |
2 0 2 2 |
||||||||||||
NIS |
NIS |
NIS |
US Dollars |
||||||||||||
|
|||||||||||||||
Income before Income taxes |
|
|
|
|
|||||||||||
Statutory tax rate |
|
% |
|
% |
|
% |
|
% |
|||||||
Tax computed by statutory tax rate |
|
|
|
|
|||||||||||
|
|||||||||||||||
Tax increments (savings) due to: |
|||||||||||||||
Non-deductible expenses |
|
|
|
|
|||||||||||
Tax exempt Income |
( |
) |
( |
) |
( |
) |
( |
) |
|||||||
Profit or loss for tax for which deferred taxes were not provided |
( |
) |
|
|
|
( |
) |
||||||||
Taxes for previous years |
|
|
|
||||||||||||
Other |
|
|
|
|
|
||||||||||
|
|
|
|
The tax rate applicable to the Company for the years 2020 – 2022 is
Note 11 - Earning per share
Year ended December 31, |
||||||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 0 |
2 0 2 2 |
|||||||||||||
NIS |
NIS |
NIS |
US Dollars |
|||||||||||||
Basic and diluted earnings per share: |
||||||||||||||||
Earnings used in the calculation of basic and diluted earnings per share |
|
|
|
|
||||||||||||
|
||||||||||||||||
Weighted average number of shares used in computing basic and diluted earnings per share |
|
|
|
|
In September 2020, the Company announced the completion of a private placement to classified institutional investors in Israel of
F - 23
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 12 - Cash and cash equivalents
December 31, |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Cash in bank |
|
|
|
|||||||||
Short-term bank deposits |
|
|
|
|||||||||
|
|
|
2 0 2 2
|
2 0 2 1
|
2 0 2 2
|
||||||||||
NIS
|
NIS
|
US Dollars
|
||||||||||
Opening balance
|
|
|
|
|||||||||
Payment of loans granted to others
|
|
(
|
)
|
|
||||||||
Closing balance
|
|
|
|
Note 14 - Trade receivables
Composition:
December 31, |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Open accounts |
|
|
|
|||||||||
Credit cards |
|
|
|
|||||||||
Checks receivables |
|
|
|
|||||||||
Less – provision for return of goods |
( |
) |
( |
) |
( |
) |
||||||
Less – estimated credit loss |
( |
) |
( |
) |
( |
) |
||||||
|
|
|
The table below shows the open accounts balance as of December 31, 2022 and 2021 segmented by the due date.
Open accounts - days past due |
||||||||||||||||||||||||
Nis in thousands |
||||||||||||||||||||||||
As of: |
Not past due |
<30 |
31-60 |
61-90 |
90< |
Total |
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December 31, 2022 |
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December 31, 2021 |
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F - 24
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 14 - Trade receivables (continued)
Changes in the allowance of credit loss
December 31, |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
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Balance at beginning of the year |
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Changes in allowance for doubtful debts |
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( |
) |
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Balance at end of the year |
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Note 15 - Other receivables and prepaid expenses
December 31, |
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2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
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NIS |
NIS |
US Dollars |
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|
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Prepaid expenses |
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Income receivables |
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Advances to suppliers |
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Government authorities |
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Others |
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Note 16 - Inventories
December 31, |
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2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
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|
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Finished products |
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|||||||||
Inventory in transit |
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Less – Provision of slow-moving inventory |
( |
) |
( |
) |
( |
) |
||||||
|
|
|
The Company records a provision for slow moving inventory in respect of inventory items estimated by management not to be realized due to expiration date. The slow-moving inventory is based on the historic realization rate of the respective item as well as on management's estimate with respect to its future realization rate.
F - 25
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 17 - Property, plant and equipment
Machinery |
Computers |
|||||||||||||||||||||||
Land and |
and |
Motor |
and |
Office |
||||||||||||||||||||
Building |
equipment |
Vehicles |
equipment |
Furniture |
Total |
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Consolidated Cost: |
||||||||||||||||||||||||
Balance - January 1, 2021 |
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Changes during 2021: |
||||||||||||||||||||||||
Additions |
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|
||||||||||||||||||
Dispositions |
|
|
( |
) |
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|
( |
) |
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|
||||||||||||||||||||||||
Balance – December 31, 2021 |
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Changes during 2022: |
||||||||||||||||||||||||
Additions |
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|
||||||||||||||||||
Dispositions |
|
|
( |
) |
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( |
) |
||||||||||||||||
|
||||||||||||||||||||||||
Balance – December 31, 2022 |
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||||||||||||||||||
|
||||||||||||||||||||||||
Accumulated depreciation: |
||||||||||||||||||||||||
Balance – January 1, 2021 |
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Changes during 2021: |
||||||||||||||||||||||||
Additions |
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|
||||||||||||||||||
Dispositions |
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|
( |
) |
|
|
( |
) |
||||||||||||||||
Balance – December 31, 2021 |
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|
||||||||||||||||||
Changes during 2022: |
||||||||||||||||||||||||
Additions |
|
|
|
|
|
|
||||||||||||||||||
Dispositions |
|
|
( |
) |
|
|
( |
) |
||||||||||||||||
Balance – December 31, 2022 |
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|
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|
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Net book value: |
||||||||||||||||||||||||
December 31, 2022 |
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December 31, 2021 |
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|
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Net book value (USD in thousands): |
||||||||||||||||||||||||
December 31, 2022 |
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|
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December 31, 2021 |
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|
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|
|
Property, plant and equipment under construction
The amount of expenses recognized in the book value of property during its construction during the period was NIS
F - 26
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 18 - Leases
All leases are accounted for by recognizing a right-of-use asset and a lease liability except for leases for low value assets and leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate of borrowing rate on commencement of the lease is used.
Right to use assets are initially measured at the amount of the lease liability.
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-to-use assets are amortized on a straight-line basis over the shorter period of the remaining term of the lease or over the remaining economic life of the asset.
Nature of leasing activities
The Company enters into agreements for the lease of trucks and private vehicles for periods of
Right of use asset, net
December 31 |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
Cost: |
||||||||||||
Opening balance |
|
|
|
|||||||||
Dispositions |
( |
) |
( |
) |
( |
) |
||||||
Additions |
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|
|
|||||||||
Closing balance |
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|
|
|||||||||
|
||||||||||||
Accumulated depreciation: |
||||||||||||
Opening balance |
|
|
|
|||||||||
Dispositions |
( |
) |
( |
) |
( |
) |
||||||
Depreciation |
|
|
|
|||||||||
Closing balance |
|
|
|
|||||||||
|
||||||||||||
Net book value |
|
|
|
F - 27
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 18 - Leases (continued)
Leases liabilities
December 31 |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Opening balance |
|
|
|
|||||||||
Additions |
|
|
|
|||||||||
Dispositions |
|
|
( |
) |
|
|
||||||
Payments |
( |
) |
( |
) |
( |
) |
||||||
Closing balance |
|
|
|
Amounts recognized in profit or loss
For the year ended December 31 |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Depreciation expense on right-to-use assets |
|
|
|
|||||||||
Interest expense on lease liabilities |
|
|
|
|||||||||
Cancellation of rental expenses |
( |
) |
( |
) |
( |
) |
||||||
( |
) |
( |
) |
( |
) |
Note 19 - Subsidiaries
The principal subsidiaries of G. Willi-Food International Ltd, all of which have been included in these consolidated financial statements, are as follows:
Subsidiary |
Country of incorporation and principal place of business |
Proportion of ownership interest at 31 December |
||||||||
December 31, |
||||||||||
2 0 2 2 |
2 0 2 1 |
|||||||||
Euro European Dairies (Goldfrost) Ltd. |
Israel |
|
% |
|
% |
|||||
W.F.D. (Import, Marketing and Trading) Ltd. |
Israel |
|
% |
|
% |
|||||
W. Capital Ltd. |
Israel |
|
% |
|
% |
Note 20 - Trade payables
December 31, |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Open accounts |
|
|
|
|||||||||
Checks payables |
|
|
|
|||||||||
|
|
|
F - 28
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 21 - Employee benefit liabilities
Liabilities for employee benefits comprise:
December 31, |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Defined benefit schemes (note 24) |
|
|
|
|||||||||
Employee benefit |
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|
|
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Accrual for annual leave |
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|
|
|||||||||
|
|
|
Estimates and assumptions
The costs, assets and liabilities of the defined benefit schemes operating by the Company are determined using methods relying on actuarial estimates and assumptions. Details of the key assumptions are set out in note 24. The Company takes advice from independent actuaries relating to the appropriateness of the assumptions. Changes in the assumptions used may have a significant effect on the consolidated statement of comprehensive income and the consolidated statement of financial position.
Note 22 - Other payables and accrued expenses
December 31, |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Customer advances |
|
|
|
|||||||||
Accrued expenses |
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Other payables |
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|
|
|||||||||
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|
|
Note 23 - Share capital
Composition
December 31 |
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2 0 2 2 |
2 0 2 1 |
|||||||
|
||||||||
Ordinary shares of NIS 0.1 each |
|
|
||||||
|
||||||||
Issued and outstanding |
|
|
F - 29
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 24 - Defined benefit scheme
Defined benefit plans – General
According to labor laws and the Severance Pay Law in Israel, the Company is required to pay compensation to an employee upon dismissal or retirement (including employees who quit their job under other specific circumstances). The computation of the employee benefit liability is made according to the current employment contract based on the employee's latest salary which, in the opinion of management, establishes the entitlement to receive the compensation and considering the employment term.
The current legal retirement age is 62 for women, 65 for women was born after January 1960 and 67 for men. Therefore, according to the plan, an employee who has been employed by the Company for at least one consecutive year (and under circumstances defined by law) and is dismissed after the said period is entitled to severance pay. The rate of compensation stipulated in the Law is the employee's last salary for each year of employment.
As part of the plan, the Company and its subsidiaries are obligated to deposit amounts, at a rate to be determined by law, in order to secure the accrual of severance pay. As stipulated in the Extension Order (Consolidated Version) of compulsory pension under the laws in Israel (hereinafter: "the Extension Order"). In the reporting year, the Company's rate of provisions for severance pay is 6.5%, to be deposited in a pension fund / insurance fund.
The actuary is not employed by the Company and is not dependent thereon. The present value of the defined benefit obligation and the relating costs of current and past services is calculated as the present value (without deducting the plan’s assets) of the future payments expected to settle the liability, in consideration for the current and past services rendered by the employee.
The plan detailed above exposes the Company to the following risks: "investment risk", i.e., the risk that the program assets will bear a negative yield and thus reduce the plan's assets in a way that does not suffice to cover the obligation. i.e., risk of actuarial assumptions regarding the expected increase in wages will be underestimated Compared with the actual wage increases, thereby exposing the Company to the risk that the obligation will increase accordingly.
The current value of the Company's post-employment benefits obligation is based on an actuarial estimation. The actuarial estimation was performed by external actuary, member of Israel Association of Actuaries.
F - 30
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 24 - Defined benefit scheme (continued)
The principal assumptions used for the purposes of the actuarial valuations were as follows:
Valuation at |
||||||||
2 0 2 2 |
2 0 2 1 |
|||||||
% |
% |
|||||||
|
||||||||
Discount rate |
|
|
||||||
Expected return on the plan assets |
|
|
||||||
Rate of increase in compensation |
|
|
||||||
|
||||||||
Expected rate of termination: |
||||||||
0-1 years |
|
|
||||||
1-2 years |
|
|
||||||
2-3 years |
|
|
||||||
3-4 years |
|
|
||||||
4-5 years |
|
|
||||||
5 years and more |
|
|
The assumptions regarding future mortality rates are based on mortality tables published and approved by the Ministry of Finance. The mortality rate of an active participant at retirement age (67 for men, 64 for women) is 0.6433% for men and 0.3574% for women.
The provisions of Standard 19 stipulate that interest used to capitalize assets and liabilities should reflect risk free interest that is interest on highly rated corporate bonds with similar maturity periods and terms. Until November 2014, absent quality data and information about bonds of this type, what was utilized was the interest on long-term index linked government bonds (index linked Galil)/or long-term shackle government bonds (NIS Dawn - “Shachar”). Following a decision by the Securities Authority, according to which there is a deep market for corporate bonds, and according to the publication of Accounting Staff Position number 12-1, as of this report, the capitalization interest is that of high-quality corporate bonds. Use of a quality curve as stated above, is published by quoting companies which specialize in this field. The nominal interest rate for the capitalization appropriate for corporate bonds with high rankings as aforesaid, as of December 31, 2022, is
F - 31
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 24 - Defined benefit scheme (continued)
Changes in the present value of the defined benefit obligation in the current period were as follows:
Year ended December 31, |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Opening defined benefit obligation |
|
|
|
|||||||||
Current service cost |
|
|
|
|||||||||
Interest cost |
|
|
|
|||||||||
Actuarial losses arising from experience adjustments |
( |
) |
( |
) |
( |
) |
||||||
Actuarial losses/(gains) arising from changes in financial assumptions |
|
|
|
|||||||||
Benefits paid |
( |
) |
( |
) |
( |
) |
||||||
Closing defined benefit obligation |
|
|
|
Changes in the fair value of the defined benefit assets in the current period were as follows:
Year ended December 31, |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Opening defined benefit assets |
|
|
|
|||||||||
Expected return on the plan assets |
|
|
|
|||||||||
Changes in financial assumptions |
( |
) |
|
|
( |
) |
||||||
Employer contribution |
|
|
|
|||||||||
Benefits paid |
( |
) |
( |
) |
( |
) |
||||||
Interest losses on severance payment allocated to remuneration benefits |
|
|
( |
) |
|
|
||||||
Closing defined benefit assets |
|
|
|
Adaption of the current value of defined benefit plan liability and the fair value of the plan's assets to the assets and liabilities recognized in the Balance Sheets:
Year ended December 31, |
||||||||||||
2 0 2 2 |
2 0 2 1 |
2 0 2 2 |
||||||||||
NIS |
NIS |
US Dollars |
||||||||||
|
||||||||||||
Present value of funded liability |
|
|
|
|||||||||
Fair value of plan assets - accumulated deposit in executive insurance |
( |
) |
( |
) |
( |
) |
||||||
Fair value of unrecognized asset |
||||||||||||
Net liability deriving from defined benefit obligation |
|
|
|
F - 32
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 24 - Defined benefit scheme (continued)
Sensitivity analyzes principal actuarial assumptions:
The sensitivity analyzes below have been determined based on reasonably possible changes in actuarial assumptions at the end of the reporting period. Sensitivity analysis does not account for any existing inter dependence between assumptions:
If the discount rate were increased / decreased by
If the rate hikes expected salaries would have increased / decreased by
If the resignation rate would have increased / decreased by
Short term employee benefits:
Paid Annual Leave
In accordance with the Annual Leave Law, 1951, Company employees are entitled to several leave days per each working year. According to the above law (and addendums determined in personal contracts between the Company and several employees), the leave days due to an employee during the year is established based on the number of years of employment of that employee.
The employee may use leave days based on the employee's needs and with the Company's consent and to accumulate the remaining unused leave days based on the employee's personal employment contract. An employee who ceases employment before using the balance of leave days is entitled to payment for the above balance of leave days.
The balance of the Company's vacation provision is in accordance with the leave entitlement of each individual employee, according to his individual agreement with the company to which the employee belongs and in accordance with the employee's salary. The balance of the Company's vacation provision for December 31, 2022, as NIS
Paid Sick Leave
In accordance with the Sick Pay Law, 1976, the Company's employees are entitled to 18 sick days per year (1.5 sick days per month). Sick days may be used only with a medical confirmation of an employee's illness. Employee who ceases employment before using the sick days due to the employee is not entitled to payment for the above balance of sick days and, therefore, such provision is not recorded in the Company's books.
F - 33
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 25 - Share based payment
25.1 - Nature and scope of share-based payment plans during the period
During the period that ended on December 31, 2022, the Company has two share-based payment plans, as described below:
|
Stock options for senior management |
Stock options for other employees |
Total options |
||
Outstanding period |
|
|
|
||
Granted during the year |
|
|
|
||
Estimated lifespan |
|
|
|
||
Vesting conditions |
See note 25 above |
See note 25 above |
See note 25 above |
F - 34
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 25 - Share based payment (continued) |
25.2 - Details regarding the stock option plans |
|
Number
|
2022
Weighted average Exercise price (NIS)
|
Number
|
2021
Weighted average Exercise price (NIS)
|
2022
Weighted average Exercise price (US Dollars)
|
||||||||||||||||
Granted during the year
|
|
|
|
|
|
25.3 - Effect of share-based payment transactions on profit or loss for the period |
|
Year ended December 31,
|
||||||||||||
2 0 2 2
|
2 0 2 1
|
2 0 2 2
|
||||||||||
NIS
|
NIS
|
US Dollars
|
||||||||||
Expense arising from plans to grant shares and stock options
|
|
|
|
F - 35
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 26 - Contingent liabilities and commitments
-
The Company has an obligation to pay incentives to several customers that are not subject to the Food Law, 5744-2014, which came into effect on January 15, 2015. Some of those incentives are payable as a rate of total annual sales to those customers, and some of those incentives are payable as a rate of acquisitions in excess of an agreed upon annual volume of activities. The incentives are calculated specifically for each customer.
-
On June 4, 2020, the General Meeting of the Shareholders of the Company update the terms of the management agreements of each of Zwi Williger and Yosef Williger in their position as chairman of the Board of Directors joint active ("the joint heads"). For more details regarding the management agreement, see note 29.1 in the periodic report for 2020.
-
On March 14, 2023, a General Meeting of the Shareholders of the Company approved a new management services agreements pursuant to which Messrs. Yosef Williger and Zwi Williger are to serve as CEO of the company and chairmen of the Board of Directors, respectively.
The Company's shareholders also approved new terms of service for each of Mr. Zwi Williger and Mr. Joseph Williger, commencing as of January 1, 2023 as follows.
(a) Monthly service fees of NIS
(b) Profit Related Bonus - an annual bonus determined according to measurable quantitative criteria:
-
Payment of the Measurable Bonus will be subject to achieving an average of the minimum operating profit of the Company before bonuses during the last three (3) years (i.e., the year in which the bonus is granted and the previous two (2) years) (the “Bonuses” and "Average Operating Profit Before Bonuses", respectively) of at least NIS
-
Subject to the
F - 36
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
-
The maximum annual Bonus to be paid to the Chairman / CEO will not exceed an amount of NIS
(c) The Company will provide the Chairman/ CEO with use of a vehicle, the value of which shall not exceed NIS
(d) Benefits in general, including the social benefits of the Chairman/ CEO and income tax payments, national insurance payments and other payments due to employees in respect of their employment, are to be paid for at the sole expense of the Chairman and CEO 's Management Company. The Chairman and CEO 's Management Company has undertaken to indemnify the Company with respect to any claims against the Company with respect to employer/employee relations.
(e) The Chairman/ CEO will be included in the D&O insurance policy available to the Company and its subsidiaries under the same terms as other officers of the Company, and he will be entitled to an exemption and indemnification letter, which is identical to the form of exemption and indemnification that was approved by the General Meeting of Shareholders on July 20, 2005 for all directors and officers of the Company. It is hereby clarified, that the exemption does will not be valid regarding apply to any decision or transaction of the Company, in which a controlling shareholder or other officer of the Company, (including a different officer than the officer that has been granted the exemption letter) has a personal interest.
-
On April 1, 1997, the parent Company, Willi-Food Investments Ltd., and the Company entered into an agreement for the provision of management, administration, bookkeeping, secretarial and controllership services. Pursuant to the said agreement, the parent company shall pay the Company a monthly amount for the said services and for external services that are provided at the same time to the parent Company and to the subsidiary by the same third party, such as legal services, auditing services, etc., but excluding unique and specific services that are provided to the parent Company or to the company.
-
On February 24, 2016, a motion to certify a derivative action (hereinafter - the “Motion”) was received at the parent Company’s offices. The Motion was filed with the District Court (Economic Department) in Tel Aviv by Yaad Peer Management Services Ltd. (hereinafter - the “Applicant”), that holds shares of the parent Company. The motion was filed against all directors and office holders in the Company. The parent Company and the Company were added as respondents to the Motion. The Motion deals with the Applicant’s claim for damages suffered by the parent Company, which is estimated by the Applicant, as of the filing of the Motion, at approximately $ 3 million, due to an alleged violation of the directors’ and officers’ fiduciary duty, duty of care and duty of expertise towards the parent Company in connection with a $
F - 37
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 26 - Contingent liabilities and commitments (continued)
-
On August 16 2018, the Company filed a notice whereby it intends to lodge a lawsuit against the office holders in connection with the events which are the subject matter of the motion and therefore it is no longer needed to discuss the motion to approve a derivative action. In view of Company's notice, the said motion was stricken out and by a court ruling on October 4, 2018 and the case was closed.
-
On November 4, 2018 the Company filed a NIS
F - 38
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 26 - Contingent liabilities and commitments (continued)
-
On July 23, 2017, Mr. Iram Graiver, former CEO of the Company and Willi-Food (hereinafter - “Mr. Graiver”) filed a lawsuit to the Regional Labor Court in Tel Aviv Jaffa (hereinafter - “the Labor Court”) claiming payment of social rights and different compensations at the total amount of NIS
According to the Company, throughout his term of employment as an office holder in the Company, the defendant has unlawfully taken from the Company salary, bonus in respect of 2016 and reimbursement of expenses. According to the Company, Mr. Graiver has done so while breaching his fiduciary duty and his duty of care towards the Company as well as the cogent provisions of the Companies Law, 5759-1999, whereby it is mandatory that payments of the type taken from the Company by Mr. Graiver are approved by the General Meeting of the Company’s shareholders; according to the Company, Mr. Graiver has not obtained such an approval. On November 2, 2017, a resolution was issued to join the hearings pertaining to the two proceedings described above. On November 26 2017 statements of defense were filed by the Company and Mr. Graiver and on March 7 2018 a preliminary hearing was held. The parties are in the process of document discovery and review. Proof hearing was held on January 15 2020. Second Proof hearing was held on June 7 2020.Third Proof hearing (and last) held on October 31 2021. On March 17, 2022, summaries were submitted on behalf of Mr. Graver, on July 7, 2022, summaries were submitted on behalf of the company. On August 14, 2022, response summaries were submitted on behalf of Mr. Graver. A judgment was given on November 27, 2022 and it was ruled that the company must pay an immaterial amount to Mr. Graver. both the company and Mr. Graver submitted requests to appeal the verdict also the company filed a request for a temporary stay order against the payment of the stipulated amount received on December 29, 2022. In light of the above, the company's management estimates that the registration, in the financial statements and in the notes to the financial statements regarding the procedure, is satisfactory.
F - 39
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 26 - Contingent liabilities and commitments (continued)
-
A lawsuit and a motion to approve it as class action was filed on May 7, 2020, against the Company and 2 other respondents to the central district court. The applicant claimed that the company marketed several products as products approved by the chief rabbinate of Israel before the actual rabbinate approval was obtained. Thus, the applicant alleges a violation of various laws. On February 27, 2022 the position of Chief Rabbinate was submitted to the court. On November 13, 2022, a pre-trial hearing was held, at the end of which it was agreed that the parties would submit within 30 days an agreed request to withdraw from the approval request. On December 4, 2022, a judgment was issued confirming the withdrawal arrangement signed between the parties. en the parties. Accordingly, the claim was dismissed and the request for approval has been removed.
-
On June 24, 2020, a lawsuit and request for approval as a representative was submitted to the Central District Court against the company, Euro Dairy Europe Ltd. and another respondent. According to the applicant, the company marketed a number of products with misleading labeling and contrary to the provisions of the law and the relevant standards. A hearing to hear the request was scheduled for June 14, 2023. At this stage, the Company and its legal advisors cannot assess the chances of the lawsuit.
-
A lawsuit and a motion to approve it as class action was filed on September 8, 2020, against Euro European Dairies to the Haifa district court. The applicant claimed that Euro European Dairies violated its obligations to import and market Gaude cheese in the quantities and prices it undertook as part of duty-free tenders. The applicant claims that he and the members of the group suffered damages in the amount of NIS
-
A lawsuit and a motion to approve it as class action was filed on August 2, 2021, against G. Willi-Food and another 5 respondents to the District Court. The applicant claimed that the Company marketed several products with misleading captions and contrary to the provisions of the law and the relevant regulations. The applicant claims that he and the members of the group suffered financial damages in amount of NIS
F - 40
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 26 - Contingent liabilities and commitments (continued)
-
A lawsuit and a motion to approve it as class action was filed on November 8, 2021, against the Company to the District Court. The applicant claimed that the Company marketed several products with misleading captions and contrary to the provisions of the law and the relevant regulations. The applicant claims that he and the members of the group suffered damages in amount of NIS
-
On May 25, 2022, a request for a lawsuit and a request for approval as a representative was submitted to the Central District Court against the company. According to the applicant, the Company marketed a product with a misleading label and contrary to the provisions of the law and the relevant standards. The applicant claims that he and the other members of the group suffered monetary and non-monetary damage in the amount of NIS
-
On February 20, 2023, the Euro European Dairies (the Company) received, from the Ashdod Customs House, a notice of a charge for a deficit of NIS
F - 41
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 27 - Events during and after the reporting period
-
COVID 19 - In the first quarter of 2020, the corona virus began to spread around the world, an event declared by the World Health Organization as a global pandemic (the "crisis"). Most of the restrictions implemented in Israel to deal with the crisis have been removed, but the Israeli economy and the world economy are still in the process of recovery, with epidemiological developments and various waves of illness slowing down from time to time. The Company purchases its goods from about 150 suppliers around the world, including the Far East, Europe, the United States, South America and Israel. The rate of exit from the crisis varies from country to country so that different restrictions on the production of products by some of the company’s suppliers may apply, which may make it difficult for it to import goods in sufficient quantities from those suppliers. The Company is also facing an increase in the prices of the raw materials it purchases, the unavailability of containers in the world and significant increases in sea freight costs, which, in the company’s estimation, are due to the corona crisis in the world. The Company works to the best of its ability to maintain the rate of its customers. At this stage the Company is unable to estimate when this situation will change due to the recurring waves of illness, so the current time is still characterized by uncertainty.
This is a variable event whose scope and period of duration are not under the control of the Company and therefore it is unable to assess the full extent of the economic effects on its activity.
-
In February 2022, a military conflict began between Russia and Ukraine ("the conflict in Ukraine"), which as of the date of the report is still ongoing. According to the Bank of Israel's updated macro division forecast, the energy crisis in Europe and the ongoing war in Ukraine, together with the high inflation and monetary tightening and slowdown in China, contributed, among other things, to a moderation in economic activity in the world in 2022 and will continue to do so in 2023, to a significant increase in energy and commodity prices, as well as to disruptions in supply chains. At the time of the report, a trend of moderation in price increases in the world has begun, but it is not possible to estimate what the consequences of the ongoing conflict in Ukraine will be, if any, on the markets and economic activity in Israel and the world.
-
The company operates as a series and the company is not aware of any effects of the conflict in Ukraine on the company and its results beyond the above. At the same time, the company's management follows the developments, and will take actions as necessary.
-
It is emphasized and clarified that as of the date of approval of the report, this is still an 'unfolding' event, characterized by a certain degree of uncertainty. Therefore, the company's estimates regarding the possible consequences of the conflict in Ukraine constitute forward-looking information, as defined in the Securities Law, 1968. These estimates may not be realized or may be realized in a different way from the company's estimates, and this, among other things, due to circumstances beyond the company's control The company continuously monitors the developments and examines the consequences for its activities.
F - 42
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 27 - Events during and after the reporting period (continued)
-
On January 27, 2020, the Company announced that its Board of Directors had approved the appointment of Mrs. Einat Peled Shapira as the Company’s new CEO, effective as of March 10, 2020. On March 2, 2021, Mrs. Einat Peled Shapira submitted notice of her resignation as CEO of the Company, effective as of April 1, 2021.
-
On May 17, 2021, the Company announced that its Board of Directors had approved the appointment of Mr. Erez Winner as the Company’s active CEO..
-
On January 17, 2023, Mr. Erez Winner finished his position as the company CEO, but continues to provide management services to the company in the field of business development, building and manufacture.
-
On January 17, 2023, Mr. Yosef Williger was appointed as the company active CEO.
-
On August 2021, the Company’s Board of Directors decided to exit the non-banking credit segment, after three years of activity, in light of the small number of transactions made and high managerial attention required. Thus, starting with the Company's consolidated financial statements for the third quarter of 2021, the Company has ceased to present the segment of providing the non-banking credit as a separate accounting segment.
- On September 16, 2021, the Company’s Board of Directors announced a dividend distribution of NIS
- On March 15, 2022, the company's Board of Directors announced a dividend distribution in the amount of NIS
-
On August 31, 2022, the company's Board of Directors announced a dividend distribution in the amount of NIS
-
On November 24, 2022, the company Board of Directors announced a dividend distribution in the amount of NIS
F - 43
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 28 - Accounting policies
Revenue
Performance obligations and timing of revenue recognition:
The majority of the Company's revenue is derived from selling goods in the Israeli market with revenue recognized at a point in time when control of the goods has transferred to the customer. This is generally when the goods are delivered to the customer. However, for export sales, control might also be transferred when delivered either to the port of departure or port of arrival, depending on the specific terms of the contract with a customer. There is limited judgement needed in identifying the point control passes: once physical delivery of the products to the agreed location has occurred, the group no longer has physical possession, usually will have a present right to payment (as a single payment on delivery) and retains none of the significant risks and rewards of the goods in question.
Determining the transaction price:
Most of the Company's revenue is derived from fixed price contracts, therefore the amount of revenue to be earned from each contract is determined by reference to those fixed prices agreed with the customers. An exception to this principal is that in most cases, the Company enables specific customers to return products which they have not sold, despite that there is no agreement between the Company and its customers regarding such returns and the Company does not have such policy. Historical experience enables the Company to estimate reliably the value of good that will be returned and restrict the amount of revenue that is recognized such that it is highly probable that there will not be a reversal of previously recognized revenue when goods are return.
Allocating amounts to performance obligations
For most contracts, there is a fixed unit price for each product sold, with reductions given for bulk orders placed at a specific time. Therefore, there is no judgement involved in allocating the contract price to each unit ordered in such contracts (it is the total contract price divided by the number of units ordered). Where a customer orders more than one product line, the Company is able to determine the split of the total contract price between each product line by reference to each product’s standalone selling prices (all product lines are capable of being, and are, sold separately).
Inventories
Inventories are initially recognized at cost, and subsequently at the lower of cost and net realizable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
Weighted average cost is used to determine the cost of the inventories.
The Company continuously reviews its inventory levels to identify slow-moving merchandise and markdowns necessary to clear slow-moving merchandise, which reduces the cost of inventories to its estimated net realizable value. Consideration is given to a number of quantitative and qualitative factors, including current pricing levels and the anticipated need for subsequent markdowns, aging of inventories, historical sales trends, and the impact of market trends and economic conditions. Estimates of markdown requirements may differ from actual results due to changes in quantity, quality and mix of products in inventory, as well as changes in consumer preferences, market and economic conditions. The Company’s historical estimates of these costs and its markdown provisions have not differed materially from actual results.
Basis of consolidation
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
F - 44
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 28 - Accounting policies (continued)
The consolidated financial statements present the results of the Company and its subsidiaries as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
Cash and Cash equivalents
Cash and cash equivalents include demand deposits and term deposits in banks that are not restricted as to usage, with an original period to maturity of not more than three months.
Deposits that are restricted as to usage are classified as pledged deposits.
Deposits with an original period to maturity exceeding three months, which as of the statement of financial position do not exceed one year, are classified as short-term investments
Leases
The majority of the Company's accounting policies for leases are set out in note 19.
Identifying leases
The Company accounts for a contract as a lease when it conveys the right to use an asset for a period of time in exchange for consideration. Leases are those contracts that satisfy the following criteria:
The Company considers whether the supplier has substantive substitution rights. If the supplier does have those rights, the contract is not identified as giving rise to a lease.
In determining whether the Company obtains substantially all the economic benefits from use of the asset, the Company considers only the economic benefits that arise from the use of the asset, not those incidental to legal ownership or other potential benefits.
In determining whether the Company has the right to direct use of the asset, the Company considers whether it directs how and for what purpose the asset is used throughout the period of use. If there are no significant decisions to be made because they are pre-determined due to the nature of the asset, the Company considers whether it was involved in the design of the asset in a way that predetermines how and for what purpose the asset will be used throughout the period of use. If the contract or portion of a contract does not satisfy these criteria, the Company applies other applicable IFRSs rather than IFRS 16.
F - 45
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 28 - Accounting policies (continued)
Property, plant and equipment
Property, plant and equipment are tangible items, which are held for use in the manufacture or supply of goods or services, or leased to others, which are predicted to be used for more than one period. The Company presents its property, plant and equipment items according to the cost model.
Under the cost method - a property, plant and equipment are presented at the balance sheet at cost (net of any investment grants), less any accumulated depreciation and any accumulated impairment losses. The cost includes the cost of the assets acquisition as well as costs that can be directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is calculated using the straight-line method at rates considered adequate to depreciate the assets over their estimated useful lives. Amortization of leasehold improvements is computed over the shorter of the term of the lease, including any extension period, where the Company intends to exercise such option, or their useful life.
Useful life (Years) |
% |
||||
|
|||||
Land |
|
|
|||
Construction |
|
|
|||
Motor vehicles |
|
|
(Mainly 20%) |
||
Office furniture and equipment |
|
|
(Mainly 15%) |
||
Computers |
|
|
(Mainly 33%) |
||
Machinery and equipment |
|
|
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Income statement.
Goodwill
Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the Company's interest in the net fair value of the identifiable assets, liabilities and Contingent liabilities of the subsidiary or jointly controlled entity recognized at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
F - 46
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 28 - Accounting policies (continued)
Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation.
Where a provision is measured using the cash flows estimated to settle the present obligation, it carrying amount is the present value of those cash flows.
When some or all of the economic benefits to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Share-based payments
Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.
Deferred taxes
Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilized.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).
F - 47
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 28 - Accounting policies (continued)
Defined benefit schemes
Defined benefit scheme surpluses and deficits are measured at:
-
The fair value of plan assets at the reporting date; less
-
Plan liabilities calculated using the projected unit credit method discounted to its present value using yields available on high quality corporate bonds that have maturity dates approximating to the terms of the liabilities and are denominated in the same currency as the post-employment benefit obligations; less
-
The effect of minimum funding requirements agreed with scheme trustees.
Remeasurements of the net defined obligation are recognized directly within equity. The remeasurements include:
-
Actuarial gains and losses.
-
Return on plan assets (interest exclusive).
-
Any asset ceiling effects.
Service costs are recognized in profit or loss, and include current and past service costs as well as gains and losses on curtailments.
Net interest expense (income) is recognized in profit or loss, and is calculated by applying the discount rate used to measure the defined benefit obligation (asset) at the beginning of the annual period to the balance of the net defined benefit obligation (asset), considering the effects of contributions and benefit payments during the period. Gains or losses arising from changes to scheme benefits or scheme curtailment are recognized immediately in profit or loss.
Settlements of defined benefit schemes are recognized in the period in which the settlement occurs.
Share capital
Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset.
The Company's ordinary shares are classified as equity instruments.
F - 48
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 28 - Accounting policies (continued)
Impairment of non-financial assets
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e., the higher of value in use and fair value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units ('CGUs'). Goodwill is allocated on initial recognition to each of the Company's CGUs that are expected to benefit from a business combination that gives rise to the goodwill.
Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognized in other comprehensive income. An impairment loss recognized for goodwill is not reversed.
Financial assets and liabilities
Financial assets and liabilities at fair value through profit or loss are measured at fair value at the end of each reporting period They are carried in the statement of financial position at fair value with changes in fair value recognized in the consolidated statement of income in the finance income or expense line.
F - 49
G. WILLI-FOOD INTERNATIONAL LTD. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
(NIS in thousands) |
(Cont.) |
Note 28 - Accounting policies (continued)
Amortized cost
The Company's financial assets (liabilities) measured at amortized cost comprise trade and other receivables, loans to others, cash and cash equivalents and trade payables in the consolidated statement of financial position.
Impairment provisions for trade receivables are recognized based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables.
Treasury shares
The cost of Company shares held by the Company or its consolidated companies is deducted from shareholders’ equity as a separate component.
F - 50