|
¨
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from __________________ to __________________
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Title of each class
|
Name of each exchange on which registered
|
|
Ordinary Shares, par value NIS 10.00 per share
|
NYSE MKT
|
1
|
Does not include a total of 85,655 ordinary shares held at that date as treasury shares under Israeli law, all of which were repurchased by Ellomay. For so long as such treasury shares are owned by Ellomay they have no rights and, accordingly, are neither eligible to participate in or receive any future dividends which may be paid to Ellomay’s shareholders nor are they entitled to participate in, be voted at or be counted as part of the quorum for, any meetings of Ellomay’s shareholders.
|
U.S. GAAP £ |
International Financial Reporting Standards as issued
by the International Accounting Standards Board
þ
|
Other £ |
Page | ||
5 | ||
6 | ||
Part I
|
||
8 | ||
8 | ||
8 | ||
Selected Financial Data | 8 | |
Capitalization and Indebtedness
|
11 | |
Risk Factors
|
11 | |
27 | ||
History and Development of Ellomay
|
27 | |
Business Overview
|
29 | |
Organizational Structure
|
71 | |
Property, Plants and Equipment
|
72 | |
73 | ||
73 | ||
Operating Results
|
73 | |
|
Liquidity and Capital Resources
|
81 |
Research and Development, Patents and Licenses, Etc.
|
90 | |
Trend Information
|
90 | |
Off-Balance Sheet Arrangements
|
91 | |
Contractual Obligations
|
91 | |
92 | ||
Directors and Senior Management
|
92 | |
Compensation
|
94 | |
Board Practices
|
98 | |
Employees
|
110 | |
Share Ownership
|
111 | |
115 | ||
Major Shareholders
|
115 | |
Related Party Transactions
|
119 | |
119 | ||
Consolidated Statements and Other Financial Information
|
119 | |
Significant Changes
|
121 |
121 | ||
Offer and Listing Details
|
121 | |
Markets
|
122 | |
123 | ||
Share Capital
|
123 | |
Memorandum of Association and Second Amended and Restated Articles
|
123 | |
Material Contracts
|
131 | |
Exchange Controls | 132 | |
Taxation | 133 | |
Dividends and Paying Agents
|
139 | |
Statement by Experts
|
139 | |
Documents on Display
|
139 | |
140 | ||
142 | ||
|
||
Part II
|
||
143 | ||
143 | ||
143 | ||
144 | ||
144 | ||
144 | ||
145 | ||
145 | ||
145 | ||
145 | ||
146 | ||
Part III
|
||
146 | ||
146 | ||
147 |
·
|
Amendments, including retroactive amendments, to the regulation governing the photovoltaic markets in which we operate or to which we may in the future enter;
|
·
|
the market, economic and political factors in Italy, in Spain and generally in Europe, in Israel and worldwide;
|
·
|
our contractors’ technical, professional and financial ability to deliver on and comply with their operation and maintenance undertakings in connection with the operation of our photovoltaic plants;
|
·
|
our ability to further familiarize ourselves and maintain expertise in the photovoltaic market and the energy market, and to track, monitor and manage the projects which we have undertaken;
|
·
|
our ability to meet our undertakings under various financing agreements, including to our debenture holders, and our ability to raise additional financing in the future;
|
·
|
the risks we are exposed to due to our holdings in Dori Energy Ltd. and Dorad Energy Ltd.;
|
·
|
the price and market liquidity of our ordinary shares;
|
·
|
the fact that we may be deemed to be an “investment company” under the Investment Company Act of 1940 under certain circumstances (including as a result of the investments of assets following the sale of our business), and the risk that
we may be required to take certain actions with respect to the investment of our assets or the distribution of cash to shareholders in order to avoid being deemed an “investment company”;
|
·
|
our plans with respect to the management of our financial and other assets and our ability to identify, evaluate and consummate additional suitable business opportunities and strategic alternatives; and
|
·
|
the possibility of future litigation.
|
|
A.
|
Selected Financial Data
|
For Year ended December 31,
|
||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
||||||||||||||||
Revenues
|
$ | 12,982 | $ | 8,890 | $ | 6,114 | $ | - | $ | - | ||||||||||
Operating expenses
|
2,381 | 1,954 | 1,391 | - | - | |||||||||||||||
Depreciation expenses
|
4,021 | 2,717 | 1,777 | - | - | |||||||||||||||
Gross profit
|
6,580 | 4,219 | 2,946 | - | - | |||||||||||||||
General and administrative expenses
|
3,449 | 3,110 | 3,102 | 3,211 | 1,931 | |||||||||||||||
Gain on bargain purchase
|
10,237 | - | - | - | - | |||||||||||||||
Capital Loss, net
|
- | 394 | - | - | - | |||||||||||||||
Operating Profit (Loss)
|
13,368 | 715 | (156 | ) | (3,211 | ) | (1,931 | ) | ||||||||||||
Financing income
|
204 | 696 | 1,971 | 1,076 | 1,366 | |||||||||||||||
Financing income (expenses) in connection with derivatives, net
|
1,501 | (2,157 | ) | (2,601 | ) | 404 | - | |||||||||||||
Financing expenses
|
(4,201 | ) | (2,166 | ) | (608 | ) | (80 | ) | (9 | ) | ||||||||||
Financing income (expenses), net
|
(2,496 | ) | (3,627 | ) | (1,238 | ) | 1,400 | 1,357 | ||||||||||||
Company’s share of losses of investee accounted for at equity
|
(540 | ) | (232 | ) | (596 | ) | (66 | ) | - | |||||||||||
Loss before taxes on income
|
10,332 | (3,144 | ) | (1,990 | ) | (1,877 | ) | (574 | ) | |||||||||||
Tax benefit (taxes on income)
|
(245 | ) | 1,011 | 1,018 | 44 | (69 | ) | |||||||||||||
Profit (loss) from continuing operations
|
10,087 | (2,133 | ) | (972 | ) | (1,833 | ) | (643 | ) | |||||||||||
Income (loss) from discontinued operations, net
|
- | - | 7,035 | (376 | ) | |||||||||||||||
Net income (loss) for the year
|
10,087 | (2,133 | ) | (972 | ) | 5,202 | (1,019 | ) | ||||||||||||
Income (Loss) attributable to:
|
||||||||||||||||||||
Shareholders of the Company
|
10,068 | (2,110 | ) | (972 | ) | 5,202 | (1,019 | ) | ||||||||||||
Non-controlling interests
|
19 | (23 | ) | - | - | - | ||||||||||||||
Net income (loss) for the year
|
10,087 | (2,133 | ) | (972 | ) | 5,202 | (1,019 | ) | ||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||
Foreign currency translation adjustments
|
6,038 | 1,620 | (3,698 | ) | 194 | - | ||||||||||||||
Total other comprehensive income (loss)
|
6,038 | 1,620 | (3,698 | ) | 194 | - | ||||||||||||||
Total comprehensive income (loss)
|
16,125 | $ | 513 | $ | (4,670 | ) | $ | 5,396 | $ | (1,019 | ) | |||||||||
Basic net earnings (loss) per share:
|
||||||||||||||||||||
Loss from continuing operations
|
$ | 0.94 | $ | (0.2 | ) | $ | (0.09 | ) | $ | (0.2 | ) | $ | (0.1 | ) | ||||||
Earnings (loss) from discontinued operations
|
- | - | 0.9 | *) - | ||||||||||||||||
Net earnings (loss)
|
$ | 0.94 | $ | (0.2 | ) | $ | (0.09 | ) | $ | 0.7 | $ | (0.1 | ) | |||||||
Diluted net earnings (loss) per share:
|
||||||||||||||||||||
Loss from continuing operations
|
$ | 0.94 | $ | (0.2 | ) | $ | (0.09 | ) | $ | (0.2 | ) | $ | (0.1 | ) | ||||||
Earnings (loss) from discontinued operations
|
- | - | - | 0.8 | *) - | |||||||||||||||
Net earnings (loss)
|
$ | 0.94 | $ | (0.2 | ) | $ | (0.09 | ) | $ | 0.6 | $ | (0.1 | ) | |||||||
Weighted average number of shares used for computing basic earnings (loss) per share
|
10,692,371 | 10,709,294 | 10,775,458 | 7,911,551 | 7,378,643 | |||||||||||||||
Weighted average number of shares used for computing diluted earnings (loss) per share
|
10,752,808 | 10,709,294 | 10,775,458 | 8,904,250 | 7,378,643 |
For Year ended December 31,
|
||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
||||||||||||||||
Adjusted EBITDA from continuing operations
(1)
|
$ | 6,612 | $ | 3,594 | $ | 1,025 | $ | (3,255 | ) | $ | (1,920 | ) |
(1)
|
Adjusted
EBITDA is a non-IFRS measure and is defined as earnings before financial expenses, net, gain on bargain purchase, capital loss, financial expenses, net, taxes, depreciation and amortization. We present this measure in order to enhance the understanding of our historical financial performance and to enable comparability between periods. While we consider Adjusted EBITDA to be an important measure of comparative operating performance, Adjusted EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. Adjusted EBITDA does not take into account our commitments, including capital expenditures and restricted cash and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. Not all companies calculate Adjusted EBITDA in the same manner, and the measure as presented may not be comparable to similarly-titled measures presented by other companies. Our
Adjusted
EBITDA may not be indicative of our historic operating results; nor is it meant to be predictive of potential future results. We use the term “Adjusted EBITDA” to highlight the fact that we deducted the gain on bargain purchase from the net income for the year ended December 31, 2013 and added the capital loss to the net income for the year ended December 31, 2012. The Adjusted EBITDA is otherwise fully comparable to EBITDA information which has been previously provided for prior periods.
|
For Year ended December 31,
|
||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
||||||||||||||||
Net income (loss) for the year
|
$ | 10,087 | $ | (2,133 | ) | $ | (972 | ) | $ | 5,202 | $ | (1,019 | ) | |||||||
Financing expenses (income), net
|
2,496 | 3,627 | 1,238 | (1,400 | ) | (1,357 | ) | |||||||||||||
Loss (income) from discontinued operations, net of tax
|
- | - | - | (7,035 | ) | 376 | ||||||||||||||
Income tax expenses (benefit)
|
245 | (1,011 | ) | (1,018 | ) | (44 | ) | 69 | ||||||||||||
Gain on bargain purchase
|
(10,237 | ) | - | - | - | - | ||||||||||||||
Capital loss
|
- | 394 | - | - | - | |||||||||||||||
Depreciation and amortization
|
4,021 | 2,717 | 1,777 | 22 | 11 | |||||||||||||||
Adjusted EBITDA
|
$ | 6,612 | $ | 3,594 | $ | 1,025 | $ | (3,255 | ) | $ | (1,920 | ) |
At December 31,
|
||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
||||||||||||||||
Working capital (deficiency)
|
$ | (4,384 | ) | $ | 27,977 | $ | 31,856 | $ | 71,756 | $ | 75,172 | |||||||||
Total assets
|
$ | 146,930 | $ | 128,740 | $ | 126,392 | $ | 106,214 | $ | 76,432 | ||||||||||
Total liabilities
|
$ | 47,169 | $ | 45,626 | $ | 42,331 | $ | 17,648 | $ | 6,404 | ||||||||||
Total shareholders’ equity
|
$ | 99,761 | $ | 83,114 | $ | 84,061 | $ | 88,566 | $ | 70,028 | ||||||||||
Capital stock
|
$ | 102,590 | (1) | $ | 102,068 | (1) | $ | 102,534 | (2) | $ | 102,369 | $ | 89,227 | |||||||
Ordinary shares outstanding
|
10,692,371 | (1) | 10,692,371 | (1) | 10,769,326 | (2) | 10 , 7 50,071 | 7 ,378,643 |
|
(1)
|
Net of 85,655 treasury shares that have been purchased during 2011 and 2012 according to a share buyback program that was authorized by our Board of Directors.
|
|
(2)
|
Net of 8,700 treasury shares that have been purchased during 2011 according to a share buyback program that was authorized by our Board of Directors.
|
|
·
|
Economic - An increase in solar power generation will reduce dependence on fossil
fuels. Worldwide demand for electricity is expected to nearly double by 2025, according to the U.S. Department of Energy. Additionally, according to International Energy Agency, over 60% of the world’s electricity is generated from fossil fuels such as coal, natural gas and oil. The combination of declining finite fossil fuel energy resources and increasing energy demand is depleting natural resources as well as driving up electricity costs, underscoring the need for reliable renewable energy production. Solar power systems are renewable energy sources that rely on the sun as an energy source and do not require a fossil fuel supply. As such, they are well positioned to offer a sustainable long-term alternative means of power generation. Once a solar power system is installed, the cost of generating electricity is relatively stable over the lifespan of the system. There are no risks that fuel prices will escalate or fuel shortages will develop, although cash paybacks for systems range depending on the level of incentives, electric rates, annualized sun intensity, installation costs and derogation in the efficiency of the panels.
|
|
·
|
Convenience - Solar power systems can be installed on a wide range of sites, including small residential roofs, the ground, covered parking structures and large industrial buildings. Most solar power systems also have few, if any, moving parts and are generally guaranteed to operate for 20-25 years, resulting in low maintenance and operating costs and reliability compared to other forms of power generation.
|
|
·
|
Environmental - Solar power is one of the cleanest electric generation sources, capable of generating electricity without air or water emissions, noise, vibration, habitat impact or waste generation. In particular, solar power does not generate greenhouse gases that contribute to global climate change or other air pollutants, as power generation based on fossil fuel combustion does, and does not generate radioactive or other wastes as nuclear power and coal combustion do. It is anticipated that greenhouse gas regulation will increase the costs and constrain the development of fossil fuel based electric generation and increase the attractiveness of solar power as a renewable electricity source.
|
|
·
|
Security - Producing solar power improves energy security both on an international level (by reducing fossil energy purchases from hostile countries) and a local level (by reducing power strains on local electrical transmission and distribution systems).
|
PV Plant Title
|
Nominal Capacity
1
|
Location
|
Technology of Panels
|
Connection to Grid
|
FiT (ˆ/kWh)
2
|
Revenue in 2012 (in thousands)
3
|
Revenue in 2013 (in thousands)
3
|
“Troia 8”
|
995.67 kWp
|
Province of Foggia, Municipality of Troia, Puglia region, Italy
|
Fix
|
January 14, 2011
|
0.346
|
$800
|
$827
|
“Troia 9”
|
995.67 kWp
|
Province of Foggia, Municipality of Troia, Puglia region, Italy
|
Fix
|
January 14, 2011
|
0.346
|
$816
|
$832
|
“Del Bianco”
|
734.40 kWp
|
Province of Macerata, Municipality of Cingoli, Marche region, Italy
|
Fix
|
April 1, 2011
|
0.346
|
$480
|
$470
|
PV Plant Title |
Nominal Capacity
1
|
Location
|
Technology of Panels
|
Connection to Grid
|
FiT (ˆ/kWh)
2
|
Revenue in 2012 (in thousands)
3
|
Revenue in 2013 (in thousands)
3
|
“Giaché”
|
730.01 kWp
|
Province of Ancona, Municipality of Filotrano, Marche region, Italy
|
Duel Axes Tracker
|
April 14, 2011
|
0.346
|
$665
|
$656
|
“Costantini”
|
734.40 kWp
|
Province of Ancona, Municipality of Senigallia, Marche region, Italy
|
Fix
|
April 27, 2011
|
0.346
|
$526
|
$531
|
“Massaccesi”
|
749.7 kWp
|
Province of Ancona, Municipality of Arcevia, Marche region, Italy
|
Duel Axes Tracker
|
April 29, 2011
|
0.346
|
$671
|
$652
|
“Galatina”
|
994.43 kWp
|
Province of Lecce, Municipality of Galatina, Puglia region, Italy
|
Fix
|
May 25, 2011
|
0.346
|
$637
|
$829
|
“Pedale (Corato)”
|
2,993 kWp
|
Province of Bari, Municipality of Corato, Puglia region, Italy
|
Single Axes Tracker
|
May 31, 2011
|
0.289
|
$2,514
|
$2,518
|
“Acquafresca”
|
947.6 kWp
|
Province of Barletta-Andria-Trani, Municipality of Minervino Murge, Puglia region, Italy
|
Fix
|
June 2011
|
0.291
|
$654
|
$675
|
“D‘Angella”
|
930.5 kWp
|
Province of Barletta-Andria-Trani, Municipality of Minervino Murge, Puglia region, Italy
|
Fix
|
June 2011
|
0.291
|
$624
|
$662
|
PV Plant Title
|
Nominal Capacity
1
|
Location
|
Technology of Panels
|
Connection to Grid
|
FiT (ˆ/kWh)
2
|
Revenue in 2012 (in thousands)
3
|
Revenue in 2013 (in thousands)
3
|
“Soleco”
|
5,923.5 kWp
|
Province of Rovigo, Municipality of Canaro, Veneto region, Italy
|
Fix
|
August 2011
|
0.238
|
--
4
|
$1,520
4
|
“Tecnoenergy”
|
5,899.5 kWp
|
Province of Rovigo, Municipality of Canaro, Veneto region, Italy
|
Fix
|
August 2011
|
0.238
|
--
4
|
$1,501
4
|
“Rinconada II”
5
|
2,275 kWp
|
Municipality of Córdoba, Andalusia, Spain
|
Fix
|
July 2010
|
0.322162
6
|
$503
7
|
$1,309
|
|
·
|
an Engineering Procurement & Construction projects Contract, or an EPC Contract, which governs the installation, testing and commissioning of a photovoltaic plant by the respective Contractor;
|
|
·
|
an Operation and Maintenance, or O&M, Agreement, which governs the operation and maintenance of the photovoltaic plant by the respective Contractor;
|
|
·
|
when applicable, an agreement between the owner of the photovoltaic plant and the Contractor, whereby the panels required for the construction of the photovoltaic plant will be purchased by such owner directly from a third party supplier of such panels, and then transferred to the Contractor;
|
|
·
|
a number of ancillary agreements, including:
|
|
o
|
one or more “surface rights agreements” with the land owners, which provide the terms and conditions for the lease of land on which the photovoltaic plants are constructed and operated;
|
|
o
|
with respect to our Italian PV Plants –
|
|
·
|
standard “incentive agreements” with Gestore dei Servizi Elettrici, or GSE, Italy’s energy regulation agency responsible,
inter alia
, for incentivizing and developing renewable energy sources in Italy and purchasing energy and re-selling it on the electricity market. Under such agreements, it is anticipated that GSE will grant the applicable FiT governing the purchase of electricity (FiTs are further detailed in “Item 4.B: Material Effects of Government Regulations on the Italian PV Plants”);
|
|
·
|
one or more “power purchase agreements” with GSE, specifying the power output to be purchased by GSE for resale and the consideration in respect thereof (in the event of sale via the “Dedicated Withdrawal System” as more fully described under “Item 4.B: Material Effects of Government Regulations on the Italian PV Plants”); and
|
|
·
|
one or more “interconnection agreements” with the Enel Distribuzione S.p.A, or ENEL, the Italian national electricity grid operator, which provide the terms and conditions for the connection to the Italian national grid.
|
|
o
|
with respect to our Spanish PV Plant –
|
|
·
|
Standard “power evacuation agreements” with the Spanish power distribution grid company Endesa Distribución Eléctrica, S.L.U., or Endesa, regarding the rights and obligations of each party, concerning, inter alia, the evacuation of the power generated in the facility to the grid; and
|
|
·
|
Standard “representation agreements” with an entity that will represent the PV Principal in its dealings with the Spanish National Energy Commission, or CNE, and the bid system managed by the operator of the market, Operador del Mercado Ibérico de Energía, Polo Español, S.A., or OMEL, who are responsible for payment of the FiT as more fully set described under “Item 4.B: Material Effects of Government Regulations on the Spanish PV Plants.” The representation agreements in connection with Rinconada II are with Nexus Energía, S.A.
|
|
·
|
optionally, one or more “project financing agreements” with financing entities, as were already executed with respect to several of the PV Plants and as more fully described below, and as may be executed in the future with respect to one or more of the remaining PV Plants; and
|
|
·
|
a stock purchase agreement in the event we acquire an existing company that owns a photovoltaic plant that is under construction or is already constructed.
|
|
·
|
by way of sale on the electricity market (Italian Power Exchange IPEX), the so called “Borsa Elettrica”;
|
|
·
|
through bilateral contracts with wholesale dealers; and
|
|
·
|
via the so-called “Dedicated Withdrawal Plant” introduced by AEEG Resolution no. 280/07 and subsequent amendments. This is the most common way of selling electricity, as it affords direct and quick negotiations with the national energy handler (GSE), which will in turn deal with energy buyers on the market. We sell electricity though this method.
|
·
|
the area to be enslaved (
asservimento
) is at least twice the size of the radiant surface; and
|
·
|
the portion of the plot of land which is not occupied by the photovoltaic plant is used exclusively for agricultural activities.
|
(i)
|
confirmed and further regulated the provisions of the
Circolare
no. 38/8763 regarding the cluster issue;
|
(ii)
|
implemented and extended the provisions of the Romani Decree by providing that the PAS applies to photovoltaic plants with power up to 200 kWp,and in particular cases (contaminated areas such as industrial areas, dumps and quarries), up to 1 MWp; and
|
(iii)
|
provided new requirements as to the procedure of application for the AU, including the requirement to submit an audited business plan together with the application.
|
Nominal Power kWp
|
Non-Integrated
|
Partially Integrated
|
Arch. Integrated
|
1 kW ≤ P ≤ 3 kW
|
0.40 Euro/kWh
|
0.44 Euro/kWh
|
0.49 Euro/kWh
|
3 kW < P ≤ 20 kW
|
0.38 Euro/kWh
|
0.42 Euro/kWh
|
0.46 Euro/kWh
|
P > 20 kW
|
0.36 Euro/kWh
1
|
0.40 Euro/kWh
|
0.44 Euro/kWh
|
1
|
With regard to the Italian PV Plant under the Third Conto Energia the tariff is equal to ˆ 0.289/kWh.
|
a)
|
the power capacity of the plant is not higher than 1 MW and - in the case of lands owned by the same owner - the PV plants are installed at a distance of at least 2 km; and
|
b)
|
the installation of the PV plants does not cover more than 10% of the surface of agricultural land which is available to the applicant.
|
1
|
With regard to the Italian PV Plant under the Forth Conto Energia the tariff is equal to ˆ 0.291/kWh.
|
|
(i)
|
new (generally lower than the Fourth Conto Energia and decreasing every six months) tariffs, comprising both the incentives and the sale of electric energy (so called “omni-comprehensive tariffs”);
|
|
(ii)
|
the provision for “large” photovoltaic plants of a register in which the same must be enrolled in order to qualify for the grant of the incentives;
|
|
(iii)
|
bonuses for photovoltaic plants whose components are manufactured in European Union countries; and
|
|
(iv)
|
bonuses for photovoltaic plants on buildings replacing asbestos roofs.
|
|
·
|
a measure consisting of granting the option to access a new revised incentive plan based on a reduced tariff amount with duration extended by 7 years
.
This specific provision applies to producers of renewable energy and owners of plants to which the ”all-inclusive tariff” (tariffa omnicomprensiva) or certain “Green Certificates” (certificati verdi) apply and provides an alternative incentive system for production of renewable energy, which can be activated voluntarily on demand of each producer who wants to continue the production of energy also after the period initially determined for the incentive plan (20 years), but with a correspondent reduction in the nominal amount of the same incentive; None of our PV Plants is subject to these provisions.
|
|
·
|
a replacement, starting from January 1, 2014, of the minimum guaranteed prices currently foreseen under the Italian mandatory purchase regime with the zonal hourly prices set out for each specific area (so called
prezzi zonali orari,
i.e. the average monthly price, correspondent to each hour, as resulting from the electric market price on the area where the PV plant is located).
|
|
(ii)
|
AEEG opinion n. 483/2013
|
|
(iii)
|
AAEG resolution 36/E
|
|
(iv)
|
Imbalance costs under AEEG Resolution n. 281/2012
|
|
(i)
|
imbalance costs are to be borne by the owners of PV plants, in an amount calculated by multiplying the discrepancy of the production forecast by a fixed parameter;
|
|
(ii)
|
in the case that the owner of the PV plant is party to the GSE mandatory purchase regime, administrative costs borne by GSE in connection with forecast services are to be charged on the owner. All of our Italian PV Plants are parties to the GSE mandatory purchase regime.
|
|
(a)
|
As a consequence of selling the electricity produced at the feed-in tariff;
|
|
(b)
|
As a consequence of selling the electricity produced on the wholesale power production market managed by the market operator (OMEL) at the market price; or
|
|
(c)
|
As a consequence of selling the electricity produced at the price negotiated between the parties in a bilateral or forward contract, entered into by a producer and an off-taker.
|
|
(a)
|
Type I – PV solar roof plants (or plants developed in similar surfaces); and
|
|
(b)
|
Type II – Any other type of PV solar plants (mainly, ground PV solar plants).
|
|
(a)
|
Taxable event
: generation of electric energy and its transmission to the grid;
|
|
(b)
|
Taxable income
: total amount received in terms of feed in tariff;
|
|
(c)
|
Tax rate
: 7%;
|
|
(d)
|
Taxpayer
: titleholder of the taxable event, i.e., the person which is entitled to generate electric energy and transfer such energy to the grid;
|
|
(e)
|
Tax period and accruing
: the tax period is the natural year and the tax is accrued each December 31;
|
|
(f)
|
Tax payment terms
: the taxpayers are obliged to issue a final self-settlement of the tax amount and to pay such amount within the following month of November as from the accruing of the tax. Therefore, the first self-settlement and payment shall be satisfied during November 2013; and
|
|
(g)
|
Interim tax payments
: the taxpayers are also required to transfer interim tax payments to the account of the final self-settlement within the first twenty calendar days of May, September, November and February of the following year, and corresponding to the periods of three, six, nine and twelve months of each year, respectively, and in accordance with the rules to be issued by the Ministry of Treasury and Public Bodies.
|
|
(a)
|
When all the necessary evacuation facilities (e.g. aerial or subterranean lines, transformation centers, etc.) are fully executed and commissioned;
|
|
(b)
|
When all the equipment for the generation of electricity are fully executed and commissioned; and
|
|
(c)
|
When the whole solar field is duly executed and commissioned.
|
|
(a)
|
The calculation of the SRR shall be made in reference to a “
standard facility
” and during its “
regulatory life term
,” which will also be defined by the future Royal Decree-.
|
|
i)
|
The standard incomes for the sale of energy production, valued at the production market prices;
|
|
ii)
|
The standard
operational
costs;
|
|
iii)
|
The standard value of the initial investment cost. For this calculation, only those costs and investments that correspond exclusively to the electricity production activity will be taken into account. Furthermore, costs or investments determined by administrative rules or acts that do not apply throughout Spanish territory will not be taken into account; and
|
|
iv)
|
The final value of the SRR shall not exceed the minimum level necessary to cover the costs so as to enable the undertakings to compete in the same conditions with the remaining undertakings using other technologies, and it shall enable a “
reasonable return
”.
|
|
(b)
|
SRR shall not be calculated independently for each power installation, and every facility will be included in one of the “
standard facility
” categories, as will be defined by the future Royal Decree, and, consequently, it will be entitled to the relevant SRR.
|
|
(a)
|
The feed-in tariff has been eliminated and PV plants are no longer entitled to receive the reactive power complement;
|
|
(b)
|
SRR shall be determined taking into account: (i) the electricity market price; and (ii) standard investment cost and operational costs by reference to each “
standard facility
” category;
|
|
(c)
|
The SRR shall be enough to compensate the investment costs of a “
standard facility
” that a well-managed and efficient company would not be able to recover through the sale of energy in the market and makes it possible to obtain a “
reasonable return
” applied to each “
standard facility
”. Nevertheless, the SRR will not exceed the minimum level necessary to cover the costs that allow the facilities to compete on equal terms with the other energy production technologies on the market;
|
|
(d)
|
The “
reasonable return
” will be set as a project profitability, which will be based, before tax, on the average yield of Spanish 10-year sovereign bonds on the secondary market, applying the appropriate differential set forth above;
|
|
(e)
|
PV plants currently in operation shall receive the SRR applicable to the relevant “
standard facility
” category; and
|
|
(f)
|
The SRR parameters may be reviewed every 6 years, which means that the SRR may not remain as is throughout the PV solar plant regulatory lifetime.
|
PV Plant
|
Size of Property
|
Location
|
Owners of the PV Plants/Lands
|
“Troia 8”
|
2.42.15 hectares
|
Province of Foggia, Municipality of Troia, Puglia region
|
PV Plant owned by Leasint and leased to Ellomay Six S.r.l. / Building right granted to Ellomay PV Six S.r.l. from owners
|
“Troia 9”
|
2.39.23 hectares
|
Province of Foggia, Municipality of Troia, Puglia region
|
PV Plant owned by Leasint and leased to Ellomay Five S.r.l. / Building right granted to Ellomay PV Five S.r.l. from owners
|
“Del Bianco”
|
2.44.96 hectares
|
Province of Macerata, Municipality of Cingoli, Marche region
|
PV Plant owned by Ellomay PV One S.r.l./ Building right granted to Ellomay PV One S.r.l. from owners
|
“Giaché”
|
3.87.00 hectares
|
Province of Ancona, Municipality of Filotrano, Marche region
|
PV Plant owned by Ellomay PV Two S.r.l.
/ Building right granted to Ellomay PV Two S.r.l. from owners
|
“Costantini”
|
2.25.76 hectares
|
Province of Ancona, Municipality of Senigallia, Marche region
|
PV Plant owned by Ellomay PV One S.r.l.
/ Building right granted to Ellomay PV One S.r.l. from owners
|
“Massaccesi”
|
3,60,60 hectares
|
Province of Ancona, Municipality of Arcevia, Marche region
|
PV Plant owned by Ellomay PV Two S.r.l.
/ Building right granted to Ellomay PV Two S.r.l. from owners
|
“Galatina”
|
4.00.00 hectares
|
Province of Lecce, Municipality of Galatina, Puglia region
|
PV Plant and Land owned by Energy Resources Galatina S.r.l.
|
“Pedale (Corato)”
|
13.59.52 hectares
|
Province of Bari, Municipality of Corato, Puglia region
|
Building Right granted to Pedale S.r.l. that will own the PV Plant once constructed/ Land held by owners and leased to Pedale S.r.l.
|
“Acquafresca”
|
3.38.26 hectares
|
Province of Barletta-Trani, Municipality of Minervino Murge, Puglia region
|
Building Right granted to Murgia Solar S.r.l. owns the PV Plant. Land held by owners and leased to Murgia Solar S.r.l.
|
“D‘Angella”
|
3.79.570 hectares
|
Province of Barletta-Trani, Municipality of Minervino Murge, Puglia region
|
Building Right granted to Luma Solar S.r.l. that owns the PV Plant. Land held by owners and leased to Luma Solar S.r.l.
|
“Soleco”
|
11.56.87 hectares
|
Province of Rovigo,Municipality of Canaro,Veneto region
|
Building Right granted to Soleco S.r.l. that owns the PV Plant. Land held by owners and leased to Soleco S.r.l.
|
“Tecnoenergy”
|
11.66.78 hectares
|
Province of Rovigo, Municipality of Canaro, Veneto region
|
Building Right granted to Tecnoenergy S.r.l. that owns the PV Plant. Land held by owners and leased to Tecnoenergy S.r.l.
|
“Rinconada II”
1
|
81,103 m²
|
Municipality of Córdoba, Andalusia, Spain
|
Building Right granted to Ellomay Spain S.L. that owns the PV Plant. Land held by owners and leased to Ellomay Spain S.L.
|
Year ended December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
Appreciation (Depreciation) of the NIS against the U.S. dollar
|
7.5
|
% | 2.3 | % | (7.1 | )% | ||||||
Appreciation (Depreciation) of the Euro against the U.S. dollar
|
4.6 | % | 2 | % | (3.2 | )% |
|
(a)
|
Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.
|
|
(b)
|
Income and expenses for each period presented in the statement of comprehensive income (loss) are translated at average exchange rates for the presented periods; however, if exchange rates fluctuate significantly, income and expenses are translated at the exchange rates at the date of the transactions.
|
|
(c)
|
Share capital, capital reserves and other changes in capital are translated at the exchange rate prevailing at the date of issuance.
|
|
(d)
|
Retained earnings are translated based on the opening balance translated at the exchange rate at that date and other relevant transactions during the period are translated as described in (b) and (c) above.
|
|
(e)
|
All resulting translation differences are recognized as a separate component of other comprehensive income (loss) in equity “adjustments arising from translating financial statement of foreign operations.”
|
|
(i)
|
a Senior Loan, to be applied to the costs of construction of the PV Plants (up to 80% of the relevant amount), in the amount of Euro 4.1 million, accruing interest at the EURIBOR rate, increased by a margin of 200 basis points per annum, repaid semi-annually with a maturity date of December 31, 2027; and
|
|
(ii)
|
a VAT Line, for payment of VAT due on the costs of construction in the amount of Euro 0.55 million, accruing interest at the EURIBOR rate, increased by 160 basis points per annum. As of December 31, 2013 the entire VAT Line was repaid.
|
|
1.
|
The Company’s equity, on a consolidated basis, shall not be less than $55 million;
|
|
2.
|
The ratio of (a) the short-term and long-term debt from banks, in addition to the debt to holders of debentures issued by the Company and any other interest-bearing financial obligations, net of cash and cash equivalents and short-term investments and net of project finance, including hedging transactions in connection with such project finance, of the subsidiaries of the Company, or, together, the Net Financial Debt, to (b) the equity of the Company, on a consolidated basis, plus the Net Financial Debt, shall not exceed a rate of 65%. As of December 31, 2013 (prior to the issuance of the Series A Debentures and repayment of the Discount Bank loan), our Net Financial Debt was approximately $13.3 million (consisting of approximately $39.8 million of short-term and long-term debt from banks and other interest bearing financial obligations, net of approximately $7.2 million of cash, cash equivalents and short-term investments and net of approximately $19.3 million of project finance and related hedging transactions of our subsidiaries); and
|
|
3.
|
The ratio of (a) the Company’s equity, on a consolidated basis, to (b) the Company’s balance sheet, on a consolidated basis, shall not be less than a rate of 20%.
|
Year ended December 31,
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
(U.S. dollars in thousands)
|
||||||||||||
Net cash (used in) provided by operating activities
|
$ |
6,389
|
$ | 5,906 | $ | (3,042 | ) | |||||
Net cash used in investing activities
|
(42,779 | ) | (1,850 | ) | (62,797 | ) | ||||||
Net cash provided by (used in) financing activities
|
9,874 | (34 | ) | 21,021 | ||||||||
Exchange differences on balances of cash and
cash equivalents
|
462
|
353 | (2,848 | ) | ||||||||
Net (decrease) increase in cash and cash equivalents
|
(26,054 | ) | 4,375 | (47,666 | ) | |||||||
Cash and cash equivalents at beginning of period
|
33,292 | 28,917 | 76,583 | |||||||||
Cash and cash equivalents at end of period
|
7,238 | 33,292 | 28,917 |
Payments due by period
(in thousands of U.S. dollars)
|
||||||||||||||||||||
Contractual Obligations*
|
Total
|
Less than 1 year
|
1 – 3 years
|
3 – 5 years
|
more than
5 years
|
|||||||||||||||
Loans and Borrowings (1)
|
18,836 | 18,836 | - | - | - | |||||||||||||||
Finance lease obligations (1)
|
8,953 | 351 | 666 | 1,998 | 5,938 | |||||||||||||||
Long-term loans (1)
|
16,633 | 977 | 981 | 4,398 | 10,277 | |||||||||||||||
Long-term rent obligations (2)
|
4,244 | 440 | 707 | 396 | 2,701 | |||||||||||||||
Other long-term liabilities (3)
|
2,520 | 472 | 720 | 579 | 749 | |||||||||||||||
Total
|
51,186 | 21,076 | 3,074 | 7,371 | 19,665 |
*
|
For contractual obligations related to our investment in the Italian and Spanish photovoltaic market, please refer to Item 4.
|
(1)
|
These amounts include future payment of interest.
|
(2)
|
Includes land lease agreements of our Italian subsidiaries. Rent until April 2016 of our offices in Tel Aviv is also included.
|
(3)
|
Consists mainly of balance amounts relating to SWAP contracts.
|
Name
|
Age
|
Position with Ellomay
|
||
Shlomo Nehama(1)(2)
|
59
|
Chairman of the Board of Directors
|
||
Ran Fridrich(1)(2)(3)
|
61
|
Director and Chief Executive Officer
|
||
Hemi Raphael(1)(2)
|
62
|
Director
|
||
Anita Leviant(1)(3)(4)
|
59
|
Director
|
||
Oded Akselrod(4)(5)
(6)
|
67
|
Director
|
||
Barry Ben Zeev(4)(5)(6)(7)
|
62
|
Director
|
||
Mordechai Bignitz(4)(5)(6)(7)
|
62
|
Director
|
||
Kalia Weintraub
|
35
|
Chief Financial Officer
|
||
Eran Zupnik
|
45
|
EVP of Business Development
|
(1)
|
Elected pursuant to the Shareholders Agreement, dated as of March 24, 2008, between S. Nechama Investments
(2008) Ltd. and Kanir Joint Investments (2005) Limited Partnership (See “Item 7.A: Major Shareholders”).
|
(2)
|
Provides management services to the Company pursuant to a Management Services Agreement (See “Item 6.B: Compensation”).
|
(3)
|
Member of our Advisory Committee.
|
(4)
|
Independent Director pursuant to the NYSE MKT rules.
|
(5)
|
Member of our Audit Committee.
|
(6)
|
Member of our Compensation Committee.
|
(7)
|
External Director and independent director pursuant to the Companies Law.
|
|
·
|
With respect to our chief executive officer, a controlling shareholder or a relative of a controlling shareholder, approval is required by the (i) compensation committee, (ii) board of directors and (iii) company’s shareholders with the “special majority” described above (in that order). Subject to certain conditions, the Israeli Companies Law provides an exemption from the shareholder approval requirement in connection with the approval of the Terms of Service and Employment of a CEO candidate.
|
|
·
|
With respect to a director, approval is required by the (i) compensation committee, (ii) board of directors and (iii) company’s shareholders with a regular majority (in that order).
|
|
·
|
With respect to any other office holder, approval is required by the compensation committee and the board of directors (in that order); however, in the event of an update of existing Terms of Service and Employment, which the Compensation Committee confirms is not material, the approval of the compensation committee is sufficient.
|
Name of Beneficial Owner
|
Number of Shares
Beneficially
Held (1)
|
Percent of Class
|
||||||
Shlomo Nehama(2)(5)
|
4,016,842 | 37.6 | % | |||||
Hemi Raphael(3)(5)
|
3,240,921 | 30.3 | % | |||||
Ran Fridrich(4)(5)
|
2,903,184 | 27.2 | % | |||||
Anita Leviant(6)
|
* | * | ||||||
Oded Akselrod(6)
|
* | * | ||||||
Barry Ben Zeev(6)
|
* | * | ||||||
Mordechai Bignitz(6)
|
* | * | ||||||
Eran Zupnik(7)
|
132,217 | 1.2 | % | |||||
Kalia Weintraub
|
- | - |
|
(1)
|
As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. For purposes of this table, a person is deemed to be the beneficial owner of securities that can be acquired within 60 days from March 1, 2014 through the exercise of any option or warrant. Ordinary shares subject to options or warrants that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding such options or warrants, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages are based upon 10,692,371 ordinary shares outstanding as of March 1, 2014. This number of outstanding ordinary shares does not include a total of 85,655 ordinary shares held at that date as treasury shares under Israeli law, all of which were repurchased by us. For so long as such treasury shares are owned by us they have no rights and, accordingly, are neither eligible to participate in or receive any future dividends which may be paid to our shareholders nor are they entitled to participate in, be voted at or be counted as part of the quorum for, any meetings of our shareholders.
|
|
(2)
|
According to information provided by the holders, the 4,016,842 ordinary shares beneficially owned by Mr. Nehama consist of: (i) 3,551,869 ordinary shares held by Nechama Investments, an Israeli company, which constitute approximately 33.2% of our outstanding ordinary shares, and (ii) 464,973 ordinary shares held directly by Mr. Nehama, which constitute approximately 4.4% of our outstanding ordinary shares. Mr. Nehama, as the sole officer, director and shareholder of Nechama Investments, may be deemed to indirectly beneficially own any ordinary shares beneficially owned by Nechama Investments, which constitute (together with the shares held directly by him) approximately 37.6% of our outstanding ordinary shares.
|
|
(3)
|
The 3,240,921 ordinary shares beneficially owned by Mr. Raphael consist of: (i) 2,786,397 ordinary shares held by Kanir, which constitute approximately 26.1% of our outstanding share capital, (ii) 314,514 ordinary shares held by a BVI private company wholly-owned by Mr. Raphael, which constitute approximately 2.9% of our outstanding shares and (iii) 140,010 ordinary shares held directly by Mr. Raphael, which constitute approximately 1.3% of our outstanding shares. Mr. Raphael, by virtue of his position as a director and majority shareholder of Kanir Investments Ltd., or Kanir Ltd., the general partner in Kanir, and his position as a limited partner in Kanir, may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir. Mr. Raphael disclaims beneficial ownership of the shares held by Kanir, except to the extent of his pecuniary interest therein, if any. In addition, Mr. Raphael, as the sole officer, director and shareholder of such private company, may be deemed to indirectly beneficially own any ordinary shares beneficially owned by the BVI private company.
|
|
(4)
|
The 2,903,184 ordinary shares beneficially owned by Mr. Fridrich consist of: (i) 2,786,397 ordinary shares held by Kanir, which constitute approximately 26.1% of our outstanding share capital and (ii) 116,787 ordinary shares held directly by Mr. Fridrich, which constitute approximately 1.1% of our outstanding shares. Mr. Fridrich, by virtue of his position as a director of Kanir Ltd. and his position as a limited partner in Kanir, may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir. Mr. Fridrich disclaims beneficial ownership of the shares held by Kanir, except to the extent of his pecuniary interest therein, if any.
|
|
(5)
|
By virtue of the 2008 Shareholders Agreement between Nechama Investments and Kanir (see “Item 7.A: Major Shareholders”), Mr. Nehama, Nechama Investments, Kanir and Messrs. Raphael and Fridrich may be deemed to be members of a group that holds shared voting power with respect to 6,338,266 ordinary shares, which together constitute approximately 59.3% of our outstanding ordinary shares, and holds shared dispositive power with respect to 5,356,878 ordinary shares, which constitute 50.1% of our outstanding ordinary shares. Accordingly, taking into account the shares directly held by Messrs. Nehama, Raphael (taking into account also shares held by the private company wholly-owned by him) and Fridrich, they may be deemed to beneficially own approximately 63.6%, 63.5% and 60.4%, respectively, of the outstanding ordinary shares. Mr. Nehama and Nechama Investments both disclaim beneficial ownership of the ordinary shares beneficially owned by Kanir and Kanir Ltd., Kanir and Messrs. Raphael and Fridrich all disclaim beneficial ownership of the shares held by Nechama Investments.
|
|
(6)
|
Our directors who are not subject to Management Services Agreement currently hold, in the aggregate, options currently exercisable into 21,502 ordinary shares.
|
|
(7)
|
Consists of options currently exercisable or that will become exercisable within 60 days from March 1, 2014.
|
Ordinary Shares
Beneficially Owned
(1)
|
Percentage of Ordinary Shares Beneficially Owned
|
|||||||
Shlomo Nehama
(2)(5)
|
4,016,842 | 37.6 | % | |||||
Kanir Joint Investments (2005) Limited Partnership
(3)(4)(5)(6)
|
2,786,397 | 26.1 | % |
(1)
|
As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security as determined pursuant to Rule 13d-3 promulgated under the U.S. Securities Exchange Act of 1934, as amended. For purposes of this table, a person is deemed to be the beneficial owner of securities that can be acquired within 60 days from March 1, 2014 through the exercise of any option or warrant. Ordinary shares subject to options or warrants that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding such options or warrants, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages are based on a total of 10,692,371 ordinary shares outstanding as of March 1, 2014. This number of outstanding ordinary shares does not include a total of 85,655 ordinary shares held at that date as treasury shares under Israeli law, all of which were repurchased by us. For so long as such treasury shares are owned by us they have no rights and, accordingly, are neither eligible to participate in or receive any future dividends which may be paid to our shareholders nor are they entitled to participate in, be voted at or be counted as part of the quorum for, any meetings of our shareholders.
|
(2)
|
The 4,016,842 ordinary shares beneficially owned by Mr. Nehama consist of: (i) 3,551,869 ordinary shares held by Nechama Investments, which constitute approximately 33.2% of our outstanding ordinary shares and (ii) 464,973 ordinary shares and held directly by Mr. Nehama, which constitute approximately 4.4% of our outstanding ordinary shares. Mr. Nehama, as the sole officer, director and shareholder of Nechama Investments, may be deemed to indirectly beneficially own any ordinary shares owned by Nechama Investments, which constitute (together with his shares) approximately 37.6% of our outstanding ordinary shares.
|
(3)
|
Kanir is an Israeli limited partnership. Kanir Ltd., in its capacity as the general partner of Kanir, has the voting and dispositive power over the ordinary shares directly beneficially owned by Kanir. As a result, Kanir Ltd. may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir. Messrs. Hemi Raphael and Ran Fridrich, who are members of our Board of Directors, are the sole directors of Kanir Ltd. and Mr. Raphael is a majority shareholder of Kanir Ltd. As a result, Messrs. Raphael and Fridrich may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir, which constitute, together with their holdings as set forth in footnote (4), 30.3% and 27.2%, respectively, of our outstanding ordinary shares. Kanir Ltd. and Messrs. Raphael and Fridrich disclaim beneficial ownership of such ordinary shares except to the extent of their respective pecuniary interest therein, if any.
|
(4)
|
Mr. Raphael beneficially owns 454,524 ordinary shares, consisting of: (i) 314,514 ordinary shares held by a BVI private company wholly-owned by Mr. Raphael, which constitute approximately 2.9% of our outstanding shares and (ii) 140,010 ordinary shares held directly by Mr. Raphael, which constitute approximately 1.3% of our outstanding shares. Mr. Raphael, as the sole officer, director and shareholder of such private company, may be deemed to indirectly beneficially own any ordinary shares beneficially owned by such private company, which constitute (together with the shares held directly by him) approximately 4.3% of our outstanding ordinary shares. Mr. Fridrich directly owns 116,787 ordinary shares, which constitute approximately 1.1% of our outstanding shares.
|
(5)
|
By virtue of the 2008 Shareholders Agreement, Mr. Nehama, Nechama Investments, Kanir, Kanir Ltd., and Messrs. Raphael and Fridrich may be deemed to be members of a group that holds shared voting power with respect to 6,338,266 ordinary shares, which constitute approximately 59.3% of our outstanding ordinary shares, and holds shared dispositive power with respect to 5,356,878 ordinary shares, which constitute 50.1% of the outstanding ordinary shares. Accordingly, taking into account the shares directly held by Messrs. Nehama, Raphael (taking into account also shares held by the private company wholly-owned by him) and Fridrich, they may be deemed to beneficially own approximately 63.6%, 63.5% and 60.4%, respectively, of our outstanding ordinary shares. Each of Mr. Nehama and Nechama Investments disclaims beneficial ownership of the ordinary shares beneficially owned by Kanir. Each of Kanir, Kanir Ltd. and Messrs. Raphael and Fridrich disclaims beneficial ownership of the ordinary shares beneficially owned by Nechama Investments. A copy of the 2008 Shareholders Agreement was filed with the Securities and Exchange Commission, or the SEC, on March 31, 2008 as Exhibit 14 to an amendment to a Schedule 13D and is not incorporated by reference herein.
|
(6)
|
Bonstar Investments Ltd., or Bonstar, an Israeli company, holds 233,258 ordinary shares, which constitute approximately 2.2% of the outstanding ordinary shares. Bonstar is a limited partner of Kanir and assisted Kanir in the financing of the purchase of some of its ordinary shares. Accordingly, Bonstar may be deemed to be a member of a group with Kanir and its affiliates, although there are no agreements between Bonstar and either of such persons and entities with respect to the ordinary shares beneficially owned by each of them. Mr. Joseph Mor and Mr. Ishay Mor are the sole shareholders of Bonstar and Mr. Joseph Mor serves as the sole director of Bonstar. Messrs. Joseph Mor and Ishay Mor also hold, through a company jointly held by them, 175,000 ordinary shares, which constitute approximately 1.6% of the outstanding ordinary shares. By virtue of their control over Bonstar and the other company, Messrs. Joseph Mor and Ishay Mor may be deemed to indirectly beneficially own the 408,258 ordinary shares beneficially owned by Bonstar and by the other company, which constitute approximately 3.8% of the ordinary shares. Each of Bonstar and Messrs. Joseph Mor and Ishay Mor disclaims beneficial ownership of the ordinary shares beneficially owned by Kanir and Nechama Investments, except to the extent of their respective pecuniary interest therein, if any.
|
NYSE MKT
|
Tel Aviv Stock Exchange
|
|||||||||||||||
Year
|
High (US$)
|
Low (US$)
|
High (NIS)
|
Low (NIS)
|
||||||||||||
2009
|
6.6 | 4.5 | -- | -- | ||||||||||||
2010
|
7.5 | 5.1 | -- | -- | ||||||||||||
2011
|
8.00 | 5.41 | -- | -- | ||||||||||||
2012
|
7.7 | 4.25 | -- | -- | ||||||||||||
2013
|
11.37 | 6.1 | 40.69 | 31.39 |
NYSE MKT
|
Tel Aviv Stock Exchange
|
|||||||||||||||
2012
|
High (US$)
|
Low (US$)
|
High (NIS)
|
Low (NIS)
|
||||||||||||
First Quarter
|
6.55 | 5.37 | -- | -- | ||||||||||||
Second Quarter
|
7.70 | 5.64 | -- | -- | ||||||||||||
Third Quarter
|
6.00 | 4.25 | -- | -- | ||||||||||||
Fourth Quarter
|
6.00 | 4.95 | -- | -- |
NYSE MKT
|
Tel Aviv Stock Exchange
|
|||||||||||||||
2013
|
High (US$)
|
Low (US$)
|
High (NIS)
|
Low (NIS)
|
||||||||||||
First Quarter
|
7.47 | 6.1 | -- | -- | ||||||||||||
Second Quarter
|
7.73 | 7.1 | -- | -- | ||||||||||||
Third Quarter
|
9 | 7.7 | -- | -- | ||||||||||||
Fourth Quarter
|
11.37 | 8.39 | 40.69 | 31.39 |
NYSE MKT
|
Tel Aviv Stock Exchange
|
|||||||||||||||
201
4
|
High (US$)
|
Low (US$)
|
High (NIS)
|
Low (NIS)
|
||||||||||||
First Quarter (through March 20, 2014)
|
10.59 | 9.3 | 37.13 | 33.12 |
NYSE MKT
|
Tel Aviv Stock Exchange
|
|||||||||||||||
Most Recent Six Months
|
High (US$)
|
Low (US$)
|
High (NIS)
|
Low (NIS)
|
||||||||||||
September 2013
|
9 | 8.32 | -- | -- | ||||||||||||
October 2013
|
11.37 | 8.39 | 40.69 | 37.64 | ||||||||||||
November 2013
|
10.96 | 9.05 | 38.60 | 31.99 | ||||||||||||
December 2013
|
9.74 | 9.16 | 33.45 | 31.39 | ||||||||||||
January 2014
|
10.59 | 9.85 | 37.13 | 33.69 | ||||||||||||
February 2014
|
9.96 | 9.3 | 35.39 | 33.12 |
|
·
|
any amendment to the articles;
|
|
·
|
an increase in the company’s authorized share capital;
|
|
·
|
a merger; or
|
|
·
|
approval of related party transactions that require shareholder approval.
|
|
(1)
|
an individual citizen or resident of the United States,
|
|
(2)
|
a corporation or other entity taxable as a corporation for U.S. federal income tax purposes organized in or under the laws of the United States or any political subdivision thereof,
|
|
(3)
|
an estate the income of which is subject to U.S. federal income tax without regard to its source, or
|
|
(4)
|
a trust, if such trust was in existence on August 20, 1996 and has validly elected to be treated as a U.S. person for U.S. federal income tax purposes, or if (a) a court within the U.S. can exercise primary supervision over its administration and (b) one or more U.S. persons have the authority to control all of the substantial decisions of such trust.
|
|
(1)
|
the excess distribution or gain will be allocated ratably over your holding period for the ordinary shares,
|
|
(2)
|
the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and
|
|
(3)
|
the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
|
December 31, 2013
|
December 31, 2012
|
December 31, 2011
|
||||||||||
Profit or loss
|
Profit or loss
|
Profit or loss
|
||||||||||
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||
Increase of 1%
|
280 | 198 | 99 | |||||||||
Increase of 3%
|
849 | 749 | 298 | |||||||||
Decrease of 1%
|
(292 | ) | (344 | ) | (99 | ) | ||||||
Decrease of 3%
|
(861 | ) | (653 | ) | (239 | ) |
2013
|
2012
|
|||||||
(US$ in thousands)
|
||||||||
Audit Fees(1)
|
$ | 207 | $ | 87 | ||||
Audit-Related Fees(2)
|
$ | 32 | -- | |||||
Tax Fees(3)
|
$ | 23 | $ | 32 | ||||
All Other Fees
|
- | -- | ||||||
Total
|
$ | 239 | $ | 119 |
(1)
|
Professional services rendered by our independent registered public accounting firm for the audit of our annual financial statements or services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements.
|
(2)
|
Professional services related to due diligence investigations.
|
(3)
|
Professional services rendered by our independent registered public accounting firm for international and local tax compliance, tax advice services and tax planning.
|
Number
|
Description
|
1.1
|
Memorandum of Association of the Registrant (translated from Hebrew), reflecting amendments through June 9, 2011*(1)
|
1.2
|
Second Amended and Restated Articles of the Registrant, reflecting amendments through June 20, 2012(1)
|
2.1
|
Specimen Certificate for ordinary shares
(2)
|
4.1
|
1998 Share Option Plan for Non-Employee Directors(1)
|
4.2
|
2000 Stock Option Plan(1)
|
4.3
|
Form of Indemnification Agreement between the Registrant and its officers and directors(1)
|
4.4
|
Form of Exemption Letter between the Registrant and its officers and directors(1)
|
4.5
|
Form of Registration Rights Agreement, dated September 12, 2005, among the Registrant, certain investors, Bank Hapoalim, Bank Leumi and Israel Discount Bank(3)
|
4.6
|
Management Services Agreement, by and among the Registrant, Kanir Joint Investments (2005) Limited Partnership and Meisaf Blue & White Holdings Ltd., effective as of March 31, 2008(4)
|
4.7
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic System in Cingoli, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 4, 2010 (portions translated from Italian)(5)*
|
4.8
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic System in Senigallia, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 4, 2010 (portions translated from Italian)(5)*
|
4.9
|
Side Agreement, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 5, 2010(6)
|
4.10
|
Giaché Building Right Agreement (summary of Italian version)(7)*
|
4.11
|
Massaccesi Building Right Agreement (summary of Italian version)(7)*
|
4.12
|
Settlement Agreement and Release, dated July 27, 2010, between Ellomay Capital Limited and Hewlett-Packard Company(7)
|
4.13
|
Troia 8 Building Right Agreement (summary of Italian version)(7)*
|
4.14
|
Troia 9 Building Right Agreement (summary of Italian version)(7)*
|
4.15
|
Investment Agreement, among U. Dori Group Ltd., U. Dori Energy Infrastructures Ltd. and Ellomay Clean Energy Ltd. , dated November 25, 2010 (summary of Hebrew version)(7)*
|
4.16
|
Shareholders Agreement, among U. Dori Group Ltd., Ellomay Clean Energy Ltd. and U. Dori Energy Infrastructures Ltd., dated November 25, 2010 (summary of Hebrew version)(7)*
|
4.17
|
Agreement, between U. Dori Energy Infrastructures Ltd. and Israel Discount Bank Ltd., dated January 26, 2011 (summary of Hebrew version)(7)*
|
Number
|
Description
|
4.18
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic Plant, between Urbe Techno S.r.l. and Pedale S.r.l., dated March 25, 2011 (portions translated or summarized from Italian)(includes a summary of the Building Rights Agreement)(7)*
|
4.19
|
Acquafresca Building Right Agreement (summary of Italian version)(2)*
|
4.20
|
D’Angella Building Right Agreement (summary of Italian version)(2)*
|
4.21
|
Rinconada II Building Right Agreement (summary of Spanish version)(2)*
|
4.22
|
Directors and Officers Compensation Policy, adopted June 2013(8)
|
4.23
|
Amendment No. 1 to Management Services Agreement, by and among the Registrant, Kanir Joint Investments (2005) Limited Partnership and Meisaf Blue & White Holdings Ltd., dated June 18, 2013
|
4.24
|
Veneto PV Plants Framework Acquisition Agreement, dated March 28, 2013, as amended on May 2, 2013 (summary of German version)*
|
4.25
|
Soleco Building Right Agreement (summary of Italian version)*
|
4.26
|
Tecnoenergy Building Right Agreement (summary of Italian version)*
|
4.27
|
Warrant issued to Mr. Zohar Zisapel, dated August 7, 2013
|
4.28
|
Deed of Trust between the Registrant and Hermetic Trust (1975) Ltd., dated December 30, 2013 (translation of Hebrew version)*
|
8
|
List of Subsidiaries of the Registrant
|
12.1
|
Certification of Principal Executive Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)
|
12.2
|
Certification of Principal Financial Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)
|
13
|
Certification of Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(b) and Rule 15d-14(b) (Section 906 Certification)
|
15.1
|
Consent of Somekh Chaikin, Member Firm of KPMG International, Independent Registered Public Accounting Firm
|
15.2
|
Consent of BDO
|
*
|
The original language version is on file with the Registrant and is available upon request.
|
|
(1)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2012 and incorporated by reference herein.
|
(2)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2011 and incorporated by reference herein.
|
(3)
|
Included in the Registrant’s Form 6-K dated October 14, 2005 and incorporated by reference herein.
|
(4)
|
Included in the Registrant’s Form 6-K dated December 1, 2008 and incorporated by reference herein.
|
(5)
|
Previously filed with Amendment No. 2 to the Registrant’s Form 20-F for the year ended December 31, 2009 and incorporated by reference herein.
|
(6)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2009 and incorporated by reference herein.
|
(7)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2010 and incorporated by reference herein.
|
(8)
|
Included in Exhibit 2 of the Registrant’s Form 6-K dated May 13, 2013 and incorporated by reference herein.
|
Ellomay Capital Ltd.
|
|||
|
By:
|
/s/ Ran Fridrich | |
Ran Fridrich
|
|||
Chief Executive Officer and Director
|
|||
Ellomay Capital Ltd. and its Subsidiaries
Consolidated Financial Statements
As at December 31, 2013
|
F-2-F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7-F-8
|
|
F-9-F-70
|
December 31
|
December 31
|
||||||||||
2013
|
2012
|
||||||||||
Note
|
US$ in thousands
|
||||||||||
Assets
|
|||||||||||
Current assets:
|
|||||||||||
Cash and cash equivalents
|
3 | 7,238 | 33,292 | ||||||||
Short-term deposits
|
5,153 | 5,290 | |||||||||
Restricted cash
|
4 | 5,653 | 8,085 | ||||||||
Trade receivables
|
134 | 95 | |||||||||
Other receivables and prepaid expenses
|
5 | 4,357 | 4,436 | ||||||||
22,535 | 51,198 | ||||||||||
Non-current assets
|
|||||||||||
Investment in equity accounted investee
|
6 | 24,601 | 19,198 | ||||||||
Financial asset
|
6 | 389 | 485 | ||||||||
Property, plant and equipment, net
|
7 | 93,671 | 53,860 | ||||||||
Restricted cash and deposits
|
4 | 4,315 | 3,253 | ||||||||
Other assets
|
1,419 | 746 | |||||||||
124,395 | 77,542 | ||||||||||
Total assets
|
146,930 | 128,740 | |||||||||
Liabilities and Equity
|
|||||||||||
Current liabilities
|
|||||||||||
Loans and borrowings
|
9 | 19,454 | 7,044 | ||||||||
Accounts payable
|
2,154 | 1,926 | |||||||||
Accrued expenses and other payables
|
8 | 5,311 | 14,251 | ||||||||
26,919 | 23,221 | ||||||||||
Non-current liabilities
|
|||||||||||
Finance lease obligations
|
10 | 6,814 | 6,898 | ||||||||
Long-term loans
|
11 | 11,050 | 11,680 | ||||||||
Other long-term liabilities
|
12 | 2,386 | 3,827 | ||||||||
20,250 | 22,405 | ||||||||||
Total liabilities
|
47,169 | 45,626 | |||||||||
Equity
|
|||||||||||
Share capital
|
26,180 | 26,180 | |||||||||
Share premium
|
76,932 | 76,410 | |||||||||
Treasury shares
|
(522 | ) | (522 | ) | |||||||
Reserves
|
4,154 | (1,884 | ) | ||||||||
Accumulated deficit
|
(7,011 | ) | (17,079 | ) | |||||||
Total equity attributed to shareholders of the Company
|
99,733 | 83,105 | |||||||||
Non-Controlling Interest
|
28 | 9 | |||||||||
Total equity
|
99,761 | 83,114 | |||||||||
Total liabilities and equity
|
146,930 | 128,740 |
For the year ended December 31
|
|||||||||||||||
2013
|
2012
|
2011
|
|||||||||||||
Note
|
US$ in thousands (except per share data)
|
||||||||||||||
Revenues
|
12,982 | 8,890 | 6,114 | ||||||||||||
Operating expenses
|
17B | (2,381 | ) | (1,954 | ) | (1,391 | ) | ||||||||
Depreciation expenses
|
17B | (4,021 | ) | (2,717 | ) | (1,777 | ) | ||||||||
Gross profit
|
6,580 | 4,219 | 2,946 | ||||||||||||
General and administrative expenses
|
17C | (3,449 | ) | (3,110 | ) | (3,102 | ) | ||||||||
Gain on bargain purchase
|
6 | 10,237 | - | - | |||||||||||
Capital loss, net
|
- | (394 | ) | - | |||||||||||
Operating Profit (Loss)
|
13,368 | 715 | (156 | ) | |||||||||||
Financing income
|
17A | 204 | 550 | 1,820 | |||||||||||
Financing income (expenses) in connection with derivatives, net
|
17A | 1,501 | (2,131 | ) | (2,406 | ) | |||||||||
Financing expenses
|
17A | (4,201 | ) | (2,046 | ) | (652 | ) | ||||||||
Financing expenses, net
|
(2,496 | ) | (3,627 | ) | (1,238 | ) | |||||||||
Company’s share of losses of investee accounted for at equity
|
(540 | ) | (232 | ) | (596 | ) | |||||||||
Profit (loss) before taxes on income
|
10,332 | (3,144 | ) | (1,990 | ) | ||||||||||
Tax benefit (taxes on income)
|
18 | (245 | ) | 1,011 | 1,018 | ||||||||||
Net income (loss) for the year
|
10,087 | (2,133 | ) | (972 | ) | ||||||||||
Income (Loss) attributable to:
|
|||||||||||||||
Shareholders of the Company
|
10,068 | (2,110 | ) | (972 | ) | ||||||||||
Non-controlling interests
|
19 | (23 | ) | - | |||||||||||
Net income (loss) for the year
|
10,087 | (2,133 | ) | (972 | ) | ||||||||||
Other comprehensive income (loss)
|
|||||||||||||||
Items that are or may be reclassified to profit or loss:
|
|||||||||||||||
Foreign currency translation adjustments
|
6,038 | 1,620 | (3,698 | ) | |||||||||||
Total other comprehensive income (loss)
|
6,038 | 1,620 | (3,698 | ) | |||||||||||
Total comprehensive income (loss)
|
16,125 | (513 | ) | (4,670 | ) | ||||||||||
Basic and Diluted net earnings (loss) per share
|
19 | 0.94 | (0.20 | ) | (0.09 | ) |
Attributable to shareholders of the Company
|
Non- controlling
interests
|
Total
Equity
|
||||||||||||||||||||||||||||||
Translation
|
||||||||||||||||||||||||||||||||
reserve
|
||||||||||||||||||||||||||||||||
from
|
||||||||||||||||||||||||||||||||
Share
|
Share
|
Accumulated
|
Treasury
|
Foreign
|
||||||||||||||||||||||||||||
capital
|
premium
|
deficit
|
shares
|
Operations
|
Total
|
|||||||||||||||||||||||||||
US$ in thousands
|
||||||||||||||||||||||||||||||||
Balance as at
|
||||||||||||||||||||||||||||||||
January 1, 2013
|
26,180 | 76,410 | (17,079 | ) | (522 | ) | (1,884 | ) | 83,105 | 9 | 83,114 | |||||||||||||||||||||
Profit for the year
|
- | - | 10,068 | - | - | 10,068 | 19 | 10,087 | ||||||||||||||||||||||||
Other comprehensive income
|
- | - | - | - | 6,038 | 6,038 | * | 6,038 | ||||||||||||||||||||||||
Total comprehensive income
|
- | - | 10,068 | - | 6,038 | 16,106 | 19 | 16,125 | ||||||||||||||||||||||||
Transactions with owners
|
||||||||||||||||||||||||||||||||
of the Company, recognized
|
||||||||||||||||||||||||||||||||
directly in equity:
|
||||||||||||||||||||||||||||||||
Cost of share-based
|
||||||||||||||||||||||||||||||||
payments
|
- | 522 | - | - | - | 522 | - | 522 | ||||||||||||||||||||||||
Balance as at
|
||||||||||||||||||||||||||||||||
December 31, 2013
|
26,180 | 76,932 | (7,011 | ) | (522 | ) | 4,154 | 99,733 | 28 | 99,761 | ||||||||||||||||||||||
Balance as at
|
||||||||||||||||||||||||||||||||
January 1, 2012
|
26,180 | 76,403 | (14,969 | ) | (49 | ) | (3,504 | ) | 84,061 | - | 84,061 | |||||||||||||||||||||
Loss for the year
|
- | - | (2,110 | ) | - | - | (2,110 | ) | (23 | ) | (2,133 | ) | ||||||||||||||||||||
Other comprehensive income
|
- | - | - | - | 1,620 | 1,620 | * | 1,620 | ||||||||||||||||||||||||
Total comprehensive income
|
- | - | (2,110 | ) | - | 1,620 | (490 | ) | (23 | ) | (513 | ) | ||||||||||||||||||||
Transactions with owners
|
||||||||||||||||||||||||||||||||
of the Company, recognized
|
||||||||||||||||||||||||||||||||
directly in equity:
|
||||||||||||||||||||||||||||||||
Treasury shares
|
- | - | - | (473 | ) | - | (473 | ) | - | (473 | ) | |||||||||||||||||||||
Cost of share-based
|
||||||||||||||||||||||||||||||||
payments
|
- | 7 | - | - | - | 7 | - | 7 | ||||||||||||||||||||||||
Non-controlling interests in
respect
of business combination
|
- | - | - | - | - | - | 32 | 32 | ||||||||||||||||||||||||
Balance as at
|
||||||||||||||||||||||||||||||||
December 31, 2012
|
26,180 | 76,410 | (17,079 | ) | (522 | ) | (1,884 | ) | 83,105 | 9 | 83,114 |
Balance as at
|
||||||||||||||||||||||||||||||||
January 1, 2011
|
26,103 | 76,266 | (13,997 | ) | - | 194 | 88,566 | - | 88,566 | |||||||||||||||||||||||
Loss for the year
|
- | - | (972 | ) | - | - | (972 | ) | - | (972 | ) | |||||||||||||||||||||
Other comprehensive loss
|
- | - | - | - | (3,698 | ) | (3,698 | ) | - | (3,698 | ) | |||||||||||||||||||||
Total comprehensive loss
|
- | - | (972 | ) | - | (3,698 | ) | (4,670 | ) | - | (4,670 | ) | ||||||||||||||||||||
Transactions with owners
|
||||||||||||||||||||||||||||||||
of the Company, recognized
|
||||||||||||||||||||||||||||||||
directly in equity:
|
||||||||||||||||||||||||||||||||
Treasury shares
|
- | - | - | (49 | ) | - | (49 | ) | - | (49 | ) | |||||||||||||||||||||
Exercise of warrants
|
77 | 105 | - | - | - | 182 | - | 182 | ||||||||||||||||||||||||
Cost of share-based
|
||||||||||||||||||||||||||||||||
payments
|
- | 32 | - | - | - | 32 | - | 32 | ||||||||||||||||||||||||
Balance as at
|
||||||||||||||||||||||||||||||||
December 31, 2011
|
26,180 | 76,403 | (14,969 | ) | (49 | ) | (3,504 | ) | 84,061 | - | 84,061 |
For the year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
||||||||||||
Cash flows from operating activities
|
||||||||||||
Net income (loss)
|
10,087 | (2,133 | ) | (972 | ) | |||||||
Adjustments for
:
|
||||||||||||
Financing expenses, net
|
2,496 | 3,627 | 1,238 | |||||||||
Gain on bargain purchase
|
(10,237 | ) | - | - | ||||||||
Capital loss
|
- | 394 | - | |||||||||
Depreciation
|
4,021 | 2,717 | 1,777 | |||||||||
Loss from disposal of property and equipment, net of insurance income
|
- | 338 | - | |||||||||
Cost of share-based payment
|
522 | 7 | 32 | |||||||||
Company’s share of losses of investees accounted for at equity
|
540 | 232 | 596 | |||||||||
Decrease (increase) in trade receivables
|
218 | (1 | ) | (95 | ) | |||||||
Decrease (increase) in other receivables and prepaid expenses
|
1,783 | 4,404 | (6,285 | ) | ||||||||
Decrease (increase) in other assets
|
12 | (11 | ) | 345 | ||||||||
Increase in accrued severance pay, net
|
22 | 6 | 17 | |||||||||
Increase (decrease) in accounts payable
|
376 | (122 | ) | (35 | ) | |||||||
Increase (decrease) in other payables and accrued expenses
|
(1,450 | ) | (1,639 | ) | 1,462 | |||||||
Taxes on income (Tax benefit)
|
245 | (1,011 | ) | (1,018 | ) | |||||||
Taxes on income paid
|
(458 | ) | (55 | ) | - | |||||||
Interest received
|
137 | 427 | 436 | |||||||||
Interest paid
|
(1,925 | ) | (1,274 | ) | (652 | ) | ||||||
(3,698 | ) | 8,039 | (2,182 | ) | ||||||||
Net cash provided by (used in) operating activities from
|
||||||||||||
continuing operations
|
6,389 | 5,906 | (3,154 | ) | ||||||||
Net cash provided by operating activities from
|
||||||||||||
discontinued operations
|
- | - | 112 | |||||||||
Net cash provided by (used in) operating activities
|
6,389 | 5,906 | (3,042 | ) |
For the year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
||||||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property and equipment
|
(9,152 | ) | (1,212 | ) | (24,937 | ) | ||||||
Acquisition of subsidiary, net of cash acquired (see note 6F)
|
(30,742 | ) | (6,472 | ) | - | |||||||
Investment in equity accounted investees
|
(4,372 | ) | (6,481 | ) | (10,765 | ) | ||||||
Disposal of an investee accounted for at equity method
|
- | 114 | - | |||||||||
Proceeds from (Investment in) deposits, net
|
137 | 4,710 | (10,000 | ) | ||||||||
Settlement of forward contract
|
(169 | ) | 112 | 465 | ||||||||
Deposit (proceeds) from restricted cash, net
|
1,519 | 7,379 | (17,560 | ) | ||||||||
Net cash used in investing activities
|
(42,779 | ) | (1,850 | ) | (62,797 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Short-term loans, net
|
(5,821 | ) | 12,914 | |||||||||
Repayment of long-term loans and financial lease obligation
|
(7,818 | ) | (1,286 | ) | - | |||||||
Treasury shares
|
- | (473 | ) | (49 | ) | |||||||
Proceeds from financial lease obligation
|
- | 1,086 | 2,166 | |||||||||
Proceeds from long term loans
|
17,692 | 6,460 | 5,808 | |||||||||
Proceeds from warrants exercised
|
- | - | 182 | |||||||||
Net cash provided by (used in) financing activities
|
9,874 | (34 | ) | 21,021 | ||||||||
Exchange differences on balances of cash and
|
||||||||||||
cash equivalents
|
462 | 353 | (2,848 | ) | ||||||||
Increase (decrease) in cash and cash equivalents
|
(26,054 | ) | 4,375 | (47,666 | ) | |||||||
Cash and cash equivalents at the beginning of year
|
33,292 | 28,917 | 76,583 | |||||||||
Cash and cash equivalents at the end of the year
|
7,238 | 33,292 | 28,917 |
|
A.
|
Ellomay Capital Ltd. (hereinafter - the "Company"), is an Israeli Company in the business of energy and infrastructure and its operations currently mainly include production of renewable and clean energy. The Company owns thirteen photovoltaic plants that are connected to their respective national grids and operating as follows: (i) twelve photovoltaic plants in Italy with an aggregate nominal capacity of approximately 22.6 MWp and (ii) 85% of one photovoltaic plant in Spain with a nominal capacity of approximately 2.3 MWp. In addition, the Company indirectly owns 7.5% of Dorad Energy Ltd. (and an option to increase its indirect holdings in Dorad under certain conditions to 9.375%).
|
|
The securities of the Company are listed on the NYSE MKT (
under the symbol “ELLO”)
and on the Tel Aviv Stock Exchange
(under the symbol “ELOM”)
. The address of the Company’s registered office is 9 Rothschild Blvd., Tel Aviv, Israel.
|
|
B
.
|
Definitions:
|
|
In these financial statements:
|
|
IFRS - Standards and interpretations that were adopted by the International Accounting Standards Board ("IASB") and which include International Financial Reporting Standards and International Accounting Standards ("IAS") along with the interpretations to these standards of the International Financial Reporting Interpretations Committee ("IFRIC") or interpretations of the Standing Interpretations Committee ("SIC"), respectively.
|
|
Subsidiaries – Companies, including a partnership, the financial statements of which are fully consolidated, directly or indirectly, with the financial statements of the Company.
|
|
Investee companies – Subsidiaries and companies, including a partnership, the Company's investment in which is stated, directly or indirectly, on the equity basis.
|
|
Related party - Within its meaning in IAS 24 (2009), "Related Party Disclosures".
|
|
Unless otherwise noted, all references to “dollars” and “$” are to United States dollars and all references to "NIS" are to New Israeli Shekels.
|
|
A.
|
Basis of preparation of the financial statements
|
|
1.
|
The consolidated financial statements of the Company as of December 31, 2013 have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the IASB.
|
|
The consolidated financial statements were authorized for issue on March 31, 2014.
|
|
2.
|
Consistent accounting policies
|
|
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.
|
|
3.
|
Measurement basis
|
|
The consolidated financial statements have been prepared on the historical cost basis, except for the following:
|
|
(i)
|
Investment in investee accounted for using the equity method;
|
|
(ii)
|
Derivative financial instruments measured at fair value through profit or loss; and
|
|
(iii)
|
Provision for tax uncertainties and deferred tax.
|
|
B.
|
Significant accounting judgments, estimates and assumptions used in the preparation of the financial statements
|
|
The preparation of the Company's consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts recognized in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. Estimates and underlying assumptions are reviewed on an ongoing basis. The changes in accounting estimates are recognized in the period of the change in estimate.
|
|
The key assumptions made in the financial statements concerning uncertainties at the balance sheet date and the critical estimates computed by the Company that may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
|
|
B.
|
Significant accounting judgments, estimates and assumptions used in the preparation of the financial statements (cont’d)
|
|
Legal claims
|
|
When assessing the possible outcomes of legal claims that were filed against the Company and its subsidiaries, the Company relied on the assessments of legal counsel. The assessments of legal counsel are based on the best of their professional judgment, and take into consideration the current stage of the proceedings and the legal experience accumulated with respect to the various matters. As the results of the claims will ultimately be determined by the courts, they may be different from such estimates. See Note 13D.
|
|
Classification of leases:
In order to determine whether to classify a lease as finance or operating lease, the Company evaluates whether the lease transfers substantially all the risks and benefits incidental to ownership of the leased asset. In this respect, the Company evaluates such criteria as the existence of a "bargain" purchase option, the lease term in relation to the economic life of the asset and the present value of the minimum lease payments in relation to the fair value of the asset. See Note 10.
|
|
Uncertain tax positions:
|
|
The Company recognizes a provision for tax uncertainties. In determining the amount of the provision, assumptions and estimates are made in relation to the probability that the position will be sustained upon examination and the amount that is likely to be realized upon settlement, using the facts, circumstances, and information available at the reporting date. The Company records an additional tax charge in a period in which it determines that a recorded tax liability is less than it expects ultimate assessment to be. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evaluation of regulations and court rulings. Therefore, the actual tax liability may be materially different from the Company's estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities.
|
|
Purchase price allocation:
|
|
The Company is required to allocate the purchase price of investment in an investee to the assets and liabilities of this investee, on the basis of its estimated fair value. This valuation requires management to use significant estimates and assumptions. The intangible assets that were recognized include the customer portfolio. Critical estimates that were used to value certain assets include, inter alia, the cash flows expected from the customer portfolio. Management's assessments regarding the fair value and useful life are based on assumptions management considered reasonable, but involve uncertainty, therefore actual results may be different. See Note 6A(1) and 6F.
|
|
Fair value measurement of non-trading derivatives
|
|
Within the scope of the valuation of derivatives not traded on an active market, management makes assumptions about unobserved data using valuation models. For information on a sensitivity analysis of level 3 financial instruments carried at fair value see Note 20F (5) regarding financial instruments.
|
|
C.
|
Functional and presentation currency
|
|
1.
|
These consolidated financial statements are presented in US dollar which is the Company's functional currency, and have been rounded to the nearest thousand. The US dollar is the currency that represents the principal economic environment in which the Company operates.
|
|
2.
|
The functional currency is examined for the Company and for each of the subsidiaries separately. The functional currency of the Company's Italian and Spanish subsidiaries' was determined to be the EURO and for the equity investment it was determined to be the NIS.
|
|
When a company's functional currency differs from parent's functional currency, that entity represents a foreign operation whose financial statements are translated so that they can be included in the consolidated financial statements as follows:
|
|
a)
|
Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet.
|
|
b)
|
Income and expenses for each period presented in the statement of profit or loss and other comprehensive income (loss) are translated at average exchange rates for the presented periods; however, if exchange rates fluctuate significantly, income and expenses are translated at the exchange rates at the date of the transactions.
|
|
c)
|
Share capital, capital reserves and other changes in capital are translated at the exchange rate prevailing at the date of issuance.
|
|
d)
|
Retained earnings are translated based on the opening balance translated at the exchange rate at that date and other relevant transactions during the period are translated as described in b) and c) above.
|
|
|
e)
|
All resulting translation differences are recognized as a separate component of other comprehensive income (loss) in equity "foreign currency translation adjustments".
|
|
On a total or partial disposal of a foreign operation, the relevant part of the other comprehensive income (loss) is recognized in the statement of comprehensive income (loss).
|
|
Intergroup loans for which settlement is neither planned nor likely to occur in the foreseeable future are, in substance, a part of the investment in that foreign operation and are accounted for as part of the investment and the exchange differences arising on these loans are recognized in the same component of equity as discussed in e) above.
|
|
Transactions denominated in foreign currency (other than the functional currency) are recorded on initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at the end of each reporting period into the functional currency at the exchange rate at that date. Exchange differences, other than those capitalized to qualifying assets or carried to equity in hedging transactions, are recognized in profit or loss. Non-monetary assets and liabilities measured at cost are translated at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated into the functional currency using the exchange rate prevailing at the date when the fair value was determined.
|
|
D.
|
Basis of consolidation and equity method accounting
|
|
The consolidated financial statements
comprise the financial statements of the Company and its subsidiaries as at
December
31, 2013 and 2012. The Company holds 100% of all subsidiaries, except for Ellomay Spain which is held at 85%. See Note 6.
|
|
Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with associates and jointly controlled entities are eliminated against the investment to the extent of the Company’s interest in these investments. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
|
|
Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies. In assessing significant influence, potential voting rights that are currently exercisable or convertible into shares of the investee are taken into account.
|
|
Associates are accounted for using the equity method (equity accounted investees) and are recognized initially at cost. The cost of the investment includes transaction costs. The consolidated financial statements include the Company’s share of the income and expenses in profit or loss and of other comprehensive income of equity accounted investees, after adjustments to align the accounting policies with those of the Company, from the date that significant influence commences until the date that significant influence ceases.
|
|
When the Company’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term interests that form a part thereof, is reduced to zero. When the Company’s share of long-term interests that form a part of the investment in the investee is different from its share in the investee’s equity, the Company continues to recognize its share of the investee’s losses, after the equity investment was reduced to zero, according to its economic interest in the long-term interests. The recognition of further losses is discontinued except to the extent that the Company has an obligation or has made payments on behalf of the investee.
|
|
The Company implements the acquisition method to all business combinations. The acquisition date is the date on which the acquirer obtains control over the acquiree. Control exists when the Company is exposed, or has rights; to variable returns from its involvement with the acquiree and it has the ability to affect those returns through its power over the acquiree. Substantive rights held by the Company and others are taken into account when assessing control.
|
|
D.
|
Basis of consolidation and equity method accounting (cont’d)
|
|
The Company recognizes goodwill on acquisition according to the fair value of the consideration transferred including any amounts recognized in respect of rights that do not confer control in the acquiree as well as the fair value at the acquisition date of any pre-existing equity right of the Company in the acquiree, less the net amount of the identifiable assets acquired and the liabilities assumed.
|
|
If the Company pays a bargain price for the acquisition (including negative goodwill), it recognizes the resulting gain in profit or loss on the acquisition date. Furthermore, goodwill is not adjusted in respect of the utilization of carry-forward tax losses that existed on the date of the business combination.
|
|
The consideration transferred includes the fair value of the assets transferred to the previous owners of the acquiree, the liabilities incurred by the acquirer to the previous owners of the acquiree and equity instruments that were issued by the Company. In a step acquisition, the difference between the acquisition date fair value of the Company’s pre-existing equity rights in the acquiree and the carrying amount at that date is recognized in profit or loss under other income or expenses.
|
|
Costs associated with the acquisitions that were incurred by the acquirer in the business combination such as: finder’s fees, advisory, legal, valuation and other professional or consulting fees are expensed in the period the services are received.
|
5.
|
Non-controlling interests
|
|
Non-controlling interests comprise the equity of a subsidiary that cannot be attributed, directly or indirectly, to the parent company.
|
|
Non-controlling interests that are instruments that give rise to a present ownership interest and entitle the holder to a share of net assets in the event of liquidation (for example: ordinary shares), are measured at the date of the business combination at their proportionate interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis.
|
|
Profit or loss and any part of other comprehensive income are allocated to the owners of the Company and the non-controlling interests. Total comprehensive income is allocated to the owners of the Company and the non-controlling interests even if the result is a negative balance of non-controlling interests.
|
|
E.
|
Cash and cash equivalents
Cash and cash equivalents are comprised of cash at hand, and unrestricted short-term deposits with original maturity of three months or less from the date of acquisition, that are redeemable on demand without penalty and that form part of the Company's cash management. Cash and cash equivalents value is as provided by bank statements and due to the short maturity approximates the fair value.
|
|
F.
|
Short term deposits
|
|
Short-term bank deposits are deposits with an original maturity of more than three months but less than one year from the date of deposit.
|
|
G.
|
Property, plant and equipment
|
|
(1)
|
Recognition and measurement
|
|
Property, plant and equipment items are measured at cost less accumulated depreciation and accumulated impairment losses.
|
|
Cost includes expenditures that are directly attributable to the acquisition of the asset.
|
|
Project licenses are included in the cost of photovoltaic plants.
|
|
(2)
|
Depreciation
|
|
Depreciation is a systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount is the cost of the asset, or other amount substituted for cost, less its residual value.
|
|
An asset is depreciated from the date it is ready for use, meaning the date it reaches the location and condition required for it to operate in the manner intended by management.
|
|
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of the fixed asset item, as this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets under finance lease agreements including lands are depreciated over the shorter of the lease term and their useful lives, unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.
|
%
|
Mainly %
|
||
Office furniture and equipment
|
6-33
|
33
|
|
Photovoltaic plants in Spain
|
4
|
4
|
|
Photovoltaic plants in Italy
|
5
|
5
|
|
Leasehold improvements
|
Over the shorter of the lease period or the life of the asset
|
7
|
|
Depreciation methods and useful lives are reviewed at each financial year-end and adjusted if appropriate.
|
|
G.
|
Property, plant and equipment (cont’d)
|
|
The estimated useful life of the project licenses of photovoltaic plants that are carried at cost is 20 years for the Italian subsidiaries and 25 years for the Spanish subsidiary.
|
|
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognized. The assets' residual values, useful lives and methods of depreciation are reviewed at each financial year-end and adjusted if appropriate.
|
|
H.
|
Financial instruments
|
|
Non-derivative Financial assets
:
The Company's financial assets include cash and cash equivalents, short-term and long-term deposits, short-term and long-term, restricted cash, trade receivables and other receivables and prepaid expenses.
|
|
The Company initially recognizes loans and receivables and deposits on the date that they are created. Financial assets are derecognized when the contractual rights of the Company to the cash flows from the asset expire, or when the Company transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.
|
|
Loans and
receivables
|
|
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.
|
|
Cash and cash equivalents include cash balances available for immediate use and call deposits. Cash equivalents include short-term highly liquid investments (with original maturities of three months or less) that are readily convertible into known amounts of cash and are exposed to insignificant risks of change in value.
|
|
H.
|
Financial instruments (cont’d)
|
|
Financial liabilities:
The Company has the following financial liabilities: loans and borrowings, accounts payables, accrued expenses and other payables, finance lease obligation, long-term loans and other long-term liabilities.
|
|
All other financial liabilities are recognized initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument. Financial liabilities (other than financial liabilities at fair value through profit or loss) are recognized initially at fair value minus any directly attributable transaction costs (such as loan raising costs). Subsequent to initial recognition, interest-bearing loans and borrowings are measured based on their terms at amortized cost using the effective interest method, taking into account directly attributed transaction costs. Short-term borrowings (such as other payables) are measured based on their terms, normally at face value. Financial liabilities are derecognized when the obligation of the Company, as specified in the agreement, expires or when it is discharged or cancelled.
|
|
Derivative financial instruments
|
|
The Company holds derivative financial instruments to economically hedge its interest rate risk exposures, and an option to acquire additional shares in an investee.
Economic hedges:
|
|
Hedge accounting is not applied to derivative instruments that economically hedge financial assets and liabilities denominated in foreign currencies. Changes in the fair value of such derivatives are recognized in profit or loss under financing income or expenses.
Share capital:
|
|
Incremental costs directly attributable to the issue of ordinary shares and share options are recognized as a deduction from equity.
|
|
When share capital recognized as equity is repurchased by the Company, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus on the transaction is carried to share premium, whereas a deficit on the transaction is deducted from retained earnings.
|
|
I.
|
Impairment of non-financial assets
|
|
The Company evaluates the need to record an impairment of the carrying amount of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable. If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in profit or loss.
|
|
An impairment loss of an asset, other than goodwill, is reversed only if there have been changes in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in prior years and its recoverable amount. The reversal of impairment loss of an asset presented at cost is recognized in profit or loss.
|
|
J.
|
Share-based payment transactions
|
|
The Company's employees and directors are entitled to remuneration in the form of equity-settled share-based payment transactions. The Company applies the provisions of IFRS 2, "
Share-Based Payme
n
t
".
|
|
The cost of equity-settled transactions with employees and directors is measured at the fair value of the equity instruments at the date on which they are granted. The fair value is determined by using the Black-Scholes option-pricing model taking into account the terms and conditions upon which the instruments were granted, additional details are included in Note 16.
|
|
The cost of equity-settled transactions is recognized in profit or loss, together with a corresponding increase in share premium, over the period in which the service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the "vesting date"). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest.
|
|
K.
|
Employees benefits
|
|
1.
|
Short-term employee benefits:
|
|
Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus is recognized when the Company has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made.
|
|
2.
|
Post-employment benefits:
|
|
The plans are normally financed by contributions to insurance companies and classified as defined contribution plan or as defined benefit plan.
|
|
The Company has defined contribution plans pursuant to Section 14 to the Israeli Severance Pay Law, 5723-1963 (the “Severance Pay Law”) under which the Company pays fixed contributions and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient amounts to pay all severance-related employee benefits relating to employee service in the current and prior periods. Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense when contributed simultaneously with receiving the employee's services and no additional provision is required in the financial statements.
|
|
The Company also operates a defined benefit plan in respect of severance pay pursuant to the Severance Pay Law. According to the Severance Pay Law, employees are entitled to severance pay upon dismissal or retirement.
|
|
The Company makes current deposits in respect of severance pay obligation to pay compensation to certain of its employees in its pension funds and insurance companies (the "plan assets"). Plan assets are not available to the Company's own creditors and cannot be returned directly to the Company.
|
|
The liability for employee benefits presented in the statement of financial position presents the present value of the defined benefit obligation less the fair value of the plan assets, less past service costs.
|
|
L.
|
Leases
|
|
The criteria for classifying leases as finance or operating leases depend on the substance of the agreements and classification is made at the inception of the lease.
|
|
Operating
leases:
|
|
Lease agreements are classified as an operating lease if they do not transfer substantially all the risks and benefits incidental to ownership of the leased asset.
|
|
Payments made under operating leases are recognized in the statement of comprehensive income (loss) on a straight-line basis over the term of the lease, including the option period, when on the date of the transaction it was reasonably certain that the option will be exercised.
|
|
L.
|
Leases (cont’d)
|
|
Finance leases
:
|
|
Finance leases transfer to the Company substantially all the risks and benefits incident to ownership of the leased asset. The leased assets are presented in the statement of financial position. The liability for lease payments is presented at its present value and the lease payments are apportioned between finance charges and a reduction of the lease obligation using the effective interest method.
|
|
M.
|
Revenue recognition
|
|
Revenue is measured according to the fair value of the consideration that was received and/or the consideration the Company is entitled to receive from the sale of electricity in the ordinary course of business.
|
|
Revenues from the sale of electricity are recognized when the units of power produced are transferred to the power company at connection points on the basis of a counter reading. Revenues in respect of power produced and transferred to the power company in the period between the most recent meter reading and the date of the statement of financial position, are included based on an estimate.
|
|
Seasonality:
|
|
Solar power production has a seasonal cycle due to its dependency on the direct and indirect sunlight and the effect the amount of sunlight has on the output of energy produced. Thus, low radiation levels during the winter months decrease power production.
|
|
N.
|
Income tax
|
|
Income tax comprises of current and deferred taxes. The tax results in respect of current or deferred taxes are recognized in the statement of comprehensive income (loss) except to the extent that the tax arises from items which are recognized directly in equity. In such cases, the tax effect is also recognized in the relevant item in equity.
|
|
Deferred income taxes are computed in respect of temporary differences between the carrying amounts in the financial statements and the amounts attributed for tax purposes, except for a limited number of exceptions.
|
|
Temporary differences (such as carry forward losses) for which deferred tax assets have not been recognized are reassessed and deferred tax assets are recognized to the extent that their recoverability has become probable. Any resulting reduction or reversal is recognized in the line item, "tax benefit (taxes on income)".
|
|
Deferred tax balances are measured at the tax rates that are expected to apply to the period when the taxes are reversed in profit or loss, comprehensive income or equity, based on tax laws that have been enacted or substantively enacted by the balance sheet date.
|
|
O.
|
Earnings (loss) per share
|
|
The earnings (loss) per share are computed by dividing the net income attributable to the Company's shareholders by the weighted-average number of shares outstanding during the period. Calculation of the basic earnings (loss) per share includes only shares actually outstanding during the period. Potential ordinary shares (convertible securities such as warrants and employee options) are included in calculation of the diluted earnings (loss) per share only if their impact dilutes the earnings (loss) per share in that their conversion reduces the earnings per share or increases the loss per share from continuing operations. In addition, potential ordinary shares converted during the period are included in calculation of the diluted earnings (loss) per share only up to the conversion date, and from this date forward they are included in calculation of the basic earnings (loss) per share. Earnings (loss) per share have been retroactively restated in comparative period to reflect the reverse split (see Note 15D).
|
|
P.
|
Financial income and expenses
|
|
Financial income includes interest income on bank deposits, an increase in the fair value of financial instruments recognized at fair value through profit or loss and exchange rate differences. Interest income is recognized as it accrues in profit or loss.
|
|
Financial expenses include bank charges and exchange rate differences.
|
|
Gains and losses on exchange rate differences are reported on a net basis.
|
|
Q.
|
Provisions
|
|
A provision in accordance with IAS 37 is recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are measured according to the estimated future cash flows discounted using a pre-tax interest rate that reflects the market assessments of the time value of money and, where appropriate, those risks specific to the liability.
|
|
Legal claims:
|
|
A provision for claims is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is more likely than not that an outflow of resources embodying economic benefits will be required by the Company to settle the obligation and a reliable estimate can be made of the amount of the obligation. For further details, refer to Note 13D.
|
|
R.
|
Standards issued but not yet effective:
|
|
(1).
|
Amendment to IAS 32 Financial Instruments: Presentation
(hereinafter – "the IAS 32 Amendment”)
The IAS 32 Amendment clarifies that an entity currently has a legally enforceable right to set-off amounts that were recognized if that right is not contingent on a future event; and it is enforceable both in the normal course of business and in the event of default, insolvency or bankruptcy of the entity and all its counterparties. The IAS 32 Amendment is applicable retrospectively for annual periods beginning on or after January 1, 2014. Early application of the IAS 32 Amendment is permitted subject to the concurrent application of the amendment to IFRS 7.
|
|
(2).
|
IFRS 9 (2010),
Financial Instruments
(hereinafter – “IFRS 9 (2010)”)
IFRS 9 (2010) is one of the stages in a comprehensive project to replace IAS 39 Financial Instruments: Recognition and Measurement ("IAS 39") and it replace the requirements included in IAS 39 regarding the classification and measurement of financial assets and financial liabilities.
In accordance with IFRS 9 (2010), there are two principal categories for measuring financial assets: amortized cost and fair value, with the basis of classification for debt instruments being the entity’s business model for managing financial assets and the contractual cash flow characteristics of the financial asset. IFRS 9 (2010) is effective for annual periods beginning on or after January 1, 2015 but may be applied earlier. The Company is examining the effects of applying IFRS 9 (2010) on the financial statements and has no plans for early application.
|
|
(3).
|
IFRS 9 (2013), Financial Instruments, amendments to IFRS 9 (2010), IFRS 7
and IAS 39 (hereinafter – “IFRS 9 (2013)”)
IFRS 9 (2013) amends IFRS 9 (2010), IFRS 7 and IAS 39 on general hedge accounting. Under IFRS 9 (2013), additional hedging strategies that are used for risk management will qualify for hedge accounting (such as risk components of non-financial items or groups of items that constitute net positions). IFRS 9 (2013) replaces the present 80%-125% test for determining hedge effectiveness, with the requirement that there be an economic relationship between the hedged item and the hedging instrument, with no quantitative threshold. In addition, IFRS 9 (2013) introduces new models that are alternatives to hedge accounting as regards exposures and certain contracts outside the scope of IFRS 9 (2013). IFRS 9 (2013) sets new principles for accounting for hedging instruments, for example allowing cash instruments to be hedging instruments in more cases and adding the possibility to defer or amortize the “cost of hedging” (such as the time value of purchased options). In addition, IFRS 9 (2013) provides new disclosure requirements. The mandatory effective date of IFRS 9 (2013) has not yet been determined. Early application is permitted subject to the conditions specified in IFRS 9 (2013).
|
December 31
|
||||||||
2013
|
2012
|
|||||||
US$ in thousands
|
||||||||
Cash available for immediate withdrawal
|
4,909 | 9,386 | ||||||
Cash equivalents bank deposits (*)
|
2,329 | 23,906 | ||||||
7,238 | 33,292 |
|
(*)
|
The annual interest rate for deposits as of December 31, 2013 is 0.42%-0.87% (0.15%-1.2% as of December 31, 2012).
|
December 31
|
||||||||
2013
|
2012
|
|||||||
US$ in thousands
|
||||||||
Short-term restricted cash (1)
|
5,653 | 8,085 | ||||||
Deposits (2)
|
1,011 | 1,003 | ||||||
Long-term bank deposits (3)
|
3,304 | 2,250 | ||||||
Long-term restricted deposits
|
4,315 | 3,253 | ||||||
|
(1)
|
Bank deposits securing the Company's short term bank loans (see Note 9). The annual interest rate as of December 31, 2013 is 0.6%- 0.7%.
|
|
(2)
|
These deposits were used to secure obligations towards the land owners and to secure obligations under financial leasing agreements of two of the Company’s photovoltaic plants.
|
|
(3)
|
Bank deposits securing the Company's swap contracts (see Notes 10 and 11). The annual interest rate as of December 31, 2013 is 0.65% - 0.95%.
|
December 31
|
||||||||
2013
|
2012
|
|||||||
US$ in thousands
|
||||||||
Government authorities
|
2,000 | 3,132 | ||||||
Income receivable
|
1,269 | 492 | ||||||
Interest receivable
|
67 | 8 | ||||||
Advance tax payment and tax provision
|
199 | - | ||||||
Prepaid expenses and other
|
822 | 804 | ||||||
4,357 | 4,436 |
|
Equity accounted investees
|
|
A.
|
Information about investee companies and other investments
|
|
1.
|
U. Dori Energy Infrastructures Ltd. (“Dori Energy”) –
|
|
On November 25, 2010, the Company through its wholly owned subsidiary, Ellomay Clean Energy Ltd. ("Ellomay Energy") entered into an Investment Agreement (the "Dori Investment Agreement") with Dori Group Ltd. ("Dori Group"), and Dori Energy, with respect to an investment in Dori Energy. Dori Energy holds 18.75% of the share capital of Dorad Energy Ltd. ("Dorad"), which is in the final stages of the construction of an approximate 800 MWp bi-fuel operated power plant in the vicinity of Ashkelon, Israel (the "power plant"). The Dori Investment Agreement sets forth that subject to the fulfillment of certain conditions precedent, Ellomay Energy shall invest a total amount of NIS 50,000 thousand (approximately $14,000 thousand) in Dori Energy, and receive 40% of in Dori Energy's share capital (the "Dori Investment"). The conditions precedents were fulfilled on January 27, 2011 (the “Dori Closing Date”).
|
|
Concurrently with the execution of the Dori Investment Agreement, Ellomay Energy, Dori Energy and Dori Group have also entered into the Dori Shareholders Agreement ("Dori SHA") that became effective upon the consummation of the Dori Investment. The Dori SHA provides that each of Dori Group and Ellomay Energy is entitled to nominate two directors (out of a total of four directors) in Dori Energy. The Dori SHA also grants each of Dori Group and Ellomay Energy with equal rights to nominate directors in Dorad, provided that in the event Dori Energy is entitled to nominate only one director in Dorad, such director shall be nominated by Ellomay Energy for so long as Ellomay Energy holds at least 30% of Dori Energy. The Dori SHA further includes customary provisions with respect to restrictions on transfer of shares, a reciprocal right of first refusal, tag along, principles for the implementation of a BMBY separation mechanism, special majority rights, etc.
Following the consummation of the Dori Investment, the holdings of Ellomay Energy in Dori Energy were transferred to Ellomay Clean Energy Limited Partnership (“Ellomay Energy LP”), an Israeli limited partnership whose general partner is Ellomay Energy and whose sole limited partner is the Company. Ellomay Energy LP replaced Ellomay Energy with respect to the Dori Investment Agreement and the Dori SHA.
|
|
Concurrently with the consummation of the Dori Investment, Dori Energy entered into an agreement with Israel Discount Bank ("Discount Bank") pursuant to which Discount Bank extended to Dorad, as per Dori Energy's request, a NIS 120,000 thousand (approximately $ 34,570 thousand) bank guarantee that was required to allow Dori Energy to extend its pro rata share of the equity required by Dorad in connection with Dorad’s power plant project. The Company is committed to provide 40% of the funds of Dori Energy towards Discount Bank under the agreement with Discount Bank. The term of this commitment was extended twice, each time for one additional year and, in the agreement authorizing such extension, each of Ellomay Energy LP and the Dori Group undertook to Discount Bank, that in the event Dorad requires funding from Dori Energy, for the construction of Dorad’s power plant project, pursuant to the agreement between Dorad and its shareholders, each of Ellomay Energy LP and the Dori Group shall extend to Dori Energy its pro rata share of such funding. In addition, each of Ellomay Energy and Dori Group pledged their holdings in Dori Energy in favor of Discount Bank as a security for the fulfillment of Dori Energy's obligations to Discount Bank under the agreement with Discount Bank.
|
|
A.
|
Information about investee companies and other investments (cont'd)
|
|
1.
|
U. Dori Energy Infrastructures Ltd. (“Dori Energy”) (cont'd)–
|
|
Following the balance sheet date Dori Energy invested its remaining pro rata share of the equity required by Dorad to establish the power plant, amounting to approximately NIS 33,716 thousand (approximately $ 9,714 thousand), by way of interest bearing shareholder loans it received from the Company and the Dori Group. Upon completion of provision of Dori Energy's share in equity required by Dorad, the Discount Bank guarantee provided to secure the injection of its share of the equity to Dorad was cancelled.
|
|
The Dori Investment Agreement also grants Ellomay Energy an option to acquire additional shares of Dori Energy that, if exercised, will increase Ellomay Energy's percentage holding in Dori Energy to 49% ("first option") and, subject to the obtainment of certain regulatory approvals to 50% ("second option"). According to the original terms, the first option exercisable starting from issuance date was to expire within six months following the earliest between the commercial operations of the power plant, the operation of at least 50% of the turbines or the operation of at least 50% of the production capacity of the power plant and the second option was to commence at this date and expire within 2 years following this date.
|
|
On October 24, 2012 the parties to the Dori Investment Agreement executed an addendum to the Dori Investment Agreement (the "Dori Addendum"). The Dori Addendum updated the terms of the options as follows: (i) the exercise period for the first option was extended so that the period will end twelve (12) months following the completion and delivery of the power plant, and (ii) the exercise price of the options was reduced from NIS 2.5 million to NIS 2.4 million for each 1% of Dori Energy's issued and outstanding share capital (on a fully diluted basis). The other terms of the options remained unchanged. The Dori Addendum further updated the undertaking of Dori Energy's shareholders in connection with the financing of investments in Dorad by clarifying that in the event Dori Energy does not obtain outside financing, each of Dori Group and Ellomay Energy LP will invest its share of the required amounts, pro rata to their holdings in Dori Energy, replacing the Dori Group's undertaking to provide debt financing to Dori Energy in the event Dori Energy does not obtain outside financing.
The total consideration of the Dori Investment Agreement was allocated to the option to acquire additional shares of Dori based on its estimated fair value as at the Dori Closing Date, in the amount of $ 98 thousand and to the 40% in Dori’s Energy capital shares in the amount of $ 13,805 thousand (including capitalized expenses in the amount of approximately $ 97 thousand).
|
|
During 2013, the Company extended approximately $ 4,372 thousand subordinated shareholder loans to Dori Energy, The shareholder loans are linked to the CPI and bear an annual interest rate of 3% higher than the interest Dorad is committed to pay to Dorad's financing consortium during the financial period in respect of the "senior debt" (5.5% as of December 31, 2013).
|
|
A.
|
Information about investee companies and other investments (cont'd)
|
|
1.
|
U. Dori Energy Infrastructures Ltd. (“Dori Energy”) (cont'd)–
|
|
Based on the fair value of the identifiable assets and liabilities that were acquired, the Company allocated the excess cost to customer contracts in the amount of $ 5,234 thousand. The estimated useful life of the customer contracts was determined to be 23 years according to the period of economic benefits and will begin when the construction of the power plant is completed and it begins operating. As at December 31, 2013 it is estimated that operation will begin in March-April 2014. The investment in Dori Energy is accounted for under the equity method.
|
|
The option to purchase additional shares of Dori Energy is measured based on its fair value in every reported period and changes are recorded as finance income or expenses. As of December 31, 2013, the fair value of the option is approximately $ 389 thousand and it is recorded as financial asset in long-term assets. The revaluation of the option was recognized as financial income in the amount of $ 236 thousand for the year ended December 31, 2013.
|
|
In accordance with IAS 18, “Revenue Recognition”, the deferred income representing fees charged by the Company for servicing a loan are recognized as revenue as the services are provided. As mentioned above, the Company is committed to provide debt financing to Dori Energy in the event Dori Energy does not obtain outside financing. In respect to this commitment, the terms of the options were updated to reflect compensation to the Company so that the exercise price was reduced and the exercise period was extended. The calculated amount of the revaluation allocated to the compensation was recognized as deferred income in 2012. The deferred income will be recognized on a time proportion basis over the commitment period using the straight line method. As of December 31, 2013, the Company's estimation for servicing a loan to Dori Energy is upon commencing operation in Dorad Energy and completion and delivery of the power plant that is expected in April 2014. During 2013, compensation in the amount of $ 184 thousand was recognized as financial income.
|
|
2.
|
Alon Cellular Ltd. (“Alon Cellular”) –
In November 2010, the Company invested in an Israeli Company with respect to the launch of a virtual mobile operator (“MVNO”) in Israel by a joint SPC entity – Alon Ribua telecom Ltd. (“Alon Ribua Telecom”) that was owned by Alon Ribua Comunications Ltd. (“Alon Ribua”) and Novosti Communications Ltd. (“Novosti”). The MVNO was purported to be operated by Alon Cellular, a wholly owned subsidiary of Alon Ribua Telecom Ltd. ("Alon Telecom"). The Company held 25% of Alon Ribua Telecom's share capital through its wholly owned subsidiary. In November 2010 the Company extended NIS 38 thousand (approximately $10 thousand), and in January 2011 the Company extended an additional amount of NIS 837 thousand (approximately $ 219 thousand) to Alon Telecom as a shareholders' loan. The amounts reflect 25% of the aggregate NIS 3,500 thousand (approximately $ 916 thousand) shareholders' loan that was extended by all shareholders of Alon Ribua Telecom.
|
|
A.
|
Information about investee companies and other investments (cont'd)
|
|
2.
|
Alon Cellular Ltd. (“Alon Cellular”) (cont'd)–
|
|
The investment was accounted for under the equity method. The Company decided not to pursue the MVNO project, therefore, in February 2012 the Company’s wholly-owned subsidiary that invested in the MVNO project entered into an agreement with related parties Alon Ribua and Alon Ribua Telecom pursuant to which subject to certain regulatory approvals, the subsidiary sold its holdings in Alon Ribua Telecom and its rights with respect to shareholders' loans extended to Alon Ribua in consideration for an amount of $115 thousand. As a result, the Company recorded during 2012 a capital gain of approximately $160 thousand.
|
|
3.
|
Pumped Storage Projects (“PSP”) –
On July 17, 2013 the Company entered into a loan agreement with Erez Electricity Ltd. ("Erez Electricity") that owns, among its other holdings, 24% of the pumped storage project in the Gilboa, Israel ("PSP Gilboa") pursuant to which an amount of approximately NIS 770 thousand ($ 213 thousand) was loaned to Erez Electricity. Subsequently in November 2013 in connection with the sale of Erez Electricity's holdings in PSP to third parties, the Company and Erez Electricity reached an agreement according to which the Company is entitled to the repayment of the amount loaned including interests accrued and linkage, amounting to approximately NIS 1,000 thousand ($ 283 thousand) and maybe entitled to additional compensation in the aggregate amount of NIS 6,700 thousand ($ 1,930 thousand) which will be linked to the Israeli CPI and will be paid in 2 installments of approximately NIS 1,200 thousand ($ 346 thousand) upon financial closing of PSP Gilboa and NIS 5,500 thousand ($ 1,584 thousand) upon receipt of permanent licenses for generation of power and the approval of the technical advisor appointed by the financial institutions who have financed PSP Gilboa to the transfer from set up phase to operational phase. The two installments to be paid to the Company will be recognized in future periods if and when the Company will be entitled to them.
|
|
In January 2014 the Company entered into an agreement with Ortam Sahar Engineering Ltd. ("Ortam"), an Israeli publicly listed company, pursuant to which, subject to the fulfillment of conditions as set forth below, the Company shall acquire Ortam’s holdings (24.75%) in Agira Sheuva Electra, L.P. (the “Partnership”), an Israeli Limited Partnership that is promoting a prospective pumped-storage project in the Manara Cliff in Israel. See note 22B.
|
|
Presented hereunder are details of investments in Dori Energy
|
|
B.
|
Composition of the investments
|
December 31
|
||||||||
2013
|
2012
|
|||||||
US$ in thousands
|
US$ in thousands
|
|||||||
Investment in shares
|
12,927 | 12,844 | ||||||
Long-term loans
|
12,732 | 6,688 | ||||||
Deferred interest
|
(1,058 | ) | (334 | ) | ||||
24,601 | 19,198 | |||||||
Financial asset - Options to acquire additional shares
|
389 | 485 |
|
C.
|
Details regarding attributed surplus costs and goodwill arising from the acquisition of affiliates
|
December 31
|
||||||||
2013
|
2012
|
|||||||
US$ in thousands
|
US$ in thousands
|
|||||||
Customer contracts (*)
|
5,762 | 5,357 | ||||||
Deferred tax
|
(1,427 | ) | (1,328 | ) | ||||
Goodwill
|
288 | 268 | ||||||
Balance of attributed surplus cost
|
4,623 | 4,298 |
|
(*)
|
The estimated useful life of the customer contracts and related deferred tax was determined to be 23 years and will begin when the construction of the Dorad power plant is completed and it commences operations.
|
|
D.
|
Changes in investments
|
2013
|
2012
|
|||||||
Changes in equity and loans:
|
US$ in thousands
|
US$ in thousands
|
||||||
Balance as at January 1
|
19,198 | 12,995 | ||||||
Grant of long term loans
|
4,372 | 5,927 | ||||||
Interest on long term loans
|
963 | 334 | ||||||
Deferred interest
|
(649 | ) | (334 | ) | ||||
Elimination of interest on loan from related party
|
(315 | ) | - | |||||
The Company’s share of losses
|
(540 | ) | (232 | ) | ||||
Foreign currency translation adjustments
|
1,572 | 508 | ||||||
Balance as at December 31
|
24,601 | 19,198 | ||||||
Changes in option to acquire additional shares:
|
||||||||
Balance as at January 1
|
485 | 52 | ||||||
Foreign currency translation adjustments
|
140 | - | ||||||
Reevaluation of option to acquire additional shares
|
(236 | ) | 433 | |||||
Balance as at December 31
|
389 | 485 |
|
E.
|
Summary financial data for investees, not adjusted for the percentage ownership held by the Company
|
(a)
|
Summary information on financial position
|
Equity
|
||||||||||||||||||||||||||||||||
attributable
|
||||||||||||||||||||||||||||||||
to the
|
||||||||||||||||||||||||||||||||
Non-
|
Non-
|
owners of
|
||||||||||||||||||||||||||||||
Rate of
|
Current
|
current
|
Total
|
Current
|
current
|
Total
|
the
|
|||||||||||||||||||||||||
ownership
|
Assets
|
assets
|
assets
|
liabilities
|
liabilities
|
liabilities
|
Company
|
|||||||||||||||||||||||||
%
|
US$ in thousands
|
|||||||||||||||||||||||||||||||
2013
|
||||||||||||||||||||||||||||||||
Dori Energy
|
40 | 145 | 134,633 | 134,778 | (38 | ) | (83,795 | ) | (83,833 | ) | 50,945 | |||||||||||||||||||||
2012
|
||||||||||||||||||||||||||||||||
Dori Energy
|
40 | 160 | 97,555 | 97,715 | (32 | ) | (45,150 | ) |
(45,182
|
) | 52,533 |
|
(b)
|
Summary information on operating results
|
Rate of
|
Loss
|
|||||||
Ownership
|
for the year
|
|||||||
%
|
US$ in thousands
|
|||||||
2013
|
||||||||
Dori Energy
|
40 | (2,137 | ) | |||||
2012
|
||||||||
Dori Energy
|
40 | (580 | ) |
|
F.
|
Subsidiaries - Business combinations
|
1.
|
On June 26, 2013, the Company consummated the acquisition of two photovoltaic plants with fixed technology in the Veneto Region, Italy (Northern Italy), with an aggregate nominal capacity of approximately 12MWp (the "Veneto PV Plants"). The Veneto PV Plants, which constitute a business, are fully constructed and operating and were connected to the Italian national grid in August 2011 under the applicable Feed-in-Tariff (0.238 Euro/kWh). The final consideration paid for the Veneto PV Plants and the related licenses was approximately Euro 23.5 million (approximately $30.7 million). The Veneto PV Plants were purchased under insolvency proceedings.
|
|
F.
|
Subsidiaries - Business combinations (cont'd)
|
|
The results presented in the statements of comprehensive income (loss) do not include the results of the Veneto PV Plants for the entire fiscal year, as the closing date of the acquisition was in June 2013. If the acquisition had occurred on January 1, 2013, management estimates that consolidated revenue for the year ended December 31, 2013 would have been $15,689 thousand and consolidated income for the same period would have been $9,574 thousand.
|
|
The Company performed an analysis of the fair value of identifiable assets acquired and liabilities assumed by applying a discounted cash-flow method recorded gain on bargain purchase (negative goodwill) in the amount of approximately $10.2 million based upon management’s best estimate of the value as a result of such analysis. Negative goodwill represents the excess of the Company’s share in the fair value of acquired identifiable assets, liabilities and contingent liabilities over the cost of an acquisition.
|
|
Identifiable assets acquired and liabilities assumed (based on provisional amounts as described hereunder):
|
30/06/2013
|
||||
US$ in thousands
|
||||
Restricted cash
|
25 | |||
Property, plant and equipment
|
39,660 | |||
Working Capital, net (excluding cash and cash equivalents)
|
890 | |||
Deferred tax assets
|
404 | |||
Bargain Purchase gain
|
(10,237 | ) | ||
Total net identifiable assets
|
30,742 |
US$ in thousands
|
||||
Cash and cash equivalents paid
|
30,778 | |||
Less - cash and cash equivalents of the subsidiary
|
36 | |||
30,742 |
|
Gain on Bargain Purchase (Negative Goodwill)
Gain on bargain purchase (negative goodwill) was recognized as a result of the acquisition under insolvency proceedings as follows:
|
US$ in thousands
|
||||
Consideration transferred
|
30,742 | |||
Less fair value of identifiable net assets, not including Cash and cash equivalents
|
(40,979 | ) | ||
Gain on bargain purchase (negative goodwill)
|
(10,237 | ) |
|
F.
|
Subsidiaries - Business combinations (cont'd)
Acquisition-related costs
|
|
During the year ended December 31, 2013 the Company incurred acquisition-related costs of approximately $500 thousand related to legal fees and due diligence costs. These costs have been included in general and administrative expenses in the statement of income.
|
|
2.
|
On March 12, 2012, Ellomay Spain S.L. (“Ellomay Spain”), a subsidiary in which the Company indirectly owns 85% of the outstanding shares, entered into share purchase agreements and an asset purchase agreement in connection with the acquisition of a photovoltaic plant located in Municipality of Córdoba, Andalusia, Spain with a total nominal capacity of approximately 2.3 MWp, (the “Spanish PV Plant”) and of related licenses. The remaining 15% of Ellomay Spain are held by a Spanish company engaged in providing construction, operating and maintenance services for photovoltaic plants in Europe and elsewhere, whose subsidiary has built and is currently providing operation and maintenance services for several of the Company's Italian PV Plants. On July 1, 2012 (the "closing date") all conditions precedent were fulfilled and the transaction was consummated.
|
|
The Spanish PV Plant is constructed and operational and has been connected to the Spanish national grid since July 2010. The Spanish PV Plant is entitled to receive the Spanish special economic regime for renewable energies. The consideration paid by the Company in connection with the acquisition of the Spanish PV Plant and the related licenses, including all applicable taxes and expenses, amounts to approximately $ 7,316 thousand.
|
|
In the six months ended December 31, 2012 Ellomay Spain contributed approximately $ 500 thousand and approximately $ 100 thousand (net of non-controlling interest) to the Company’s consolidated revenue and consolidated profit, respectively. If the acquisition had occurred on January 1, 2012, management estimates that consolidated revenue would have been approximately $ 9,780 thousand and net loss for the year would have been approximately $ 2,270 thousand.
|
|
The following summarizes the consideration transferred, and the recognized amounts of assets acquired and liabilities assumed at the closing date:
|
June 30,
2012
|
||||
US$ in thousands
|
||||
Property and equipment
|
$ | 6,914 | ||
Working capital, net (excluding cash and cash equivalents)
|
(410 | ) | ||
Non-controlling interests
|
(32 | ) | ||
Total cash paid, net
|
$ | 6,472 |
|
G.
|
Subsidiaries – Regulatory updates
|
|
Italy
|
|
·
|
In addition to the FiT ("feed-in tariffs " incentives to promote the use of solar energy) payment, the Italian PV Plants are eligible to receive the price paid for the electricity generated by the plant (“ritiro dedicato”) equal to the applicable electricity market price. Until December 31, 2013 Italian PV plants with a capacity under 1 MW were eligible to receive a minimum market price guarantee, as a function of supply and demand, on an hourly basis for different zones within Italy. Resolution no. 618/2013/R/EFR dated December 19, 2013 set a replacement, starting January 1, 2014, of the minimum guaranteed prices currently foreseen under the Italian mandatory purchase regime with the zonal hourly prices set out for each specific area (so called prezzi zonali orari, i.e. the average monthly price, correspondent to each hour, as resulting from the electric market price on the area where the PV plant is located).
|
|
·
|
The Italian Tax Agency provided relevant clarifications as to cadastral and tax issues regarding photovoltaic plants in its Resolution n. 36/E dated December 19, 2013, which provides a 4% depreciation rate for tax purposes.
|
·
|
In July 2013, a new remunerative regime (RDL 9/2013) was announced in Spain establishing the basis of the new remuneration scheme (received in terms of feed-in tariff) applicable to renewable energies that will provide the owner a defined yield currently estimated to be calculated as 10-year government bonds plus 300 basis points. The new regulation includes: (i) the proceeds for the sale of electricity according to market price, (ii) an "investment retribution" enough to cover the investment costs of a so-called “standard facility” – provided that such costs are not fully recoverable through the sale of energy in the market and (iii) an "operational retribution" enough to cover the difference, if any, between the operational income and costs of a standard plant that participates in the market. The definition of what constitutes a “standard facility” as well as the rest of the elements included in this new regulation and its relevant calculation formula are expected to be included in a future Spanish Royal Decree to be approved by the Spanish Government during 2014. Once the new regulation enters into full force, the amounts received in terms of feed-in tariff shall be subject to a final settlement, concerning the amount received by owners of PV plants during the transitory period since July 14, 2013 and through the adoption of the new regulation. This settlement will be conducted during the first six monthly payments after the approval of the new regulation.
|
|
As the elements and calculation formula have not yet been finalized, based on information available at the date of issuance of these Financial Statements, in accordance with the analysis performed by the Company, management has concluded that the analysis carried out do not indicate an impairment in the carrying amount of assets related to solar electricity generation activity in Spain.
|
Office
|
||||||||||||||||
Photovoltaic
|
furniture and
|
Leasehold
|
||||||||||||||
Plants
|
equipment
|
Improvements
|
Total
|
|||||||||||||
US$ in thousands
|
||||||||||||||||
Cost
|
||||||||||||||||
Balance as at January 1, 2012
|
50,169 | 115 | 72 | 50,356 | ||||||||||||
Additions
|
536 | 16 | - | 552 | ||||||||||||
PV Plant acquired in a business combination (see Note 6F)
|
6,914 | - | - | 6,914 | ||||||||||||
Disposals
|
(828 | ) | - | - | (828 | ) | ||||||||||
Effect of changes in exchange rates
|
1,344 | - | - | 1,344 | ||||||||||||
Balance as at December 31, 2012
|
58,135 | 131 | 72 | 58,338 | ||||||||||||
Balance as at January 1, 2013
|
58,135 | 131 | 72 | 58,338 | ||||||||||||
Additions
|
25 | 13 | - | 38 | ||||||||||||
PV Plant acquired in a business combination (see Note 6F)
|
39,660 | - | - | 39,660 | ||||||||||||
Disposals
|
(384 | ) | - | - | (384 | ) | ||||||||||
Effect of changes in exchange rates
|
5,037 | - | - | 5,037 | ||||||||||||
Balance as at December 31, 2013
|
102,473 | 144 | 72 | 102,689 | ||||||||||||
Depreciation
|
||||||||||||||||
Balance as at January 1, 2012
|
1,659 | 38 | 21 | 1,718 | ||||||||||||
Depreciation for the year
|
2,694 | 13 | 10 | 2,717 | ||||||||||||
Disposals
|
(55 | ) | - | - | (55 | ) | ||||||||||
Effect of changes in exchange rates
|
98 | - | - | 98 | ||||||||||||
Balance as at December 31, 2012
|
4,396 | 51 | 31 | 4,478 | ||||||||||||
Balance as at January 1, 2013
|
4,396 | 51 | 31 | 4,478 | ||||||||||||
Depreciation for the year
|
4,000 | 11 | 10 | 4,021 | ||||||||||||
Disposals
|
- | - | - | - | ||||||||||||
Effect of changes in exchange rates
|
519 | - | - | 519 | ||||||||||||
Balance as at December 31, 2013
|
8,915 | 62 | 41 | 9,018 | ||||||||||||
Carrying amounts
|
||||||||||||||||
As at January 1, 2012
|
48,510 | 77 | 51 | 48,638 | ||||||||||||
As at December 31, 2012
|
53,739 | 80 | 41 | 53,860 | ||||||||||||
As at December 31, 2013
|
93,558 | 82 | 31 | 93,671 |
|
Investment in Photovoltaic Plants
Since March 4, 2010, the Company has acquired thirteen photovoltaic plants located in Italy and in Spain (each, a "PV Plant" and, together, the "PV Plants").
|
|
In connection with the establishment of the Company's PV Plants, the Company recorded as of December 31, 2013, property, plant and equipment at an aggregate value of approximately $ 102,473 thousand, in accordance with actual costs incurred.
|
|
During the year ended December 31, 2013 the Company invested in PV Plants an aggregate of approximately
$ 39,685 tho
usand. During the 2013 the Company disposed assets amounting to approximately $ 384 thousand
, as a result of a reduction in
the nominal capacity of the Pedale Plant
due to
issues that arose in connection with the Plant’s authorization process, for which the relevant contractor was liable and therefore indemnified the Company for this disposal amount. Depreciation with respect to the PV Plants in Italy is calculated using the straight-line method over 20 years starting connection to the national grid that represent the estimated useful lives of the assets. Depreciation with respect to the PV Plant in Spain is calculated using the straight-line method over 25 years starting connection to the national grid that represent the estimated useful lives of the assets. During the year ended December 31, 2013 the Company had recorded depreciation expenses with respect to its PV Plants in Italy and Spain of approximately $ 4,000 thousand.
|
|
Presented hereunder are data regarding the Company’s investments in photovoltaic plants as at December 31, 2013:
|
Cost included in the
|
||||||
PV Plant Title
|
Capacity*
|
Connection to Grid
|
Book value
|
|||
US$ in thousands
|
||||||
“Troia 8”
|
995.67 kWp
|
January 14, 2011
|
4,825
|
|||
“Troia 9”
|
995.67 kWp
|
January 14, 2011
|
4,792
|
|||
“Del Bianco”
|
734.40 kWp
|
April 1, 2011
|
2,887
|
|||
“Giaché”
|
730.01 kWp
|
April 14, 2011
|
3,797
|
|||
“Costantini”
|
734.40 kWp
|
April 27, 2011
|
2,914
|
|||
“Massaccesi”
|
749.7 kWp
|
April 29, 2011
|
3,775
|
|||
“Galatina”
|
994.43 kWp
|
May 25, 2011
|
5,662
|
|||
“Pedale
|
2,993 kWp
|
May 31, 2011
|
15,504
|
|||
“Acquafresca”
|
947.6 kWp
|
June 2011
|
4,360
|
|||
“D‘Angella”
|
930.5 kWp
|
June 2011
|
4,297
|
|||
“Soleco”
|
5,924 kWp
|
August, 2011**
|
21,131
|
|||
“Technoenergy”
|
5,900 kWp
|
August, 2011**
|
20,941
|
|||
“Ellomay Spain - Rinconada”
|
2,275 kWp
|
June 2010 **
|
7,588
|
December 31
|
||||||||
2013
|
2012
|
|||||||
US$ in thousands
|
||||||||
Employees and payroll accruals
|
68 | 82 | ||||||
Provision for Legal Claims
|
85 | - | ||||||
Accrued Interest
|
171 | - | ||||||
Government authorities
|
- | 42 | ||||||
SWAP and forward related balances
|
472 | 755 | ||||||
Tax provision and advance tax payment
|
2,247 | 2,318 | ||||||
Deferred income in connection with investment in equity accounted investee (see Note 6A(1))
|
103 | 287 | ||||||
Payable in connection with photovoltaic plants
|
491 | 9,404 | ||||||
Accrued expenses
|
1,674 | 1,363 | ||||||
5,311 | 14,251 |
A.
|
Composed as follows:
|
Interest
|
Interest
|
||||||||||||||||
Linkage
|
rate
|
rate
|
December 31
|
December 31
|
|||||||||||||
terms
|
2013
|
2012
|
2013
|
2012
|
|||||||||||||
%
|
%
|
US$ in thousands
|
US$ in thousands
|
||||||||||||||
Current maturities of long term loans (refer to Notes 10 and 11)
|
EURIBOR
|
1.6-5.15 | 1.6-5.15 | 855 | 1,112 | ||||||||||||
Short term bank loans
(1) (2)
|
EUROLIBOR
|
4.7 | 0.75 | 18,599 | 5,932 | ||||||||||||
19,454 | 7,044 |
|
(1)
|
During 2012 the Company received short term bank loans renewable each month in the aggregate amount of Euro 9,000 thousand and repaid Euro 4,500 thousand in December 2012. As of December 31, 2012 the outstanding loan balance was Euro 4,500 thousand ($5,932 thousand) linked to the EURO LIBOR monthly rate. During February and March 2013, the Company repaid the rest of the loan.
|
|
(2)
|
On June 20, 2013 the Company entered into a loan agreement (hereinafter – the “Loan Agreement”) with Discount Bank. Pursuant to the Loan Agreement the Company received an amount of Euro 13,500 thousand (approximately $17,692 thousand), for a period of 18 months, bearing an interest at the EURO LIBOR 3 month rate plus 4.5%. The Company is entitled to perform early repayments of the loan, in whole or in part, at the end of each interest period, without having to pay any fees or penalties, upon delivering the bank with a request of early repayment at least 10 business days in advance.
|
|
·
|
A fixed pledge and mortgage on the Company's holdings of Ellomay Clean Energy, Limited Partnership, the holdings of such partnership in U. Dori Energy Infrastructures Ltd. and the holdings of the Company in the general partner of said partnership, Ellomay Clean Energy Ltd as well as on the rights (including shareholders loans) of said general partner in and/or towards the partnership.
|
|
·
|
A fixed pledge on Ellomay Clean Energy, Limited Partnership and Ellomay Clean Energy Ltd's bank accounts.
|
|
·
|
A floating lien on Ellomay Clean Energy Ltd.'s rights, assets, registered and non-issued capital and goodwill.
|
|
·
|
A fixed pledge on Ellomay Luxembourg Holdings S.a.r.l's holdings of four of the Company's subsidiaries in Italy -Pedale S.r.l, Ellomay PV Seven (formerly, Energy Resources Galatina) S.r.l, Luma Solar S.r.l and Murgia Solar s.r.l. (together, the "Pledged entities") as well as on all the rights (including shareholders loans) of Ellomay Luxembourg Holdings S.a.r.l towards each of the Pledged Entities.
|
|
·
|
An undertaking by each of the Pledged entities not to dispose of their assets other than in their regular course of business
|
|
·
|
A guarantee by Ellomay Luxembourg Holdings S.a.r.l.
|
|
·
|
An undertaking by Ellomay Luxembourg Holdings. S.a.r.l not sell or dispose its holdings in the Pledged Entities, except as provided for or approved pursuant to the Loan Agreement
|
|
·
|
A fixed pledge on the Company's and the General Partner's Discount Bank accounts that are used solely for the purposes of this loan.
|
|
·
|
Undertaking by Ellomay Luxembourg Holdings. S.a.r.l, Ellomay Clean Energy Ltd and Ellomay Clean Energy, Limited Partnership not to take any financial liabilities and not to place any liens on assets, except as permitted under the Loan Agreement.
|
|
A.
|
Composed as follows:
|
Linkage
|
Interest rate
|
December 31
|
December 31
|
||||||||||
terms
|
2012 and 2013
|
2013
|
2012
|
||||||||||
%
|
US$ in thousands
|
US$ in thousands
|
|||||||||||
Leasing institution
|
EURIBOR
|
3.43 | 6,814 | 6,898 |
|
1.
|
On December 31, 2010 two wholly-owned Italian subsidiaries of the Company entered into financial leasing agreements, (the “Leasing Agreements”) in the amount of Euro 3,000 thousand each (Euro 6,000 thousand in total) for the financing of the subsidiaries, with the following terms: nominal annual interest rate of 3.43%. Monthly payments in the amount of Euro 20 thousand each, commencing 210 days after issuance, for the duration of the Leasing Agreements (17 years) which are linked to the EURIBOR monthly average Euro Interbank Offered Rate. As of December 31, 2011 the first two drawdowns under the Leasing
Agreements were received in the aggregate amount of approximately Euro 5 million (approximately $6,483 thousand) net of expenses capitalized in the amount of approximately Euro 1.142 million (approximately $1,476 thousand) comprised mainly of Cadastral tax and VAT paid in connection with the Leasing Agreements. In March 2012 the final drawdown under the Leasing Agreements was received in the amount of approximately Euro 818.5 (approximately $1,080 thousand).
|
|
2.
|
The Leasing Agreements include the following covenants:
|
|
a.
|
A declaration that the shareholders credit towards the two Italian wholly-owned subsidiaries will be subordinated to the leasing company’s credit;
|
|
b.
|
The Company undertook not to transfer the entire holdings in two wholly-owned Italian subsidiaries and shares not exceeding 20% of its holdings in the wholly-owned Luxembourgian subsidiary that wholly-owns the two Italian subsidiaries;
|
c.
|
The Company undertook to assign (as guarantee) the receivables from GSE; and
|
|
d.
|
The Company undertook encumber in favor of the leasing company the rights in connection with the guarantees provided under the EPC Contracts and the Operation and Maintenance agreements.
|
|
3.
|
The Company accounted for the transaction as a sale and a finance leaseback as the Company retained the significant risks and benefits of ownership related to its relevant PV Plants. The carrying value of the photovoltaic plants was left unchanged, with the sales proceeds recorded as a finance lease obligation accounted for under IAS 39.
|
|
As of December 31, 2013 financial covenants were met.
|
|
B.
|
The aggregate annual maturities are as follows:
|
December 31
|
December 31
|
|||||||
2013
|
2012
|
|||||||
US$ in thousands
|
US$ in thousands
|
|||||||
First year (current maturities)
|
396 | 367 | ||||||
Second year
|
411 | 379 | ||||||
Third year
|
424 | 393 | ||||||
Fourth year
|
439 | 406 | ||||||
Fifth year
|
455 | 420 | ||||||
Sixth year and thereafter
|
5,085 | 5,300 | ||||||
7,210 | 7,265 | |||||||
Less current maturities
|
396 | 367 | ||||||
Long-term finance lease obligation
|
6,814 | 6,898 |
|
A.
|
Composed as follows:
|
Interest
|
|||||||||
Linkage
|
rate
|
December 31
|
|||||||
terms
|
2013
|
2013
|
|||||||
%
|
US$ in thousands
|
||||||||
Bank loans
|
EURIBOR
|
1.6-5.15 | 9,875 | ||||||
Other long-term loans
|
EURIBOR
|
5.15 | 1,175 |
Interest
|
|||||||||
Linkage
|
rate
|
December 31
|
|||||||
terms
|
2012
|
2012
|
|||||||
% |
US$ in thousands
|
||||||||
Bank loans
|
EURIBOR
|
1.6-5.15 | 10,425 | ||||||
Other long-term loans
|
EURIBOR
|
5.15 | 1,255 |
|
1.
|
On February 17, 2011, one of the Company's Italian subsidiaries entered into a project finance facilities credit agreement (the “Finance Agreement”) with an Italian bank (Centrobanca – Banca di Credito Finanziario e Mobiliare S.p.A.). Pursuant to the Finance Agreement, two lines of credit in the aggregate amount of Euro 4.65 million were provided:
|
|
(i)
|
A Senior Loan, to be applied to the costs of construction of the PV Plants (up to 80% of the relevant amount), in the amount of Euro 4.1 million, accruing interest at the EURIBOR rate, increased by a margin of 200 basis points per annum, to be repaid in six-monthly installments with a maturity date of December 31, 2027.
|
|
A.
|
Composed as follows: (cont’d)
|
|
(ii)
|
A VAT Line, for payment of VAT due on the costs of construction in the amount of Euro 0.55 million, accruing interest at the EURIBOR rate, increased by 160 basis points per annum. As of December 31, 2013 the entire VAT Line was repaid.
|
|
The Finance Agreement also requires the payment of commitment fees equal to 0.5% per annum calculated on the undrawn and un-cancelled amount of both the Senior Loan and the VAT Line and certain additional payments, including an arranging fee and an annual agency fee.
|
|
The Company's Italian subsidiary undertook to comply with the following financial covenants verified at each repayment date starting from the first installment of the Senior Loan and up to the final redemption date:
|
|
DSCR (Debt Rate Cover Ratio): equal or greater than 1.25:1;
LLCR (Loan Life Coverage Ratio): equal or greater than 1.25:1; and
|
|
Debt/Equity: equal or less than 80:20.
|
|
On November 30, 2011 an amount of Euro 4.4 million (approximately $ 5,640 thousand) was drawn down on account of these credit lines. Related expenses capitalized to the loan comprised mainly of related notary fee and bank charges amount to
approximately
Euro 171 thousand (approximately $221 thousand).
As of December 31, 2013 financial covenants were met.
|
2.
|
On December 20, 2011, one of the Company's Italian subsidiaries, entered into a loan agreement (the “Loan Agreement”) with an Italian bank (Unicredit S.p.A.). Pursuant to the Loan Agreement, a line of credit was set up to an amount of Euro 5.047 million bearing an interest at the EURIBOR 6 month rate plus a range of 5.15%-5.35% per annum, depending on the period in which interest is accrued during the term of the Loan Agreement. The principal and interest on the loan are repaid semi-annually. The final maturity date of this loan is December 31, 2029. The Loan Agreement provides for mandatory prepayment upon the occurrence of certain events, including in the event the borrower receives insurance or indemnity compensation and in the event of a change in control of the borrower without the bank's consent.
|
|
|
On January 31, 2012 an amount of Euro 4.9 million (approximately $ 6,460 thousand) was drawn down on account of these credit lines. Related expenses capitalized to the loan are comprised mainly of related notary fee and bank charges and amount to
approximately
Euro 148 thousand (approximately $195 thousand).
|
|
As of December 31, 2013 financial parameters were met.
|
|
A.
|
Composed as follows: (cont’d)
|
3.
|
Effective as of March 8, 2012, the Company's 85% owned Spanish subsidiary entered into a loan agreement with the owner of the remaining 15% of its outstanding shares. Pursuant to the Loan Agreement, a line of credit was set up to an amount of Euro 8 million bearing an interest at the EURIBOR 6 month rate plus a range of 5.15% per annum for a period of 5 years, and renewable for additional 5 year periods. As of December 31, 2013 the credit facility balance used amounts to approximately Euro 853 thousand (approximately $ 1,175 thousand) including accumulated interests.
|
|
B.
|
The aggregate annual maturities are as follows:
|
December 31
|
December 31
|
|||||||
2013
|
2012
|
|||||||
US$ in thousands
|
US$ in thousands
|
|||||||
First year (current maturities)
|
459 | 745 | ||||||
Second year
|
486 | 471 | ||||||
Third year
|
510 | 499 | ||||||
Fourth year
|
1,711 | 522 | ||||||
Fifth year
|
569 | 1,805 | ||||||
Sixth year and thereafter
|
7,774 | 8,383 | ||||||
11,509 | 12,425 | |||||||
Less current maturities
|
459 | 745 | ||||||
Long-term loans
|
11,050 | 11,680 |
|
C.
|
In order to minimize the interest-rate risk resulting from liabilities to banks and financing institutions in Italy linked to the Euribor, the Company executed swap transactions. See note 20.
|
December 31
|
December 31
|
|||||||
2013
|
2012
|
|||||||
US$ in thousands
|
US$ in thousands
|
|||||||
Deferred Tax (see Note 18E)
|
40 | 384 | ||||||
Government authorities
|
248 | - | ||||||
Swap contracts
|
2,048 | 3,415 | ||||||
Liabilities for employees benefits
|
50 | 28 | ||||||
2,386 | 3,827 |
|
A.
|
Investment in photovoltaic plants
|
|
-
|
An EPC Contract, which governs the installation, testing and commissioning of a photovoltaic plant by the respective contractor;
|
|
-
|
An Operation and Maintenance Agreement (an "O&M Agreement"), which governs the operation and maintenance of the photovoltaic plant by the respective contractor. Based on the range of services offered by the contractor, the annual consideration for the O&M Agreement varies from Euro 19 thousand to Euro 45 thousand per MWp (linked to the Italian inflation rate or the Spanish Consumer Price Index) for each of the PV Plants, paid in the majority of the PV Plants on a quarterly basis.;
|
|
-
|
When applicable, agreement between the Company's relevant subsidiary and the contractor, whereby the panels required for the construction of the photovoltaic plant will be purchased by such Italian subsidiary directly from a third party supplier of such panels, and then transferred to the contractor;
|
-
|
A number of ancillary agreements, including:
|
|
*
|
One or more "building rights agreements" with the land owners, which provide the terms and conditions for the lease of land on which the photovoltaic plants are constructed and operated.
|
|
*
|
Standard "incentive agreements" with Gestoredei Servizi Elettrici ("GSE"), Italy's energy regulation agency responsible, inter-alia, for incentivizing and developing renewable energy sources in Italy and purchasing energy and re-selling it on the electricity market. The incentive agreements will be entered into prior to connection of the each of the PV Plants to the Italian national grid. Under such agreement, it is anticipated that GSE will grant the applicable feed-in tariff governing the purchase of electricity.
|
|
*
|
One or more "power purchase agreements" with GSE, specifying the power output to be purchased by GSE for resale and the consideration in respect thereof.
|
|
*
|
One or more "interconnection agreements" with the Enel Distribuzione S.p.A ("ENEL"), the Italian national electricity grid operator, which provide the terms and conditions for the connection to the Italian national grid.
|
|
*
|
A stock purchase agreement in the event the Company acquires a plant that is under construction or is already constructed.
|
|
A.
|
Investment in photovoltaic plants (cont’d)
|
|
*
|
Standard “power evacuation agreements” with the Spanish power distribution grid company Endesa Distribución Eléctrica, S.L.U., or Endesa, regarding the rights and obligations of each party, concerning, inter alia, the evacuation of the power generated in the facility to the grid;
|
|
*
|
Standard “representation agreements” with an entity that will represent the PV Principal in its dealings with the Spanish National Energy Commission, or CNE, and the bid system managed by the operator of the market, Operador del Mercado Ibérico de Energía, Polo Español, S.A., or OMEL, who are responsible for payment of the FiT. The representation agreements in connection with Rinconada II are with Nexus Energía, S.A.; and
|
|
*
|
a stock purchase agreement in the event the Company acquire an existing company that owns a photovoltaic plant that is under construction or is already constructed.
|
|
B.
|
Agreement to receive participation interest
|
|
On February 22, 2011 (the " Licenses Effective Date") the Company entered into agreements to receive participation interests in four oil and gas exploration licenses (the "Licenses") in Israel. In December 2011, the Israeli Petroleum Commissioner published its decision not to extend the terms of the Licenses and as of April 1, 2012 all four licenses have expired and the Petroleum Commissioner announced that they will not be renewed. As these transactions were not consummated, as of December 31, 2013 the Company made no expenditures in connection with these licenses.
|
|
On December 5, 2011 the Company, through a limited partnership of which a wholly-owned subsidiary of the Company is the general partner and of which the Company is the limited partner, entered into an agreement to receive participation interests in an exploration license in Israel (the “Yitzchak License”). The Company committed to finance its share of the anticipated expenditures in an amount of up to $2 million, including reimbursement for past expenditures incurred by the transferors of the participating interests in connection with operations under the Yitzchak License until closing date of the agreement (that was subject to the approval of the Israeli Petroleum Commissioner). Thereafter, if the Company does not contribute its share of expenditures in excess of such $2 million, it will be permitted to sell its participating interest to a third party and, if not sold, its holdings in the Yitzchak License would be diluted pro rata to the total expenditures in connection with the Yitzchak License. On January 9, 2012 following the Israeli Petroleum Commissioner approval, the transaction was consummated.
|
|
The Company funded approximately $554 thousand, which only represents 10% of the total cash calls to the partners in the Yitzhak license expenses. In 2012, in light of the precarious financial situation of the major partner in the Yitzhak license, holding 70% of the license, the Company identified a required impairment of the investment in the Yitzhak License and recorded a loss of approximately $ 554 thousand.
|
|
C.
|
Operating lease commitments
|
|
The PV Plants are constructed on land leased for 20-25 years under operating lease agreements, which expire on various dates, ranging from 2031 to 2035. In respect to several of the leases the Company has the option to extend the lease for different terms, the latest of which is until 2041. The Company leases its office space under an operating lease that expires in April 2015 with an additional one year optional extension period. The following table summarizes the minimum annual rental commitments as of the periods indicated under the non-cancelable operating leases and sub-lease arrangements with initial or remaining terms of more than one year, reflecting the terms that were in effect as of December 31, 2013:
|
Operating
|
||||
lease
|
||||
US$ in thousands
|
||||
Year ended December 31
|
||||
2014
|
440 | |||
2015
|
440 | |||
2016
|
267 | |||
2017
|
198 | |||
2018 and thereafter
|
2,899 | |||
Total minimum lease payments
|
4,244 |
|
D.
|
Legal proceedings:
|
|
The following is a summary of legal proceedings filed against the Company or its subsidiaries. All amounts are converted to US Dollars at the exchange rate as of December 31, 2013.
|
|
D.
|
Legal proceedings: (cont'd)
|
|
1.
|
In December 2003, a customer of a subsidiary filed a lawsuit alleging that a machine purchased by it failed to perform. The customer sought reimbursement of the purchase price paid by it in the amount of approximately $ 398 thousand (as of December 31, 2013). During 2006 the Company launched a counter claim to this lawsuit for the collection of unpaid outstanding invoices which was settled between the parties in May 2010. In January 2010 the court dismissed the customer’s lawsuit and in June 2010 the customer filed an appeal. Based on management's estimation and the assessment of its legal counsel, no provision was recorded with respect to this claim.
|
|
2.
|
In February 2007, a claim was filed against the Company and one of its former officers by a person claiming to have been an agent of the Company in West Africa for commissions on sales of printers. The claim is for NIS 3,000 thousand ($ 864 thousand as of December 31, 2013). The Company filed a statement of defense denying all claims, both with respect to the causes of action and with respect to the factual allegations in the claim. The plaintiff's filed a motion with the Court to strike the Company’s Statement of Defense, which was rejected. The plaintiff's filed a motion to appeal to the Supreme Court. That motion was rejected in July 2010. In October 2012, the district court rendered its ruling and rejected the plaintiff’s claims in their entirety. In November 2012 an appeal was filed in the Supreme Court by the plaintiff. Written summaries were submitted by the plaintiffs and by the defendants by September 2013 and November 4, 2013, respectively. On March 5, 2014 an appeal hearing was held at the Israeli Supreme Court. In accordance with the court's recommendation, the parties agreed to end all their disputes on a settlement for the amount of $ 85 thousand in favor of the plaintiff. As of December 31, 2013, a provision was recorded with respect to the settlement amount.
|
|
|
3.
|
In September 2010 a claim was filed with the Court of Brescia, Italy against the Company and against HP and several of its subsidiaries by a former customer asking the declaration of invalidity or voidness or termination of the supply of agreements in connection with five printers it purchased between 2004 - 2006 alleging the defectiveness of the printers (in particular, the lack of the essential safety qualifications and relevant certifications) and requesting damages in the aggregate amount of Euro 2,500 thousand plus VAT (approximately $ 3,295 thousand plus VAT, as of December 31, 2012). The Company was sued based on its past ownership of the seller of the printers, NUR Europe (which was sold to HP in connection with the HP Transaction). The Company has required that HP pay its legal fees in connection with this claim based on the settlement agreement executed with HP in July 2010. The parties reached a settlement in November 2012 and the case was dismissed. In addition, the Company reached a settlement with HP concerning the payment of legal fees.
|
A.
|
On December 30, 2008, the Company's shareholders approved the terms of a management services agreement entered into among the Company, Kanir Joint Investments (2005) Limited Partnership ("Kanir") and Meisaf Blue & White Holdings Ltd. ("Meisaf"), a company controlled by the Company's chairman of the board and controlling shareholder, effective as of March 31, 2008 (the "Management Agreement"). According to the Management Agreement, Kanir and Meisaf, through their employees, officers and directors, provide assistance to the Company in all aspects of the new operations process, including but not limited to, any activities to be conducted in connection with identification and evaluation of the business opportunities, the negotiations and the integration and management of any new operations and including discussions with the Company's management to assist and advise them on such matters and on any matters concerning the Company's affairs and business. In consideration of the performance of the management services and the board services pursuant to the Management Agreement, the Company agreed to pay Kanir and Meisaf an aggregate annual management services fee in the amount of $ 250 thousand.
|
|
This annual amount was increased to $400,000 in June 2013 following approval by the Audit Committee, Compensation Committee, Board of Directors and by the Company's shareholders at the shareholders' meeting held in June 2013. In addition, in June 2013 the term of the Management Agreement was extended until June 17, 2016 subject to certain rights of early termination.
|
|
The Company sub-leases a small part of its office space to a company controlled by Mr. Shlomo Nehama, the Company's chairman of the Board and a controlling shareholder, at a price per square meter based on the price that it pays under its lease agreements. This sub-lease agreement was approved by the Company's Board of Directors.
|
|
B.
|
Compensation to key management personnel and interested parties (including directors)
|
|
Executive officers and directors participate in the Company’s share option programs. For further information see Note 16 regarding share-based payments.
|
|
Compensation to key management personnel and interested parties that are employed by the Company:
|
Year ended December 31
|
||||||||||||||||||||||||
2013
|
2012
|
2011
|
||||||||||||||||||||||
Number of
|
Number of
|
Number of
|
||||||||||||||||||||||
people
|
Amount
|
people
|
Amount
|
people
|
Amount
|
|||||||||||||||||||
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||||||||||||
Short-term employee
|
||||||||||||||||||||||||
Benefits
|
2 | 461 | 2 | 443 | 2 | 565 | ||||||||||||||||||
Post-employment
|
||||||||||||||||||||||||
Benefits
|
2 | 29 | 2 | 27 | 2 | 29 | ||||||||||||||||||
Share-based payments
|
1 | * | 1 | * | 1 | 20 |
Year ended December 31
|
||||||||||||||||||||||||
2013
|
2012
|
2011
|
||||||||||||||||||||||
Number of
|
Number of
|
Number of
|
||||||||||||||||||||||
people
|
Amount
|
people
|
Amount
|
people
|
Amount
|
|||||||||||||||||||
US$ thousands
|
US$ thousands
|
US$ thousands
|
||||||||||||||||||||||
Total compensation to
|
||||||||||||||||||||||||
directors not employed
|
||||||||||||||||||||||||
by the Company
|
4 | 90 | 4 | 79 | 4 | 73 | ||||||||||||||||||
share-based payments
|
4 | 9 | 4 | 7 | 4 | 12 |
|
C.
|
Debts and loans to related and interested parties
|
The terms of the loan
|
Balance as at December 31
|
Financing income recognized in statement of
income for the year ended December 31
|
|||||||||||||||||||||||
Interest
|
Linkage
|
||||||||||||||||||||||||
rate
|
base
|
2013
|
2012
|
2013
|
2012
|
2011
|
|||||||||||||||||||
US$ thousands
|
|||||||||||||||||||||||||
Dori Energy
|
8.5 | (*) |
NIS+CPI
|
12,732 | 6,688 | 314 | - | - |
|
A.
|
Composition of share capital
|
December 31, 2013
|
December 31, 2012
|
December 31, 2011
|
||||||||||||||||||||||
Issued and
|
Issued and
|
Issued and
|
||||||||||||||||||||||
Authorized
|
Outstanding(1)
|
Authorized
|
outstanding(1)
|
Authorized
|
Outstanding
|
|||||||||||||||||||
Number of shares
|
||||||||||||||||||||||||
Ordinary shares
|
||||||||||||||||||||||||
of NIS 10.00 par
|
||||||||||||||||||||||||
value each
|
17,000,000 | (1)10,692,371 | 17,000,000 | (1)10,692,371 | 17,000,000 | (2)10,769,326 |
(1)
|
Net of treasury shares. 85,655 Ordinary shares as of December 31, 2013 and 2012, have been purchased according to a share
buyback
program that was authorized the Company's Board of Directors.
|
(2)
|
Net of treasury shares. 8,700 Ordinary shares as of December 31, 2011, have been purchased according to a share buyback program that was authorized by the Company's Board of Directors.
|
|
B.
|
Rights attached to shares:
|
|
1.
|
Voting rights at the general meeting, right to dividend and rights upon liquidation of the Company.
|
|
2.
|
The Ordinary shares of the Company were traded until May 2005 on the NASDAQ Capital Market. From May 19, 2005, the Company's Ordinary shares have been quoted over-the-counter in the "pink sheets" and, commencing August 22, 2011, have been listed on the NYSE MKT (formerly the NYSE Amex).
On October 27, 2013,
the Company's
ordinary shares were also listed for trading on the Tel Aviv Stock Exchange in Israel.
|
|
D.
|
Reverse share split
|
|
On June 9, 2011, the Company effected a 1-for-10 reverse share split (“the reverse split”). As a result of the reverse split, every 10 shares of the Company were combined into one share, all fractional shares which were one-half or more were increased to the next higher whole number of shares and all fractional shares which were less than one-half share were decreased to the next lower whole number of shares. The par value of the Company’s shares increased from NIS 1.00 to NIS 10.00. The reverse split affected all of the Company's ordinary shares, including ordinary shares reserved for issuance under stock options and warrants outstanding immediately prior to the effective date of the reverse split. The reverse split reduced the number of shares outstanding at June 9, 2011 from 107,778,493 shares to 10,777,917 shares. All references to share and per share amounts for all periods presented have been retroactively restated to reflect this reverse split.
|
|
E.
|
Buyback plan
|
|
On September 25, 2011, the Company's Board of Directors approved the repurchase of up to $3 million of the Company's ordinary shares to be made from time to time. The timing, volume and nature of share repurchases are at the sole discretion of the Company's management, subject to the funds available for share repurchase under the Companies Law, and are dependent on market conditions, the price and availability of the Company's ordinary shares, applicable securities laws, restrictions under the Israeli Companies Law and other factors.
|
|
The buyback program did not obligate the Company to acquire a specific number of shares in any period, and could be modified, suspended, extended or discontinued at any time, without prior notice. Due to Israeli regulatory considerations with respect to the funds available for share repurchases, the Company ceased repurchasing ordinary shares commencing July 1, 2012 and until the expiration date of the buyback program. As of December 31, 2013 the Company purchased 85,655 ordinary shares for a total consideration of $522 thousand.
|
|
F.
|
Warrants
|
|
During 2011, warrants to purchase 27,887 ordinary shares at an exercise price of $ 6.5 per share were exercised.
|
|
As of December 31, 2011, the Company had 324,164 warrants outstanding that were exercisable into 324,164 ordinary shares of NIS 10.00 par value each for an exercise price of $ 6.5 per ordinary share. These warrants were classified in equity. During January and February 2012 these warrants expired.
|
|
In August 2013, the Company issued a warrant to purchase 308,427 ordinary shares at an exercise price of $7.97 per share to Mr. Zohar Zisapel that includes a contractual provision that prohibits Mr. Zisapel from exercising such warrant during a 12 month period following the effective date of such warrant if such exercise would result in the Mr. Zisapel beneficially owning more than 4.99% of the Company's ordinary shares. The warrant further provides that it may only be exercised via cashless exercise methods described in the Warrant.
|
|
The grant date fair value of the fully vested warrant was recorded as an expense in profit or loss. The fair value of the warrant was estimated using a Black-Scholes pricing model with the following assumptions: dividend yield – 0%, expected volatility – 0.37, risk-free interest – 0.32%, contractual life – 2 years.
|
|
G.
|
Translation reserve from foreign operation
|
|
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
|
|
H.
|
Capital management in the Company
|
|
The Company's capital management objectives are:
|
|
1.
|
To preserve the Company's ability to ensure business continuity thereby creating a return for the shareholders, investors and other interested parties.
|
|
2.
|
To ensure adequate return for the shareholders by making reasonable investment decisions based on the level of internal rate of return that is in line with the Company's business activity.
|
|
3.
|
To maintain healthy capital ratios in order to support business activity and maximize shareholders value.
|
|
A.
|
Expenses recognized in the financial statements
|
|
The expense recognized in the financial statements for services received from employees is shown in the following table:
|
Year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ thousand
|
||||||||||||
Expenses arising from share-based payment
|
||||||||||||
transactions
|
9 | 7 | 32 |
|
The share-based payments that the Company granted to its employees are described below. Other than the revision to the 1998 Plan (as hereinafter defined) during 2013, there have been no modifications or cancellations to any of the employee stock options plans during 2013, 2012 or 2011, except for the reverse split as described in Note 15D. The amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.
|
|
The fair value of the options is estimated using a Black-Scholes options pricing model with the following weighted average assumptions:
|
Year ended December 31
|
||||||||
2013
|
2012
|
|||||||
Dividend yield
|
0 | % | 0 | % | ||||
Expected volatility
|
0.374 | 0.552 | ||||||
Risk-free interest
|
0. 35 | % | 0. 24 | % | ||||
Expected life (in years)
|
2-3 | 2-3 |
|
All options granted during 2013 and 2012 were granted with exercise price equal or higher than the market price on the date of grant. Weighted average fair values and exercise price of options on dates of grant are as follows:
|
Equal market price
|
||||||||
2013
|
2012
|
|||||||
US$
|
||||||||
Weighted average exercise prices
|
8.48 | 5.24 | ||||||
Weighted average fair value on grant date
|
1.8 | 1.6 |
|
B.
|
Stock Option Plans
|
|
In December 1998, the Company's shareholders approved the non-employee director stock option plan (the "1998 Plan"). Each option granted under the 1998 Plan is vested immediately and expires after 10 years. Generally, the Company grants options under the plan with an exercise price equal to the market price of the underlying shares on the date of grant. Following the reverse share split an aggregate amount of not more than 75,000 ordinary shares is reserved for grants under the 1998 Plan. The original expiration date of the 1998 Plan pursuant to its terms was December 8, 2008 (10 years after its adoption). At the General Meeting of the Company's shareholders, held on January 31, 2008, the term of the 1998 Plan was extended and as a result it will expire on December 8, 2018, unless earlier terminated by the Board. In connection with the adoption of the Company's compensation policy in 2013, the 1998 Plan was amended to provide that options granted under the 1998 Plan will become exercisable based on the vesting schedule determined in the approvals of the option grant.
|
|
In August 2000, the Company's board of directors adopted the 2000 Stock Option Plan (the "2000 Plan" and, together with the 1998 Plan, the "Plans"). The initial reserve to the 2000 Plan was 200,000 options that may be granted to officers, directors, employees and consultants of the Company and its subsidiaries. The options usually vest over a three year period. The exercise price of the options under the 2000 Plan is determined to be not less than 80% of the fair market value of the Company's ordinary shares at the time of grant, and they usually expire after 10 years from the date of grant. In June 2008 the Company's board of directors extended the 2000 Plan by an additional 10 years and the current expiration date of the 2000 Plan is August 31, 2018.
|
|
Following increases in shares reserved for issuance under the Company's 2000 Plan, the Company reserved for issuance 1,772,459 ordinary shares under such plan. As a result of a repurchase and cancellation of employee options following with the HP Transaction, the number of shares reserved for issuance under the 2000 was decreased by 987,645.
|
|
As a result of the reverse split, every 10 options of the Company were combined into one option, all fractional shares which were one-half or more were increased to the next higher whole number of shares and all fractional shares which were less than one-half share were decreased to the next lower whole number of options. The exercise price of the options was proportionately increased.
|
|
As of December 31, 2013, 23,502 options are outstanding and 43,081 ordinary shares are available for future grants under the 1998 Plan and 132,285 options are outstanding and 594,919 Ordinary shares are available for future grants under the 2000 Plan. Options that are cancelled or forfeited become available for future grant.
|
|
During 2013, 2012 and 2011, the Company granted to directors 4,000, 4,000 and 4,583 options, respectively.
|
|
During 2013, 2012 and 2011 the Company granted to one of its senior employee 45, 45 and 45 options, respectively. There were no other option grants during 2013, 2012 and 2011.
|
|
C.
|
Changes during the year:
|
|
The following table lists the number of share options, the weighted average exercise prices of share options during the current year:
|
2013
|
2012
|
2011
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
average
|
average
|
average
|
||||||||||||||||||||||
Number of
|
exercise
|
Number of
|
exercise
|
Number of
|
exercise
|
|||||||||||||||||||
options
|
price
|
options
|
price
|
options
|
price
|
|||||||||||||||||||
US$
|
US$
|
US$
|
||||||||||||||||||||||
Outstanding at
|
||||||||||||||||||||||||
beginning of year
|
151,742 | 8.24 | 153,364 | 8.2 | 148,736 | 8.3 | ||||||||||||||||||
Granted during
|
||||||||||||||||||||||||
the year
|
4,045 | 8.48 | 4,045 | 5.24 | 4,628 | 6.82 | ||||||||||||||||||
Exercised during
|
||||||||||||||||||||||||
the year
|
- | - | ( 5,667 | ) | 5.72 | - | - | |||||||||||||||||
Expired during
|
||||||||||||||||||||||||
the year
|
- | - | - | - | - | - | ||||||||||||||||||
Outstanding at
|
||||||||||||||||||||||||
end of year
|
155,787 | 8.24 | 151,742 | 8.24 | 153,364 | 8.2 | ||||||||||||||||||
Exercisable at
|
||||||||||||||||||||||||
end of year
|
153,708 | 8.24 | 151,663 | 8.24 | 153,282 | 7.04 | ||||||||||||||||||
|
D.
|
The weighted average remaining contractual life for the share options outstanding as of December 31, 2013 was 4.76- 6.89 years (as of December 31, 2011: 6.48-8 years and as of December 31, 2012: 5.76-7.89 years).
|
|
E.
|
The range of exercise prices for share options outstanding as of December 31, 2013 was $3.1- $9.2 (as of December 31, 2011: $ 3.1- $ 9.2 and as of December 31, 2012: $ 3.1- $ 9.2).
|
|
A.
|
Financing income and expenses:
|
|
1.
|
Financing income
|
For the year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
||||||||||||
Interest income
|
204 | 438 | 436 | |||||||||
Change in fair value of derivatives
|
1,501 | - | - | |||||||||
Forward gain
|
- | 112 | - | |||||||||
Gain from exchange rate differences, net
|
- | - | 1,384 | |||||||||
Total financing income
|
1,705 | 550 | 1,820 |
|
2.
|
Financing expenses
|
For the year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
||||||||||||
Change in fair value of derivatives
|
- | 2,131 | 2,406 | |||||||||
Swap interest
|
768 | 511 | 148 | |||||||||
Share-based payment
|
513 | - | - | |||||||||
Interest on loans
|
1,258 | 1,028 | 464 | |||||||||
Loss
from exchange rate differences, net
|
1,434 | 485 | - | |||||||||
Bank charges and other commissions
|
228 | 22 | 40 | |||||||||
Total financing expenses
|
4,201 | 4,177 | 3,058 |
|
B.
|
Operating Costs and Depreciation
|
For the year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
||||||||||||
Depreciation
|
4,021 | 2,717 | 1,777 | |||||||||
Professional services
|
165 | 268 | 822 | |||||||||
Annual rent
|
215 | 205 | 190 | |||||||||
Operating and maintenance services
|
1,251 | 922 | 164 | |||||||||
Insurance
|
250 | 153 | 62 | |||||||||
Other
|
500 | 406 | 153 | |||||||||
Total operating costs
|
6,402 | 4,671 | 3,168 |
|
C.
|
General and administrative expenses
|
For the year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
||||||||||||
Salaries and related compensation
|
1,100 | 963 | 1,148 | |||||||||
Professional services
|
2,608
|
1,547 | 1,614 | |||||||||
Loss from disposal of fixed assets, net of insurance income
|
- | 338 | - | |||||||||
Income from Bond enforcement (*)
|
(596 | ) | - | - | ||||||||
Other
|
337 | 262 | 340 | |||||||||
Total general and administrative expenses
|
3,449
|
3,110 | 3,102 |
|
(*) The contractor of four of the Company's photovoltaic plants (Del Bianco, Giache, Constantini and Massaccesi) has entered into insolvency proceedings during 2012 that are subject to an arrangement with its creditors. In connection with such insolvency proceedings, the Company enforced the bonds received from the contractor as part of its obligations under the EPC agreements and received an amount of approximately $ 596 thousand.
|
A.
|
Israeli taxation
|
|
Corporate tax structure:
|
|
On July 14, 2009, the Knesset passed the Economic Efficiency Law (Legislation Amendments for Implementation of the 2009 and 2010 Economic Plan), 2009 (the "Economic Efficiency Law"), which provided, inter alia, a gradual reduction in the corporate tax rate to 18% as from the 2016 tax year. In accordance with the aforementioned amendments, the corporate tax rate in 2010 and 2011 was 25% and 24%, respectively.
|
|
On December 5, 2011, the Knesset approved the Law to Change the Tax Burden (Legislative Amendments), 2011. According to this law, the tax reduction that was provided in the Economic Efficiency Law, as aforementioned, was cancelled and the corporate tax rate will be 25% as from 2012.
|
|
On August 5, 2013, the Knesset passed the Law for Changes in National Priorities (Legislative Amendments for Achieving Budget Objectives in the Years 2013 and 2014), 2013, by which, inter alia, the corporate tax rate would be raised by 1.5% to a rate of 26.5% as from 2014.
|
|
Corporate tax structure:
|
|
As a rule, corporate income tax (named IRES from 2004) is payable by all resident companies on income from any source, whether earned in Italy or abroad at the rate of 27.5%. Both resident and non-resident companies are subject to regional income tax (IRAP), but only on income arising in Italy at the rate from 3.90% to 4.82%, depend by the Region.
|
|
As a rule, corporate income tax is payable by all resident companies on income from any source, whether earned in Spain or abroad at the rate of 30%.
|
|
The Spanish Parliament has enacted the Spanish Law No. 15/2012, dated December 27, 2012, or Law No. 15/2012, on fiscal measures for the sustainability of the energy sector, which entered into force on January 1, 2013.
|
|
(a)
|
Taxable event
: generation of electric energy and its transmission to the grid;
|
|
(b)
|
Taxable income
: total amount received in terms of feed in tariff;
|
|
(c)
|
Tax rate
: 7%;
|
|
(d)
|
Taxpayer
: titleholder of the taxable event, i.e., the person which is entitled to generate electric energy and transfer such energy to the grid;
|
|
(e)
|
Tax period and accruing
: the tax period is the natural year and the tax is accrued each December 31;
|
|
(f)
|
Tax payment terms
: the taxpayers are obliged to issue a final self-settlement of the tax amount and to pay such amount within the following month of November as from the accruing of the tax. Therefore, the first self-settlement and payment shall be satisfied during November 2013; and
|
|
(g)
|
Interim tax payments
: the taxpayers are also required to transfer interim tax payments to the account of the final self-settlement within the first twenty calendar days of May, September, November and February of the following year, and corresponding to the periods of three, six, nine and twelve months of each year, respectively, and in accordance with the rules to be issued by the Ministry of Treasury and Public Bodies.
|
|
B.
|
Composition of income tax benefit (taxes on income):
|
For the year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
US$ in thousands
|
US$ in thousands
|
||||||||||
Current tax income (expense)
|
||||||||||||
Current year
|
(1,045 | ) | (526 | ) | (432 | ) | ||||||
Previous years
|
71 | 24 | - | |||||||||
Reverse
of uncertain tax positions
|
209 | 1,316 | 1,352 | |||||||||
(765 | ) | 814 | 920 | |||||||||
Deferred tax income
|
||||||||||||
Creation and reversal of temporary differences
|
520 | 197 | 98 | |||||||||
Tax benefit (taxes on income)
|
(245 | ) | 1,011 | 1,018 |
|
C.
|
Theoretical tax:
|
|
Statutory rate applied to corporations in Israel and the actual tax expense, is as follows:
|
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
||||||||||||
Profit (loss) before taxes on income
|
10, 332 | (3,144 | ) | (1,990 | ) | |||||||
Primary tax rate of the Company
|
25 | % | 25 | % | 24 | % | ||||||
Theoretical tax benefit (tax on income
)
|
(2,583 | ) | 786 | 478 | ||||||||
profit (loss) subject to different tax rate
|
117 | 70 | 49 | |||||||||
Foreign exchange differences
|
(82 | ) | 92 | (685 | ) | |||||||
Permanent differences including gain on bargain purchases
|
(2,267 | ) | 190 | 285 | ||||||||
Unrecognized tax profit (losses) and reserve of uncertain tax position
|
(106 | ) | (577 | ) | (189 | ) | ||||||
Actual tax benefit (tax on income
)
|
(245 | ) | 1,011 | 1,018 |
|
D.
|
Carry forward tax losses:
|
|
Deferred taxes have not been recognized of the Company's and its non-operating subsidiaries' carry forward tax losses.
|
|
The Company's management currently believes that as Ellomay Capital Ltd. has a history of losses it is more likely than not that the deferred tax regarding all losses carry forward will not be utilized in the foreseeable future. Therefore, deferred tax assets were not recorded in the years 2013 and 2012.
|
|
E
|
Deferred taxes:
|
Finance lease
|
||||||||||||||||||||
Property and
|
obligations and
|
Swap
|
Losses
|
|||||||||||||||||
equipment
|
Long term loans
|
contract
|
on income
|
Total
|
||||||||||||||||
US$ in thousands
|
||||||||||||||||||||
Balance of deferred tax asset
|
||||||||||||||||||||
(liability) as at January 1, 2013
|
(3,028 | ) | 2,994 | 321 | - | 287 | ||||||||||||||
Changes recognized in profit or loss
|
290 | (90 | ) | (151 | ) | 471 | 520 | |||||||||||||
Changes recognized due to business combination
|
- | 404 | - | - | 404 | |||||||||||||||
Changes recognized in in other comprehensive income
|
15 | 86 | 8 | (7 | ) | 102 | ||||||||||||||
Balance of deferred tax asset
|
||||||||||||||||||||
(liability) as at December 31, 2013
|
(2,723 | ) | 3,394 | 178 | 464 | 1,313 |
Finance lease
|
||||||||||||||||
Property and
|
obligations and
|
|||||||||||||||
Equipment
|
Long term loans
|
Swap contract
|
Total
|
|||||||||||||
US$ in thousands
|
||||||||||||||||
Balance of deferred tax asset
|
||||||||||||||||
(liability) as at January 1, 2012
|
(2,875 | ) | 2,952 | 21 | 98 | |||||||||||
Changes recognized in profit or loss
|
65 | (153 | ) | 285 | 197 | |||||||||||
Changes recognized in in other comprehensive income
|
(218 | ) | 195 | 15 | (8 | ) | ||||||||||
Balance of deferred tax asset
|
||||||||||||||||
(liability) as at December 31, 2012
|
(3,028 | ) | 2,994 | 321 | 287 |
|
F. Provision for tax uncertainties:
|
|
As of December 31, 2013, the total amount of unrecognized tax benefits was $ 1,724 thousand which, if recognized, would affect the effective tax rates in future periods. Management performs a comprehensive review of its global tax positions on an annual basis and accrues amounts for contingent tax liabilities. Based on these reviews, the result of discussions and resolutions of matters with certain tax authorities and the closure of tax years subject to tax audit, reserves are adjusted as necessary. However, future results may include favorable or unfavorable adjustments to estimated tax liabilities in the period the assessments are determined or resolved.
|
|
The following table sets forth the computation of basic and diluted earnings per share:
|
For the year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
US$ in thousands
|
US$ in thousands
|
||||||||||
Net income (loss) attributed to owners of the Company
|
10,068 | (2,110 | ) | (972 | ) | |||||||
Weighted average ordinary shares outstanding (1)
|
10,692,371 | 10,709,294 | 10,775,458 | |||||||||
Dilutive effect:
|
||||||||||||
Stock options and warrants
|
60,437 | - | - | |||||||||
Diluted weighted average ordinary shares
|
||||||||||||
Outstanding
|
10,752,808 | 10,709,294 | 10,775,458 | |||||||||
Basic profit (loss) per share from continuing operations
|
0.94 | (0.20 | ) | (0. 09 | ) | |||||||
Diluted profit (loss) per share from continuing operations
|
0.94 | (0.20 | ) | (0. 09 | ) | |||||||
|
A.
|
Overview
|
|
The Company has exposure to the following risks from its use of financial instruments:
|
|
—
|
Credit risk
|
|
—
|
Liquidity risk
|
|
—
|
Market risk
|
|
This note presents quantitative and qualitative information about the Company’s exposure to each of the above risks, and the Company’s objectives, policies and processes for measuring and managing risk.
|
|
In order to manage these risks and as described hereunder, the Company executes transactions in derivative financial instruments. Presented hereunder is the composition of the derivatives:
|
For the year ended December
|
||||||||
2013
|
2012
|
|||||||
Derivatives presented under current liabilities
|
US$ in thousands
|
|||||||
Forward contracts
|
- | (120 | ) | |||||
SWAP contracts
|
(472 | ) | (591 | ) | ||||
Total
|
(472 | ) | (711 | ) | ||||
Derivatives presented under non-current liabilities
|
||||||||
SWAP contracts
|
(2,048 | ) | (3,415 | ) | ||||
Total
|
(2,048 | ) | (3,415 | ) |
|
B.
|
Risk management framework
|
|
The Company's management has overall responsibility for the establishment and oversight of the Company’s risk management framework.
|
|
C.
|
Credit Risk
|
|
As at December 31, 2013, the Company does not have any significant concentration of credit risk.
|
|
As at December 31, 2013 and 2012, the Company had cash and cash equivalents in the amount of $7,238 thousand and $33,292 thousand, respectively and short-term deposits in the amount of $5,153 thousand and $5,290 thousand, respectively. The Company’s cash and cash equivalents and short-term deposits are deposited with financial institutions that received a credit rating (international rating scale) also Note 3.
|
|
As at December 31, 2013 and 2012, the Company had a balance of current restricted cash of $5,653 thousand and $8,085 thousand, respectively, and a balance of non-current restricted cash of $4,315 thousand and $3,253 thousand, respectively. See also Note 4.
|
|
As at December 31, 2013 and 2012, the Company had a balance of trade receivables of $134 thousand and $95 thousand, respectively. This balance refers to invoices issued and unbilled to ENEL, the Italian national electricity grid operator and to NEXUS that represents the PV Plant located in Spain in its dealings with the Spanish National Energy Commission, and is due within 60 days from issuance.
As at December 31, 2013 and 2012, the Company had a balance of revenue receivables of $1,269 thousand and $492 thousand, respectively. This balance refers to amounts to be paid from GSE, Italy's energy regulation agency responsible, inter-alia, for incentivizing energy manufacturers, and is due within 90 days from the end of the month.
As at December 31, 2013 and 2012, the Company had a balance of government authorities' receivables of $2,000 thousand and $3,132 thousand, respectively. This balance refers to vat and withholding tax receivables in Italy and Spain.
|
|
D.
|
Liquidity risk
|
|
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
|
|
The Company has contractual commitments due to financing agreements and EPC and O&M agreements of its subsidiaries in Italy and Spain see also Note 13A.
|
|
D.
|
Liquidity risk (cont’d)
|
|
The following are the contractual maturities of financial liabilities at undiscounted amounts and based on the future rates forecasted at the reporting date, including estimated interest payments. This disclosure excludes the impact of netting agreements:
|
December 31, 2013
|
||||||||||||||||||||||||
Carrying
|
Contractual
|
Less than
|
More than
|
|||||||||||||||||||||
amount
|
cash flows
|
1 year
|
1-2 years
|
2-5 years
|
5 years
|
|||||||||||||||||||
US$ in thousands
|
||||||||||||||||||||||||
Non-derivative financial liabilities
|
||||||||||||||||||||||||
Long term loans, including current maturities
|
11,509 | 16,633 | 977 | 981 | 4,398 | 10,277 | ||||||||||||||||||
Finance lease obligation including current maturities
|
7,210 | 8,953 | 351 | 666 | 1,998 | 5,938 | ||||||||||||||||||
Loans and borrowings
|
18,599 | 18,836 | 18,836 | - | - | - | ||||||||||||||||||
Trade payables and other accounts payable
|
4,490 | 4,490 | 4,490 | - | - | - | ||||||||||||||||||
41,808 | 48,912 | 24,654 | 1,647 | 6,396 | 16,215 | |||||||||||||||||||
Derivative finance liabilities
|
||||||||||||||||||||||||
Swap contracts
|
2,520 | 2,520 | 472 | 720 | 579 | 749 | ||||||||||||||||||
2,520 | 2,520 | 472 | 720 | 579 | 749 |
|
D.
|
Liquidity risk (cont’d)
|
December 31, 2012
|
||||||||||||||||||||||||
Carrying
|
Contractual
|
Less than
|
More than
|
|||||||||||||||||||||
amount
|
cash flows
|
1 year
|
1-2 years
|
2-5 years
|
5 years
|
|||||||||||||||||||
US$ in thousands
|
||||||||||||||||||||||||
Non-derivative financial liabilities
|
||||||||||||||||||||||||
Long term loans, including current maturities
|
12,425 | 18,311 | 1,341 | 1,039 | 4,454 | 11,477 | ||||||||||||||||||
Finance lease obligation including current maturities
|
7,265 | 9,441 | 621 | 620 | 1,857 | 6,343 | ||||||||||||||||||
Loans and borrowings
|
5,932 | 5,980 | 5,980 | - | - | - | ||||||||||||||||||
Trade payables and other accounts payable
|
12,737 | 12,737 | 12,737 | - | - | - | ||||||||||||||||||
38,359 | 46,469 | 20,679 | 1,659 | 6,311 | 17,820 | |||||||||||||||||||
Derivative finance liabilities
|
||||||||||||||||||||||||
Forward contracts
|
120 | 120 | 120 | - | - | - | ||||||||||||||||||
Swap contracts
|
4,006 | 4,006 | 591 | 531 | 1,272 | 1,612 | ||||||||||||||||||
4,126 | 4,126 | 711 | 531 | 1,272 | 1,612 |
|
E.
|
Market risk
|
|
Market risk is the risk that changes in market prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
|
|
The principal risks that the Company faces, as assessed by management, are as follows: a change in the regulation applicable to the area of activity, a change in the tariffs as approved by the Electricity Authority in Italy and Spain, changes in the situation of the electricity and gas market, political and security events.
|
|
(1)
|
Foreign currency risk
|
|
As a result of the Company's operations, the Company is exposed to changes in the dollar/Euro exchange rate.
|
|
E.
|
Market risk (cont’d)
|
|
(1)
|
Linkage and foreign currency risks (cont’d)
|
|
(a)
|
The exposure to linkage and foreign currency risk
|
|
The Company's exposure to linkage and foreign currency risk except in respect of derivatives (see hereunder) was as follow:
|
December 31, 2013
|
||||||||||||||||||||
Non-monetary
|
NIS
|
Unlinked
|
EURO
|
Total
|
||||||||||||||||
US$ in thousands
|
||||||||||||||||||||
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
- | 1,497 | 224 | 5,517 | 7,238 | |||||||||||||||
ST deposits
|
- | - | 5,153 | - | 5,153 | |||||||||||||||
ST restricted cash
|
- | 3,805 | - | 1,848 | 5,653 | |||||||||||||||
Trade receivables
|
- | - | - | 134 | 134 | |||||||||||||||
Other accounts receivables
|
871 | 30 | 67 | 3,389 | 4,357 | |||||||||||||||
Non-current assets:
|
||||||||||||||||||||
Investments in equity
|
||||||||||||||||||||
accounted investees
|
24,601 | - | - | - | 24,601 | |||||||||||||||
Financial asset
|
389 | - | - | - | 389 | |||||||||||||||
Property, plant and
|
||||||||||||||||||||
equipment, net
|
93,671 | - | - | - | 93,671 | |||||||||||||||
LT restricted cash
|
- | - | 3,304 | 1,011 | 4,315 | |||||||||||||||
Other assets
|
1,419 | - | - | - | 1,419 | |||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Loans and borrowings
|
- | - | - | (19,454 | ) | (19,454 | ) | |||||||||||||
Accounts payable
|
- | (108 | ) | (20 | ) | (2,026 | ) | (2,154 | ) | |||||||||||
Accrued expenses and
|
||||||||||||||||||||
other payables
|
(2,299 | ) | (195 | ) | (1,217 | ) | (1,600 | ) | (5,311 | ) | ||||||||||
Non-current liabilities:
|
||||||||||||||||||||
Finance lease obligations
|
- | - | - | (6,814 | ) | (6,814 | ) | |||||||||||||
Long-term loans
|
- | - | - | (11,050 | ) | (11,050 | ) | |||||||||||||
Other long-term liabilities
|
(90 | ) | - | - | (2,296 | ) | (2,386 | ) | ||||||||||||
Total exposure in statement
|
||||||||||||||||||||
of financial position in
|
||||||||||||||||||||
respect of financial assets
|
||||||||||||||||||||
and financial liabilities
|
118,562 | 5,029 | 7,511 | (31,341 | ) | 99,761 |
|
E.
|
Market risk (cont’d)
|
|
(1)
|
Linkage and foreign currency risks (cont’d)
|
|
(a)
|
The exposure to linkage and foreign currency risk (cont’d)
|
December 31, 2012
|
||||||||||||||||||||
Non-monetary
|
NIS
|
Unlinked
|
EURO
|
Total
|
||||||||||||||||
US$ in thousands
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
- | 84 | 26,605 | 6,603 | 33,292 | |||||||||||||||
ST deposits
|
- | - | 5,290 | - | 5,290 | |||||||||||||||
ST restricted cash
|
- | - | 6,408 | 1,677 | 8,085 | |||||||||||||||
Trade receivables
|
- | - | - | 95 | 95 | |||||||||||||||
Other accounts receivables
|
348 | 30 | 8 | 4,050 | 4,436 | |||||||||||||||
Non-current assets:
|
||||||||||||||||||||
Investments in equity
|
||||||||||||||||||||
accounted investees
|
19,198 | - | - | - | 19,198 | |||||||||||||||
Financial asset
|
485 | - | - | - | 485 | |||||||||||||||
Property, plant and
|
||||||||||||||||||||
equipment, net
|
53,860 | - | - | - | 53,860 | |||||||||||||||
LT restricted cash
|
- | - | 2,600 | 653 | 3,253 | |||||||||||||||
Other assets
|
746 | - | - | - | 746 | |||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Loans and borrowings
|
- | - | - | (7,044 | ) | (7,044 | ) | |||||||||||||
Accounts payable
|
- | (11 | ) | (2 | ) | (1,913 | ) | (1,926 | ) | |||||||||||
Accrued expenses and
|
||||||||||||||||||||
other payables
|
(2,931 | ) | (99 | ) | (1,020 | ) | (10,201 | ) | (14,251 | ) | ||||||||||
Non-current liabilities:
|
||||||||||||||||||||
Finance lease obligations
|
- | - | - | (6,898 | ) | (6,898 | ) | |||||||||||||
Long-term loans
|
- | - | - | (11,680 | ) | (11,680 | ) | |||||||||||||
Other long-term liabilities
|
(412 | ) | - | - | (3,415 | ) | (3,827 | ) | ||||||||||||
Total exposure in statement
|
||||||||||||||||||||
of financial position in
|
||||||||||||||||||||
respect of financial assets
|
||||||||||||||||||||
and financial liabilities
|
71,294
|
4
|
39,889
|
(28,073
|
) | 83,114 |
|
E.
|
Market risk (cont’d)
|
|
(1)
|
Linkage and foreign currency risks (cont’d)
|
|
(a)
|
The exposure to linkage and foreign currency risk (cont’d)
|
For the year ended December 31
|
||||||||||||||||
2013
|
2012
|
|||||||||||||||
Rate of
|
Rate of
|
|||||||||||||||
change
|
change
|
|||||||||||||||
%
|
USD
|
%
|
USD
|
|||||||||||||
1 Euro
|
4.6 | 1.378 | 2 | 1.318 | ||||||||||||
1 NIS
|
7.5 | 0.288 | 2.3 | 0.268 |
|
(b)
|
Sensitivity analysis
|
|
A change as at December 31 in the exchange rates of the following Euro against the USD, as indicated below would have increased (decreased) profit or loss and equity by the amounts shown below (after tax). This analysis is based on foreign currency exchange rate that the Company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant.
|
December 31, 2013
|
||||||||
Increase
|
Decrease
|
|||||||
Profit or loss
|
Profit or loss
|
|||||||
US$ thousands
|
||||||||
Change in the exchange rate of:
|
||||||||
5% in the Euro
|
(1,209 | ) | 1,209 | |||||
5% in NIS
|
873 | (873 | ) |
December 31, 2012
|
||||||||
Increase
|
Decrease
|
|||||||
Profit or loss
|
Profit or loss
|
|||||||
US$ thousands
|
||||||||
Change in the exchange rate of:
|
||||||||
5% in the Euro
|
(295 | ) | 295 | |||||
5% in NIS
|
27 | (27 | ) |
|
E.
|
Market risk (cont’d)
|
|
Interest rate risk
|
|
The Company is exposed to changes in fair value, as a result of changes in interest rate in connection with its loans and borrowings. The debt instruments of the Company bear variable interest rate.
|
|
A change in interest rate would have increased (decreased) profit or loss by the amounts shown below:
|
December 31,
|
||||||||
2013
|
2012
|
|||||||
Profit or loss
|
Profit or loss
|
|||||||
US$ in thousands
|
US$ in thousands
|
|||||||
Increase of 1%
|
280 | 198 | ||||||
Increase of 3%
|
849 | 749 | ||||||
Decrease of 1%
|
(292 | ) | (344 | ) | ||||
Decrease of 3%
|
(861 | ) | (653 | ) |
|
F.
|
Fair value
|
|
(1)
|
Fair values versus carrying amounts
|
|
The carrying amounts of certain financial assets and liabilities, including cash and cash equivalents, other accounts receivables, pledged deposits, financial derivatives credit from banks and trade payables and other accounts payables are the same or proximate to their fair value.
|
|
The fair values of the other financial liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:
|
December 31, 2013
|
|||||||||||||||||||
Fair value
|
|||||||||||||||||||
Carrying
amount
|
Level 1
|
Level 2
|
Level 3
|
Valuation techniques for
determining fair value
|
Inputs used to
determine fair value
|
||||||||||||||
US$ in thousands
|
|||||||||||||||||||
Non-current liabilities:
|
|||||||||||||||||||
Loans from banks and others (including current maturities)
|
30,108 | - | 29,992 | - |
Future cash flows by the market interest rate on the date of measurement.
|
Discount rate of Euribor+ 5-6%
|
|||||||||||||
Finance lease obligations (including current maturities)
|
7,210 | - | 5,925 | - |
Future cash flows by the market interest rate on the date of measurement.
|
Discount rate of Euribor+ 5-6%
|
|||||||||||||
|
37,318 | - | 35,917 | - |
|
F.
|
Fair value
|
|
(2)
|
Interest rates used for determining fair value
|
|
The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus an adequate credit spread, and were as follows:
|
December 31
|
||||||||
2013
|
2012
|
|||||||
%
|
%
|
|||||||
Non-current liabilities:
|
||||||||
Loans from banks
|
Euribor+ 5-6%
|
Euribor+ 1.9-5.6%
|
||||||
Finance lease obligations
|
Euribor+ 5-6%
|
Euribor+ 1.9-5.6%
|
|
(3)
|
Fair value hierarchy
|
|
The financial instruments presented at fair value are grouped into classes with similar characteristics using the following fair value hierarchy which is determined based on the source of input used in measuring fair value:
|
Level 1
|
-
|
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
Level 2
|
-
|
Inputs other than quoted prices included within Level 1 that are observable either directly or indirectly.
|
Level 3
|
-
|
Inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).
|
December 31, 2013
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
US$ in thousands
|
||||||||||||||||
Option to acquire additional
|
||||||||||||||||
shares in investee
|
- | - | 389 | 389 | ||||||||||||
Swap contracts
|
- | 2,520 | - | 2,520 |
|
The fair value of non-marketable options is determined based on valuations on a regular basis. The valuations are presented to the Company’s Audit Committee.
|
|
Unobservable inputs relate to the fair value of the option to acquire additional shares in investee was calculated based on a binomial option pricing model considering estimates and parameters such as NAV (net asset value) of Dori Energy, which was determined based on the value of Dorad, estimated according to the discounted operational cash flows of Dorad, discounted by the return on equity of Dorad and net of its financial liabilities as of December 31, 2013.
|
|
F.
|
Fair value (cont’d)
|
|
(4)
|
Level 3 financial instruments carried at fair value
|
|
The table hereunder presents reconciliation from the beginning balance to the ending balance of financial instruments carried at fair value in level 3 of the fair value hierarchy:
|
Financial assets
|
||||
Option to purchase
|
||||
Additional shares
|
||||
in investee
|
||||
US$ in thousands
|
||||
Balance as at December 31, 2011
|
52 | |||
Total losses recognized in profit or loss
|
146 | |||
Deferred income
|
287 | |||
Balance as at December 31, 2012
|
485 | |||
Total income recognized in profit or loss
|
(236 | ) | ||
Foreign Currency translation adjustments
|
140 | |||
Balance as at December 31, 2013
|
389 |
|
(5)
|
Fair value sensitivity analysis of level 3 financial instruments carried at fair value
|
|
Even though the Company believes that the fair values determined for measurement and/or disclosure purposes are appropriate, the application of different assumptions or different measurement methods may change such fair values. As regards fair value measurements classified in level 3 of the fair value hierarchy, a reasonably possible change in one or more unobservable inputs would have increased (decreased) profit or loss and equity as follows (after tax):
|
December 31, 2013
|
||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||
Profit or loss
|
Equity
|
Profit or loss
|
Equity
|
|||||||||||||
US$ in thousands
|
||||||||||||||||
Option to purchase additional
shares in investee:
|
||||||||||||||||
Change in volatility of 10%
|
135 | 135 | (116 | ) | (116 | ) | ||||||||||
Change in volatility of 20%
|
268 | 268 | (211 | ) | (211 | ) | ||||||||||
Change in interest rate of 1%
|
10 | 10 | (9 | ) | (9 | ) | ||||||||||
Change in interest rate of 2%
|
21 | 21 | (9 | ) | (9 | ) |
|
The Company's chief operating decision maker (CODM) reviews internal management reports on a consolidated basis. The Company has only one strategic business unit.
|
|
The Company is domiciled in Israel and it operates in Italy and in Spain through its subsidiaries that own thirteen PV Plants and in Israel through Dori Energy.
|
|
The following table lists the revenues from the company's operation in Italy and Spain:
|
For the year ended December 31
|
||||||||||||
2013
|
2012
|
2011
|
||||||||||
US$ in thousands
|
||||||||||||
Italy
|
11,673 | 8,387 | 6,114 | |||||||||
Spain
|
1,309 | 503 | - | |||||||||
Total income
|
12,982 | 8,890 | 6,114 |
|
The following table lists the Property, plant and equipment, net from the company's operation:
|
For the year ended December 31
|
||||||||
2013
|
2012
|
|||||||
US$ in thousands
|
||||||||
Israel
|
112 | 121 | ||||||
Italy
|
86,470 | 46,640 | ||||||
Spain
|
7,089 | 7,099 | ||||||
Total Property, plant and equipment, net
|
93,671 | 53,860 |
|
A.
|
Series A Debentures
|
|
On January 13, 2014, the Company issued NIS 120,000 thousand ($ 34,404 thousand) of unsecured non-convertible Series A Debentures (the “Series A Debentures”) through a public offering that was limited to residents of Israel. The Series A Debentures were issued with a price per unit (each unit comprised of NIS 1,000 par value) of NIS 973(approximately $ 280). The Series A Debentures are traded on the TASE (Tel Aviv Stock Exchange) and have been rated ilA-, on a local scale, by Standard & Poor’s Maalot Ltd.
|
|
The principal amount of Series A Debentures is repayable in ten equal annual installments on December 31 of each of the years 2014 through 2023 (inclusive) and is not linked to the CPI or otherwise. The Series A Debentures bear a fixed annual interest rate of 4.6%, payable semi-annually on June 30 and December 31 of each of the years 2014 through 2023 (inclusive). The gross offering proceeds were NIS 116,760 thousand (approximately $33,475 thousand as of the issuance date), and, net of offering expenses, the proceeds were approximately NIS 114,700 thousand (approximately $32,884 thousand as of the issuance date).
|
|
A.
|
Series A Debentures (cont'd)
|
|
The deed of trust governing the Series A Debentures (the “Series A Deed of Trust”) includes customary provisions and also includes the following: (i) a negative pledge such that the Company may not place a floating charge on all of the Company's assets, subject to certain exceptions, and (ii) an obligation to pay additional interest for certain security rating downgrades, up to an increase of 1% for a decrease of four rating levels compared to the rating at the time of issuance of the Series A Debentures. The Series A Deed of Trust does not restrict the Company's ability to issue any new series of debt instruments other than in certain circumstances and enables the Company to expand the Series A Debentures subject to maintaining the rating assigned to the Series A Debentures and the Company's continued compliance with the financial covenants included in the Series A Deed of Trust.
|
|
The Series A Deed of Trust further includes a number of customary causes for immediate repayment, including a default in connection with certain financial covenants for two consecutive financial quarters, which is not cured within the cure period set forth in the Series A Deed of Trust. The financial covenants are as follows:
|
|
1.
|
The Company’s equity, on a consolidated basis, shall not be less than $55 million;
|
|
2.
|
The ratio of (a) the short term and long term debt from banks, in addition to the debt to holders of debentures issued by the Company and any other interest-bearing financial obligations, net of cash and cash equivalents and short term investments and net of project finance, including hedging transactions in connection with such project finance, of the subsidiaries of the Company, or, together, the Financial Debt, Net, to (b) the equity of the Company, on a consolidated basis, plus the Financial Debt, Net, shall not exceed a rate of 65%; and
|
|
3.
|
The ratio of (a) the Company’s equity, on a consolidated basis, to (b) the Company’s balance sheet, on a consolidated basis, shall not be less than a rate of 20%.
|
|
The Series A Deed of Trust further provides that the company may make distributions (as such term is defined in the Companies Law, e.g. dividends), to the Company's shareholders, provided that: (a) the Company's equity following such distribution will not be less than $75 million, (b) the Company meet the financial covenants set forth above prior to and following the distribution, (c) the Company will not distribute more than 75% of the distributable profit and (d) the Company will not distribute dividends based on profit due to revaluation (for the removal of doubt, negative goodwill will not be considered a revaluation profit).
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B.
Pumped-storage project in the Manara Cliff in Israel
|
|
On January 28, 2014 the Company entered into an agreement (the “Agreement”) with Ortam, an Israeli publicly listed company, pursuant to which, subject to the fulfillment of conditions as set forth below, the Company shall acquire Ortam’s holdings (24.75%) in Agira Sheuva Electra, L.P. (the “Partnership”), an Israeli Limited Partnership that is promoting a prospective pumped-storage project in the Manara Cliff in Israel as well as Ortam's holdings: (i) in Chashgal Elyon Ltd. (the “GP”), an Israeli private company, which is the general partner of the Partnership (25%), and (ii) in the engineering, procurement and construction contractor of the aforementioned project (50%).
|
|
The Agreement forms part of several prospective agreements that the Company is currently negotiating with the other partners of the Partnership. As of this date the Company entered into agreements that are subject to various conditions to closing.
|
|
The consummation of the transactions contemplated by the Agreement, as well as by the other conditional agreements referred to above, is subject to the Company entering into additional agreements with other partners of the Partnership and with several third parties, which are yet to be negotiated. Furthermore, the consummation of the transactions contemplated by the Agreement and the agreements referred to in the previous paragraph is subject to the fulfillment of additional conditions precedent, including, among others, the obtainment of third party and various regulatory approvals.
|
Number
|
Description
|
1.1
|
Memorandum of Association of the Registrant (translated from Hebrew), reflecting amendments through June 9, 2011*(1)
|
1.2
|
Second Amended and Restated Articles of the Registrant, reflecting amendments through June 20, 2012(1)
|
2.1
|
Specimen Certificate for ordinary shares
(2)
|
4.1
|
1998 Share Option Plan for Non-Employee Directors(1)
|
4.2
|
2000 Stock Option Plan(1)
|
4.3
|
Form of Indemnification Agreement between the Registrant and its officers and directors(1)
|
4.4
|
Form of Exemption Letter between the Registrant and its officers and directors(1)
|
4.5
|
Form of Registration Rights Agreement, dated September 12, 2005, among the Registrant, certain investors, Bank Hapoalim, Bank Leumi and Israel Discount Bank(3)
|
4.6
|
Management Services Agreement, by and among the Registrant, Kanir Joint Investments (2005) Limited Partnership and Meisaf Blue & White Holdings Ltd., effective as of March 31, 2008(4)
|
4.7
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic System in Cingoli, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 4, 2010 (portions translated from Italian)(5)*
|
4.8
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic System in Senigallia, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 4, 2010 (portions translated from Italian)(5)*
|
4.9
|
Side Agreement, between Ellomay PV One S.R.L. and Ecoware S.p.A., dated March 5, 2010(6)
|
4.10
|
Giaché Building Right Agreement (summary of Italian version)(7)*
|
4.11
|
Massaccesi Building Right Agreement (summary of Italian version)(7)*
|
4.12
|
Settlement Agreement and Release, dated July 27, 2010, between Ellomay Capital Limited and Hewlett-Packard Company(7)
|
4.13
|
Troia 8 Building Right Agreement (summary of Italian version)(7)*
|
4.14
|
Troia 9 Building Right Agreement (summary of Italian version)(7)*
|
4.15
|
Investment Agreement, among U. Dori Group Ltd., U. Dori Energy Infrastructures Ltd. and Ellomay Clean Energy Ltd. , dated November 25, 2010 (summary of Hebrew version)(7)*
|
4.16
|
Shareholders Agreement, among U. Dori Group Ltd., Ellomay Clean Energy Ltd. and U. Dori Energy Infrastructures Ltd., dated November 25, 2010 (summary of Hebrew version)(7)*
|
4.17
|
Agreement, between U. Dori Energy Infrastructures Ltd. and Israel Discount Bank Ltd., dated January 26, 2011 (summary of Hebrew version)(7)*
|
Number
|
Description
|
4.18
|
Engineering Procurement & Construction Contract for the Construction of a Photovoltaic Plant, between Urbe Techno S.r.l. and Pedale S.r.l., dated March 25, 2011 (portions translated or summarized from Italian)(includes a summary of the Building Rights Agreement)(7)*
|
4.19
|
Acquafresca Building Right Agreement (summary of Italian version)(2)*
|
4.20
|
D’Angella Building Right Agreement (summary of Italian version)(2)*
|
4.21
|
Rinconada II Building Right Agreement (summary of Spanish version)(2)*
|
4.22
|
Directors and Officers Compensation Policy, adopted June 2013(8)
|
4.23
|
Amendment No. 1 to Management Services Agreement, by and among the Registrant, Kanir Joint Investments (2005) Limited Partnership and Meisaf Blue & White Holdings Ltd., dated June 18, 2013
|
4.24
|
Veneto PV Plants Framework Acquisition Agreement, dated March 28, 2013, as amended on May 2, 2013 (summary of German version)*
|
4.25
|
Soleco Building Right Agreement (summary of Italian version)*
|
4.26
|
Tecnoenergy Building Right Agreement (summary of Italian version)*
|
4.27
|
Warrant issued to Mr. Zohar Zisapel, dated August 7, 2013
|
4.28
|
Deed of Trust between the Registrant and Hermetic Trust (1975) Ltd., dated December 30, 2013 (translation of Hebrew version)*
|
8
|
List of Subsidiaries of the Registrant
|
12.1
|
Certification of Principal Executive Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)
|
12.2
|
Certification of Principal Financial Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)
|
13
|
Certification of Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(b) and Rule 15d-14(b) (Section 906 Certification)
|
15.1
|
Consent of Somekh Chaikin
|
15.2
|
Consent of BDO
|
*
|
The original language version is on file with the Registrant and is available upon request.
|
|
(1)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2012 and incorporated by reference herein.
|
(2)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2011 and incorporated by reference herein.
|
(3)
|
Included in the Registrant’s Form 6-K dated October 14, 2005 and incorporated by reference herein.
|
(4)
|
Included in the Registrant’s Form 6-K dated December 1, 2008 and incorporated by reference herein.
|
(5)
|
Previously filed with Amendment No. 2 to the Registrant’s Form 20-F for the year ended December 31, 2009 and incorporated by reference herein.
|
(6)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2009 and incorporated by reference herein.
|
(7)
|
Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2010 and incorporated by reference herein.
|
(8)
|
Included in the Exhibit 2 of the Registrant’s Form 6-K dated May 13, 2013 and incorporated by reference herein.
|
Whereas
,
|
the Company and the Service Providers entered into a Management Services Agreement effective as of March 31, 2008 (the “
Agreement
”);
|
Whereas
,
|
on each of December 30, 2009, December 22, 2010 and December 20, 2011, the term of the Management Services Agreement was extended by the Company’s audit committee, board of directors and shareholders and by the Service Providers; and
|
Whereas,
|
the parties to the Agreement wish to amend the Agreement as specifically set forth herein and such amendments were approved by the Company’s compensation committee, audit committee, board of directors and, on June 18, 2013, by the Company’s shareholders, and by the Service Providers.
|
1.
|
Amendment of Section 2.1
|
|
1.1.
|
Section 2.1 of the Agreement is hereby amended and restated in its entirety to read as follows:
“In consideration of the performance of the Management Services and the Board Services hereunder, the Company shall pay to the Service Providers an aggregate annual management services fee in the amount of four hundred thousand United States dollars (US$400,000) (the “
Management Fee
”), to be paid in equal quarterly installments of fifty thousand United States dollars (US$50,000) to each of Kanir and Meisaf. Each quarterly installment shall be paid not later than the seventh (7
th
) day of each calendar quarter for services rendered during the preceding calendar quarter.”
|
2.
|
Amendment of Section 4
|
|
2.1.
|
Section 4 of the Agreement is hereby amended and restated to read as follows:
“
Term and Termination
.
This Agreement shall be deemed effective as of March 31, 2008 (the “
Effective Date
”) and shall continue to remain in effect until the earlier of: (i) June 17, 2016, (ii) the termination of service of either of the Kanir and Nechama Investments affiliates on our Board of Directors, or (iii) a date that is six (6) months following the delivery of a written termination notice by Meisaf and Kanir to the Company or by the Company to Meisaf and Kanir.”
|
3.
|
General
|
|
3.1.
|
Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meaning ascribed to them under the Agreement.
|
|
3.2.
|
Except as specifically modified and amended hereby, the Agreement shall remain in full force and effect. No provision of this Amendment may be modified or amended, nor shall any terms be waived, except expressly in a writing signed by the parties.
|
Ellomay Capital Ltd.
By:
/s/ Menahem Raphael
_
Name: Menahem Raphael
Title: Director
By:
/s/ Kalia Weintraub
Name: Kalia Weintraub
Title: Chief Financial Officer
|
Kanir Joint Investments (2005) Limited Partnership
By: Kanir Investments Ltd., its general partner
By:
/s/ Menahem Raphael
Name: Menahem Raphael
Title: Director
By:
/
s/ Ran Fridrich
Name: Ran Fridrich
Title: Director
|
Meisaf Blue & White Holdings Ltd.
By:
/s/ Shlomo Nehama
Name: Shlomo Nehama
Title: Director
|
b.
|
delivery by the Sellers of: (i) Re-Assignments of GSE-Claims; (ii) an irrevocable notice signed by Hanwha for the service on GSE of the Re-Assignments of GSE Claims;
|
|
o
|
any payment made by a SPV to SSSG as payment of dividends and/or repayment of the Shareholder Loans and/or to SG as repayment of the EPC-Loans after the Reference Date;
|
|
o
|
any proceeds generated by the SPVs after the Reference Date which have not remained available within the SPVs;
|
|
o
|
any losses or damages arising as a result of the untruthfulness, incorrectness and/or inaccuracy of any of the Seller’s guarantees.
|
The right to Indemnification shall be excluded 12 months after Closing.
|
||
Applicable Law
|
German law
|
|
Jurisdiction
|
After Closing: Court of Frankfurt am Main
|
1. Execution date
|
July 7, 2011
|
2. Previous Owners
|
Messers. Vasco Grendene, Giovanni Polonio and Sergio Bianchi and Ms. Angelina Rondanin
|
3. Current Owner
|
Solemax
|
4. Portion of the land
|
Municipality of Canaro (RO), sheet 9, parcels 115, 117 and 119; sheet 10, parcels 16, 153, 155 and 159,
size 11.57.87 hectares
.
|
5. Duration
|
21 years
(until June 30, 2032)
|
6. Consideration
|
As consideration for the 21-year building right, Soleco paid an amount of Euro 662,822.11. This consideration has been fully paid upon execution and acknowledgement of such payment is included in the deed.
|
7. Easements
|
An electric easement right is in place in favour of Enel on parcels 16 and 159.
|
8. Competent Court
|
Exclusive jurisdiction of the court of Rovigo.
|
1. Execution date
|
July 7, 2011
|
2. Previous Owners
|
Messrs. Giovanni Polonio and Sergio Bianchi and Ms. Angelina Rondanin
|
3. Current Owner
|
Solemax
|
4. Portion of the land
|
Municipality of Canaro (RO), sheet 9, parcels 120 and 122; sheet 10, parcels 18, 19, 21, 53, 55, 56, 57, 116, 154, 156, 157, 160, 161, 163, 165, 167 and 169,
size 11.66.78 hectares
.
|
5. Duration
|
21 years
(until June 30, 2032)
|
6. Consideration
|
As consideration for the 21-year building right, Tecnoenergy paid an amount of Euro 686,676.76. This consideration has been fully paid upon execution and acknowledgement of such payment is included in the deed.
|
7. Easements
|
An electric easement right is in place in favour of Enel on parcel 159.
|
8. Competent Court
|
Exclusive jurisdiction of the court of Rovigo.
|
|
1.
|
Definitions
|
|
1.1.
|
“
Business Day
” means any day other than Friday, Saturday, Sunday or other day on which commercial banks in The City of New York or Israel are authorized or required by law to remain closed.
|
|
1.2.
|
“
Exercise Price
” means the price of Seven United States Dollars and Ninety Seven Cents ($7.97) payable hereunder for each Warrant Share, as adjusted in the manner set forth hereinafter.
|
|
1.3.
|
“
Warrants
” means this Warrant and all warrants hereafter issued in exchange or substitution for this Warrant.
|
|
1.4.
|
“
Warrant Shares
” means the Ordinary Shares issuable hereunder or any other securities which, in accordance with the provisions hereof, may be issued by the Company in substitution therefor.
|
|
2.
|
Warrant Period; Exercise of Warrant
|
|
2.1.
|
Method of Exercise
. Subject to the terms and conditions hereof, this Warrant may be exercised in whole at any time, or in part from time to time, beginning on the Effective Date until the Expiration Date (the “
Warrant Period
”), by the surrender of this Warrant (with a duly executed exercise form in the form attached hereto as
Exhibit A
), at the principal office of the Company, set forth above. The Warrant may only be exercised pursuant to the "cashless exercise” method (as defined below).
|
|
2.2.
|
Resale Restrictions
. The Holder of the Warrant, by its acceptance hereof, covenants and agrees that this Warrant is being acquired as an investment and not with a view to the distribution hereof. The Shareholder further covenants and agrees that he will not sell, transfer, pledge, assign, or hypothecate the Warrant Shares unless there is an effective registration statement under the Securities Act of 1933 covering the Warrant Shares, or by obtaining from the Company, at the Company’s expense, an opinion of counsel stating that such sale, transfer, pledge, assignment, or hypothecation is exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 and the qualification requirements under applicable law. Subject to the last sentence of Section 2.3 herein, the Company undertakes that, following the later of: (i) the exercise of the Warrant in accordance with its terms and (ii) the Restriction Period, it will be the Company's responsibility to remove the restriction from the Warrant Shares within a period of 14 days of receipt of Rule 144 documentation reasonably required by the Company's US counsel as agreed between the Parties on the Effective Date of this Warrant.
|
|
2.3.
|
Cashless Exercise
. An exercise by means of a “cashless exercise” means that the Company shall issue to the Holder, without charge, the number of Warrant Shares determined, at the Shareholder’s discretion, in one of the following methods (each, a “
Cashless Exercise
”):
|
|
2.4.
|
Limitations on Exercise
. During the 12 months period following the Effective Date (the “
Restriction Period
”), the Company shall not effect the exercise of this Warrant, and the Holder shall not have the right to exercise this Warrant, to the extent that after giving effect to such exercise, the Holder (together with the Holder’s “affiliates” as such term is defined under the Securities Act of 1933, as amended, and any persons acting as a group together with the Holder or any of the Holder’s affiliates) would beneficially own in excess of 4.99% (the “
Maximum Percentage
”) of the Ordinary Shares outstanding immediately after giving effect to such exercise (without treating treasury shares as outstanding for purposes of such calculation); provided that in the last 60 days of the Restriction Period, the Holder may beneficially own (as described in the previous sentence) more than the Maximum Percentage only due to the addition of the Warrant Shares into his holdings. For purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this Warrant, in determining the number of outstanding Ordinary Shares, the Holder may rely on the number of outstanding Ordinary Shares as reflected in the most recent of (1) the Company’s most recent Form 20-F, Form 6-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other written notice by the Company or the Transfer Agent setting forth the number of Ordinary Shares outstanding. The limitations contained in this paragraph shall apply to any successor Holder of this Warrant. It is hereby clarified that following the end of the Restriction Period the Holder shall have the right to exercise this Warrant and upon such exercise the Company will effect the exercise of this Warrant, without regard to the Maximum Percentage limitation included herein.
|
|
2.5.
|
Partial Exercise
. If this Warrant should be exercised in part prior to the Expiration Date, the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the rights of the Holder to purchase the remainder of the Warrant Shares purchasable hereunder.
|
|
2.6.
|
No Fractional Shares
. No fractions of Ordinary Shares shall be issued in connection with the exercise of this Warrant, and the number of Ordinary Shares issued shall be rounded up or down to the nearest whole number.
|
|
2.7.
|
Letter of Instruction
. Upon the issuance of Ordinary Shares resulting from the exercise in whole or in part of this Warrant, the Company shall deliver to the Holder an irrevocable letter of instructions to the Company’s transfer agent to issue as soon as is reasonably practicable (and in any event not later than within five (5) Business Days from the date the Holder sent to the Company the exercise notice and the applicable Exercise Price, if any) to the Holder share certificates reflecting the Warrant Shares exercised thereby, together with any and all other documents required for the issuance of such certificates by the transfer agent.
|
|
3.
|
Reservation of Shares
|
|
4.
|
Adjustments to Exercise Price and Number of Securities
|
|
4.1.
|
Share Dividends and Share Splits
. If, at any time or from time to time during the Warrant Period, the Company shall issue to the holders of its Ordinary Shares any additional shares by way of a share dividend or share split (including, without limitation, a reverse share split), then in each such case, the Exercise Price and the number and kind of Shares receivable upon exercise of this Warrant, in effect at the time of the record date for such dividend, shall be proportionately adjusted so that the Holder after such time shall be entitled to receive the aggregate number and kind of shares which, if such Warrant had been exercised immediately prior to such time, he would have owned upon such exercise and been entitled to receive by virtue of such dividend. Such adjustment shall be made successively whenever any event listed above shall occur.
|
|
4.2.
|
Reclassification, etc
. If the Company, at any time while this Warrant, or any portion hereof, remains outstanding and unexpired, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number or securities or any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefore shall be appropriately adjusted, all subject to further adjustment as provided in this Section.
|
|
4.3.
|
Dividends
. If the Company, at any time while this Warrant, or any portion hereof, remains outstanding and unexpired, shall distribute to the holders of Ordinary Shares a dividend, whether payable out of earnings or surplus legally available for dividends or as a dividend in liquidation or partial liquidation or by way of return of capital, the Exercise Price shall be reduced by an amount equal to the Dollar amount of the per-share distribution on the record date fixed for the purpose of such distribution (or if no such record date is fixed then on the date of such payment).
|
|
4.4.
|
No Adjustment of Exercise Price in Certain Cases
. No adjustment of the Exercise Price shall be made if the amount of said adjustment shall be less than 1 cent ($0.01) per Ordinary Share, provided, however, that in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment so carried forward, shall amount to at least 1 cent ($0.01) per Ordinary Share.
|
|
4.5.
|
Merger or Consolidation
. If at any time while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) a reorganization (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), (ii) a merger or consolidation of the Company with or into another corporation or a reverse triangular merger in which the Company is the surviving entity but the shares of the Company’s capital stock outstanding immediately prior to the merger are converted by virtue of the merger into property, whether in the form of securities, cash, or otherwise, or (iii) a sale or transfer of the Company’s properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the Holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares or other securities or property of the successor corporation resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section. If the per-share consideration payable to the holder thereof for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined by the Board of Directors of the Company acting reasonably and in good faith.
|
|
5.
|
Rights of Shareholders
|
|
6.
|
Transferability
|
|
6.1.
|
The Holder may not sell, transfer, assign, encumber, pledge or otherwise dispose or undertake to dispose of the Warrant.
|
|
6.2.
|
Unless registered, the Warrant Shares issued upon exercise of the Warrants shall be subject to a stop transfer order and the certificate or certificates evidencing such Warrant Shares shall bear legend substantially similar to the following:
|
|
7.
|
Loss, etc. of Warrant
|
|
8.
|
Headings
|
|
9.
|
Notices
|
|
10.
|
Governing Law
|
|
11.
|
Entire Agreement; Amendment and Waiver
|
Ellomay Capital Ltd.
|
||
By:
|
/s/ Ran Fridrich
|
|
Name: Ran Fridrich
|
||
Title: CEO and director
|
By:
|
/s/ Shlomo Nehama
|
|
Name: Shlomo Nehama
|
||
Title: Chairman of the Board
|
1.
|
The undersigned hereby irrevocably elects to exercise the attached Warrant to the extent of ___________________ Ordinary Shares of Ellomay Capital Ltd., all in accordance with Section 2 of the Warrant.
|
2.
|
The undersigned certifies that he (together with his “affiliates” as such term is defined under the Securities Act of 1933,as amended, and any persons acting as a group together with him or any of his affiliates) “beneficially owns” ___________ Shares as of the date hereof.
|
3.
|
The undersigned requests that certificates for such Ordinary Shares be registered in the name of ____________________ whose address is ____________________ and that such certificates be delivered to whose address is _____________________________.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
Whereas:
|
the Company’s Board of Directors resolved on December 25, 2013 to approve the issuance of the Debentures (as hereinafter defined), the terms of which are as set forth in this Deed of Trust and which shall be offered to the public by the Prospectus (as hereinafter defined);
|
And whereas:
|
the Trustee is a company limited by shares that was incorporated in Israel in 1975 according to the Companies Ordinance, whose main object is to engage in trusts, and it meets the eligibility requirements established by law, and in particular the requirements of the Securities Law (as hereinafter defined) to be a trustee of debentures;
|
And whereas:
|
the Trustee declared that there is no hindrance according to the Securities Law or any other law barring it from entering into this Deed of Trust with the Company and that it meets all of the demands and eligibility requirements set forth in the Securities Law to serve as Trustee for the issuance of the Debentures;
|
And whereas:
|
the Company has made a request to the Trustee that he shall serve as Trustee for the holders of the Debentures and the Trustee has agreed, all subject to and in accordance with the terms of this Deed of Trust;
|
1.
|
Preamble; Interpretation; Definitions and Entry into Force
|
|
1.1.
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The preamble of this Deed of Trust and the appendixes attached to it constitute a material and inseparable part hereof.
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1.2.
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The division of this Deed of Trust into sections and providing titles to the sections was made for convenience and as place-holders only and they should not be used for the purpose of interpretation.
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1.3.
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Anything mentioned in this Deed of Trust in plural shall also refer to singular and vice versa, anything mentioned in the masculine shall also refer to the feminine and vice versa, and anything mentioned regarding a person shall also refer to a body corporate, provided that this Deed does not contain any provision otherwise whether express and/or implied and/or if the contents of the matter or its context do not require otherwise.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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1.4.
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In any matter that was not mentioned in this Deed of Trust and in any case of a contradiction between the provisions of the Israeli law and this Deed of Trust, the parties shall act in accordance with the provisions of the Israeli law. In any event of a contradiction between the Deed of Trust and the provisions described in the Prospectus with respect to this Deed of Trust and the provisions of this Deed of Trust, the provisions of this Deed of Trust shall prevail.
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1.5.
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In this Deed of Trust the following expressions shall have the meaning written at their side:
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1.5.1.
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“
Debentures (Series A)
” or the “
Debentures
” or “
Outstanding Debenture
s” or “
Certificates of Undertaking
”: Debentures (Series A) of the Company, registered, which will be issued according to the Prospectus, and have not been fully paid or expired or cancelled.
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1.5.2.
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“
A Person that has a Control Relationship with the Company
”: a person that controls the Company, his family member and a body corporate that is under the control of any of them and/or a subsidiary of the Company, however except for the Company itself. With respect to this definition, “Control” as defined in the Law.
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1.5.3.
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“
Meeting
” or “
Debenture Holders Meeting
”: a meeting of Debenture Holders, including a meeting of a class of Debenture Holders.
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1.5.4.
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“
Deferred Debenture Holders Meeting
”: a Debenture Holders Meeting that was deferred to another time than the one scheduled for opening the Meeting, as a legal quorum was not present at the end of a half hour after the time that was scheduled for the beginning of the Meeting.
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1.5.5.
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“
Stock Exchange
”: the Tel-Aviv Stock Exchange Ltd.
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1.5.6.
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“
Collaterals
”: Any pledge on assets, guarantee or any other undertakings that secure the undertakings of the Company towards the Trustee and/or the Debenture Holders whether given by the Company and/or any third party.
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1.5.7.
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“
Immediate Report
”: A report of the Company that is submitted in accordance with the provisions of the Securities Regulations (Periodical Reports and Immediate Reports of a Foreign Corporation), 5761-2001.
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1.5.8.
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The “
Law
” or the “
Securities Law
”: The Securities Law, 5728-1968 and the regulations according to it, as they shall be from time to time. It is clarified that as of the date of this Deed of Trust the Company reports according and is subject to the provisions of Chapter E’3 of the Law.
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1.5.9.
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“
Nominee Company
”: as defined in the Law.
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1.5.10.
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“
Trading Day
”: a day on which trade is conducted on the Stock Exchange.
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1.5.11.
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“
Business Day
”: Sundays-Thursdays, in which a majority of the banks in Israel are open for performing transactions with the public, except for official holidays and days of rest in Israel.
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1.5.12.
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“
Magna
”- the Electronic Proper Disclosure System of the Securities Authority.
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1.5.14.
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Deleted.
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1.5.15.
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Deleted.
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1.5.16.
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“
Holder
” or “
Debenture Holder
”: as this term is defined in the Securities Law.
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1.5.17.
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“
Registrar
”: Registrar of Debenture Holders as mentioned in section 28 of this Deed.
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1.5.18.
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“
Trustee
”: The First Trustee (as hereinafter defined) and/or anyone that shall serve from time to time as Trustee of the Debenture Holders according to this Deed.
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1.5.19.
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“
First Trustee
” Hermetic Trust (1975) Ltd. that shall serve as Trustee up to the date set forth in section 2.3 hereafter.
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1.5.20.
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“
Office Holder
”: as defined in the Companies Law, 5759-1999.
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1.5.21.
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“
Principal
”: the par value of the Debentures that are in circulation.
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1.5.22.
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“
Control
” as this term is defined in the Law.
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1.5.23.
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“
This Deed
” or “
Deed of Trust
”: This Deed of Trust including the appendixes attached to it and that constitute a material and integral part hereof.
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1.5.24.
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“
Debenture Certificate
”: The Debenture certificate the version of which is attached as
Appendix 2.1
of this Deed of Trust.
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1.5.25.
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“
Prospectus
”: the prospectus of the Company that shall be published in December 2013 for issuing the Debentures and any later Prospectus according to which additional Debentures (from Series A) shall be issued.
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2.
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Issuing the Debentures; the Terms of Issuance; Equal Ranking
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2.1.
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The Company shall issue a series of Debentures (Series A) under the terms set forth in
Appendix 2.1
. If after the date of the first issuance of the Debentures (Series A) this same series of Debentures shall be expanded by the Company, the Holders of the Debenture (Series A) that shall be issued in the framework of the expansion of that series shall not be entitled to receive payment on account of the Principal and/or interest for these Debentures that the record date for payment thereof shall be before the date of their issuance as mentioned.
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2.2.
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The Company shall be entitled or required, as the case may be, to perform an early redemption of the Debentures in the event the terms set forth in section 8 of the Deed of Trust have been fulfilled.
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2.3.
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The Debentures shall all be set at an equal security ranking pari passu between them with respect with the Company’s undertakings according to this Deed of Trust, and without a preferred right or right of priority over one another.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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3.
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Appointment of the Trustee; Commencement of Term; Period of Term ofin Service of the Trustee; Expiration of the Term of Service of the Trustee; Resignation; Dismissal; the Duties of the Trustee; the Powers of the Trustee
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3.1.
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The Company hereby appoints the Trustee as the First Trustee for the Debenture Holders by virtue of the provisions of Chapter E’1 of the Securities Law including for those entitled to payments by virtue of the Debentures that were not paid after the date for their payment arrived.
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3.2.
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If the Trustee shall be replaced by another Trustee, the other Trustee shall be Trustee for the Debenture Holders by virtue of Chapter E’1 of the Securities Law including for those entitles to payments by virtue of the Debentures which were not paid after the date for their payment arrived.
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3.3.
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The Trust for the Debenture Holders and the duties of the Trustee according to this Deed of Trust shall come into force upon the issuance of the Debentures by the Company.
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3.4.
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The First Trustee shall serve commencing onthe date mentioned in section 3.3 above and its term of service shall end at the time that the Debenture Holders Meeting is convened (the “
First Appointment Meeting
”), that the Trustee shall convene no later than 14 days after submitting the annual report regarding Trusteeship matters according to section 35H1(a) of the Law. Insofar as the First Appointment Meeting (by ordinary majority) approved the continuation of the term of service of the First Trustee, it shall continue to serve as Trustee until the end of the additional appointment period that was determined in a resolution of the First Appointment Meeting (which could be until the final repayment date of the Debentures).
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3.5.
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Notwithstanding everything stipulated in section 3 the provisions of the Law shall apply to the appointment of the Trustee, his replacement, term of service, expiration, resignation and dismissal.
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3.6.
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In addition to the provisions of the Law and without derogating from them, the duties of the Trustee shall be those mentioned in
Appendix 3
of this Deed of Trust, and according to the law.
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3.7.
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The Trustee entering into this Deed of Trust is as an agent on behalf of the Debenture Holders.
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3.8.
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The Trustee shall represent the Holders of the certificates of undertaking in any matter that arises from the undertakings of the issuer towards them, and it shall be entitled for this purpose to act in order to realize the rights given to the Debenture Holders according to the Law or according to this Deed.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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3.9.
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The actions of the Trustee are valid notwithstanding a flaw discovered in its appointment or qualifications.
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3.10.
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The Trustee shall use the powers, permissions and authorities that were conferred upon him according to this Deed of Trust, according to its discretion or in accordance with the resolutions of a Meeting.
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3.11.
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The Trustee shall be entitled to deposit all of the deeds and the documents that indicate, represent and/or stipulate its rights with respect with the trust pertaining to his Deed of Trust, including with respect to any asset that is in its possession at that time, in a safe and/or in another place that shall be chosen and/or at any bank and/or any banking auxiliary corporation and/or lawyer and/or accountant.
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3.12.
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The Trustee shall be entitled in the framework of performing the Trusteeship matters according to this Deed of Trust, to order an opinion and/or the advice of any lawyer, accountant, appraiser, assessor, surveyor, broker or any other expert. The Trustee is entitled to act according to an opinion or advice that was given by such person whether the opinion and/or advice was prepared at the Trustee’s request or at the Company’s request or anyone on its behalf or for it, and the Trustee shall not be required to pay and an offset shall not be performed from any money that is due to it with respect to any loss or damage that shall occur as a result of any action and/or omission that were made by it based on such advice or opinion as aforesaid, unless it was determined in a final judgment that the Trustee acted maliciously or in negligence in respect of which the Trustee is not exempted by law as shall be from time to time. The Company undertakes to bear, including in advance, the entire reasonable cost that is involved in employing any such expert that shall be appointed by the Trustee provided that the Trustee shall give the Company an advance notice of its intention to receive an expert opinion or advice as aforementioned with details of the expert’s fees and the purpose of the opinion (and regarding providing notice of the purpose of the opinion, provided that in the Trustee’s opinion this shall not harm the rights of the Debenture Holders), and the Company did not notify the Trustee in writing, within 3 Business Days, of its objection. The Company shall not object to the appointment of an expert or agent on behalf of the Trustee other than for reasonable reasons.
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3.13.
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The Trustee shall be entitled to give its consent or approval to any motion to the court that comes according to the demand of a Debenture Holder, and the Company shall compensate the Trustee for all reasonable costs that were incurred by such motion and from actions performed as a result of it or with respect to it provided that before makink such expense as abovementioned the Trustee will update the Company regarding its intention to make such expense and will receive the Company’s approval for this unless in the opinion of the Trustee such prior update as aforementioned could harm the rights of the Debenture Holders.
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3.14.
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The Trustee is entitled to institute any proceeding for protecting the rights of the Debenture Holders as set forth in section 10 below.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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3.15.
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The Trustee is entitled to appoint agents as set forth in section 24 of this Deed. The representing body of the Debenture Holders, insofar as will be appointed, is an agent of the Trustee from the time of its appointment.
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4.
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Purchasing Debentures by the Company or by a Person that has a Control Relationship with the Company
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4.1.
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Without derogating from the Company’s right to redeem the Debentures by early redemption as set forth in this Deed, the Company reserves the right to purchase at any time, whether on the Stock Exchange or outside of the Sock Exchange, Debentures at any price and quantity that it shall see fit, without harming the duty of repayment of the remaining outstanding Debentures. In the event of such purchase by the Company, the Company shall notify this in an Immediate Report.
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4.2.
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Any person shall be entitled to purchase and/or sell Debentures at any time and from time to time, including in the event of an issuance by the Company. The Debentures that are held by a Person that has a Control Relationship with the Company shall be considered as the asset of that person, shall not be delisted from trade on the Stock Exchange and they shall be transferable as the other Debentures of the Company (subject to the provisions of the Deed of Trust and the Debenture), however as long as they are held by that person, they shall not confer upon that person the right to vote in any Debenture Holders Meeting, they shall not be taken into account for determining the existence of a legal quorum, and they shall not be included in the “balance of the par value of the outstanding Debentures” with respect to voting and the count of those present and the votes in Meetings and in class Meetings.
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5.
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Issuance of Debentures from New Series; Increasing a Series
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5.1.
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The Company
shall
be entitled to issue at any time, whether by an offering to the public according to a prospectus or in any other manner, and without needing the consent of the Trustee and/or the Debenture Holders or giving a notice to any of them of this, including to a Person that has a Control Relationship with the Company, debentures of other series beyond the Debenture series (the “
Other Series
”), under terms of redemption, interest, linkage, priority of payment in the event of liquidation and other terms, as the Company shall see fit, and whether they are preferable over the terms of the Debentures, equal to them or inferior to them, and this without derogating from the duty of repayment imposed on it, and provided that the Company shall not issue additional series of debentures which are not secured by a pledge and which have any preference at the time of liquidation in relation to the Debentures (Series A).
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5.2.
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The Company
shall not
be entitled to issue, whether by issuance to the public according to a prospectus, and whether in any other manner, additional Debentures of Series A, unless all of the terms set forth in
Appendix 5.2
of this Deed have been fulfilled or after receiving the approval of the Debenture Holders Meeting.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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5.3.
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Without derogating from the right of the Company to issue additional Debentures of Series A at a different discount rate than the discount rate of the outstanding Debentures at that time and subject to the Company meeting the terms in section 5.2 above, the Company reserves for itself the right to issue additional Debentures of Series A, in the framework of increasing the Series according to section 5.2 above, at a higher discount rate than the discount rate of the outstanding Debentures at that time. In the event of such increase, the Company shall calculate the weighted discount rate for all the Debentures from the Series After increasing the Series, it shall publish in an Immediate Report the weighted discount rate for the entire series of Debentures and the members of the Stock Exchange shall deduct tax at the payment dates of the Debentures according to the weighted discount rate as mentioned an in accordance with the provisions of the law. If an approval of the tax authorities regarding such discount rates shall not be received, the Company shall notify in an Immediate Report, immediately after issuing the Debentures as a result of increasing the series, the highest discount rate that was created for the series. The members of the Stock Exchange shall deduct withholding tax at the time of repayment of the outstanding Debentures, in accordance with the discount rate that shall be reported as aforementioned. Therefore, there could be cases where the Company shall deduct withholding tax for discount fees, at a higher rate than the discount fees determined to whoever held Debentures before the series was increased. In this case, it is the responsibility of the Debenture Holder (and the Debenture Holder only) who held the Debentures before the series was increased and until their repayment who is entitled, with their payment, to a refund of tax that was deducted at source, for the over-discount, to approach the tax authority in this matter insofar as he shall wish to receive a tax refund.
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5.4.
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The Company shall notify in an Immediate Report regarding the issuance of debentures as mentioned in this section above.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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6.
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The Company’s Undertakings
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6.1.
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To pay, at the times scheduled for this, the sums of the Principal, the interest and the linkage differences, insofar as these shall apply, which shall be paid according to the terms of the Debentures, and to fulfill all the other terms and undertakings that are imposed on it according to the terms of the Debentures and according to this Deed of Trust.
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6.2.
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To fulfill all of the financial terms and undertakings set forth in
Appendix 6.2
to this Deed including with respect to the limitation regarding the distribution of dividends and regarding the rating of the Company.
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6.3.
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Deleted.
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6.4.
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To immediately notify the Trustee in writing of a reasonable concern of the Company that all or any of the events set forth in section 9.1 hereafter will occur or that there is a reasonable concern that the Company shall not have the ability to meet its existing and expected undertakings when the time to perform them arrives.
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6.5.
|
To deliver to the Trustee no later than the end of 30 days after the date of this Deed of Trust, a clearing schedule for paying the Debentures (Principal and interest) in an Excel file.
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6.6.
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To notify the Trustee in a written notice signed by the senior Office Holder in the Company’s finances, within 4 Business Days from the date of payment, of any payment to the Debenture Holders and of the balance of the sums that the Company owes at that time to the Debenture Holders after making the aforementioned payment.
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6.7.
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To deliver to the Trustee annual financial statements or quarterly financial results, as the case may be, and in accordance with the requirements of the law that apply to the Company from it being a dual listed Company, at the time of their publication and in any event no later than from the time scheduled for this in the law to publish them (also in the event that the Company shall stop being a public or reporting Company then it shall report in accordance with the provisions of the Law that apply to the Company at the time of signing this Deed of Trust). Notwithstanding the forgoing, it is clarified that the quarterly financial results shall be published by the end of the following quarter.
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6.8.
|
Deleted.
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6.9.
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To deliver to the Trustee notices regarding the purchase of Debentures by the Company or A Person that has A Control Relationship with the Company immediately upon the Company becoming informed of this.
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6.10.
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Each 31
st
of December of each year, and for as long as this Deed is in effect, the Company shall furnish to the Trustee a confirmation signed by the chairman of the board of directors of the Company that according to his best knowledge and in reliance on the examination that he has performed, in the period starting from the date of the Deed and/or from the date of the prior confirmation that was given to the Trustee, whichever is later, and until the date of the confirmation, the Company has not breached this Deed, including a breach of the terms of the Debenture, unless it was expressly mentioned otherwise.
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6.11.
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To deliver to the Trustee copies of the notices and invitations which the Company shall give to the Debenture Holders, as mentioned in section 26 hereafter.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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6.12.
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To cause that a senior Office Holder in financial matters in the Company shall give, within a reasonable time, to the Trustee and/or to the people who the Trustee shall order, any explanation, document, calculation or information regarding the Company, its business and/or assets that shall be required in a reasonable manner, according to the Trustee’s discretion, for fulfilling the Trustee’s duties and for protecting the rights of the Debenture Holders.
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6.13.
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To manage systematic accounting books in accordance with acceptable accounting principles. To keep the books and documents that serve as proof to them (including deeds of pledge and mortgage, bills and receipts).
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6.14.
|
To inform the Trustee, immediately upon becoming informed, of any case in which a lien shall be imposed on its assets, all or in part, and in any event that a receiver is appointed to its assets, all or in part, and to report of the means that it took in order to remove such lien or cancel the receivership.
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6.15.
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To summon the Trustee to all of its general meetings (whether if to annual general meetings or whether to special general meetings) of the shareholders in the Company, without granting the Trustee the right to vote in these meetings.
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6.16.
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To deliver to the Trustee on the 15
th
of each January starting from 2015, a written approval signed by the senior Office Holder in the finance field, that all of the payments to the Debenture Holders were fully paid on time, and the balance of the par value of the outstanding Debentures.
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6.17.
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In addition to the statements or notices which the Company is required to give according to section 35J(a) of the Law, to give the Trustee, according to his demand, an affidavit and/or declerations and/or documents and/or details and/or information, as these shall be required by the Trustee, in a reasonable manner in order to protect the rights of the Debenture Holders.
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6.18.
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To perform all of the actions required and/or reasonably needed and in accordance with the provisions of this Deed and any law for validating the exercise of powers, authorities and authorizations of the Trustee and/or of its delegates in accordance with the provisions of this Deed of Trust.
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6.19.
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To list the Debentures for trade in the Stock Exchange and to act so that the Debentures shall continue to be listed for trade on the Stock Exchange until the date of their final repayment.
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6.20.
|
To assist the Trustee in any reasonable manner to fulfill its duties according to law and/or according to this Deed including examining the performance of the Company’s undertakings in full and on time, examining actions and/or transactions that the Company performed, insofar as this is reasonably required in order to protect the rights of the Debenture Holders.
Any report or information that shall be published by the Company in the Magna system shall be considered as a report or information or summons, as the case may be, which was given to the Trustee in accordance with the provisions of this section. Notwithstanding the aforesaid, at the request of the Trustee, the Company shall transfer a printed copy of the report or information as mentioned.
See section 18 hereafter with respect to the confidentiality undertaking that applies to the Trustee.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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7.
|
Not Securing the Debentures; Negative Pledge
|
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7.1.
|
The Debentures are not secured by any pledge or any other collateral. The status of the Debenture Holders is the status of unsecured creditors of the Company, with all that this entails.
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7.2.
|
Except as set forth in section 7.4 hereafter, the Company shall be entitled from time to time, to sell, pledge, lease, assign, deliver or transfer in any other manner its assets all or in part, in any manner, in favor of any third party, without the need for the Trustee’s and/or the Debenture Holders’ consent, but subject to the duties of the Company to report with respect to the aforesaid, as these are determined in the Deed of Trust or according to law.
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7.3.
|
The Debentures issued under a certain series shall be equal in priority (pari passu) between them, without any right of preference or priority of one over the other.
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7.4.
|
Notwithstanding the aforesaid in section 7.2 above, for as long as the Debentures (Series A) have not yet been fully repaid in any manner, including by way of a self purchase and/or early redemption, the Company undertakes not to create a floating charge on all of its assets in favor of any third party to secure any debt or undertaking and this is as opposed to a fixed charge or floating charge on a certain asset or a floating charge on a certain number of assets that the Company may create. Notwithstanding the aforesaid, the Company shall be entitled to create a floating charge on all of its assets in favor of a third party, in each one of the following cases:
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7.4.1.
|
A receipt in advance of the consent of the Debenture Holders (Series A), which shall be adopted in the Meeting of the Debenture Holders (Series A) in which Debenture Holders (Series A) that hold themselves, or by their proxies, at least 50% of the balance of the par value of the outstanding Debentures (Series A) were present, by a majority of the Holders at least two thirds (2/3) from the balance of the par value of the Debentures (Series A) that is represented by a vote, or by a majority as aforementioned in a deferred meeting, in which the Debenture Holders that hold themselves or by their proxies at least twenty percent (20%) of this balance were present.
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7.4.2.
|
Without the need to receive the consent of the Debenture Holders or the Trustee, and provided that together with creating the floating charge on all of its assets in favor of the third party, a floating charge shall be created on all of its assets also in favor of the Holders of Debentures (Series A) of the same priority, pari passu, which shall remain in force up to the date of removing the charge which shall be registered in favor of the third party, and this is as long as outstanding Debentures (Series A) shall exist (in other words as long as they were not fully paid or removed in any manner, including by way of a self purchase and/or early redemption).
For the removal of doubt, it is emphasized that the Company has the right, at any time (subject to the restrictions according to any law and/or any other agreement that the Company is party to), to pledge its assets, including its rights, all or in part, by any other pledge except for a floating charge on all of its assets, including, but not only, fixed pledges, including the creation of floating charges on specific assets, one or more, of the Company with respect to creating these charges (and bank accounts that can be pledged by a floating charge even without a fixed charge) and it is clarified that these fixed charges and/or floating charges shall be detracted from the applicability of a floating charge insofar as this shall be imposed according to the provisions of this sub-section above. Except for the aforesaid no restrictions shall apply to the Company in imposing all kinds of charges on its assets. It is further clarified, for the removal of doubt, that this clause cannot restrict the companies held by the Company (including subsidiaries and associated companies) from creating any charges, floating or fixed, on their assets, including on all of their assets.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
As of the date of signing this Deed, there is no floating charge in favor of a third party on all of the Company’s assets. As of the date of signing this Deed there are charges on the assets of the subsidiaries of the Company in the framework of project financing and additional pledges to Discount Bank as set forth in Item 5 of the annual report which the Company filed with the US Securities and Exchange Commission on the 25
th
of March 2013 and in the Company’s financial statements as at June 30, 2013 that were published on the December 26, 2013.
If and insofar as a floating charge shall be given as a security, as mentioned in section 7.4 above, the following provisions shall apply:
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a)
|
The existence of a cause to declare the Debentures immediately payable and/or the realization of Collaterals is a preliminary condition to realizing a floating charge as mentioned.
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b)
|
The Trustee shall be entitled to enforce a floating charge before immediate repayment has been declared for the Debentures, in accordance with section 35J1 of the Law or subject to adopting a decision of performing realizations in a resolution that shall be adopted by the Meeting of the Debenture Holders in accordance with the provisions of section 9.7 of this Deed.
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c)
|
In enforcing the floating charge the Trustee shall make an effort so that the realization shall be performed in a manner that is expected according to the Trustee’s reasonable assessment to maximize the realization consideration from the floating charge and for this purpose the Trustee shall be entitled, subject to law, to determine the manner of enforcing this floating charge and the time when the floating charge should be enforced (hereinafter: the “
Manner of Enforcing the Collaterals
”).
Without derogating from any right that the Trustee has according to any law, the Trustee shall be entitled to receive instructions with respect to the Manner of Enforcing the Collaterals also by a resolution that shall be adopted in a Meeting of the Debenture Holders (Series A) in which Debenture Holders (Series A) that hold at least 50% of the balance of the par value of the outstanding Debentures (Series A) were present, themselves or by their proxies, by a majority Debenture Holders holding at least two thirds (2/3) of the balance of the par value of the Debentures (Series A) that is represented in the vote, or by such majority in a deferred meeting, in which Debenture Holders that hold at least twenty percent (20%) of this balance were present, themselves or by their proxies, and on its agenda is the giving of instructions to the Trustee regarding the Manner of Enforcing the Collaterals. The Meeting of the Debenture Holders as mentioned, shall be entitled to authorize a representing body of the Debenture Holders for advising the Trustee regarding the Manner of Enforcing the Collaterals.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
In any event in which the Company shall create a charge as mentioned in this sub-section in favor of the Debenture Holders, and this is a charge that requires registration in the Registry of Charges that is administered at the Registrar of Companies for its perfection, the charge shall be considered as legally registered only after the Company has furnished to the Trustee all the following documents:
|
|
1)
|
A charge document according to which the charge was registered in favor of the Trustee, bearing an original signature by the Company and stamped with an original “received” stamp by the office of the Registrar of Companies, and bearing a date which is not later than twenty one (21) days after the signature date on the charge document;
|
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2)
|
A notice of details of mortgages and pledges (form 10) signed with an original “received” stamp from the office of the Registrar of Companies, which bears a date that is not later than twenty one (21) days after creating the notice;
|
|
3)
|
An original pledge registration certificate from the Registrar of Companies;
|
|
4)
|
An extract of the pledges from the Registrar of Companies according to which this charge was registered;
|
|
5)
|
An affidavit of a senior Office Holder in the Company that the charge does not contradict or it is not in contradiction to the Company’s undertakings to third parties, all according to the wording that shall be acceptable to the Trustee according to his reasonable discretion;
|
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6)
|
An opinion of a lawyer on behalf of the Company, inter alia, with respect to the nature of the rights of the pledging party in the pledged asset, the manner of the pledge registration, its validity, its creditor priority, its legality and it being exercisable and enforceable against the pledging party according to the law that applies in Israel, in the wording that shall be acceptable to the Trustee according to his reasonable discretion, which shall be given to the Trustee each year according to its demand.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
8.
|
Early Redemption
|
|
8.1.
|
Early Redemption Initiated by the Stock Exchange
|
|
8.1.1.
|
Within 45 days after the decision of the board of directors of the Stock Exchange regarding delisting as aforementioned, the Company shall notify of an early redemption date in which the Holders of Debentures may redeem them. The notice of early redemption shall be published in an Immediate Report that shall be sent to the securities authority and to the Stock Exchange and in two daily and prevalent newspapers in Israel in the Hebrew language and it shall be given in writing to all the registered Debenture Holders.
|
|
8.1.2.
|
The early redemption date shall occur not before 17 days of the date of publishing the notice and no later than 45 days after this date, however not in a period between the record date for the payment of interest and its actual payment.
|
|
At the early redemption day the Company shall redeem the Debentures that the Debenture Holders requested to redeem. The redemption consideration shall not be less than the sum of the par value of the certificates of undertaking with additional interest that has accumulated until the date of actual payment, as set forth in the terms of the certificates of undertaking.
|
|
8.1.3.
|
The determination of an early redemption date as mentioned above cannot harm the redemption rights stipulated in the Debentures, of any of the Debenture Holders that shall not redeem them at the early redemption date as mentioned above, however the Debentures shall be delisted from trade on the Stock Exchange and will be subject, inter alia, to the tax implications arising from this.
|
|
8.1.4.
|
The early redemption of Debentures as mentioned above shall not confer upon any of the Holders of Debentures that shall be redeemed as mentioned the right to the payment of interest for the period after their redemption.
|
|
8.2.
|
Early Redemption Initiated by the Company
|
|
8.2.1.
|
The frequency of the early redemptions shall not exceed one redemption per quarter. With respect to this “
quarter
” means each of the following periods: January – March, April – June, July – September, and October- December. The minimal scope of each early redemption shall not be less than 1 million NIS. Notwithstanding the aforesaid, the Company shall be entitled to perform an early redemption at a scope which is less than 1 million NIS provided that the frequency of redemptions shall not exceed one redemption per year.
|
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8.2.2.
|
Upon adoption of the resolution of the board of directors of the Company regarding the performance of an early redemption as mentioned above, the Company shall publish an Immediate Report with a copy to the Trustee no less than seventeen (17) days and no more than forty five (45) days before the early redemption date. If an early redemption is scheduled in a quarter in which payment of interest is also scheduled, or payment of partial redemption or payment of final redemption, the early redemption shall be performed at the time that was scheduled for payment as mentioned. The early redemption date shall not apply in a period between the record date for the payment of interest for the Debentures and the date of actual payment of interest. The Company shall publish, in the aforementioned Immediate Report, the sum of the Principal that shall be repaid in the early redemption and the interest that has accumulated for it until the date of the early redemption in accordance with the provisions hereafter.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
Early redemption shall not be made to part of the series of Debentures if the last redemption sum shall be less than 3.2 million NIS. At the date of a partial early redemption, insofar as shall exist, the Company shall notify in an Immediate Report of: (1) The rate of the partial redemption in terms the unpaid balance; (2) The rate of the partial redemption in terms of the original series; (3) The interest rate in partial redemption of the redeemed part; (4) The interest rate that shall be paid in partial redemption calculated regarding the unpaid balance; (5) Update of the rate of the partial redemptions remaining, in terms of the original series; (6) The record date for entitlement to receive early redemption of the Principal of a Debentures that shall be twelve (12) days before the date scheduled for early redemption (it is clarified that if the record date for entitlement to receive partial redemption shall occur during a quarter during which there is the payment of current interest, the record date for entitlement to receive partial redemptions shall occur on the record date for receiving the payment of current interest that shall be paid during that quarter).
|
|
Partial early redemption shall be performed pari passu for each of the Debenture Holders according to the par value of each held Debenture.
|
|
8.2.3.
|
The sum that shall be paid to the Debenture Holders in the event of early redemption shall be the highest sum out of the following: (1) the market value of the balance of the outstanding Debentures, which shall be determined according to the average close price of the Debentures in the thirty (30) Trading Days prior to the date the resolution of the board of directors was adopted regarding the performance of early redemption; (2) the undertaking value of the outstanding Debentures that are subject to early redemption, in other words Principal plus interest, up to the date of the actual early redemption; (3) the balance of cash flow of the Debentures that are subject to early redemption (Principal plus interest) while discounted according to the Government Debentures Yield (as defined below) Report plus an annual interest of 1.5% calculated on a daily calculation basis based on 365 days per year. Discounting the Debentures (Series A) that are subject to early redemption shall be calculated commencing from the early redemption date up to the last redemption date that was determined with respect to the Debentures that are subject to early redemption.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
With respect to this matter: “
Government Debenture Yield
” means the average return (gross) for redemption, in a period of seven Business Days, that ends two Business Days prior to the date of notice of early redemption, of three series of governmental debentures whose average duration is closest to the average duration of the Debentures (Series A) at the relevant time.
|
|
The early redemption of the Debentures as mentioned above shall not confer upon a Holder of Debentures that shall be redeemed as mentioned, the right to receive interest for the period after the redemption date.
|
9.
|
Immediate Repayment
|
|
9.1.
|
Upon the occurrence of the causes, conditions and/or circumstances set fort below, the provisions of section 9.3.1 hereafter shall apply:
|
|
9.1.1.
|
A material worsening has occurred in the Company’s business as compared to its state at the issuance date, and there is a real concern that the Company will not be able to repay the Debentures on time.
|
|
9.1.2.
|
The Debentures were not repaid on time or another material undertaking provided in favor of the Debenture Holders was not fulfilled, however it shall be possible to declare the Debentures (Series A) immediately repayable due to this, only if the breach was not amended by the end of a period of fourteen (14) days after the date of breach.
|
|
9.1.3.
|
The Company did not publish a financial statement which it is required to publish according to any law or according to the provisions of this Deed, within 30 days after the last date on which it is obligated publish it. This section shall not apply in the case where the Company shall receive an extension to submit its financial statements from an qualified authority or in accordance with the provisions of this Deed, in such an event this count of days shall begin to be counted commencing from the last date set forth in the aforementioned extension.
|
|
9.1.4.
|
The Debentures have been delisted from trade on the Stock Exchange in accordance with the provisions of the Stock Exchange bylaws.
|
|
9.2.
|
Upon the occurrence of the conditions or circumstances set fort below,
and provided that a resolution of the Debenture Holders Meeting has been lawfully adopted, the provisions of section 9.3.2 hereafter shall apply upon the fulfillment of the terms or circumstances set forth hereafter,:
|
|
9.2.1.
|
If a motion was filed for receivership or to appoint a receiver (temporary or permanent) on the Company’s assets, all or most, or if an order shall be given to appoint a temporary receiver – which was not dismissed or cancelled within forty five (45) days after they were filed or granted, respectively; or – if an order was given to appoint a permanent receiver on the Company’s assets, all or most.
Notwithstanding the aforesaid, the Company shall not be given any cure period with respect to the motions or orders that were filed or granted, respectively, by the Company or with its consent.
|
|
9.2.2.
|
(a) If the Company shall file a motion to issue a stay of proceedings or if such order shall be granted as mentioned or if the Company shall file a motion for settlement or arrangement with its creditors according to section 350 of the Companies Law (except for the purpose of a merger with another Company and/or a change in the Company’s structure or split that is not prohibited according to the terms of this Deed, and except for arrangements between the Company and its shareholders that are not prohibited according to the terms of this Deed, and which do not affect on the Company’s ability to repay the Debentures) or if the Company shall propose in another manner a settlement or arrangement to its creditors, in light of the Company’s lack of ability to meet its undertakings on time; or (b) – if a motion shall be submitted according to section 350 of the Companies Law against the Company (not with its consent) which was not dismissed or cancelled within forty five (45) days after it was submitted.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
9.2.3.
|
If a lien shall be imposed on a Material Asset and except for assets that the finance that was received for them is without recourse to the Company (non–recourse), or if any action shall be performed of execution against any such Material Asset; and the lien was not removed, or the action was not cancelled, respectively, within 45 days after they were imposed or performed, respectively.
|
|
Notwithstanding the aforesaid, the Company shall not be given any cure period with respect to motions filed or given, respectively, by the Company or with its consent.
|
|
9.2.4.
|
If the Company shall cease to continue to operate and/or manage its business, as these are at the time of this Deed of Trust, and/or it shall notify of its intent to cease from continuing to operate its business as it is at the time of this Deed of Trust, and/or to manage its business. It is clarified that as long as the majority of the Company’s business is in the field of energy it shall be considered as continuing to manage its business.
|
|
9.2.5.
|
If the two following conditions shall occur, in the aggregate: (a) the rating of the Debentures (Series A) has decreased below ilBBB minus (or an equivalent rating by another rating company, insofar as it shall come in place of the company that rates the Debentures (Series A) at the signature date of this Deed of Trust) and (b) the ratio of the equity to the balance sheet of the Company, on a consolidated basis, shall be less than a rate of 25%.
|
|
9.2.6.
|
If the Company shall adopt a decision to liquidate (except for liquidation as a result of a merger with another Company as mentioned in section 9.2.16 hereafter) or if a final permanent liquidation order shall be given with respect to the Company by court or a permanent liquidator shall be appointed to it.
|
|
9.2.7.
|
If a temporary liquidation order shall be given by the court, or a temporary liquidator shall be appointed for the Company, or if any judicial decision of a similar nature shall be granted, and the appointment, the order or the decision as mentioned were not dismissed or cancelled within forty five (45) days after the day on which they were given or from the date the decision was granted, respectively.
|
|
Notwithstanding the aforesaid, the Company shall not be given any cure period with respect to motions or orders that were filed or given, respectively, by the Company or with its consent.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
9.2.8.
|
The Company ceased or notified of its intention to cease conducting its business as this shall be from time to time, and if the Company stopped or notified of its intention to stop its payments (subject to the cure periods insofar as these are included in this Deed of Trust). If the Company shall cease conducting its business as set forth in this section, the Company shall submit an Immediate Report of this.
|
|
9.2.9.
|
A Material Debt of the Company, or another series of the Company’s debentures, was declared immediately repayable.
|
|
9.2.10.
|
The Debentures have ceased to be rated and this is for a period exceeding 60 consecutive days, due to reasons and/or circumstances that are only in the Company’s control.
|
|
9.2.11.
|
The auditors of the Company shall write a going concern note in their report which is attached to the consolidated financial statements of the Company.
|
|
|
9.2.12.
|
Not fulfilling one or more of the financial criteria in Appendix 6.2 of this Deed of Trust at the end of the Examination Period (as defined in Appendix 6.2 of the Deed of Trust), and this non fulfillment was not cured according to its financial statements for the following calendar quarter after the Examination Period, provided that the Company was not given an extension to cure as mentioned in section 27 of the Deed of Trust or in section 17.1.1 of the Deed of Trust (in this section: the “
Cure Period
”) or, a waiver was not given to the Company for the breach as mentioned in section 27 of the Deed of Trust.
|
|
|
9.2.13.
|
The non fulfillment of its undertakings concerning the distribution of dividends included in Appendix 6.2 of this Deed of Trust.
|
|
|
9.2.14.
|
There is a real concern that the Company shall not meet its material undertakings towards the Debenture Holders.
|
|
|
9.2.15.
|
If the Company shall breach the terms of the Debentures or the Deed of Trust by a fundamental breach or if it will not perform any of its material undertakings within their framework, and the breach was not cured within 14 days after receiving a notice regarding the breach, during which the Company shall act to cure it or if a material representation of the representations of the Company in the Debentures or in the Deed of Trust is discovered to be incorrect and/or not complete, and in the event that this is a breach that can be cured – the breach was not cured within 14 days after receiving a notice regarding the breach, during which the Company shall act to cure it.
|
|
|
9.2.16.
|
If a Merger was performed without receiving a prior approval of the Holders of the Debentures (Series A) by an ordinary majority, unless the Company or the receiving Company declared, as the case may be, towards the Holders of the Debenture (Series A), including via the Trustee, at least ten (10) Business Days before the merger date that there is no reasonable concern that as a result of such merger the Company or the receiving company, as the case may be, would not be able to fulfill its undertakings towards the Holders of the Debentures (Series A).
|
|
|
With respect to this section: “
Merger
” means except for merger between companies that are under the Company’s control, when in this case a declaration of the Company or of the receiving company as mentioned above or a prior approval of the Debenture Holders as mentioned above shall not be required.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
9.2.17.
|
If the Company breached its undertaking not to create pledges as set forth in
section 7.4
of this Deed.
|
|
|
9.2.18.
|
A sale was made of most of the Company’s assets; in respect to this section “
sale of most of the Company’s assets
” means the sale of assets owned by the Company or owned by companies that are consolidated in its financial statements during 6 consecutive months, whose value, after deducting the value of assets that were purchased by the Company or the companies which are consolidated in its financial statements during the same 6 consecutive months period, exceeds percentage rate of 50% of the total assets according its last consolidated financial statements that were published. If a sale was made of most of the Company’s assets as set forth in this section, the Company shall submit an Immediate Report of this.
|
|
|
9.2.19.
|
If the Stock Exchange suspended the trade of the Debentures, except for a suspension due to a cause of the creation of vagueness, as this cause is defined in the fourth part of the Stock Exchange bylaws, and the suspension was not cancelled within sixty (60) Trading Days.
|
|
9.2.20.
|
In the event the Company shall perform an expansion of the Debenture series (Series A) in a manner that the expansion of the series shall cause a reduction of the rating of the series of Debentures (Series A) or the Company not fulfilling one or more of the financial criteria as set forth in appendix 6.2 of this Deed, without the consent of the Debenture Holders (Series A) as set forth in Appendix 5.2 of this Deed.
|
|
|
9.2.21.
|
If the Company stopped or shall notify of its intention to stop its payments to the Debenture Holders.
|
|
|
9.2.22.
|
If the following three conditions have been fulfilled in the aggregate:
|
|
a)
|
The percentage of indirect and/or direct holdings of Shlomo Nehama, Ran Fridrich and Hemi Raphael together, or their relatives, as such term is defined in the Companies Law, or corporations under the control, as the case may be, of each of them (hereinafter together referred to as the “
Controlling Shareholders
”) all together, has decreased below 25% of the issued and paid up share capital of the Company;
|
|
b)
|
The Controlling Shareholders shall cease to be the largest shareholders in the Company and there is one shareholder that holds himself or together with others a larger quantity of shares in the Company (hereinafter: the “
New Controlling Shareholder
”); and/or the Controlling Shareholders shall cease to have the actual ability to appoint the largest amount of directors in the Company by themselves;
“
Holding
” and “
Holding Securities together with Others
” – as defined in the Law.
|
|
c)
|
As a result of the New Controlling Shareholder joining, the rating of the Debentures has decreased below the rating before the New Controlling Shareholder joined. The Company shall provide the Trustee with confirmation that the rating was not changed as a result of the New Controlling Shareholder joining in proximity to or before transferring the control.
If the conditions set forth above in this clause are fulfilled in the aggregate, the Company shall submit an Immediate Report of this.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
9.3.
|
Upon the occurrence of the causes, conditions and/or the circumstances:
|
|
9.3.1.
|
That are set forth in sections 9.1.1 – 9.1.4 above, the Trustee alone and the Debenture Holders (Series A) in a resolution of a Meeting that shall be adopted in the manner set forth in section 9.7 hereafter may declare the sum that is due to the Debenture Holders according to the terms of the Debentures immediately payable. The Trustee, insofar as according to its sole discretion it shall not materially harm the rights of the Debenture Holders, shall act to convene a Meeting of the Holders of the Debenture (Series A) on the agenda of which is declaring the Debentures immediately payable as set forth hereafter, and this before the Debentures are declared immediately payable at its initiative; and/or
|
|
9.3.2.
|
That are set forth in sections 9.2.1 – 9.2.22, except for sections 2.14- 9.2.15 above, the Trustee and a Debenture Holder (that holds alone or together with others 5% or more) shall be entitled to convene a Meeting of the Debenture Holders that on its agenda is a decision regarding the declaring of the entire unpaid balance of the Debentures immediately payable; and/or
|
|
9.3.3.
|
That are set forth in section s 9.2.14- 9.2.15 above, the Trustee and a Debenture Holder (that holds alone or together with others 5% or more) shall be entitled to convene a Meeting of the Debenture Holders that on its agenda is a decision regarding the declaring of the entire unpaid balance of the Debentures immediately payable;
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
9.4.
|
Upon the occurrence of any of the events in section 9.1 above the Trustee, before he uses his authority to declare immediate repayment or to realize the Collaterals, insofar created, as mentioned in the beginning of section 9.1 above, shall be entitled to convene a Meeting of the Debenture Holders and receive its instructions.
|
|
9.5.
|
The Trustee or the Debenture Holders shall not declare the Debentures immediately payable and they shall not realize Collaterals, insofar as created, until after they gave the Company a notice of their intention to do so at least 21 days before the date of the decision or the Meeting, as the case may be: however, the Trustee or the Debenture Holders are not obligated to give the Company a notice as mentioned, if there is a reasonable concern that delivering the notice shall harm the possibility of declaring the Debentures immediately payable or realizing the Collaterals, insofar as created.
|
|
9.6.
|
If a reasonable period was determined in sections 9.1- 9.2 above or in a resolution of a creditors’ meeting, as the case may be, with respect to a certain section, in which the Company is entitled to perform an action or to adopt a decision which as a result the cause for declaring immediate repayment or realization of the Collaterals, insofar as created, is dropped, the Trustees or the Debenture Holders are entitled to declare the Debentures immediately payable according to these sections only if the period that was determined as mentioned has passed and the cause was not dropped; however, the Trustee is entitled to shorten the period that was determined as mentioned if it thought that it will materially harm the rights of the Debenture Holders.
|
|
9.7.
|
The decision of the Debenture Holders to declare the Debenture immediately payable or to realize the Collaterals, insofar as created, shall be adopted in a Meeting of the Debenture Holders in which Holders of at least fifty percent (50%) of the balance of the par value of the Debentures (Series A) were present, by a majority of the Debenture Holders of the balance of the par value of the Debentures that is represented or by such a majority in a deferred Debenture Holders Meeting in which the Holders of at least twenty percent (20%) of the aforementioned balance were present.
|
|
9.8.
|
Subject to the provisions of any law, the Trustee’s duties according to this section 9 are subject to its actual knowledge of the existence of the facts, the occasions, the circumstances and the events set forth in it.
|
|
9.9.
|
The sending of a notice to the Company of the declaration of immediate repayment of the Debentures can be done also by way of publishing a notice of the decision of the Meeting or the decision of the Trustee in accordance with the provisions of section 26 hereafter and it shall constitute a declaration of the Debentures immediately payable.
|
|
9.10.
|
In the event that a notice shall be delivered to the Company that the Debentures were declared immediately payable according to the provisions of section 9, the Company undertakes:
|
|
9.10.1.
|
To pay to the Debenture Holders and to the Trustee any sums due to them and/or that shall be due to them according to the terms of the Deed of Trust, whether the date of the obligation has arrived or not (‘acceleration’), and this is within 7 days after the notice date as mentioned in section 9.8 above; and
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
9.10.2.
|
To deliver to the Trustee, according to its reasonable request, any affidavit or declarations and/or to sign any document and/or to perform and/or to cause the performance of the actions necessary and/or required in accordance with any law for giving effect to the exercise of authorities, the powers and the permissions of the Trustee and/or his attorneys that are required in order to enforce upon the Company its undertaking as mentioned in the Deed of Trust.
|
|
9.11.
|
For the purposes of this section 9 – a written notice to the Company signed by the Trustee that confirms that the action required by it in the framework of its powers, is a reasonable action, shall constitute prima facie evidence of this.
|
|
9.12.
|
After declaring the Debentures immediately payable in accordance with the provisions of this section 9, the Trustee and/or the Debenture Holders shall be entitled to immediately take all the steps that they shall see fit to take. Inter alia, the Trustee and/or the Debenture Holders shall be entitled to enforce and to realize the Collaterals, insofar as created, (all or in part) that were given to secure the Company’s undertakings to the Debenture Holders and to the Trustee according to this Deed. The Trustee shall be entitled to act in any manner that it shall see fit and effective, including in accordance with the relevant law in the relevant territory for each Collateral and within such actionsit shall be entitled to appoint by itself and/or by the court, a trustee, receiver or manager on assets that were provided as Collateral, all or part of them and insofar as such assets were provided.
|
10.
|
Claims and Proceedings by the Trustee
|
|
10.1.
|
In addition to any provision in this Deed and as a right and independent authority, the Trustee is entitled, according to its discretion, and will be obligated to do so by a decision adopted in a Meeting of Debenture Holders by the majority required according to law, and without giving an additional notice to the Company, to take, all of those proceedings, including legal proceedings and motions to receive instructions as it shall see fit and subject to the provisions of any law, for enforcing the Company’s undertakings according to this Deed of Trust, realizing Collaterals, insofar as created, and/or rights of Debenture Holders and protecting their rights according to this Deed of Trust. The Trustee shall be entitled to open legal proceedings and/or others even if the Debentures were not declared immediately payable and all for realizing Collaterals, insofar as created, and/or for protecting rights of Debenture Holders and the Trustee and subject to any law. The Trustee is entitled, in accordance with its sole discretion and without the need for giving a notice, to approach the competent court and submit a motion to receive instructions in any matter stemming and/or connected to this Deed of Trust also before the Debentures shall be declared immediately payable, including for giving any order regarding the trust matters.
|
|
10.2.
|
Subject to the provisions of this Deed of Trust, the Trustee is entitled but not required to convene at any time a general Meeting of the Debenture Holders in order to discuss and/or to receive its instructions in any matter regarding this Deed and it is entitled to convene it again. The Company waives any claim, towards the Trustee and/or the Debenture Holders, regarding damage that could be caused and/or was caused to it due to summoning a Debenture Holders Meeting.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
10.3.
|
The Trustee is entitled before instituting any legal proceedings to convene a Meeting of the Debenture Holders in order for them to decide which proceedings to take in order to realize their rights according to this Deed of Trust. The Company waives any claim towards the Trustee and/or the Debenture Holders regarding damage that could be caused and/or was caused to it due to summoning the Debenture Holders Meeting.
|
|
10.4.
|
The Trustee is entitled, according to its sole discretion, to delay the performance of any action by it according to this Deed of Trust, for the purpose of approaching the Debenture Holders Meeting and/or the court until instructions are received from the Debenture Holders Meeting and/or instructions from the court are received how to act. Notwithstanding the aforesaid, the Trustee is not entitled to delay proceedings to declare the Debentures immediately payable which the Debenture Holders Meeting decided according to section 9 above.
|
11.
|
Order of Priority of Creditors; Dividing the Receivables
|
12.
|
Authority to Demand Finance
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
12.1.
|
The Company shall transfer to the Trustee the Finance Sum at the time determined in this Deed for paying the Principal or the interest as mentioned above.
|
|
12.2.
|
The amount of the certain payment as mentioned above (Principal or interest) shall be reduced by deducting the Finance Sum, and in the event of an interest payment, the rate of the certain payment shall also be reduced respectively.
|
|
12.3.
|
Insofar as the Company has a duty according to law or according to the Deed of Trust to pay the costs and fees for which the Finance Sum was deposited, the Finance Sum (in addition to linkage and interest that apply to the Debentures according to this Deed of Trust, from the record date for the certain payment as mentioned above and until its actual payment) shall be paid at the next date scheduled in this Deed of Trust for payment on account of the Principal and/or the interest (or at another time as shall be determined in a decision of the Meeting as mentioned above) and it shall be added to the next payment as mentioned as an integral part of it.
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|
12.4.
|
The transfer of the Finance Sum to the Trustee cannot constitute an admission of the Company regarding its liability in financing the costs and fees for which the Finance Sum was deposited.
|
|
12.5.
|
The Company shall publish an Immediate Report before the record date regarding the changes in the terms of this Deed of Trust regarding payments on account of the Principal and/or interest that arise from the aforesaid.
|
13.
|
Authority to Delay the Division of Funds
|
|
13.1.
|
Notwithstanding the provisions in section 11 above, and until the earliest of the dates set forth hereafter, if the sum which shall be received as a result of instituting such proceedings mentioned above and which shall be available at any time for distribution to the Debenture Holders as mentioned in that section, shall be less than 1 million NIS at the record date for distribution (the “
Distribution Threshold
”) the Trustee shall not be required to distribute it and it shall be entitled to invest this sum, all or in part, in accordance with the provisions of section 16 hereafter.
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|
13.2.
|
When these investments mentioned above reach, if they shall reach, with their profits, together with other funds that shall reach the Trustee for the purpose of paying them to the Debenture Holders to a sum that will be sufficient in order to pay this sum mentioned above, the Trustee shall be required to use the mentioned sums according to the order of priorities in section 11 above and to distribute this sum at the earliest time of the payment of the Principal or the interest. Notwithstanding the aforesaid, the fees to the Trustee and its expenses shall be paid out of these funds immediately upon their arrival to the Trustee and even if they are lower than the sum set forth in section 13.1 above.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
14.
|
Notice of Distribution and Deposit with the Trustee
|
|
14.1.
|
The Trustee shall notify the Debenture Holders of the date and place in which any payment shall be made out of the payments mentioned in sections 11 and 13 above, and this is by a prior notice of 14 days that shall be given in the manner set forth in section 26 hereafter.
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14.2.
|
After the record date for entitlement for payment that was determined in the Trustee’s notice as mentioned, the Debenture Holders shall be entitled to interest for them according to the interest rate set forth in the Debentures, only on the balance of the Principal sum (if such shall exist) after deducting the sum that was paid or that was offered to them for payment as mentioned in this notice.
|
15.
|
Avoidance from Payment for a Reason that is not Dependent on the Company; Deposit with the Trustee
|
|
15.1.
|
Any sum that is due to a Debenture Holder and that was not actually paid for a reason that is not dependent on the Company, while the Company was willing to pay it and it was deposited with the Trustee according to the provisions of section 15.2 hereafter, shall cease to bear interest and linkage differences from the time that was determined, according to the provisions of the Deed of Trust, for its payment and the Debenture Holder shall be entitled, subject to the provisions hereafter, to that sum.
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|
15.2.
|
The Company shall deposit with the Trustee, no later than 10 Business Days after the time that was scheduled for that payment, the payment sum which was not paid for a reason that is not dependent on the Company, and subject to the provisions of section 15.5 hereafter, such deposit as mentioned shall be considered as paying that payment, and in the event of payment of everything due for that Debenture, also as the redemption of the Debenture.
|
|
15.3.
|
The Trustee shall deposit in bank accounts in its name and to its order in trust for the Debenture Holders, the funds that shall be transferred to it as mentioned in sub- section 15.2 above, and shall invest them in investments in accordance with the provisions of section 16 hereafter. If the Trustee did so, it shall not owe to those entitled to those sums, other than the consideration received from realizing the investments, after deducting expenses, fees and mandatory payments, if existing, that are connected to that investment and to managing the trust account and after deducting its fees and expenses.
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|
15.4.
|
Subject to the Trustee not transferring the sums to the Company according to section 15.5 hereafter, the Trustee shall transfer to any Debenture Holder the payment that is due to him after such deductions as mentioned in section 15.3 above, and this against presenting the proof to the entitlement for this payment, as shall be required by the Trustee to its full satisfaction.
|
|
15.5.
|
The Trustee shall hold the funds that shall be deposited as mentioned in section 15.3 above and it shall invest them in the aforementioned manner, until the end of one year after the final payment of the Debentures or by the date of payment of the funds to the Debenture Holders, whichever is earlier. After this time, the Trustee shall transfer to the Company the sums out of these funds, which have remained with him (including profits that have accrued from their investment) after deducting its fees, expenses and other costs that were expended in accordance with the provisions of this Deed (such as fees of service providers etc.).
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
16.
|
Investment of Funds
|
|
16.1.
|
If provisions were determined in the laws of the State of Israel regarding permitted investments for a trustee, the Trustee shall invest any such sum, as it shall see fit in accordance with the provisions of the law. If such provisions were not determined in the law, the Trustee shall invest any sum as mentioned in bank(s) in its name or to its order, in bank deposits of one of the five largest banks in Israel (provided that the bank rating shall not be less than AA minus) or in investments in securities of the State of Israel, all as the Trustee shall see fit.
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16.2.
|
For performing such investments, the Trustee is entitled to use investment experts and agents and the provisions of sections 3.12 and 24 hereafter shall apply, as the case may be.
|
17.
|
Urgent Representing Body for the Debenture Holders
|
|
17.1.
|
The Trustee shall appoint an urgent representing body of the Debenture Holders after it receives a written request from the Company that notes that the Company has adopted a decision to appoint an urgent representing body according to the terms of this section, that details the specific purpose and authorities that such urgent representing body should be granted, with the wording of the decision and written confirmation of the Company’s attorney, that the decision to which the confirmation is attached was lawfully adopted by the Company.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
17.1.1.
|
A one- time extension for fulfilling one or more of the financial criteria during a period that shall not exceed 3 months regarding each such extension;
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|
17.1.2.
|
A one-time deferral of one or more of the dates appointed for the performance of any undertaking of the Company, for a period that shall not exceed three months regarding any such deferral.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
18.
|
Confidentiality
|
|
18.1.
|
Subject to the provisions of any law and to the provision in this section hereafter, the Trustee undertakes, by signing this Deed, to keep confidential any information that was given to it from the Company, not to disclose it to another and not to make any use of it, unless its disclosure or the use of it is required for fulfilling its duties according to the Law, according to the Deed of Trust, or according to a court order or according to the instructions of a legally authorized authority.
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|
18.2.
|
Transferring information to the Debenture Holders, including by publishing it publicly, for the purpose of adopting a decision regarding their rights according to the Debenture or for providing a report of the Company’s situation does not constitute a breach of the confidentiality undertaking as mentioned, all after advance coordination with the Company, and in any event only the necessary information for adopting such decision will be provided, to the extent provided.
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18.3.
|
This confidentiality undertaking shall not apply to any part of the information, that is in the public domain (except for information that became public domain for a breach of this confidentiality undertaking) or that was received by the Trustee not from the Company – starting from the date its receipt.
|
|
18.4.
|
All the conversations and discussions in the parts of the Meetings that are conducted without the Company or in the Meetings conducted without the Company, insofar as the absence of the Company is required by the Trustee, are confidential, and the Company and/or anyone on its behalf including any Office Holder in it shall not require the disclosure of this information.
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19.
|
Other Agreements
|
20.
|
Reporting by the Trustee
|
|
20.1.
|
The Trustee shall make each year, at the time determined for this in the Law and in absence of a schedule time within 40 days after the end of each twelve months from the date of this Deed of Trust, an annual report of the trust matters (the “
Annual Report
”) and it shall submit it to the Securities Authority and to the Stock Exchange.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
20.2.
|
The Annual Report shall include details that shall be determined from time to time in the Law. Submitting the Annual Report to the Securities Authority and to the Stock Exchange, is as furnishing the Annual Report to the Company and to the Debenture Holders.
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|
20.3.
|
The Trustee must submit a report regarding the actions that it performed according to the provisions of chapter E’1 of the Law, according to a reasonable demand of the Debenture Holders that hold at least ten percent (10%) of the balance of the par value of the Debentures of that series, within a reasonable time of the demand, all subject to the confidentiality obligation of the Trustee towards the Company as set forth in section 35J(d) of the Law.
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20.4.
|
The Trustee shall update the Company before a report according to section 35H1(a) through (c) of the Law.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
21.
|
Fees and Covering the Trustee’s Expenses
|
|
21.1.
|
The Trustee shall be entitled to payments of its fees and expenses in connection with fulfilling its duties, in accordance with the provisions in
Appendix 21
which is attached to this Deed of Trust. If a Trustee has been appointed in place of the Trustee whose term of service has ended according to sections 35B(a1) or section 35N(d) of the Securities Law, the Holders of certificates of undertaking (Series A) shall pay the difference by which the Trustee’s fees who was appointed as mentioned exceed the fee that was paid to the Trustee in place of whom it was appointed if such difference is unreasonable and the provisions of the relevant law at the date of replacement shall apply.
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21.2.
|
The Debenture Holders (Series A) shall participate in financing the Trustee’s fees and the refund of its expenses in accordance with the provisions of the indemnification clause in section 25 of the Deed of Trust.
|
22.
|
Constant Safety Cushion for Covering the Company’s Undertakings of Indemnity and to Deposit Finance Cushions
|
23.
|
Liability
|
|
23.1.
|
The liability of the Trustee shall be according to law.
|
|
23.2.
|
For the removal of doubt it is hereby clarified that:
|
|
23.2.1.
|
The Trustee has no duty to examine, and in actual fact the Trustee has not examined, the financial situation of the Company and this is not included among its duties.
|
|
23.2.2.
|
The Trustee did not make any financial, accounting or legal due diligence examination of the Company’s business situation or of the companies held by the Company or by a person that holds the Company’s shares and this is not among its duties.
|
|
23.2.3.
|
The Trustee has not given its opinion expressly or impliedly regarding the Company’s ability to meet its undertakings towards the Debenture Holders, nor by the fact that it entered into this Deed of Trust, nor by its consent to serve as Trustee of the Debenture Holders.
|
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23.2.4.
|
The Trustee’s signature on this Deed of Trust is not an opinion of it regarding the nature of the offered Debentures or that it is worthwhile investing in them.
|
|
23.3.
|
The Trustee shall not be required to notify any party of the signature of this Deed. The Trustee shall not get involved in any manner in the management of the Company’s business or its affairs and this is not included in its duties.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
23.4.
|
Subject to the provisions of any law, the Trustee is not required to act in a manner that is not expressly set forth in this Deed of Trust, so that any information, including with respect to the Company and/or with respect to the Company’s ability to meet its undertakings to the Debenture Holders will be brought to its knowledge and this is not one of its duties.
|
|
23.5.
|
The Trustee is entitled to rely on the presumption as mentioned in section 28 hereafter, and to rely on the correctness of the identity of a non registered Debenture Holder of the Debentures as this shall be given to the Trustee by a person whose name is registered as authorized by power of attorney, that a Nominee Company issued, insofar as the identity of the Debenture Holder was not registered in the power of attorney.
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|
23.6.
|
The Trustee is entitled to rely within the framework of its trusteeship on any written document including, written instruction, notice, request, consent or approval, which appears to be signed or issued by any person or body, which the Trustee believes in good faith that it was signed or issued by him.
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24.
|
The Authority of the Trustee to Employ Agents
|
25.
|
Indemnification
|
|
25.1.
|
The Company and the Debenture Holders (at the relevant record date as mentioned in section 25.5 hereafter, each for its undertaking as mentioned in section 25.3 hereafter) hereby undertake to indemnify the Trustee, each Office Holder in it, its employees, shareholders, agents and experts that the Trustee shall appoint (“
Those Entitled to Indemnification
”) as follows:
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|
25.1.1.
|
For any expense and/or damage and/or payment and/or financial obligation, including according to a judgment, an arbitration judgment (in respect to which a stay of execution was not granted) or according to a settlement (and the Company’s consent to the settlement has been given) the causes of which are connected to an act or omission that Those Entitled to Indemnification performed or which they must perform by virtue of the provisions of this Deed, and/or according to the law and/or a instruction of an authorized authority and/or according to the demand of Debenture Holders and/or according to the Company’ demand; and
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
25.1.2.
|
For wages due to Those Entitled to Indemnification and reasonable costs that they expended and/or that they are about to expend in respect to performing an act or omission as mentioned above and/or with respect to using the authorities and powers according to this Deed, including with respect to all kinds of legal proceedings, opinions of lawyers and other experts, negotiations, discussions, expenses, travel costs and other costs, and provided that they shall be reasonable, claims and demands regarding any matter and/or thing that were made and/or not made in any manner with respect to the aforesaid.
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|
25.1.3.
|
Those Entitled to Indemnification shall not demand indemnification in advance in a matter that cannot be delayed;
|
|
25.1.4.
|
Regarding an act or omission for which the indemnification is requested it was not determined in a final judicial decision that Those Entitled to Indemnification acted: maliciously, negligently in respect to which there is no exemption according to the law, not in good faith or not in the framework of fulfilling their duties;
|
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25.1.5.
|
The Trustee has informed the Company in writing, immediately after it has become informed, regarding any claim and/or demand as mentioned, and allowed the Company to manage the proceedings, unless these proceedings are managed by the insurance company of the Trustee or if the Company is in conflict of interest according to the reasonable discretion of the Trustee.
|
|
25.2.
|
Without derogating from the validity of the “Indemnification Undertaking” in section 25.1 above, as long as the Trustee shall be required according to the terms of the Deed of Trust and/or according to Law and/or instruction of an authorized authority and/or any law and/or according to the demand of Debenture Holders and/or the Company’s demand, to perform any action, including but not only instituting proceedings or submitting claims according to the demand of Debenture Holders, as mentioned in this Deed, and insofar as the Trustee shall be of the opinion, according to its sole discretion, that the deposit funds (as this term is defined in section 35E1(b) of the Law) which the Company transferred are not sufficient and/or that the Law does not permit use of the deposit funds for the purposes necessary as mentioned, the Trustee shall be entitled to refrain from taking any such action, until it receives a money deposit to its satisfaction for covering the Indemnification Undertaking (the “
Finance Deposit
”) in first preference from the Company, and in the case that the Company shall not deposit the Finance Deposit at the time it was required to do so by the Trustee, the Trustee shall approach the Debenture Holders that held at the record date (as mentioned in section 25.5 hereafter) to request that they deposit with it the sum of the Finance Deposit, each according to its Relative Share (as this term is defined hereafter). In the event that the Debenture Holders will not deposit the entire Finance Deposit the Trustee will not have the obligation to take any action or relevant proceedings. The aforesaid cannot exempt the Trustee from taking any urgent action required to prevent adverse material harm to the rights of the Debenture Holders.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
25.3.
|
The Indemnification Undertaking:
|
|
25.3.1.
|
Shall apply to the Company
in any event of
(1).
Actions that were preformed and/or required to be performed according to the terms of the Deed of Trust including for protection the rights of the Debenture Holders (including due to the demand of a Debenture Holder that is needed for such protection);
and (2).
Actions that were performed and/or required to be performed according to the Company’s demand.
|
|
25.3.2.
|
Shall apply to the Debenture Holders
that held at the record date (as mentioned in section 25.5 hereafter) in any event of
(1).
an event that is not within the scope of section 25.3.1; and
(2).
the non- payment by the Company of the indemnification sum that applies to it according to section 25.3.1 above (without derogating from the provisions of section 25.6 hereafter).
|
|
25.4.
|
In any event that:
(a).
the Company
does not pay
the sums required for covering the Indemnification Undertaking and/or
shall not deposit
the sum of the Finance Deposit as the case may be;
and/or (b).
the indemnification duty applies to the Debenture Holders by virtue of the provisions of section 25.3.2 above and/or the Debenture Holders were called to deposit the sum of the Finance Deposit according to section 25.2 above, the following provisions shall apply:
|
|
25.4.1.
|
Insofar as sums are deposited in the safety cushion that shall be deposited in accordance with the provisions of section 35E1(b) of the Law and the regulations that shall be enacted by its virtue, the Trustee shall use the money deposited in it;
|
|
25.4.2.
|
Insofar as the sum deposited in the safety cushion as set forth above is not sufficient for indemnification as mentioned or that there is a restriction on the Trustee regarding the use of it, the money shall be collected in the following manner:
|
a)
|
First
– out of the money (interest and/or Principal) which the Company must pay to the Debenture Holders after the date of the required action, and the provisions of section 11 above shall apply;
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
b)
|
Second
– insofar as according to the Trustee’s opinion the sums deposited in the Finance Deposit shall not be enough to cover the Indemnification Undertaking, the Debenture Holders that shall hold Debentures at the record date (as mentioned in section 25.5 hereafter) shall deposit the missing sum, each one in accordance with its Relative Share (as such term is defined) with the Trustee. The sum that each Debenture Holder shall deposit shall bear annual interest at a rate equal to the interest determined for the Debentures and it shall be paid with preference as mentioned in section 25.7 hereafter.
|
|
25.5.
|
The record date for determining the Debenture Holder’s obligation in the Indemnification Undertaking and/or in the payment of the Finance Deposit is as follows:
|
|
25.5.1.
|
In any event that the Indemnification Undertaking and/or payment of the Finance Deposit are required due to a decision or urgent action required for preventing adverse material harm to the rights of the Debenture Holders and this is without an advance decision of the Debenture Holders Meeting – the record date of the obligation shall be the end of the Trading Day of the date the action was taken or the decision was made, and if this day is not a Trading Day, the Trading Day prior to it.
|
|
25.5.2.
|
In any event that the Indemnification Undertaking and/or payment of the Finance Deposit is required according to a decision of the Meeting of the Debenture Holders – the record date for the obligation shall be the record date for participating in the Meeting (as this date was determined in the summons notice) and it shall also apply to a Debenture Holder that was not present or that did not participate in the Meeting.
|
|
25.5.3.
|
In any other case or in the case of disputes regarding the record date – the record date shall be as determined by the Trustee according to its absolute discretion.
|
|
25.6.
|
The payment by the Debenture Holders instead of the Company of any sum that is imposed on the Company according to this section 25 cannot release the Company from its obligation to pay such payment.
|
|
25.7.
|
The refund to the Debenture Holders that paid payments according to this section shall be made according to the order of preference set forth in section 11 above.
|
26.
|
Notices
|
|
26.1.
|
Any notice on behalf of the Company and/or the Trustee to the Debenture Holders shall be given as follows:
|
|
26.1.1.
|
In cases in which the provisions of the law require this or according to a decision of the Trustee by reporting to the Magna system of the Securities Authority (the Trustee may order the Company and the Company shall be required to immediately report to the Magna system on behalf of the name of the Trustee any statement according to its form as it shall be transferred in writing by the Trustee to the Company);
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
26.1.2.
|
In the cases set forth hereafter only in addition by way of publishing a notice that shall be published in two daily newspapers that are widely distributed, that are published in Israel in the Hebrew language: (a). An arrangement or settlement according to section 350 of the Companies Law, 5759- 1999; (b). Merger.
|
|
26.1.3.
|
Any notice that shall be published or sent as mentioned above, shall be considered as if it was delivered to the Debenture Holder on the date of its publication as mentioned (in the Magna system or in the press, respectively).
|
|
26.1.4.
|
In the event that the Company shall cease to report in accordance with the law, in cases in which there are provisions of the law that require this, or according to the decision of the Trustee, by sending a notice by registered mail to each registered Debenture Holder according to his last address registered in the Debenture Holders registry (in the event of joint Holders – to the joint Debenture Holder whose name appears first in the registry). Any notice that shall be sent as mentioned shall be considered as if it was delivered to the Debenture Holders 3 business days after it was delivered in the mail.
|
|
26.2.
|
Any notice or demand on behalf of the Trustee or Debenture Holder to the Company may be given by a letter that shall be sent by registered mail to their address, or by transmitting it by fax or in writing by a messenger or by electronic mail and any notice or demand such as this shall be considered as if it was received by the Company or other addressee:
|
|
26.2.1.
|
In the event of sending by registered mail – 3 Business Days after it was delivered in the mail.
|
|
26.2.2.
|
In the event of transmitting it by facsimile (with additional telephone confirmation that it was received) – at the time of the telephone confirmation.
|
|
26.2.3.
|
In the event of transmitting it by electronic mail – at the time of receiving confirmation by electronic mail that it was read or at the time that it was confirmed by telephone that it was received (if confirmation was performed), whichever is earlier of the two.
|
|
26.2.4.
|
In the event that it was sent by a messenger – at the time of its delivery by messenger to the addressee or in the event that the addressee refrained from accepting it during the messenger’s proposal to the addressee to accept it.
|
|
26.3.
|
Any notice or demand to the Trustee shall be given in one of the ways set forth in section 26.2 above.
|
27.
|
Waiver; Settlement; Changes in the Terms of the Deed of Trust, Debentures
|
|
27.1.
|
Subject to the provisions of the Law and the regulations that were promulgated and/or that shall be promulgated by its virtue, the Trustee shall be entitled from time to time and at any time, to waive any technical breach or the non fulfillment of the terms of this Deed by the Company if it was convinced that this is for the benefit of the Debenture Holders or where the change does not harm the Debenture Holders. The provisions of this section shall not apply to the change of the identity of the Trustee or its remuneration in this eed, for appointing a Trustee in place of the Trustee whose term has ended. The Trustee shall not be entitled to waive with respect to the times of the payments according to the Debentures, the interest rate, the causes for declaring Debentures immediately payable, financial criteria or with respect to changing the interest in the event a decrease in the rating of the Debentures .
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
27.2.
|
The terms of the Deed of Trust and/or the Debentures may be changed in the event of one of the following:
|
|
27.2.1.
|
The Trustee was convinced that the change does not harm the Debenture Holders. The provisions of this section shall not apply with respect to a change in the identity of the Trustee or its remuneration in this Deed, for appointing a Trustee in place of the Trustee whose term has ended; the Trustee shall be entitled to approve technical changes only. The Trustee shall not be permitted to change the Deed of Trust with respect to the payment times according to the Debentures, the interest rates, the causes for declaring the Debentures immediately payable, the financial criteria or with respect to changing the interest in the event a decrease in the rating of the Debentures.
|
|
27.2.2.
|
The Debenture Holders have agreed to the proposed change in a decision that was adopted in the Meeting of the Debenture Holders, in which Debenture Holders holding at least 50% of the balance of the par value of the outstanding Debentures were present, themselves or their attorneys, by a majority of the holders of at least two thirds (2/3) of the remainder of the par value of the Debentures represented at the vote, or by such majority in a deferred Meeting, in which Debenture Holders holding, themselves or by their attorneys, at least twenty percent (20%) of this balance were present.
|
|
27.3.
|
The Company shall report by Immediate Report of any change, or waiver as mentioned above, as soon as possible after it was made.
|
28.
|
Registry of Debenture Holders
|
|
28.1.
|
The Company shall administer a registry of Debenture Holders that shall be open to the review of any person in accordance with the provisions of the Law.
|
29.
|
Meetings of the Debenture Holders
|
30.
|
Applicability of the Law
|
31.
|
Exclusive Authority
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
32.
|
General
|
33.
|
Addresses
|
34.
|
Authorization to Magna
|
/s/ Shlomo Nehama, /s/ Ran Fridrich
|
/s/
|
|
Ellomay Capital Ltd.
|
Hermetic Trusts (1975) Ltd.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
/s/ Odeya Brick-Zarsky
|
|
Odeya Brick-Zarsky, Adv.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
This Debenture indicates that Ellomay Capital Ltd. (the “Company”) shall pay at the payment date as defined in Appendix 2.1 –Economic Terms of the Debentures (Series A) to whoever shall be a Debenture Holder at the record date, payments of Principal and interest, all subject to the details in Appendix 2.1 –Economic Terms of the Debentures (Series A) and the Deed of Trust.
|
2.
|
This Debenture is issued as part of the series of the debentures under terms that are identical to this debenture (the “series of the debentures”), that are issued in accordance with the Deed of Trust (“
Deed of Trust
) of the 30
th
of December 2013, which was signed between the Company of the first part and Hermetic Trusts(1975) Ltd. (“
Hermetic
”). It is clarified that the provisions of the Deed of Trust shall constitute an integral part of the provisions of this Debenture, and they shall bind the Company and the Debenture Holders included in this series. All the Debenture Holders of this series shall of equal priority among themselves (pari–passu) without anyone having right of priority over the other.
|
3.
|
This Debenture is issued subject to the terms set forth in Appendix 2.1 –Economic Terms of the Debentures (Series A) and in the Deed of Trust, which constitute an inseparable part of the Debentures.
|
4.
|
The terms set forth in this certificate shall change without the need for issuing a new certificate at any time when the Deed of Trust and/or its versions shall be lawfully modified.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
General
|
2.
|
Securing the Debentures
|
3.
|
The Date of Payment of the Principal of the Debentures
|
4.
|
The Interest
|
|
4.1.
|
The unpaid balance of the Principal of the Debentures (Series A) shall bear interest at a fixed annual rate of 4.6%, without linkage to any index or currency. The interest for the unpaid balance of the Principal of the Debentures (Series A) shall be paid twice a year in semi annual payments on the 30
th
of June and on the 31
st
of December of each of the years 2014 to 2023 (inclusive) for the period of six (6) months (except for the first interest period, as set forth hereafter) that began a day after the prior interest payment date and that ended on the date of payment. The first payment of interest for the Debentures (Series A) is scheduled for the 30
th
of June 2014, for the period that begins on the first Trading Day the next day after the day on which the Debentures (Series A) shall be offered to the public, and that ends on the first payment date of interest, when it is calculated on the basis of 365 days per year.
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|
4.2.
|
Withholding tax that must be deducted shall be deducted from any payment.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
4.3.
|
Adjustment mechanism of the interest rate:
|
|
4.3.1.
|
Changes to the interest rate as a result of a decrease in the rating of the Debentures (Deries A)
|
|
a.
|
Insofar as the rating of the Debentures (Series A) by the rating company set forth in the Deed of trust or any other rating company which shall take its place (hereinafter the “
Rating Company
”) (in the event of switching the rating company the Company shall transfer to the Trustee a comparison between the rating scale of the replaced rating company and the rating scale of the new rating company) shall be updated during any interest period, so that the rating that shall be determined for the Debentures (Series A) shall be lower by one level or more (hereinafter the “
Reduced Rating
”) from the rating that was mentioned in the prospectus (or a parallel rating that shall take its place and which shall be determined by another rating company, insofar as it shall take the place of the rating company mentioned in the Deed of Trust) (hereinafter the “
Base Rating
”), the annual interest rate which the unpaid balance of the Debentures (Series A) shall bear shall increase by the additional interest rate, above the interest rate that shall be determined in the tender, as the Company shall publish in the Immediate Report regarding the results of the offering (the “
Base Interest
”) and this is for the period that shall begin from the date of publishing the new rating by the Rating Company until full payment of the unpaid balance of the Debentures (Series A) as follows: (a) in the event the rating that shall be determined shall be lower by one level from the Base Rating – the annual interest rate which the unpaid balance of the Debentures shall bear shall not change and it shall be equal the Base Interest; (b) in the event the rating that shall be determined shall be lower by two levels from the Base Rating – the annual interest rate which the unpaid balance of the Debentures shall bear shall increase by 0.5% so that it shall equal the Base Interest with an additional 0.5%; (c) in the event that the rating that shall be determined shall be lower by three levels from the Base Rating - the annual interest rate that the unpaid balance of the Debentures shall bear shall increase by an additional 0.25%, so that it will equal the Base Interest with an additional 0.75%; (d) in the event the rating that shall be determined shall be lower by four levels from the Base Rating - the annual interest rate that the unpaid balance of the Debentures shall bear shall increase by 0.25% so that it will equal the Base Rating with an additional 1%.
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|
b.
|
No later than the end of one Business Day after receiving the notice of the rating company regarding lowering the rate of the debentures (series A) to a Reduced Rating as defined in sub- section (a) above, the Company shall publish an Immediate Report, in which the Company shall mention: (a) the fact that the rating was decreased, the Reduced Rating, and the date of commencement of the Reduced Rating of the Debentures (Series A) (hereinafter the “
Reduced Rating Commencement Date
”); (b) the accurate interest rate that the balance of the Debentures (Series A) shall bear for the period that commences and the beginning of the current interest period until the Reduced Rating Commencement Date (the interest rate shall be calculated according to 365 days per year) (hereinafter in this section: the “
Original Interest
” and the “
Original Interest Period
”, respectively); (c) the interest rate that the balance of the Debentures (Series A) shall bear beginning on the Reduced Rating Commencement Date until the next interest payment date, that is: the original interest with additional interest rate per year (the interest rate shall be calculated according to 365 days per year) (hereinafter in this section: the “
Updated Interest
”); (d) the weighted interest rate which the Company shall pay to the Holders of the Debentures (Series A) at the next date of payment of interest, that arises from the aforesaid in sub-sections (b) and (c) above; (e) the annual interest rate that is reflected from the weighted interest rate; (f) the annual interest rate and the semi-annual interest rate.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
c.
|
If the Reduced Rating Commencement Date of the Debentures (Series A) shall occur during the days beginning four days before the record date for paying any interest and ending at the next interest payment date after the record date (hereinafter in this section the “
Deferral Period
”) the Company shall pay the Holders of the Debentures (Series A) at the date of the next interest payment, the Original Interest (as appearing in the original terms of the paper) only, when the interest rate that stems from the additional interest in an amount equal to the additional interest rate per year during the Deferral Period shall be paid at the next interest payment date. The Company shall notify in an Immediate Report the exact interest rate to be paid at the next interest payment date.
|
|
d.
|
In the event the rating of the Debentures (Series A) was updated by the rating company, in a manner that shall affect the interest rate which the Debentures (Series A) shall bear as mentioned above in this section, the Company shall notify this to the Trustee in writing within one Business Day after publishing the Immediate Report as mentioned.
|
|
e.
|
It is clarified that in the event that after the rating is decreased in a manner that affected the interest rate which the Debentures (Series A) shall bear as mentioned in this section, the Rating Company shall update the rating of the Debentures (Series A) upwards, to a rating that equals or is higher than the Base Rating or to a rating at which the additional interest rate is lower, as set forth above (hereinafter the “
Higher Rating
”), then the interest rate that shall be paid by the Company to the Holders of the Debentures (Series A) shall be reduced, at the time of the relevant payment of interest, and this is for the period in which the Debentures (Series A) were rated by the Higher Rating only, so that the interest rate that the unpaid balance of the Principal of the Debentures (Series A) shall bear shall be an interest rate that was determined in the tender, as the Company shall publish in an Immediate Report regarding the results of the offering, without any addition or at a lower addition in accordance with the steps set forth in sub-section (a) above (and in any event the interest rate which the Debentures shall bear shall not be less than the interest rate determined in the tender). In such case the Company shall act in accordance with the provisions in sub-sections (b) to (d) above, mutatis mutandis that result from the Higher Rating instead of the Reduced Rating.
|
|
f.
|
Insofar as the Debentures (Series A) shall cease being rated for a reason dependent on the Company for a period that exceeds 60 days, before the final payment, provided that the interest rate as mentioned in sub-section (a) above was not increased, the cessation of rating shall be considered as a reduction of rating of the Debentures (Series A), to a rating lower by four levels from the Base Rating, as set forth in sub-section (a) above. Insofar as the Debentures (Series A) were not re- rated after 60 days have passed as mentioned above, the Company shall regard the date of the cessation of rating as the Reduced Rating Commencement Date with respect to the payment of interest and the provisions of sub sections (b) – (e) shall apply accordingly. For the sake of avoiding doubt it is clarified that if the Debentures shall cease to be rated, before final repayment, for a reason that is not dependent on the Company, this will not affect the interest rate as mentioned in section (a) above and the provisions of this section shall not apply.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
g.
|
It is hereby clarified that insofar as the Debentures are rated or they shall be rated simultaneously by more than one rating company, changing of rating (or cessation of rating) that shall be performed only by one rating company, shall not lead to any change in the interest rate which the Debentures (Series A) shall bear, and a change in the interest rate shall be only after the rating is changed (or ceases, as the case may be) by all the rating companies that shall rate the Debentures. Furthermore, insofar as the Debentures are rated or shall be rated simultaneously by more than one rating company, the rating that shall be considered for this purpose shall be whichever rating is lower of the rating companies.
|
|
h.
|
Adjusting the interest rate for the Debentures as set forth in this section above shall not apply in the event of a decrease of the rating of the Company below the Base Rating, that arises as a direct result of changing the rating scale of the different rating companies, as part of the adjustment of the local ratings to international ratings, if and insofar as relevant. In such case, the Base Rating shall be adjusted to the new rating which is parallel to it, as shall be determined.
|
|
i.
|
For the sake of avoiding doubt it is hereby clarified that a change in the rating outlook of the Debentures (Series A) (or of the Company) shall not lead to a change in the interest rate which the Debentures (Series A) shall bear.
|
|
j.
|
Furthermore, notwithstanding the aforesaid, lowering the rating for the Debentures (Series A) or of the Company performed in the framework of a rating update for all companies in Israel and/or for companies that operate in the energy field, as a result of changing the methodology of the Rating Company, shall not lead to a change in the interest rate that the Debentures (Series A) shall bear.
|
5.
|
The Linkage Terms of the Principal and the Interest
|
6.
|
Deferral of Appointed Times
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
7.
|
Payments of the Principal and Interest of the Debentures
|
|
7.1.
|
Any payment on account of the Principal and/or interest of the Debentures (Series A) shall be paid to people whose names shall be registered as holders in the Debenture Holders (Series A) registry of the Company at the end of the 18
th
of June and 19
th
of December of each of the years 2014 to 2023 (inclusive), that falls immediately prior to the date of payment of that payment (hereinafter the “
Record Date
”), except for the last payment of the Principal and the interest that shall be paid to people whose names shall be registered in the registry on the date of payment and that shall be made against the delivery of the Debenture (Series A) certificates to the Company, on the date of payment, at the Company’s registered office or anywhere else where the Company shall notify. The Company’s notification as mentioned shall be published no later than five (5) Business Days before the last date of payment.
|
|
7.2.
|
Payment to those entitled shall be made in checks or by bank transfer to the bank account of the people whose names shall be registered in the registry of Debenture Holders (as mentioned in section 7.1 above) and who shall be mentioned in the details given in writing to the Company on time, in accordance with the provisions of section 7.3 hereafter. If the Company shall not be able, for any reason which is not dependent on it, to pay any sum to those entitled, it shall deposit this sum with the Trustee as mentioned in section 14 of the Deed of Trust. In the event the clearing shall be made through the stock exchange clearing house – through the clearing house.
|
|
7.3.
|
A Debenture Holder that shall wish to notify to the Company the details of the bank account to credit with payments according to the Debentures as mentioned above, or change the payment instructions, as the case may be, can do so in a registered letter to the Company. The Company shall fulfill the instruction if it shall reach its registered office at least 30 days before the record date for paying any payment according to the Debentures.
|
|
7.4.
|
In the event that the notice shall be received by the Company late, the Company shall act according to it only with respect to payments scheduled after the payment date that is in proximity to the date the notice was received.
|
|
7.5.
|
If the Debenture Holder entitled to such payment did not deliver details to the Company regarding his bank account, any payment on account of the Principal and interest shall be made by check which shall be sent by registered mail to his last address written in the registry of Debenture Holders or by bank transfer crediting the bank account of the Debenture Holder, according to the Company’s choice. Sending a check to the one entitled by registered mail as aforementioned shall be considered for all intents and purposes as payment of the sum stipulated in it at the date of sending it by mail provided that it was paid upon lawfully presenting it for payment.
|
|
7.6.
|
Any obligatory payment insofar as required according to law shall be deducted from any payment for the Debentures (Series A).
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
8.
|
Arrears Interest
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
9.
|
Avoidance from Payment for a Reason that does not Depend on the Company
|
10.
|
Registry of Debenture Holders
|
11.
|
Splitting Debenture Certificates and Transferring Them
|
|
11.1.
|
The Debentures can be transferred regarding any par value sum provided that it will be in whole New Shekels. Any transfer of Debentures shall be done according to a transfer document which is made out in the version acceptable for transferring shares, properly signed by the registered owner or his legal representatives, and by the recipient of the transfer or his legal representatives, that shall be delivered to the Company at its registered office with the Debenture certificates transferred according to it, and any other reasonable proof that shall be required by the Company for proving the right of the transferor to transfer them.
|
|
11.2.
|
Subject to the aforesaid, the procedural provisions included in the Company’s articles of association with respect to the manner of transferring shares shall apply, mutatis mutandis respectively, with respect to the manner of transferring Debentures and their assignment.
|
|
11.3.
|
If any obligatory payment shall apply to the transfer document of the Debentures, reasonable proof shall be given to the Company of their payment by the one requesting transfer.
|
|
11.4.
|
In the event of a transfer of only part of the sum of the Principal of the Debentures set forth in this certificate, the certificate shall be split first to a number of Debenture certificates as required from this, in a manner that the total sums of the Principal set forth in them shall be equal to the Principal sum set forth in this Debenture certificate.
|
|
11.5.
|
After fulfilling all of these terms the transfer shall be registered in the registry and all of the terms set forth in the Deed of Trust and in this Debenture shall apply to the transferee.
|
|
11.6.
|
All the costs and the fees involved in the transfer shall apply to the transfer applicant.
|
|
11.7.
|
Each Debenture certificate may be split to a number of Debenture certificates that their total Principal sum is equal to the Principal sum of the certificate the split of which is requested, and provided that such certificates shall not be issued unless this is by a reasonable quantity. The split shall be made against the delivery of that Debenture certificate to the Company at its registered office for the purpose of performing the split together with a split request lawfully signed by the applicant. Any costs involved in the split, including taxes and levies, if such shall exist, shall apply to the split applicant.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
12.
|
Replacing Debenture Certificate
|
13.
|
Early Redemption
|
14.
|
Purchasing the Debentures
|
15.
|
Waiver; Settlement and Changes in the Debenture Terms
|
16.
|
Debenture Holders Meetings
|
17.
|
Immediate Repayment
|
18.
|
Notices
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
Checking according to the Company’s reports that were published in Magna (the “
Public Reports of the Company
”) and according to the confirmations and documents that shall be given to the Trustee by the Company according to the provisions of this Deed:
|
|
1.1.
|
That the payments of Principal and interest by the Company have been paid in a timely fashion.
|
|
1.2.
|
That the uses which the Company has made of the proceeds received for issuing the Debentures meet the targets that have been determined for this in the Deed of Trust and/or in the chapter that deals with the designation of the proceeds in the prospectus of the offering, insofar as determined.
|
|
1.3.
|
That the Company has met the milestones that have been determined in the Deed of Trust for its activities, insofar as determined.
|
|
1.4.
|
If any of the causes for declaring the debentures immediately repayable have occurred based on the Public Reports of the Company.
|
2.
|
Summoning Meetings of Debenture Holders according to the provisions of the second addendum of the Deed of Trust.
|
3.
|
Participating (including by electronic means) in meetings of the shareholders of the Company.
|
4.
|
Preparing an annual report of the trust matters as mentioned in section 20.1 of this Deed, and making it available for the Debenture Holders to review and preparing the reports required in the Law.
|
5.
|
Notice to the Debenture Holders of a material breach of this Deed by the Company in proximity to the date in which it is made aware of the breach and notice of the steps it has taken to prevent it or for the performance of the Company’s undertakings, as the case may be.
|
6.
|
Taking all the actions required for ensuring the Company’s undertakings towards the Debenture Holders, including examining the Company’s fulfillment of its undertakings towards the Debenture Holders.
|
7.
|
Examining from time to time and at least once per year, the validity of the Collaterals, insofar as given. It is clarified that the Trustee is entitled, if it thought that this is necessary for the examination as mentioned, to check the Company’s assets that are pledged in favor of the Debenture Holders; checking according to the Public Reports of the Company and according to the confirmation and documents that shall be given to the Trustee by the Company according to the provisions of the Deed of Trust:
|
|
7.1.
|
That the Company fulfills its undertakings towards the Debenture Holders.
|
|
7.2.
|
That the Company fulfills all of its undertakings set forth in the Deed of Trust.
|
|
7.3.
|
That the Company meets the financial criteria determined, if determined in the Deed of Trust.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
7.4.
|
If a change has occurred in the registration of charges registered according to the provisions of the Deed of Trust, insofar as were registered. If a change has occurred in the Company’s rating or rating of the Debentures, insofar as rated.
|
8.
|
To fulfill all of the duties imposed on the Trustee according to the provisions of the Deed of Trust, insofar as imposed.
|
9.
|
To implement the resolutions of the Meeting of Debenture Holders that impose a duty on the Trustee and to take all the proceedings and actions required for protecting the rights of the Debenture Holders subject to providing the Trustee the financing required for implementing them, insofar as required.
|
10.
|
To take urgent actions for preventing adverse material harm to the rights of the Debenture Holders where it is not possible to wait for a Meeting to be convened.
|
11.
|
To examine the possibility of negotiations with the Company in the event the Company intends to turn to the Debenture Holders with requests or proposals.
|
12.
|
In the event the Trustee thought that there is a reasonable fear that the Company shall prevented of the ability to meet its existing and expected undertakings when the time comes to fulfill them, to examine the circumstances that establish such fear as mentioned and to act to protect the Debenture Holders as the Trustee shall see fit; and it is entitled, inter alia-
|
|
12.1.
|
To examine if the circumstances mentioned are due to actions or transactions performed by the Company, including distribution as defined in the Companies Law, that were made in breach of the law; however the Trustee shall not make such examination as mentioned if an expert was appointed for the holders of certificates of undertaking, as such term is used in section 350[18] of the aforementioned law, whose duty is to conduct such examination.
|
|
12.2.
|
To manage, in the name of the Holders of certificates of undertaking, negotiations with the issuer for changing the terms of the certificates of undertaking.
|
|
12.3.
|
With respect to this issue, the convening of a meeting of Holders of certificates of undertaking by the Trustee for receiving instructions how to act, shall not be regarded as a breach of its duty, provided that the convening of such meeting does not adversely harm the rights of the Holders.
|
|
12.4.
|
If a Meeting of Holders of certificates of undertaking was convened as mentioned in sub-section (d1), and a resolution was lawfully adopted at the Meeting, the Trustee shall act in accordance with the resolution; if it did so, its action according to this same resolution shall be regarded as having met the provisions of this section concerning the resolution.
|
|
To pay to the Debenture Holders money from the security cushions that were deposited with the Trustee for this purpose in accordance with the provisions in appendix 7, insofar as such security cushion was deposited.
|
13.
|
Deleted.
|
14.
|
Deleted.
|
15.
|
To distribute money to the Debenture Holders in accordance with the provisions of the Deed of Trust, which the Debenture Holders are entitled to receive and which have reached the Trustee.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
16.
|
To supervise the process of realizing the rights of the Debenture Holders in the event a functionary has been appointed to the Company or for its assets.
|
17.
|
Performing any action required according to law including in accordance with amendments 50 and 51 of the Securities Law.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
The actual expansion shall not harm the rating of the outstanding Debentures of Series A that are in circulation (that is, Debentures (Series A) that are in circulation before the expansion of the series), in a way that for purposes of expanding the series of the Debentures (Series A) an advance approval of the rating company for the rating the additional Debentures (Series A) will be received, in which the additional Debentures (Series A) were taken into account, by a rating that does not fall from the original rating of the Debentures (Series A) that existed at the time of initial issuance of the series or from the rating of the Debentures (Series A) on the eve of issuance of the additional Debentures (whichever is lower) and also the approval of the rating company that issuing the additional Debentures (Series A) does not harm the rating of the existing Debentures (Series A). Such approval shall be transferred to the Trustee before the performance of the issuance and it shall be published by the Company in an Immediate Report. The Trustee shall rely on the rating company’s notice and it shall not be required to an additional examination.
|
2.
|
At the time of expanding the series of Debentures (Series A) the Company meets the financial conditions set forth in appendix 6.2 and the expanding of the series will not harm the Company’s meeting the financial conditions as mentioned above. The Company shall deliver to the Trustee a written approval signed by an officer in the Company regarding the existence of these terms.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
[1]
|
Definitions
|
[2]
|
Minimal Balance Equity
|
[3]
|
The Ratio of Net Financial Debt to Net Cap
|
[4]
|
Equity to Balance Sheet
|
[5]
|
General
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
[1]
|
Rating
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
[2]
|
Distributing Dividends
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
The Company shall pay remuneration to the Trustee for its services in accordance with the Deed of Trust, as set forth hereafter:
|
|
1.1.
|
Annual payment for the first trust year in the sum of 25,000 NIS.
|
|
1.2.
|
Annual payment for each trust year in the sum of 20,000 NIS.
|
2.
|
In the event that we shall participate in the discussions with the Securities Authority we shall be paid remuneration (at the tariff stipulated in section 5 hereafter), in accordance with the hours of the discussions in which we shall take part, including a refund of travel costs. This payment is not conditioned upon the issue of the Debentures or signing the Deed of Trust.
|
3.
|
In the event the term of the Trustee has expired as mentioned in the Deed of Trust, the Trustee shall not be entitled to the payment of its remuneration starting from the date that its term has expired. If the Trustee’s term has expired during the trust year the remuneration paid to it for the months that it did not serve as Trustee of the Company shall be returned. The provisions in this section shall not apply regarding the first trust year.
|
4.
|
The Trustee is entitled to a refund for the reasonable expenses that it shall expend in the framework of fulfilling its duties, and/or by virtue of the powers granted to it according to the Deed of Trust, including for publications in the press, provided that for the costs of expert opinion as set forth in the Deed of Trust, the Trustee shall give an advance notice of his intention to receive an expert opinion.
|
5.
|
The Trustee is entitled to additional payment, for actions, including those which it must perform in order to fulfill its lawful obligations by virtue of the Securities Law, (including amendments 50 and 51 of the Securities Law), and the regulations that shall be promulgated following these amendments and also those arising from a breach of this Deed of Trust by the Company and/or for an action of declaring Debentures immediately repayable and/or for special actions which shall be required to be performed, if required, for fulfilling its duties according to the Deed of Trust, all in addition and without harming the payments due to it as mentioned in this appendix.
|
6.
|
The Trustee shall be entitled to additional payment as mentioned, in the sum of 600 NIS for each working hour that it shall require to perform as mentioned above, linked to the known index, at the date of publishing the prospectus, but in any event no less than the sum set forth above. For each annual meeting of shareholders or Debenture Holders (and this is in addition to the payment according to section 5 above) in which the Trustee shall take part, an additional remuneration in the sum of 600 NIS per meeting, linked to the index known at the date of publishing the prospectus shall be paid, but in any case no less than the sum set forth above. The sum mentioned shall be paid immediately upon the issuing of the Trustee’s demand.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
7.
|
This agreement is based on the consent that the debentures are without collaterals and without financial criteria which the Trustee must examine. However in the event that the Debenture Holders (series A) shall be granted any collaterals or in the event that they shall be determined with financial criteria or any other undertaking that the Trustee must examine, then the Trustee’s remuneration shall be agreed in accordance with the scope of work that shall be required to dedicate to the trust.
|
8.
|
VAT if applicable, shall be added to the payments due to the Trustee, according to the provisions of this appendix and it shall be paid by the Company. The sums above do not include a refund of expenses and lawful Vat and they shall be linked to the base index of each series however in each case a lower sum than the sum set forth in this proposal shall not be paid. The payment terms are 30 days net after the end of the calendar month of the invoice.
|
9.
|
The Debenture Holders shall participate in financing the Trustee’s remuneration and refund of expense in accordance with the provisions of the indemnification clause in section 25 of the Deed of Trust.
|
UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
The Trustee shall summon a Debenture Holders Meeting (“
Annual Meeting
”) each year and no later fourteen (14) days after the annual report (as mentioned in section 20 of the Deed of Trust) was submitted, which shall be convened no later than sixty (60) days after the report was submitted. The agenda of the Annual Meeting shall include the appointment of the Trustee for the period that shall be determined (unless the prior Meeting determined a longer appointment time).
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|
1.1.
|
The Trustee shall convene a Meeting of the Debenture Holders if it saw a need for this, or according to a written request of Debenture Holders that hold, alone or together, at least five percent (5%) of the balance of the par value of the outstanding Debentures.
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|
1.2.
|
In the event those requesting to summon a Meeting are Debenture Holders, the Trustee shall be entitled to demand indemnification from them, including in advance, for the reasonable costs involved in this.
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|
1.3.
|
The Trustee shall summon a Debenture Holders Meeting within 21 days after a demand to summon it was submitted to the Trustee, to a date that shall be determined in the summons, provided that the convening date shall not be earlier than seven days and not later than 21 days from the summons date; however, the Trustee is entitled to bring the meeting forward, to at least one day after the summons date, if it thought that this was required in order to protect the Debenture Holders rights and subject to the provisions of section 1.19 hereafter; if it did so, the Trustee shall explain the reasons for bringing the convening date forward in the report regarding the summoning of the Meeting.
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1.4.
|
The Trustee may change the scheduled meeting time.
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1.5.
|
In the event the Trustee convened a Meeting of the Debenture Holders not according to the request of the Debenture Holders the Trustee is entitled to determine that the Meeting shall take place by electronic means.
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|
1.6.
|
If the Trustee did not summon the Debenture Holders Meeting, according to the demand of the Debenture Holder, within such time as mentioned in section 1.4 above, the Debenture Holder may convene the Meeting, provided that the scheduled Meeting shall be within 14 days, after the end of the period for summoning the Meeting by the Trustee and the Trustee shall bear the expenses that the Debenture Holder expended with respect to convening the meeting.
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1.7.
|
If the Debenture Holders Meeting was not convened as mentioned in section 1.1 or 1.2 above, the court may at the request of the Debenture Holder, order that it be convened.
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1.8.
|
If the court ordered as mentioned, the Trustee shall bear reasonable costs that the applicant expended in a court proceeding, as shall be determined by the court.
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1.9.
|
Where there is no practical possibility to convene a Debenture Holders Meeting or to conduct it in the manner determined for this in the Deed of Trust or in the Law, the court may, at the request of the Company, of a Debenture Holder that is entitled to vote in the Meeting or the Trustee, to order that a Meeting be convened and conducted in the manner as the court shall determine, and it may give supplementary instructions for this insofar as it shall see fit.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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|
1.10.
|
The court may, at the request of a Debenture Holder, order the cancellation of a resolution that was adopted in a Debenture Holders Meeting that was convened or conducted without fulfilling the requirements in the Law or according to this Deed.
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|
1.11.
|
If the flaw in convening the Meeting concerns a notice regarding the place of convening the Meeting or its scheduled time, a Debenture Holder that attended the Meeting despite the flaw, shall not be entitled to demand the cancellation of the resolution.
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1.12.
|
A notice of a Meeting of the Debenture Holders shall be published according to the provisions of chapter G1 of the Law (“Electronic Reporting”) and it shall be delivered to the Company by the Trustee before the reporting and in accordance with the provisions in the regulations.
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1.13.
|
The summons notice shall include the agenda, the proposed resolutions and arrangements regarding a written vote according to the provisions of section 1.28 hereafter.
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|
1.14.
|
The Trustee shall determine the agenda in the Debenture Holders Meeting and it shall include issues for which the Debenture Holders Meeting is required according to sections 1.1 and/or 1/2 above, and the issue for which it was requested as mentioned in section 1.2 of the Debenture Holder’s request.
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1.15.
|
A Debenture Holder, one or more, that has five percent (5%) at least of the balance of the par value of the series of Debentures may request the Trustee to include an issue on the agenda of the Debenture Holders Meeting that shall be convened in the future, provided that the issue is suitable to be discussed in the Meeting as mentioned.
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1.16.
|
In the Debenture Holders Meeting resolutions shall be adopted in issues as set forth in the agenda only.
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1.17.
|
The Debenture Holders Meeting shall take place in Israel at the Company’s offices or another place which the Trustee shall notify of. The Trustee may change the address of the Meeting. The Company shall bear the costs of convening the Meeting at an address which is not its office.
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1.18.
|
Debenture Holders that are entitled to participate and to vote in the Debenture Holders’ Meetings are Holders of Debentures at the time that shall be determined in the decision to summons a Debenture Holders Meeting, provided that this date shall not exceed three days before the date of convening the Debenture Holders Meeting and it shall not be less than one day before the convening date.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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1.19.
|
In each Debenture Holders Meeting the Trustee or whoever it appointed shall serve as chairman of that Meeting.
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1.20.
|
The Trustee shall prepare a protocol of the Meeting of the Debenture Holders and shall keep it at its registered office for a period of seven (7) years after the Meeting date. The protocol of the Meeting may be by way of recording. A protocol, insofar as made in writing, shall be signed by the chairman of the Meeting or by a chairman of the Meeting that was held after it. Each protocol that was signed by the chairman of the Meeting constitutes prima facie evidence to whatever is stated in it. The protocol registry shall be kept at the Trustee as mentioned, and it shall be open for the review of the Debenture Holders during work hours and with advance coordination and a copy of it shall be sent to any Debenture Holder that shall request this.
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1.21.
|
The declaration of the chairman of the Meeting that a resolution in the Debenture Holders Meeting was adopted or rejected, whether unanimously or by a certain majority, shall be prima facie evidence to whatever is stated in it.
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1.22.
|
A Meeting of the Debenture Holders shall be opened by the chairman of the Meeting after he has determined that the legal quorum required for any of the issues on the agenda of the Meeting exists, as follows:
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|
1.22.1.
|
The legal quorum required for opening a Meeting of the Debenture Holders shall be the presence of at least two Debenture Holders, who are present themselves or by their attorneys, that hold at least twenty five percent (25%) of the outstanding voting rights in circulation, within a half hour of the time that was scheduled for opening the Meeting, unless stipulated otherwise in the Law.
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1.22.2.
|
If a legal quorum was not present in the Debenture Holders Meeting at the end of a half hour after the time scheduled for the beginning of the Meeting, the meeting shall be postponed to another time which shall not be earlier than two Business Days after the record date that was determined for convening the original meeting or one Business Day, if the Trustee was of the opinion that this is required for protecting the rights of the Debenture Holders; if the Meeting was postponed, the Trustee shall explain the reasons for this in the Meeting summons report.
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1.22.3.
|
If a legal quorum was not present in the postponed Debenture Holders Meeting as mentioned in section 1.22.2 above, a half an hour after the time that was scheduled for it, the Meeting shall be convened with any number of participants, unless stipulated otherwise in the Law.
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1.22.4.
|
Notwithstanding the provisions in section 1.22.3 above, in the event a Debenture Holders Meeting was summoned according to the demand of Debenture Holders that hold five percent (5%) at least of the balance of the par value of the outstanding Debentures, the postponed Meeting shall be convened only if holders of certificates of undertaking were present in it at least in the number required for summoning a Meeting as mentioned (in other words: five percent (5%) at least of the balance of the par value of the outstanding Debentures).
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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1.23.
|
According to the decision of the Trustee or resolution by ordinary majority of those voting in a Meeting in which a legal quorum was present, the continuation of the Meeting adjourned(the “
Original Meeting
”) from time to time, the discussion or adopting a resolution in an issue that was set forth in the agenda, to another time and to a place that shall be determined as the Trustee or the aforementioned Meeting shall decide (the “
Continued Meeting
”). In the Continued Meeting and in the postponed meeting only matters that were on the agenda and in respect to which no resolution was adopted shall be discussed.
If a Debenture Holders Meeting was postponed without changing its agenda, summons shall be given regarding the new time for the Continued Meeting, as early as possible, and no later than 12 hours before the Continued Meeting; the summons as mentioned shall be given according to section 1.12 above.
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1.24.
|
The Trustee, in accordance with its discretion, shall be entitled to split the Meeting into meetings of types and to determine who shall be entitled to participate in each type of meeting.
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1.25.
|
A Debenture Holder is entitled to vote in Debenture Holders Meetings by himself or by proxy.
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1.26.
|
Any resolution that shall be proposed in the Debenture Holders Meeting during the meeting shall be decided by way of a show of hands, unless a confidential vote is required by ballot box by the chairman, and in this situation the vote shall be made by a count of votes.
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1.27.
|
The chairman of the Meeting may determine that the votes shall be during the Meeting or by voting ballots that shall be delivered after the end of the Meeting – at a time that shall be determined by it. in the event that it was determined that the vote shall be by way of a voting ballot the chairman of the Meeting shall notify the Debenture Holders by a notice in accordance with the provisions of section 28 of the Deed of Trust that shall include the details required including by way of reference. The Trustee is entitled to extend or to shorten the voting times by voting ballot and it shall give a notice to the Debenture Holders of this in accordance with the provisions of section 28 of this Deed of Trust.
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1.28.
|
A Debenture Holder is entitled to vote in the Meeting, by a show of hands, a voting ballot as mentioned in section 1.28 above or by voting deed that shall be sent by the Trustee to all of the Debenture Holders; a Debenture Holder may note the manner of his vote in the voting deed and send it to the Trustee.
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A voting deed in which the Debenture Holder noted the manner of his vote, and which reached the Trustee by the last date determined for this, shall be considered as presence in the Meeting with respect to the existence of a legal quorum as mentioned in section 1.21 above.
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The voting deed that was received by the Trustee regarding a certain matter in respect to which a vote was not held in the Debenture Holders Meeting, shall be considered as having abstained in the vote in that Meeting regarding a resolution to convene a deferred Debenture Holders Meeting according to the provision of section 1.23 above, and it shall be counted in the deferred Meeting that shall be convened according to the provisions of sections 1.22 or 1.22.3 above.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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1.29.
|
Each 1 NIS par value of the Debentures that are represented by vote shall confer one vote in the voting.
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1.30.
|
A Debenture Holder may vote for part of the Debentures held by him including voting for some of them in favor for the proposed resolution and for another part of them against the resolution, all as he shall see fit.
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1.31.
|
The holdings of a Debenture Holder that has a Control Relationship shall not be taken into account for determining the legal quorum in the Debenture Holders Meetings, and his votes shall not be taken into account in the vote of the Meeting as mentioned.
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1.32.
|
Resolutions in the Debenture Holders Meetings shall be adopted by a vote of an ordinary majority, unless another majority was determined in the Law or in the Deed of Trust.
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1.33.
|
The votes of those who have abstained in the vote shall not be counted in the number of votes participating in the vote.
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|
1.34.
|
A proposed resolution regarding an issue that was not determined in respect to it that it shall be decided by a certain majority as following hereafter, shall be decided in an ordinary resolution.
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1.35.
|
The issues hereafter shall be decided in a Debenture Holders Meeting by a majority which is not ordinary and/or by a legal quorum that is different than the one set forth in section 1.22,
and these are the issues
:
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|
1.35.1.
|
Change, including an addendum and/or amendment in the provisions of the Deed of Trust as mentioned in section 29 of the Deed of Trust.
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|
1.35.2.
|
Any amendment, change or arrangement of the rights of the Debenture Holders, whether these rights originate in the Deed of Trust or another source, including any settlement or waiver with respect to these rights except for a change that arises due to the action by virtue of section 14 of this Deed of Trust.
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1.35.3.
|
Any other issue in respect to which it was determined in the Deed of Trust that it is subject to a resolution by a majority that is not an ordinary majority and/or legal quorum that is not a legal quorum as set forth in section 1.22 above.
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1.35.4.
|
Any proposed resolution which the Trustee determined in respect to it that it shall be adopted by a majority which is not an ordinary majority.
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1.35.5.
|
A resolution regarding the replacement of a Trustee as set forth in section 3.4 of the Deed of Trust, shall be adopted by a majority of fifty percent (50%) at least of the unpaid balance of the outstanding Debentures.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
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1.36.
|
An appointment instrument appointing a proxy shall be in writing and it shall be signed by the appointer or by his attorney that has authorization to do so lawfully in writing. If the appointer is a corporation, the appointment instrument shall be made in writing and will be signed by a stamp of the corporation, with a signature of the authorized signatories of the corporation
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1.37.
|
An appointment instrument of the proxy shall be made in any form which shall be acceptable to the Trustee.
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1.38.
|
A proxy does not need to be a Debenture Holder himself.
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|
1.39.
|
An appointment instrument and power of attorney and any other certificate according to which an appointment instrument was signed or a certified copy of such power of attorney, shall be given to the Trustee by the time of convening the Meeting unless it was otherwise stipulated in the notice summoning the Meeting.
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|
1.40.
|
The Trustee shall participate in the Meeting via its employees, Office Holders s in it, holders of positions in it or another person that shall be appointed by it, however it shall not have a voting right.
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1.41.
|
The Company and any other person except for the Trustee shall be prevented from participating in the Debenture Holders Meeting or in any part of it, according to the decision of the Trustee or according to an ordinary resolution of the Debenture Holders.
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1.42.
|
The Trustee, and the Debenture Holder, one or more, that has five percent (5%) at least of the balance of the par value of the outstanding Debentures, are entitled to adress the Debenture Holders in writing, via the Trustee, in order to convince them regarding the manner of their vote in any of the issues being raised for discussion in that Meeting (the “
Position Notice
”).
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1.43.
|
If a Meeting of the Debenture Holders was convened, the Trustee shall examine the existence of a conflict of interests of the Debenture Holders, whether an interest arising from their holding the Debentures and another interest of theirs, as the Trustee shall determine (in this section – “
another interest
”), in accordance with the provisions set forth in appendix 1.43 attached to this Deed; the Trustee shall require a Debenture Holder participating in the Meeting to notify it before the vote, regarding another interest of his and if he has a conflict of interests as mentioned.
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1.44.
|
In the count of the votes in the vote that took place in the Debenture Holders Meeting, the Trustee shall not take into account the votes of the Debenture Holders that did not meet its requirements as mentioned in section 1.43 above or of the Debenture Holders in respect to which it found that a conflict of interests exists as mentioned in section 1.43 above (in this section – “
Debenture Holders that have a Conflict of Interests
”).
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1.45.
|
Notwithstanding the provisions in section 1.44 above, if the total sum of holdings participating in the vote are not Debenture Holders that have a Conflict of Interests, became less than five percent (5%) of the balance of the par value of the Debentures of that same series, the Trustee shall take into account in counting the votes in the voting also the votes of the Debenture Holders that have a Conflict of Interest.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
|
1.46.
|
The provisions of sections 1.2, 1.5, 1.7, 1.14, 1.15 and 1.16 above cannot derogate from the Trustee’s authority to convene a Debenture Holders Meeting, if it saw it necessary to consult with them; in the summons to the Meeting as mentioned the issues on its agenda shall not be detailed, and the date of the Meeting shall be one day at least after the summons date.
In such meeting a vote shall not take place, no resolutions shall be adopted in it and the provisions of sections 35[12]1, 35[12]2, 35[12]3, 35[12]5, 35[12]6, 35[12]7(b), 35[12]12, 35[12]13, 35[12]14, 35[12]20(b), 35[12]21 and 35[12]24 shall not apply to it.
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UNOFFICIAL TRANSLATION FROM HEBREW
THE BINDING VERSION IS THE HEBREW VERSION
|
1.
|
Subject to the provisions of section 1.43-1.45 of the second addendum of the Deed of Trust, in the framework of voting in any Meeting of the Debenture Holders, the Trustee shall examine the votes of the ‘pure holders’ only so that the majority required for adopting a resolution shall be counted only out of the votes of the ‘pure holders.’ When counting the votes of the ‘pure holders’ only the votes of the Debenture Holders that have no foreign interests shall be counted, in other words- those in respect to which there is no reasonable concern that the vote of those Debenture Holders shall be affected from their holdings of other securities of the Company or of a party associated with the resolution, without referring to the nature of that impact or due to another impact that shall be mentioned by that Debenture Holder.
|
2.
|
For classifying the “pure holders” it was stipulated that a Debenture Holder in respect to which at least one of the following conditions has been fulfilled, shall be considered as a “Debenture Holder that has a Conflict of Interests,” whose vote shall not be counted in the framework of the votes of the “pure holders” in other words: they shall not be taken into account in the count of those votes participating in the voting.
And these are the conditions
:
|
|
2.1.
|
A Person that has a Control Relationship with the Company (as defined in the Deed of Trust).
|
|
2.2.
|
A Debenture Holder who served as an Office Holder in the Company in proximity to the event which is the basis of the resolution in the Meeting;
|
|
2.3.
|
Any Debenture Holder with respect to which the “fair value” (as defined hereafter) or “presumption of value” (as defined hereafter), as the case may be, that was determined for his holdings of the other securities (such as: shares, debentures, options etc.) of any relevant corporation (the Company or another) (the “
Examined Securities
”) is larger than the “fair value” or “presumption of value”, as the case may be that was determined for his holdings in the Debentures (pertaining to the meeting) when they are multiplied by 70%;
|
|
“
Fair Value
” shall be calculated as follows: the quantity of holdings of a certain Debenture Holder of a tradable security (including in the TACT-Institutional) multiplied by a weighted average of the closing price of the security in the last 30 days prior to the date of publishing the Meeting summons.
|
|
“
Presumption of Value
” means: the quantity of the Debenture Holder’s holdings of a certain non-tradable security, multiplied by a sum that the Trustee shall determine in a reasonable manner for the security.
|
3.
|
A separate meeting of Debenture Holders who shall fall under the definition of the term -Debenture Holder that has a “Conflict of Interests” shall not be convened, and in order to adopt a binding resolution it is not required to adopt a resolution also in a meeting of the Debenture Holders that have a “Conflict of Interests”.
|
4.
|
The criteria in this appendix is implemented for the purpose of identifying the ‘pure holders’ and it reflects an appropriate balance between the wish to prevent resolutions from being adopted on the basis of a vote affected – at least potentially – by a conflict of interests, and between the need to avoid a situation in which deciding the resolution remains with the minority of the Debenture Holders. However, it is possible that even this classification will lead at the end of the day to giving too much weight to Debenture Holders of a small percentage of the Debentures, whose vote does not necessarily reflect the position of the majority of the Debenture Holders. In such a case, the Trustee reserves the right to turn to the competent court to receive instructions regarding the proper manner to count the votes of the voters in the circumstances of the matter.
|
Name of Subsidiary
|
Percentage of
Ownership
|
Jurisdiction of
Incorporation
|
|||
Ellomay Clean Energy Ltd.
|
100%
|
Israel
|
|||
Ellomay Clean Energy LP
|
100%
|
Israel
|
|||
Ellomay Luxemburg Holdings S.àr.l.
|
100%
|
Luxemburg
|
|||
Ellomay PV One S.r.l.
|
100%
1
|
Italy
|
|||
Ellomay PV Two S.r.l.
|
100%
1
|
Italy
|
|||
Ellomay PV Five S.r.l.
|
100%
1
|
Italy
|
|||
Ellomay PV Six S.r.l.
|
100%
1
|
Italy
|
|||
Ellomay PV Seven S.r.l. (formerly Energy Resources Galatina S.r.l.)
|
100%
1
|
Italy
|
|||
Pedale S.r.l.
|
100%
1
|
Italy
|
|||
Luma Solar S.r.l.
|
100%
1
|
Italy
|
|||
Murgia Solar S.r.l.
|
100%
1
|
Italy
|
|||
Soleco S.r.l
|
100%
1
|
Italy
|
|||
Technoenergy S.r.l
|
100%
1
|
Italy
|
|||
Ellomay Spain S.L.
2
|
85%
1
|
Spain
|
1.
|
Held by Ellomay Luxemburg Holdings S.àr.l.
|
2.
|
Ellomay Spain owns 21 Spanish companies, each holding a 90 kW solar installation portion of the Riconada II, the first named Energía Solar Fotovoltaica Parque 15, S.L. and the others bear a similar name with references to different numbers (16-34 and 69).
|
1.
|
I have reviewed this annual report on Form 20-F of Ellomay Capital Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
/s/ Ran Fridrich
Ran Fridrich
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 20-F of Ellomay Capital Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
/s/ Kalia Weintraub
Kalia Weintraub
Chief Financial Officer
|
A)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
B)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Ran Fridrich
Ran Fridrich
Chief Executive Officer
/s/ Kalia Weintraub
Kalia Weintraub
Chief Financial Officer
|