Avner Oil - Annual Report 2011 - Delek Energy Systems

AVNER OIL EXPLORATION (LIMITED PARTNERSHIP)NOTES TO THE FINANCIAL STATEMENTSNote 23 - Interested Parties, Related Parties, and Controlling Ownership Holders - Transactions and Balances(Continued):E. Company Policy in Respect of Negligible Transactions:On August 5, 2008, an Amendment to Securities Regulations (Periodic and Immediate Reports), 5730-1970, ("reportingregulations"), came into effect. The Amendment expanded some of the reporting requirements required of publiccompanies that report on transactions with controlling ownership holders, or transactions with other parties in which thecontrolling ownership holder has a personal interest ("controlling ownership holder transactions"), and transactionswhich are not exceptional transactions, as defined by Companies Law, except for transactions which have beenclassified as negligible transactions in the most recent financial statements.On March 11, 2009, the general partner's board of directors decided to adopt guiding principles for classifying atransaction as negligible, as stated in the reporting regulations, in respect of transactions with an interested partyreported in the financial statements, and in respect of transactions with controlling ownership holders.On March 27, 2011 the general partner's board of directors updated its guidelines for considering a transactionnegligible.The general partner's board of directors decided that a transaction would be considered immaterial if all of the followingconditions would exist:1. It is not an exceptional transaction (as this term is defined by Companies Law).2. In respect of a transaction that is subject to negligibility tests, all relevant threshold criteria will be considered beforeany event noted below transpires, and if each relevant threshold criteria for the transaction is less than 0.8%, or equal to$ 500 thousand, the lower of the two, the transaction will be considered negligible:A. Purchase/sale of property, plant and equipment assets – the volume of assets involved in a transaction, divided bytotal assets according to the latest reviewed, or audited financial statements, as relevant.B. Sale of goods or services - volume of revenue involved in a transaction, divided by total annual revenue, calculatedon the basis of the last four quarters, according to the latest reviewed, or audited financial statements.C. Purchase of goods or services - volume of expenses involved in a transaction, divided by the relevant annualoperating expenses, calculated on the basis of the last four quarters, according to the latest reviewed, or auditedfinancial statements.D. Acceptance of a financial liability – a liability involved in a transaction, divided by total liabilities, according to thelatest reviewed, or audited financial statements, as relevant.E. Insurance transactions – the premium payable will be considered as the transaction amount, as opposed to theinsurance coverage provided.3. If, at the discretion of the general partner, not all said criteria are relevant for the transaction being considered, thegeneral partner may determine other criteria, so long as the relevant transaction criteria threshold, will be less than0.8%, or equal to $ 500 thousand, the lower of the two.4. The transaction is considered negligible also from the standpoint of quality.5. When considering the negligibility of any transaction, which is expected in the future, the likelihood of its realizationmust also be considered.6. For the purpose of any immediate report, the immateriality of each transaction will be considered separately.-11-