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 Shareholders - Transactions and Balances (Continued):7. The negligibility of a transaction will be considered on an annual basis for the purpose of the periodic report, thefinancial statements and any prospectus (including shelf offers) as published, while combining all transactions of thesame type that were concluded with an interested party or with a controlling shareholder, as relevant, during the year.8. Multi-year transactions (such as rentals of assets for number of years) - the immateriality of the transaction will beconsidered on an annual basis (that is, in the above noted example, annual rental fees).9. Each transaction will be considered separately, however the immateriality of integrated transactions or conditionaltransactions will be considered on a cumulative basis. Regular and closely recurring transactions during the year will beconsidered integrated transactions.10. If questions are raised regarding the application of said criteria, the general partner will use its discretion andconsider the immateriality of the transaction, while considering the basic objectives of the reporting regulations and theguiding principles, as noted above.Note 24 – Financial Instruments:A. Determining The Fair Value Of Financial Instruments:Because of their features, the fair values of financial instruments such as cash and cash equivalents, trade receivables,short-term receivables, short term loans and short term trade payables closely approximate their book values.Marketable bondsNon marketable assets andliabilities, short term, interestbearing, fixed repayment datesLong term bonds, at fixedinterest ratesInterest rate SWAP contracts,forward contractsAccording to price quotes on an active stock exchange, as at reporting date.Book value reflects fair value as at reporting date, as average rates of interest donot differ significantly from the rate of interest prevailing in the market forsimilar items, as at reporting date.Fair value of long-term bonds bearing fixed interest rates is based on the presentvalue of cash flows using an interest rate that is acceptable for similar loans withsimilar characteristics, as at consideration date..Fair value is based on market price. In the absence of any market price, fair valueis based on economic models.-11-