Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Financial Instruments (Tables)

v3.19.1
Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2018
Disclosure of detailed information about financial instruments [abstract]  
Schedule of Composition of Derivatives
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
 
   
2018
   
2017
 
   
€ in thousands
 
Derivatives presented under current liabilities
           
Currency swap
   
(192
)
   
-
 
Swap contracts
   
(173
)
   
(121
)
     
(365
)
   
(121
)
Derivatives presented under non-current liabilities
               
Forward contracts
   
(977
)
   
(2,650
)
Currency swap
   
(1,925
)
   
(1,244
)
Swap contracts
   
(459
)
   
(418
)
     
(3,361
)
   
(4,312
)
Schedule of Forward and SWAP Contracts
The following table sets forth the details of the Company’s Forward and SWAP contracts with banking institutions:

 
December 31, 2018
 
Currency/
 
Currency/
       
 
linkage/interest rate
 
Linkage/interest rate
 
Date of expiration
 
Fair value - in
 
receivable
 
Payable
     
thousand
               
Euro 3.75 million interest swap transaction for a period of 15 years, semi-annually.
Euribor 6 months
 
Fixed 2.53%
 
June 30, 2027
 
(236)
Euro 25 million interest rate swap transaction for a period of 10 years, semi-annually.
Euribor 6 months
 
Fixed 0.71%
 
December 31, 2027
 
(396)
Forward EUR/USD contracts with an aggregate EUR denominated principal of EUR 18 million.
weighted average rate of approximately 1.18
 
November 2021
 
(977)
           
NIS 83.2 million currency swap transaction EUR/NIS for a period of 7 years, semi-annually.
NIS
 
Euro
 
June 2024
 
(2,117)
Schedule of Contractual Maturities of Financial Liabilities
The following are the contractual maturities of financial liabilities at undiscounted amounts and based on the spot rates at the reporting date, including estimated interest payments. This disclosure excludes the impact of netting agreements:
 
   
December 31, 2018
 
   
Carrying
   
Contractual
   
Less than
               
More than
 
   
amount
   
cash flows
   
1 year
   
2 years
   
3-5 years
   
5 years
 
   
€ in thousands
 
Non-derivative financial liabilities
                                   
                                     
Long term loans, including current maturities
   
66,092
     
71,826
     
7,350
     
7,805
     
22,501
     
34,170
 
                                                 
Debentures
   
51,343
     
58,667
     
11,029
     
10,656
     
31,133
     
5,849
 
                                                 
Trade payables and other accounts payable
   
4,819
     
4,819
     
4,819
     
-
     
-
     
-
 
                                                 
     
122,254
     
135,312
     
23,198
     
18,461
     
53,634
     
40,019
 
                                                 
Derivative finance liabilities
                                               
                                                 
Forward contracts
   
977
     
977
     
-
     
-
     
977
     
-
 
                                                 
Currency swap
   
2,117
     
2,117
     
192
     
622
     
947
     
356
 
                                                 
Swap contracts
   
632
     
632
     
173
     
263
     
155
     
41
 
                                                 
     
3,726
     
3,726
     
365
     
885
     
2,079
     
397
 
 
   
December 31, 2017
 
   
Carrying
   
Contractual
   
Less than
               
More than
 
   
Amount
   
cash flows
   
1 year
   
2 years
   
3-5 years
   
5 years
 
   
€ in thousands
 
Non-derivative financial liabilities
                                   
                                     
Long term loans, including current maturities
   
44,864
     
48,506
     
4,313
     
4,861
     
14,744
     
24,588
 
                                                 
Finance lease obligation including current maturities
   
4,020
     
4,987
     
483
     
483
     
1,449
     
2,572
 
                                                 
Debentures
   
57,631
     
67,884
     
7,251
     
11,398
     
31,880
     
17,355
 
                                                 
Trade payables and other accounts payable
   
2,990
     
2,990
     
2,990
     
-
     
-
     
-
 
                                                 
     
109,505
     
124,367
     
15,037
     
16,742
     
48,073
     
44,515
 
                                                 
Derivative finance liabilities
                                               
                                                 
Forward contracts
   
2,650
     
2,650
     
-
     
-
     
2,650
     
-
 
                                                 
Currency swap
   
1,244
     
1,244
     
(145
)
   
75
     
446
     
868
 
                                                 
Swap contracts
   
539
     
539
     
121
     
183
     
116
     
119
 
                                                 
     
4,433
     
4,433
     
(24
)
   
258
     
3,212
     
987
 
Schedule of Company's 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, 2018
 
   
Non-monetary/ Non finance
   
NIS(*)
   
Unlinked
   
EURO
   
Total
 
   
€ in thousands
 
                               
Current assets:
                             
Cash and cash equivalents
   
-
     
287
     
937
     
35,658
     
36,882
 
Marketable securities
   
-
     
-
     
2,132
     
-
     
2,132
 
Restricted cash short-term and
                                       
restricted marketable securities
   
-
     
3,338
     
-
     
1,315
     
4,653
 
Asset from concession project
   
-
     
1,292
     
-
     
-
     
1,292
 
Trade and other receivables
   
1,279
     
780
     
531
     
10,033
     
12,623
 
Financial asset short-term
   
-
     
1,282
     
-
     
-
     
1,282
 
Non-current assets:
                                       
Investments in equity
                                       
 accounted investees
   
21,175
     
6,571
     
-
     
-
     
27,746
 
Advances on account of
                                       
 investments in process
   
798
     
-
     
-
     
-
     
798
 
Concession intangible asset
   
4,882
     
-
     
-
     
-
     
4,882
 
Asset from concession project
   
-
     
25,710
     
-
     
-
     
25,710
 
Fixed assets
   
87,220
     
-
     
-
     
-
     
87,220
 
Restricted cash long-term
   
-
     
1,654
     
267
     
141
     
2,062
 
Deferred tax
   
2,423
     
-
     
-
     
-
     
2,423
 
Other assets
   
1,055
     
-
     
-
     
400
     
1,455
 
Current liabilities:
                                       
Loans and borrowings
   
-
     
(1,622
)
   
-
     
(4,242
)
   
(5,864
)
Short-term debentures
   
-
     
(8,758
)
   
-
     
-
     
(8,758
)
Accounts payable
   
-
     
(24
)
   
-
     
(2,102
)
   
(2,126
)
Accrued expenses and
                                       
 other payables
   
-
     
(1,116
)
   
-
     
(1,987
)
   
(3,103
)
Non-current liabilities:
                                       
Long-term loans
   
-
     
(18,314
)
   
-
     
(41,914
)
   
(60,228
)
Long-term debentures
   
-
     
(42,585
)
   
-
     
-
     
(42,585
)
Deferred tax
   
(6,219
)
   
-
     
-
     
-
     
(6,219
)
Other long-term liabilities
   
-
     
(19
)
   
-
     
(5,301
)
   
(5,320
)
Total exposure in statement
                                       
 of financial position in
                                       
 respect of financial assets
                                       
 and financial liabilities
   
112,613
     
(31,524
)
   
3,867
     
(7,999
)
   
76,957
 
 
(*) including items linked to CPI
   
December 31, 2017
 
   
Non-monetary/Non finance
   
 
NIS(*)
   
 
Unlinked
   
 
EURO
   
 
Total
 
   
€ in thousands
 
                               
                               
Current assets:
                             
Cash and cash equivalents
   
-
     
2,723
     
11,742
     
9,497
     
23,962
 
Marketable securities
   
-
     
-
     
2,162
     
-
     
2,162
 
Restricted cash short-term and restricted marketable securities
   
-
     
-
     
3,250
     
15
     
3,265
 
Asset from concession project
   
-
     
1,286
     
-
     
-
     
1,286
 
Trade and other receivables
   
548
     
3,359
     
731
     
6,007
     
10,645
 
Financial asset short-term
   
-
     
1,249
     
-
     
-
     
1,249
 
Non-current assets:
                                       
Investments in equity
                                       
 accounted investees
   
17,171
     
10,484
     
-
     
-
     
27,655
 
Advances on account of
                                       
 investments in process
   
8,825
     
-
     
-
     
-
     
8,825
 
Concession intangible asset
   
5,505
     
-
     
-
     
-
     
5,505
 
Asset from concession project
   
-
     
27,725
     
-
     
-
     
27,725
 
Fixed assets
   
78,837
     
-
     
-
     
-
     
78,837
 
Restricted cash long-term
   
-
     
1,797
     
351
     
1,512
     
3,660
 
Deferred tax
   
1,777
     
-
     
-
     
-
     
1,777
 
Other assets
   
1,122
     
-
     
-
     
413
     
1,535
 
Current liabilities:
                                       
Loans and borrowings
   
-
     
(1,455
)
   
-
     
(1,648
)
   
(3,103
)
Short-term debentures
   
-
     
(4,644
)
   
-
     
-
     
(4,644
)
Accounts payable
   
-
     
7
     
-
     
(1,356
)
   
(1,349
)
Accrued expenses and
                                       
 other payables
   
-
     
(811
)
   
-
     
(1,376
)
   
(2,187
)
Non-current liabilities:
                                       
Finance lease obligations
   
-
     
-
     
-
     
(3,690
)
   
(3,690
)
Long-term loans
   
-
     
(20,141
)
   
-
     
(21,950
)
   
(42,091
)
Long-term debentures
   
-
     
(52,987
)
   
-
     
-
     
(52,987
)
Deferred tax
   
(5,982
)
   
-
     
-
     
-
     
(5,982
)
Other long-term liabilities
   
-
     
(4
)
   
-
     
(4,551
)
   
(4,555
)
Total exposure in statement
                                       
 of financial position in
                                       
 respect of financial assets
                                       
 and financial liabilities
   
107,803
     
(31,412
)
   
18,236
     
(17,127
)
   
77,500
 
 
(*) including items linked to CPI
Schedule of Significant Exchange Rates
Information regarding significant exchange rates:

   
For the year ended December 31
 
   
Rate of
         
Rate of
       
   
Change
         
Change
       
   
%
   
Dollar
   
%
   
NIS
 
1 euro in 2018
   
(4.4
)
   
1.145
     
3.3
     
4.292
 
1 euro in 2017
   
13.9
     
1.198
     
2.7
     
4.153
 
Schedule of Sensitivity Analysis
The analysis assumes that all other variables, in particular interest rates, remain constant.


   
December 31, 2018
 
   
Increase
   
Decrease
 
   
Equity
   
Equity
 
   
€ thousands
 
Change in the exchange rate of:
           
5% in the USD
   
169
     
(169
)
5% in NIS
   
(367
)
   
367
 
 
   
December 31, 2017
 
   
Increase
   
Decrease
 
   
Equity
   
Equity
 
   
€ thousands
 
Change in the exchange rate of:
           
5% in the USD
   
761
     
(761
)
5% in NIS
   
(378
)
   
378
 
Schedule of Change in Interest Rate
A change in interest rate would have increased (decreased) profit or loss by the amounts shown below:

   
December 31,
 
   
2018
   
2017
 
   
Profit or loss
   
Profit or loss
 
   
€ in thousands
 
Increase of 1%
   
1,012
     
804
 
Increase of 3%
   
2,604
     
2,473
 
Decrease of 1%
   
(581
)
   
(863
)
Decrease of 3%
   
(2,172
)
   
(2,532
)
Schedule of Statement of Fair value of Other Financial Liabilities
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, 2018
         
Fair value
        
   
Carrying
                   
Valuation techniques for
 
Inputs used to
   
amount
   
Level 1
   
Level 2
   
Level 3
 
determining fair value
 
determine fair value
   
€ in thousands
        
Non-current liabilities:
                                  
Debentures
   
51,343
     
49,190
     
-
     
-
        
Loans from banks and others (including current maturities)
   
66,092
     
-
     
66,233
     
-
 
Discounting future cash flows by the market interest rate on the date of measurement.
 
Discount rate of Euribor+ 2.53%, Discount rate of Euribor+ 1.85%, fix rate for 5 years 2.9%-3.1% and 4.65% Linkage to Consumer price index in Israel
                                             
     
117,435
     
49,190
     
66,233
     
-
        
 
   
December 31, 2017
         
Fair value
        
   
Carrying
                   
Valuation techniques for
 
Inputs used to
   
amount
   
Level 1
   
Level 2
   
Level 3
 
determining fair value
 
determine fair value
   
€ in thousands
        
Non-current liabilities:
                                  
Debentures
   
57,631
     
60,518
     
-
     
-
        
Loans from banks and others (including current maturities)
   
44,864
     
-
     
45,561
     
-
 
Discounting future cash flows by the market interest rate on the date of measurement.
 
Discount rate of Euribor+ 2.53% and 4.65% Linkage to Consumer price index in Israel
Finance lease obligations (including current maturities)
   
4,020
     
-
     
4,209
     
-
 
Discounting future cash flows by the market interest rate on the date of measurement.
 
Discount rate of Euribor+ 2.85%
     
106,515
     
60,518
     
49,770
     
-
        
Schedule of Interest Rates Used to Discount Estimated Cash Flows
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
 
2018
 
2017
 
%
Non-current liabilities:
     
Loans from banks
Euribor+ 2.53%
 
Euribor+ 2.53%
Loans from banks
4.65% Linkage to Consumer price index in Israel
 
4.65% Linkage to Consumer price index in Israel
Loans from banks
Euribor+ 1.85%
 
-
Loans from banks
fix rate for 5 years 2.9% - 3.1%
 
-
Finance lease obligations
-
 
Euribor+ 2.85%
Schedule of Fair Values Hierarchy
 
December 31, 2018
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Valuation techniques for
   
in thousands
 
determining fair value
Income receivable in connection with the A.R.Z. electricity pumped storage project (see Note 6)
   
-
     
-
     
1,282
     
1,282
 
The fair value of the income receivable in connection with the A.R.Z. electricity pumped storage project was calculated according to the cash flows expected to be received in 4.5 years following the financial closing of the project, discounted at a weighted interest rate of 2.36% reflecting the credit risk of the debtor.
Marketable securities
   
-
     
2,132
     
-
     
2,132
 
 
Market price
Forward contracts
   
-
     
977
     
-
     
977
 
Fair value measured on the basis of discounting the difference between the forward price in the contract and the current forward price for the residual period until redemption using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Swap contracts
   
-
     
632
     
-
     
632
 
Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Currency swap
   
-
     
2,117
     
-
     
2,117
 
Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Dori loan
                   
9,189
     
9,189
 
The fair value is measured by discounting the expected future loan repayments  and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
 
   
December 31, 2017
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Valuation techniques for
   
in thousands
 
determining fair value
Income receivable in connection with the A.R.Z. electricity pumped storage project (see Note 6)
   
-
     
-
     
1,249
     
1,249
 
The fair value of the income receivable in connection with the A.R.Z. electricity pumped storage project was calculated according to the cash flows expected to be received in 4.5 years following the financial closing of the project, discounted at a weighted interest rate of 2.36% reflecting the credit risk of the debtor.
Marketable securities
   
-
     
5,412
     
-
     
5,412
 
 
Market price
Forward contracts
   
-
     
2,650
     
-
     
2,650
 
Fair value measured on the basis of discounting the difference between the forward price in the contract and the current forward price for the residual period until redemption using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Swap contracts
   
-
     
539
     
-
     
539
 
Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Currency swap
   
-
     
1,244
     
-
     
1,244
 
Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Schedule of Reconciliation 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
 
   
Income receivable in connection with the A.R.Z. electricity
 
   
pumped storage project
 
   
€ in thousands
 
Balance as at December 31, 2016
   
1,265
 
         
Total income recognized in profit or loss
   
17
 
Exercise of first option to acquire additional shares
   
-
 
Foreign Currency translation adjustments
   
(33
)
         
Balance as at December 31, 2017
   
1,249
 
         
Total income recognized in profit or loss
   
73
 
Exercise of second option to acquire additional shares
   
-
 
Foreign Currency translation adjustments
   
(40
)
         
         
Balance as at December 31, 2018
   
1,282
 

   
Asset from concession project
 
   
Income receivable in connection with the concession project
 
   
€ in thousands
 
       
Balance as at December 31, 2017
   
29,011
 
         
Total income recognized in profit or loss
   
1,949
 
Proceeds from receivable from concession project
   
(3,040
)
Foreign Currency translation adjustments
   
(918
)
         
         
Balance as at December 31, 2018
   
27,002