UNITED STATES SECURITIES AND EXCHANGE COMMISSION




Washington, D.C. 20549





FORM 20-F


(Mark One)





o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934





OR




x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended December 31, 2013





OR




o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





OR




o

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Date of event requiring this shell company report . . . . . . . . . . . . . . . .








Commission file number:  000-29884





R.V.B. HOLDINGS LTD.


(Exact name of Registrant as specified in its charter)





R.V.B. Holdings Ltd.
Israel(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)





Platinum House, 7 Jabotinsky St., Ramat Gan, 52509 Israel
 (Address of principal executive offices)
 
 Ofer Naveh, +972-3-611-4933, 7 Jabotinsky St., Ramat Gan, 52509, Israel
 (Name, Telephone, E-mail and/or Facsimile number and Address of the Registrant’s Contact Person)
 
 
 Securities registered or to be registered pursuant to Section 12(b) of the Act: None.
 
 Securities registered or to be registered pursuant to Section 12(g) of the Act: Ordinary Shares, par value NIS 1.00 per share.
 
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
 
 Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 232,725,787 Ordinary Shares, par value NIS 1.00 per share, as of December 31, 2013 (not taking into account 1,040,000 dormant shares of the Registrant which are held by the Registrant).
 
 Indicate by check mark if the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act.
 
 Yes £No S
 
 If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 
 Yes £No S
 
 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 Yes SNo £
 
 
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):
 
 Large accelerated filer £       Accelerated filer £       Non-accelerated filer S
 
 Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:
 
 U.S. GAAP £
 
 International Financial Reporting Standards as issued by the International Accounting Standards Board S
 
 Other £
 
 If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant elected to follow.
 
 Item 17 oItem 18 o
 
 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
 Yes oNo x
  
 
 TABLE OF CONTENTS
 
 PageINTRODUCTIONPART IItem 1.
Identity of Directors, Senior Management and Advisors
3Item 2.
Offer Statistics and Expected Timetable
3Item 3.
Key Information
3Item 4.
Information on the Company
6Item 4A.
Unresolved Staff Comments
12Item 5.
Operating and Financial Review and Prospects
12Item 6.
Directors, Senior Management and Employees
15Item 7.
Major Shareholders and Related Party Transactions
24Item 8.
Financial Information
26Item 9.
Offer and Listing
27Item 10.
Additional Information
28Item 11.
Quantitative and Qualitative Disclosures about Market Risk
42Item 12.
Description of Securities Other than Equity Securities
43PART IIItem 13.
Defaults, Dividend Arrearages and Delinquencies
43Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
43Item 15 and 15T.
Controls and Procedures
43Item 16A.
Audit Committee Financial Expert
44Item 16B.
Code of Ethics
44Item 16C.
Principal Accountant Fees and Services
44Item 16D.
Exemptions from the Listing Standards for Audit Committees
44Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
44Item 16F.
Change in Registrant’s Certifying Accountant
44Item 16G.
Corporate Governance
45Item 16H.
Mine Safety Disclosure
45PART IIIItem 17.
Financial Statements
46Item 18.
Financial statements
46Item 19.
Exhibits
46FINANCIAL STATEMENTS
F-1SIGNATURE
47
 
 
 
 INTRODUCTION
 
 R.V.B. Holdings Ltd. (“RVB”) (formerly B.V.R. Systems (1998) Ltd.), is an Israeli company that was formed in January 1998 to receive all of the assets and liabilities of the defense-related business of BVR Technologies Ltd. in accordance with the terms of a reorganization plan. RVB (then, BVR) commenced operations as an independent company effective as of January 1, 1998. In November 2009, RVB sold substantially all of its assets and liabilities, including the brand name “B.V.R.”, to Elbit Systems Ltd. (“Elbit”) and, subsequent to the sale, in January 2010 changed its name to R.V.B. Holdings Ltd. RVB was controlled by Mr. Aviv Tzidon until March 2010, when Greenstone Industries Ltd. (“Greenstone”), purchased from A.O. Tzidon (1999) Ltd. and Aviv Tzidon the control of RVB as of that date. As of January 12, 2012, RVB completed the multi-closing transaction in which it acquired all of E.E.R. Environmental Energy Resources (Israel) Ltd.'s (“EER”) shares held by Greenstone and by S.R. Accord Ltd., and the majority of EER shares held by certain other EER shareholders, and, as of the date of this annual report, holds approximately 80% of EER's share capital (approximately 75% on a fully-diluted basis) and approximately 99% of EER's voting rights (as a result of the Voting Agreement as described below).
 
 The following is the annual report on Form 20-F for the fiscal year ended December 31, 2013, of R.V.B. Holdings Ltd. The terms “we”, “us”, “our”, “the Company” and “RVB”, as used in this annual report, mean R.V.B. Holdings Ltd.  unless otherwise indicated.
 
 All references herein to “dollars” or “US$” are to United States Dollars, and all references to “Shekels” or “NIS” are to New Israeli Shekels.
 
 On August 31, 2011, we completed the EER Transaction (as defined below) following which EER became our subsidiary. RVB had no business activity prior to the EER Transaction and thus does not meet the definition of a “Business” under IFRS 3. In addition, the majority of the shareholders of RVB following the completion of the EER Transaction were former EER shareholders. Therefore, the EER Transaction did not meet the definition of a “Business Combination” under IFRS 3. Thus, although RVB is the legal acquirer, for accounting purposes the EER Transaction was treated as a capital transaction of EER.  See also Note 2v to RVB's financial statements for the year ended December 31, 2013, starting on page F-1 of this annual report. The Company has incurred recurring losses and negative cash flows from operations, and the board of directors of the Company decided to cease EER's operations and to act in order to dismantle the demonstration facility located near the village of Y'bllin, in Northern Israel (the “Y'bllin Facility”) owned by EER and also to implement a significant cost reduction plan in the Group. Therefore, the board of directors and management of the company concluded that the Company is not a going concern. The Financial statements are prepared in accordance with IFRS as issued by the IASB with appropriate adjustments to reflect the fact that the Company is not a going concern.
 
 FORWARD LOOKING STATEMENTS
 
 In addition to historical information, this annual report contains forward-looking statements. Some of the statements discussed in “Item 3.D. Risk Factors” and elsewhere in this report contain forward-looking statements. Statements that use the terms “believe”, “anticipate”, “expect”, “plan”, “intend”, “estimate”, “project” and similar expressions in the affirmative and the negative are intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on current assumptions, expectations, estimates and projections with respect to, among others, the financial conditions and business results of EER and RVB. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.  Factors that could cause actual results to differ from our expectations or projections include the risks and uncertainties relating to our business described in this annual report under “Item 3.D. Risk Factors,” “Item 5. Operating and Financial Review and Prospects” and elsewhere in this annual report. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof, except as required by applicable law. In addition to the disclosure contained herein, readers should carefully review any disclosure of risks and uncertainties contained in other documents that we file from time to time with the Securities and Exchange Commission (the “SEC”).
 
 To the extent that this annual report contains forward-looking statements (as distinct from historical information), we desire to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and we are therefore including this statement for the express purpose of availing ourselves of the protections of the safe harbor with respect to all forward-looking statements.
 
 2
 
 PART I
 
 ITEM 1.                      Identity of Directors, Senior Management and Advisors
 
 Not applicable.
 
 ITEM 2.                      Offer Statistics and Expected Timetable
 
 Not applicable.
 
 ITEM 3.                       Key Information
 
 A.            Selected Consolidated Financial Data
 
 You should read the following selected consolidated financial data in conjunction with the section of this annual report entitled “Item 5 - Operating and Financial Review and Prospects” and our consolidated financial statements and the notes thereto included elsewhere in this annual report.
 
 The selected data presented below under the captions “Statement of Operations Data,” and “Statements of Financial Position Data” as of and for each of the years in the five-year period ended December 31, 2013, are derived from the audited consolidated financial statements of the Company and of EER. The consolidated financial statements as of December 31, 2013 and 2012, and for each of the years in the three-year period ended December 31, 2013, are included elsewhere in this annual report. The selected data should be read in conjunction with the consolidated financial statements and the related notes. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by The International Accounting Standards Board (IFRS).
 
 As described above, although RVB is the legal acquirer, for accounting purposes the EER Transaction was treated as a capital transaction of EER and the financial data of previous years (comparative numbers) presented in this annual report is based upon the consolidated financial statements of EER for the years then ended. As of the date of this annual report, we do not have any other business activity aside from EER's business.
 
 For additional information, see “Item 7.B. Related Party Transactions – The EER Transaction” in this annual report.
 
 Year ended December 312013


2012


2011


2010


2009Statement of Operations Data:

(US$ in thousands)Revenues


-



62



63



-



-ExpensesOperating expenses and facility maintenance


2,068



2,952



2,526



2,590



2,962Marketing expenses


251



549



1,200



1,256



1,251Administrative and general expenses


956



1,430



1,759



1,793



1,910Other expenses


12,415







-



98



-Total expenses


15,690



4,931



5,485



5,737



6,123Loss from ordinary activities


(15,690
)


(4,869
)


(5,422
)


(5,737
)


(6,123
)Financing income


42



428



54



17



29Financing expenses


(47
)


(60
)


(878
)


(1,917
)


(1,213
)Total financing expenses, net


(5
)


368



(824
)


(1,900
)


(1,184
)Loss for the year


(15,695
)


(4,501
)


(6,246
)


(7,637
)


(7,307
)Loss attributable to:Owners of the Company


(12,583
)


(3,615
)


(5,950
)


(7,637
)


(7,307
)Non-controlling interests


(3,112
)


(886
)


(296
)


-



-(15,695
)


(4,501
)


(6,246
)


(7,637
)


(7,307
)Basic and diluted loss per Ordinary Share

(in US$)


(0.054
)


(0.016
)


(0.029
)


(0.041
)


(0.041
)Weighted average number of Ordinary

Shares used in basic and diluted loss perOrdinary Share calculation (*)


231,686



231,686



204,861



187,507



179,561
 
 (*) The number of ordinary shares as of the periods before the completion of the EER Transaction were adjusted according to the exchange ratio (11.65 shares of the Company for each share of EER) applied in the EER Transaction.
 
 3
 
 Year ended December 31,2013


2012


2011


2010


2009(US$ in thousands)Consolidated statement of position:Cash and cash equivalents


102



2,613



6,751



57



309Fixed assets, net


1,642



11,092



12,505



13,967



15,557Intangible assets, net


-



3,110



3,521



3,931



4,342Total assets


2,127



17,493



23,015



18,695



21,863Banks credits and loans


-



-



603



4,529



4,313Shareholders loans and convertible


-



-



-



8,579



8,265Equity attributable to owners of the Company


329



13,113



17,076



4,236



7,970Non-controlling interests


529



3,428



3,902



-



-Total equity


858



16,541



20,978



4,236



7,970
 
 B.            Capitalization and Indebtedness
 
 Not applicable.
 
 C.            Reasons for the Offer and Use of Proceeds
 
 Not applicable.
 
 D.            Risk Factors
 
 Investing in our securities involves significant risk. You should carefully consider the risks described below as well as the other information contained in this annual report before making an investment decision.  Any of the following risks could materially adversely affect our business, financial condition, results of operations and cash flows. In such case, you may lose all or part of your original investment. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or results of operations.
 
 Risks Related to our Business
 
 We do not have sufficient funds to finance our operations and decided to cease our EER operations.
 
 We have incurred recurring losses and negative cash flows from operations throughout the years. We incurred net losses of approximately US$ 15,695 thousands in 2013, approximately US$4,501 thousand in 2012 and approximately US$6,246 thousand in 2011. Since we did not have sufficient funds to finance our operations and working plan, our board of directors has decided to cease the operation of the Y'bllin Facility owned by EER and to implement a significant cost reduction plan in the Company and in EER. Following the aforementioned decision, on October 31, 2013, our board of directors decided to act to dismantle the Y'bllin Facility and to sell the systems and equipment. Therefore, our board of directors and management has concluded that the Company is not a going concern.
 
 4
 
 You may have difficulty enforcing a judgment issued by a court in the United States against us in Israel
 
 We are organized under the laws of Israel and our headquarters are in Israel. All of our officers and directors reside outside of the United States. Therefore, you may not be able to enforce any judgment obtained in the United States against us or any of such persons. You may not be able to enforce civil actions under United States securities laws if you file a lawsuit in Israel. In addition, if a foreign judgment is enforced by an Israeli court, it will be payable in Israeli currency.
 
 Currency fluctuations may affect the value of our assets and decrease our earnings
 
 The devaluation of the U.S. dollar against the NIS may decrease the value of our assets and could impact our business. We anticipate that a significant portion of our and EER's expenses will continue to be denominated in NIS.
 
 If we are considered to be a passive foreign investment company, either presently or in the future, U.S. Holders will be subject to adverse U.S. tax consequences
 
 We will be a passive foreign investment company, or a PFIC, if 75% or more of our gross income in a taxable year, including our pro rata share of the gross income of any company, U.S. or foreign, in which we are considered to own, directly or indirectly, 25% or more of the shares by value, is passive income. Alternatively, we will be considered a PFIC if at least 50% of our assets in a taxable year, averaged over the year and ordinarily determined based on fair market value, including our pro rata share of the assets of any company in which we are considered to own, directly or indirectly, 25% or more of the shares by value, are held for the production of, or produce, passive income. If we were to be a PFIC, and a U.S. Holder does not make an election to treat us as a “qualified electing fund,” or QEF, or a “mark to market” election, “excess distributions” to a U.S. Holder, and any gain recognized by a U.S. Holder on a disposition of our ordinary shares, would be taxed in an unfavorable way. Among other consequences, our dividends would be taxed at the regular rates applicable to ordinary income, rather than the 15% maximum rate applicable to certain dividends received by an individual from a qualified foreign corporation. The tests for determining PFIC status are applied annually and it is difficult to make accurate predictions of future income and assets, which are relevant to the determination of PFIC status. In addition, under the applicable statutory and regulatory provisions, it is unclear whether we would be permitted to use a gross loss from sales (sales less cost of goods sold) to offset our passive income in the calculation of gross income. In light of the uncertainties described above, we have not obtained an opinion of counsel with respect to our PFIC status and no assurance can be given that we will not be a PFIC in any year. If we determine that we have become a PFIC, we will then notify our U.S. Holders and provide them with the information necessary to comply with the QEF rules. If the IRS determines that we are a PFIC for a year with respect to which we have determined that we were not a PFIC, however, it might be too late for a U.S. Holder to make a timely QEF election, unless the U.S. Holder qualifies under the applicable Treasury regulations to make a retroactive (late) election. U.S. Holders who hold ordinary shares during a period when we are a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC in subsequent years, subject to exceptions for U.S. Holders who made a timely QEF or mark-to-market election.
 
 Your rights and responsibilities as a shareholder will be governed by Israeli law and differ in some respects from the rights and responsibilities of shareholders under U.S. law
 
 We are incorporated under Israeli law. The rights and responsibilities of the holders of our Ordinary Shares are governed by our amended and restated articles of association (“Articles of Association”) and by Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, a shareholder of an Israeli company has a duty to act in good faith toward the company and other shareholders and to refrain from abusing his power in the company, including, among other things, in voting at the general meeting of shareholders on certain matters. See “Item 10.B. Additional Information – Memorandum and Articles of Association”
 
 Risks Relating to EER
 
 We may not be able to succeed in our efforts to market and/or to sell the know-how and technology of EER
 
 Pursuant to the resolution of our board of directors to cease the operation of and dismantle the Y'bllin Facility, we intend to continue with our efforts to market and/or to sell the know-how and technology of EER.  There are no assurances, however, that our efforts will be successful. In addition, EER has ceased paying the annual fees required in order to maintain the validity of its patents and therefore certain of its patents are no longer considered EER intellectual property.
 
 5
 
 EER has received grants from the Office of the Chief Scientist in Israel, and it is therefore obligated to pay certain royalties to the Israeli government from sales of its products, and it is bound by the provisions of the Israeli Research and Development Law
 
 EER has received grants from the government of Israel through the Office of the Chief Scientist of the Ministry Economy (formerly the Ministry of Industry, Trade and Labor), or the Office of the Chief Scientist, for the financing of a portion of its research and development expenditures in Israel, pursuant to the Encouragement of Industrial Research and Development Law, 1984, or the R&D Law. Under the R&D Law, royalties on the revenues derived from sales of products (and related services) developed (all or in part) according to, or as a result of, the Office of the Chief Scientist funded plans are payable to the Israeli government, at annual rates which are determined under the Encouragement of Industrial Research and Development Regulations (Rate of Royalties and Rules for the Payment thereof), 1996, or the R&D Regulations, up to the aggregate amount of the grants received by the Office of the Chief Scientist, plus annual interest (as defined in the R&D Regulations). Any intellectual property developed using the Office of the Chief Scientist funds must be wholly owned by the Israeli company which received such funds. The R&D Law restricts the ability to transfer abroad know-how funded by the Office of the Chief Scientist. Transfer of such know-how to a foreign entity requires prior approval from the Office of the Chief Scientist, and is subject to payment of a redemption fee to the Office of the Chief Scientist calculated according to formulas provided under the R&D Law. As of the date of this annual report, EER has received a total of NIS 1.7 million (approximately US$0.5 million), out which amount, it has paid only the principal amount of NIS 0.2 million (approximately US$0.06 million) in royalties.
 
 If EER transfers outside of Israel know-how and technology, which were developed according to, or as a result of, the Office of the Chief Scientist funded plans, without obtaining the approval of the Office of the Chief Scientist, it may also be subject to criminal charges. In recent years, the government of Israel has accelerated the rate of repayment of the Office of Chief Scientist grants and may further accelerate them in the future. These restrictions on transferring technologies and/or manufacturing outside of Israel continue to apply even after EER have repaid any grants, in whole or in part.
 
 ITEM 4.                      Information on the Company
 
 A.            History and Development of the Company
 
 Our legal and commercial name is R.V.B. Holdings Ltd. Our office is located at 7 Jabotinsky St., Ramat Gan 52520, Israel, and our telephone number is +972 (3) 611-4933.
 
 We were incorporated as an Israeli corporation under the name B.V.R. Systems (1998) Ltd. (“BVR”), in January 1998 to receive all of the assets and liabilities of the defense-related business of BVR Technologies Ltd., or BVR-T, in accordance with the terms of a reorganization plan. The reorganization plan was consummated, and BVR commenced operations as of January 1, 1998. In January 2010, we changed our name to R.V.B. Holdings Ltd. Our corporate governance complies with the Israeli Companies Law, 1999, as amended (the “Companies Law”).
 
 On July 19, 2009, we entered into an asset purchase agreement with Elbit Systems Ltd., or Elbit, whereby Elbit acquired substantially all of our assets and business for cash consideration of approximately US$34 million and assumed substantially all of our business related liabilities (the “Elbit Transaction”). The sale of our business to Elbit was completed on November 19, 2009.  For more information related to the Elbit Transaction see “Item 10.C. Material Contracts”, below.
 
 On March 24, 2010, Greenstone exercised its option to purchase from Aviv Tzidon and A.O. Tzidon (1999) Ltd., a company wholly owned by Aviv Tzidon (collectively: “Tzidon”), the control of the Company. As part of the closing of the option exercised by Greenstone, A.O. Tzidon (1999) Ltd. purchased from HSN General Managers Holdings Limited Partnership (“HSN”) all of its holdings in the Company, namely 20,000,000 of our Ordinary Shares, which constitute part of the shares sold by Tzidon to Greenstone, at a price per share of US$0.215 and an aggregate consideration of US$4,300,000, pursuant to a share purchase agreement between HSN and Tzidon, dated February 6, 2011. On March 15, 2011, pursuant to an agreement entered into by and among Greenstone and Tzidon on December 12, 2010 and the option awarded to Greenstone to purchase up to 65% but not less than 50.14% of our issued share capital as of that date, Tzidon sold to Greenstone: (i) 76,680,848  of our ordinary shares, constituting 65% of our issued and outstanding share capital as of that date (not taking into account 1,040,000 of our dormant shares); and (ii) 1,800,000 options exercisable into 1,800,000 of our ordinary shares (such option expired in November 2011).
 
 On August 22, 2011, our shareholders approved the EER Transaction (following an approval by our audit committee and board of directors), together with a form of additional share purchase agreement, to be entered into between RVB and certain EER shareholders who elect to join the EER Transaction and sell their holdings in EER to RVB, in exchange for RVB shares (the “Additional SPA”). As of January 12, 2012, we completed the multi closings of the EER Transaction and purchased 7,996,210 EER shares from S.R. Accord Ltd. and Greenstone, our controlling shareholder at that date and 8,048,958 EER shares from other EER shareholders and issued a total of 113,825,252 RVB shares. Following such closings, there is one shareholder who holds 200,000 shares of EER (constitutes approximately 1% of EER share capital) other than the Company and Mazal (which is party to the Option Agreement with the Company). For information regarding the EER Transaction and the Additional SPA, see “Item 7.B. Related Party Transactions – The EER Transaction” in this annual report.
 
 6
 
 In July 2013, our board of directors resolved to cease operation of the Y'bllin Facility and to implement a significant cutback in the personnel of our company and its subsidiary, EER. We intend to continue with our efforts to market the technology of EER and/or to raise external financing and/or enter into collaboration agreements based on the technology of EER and/or sell the technology. On October 31, 2013, our board of director decided to act to dismantle the Y'bllin Facility and to sell the systems and equipment.
 
 From October 1998 until March 2001, our ordinary shares traded on the NASDAQ National Market. Between March 2001 and February 2003, our ordinary shares traded on the NASDAQ Small Cap Market under the symbol BVRSF.  From February 2003 until March 2010 our ordinary shares quoted on the Over the Counter Bulletin Board under the symbol BVRSF.OB. Since March 2010, our ordinary shares have been quoted on the Over the Counter Bulletin Board under the symbol, RVBHF, which reflects our name change to R.V.B. Holdings Ltd.
 
 Capital Expenditures
 
 We had no material capital expenditures during the years 2013, 2012 and 2011. See also “EER's Business Overview” in Item 4.B. below.
 
 4.B.        Business Overview
 
 General
 
 On August 31, 2011, we completed the EER Transaction (on January 12, 2012, both closings of EER Transaction were completed), following which, EER became our subsidiary. For additional information, see “Item 7.B. Related Party Transactions – The EER Transaction” in this annual report.
 
 Below is a description of EER's business. As of the date of this annual report, we do not have any other business activity besides EER's business.
 
 EER's Business Overview
 
 EER was incorporated in Israel in the year 2000, as a private company. EER is in the waste management industry, developing technology for the conversion of certain types of waste into recycled materials or energy via waste to energy technology (“WTE”). Moreover, EER develops technology for treatment of solid waste through Plasma-Gasification-Melting, which is a new, innovative technology to treat solid waste (including, among others, treatment of urban waste, medical waste and radioactive waste that emits low and medium-level radiation) (the “PGM Technology”).
 
 In early 2007, EER completed the construction of the Y'bllin Facility. Over the years 2007-2009, several demonstrations were held using the Y'bllin Facility. As part of the working plan of EER, the board of directors approved an investment of up to US$1 million in the Y'bllin Facility. The purpose of the investment was to make improvements to the Y'bllin Facility, which primarily involved the replacement of the current processing chamber and preparation of the facility for continuous operation. These improvements have been completed as of June 2013. In June 2013, EER conducted a trial operation of the Y'bllin Facility, included among others, a test of the capabilities of the new reactor which operates on EER’s technology for treatment of solid waste through Plasma-Gasification-Melting.
 
 In July 2013, our board of directors had resolved, after considerable deliberation, to cease operation of the Y'bllin Facility and to implement a significant cutback in the personnel of our Company and its subsidiary, EER. Following such decision of our board of directors, on October 31, 2013, our board of directors resolved to act to dismantle the facility and to sale the systems and equipment. In addition, the Company and EER are continuing with their efforts to enter into collaboration agreements based on the technology of EER and/or sell such technology.
 
 EER's offices are located in 21 HaMelacha St, Rosh Ha'ayin, Israel.
 
 7
 
 EER's Industry
 
 With the rapid growth in the world's population, the waste generation volume is becoming an increasing concern around the world. The world's population is producing approximately 2.5 billion tons of municipal solid waste (“MSW”) each year. Certain factors, such as the rate of growth in the general population, improvements in the quality of life and continuous increase in the global GNP, contribute to the accelerated growth in the production of MSW. In order to cope with the constant growth in the production of waste, the global waste management industry is undergoing certain changes, among which the transfer from traditional waste disposal methods to a resource recovery processes. In light of these changes, the development of new technology is required in order to convert certain types of waste into recycled materials or energy.
 
 Nations around the world vary in their progress towards the facilitation of these changes. Countries like Germany, Japan, Denmark and the Netherlands, which are characterized as 'mature markets' already have clear regulatory, fiscal and policy frameworks in place for such matters, and over the last few years, they placed substantial investments in the development of modern waste treatment solutions. On the other hand, some countries, like the U.K., Italy, Spain, Greece, Canada, Australia, as well as some Gulf Arab states and certain countries in East and South-East Asia, are characterized as immature markets. These countries are expected to show rapid growth in the amount of waste treatment over the next ten to fifteen years, due to the increase of new regulations which aim to direct the waste streams from traditional waste treatment methods, such as landfill and incineration, to the alternative technology sector. Other countries, including some EU Member States, some countries in the Middle East, South Africa, Latin America and the Caribbean, are characterized as embryonic markets. In these countries, there is little governmental investment in the development or the adoption of “green” advanced technologies, and the relevant regulation is considered obsolete.
 
 There are currently three main waste treatment methods, employed by different companies and governments around the world:
 
 ·
Recycling - Recycling is the process of sorting waste and reusing the items from which utility can still be derived. This method is not always economically feasible, as it requires a substantial amount of resources for sorting waste. In addition, a large portion of waste is not recyclable.
 
 ·
Landfill – The use of landfill is the most traditional and common method for waste treatment, which involves disposal of waste by burial in landfill sites. This method, though it is common, is a main factor for pollution of air, ground and underground water. Therefore, in recent years, some countries, such as Germany, Austria, Belgium, the Netherlands, and Switzerland, have banned the disposal of untreated waste in landfills and some other countries have set up time frame for banning landfill operations.
 
 ·
Waste to Energy (WTE) -The WTE method is divided into three main methods: biological, physical and thermal. The thermal treatment is divided to three main processes: Incineration, thermal gasification/pyrolisys and plasma gasification. The incineration process has a lot of disadvantages, such as the emission of toxic gases and ashes which require additional separate treatment. Therefore, the thermal processes of gasification or plasma gasification are more attractive options since they do not require additional separate treatment and do not bear the disadvantages of incineration.
 
 The Waste to Energy Market
 
 Each year, approximately 170 million tons of municipal solid waste is treated in about 900 waste treatment facilities around the world. The WTE market was estimated to be worth US$7 billion in 2010, and its estimated annual growth is 6-10%. Thus, the WTE market is expected to be worth about US$27 billion in 2021.
 
 The main entrance barriers to the solid waste market include acquisition and development costs, licensing costs, depending on local regulation in each country in which the technology is implemented, facilities establishment costs, large competitors and willingness of finance institutions to finance the establishment of facilities based on new technologies.
 
 The global economic crisis has caused, among other impediments, a decrease in the investments in advanced technologies, including new emerging technologies such as the PGM technology. According to EER's estimation, in spite of the recovery from the crisis during 2009 through 2011, it is still very difficult for EER and its customers to obtain financing for its activity and facilities from private investors and especially from institutional investors. Many companies around the world are in the business of developing advanced technologies for the treatment of solid waste, and such companies can compete with EER in its target markets. Some of these companies use different variations of the plasma gasification technology, and some use other WTE technological solutions.
 
 8
 
 Below is a description of the main new thermal treatment technologies (NTTT), which EER's competitors are developing:
 
 ·
Gasification technology - thermal reaction under a deficient supply of oxygen which creates fuel gas, along with heat which supports conversion of the rest of the waste, a process which increases the energetic efficiency.
 
 ·
Pyrolysis technology - a similar process to the gasification. The waste is first processed in an early process for the creation of refuse-derived fuel.
 
 ·
Plasma technology - gasification of the materials conducted in the highest temperatures under special conditions.
 
 ·
Thermal Hydrolysis technology - technology based on “cold incineration”. This technology cannot be used for treatment of solid waste.
 
 ·
Hybrid facilities - facilities which combine different innovative WTE technologies. The PGM technology belongs to this technology.
 
 These are the main advantages of the PGM technology:
 
 ·
Decreased operating costs due to the combination of three processes into one continuous process.
 
 ·
Decreased operating costs due to the fact that the pollution level in this technology is lower, compared to other technologies.
 
 ·
The ability to handle a wide spectrum of waste without the necessity of any preliminary sorting or treatment.
 
 ·
The solid residue of the process is an environmentally benign material which can be used as raw material in construction.
 
 EER's major competitors in the field of waste treatment include:
 
 ·
Thermoselect – a Swiss origin Pyrolysis/Gasification technology, which has been implemented in Japan by JFE and licensed in the U.S. by IWT. Thermoselct has several commercial installations in Japan that are processing selective portion of MSW and industrial waste.
 
 ·
JFE – a large Japanese engineering company, active in various waste treatment areas, also with own proprietary solutions.
 
 ·
Ebara – a Japanese gasification technology with several installations in Japan for MSW.
 
 ·
Westinghouse (AlterNRG) – Plasma Arc technology, implemented by AlterNRG, a Canadian listed company. There are several installations of AlterNRG in Japan.
 
 ·
Plasco Energy – a Canadian plasma arc technology company, aiming for MSW conversion. To the best of our knowledge, Plasco Energy has raised significant funds to establish its first commercial facility and to support a vast worldwide business development activity related to waste treatment.
 
 ·
InEntech (S4) – MIT Plasma technology. Significant funds were invested in the technology so far. Several installations are located in Asia and one in US. It has formed together with Waste Management, a joint venture, for the implementation of its technology.
 
 Other companies in the field include, Nippon Steel (Japan), Entech, S4 Energy Solution, GEM, Enerkem, Nexterra and OE, that mostly have gasification technology for specific waste streams.
 
 Material Agreements
 
 The Kurchatov Institute Agreement
 
 On June 6, 2000, EER Ltd., entered into an agreement with the Kurchatov Institute, which was amended on February 12, 2002 (the “Kurchatov Agreement”) (the agreement and the rights and obligations of EER Ltd. thereunder were later assigned to EER). Under the terms of the Kurchatov Agreement, Kurchatov Institute assigned and transferred to EER Ltd. all then present and future intellectual property rights and know-how related to the Y'bllin Facility (which was designed, manufactured and constructed by EER) and to the Additional Projects (as defined below) (collectively, the “IP Rights”). According to the Kurchatov Agreement, EER shall cover all the expenses related to the assigning, registration and recordation of the IP Rights. According to the Kurchatov Agreement, the Kurchatov Institute shall fully cooperate with EER for the purposes of utilizing the PGM technology with regard to MSW, Medical Waste (“MW”), Low Radio Active Waste (“LRAW”) and PGM Compatible Industrial Waste (“IW”), including, but limited to, the designing and construction of plants and installations by EER Ltd., its licensee(s) and/or other purposes (the “Additional Projects”). Upon EER’s request, the Kurchatov Institute shall assign to EER any know-how or intellectual property rights relating to such technologies to be used outside the territories comprising the former Soviet Union, provided the financial and other legal and reasonable interests of the Kurchatov Institute have been satisfied. The Kurchatov Institute and its affiliates shall exclusively work with EER on all of the aforementioned applications of the PGM Technology, and shall not assist, directly or indirectly, any individual or entity to engage in any activity in the fields of SMW, MW, LRAW and IW. In addition, the Kurchatov Institute undertook to provide EER its know-how and experienced highly qualified specialists in order to obtain the required scientific and technical qualifications in the works related to the Projects, as will be mutually agreed by the parties. In consideration for Kurchatov Institute’s undertakings under the Kurchatov Agreement, EER shall pay Kurchatov Institute a royalty in the amount of 1% of the purchase price actually received by EER from the sale of the Additional Projects.
 
 9
 
 The PyroGenesis Agreement
 
 On December 5, 2005, EER entered into an agreement for the purchase of equipment with PyroGenesis Inc. (“PyroGenesis” and the “PyroGenesis Agreement”), under which EER purchased from PyroGenesis a Non-Transferred Arc Plasma Torch System (the “Equipment”) which was installed in the Y'bllin Facility, for an aggregate amount of US$810,000 (the “Purchase Price”). The Purchase price did not include spare and wear parts, and certain other components. Pursuant to the PyroGenesis Agreement, PyroGenesis was provided with a right of first refusal for the supply of any and all future torch systems required by EER.
 
 The Lease Agreement
  In July 2012, EER renewed the Lease Agreement (originally entered into in September 2007) with Naser Recycling Ltd. (“Naser”), with respect to the ground on which the Y'bllin Facility is located (the “Lease Agreement”) for a period of five years (the “Lease Period”), and EER has an option to extend the term of the rent for additional five years (the “Option Period”). The monthly rent for the first 18 months of the Lease Period is NIS 40 thousand (approximately US$10 thousand) and NIS 45 thousand (approximately US$11 thousand) for the remaining Lease Period. The monthly rent for the Option Period will be NIS 50 thousand (approximately US$13 thousand). All the amounts mentioned above are linked to the CPI and do not include VAT. The payment of the rent will be paid for each year of lease in advance. In addition to the rent fees and if the Y'bllin Facility becomes a commercial plant, Naser will be entitled to receive certain payments from profits generated by the plant and/or from proceeds of the sale of the plant, as set forth in the Lease Agreement. Pursuant to the terms of the Lease Agreement, the Y'bllin Facility is the property of EER, and EER is responsible for disassembling the Y'bllin Facility and removing it from the property at the end of rental period. It was further agreed that to secure EER’s commitments pursuant to the Lease Agreement, EER gave Naser a bank guarantee in the amount of US$250 thousand. As of the date of this annual report, EER is in negotiations with Naser to change the terms of the lease agreement as a result of the Company’s resolution to cease operation of the Y'bllin Facility and to act to dismantle the facility and sell EER’s systems and equipment.
 
 Framework Agreement
 
 On May 31, 2012, EER entered into an agreement with a third party located in the U.S. (the “US Company”), for the initial planning and the supply of EER's technology of Plasma-Gasification-Melting Waste-To-Energy (the “Framework Agreement”) in plants (the “Facilities”) located in five states in the U.S. and such other territories as may be agreed between EER and the  U.S.  Company (“Territories”).
 
 Under the Framework Agreement, each of EER and the U.S. Company has granted the other certain exclusivity rights (subject to some exceptions) with respect to the Territories.
 
 In addition, EER has agreed to invest US$400,000 in the U.S. Company, in consideration of equity in the U.S. Company. The first tranche of the investment was transferred to the U.S. Company but was subsequently returned to EER, since the investment round did not materialize. Since then, and due, inter alia, to the time which has passed, EER notified the US Company that it will not make the equity investments in the US Company.
 
 The Greenstone-EER Management Service Agreement
 
 According to a management service agreement between EER and Greenstone, dated February 13, 2002 (the “Greenstone Agreement”), Greenstone undertook to provide EER with management services, office services, accounting services and office rental in accordance with EER needs. In consideration for such services, EER undertook to pay Greenstone the sum of NIS 20,000 per month (plus VAT) linked to the Consumer Price Index (in this section –the “management fees”), as of January 2002 (approximately NIS 25,000 as of the date of this annual report). The term of the Greenstone Agreement was set at one year, at the end of which the agreement will be renewed automatically for additional one-year periods, and may be terminated by one month prior notice by either party.
 
 10
 
 In light of EER’s financial condition, since June 2013, Greenstone has agreed that such management fees shall be accumulated. As at December 31, 2013, EER’s outstanding debt pursuant to the Greenstone Agreement is approximately NIS 180 thousands (approximately US$52 thousands).
 
 Regarding the management services agreement between the Company and Greenstone, see “Item 7.B. Major Shareholders and Related Party Transactions” below.
 
 Qualisense Agreement
 
 On November 19, 2013, EER entered into an agreement with Qualisense Technologies Ltd. (“Qualisense”) under which Qualisense shall disassemble the Y’bllin Facility and will act to sell all of its main parts for a total fee of NIS 1 million (approximately US$ 285 thousands). In addition to such fee, Qualisense shall be entitled to a commission payment in accordance with the provisions of the agreement. As of the date of this Annual Report, Qualisense has not yet sold a material amount worth of equipment.
 
 Research and Development
 
 EER’s research and development activity has been conducted mostly in Israel with technical and scientific support from the Royal Institute of Technology of Sweden (“KTH”). In 2007, the development stage of the Technology has ended.
 
 In 2004, the Chief Scientist Office at the Ministry of Industry, Trade and Labor, approved EER’s request to receive financial assistance for research and development in connection with the products of EER. The approval was conditioned on abiding by the provisions of the Israeli R&D Law, including, among others, payment of royalties from the sale of products developed with the assistance of the Chief Scientist up to a 100% refund of the grant amounts received by EER. Under the terms of the R&D Law, any intellectual property developed using the Office of the Chief Scientist funds must be fully and originally owned by the Israeli company which received such funds. The R&D Law restricts the ability to transfer abroad know-how funded by the Office of the Chief Scientist. Transfer of such know-how to a foreign entity requires a prior approval from the Office of the Chief Scientist, and is subject to payment of a redemption fee to the Office of the Chief Scientist calculated according to formulas provided under the R&D Law.
 
 As of the date of this annual report, EER has received a total of NIS 1.7 million (approximately US$0.5 million), out which an amount of NIS 0.2 million (approximately US$0.05million) has been repaid to date by EER.
 
 Intellectual Property
 
 EER had maintained eight families of patent application and patents in and outside of Israel. As of December 31, 2013, EER has ceased on paying the annual fees for many of its patents and therefore such patents are no longer EER intellectual property.  As of December 31, 2013, the following patent families still include active patents and patents applications:
 
 ·
Apparatus for Processing Waste. This application generally describes the overall plant, comprising waste input means, a waste processing chamber to hold a column of waste, one or more plasma torches, a control system, and post processing means.
 
 ·
System and Method for Removing Blockages in a Waste Converting Apparatus. This application repeats the description of the processing chamber and describes the problems of blockage that can arise during operation of the system due to incomplete breakdown of the waste into gaseous and liquid products.
 
 ·
Apparatus for Processing Waste with Distribution/Mixing Chamber for Oxidising Fluid. The description and claims are mainly concerned with the shape of the vertical shaft processing chamber, which is constructed such that it does not have a uniform cross-section but is provided with a transition between its upper and lower parts.
 
 ·
System and Method for Decongesting Waste Disposal Apparatus. The principal claims in this application are directed towards the presence of a fluxing agent inlet to provide flux to overcome the decongestion problems.
 
 ·
Recycling System for a Waste Processing Plant. This application is related to the post processing system of the waste processing plant, i.e. to the part of the plant whose job it is to collect and purify the gaseous products that exit the processing chamber so that they can either be stored for reuse or safely released to the atmosphere.
 
 11
 
 ·
Control System for a Waste Processing Apparatus. This application describes and claims a control system for operating an air lock arrangement used to introduce the waste into the top of the processing chamber.
 
 ·
Systemfor Controlling the Level of Potential Pollutants in a Waste Treatment Plant. This application describes and claims a system placed at the entrance to the waste treatment plant for sorting the waste entering the plant according to the concentration of specified chemicals in the waste.
 
 ·
AnImproved Plasma Torch for Use in a Waste Processing Chamber. This application describes and claims an improved plasma torch design. The unique feature of the torch is a sleeve that surrounds the portion of the torch that extends into the processing chamber.
 
 Government Regulations
 
 The Encouragement of Industrial Research and Development Law, 1984
 
 EER has received grants from the government of Israel through the Office of the Chief Scientist of the Ministry of Industry, Trade and Labor, or the OCS, for the financing of a portion of its research and development expenditures in Israel, pursuant to the R&D Law. Under the R&D Law, royalties on the revenues derived from sales of products (and related services) developed (in all or in part) according to, or as a result of, the OCS funded plans are payable to the Israeli government, at annual rates which are determined under the R&D Regulations, up to the aggregate amount of the grants received by the OCS, plus annual interest (as defined in the R&D Regulations). Any intellectual property developed using the OCS funds must be fully and originally owned by the Israeli company which received such funds. The R&D Law restricts the ability to transfer abroad know-how funded by the OCS. Transfer of such know-how to a foreign entity requires prior approval from the OCS, and is subject to payment of a redemption fee to the OCS calculated according to formulas provided under the R&D Law. As of the date of this annual report, EER has received a total of NIS 1.7 million (approximately US$0.5 million), out which an amount of NIS 1.5 million (approximately US$0.45 million) has not yet been repaid by EER.
 
 4.C.         Organizational Structure
 
 We currently own approximately 80% of EER's share capital and approximately 99% of its voting rights (as a result of the Voting Agreement as described below) , which, as of the date of this annual report, is our only subsidiary. Greenstone beneficially owns approximately 35.88% of our outstanding share capital (excluding 1,040,000 dormant shares held by us).
 
 4.D.         Property, Plant and Equipment
 
 We currently do not have any material fixed assets. EER, our subsidiary owns the Y'bllin Facility, which as of the date of this annual report is the process of disassembling. EER is leasing the ground on which the Y'bllin Facility is located.
 
 ITEM 4A.                   Unresolved Staff Comments
 
 Not applicable.
 
 ITEM 5.                      Operating and Financial Review and Prospects
 
 General
 
 The following operating and financial review and prospects should be read in conjunction with “Item 3.A Selected Financial Data” and our consolidated financial statements and accompanying notes appearing elsewhere in this annual report. Our financial statements have been prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board or IFRS, which differ in certain respects from U.S. Generally Accepted Accounting Principles, or U.S. GAAP.  Following our January 1, 2008 adoption of IFRS, we are no longer required to reconcile our financial statements prepared in accordance with IFRS to U.S. GAAP.
 
 On August 31, 2011, we completed the EER Transaction following which EER has become our subsidiary. As of January 12, 2012, we completed the multi closings of the EER Transaction and as of the date of this annual report, we hold approximately 80% of EER's share capital and approximately 99% of EER's voting rights (as a result of the Voting Agreement as described below).
 
 Since RVB had no business activity as of the date of the closing of the EER Transaction, and thus did not meet the definition of a “Business” under IFRS 3, and since the majority of the shareholders of RVB following the closing of the EER Transaction were former shareholders of EER, the EER Transaction did not meet the definition of a “Business Combination” under IFRS 3. For accounting purposes, the EER Transaction was treated as a capital transaction of EER.
 
 12
 
 The Company has incurred recurring losses and negative cash flows from operations, and the board of directors of the Company decided to cease EER's operations and to act in order to dismantle Y'bllin Facility owned by EER and also to implement a significant cost reduction plan in the Group. Therefore, the board of directors and management of the company concluded that the Company is not a going concern. The Financial statements are prepared in accordance with IFRS as issued by the IASB with appropriate adjustments to reflect the fact that the Company is not a going concern.
 
 Critical Accounting Policies
 
 The preparation of the consolidated financial statements, in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. These are management’s best estimates based on experience, various facts, external circumstances, reasonable assumption and historical data.  Actual results could differ from those estimates.
 
 For a further description of RVB's material accounting policies, please read Notes 2 and 4 to RVB's financial statements for the year ended December 31, 2013, starting on page F-1 of this annual report.
 
 For a description of the impairment of tangible and intangible assets, please read Notes 8 and 9 to RVB's financial statements for the year ended December 31, 2013, starting on page F-1 of this annual report.
 
 5.A.        Operating Results
 
 Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
 
 The loss for 2013 amounted to US$15.7 million decreasing US$11.2 million from the US$4.5 million loss in 2012, mainly due to an impairment of tangible and intangible assets.
 
 Revenues
 
 No revenues have been recorded for 2013. The revenues for 2012 amounted to US$0.1 million and derived from the study work produced by EER in connection with the Orgrez Project as described above.
 
 Operating Expenses and Facility Maintenance
 
 Operating and facility maintenance expenses in 2013 amounted to US$2.1 million decreasing US$0.8 million from the US$2.9 million in 2012, mainly due to the decision to cease operation of the Y'bllin Facility and to implement a significant cutback in the personnel of our company and EER, as mentioned above.
 
 Marketing Expenses
 
 Marketing expenses in 2013 amounted to US$0.3 million, decreasing US$0.2 million from the US$0.5 million in 2012, mainly due to efficiency measures taken by the Company.
 
 General and Administrative Expenses
 
 General and administrative expenses in 2013 amounted to US$1.0 million decreasing US$0.4 million from the US$1.4 million in 2012, mainly due to efficiency measures taken by the Company.
 
 Financing Expenses, Net
 
 Financing income, net, in 2013 was an immaterial amount compared to financing income, net, of US$0.4 million in 2012.
 
 Other Expenses
 
 Other expenses, net, in 2013 amounted to US$12.4 million. In 2012 we had no other expenses. The other expenses during 2013 were mainly regarding an impairment loss of tangible and intangible assets. For further description, please see Notes 8 and 9 to RVB's financial statements for the year ended December 31, 2013, starting on page F-1 of this annual report.
 
 Year Ended December 31, 2012 Compared to Year Ended December 31, 2011
 
 The loss for 2012 amounted to US$4.5 million, decreasing US$1.7 million from the US$6.2 million loss in 2011, mainly due to decrease of financial expenses.
 
 13
 
 Revenues
 
 The revenues for 2012 amounted to US$0.06 million derived from the study work produced by EER in connection with an agreement that EER entered into during December 2011 with a company based in the Czech Republic regarding a feasibility study work to be performed by EER with regard to the design, engineering, construction and operation of a hazardous waste treatment facility at an estimated cost of approximately US$25 million.
 
 Operating Expenses and Facility Maintenance
 
 Operating and facility maintenance expenses in 2012 amounted to US$2.9 million increasing US$0.4 from the US$2.5 million in 2011. It should be noted that during these years the Y'bllin Facility was not operating.
 
 Marketing Expenses
 
 Marketing expenses in 2012 decreased to US$0.5 million, from the US$1.2 million in 2011.
 
 General and Administrative Expenses
 
 General and administrative expenses in 2012 decreased to US$1.4 million, from the US$1.8 in 2011.
 
 Financing Expenses, Net
 
 Financing income, net, in 2012 amounted to US$0.0.4 million compared to financing expenses, net, of US$0.8 million in 2011. The decrease in financing expenses was mainly due to the conversion of all of EER shareholders' debts and loans to EER shares at the closing date of the EER transaction.
 
 Impact of Inflation and Devaluation on Results of Operations, Liabilities and Assets
 
 The following table presents information about the rate of inflation in Israel, the rate of devaluation of the NIS against the dollar, and the rate of inflation in Israel adjusted for the devaluation:
 
 Year ended

December  31

Israeli inflation % rate


Devaluation of the NIS

rate %


Israeli inflation adjusted for devaluation %2009


3.9



(0.7
)


4.62010


2.7



(6
)


8.72011


2.2



7.7



(5.5
)2012


1.6



(2.3
)


3.92013


1.8



(7.0
)


8.8
 
 Devaluation of the NIS in relation to the dollar has the effect of reducing the dollar amount of any of our expenses or liabilities payable in NIS, unless those expenses or payables are linked to the dollar or to another currency.  This devaluation also has the effect of decreasing the dollar value of any asset that consists of NIS or receivables payable in NIS, unless the receivables are linked to the dollar or to another currency. Conversely, any increase in the value of the NIS in relation to the dollar has the effect of increasing the dollar value of any unlinked NIS assets and the dollar amounts of any unlinked NIS liabilities and expenses.
 
 Because exchange rates between the NIS and the dollar fluctuate continuously, exchange rate fluctuations as recently experienced in Israel and, particularly larger periodic devaluations or revaluations, will have an impact on our profitability and period-to-period comparisons of our results.
 
 We currently conduct our business in Israel and a significant portion of our expenses are in NIS.  We therefore expect to continue to be affected by changes in the prevailing NIS/U.S. dollar exchange rate in the future.  Further as we are exploring business opportunities around the world, our investment in prospective businesses may be denominated in non U.S. dollar currencies, and due to the fluctuations in the exchange rates in recent years, we cannot anticipate the impact that the prevailing exchange rate will have on our future investments.
 
 The effects of foreign currency re-measurements are reported in our consolidated financial statements in the statement of operations.
 
 Effective Corporate Tax Rate
 
 The Israeli corporate tax rate applicable to Israeli resident companies in 2013 was 25% (26.5% as of 2014).
 
 14
 
 5.B.         Liquidity and Capital Resources
 
 Cash flows used in operating activities during 2013 amounted to US$2.3 million. Cash flows during 2013 were mainly used to finance EER’s current expenses.
 
 Cash flows used in investment activities during 2013 amounted to US$0.7 million, mainly relating to the improvements in the Y'bllin Facility as mentioned above.
 
 Cash flows provided by financing activities during 2013 amounted to US$0.5 million. Cash flows during the reporting period were  provided by proceeds from Greenstone according to the credit line agreements as described below.
 
 As of the date of this annual report, EER has no material revenues and has negative cash flows from operating activities. On July 2013, the board of directors has decided to cease the operation of the Y'bllin Facility owned by EER and to implement a significant cost reduction plan in the Company and in EER. Following the aforementioned decision, on October 31, 2013, our board of directors decided to act to dismantle the Y'bllin Facility and to sale the systems and equipment. Therefore, the board of directors and management has concluded that the Company is not a going concern.
 
 5.C.         Research and Development, Patents and Licenses
 
 EER devoted significant time, efforts and financial resources to research and development activity in the past years. As of December 31, 2013, EER has ceased on paying the annual fees for many of its patents and therefore such patents are no longer EER intellectual property.
 
 For more information regarding our research and development activities, see “Item 4.B. – Research and Development and intellectual property” in this annual report.
 
 5.D.         Trend Information
 
 Not applicable.
 
 5.E.          Off-Balance Sheet Arrangements
 
 We do not have any off-balance sheet arrangements which have or are reasonably likely to have a material current or future effect on the financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of our Company.
 
 5.F.         Tabular Disclosure of Contractual Obligations
 
 As of December 31, 2013, we had no contractual obligations of the type required to be disclosed in this section.
 
 5.G.         Safe Harbor
 
 All information included in Item 5.E of this Item is deemed to be a “forward-looking statement” as that term is defined in the statutory safe harbors, except for historical facts.  The safe harbor provided in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall apply to all forward-looking information provided in Item 5.E of this Item.
 
 ITEM 6.                      Directors, Senior Management and Employees
 
 6.A.         Directors and Senior Management
 
 The following table lists the name, age and position held by our executive officers and directors, as of April 28, 2014:
 
 Name

Age

PositionYair Fudim

65

Director and Chairman of the Board of DirectorsMordechai (Moti) Menashe

54

DirectorJonathan Regev(1) (2)

49

External DirectorAlicia Rotbard(1) (2)

64

External DirectorGedaliah Shelef(1) (2)

79

Independent DirectorOfer Naveh

42

Chief Financial Officer
 _________________
 (1) Member of the Company's Audit Committee
 (2) Member of the Company’s Compensation Committee
 
 15
 
 Yair Fudim is serving as a director of our Company since March 2011 and was appointed the chairman of our board of directors in February 2013. Mr. Fudim has been serving as Chief Executive Officer of Leader Holdings & Investments Ltd. since April 1991 and as Chief Executive Officer of Greenstone Industries Ltd. since February 2010 till March 2013 and since then as the chairman of the board of Greenstone. Mr. Fudim has served as chairman of the board of directors of Leader Capital Markets Ltd., and has been a member of the board of directors of the following companies, among others: Zmiha Investment House Ltd, Yelin Lapidot Holdings ltd., Leader Hanpakot (1993) Ltd., Leader Financial Analysis (1999) Ltd., Leader Trust Company Ltd., Leader & Co Investment House Ltd., Leader & Co Finance (2001) Ltd., Leader & Co Capital Ltd., Leader Financial Assets Management (2005) Ltd., Leader & Co Asset Management Ltd., Leader Resources Ltd., Leader Resources Trustees Ltd., Leader Real Estate (2006) Ltd., E.E.R. Environmental Energy Resources (Israel) Ltd., Yariv Assets and Holdings (1980) Ltd., Zimmcor Alubin (1973) Ltd., RonRom Consulting Services Ltd. Mr. Fudim holds a B.A. in Economics and an MBA from the Hebrew University of Jerusalem.
 
 Mordechai (Moti) Menasheis serving as a director of our Company since March 2013. Mr. Menashe serves as a senior vice president at Upswing Capital Ltd. since 2006. He serves in a number of capacities for companies held (directly or indirectly) by Upswing Capital Ltd., including Zmiha Investment House Ltd. (Chief Executive Officer); Intercolony Investments Ltd. (Chief Executive Officer and Director); Yaad Industrial Representation Ltd. (Director of Business Development and Director); Ultra Equity Investments Ltd. (Director); and Greenstone Industries Ltd. (Director).
 
 Alicia Rotbard is serving as our external director since July 2008. In 1989 Ms. Rotbard founded DOORS Information Systems, Inc. and she served as its Chief Executive Officer until 2002. Since 1989 she has served as President and Chief Executive Officer of Quality Computers Ltd. and from 1980 to 1985, she served as Deputy General Manager of the Tel-Aviv Stock Exchange, managing its computer department and operations.  Ms. Rotbard holds a B.Sc. in Mathematics and Physics from the Hebrew University of Jerusalem.
 
 Jonathan Regev is serving as our external director since April 2010. From 2007 to October 2012, Mr. Regev has been serving as Chief Executive Officer of Abnet Communications Ltd.  From 2004 to 2006, Mr. Regev served as the Chief Financial Officer of Oblicore Inc.  From 2000 to October 2004, Mr. Regev worked at Amdocs Management Limited in various positions including as Chief Operating Officer and Chief Financial Officer of Amdocs' CRM Division. From 1998 to 2000, Mr. Regev worked as the Director of Corporate Treasury, Budget Control and Chief Financial Officer Deputy of Nilit Ltd. From 1995 to 1997 he worked as the Controller and Director of Corporate Economics of the Strauss Group in Israel and from 1992 to 1995, Mr. Regev worked as Head of Industrial Control and Economic Department of the Manufacturing Division of Tadiran Electrical Appliances Ltd.  Mr. Regev holds an M.A. in Economics from the Technion-Israel Institute of Technology and a Bs. in Physics from the Tel Aviv University.
 
 Gedaliah Shelefis serving as a director of our Company since March 2011 and was classified by the Company as an independent director on January 2012. Mr. Shelef has served as executive director of Environmental System Ltd. since 1991. Mr. Shelef has served as a professor emeritus of the Technion-Israel Institute of Technology (the “Technion”) since 2004. From 1968 to 1971 Mr. Shelef served as Chief Sanitary Engineer and Head of the Division of Environmental Health of the Ministry of Health, Israel. From 1990 to 1992 Mr. Shelef served as a member of the advisory committee of the U.S. Environmental Protection Agency. From 1981 to 2004 Mr. Shelef served as head of the Environmental Laboratory and Research Group at the Technion. From 1972 to 1992 Mr. Shelef served as a member of the board of director or the board of governors of the following companies and institutes, among others: National Building Research Institute (1988-1990) and Tahal Consulting Engineers Ltd. (1989-1993), Coastal and Marine Engineering Research Institute of the Technion and the Port Authority (1985-1990), Transportation Research Institute of the Technion and the Ministry of Transportation (1985-1990), Technion (1983-1985), International Association of Water Pollution Research (1976-1980), Israel Oceanographic and Limnological Research Company Ltd (1971-1976). Mr. Shelef holds a Ph.D. in Hydraulics and Sanitary Engineering from the University of California, Berkley (1968).
 
 Ofer Navehis serving as Chief Finance Officer (CFO) of our Company since November 2011. Mr. Naveh serves as the Director of Finance of Greenstone Industries Ltd. and as CFO of S.R Accord Ltd., and served as the Director of Finance of Polar Communications Ltd. till April 1, 2012. From 2005 to 2010, Mr. Naveh served as a controller of S.R Accord Technologies Ltd. From 2000 to 2005, Mr. Naveh served as an Audit Manager in KPMG Somekh Chaikin. Mr. Naveh holds a B.A. in Accounting and Business from The College of Management Academic Studies and a M.A. in Law from Bar-Ilan University.
 
 6.B.        Compensation
 
 For his service to the Company as chief executive officer, which began in January 2012 and terminated in February 2013, Ofer Sandelson, was granted compensation valued at approximately US$266 thousand including related expenses, as well as US$64 thousand share based payments.
 
 16
 
 For his service to the Company as chief executive officer, which began in March 18, 2013 and terminated in October 25, 2013, Mr. Giora Gutman, was granted compensation valued at approximately US$85 thousand including related expenses.
 
 Aside from the compensation provided to Mr. Gutman and Mr. Sandelson, no other compensation was paid or is payable to persons who served as our executive officers.
 
 During 2013, the total amount paid or payable to our directors for the year ended December 31, 2013 was approximately US$87 thousand.
 
 In March, 2011, our audit committee and board of directors resolved that, as of the date of Ms. Rotbard election as an external director of the Company, the Company’s external directors (Alicia Rotbard and Jonathan Regev) shall be paid the maximum amount allowed under the Companies Regulations (Rules regarding Compensation and Expense Reimbursement of External Directors), 2000 (the “Regulations”), currently, an annual fee of approximately NIS 37 thousand and a participation fee of approximately NIS 2.5 thousand per meeting.
 
 On March 27, 2011, our  audit committee and board of directors approved, in accordance with the Israeli Companies Regulations (Relieves for Transactions with Interested Parties), 2000, that  Mr. Gedaliah Shelef shall be entitled to compensation equal to the “Maximum Amount” under the Regulations.
 
 On August 22, 2011, our shareholders approved (following the approval of our audit committee and board of directors), among others: (i) the grant to each of our directors, Gedaliah Shelef, Alicia Rotbard and Jonathan Regev, options to purchase 900,000 ordinary shares of the Company, with an exercise price of US$0.2145 per (adjusted for future dividend). The options are granted under the 2011 Plan; and (ii) the grant to Yair Fudim, of options to purchase RVB shares representing, on a Fully Diluted Basis (as defined in the Management Agreement between RVB and Greenstone, dated July 14, 2011 (the “Management Agreement”), i.e. assuming exercise of the Put Option (as defined below) by Mazal Resources B.V. (“Mazal”) and excluding: (i) options granted to directors, officers and employees of RVB or its affiliates or EER, after the execution of the Services Agreement between RVB, Mr. Moshe Stern and M. Stern Holding Ltd. (“Stern Holding”), a company under Mr. Stern's control, dated July 3, 2011 (the “Services Agreement”); (ii) options granted to Greenstone pursuant to the Management Agreement; and (iii) options granted pursuant to the Services Agreement (“Fully Diluted Basis”)), approximately 0.3% of RVB's issued and outstanding share capital as of the date of the grant, with an exercise price of US$0.2145 per share (adjusted for future dividend). The options shall become vested and exercisable, in accordance with the Vesting Schedule (as defined below). Such options to purchase ordinary shares of the Company were granted on January 5, 2012, following the completion of the multi-closing EER Transaction.
 
 On March 18, 2013, the  board of directors of our Company approved, following the approval of its compensation and audit committees, in accordance with the Israeli Companies Regulations (Relieves for Transactions with Interested Parties) of 2000, the compensation terms of Mr. Yair Fudim, the chairman of the board of directors and Mr. Mordechai (Moti) Menashe, a member of the board of directors, as follows: Mr. Fudim and Mr. Menashe shall be entitled to compensation equal to the “maximum amount” under the Regulations for companies similarly classified based on their shareholding equity, which is the currently paid compensation to other members of the board of directors of RVB. Namely - an annual fee of approximately NIS 37 thousand and a participation fee of approximately NIS 2.5 thousand per meeting.
 
 On January 9, 2014 our shareholders approved the Company's compensation policy. The full text of the compensation policy was included as Appendix A to the proxy statement attached to the Company's report on Form 6-K furnished to the Securities and Exchange Commission on December 5, 2013.
 
 For information regarding options to purchase our ordinary shares, issued to certain officers and members of our board of directors, see “Item 6.E. Directors, Senior Management and Employees - Share Ownership” below.
 
 6.C.        Board Practices
 
 Our Articles of Association provide for a board of directors of not less than two and no more than nine members and shall include at least two external directors.  Each director, with the exception of the external directors, is elected to serve until the next annual general meeting of shareholders, and so long as an annual general meeting is not convened, unless their office is vacated prior thereto in accordance with the provisions of our Articles of Association and the Companies Law.
 
 The Companies Law provides that a person, who is, directly or indirectly subordinated to the chief executive officer of a public company, may not serve as the chairman of its board of directors. In addition, neither the chief executive officer nor his relative is eligible to serve as chairman of the board of directors (and vice versa), unless such nomination was approved by a majority of the company’s shareholder for terms not exceeding three years each, and either: (i) such majority included at least two thirds of the voting shareholders (the votes of abstaining shareholders shall not be included in the number of the said total votes) which are not controlling shareholders and have no personal interest in the decision; or (ii) the aggregate number of shares voting against the proposal did not exceed 2% of company voting shareholders.
 
 17
 
 Our Articles of Association provide that any director may, by written notice, appoint another person to serve as an alternate director and may cancel such appointment.  According to the Companies Law, a person may not serve as an alternate director if such a person is not qualified to be appointed as a director, or a person who is already serving or as an alternate director. To our knowledge, no director currently has appointed any other person as an alternate director.
 
 External Directors
 
 Under the Companies Law, companies incorporated under the laws of Israel whose shares have been offered to the public in or outside of Israel are required to appoint no less than two external directors.  The Companies Law provides that a person may not be appointed as an external director if the person is a relative of a controlling shareholder or if the person or the person’s relative, partner, employer or anyone to whom that person is subordinate to, whether directly or indirectly, or any entity under the person’s control, has, as of the date of the person’s appointment to serve as external director, or had, during the two years preceding that date, any affiliation with the company, any entity controlling the company, any relative of the company's controlling shareholder or any entity controlled by the company or by its controlling entity; and in the event that the company does not have a controlling shareholder or a shareholder holding 25% or more of the voting rights in the company - any affiliation to the chairman of the board of directors, to the general manager (chief executive officer), to a shareholder holding 5% or more of the company's shares or voting rights, or to the senior financial officer as of the date of the person’s appointment. The term “affiliation” under the Companies Law includes:
 
 ·
an employment relationship;
 
 ·
a business or professional relationship maintained on a regular basis;
 
 ·
control; and
 
 ·
service as an office holder, excluding service as a director in a private company prior to the first offering of its shares to the public if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering.
 
 Without derogating from the above, a person may not serve as an external director if the person or the person’s relative, partner, employer, someone to whom he is subordinated, directly or indirectly, or any entity under the person’s control has business or professional relationship with an entity which an affiliation with is prohibited as detailed above, even if such relationship is not ordinarily (excluding negligible relationship). In addition, a person who received compensation other than the compensation permitted by the Companies Law may not serve as an external director.
 
 The term “relative” is defined as a spouse, sibling, parent, grandparent, descendant, spouse’s descendant, spouse’s sibling and spouse’s parent and the spouse of each of the foregoing.
 
 The term “office holder” is defined as a general manager, chief business manager, deputy general manager, vice general manager, or any other person assuming the responsibilities of any of the foregoing positions, without regard to such person’s title, director or manager directly subordinate to the general manager.
 
 No person can serve as an external director if the person’s position or other business creates, or may create, a conflict of interests with the person’s responsibilities as a director or may otherwise interfere with the person’s ability to serve as a director.  If at the time an external director is appointed all current members of the board of directors, who are not controlling shareholders or their relatives, are of the same gender, then the external director to be appointed must be of the other gender.  In addition, a person who is a director of a company may not be elected as an external director of another company if, at that time, a director of the other company is acting as an external director of the first company. A person cannot be appointed as an external director if he is an employee of the Israel Securities Authority or of the Israeli stock exchange.
 
 A person shall be qualified to serve as an external director only if he or she possesses accounting and financial expertise or certain professional qualifications. At least one external director must possess accounting and financial expertise and the other external directors are to possess professional qualifications as defined by regulations to the Companies Law.  Financial and accounting expertise require such external director to possess a high level of understanding in business matters, such that he or she can read and understand financial statements in depth and be able to raise issues with respect to the manner in which the financial data is presented therein. A company's board of directors is to determine such candidate's qualifications based on his or her education, experience and skills regarding financial and control matters in companies of similar size and in a similar industry and knowledge of preparation and approval of financial statements under the Companies Law and the Israeli Securities Law, 1968.
 
 18
 
 The regulations promulgated under the Companies Law define an external director with requisite professional qualifications as a director who satisfies one of the following requirements: (1) the director holds an academic degree in either economics, business administration, accounting, law or public administration, (2) the director either holds an academic degree in any other field or has completed another form of higher education in the company’s primary field of business or in an area which is relevant to his or her office as an external director in the company, or (3) the director has at least five years of experience serving in any one of the following, or at least five years of cumulative experience serving in two or more of the following capacities: (a) a senior business management position in a company with a substantial scope of business, (b) a senior position in the company’s primary field of business or (c) a senior position in public administration.
 
 According to the Companies Law, the board of directors of a public company must establish the minimum number of board members that are to have accounting and financial expertise while considering, inter alia, the nature of the company, its size, the scope and complexity of its operations and the number of directors.
 
 Until the lapse of two years from termination of office, a company, its controlling shareholder or a corporation controlled by the controlling shareholder may not grant that former external director, nor his spouse or children, any benefits, either directly or indirectly, including the prohibition to engage one of the persons above to serve as an office holder at the company or at a corporation controlled by the controlling shareholder, nor employ or receive services from that person, either directly or indirectly, including through a corporation controlled by that person. The abovementioned prohibition also applies for a relative who is not the former external director's spouse or children - until the lapse of one year period from the date that the external director has ceased to act as an external director.
 
 External directors are to be elected by a majority vote at a shareholders’ meeting, provided that either:
 
 ·
The total number of votes for the appointment of the external directors, excluding abstentions, shall include the votes of at least a majority of the shares represented at the meeting in person or by proxy, which are not held by controlling shareholders of the company nor by shareholders who have a personal interest in the appointment (excluding a personal interest which did not result from the shareholder’s relationship with the controlling shareholder); or
 
 ·
The total number of votes against the appointment of the external directors, among the non-controlling shareholders of the company, shall not exceed 2% of the aggregate voting rights in the company.
 
 An external director is entitled to compensation and reimbursement of expenses as provided in regulations promulgated under the Companies Law and is otherwise prohibited from receiving any compensation, directly or indirectly, in connection with services provided as an external director, except for certain exculpation, indemnification and insurance provided by the company, as specifically allowed by the Companies Law.
 
 An independent director is defined as an external director or a director who meets the following conditions and who is appointed or classified as such according to the Companies Law: (i) the conditions for his or her appointment as an external director (as described above) are satisfied and the audit committee approves the director having satisfied such conditions; and (ii) he or she has not served as a director of the company for over nine consecutive years with any interruption of up to two years of his or her service not being deemed a disruption to the continuity of his or her service. An independent director is entitled to compensation and reimbursement of expenses similar to such entitlement of an external director, as stated above.
 
 We compensate our two external directors and our independent director in accordance with regulations promulgated under the Companies Law.
 
 The initial term of an external director is three years and may be extended, subject to certain circumstances and conditions, for two additional terms of three years. An external director may be removed by the same special majority of the shareholders required for his or her election, if he or she ceases to meet the statutory qualifications for appointment or if he or she violates his or her fiduciary duty to the company. An external director may also be removed by order of an Israeli court if the court finds that the external director is permanently unable to exercise his or her office, has ceased to meet the statutory qualifications for his or her appointment, has violated his or her fiduciary duty to the company, or has been convicted by a court outside Israel of certain offenses detailed in the Companies Law.
 
 If the vacancy of an external directorship causes a company to have fewer than two external directors, the company’s board of directors is required under the Companies Law to call a special general meeting of the company’s shareholders as soon as possible to appoint such number of new external directors so that the company thereafter has two external directors.
 
 19
 
 Each committee of a company’s board of directors, which exercises board powers, is required to include at least one external director and the audit committee must include all of the company’s external directors and one of which should be its chairman.
 
 At the Company's annual general meeting held on July 10, 2008, we appointed Ms. Alicia Rotbard to serve as external director and on August 22, 2011, our annual general meeting of shareholders re-appointed Ms. Rotbard to serve as external director. The re-appointment of Ms. Rotbard to an additional 3-year term was approved by the board of directors and will be proposed for approval in the next annual meeting of the shareholders of the Company. In April 2010, pursuant to the decision of an extraordinary meeting of shareholders, we appointed Mr. Jonathan Regev as an external director of the Company and on January 4, 2014, at the Company’s special general meeting of shareholders we re-appointed Mr. Regev to serve as an external director for additional three (3) years, effective as of April 22, 2013. At the Company’s special general meeting held on May 23, 2013 we appointed Prof. Gedaliah Shelef as an independent director of the Company under the Companies Law. The re-appointment and re-classification of Prof. Shelef as an independent director under the Companies Law was approved by the board of directors and will be proposed for approval in the next annual meeting of the shareholders of the Company.
 
 Exculpation, Insurance and Indemnification of Directors and Officers
 
 Under the Companies Law, an Israeli company may not exempt an office holder from liability with respect to a breach of his fiduciary duty, but may exempt in advance an office holder from his or her liability to the company, in whole or in part, with respect to a breach of his duty of care, provided, that the company is so permitted under its articles of association.
 
 Office Holder Insurance
 
 Our Articles of Association provide that, subject to the provisions of the law, we may enter into a contract for the insurance of the liability of any of our office holders with respect to:
 
 ·
a breach of his or her duty of care to us or to another person;
 
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a breach of his or her fiduciary duty to us, provided that the office holder acted in good faith and had reasonable basis to believe that the act would not harm us; or
 
 ·
a monetary obligation imposed on him or her in favor of another person.
 
 Any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of an Office Holder in the Company, including, without limitation, matters referenced in Section 56H(b)(1) of the Securities Law.
 
 Indemnification of Office Holders
 
 Our Articles of Association provide that we may indemnify an office holder against:
 
 ·
a monetary obligation imposed on him or her or incurred by him or her in favor of another person pursuant to a judgment, including a judgment given in settlement or a court approved settlement or an arbitrator’s award concerning an act performed in his or her capacity as an office holder;
 
 ·
reasonable legal fees, including attorney’s fees, incurred by the office holder in consequence of an investigation or proceeding filed against him by an authority that is authorized to conduct such investigation or proceeding, provided that such investigation or proceeding (i) concludes without the filing of an indictment against the office holder or (ii) concluded with the imposition of a monetary payment on the office holder in lieu of criminal proceedings, but the criminal offense in question does not require the proof of criminal intent, all within the meaning of the Law or in connection with a financial sanction;
 
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reasonable litigation costs, including attorneys’ fees, incurred by the office holder or charged to him or her by a court, in proceedings we institute against him or her or instituted on our behalf or by another person, or in a criminal charge from which he or she was acquitted, or a criminal charge in which he or she was convicted for a criminal offense that does not require proof of intent, in each case relating to an act performed in his or her capacity as an office holder; and
 
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Any other obligation or expense in respect of which it is permitted or will be permitted under the statutes to indemnify an office holder, including, without limitation, matters referenced in Section 56H(b)(1) of the Securities Law.
 
 ·
In addition, our Articles of Association provide that we may give an advance undertaking to indemnify and may retroactively indemnify an office holder therein with respect to certain matters as detailed in the Articles of Association.
 
 20
 
 Limitations on Insurance and Indemnification.
 
 The Companies Law provides that a company may not indemnify an office holder nor enter into an insurance contract which would provide coverage for any monetary liability incurred as a result of any of the following:
 
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a breach by the office holder of his or her fiduciary duty unless the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
 
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a breach by the office holder of his or her duty of care if the breach was done intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
 
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any act or omission done with the intent to derive an illegal personal benefit; or
 
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any fine levied against the office holder.
 
 In addition, under the Companies Law, indemnification of, and procurement of insurance coverage for, our office holders must be approved by our audit committee and our board of directors and, in specified circumstances, by our shareholders.
 
 We have obtained liability insurance for our directors and officers.
 
 Audit Committee
 
 Our audit committee is comprised of Mr. Jonathan Regev, Ms. Alicia Rotbard and Prof. Gedaliah Shelef. The audit committee is responsible, among other things, to assist the board of directors in fulfilling its responsibility for oversight of the quality and integrity of accounting, auditing and financial reporting practices of the Company. Under the Companies Law, the board of directors of a public company must establish an audit committee. The audit committee must consist of at least three directors, must include all of the company’s external directors and the majority of its members must be “independent” (as defined above). The chairman of the audit committee must be an external director. The following  individuals may not be members of the audit committee: (i) the chairman of the board of directors, (ii) any director employed by the company, its controlling shareholder or by an entity controlled by the controlling shareholder, (iii) a director who regularly provides services to the company, its controlling shareholder or any entity controlled by the controlling shareholder, (iv) any director whose main source income comes from the company's controlling shareholder, or (v) the company's controlling shareholders or any of their relatives. The members of the audit committee are also required to meet the independence requirements established by the SEC in accordance with the requirements of the Sarbanes-Oxley Act. Whoever is disqualified from serving as member of the audit committee may not be present at the audit committee meetings, unless the chairman of the audit committee determined that such person is required to be present at the meeting or if such person applies to one of the exemptions under the Companies Law.
 
 Our audit committee provides assistance to our board of directors in fulfilling its legal and fiduciary obligations in matters involving our accounting, auditing, financial reporting and internal control functions by pre-approving the services performed by our independent accountants and reviewing their reports regarding our accounting practices and systems of internal control over financial reporting. The audit committee also oversees the audit efforts of our independent accountants and takes those actions as it deems necessary to satisfy itself that the accountants are independent of management. The audit committee is also responsible for evaluating the Company's internal audit program and the performance of the Company's internal auditor and the resources at his/her disposal and creating procedures relating to the employees' complaints regarding deficiencies in the administration of the Company. Under the Companies Law, the audit committee is required to identify deficiencies in the management of the company, including by consulting with the internal auditor or the independent accountants, and recommending remedial actions to the board of directors with respect to such deficiencies, and is responsible for reviewing and approving certain related party transactions, as described below. The audit committee may not approve such a related party transaction unless at the time of approval a quorum is presented at the meeting at which the approval was granted. The quorum for the audit committee is the majority of the members of the audit committee, provided that the majority of the independent directors are present and at least one of which is an external director.
 
 The audit committee is also responsible for the determination of whether certain related party actions and transactions are “material” or “extraordinary” for purposes of the requisite approval procedures; assess the scope of work and compensation of the company's independent accountant; to assess the company's internal audit system and the performance of its internal auditor; ensuring that a competitive process is conducted for related party transactions with a controlling shareholder (regardless of whether or not such transactions are deemed extraordinary transactions), optionally based on criteria which may be determined by the audit committee annually in advance; setting forth the approval process for transactions that are 'non-negligible' (i.e. transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; and creating procedures relating to the employees’ complaints regarding deficiencies in the administration of the Company.
 
 21
 
 Compensation Committee
 
 Amendment No. 20 to the Companies Law, which became effective as of December, 2012, established new regulations relating to the terms of office and employment of directors and officers in public companies and companies that have publicly issued debentures (“Public Companies”). Following the amendment, Public Companies are required to appoint a compensation committee, in accordance with the guidelines set forth in the amendment.
 
 The compensation committee consists of at least three members. All of the external directors must serve on the committee and constitute a majority of its members. The chairman of the compensation committee must be an external director. The remaining members must be directors who qualify to serve as members of the audit committee (as stated in item above). Our compensation committee is currently composed of three members, Mr. Jonathan Regev, Ms. Alicia Rotbard and Prof. Gedaliah Shelef Mr. Regev and Ms. Rotbard are the Company’s external directors serving on the board of directors. Mr. Regev also serves as the chairman of the compensation committee. Prof. Shelef is the independent director that sits on the board of directors.
 
 As per the Companies Law, the roles of the compensation committee are, among others, as follows:
 
 (1)
to recommend to the board of directors with regards to the compensation policy for directors and officers, and recommend to the board of directors once every three years regarding extension of the compensation policy that had been approved for a period of more than three years;
 
 (2)
to recommend to the board of directors regarding the update of the compensation policy, from time to time, and examine its implementation;
 
 (3)
to decide whether to approve the terms of office and employment of directors and officers that require approval of the compensation committee; and
 
 (4)
to decide, in certain circumstances, whether to exempt the approval of terms of office of a Chief Executive Officer from the requirements of shareholders approval.
 
 In addition to the roles mentioned above our compensation committee also makes recommendations to our board of directors regarding the awarding of employee options.
 
 In accordance with the provisions of the amendment, a compensation policy must be adopted by the Company. A compensation policy must be approved by the board of directors after receiving and considering the recommendations of the compensation committee. In addition, the compensation policy requires the approval of the general meeting of the shareholders. In Public Companies, shareholder approval requires one of the following: (i) the majority of shareholder votes counted at general meeting including the majority of all of the votes of those shareholders who are non controlling shareholders and do not have a personal interest in the approval of the compensation policy, who participate at the meeting (excluding abstentions) or (ii) the total number of votes against the proposal among the shareholders mentioned in paragraph (i) does exceed two percent (2%) of the voting rights in the company. Under special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition that the compensation committee and then the board of directors decide, on the basis of detailed arguments and after discussing again the compensation policy, that approval of the compensation policy, despite the objection of the meeting of shareholders, is for the benefit of the company. As of the date of this annual report, we have not adopted yet a compensation policy. For more information regarding Amendment 20, see “Item 10.B. Memorandum and Articles of Association”. On January 9, 2014, our shareholders approved our compensation policy, following the favorable recommendation of the Compensation Committee and approval by the board of directors, and took effect thereafter. The full text of the compensation policy was included as Exhibit A to the proxy statement attached to the Company's report on Form 6-K furnished to the Securities and Exchange Commission on December 5, 2013.
 
 Internal auditor
 
 Under the Companies Law, the board of directors of a public company must appoint an internal auditor based on the recommendation of the audit committee.  Our internal auditor is Mr. Yehuda Ezra, C.P.A (Isr) of Ezra Yehuda-Rozenblum, Consulting, Control and Risk Management Ltd. The role of the internal auditor is, among other things, to examine whether a company’s actions comply with applicable law and orderly business procedure.  Under the Companies Law, the internal auditor may not be an interested party, an office holder or a relative of an interested party or of an office holder, nor may the internal auditor be the company’s independent auditor or its representative.
 
 22
 
 An “interested party” is defined in the Companies Law as (i) a holder of 5% or more of the issued share capital or voting power in a company, (ii) any person or entity who has the right to designate one or more directors or to designate the general manager (chief executive officer) of the company, or (iii) any person who serves as a director or as the general manager (chief executive officer) of the company.
 
 D.            Employees
 
 During the years 2011 through 2013, only Ofer Sandelson, the former chief executive officer of the Company was employed by the Company. For more information, see “Item 6.B. Compensation.”
 
 On July 25, 2013, the board of directors of the Company implemented a significant cutback in the personnel of EER and as of the date of this report EER is employing 3 employees.
 
 On November 18, 2012, Mr. Ofer Sandelson, the Company’s and EER’s Chief Executive Officer notified the Company that he has decided to terminate his employment with the Company and with its subsidiary company EER. In accordance with Mr. Sandelson employment agreement with the Company and EER, he terminated his employment upon three months prior notice (during February 2013).
 
 On March 18, 2013, our board of directors approved the appointment of Mr. Giora Gutman as the Company's and EER’s Chief Executive Officer (CEO) effective immediately.  On July 25, 2013, Mr. Gutman notified the Company that he has decided to terminate his engagement with the Company and with its subsidiary company EER. In accordance with Mr. Gutman service agreement with the Company and EER, he terminated his engagement upon three months prior notice on October 25, 2013.
 
 We are subject, like all Israeli employers, to labor laws and regulations in Israel. These laws principally concern matters like paid annual vacation, paid sick days and other conditions of employment. In addition, Israeli law generally requires severance pay, which may be funded by managers’ insurance and/or pension fund as described below (or by other funds), upon the retirement or death of an employee or termination of employment, subject to the provisions of the law.  Provisions for severance pay amount to approximately 8.33% of wages. Furthermore, Israeli employees and employers are required to pay predetermined sums to the National Insurance Institute, which is broadly parallel to the United States Social Security Administration. These amounts also include payments by the employee for national health insurance. The total payments to the National Insurance Institute are equal to approximately 16.25% of the wages (up to a specified amount), of which the employee contributes approximately 66% and the employer contributes approximately 34%. As above stated, currently we have no employees.
 
 We and any Israeli employees we may employ in the future may be subject to certain provisions of the general collective bargaining agreements between the Histadrut, the General Federation of Labor in Israel, the Coordination Bureau of Economic Organizations and employers organizations (including the Industrialists Association) and orders of the Israel Ministry of Economy.
 
 6.E.         Share Ownership
 
 As of April 28, 2014 none of our directors and executive officers beneficially own more than 1% of our outstanding equity securities.
 
 Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Ordinary shares that are subject to warrants or options that are presently exercisable or exercisable within 60 days of the date of April 28, 2014 are deemed to be outstanding and beneficially owned by the person holding the options for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage of any other person.
 
 Employee Share Option Plan
 
 On June 29, 2011, our board of directors approved our 2011 Share Option Plan (the “2011 Plan”). Under the 2011 Plan, we may grant to any of our and our affiliates' (i.e. present or future companies that either control or controlled by RVB) employees, officers and directors options to purchase our ordinary shares. The total number of the shares reserved for issuance under the 2011 Plan was set up to be 5% of the issued and outstanding share capital of RVB as of January 1 of each year. The options under the 2011 Plan shall become vested and exercisable, in accordance with the following vesting schedule: (i) 33% of the options shall vest on the first anniversary of the date of grant; and (ii) 8.375% of the options shall vest on the last business day of each subsequent fiscal quarter following the first anniversary of the date of grant, such that any option shall become fully vested and exercisable by the third anniversary of the date of grant (the “Vesting Schedule”).
 
 23
 
 In January 2012, following the approval of the Company's audit committee and board of directors, our Company granted to seven of its and  EER's employees options to purchase 25,793,156 ordinary shares of the Company with an exercise price of US$0.2145 per share (adjusted for future dividend), (including 10,000,000 options to the Company's CEO), according to the 2011 Plan. In November 2012, the Company granted to additional three of EER's employees options to purchase 1,148,593 ordinary shares of the Company, according to the 2011 plan. The Company has not granted options to either its or EER’s employees since November 2012.
 
 As of the date of this annual report, there are outstanding options to purchase up to 9,735,133  of our ordinary shares in aggregate, held by our directors, officers and employees (as well as EER's employees).
 
 ITEM 7.                      Major Shareholders and Related Party Transactions
 
 7.A.        Major Shareholders
 
 The following table sets forth certain information regarding the beneficial ownership of our Ordinary Shares as of April 28, 2014 by each person or entity known to own beneficially more than 5% of our outstanding ordinary shares based on information provided to us by the holders or disclosed in public filings with the Securities and Exchange Commission.
 
 Name

Number of Ordinary

Shares Beneficially Owned


Percentage of

Outstanding Ordinary

Shares(1)Greenstone Industries Ltd.(2)

7 Jabotinsky St. Ramat Gan, 52509, Israel


86,731,038



35.88
%Bank Leumi le-Israel B.M.(3)

34 Yehuda Halevi St. P.O. Box 2

Tel Aviv, 65546, Israel


19,111,111



8.25
%EBN Korea Ltd.(4)

Seoul Center Building 91-1

Sogong-Dong Jung-Gu,

Seoul M5 100-070


15,231,571



6.57
%Makoto Takahashi(5)

3-1-2-511, Shinyokohama, Kohokuku,

Yokohama, Japan


23,445,975



10.12
%Mazal Resources B.V. (6)

Rietlandpark, 125 DT

Amsterdam P7 1019


52,425,000



18.45
%
 (1)
Based on 231,685,787ordinary shares of RVB outstanding as of April 15, 2013 (not taking into account 1,040,000 dormant shares held by RVB).
 
 (2)
The information is based on Amendment no. 9 to Schedule 13D filed by Greenstone, on March 25, 2013. The total number of RVB shares beneficially owned by Greenstone (i.e. 86,731,038), consists of (i) 76,680,848 RVB shares held by Greenstone; (ii) 10,050,190RVB shares issuable under an option granted to Greenstone. Greenstone has sole dispositive power solely with respect to items (i) and (ii) above.
 
 (3)
The information is based on Schedule 13G filed by Bank Leumi le-Israel B.M on February 14, 2014.
 
 (4)
The information is based on Schedule 13G filed by EBN Korea Ltd. on March 7, 2012.
 
 (5)
The information is based on Schedule 13G filed by Mr. Makoto Takahashi, on January 23, 2012. Mr. Takahashi beneficially holds the ordinary shares of RVB through the following companies: (i) Capital Catalyzer Japan Ltd. which holds 4,045,183 ordinary shares of the RVB, (ii) EER Japan Inc. which holds 6,465,750 ordinary shares of RVB, and (iii) Alma Inc. which holds 12,935,042 ordinary shares of RVB. Mr. Takahashi is the owner of 50% of the outstanding shares of EER Japan Inc. and of 20% of the outstanding shares of Alma Inc., and is, therefore, considered a controlling shareholder of such companies. Catalyzer Japan Ltd is a wholly-owned subsidiary of Alma Inc.
 
 (6)
The information is based on Amendment no. 6 to Schedule 13D filed by Mazal Resources B.V. on December 13, 2011. Mazal has a put option to sell ordinary shares of EER to RVB in exchange for issuing 52,425,000 ordinary shares of RVB. As of the date of its report, Mazal didn't own any shares of RVB.
 
 As of April 28, 2014, there were a total of 2 registered holders of our ordinary shares with addresses in the United States (other than CEDE & Co.). Such United States holders were, as of such date, the registered holders of 2,773,075 ordinary shares representing approximately 1.20% of our outstanding share capital. The number of registered holders in the United States is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these ordinary shares were held by a U.S. nominee company, CEDE & Co., which held approximately 16.76% of our outstanding ordinary shares as of said date.
 
 24
 
 7.B.        Related Party Transactions
 
 The EER Transaction
 
 On August 22, 2011, our shareholders approved the EER Transaction (following an approval by our audit committee and board of directors), together with the Additional SPA. At that meeting, our shareholders also approved the grant to Mr. Yair Fudim, of options to purchase ordinary shares of the Company representing, on a Fully Diluted Basis, approximately 0.3% of the Company's issued and outstanding share capital as of the date of grant, with an exercise price of US$0.2145 per share (adjusted for future dividend), which shall become vested and exercisable in accordance with the Vesting Schedule. These options were granted on January 5, 2012.
 
 On January 12, 2012, we completed the multi-closing EER Transaction and purchased all of the EER shares held by Greenstone and Accord and the majority of EER shares held by certain other EER shareholders. Following such closings there is one shareholder who holds 200,000 shares of EER (constitutes approximately 1% of EER share capital) other than the Company and Mazal (which is side to the Option Agreement with the Company).
 
 Below is description of the EER Transaction, including a summary of the terms and conditions of the EER Share Purchase Agreement, the Option Agreement, the Voting Agreement (as defined below) and the Services Agreement, and the actions that took place at the Closing Date of the EER transaction on August 31, 2011 (the “Closing Date”) in connection therewith:
 
 (i)
At the Closing Date, pursuant to the EER Share Purchase Agreement, we acquired all of EER's shares held by Greenstone (6,274,760 ordinary shares of EER), for a total cash consideration of US$15,686,900. In addition, we acquired all of EER’s share capital held by Accord (1,721,450 ordinary shares of EER), in exchange for 20,054,893 RVB shares (each EER share was exchanged for 11.65 ordinary RVB shares);
 
 (ii)
The EER Share Purchase Agreement provided that we would cause Bank Leumi L’Israel Ltd. to release Greenstone, Accord and S.R. Accord Technologies Ltd., from all their obligations according to guarantees provided by them to the bank. As of the date of this annual report, the loan has been fully paid and these guarantees have been released.
 
 (iii)
In addition, pursuant to the EER Share Purchase Agreement, we were provided with the opportunity, until the lapse of 24 months following the Closing Date, to make an investment from time to time in EER’s share capital in an aggregate amount of up to US$8,000,000 by purchasing EER ordinary shares at a price of US$2.5 per share. Since the closing date and until August 31, 2013 (the end of the above mentioned 24 month period) the Company has invested in EER a total amount of approximately $7 million;
 
 (iv)
Pursuant to the Option Agreement between the Company and Mazal, dated July 3, 2011 (the “Option Agreement”), we granted Mazal an option to sell to RVB or to whom RVB may direct, no later than December 31, 2016, Mazal’s holdings in EER, in exchange of RVB shares at the same exchange ratio applied for the purchase of EER's shares pursuant to the Share Purchase Agreement (the “Put Option”), and Mazal granted us the option to buy all of Mazal's holdings in EER, upon the occurrence of certain reorganization events on or prior to December 31, 2016 (the “Call Option”). The terms and conditions of the Option Agreement applies, where applicable, to the 150,000 options to purchase EER shares, which EER granted to EER’s former CEO, Mr. Stern, in June 2011;
 
 (v)
Pursuant to the Voting Agreement between Greenstone and Mazal, dated July 3, 2011 (the “Voting Agreement”), Greenstone and Mazal agreed to coordinate the voting of RVB shares held by such parties, including with respect to the appointment of directors to the board of directors of RVB. The Voting Agreement was terminated as of November 29, 2011 pursuant to a termination agreement between Greenstone and Mazal, dated November 29, 2011;
 
 (vi)
Pursuant to the Shareholders' Agreement, Mazal undertook to vote its EER shares in the same manner as then voted on such matter by RVB and/or as instructed by RVB in its sole discretion. The Shareholders' Agreement also contains certain provisions concerning rights of first refusal, pursuant to which, if Mazal proposes transfer in any way any of the Mazal EER shares, to one or more third parties except to a permitted transferee, then RVB shall have a right of first refusal with respect to such transfer;
 
 25
 
 (vii)
Pursuant to the Management Agreement, Greenstone provides RVB with management and accounting services, for a total consideration of NIS 25,000 per month plus VAT, and, in addition, 10,050,190 options to purchase ordinary shares of the Company representing, on a Fully Diluted Basis, approximately 3.5% of the Company's issued and outstanding share capital as of the date of grant, with an exercise price of US$0.2145 per share (adjusted for future dividend), exercisable in accordance with the Vesting Schedule. The options described in this paragraph, which number was set upon the additional closing of the Additional SPA dated January 12, 2012 at 10,050,190 were granted on such closing date with an exercise price of US$0.2145 per share (adjusted for future dividends), exercisable in accordance with the Vesting Schedule. During the reported period, Greenstone notified the Company that it waives the total consideration of the management fees due from September 1, 2012.; and
 
 (viii)
Pursuant to the Services Agreement, Stern Holding undertook to provide business development services to RVB, for a total consideration of NIS 50,000 per month plus VAT, as well as certain expenses. The Services Agreement was terminated as of November 1, 2011 pursuant to a termination agreement by and among the parties, dated November 29, 2011.
 
 Following the completion of the EER Transaction, EER has become our subsidiary.
 
 For information regarding options to purchase our ordinary shares, issued to certain officers and members of our board of directors, see “Item 6.B. Directors, Senior Management and Employees - Compensation” above.
 
 Directors’ and Officers’ Liability Insurance
 
 On March 13, 2014, the Company’s board of directors approved, following the approval of the Company's audit and compensation committees, an extension of the Company’s directors’ and officers’ liability insurance (“D&O insurance policy”) until March 24, 2015, as well as a framework for the extension, renewal, and entering into insurance policies for our directors’ and officers’ liability (the “Framework”), pending the approval of our shareholders at next general meeting of the shareholders. Pursuant to terms of the D&O insurance policy, as extended, the insurance coverage will be for an aggregate amount of US$7.5 million and the total annual premium shall be US$35,800. Pursuant to terms of the Framework, the insurance coverage will be for an aggregate amount of up to US$10 million and the total annual premium shall be up to US$50,000. In addition, the insurance coverage, as extended, covers events related to EER as well.
 
 Credit Line
 
 In October and January 2014, RVB and Greenstone entered into two credit line agreements of up to NIS 1 million each. The term of each of such credit line was six months and the outstanding principal amount under these credit lines originally was not bearing any interest and was linked the changes in the consumer price index. In the upcoming annual meeting of the shareholders of the Company, the shareholders will be asked to approve an additional credit line from Greenstone in the amount of up to NIS 600,000. Any outstanding balance under this credit line will bear an annual interest of 10%. In addition, the shareholders will be asked to approve that the term of the previous loans we have received from Greenstone in the aggregate principal amount of NIS 2 million shall be extended and such loans shall be subject to similar terms as the new credit line, as of date of the shareholders approval.
 
 7.C.        Interests of Experts and Counsel
 
 Not applicable.
 
 ITEM 8.                      Financial Information
 
 8.A.        Consolidated Statements and Other Financial Information
 
 The Financial Statements required by this item are found at the end of this annual report, beginning on page F-1.
 
 Legal Proceedings
 
 As of the end of 2012 and in 2013, the Company, its directors and former CEO, Giora Gutman, received letters from former shareholders of EER, who are currently shareholders of the Company, claiming, among others, that there were financial irregularities and other irregularities in connection with resolutions made by the Company’s directors relating to EER. The Company has denied all such claims and as of the date of this annual report no claim regarding that matter was filed.
 
 26
 
 As of December 12, 2013 there were letter correspondences between the Company and a shareholder of the Company, with regard to the shareholder’s claims that the EER Transaction was not approved properly. In his letter, the shareholder requested the Company to provide him with certain materials related to the EER Transaction. The Company has denied the claims and as of the date of this annual report no claim regarding that matter was filed.
 
 Dividend Policy
 
 We have no dividend policy.
 
 B.            Significant Changes
 
 There have been no material changes in our financial position since December 31, 2013 except as otherwise disclosed in this annual report.
 
 ITEM 9.                      The Offer and Listing
 
 A.            Offer and Listing Details
 
 Our Ordinary Shares are quoted on the Over the Counter Bulletin Board under the symbol RVBHF.
 
 The following table sets forth, for the periods indicated, the range of high and low sales prices of our Ordinary Shares:
 
 High


LowYearly highs and lows2009Year ending December 31, 2009

US$
0.26


US$
US0.052010Year ending December 31, 2010

US$
0.18


US$
0.052011Year ending December 31, 2011

US$
0.20


US$
0.042012Year ending December 31, 2012

US$
0.22


US$
0.012013Year ending December 31, 2013

US$
0.09


US$
0.0015Quarterly highs and lows2012First Quarter

US$
0.12


US$
0.01Second Quarter

US$
0.22


US$
0.06Third Quarter

US$
0.18


US$
0.03Fourth Quarter

US$
0.05


US$
0.012013First Quarter

US$
0.09


US$
0.01Second Quarter

US$
0.01


US$
0.005Third Quarter

US$
0.03


US$
0.002Fourth Quarter

US$
0.01


US$
0.00152014First Quarter

US$
0.0016


US$
0.0015Monthly highs and lowsMarch 2014

US$
0.0015


US$
0.0015February 2014

US$
0.0016


US$
0.0015January 2014

US$
0.0016


US$
0.0015December 2013

US$
0.005


US$
0.0015November 2013

US$
0.01


US$
0.0015October 2013

US$
0.07


US$
0.003
 
 9.B.
Plan of Distribution
 
 Not applicable.
 
 27
 
 9.C.
Markets
 
 Our Ordinary Shares were traded on the Nasdaq Capital Market until February, 2003 under the ticker symbol BVRSF.  Our Ordinary Shares were then delisted from the Nasdaq Capital Market after we failed to comply with its required listing standards. Our Ordinary Shares traded on the Over-the-Counter Bulletin Board under the symbol “BVRSF.OB” from February, 2003 until March 2010.  Following the Elbit Transaction and our name change to R.V.B. Holdings Ltd, we changed our ticker symbol and on March 2, 2010, our Ordinary Shares began trading on the Over-the-Counter Bulletin Board under the symbol “RVBHF”.
 
 9.D.
Selling Shareholders
 
 Not applicable.
 
 9.E.
Dilution
 
 Not applicable.
 
 9.F.
Expenses of the Issue
 
 Not applicable.
 
 ITEM 10.                    Additional Information
 
 10.A.
Share Capital
 
 Not applicable.
 
 10.B.
Memorandum and Articles of Association
 
 Objects and Purposes
 
 We are a public company registered under the Companies Law as R.V.B. Holdings Ltd (formerly B.V.R. Systems (1998) Ltd.), registration number 52-004362-1.  Pursuant to Article 4.2 of our Articles of Association, our objective is any purpose stated in the Company's memorandum of association and to engage in any lawful activity.
 
 Transactions Requiring Special Approval
 
 The Companies Law requires that an office holder disclose to the company any personal interest that he or she may have, and all related material information known to him or her, in connection with any existing or proposed transaction by the company.  The disclosure is required to be made promptly and in any event, no later than the board of directors meeting in which the transaction is first discussed.  If the transaction is an extraordinary transaction, the office holder must also disclose any personal interest held by his or her relative.
 
 An “office holder” is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any person assuming the responsibilities of any of the foregoing positions without regard to such person’s title and a director or any manager who is directly subject to the general manager.
 
 The Companies Law imposes a duty of care and a fiduciary duty on all office holders of a company.  The duty of care requires an office holder to act with the level of care which a reasonable office holder in the same position would have acted under the same circumstances.  The duty of care includes a duty to use reasonable means to obtain:
 
 ·
information on the appropriateness of a given act or action to be approved or performed by the officer holder by virtue of his or her position; and
 
 ·
all other important information pertaining to such an act or action.
 
 The fiduciary duty requires an office holder to act in good faith for the interests of the company and includes a duty to:
 
 ·
refrain from any conflict of interest between the performance of the office holder’s duties in the company and his or her personal affairs;
 
 ·
refrain from any activity that is competitive with the company;
 
 ·
refrain from exploiting any business opportunity of the company to receive a personal gain for himself or herself or for others; and
 
 ·
disclose to the company any information or documents relating to a company’s affairs which the office holder has received due to his or her position as an office holder.
 
 28
 
 Each person listed in the table under “Item 6 – Directors, Senior Management and Employees – A. Directors and Senior Management” is an office holder.
 
 Under the Companies Law,  a “personal interest” is defined as the personal interest of a person in an action or in a transaction of the company, including the personal interest of such person’s relative or the interest of any other corporate body in which the person and/or such person’s relative is a director or general manager, a 5% shareholder or holds 5% or more of the voting rights, or has the right to appoint at least one director or the general manager, but excluding a personal interest stemming solely from the fact of holding shares in the company. A personal interest also includes a personal interest of a person who votes according to a proxy of another person, even if the other person has no personal interest, and a personal interest of a person who gave a proxy to another person to vote on his behalf – all whether the discretion how to vote lies with the person voting or not.
 
 Under the Companies Law, an extraordinary transaction is a transaction:
 
 ·
not in the ordinary course of business;
 
 ·
not on market terms; or
 
 ·
likely to have a material impact on the company’s profitability, assets or liabilities.
 
 Under the Companies Law, once an office holder complies with the above disclosure requirement, the board of directors may approve the transaction, unless the company’s articles of association provide otherwise.  A transaction that is adverse to the company’s interest may not be approved.  If the transaction is (i) an extraordinary transaction with an office holder or a third party in which the office holder has a personal interest, or (ii) an engagement by the company with an office holder who is not a director regarding his or her service and terms of employment, including an undertaking to indemnify, exculpate or insure such office holder, then it must be approved by the audit committee, before the board approval. In the event that an amendment is made to an existing engagement with an office holder, such amendment does not require board approval to the extent that it is immaterial to the existing engagement. Transaction between a company and  its directors regarding such directors' service and terms of employment, including with respect to exculpation, indemnification or insurance, including compensation for non-directorial duties in the company, require the approval of each of the audit committee, the board of directors and the shareholders, in that order.
 
 Extraordinary transactions of a public company with its controlling shareholder or in which a controlling shareholder has a personal interest, including a private placement in which a controlling shareholder has a personal interest, and the terms of engagement of the company, directly or indirectly, with a controlling shareholder or a controlling shareholder’s relative (including through a corporation controlled by a controlling shareholder), regarding the company’s receipt of services from the controlling shareholder, and if such controlling shareholder is also an office holder or an employee of the company, regarding his or her terms of engagement and employment, require the approval of the audit committee, the board of directors and the shareholders of the company.  The shareholders approval must satisfy either of the following criteria:
 
 ·
the majority must include a majority of the total votes of shareholders who are present and voting at the meeting and who have no personal interest in the transaction (the votes of abstaining shareholders shall not be included in the number of the said total votes); or
 
 ·
the total of opposition votes, among the shareholders who are present at the meeting and who have no personal interest in the transaction, shall not exceed 2% of the aggregate voting rights in the company.
 
 In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years, requires the abovementioned approval every three years; unless, with respect to transactions not involving the receipt of services or compensation, the audit committee has determined that a longer term is reasonable under the circumstances.
 
 A person who has a personal interest in a matter which is considered at a meeting of the board of directors or the audit committee may not be present at this meeting or vote on this matter. However, if the chairman of the board of directors or the chairman of the audit committee has determined that the presence of an office holder with a personal interest is required, such office holder may be present at the meeting. Notwithstanding the foregoing, a director who has a personal interest may be present at the meeting and vote on the matter if a majority of the directors or members of the audit committee have a personal interest in the approval of such transaction. If a majority of the directors have a personal interest in a transaction, such transaction requires approval of the shareholders of the Company.
 
 Under the Companies Law, the disclosure requirements which apply to an office holder also apply to a controlling shareholder of a public company.  A shareholder is presumed to have “control” of the company and thus to be a controlling shareholder of the company if the shareholder holds 50% or more of the “means of control” of the company.  “Means of control” is defined as (1) the right to vote at a general meeting of a company or a corresponding body of another corporation; or (2) the right to appoint directors of the corporation or its general manager.  For the purpose of approving transactions with controlling shareholders, the term also includes any shareholder that holds 25% or more of the voting rights in a public company if no other shareholder owns more than 50% of the voting rights in the company. For purposes of determining the holding percentage stated above, two or more shareholders who have a personal interest in a transaction that is brought for the company’s approval are deemed as joint holders.
 
 29
 
 The Companies Law requires that every shareholder that participates, in person, by proxy or by voting instrument in a vote regarding a transaction with a controlling shareholder, must indicate in advance or in the ballot whether or not that shareholder has a personal interest in the vote in question. Failure to so indicate will result in the invalidation of that shareholder’s vote.
 
 For information concerning the direct and indirect personal interests of certain of our office holders and principal shareholders in certain transactions with us, see “Item 7.B. – Major Shareholders and Related Party Transactions – Related Party Transactions.”
 
 Compensation of Officers and Directors
 
 Pursuant to Amendment No. 20 to the Companies Law (“Amendment No. 20”) adopted new procedures relating to the approval of executive compensation and the formulation of compensation policies in Israeli public companies (including companies that issued only debentures to the public). Pursuant to Amendment No. 20, Israeli public companies are required to establish a compensation committee and adopt a policy regarding the compensation and terms of employment of their directors and officers. For information on the composition, roles and objectives of the compensation committee pursuant to the Companies Law and our compensation committee charter, see “Item 6C. Board Practices –Board of Directors' Committees – Compensation Committee”.
 
 Pursuant to Companies Law following Amendment No. 20, the compensation policy must be approved by company's board of directors following its approval by the compensation committee. The compensation policy also requires the approval of the general meeting of the shareholders, which approval must satisfy one of the following (the “Majority Requirement”): (i) the majority should include at least a majority of the shares of the voting shareholders who are non controlling shareholders or do not have a personal interest in the approval of the compensation policy (in counting the total votes of such shareholders, abstentions shall not be taken into account) or (ii) the total number of votes against the proposal among the shareholders mentioned in paragraph (i) does not exceed two percent of the aggregate voting power in the company. Under certain circumstances and subject to certain exceptions, the board of directors may approve the compensation policy despite the objection of the shareholders, provided that the compensation committee and the board of directors determines that it is for the benefit of the company, following an additional discussion and based on detailed arguments.
 
 The Companies Law provides that the compensation policy must be re-approved every three years, in the manner described above. Moreover, the board of directors is responsible for reviewing from time to time the compensation policy and deciding whether or not there are any circumstances that require an adjustment to the company's compensation policy. When approving the compensation policy, the relevant organs must take into consideration the goals and objectives listed in the Companies Law, and include reference to specific issues listed in the Companies Law. Such issues include, among others (the “Compensation Policy Mandatory Criteria”): (i) the relevant person’s education, qualifications, professional experience and achievements; (ii) such person's position within the company, the scope of his responsibilities and previous compensation arrangements with the company; (iii) the proportionality of such person's compensation in relation to the average and median pay of other employees in the company, including contract workers, and the impact of the differences between such person's compensation and the other employees' compensation on the labor relations in the company; (iv) the authority, at the board of director's sole discretion, to lower any variable compensation components or set a maximum limit (cap) on the actual value of the non-cash variable components, when paid; and (v) in the event that the terms of engagement include any termination payments - the term of employment of the departing person, the company’s performance during that term, and the departing person’s contribution to the performance of the company.
 
 In addition, the Companies Law provides that the following matters shall be included in the compensation policy (the “Compensation Policy Mandatory Provisions”): (i) the award of variable components must be based on long term and measurable performance criteria (other than non-material variable components, which may be based on non measurable criteria taking into account the relevant person's contribution to the performance of the company); (ii) the company must set a ratio between fixed and variable pay, set a cap on the payment of any cash variable compensation components as of the payment of such components, and set a cap on the maximum cash value all non-cash variable components as of their grant date; (iii) the compensation policy must include a provision requiring the relevant person to return to the company any compensation that was awarded on the basis of financial figures that were subsequently restated; (iv) equity based variable compensation components should have an appropriate minimum vesting periods, which should be linked to long term performance objectives; and (v) the company must set a clear limit on termination payments.
 
 30
 
 Amendment No. 20 also introduced new procedures for the approval of compensation arrangements with officers and directors of Israeli public companies (including companies that issued only debentures to the public). Pursuant to the Companies Law following Amendment No. 20, any transaction with an office holder (except directors and the CEO of the company) with respect to such office holder's compensation arrangements and terms of engagement, requires the approval of the compensation committee and the board of directors. Such transaction must be consistent with the provisions of the company's compensation policy, provided that the compensation committee and the board of directors may, under special circumstances, approve such transaction that is not in accordance with the company's compensation policy, if both of the following conditions are met: (i) the compensation committee and the board of directors discussed the transaction in light of the roles and objectives of the compensation committee (see “Item 6C. Board Practices –Board of Directors' Committees – Compensation Committee) and after taking into consideration the Compensation Policy Mandatory Criteria and including in such transaction the Compensation Policy Mandatory Provisions; and (ii) the company's shareholders approved the transaction, provided that in public companies the approval must satisfy the Majority Requirement. Notwithstanding the above, the compensation committee and the board of directors may, under special circumstances, approve such transaction even if the shareholders' meeting objected to its approval, provided that (i) both the compensation committee and the board of directors re-discussed the transactions and decided to approve it despite the shareholder's objection, based on detailed arguments, and (ii) the company is not a 'Public Pyramid Held Company'. For the purpose hereof, a “Public Pyramid Held Company” is a public company that is controlled by another public company (including companies that issued only debentures to the public), which is also controlled by another public company (including companies that issued only debentures to the public) that has a controlling shareholder.
 
 Transactions between public companies (including companies that have issued only debentures to the public) and their chief executive officer, with respect to his or hers compensation arrangement and terms of engagement, require the approval of the compensation committee, the board of directors and the shareholder's meeting, provided that the approval of the shareholders' meeting must satisfy the Majority Requirement. Notwithstanding the above, the compensation committee and the board of directors may, under special circumstances, approve such transaction with the CEO even if the shareholders' meeting objected to its approval, provided that (i) both the compensation committee and the board of directors re-discussed the transactions and decided to approve it despite the shareholder's objection, based on detailed arguments, and (ii) the company is not a Public Pyramid Held Company. Such transaction with the CEO must be consistent with the provisions of the company's compensation policy, provided that the compensation committee and the board of directors may, under special circumstances, approve such transaction that is not in accordance with the company's compensation policy, if both of the following conditions are met: (i) the compensation committee and the board of directors discussed the transaction in light of the roles and objectives of the compensation committee (see “Item 6C. Board Practices –Board of Directors' Committees – Compensation Committee” in this annual report) and after taking into consideration the Compensation Policy Mandatory Criteria and including in such transaction the Compensation Policy Mandatory Provisions; and (ii) the company's shareholders approved the transaction, provided that in public companies the approval must satisfy the Majority Requirement. In addition, the compensation committee may determine that such transaction with the CEO nominee does not have to be approved by the shareholders of the company, provided that: (i) the CEO nominee is independent based on criteria set forth in the Companies Law; (ii) the compensation committee determined, based on detailed arguments, that bringing the transaction to the approval of the shareholders may compromise the chances of entering into the transaction; and (iii) the terms of the transaction is consistent with the provisions of the company's compensation policy. Under the Companies Law, non material amendments of transactions relating to the compensation arrangement or terms of engagement of office holders (including the CEO), require only the approval of the compensation committee.
 
 With respect to transactions relating to the compensation arrangement and terms of engagements of directors in public companies (including companies that have issued only debentures to the public), the Companies Law following Amendment No. 20 provides that such transaction shall be subject to the approval of the compensation committee, the board of directors and the shareholders' meeting. Such transaction must be consistent with the provisions of the company's compensation policy, provided that the compensation committee and the board of directors may, under special circumstances, approve such transaction that is not in accordance with the company's compensation policy, if both of the following conditions are met: (i) the compensation committee and the board of directors discussed the transaction in light of the roles and objectives of the compensation committee (see “Item 6C. Board Practices –Board of Directors' Committees – Compensation Committee” in this annual report) and after taking into consideration the Compensation Policy Mandatory Criteria and including in such transaction the Compensation Policy Mandatory Provisions; and (ii) the company's shareholders approved the transaction, provided that in public companies the approval must satisfy the Majority Requirement.
 
 31
 
 On January 9, 2014, our shareholders approved our compensation policy, following the favorable recommendation of the Compensation Committee and approval by the board of directors, and took effect thereafter. The full text of the compensation policy was included as Exhibit A to the proxy statement attached to the Company's report on Form 6-K furnished to the Securities and Exchange Commission on December 5, 2013.
 
 The Israeli parliament (the Knesset) has recently approved the new Promotion of Competition and Reduction of Centralization Law, 5774-2013 (the “Centralization Law”), which, among others, imposes new constraints and stricter corporate governance rules on pyramid conglomerates, and forces separation between equity holdings in significant non-financial corporate businesses and equity holdings in significant financial businesses. The Centralization Law has entered into force on December 11, 2013.
 
 Directors’ Borrowing Powers
 
 Our board of directors may from time to time, in its discretion, cause the Company to raise or borrow or secure the payment of any sum or sums of money for the purposes of the Company. Such borrowing powers may be exercised by a majority of the board of directors in accordance with our Articles of Association.
 
 Rights attached to our Shares
 
 Dividend Rights. Our board of directors may decide on a distribution, subject to the provisions set forth under the Companies Law and our Articles of Association.  Under the Companies Law, dividends may be paid out of net earnings, as calculated under that law, for the two years preceding the distribution of the dividend and retained earnings, provided that there is no reasonable concern that the dividend will prevent the company from satisfying its existing and foreseeable obligations as they become due.
 
 Voting Rights. Holders of Ordinary Shares have one vote for each ordinary share held on all matters submitted to a vote of shareholders.  These voting rights may be affected by the grant of any special voting rights to the holders of a class of shares with preferential rights that may be authorized in the future.  The Ordinary Shares do not have cumulative voting rights in the election of directors.  As a result, holders of Ordinary Shares that represent more than 50% of the voting power have the power to elect all the directors to the exclusion of the remaining shareholders.
 
 Liquidation Rights. In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of Ordinary Shares in proportion to their respective holdings.  This liquidation right may be affected by the grant of preferential dividends or distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.
 
 Redemption Provisions. We may, subject to applicable law, issue redeemable preference shares and redeem the same.
 
 Capital Calls. Under our memorandum of association and the Companies Law, the liability of our shareholders is limited to the par value of the shares held by them.
 
 Preemptive, First Refusal and Co-Sale Rights. All outstanding Ordinary Shares are validly issued, fully paid and non-assessable and do not have preemptive rights, rights of first refusal or co-sale rights.
 
 Transfer of Shares. Fully paid Ordinary Shares are issued in registered form and may be transferred pursuant to our Articles of Association, unless such transfer is restricted or prohibited by another instrument and subject to applicable securities laws.
 
 Modification of Rights
 
 Unless otherwise provided by our Articles of Association, rights attached to any class may be modified or abrogated by a resolution adopted in a general meeting approved by an ordinary majority of the voting power represented at the meeting in person or by proxy and voting thereon, subject to the sanction of a resolution passed by an ordinary majority of the shares of such class present and voting as a separate general meeting of the holders of such class.
 
 Shareholders’ Meetings and Resolutions
 
 The quorum required for an ordinary meeting of shareholders consists of at least two shareholders present in person or by proxy, who hold or represent between them at least 25% of the outstanding voting shares, unless otherwise required by applicable rules.  A meeting adjourned for lack of a quorum generally is adjourned to one day thereafter at the same time and place or any other day, time and place as the board may designate. At such reconvened meeting the required quorum consists of any number shareholders present in person or by proxy.
 
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 Under the Companies Law and our Articles of Association, all resolutions of our shareholders require a simple majority of the shares present, in person or by proxy, and voting on the matter.
 
 Under the Companies Law, each and every shareholder has a duty to act in good faith in exercising his rights and fulfilling his obligations towards us and other shareholders, and to refrain from abusing its power in the company, such as in voting in the general meeting of shareholders on the following matters:
 
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any amendment to the articles of association;
 
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an increase of our authorized share capital;
 
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a merger; or
 
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approval of certain actions and transactions that require shareholder approval.
 
 In addition, each and every shareholder has the general duty to refrain from depriving other shareholders of their rights.
 
 The remedies generally available upon a breach of contract will also apply to a breach of the shareholder duties mentioned above, and in the event of discrimination against other shareholders, additional remedies are available to the injured shareholder.
 
 In addition, any controlling shareholder, any shareholder that knows that its vote can determine the outcome of a shareholder vote and any shareholder that, under a company’s articles of association, has the power to appoint or prevent the appointment of an office holder, or any other power with respect to a company, is under a duty to act with fairness towards the company.  The Companies Law does not describe the substance of this duty except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty to act with fairness, taking the shareholder’s position in the company into account.
 
 Our annual general meetings are held once in every calendar year at such time (within a period of not more than fifteen months after the last preceding annual general meeting) and at such place as determined by our board.  All general meetings other than annual general meetings are called special meetings.  Our board may, whenever it thinks fit, convene a special meeting at such time and place as it determines, and shall be obligated to do so upon a requisition in writing in accordance with the Companies Law.
 
 Limitation on Owning Securities
 
 The ownership of our Ordinary Shares by nonresidents of Israel is not restricted in any way by our memorandum of association and Articles of Association or the laws of the State of Israel, except for citizens of countries, which are in a state of war with Israel, who may not be recognized as owners of our Ordinary Shares.
 
 Acquisitions under Israeli Law
 
 Merger
 
 The Companies Law permits merger transactions if such merger was approved by each of the merging companies' board of directors and, unless certain requirements described under the Companies Law are met, a majority of each merging companies shareholders.
 
 The board of directors of a merging company is required pursuant to the Companies Law to discuss and determine whether in its opinion there exists a reasonable concern that as a result of a proposed merger, the surviving company will not be able to satisfy its obligations towards its creditors, taking into account the financial condition of the merging companies.  If the board of directors has determined that such a concern exists, it may not approve a proposed merger.  Following the approval of the board of directors of each of the merging companies, the board of directors of the merging companies must jointly prepare a merger proposal for submission to the Israeli Registrar of Companies.
 
 For purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the shares voting at the shareholders meeting (excluding abstentions) that are held by parties other than the other party to the merger, any person who holds 25% or more of the means of control of the other party to the merger or any one on their behalf including their relatives or corporations controlled by any of them, vote against the merger. In addition, if the target entity has more than one class of shares, the merger must be approved by each class of shareholders.
 
 If the transaction would have been approved but for the separate approval of each class of shares or the exclusion of the votes of certain shareholders as provided above, a court may still rule that the company has approved the merger upon the request of holders of at least 25% of the voting rights of a company. The court will not approve such merger unless the court holds that the merger is fair and reasonable, taking into account the appraisal of the merging companies’ value and the consideration offered to the shareholders.
 
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 Under the Companies Law, each merging company must send a copy of the proposed merger plan to its secured creditors. Unsecured creditors are entitled to receive notice of the merger, as provided by the regulations promulgated under the Companies Law.  Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the target company. The court may also give instructions in order to secure the rights of creditors.
 
 In addition, a merger may not be completed unless at least 50 days have passed from the date that a proposal for approval of the merger was filed with the Israeli Registrar of Companies and 30 days from the date that shareholder approval of both merging companies was obtained.
 
 Full Tender Offer
 
 A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the target company’s issued and outstanding share capital, is required by the Companies Law, to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company.
 
 A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the issued and outstanding share capital of a certain class of shares is required to make a tender offer to all of the shareholders who hold shares of the same class for the purchase of all of the issued and outstanding shares of the same class.
 
 If the shareholders who do not respond to or accept the offer hold less than 5% of the issued and outstanding share capital of the company or of the applicable class of shares, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law. However, a tender offer will be accepted if the shareholders who do not accept it hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares.
 
 If the shareholders who did not respond or accept the tender offer hold at least 5% of the issued and outstanding share capital of the company or of the applicable class of shares, the acquirer may not acquire shares of the company that will increase its holdings to more than 90% of the company’s issued and outstanding share capital or of the applicable class from shareholders who accepted the tender offer
 
 Upon a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder accepted the tender offer or not, may, within six months from the date of acceptance of the tender offer, petition the Israeli court to determine whether the tender offer was for less than fair value and that the fair value should be paid as determined by the court. However, under certain conditions, the offeror may determine in the terms of the tender offer that an offeree who accepted the offer will not be entitled to petition the Israeli court as described above.
 
 The description above regarding a full tender offer shall also apply, with necessary changes, when a full tender offer is accepted and the offeror has also offered to acquire all of the company’s securities.
 
 Special Tender Offer
 
 The Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of at least 25% of the voting rights in the company.  This rule does not apply if there is already another holder of at least 25% of the voting rights in the company.
 
 Similarly, the Companies Law provides that an acquisition of shares in a public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the company, if there is no other shareholder of the company who holds more than 45% of the voting rights in the company.
 
 These requirements do not apply if the acquisition (i) occurs in the context of a private offering, provided that the shareholders meeting approved the acquisition as a private offering whose purpose is to give the acquirer at least 25% of the voting rights in the company if there is no person who holds at least 25% of the voting rights in the company, or as a private offering whose purpose is to give the acquirer 45% of the voting rights in the company, if there is no person who holds 45% of the voting rights in the company; (ii) was from a shareholder holding at least 25% of the voting rights in the company and resulted in the acquirer becoming a holder of at least 25% of the voting rights in the company; or (iii) was from a holder of more than 45% of the voting rights in the company and resulted in the acquirer becoming a holder of more than 45% of the voting rights in the company.
 
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 The special tender offer may be consummated only if (i) at least 5% of the voting power attached to the company’s outstanding shares will be acquired by the offeror and (ii) the special tender offer is accepted by a majority of the votes of those offerees who gave notice of their position in respect of the offer; in counting the votes of offerees, the votes of a holder of control in the offeror, a person who has personal interest in acceptance of the special tender offer, a holder of at least 25% of the voting rights in the company, or any person acting on their or on the offeror’s behalf, including their relatives or companies under their control, are not taken into account.
 
 In the event that a special tender offer is made, a company’s board of directors is required to express its opinion on the advisability of the offer or shall abstain from expressing any opinion if it is unable to do so, provided that it gives the reasons for its abstention.
 
 An office holder in a target company who, in his or her capacity as an office holder, performs an action the purpose of which is to cause the failure of an existing or foreseeable special tender offer or is to impair the chances of its acceptance, is liable towards the potential purchaser and shareholders for damages resulting from his actions, unless such office holder acted in good faith and had reasonable grounds to believe he or she was acting for the benefit of the company.  However, office holders of the target company may negotiate with the potential purchaser in order to improve the terms of the special tender offer, and may further negotiate with third parties in order to obtain a competing offer.
 
 In case a special tender offer was accepted, offerees who did not respond to the special offer or had objected to the special tender offer may accept the offer within four days of the last day set for the acceptance of the offer.
 
 In the event that a special tender offer is accepted, then the purchaser or any person or entity controlling it and any corporation controlled by them shall refrain from making a subsequent tender offer for the purchase of shares of the target company and may not execute a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial special tender offer.
 
 10.C.      Material Contracts
 
 Elbit Transaction
 
 On July 19, 2009, we entered into an Asset Purchase Agreement with Elbit Systems Ltd., whereby Elbit acquired substantially all of our assets and business for a cash consideration of approximately US$34 million and to assume substantially all of our business related liabilities.  The purchase price of US$34 million was based on the assumption that the purchased projects were balanced, or consistent with the presented stage of execution.
 
 As at the closing date of the transaction, there were certain assets that were unable to be transferred to Elbit (“Non-Transferable Assets and Liabilities”). Therefore we entered into an agreement with Elbit, regarding such Non-transferable Assets and Liabilities which stipulates that until such Non-transferable Assets and Liabilities are able to be transferred to Elbit, we shall provide Elbit with the benefit of each of the non-transferable assets and Elbit shall satisfy or perform any liability, back-to-back with our obligations. Both parties agreed that Elbit shall be responsible for the fulfillment of the undertaking under any contract with respect to non-transferable assets and shall provide the products and/or services, via the Company. As of the date hereof there is one agreement that is subject to this back-to-back agreement.
 
 EER Transaction
 
 For a summary of the EER Transaction, see “Item 7.B. – Major Shareholders and Related Party Transactions – Related Party Transactions.”
 
 10.D.
Exchange Controls
 
 Under current Israeli regulations, we may pay dividends or other distributions in respect of our Ordinary Shares either in non-Israeli or Israeli currencies.  If we make these payments in Israeli currency, they will be freely converted into non-Israeli currencies at the rate of exchange prevailing at the time of conversion.  Because exchange rates between the NIS and the dollar continuously fluctuate, a U.S. shareholder will be subject to the risk of currency fluctuations between the date when we declare NIS-denominated dividends and the date we pay them in NIS.  See “Item 3. Key Information — D. Risk Factors.”
 
 Non-residents of Israel may freely hold and trade our securities pursuant to the general permit issued under the Israeli Currency Control Law, 1978.  Neither our memorandum of association, Articles of Association nor the laws of the State of Israel restrict the ownership of our Ordinary Shares by non-residents in any way, except with respect to citizens of countries which are in a state of war with Israel.
 
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 10.E.       Taxation
 
 HOLDERS OF OUR ORDINARY SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE UNITED STATES, ISRAELI OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF ORDINARY SHARES, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY FOREIGN, STATE OR LOCAL TAXES.
 
 Israeli Tax Considerations and Government Programs
 
 The following is a summary of the current tax structure applicable to companies in Israel, with special reference to its effect on us. The following also contains a discussion of certain Israeli and United States tax consequences to purchasers of our Ordinary Shares and certain Israeli Government programs benefiting us.  To the extent that the discussion is based on new tax legislation that has not been subject to judicial or administrative interpretation, there can be no assurance that the views expressed in the discussion will be accepted by the tax authorities in question.  The discussion is not intended, and should not be construed, as legal or professional tax advice and is not exhaustive of all possible tax considerations.
 
 General Corporate Tax Structure
 
 Israeli companies are generally subject to corporate tax at a rate of 25% in 2013 (26.5% in 2014).
 
 Capital Gains Tax on Sales of Our Ordinary Shares
 
 Capital gains tax is imposed on the disposal of capital assets by an Israeli resident and on the disposal of such assets by a non- Israel resident, if those assets are either: (i) located in Israel; (ii) shares or rights to shares in an Israeli resident company, or (iii) represent, directly or indirectly, rights to assets located in Israel. The Israeli Income Tax Ordinance, 1961 [new version] (the “Ordinance”) distinguishes between “Real Capital Gain” and “Inflationary Surplus”. The Real Capital Gain on the disposition of a capital asset is the amount of total capital gain in excess of Inflationary Surplus. Inflationary Surplus is generally computed on the basis of the increase in the Israeli Consumer Price Index between the date of purchase and the date of disposal of the capital asset.
 
 Real Capital Gain generated by a company is generally subject to tax at the corporate tax rate (26. 5% in 2014). The Real Capital Gain accrued by individuals on the sale of our ordinary shares will be taxed at the rate of 25%. However, if the individual shareholder is a “Controlling Shareholder” (i.e.,  a person who holds, directly or indirectly, alone or together with another, 10% or more of one of the Israeli resident company’s “means of control” (including,  among others, the right to company profits, voting rights, the right to the company’s liquidation proceeds and the right to appoint a company director) at the time of sale or at any time during the preceding 12 month period)), such gain will be taxed at the rate of 30%.
 
 Individual and corporate shareholders dealing in securities in Israel are taxed at the tax rates applicable to business income – 26.5% for corporations in 2014 and a marginal tax rate of up to 50% for individuals in 2014 (including a 2% excess tax for individuals whose taxable income in Israel exceeds 811,560 in 2014).
 
 Notwithstanding the foregoing, capital gains generated from the sale of our securities by a non-Israeli shareholder may be exempt under the Ordinance from Israeli taxes provided that all the following cumulative conditions are met: (i) the securities were purchased upon or after the registration of the securities on a stock exchange (this requirement generally does not apply to shares purchased on or after January 1, 2009); (ii) the seller of the securities does not have a permanent establishment in Israel to which the generated capital gain is attributable; and (iii) if the seller is a corporation, less than 25% of its means of control are held, directly and indirectly, by Israeli resident shareholders. In addition, the sale of the securities may be exempt from Israeli capital gain tax under the provisions of an applicable tax treaty. For example, the Convention between the Government of the United States of America and the Government of Israel with respect to Taxes on Income (the “Israel-U.S. Double Tax Treaty”) exempts U.S. residents from Israeli capital gains tax in connection with such sale, provided that: (i) the U.S. resident owned, directly or indirectly, less than 10% of the Israeli resident company’s voting power at any time within the 12-month period preceding such sale; (ii) the seller, if an individual, has been present in Israel for less than 183 days (in the aggregate) during the taxable year; and (iii) the capital gain from the sale was not generated through a permanent establishment of the U.S. resident in Israel.
 
 Either the purchaser of the securities, the stockbrokers who effected the transaction or the financial institution holding the traded securities through which the payment to the seller is made is obligated, subject to the above-referenced exemptions, to withhold tax on the Real Capital Gains resulting from a sale of securities at the rate of 25% in respect of a corporation and/or an individual.
 
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 A detailed return, including a computation of the tax due, must be filed and an advance payment must be paid on January 31 and June 30 of each tax year for sales of securities traded on a stock exchange made in the 6 months period prior to each of the aforementioned filing dates. However, if all tax due was withheld at source according to applicable provisions of the Ordinance and the regulations promulgated thereunder, the return does not need to be filed and no advance payment is required. Capital gains are also reportable on an annual income tax return.
 
 Taxation of Dividends
 
 As of January 1, 2012, a distribution of dividends from income derived during any period for which the Israeli company is not entitled to reduced tax rates applicable to an Approved Enterprise/Benefited Enterprise/ Preferred Enterprise under the Law for the Encouragement of Capital Investments-1959, to an Israeli resident individual, will generally be subject to tax at a rate of 25%. However, a 30% tax rate will apply if the dividend recipient is a “Controlling Shareholder” (as defined above) at the time of distribution or at any time during the preceding 12 months period. If the recipient of the dividend is an Israeli resident corporation, such dividend will be exempt from tax in Israel provided that the income from which such dividend was distributed was derived or accrued within Israel.
 
 The aforementioned rates may be reduced by an applicable double tax treaty. Thus, under the Israel – U.S. Double Tax Treaty the following rates will apply in respect of dividends distributed by an Israeli resident company to a U.S. resident: (i) if the U.S. resident is a corporation which holds during that portion of the taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable year (if any), at least 10% of the outstanding shares of the voting stock of the Israeli resident paying corporation and not more than 25% of the gross income of the Israeli resident paying corporation for such prior taxable year (if any) consists of certain type of interest or dividends – the tax rate is 12.5%, (ii) if both the conditions mentioned in section (i) above are met and the dividend is paid from an Israeli resident company's income which was entitled to a reduced tax rate applicable to an Approved Enterprise/ Benefited Enterprise/Preferred Enterprise – the tax rate is 15%, and (iii) in all other cases, the tax rate is 25%. The aforementioned rates under the Israel U.S. Double Tax Treaty will not apply if the dividend income has been derived through a permanent establishment of the U.S. resident in Israel.
 
 Our company is obligated to withhold tax, upon the distribution of a dividend attributed to an Approved Enterprise's/Privileged Enterprise's/Preferred Enterprise's income, from the amount distributed, at the following rates: (i) Israeli resident corporations – 15% (20% if the dividend income is attributable to a benefits plan implemented as of January 1, 2014)  , (ii) Israeli resident individuals – 15%  (20% if the dividend income is attributable to a benefits plan implemented as of January 1, 2014), and (iii) non-Israeli residents – 15% (20% if the dividend income is attributable to a benefits plan implemented as of January 1, 2014) (4% under the Ireland Track), subject to a reduced tax rate under the provisions of an applicable double tax treaty. If the dividend is distributed from an income not attributed to the Approved Enterprise/Privileged Enterprise/Preferred Enterprise, the following withholding tax rates will apply: (a) for securities which are registered and held by a clearing corporation: (i) Israeli resident corporations – 0%, (ii) Israeli resident individuals – 25% and (iii) non-Israeli residents - 25%, subject to a reduced tax rate under the provisions of an applicable double tax treaty; (b) in all other cases: (i) Israeli resident corporations – 0%, (ii) Israeli resident individuals – 25%/30% (the 30% tax rate shall apply if the dividend recipient is a “Controlling Shareholder” (as defined above) at the time of the distribution or at any time during the preceding 12 months period), and (iii) non-Israeli residents - 25%/30% as referred to above with respect to Israeli resident individuals, subject to a reduced tax rate under the provisions of an applicable double tax treaty.
 
 United States Federal Income Tax Considerations
 
 The following discussion describes certain material United States (“U.S.”) federal income tax consequences of the purchase, ownership and disposition of our ordinary shares.
 
 For purposes of this discussion, a “U.S. holder” is a beneficial owner of ordinary shares who or which is any of the following for U.S. federal income tax purposes:
 
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a citizen or resident of the U.S. or someone treated as a U.S. citizen or resident of the U.S.;
 
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a corporation (or another entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof, or the District of Columbia;
 
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an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
 
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a trust, if (a) a U.S. court is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or (b) the trust was in existence and treated as a U.S. person on August 20, 1996 and has a valid election in effect under applicable Treasury Regulations (as defined below) to be treated as a U.S. person.
 
 37
 
 This summary is for general information purposes only and does not purport to be a comprehensive description of all of the U.S. federal income tax considerations that may be relevant to a decision to purchase, hold or dispose of the Company’s ordinary shares. This summary generally considers only U.S. holders that will own the ordinary shares as capital assets and does not consider the U.S. tax consequences to a person that is not a U.S. holder or the tax treatment of persons who hold the ordinary shares through a partnership or other pass-through entity. In addition, the possible application of U.S. federal estate or gift taxes or any aspect of state, local or non-U.S. tax laws is not considered. This discussion is based on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated under the Code by the U.S. Treasury Department (including proposed and temporary regulations) (the “Treasury Regulations”), rulings, current administrative interpretations and official pronouncements by the Internal Revenue Service (the “IRS”), and judicial decisions, all as currently in effect and all of which are subject to differing interpretations or to change, with a retroactive effect. Such changes could materially and adversely affect the tax consequences described below. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below.
 
 This discussion does not address all aspects of U.S. federal income taxation that may be relevant to any particular U.S. holder based on the holder’s particular circumstances, such as,
 
 
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persons who own, directly, indirectly or constructively, 10% or more (by voting power or value) of our outstanding voting shares;
 
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persons who hold the ordinary shares as part of a hedging, straddle or conversion transaction;
 
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persons whose functional currency is not the U.S. dollar;
 
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persons who acquire their ordinary shares in a compensatory transaction;
 
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broker-dealers;
 
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insurance companies;
 
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regulated investment companies;
 
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real estate investment companies;
 
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traders who elect to mark-to-market their securities;
 
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tax-exempt organizations;
 
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banks or other financial institutions;
 
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U.S. expatriates; and
 
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persons subject to the alternative minimum tax.
 
 HOLDER RELIANCE ON TAX STATEMENTS
 
 THIS SUMMARY OF MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. EACH HOLDER SHOULD CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE ORDINARY SHARES, INCLUDING THE EFFECTS OF APPLICABLE UNITED STATES FEDERAL INCOME TAX LAWS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE UNITED STATES FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY FOREIGN, STATE OR LOCAL JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
 
 Availability of Reduced Tax Rates
 
 Recent U.S. legislation increased to 20% the maximum U.S. Federal income tax rate on certain long-term capital gains and on qualifying dividends. Long-term capital gains from the sale of our ordinary shares may be eligible for this rate, although the actual rates may be higher due to the phase out of certain tax deductions, exemptions and credits. Subject to the discussion below, dividends, if any, may also be eligible for this 20% maximum rate on long-term capital gains, provided that we do not constitute a passive foreign investment company (a “PFIC”). However, tax rates are subject to change, especially given the uncertain economic conditions in the United States and the size of the federal deficit. U.S. holders should consult their tax advisors.
 
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 Distributions on the Ordinary Shares
 
 We currently do not intend to pay dividends for at least the next several years. However, if we make any distributions of cash or other property to a U.S. holder of our ordinary shares, the amount of the distribution for U.S. federal income tax purposes will equal the amount of cash and the fair market value of any property distributed and will also include the amount of Israeli taxes withheld, if any, as described above under “Taxation of Dividends”. In general (and subject to the PFIC rules discussed below), any distribution paid by us on the ordinary shares to a U.S. holder will be treated as dividend income if the distribution does not exceed our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. If holding period and other requirements are met, dividends paid to non-corporate U.S. holders currently should generally qualify for the reduced maximum tax rate of 20% as long as our common shares remain “readily tradable on an established securities market in the United States,” provided that we are not considered a PFIC (as discussed below) in the taxable year in which the dividend is paid or in any preceding taxable year. The amount of any distribution which exceeds these earnings and profits will be treated first as a non-taxable return of capital, reducing the U.S. holder’s tax basis in its ordinary shares to the extent thereof, and then as capital gain, and as long-term capital gain if the U.S. holder’s holding period exceeds one year, from the deemed disposition of the ordinary shares (subject to the PFIC rules discussed below). Corporate holders generally will not be allowed a deduction for dividends received on the ordinary shares.
 
 A dividend paid by us in NIS will be included in the income of U.S. holders at the U.S. dollar value of the dividend, based upon the spot rate of exchange in effect on the date of the distribution. U.S. holders will have a tax basis in NIS for U.S. federal income tax purposes equal to that U.S. dollar value. Any subsequent gain or loss resulting from exchange rate fluctuations between the day the dividend was included in the income of U.S. holders and the day the NIS are converted into U.S. dollars or are otherwise disposed of, will be taxable as ordinary income, gain or loss from U.S. sources.
 
 Dividends paid by us generally will be foreign source “passive income” for U.S. foreign tax credit purposes or, in the case of a U.S. holder that is a financial services entity, “financial services income.” U.S. holders may elect to claim as a foreign tax credit against their U.S. federal income tax liability the Israeli income tax withheld from dividends received on the ordinary shares. The Code provides limitations on the amount of foreign tax credits that a U.S. holder may claim. U.S. holders that do not elect to claim a foreign tax credit may instead claim a deduction for Israeli income tax withheld, but only for a year in which these U.S. holders elect to do so for all foreign income taxes. The rules relating to foreign tax credits are complex (and may also be impacted by the tax treaty between the United States and Israel), and you should consult your tax advisor to determine whether and if you would be entitled to this credit.
 
 Sale or Exchange of the Ordinary Shares
 
 Upon the sale or exchange of the ordinary shares (subject to the PFIC rules discussed below), a U.S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized on the sale or exchange and the U.S. holder’s tax basis in the ordinary shares. The gain or loss recognized on the sale or exchange of the ordinary shares generally will be long-term capital gain or loss if the U.S. holder’s holding period of the ordinary shares is more than one year at the time of the disposition.
 
 Gain or loss recognized by a U.S. holder on a sale or exchange of ordinary shares generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. Under the tax treaty between the United States and Israel, gain derived from the sale, exchange or other disposition of ordinary shares by a holder who is a resident of the U.S. for purposes of the treaty and who sells the ordinary shares within Israel may be treated as foreign source income for U.S. foreign tax credit purposes.
 
 Passive Foreign Investment Companies
 
 In general, a foreign (i.e., non-U.S.) corporation will be a PFIC for any taxable year in  which, after applying the relevant look-through rules with respect to the income and assets of its subsidiaries, either (1) 75% or more of its gross income in the taxable year is “passive income,” or (2) assets held for the production of, or that produce, passive income comprise 50% or more of the average of its total asset value in the taxable year. For purpose of the income test, passive income includes dividends, interest, royalties, rents, annuities and net gains from the disposition of assets, which produce passive income. For purposes of the assets test, assets held for the production of passive income includes assets held for the production of, or that produce dividends, interest, royalties, rents, annuities, and other income included in the income test. In determining whether we meet the assets test, cash is considered a passive asset and the total value of our assets generally will be treated as equal to the sum of the aggregate fair market value of our outstanding stock plus our liabilities. If we own at least 25% (by value) of the stock of another corporation, we will be treated, for purposes of the PFIC tests, as owning our proportionate share of the other corporation’s assets and receiving our proportionate share of the other corporation’s income. The income test is conducted at the taxable year-end. The asset test is conducted on a quarterly basis and the quarterly results are then averaged together.
 
 39
 
 If a corporation is treated as a PFIC for any year during a U.S. holder’s holding period and the U.S. holder does not timely elect to treat the corporation as a “qualified electing fund” under Section 1295 of the Code or elect to mark its ordinary shares to market (both as described below), any gain on the disposition of the shares will be treated as ordinary income, rather than capital gain, and the holder will be required to compute its tax liability on that gain, as well as on dividends and other distributions, as if the income had been earned ratably over each day in the U.S. holder’s holding period for the shares. The portion of the gain and distributions allocated to prior taxable years in which a corporation was a PFIC will be ineligible for any preferential tax rate otherwise applicable to any “qualified dividend income” or capital gains, and will be taxed at the highest ordinary income tax rate in effect for each taxable year to which this portion is allocated. An interest charge will be imposed on the amount of the tax allocated to these taxable years. A U.S. holder may elect to treat a corporation as a qualified electing fund only if the corporation complies with requirements imposed by the IRS to enable the shareholder and the IRS to determine the corporation’s ordinary income and net capital gain. Additionally, if a corporation is a PFIC, a U.S. holder who acquires shares in the corporation from a decedent will be denied the normally available step-up in tax basis to fair market value for the shares at the date of death and instead will have a tax basis equal to the decedent’s tax basis if lower than fair market value. These adverse tax consequences associated with PFIC status could result in a material increase in the amount of tax that a U.S. holder would owe and an imposition of tax earlier than would otherwise be imposed and additional tax form filing requirements. Unless otherwise provided by the IRS, if a corporation is classified as a PFIC, a U.S. holder will generally be required to file an informational return annually to report its ownership interest in such entity.
 
 Available Elections. If we become a PFIC for any taxable year, U.S. holders should consider whether or not to elect to treat us as a “qualified electing fund” or to elect to “mark-to-market” their ordinary shares in order to mitigate the adverse tax consequences of PFIC status.
 
 If a U.S. holder makes a qualified electing fund election (a “QEF election”) for its ordinary shares that is effective from the first taxable year that the U.S. holder holds our ordinary shares and during which we are a PFIC, the electing U.S. holder will avoid the adverse consequences of our being classified as a PFIC but will instead be required to include in income a pro rata share of our net capital gain, if any, and other earnings and profits (“ordinary earnings”) as long-term capital gains and ordinary income, respectively, on a current basis, in each case whether or not distributed, in the taxable year of the U.S. holder in which or with which our taxable year ends. A subsequent distribution of amounts that were previously included in the gross income of U.S. holders should not be taxable as a dividend to those U.S. holders who made a QEF election. In the event we incur a net loss for a taxable year, such loss will not be available as a deduction to an electing U.S. holder, and may not be carried forward or back in computing our net capital gain or ordinary earnings in other taxable years. The tax basis of the shares of an electing U.S. holder generally will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the QEF rules described above. In order to make (or maintain) a QEF election, the U.S. holder must annually complete and file IRS Form 8621. In addition, we must make certain information regarding our net capital gains and ordinary earnings available to the U.S. holder and permit our books and records to be examined to verify such information. Therefore, we will monitor our PFIC status and make a disclosure to our shareholders if we determine that we have become a PFIC. If we are a PFIC for any year and you make a request to us in writing at the address on the cover of our latest Annual Report on Form 20-F, Attention Chief Financial Officer, for the information required to make a QEF election, we will promptly make the information available to you and comply with any other applicable requirements of the Code.
 
 A QEF election, once made with respect to us, applies to the tax year for which it was made and to all subsequent tax years, unless the election is invalidated or the IRS consents to revocation of the election. If you make a QEF election and we cease to be classified as a PFIC in a subsequent tax year, the QEF election will remain in effect, although it will not be applicable during those tax years in which we are not classified as a PFIC. Therefore, if we – after ceasing to be classified as a PFIC – again are classified as a PFIC in a subsequent tax year, the QEF election will be effective and you will again be subject to the rules described above for U.S. holders making QEF elections in such tax year and any subsequent tax years in which we are classified as a PFIC. A QEF election also remains in effect even after you dispose of all of your direct and indirect interest in our ordinary shares. As a result, if you subsequently acquire any of our ordinary shares or an interest in any of our ordinary shares, you will again be subject to the rules described above for U.S. holders making a QEF election for each tax year in which we are classified as a PFIC.
 
 40
 
 Alternatively, if a U.S. holder elects to “mark-to-market” its ordinary shares, the U.S. holder will generally include in its income any excess of the fair market value of our ordinary shares at the close of each taxable year over the holder’s adjusted basis in such ordinary shares. If a U.S. holder makes a valid mark-to-market election with respect to our ordinary shares for the first taxable year of the U.S. holder in which the U.S. holder holds (or is deemed to hold) our ordinary shares and for which we are determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in respect to its common shares. A U.S. holder generally will be allowed an ordinary deduction for the excess, if any, of the adjusted tax basis of the ordinary shares over the fair market value of the ordinary shares as of the close of the taxable year, or the amount of any net mark-to-market gains recognized for prior taxable years, whichever is less. A U.S. holder’s adjusted tax basis in the ordinary shares will generally be adjusted to reflect the amounts included or deducted under the mark-to-market election. Additionally, any gain on the actual sale or other disposition of the ordinary shares generally will be treated as ordinary income. Ordinary loss treatment also will apply to any loss recognized on the actual sale or other disposition of ordinary shares to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included with respect to such ordinary shares. A mark-to-market election applies to the tax year for which the election is made and to each subsequent year, unless our ordinary shares cease to be marketable, as specifically defined, or the IRS consents to revocation of the election. No view is expressed regarding whether our ordinary shares are marketable for these purposes or whether the election will be available.
 
 If a U.S. holder makes either the QEF election or the mark-to-market election, distributions and gain will not be recognized ratably over the U.S. holder’s holding period or be subject to an interest charge as described above. Further, the denial of basis step-up at death described above will not apply. If a U.S. holder elects to treat us as a “qualified electing fund,” gain on the sale of the ordinary shares will be characterized as capital gain. However, U.S. holders making one of these two elections may experience current income recognition, even if we do not distribute any cash. The elections must be made with the U.S. holder’s federal income tax return for the year of election, filed by the due date of the return (as it may be extended) or, under certain circumstances provided in applicable Treasury Regulations, subsequent to that date.
 
 A NUMBER OF SPECIFIC RULES AND REQUIREMENTS APPLY TO BOTH THE QEF ELECTION AND THE MARK-TO-MARKET ELECTION, AND YOU ARE URGED TO CONSULT YOUR TAX ADVISOR CONCERNING OUR PFIC STATUS AND THE VARIOUS ELECTIONS YOU CAN MAKE.
 
 New Legislation regarding Medicare Tax
 
 For taxable years beginning after December 31, 2012, a U.S. holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax on the lesser of (1) the U.S. holder’s “net investment income” for the relevant taxable year and (2) the excess of the U.S. Investor’s modified adjusted gross income for the taxable year over a certain threshold (which, in the case of individuals, will be between US$125,000 and US$250,000 depending on the individual’s circumstances). A U.S. holder’s “net investment income” may generally include its dividend income and its net gains from the disposition of shares, unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a U.S. holder that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax to your income and gains in respect of your investment in the shares.
 
 Withholdable Payments to Foreign Financial Entities and Other Foreign Entities
 
 A non-U.S. holder may be subject to a U.S. federal withholding tax at a rate of 30% on certain payments made beginning January 1, 2014 to certain non-U.S. entities if certain disclosure requirements related to U.S. accounts maintained by, or the U.S. ownership of, the non-U.S. holder are not satisfied. Such payments would include U.S.-source dividends and the gross proceeds from the sale or other disposition of our common stock that can produce U.S.-source dividends. Non-U.S. holders should consult their own tax advisors regarding the effect, if any, of such withholding taxes on their ownership and disposition of our common stock.
 
 United States Information Reporting and Backup Withholding
 
 In general, U.S. holders may be subject to certain information reporting requirements under the Code relating to their purchase and/or ownership of stock of a foreign corporation such as the Company. Failure to comply with these information reporting requirements may result in substantial penalties.
 
 For example, recently enacted legislation generally requires certain individuals who are U.S. holders to file Form 8938 to report the ownership of specified foreign financial assets for tax years beginning after March 18, 2010 if the total value of those assets exceeds an applicable threshold amount (subject to certain exceptions). For these purposes, a specified foreign financial asset includes not only a financial account (as defined by the Code and applicable Treasury Regulations for these purposes) maintained by a foreign financial institution, but also any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity, provided that the asset is not held in an account maintained by a financial institution. The minimum applicable threshold amount is generally US$50,000 in the aggregate, but this threshold amount varies depending on whether the individual lives in the U.S., is married, files a joint income tax return with his or her spouse, etc. Certain domestic entities that are U.S. holders may also be required to file Form 8938 in the near future. U.S. holders are urged to consult with their tax advisors regarding their reporting obligations, including the requirement to file IRS Form 8938.
 
 41
 
 Dividend payments and proceeds from the sale or disposal of ordinary shares may be subject to information reporting to the IRS and possible U.S. federal backup withholding at the rate of 31%. Certain holders (including, among others, corporations) are generally not subject to information reporting and backup withholding. A U.S. holder generally will be subject to backup withholding if such holder is not otherwise exempt and such holder:
 
 ·
fails to furnish its taxpayer identification number, or TIN, which, for an individual, is ordinarily his or her social security number,
 
 ·
furnishes an incorrect TIN,
 
 ·
is notified by the IRS that it is subject to backup withholding because it has previously failed to properly report payments of interest or dividends, or
 
 ·
fails to certify, under penalties of perjury, that it has furnished a correct TIN and that the IRS has not notified the U.S. holder that it is subject to backup withholding.
 
 Any U.S. holder who is required to establish exempt status generally must file IRS Form W-9 (“Request for Taxpayer Identification Number and Certification”).
 
 Amounts withheld as backup withholding may be credited against a U.S. holder’s federal income tax liability. A U.S. holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing any required information.
 
 10.F.
Dividends and Paying Agents
 
 Not applicable.
 
 10.G.
Statements by Experts
 
 Not applicable.
 
 10.H.
Documents on Display
 
 We are subject to the informational requirements of the Exchange Act, applicable to foreign private issuers and fulfill the obligation with respect to such requirements by filing reports with the Securities and Exchange Commission. You may read and copy any document we file with the Securities and Exchange Commission without charge at the Securities and Exchange Commission’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such material may be obtained by mail from the Public Reference Branch of the Securities and Exchange Commission at such address, at prescribed rates. Please call the Securities and Exchange Commission at l-800-SEC-0330 for further information on the public reference room. In addition, certain of the Company’s reports filed or furnished with the Securities and Exchange Commission are available on-line at www.sec.gov.
 
 As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act.  In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the Securities and Exchange Commission as frequently or as promptly as United States companies whose securities are registered under the Exchange Act.  A copy of each report submitted in accordance with applicable United States law is available for public review at our principal executive offices.
 
 10.I.
Subsidiary Information
 
 Not applicable.
 
 ITEM 11.                    Quantitative and Qualitative Disclosures about Market Risk
 
 Market risk represents the risk of changes in the value of a financial instrument caused by fluctuations in interest rates, equity prices and foreign currency exchange rates.
 
 Interest Rate Risk
 
 As of December 31, 2013, we have not been involved in transaction of which we were required to pay interest. Hence there was no exposure to interest rate risk.
 
 42
 
 Equity Price Risk
 
 As of December 31, 2013, we did not have any marketable securities that were recorded at fair value. Hence there was no exposure to equity price risk.
 
 Foreign Currency Exchange Risk
 
 We are exposed to financial market risk associated with changes in foreign currency exchange rates.
 
 As of December 31, 2013, we had immaterial amounts of cash in New Israeli Shekels (NIS) or in funds linked thereto.
 
 In addition, most of our expenses are denominated in NIS. Market risk is estimated as the potential increase in fair value resulting from a hypothetical 5% decrease in the year-end dollar exchange rate. Assuming such a decrease in the dollar exchange rate, the total of our expenses would increase by approximately US$0.1 million.
 
 ITEM 12.                   Description of Securities Other Than Equity Securities
 
 Not applicable.
 
 PARTII
 
 ITEM 13.
Defaults, Dividend Arrearages and Delinquencies
 
 None.
 
 ITEM 14.                   Material Modifications to the Rights of Security Holders and Use of Proceeds
 
 None.
 
 ITEM 15.                   Controls and Procedures
 
 Disclosure Controls and Procedures
 
 We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions to be made regarding required disclosure. Our management  has evaluated the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) of the Exchange Act) as of December 31, 2013. Based on such review, our management concluded that our disclosure controls and procedures were effective as of December 31, 2013.
 
 Management's Annual Report on Internal Control over Financial Reporting
 
 Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f).
 
 Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards (IFRS). Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
 
 Our management assessed the effectiveness of our internal control over financial reporting as of the end of the period covered by this annual report. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (1992). Their assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting.
 
 Based on that assessment, our management concluded that as of December 31, 2013 the Company’s internal control over financial reporting was effective.
 
 43
 
 Attestation Report of the Registered Public Accounting Firm
 
 This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the Dodd-Frank Act, passed in 2010, which eliminated the requirements for non-accelerated filers.
 
 Changes in Internal Control over Financial Reporting
 
 There were no changes in our internal controls over financial reporting identified with the evaluation thereof that occurred during the period covered by this annual report that have materially affected, or are reasonable likely to materially affect our internal control over financial reporting.
 
 ITEM 16A.                Audit Committee Financial Expert
 
 Our board of directors has determined that Alicia Rotbard is our audit committee financial expert and is independent as defined by the applicable SEC regulations.
 
 ITEM 16B.                Code of Ethics
 
 Our company has adopted a code of ethics, which applies to all employees, officers and directors, including our principal executive officer or CEO and our principal accounting officer or CFO or other persons performing similar functions. Copies of our code of ethics are available free of charge at our executive offices upon request.
 
 ITEM 16C.                Principal Accountant Fees and Services
 
 The following table presents fees for professional audit services rendered by Brightman Almagor Zohar & Co., an independent registered accounting firm and a member firm of Deloitte Touche Tohmatsu (“Brightman Almagor Zohar & Co.”) for the audit of the Company’s consolidated annual financial statements for the years ended December 31, 2013 and for other services rendered as well as for tax return preparation.  In 2012 and 2013, no audit related fees were charged under than stated above by Brightman Almagor Zohar & Co. to the Company.
 
 2012


2013(In thousands)Audit Fees (1)

$
38


$
40Tax Fees (2)

$
2


$
3
 
 (1)
Audit fees consist of fees for professional services rendered for the audit of the Company’s Consolidated Financial Statements and review of financial statements and services normally provided by the independent auditor in connection with statutory and regulatory filings or engagements.
 
 (2)
Tax fees consist of tax compliance fees for the preparation of original and amended tax returns, claims for refunds and tax advice.
 
 Pre-Approval Policies and Procedures
 
 The audit committee approves all audits, audit-related services, tax services and other services provided by our independent auditors. Any services provided by our independent auditors that are not specially included within the scope of the audit must be pre-approved by our audit committee prior to any engagement.
 
 ITEM 16D.                Exemptions from the Listing and Standards of Audit Committees
 
 Not applicable.
 
 ITEM 16E.                 Purchases of Equity Securities by the Issuer and Affiliated Purchasers
 
 Purchases of Equity Securities by the Issuer
 
 None.
 
 Purchases of Equity Securities by an Affiliated Purchaser
 
 No purchases of our equity securities were made in 2013 by an affiliated purchaser.
 
 Item 16F.                   Change in Registrant’s Certifying Accountant
 
 None.
 
 44
 
 Item 16G.                  Corporate Governance
 
 Not applicable.
 
 Item 16H.                  Mine Safety Disclosure
 
 Not applicable.
 
 45
 
 PART III
 
 ITEM 17.                   Financial Statements
 
 Not applicable.
 
 ITEM 18.                   Financial Statements
 
 (i)               Consolidated Financial Statements of RVB as of and for the year ended December 31, 2013 (filed herewith);
 
 ITEM 19.                   Exhibits
 
 The exhibits filed with or incorporated into this annual report are listed on the index of exhibits below.
 
 Exhibit No.
Description1.1
Memorandum of Association of Registrant (incorporated by reference to Exhibit 1.1 to the Registrant's shell company report on Form 20-F, filed on September 7, 2011);1.2
Articles of Association (incorporated by reference to Exhibit 1.2 to the Registrant's shell company report on Form 20-F, filed on September 7, 2011);4.1
Share Purchase Agreement among the Registrant, Greenstone Industries Ltd., S.R. Accord Ltd., Mazal Resources B.V. and E.E.R. Environmental Energy Resources (Israel) Ltd., dated July 3, 2011 (incorporated by reference to Appendix A of Exhibit 99.1 to the Registrant's Form 6-K, filed on July 20, 2011);4.2
Form of additional Share Purchase Agreement between the Registrant and certain E.E.R. Environmental Energy Resources (Israel) Ltd. shareholders (incorporated by reference to Appendix B of Exhibit 99.1 to the Registrant's Form 6-K, filed on July 20, 2011);4.3
Option Agreement between the Registrant and Mazal Resources B.V., dated July 3, 2011(incorporated by reference to Appendix C of Exhibit 99.1 to the Registrant's Form 6-K, filed on July 20, 2011);4.4
Management Agreement between the Registrant and Greenstone, dated July 14, 2011 (incorporated by reference to Exhibit 99.5 to the Registrant's Form 6-K, filed on July 20, 2011);4.5
Shareholders' Agreement between the Registrant and Mazal, dated July 3, 2011 (incorporated by reference to Exhibit 99.6 to the Registrant's Form 6-K, filed on July 20, 2011);4.6
The Registrant's 2011 Share Option Plan (incorporated by reference to Exhibit 4.9 to the Registrant's shell company report on Form 20-F, filed on September 7, 2011);4.7
Form of Indemnification Agreement (incorporated by reference to Appendix G of Exhibit 99.1 to the Registrant's Form 6-K, filed on July 20, 2011);4.8
Translation of the Line of Credit Agreement between the Company and Greenstone, dated October 6 2013 (filed herewith);4.9
Translation of the Line of Credit Agreements between the Company and Greenstone, dated January 6, 2014 (filed herewith);4.10
Translation of the Line of Credit Agreements between the Company and EER, dated October 6, 2013 (filed herewith);4.11
Translation of the Line of Credit Agreements between the Company and EER, dated January 6, 2014 (filed herewith);8.1
List of Subsidiaries (incorporated by reference to Exhibit 8.1 to the Registrant's annual report on Form 20-F, filed on April 30, 2012);12.1
Certification of principal executive officer  required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith);12.2
Certification required of principal financial officer by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith);13.1
Certification of principal executive officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith);13.2
Certification of principal financial officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith);
 
 46
 
 SIGNATURE
 
 The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
 
 R.V.B. HOLDINGS LTD.By:
/s/ Yair FudimName:  Yair FudimTitle:    Chairman of the board of directors
 By:
/s/ Ofer NavehName:   Ofer NavehTitle:     Chief Financial Officer
 
 Date:  April 28, 2014
 
 47
 
 R.V.B. HOLDINGS LTD.
  CONSOLIDATED FINANCIAL STATEMENTS
 AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2013
 
 
 
 R.V.B. HOLDINGS LTD.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2013
 
 TABLE OF CONTENTS
  PageREPORT OF INDEPENDENT REGISTERED  PUBLIC ACCOUNTING FIRM
F-2CONSOLIDATED FINANCIAL STATEMENTSConsolidated statements of financial position
F-3Consolidated statements of comprehensive income
F-4Consolidated statements of changes in equity
F-5-F-7Consolidated statements of cash flows
F-8-F-9Notes to consolidated financial statements
F-10-F-37
  
 
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board of directors and Shareholders of
  R.V.B. HOLDINGS LTD.
 
 We have audited the accompanying consolidated statements of financial position of R.V.B. Holdings Ltd.and its subsidiary (hereafter - "the Group") as of December 31,2013 and 2012 and the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2013. These consolidated financial statements are the responsibility of the Group's management and Board of Directors.  Our responsibility is to express anopinion on these consolidated financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control over financial reporting. Accordingly, we express no such opinion. Anaudit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2013 and 2012 and the results of its operations, changes in equity and cash flows for each of the three years in the period ended December 31, 2013, in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standard Board (IASB).
 
 As discussed in Note 1d to the financial statements, the Company has incurred recurring losses and negative cash flows from operations, and the board of directors of the Company decided to cease EER's operations and to act in order to dismantle the demonstration facility in Y'bllin owned by EER and also to implement a significant cost reduction plan in the Group. Therefore, the board of directors and management of the company concluded that the Company is not a going concern.
 The Financial statements are prepared in accordance with IFRS as issued by the IASB with appropriate adjustments to reflect the fact that the Company is not a going concern.
 
 /s/ Brightman Almagor Zohar & Co.



Brightman Almagor Zohar & Co.Certified Public Accountants (Isr.)

A member firm of Deloitte ToucheTohmatsu Limited
 
 Tel Aviv, March 13, 2014.
  
  F - 2
 
 R.V.B. HOLDINGS LTD.
  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 
 As of December 312013


2012Note


$ in thousandAssetsCurrent assetsCash and cash equivalents

5



102



2,613Accounts receivable

6



85



412187



3,025Fixed assets classified as held for sale

8, 13a(8)



1,642



-Total current assets





1,829



3,025Non-current assetsRestricted bank deposit

13a(1)



298



266Fixed assets, net

8



-



11,092Intangible assets, net

9



-



3,110Total non-current assets





298



14,468Total assets





2,127



17,493Liabilities and equityCurrent liabilitiesRelated party

13a(3),(10)



513



9Liability in respect of dismantling and vacating fixed assets

2h



175



-Accounts payable and accruals

10



145



360Total current liabilities





833



369Non-current liabilitiesAccounts payable and accruals

13a(1)



436



-Liability to the Office of the Chief Scientist

13b



-



418Liability in respect of dismantling and vacating fixed assets

2h



-



165Total non-current liabilities





436



583Equity attributable to owners of the Company

14



329



13,113Non-controlling interests





529



3,428Total equity





858



16,541Total liabilities and equity





2,127



17,493
  /s/ Yair Fudim

/s/ Ofer NavehYair Fudim

Chairman of the Board

Ofer Naveh

CFO
 
 Approval date of the financial statements: March 13, 2014.
  The accompanying notes are an integral part of the consolidated financial statements.
  F - 3
  R.V.B. HOLDINGS LTD.
  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
  For the year ended December 312013


2012


2011Note


$ in thousandRevenues

13a(9)



-



62



63ExpensesOperating expenses and facility maintenance

16



2,068



2,952



2,526Marketing expenses

17



251



549



1,200Administrative and general expenses

18



956



1,430



1,759Other expenses

19



12,415



-



-Total expenses





15,690



4,931



5,485Loss from ordinary activities





(15,690
)


(4,869
)


(5,422
)Financing income

20



42



428



54Financing expenses

20



(47
)


(60
)


(878
)Total financing expenses, net





(5
)


368



(824
)Loss for the year





(15,695
)


(4,501
)


(6,246
)Total comprehensive loss for the period





(15,695
)


(4,501
)


(6,246
)Loss and total comprehensive loss attributable to:Owners of the Company





(12,583
)


(3,615
)


(5,950
)Non-controlling interests





(3,112
)


(886
)


(296
)(15,695
)


(4,501
)


(6,246
)Loss per share (in $)Basic and diluted loss per share

15



(0.054
)


(0.016
)


(0.029
)
 
 The accompanying notes are an integral part of the consolidated financial statements.
  F - 4
 
 R.V.B. HOLDINGS LTD.
  CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 
 For the year ended December 31, 2013Share capital


Premium on shares


Capital reserve in respect of share-based payments


Accumulated losses


Attributable to owners of the Company


Non-controlling interests


Total$ in thousandBalance as of January 1, 2013


56,885



6,874



64



(50,710
)


13,113



3,428



16,541Changes during the  period (unaudited)Share-based payment


-



-



12



-



12



-



12Change in non-controlling interests in respect of change in holding in a subsidiary


-



(213
)


-



-



(213
)


213



--



(213
)


12



-



(201
)


213



12Loss for the period


-



-



-



(12,583
)


(12,583
)


(3,112
)


(15,695
)Total comprehensive loss for the period


-



-



-



(12,583
)


(12,583
)


(3,112
)


(15,695
)Balance as of December 31, 2013 (unaudited)


56,885



6,661



76



(63,293
)


329



529



858
 
 The accompanying notes are an integral part of the consolidated financial statements.
  F - 5
 
 R.V.B. HOLDINGS LTD.
  CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 
 For the year ended December 31, 2012Share capital


Premium on shares


Capital reserve in respect of share-based payments


Accumulated losses


Attributable to owners of the Company


Non-controlling interests


Total$ in thousandBalance as of January 1, 2012


42,364



21,807



-



(47,095
)


17,076



3,902



20,978Changes during 2012Share-based payment


-



-



64



-



64



-



64Issue of ordinary shares


14,521



(14,521
)


-



-



-



-



-Change in non-controlling interests in respect of change in holding in a subsidiary


-



(412
)


-



-



(412
)


412



-14,521



(14,933
)


64



-



(348
)


412



64Loss for the year


-



-



-



(3,615
)


(3,615
)


(886
)


(4,501
)Total comprehensive loss for the year


-



-



-



(3,615
)


(3,615
)


(886
)


(4,501
)Balance as of December 31, 2012


56,885



6,874



64



(50,710
)


13,113



3,428



16,541
 
 The accompanying notes are an integral part of the consolidated financial statements.
  F - 6
 
 R.V.B. HOLDINGS LTD.
  CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 
 For the year ended December 31, 2011Share capital


Premium on shares


Receipts on account of options


Capital reserve from transactions with shareholders


Capital reserve in respect of share-based payments and equity component of convertible loans


Accumulated losses


Attributable to owners of the Company


Non-controlling interests


Total$ in thousandBalance as of January 1, 2011


4,906



34,078



173



161



6,063



(41,145
)


4,236



-



4,236Changes during 2011Share-based payment


-



-



-



-



1,220



-



1,220



-



1,220Termination of employee options


-



2,852



-



-



(2,852
)


-



-



-



-Equity component of convertible loans


-



1,013



-



-



-



-



1,013



-



1,013Conversion of shareholder's debts


1,445



15,128



-



(161
)


(3,393
)


-



13,019



-



13,019Issuance of ordinary shares – EER Transaction


25,692



(20,862
)


(173
)


-



(1,038
)


-



3,619



4,117



7,736Change in non-controlling interests in

respect of change in holding in a subsidiary


-



(81
)


-



-



-



-



(81
)


81



-27,137



(1,950
)


(173
)


(161
)


(6,063
)


-



18,790



4,198



22,988Loss for the year


-



-



-



-



-



(5,950
)


(5,950
)


(296
)


(6,246
)Total comprehensive loss for the year


-



-



-



-



-



(5,950
)


(5,950
)


(296
)


(6,246
)Balance as of December 31, 2011


32,043



32,128



-



-



-



(47,095
)


17,076



3,902



20,978
 
 The accompanying notes are an integral part of the consolidated financial statements.
  F - 7
 
 R.V.B. HOLDINGS LTD.
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 For the year ended on December 312013


2012


2011$ in thousandCash flows from operating activityLoss for the year


(15,695
)


(4,501
)


(6,246
)Adjustments required to present cash flows from operating activity (Appendix A)


13,389



1,233



3,703Net cash used in operating activity (*)


(2,306
)


(3,268
)


(2,543
)Cash flows from investment activityIncrease in restricted bank deposit


(11
)


(300
)


-Investment in fixed assets


(647
)


(60
)


(2
)Net cash used in investment activity


(658
)


(360
)


(2
)Cash flows from financing activityEER Transaction (Note 7c)


-



-



7,977Repayment of bank loans


-



(510
)


(204
)Proceeds from shareholders loans


453



-



1,466Net cash provided by financing activity


453



(510
)


9,239Increase (decrease) in cash and cash equivalents


(2,511
)


(4,138
)


6,694Balance of cash and cash equivalents at the start of the year


2,613



6,751



57Balance of cash and cash equivalents at end of the year


102



2,613



6,751(*)  Including cash interest payments in the amount of


-



19



22(*)  Including cash interest receipts in the amount of


20



36



51
 
 The accompanying notes are an integral part of the consolidated financial statements.
  F - 8
  R.V.B. HOLDINGS LTD.
  CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
  Appendix A – Adjustments required to present the cash flows from operating activity
  For the year ended on December 312013


2012


2011$ in thousandIncome and expenses not involving cash flows:Depreciation and amortization


13,094



1,884



1,874Interest accrued on loans and others, net


(13
)


8



706Financing income regarding a short term loan


-



(204
)


-Transformation of loan into grant


-



-



701Loss (profit) arising on financial liabilities at fair value through profit or loss


-



(158
)


(52
)Bonus in respect of options to shareholders in connection with the provision of a guarantee


-



-



432Share-based payments


12



64



42213,093



1,618



4,083Changes in asset and liability items:Decrease (increase) in accounts receivable


379



(124
)


(14
)Decrease in accounts payable and accruals


(83
)


(261
)


(366
)296



(385
)


(380
)13,389



1,233



3,703
  The accompanying notes are an integral part of the consolidated financial statements.
  F - 9
  R.V.B. HOLDINGS LTD.
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE1 - GENERAL
 
 a.
R.V.B. Holdings Ltd. (formerly B.V.R Systems (1998) Ltd.) (the "Company") is an Israeli company incorporated in Israel(the Company changed its name on January 12, 2010).
 
 The Company’s ordinary shares are traded in the United States on the Over the Counter Bulletin Board (OTCBB) under the symbol RVBHF.
 
 b.
On August 31, 2011, the Company completed the transaction, following which E.E.R. Environmental Energy Resources (Israel) Ltd.'s ("EER") became its subsidiary (the "EER Transaction").  As of January 12, 2012 the Company completed the multi-closing of the EER transaction in which it acquired all of EER's shares held by Greenstone Industries Ltd. ("Greenstone") and by S.R. Accord Ltd. ("Accord"), and the majority of EER shares held by certain other EER shareholders, and, as of the date of these financial statements, holds approximately 80% of EER's share capital and 99.1% of EER's voting rights.
 
 For additional information regarding the EER Transaction, see Note 7b.
 
 c.
Description of EER and its operations:
 
 EER was incorporated in Israel on May 21, 2000, as a private company limited by shares. EER owns know-how and rights in the field of solid waste treatment through the use of Plasma-Gasification-Melting (PGM) technology, an innovative approach to waste treatment, which can be implemented, among others, for the treatment of municipal waste, medical waste and low and intermediate level radioactive waste (the “PGM Technology” or the “Technology”).
  In early 2007, EER completed the construction of a facility in Yblin, Israel (containing systems similar to those found in a commercial facility) to make use of the Technology for the treatment of municipal waste (the "Yblin Facility").  The Yblin Facility, according to its permit, can operate only few times a year. At the start of 2008, the Company began depreciating the facility after a successful first year of trial running.
  Over the years 2007-2009, several demonstrations were held using the Yblin Facility.
 
 As part of the working plan of EER, the Board of Directors of the Company (the “Board”) approved an investment of up to US$ 1 million in EER's Yblin Facility. The purpose of the investment was implementing improvements in Yblin Facility which mainly include the replacement of the current processing chamber and preparation of the facility for continuous operation. These improvements have been completed as of June 2013.
  During June 2013, EER also conducted an additional trial operation of the Y'bllin Facility that included, among others, a test of the capabilities of the new reactor which operates on EER's technology for treatment of solid waste through Plasma-Gasification-Melting.
 
 Considering EER's financial difficulties and needs as mentioned in note 1d below, on July 29, 2013 the board has decided, after considerable deliberation, to cease the operation of the demonstration facility in Y'bllin and to implement a significant cutback in the personnel of the Company and EER, and following the aforementioned decision, on October 31, 2013, the Board decided to act to dismantle the facility and to sale the systems and equipment. See also notes 7d and 13 a(8) below.
  F - 10
 
 R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE1 – GENERAL (continued):
 
 d.
The Going Concern Assumption
 
 The Company has incurred recurring losses and negative cash flows from operations. As at December 31, 2013, the Company had cash and cash equivalents in a total amount of $102 thousands.
 
 On July 29, 2013 the board of directors of the company has decided to cease the operation of the demonstration facility in Y'bllin owned by EER and to implement a significant cost reduction plan in the Company and in EER. Following the aforementioned decision, on October 31, 2013, the Board decided to act to dismantle the facility and to sale the systems and equipment
 
 Therefore, the board of directors and management of the company concluded that the Company is not a going concern.
  The Financial statements are prepared in accordance with IFRS as issued by the IASB with appropriate adjustments to reflect the fact that the Company is not a going concern.
 
 Regarding a line credit received from Greenstone see note 13a(10) below.
  e.
Definitions:
  The Company
-
R.V.B. Holdings Ltd.The Group
-
The Company and its Subsidiaries (as defined below)Subsidiaries
-
Companies in which the Company holds 50% or more of its voting rights or have the right to appoint half or more of the members of the Board of Directors, and the financial statements ofwhich are consolidated with those of the Company.Related parties
-
As defined in IAS 24.CPI
-
The Consumer Price Index, as published by the Central Bureau of Statistics.Dollar
-
A United States dollar
 
 F - 11
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE   2 - SIGNIFICANT ACCOUNTING POLICIES
 
 a.
Statement of compliance
 
 These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and its interpretations published by the International Accounting Standards Board (“IASB”).
 
 b.
Presentation of the statement of financial position
 
 The Company’s assets and liabilities in the statement of financial position are classified according to current and non-current items.
 
 c.
Basis for the preparation of the financial statements:
 
 The consolidated financial statements have been prepared on the historical cost basis except for certain properties and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
 
 The principal accounting policies are set out below.
 
 d.
Analysis of the expenses recognized in profit and loss
 
 The Company’s expenses in the statement of comprehensive income are presented based on the function of expenses within the entity.
 
 e.
Foreign currency:
 
 (1)
Functional currency and operating currency:
 
 The currency of the main economic environment in which the Group operates is the US dollar (hereinafter – "the functional currency").
 
 (2)
Translation of transactions that are not in the functional currency
 
 In the preparation of the financial statements, transactions carried out in currencies other than the Company's functional currency (hereinafter – "foreign currency") are recorded at the exchange rates in effect on the dates of the transaction. At each reporting period, monetary items stated in foreign currency are translated according to the exchange rates in effect at that date; non-monetary items that are measured in terms of historical cost are translated according to the exchange rates in effect at the time of the transaction in connection with the non-monetary item.
  (3)
The method of recording exchange rate differences
 
 Exchange rate differences (primarily in respect of monetary balances that are not in the functional currency) are recognized in the income statement in the period in which they occurred.
 
 F - 12
 
 R.V.B. HOLDINGS LTD.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE  2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
 
 f.
Cash and cash equivalents
 
 Cash and cash equivalents include all highly liquid investments, which include short-term bank deposits (up to three months from date of deposit) that are not restricted as to withdrawal or use and the period to maturity of which did not exceed three months at time of investment.
 g.
Consolidated financial statements
 
 (1)
General
 
 The consolidated financial statements incorporate the financial statements of the Company and entity controlled by the Company (its subsidiary).
 
 Control is achieved when the Company:
 
 ·
has power over the investee;
  ·
is exposed, or has rights, to variable returns from its involvement with the investee; and
  ·
has the ability to use its power to affect its returns.
 
 Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.
 
 When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the other members of the Group.
 
 All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
 
 (2)
Non-controlling interest
 
 Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
 
 Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Company.
 
 (3)
Regarding the accounting treatment of the EER transaction see note 1d above.
 
 F - 13
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE  2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
 
 h.
Fixed assets:
 
 A fixed asset is a tangible item, which is held for use in manufacture or the supply of goods or services, or rent for others, which is forecasted to be used for more than one period. The Company presents its fixed asset items according to the cost model.
 
 Under the cost model, fixed asset items are presented in the balance sheet at cost (net of received investment grants), net of accumulated depreciation and less accumulated impairment losses.
 
 Any component of a fixed-asset item having a cost that is significant in relation to the total cost of the asset shall be depreciated separately. The depreciation is carried out systematically over the estimated useful life of the asset by the straight line method from the time at which the asset is ready for its intended use.
 
 The annual rates of depreciation are as follows:
 
 Useful life

Depreciation rates%Buildings

12.5

8Construction and miscellaneous

12.5

8Plasma, compressors and bellows

12.5

8Machinery and equipment

12.5

8Pipelines

12.5

8Crane and reactor

12.5

8Faucets and electricity

10

10Steam boilers

5

20Furniture and office equipment

3-17, mainly 3

6-33 (mainly 33%)
 
 The useful life of an asset is reviewed by the Company's management at the end of each financial year. Changes are treated as changes in estimates and accounted for prospectively.
  Liability in respect of costs for dismantling and removing an item and restoring the site on which the asset is located:
 
 The cost of a fixed-asset item includes, among others, costs to dismantle and remove the item and to restore the site on which the asset is located, for which the Company incurred an obligation, when the item was purchased or as a result of the use of this item during a certain period, that is not for the purpose of manufacturing inventory during that period.
 
 ·
Changes in said liability regarding the end of the period of depreciation of the item will be deducted from or added to the asset during the period in which they occurred.
 
 ·
Changes in said liability deriving from the passage of time are recognized in the statement of income as a financing cost as incurred.
 
 See also note 13a(8).
  F - 14
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE  2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
 
 i.
Non-current assets held for sale:
 
 Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
 
 Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.
 
 j.
Impairment of tangible and intangible assets other than goodwill:
 
 At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
 
 Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
 
 Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
 
 If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
 
 When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
  F - 15
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE  2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
 
 k.
Financial assets:
 
 (1)
General
 
 Financial assets are recognized in the balance sheet when the Company becomes a party to the contractual terms of the instrument.
 
 Investments in financial instruments are initially measured at fair value plus transaction costs, except for those financial assets classified at fair value through profit or loss, where the transaction costs are carried to the income statement.
 
 The Company's financial assets are loans and receivables. The classification is dependent on the nature and purpose of holding the financial asset and is determined at the initial date of recognition of the financial asset.
 
 As for the publication of IFRS 9 "Financial Instruments", see note 3b.
 
 (2)
Loans and receivables
 
 Deposits, loans and other receivables with fixed or determinable payments that are not quoted in an active market, are classified as loans and receivables. The value of these financial assets is not materially different than their fair value.
 
 l.
Financial liabilities and equity instruments issued by the Company:
 
 (1)
Classification as a financial liability or an equity instrument
 
 Non-derivative financial instruments are classified as either financial liabilities or as equity instruments in accordance with the substance of the contractual arrangement.
 
 An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the amount of the proceeds received, net of direct issuing costs.
 
 Financial liabilities of the Company are measured in accordance with their classification as other financial liabilities, at amortized cost (not at fair value through profit and loss).
 
 (2)
Other financial liabilities
 
 Other financial liabilities (credit, loans, and accounts payable) are initially measured at fair value, net of transaction costs. The value of these financial liabilities is not materially different than their fair value.
 
 m.
Leasing of real estate by the Company
 
 Payments made under operating leases were recognized in the statement of income on a straight-line basis over the term of the lease. Regarding onerous contracts see note 2o below.
 
 F - 16
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE  2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
 
 n.
Government grants and grants from the office of the Chief Scientist
 
 Grants received from the Chief Scientist (prior to the Amendment to IAS 20), which EER is required to repay with the addition of interest payments, provided the conditions associated with the grant are met, and which do not constitute forgivable loans, are recognized on the date of initial recognition, the amount to be repaid is presented as a liability at its nominal value without reflecting the benefit that arises from the capitalization of the grant at a capitalization rate that reflects the level of risk of the research and development project.
 
 o.
Provisions:
 
 A provision is recognized if, as a result of a past event, the group has a present legal or constructive obligation, and it is probable that an outflow of economic benefits, which can be estimated reliably, will be used to settle the obligation.
 
 The amount recognized as a provision, reflects management's best estimate of the amount required in order to settle the obligation on the balance sheet date, whilst taking into account the risks and uncertainties connected with the obligation. When the provision is measured using the forecasted cash flows in order to settle the liability, the book value of the provision is the current value of the forecasted cash flows.
 
 When the entire amount or a portion thereof, which is required to settle the commitment at the balance sheet date is expected to be recovered by a third party, the Group recognizes the asset, in respect of said recovery, up to the amount of the recognized provision, only when it is virtually certain that the indemnification will be received and that it can be reliably measured.
 
 Onerouscontracts
 
 Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract.
 
 p.
Share-based payments:
 
 Share-based payments to employees and others that provide similar services, which are settled in equity instruments of the Group, are measured at fair value on the grant date. On the grant date, the Company measures the fair value of the granted equity instruments by using the Black and Scholes model. If the equity instruments granted to them have not vested until these employees have completed a defined period of service, have met performance conditions or defined market conditions are met, the company recognizes the share-based payment transactions in its financial statements over the vesting period against an increase in its shareholders' equity, under "Capital reserve in respect of share-based payment". At each balance sheet date, the Company estimates the number of equity instruments that are expected to vest. Any change in the estimate relative to previous periods is recognized in the income statement over the remaining vesting period.
  F - 17
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE  2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
 
 q.
Taxes on income
 
 In view of losses for tax purposes accrued by the Company and given the fact that as of the reporting date there was no certainty as to the realization of these losses in the foreseeable future, the Company does not recognize deferred taxes in respect of carry-forward losses and in respect of temporary differences in the value of certain revenues and expenses, between the financing reporting and the reporting for tax purposes.
 
 r.
Employee benefits:
 
 (1)
Post-employment benefits
 
 The Company has defined contribution plans in accordance with Section 14 of the Israeli Severance Pay Law. In respect of these plans, the actuarial and economic risks are not imposed on the Company. In said plans, during the employment period, an entity makes fixed payments to a separate entity without having a legal or constructive obligation to make additional payments if the fund has not accumulated sufficient amounts. Deposits with the defined contribution plan are included as an expense at the date of the deposit, parallel to receiving services from the employee. The Company makes deposits with pension funds and insurance companies in respect of its liabilities to pay severance pay to some of its employees on a current basis.
 
 (2)
Short-term employee benefits
 
 Short-term employee benefits include wages, vacation days, sick leave, recreation and deposits with the National Insurance Institute, which are paid within one year of the period in which the employee provides the related service. These benefits are recognized as an expense upon the provision of services.
 
 s.
Earnings (loss) per share
 
 The Company presents basic and diluted earnings (loss) per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees and others (See Note 17).
 
 t.
Revenue recognition
 
 Revenue is measured at the fair value of the consideration received or receivable.
 
 Rendering ofservices
 
 Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract.
  F - 18
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE  2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
 
 u.
Exchange rates and linkage basis:
 
 (1)
Balances in or linked to foreign currency are presented according to the representative exchange rate published by the Bank of Israel at the balance sheet date.
 
 (2)
Balances linked to the CPI are presented according to the CPI for the last month of the reporting period.
 
 (3)
Data in respect of changes in the CPI and the dollar's exchange rate are as presented as follows:
 
 The dollar's


CPI in IsraelExchange rate


Actual CPI


Known CPI(NIS to 1 $)


Points


PointsDate of the financial statementsAs of December 31, 2013


3.471



114.2



114.1As of December 31, 2012


3.733



112.1



111.9Rate of change

Change in %For the year ended December 31, 2013


(7.02
)


1.8



1.9For the year ended December 31, 2012


(2.30
)


1.6



1.4For the year ended December 31, 2011


7.66



2.2



2.5
 
 v.
Accounting treatment of the EER Transaction:
 
 Although in the EER Transaction, mentioned in note 7b below, the Company was the legal purchaser of the rights in EER, the Company had no business activity ("Shell Company") as of the date of the EER transaction and thus does not meet the definition of a Business under IFRS 3, and since the majority of the shareholders of the Company after the completion of transaction (including the completion of the Additional SPA) are former shareholders of EER, this transaction does not meet the definition of a 'Business Combination' under IFRS 3. For accounting purposes the transaction is treated as a capital transaction of EER.
 
 See also notes 7b & 7c.
 
 NOTE 3 – NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS):
  There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 January 2013 that had or would be expected to have a material impact on the group.
  F - 19
 
 R.V.B. HOLDINGS LTD.
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE 4 – CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF   ESTIMATION UNCERTAINTY:
 
 In the Company's accounting policy, which is described in note 2 above, the Company is required in certain cases to use accounting judgment regarding estimates and assumptions in connection with the book value of assets and liabilities that are not necessarily found in other sources. The related estimates and assumptions are based on past experience and other factors which are considered relevant. Actual results may differ from these estimates.
 
 Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
 
 Regarding Impairment of tangible and intangible assets see notes 8 and 9 below.
 
 NOTE 5 – CASH AND CASH EQUIVALENTS
 
 Composed as follows:
  As of December 312 0 1 3


2 0 1 2$ in thousandIn Dollars


6



2,382In New Israel Shekels (NIS)


96



231102



2,613
 
 NOTE 6 – ACCOUNTS RECEIVABLE
 
 Composed as follows:
 
 As of December 312 0 1 3


2 0 1 2$ in thousandInstitutions


50



79Employees


-



2Prepaid expenses


23



141Restricted bank deposit


12



53Advances to suppliers


-



13785



412
  F - 20
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 7 – SUBSIDIARY
 
 a.
General
 
 As of December 31, 2013 the Company's only subsidiary is EER.
 
 As mentioned in note 7b(1) below, as of January 12, 2012, RVB completed the multi-closing of EER Transaction in which it acquired all of EER shares held by Greenstone and Accord, and the majority of EER shares held by certain other EER shareholders, and holds 80% of EER's share capital and 99% of EER's voting rights.
 
 Regarding the accounting treatment of the EER transaction see note 2v above and 7c below..
 
 b.
The EER Transaction
 
 Below is a description of the EER Transaction, including a summary of the terms and conditions of the EER Share Purchase Agreement, the Option Agreement, the Voting Agreement and the Services Agreement, and the actions that took place at the closing of the EER transaction on August 31, 2011, (the "Closing Date") in connection therewith:
 
 (1)
At the Closing Date, pursuant to the EER Share Purchase Agreement, the Company acquired all of EER's shares held by Greenstone (6,274,760 ordinary shares of EER), for a total cash consideration of US$ 15,686,900. In addition, the Company acquired all of EER’s share capital held by Accord (1,721,450 ordinary shares of EER), in exchange for 20,054,893 ordinary shares of the Company (each EER share was exchanged for 11.65 ordinary shares of the Company).On October 11, 2011 an initial closing of an Additional SPA was completed with certain EER shareholders. At this closing, the Company issued a total of 38,066,489 ordinary shares of the Company in exchange for a total of 3,267,510 EER shares from these certain EER shareholders.
 
 On January 12, 2012, an additional closing of the Additional SPA with other EER shareholders who elected to become parties to the Additional SPA was completed. At this additional closing the Company issued a total of 55,703,870 ordinary shares of the Company, in exchange for 4,781,448 EER shares of these certain EER shareholders.
 
 (2)
In addition, pursuant to the EER Share Purchase Agreement, the Company was provided with the opportunity, before the lapse of 24 months following the Closing Date, to make an investment from time to time in EER’s share capital in an aggregate amount of up to US$ 8,000,000 by purchasing EER ordinary shares at a price per share of US$ 2.5. Since the closing date and until August 31, 2013 (the end of the above mentioned 24 month period) the Company has made an investment in a total amount of approximately $7 million.
 
 (3)
Pursuant to the Option Agreement, the Company granted Mazal an option to sell to the Company or to whom the Company may direct, no later than December 31, 2016, Mazal’s holdings in EER, in exchange for shares of the Company at the same exchange ratio applied for the purchase of EER's shares pursuant to the Share Purchase Agreement (the "Put Option"), and Mazal granted the Company the option to buy all of Mazal's holdings in EER, upon the occurrence of certain reorganizational events on or prior to December 31, 2016 (the "Call Option").
  The terms and conditions of the Option Agreement shall apply, where applicable, to 150,000 options to purchase EER shares, which EER granted to EER's former CEO, on June 2011;
  F - 21
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 7 – SUBSIDIARY (continued)
 
 b.
The EER Transaction (continued)
 
 (4)
Pursuant to the Shareholders Agreement, Mazal undertook to vote with its EER shares in the same manner as then voted on such matter by the Company and/or as instructed by the Company in its sole discretion. The Shareholders Agreement also contains certain provisions concerning rights of first refusal, pursuant to which, if Mazal proposes transfer in any way any of the Mazal EER shares, to one or more third parties except to a permitted transferee, then the Company shall have a right of first refusal with respect to such transfer;
 
 (5)
Pursuant to the Management Agreement, Greenstone will provide the Company with management and accounting services, for a total consideration of NIS 25,000 per month plus VAT, and in addition, 10,050,190 options to purchase ordinary shares of the Company, with an exercise price of US$ 0.2145 per share (adjusted for future dividends), which shall become vested and exercisable in accordance with the Vesting Schedule (see note 15d(2) below). The parameters used in the calculation of the fair value of the options are a share price of $0.09, an exercise price of US$0.2145 per share, the expected volatility of companies operating in this field - 32%, the life of the option – 5 years and a risk-free interest of 1%; The fair value of these options is immaterial. Greenstone noticed the Company that it waives the total consideration of the management fees valid from September 1, 2012.
 
 d.
Additional information regarding EER
 
 (1)
Considering EER's financial difficulties and needs as mentioned in note 1d above, on July 29, 2013 the board has decided, after considerable deliberation, to cease the operation of the demonstration facility in Y'bllin and to implement a significant cutback in the personnel of the Company and EER.
 
 As a result of the cease of operation of the Facility, the Company has recognized a significant impairment loss on the value of its assets in the reported period in a total amount of approximately $12.4 million (see note 19).
 
 Following the aforementioned decision, on October 31, 2013, the Board decided to act to dismantle the facility and to sale the systems and equipment. See also note 13a(8) below.
 
 In addition, the Company and EER are continuing with their efforts to enter into collaborations based on the technology of EER and/or sell the technology.
 
 (2)
In addition, the Company had an immediate need for funding for the period beginning as of the cease of the Facility’s operation. Therefore, the Board approved the receipt of a line of credit from Greenstone in the amount of up to NIS 2 million. For more details regarding the credit line received from Greenstone see note 13a(10) below.
 
 (3)
The Board of Directors of EER approved, on several different dates, allotments of options to shareholders, employees and officers of EER (in this note – “the options”).
 
 As of the date of these financial statements there are options that were allotted to employees, officers and others, which confer approximately 5% of the fully-diluted share capital of EER.
  F - 22
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 8 – FIXED ASSETS
  A.
Composition and changes:
  Furniture &


Yblinequipment


Facility


Total$ in thousandCostAs of January 1, 2013


212



19,027



19,239Changes in the accounting year -Additions


2



532



534Impairment (**)


-



(9,351
)


(9,351
)As of December 31, 2013


214



10,208



10,422As of January 1, 2012


200



18,979



19,179Changes in the accounting year -Additions


12



48



60As of December 31, 2012


212



19,027



19,239Accumulated depreciationAs of January 1, 2013


179



7,968



8,147Changes in the accounting year -Additions


2



631



633As of December 31, 2013


181



8,599



8,780As of January 1, 2012


174



6,500



6,674Changes in the accounting year -Additions


5



1,468



1,473As of December 31, 2012


179



7,968



8,147Depreciated cost:As of December 31, 2013


33



1,609



1,642As of December 31, 2012


33



11,059



11,092The cost as of December 31, 2013 and 2012 includes:Capitalized expenses


-



2,348



2,348Offset of a grant from the Chief Scientist of:


-



271



271
  B.
The recoverable amount of the fixed assets was determined according to the management assessment based on data and estimates provided by a third party which EER has entered into an agreement with him in respect of the dismantle of the Yblin facility and the sale of the systems and equipment (after deducting selling expenses). See also note 13 a (8) below.
  F - 23
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 9 –INTANGIBLE ASSETS
 
 
 a.
Composition and changes:
 
 Know-how forThe Implement ofwaste treatmenttechnology$ in thousandCostAs of January 1, 2013


5,164Changes in the accounting year -Impairment


(2,904
)As of December 31, 2013


2,260As of January 1, 2012


5,164Changes in the accounting year -Additions


-As of December 31, 2012


5,164Accumulated depreciationAs of January 1, 2013


2,054Changes in the accounting year -Additions


206As of December 31, 2013


2,260As of January 1, 2012


1,643Changes in the accounting year -Additions


411As of December 31, 2012


2,054Depreciated cost as of December 31, 2013


-Depreciated cost as of December 31, 2012


3,110
 
 b.
The depreciation of intangible assets is presented in the statement of comprehensive income under administrative and general expenses.
 
 c.
Material intangible assets:
 
 The balance includes acquisition and development costs of know-how to implement new technology for the treatment of solid waste, bio-medical waste and low and intermediate radioactive waste.
 
 As of January 1, 2008 and after completing one year of trial running of the Yblin facility for the treatment of solid waste ("the facility") the Company began depreciating the know-how.
 
 The know-how is depreciated over a period of 12.5 years, based on the remaining useful life of the main patent registered thereto as of the date of commencement of depreciation.
  The Company has numerous patents in respect of the said know-how.
 
 In light of the present financial situation of the Company as mentioned in note 1d above, the Company recognized, during the report period, an impairment of the balance of its intangible assets.
  F - 24
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 10 – ACCOUNTS PAYABLE AND ACCRUALS:
 
 Composed as follows:
 
 As of December 312 0 1 3


2 0 1 2$ in thousandInstitutions, net


11



-Trade payables (mainly in NIS)


32



114Accrued expenses


42



100Employees and institutions in respect of payroll (*)


60



146145



360(*) See also note 11.
 
 NOTE 11 – EMPLOYEE BENEFITS
 
 a.
Composed as follows:
 
 As of December 312 0 1 3


2 0 1 2$ in thousandShort-term employee benefits:Payroll, wages and social benefits


43



110Short-term vacation


17



3660



146
 
 b.
Post-employment benefits:
 
 (1)
Plans in respect of severance pay
  The Severance Pay Law in Israel requires the Company and its subsidiaries to pay severance pay upon dismissal of an employee or upon termination of employment in other certain circumstances.  In principle, the Severance Pay Law in Israel stipulates that the severance pay amount equals the employee's last salary multiplied by the amount of years in which the employee was employed.
 
 The Group applies to most of its employees Section 14 to the Israeli Severance Pay Act of, 1963,pursuant to which it is exempt from any severance pay liability, subject to it making certain monthly allocations to employees' pension plans. The Group will not have a legal or constructive obligation to make additional payments if the plan does not have sufficient assets to pay the entire employee benefits relating to the employee's service during the current period and in previous periods.
 
 (2)
Paid vacation days
 
 In accordance with the Israeli Annual Vacation Act of, 1951, the Group's employees are entitled to several paid vacation days in respect of each year of employment. Pursuant to said law, the number of vacation days per year to which each employee is entitled is determined in accordance with the seniority of said employee.
 
 An employee is entitled, with the consent of the Company, to use the vacation days and accumulate up to 60 vacation days.
  An employee terminating his employment before using his accumulated vacation leave is entitled to payment in respect of the balance of vacation leave.
  F - 25
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 12 – INCOME TAX
 
 a.
On August 2013 the "Arrangements Law" was published. Pursuant the Arrangements Law the corporate income tax rate will be increased to 26.5% in 2014 (an increase of 1.5%).
 
 b.
The Company and EER received final tax assessments (including assessments considered as final) through to the tax year 2009.
 
 c.
As at December 31, 2013 the Company has carried forward tax losses in the amount of approximately NIS 114 million (approximately $33 million), and EER has carried forward tax losses in the amount of approximately NIS 218 million (approximately $63 million).
 
 d.
In view of the lossesfor tax purposes and since the Company and EER does not anticipate any taxable income in the foreseeable future, the Company and EER have not recorded deferred tax assets in respect of carry forward losses.
 
 NOTE 13 – COMMITMENTS AND CONTIGENT LIABILITIES
 
 a.
Commitments:
 
 (1)
Lease agreement
 
 In July 2012, EER entered into a new lease agreement with Naser Recycling Ltd. ("Naser"), with respect to the ground on which the Yblin Facility is located (the "Lease Agreement") for a period of five years (the "Lease Period") and EER has an option to extend the term of the rent for an additional five years (the "Option period"). The monthly rent for the first 18 months of the Lease Period is NIS 40 thousands (approximately $10 thousands) and NIS 45 thousands (approximately $11 thousands) for the remaining Lease Period. The monthly rent for the Option Period will be NIS 50 thousands (approximately $13 thousands). All the amounts mentioned above are linked to the CPI and do not include VAT. The payment of the rent will be paid for each year of lease in advance.
 
 In addition to the rent fees and if the Yblin plant becomes a commercial plant, Naser will be entitled to receive certain payments from profits generated by the plant and/or from proceeds of the sale of the plant, as set forth in the Lease Agreement.
 
 Pursuant to the terms of the Lease Agreement, the Yblin Facility is the property of EER, and EER is responsible for disassembling the Yblin Facility and removing it from the property at the end of rental period.
 
 It was further agreed that to secure EER's commitments pursuant to the Lease Agreement, EER gave Naser a bank guarantee in the amount of $250 thousand.
 
 At the Company's decision to cease the operation of the Yblin Facility, the Company recognized a provision in respect of an onerous contract in a total amount of approximately $589 thousands which represents its obligations under the lease agreement. As at December 31, 2013the balance of this provision is $436 thousands.
 
 As of the date of these financial statements EER in negotiations with Naser to change the lease agreement terms according to the circumstances mentioned above.
  F - 26
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 13 – COMMITMENTS AND CONTIGENT LIABILITIES (continued):
 
 a.
Commitments (continued):
 
 (2)
The Kurchatov Institute Agreement
 
 On June 6, 2000, EER entered into an agreement with the Kurchatov Institute, which was amended on February 12, 2002 (the “Kurchatov Agreement”). Under the terms of the Kurchatov Agreement, Kurchatov Institute assigned and transferred to EER all then present and future intellectual property rights and know-how related to the Yblin Facility (which was designed, manufactured and constructed for EER by Kurchatov Institute's subsidiary under a separate agreement) and to the Additional Projects (as defined below) (collectively, the "IP Rights"). According to the Kurchatov Agreement, EER shall cover all the expenses related to the assigning, registration and recordation of the IP Rights.
 
 According to the Kurchatov Agreement, the Kurchatov Institute shall fully cooperate with EER for the purposes of utilizing the PGM technology with regard to Municipal Solid Waste ("MSW"), Medical Waste (“MW”), Low and intermediate Radio Active Waste (“LRAW”) and PGM Compatible Industrial Waste (“IW”), including, but not only, for the designing and construction of plants and installations by EER, its licensee(s) and/or other purposes (the "Additional Projects"). Upon EER’s request, the Kurchatov Institute shall assign to EER any know-how or intellectual property rights relating to such technologies to be used outside the territories comprising the former Soviet Union, provided the financial and other legal and reasonable interests of the Kurchatov Institute have been satisfied. The Kurchatov Institute and its affiliates shall exclusively work with EER on any of the aforementioned applications of the PGM Technology, and shall not assist, directly or indirectly, any individual or entity to engage in any activity in the fields of MSW, MW, LRAW and IW. In addition, the Kurchatov Institute undertook to provide EER its know-how and experienced highly qualified specialists in order to obtain the required scientific and technical qualifications in the works related to the Projects, as was mutually agreed by the parties. In consideration for Kurchatov Institute’s undertakings under the Kurchatov Agreement, EER shall pay Kurchatov Institute a royalty in the amount of 1% of the purchase price actually received by EER from the sale of the Additional Projects.
 
 (3)
Management service agreements
 
 a.
According to a management service agreement between EER and Greenstone (the “Greenstone Agreement”), Greenstone undertook to provide EER with management services, office services, accounting services and office rental in accordance with EER needs. In consideration for such services, EER undertook to pay Greenstone the sum of NIS 20,000 per month (plus VAT) linked to the Consumer Price Index (in this section – “the management fees”), as of January 2002 (approximately NIS 25,000 as of the date of this report). The term of the management agreement was set at one year, at the end of which the agreement will be renewed automatically for additional one-year periods, and may be terminated by one month’s notice by either party.
 
 In view of the financial condition of EER, since June 2013 the management fees are not being paid and accrued. As at December 31, 2013 the debt management fee is approximately $52 thousands.
 
 b.
Regarding the management service agreement between the Company and Greenstone see note 7b (5) above.
 
 F - 27
 
 R.V.B. HOLDINGS LTD.
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE 13 – COMMITMENTS AND CONTIGENT LIABILITIES (continued):
 
 a.
Commitments (continued):
 
 (6)
D&O insurance
 
 On March  2013, the Company’s audit committee and the Board of Directors  approved to renew the  directors’ and officers’ liability insurance for the Company's officers and directors (“D&O insurance policy”) with coverage in an aggregate amount of $7.5 million for a period of one year until March 23, 2015 for a total premium of $ 38,500. This D&O insurance policy is subject to the approval of the Company’s shareholder’s.
 
 (7)
Framework Agreement
 
 On May 31, 2012, EER entered into an agreement with a third party located in the U.S. (the "US Company"), for the initial planning and the supply of EER's technology of Plasma-Gasification-Melting Waste-To-Energy (the “Framework Agreement") in plants (the “Facilities”) located in five states in the U.S. and such other territories as may be agreed between EER and the US Company ("Territories").
  Under the Framework Agreement, each of EER and the US Company has granted the other certain exclusivity rights (subject to some exceptions) with respect to the Territories.
  In addition, EER has agreed to invest $400,000 in the US Company, in consideration of equity in the US Company, which shall constitute 1.9% of the US Company's fully-diluted capital. The first tranche was transferred to the US Company but was subsequently returned to EER, since the investment round did not materialize. Since then, and due, inter alia, to the time which has passed, EER notified the US Company that it will not make the equity investments in the US Company.
 
 (8)
Agreement on dismantling the facility
 
 During November 2013 EER entered into an agreement with a third party (the "Contractor") in connection with dismantle and sale of the Yblin facility and the equipment therein. According to the agreement, the contractor will, at his own expense and responsibility, dismantle and sale the Yblin facility and the equipment therein in accordance with the terms stipulated in the agreement.
 
 In return the company would pay the contractor the sum of NIS 1 million (of which NIS 400 thousands have been paid up front and the remaining sum will be paid with the progress and sales). In addition, the contractor will be entitled to a Commission from the total amount received in respect of such sales, all in accordance with the terms stipulated in the agreement.
 
 See also note 8B.
 
 (9)
During December 2011 EER entered into an agreement with a company from the Czech Republic regarding a feasibility study work to be performed by EER with regard to the design, engineering, construction and operation of a hazardous waste treatment facility.
 
 In consideration for the performance of the study work, EER was entitled to a total sum of US $125,000. A down payment of US $ 63,000 received in December 2011 and was recorded as revenue in 2011. An additional payment of US $ 62,000 was received and recorded as revenue in 2012.
  F - 28
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 13– COMMITMENTS AND CONTIGENT LIABILITIES (continued):
 
 a.
Commitments (continued):
 
 (10)
Line of Credit
 
 Following the above mentioned regarding the Company's financial situation, the Company had an immediate need for funding for the period beginning as of the cease of the Facility’s operation. Therefore, the Board, following the approval of the Company’s Audit Committee and subject to the approval by the board of directors of Greenstone, approved the receipt of a line of credit from Greenstone in the amount of up to NIS 1 million (the “Line of Credit”) which will bear no interest and will be linked to the consumer price index (“CPI”). The Line of Credit plus any additional amounts due to the indexation to the CPI shall be repaid in one installment within six months as of the day of the approval of the Line of Credit. The board of directors of Greenstone approved the Line of Credit on August 2013.
 
 During November 2013, the Board, following the approval of the Company’s Audit Committee and subject to the approval by the board of directors of Greenstone, approved the receipt of an additional line of credit from Greenstone in the amount of up to NIS 1 million.
 
 As of December 31, 2013 the Company received a total amount of NIS 1.6 million (approximately $461 thousands) from Greenstone and subsequent to the balance sheet date the Company received an additional amount of approximately NIS 0.3 million.
 
 b.
Contingent liabilities:
 
 During 2004 the Israeli office of the Chief Scientist (the "Scientist") approved EER's application to obtain financial assistance for conducting research and development in connection with EER's products. The approval was contingent on the Company's compliance with the provisions of the Israeli Law of Encouragement of Research and Development in Industry, 1984, and on fulfillment of the terms of the approval that include, inter alia, the payment of royalties in respect of revenues from products developed with the assistance of the Chief Scientist.
 
 As of the balance sheet date, EER has received grants in the amount of NIS 1.7 million, the liability in respect thereof was recorded in full in accordance with IAS 20 (before its amendment in 2008).
 
 In August 2010 EER paid royalties of NIS 169 thousands to the Scientist. In February 2012 and January 2013 EER paid additional royalties of NIS 17 thousands to the Scientist.
 
 See also note 2n.
 
 In light of the financial situation of the Company as mentioned in note 1d above, the Company recorded, during the report period, a profit in the amount of approximately $429 thousands for canceling the remaining obligations for royalties' payments to the Scientist, in light of the fact that the company doesn't anticipate revenues from products developed with the assistance of the Chief Scientist.
  F - 29
 
 R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 14 - SHAREHOLDERS' EQUITY
 
 a.
The Company’s ordinary shares are traded in the United States on the Over the Counter Bulletin Board (OTCBB) under the symbol RVBHF.
 
 b.
 
 Issued and OutstandingDecember 312013


2012Number of sharesBalance as of January 1


232,725,787



177,021,917Issuance of shares (*)


-



55,703,870Balance as of December 31


232,725,787



232,725,787Ordinary shares of NIS 1.00 par value each
 (*) See also note 1c.
  The authorized ordinary shares of the Company as of December 31, 2013 and 2012 was 400,000,000 shares with a value of NIS 1.00 per share.
 
 The holders of ordinary shares are entitled to receive dividends and are entitled to one vote per share at general meetings of the Company.
 
 c.
Treasury stock
 
 In January 2011 the Company purchased 1,040,000 shares of the Company from its former employees.
  The rights attached to these Company shares are suspended until their re-issuance (dormant shares).
 
 d.
Share-based compensation
 
 1.
In 2009, the Company granted a third party, an option to purchase 3,000,000 Ordinary Shares of the Company, at an exercise price per share of $0.18, exercisable for a period of five years. As of December 31, 2013, this option is still outstanding.
 
 2.
On June 29, 2011, the Company's board of directors approved a share options plan (the "2011 Plan"). Under the 2011 Plan, the Company may grant to any of its and its affiliates' (i.e. present or future company that either controls or is controlled by the Company) employees, officers and directors options to purchase ordinary shares of the Company. The options under the 2011 Plan shall become vested and exercisable, in accordance with the following vesting schedule: (i) 33% of the options shall vest on the first anniversary of the date of grant; and (ii) 8.375% of the options shall vest on the last business day of each subsequent fiscal quarter following the first anniversary of the date of grant, such that all options shall become vested and exercisable by the third anniversary of the date of grant (the "Vesting Schedule").
 
 The options, granted under 2011 plan are allocated on behalf of the participant to a Trustee - under the provisions of the 102 Capital Gains Track and will be held by the Trustee for the period stated in Section 102 of the Israeli Income Tax Ordinance, 1961, as amended and the Israeli Income Tax Regulations (Tax Relieves in Allocation of Shares to Employees), 2003.
  F - 30
 
 R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 14 - SHAREHOLDERS' EQUITY (continued)
 
 d.
Share-based compensation (continued)
 
 On January 2012, following the approval of the Company's audit committee and board of directors, the Company granted to seven of its and its affiliates employees options to purchase 25,793,156 ordinary shares of the Company with an exercise price of US$ 0.2145 per share (adjusted for future dividend), (including 10,000,000 options to the Company's former CEO), according to the 2011 plan.  On November 2012 the Company granted to additional three of its affiliate employees options to purchase 1,148,593 ordinary shares of the Company, according to the 2011 plan.
 
 3.
On August 22, 2011, the Company's shareholders approved (following the approval of the Company's audit committee and board of directors), among others: (i) the grant to each of the Company's directors, Gedaliah Shelef, Alicia Rotbard and Jonathan Regev, options to purchase 900,000 ordinary shares of the Company, with an exercise price of US$0.2145 per share (adjusted for future dividend). The options were granted under the 2011 Plan; and (ii) the grant to Yair Fudim, of options to purchase shares of the Company representing, on a fully diluted basis, approximately 0.3% of the Company's issued and outstanding share capital as of the date of the grant (actually 861,445 were granted), with an exercise price of US$ 0.2145 per share (adjusted for future dividend). The options shall become vested and exercisable, in accordance with the Vesting Schedule. The options described in this paragraph were granted in January 2012.
 
 The parameters used in the calculation of the fair value of the options described above, are a share price of $0.09 (regarding Yair Fudim) and 0.04$ (regarding the other directors), an exercise price of US$0.2145 per share, the expected volatility of companies operating in this field - 32%, the life of the option – 5 years and a risk-free interest of 1%. The fair value of these options is immaterial.
 
 4.
Regarding options granted to Greenstone pursuant to the Management Agreement see note 7b (5) above.
 
 5.
Regarding options granted to Mazal pursuant to the Option Agreement see note 7b (3) above.
  F - 31
 R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 15 – LOSS PER ORDINARY SHARE
 
 The following table summarizes information related to the computation of basic and diluted loss per Ordinary Share for the years indicated:
 
 Year ended December 31,2013


2012


2011$ thousandsLoss attributable to Ordinary Shares


(12,583
)


(3,615
)


(5,950
)
 
 Shares (thousands)Weighted average number of Ordinary Shares used inbasic and diluted loss per Ordinary Share calculation


231,686



231,686



204,861
 
 $Basic and diluted loss per Ordinary Share


(0.054
)


(0.016
)


(0.029
)
 
 The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of ordinary shares for the purposes of diluted earnings per share:
 
 ·
Options granted to Greenstone pursuant to the Management Agreement see note 7b (5) above.
 
 ·
Options granted to Mazal pursuant to the Option Agreement see note 7b (3) above.
 
 ·
Additional options see note 13d above.
  NOTE 16 – OPERATING EXPENSES AND FACILITY MAINTENANCE:
 
 Composed as follows:
  Year ended December 31,2013


2012


2011$ thousands
 Payroll and related expenses


606



745



671Car maintenance


62



67



68Professional services


44



110



29Maintenance of the facility's site


528



554



285Depreciation and amortization (*)


828



1,472



1,464Other


-



4



9Total operating and facility maintenance results


2,068



2,952



2,526
 (*) See also notes 8 and 9 regarding the depreciation of the Yblin facility and know-how.
  
 F - 32
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 17 – MARKETING EXPENSES AND BUSINESS DEVELOPMENT:
 
 Composed as follows:
 For the year ended December 312013


2012


2011$ in thousandPayroll and related expenses


79



244



109Share-based payment


6



32



211Loan which became a grant


-



-



351Management fees (see note 22)


-



-



101Car maintenance


4



3



1Professional services


159



198



340Overseas travel


-



69



84Advertising


3



3



3Total marketing expenses


251



549



1,200
  NOTE 18 – ADMINISTRATIVE AND GENERAL EXPENSES:
 
 Composed as follows:
 
 For the year ended December 312013


2012


2011$ in thousand
 Payroll and related expenses


89



175



85Share-based payment


6



32



211Loan which became a grant


-



-



351Management fees (see note 22)


85



132



240Car maintenance


-



35



12Professional services


434



353



252Office maintenance


100



146



150Depreciation and amortization


103



411



410Taxes (*)


-



31



47Other


139



115



1Total administrative and general expenses


956



1,430



1,759
 
 (*) See also note 12.
 NOTE 19 – OTHER EXPENSES:
 Composed as follows:
  For the year ended December 312013


2012


2011$ in thousand
 Impairment of assets (see notes 8 and 9)


12,255



-



-Provision regarding an onerous contract (see note 13a(1))


589



-



-Write-off of a liability to the Office of the Chief Scientist (see note 13b)


(429
)


-



-Total other expenses


12,415



-



-
  F - 33
 
 R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 20 – FINANCING INCOME (EXPENSES), NET:
 
 Composed as follows:
 
 For the year ended December 312013


2012


2011$ in thousand
 Financing expensesLong-term loans


-



-



(83
)Short-term loans


-



(13
)


(795
)Others


(47
)


(47
)


-(47
)


(60
)


(878
)Financing incomeLong-term loans


-



-



3Short-term loan


-



204



-Options at fair value through profit and loss (note 7d(3))


-



158



-Short-term deposits


42



66



5142



428



54(5
)


368



(824
)
  NOTE 21 – FINANCIAL INSTRUMENTS:
 
 a.
Capital management policy
 
 The Company's capital structure consists of debt, which includes the line of credit from Greenstone described in note 13a(10) and the shareholders' equity, which includes issued share capital, capital reserve and retained earnings as described in the statement of changes in equity.
 
 b.
The main accounting policies
 
 Details on the main accounting policies and the adopted accounting methods, including the terms for recognition, the measurement basis and the basis for recognizing revenue and expenses in connection with each group of financial assets, financial liabilities and capital instruments, are set forth in note 2.
 
 c.
Groups of financial instruments:
  As of December 312 0 1 3


2 0 1 2$ in thousandFinancial assetsLoans and receivables (including cash and cash equivalents)


462



3,150Financial liabilitiesFinancial liabilities measured at amortized cost


1,269



952
  F - 34
  R.V.B. HOLDINGS LTD.
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 21 – FINANCIAL INSTRUMENTS (continued):
 
 d.
Objectives and policies concerning risk management
 
 The Company's activities expose it to risks associated with various financial instruments, such as: market risks (including currency risks and risk of cash flows in respect of interest rates. The Company's risk management plan focuses on activities to minimize any potential adverse effects on the Company's financial performance.
 
 Risk management is carried out by the Company's finance division in accordance with a policy determined from time to time by the board of directors. The finance division identifies and assesses financial risks. The board of directors lays down principles for the overall risk management, as well as sets the specific policy for certain exposure to risks, such as exchange rate risks, interest rate risks and credit risks.
 
 e.
Currency risk:
 
 The Company also operates in currencies that are not its functional currency (dollar), mainly NIS, and it is exposed to currency risks as a result of changes in exchange rates of different currencies, mainly that of the NIS. The currency risk primarily emanates from current expenses in foreign currency (NIS).
 
 During 2013 there was no change in the Company’s exposure to currency risk or in the way the Group manages or measures the risk.
 
 The carrying values of financial assets and liabilities in foreign currency are set forth in notes 5, 6, 10, and 13b.
  f.
Liquidity risk management
 
 The ultimate responsibility for liquidity risk management lays with the Board of Directors, which has outlined an appropriate work plan for the management of liquidity risks based on management's requirements for short-term, medium-term and long-term financing and liquidity. The Group manages liquidity risk by maintaining bank measures, loan measures and by continuously monitoring present and forecasted cash flows. See also note 1.
 
 F - 35
 
 R.V.B. HOLDINGS LTD.
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE 22 – TRANSACTIONS WITH INTERESTED PARTIES AND RELATED PARTIES
 
 a.
Transactions with interested parties and related parties:
 
 (1)
On January 2012, the board of directors of the Company approved the appointment of Mr. Ofer Sandelson as the Company's Chief Executive Officer (CEO) as of January 8, 2012. On November 18, 2012, Mr. Ofer Sandelson has notified the Company that he has decided to terminate his employment with the Company and with its subsidiary company EER. In accordance with Mr. Sandelson employment agreement with the Company and EER, he terminated his employment upon three months prior notice (during February 2013). Regarding options granted to Mr. Sandelson see note 14 above.
 
 (2)
On March 18, 2013, the board of directors of the Company resolved to appoint Mr. Giora Gutman to serve as the chief executive officer (CEO) of the Company and its subsidiary EER.
 
 The Company's compensation committee and board of directors approved a Services Agreement between the Company and Inbal Natural Gas and Fertilizers Industries Ltd. (“Inbal”), pursuant to which Mr. Giora Gutman shall serve as the CEO of the Company and its subsidiary, E.E.R.
  Pursuant to the Services Agreement, Mr. Gutman will devote 50% of his work time to serve as the chief executive officer of the Company and EER. In consideration of Mr. Gutman's services Inbal will be entitle for a total amount of NIS 50,000 (plus VAT) per month, and Mr. Gutman will be entitled to reimbursement for reasonable expenses relating to his office. In addition, Mr. Gutman shall be granted options to purchase 9,000,000 ordinary shares of the Company under the Company's 2011 share option plan, with an exercise price of $0.065 per share.
  The term of the Services Agreement is of three years, commencing March 18, 2013, provided that each party may terminate the Services Agreement, with or without cause, upon a ninety-day written notice to the other party.
  The compensation terms of Mr. Gutman, as detailed above, have been approved by the Company's shareholders on May 23, 2013.
  Mr. Giora Gutman, has notified the Company on July 25, 2013, that he has decided to terminate his services agreement with the Company and with EER as the Company’s and EER’s CEO. In accordance with Mr. Gutman’s services agreement with the Company, he terminated his services as CEO on October 25, 2013.
  (3)
Regarding a management agreement between EER and Greenstone see note 13a(3).
 
 (4)
Regarding the Management Agreement between the Company and Greenstone including options granted to Greenstone, see note 7b (5).
 
 (5)
Regarding options granted to directors of the Company see note 14d (3).
 
 F - 36
 
 R.V.B. HOLDINGS LTD.
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 22 – TRANSACTIONS WITH INTERESTED PARTIES AND RELATED PARTIES (continued):
 
 b.
The amounts recorded in respect of transactions with interested parties and related parties are presented below:
  For the year ended December 312013


2012


2011$ in thousand
 Management fees to EER's former CEO(excluding share-based payment)


84



-



232Loan to EER's former CEO which became a grant


-



-



702Payroll and related expenses – former CEO


22



244



-Management fees


-



-



54Management fees to Greenstone


85



132



55Share-based payment


-



7



422Financing expenses


-



-



959Financing income


-



158



3
  c.
Balances with interested parties and related parties:
 
 As of December 312 01 3


2 01 2$ in thousandAccounts payable and accruals (see note 11)


513



9
 
 d.
For additional information, see also notes 7 and 13.
 
 e.
Remuneration of key executives:
  For the year ended December 312013


2012


2011$ in thousand Short-term benefits


106



244



530Share-based payment


-



7



422106



251



952