Star Energy Regulatory News (STAR)

December 31,

Note

2015

2014

ASSETS

NON-CURRENT ASSETS:

Property, plant and equipment, net

6

359

395

Intangible assets

7

2,611

2,312

Income Tax Authorities

67

-

Total Non-Current Assets

3,037

2,707

CURRENT ASSETS:

Cash and cash equivalents

90

103

Short-term bank deposit

5

63

101

Trade receivables

3B

1,343

1,943

Other accounts receivable

3A

44

114

Inventories

4

2,202

3,382

Income Tax Authorities

-

56

Total Current Assets

3,742

5,699

9,632

TOTAL ASSETS

6,779

8,406

EQUITY AND LIABILITIES

EQUITY

13

3,497

4,368

NON-CURRENT LIABILITIES:

Long-term loans from banks, net of current maturities

11

570

698

Related parties

18

153

-

Notes payable

26

-

Total Non-Current Liabilities

749

698

CURRENT LIABILITIES:

Short term bank credit

270

309

Short-term loans and current maturities of long-term loans from banks

9

316

331

Convertible debentures

19

91

-

Trade payables

1,330

2,167

Other accounts payable

10

179

159

Related parties

18

347

374

Total Current Liabilities

2,533

3,340

TOTAL LIABILITIES AND EQUITY

6,779

8,406

Year Ended December 31

Note

2015

2014

Revenues

5,131

5,005

Cost of sales

14

(3,065)

(2,499)

Gross profit

2,066

2,506

Operating expenses:

Research and development

(115)

(253)

Selling and marketing

(615)

(*) (901)

General and administrative expenses

15

(2,906)

(*) (4,037)

Other income (expenses)

15A

10

(221)

Total operating expenses

(3,626)

(5,412)

Operating loss

(1,560)

(2,906)

Finance income

16A

1

233

Finance costs

16B

(200)

(145)

Net finance income (costs)

(199)

88

Loss before taxes on income

(1,759)

(2,818)

Taxes on income (tax benefit)

8

- . -

- . -

Total comprehensive loss for the year

(1,759)

(2,818)

Earnings (loss) per share:

 Basic and diluted loss per share

17

(0.02)

(0.03)

Share

Capital

Premium on Shares

Capital Reserve

Capital Reserve in Regard to Share-Based Payment Transactions

Accumulated

Earnings (Loss)

Total

Balance as of December 31 2013

-

3,121

89

309

484

4,003

Proceeds from issued share capital, net of mobilization costs (see Note 13c)

-

3,119

-

-

-

3,119

Share based payment (see Note 13d)

-

-

-

64

-

64

Comprehensive loss for the year

-

-

-

-

(2,818)

(2,818)

Balance as of December 31 2014

-

6,240

89

373

(2,334)

4,368

Proceeds from issued share capital, net of mobilization costs (see Note 1)

-

701

-

-

-

701

Conversion of convertible debentures (see Note 1 and Note 19d)

-

153

-

-

-

153

Share based payment (see Note 13d)

-

-

-

34

-

34

Comprehensive loss for the year

-

-

-

-

(1,759)

(1,759)

Balance as of December 31 2015

-

7,094

89

407

(4,093)

3,497

Year Ended December 31,

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Loss for the year

(1,759)

(2,818)

Adjustments to reconcile net profit to net cash used in operating activities:

Depreciation and amortization

343

461

Interest expense and exchange rate differences

33

(146)

Equity settled option- based payment expense

34

64

Capital loss

3

19

Changes in assets and liabilities:

Decrease (Increase) in inventories

1,180

(585)

Decrease in trade receivables

600

1,133

Decrease in other accounts receivable

70

289

Increase in Income Tax Authorities

(11)

-

Decrease in trade payables

(837)

(1,220)

Increase (Decrease) in other accounts payable

20

(75)

Net cash used in operating activities

(324)

(2,878)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

(88)

(267)

Proceeds from sales of property, plant and equipment

46

53

Decrease in short-term deposits

38

45

Cost of intangible assets

(567)

(700)

Net cash used in investing activities

(571)

(869)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from (Repayment of) short-term bank credit, net

(39)

197

Short-term loan from a bank, net

(89)

87

Proceeds from convertible debenture

218

-

Repayment from (Proceeds to) related parties

126

204

Increase in notes payable

26

-

Proceeds from receipt of long-term loans

255

737

Repayment of long-term loans

(316)

(543)

Consideration from issue of shares, net

701

3,119

Net cash provided by financing activities

882

3,801

Increase (Decrease) in cash and cash equivalents

(13)

54

Cash and cash equivalents at the beginning of the year

103

49

Cash and cash equivalents at the end of the year

90

103

Appendix A - Additional Information

Interest received during the year

-

-

Interest paid during the year

(50)

(58)

NOTE 1 -

GENERAL INFORMATION

a.

The Reporting Entity

1.

Starcom plc ("the Company") was incorporated in Jersey on November 28, 2012. The Group specializes in easy-to-use practical wireless solutions that combine advanced technology, telecommunications and digital data for the protection and management of people, fleets of vehicles, containers and assets and engages in production, marketing, distribution, research and development of G.P.S. systems.

The Company fully owns Starcom G.P.S. Systems Ltd., an Israeli company that engages in the same field, and Starcom Systems Limited, a company in Jersey.

The Company's shares are admitted for trading on London's Stock Exchange Alternative Investment Market ("AIM").

Address of the official Company office in Israel of Starcom G.P.S. Systems Ltd. is:

33 Jabotinsky St., Migdal Hateomim 1, Ramat Gan, Israel.

Address of the Company's registered office in Jersey of Starcom Systems Limited is:

13-14 Esplanade, St Helier, Jersey JE1 1BD.

2.

On June 1, 2015, the Company issued 11,875,000 Ordinary Shares raising £475 ($723) thousand before expenses.

3.

In addition, during November and December 2015, the Company issued 4,958,077 Ordinary Shares with connection to the company's unsecured convertible loan facility (the "Loan Facility") with YA Global Master SPV Ltd, by converting $150,000 loan principal and accrued interest (amounting in aggregate to US$152,224 (£100,840.63)).

See also Note 19d regarding the Loan Facility.

1.

International Financial Reporting Standards (hereinafter: "IFRS") - Standards and interpretations adopted by the International Accounting Standards Board (hereafter: "IASB") that include international financial reporting standards (IFRS) and international accounting standards (IAS), with the addition of interpretations to these Standards as determined by the International Financial Reporting Interpretations Committee (IFRIC) or interpretations determined by the Standards Interpretation Committee (SIC), respectively.

2.

The Company - Starcom Plc.

3. 

The subsidiaries - Starcom G.P.S. Systems Ltd. And Starcom Systems Limited.

4.

Starcom Jersey - Starcom Systems Limited.

5.

Starcom Israel - Starcom G.P.S. Systems Ltd.

6.

The Group - Starcom Plc. and the Subsidiaries.

7.

Related party - As determined by International Accounting Standard No. 24 in regard to related parties.

NOTE 2A -

BASIS OF PREPARATION

a.

Declaration in regard to implementation of International Financial Reporting Standards (IFRS)

The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (hereinafter - "IFRS") and related clarifications published by the International Accounting Standards Board ("IASB").

The Consolidated Financial Statements were authorized by the company's Board of Directors.

b.

Basis of Measurement

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments at fair value through profit or loss that are stated at fair value.

c.

Operating Turnover Period

The ordinary operating period turnover for the Group is a year. As a result, the current assets and current liabilities include items that are expected and intended to be realized at the end of the ordinary operating turnover period for the Group.

d.

Functional and Presentation Currency

The consolidated financial statements are presented in U.S. dollars (hereinafter: "dollars") that is the functional currency of the Group and is rounded to the nearest thousand, except when otherwise indicated.

The dollar is the currency that represents the economic environment in which the Group operates.

The Group's transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars. All transaction gains and losses from remeasurement of monetary assets and liabilities denominated in non-dollar currencies are reflected in the statements of comprehensive income as financial income or expenses, as appropriate.

NOTE 2B -

USE OF ESTIMATES AND JUDGMENTS

The preparation of 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. Actual results may differ from these estimates.

Upon formulation of accounting estimates used in preparation of the Group financial statements, management is required to make assumptions in regard to circumstances and events that are significantly uncertain. Management arrives at these decisions based on prior experiences, various facts, external items and reasonable assumptions in accordance with the circumstances related to each assumption.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about critical judgment in applying accounting policies that have a significant effect on the amounts recognized in the consolidated financial statements is included in the following Note:

Note 7 - Capitalization of development costs and amortization of these costs.

Note 13d - Options issued.

Note 19d - Convertible debentures.

Information about assumptions and estimations regarding depreciation that have significant risk of resulting in a material adjustment is included in the following Notes:

Note 3B - Allowance for doubtful accounts.

Note 7 - Calculation of amortization.

Note 8 - Utilization of tax losses.

NOTE 2C -

SIGNIFICANT ACCOUNTING POLICIES

a.

Basis of consolidation

All intra-Group transactions, balances, income and expenses of the companies are eliminated on consolidation.

b.

Foreign currency and linkage basis

Balances stated in foreign currency or linked to a foreign currency have been included in the consolidated financial statements according to the prevailing representative exchange rates at the balance sheet date. Balances linked to the Consumer Price Index in Israel are included in accordance with the Index published prior to balance sheet date. Linkage and exchange rate differences are included in the statement of comprehensive income when incurred.

December 31,

2015

2014

 CPI (in points) *

123.085

124.3

Exchange Rate of U.S. $ in NIS

3.902

 3.889

Year Ended December 31,

2015

2014

Change in CPI

(1%)

(0.2%)

Change in Exchange Rate of U.S. $

 0.33%

12%

* Base Index 2002 = 100.

c.

Financial instruments

(i) Non-derivative financial assets

The Group initially recognizes loans and receivables on the date that they are originated. All other financial assets (including assets designated as at fair value through profit or loss) are recognized initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

The Group classified non-derivative financial assets into the following categories: Financial assets at fair value, through profit or loss, held-to-maturity financial assets, loans and receivables, and available-for-sale financial assets.

(i) Non-derivative financial assets (cont.)

Financial assets at fair value through profit or loss:

A financial asset is classified as at fair value through profit or loss if it is classified as held for trading or is designated as such on initial recognition. Financial assets are designated as at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group's documented risk management or investment strategy. Attributable transaction costs are recognized in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value and changes therein, which take into account any dividend income, are recognized in profit or loss.

Financial assets designated as at fair value through profit or loss comprise equity securities that otherwise would have been classified as available for sale.

Loans and receivables:

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.

Loans and receivables comprise from trade and other receivables, excluding short term trade and other receivables where the interest amount is immaterial.

(ii) Non-derivative financial liabilities

The Group initially recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated as at fair value through profit or loss) are recognized initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.

Other financial liabilities comprise loans and borrowings, bank overdrafts, and trade and other payables.

(iii) Compound financial instruments

Compound financial instruments issued by the Company comprised: an interest bearing loan with a conversion option issued to the lender.

The option component was recognized initially at its fair value using a binomial calculation.

The liability component was recognized initially as the difference between the loan amount and the option component

Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequent to initial recognition.

Interest related to the financial liability is recognized in profit or loss.

d.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments.

e.

Share capital

Ordinary shares:

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects.

f.

Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates:

%

Computers and software

33

Office furniture and equipment

7 - 15

Vehicles

15

Laboratory equipment

15

Leasehold improvements

10

Leasehold improvements are depreciated by the straight-line method over the term of the lease, ten year period, (including option terms) or the estimated useful lives of the improvements, unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

At each balance sheet date, the Group examines the residual value, the useful life and the depreciation method it uses. If the Group identifies material changes in the expected residual value, the useful life or the future pattern of consumption of future economic benefits in the asset that may indicate that a change in the depreciation is required, such changes are treated as changes in accounting estimates. In the reported periods, no material changes have taken place with any material effect on the financial statements of the Group.

g.

Intangible assets: Research and Development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as incurred.

Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset.

The expenditure capitalized includes the cost of materials, direct labor, overhead costs that are directly attributable to preparing the asset for its intended use. Other development expenditure is recognized in profit or loss as incurred.

Capitalized development expenditure is measured at cost less accumulated amortization and accumulated impairment losses. Amortization is calculated using the straight-line method over the estimated useful lives of the assets: ten years.

At each balance sheet date, the Group reviews whether any events have occurred or changes in circumstances have taken place, which might indicate that there has been an impairment of the intangible assets. When such indicators of impairment are present, the Group evaluates whether the carrying value of the intangible asset in the Group's accounts can be recovered from the cash flows anticipated from that asset, and, if necessary, records an impairment provision up to the amount needed to adjust the carrying amount to the recoverable amount.

h.

Short-term deposit

Deposits with maturities of more than three months but less than one year are included in short-term deposits.

i.

Leases

(1)

Lease payments

Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(2)

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. This will be the case if the following two criteria are met:

● The fulfillment of the arrangement is dependent on the use of a specific asset or assets; and

● the arrangement contains a right to use the asset(s).

At inception or on reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognized at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced as payments are made and an imputed finance cost for the liability is recognized using the Group's incremental rate.

j.

Inventories

Inventories are stated at the lower of cost or net market value.

Cost is determined using the "first-in, first -out" method.

Inventory write-downs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, and discontinued products and for market prices lower than cost, if any. At the point of loss recognition, a new lower cost basis for that inventory is established.

k.

Impairment in value of assets

During every financial period, the Group examines the book value of its tangible and intangible assets to determine any signs of loss from impairment in value of these assets. In the event that there are signs of impairment, the Group examines the realization value of the designated asset. In the event that the realization cannot be measured for an individual asset, the Group estimates realization value for the unit where the asset belongs. Joint assets are assigned to the units yielding cash on the same basis. Joint assets are designated to the smallest groups of yielding assets for which one can identify a reasonable basis that is consistent to the allocation.

The realization value is the higher of net sale price of the asset as compared with its useful life that is determined by the present value of projected cash flows to be realized from this asset and its realization value at the end of its useful life.

In the event that the book value of the asset or cash-yielding unit is greater than its realization value, a devaluation of the asset has occurred in the amount of the difference between its book value and its realization value. This amount is recognized immediately in the statements of comprehensive income.

In the event that prior devaluation of an asset is nullified, the book value of the asset or of the cash-yielding unit is increased to the estimated current fair value, but not in excess of the asset or cash-yielding unit book value that would have existed had there not been devaluation. Such nullification is recognized immediately in the statements of comprehensive income.

l.

Revenue recognition

The Group generates revenues from sales of products, which include hardware and software, software licensing, professional services and maintenance. Professional services include mainly installation, project management, customization, consulting and training. The Group sells its products indirectly through a global network of distributors, system integrators and strategic partners, all of whom are considered end-users, and through its direct sales force.

Revenue from products and software licensing is recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, the fee is fixed or determinable and collectability is probable.

Revenues from maintenance and professional services are recognized ratably over the contractual period or as services are performed, respectively.

m.

Allowance for doubtful accounts

n.

Concentrations of credit risk

Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents, short-term deposits and trade receivables.

o.

Provisions

Provisions are recognized when the Group has a current obligation (legal or derived) as a result of a past occurrence that can be reliably measured, that will in all probability result in the Group being required to provide additional benefits in order to settle this obligation. Provisions are determined by capitalization of projected cash flows at a rate prior to taxes that reflects the current market preparation for the money duration and the specific risks for the liability.

q.

Finance income and expenses

Finance income includes interest in regard to invested amounts, changes in the fair value of financial assets presented at fair value in the statements of comprehensive income and gains from changes in the exchange rates and interest income that are recognized upon accrual using the effective interest method.

Finance expenses include interest on loans received, changes in the time estimate of provisions, changes in the fair value of financial assets presented at fair value in the statements of comprehensive loss and losses from changes in value of financial assets.

Gains and losses from exchange rate differences are reported net. Exchange rate differences in regard to issuance of shares are charged to equity.

r.

Taxes

Tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that they relate to a business combination, or items recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax payable also includes any tax liability arising from the declaration of dividends.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is not recognized for:

●

Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

●

Temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future; and

●

Taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same Tax Authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

Since there is uncertainty in regard to existence of taxable revenues in the near future, a deferred tax asset was not recognized.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets and liabilities are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit (taxes on income) will be realized.

s.

Basic and Diluted Earnings per Share

Basic earnings per share are computed based on the weighted average number of common shares outstanding during each year.

Diluted earnings per share are computed based on the weighted average number of common shares outstanding during each year, plus dilutive potential common shares considered outstanding during the year. 

t.

Statement of cash flows

The statement of cash flows from current operations is presented using the indirect method, whereby interest amounts paid and received by the Group are included in the cash flows in current operations.

u.

Dividend distribution

Dividend distribution to the Company's shareholders is recognized as a liability in the Group's financial statements in the period in which the dividends are approved by the Group's shareholders.

v.

Segment reporting

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head office expenses and tax.

w.

Standards issued but not yet effective

The Standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below. The Group intends to adopt these Standards, if applicable, when they become effective.

IFRS 9 Financial Instruments

In July 2014, the IASB issued the final and complete version of IFRS 9, "Financial Instruments" ("IFRS 9"), which replaces IAS 39, "Financial Instruments: Recognition and Measurement". IFRS 9 mainly focuses on the classification and measurement of financial assets and it applies to all assets in the scope of IAS 39.

According to IFRS 9, all financial assets are measured at fair value upon initial recognition. In subsequent periods, debt instruments are measured at amortized cost only if both of the following conditions are met:

- The asset is held within a business model whose objective is to hold assets in order to collect the contractual cash flows.

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent measurement of all other debt instruments and financial assets should be at fair value. IFRS 9 establishes a distinction between debt instruments to be measured at fair value through profit or loss and debt instruments to be measured at fair value through other comprehensive income.

Financial assets that are equity instruments should be measured in subsequent periods at fair value and the changes recognized in profit or loss or in other comprehensive income (loss), in accordance with the election by the Company on an instrument-by-instrument basis. If equity instruments are held for trading, they should be measured at fair value through profit or loss.

According to IFRS 9, the provisions of IAS 39 will continue to apply to derecognition and to financial liabilities for which the fair value option has not been elected.

According to IFRS 9, changes in fair value s of financial liabilities which are attributable to the change in credit risk should be presented in other comprehensive income. All other changes in fair value should be presented in profit or loss.

IFRS 9 also prescribes new hedge accounting requirements.

IFRS 9 is to be applied for annual periods beginning on January 1, 2018. Early adoption is permitted.

The Company is evaluating the possible impact of IFRS 9 but is presently unable to assess its effect, if any, on the financial statements.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 was issued in May 2014 and establishes a new five-step model that will apply to revenue arising from contracts with customers. Under IFRS 15 revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in IFRS 15 provide a more structured approach to measuring and recognizing revenue.

The new revenue Standard is applicable to all entities and will supersede all current revenue recognition requirements under IFRS. Either a full or modified retrospective application is required for annual periods beginning on or after January 1, 2018 with early adoption permitted. The Group is currently assessing the impact of IFRS 15 and plans to adopt the new Standard on the required effective date.

The impact on the Company's financial statements of the future Standards, amendments and interpretations is still under review, but the Company does not currently expect any of these changes to have a material impact on the results or the net assets of the Company.

 NOTE 3A -

OTHER ACCOUNTS RECEIVABLE

December 31

2015

2014

Advances to suppliers

-

24

Government institutions

44

90

44

114

NOTE 3B -

TRADE RECEIVABLES

December 31

2015

2014

Group receivables

1,864

2,446

Net of allowance for doubtful accounts

(521)

(503)

1,343

1,943

NOTE 4 -

INVENTORIES

December 31

2015

2014

Raw materials

1,107

905

Finished goods

1,095

2,477

2,202

3,382

NOTE 5 -

SHORT-TERM BANK DEPOSIT

The deposit sums of $63 and $101 for the years ended December 31, 2015 and 2014, respectively, serve as a security deposit for repayment of a long-term bank loan. In accordance with terms of the loan, the deposit constitutes approximately 15% of the loan balance. The deposit bears yearly interest at the rate of 1%.

NOTE 6 -

PROPERTY, PLANT AND EQUIPMENT, NET

Computers and Software

Office Furniture and Equipment

Laboratory Equipment

Leasehold Improvements

Vehicles

Total

Cost:

Balance as of January 1 2015

145

110

66

80

235

636

Additions during the year

10

-

-

-

78

88

Decrease

-

-

-

-

(71)

(71)

Balance as of December 31 2015

155

110

66

80

242

653

Accumulated Depreciation:

Balance as of January 1 2015

95

46

40

27

33

241

Depreciation during the year

15

8

10

8

34

75

Decrease

-

-

-

-

(22)

(22)

Balance as of December 31 2015

110

54

50

35

45

294

Net book value as of December 31 2015

45

56

16

45

197

359

NOTE 6 -

PROPERTY, PLANT AND EQUIPMENT, NET (cont.)

Computers and Software

Office Furniture and Equipment

Laboratory Equipment

Leasehold Improvements

Vehicles

Total

Cost:

Balance as of January 1 2014

117

106

66

80

130

499

Additions during the year

28

4

-

-

235

267

Decrease

-

-

-

-

(130)

(130)

Balance as of December 31 2014

145

110

66

80

235

636

Accumulated Depreciation:

Balance as of January 1 2014

82

38

31

21

57

229

Depreciation during the year

13

8

9

6

34

70

Decrease

-

-

-

-

(58)

(58)

Balance as of December 31 2014

95

46

40

27

33

241

Net book value as of December 31 2014

50

64

26

53

202

395

NOTE 7 -

INTANGIBLE ASSETS

Total

Cost:

Balance as of January 1 2015

3,021

Additions during the year

567

Balance as of December 31 2015

3,588

Accumulated Depreciation:

Balance as of January 1 2015

507

Amortization during the year

268

Balance as of December 31 2015

(775)

Impairment of assets

(202)

Net book value as of December 31 2015

2,611

Total

Cost:

Balance as of January 1 2014

2,321

Additions during the year

700

Balance as of December 31 2014

3,021

Accumulated Depreciation:

Balance as of January 1 2014

318

Amortization during the year

189

Balance as of December 31 2014

(507)

Impairment of assets

(202)

Net book value as of December 31 2014

2,312

Detail of remaining life of instruments as of December 31, 2015:

Instrument

Cost

Remaining Useful Life (in years)

Set 1

566

5.75

Set 2

340

5.75

Set 3

534

6.5

Set 4

410

6.5

Set 5

307

7.5

Set 6

100

8

Set 7

105

8

Set 8

539

8

Set 9

274

8

Set 10

73

9

Set 11

162

9

Set 12

82

10

Set 13

96

8.75

Total

3,588

The expenditure capitalized includes the cost of materials and direct labor that are directly attributable to preparing the assets for its intended use. Other development expenditure is recognized in profit or loss as incurred.

Capitalized development expenditure is measured at cost less accumulated amortization and accumulated impairment losses.

Amortization is calculated using the straight-line method over the estimated useful lives of the assets: ten years.

See also Note 2C g.