TAKING DISTRIBUTED
TRAINING SIMULATION
PERSONALLY
‘14
2014 ANNUAL REPORT
About SimiGon
SimiGon (AIM: SIM) is a leading developer and supplier of distributed simulation solutions
for defence and civilian applications. SimiGon is the creator of SIMbox, a leading PC-based
platform for creating, managing and deploying simulation-based content across multiple
domains. Through its off-the-shelf training solutions for demanding high-skill occupations,
SimiGon provides diverse organizations with faster and more cost-effective training.
SimiGon’s growing client base includes blue-chip training and simulation systems providers
as well as over 20 air forces and commercial airlines worldwide. Founded in 1998, SimiGon
maintains offices in Israel and the United States.
Contents
3
4
6
7
10
12
Financial and Operational Highlights
Market
Solutions
Chairman & CEO Reviews
Board & Management
Financial
- 2 -
TAKING DISTRIBUTED TRAINING SIMULATION
PERSONALLY
When it comes to distributed simulation solutions, SimiGon technology is the way
to go. Leading the industry shift away from inflexible, stationary and expensive
training systems, offering personal, portable and cost-effective training solutions
optimized for the PC or laptop. Our off-the-shelf platform and products – for air,
land, sea and industrial applications – are highly flexible, adaptable and robust.
This “personal” approach enables multiple high-skill users to train simultaneously
on multiple platforms, saving defence and civilian organizations significant time
and money. We offer state-of-the-art simulation solutions for non-training
applications, bringing the best of personal simulation to wider audiences.
Financial Highlights
Delivering on all long term contracts:
Net profit increased by 51% to $1.36 million
(2013: $0.90 million)
Revenues increased by 2% to $8.32 million
(2013: $8.17 million)
Gross margin of 76% (2013: 75%)
Basic and diluted EPS of $0.03 (2013: $0.02)
Annual dividend declared at 0.6 cents per share
Operational Highlights
Latin American high
New major awards:
Awarded additional three years maintenance
and support contract worth $0.8 million for
major European customer;
Signed new license agreement with Corporacion
de Alta Tecnologia para la Defensa (Codaltec), a
leading
technology
corporation;
Selected by the University of Central Florida
(UCF), the second largest university in the U.S
and an
internationally recognized academic
leader in the field of modeling, simulation and
training;
Signed
agreement, initially worth $0.75 million
aviation
Chinese
training
civil
Delivering on project milestones on $6.7 million
contract awarded in June 2013;
Now in our seventh year supporting Lockheed
Martin's F-35 Lightning II Joint Strike Fighter
training program (JSF);
Entered the sixth year of supporting the UK
Military Flying Training System;
In the sixth year of a long-term contract to
provide training simulations
for a strategic
European aircraft manufacturer;
In the fourth year of a contract with Check-6, the
first major contract outside the
Company’s
aerospace and defence industry;
Now in our second year of supporting U.S. Air
Force Air Education Training Command on its T-6
Modular training Devices.
- 3 -
LEVERAGING GROWING MARKETS
FOR PERSONAL TRAINING & SIMULATION
Organizations recognize the need for more Simulation and Training as militaries
adjust to reduced live training events.
Key Trends
Growth in the training and simulation market will
continue due to training requirements, training
methodologies, cost savings and advances
in
technology.
The 2015 military training and simulation market is
valued at US$10.4 billion and is expected to reach
US$15.8 billion by 2025.
There are numerous trends in the military and civilian
training and simulation market providing optimism for
the industry.
Growth in this market is attributed primarily to
military and civilian flight simulators, the need for
networked training among troops and the growing
training requirements for Unmanned systems in air,
ground and naval domains.
Defense budget cuts have led militaries to transition
from traditional and costly live exercises to utilizing
affordable simulators. For example, the cost savings
for using a big simulator versus an aircraft ranges
between 5 to 20 percent.
In light of today’s harsh fiscal environment, the
training and simulation industry is viewed by militaries
worldwide as vital in maintaining troop readiness.
While experts agree live training has no equal, the
benefits of using simulators for procedural training
are recognized and well documented. Task intensive
skills honed in simulators translate well to the aircraft,
submarine, tank or any other system.
Another trend in the industry is stemming from the
need to provide advanced training along with cost
(LVC)
is Live, Virtual and Constructive
savings
simulation training. LVC is comprised of live soldiers
training on their real-life platforms together with
simulation and computer models
to create a
comprehensive virtual environment. Driven by
requirements from the armed forces, LVC is an
underlying factor in new technological development
and opportunities for the modelling and simulation
industry.
With budget cuts affecting the number of available
instructor personnel, the need for training solutions that
can support personal training is significant. An Intelligent
Tutor capability allows trainees to learn at an individual
pace while adjusting to each individual’s learning style, an
let alone
important capability for training anyone,
“millennials”.
Government agencies and corporations worldwide
continue to seek advanced training technologies and
solutions to support their operations. Today’s well-
informed organization meticulously researches available
solutions to meet personal and team or crew training
requirements.
SimiGon’s comprehensive technologies, solutions and
services meet market requirements providing added-
value through improved training efficiencies, training
analytics and cost-effective, saving significant time and
money.
Growth Opportunities in the Market
There are numerous growth opportunities for SimiGon in
the training and simulation market.
As the simulation based training technologies and
solutions provided by SimiGon and
its partners are
increasingly recognized as one of the best ways to train
and achieving proficiency in a particular skill or system,
there is corresponding demand.
Opportunities range from SimiGon’s traditional military
aviation training niche to additional military customers as
well as commercial aviation, petrochemical and many
other vertical markets where SimiGon technologies and
know-how can be successfully leveraged.
The global military aircraft market, according to Stragic
Defence Intelligence, is expected to be worth US$61.2
billion in 2015, and grow to US$87.5 billion by 2025. The
US is anticipated to be the largest spender with a
cumulative expenditure of US$260.9 billion over the next
decade. As the cost to train pilots increases, estimated at
approximately $6 million per fighter pilot, cost-effective
interactive,
technologies will be
increasingly adopted.
training
virtual
- 4 -
LEVERAGING GROWING MARKETS
FOR PERSONAL TRAINING & SIMULATION (CONT.)
Unmanned Aircraft Vehicles (UAV) is an emerging
military and commercial aircraft subsector with
considerable growth potential. The Teal Group
estimates the total value for the government and
civilian UAV market will be worth $91 billion by 2024.
The US DoD budgeted about $5 billion on unmanned
systems in fiscal 2015, the vast majority for UAVs.
There are nearly 1,000 active-duty pilots for the
Predator and Reaper UAVs alone, though more than
1,200 such pilots are needed. The USAF currently
trains about 180 remotely piloted aircraft operators a
year, but needs about 300 of them and loses about
240 due to attrition.
According to Education Week, the Education Market
subset of eLearning is valued at $91 billion. The potential
of further leveraging SimiGon technologies for vertical
markets exist in many disciplines, ranging from soft skills
required in leadership and decision making training, IT
application training and customer service, to procedural
skills
for power plant operators, crane
operations, driving and medical fields. Organisations and
operators in these domains require the advanced, training
and simulation management systems and services
provided by SimiGon to reach and maintain high levels of
operational skill.
required
grow due
Opportunities in the commercial UAV training sector
will
to emerging UAV operator
requirements from government agencies such as the
US Federal Aviation Administration (FAA). As many as
100,000 new jobs will be created in the first 10 years
after unmanned aircraft are cleared for U.S. airspace,
according to a 2013 report from the Association for
Unmanned Vehicle Systems International.
Companies such as Amazon and Facebook, as well as
defense contractors are
for pilots and
engineers with unmanned aircraft experience.
looking
The Civilian aviation market continues to be a force in
simulation market opportunities with almost 37,000
commercial airplanes forecast to be produced over
the next 20 years, valued at $5.2 trillion. Along with
the new aircraft, there is a significant need to train
new commercial airline pilots, expected to reach more
than 530,000 over the next 20 years.
Along with the aircraft, there is also demand for
584,000 new maintenance technicians to maintain the
world fleet over the next 20 years.
its
leading
technology,
industry
SimiGon, with
successfully honed in the military aviation market, is
poised to capture this opportunity. The Company’s
training methodologies, solutions and services receive
high grades from customers and partners for training
pilots faster and more effectively at a lower cost.
The Company expects to build on this track record of
success to compete and win new contracts in the
civilian sector, including training products and services
for commercial aviation to increase company growth.
- 5 -
GETTING PERSONAL
WITH DISTRIBUTED SIMULATION SOLUTIONS
SimiGon’s comprehensive portfolio of off-the-shelf solutions – including a state-of-
the-art simulation platform and range of compelling products – “closes the
knowledge gap” for professional users. At the same time, SimiGon’s flexible
solutions are easily integrated either by customer organizations or third-party
systems integrators for both military and civilian applications.
SIMbox
SimiGon is the creator of SIMbox, a leading PC-based
platform
for creating, managing and deploying
simulation based content across multiple domains
training, mission debriefing, homeland
including
security and entertainment. SIMbox is a flexible, off-
the-shelf 3D simulation engine comprised of a wide
array of software modules that empowers users to
create an unlimited range of new products and content.
Built from the ground up as a robust and flexible
platform, SIMbox has been deployed successfully by
large training and simulation systems providers, leading
military contractors, and over 20 air forces and
commercial airlines worldwide. SIMbox is comprised of
three main environments:
SIMbox Toolkit development environment: SIMbox
Toolkit
suite,
empowering non-programmers to create, reuse and
control simulation-based applications.
SIMbox Server management environment: SIMbox
Server which serves as the Learning Management
System (LMS), contains various software modules used
for configuration management of developed content,
control over content distribution, data gathering from
end users, and data analysis and report generation.
SIMbox Runtime delivery environment: SIMbox
Runtime provides hi-fidelity 3D distributed simulations
that place the user
in a virtual or constructive
environment with numerous viewpoints for both
military and civilian applications.
easy-to-use development
an
is
Major Existing COTS products under
SIMbox
Fully Functional F-16 Training Device
T-6 Flight Training Device
Cessna Caravan Training Device
Sensor Operator Training System
KnowBook™ Family
KnowBook
is a family of PC-based COTS training
applications used by leading organisations for training
professional users.
KnowBook provides a common platform for learning,
training, planning and debriefing.
The key members of the KnowBook family are:
- 6 -
* AirBook™: the family’s flagship application that
enables aircrew and organisations to remain completely
updated with the rapidly changing demands of the
military and civilian aviation world.
GroundBook, MarineBook and CarBook: the newest
members of the KnowBook family designed for ground,
maritime and driving training scenarios.
AirTrack™
AirTrack represents the next generation of passenger in-
flight entertainment
solutions. Successfully
(IFE)
installed and operational on airlines worldwide, AirTrack
is a cost-effective, rapidly deployable solution for
airlines seeking to upgrade their IFE systems. Based on
advanced SIMbox technology, the system’s capabilities
include hi-fidelity 360º 3D simulation views, moving
maps, external plane views, dynamic media, and real-
time flight data and news. AirTrack is provided with an
easy-to-use, PC-based software configuration tool that
enables airlines to independently and rapidly customize
and upload in-flight content based on specific needs.
Debriefing Systems
SimiGon offers advanced post-mission debriefing
applications that provide critical feedback and improve
operational readiness. Utilizing a standard Windows
graphical user interface (GUI), the PC-based systems can
be deployed at any location and are extremely simple to
operate. SimiGon’s debriefing systems include D-Brief
PC and MDDS Pro. Operated from a server connected to
multiple client workstations, the systems analyse flight
data stored on the aircraft’s PMC or RMM cartridge. D-
Brief PC
is used to support real-time air combat
debriefing. MDDS Pro is a digital debriefing solution
incorporating video with 3D simulation.
Air Traffic Control
SimiGon's successfully deployed Air Traffic Control
training solution includes instructor operator stations,
virtual pilots, voice recognition and the ability for
instructors to modify training sessions in real time. The
systems are used by ATC instructors to train new
controllers in guiding aircraft through take-off and
landing procedures as well as for recurrent and
operational training. The Company aims to leverage its
success in this market to compete for additional military
and civilian ATC training contracts.
SHARING PERSONAL MESSAGES
FROM CORPORATE LEADERSHIP
Chairman & CEO Reviews
Chairman’s Statement
Chief Executive’s Review
I am proud to report SimiGon’s fourth consecutive year
of revenue growth and strong increased profits.
solutions offerings
In 2014, SimiGon made further strides in its key
objectives to become a major prime contractor,
reaching new geographic regions and enhancing its
technologies and
solidify
SimiGon's reputation as a market leader and partner of
largest simulation training
choice for the world's
programmes. The successful execution of this strategy
and the strong foundation in place will allow the
Company to continue to leverage this experience into
sustainable revenue and growth.
to
The Company has continued
to meet project
milestones for long term contracts on time and on
budget, executing delivery and performance of its
systems including delivering on project milestones on
the $6.7 million contract announced in June 2013. The
expansion beyond aerospace and defence and into the
oil and gas sector has resulted in significant revenue
derived from business with Check-6, SimiGon’s first
major contract outside the aerospace and defence
sector.
Further to the Company’s declared intention to pay an
annual dividend to its shareholders and in light of its
strong cash position, the Board has decided to pay a
to
dividend of 0.6 cents per share, equating
approximately 22% if the Company’s earnings per
share.
The required pillars for long term, sustainable growth
are in place, based on our ability to create and maintain
partnerships, be a prime contractor and expand into
new territories and vertical markets. I look forward to
seeing the Company’s order book and encouraging
business pipeline driving further progress in 2015.
On behalf of the board, I would like to thank the
management, employees and all those involved and
associated with SimiGon for their hard work over the
last few years and their continued commitment in 2015
and beyond.
Alistair Rae
Chairman
- 7 -
We are delighted to announce another year of strong
growth in profitability and increased revenue as a result
of achieving milestones set out in our growth strategy.
SimiGon has continued to expand into new territories,
secure significant new contracts and further cement its
role as a prime contractor as it continues to provide a
highly valued solution to our customers. Generating
sales from the successful delivery of key projects and
winning new strategic contracts, we are very pleased
with our strong performance in 2014
Looking ahead, we will continue to leverage our leading
position and our improved global footprint to build new
partnerships, expand our customer base, and target
even larger contracts. SimiGon has excellent revenue
visibility based on our long term contracts and a strong
order book in place. As a result the board enters 2015
with increased confidence in delivering continued year-
on-year growth and viewing the future with confidence
as demonstrated by the Company’s continued annual
dividend distribution.
Overview
SimiGon is pleased to report another year of strong
growth in profitability and increased revenue, both as a
result of new business being won within the period and
an increase in recurring revenues from existing strategic
partners. The Company’s net profit increased by 51% to
$1.36 million
(2013: $0.9 million) and revenues
increased by 2% to $8.32 million as compared to $8.17
million in 2013
SimiGon’s ability to capture a share of the largest global
simulation and training projects has enabled the
Company to increase its strategic business scope and
potential revenue. Chief among these initiatives is
competing as a prime contractor
for multiple
government contracts in the defence sector. As a prime
contractor, aside from larger contracts, by interfacing
directly with the customer, the Company has another
opportunity to build a long term relationship with the
end user.
As stated at the time of the interim results, the
Company delivered a strong performance for 2014 and
has a bedrock foundation for 2015 and beyond.
SHARING PERSONAL MESSAGES
FROM CORPORATE LEADERSHIP (CONT.)
Our market position as a preferred supplier for
simulation and training technologies and solutions has
been solidified by our work this past year.
The Company expects that its performance under this
contract will lead to subsequent contracts with the
customer.
The revenue mix of new contracts and support
contracts, along with a growth strategy, means that the
tools are in place to build a larger business. The
Company believes it is well positioned for immediate
and long term growth.
SimiGon continues to focus on developing further
strategic programs that will assist the Company’s long
term growth. Our ability to grow business and bolster
is demonstrated by greater
our strong financials
revenue visibility and our robust pipeline of new
opportunities for 2015 and beyond.
Operational Review
During the year, SimiGon strengthened its position as
the provider of choice for large simulation training
programs. The Company continues to be a leading
supplier of training and simulation technologies for the
world's largest military flight training programmes while
expanding into vertical markets such as military and
civil aviation training. In positioning itself as a prime
contractor for major, long term simulation training and
services programmes, SimiGon’s market reach has
expanded to new areas while its technologies continue
to lead the industry.
As a prime contractor, SimiGon benefits from a direct
relationship with the customer which gives us increased
visibility of the market and long term revenues while
affording valuable insight into new and potentially
significantly larger opportunities. This places SimiGon
in the spotlight for some of the industry’s largest
simulation training contracts with the Company now
targeting programs far larger than had previously been
possible.
SimiGon has enhanced its prospects for securing new
contracts by further diversifying its training products
and services by entering new markets, such as the
rapidly growing civil aviation market in China.
Expanding into civil aviation market
SimiGon announced in February 2014 that it had
successfully entered the civil aviation training services
market with a joint venture (JV) agreement with a
leading Chinese aviation services company.
The initial contract valued at $0.75 million, will provide
the new entity with SimiGon’s SIMbox technology for
developing its training solutions.
SimiGon has identified the civil aviation market as a
long term growth driver. With China’s well known
burgeoning civilian aviation market, this JV is an ideal
entry point for SimiGon in this attractive sector and
region.
New major contracts
license agreement with
SimiGon signed a new
Corporacion de Alta Tecnologia para
la Defensa
(Codaltec), a leading Latin American high-technology
corporation, as announced
in September 2014.
Codaltec was formed in August 2012 by the Colombian
Government to meet the defense sector’s needs,
including training and simulation for her armed forces.
Codaltec has agreed to extend its original agreement
with SimiGon and purchase additional software licenses
its numerous training programs. The
to support
partnership
is evidence of how companies adopt
SimiGon’s technology to rapidly develop and deliver a
higher quality training and simulation solution for their
customers. It is another significant endorsement for
SimiGon and a milestone in this growing relationship.
SimiGon strengthened its relationship with a major
European customer in August 2014 when it announced
a three year agreement valued at $0.8 million to
provide additional maintenance and support services
for the customer’s simulation training centers.
Major Training systems deliveries as prime
contractor
Long term contracts
SimiGon is currently fulfilling training system deliveries
milestones under the $6.7 million contract announced
in June 2013. This contract was a milestone contract for
the Company in terms of the value of the order and the
location.
The Company has a growing portfolio of long term
partnerships that continue to blossom into further
business and provide good revenue visibility. Many of
these partnerships are expected to continue with
additional purchases in 2015.
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SHARING PERSONAL MESSAGES
FROM CORPORATE LEADERSHIP (CONT.)
The Company is now in its seventh year of supporting
Lockheed Martin's JSF training program. Additional
licenses and ongoing maintenance support agreements
are part of the ongoing, long term partnership.
SimiGon is now in its sixth year supporting the UK
Military Flying Training System. The Company
continues to deliver under this long term contract,
exceeding partner and customer expectations of
SimiGon’s technologies and their performance.
SimiGon’s partnership with Check-6 Inc., one of the
leading providers of training solutions to the energy
and mining industries, is also blossoming into long
term, recurring revenue. Throughout this contract,
SimiGon has successfully executed against its agreed
deliverables. As a result, the Company is confident the
partnership will be extended with additional
agreements.
tax
this regard, shareholders, who have a
In
withholding exemption or reduced withholding tax
rate from dividend payments obtained from by Israeli
Tax Authorities, should present and deliver it to the
Company, together with the contact details of their
stock broker, no later than the end of the business day
of Wednesday, 6 May 2015.
Financial Performance
Revenue for the year ended 31 December 2014 was
$8.32 million, compared to $8.17 million in 2013, an
increase of 2%. In terms of regional breakdown, 50% of
SimiGon’s revenues came from North America (2013:
62%), 14% from Europe and the Middle East (2013:
17%) and 36% from the Far East (2013: 21%).
Net profit for the fiscal year increased by 51% to $1.36
million (2013: profit of $0.90 million).
In October 2014, SimiGon secured maintenance and
support contract from the USAF for the SIMbox based
T-6A Modular Training Devices it delivered as part of a
June
contract
demonstrates the long term nature of the relationship
with this strategic customer. SimiGon expects this
relationship to continue to evolve.
contract.
support
2011
This
SimiGon maintains its close relationship with a major
existing European customer that it has been working
with since 2009. Following additional orders, received
during 2014, the Company is confident that this
relationship will continue and lead to additional orders
in the future.
reflecting
SimiGon’s
Total operating expenses for the year decreased by 2%
to $5.02 million (2013: $5.10 million). Research and
development expenses were $2.38 million (2013:
$2.40 million)
continued
investment in its product development. Sales and
marketing expenses decreased by 12% to $1.46 million
(2013: $1.65 million) mainly due to a decrease in salary
and related benefits expenses and general and
administration expenses increased to $1.18 million
(2013: $1.05 million) mainly due to professional fees.
The operating profit therefore is $1.31 million (2013:
$1.0 million) and the net profit is $1.36 million (2013:
$0.9 million). This resulted in an increase in net basic
and diluted earnings per share of $0.03 (2013: $0.02).
Annual dividend declaration
Outlook
In light of the strong cash position and further to the
Company’s declared
intention to pay an annual
dividend, the Board intends to pay a dividend of 0.6
cents per share, equating to approximately 22% of the
Company’s earnings per share. The dividend will be
payable on Friday, 29 May 2015. The record date of
payment of the dividend will be Friday, 8 May 2015.
The ex-dividend date will be Thursday, 7 May 2015.
In line with the Israeli tax ordinance and regulations,
the dividend payment will be subject to 25%
withholding at source unless reduced by a relevant tax
treaty.
SimiGon has cemented
its position as a prime
contractor for major, long term simulation training
into new territories and
programmes, expanded
diversified
its offering. As a result of achieving
millstones set in its growth strategy, the Company
continues to deliver strong growth in profitability and
increased revenue.
With excellent revenue visibility as a result of our long
term contracts and a strong forward order book, the
board enters the current financial year with increased
confidence
in delivering continued year-on-year
growth as demonstrated by the Company’s continued
annual dividend distribution.
Amos Vizer
President & CEO
- 9 -
DISPLAYING PERSONAL COMMITMENT TO
ORGANIZATIONAL SUCCESS
Board of Directors
Alistair Rae, Non-Executive Chairman
Alistair is currently chief executive of
LTG Technologies Plc, an AIM traded
company, having been a non-executive
director from 2002 to 2005. He was the
group finance director of Jarvis Plc from
2004 to 2005, guiding the company
through a period of reconstruction. Prior to this he was
a director in the corporate finance department of HSBC
Investment Bank from 1996 to 2002, and before that he
worked in corporate finance at Cazenove for ten years
in the UK and the Far East. Alistair qualified as a
chartered accountant with KPMG.
Amos Vizer, President & CEO
founding SimiGon, Amos
Prior
to
founded
software
a
Logi-Cali,
development house specializing in data
storage applications. He previously
served as marketing and business
development manager
ISYS
Operational Management Systems, an
international IT company. Amos also previously worked
for
the missiles division of RAFAEL Armament
Development Authority Ltd. Additionally, he served ten
years in the Israeli Air Force (IAF) as an F-4 Phantom
Fighter navigator, a flight school course commander,
and a Popeye missile weapons officer. With extensive
training in advanced software development, Amos holds
a BA in business administration.
of
Eitan Cohen, Non-Executive Director
Eitan Cohen is a Co-Founder and Chief
Executive Officer of ASIC Depot OOD
an EDA and Semiconductor design
centre. Eitan previously held positions
as CEO and Country manager
for
Semiconductor and EDA companies, in
which he led to the award of multi-
million
tier-one companies and
managed business development activities with potential
partners worldwide.
dollar deals with
Independent Non-
Nevat Simon,
Executive Director
Nevat has practiced as a certified public
accountant in his own accounting firm
since 1991, providing both accounting
and other financial services to the
firm’s clients. He has previously served
on the board of Sprint Investments Ltd.
and Multimetrics Ltd., both publicly listed companies on
the Tel Aviv Stock Exchange, and on the board of a
number of private companies. Nevat has a BA
in
accounting and marketing from the Business College of
Management in Tel Aviv and has been a member of the
in the Justice
Certified Public Accountant Council
Department of the State of Israel since 1991.
in
controller
reporting,
Efraim Manea, CFO
Mr Manea joined the Company as its
finance
June 2008,
managing its financial aspects including
corporation
financial
accounting and tax preparation, budget
and forecasting and risk management.
He has more than seven years of
accounting and management experience and before
joining SimiGon served for approximately four years as
an Audit Team Manager at Ernst & Young's High-
Technology sector. Mr Manea is a Certified Public
Accountant and holds a BA in Accounting and Business
Administration from the College for Management in
Israel.
strategic
consulting
Dr. Vered Shany, Independent Non-Executive Director
Since March 2002, Vered has managed Tashik
Consultants, providing
and
corporate analysis in the life sciences sector. Previously,
Vered served as managing director of Up-Tech Ventures
Ltd., as a member of the board of directors of the
Weizmann Science Park Incubator, and as vice president
of marketing for Arad Technological Incubator. Prior to
that, she was business and marketing manager of
Medun Ltd., a medical start-up company, from 1995 to
1998. Vered received her masters’ degree in business
administration from Heriot–Watt University, Edinburgh
Business School, and gained her doctorate of medical
dentistry and her B.Med.Sc. from the Hebrew University
of Jerusalem.
- 10 -
DISPLAYING PERSONAL COMMITMENT TO
ORGANIZATIONAL SUCCESS (CONT.)
Management
to
Amos Vizer, President & CEO
founding SimiGon, Amos
Prior
founded
software
a
Logi-Cali,
development house specializing in data
storage applications. He previously
served as marketing and business
ISYS
development manager
Operational Management Systems, an international IT
company. Amos also previously worked for the missiles
division of RAFAEL Armament Development Authority Ltd.
Additionally, he served ten years in the Israeli Air Force
(IAF) as an F-4 Phantom Fighter navigator, a flight school
course commander, and a Popeye missile weapons officer.
With
software
development, Amos holds a BA in business administration.
advanced
extensive
training
of
in
Efraim Manea, CFO
Mr Manea joined the Company as its
finance controller in June 2008, managing
its financial aspects including financial
reporting, corporation accounting and tax
preparation, budget and forecasting and
risk management. He has more than
seven years of accounting and management experience
and before joining SimiGon served for approximately four
years as an Audit Team Manager at Ernst & Young's High-
Technology sector.
is a Certified Public
Mr Manea
Accountant and holds a BA in Accounting and Business
Administration from the College for Management in Israel.
Roger Torres - Director, Programs
Mr Torres joined SimiGon’s Programs
team in 2011. He has over 14 years of
management experience, primarily with
Aerospace, Department of Defense
(DoD), and Courseware Development
programs. Prior to program management
Mr. Torres was a pilot, and flew charter, corporate, and
commercial operations world-wide. He holds several
certificates and ratings
industry,
including Flight Instructor, Flight Engineer, and Airline
Transport Pilot. Mr. Torres has a Bachelor in Vocational
Education and a Master’s in Aeronautical Science.
from the aviation
Hagai Pichovich - VP, R&D
Mr Pichovich joined the company as a
software developer for the LMS team in
2006 and since then carried out various
roles such as team lead and Director of
R&D. He has an extensive experience
with large scale project architecture and
deep knowledge with SimBox based
solutions and
internals. Picho has over 15 years of
experience with software development using various
technologies and methodologies, and holds a bachelor
degree in computer science.
- 11 -
Alon Shavit, VP Business Development
Before joining SimiGon, Alon served 15
years in the Israeli Air Force (IAF), having
flown F-16s for the past 20 years. He was
an instructor in the Operational Training
Unit (OTU) on A-4s for two years and a
commander of the F-16 OTU for 18
months. His last role in the IAF was managing the
planning, coordination, synchronization, and monitoring
of the training program. Alon holds an MBA and
bachelor’s degrees in economics and psychology.
Koby Ben Yakar, VP Product
Koby, has a distinguished record as an
experienced manager with extensive
technical skills and knowledge. Mr. Ben
Yakar has led a wide range of projects
including
with cross-functional teams,
Information
serving
as
Technology team leader and overseeing the architecture,
design and development of the SIMbox LCMS Server
infrastructure. Mr. Ben Yakar has over 10 years of
experience in large training and simulation technologies
enterprise projects with a proven ability to manage
business and technical relationships for
large-scale
projects.
SimiGon’s
and
Jeff Annis, VP Sales & Marketing
Mr Annis, joined SimiGon in 2011 and
has a career in the Sales & Marketing of
software
simulation,
training,
development technology, primarily
in
the Aerospace/Defense and Automotive
sectors. Before joining SimiGon he held
Director positions at Adacel Systems, Advanced
Rotorcraft Technology, and Engenuity Technologies each
specializing in high-tech, advanced pilot training software
systems. Prior to this Mr. Annis founded American Data-
Pro, a company specializing in the development of
database and network systems. Mr. Annis has a Bachelor
degree
in Management and Marketing from Troy
University in Alabama.
joined SimiGon
Merav Nahmani, Director of Human
Resources
Ms. Nachmani,
in
November 2005 and has been managing
SimiGon’s HR Department since July
2009. Ms. Nachmani has more than ten
years of experience in financial aspects
including payroll controlling, accounts payable, accounts
receivable , cash flow and tax reporting. Before joining
SimiGon Ms. Nachmani served as a bookkeeping & salary
controller in several High-Technology companies. Ms.
Nachmani has a Bookkeeping&Salary controller diploma.
FINANCIALS
Consolidated Financial Statements of SimiGon Ltd.
and Its Subsidiaries as of December 31, 2014
(U.S. Dollars in Thousands)
INDEX
Corporate Governance
Report on Directors Remuneration
Directors Report
Independent Auditors' Report
Consolidated Statement of Financial Position
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Share Information, Advisers, Contact Information
PAGE
13
14
15 – 16
17
18 - 19
20 - 21
22 - 23
24 - 25
26 – 63
64
- 12 -
CORPORATE GOVERNANCE FOR THE PERIOD ENDED 31 DECEMBER 2014
31 December 2007
Introduction
SimiGon Ltd. commenced trading on the AIM Market operated by the London Stock Exchange on 2 November 2006.
Although the rules of AIM do not require the Company to comply with the Combined Code on corporate governance
(“the Code”) published by the Financial Reporting Council, the Company fully supports the principles set out in the
Code and will attempt to comply with them wherever appropriate, given the Company’s size, the constitution of the
Board and the resources available to the Company. Details are provided below of how the Company applies those
parts of the Code, which it believes to be appropriate.
Directors
The Board comprises two executive Directors, two Non- Executive Directors and two independent Non-Executive
Directors nominated by the majority shareholders of the Company. The Board generally meets a minimum five times a
year and receives a Board pack comprising a report from senior management together with any other material
deemed necessary for the Board to discharge its duties. It is the Board’s responsibility for formulating, reviewing and
approving the Group’s strategy, budgets, major items of expenditure and acquisitions.
Audit Committee
The audit committee consists of Eitan Cohen, Dr. Vered Shany and Nevat Simon and meets at least twice a year. The
role of the audit committee is to review the management and systems of internal control of the company, including in
consultation with the internal auditor and the company’s independent auditor and to recommend any remedial
action. In addition, the approval of the audit committee is required to effect certain related-party transactions.
Remuneration Committee
The remuneration committee consists of Alistair Rae, Dr. Vered Shany and Nevat Simon. The Remuneration
Committee has a primary responsibility to review the performance of the Company’s executive directors and the
senior employees and to recommend their remuneration and other terms of employment.
Shareholder Relations
The Company meets with its shareholders and analysts periodically to encourage communication with shareholders.
In addition, the Company intends to facilitate communication with shareholders through the annual report and
accounts, interim statement, press releases as required during the ordinary course of business and the Company
website (www.simigon.com).
Going Concern
The directors have satisfied themselves that the Company has adequate resources to continue in operational
existence for the foreseeable future, and for this reason the financial statements are prepared on a going concern
basis.
Internal Control
The Board is responsible for the system of internal control and for reviewing its effectiveness. Such systems are
designed to manage rather than eliminate risks and can provide only reasonable and not absolute assurance against
material misstatement or loss. Each year, on behalf of the Board, the audit committee reviews the effectiveness of
these systems. This is achieved primarily by considering risks potentially affecting the Group and from discussions with
the external auditors. Each year, the Group is subject to internal audit, the results of which are presented to the audit
committee.
A comprehensive budgeting process is completed once a year and is reviewed and approved by the Board. The
Group’s results, as compared against budget, are reported to the Board on a quarterly basis and discussed in detail at
each meeting of the Board. The Group maintains appropriate insurance cover in respect of any legal actions against
the Directors as well as against material loss or claims against the Group and reviews the adequacy of the cover
regularly. To comply with AIM rules, the Company has adopted a code for dealings in its shares by directors and
employees.
- 13 -
REPORT ON DIRECTORS REMUNERATION
Remuneration Policy
The remuneration packages for non-executive directors are based principally on annual salaries. The remuneration
packages for independent non-executive directors are based on an annual fixed fee and till October 2009 were
including payment for each Board or Board committee meeting attended. The remuneration packages for executives
are based on annual salaries and benefits.
Executive
Ami Vizer *
Efraim Manea **
Non-Executive
Alistair Rae
Eitan Cohen
Nevat Simon
Dr. Vered Shany
Total
Total 2014
$
408,082
134,397
53,772
26,400
26,400
26,400
675,451
Total 2013
$
407,321
129,117
54,597
26,400
26,400
26,400
670,235
* Year 2014 does not include $26,110 paid in respect of vacation days, additional $28,721 paid in respect of severance allocation
transfer, additional $32,996 paid in respect to health insurance and a bonus of $116,000 paid in respect to year 2013
performance.
Year 2013 does not include $26,512 paid in respect of vacation days, additional $28,721 paid in respect of severance allocation
transfer, additional $30,508 paid in respect to health insurance and a bonus of $120,000 paid in respect to year 2012
performance.
** Year 2014 does not include bonus of $38,826 paid in respect to year 2013 performance.
Please see the Directors Report below for details of options and shares granted to directors.
- 14 -
DIRECTORS REPORT
The directors submit their report and the financial statements of the Group for the period ended 31 December 2014.
Incorporation and Admission onto the AIM Market
The Company was incorporated on 1 October 1998. On November 2006 the Company commenced trading on AIM and
issued 6,076,811 new Ordinary Shares of NIS 0.01 at price of £0.88 per share. The number of Ordinary Shares issued
immediately following the admission were 37,250,666.
Shares
As of December 31, 2014 the total numbers of Ordinary Shares Issued were 50,079,690.
Share Options
As of 31 December 2014, the outstanding balance of options granted to certain employees of SimiGon is
approximately 4.2 percent of the Company’s issued and outstanding shares at an average exercise price of $0.3. The
majority of the options vest in four years from the date of grant. The options expire in ten years from the date of
grant.
Review of Business and Future Developments
The business review is given within the Chief Executive Officer’s statement.
Dividends
The Company has not declared a dividend in respect of the relevant period.
Suppliers Payment Policy
The Group does not operate a standard code in respect of payment to suppliers. It has due regard to the payment
terms of suppliers and generally settles all undisputed accounts within 60 days of the date of invoice, except where
different arrangements have been arranged with suppliers.
Efraim Manea was appointed as an executive director on July 30, 2010.
Directors
The following directors have held office during the year:
Amos Vizer has been an executive director of the Company since 4 November 1998.
Alistair Rae, appointed as a director and Chairman of the Board on 27 October 2006.
Nevat Simon, appointed as an independent director on 27 October 2006.
Dr. Vered Shany, appointed as an independent director on 27 October 2006.
Mr. Eitan Cohen was appointed a non-executive director on June 3, 2008.
- 15 -
DIRECTORS REPORT (CONT.)
Directors Interest in Shares and Share Options
The interest of directors in the issued share capital of the company at 31, December 2014 were as follows.
Directors
Alistair Rae
Eitan Cohen
Dr. Vered Shany
Nevat Simon
Ami Vizer
Efraim Manea
Number of Ordinary Shares Capital
202,249
72,000
72,000
72,000
10,464,184
284,346
Percentage of Ordinary shares
0.40
0.14
0.14
0.14
20.90
0.57
Options
0
0
0
0
951,308
50,000
Substantial Shareholdings
At 31, December 2014 the Company was informed of the following interests of 3% or more in its ordinary shares
issued at that date:
Shareholder
A. Vizer Holdings A. Vizer
Jeffrey Braun
Packet Science Rami Weitz
Herald Investment Management Limited
Green Venture Capital Ltd.
G. Poran Holding Ltd
Shroder Euroclear Nominees Limited
Number Of Ordinary Shares
10,464,184
6,543,039
6,244,944
5,050,000
3,067,848
2,273,444
1,711,070
Percentage of issued
20.90
13.07
12.47
10.08
6.13
4.54
3.42
Auditors
Kost Forer Gabbay & Kasierer
A member of Ernst & Young Global
3 Aminadav St.
Tel Aviv 67067
Israel
- 16 -
Kost Forer Gabbay & Kasierer
3 Aminadav St.
Tel-Aviv 6706703, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
INDEPENDENT AUDITORS' REPORT
To the Shareholders of
SIMIGON LTD.
We have audited the accompanying consolidated financial statements of SimiGon Ltd. and its subsidiaries
("the Group"), which comprise the consolidated statements of financial position as of December 31, 2014
and 2013, and the consolidated statements of comprehensive income, consolidated statements of changes in
equity and consolidated statements of cash flows for each of the years ended December 31, 2014, 2013 and
2012, and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with International Financial Reporting Standards as adopted by the European
Union and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with International Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's
preparation and fair presentation of the consolidated financial statements in order to design audit procedures
that are appropriate for the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Group as of December 31, 2014 and 2013, and its financial performance and cash flows for
each of the years ended December 31, 2014, 2013 and 2012, in accordance with International Financial
Reporting Standards as adopted by the European Union.
April 8 , 2015
Tel-Aviv, Israel
KOST FORER GABBAY & KASIERER
A Member of Ernst & Young Global
- 17 -
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
SIMIGON LTD
AND ITS SUBSIDIARIES
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Short-term bank deposits
Short-term investments
Trade receivables, net
Other accounts receivable and prepaid expenses
Total current assets
NON-CURRENT ASSETS:
Restricted cash
Long-term prepaid expenses
Property, plant and equipment
Intangible assets, net
Total non-current assets
Total assets
December 31,
2014
2013
Note
U.S. dollars in thousands
3
4
5
6
7
6,490
-
2,952
506
51
9,999
374
29
103
1,173
1,679
8,100
511
-
249
69
8,929
404
31
115
1,223
1,773
11,678
10,702
The accompanying notes are an integral part of the consolidated financial statements.
- 18 -
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
SIMIGON LTD
AND ITS SUBSIDIARIES
EQUITY AND LIABILITIES
CURRENT LIABILITIES:
Trade payables
Deferred revenues
Other accounts payable and accrued expenses
Total current liabilities
NON-CURRENT LIABILITIES:
Employee benefit liabilities, net
Other non-current liabilities
Total non-current liabilities
Total liabilities
EQUITY:
Share capital
Additional paid-in capital
Accumulated deficit
Total equity
Total liabilities and equity
December 31,
2014
2013
Note
U.S. dollars in thousands
8
9
13a
10
153
925
909
1,987
178
729
907
143
1,218
808
2,169
177
777
954
2,894
3,123
121
16,350
(7,687)
113
16,248
(8,782)
8,784
7,579
11,678
10,702
The accompanying notes are an integral part of the consolidated financial statements.
April 8, 2015
Date of approval of the
financial statements
Alistair Rae
Non-Executive Chairman
of the Board of Directors
Ami Vizer
Chief Executive Officer
and Director
Efraim Manea
Chief Financial Officer
and Director
- 19 -
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
SIMIGON LTD
AND ITS SUBSIDIARIES
Revenues
Cost of revenues
Gross profit
Operating expenses:
Research and development
Selling and marketing
General and administrative
Total operating expenses
Operating profit
Other income
Finance income
Finance expenses
Net income
Note
15
14a
14b
14c
14d
14e
14f
Year ended
December 31,
2013
U.S. dollars in thousands
(except share and per share amounts)
2014
2012
8,316
1,989
6,327
2,381
1,458
1,181
5,020
1,307
-
178
127
1,358
8,172
2,070
6,102
2,404
1,652
1,048
5,104
998
-
57
159
896
6,805
1,367
5,438
2,145
1,568
1,015
4,728
710
26
126
154
708
The accompanying notes are an integral part of the consolidated financial statements.
- 20 -
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
SIMIGON LTD
AND ITS SUBSIDIARIES
Year ended
December 31,
2013
U.S. dollars in thousands
(except share and per share amounts)
2014
2012
Note
Net income
1,358
896
708
Other comprehensive income not to be
reclassified to profit or loss in subsequent
periods:
Remeasurement gain (loss) from defined benefit
plan
Total comprehensive income
Basic and diluted earnings per share in U.S.
dollars
Weighted average number of shares used in
computing basic earnings per share (in
thousands)
Weighted average number of shares used in
computing diluted earnings per share (in
thousands)
6
1,364
-
896
(16)
692
0.03
0.02
0.02
16
48,854
47,188
45,884
16
49,085
49,131
46,454
The accompanying notes are an integral part of the consolidated financial statements.
- 21 -
SIMIGON LTD
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Number
of shares
Share
capital
Additional
paid-in
capital
Accumulated
deficit
Total
equity
U .S. dollars in thousands (except share amounts)
Balance as of January 1, 2012
44,134,769
105
15,997
(10,370)
5,732
Net income
Other comprehensive income:
Remeasurement loss from
defined benefit plan
Total comprehensive income
Issuance of shares (Note 10a1
and Note 10a2)
Share-based compensation
Exercise of stock options (Note
10a3)
Balance as of December 31,
-
-
-
3,009,106
-
-
-
-
8
-
9,304
*) -
-
-
-
-
112
1
708
708
(16)
692
-
-
-
(16)
692
8
112
1
2012
47,153,179
113
16,110
(9,678)
6,545
Net income and other
comprehensive income:
Total comprehensive income
-
-
-
-
Issuance of shares (Note 10a1)
Share-based compensation
Exercise of stock options (Note
10a4)
119,727
-
*) -
-
19,800
*) -
-
-
-
137
1
896
896
-
-
-
896
896
*) -
137
1
Balance as of December 31,
2013
47,292,706
113
16,248
(8,782)
7,579
*)
Represents an amount lower than $ 1 thousand.
The accompanying notes are an integral part of the consolidated financial statements.
- 22 -
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
SIMIGON LTD
AND ITS SUBSIDIARIES
Number
of shares
Share
capital
Additional
paid-in
capital
Accumulated
deficit
Total
equity
U .S. dollars in thousands (except share amounts)
Balance as of December 31,
2013
47,292,706
113
16,248
(8,782)
7,579
Net income
Other comprehensive income:
Remeasurement gain from
defined benefit plan
Total comprehensive income
Dividend distribution
Share-based compensation
Exercise of stock options (Note
-
-
-
-
-
10a2 and 10a5 till 10a8)
2,786,984
Balance as of December 31,
-
-
-
-
-
8
-
-
-
-
90
12
1,358
1,358
6
6
1,364
1,364
(269)
-
-
(269)
90
20
2014
50,079,690
121
16,350
(7,687)
8,784
The accompanying notes are an integral part of the consolidated financial statements.
- 23 -
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIMIGON LTD
AND ITS SUBSIDIARIES
Year ended
December 31,
2013
U.S. dollars in thousands
2014
2012
Cash flows from operating activities:
Net income
1,358
896
708
Adjustments to reconcile net income to net cash used in
operating activities:
Adjustments to the profit or loss items:
Depreciation and amortization
Gain on disposal of fixed assets
Finance expense (income), net
Share-based compensation
Change in employee benefit liabilities, net
Changes in asset and liability items:
Decrease (increase) in trade receivables
Decrease (increase) in other accounts receivable and
prepaid expenses (including long-term)
Increase (decrease) in trade payables
Increase (decrease) in deferred revenues
Increase (decrease) in other accounts payable and accrued
expenses
Cash paid and received during the year for:
Interest paid
Interest received
101
-
(9)
90
6
(257)
28
10
(293)
53
98
-
(1)
137
36
407
(21)
3
213
160
98
(26)
(3)
112
17
584
260
(34)
892
(96)
(271)
1,032
1,804
-
-
-
-
1
1
(1)
4
3
Net cash provided by operating activities
1,087
1,929
2,515
The accompanying notes are an integral part of the consolidated financial statements.
- 24 -
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from investing activities:
Increase in short-term investments
Proceeds from disposal of fixed assets
Decrease (increase) in restricted cash
Decrease (increase) in short-term bank deposits
Increase in long-term deposits
Purchase of fixed assets
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from share issuance
Exercise of stock options
Dividend distribution
Repayment of long-term bank loan
Proceeds from (repayment of) refundable grants
Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
SIMIGON LTD
AND ITS SUBSIDIARIES
Year ended
December 31,
2013
U.S. dollars in thousands
2014
2012
(2,943)
-
30
511
-
(39)
(2,441)
-
13
(269)
-
-
(256)
(1,610)
8,100
6,490
-
-
(381)
45
(12)
(30)
(378)
-
1
-
-
(2)
(1)
1,550
6,550
8,100
-
36
(23)
(45)
-
(103)
(135)
2
1
-
(188)
124
(61)
2,319
4,231
6,550
(a)
Supplemental disclosure of non-cash financing
activities:
Receivable in respect of issuance of shares
7
-
6
The accompanying notes are an integral part of the consolidated financial statements.
- 25 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1:- GENERAL
SIMIGON LTD.
AND ITS SUBSIDIARIES
a. The Company commenced its operations on October 1, 1998, and is engaged in
developing advanced learning, training and simulation technologies and applications for
use in professional communities. The Company's registered office is in Herzlia, Israel.
b. The Company has two wholly-owned subsidiaries in the United States, SimiGon Inc. and
National Simulation Services Inc., which are engaged in the marketing of the Company's
products in the United States. The Company also has a wholly-owned subsidiary in
Singapore, SimiGon Pte Ltd which is engaged in marketing of the Company's products in
the Far East.
c. The Company's shares are traded on the Alternative Investment Market ("the AIM") on
the London Stock Exchange.
d.
Definitions:
In these financial statements:
The Company
- SimiGon Ltd.
The Group
- SimiGon Ltd. and its subsidiaries.
Subsidiaries
- Companies that are controlled by the Company.
Related parties - As defined in IAS 24.
Dollar
- U.S. dollar
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently in the financial statements
for all periods presented, unless otherwise stated.
a.
Basis of preparation of the financial statements:
These financial statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European Union.
b.
Functional currency, presentation currency and foreign currency:
The consolidated financial statements are presented in U.S. dollars, which is the
Company's functional and presentation currency. Each entity in the Group determines
its own functional currency and items included in the financial statements of each entity
are measured using that functional currency.
The functional currency of the subsidiaries is the U.S. dollar.
- 26 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Transactions, assets and liabilities in foreign currency:
Transactions denominated in foreign currency (other than the functional currency) are
recorded on initial recognition at the exchange rate at the date of the transaction. After
initial recognition, monetary assets and liabilities denominated in foreign currency are
translated at the end of each reporting period into the functional currency at the
exchange rate at that date. Exchange differences, other than those capitalized to
qualifying assets or recorded in equity in hedging transactions, are recognized in profit
or loss. Non-monetary assets and liabilities measured at cost in a foreign currency are
translated at the exchange rate at the date of the transaction. Non-monetary assets and
liabilities denominated in foreign currency and measured at fair value are translated into
the functional currency using the exchange rate prevailing at the date when the fair
value was determined.
c.
Consolidated financial statements:
The consolidated financial statements comprise the financial statements of companies
that are controlled by the Company (subsidiaries). Control is achieved when the
Company is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee.
Potential voting rights are considered when assessing whether an entity has control. The
consolidation of the financial statements commences on the date on which control is
obtained and ends when such control ceases.
The financial statements of the Company and of the subsidiaries are prepared as of the
same dates and periods. The consolidated financial statements are prepared using
uniform accounting policies by all companies in the Group. Significant intragroup
balances and transactions and gains or losses resulting from intragroup transactions are
eliminated in full in the consolidated financial statements.
d.
Cash equivalents:
Cash equivalents are considered as highly liquid investments, including unrestricted
short-term bank deposits with an original maturity of three months or less from the date
of acquisition.
e.
Short-term deposits:
Short-term bank deposits are deposits with an original maturity of more than three
months from the date of acquisition. The deposits are presented according to their terms
of deposit.
- 27 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
f.
Allowance for doubtful accounts:
The allowance for doubtful accounts is determined in respect of specific debts whose
collection, in the opinion of the Company's management, is doubtful. Impaired debts are
derecognized when they are assessed as uncollectible.
g.
Financial instruments:
1. Financial assets:
Financial assets within the scope of IAS 39 are initially recognized at fair value plus
directly attributable transaction costs, except for financial assets measured at fair
value through profit or loss in respect of which transaction costs are recorded in
profit or loss.
After initial recognition, the accounting treatment of investments in financial assets
is based on their classification into one of the following categories:
financial assets at fair value through profit or loss;
loans and receivables.
a. Financial assets at fair value through profit or loss:
includes financial assets held for
This category
trading (short-term
investments in mutual funds) and financial assets designated upon initial
recognition as at fair value through profit or loss.
The Group assesses the existence of an embedded derivative and whether it is
required to be separated from a host contract when the Group first becomes
party to the contract. Reassessment of the need to separate an embedded
derivative only occurs if there is a change in the terms of the contract that
significantly modifies the cash flows that would otherwise be required.
Derivatives, including embedded derivatives separated from the host contract,
are classified as held for trading unless they are designated as effective
hedging instruments.
In the event of a financial instrument that contains one or more embedded
derivatives, the entire combined instrument is designated as a financial asset
at fair value through profit or loss only upon initial recognition.
b. Receivables:
Receivables are investments with fixed or determinable payments that are not
quoted in an active market.
- 28 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
After initial recognition, Short-term receivables (such as trade and other
receivables) are measured based on their terms, normally at face value.
2. Financial liabilities:
Financial liabilities are initially recognized at fair value. After initial recognition,
loans and other liabilities are measured at amortized cost based on their terms net of
directly attributable transaction costs using the effective interest method.
A financial liability is derecognized when it is extinguished, that is when the
obligation is discharged or cancelled or expires. A financial liability is extinguished
when the debtor (the Group):
discharges the liability by paying in cash, other financial assets, goods or
services; or
is legally released from the liability.
h.
Leases:
The criteria for classifying leases as finance or operating leases depend on the substance
of the agreements and are made at the inception of the lease in accordance with the
following principles as set out in IAS 17.
The Group as lessee:
Operating leases:
Lease agreements are classified as an operating lease if they do not transfer substantially
all the risks and benefits incidental to ownership of the leased asset. Lease payments are
recognized as an expense in profit or loss on a straight-line basis over the lease term.
i.
Property, plant and equipment:
Property, plant and equipment are measured at cost, including directly attributable costs,
less accumulated depreciation, accumulated impairment losses and any related
investment grants and excluding day-to-day servicing expenses.
Depreciation is calculated on a straight-line basis over the useful life of the assets at
annual rates as follows:
Computers and peripheral equipment
Office furniture and equipment
Leasehold improvements
%
33
7 - 15 (mainly 15%)
Over the term of the lease or the
expected life, whichever is shorter
- 29 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
The useful life, depreciation method and residual value of an asset are reviewed at least
each year-end and any changes are accounted for prospectively as a change in
accounting estimate.
Depreciation of an asset ceases at the earlier of the date that the asset is classified as
held for sale and the date that the asset is derecognized. An asset is derecognized on
disposal or when no further economic benefits are expected from its use. The gain or
loss arising from the derecognition of the asset (determined as the difference between
the net disposal proceeds and the carrying amount in the financial statements) is
included in profit or loss when the asset is derecognized.
j.
Intangible assets:
Intangible assets (Technology) acquired in a business combination are included at fair
value at the acquisition date (see Note 7). After initial recognition, intangible assets are
carried at their cost less any accumulated amortization and any accumulated impairment
losses.
According to management's assessment, intangible assets have a finite useful life. The
assets are amortized over their useful life using the straight-line method and reviewed
for impairment whenever there is an indication that the asset may be impaired. The
amortization period and the amortization method for an intangible asset with a finite
useful life are reviewed at least at each financial year end. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied
in the asset are accounted for prospectively as changes in accounting estimates. The
amortization of intangible assets with finite useful lives is recognized in the profit or
loss.
The useful life of the Technology is 10 years.
k.
Research and development:
Research and development costs are charged to profit or loss as incurred as
development costs do not meet the criteria for recognition as an intangible asset.
l.
Impairment of non-financial assets:
The Company evaluates the need to record an impairment of the carrying amount of
non-financial assets whenever events or changes in circumstances indicate that the
carrying amount is not recoverable. If the carrying amount of non-financial assets
exceeds their recoverable amount, the assets are reduced to their recoverable amount.
The recoverable amount is the higher of fair value less costs of sale and value in use. In
measuring value in use, the expected future cash flows are discounted using a pre-tax
discount rate that reflects the risks specific to the asset. The recoverable amount of an
asset that does not generate independent cash flows is determined for the cash-
generating unit to which the asset belongs. Impairment losses are recognized in profit or
loss.
- 30 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
The following criteria are applied in assessing impairment of these specific assets:
Goodwill in respect of business combination:
For the purpose of impairment testing, goodwill acquired in a business combination is
allocated, at the acquisition date, to each of the Group's cash-generating units that is
expected to benefit from the synergies of the combination.
The Company reviews goodwill for impairment once a year as of December 31 or more
frequently if events or changes in circumstances indicate that there is impairment.
Goodwill is tested for impairment by assessing the recoverable amount of the cash-
generating unit (or group of cash-generating units) to which the goodwill has been
allocated. An impairment loss is recognized if the recoverable amount of the cash-
generating unit (or group of cash-generating units) to which goodwill has been allocated
is less than the carrying amount of the cash-generating unit (or group of cash-generating
units). Any impairment loss is allocated first to goodwill. Impairment losses recognized
for goodwill cannot be reversed in subsequent periods.
m. Government grants:
Government grants are recognized where there is reasonable assurance that the grant
will be received and the Company will comply with the attached conditions.
Government grants received from the Office of the Chief Scientist ("OCS") and the
Korea Israel Industrial R&D Foundation as support for research and development
projects which grants include an obligation to pay royalties that are conditional on
future sales arising from the project, are recognized upon receipt as a liability if future
economic benefits are expected from the project that will result in royalty-bearing sales.
If no such economic benefits are expected, the grants are recognized as a reduction of
the related research and development expenses. In that event, the royalty obligation is
treated as contingent liability in accordance with IAS 37.
At the end of each reporting period, the Company evaluates, based on its best estimate
of future sales, whether there is reasonable assurance that the liability recognized, in
whole or in part, will not be repaid (since the Company will not be required to pay
royalties). If there is such reasonable assurance, the appropriate amount of the liability
is derecognized and recorded in profit or loss as a reduction of research and
development expenses. If the estimate of future sales indicates that there is no such
reasonable assurance, the appropriate amount of the liability that reflects expected
future royalty payments is recognized with a corresponding adjustment to research and
development expenses.
Grants received after January 1, 2009, which are recognized as a liability, are accounted
for as forgivable loans, in accordance with IAS 20 (Revised), pursuant to the provisions
of IAS 39, "Financial Instruments: Recognition and Measurement". Accordingly, when
the liability for the loan is first recognized, it is measured at fair value using a discount
rate that reflects a market rate of interest.
- 31 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
The difference between the amount of the grants received and the fair value of the
liability is accounted for upon recognition of the liability as a government grant and
recognized as a reduction of research and development expenses.
After initial recognition, the liability is measured at amortized cost using the effective
interest method. Changes in the projected cash flows are discounted using the original
effective interest and recorded in profit or loss in accordance with the provisions of IAS
39.AG8.
Royalty payments are treated as a reduction of the liability.
n.
Revenue recognition:
Revenues are recognized in profit or loss when the revenues can be measured reliably, it
is probable that the economic benefits associated with the transaction will flow to the
Company and the costs incurred or to be incurred in respect of the transaction can be
measured reliably. When the Company acts as a principal and is exposed to the risks
associated with the transaction, revenues are presented on a gross basis. Revenues are
measured at the fair value of the consideration less any trade discounts.
The Company generates revenues mainly from licensing the software products and sales
of software licenses that require significant customization. The Company also generates
revenues from maintenance, support and training.
Revenues from software licensing that requires significant customization are recognized
by reference to the stage of completion of the transaction at the end of the reporting
period. When the outcome of the transaction cannot be estimated reliably, revenues are
recognized only to the extent of the costs recognized that are recoverable. A provision
for estimated losses on uncompleted contracts is recorded in the period in which such
losses are first identified. As of December 31,2014 and 2013, no provision for such
losses has been identified.
Maintenance and support revenue included in multiple element arrangements is deferred
and recognized on a straight-line basis over the term of the maintenance and support
agreement. The fair value of the undelivered elements (maintenance and support
services) is determined based on the price charged for the undelivered element when
sold separately.
Deferred revenue includes unearned amounts received under maintenance and support
contracts, and amounts received from customers but not recognized as revenues.
Revenues from software arrangements:
Software arrangements contain multiple elements (software, integration, installation,
upgrades, support,
the
arrangement's elements, including those delivered on a "when and if available basis", in
order to determine if the elements can be separately identified.
training, consultation etc.). The Company evaluates
- 32 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
The Company recognizes revenues from the sale of software only after the significant
risks and rewards of ownership of the software have been transferred to the buyer for
which a necessary, but not sufficient condition, is delivery of the software, either
physically or electronically, or providing the right to use or permission to make copies,
of the software. The Company recognizes revenues from providing software related
services when the outcome can be measured reliably by reference to the stage of
completion of the transaction at the end of the reporting period.
If the services consist of a number of activities that are not defined over a specified
period of time, revenues are recognized on a straight-line basis over the specified
period, unless there is evidence that some other method better represents the stage of
completion.
o.
Earnings per share:
Earnings per share are calculated by dividing the net income attributable to equity
holders of the Company by the weighted number of Ordinary shares outstanding during
the period. Basic earnings per share only include shares that were actually outstanding
during the period. Potential Ordinary shares are only included in the computation of
diluted earnings per share when their conversion decreases earnings per share or
increases loss per share from continuing operations. Further, potential Ordinary shares
that are converted during the period are included in diluted earnings per share only until
the conversion date and from that date in basic earnings per share. The Company's share
of earnings of investees is included based on the earnings per share of the investees
multiplied by the number of shares held by the Company.
p.
Provisions:
A provision in accordance with IAS 37 is recognized when the Company has a present
(legal or constructive) obligation as a result of a past event and it is probable that an
outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
If the effect is material, provisions are measured according to the estimated future cash
flows discounted using a pre-tax interest rate that reflects the market assessments of the
time value of money and, where appropriate, those risks specific to the liability.
q.
Employees benefit liabilities:
The Company's liability for severance pay pursuant to the Israel's Severance Pay Law
(for those who elected not to be fully included under section 14 of the Severance Pay
Law, 1963) is based on the last monthly salary of the employee multiplied by the
number of years of employment, as of the date of severance.
The cost of providing severance pay is determined using an independent actuary.
Remeasurements, comprising of actuarial gains and losses, are recognized immediately
in the statement of financial position with a corresponding debit or credit to other
comprehensive income in the period in which they occur. Remeasurements are not
reclassified to profit or loss in subsequent periods.
- 33 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
Pursuant to Section 14 of the Severance Pay Law, which covers 75% of most of the
employees' severance pay, monthly deposits with insurance companies release the
Company from any future severance obligations in respect of those employees (defined
contribution). Deposits under Section 14 are recorded as an expense in the Company's
statements of comprehensive income.
r.
Fair value of financial instruments:
The carrying amounts of cash and cash equivalents, short-term bank deposits and
investments, trade receivables, other accounts receivable, trade payables and other
accounts payable approximate their fair value due to the short-term maturity of such
instruments.
s.
Share-based payment transactions:
The Company applies the provisions of IFRS 2, "Share-Based Payment". IFRS 2
requires an expense to be recognized where the Company buys goods or services in
exchange for shares or rights over shares ("equity-settled transactions"), or in exchange
for other assets equivalent in value to a given number of shares of rights over shares
("cash-settled transactions"). The main impact of IFRS 2 on the Company is the
expensing of employees' and directors' share options (equity-settled transactions).
The Company's employees/other service providers are entitled to remuneration in the
form of equity-settled share-based payment transactions.
The cost of equity-settled transactions with employees is measured at the fair value of
the equity instruments granted at grant date. The fair value is determined using an
acceptable option pricing model.
As for other service providers, the cost of the transactions is measured at the fair value
of the goods or services received as consideration for equity instruments. In cases where
the fair value of the goods or services received as consideration of equity instruments
cannot be measured, they are measured by reference to the fair value of the equity
instruments granted .
The cost of equity-settled transactions is recognized in profit or loss, together with a
corresponding increase in equity, during the period which the performance and/or
service conditions are to be satisfied, ending on the date on which the relevant
employees become fully entitled to the award ("the vesting period"). The cumulative
expense recognized for equity-settled transactions at the end of each reporting period
until the vesting date reflects the extent to which the vesting period has expired and the
Group's best estimate of the number of equity instruments that will ultimately vest. The
expense or income recognized in profit or loss represents the change between the
cumulative expense recognized at the end of the reporting period and the cumulative
expense recognized at the end of the previous reporting period.
- 34 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
No expense is recognized for awards that do not ultimately vest, except for awards
where vesting is conditional upon a market condition, which are treated as vesting
irrespective of whether the market condition is satisfied, provided that all other vesting
conditions (service and/or performance) are satisfied.
If the Company modifies the conditions on which equity-instruments were granted, an
additional expense is recognized for any modification that increases the total fair value
the
the share-based payment arrangement or
of
employee/other service provider at the modification date
is otherwise beneficial
to
t.
Finance income and expenses:
Finance income includes interest income on amounts invested and exchange rate gains.
Finance expenses comprise interest expense on bank loan fees and exchange rate losses.
u.
Significant accounting judgments, estimates and assumptions used in the preparation of
the financial statements.
In the process of applying the significant accounting policies, the Group has made the
following judgments which have the most significant effect on the amounts recognized
in the financial statements:
a.
-
Judgments:
Determining the fair value of share-based payment transactions:
The fair value of share-based payment transactions is determined using an
acceptable option-pricing model. The model includes data as to the share price
and exercise price, and assumptions regarding expected volatility, expected life,
expected dividend and risk-free interest rate.
b.
Estimates and assumptions:
The preparation of the financial statements requires management to make estimates and
assumptions that have an effect on the application of the accounting policies and on the
reported amounts of assets, liabilities, revenues and expenses. These estimates and
underlying assumptions are reviewed regularly. Changes in accounting estimates are
reported in the period of the change in estimate.
The key assumptions made in the financial statements concerning uncertainties at the
end of the reporting period and the critical estimates computed by the Group that may
result in a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
- 35 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
- Chief Scientist grants:
Government grants received from the Office of the Chief Scientist at the Ministry of
Industry, Trade and Labor are recognized as a liability if future economic benefits
are expected from the research and development activity that will result in royalty-
bearing sales. There is uncertainty regarding the estimated future cash flows and the
estimated discount rate used to measure the amount of the liability. As for the
accounting treatment of grants received from the OCS, see also Note 13.
- Deferred tax assets:
Deferred tax assets are recognized for unused carryforward tax losses and
deductible temporary differences to the extent that it is probable that taxable profit
will be available against which the losses can be utilized. Significant management
judgment is required to determine the amount of deferred tax assets that can be
recognized, based upon the timing and level of future taxable profits, its source and
the tax planning strategy.
-
Determining the fair value of share-based payment transactions:
The fair value of share-based payment transactions is determined upon initial
recognition by an acceptable option pricing model. The inputs to the model include
share price and exercise price and assumptions regarding expected volatility,
expected life of share option and expected dividend yield.
v.
Disclosure of new standards in the period prior to their adoption
1. IFRS 15, "Revenue from Contracts with Customers":
In May 2014, the IASB issued IFRS 15 ("IFRS 15").
IFRS 15 replaces IAS 18, "Revenue", IAS 11, "Construction Contracts", IFRIC 13,
"Customer Loyalty Programs", IFRIC 15, "Agreements for the Construction of Real
Estate", IFRIC 18, "Transfers of Assets from Customers" and SIC-31, "Revenue -
Barter Transactions Involving Advertising Services".
The IFRS 15 introduces a five-step model that will apply to revenue earned from
contracts with customers:
Step 1: Identify the contract with a customer, including reference to contract
combination and accounting for contract modifications.
- 36 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Step 2: Identify the separate performance obligations in the contract
Step 3: Determine
to variable
consideration, financing components that are significant to the contract, non-cash
consideration and any consideration payable to the customer.
including reference
transaction price,
the
Step 4: Allocate the transaction price to the separate performance obligations on a
relative stand-alone selling price basis using observable information, if it is
available, or using estimates and assessments.
Step 5: Recognize revenue when the entity satisfies a performance obligation over
time or at a Point in time.
The Company is evaluating the possible impact of IFRS 15 but is presently unable
to assess its effect, if any, on the financial statements.
2. 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 certain conditions are met. Subsequent measurement of all other debt
instruments and financial assets should be at fair value.
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. 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.
- 37 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3:- SHORT-TERM INVESTMENTS
SIMIGON LTD.
AND ITS SUBSIDIARIES
December 31,
2014
2013
U.S. dollars in thousands
Financial assets classified as held for trading at fair
value through profit or loss- Mutual Funds *)
2,952
-
*) The mutual funds invest in substantially short-term low risk securities.
NOTE 4: - TRADE RECEIVABLES
Trade receivables (1)
(1) Net of allowance for doubtful debts
December 31,
2014
2013
U.S. dollars in thousands
506
302
249
326
Trade receivables are non-interest bearing and are generally on 30 - 90 days' terms.
The aging analysis of trade receivables is as follows:
Neither
past due
nor
impaired
Past due but not impaired
< 30
days
30 - 60
days
60 - 90
day
> 90
days
Total
U.S. dollars in thousands
2014
2013
131
101
41
13
305
115
*) -
-
16
33
506
249
*)
Represents an amount lower than $ 1 thousands.
- 38 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5:- RESTRICTED CASH
SIMIGON LTD.
AND ITS SUBSIDIARIES
a. As part of a $6.7 million contract signed in May 2013 in which SimiGon was selected
as a prime contractor to deliver a SIMbox based training solution, on June 10, 2013
the Company issued a Performance Bond in favor of its customer in a total amount of
$335 thousand prior to contract deliveries and receiving payments from the client. The
Performance Bond expires on August 1, 2016.
b. To operate an ongoing business account in Bank Mizrahi, the Company is obligated to
secure a deposit in the amount of $45 thousand in its favor (the “Security Deposit”).
On March 17, 2014 the Security Deposit was reduced to $15 thousand.
c. As part of SimiGon Ltd premises lease agreement, the Company is obligated to secure
a deposit in the amount of $24 thousand in favor of the landlord.
NOTE 6:- PROPERTY, PLANT AND EQUIPMENT
Composition and movement:
Computers
and
peripheral
equipment
Office
furniture
and
equipment
U.S. dollars in thousands
Leasehold
improvements
Cost:
Balance as of January 1, 2013
Disposal during the year
Acquisitions during the year
Balance as of December 31, 2013
Disposal during the year
Acquisitions during the year
Balance as of December 31, 2014
Accumulated depreciation:
Balance as of January 1, 2013
Disposal during the year
Depreciation during the year
Balance as of December 31, 2013
Disposal during the year
Depreciation during the year
Balance as of December 31, 2014
Depreciated cost as of December 31,
2014
Depreciated cost as of December 31,
2013
- 39 -
722
(13)
26
735
(19)
31
747
669
(13)
31
687
(19)
37
705
42
48
204
-
4
208
(11)
7
204
126
-
16
142
(11)
14
145
59
66
54
-
-
54
-
1
55
53
-
-
53
-
*) -
53
2
1
Total
980
(13)
30
997
(30)
39
1,006
848
(13)
47
882
(30)
51
903
103
115
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7:- GOODWILL AND AN INTANGIBLE ASSET
The carrying amount of intangible assets acquired as of December 31, 2014 and 2013 in the
accounts of the Company was as follows:
Technology **)
Goodwill
Total
Carrying amount as of
December 31,
2014
2013
U.S. dollars in thousands
105
1,068
1,173
155
1,068
1,223
As the activities of VTSG have been fully integrated into those of the Company, the
goodwill arising in the acquisition of VTSG is evaluated for impairment purposes as
part of the cash generating unit representing the Company. As of December 31, 2014,
the recoverable amount determined based on the market price of the Company's shares
exceeded the carrying amount of the Company's net assets (equity), and therefore, no
provision for impairment was recorded.
**) During the years ended December 31, 2014, 2013 and 2012, the Company recorded
amortization in the amount of $50 thousand, $51 thousand and $50 thousand,
respectively, which was recorded in cost of revenues.
NOTE 8:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Employees and payroll accruals
Accrued expenses
December 31,
2014
2013
U.S. dollars in thousands
594
315
909
451
357
808
NOTE 9:- EMPLOYEE BENEFIT LIABILITIES, NET
Employee benefits consist of short-term benefits, post-employment benefits, other long-term
benefits and termination benefits.
a.
Post-employment benefits:
According to the labor laws and Severance Pay Law in Israel, the Company is required
to pay compensation to an employee upon dismissal or retirement or to make current
contributions in defined contribution plans pursuant to Section 14 to the Severance Pay
Law, as specified below.
- 40 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9:- EMPLOYEE BENEFIT LIABILITIES, NET (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
The Company's liability is accounted for as a post-employment benefit. The
computation of the Company's employee benefit liability is made in accordance with a
valid employment contract based on the employee's salary and employment term which
establish the entitlement to receive the compensation.
b.
The amounts recognized in the balance sheet are as follows:
2014
December 31,
2013
U.S. dollars in thousands
2012
Liability at the beginning of the year
Expense recognized in the profit or loss
Benefits paid
Remeasurement loss (gain)
Liability at the end of the year
177
37
(30)
(6)
178
141
65
(29)
-
177
108
52
(35)
16
141
c.
Amounts recognized in profit and loss are as follows:
2014
Year ended December 31,
2013
U.S. dollars in thousands
2012
Current service cost
Interest cost
Exchange rate
Total expense included in profit or loss
50
7
(20)
37
48
7
10
65
44
5
3
52
d.
Changes in the present value of defined benefit obligation:
Composition:
2014
Year ended December 31,
2013
U.S. dollars in thousands
2012
Balance at January 1
Interest cost
Exchange rate
Current service cost
Benefits paid
Remeasurement loss (gain)
Balance at December 31
.
- 41 -
177
7
(20)
50
(30)
(6)
178
141
7
10
48
(29)
-
177
108
5
3
44
(35)
16
141
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9:- EMPLOYEE BENEFIT LIABILITIES, NET (Cont.)
e.
The actuarial assumptions used are as follows:
Year ended
December 31,
2013
2014
2012
Discount rate
3.83%
4.26%
4.57%
Future salary increases
3.80%
4.43%
4.72%
Average expected remaining working
years
6.78
6.65
6.30
NOTE 10:- EQUITY
a.
Share issuance:
1. Further to the implementation of a one-year plan for salary reduction of 15% for the
Non-Executive Board members dated July 27, 2009, on April 12, 2012 the
Company issued a total of 72,000 and 47,727 Ordinary Shares to the Company's
Non-Executive Directors and to Non-Executive Chairman of the Board respectively
in return for a one year salary reduction.
On October 9, 2013 the Company issued a total of 72,000 and 47,727 Ordinary
Shares to the Company's Non-Executive Directors and to Non-Executive Chairman
of the Board respectively in return for a one year salary reduction.
2. On September 12, 2011, the Board of Directors approved the implementation of a
share bonus plan ("the Share Bonus Plan") for year 2011.
According to the Share Bonus Plan, the Bonus Compensation will be granted with
an equivalent value of Ordinary shares based on the quoted fair market price of the
shares as of September 12, 2011, which is equal to $ 0.0812 per Ordinary share
("the Bonus Shares"). The Bonus Shares will vest upon receiving actual payment
from the customer under the relevant PO ("the Bonus Shares Vested Date").
The fair value, on date of grant equal to $ 0.08 per Ordinary Share.
Based on full vesting as of December 31, 2011, the Company's senior management
and other employees are entitled to a total of 2,889,379 Ordinary Shares and a total
of 3,141,288 Options at an exercise price of NIS 0.01 per share of the Company,
which Ordinary Shares and Options were issued in 2012.
On April 12, 2012 the Company issued a total 2,055,838 Ordinary Shares and
3,141,288 Options at an exercise price of 0.01 NIS each ("Options") to its senior
management and other employees.
- 42 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10:- EQUITY (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
Out of the shares issued, 1,972,233 and 22,109 Ordinary Shares were issued to Mr.
Ami Vizer the Company's Chief Executive Officer and to Mr. Efraim Manea Chief
Finance Officer, who are also Directors of the Company, respectively. Out of the
Options issued, 2,926,533 and 37,582 Options were issued to Mr. Ami Vizer the
Company's Chief Executive Officer and to Mr. Efraim Manea Chief Finance
Officer, who are also Directors of the Company, respectively
On October 11, 2012, a total of 833,541 Ordinary Shares of have been issued to
senior management and employees, including 516,921 Ordinary Shares to Mr. Ami
Vizer the Chief Executive Officer of the Company and also a Director of the
Company.
Further to the above, on April 30, 2014 a total of 1,712,429 options were exercised
under the Company’s Stock Option Plan by senior management into SimiGon’s
Ordinary Shares at an exercise price of NIS 0.01 each. Out of the shares issued,
1,497,674 and 37,582 Ordinary Shares were issued to the Company’s CEO and
CFO, who are also Directors of the Company; respectively.
On November 11, 2014 a total of 527,554 options were exercised under the
Company’s Stock Option Plan into SimiGon’s Ordinary Shares at an exercise price
of NIS 0.01 each by the Company’s CEO, who is also Director of the Company.
The Company recorded share-based compensation expenses of $ 46 thousand and
$66 thousand, in respect of the bonus compensation for year 2014 and 2013,
respectively.
3.
On October 17, 2012, a total of 9,304 options were exercised under the Company's
Stock Option Plan at an average exercise price of $ 0.09.
4. On August 5, 2013, a total of 19,800 options were exercised under the Company's
Stock Option Plan at an average exercise price of $ 0.043.
5. On April 30, 2014 a total of 27,500 options were exercised under the Company’s
Stock Option Plan by senior management into SimiGon’s Ordinary Shares at an
exercise price of $ 0.08 each.
6. On April 30, 2014 a total of 454,000 options were exercised under the Company’s
Stock Option Plan by senior management into SimiGon’s Ordinary Shares at an
exercise price of NIS 0.01 each.
7. On May 20 2014, a total of 15,500 options were exercised under the Company’s
Stock Option Plan by a former employee into SimiGon’s Ordinary Shares of 0.01
NIS. Out of the options exercised, 8,000 Options and 7,500 Options were exercised
at an exercise price of $ 0.13 and $ 0.08 each; respectively.
8. On November 11 2014, a total of 50,001 options were exercised under the
Company’s Stock Option Plan by a former employee into SimiGon’s Ordinary
Shares of 0.01 NIS. Out of the options exercised, 16,667 Options and 33,334
Options were exercised at an exercise price of $ 0.25 and $ 0.14 each; respectively.
- 43 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10:- EQUITY (Cont.)
b.
Composition of share capital:
December 31,
2014, 2013
and 2012
Authorized
2014
December 31,
2013
Issued and outstanding
2012
Ordinary shares of
NIS 0.01 par value each
100,000,000
50,079,690 47,292,706 47,153,179
Number of shares
c.
Stock option plan:
In August 2000, the Company's Board of Directors authorized an incentive share option
plan ("the Option Plan") and has since granted options to purchase Ordinary shares to
employees and consultants. Under the Option Plan, options generally vest ratably over a
period of four years, commencing with the date of grant.
The exercise price of the options granted under the Option Plan may not be less than the
par value of the shares. The options generally expire no later than 10 years from the date
of the grant, and are non-transferable, except under the laws of succession. On
November 2, 2010, the Company decided to increase its Option Plan reserves by
8,000,000 options to accumulate a total of 17,500,000. As of December 31, 2014, an
aggregate of 1,787,343 Ordinary shares of the Company are still available for future
grant.
On January 31, 2012 the Board of Directors granted to the Company employees a total
of 190,000 options to purchase Ordinary shares of the Company. Such options are
granted in accordance with the Company's Employees' Stock Option Plan (the "ISOP")
and will vest quarterly over a period of 4 years commencing from the grant date at an
exercise price of US$0.14.
On April 11, 2013 the Board of Directors granted to the Company employees a total of
155,000 options to purchase Ordinary shares of the Company. Such options were
granted in accordance with the Company's Employees' Stock Option Plan and will vest
quarterly over a period of 4 years commencing from the grant date at an exercise price
of $0.33 U.S. dollars.
On May 30, 2013 the Board of Directors granted to the Company employees a total of
150,000 options to purchase Ordinary shares of the Company. Such options were
granted in accordance with the Company's Employees' Stock Option Plan and will vest
quarterly over a period of 4 years commencing from the grant date at an exercise price
of $0.42 U.S. dollars.
On November 24, 2013, the Company’s Board of directors approved the extension of
the Israeli Share and Option Plan for 2003 for additional 10 years under the same terms
and conditions.
- 44 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10:- EQUITY (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
The fair value of share options is measured at the grant date using the Black-Scholes
option pricing model taking into account the terms and conditions upon which the
options were granted. The following are the inputs to the model used for the three years
ended December 31, 2014: risk-free interest rates of 1% in year 2014 and a risk-free
interest rates for years 2013 and 2012 ranging from 0.87%-1.92%; a dividend yield of
0%; volatility factor of the expected market price of the Company's Ordinary shares of
80%; and a weighted average expected life of the options of 6 years. The weighted
average fair values of the options granted in 2014, 2013 and 2012 were $ 0.43, $ 0.38
and $ 0.01, respectively.
A summary of the activity in options to employees, consultants, and directors (including
the senior management, see d. below) for the years 2014, 2013 and 2012 is as follows:
2014
Year ended December 31,
2013
2012
Number
of
options
Weighted
average
exercise
price
Number
of
options
Weighted
average
exercise
price
Weighted
average
exercise
price
Number
of options
4,962,471
227,000
(2,786,984)
$ 0.134
$ 0.425
$ 0.007
(128,300) $ 0.6
(152,999) $ 0.214
5,021,788
305,000
(19,800)
-
$ 0.133
$ 0.377
$ 0.043
-
$
(344,517) $ 0.053
1,993,248
3,331,288
(9,304)
$ 0.315
$ 0.01
$ 0.09
(103,946) $ 0.6
(189,498) $ 0.17
Outstanding at
beginning of year
Granted
Exercised
Expired
Forfeited
Outstanding at end of
year
2,121,188
$ 0.297
4,962,471
$ 0.134
5,021,788
$ 0.133
Exercisable options
908,481
$ 0.409
2,549,519
$ 0.187
1,067,526
$ 0.428
The options outstanding as of December 31, 2014, have been separated into ranges of
exercise price as follows:
Weighted
average
remaining
contractual
life (years)
6.99
2.96
2.39
Options
exercisable
as of
December 31,
2014
534,301
204,180
170,000
908,481
Options
outstanding
as of
December 31,
Exercise price
2014
$0.002 - $0.127
$0.129 - $1.2
$1.33 - $2.5
1,168,805
752,383
200,000
2,121,188
- 45 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10:- EQUITY (Cont.)
d.
Options to the CEO and senior employees:
1.
On January 27, 2010, the Board of Directors granted 1,249,000 options as
follows:
a)
b)
c)
d)
e)
A total of 360,000 options were granted to the CEO at an exercise price of
NIS 0.01 per share.
A total of 312,000 options were granted to senior management at an
exercise price of NIS 0.01 per share.
A total of 132,000 options were granted to employees at an exercise price
of NIS 0.01 per share.
A total of 304,000 options were granted to employees at an exercise price
of $ 0.13 per share.
A total of 141,000 options were granted to the former CFO at an exercise
price of NIS 0.01 per share.
The options will vest in 3 tranches annually equal amounts commencing as of
January 1, 2010 and will be conditional upon the following:
a)
b)
Employee being employed by the Company, and
The EBITDA of the Company (on a consolidated basis) for the relevant
fiscal year (2011, 2012 and 2013) shall increase by more than 20%
compared to the previous year.
The 2011 EBITDA performance goal was not achieved therefore the first
tranche did not vest.
The 2012 and 2013 EBITDA performance goal was achieved.
Vesting will be fully accelerated in the event of any of the following:
a) Merger, acquisition or reorganization of the Company with one or more
other entities;
b)
c)
A sale of all or substantially all of the assets or shares of the Company;
An investment in the Company of at least $ 2 million.
As of December 31, 2013 a total of 552,233 options have been vested and the
Company recorded share-based compensation expenses in a total of $15
thousand, $12 thousands and $6 thousands in respect to Mr. Ami Vizer, the
Company's Chief Executive Officer who is also a Director of the Company, to
senior management and to employees, respectively for the year 2013.
- 46 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10:- EQUITY (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
2.
3.
4.
Further to note 10a6, on April 30, 2014 a total of 454,000 options were exercised
under the Company’s Stock Option Plan by senior management into SimiGon’s
Ordinary Shares at an exercise price of NIS 0.01 each. Out of the shares issued,
240,000 and 50,000 Ordinary Shares were issued to the Company’s CEO and
CFO, who are also Directors of the Company; respectively
On June 29, 2011 the Company's Board of Directors approved. the extension in
terms of options granted to former senior employee according to which, options
in a total of 75,000 will be exercisable until June 10, 2012 only in case of a
Transaction (as defined in the Company's Share Option Plan). All other vested
options in a total of 85,400 will be exercisable until December 7, 2012 only in
case of a Transaction (as defined in the Company's Share Option Plan).
On November 28, 2011 the Annual General meeting of the Company's approved
the grant of 40,000 options to purchase ordinary shares of the Company to Mr.
Efraim Manea, a director of the Company and its CFO. Such options are granted
to Mr. Manea in accordance with the Company's Employees' Stock Option Plan
(the "ISOP") and in the same terms that similar options are granted to the
employees of the Company. The options will be vested over 36 months
commencing September 2012 at an exercise price of US$0.08. The Vested
Options are exercisable only in an event of a Transaction as defined under the
ISOP.
Further to note 10a2, (a) on April 12, 2012, the Company issued 2,926,533 and
182,541 Options to Mr. Ami Vizer, the Company's Chief Executive Officer who
is also a Director of the Company, and to senior management, respectively; (b) on
December 20, 2012 the Annual General meeting of the Company's approved the
grant of 37,582 options to purchase Ordinary Shares to Mr. Efraim Manea, a
director of the Company and its CFO and (c) as of December 31, 2014, 2013 and
2012, the Company recorded share-based compensation expenses in a total of $46
thousand, $66 thousands and $51 thousand in respect to the CEO, respectively.
e.
Shares to the CEO and senior employees:
Further to Note 10a2, (a) on April 12, 2012 the Company issued a total 1,972,233 and
66,291 Ordinary Shares to Mr. Ami Vizer the Company's Chief Executive Officer who
is also a Director of the Company and to senior management, respectively; (b) On
October 11, 2012, a total of 516,921 and 309,711 Ordinary Shares each have been
issued, to Mr. Ami Vizer and to senior management, respectively; (c) On April 30, 2014
a total of 1,497,674 and 214,755 Ordinary Shares have been issued, to Mr. Ami Vizer
and to senior management, respectively; (d) on November 11, 2014 a total of 527,554
Ordinary Shares have been issued, to Mr. Ami Vizer and (e) on April 30, 2014 a total of
27,500 options were exercised under the Company’s Stock Option Plan by senior
management into SimiGon’s Ordinary Shares at an exercise price of $ 0.08 each. Out of
the shares issued, 7,500 Ordinary Shares were issued to Mr. Ami Vizer.
- 47 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11:- JOINT VENTURE
On March 30, 2014 SimiGon’s subsidiary (“the Subsidiary”) entered into a Joint Venture
agreement (“the Joint Venture") with a company based in China that will provide the Joint
Venture with aviation services. Under the terms of the Joint Venture agreement, the Subsidiary
will provide the SIMbox licenses enabling the Joint Venture to develop its own training
solutions. The Subsidiary will invest $30 thousand in the Joint Venture representing an interest
of 4% in its shares. As of the date of the approval of the financial statements as of December
31, 2014, the Joint Venture is under a process of establishment.
NOTE 12:- INCOME TAXES
a.
Tax benefits under the Law for the Encouragement of Capital Investments, 1959:
The Company has been granted an "Approved Enterprise" status for an original program
and an additional expansion program, ("the programs") under the Law for the
Encouragement of Capital Investments, 1959 ("the Law"). According to the provisions
of the Law, the Company has elected to enjoy the "alternative benefits track" - a waiver
of grants in return for tax holidays.
The "Approved Enterprise" status will allow the Company a tax holiday on
undistributed income derived from the "Approved Enterprise" program.
The income derived from this "Approved Enterprise" will be tax-exempt for a period of
two years, and may enjoy a reduced tax rate of 10% to 25% (based on percentage of
foreign ownership) for an additional five years. The seven-year period of benefits will
commence with the first year in which the Company earns taxable income.
The Company completed the implementation of its original and expansion programs.
The period of tax benefits, detailed above, is subject to limits of the earlier of 12 years
from the commencement of production, or 14 years from receiving the approval. The
period of benefits has not yet commenced, and will expire in the year 2016
The entitlement to the above benefits is conditional upon the Company's fulfilling the
conditions stipulated by the above Law, regulations published thereunder and the letters
of approval for the specific investments in "Approved Enterprises". In the event of
failure to comply with these conditions, the benefits may be canceled and the Company
may be required to refund the amount of the benefits, in whole or in part, including
interest.
Should the Company derive income from sources other than the "Approved Enterprise"
during the period of benefits, such income shall be taxable at the regular corporate tax
rate.
If tax-exempt profits are distributed to shareholders, they would be taxed at the
corporate tax rate applicable to such profits as if the Company had not elected the
alternative system of benefits, currently between 10%-25% for an "Approved
Enterprise".
An amendment to the Law, which became effective in 2005 ("the Amendment")
changed certain provisions of the Law.
- 48 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12:- INCOME TAXES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
As a result of the Amendment, a company is no longer obliged to implement an
"Approved Enterprise" status in order to receive the tax benefits previously available
under the alternative benefits provisions, and therefore there is no need to apply to the
Investment Center for this purpose (Approved Enterprise status remains mandatory for
companies seeking grants).
Rather, a company may claim the tax benefits offered by the Investment Law directly in
its tax returns, provided that its facilities meet the criteria for tax benefits set out by the
Amendment. A company is also granted a right to approach the Israeli Tax Authorities
for a pre-ruling regarding their eligibility for benefits under the Amendment.
Tax benefits are available under the Amendment to production facilities (or other
eligible facilities), which are generally required to derive more than 25% of the
company's business income from export. In order to receive the tax benefits, the
Amendment states that a company must make an investment in the beneficiary
enterprise exceeding a minimum amount specified in the Law. Such investment may be
made over a period of no more than three years ending at the end of the year in which
the company requested to have the tax benefits apply to the beneficiary enterprise ("the
Year of Election").
Where a company requests to have the tax benefits apply to an expansion of existing
facilities, then only the expansion will be considered a beneficiary enterprise and the
company's effective tax rate will be the result of a weighted combination of the
applicable rates. In this case, the minimum investment required in order to qualify as a
beneficiary enterprise is required to exceed a certain percentage of the company's
production assets before the expansion.
The duration of tax benefits is subject to a limitation of the earlier of 7 years from the
Commencement Year, or 12 years from the first day of the Year of Election.
Amendments to the Law for the Encouragement of Capital Investments, 1959:
In December 2010, the "Knesset" (Israeli Parliament) passed the Law for Economic
Policy for 2011 and 2012 (Amended Legislation), 2011 ("the Amendment"), which
prescribes, among others, amendments in the Law for the Encouragement of Capital
Investments, 1959 ("the Law"). The Amendment became effective as of January 1,
2011.
According to the Amendment, the benefit tracks in the Law were modified and a flat tax
rate applies to the Company's entire preferred income. Commencing from the 2011 tax
year, the Company will be able to opt to apply (the waiver is non-recourse) the
Amendment and from the elected tax year and onwards, it will be subject to the
amended tax rates that are: 2011 and 2011 - 15% (in development area A - 10%), 2013
and 2014 - 12.5% (in development area A - 7%) and in 2015 and thereafter - 12% (in
development area A - 6%).
b. Measurement of results for tax purposes under the Income Tax (Inflationary
Adjustments) Law, 1985:
Results for tax purposes are measured in terms of earnings in NIS after certain
adjustments for increases in the Israeli Consumer Price Index ("CPI"). As explained in
Note 2b, the financial statements are presented in U.S. dollars.
- 49 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12:- INCOME TAXES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
The difference between the annual change in the Israeli CPI and in the NIS/dollar
exchange rate causes a difference between taxable income or loss and the income or loss
before taxes reflected in the financial statements.
c.
Tax reconciliation:
In 2014, 2013 and 2012, the main reconciling item between the statutory tax rate of the
Company and the effective tax rate (0%) is carryforward tax losses and tax exemption
for which no deferred taxes were provided.
d.
Carryforward losses:
Domestic:
As of December 31, 2014, 2013 and 2012, the Company had accumulated losses for
Israeli tax purposes of approximately $ 0.9 million, $ 3.4 million and $ 5.3 million,
respectively, which may be carried forward, in order to offset taxable income in the
future, for an indefinite period.
Foreign:
As of December 31, 2014, 2013 and 2012, the federal tax loss carryforwards of the U.S.
subsidiaries amounted to approximately $ 6.8 million, $ 6.4 million and $ 6.1 million,
respectively. Such losses are available for offset against future U.S. taxable income of
the subsidiaries and will expire in the years 2023-2026.
As of December 31, 2014 and 2013, the tax loss carryforwards of the Singaporean
subsidiary amounted to approximately $ 91 thousands and $ 44 thousands; respectively,
which may be carried forward, in order to offset taxable income in the future, for an
indefinite period.
Deferred tax assets relating to carryforward operating losses were not recognized
because their utilization in the foreseeable future is not probable.
e.
Tax rates applicable to the income of the Company and its subsidiaries:
Domestic:
The Israeli corporate tax rate applicable in 2014 is 26.5% and 25% in 2013 and 2012.
A company is taxable on its real (non-inflationary) capital gains at the corporate tax rate
in the year of sale.
A temporary provision for 2006-2009 stipulates that the sale of an asset other than a
quoted security (excluding goodwill that was not acquired) that had been purchased
prior to January 1, 2003, and sold by December 31, 2009, is subject to corporate tax as
follows:
- 50 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12:- INCOME TAXES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
The part of the real capital gain that is linearly attributed to the period prior to
December 31, 2002 is subject to the corporate tax rate in the year of sale as set forth in
the Israeli Income Tax Ordinance, and the part of the real capital gain that is linearly
attributed to the period from January 1, 2003 through the date of sale is subject to tax at
a rate of 25%.
On December 5, 2011, the "Knesset" (Israeli parliament) passed the Law for Tax
Burden Reform (Legislative Amendments), 2011 ("the Law") which, among others,
cancels effective from 2012, the scheduled reduction in the corporate tax rate. The Law
also increases the corporate tax rate to 25% in 2012. In view of this increase in the
corporate tax rate to 25%, as above, the real capital gain tax rate and the real betterment
tax rate were also increased accordingly.
On August 5, 2013, the "Knesset" issued the Law for Changing National Priorities
(Legislative Amendments for Achieving Budget Targets for 2013 and 2014), 2013 ("the
Budget Law"), which consists, among others, of fiscal changes whose main aim is to
enhance the collection of taxes in those years. These changes include, among others,
increasing the corporate tax rate from 25% to 26.5%, cancelling the reduction in the tax
rates applicable to privileged enterprises (9% in development area A and 16%
elsewhere) and, in certain cases, increasing the rate of dividend withholding tax within
the scope of the Law for the Encouragement of Capital Investments to 20% effective
from January 1, 2014. There are also other changes such as taxation of revaluation gains
effective from August 1, 2013. The provisions regarding revaluation gains will become
effective only after the publication of regulations defining what should be considered as
"retained earnings not subject to corporate tax" and regulations that set forth provisions
for avoiding double taxation of overseas assets.
Foreign:
The subsidiaries were incorporated in Orlando, Florida, U.S.A., and are taxed according
to U.S. tax laws. The statutory federal tax rate is 35%.
f.
Tax assessments:
The Company's tax assessments in Israel for the years until and including 2009 are
considered final, subject to the powers vested with the director of the Tax Authority
pursuant to sections 145, 147 and 152 to the Income Tax Ordinance.
The Israeli Tax Authority ("ITA") requested information in order to issue an assessment
with respect to income tax returns of the Company for 2010 until 2013.
g.
Deferred taxes:
On December 31, 2014, there was no recognized deferred tax liability for taxes that
would be payable on unremitted earnings of the Company and its subsidiaries.
- 51 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13:- OTHER LIABILITIES AND COMMITMENTS
a.
Royalty commitments:
1.
On September 1, 2009, the Company and a third party signed a Cooperation and
Project Funding Agreement with KORIL ("the Agreement"), which is an
establishment of the Korea-Israel Industrial Research and Development Fund.
According to the agreement, KORIL agreed to fund, by conditional grant, the
implementation of the proposal submitted by the Company ("the proposal") and
the third party for a research and development project in the maximum amount of
$ 273 thousand.
As of December 31, 2014, the Company received a total amount of $ 254
thousand.
The Company shall make repayments to KORIL, based on gross sales derived
from the gross invoiced sales value of the products, processes, inventions,
improvements, modifications, methods, software,
technology, discoveries,
specifications, or any form of technical information developed or arising from the
proposal (gross sales). Such payments shall be repaid in U.S. dollars at the rate of
2.5% of the first year's gross sales until 100% of the conditional grant and other
sums have been repaid.
The total non-current liability for the years ended December 31, 2014 and 2013
was $ 211 thousand and $ 200 thousand, respectively.
2.
On September 16, 2010, the Company signed a Project Funding Agreement ("the
Agreement") with the Israeli Chief Scientist ("the OCS"). According to the
Agreement, the OCS agreed to fund, by conditional grant, the implementation of
the proposal submitted by the Company for a research and development project in
the maximum amount of $ 365 thousand.
On March 29, 2011, the Company signed on a supplement to the Agreement ("the
Supplement"). According to the Supplement, the OCS agreed to fund, by
conditional grant, the implementation of the proposal submitted by the Company
for a research and development continued project in the maximum amount of
$ 278 thousand.
As of December 31, 2014, the Company received total amount of $ 611 thousand.
The Company shall make repayments to the OCS, based on gross sales derived
from the gross invoiced sales value of the products, processes, inventions,
technology, discoveries,
improvements, modifications, methods, software,
specifications, or any form of technical information developed or arising from the
proposals (gross sales).
Such payments shall be repaid in NIS at the rate of 3% of the first year's gross
sales until 100% of the conditional grant and other sums have been repaid.
The total non-current liability for the years ended December 31, 2014 and 2013
was $ 448 thousand and $ 499 thousand, respectively.
- 52 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13:- OTHER LIABILITIES AND COMMITMENTS (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
3.
On April 7, 2011, the Company and a third party signed a Cooperation and
Project Funding Agreement with the Israeli Chief Scientist ("the OCS"), which is
an establishment of the Italian-Israel Industrial Research and Development Fund.
According to the agreement, the OCS agreed to fund, by conditional grant, the
implementation of the proposal submitted by the Company ("the proposal") and
the third party for a research and development project in the maximum amount of
$ 91 thousand.
As of December 31, 2014, the Company received a total amount of $ 95
thousand.
The Company shall make repayments to the OCS, based on gross sales derived
from the gross invoiced sales value of the products, processes, inventions,
technology, discoveries,
improvements, modifications, methods, software,
specifications, or any form of technical information developed or arising from the
proposal (gross sales). Such payments shall be repaid in NIS at the rate of 3% of
the first year's gross sales until 100% of the conditional grant and other sums
have been repaid.
The total non-current liability for the year ended December 31, 2014 and 2013
was $ 70 thousand and $ 78 thousand, respectively.
b.
Lease commitments:
1. Premises occupied by the Company are rented under various non-cancelable lease
agreements. The latest rental agreement for the premises expires in October 2017 as
determined under a lease agreement signed on October 1, 2014.
2. The Company has leased various motor vehicles under cancelable operating lease
agreements, which expire on various dates, the latest of which is in 2016.
3. Premises occupied by the subsidiaries are rented under non-cancelable lease
agreements. The latest rental agreement for the premises expires in March 2016 as
determined under a lease agreement signed on December 14, 2011 by SimiGon Inc.
4. Future minimum rental payments under non-cancellable operating leases are as
follows:
Year ended December 31,
U.S. dollars
in thousands
2015
2016
2017
265
230
124
619
The total expense for the years ended December 31, 2014, 2013 and 2012 was
$ 342 thousand, $ 317 thousand and $ 301 thousand, respectively.
- 53 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14:- SUPPLEMENTARY
INFORMATION
TO
THE
STATEMENT
OF
COMPREHENSIVE INCOME
SIMIGON LTD.
AND ITS SUBSIDIARIES
Year ended
December 31,
2013
U.S. dollars in thousands
2014
2012
946
151
149
69
15
659
1,989
2,060
312
21
13
-
(25)
595
72
139
59
14
1,191
2,070
2,084
319
25
16
1
(43)
468
54
64
57
10
714
1,367
1,793
323
28
12
1
(12)
2,381
2,404
2,145
1,042
66
101
32
102
7
60
48
1,458
1,118
80
123
41
92
9
93
96
1,652
1,000
70
123
70
113
8
67
117
1,568
a.
Cost of revenues:
Salaries and related benefits
Lease and office maintenance
Travel expenses, net
Depreciation and amortization
Share-based compensation
Subcontractors
b.
Research and development expenses:
Salaries and related benefits
Lease and office maintenance
Depreciation and amortization
Share-based compensation
Other
Government grants
c.
Selling and marketing expenses:
Salaries and related benefits
Lease and office maintenance
Consultant fees
Advertising and sales promotion
Travel expenses
Depreciation and amortization
Share-based compensation
Commission
- 54 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14:- SUPPLEMENTARY
INFORMATION
TO
THE
STATEMENT
OF
COMPREHENSIVE INCOME (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
d.
General and administrative expenses:
Salaries and related benefits
Lease and office maintenance
Travel expenses
Professional fees and public company
expenses
Depreciation and amortization
Share-based compensation
Doubtful debt provision
Other
Year ended
December 31,
2013
U.S. dollars in thousands
2014
2012
659
58
26
425
4
2
*) -
7
1,181
681
63
14
314
5
14
(43)
-
608
60
21
324
5
22
(25)
-
1,048
1,015
*)
Represents an amount lower than $ 1 thousand.
e.
Finance income:
Exchange rate differences
Government grants interest
Interest income from banks
f.
Finance cost:
Exchange rate differences
Government grants interest
Bank loans and fees
132
37
9
178
120
-
7
127
56
-
1
57
124
29
6
159
122
-
4
126
147
7
-
154
- 55 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15:- REVENUES
The Company manages its business on the basis of one reportable segment.
a.
Revenues:
Software licenses and customization
Recurring Maintenance & Support
Training
Year ended
December 31,
2013
U.S. dollars in thousands
2014
2012
6,798
1,466
52
8,316
6,356
1,745
71
8,172
5,420
1,342
43
6,805
b.
Geographical information:
Revenues classified by geographical destinations based on the customer location:
EMEA and South America (1)
North America
Asia Pacific
Year ended
December 31,
2013
U.S. dollars in thousands
2012
2014
1,187
4,166
2,963
8,316
1,399
5,032
1,741
8,172
1,730
4,928
147
6,805
(1) Europe, South America, Middle East, Australia and Africa.
The carrying amounts of non-current assets (property, plant and equipment and
intangible assets) based on the location of the assets, are as follows:
EMEA and South America (1)
North America
2014
December 31,
2013
U.S. dollars in thousands
2012
43
1,233
1,276
41
1,297
1,338
37
1,369
1,406
(1) Europe, South America, Middle East, Australia and Africa.
- 56 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15:- REVENUES (Cont.)
c.
Information about major customers:
Revenues from major customers, each of whom amount to 10% or more of total
revenues reported in the financial statements:
Customer A
Customer B
Customer C
Customer D
Customer E
Customer F
Year ended
December 31,
2013
21%
10%
15%
21%
6%
20%
2014
22%
7%
20%
3%
4%
32%
2012
24%
8%
17%
19%
13%
-
NOTE 16:- EARNINGS PER SHARE
The following reflects the income and share data used in the basic and diluted earnings per
share computations:
Year ended
December 31,
2013
U.S. dollars in thousands
2012*)
2014
Net income for the year
1,358
896
708
2014
2013
2012
Weighted average number of Ordinary shares
for computing basic earnings (loss) per share
48,854
47,188
45,884
Effect of dilution:
Share options
231
1,943
570
Weighted average number of Ordinary shares
adjusted for the effect of dilution
49,085
49,131
46,454
- 57 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES
SIMIGON LTD.
AND ITS SUBSIDIARIES
Year ended
December 31,
2013
U.S. dollars in thousands
2012
2014
a.
Expenses to related party of a
shareholder:
Sales and marketing *)
-
-
18
*)
As part of a sales consulting agreement signed with a company whom one of its
shareholder is also a shareholder in SimiGon, holding less than 10%.
b.
Compensation of key management
personnel of the Company:
Employee benefits *)
Share-based payments **)
Year ended
December 31,
2013
U.S. dollars in thousands
2012
2014
1,628
55
1,683
1,560
83
1,643
1,448
87
1,535
*)
Includes long-term employee benefits in the amount of $ 30 thousand, $ 40
thousand and $ 47 thousand for the years ended December 31, 2014, 2013 and
2012, respectively.
As disclosed under Note 20b, year 2014 includes annual bonus provision of $ 51
thousand to the VP of Business Development and VP Projects. Year 2013 include
bonus payment of $ 17 thousand to the VP of Business Development and VP
Projects.
Year 2014 includes bonus provision to Mr. Efraim Manea, a director of the
Company and its CFO with respect to fiscal year 2014 in the amount of $21
thousand (see Note 17d). Year 2013 includes bonus provision to Mr. Efraim
Manea, a director of the Company and its CFO with respect to fiscal year 2013 in
the amount of $33 thousand (see Note 17d).
Year 2014 includes bonus provision to Mr. Ami Vizer, the Company's Chief
Executive Officer and executive director (“the CEO”) in respect to fiscal year
2014 in the amount of $80 thousand (see Note 17e). Year 2013 includes bonus
provision to the CEO in respect to fiscal year 2013 in the amount of $114
thousand and a payment of $ 6 thousand paid to the CEO in respect of the bonus
of the fiscal year 2012 (see Note 17e).
- 58 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
Year 2012 include the provision for sales bonus of $ 2 thousand to the VP of
Business Development.
Year 2012 includes bonus of $ 30 thousand and a bonus provision of $114
thousand to the CEO in respect of the fiscal year 2011 and 2012, respectively (see
Note 17e).
**) Years 2014, 2013 and 2012 include share-based compensation of $46 thousand,
$66 thousands and $51 thousand, respectively, due the Share Bonus Plan as
described under Note 10d4, in respect to the CEO.
Year 2013 includes share-based compensation of $ 15 thousand and $17 thousand
in respect of Options granted under Note 10d1, to the CEO and senior
management, respectively. Year 2012 includes share-based compensation of $ 15
thousand and $12 thousand in respect of options granted under Note 10d1, to the
CEO and senior management, respectively.
c.
Compensation policy for the Company’s Directors and officers:
On November 24, 2013, the Company’s Board of directors approved the adoption
of a Compensation policy for the Company’s Directors and officers (the
“Compensation Policy Plan”) as required by the Israeli Companies Law in order
to provide the Company the ability to attract, retain, reward and motivate highly
skilled Officers and to assure that the compensation structure meets the
Company's interests and its overall financial and strategic objectives.
The Compensation policy for the Company’s Directors and officers was approved
at SimiGon Annual General Meeting for year 2013 held on December 30, 2013.
d.
Agreement with CFO:
On December 6, 2012, the Board of Directors approved the grant of a one-time
cash bonus to Mr. Efraim Manea, a director of the Company and its CFO with
respect to fiscal year 2013 in the amount of up to $34 thousand, subject to
revenues, net profit and share price criteria and milestones.
On November 24, 2013, the Board of Directors approved the grant of a one-time
cash bonus to Mr. Efraim Manea, a director of the Company and its CFO with
respect to fiscal year 2014 in accordance to the Company’s Compensation Policy
Plan mentioned above. The granted bonus is in the amount of up to $35 thousand,
subject to revenues, net profit and share price criteria and milestones.
As of December 31, 2014, the Company has made a provision of $21 thousand in
respect of its CFO annual bonus for year 2014.
- 59 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)
e.
Significant agreements with shareholders:
1.
On September 21, 2006, the Company signed an agreement with Mr. Ami Vizer,
the Chief Executive Officer of the Company, according to which Mr. Ami Vizer
is engaged with a current salary of $ 313 thousand per annum (excluding bonuses
and benefits), terminable by either party on nine months' notice. In addition,
pursuant to this agreement, Mr. Vizer received options.
On January 27, 2010, the Board of Directors approved an increase of 10% in his
salary effective January 1, 2010.
On December 6, 2012, the Board of Directors approved a one-time cash bonus
grant to Mr Ami Vizer with respect to fiscal year 2011 in the amount of $ 30
thousand. It has also approved the grant of annual cash bonus to Mr Ami Vizer
with respect to fiscal years 2012 and 2013 in the amount of up to $ 125 thousand
per year, subject to revenues, net profit and share price criteria and milestones
(the “Conditions”). Based on the Conditions above, the Company recorded for
each fiscal year ended December 31, 2012 and 2013 a provision of $114
thousand. The actual bonuses for the fiscal years ended December 31, 2012 and
2013 were paid on April 2013 and on May 2014 and amounted to $ 120 thousand
and $116, respectively.
On November 24, 2013, the Board of Directors approved the grant to Mr. Ami
Vizer, the Company's Chief Executive Officer and executive director of annual
cash bonus to with respect to fiscal year 2014 in accordance with the Company’s
Compensation Policy Plan mentioned above. The granted bonus is in the amount
of up to $125 thousand, subject to revenues, net profit and share price criteria and
milestones. On December 30, 2013 the Company’s Annual General Meeting for
year 2013, approved 2014 bonus grant to Mr Ami Vizer. As of December 31,
2014, the Company has made a provision of $80 thousand in respect of Mr. Ami
Vizer annual bonus for year 2014.
In the annual general meeting for year 2013 held on December 30, 2013, the
shareholders, reapproved the employment agreement of Mr. Ami Vizer as the
Company's Chief Executive Officer and an executive director.
Total salary including employer tax (excluding share bonus grant mentioned
under Note 10a2) of Mr. Ami Vizer during year 2014 amounted to an annual
salary of $ 360 thousand, related benefits include bonus for 2013 fiscal year of
$116 thousand, annual social benefits of $ 43 thousand (12.5% out of his annual
salary), expenses allowance of $6 thousand, recovery fees of $1 thousand,
severance pay of $29 thousand, vacation days of $39 thousand and health
insurance of $33 thousand. In addition, the Company has made a provision for
2014 bonus of $ 80 thousand.
2.
On September 27, 2006, the Company entered into a consultant agreement (“the
Consultant Agreement”) with Mr. Rami Weitz, pursuant to which Mr. Weitz
receives a fee of $ 122 thousand per annum in consideration of consulting
services. The agreement may be terminated by either party by at least six months'
written notice. In addition, pursuant to this agreement, Mr. Weitz received
options.
- 60 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)
SIMIGON LTD.
AND ITS SUBSIDIARIES
Prior to this agreement, Mr. Rami Weitz had been the Chairman of the Board of
Directors of the Company.
On April 22 2014, the Company signed on a Loan Agreement with Mr. Rami
Weitz (“the Loan Agreement”) according to which, the Company will provide
Mr.Weitz with a loan in a total of $60 thousand bearing interest at the minimum
rate mandated by law, repayable within 12 months till April 7, 2015. According
to the Loan Agreement, the Company shall have the right at any time (even prior
to the due repayment date) to set-off and deduct any amount due hereunder from
any amount payable by the Lender to Mr.Weitz, to Packet Science Ltd. or to any
company in which Mr.Weitz and/or his immediate family and/or third respective
affiliates have a controlling interest.
In May 2014, the consultant Agreement was terminated and the Company offset
the above loan against fees due to Mr. Weitz.
NOTE 18:- DIVIDEND DISTRIBUTION
On April 24, 2014 the Company’s Board of Directors approved the distribution of a maiden
dividend in the amount of $268 thousand (approximately $0.543 cent per share). The dividend
was paid on May 30, 2014.
NOTE 19:- FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Capital management:
The primary objective of the Company's capital management is to ensure that it maintains a
strong credit rating and sufficient capital in order to support its business and maximize
shareholder value.
The Company manages its capital structure and makes adjustments to it, in light of changes in
economic conditions.
Financial risks factors:
The Company's activities expose it to various financial risks such as market risk (including
foreign exchange risk), credit risk and liquidity risk.
a.
Foreign exchange risk:
The Company operates in a number of countries and is exposed to foreign exchange risk
resulting from the exposure to different currencies, mainly the NIS. As of December 31,
2012, balances in foreign currency are immaterial.
- 61 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19:- FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont.)
b.
Credit risk:
Financial instruments that potentially subject the Company to concentrations of credit
risk consist principally of cash and cash equivalents, short-term bank deposits, short-
term investments and trade receivables.
Cash and cash equivalents and short-term bank deposits are invested in major banks in
Israel and the United States. Management believes that the financial institutions that
hold these and other short-term investments of the Company and its subsidiaries are
financially sound and, accordingly, minimal credit risk exists with respect to these
investments.
The Company trades only with creditworthy customers. The Company performs
ongoing credit evaluation of its customer's financial condition and requires collateral as
deemed necessary.
The Company has no off-balance-sheet concentration of credit risk such as foreign
exchange contracts, option contracts or other foreign hedging arrangements.
The Company has no significant concentrations of credit risk. The Company has a
policy to ensure collection through sales of its products to wholesalers with an
appropriate credit history and through retail sales in cash or by credit card.
As of December 31, 2014, cash and cash equivalents together with the Company's short
time bank deposits and investments amounted to $ 9,442 thousand.
c.
Liquidity risk:
The table below presents the maturity profile of the Company's financial liabilities
based on contractual undiscounted payments:
December 31, 2014:
Less than
one year
3 to 4
Years
U.S. dollars in thousands
Total
Government grants
Trade payables
Other accounts payable and accrued
expenses
37
153
872
1,062
729
-
-
729
766
153
872
1,791
- 62 -
SIMIGON LTD.
AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19:- FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont.)
December 31, 2013:
Less than
one year
3 to 4
Years
U.S. dollars in thousands
Total
Government grants
Trade payables
Other accounts payable and accrued
expenses
38
143
770
951
777
-
-
777
815
143
770
1,728
NOTE 20:- SUBSEQUENT EVENTS
a. On January 21, 2015, a total of 3,194 options were exercised under the Company's Stock
Option Plan by a by a former employee at an average exercise price of $ 0.19.
b. On February 26, 2015, the Company’s Board of directors approved the grant of an annual
bonus to key employees and Non-Executive Directors of $150 thousand in recognition of
their contribution to the Company's positive financial performance in 2014 and as part of
the Company’s consistent approach to compensate its key employees and Non-Executive
Directors (excluding the Company’s CEO and CFO). The bonus will be granted in shares
calculated based on the closing price on the day of announcement of the Company's
financial results for 2014. The bonus granted to the Non-Executive Directors will be
subject to the approval of the Company’s shareholders. A provision for this bonus has
been recorded in the 2014 financial statements.
The Board of Directors also approved the grant of annual cash bonus to Mr. Ami Vizer,
the Company's Chief Executive Officer and to Mr. Efraim Manea the Company's Chief
Financial Officer who are also Directors of the Company, with respect to fiscal year 2015
in accordance with the Company’s Compensation Policy Plan. The granted bonuses are in
the amount of up to $125 thousand and NIS125 thousand, respectively, subject to
revenues, net profit and share price criteria and milestones.
- - - - - - - - - - - - - - - - - -
- 63 -
SHARE INFORMATION
SimiGon is listed on the AIM. The shares of the
Company are available through the Crest settlement
system, enabling immediate, secured electronic trading
and registration of shareholders’ assets. Symbol: SIM
Financial Year End: 31 December
CONTACT INFORMATION
To request additional information about SimiGon
and our products, please contact us by telephone,
fax or e-mail:
ADVISERS
Nominated Adviser and Broker
finnCap
60 New Broad St
London, EC2M 1JJ
SimiGon Ltd.
1 Sapir St.
PO Box 12050
Herzliya, Israel 46733
Tel: +972-9-956-1777
Fax: +972-9-951-3566
Registrar
Computershare Investor Services (Jersey) Limited
Queensway House
Hilgrove Street
St Helier
Jersey
JE1 1ES
SimiGon Inc.
7001 University Blvd.
Winter Park, Florida 32792
Phone: +1 (407) 951-5548
Fax: +1 (407) 960-4794
For more information:
info@simigon.com
Auditors and Reporting Accountants
Kost Forer Gabbay & Kasierer
A member of Ernst & Young Global
3 Aminadav Street
Tel Aviv 67067
Israel
Solicitor to the Company as to English law
Halliwells LLP
1 Threadneedle Street
London
EC2R 8AW
Counsel of the Company as to Israeli law
Amit, Pollak, Matalon & Co. Advocates and Notary
Nitsba Tower, 19th Floor, 17 Yitzhak Sadeh St.,
Tel Aviv 67775
Israel
- 64 -
WWW.SIMIGON.COM