| e. | Intangible assets: |
| 1. | Unamortized intangible assets (licenses and patent rights): |
These assets are reviewed for impairment once a year and whenever there are indicators of a possible impairment, in accordance with the provisions of IAS 36, Impairment of Assets (see also Note 9). The amortization of an asset on a straight-line basis over its useful life begins when the development procedure is completed and the asset is available for use.
| 2. | Research and development: |
Research expenditures are recognized as expenses when incurred. Costs arising from development projects are recognized as intangible assets when the following criteria are met:
| - | it is technically feasible to complete the intangible asset so that it will be available for use; |
| - | management intends to complete the intangible asset and use or sell it; |
| - | there is an ability to use or sell the intangible asset; |
| - | it can be demonstrated how the intangible asset will generate probable future economic benefits; |
| - | adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available; and |
| - | the expenditure attributable to the intangible asset during its development can be reliably measured. |
Other development expenditures that do not meet these criteria are recognized as an expense when incurred. Development costs that were previously recognized as an expense are not recognized as an asset in a later period. As of December 31, 2017 and 2016, the Group did not capitalize development project costs as intangible assets.