Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements

v3.20.4
Fair Value Measurements
12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements

3. FAIR VALUE MEASUREMENTS

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2019 (in thousands):

 

 

 

Fair Value Hierarchy as of December 31, 2020

 

 

Aggregate

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds (1)

 

$

590

 

 

$

 

 

$

 

 

$

590

 

      Certificates of deposit (2)

 

 

 

 

 

4,253

 

 

 

 

 

 

4,253

 

Total Assets

 

$

590

 

 

$

4,253

 

 

$

 

 

$

4,843

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate Swap (3)

 

$

 

 

$

109

 

 

$

 

 

$

109

 

Debt for forward share purchase agreements (4)

 

 

 

 

 

483

 

 

 

 

 

 

483

 

Total Liabilities

 

$

 

 

$

592

 

 

$

 

 

$

592

 

 

 

(1)

Included in the consolidated balance sheet line item “Short-term investments”.

 

(2)

Included in the consolidated balance sheets line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

 

(3)

Included in the consolidated balance sheet line item “Other long-term liabilities”.

 

(4)

Based on the information available at the reporting date, debt for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option.

 

 

 

Fair Value Hierarchy as of December 31, 2019

 

 

Aggregate

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Fair Value

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds (1)

 

$

5,124

 

 

$

 

 

$

 

 

$

5,124

 

Total Assets

 

$

5,124

 

 

$

 

 

$

 

 

$

5,124

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate Swap (2)

 

$

 

 

$

80

 

 

$

 

 

$

80

 

Preference shares (3)

 

 

 

 

 

 

 

 

2,530

 

 

 

2,530

 

Debt for forward share purchase agreements (4)

 

 

 

 

 

34,013

 

 

 

 

 

 

34,013

 

Total Liabilities

 

$

 

 

$

34,093

 

 

$

2,530

 

 

$

36,623

 

 

 

(1)

Included in the consolidated balance sheet line item “Short-term investments”.

 

(2)

Included in the consolidated balance sheet line item “Other long-term liabilities”.

 

(3)

Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ended March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represented management’s best estimates and was significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during period; (ii) accrued interest expense due to the fact that the obligation was to be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period.

 

(4)

Based on the information available at the reporting date, debts for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option. The amount in the above table excludes accrued interest.

 

The values of short-term investments as of December 31, 2020 and 2019 were as follows (in thousands):

 

 

 

As of December 31,

 

 

 

2020

 

 

2019

 

 

 

Cost

 

 

Unrealized

gains

 

 

Unrealized

losses

 

 

Fair value

 

 

Cost

 

 

Unrealized

gains

 

 

Unrealized

losses

 

 

Fair value

 

Mutual funds

 

$

580

 

 

$

10

 

 

$

 

 

$

590

 

 

$

5,129

 

 

$

1

 

 

$

(6

)

 

$

5,124

 

Certificates of deposit

 

 

4,253

 

 

 

 

 

 

 

 

 

4,253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following tables present changes during the years ended December 31, 2020 and 2019 in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities in the consolidated balance sheets at December 31, 2020 and 2019 (in thousands):

 

 

 

Fair Value

Beginning

of Year

 

 

Net Realized

and

Unrealized

Gains (Losses)

Included

in Income

 

 

Other

Comprehensive

Income

(Loss)

 

 

Settlements,

Net

 

 

Change in

scope of

consolidation

 

 

Gross

Transfers

Out

 

 

Fair Value

End of

Year

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preference shares

 

$

1,834

 

 

$

753

 

 

$

(57

)

 

$

 

 

$

 

 

$

 

 

$

2,530

 

Contingent consideration for Solutions Infini acquisition

 

 

482

 

 

 

(15

)

 

 

23

 

 

 

(490

)

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preference shares

 

 

2,530

 

 

 

2,486

 

 

 

42

 

 

 

2

 

 

 

 

 

 

 

 

 

 

There were no transfers of liabilities into or out of Level 2 or Level 3 in the year ended December 31, 2020.

Net realized and unrealized gains and losses included in income related to Level 3 liabilities shown above are reported in the consolidated statements of operations as follows (in thousands):

 

 

 

Research

and

development

 

 

Sales

and

marketing

 

 

General

and administrative

 

 

Financial

expense, net

 

 

Foreign

currency

loss

 

 

Total

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preference shares

 

$

225

 

 

$

89

 

 

$

180

 

 

$

259

 

 

$

 

 

$

753

 

Contingent consideration for Solutions Infini acquisition

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

(18

)

 

 

(15

)

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preference shares

 

 

941

 

 

 

372

 

 

 

756

 

 

 

417

 

 

 

 

 

 

2,486