FORMULA SYSTEMS (1985) LTD (ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory)

NOTE 8:-

INVESTMENTS IN COMPANIES ACCOUNTED FOR AT EQUITY METHOD

a.	The following is a summary of the Group’s investments in companies accounted for at equity:

	December 31,
	2016		2017

Affiliated company		38		55

Joint venture – TSG (see Note 4(i)(a))		24,022		25,260

		24,060		25,315

b.	The Group holds a 50% share in TSG, a joint venture engaged in the fields of command and control systems, intelligence, homeland security and cyber security. The Group’s interest in TSG is accounted for using the equity method in the consolidated financial statements.

The following is the composition of the Group’s investment in TSG:

	December 31,
	2016		2017
Shares		16,353		17,591
Capital notes		7,669		7,669
		24,022		25,260

Dividend preference derivative in TSG ⁽¹⁾		2,140		2,400

Goodwill		9,836		9,836

(1)

Dividend preference derivative in TSG is included in Company’s long term prepaid expenses and other receivables and is accounted for at fair value through to profit or loss.

c.	The following table summarizes activity related to the Group’s investment in TSG:

January 1, 2016	$	-
Acquisition of shares in joint venture		16,004
Investment in Capital notes of joint venture		7,669
Company’s share of profit of joint venture		349
December 31, 2016	$	24,022

Company’s share of profit of joint venture		1,134
Company’s share of other comprehensive income of joint venture		104
December 31, 2017	$	25,260

d.	Summarized financial information of TSG:

(i)

Summarized statement of financial position of TSG :

	December 31,
	2016			2017
Current assets		24,396			34,137
Noncurrent assets ⁽¹⁾		467			1,746
Current liabilities		(16,969	)		(20,311	)
Noncurrent liabilities		(1,895	)		(4,426	)
Equity		5,999			11,146
Group’s share in equity		50	%		50	%
		3,000			5,573
Excess cost of intangible assets net of deferred tax		11,186			9,851
Goodwill		9,836			9,836
Group’s carrying amount of the investment		24,022			25,260

(1)

Not including balance of goodwill in an amount of $19,006 as of December 31, 2016 and 2017.

(ii)

Summarized statement of profit or loss of TSG:

	Year ended December 31,
	2016⁽¹⁾			2017
Revenues		38,648			66,816
Net income		2,744			4,938
Other comprehensive income		-			208
Total comprehensive income		2,744			5,146
Group’s share		50	%		50	%
		1,372			2,573
Amortization of excess cost of intangible assets net of tax		(1,023	)		(1,335	)
		349			1,238
Group’s share of other comprehensive income		-			104
Group’s share of profit		349			1,134

(1)

From May 1, 2016.

FORMULA SYSTEMS (1985) LTD | CIK:0001045986 |

ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory