Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Document Information Line Items | |
Entity Registrant Name | FORMULA SYSTEMS (1985) LTD |
Document Type | 20-F |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 15,294,267 |
Amendment Flag | false |
Entity Central Index Key | 0001045986 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Large Accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Dec. 31, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Document Annual Report | true |
Document Shell Company Report | false |
Document Transition Report | false |
Entity File Number | 000-29442 |
Entity Incorporation, State or Country Code | L3 |
Entity Interactive Data Current | Yes |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 501,650 | $ 368,666 |
Short-term deposits | 30,289 | 29,886 |
Marketable securities | 1,238 | 6,600 |
Trade receivables (net of allowances for doubtful accounts of $6,910 and $9,717 as of December 31, 2019 and 2020, respectively) | 519,885 | 486,007 |
Prepaid expenses and other accounts receivable | 83,820 | 65,709 |
Inventories | 23,988 | 8,636 |
Total current assets | 1,160,870 | 965,504 |
LONG-TERM ASSETS: | ||
Deferred taxes | 39,750 | 38,865 |
Prepaid expenses, other accounts receivable and other investments | 22,872 | 22,205 |
Total long-term assets | 62,622 | 61,070 |
INVESTMENTS IN COMPANIES ACCOUNTED FOR AT EQUITY METHOD | 28,311 | 26,021 |
RIGHT-OF-USE ASSETS | 114,414 | 104,130 |
PROPERTY, PLANTS AND EQUIPMENT, NET | 59,176 | 43,059 |
INTANGIBLE ASSETS, NET | 222,263 | 165,280 |
GOODWILL | 872,424 | 724,193 |
Total assets | 2,520,080 | 2,089,257 |
CURRENT LIABILITIES: | ||
Credit from banks and others | 120,444 | 125,297 |
Debentures | 41,454 | 31,362 |
Current maturities of operating lease liabilities | 32,065 | 35,673 |
Trade payables | 153,322 | 125,163 |
Deferred revenues | 128,898 | 93,512 |
Employees and payroll accrual | 190,247 | 142,033 |
Other accounts payable | 68,976 | 63,172 |
Dividend payable | 7,081 | |
Liabilities in respect of business combinations | 8,654 | 8,431 |
Put options of non-controlling interests | 35,843 | 39,668 |
Total current liabilities | 779,903 | 671,392 |
LONG-TERM LIABILITIES: | ||
Loans from banks and others | 180,316 | 162,062 |
Debentures | 203,070 | 175,411 |
Long-term operating lease liabilities | 91,188 | 73,686 |
Other long-term liabilities | 12,191 | 8,311 |
Deferred taxes | 68,367 | 53,854 |
Deferred revenues | 16,626 | 6,491 |
Liability in respect of business combinations | 16,582 | 14,895 |
Put options of non-controlling interests | 28,175 | 15,182 |
Employee benefit liabilities | 15,119 | 11,639 |
Total long-term liabilities | 631,634 | 521,531 |
COMMITMENTS AND CONTINGENCIES | ||
Share capital: | ||
Authorized: 25,000,000 shares at December 31, 2019 and 2020; Issued: 15,862,887 at December 31, 2019 and 2020; Outstanding: 15,294,267 at December 31, 2019 and 2020 | 4,340 | 4,340 |
Additional paid-in capital | 149,249 | 120,737 |
Retained earnings | 324,358 | 285,146 |
Accumulated other comprehensive income | 25,513 | 11,676 |
Treasury shares (568,620 shares as of December 31, 2019 and 2020) | (259) | (259) |
Total equity attributable to Formula Systems shareholders | 503,201 | 421,640 |
Non-controlling interests | 605,342 | 474,694 |
Total equity | 1,108,543 | 896,334 |
Total liabilities and equity | $ 2,520,080 | $ 2,089,257 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parentheticals) $ in Thousands | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares |
Statement of financial position [abstract] | ||
Allowances for doubtful accounts (in Dollars) | $ | $ 9,717 | $ 6,910 |
Ordinary shares, authorized | 25,000,000 | 25,000,000 |
Ordinary shares, issued | 15,862,887 | 15,862,887 |
Ordinary shares, outstanding | 15,294,267 | 15,294,267 |
Treasury shares | 568,620 | 568,620 |
Consolidated Statements of Prof
Consolidated Statements of Profit or Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Proprietary software products and related services | $ 513,957 | $ 446,461 | $ 401,870 |
Software services | 1,419,961 | 1,254,654 | 1,091,118 |
Total revenues | 1,933,918 | 1,701,115 | 1,492,988 |
Cost of revenues: | |||
Proprietary software products and related services | 284,325 | 248,957 | 230,724 |
Other software products and related services | 1,202,160 | 1,066,109 | 928,952 |
Total cost of revenues | 1,486,485 | 1,315,066 | 1,159,676 |
Gross profit | 447,433 | 386,049 | 333,312 |
Research and development expenses, net | 52,604 | 46,690 | 41,223 |
Selling, marketing, general and administrative expenses | 224,188 | 200,870 | 182,472 |
Operating income | 170,641 | 138,489 | 109,617 |
Financial expenses | 29,444 | 22,443 | 15,852 |
Financial income | 2,559 | 3,791 | 7,562 |
Pre-tax income before share of profits of companies accounted for at equity, net | 143,756 | 119,837 | 101,327 |
Taxes on income | 31,269 | 27,201 | 24,301 |
Share of profits of companies accounted for at equity, net | 1,535 | 1,787 | 369 |
Net income | 114,022 | 94,423 | 77,395 |
Attributable to: | |||
Equity holders of the Company | 46,776 | 38,820 | 32,365 |
Non-controlling interests | 67,246 | 55,603 | 45,030 |
Net income | $ 114,022 | $ 94,423 | $ 77,395 |
Net earnings per share attributable to equity holders of The Company | |||
Basic earnings per share (in Dollars per share) | $ 3.05 | $ 2.56 | $ 2.20 |
Diluted earnings per share (in Dollars per share) | $ 3.01 | $ 2.44 | $ 2.14 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $ 114,022 | $ 94,423 | $ 77,395 |
Amounts that will not be reclassified subsequently to profit or loss: | |||
Actuarial gain (loss) from defined benefit plans | 840 | (26) | 387 |
Share in other comprehensive income (loss) of joint venture | (169) | 62 | 58 |
Amounts that will be or that have been reclassified to profit or loss when specific conditions are met: | |||
Unrealized gain (loss) on debt instruments at fair value through other comprehensive income, net | (2) | 95 | (37) |
Amounts transferred to the statement of profit or loss for sale of debt instruments at fair value through other comprehensive income, net | |||
Foreign exchange differences on translation of foreign operations | 34,106 | 22,293 | (30,395) |
Total other comprehensive income (loss), net of tax | 34,775 | 22,424 | (29,987) |
Total Comprehensive income | 148,797 | 116,847 | 47,408 |
Total comprehensive income attributable to: | |||
Equity holders of the Company | 61,009 | 47,350 | 17,610 |
Non-controlling interests | $ 87,788 | $ 69,497 | $ 29,798 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Share Capital | Additional paid-in capital | Retained earnings | Accumulated other comprehensive Loss | Treasury shares (cost) | Non-controlling interests | Total |
Balance at Dec. 31, 2017 | $ 4,187 | $ 98,040 | $ 239,156 | $ 18,078 | $ (259) | $ 413,720 | $ 772,922 |
Balance (in Shares) at Dec. 31, 2017 | 14,738,782 | ||||||
Impact of the adoption of IFRS 15 | 874 | 941 | 1,815 | ||||
Balance as of January 1, 2018 (Including the impact of the adoption of IFRS 15) | $ 4,187 | 98,040 | 240,030 | 18,078 | (259) | 414,661 | 774,737 |
Balance as of January 1, 2018 (Including the impact of the adoption of IFRS 15) (in Shares) | 14,738,782 | ||||||
Net income | 32,365 | 45,030 | 77,395 | ||||
Foreign currency translation reserve | (14,983) | (15,412) | (30,395) | ||||
Actuarial gain from defined benefit plans | 189 | 198 | 387 | ||||
Unrealized loss on debt instruments at fair value through other comprehensive income, net | (19) | (18) | (37) | ||||
Share in other comprehensive income of joint venture | 58 | 58 | |||||
Total other comprehensive income (loss) | 189 | (14,944) | (15,232) | (29,987) | |||
Total comprehensive income (loss) | 32,554 | (14,944) | 29,798 | 47,408 | |||
Issuance of restricted shares to employees | $ 3 | (3) | |||||
Issuance of restricted shares to employees (in Shares) | 10,000 | ||||||
Issuance of shares upon conversion of convertible debentures | 64 | 64 | |||||
Issuance of shares upon conversion of convertible debentures (in Shares) | 1,556 | ||||||
Cost of share-based payment (Note 17) | 234 | 3,747 | 3,981 | ||||
Dividend to Formula’s shareholders | (10,027) | (10,027) | |||||
Dividend to non-controlling interests in subsidiaries | (31,316) | (31,316) | |||||
Dilution in Formula’s share in Magic Software due to issuance of Magic Software’s ordinary shares | 2,682 | 22,722 | 25,404 | ||||
Transactions with non-controlling interests due to holding changes, including exercise of employees’ stock options | (526) | 1,731 | 1,205 | ||||
Acquisition of non-controlling interests | (590) | (1,325) | (1,915) | ||||
Non-controlling interests due to expiration of put options | 498 | 855 | 1,353 | ||||
Settlement of put options over non-controlling interests | (2,391) | (3,933) | (6,324) | ||||
Non-controlling interests arising from initially consolidated company | 827 | 827 | |||||
Balance at Dec. 31, 2018 | $ 4,190 | 98,008 | 262,557 | 3,134 | (259) | 437,767 | 805,397 |
Balance (in Shares) at Dec. 31, 2018 | 14,750,338 | ||||||
Impact of the adoption of IFRS 16 | (1,187) | (1,225) | (2,412) | ||||
Balance as of January 1, 2019 (Including the impact of the adoption of IFRS 16) | $ 4,190 | 98,008 | 261,370 | 3,134 | (259) | 436,542 | 802,985 |
Balance as of January 1, 2019 (Including the impact of the adoption of IFRS 16) (in Shares) | 14,750,338 | ||||||
Net income | 38,820 | 55,603 | 94,423 | ||||
Foreign currency translation reserve | 8,437 | 13,856 | 22,293 | ||||
Actuarial gain from defined benefit plans | (12) | (14) | (26) | ||||
Unrealized loss on debt instruments at fair value through other comprehensive income, net | 43 | 52 | 95 | ||||
Share in other comprehensive income of joint venture | 62 | 62 | |||||
Total other comprehensive income (loss) | (12) | 8,542 | 13,894 | 22,424 | |||
Total comprehensive income (loss) | 38,808 | 8,542 | 69,497 | 116,847 | |||
Issuance of shares upon conversion of convertible debentures | $ 150 | 22,321 | 22,471 | ||||
Issuance of shares upon conversion of convertible debentures (in Shares) | 543,929 | ||||||
Cost of share-based payment (Note 17) | 257 | 3,617 | 3,874 | ||||
Dividend to Formula’s shareholders | (15,032) | (15,032) | |||||
Dividend to non-controlling interests in subsidiaries | (38,233) | (38,233) | |||||
Transactions with non-controlling interests due to holding changes, including exercise of employees’ stock options | (100) | 1,053 | 953 | ||||
Acquisition of non-controlling interests | (9) | (3,838) | (3,847) | ||||
Settlement of put options over non-controlling interests | 260 | 5,597 | 5,857 | ||||
Non-controlling interests arising from initially consolidated company | 459 | 459 | |||||
Balance at Dec. 31, 2019 | $ 4,340 | 120,737 | 285,146 | 11,676 | (259) | 474,694 | $ 896,334 |
Balance (in Shares) at Dec. 31, 2019 | 15,294,267 | 15,294,267 | |||||
Net income | 46,776 | 67,246 | $ 114,022 | ||||
Foreign currency translation reserve | 14,007 | 20,099 | 34,106 | ||||
Actuarial gain from defined benefit plans | 396 | 444 | 840 | ||||
Unrealized loss on debt instruments at fair value through other comprehensive income, net | (1) | (1) | (2) | ||||
Share in other comprehensive income of joint venture | (169) | (169) | |||||
Total other comprehensive income (loss) | 396 | 13,837 | 20,542 | 34,775 | |||
Total comprehensive income (loss) | 47,172 | 13,837 | 87,788 | 148,797 | |||
Cost of share-based payment (Note 17) | 1,310 | 6,546 | 7,856 | ||||
Dividend to Formula’s shareholders | (7,960) | (7,960) | |||||
Dividend to non-controlling interests in subsidiaries | (39,056) | (39,056) | |||||
Transactions with non-controlling interests due to holding changes, including exercise of employees’ stock options | 847 | 4,459 | 5,306 | ||||
Acquisition of non-controlling interests | (6,538) | (13,114) | (19,652) | ||||
Dilution in Formula’s share in Sapiens due to issuance of Sapiens’ ordinary shares | 34,462 | 74,275 | 108,737 | ||||
Settlement of put options over non-controlling interests | (1,569) | (4,137) | (5,706) | ||||
Non-controlling interests arising from initially consolidated company | 13,887 | 13,887 | |||||
Balance at Dec. 31, 2020 | $ 4,340 | $ 149,249 | $ 324,358 | $ 25,513 | $ (259) | $ 605,342 | $ 1,108,543 |
Balance (in Shares) at Dec. 31, 2020 | 15,294,267 | 15,294,267 |
Consolidated Statements of Othe
Consolidated Statements of Other Comprehensive Income - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of cash flows [abstract] | |||
Reserve from debt instruments at fair value through other comprehensive income | $ 400 | $ 401 | $ 358 |
Foreign currency translation reserve | 27,273 | 13,266 | 4,829 |
Reserve from derivatives | 4 | 4 | 4 |
Share in other comprehensive loss of companies accounted for at equity, net | (2,164) | (1,995) | (2,057) |
Accumulated other comprehensive income (loss) | $ 25,513 | $ 11,676 | $ 3,134 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 114,022 | $ 94,423 | $ 77,395 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share of profits of companies accounted for at equity, net | (1,535) | (1,787) | (369) |
Depreciation and amortization | 95,507 | 86,932 | 48,734 |
Changes in value of debentures, net | (42) | (2,067) | (3,025) |
Increase (decrease) in employee benefit liabilities | 1,194 | 114 | 565 |
Loss (gain) from sale of property, plants and equipment | 118 | (23) | 1 |
Stock-based compensation expenses | 7,779 | 3,874 | 3,981 |
Changes in value of short-term and long-term loans from banks and others and deposits, net | 5,482 | 5,621 | (2,296) |
Changes in deferred taxes, net | (6,348) | (13,157) | (5,743) |
Change in liability in respect of business combinations | (643) | 523 | 666 |
Impairment of right-of-use asset | 351 | ||
Loss (gain) from sale and increase in value of marketable securities classified as trading | 35 | (53) | |
Amortization of premium and accrued interest on debt instruments at fair value through other comprehensive income | (70) | 82 | 189 |
Change in value of dividend preference derivative in TSG | (48) | (93) | (333) |
Working capital adjustments: | |||
Decrease (increase) in inventories | (10,966) | (938) | (1,024) |
Decrease (increase) in trade receivables | 23,312 | 16,265 | (66,069) |
Decrease (increase) in other current and long-term accounts receivable | 8,735 | 12,692 | (5,768) |
Increase (decrease) in trade payables | 10,954 | (18,010) | 19,955 |
Increase in other accounts payable and employees and payroll accrual | 34,859 | 5,937 | 12,781 |
Increase in deferred revenues | 4,282 | 5,658 | 3,008 |
Net cash provided by operating activities | 286,943 | 196,081 | 82,595 |
Cash flows from investing activities: | |||
Payments for business acquisitions, net of cash acquired (Appendix C) | (141,364) | (52,457) | (49,069) |
Cash paid in conjunction with deferred payments and contingent liabilities related to business combinations | (9,111) | (8,321) | (8,288) |
Payments to former shareholders of consolidated company | (6,656) | (996) | |
Purchase of intangible assets | (2,852) | (4,399) | (180) |
Purchase of other investment | (178) | ||
Purchase of property and equipment | (16,651) | (22,379) | (11,625) |
Proceeds from maturity and sale net of investment in debt instruments at fair value through other comprehensive income or loss, net | 5,429 | 3,356 | 4,000 |
Proceeds from sale of property and equipment | 693 | 1,660 | 440 |
Investment in and loans to affiliates and other | (283) | 37 | 26 |
Investment in restricted deposit on account of future acquisition | 22,890 | (22,890) | |
Dividend from joint venture | 3,000 | ||
Change in restricted cash in other accounts receivable | 362 | ||
Change in short-term and long-term deposits, net | (22,822) | 8,160 | (17,292) |
Capitalization of software development and other costs | (9,305) | (9,808) | (8,826) |
Net cash used in investing activities | (177,032) | (108,215) | (90,452) |
Cash flows from financing activities: | |||
Exercise of employees’ stock options in subsidiaries | 5,306 | 953 | 1,206 |
Proceeds from issuance of ordinary shares in subsidiaries | 108,737 | 25,404 | |
Dividend paid to non-controlling interests | (40,519) | (37,656) | (34,103) |
Dividend to Formula’s shareholders | (14,939) | (12,966) | (5,012) |
Short-term bank credit, net | (29,630) | 49,142 | (20,741) |
Repayment of long-term loans from banks and others | (79,348) | (75,548) | (42,884) |
Receipt of long-term loans from banks and others | 91,024 | 73,819 | 83,478 |
Proceeds from issuance of debentures, net | 60,346 | 81,676 | 45,356 |
Repayment of long-term liabilities to office of the chief scientist | (457) | (617) | (220) |
Repayment of debentures | (29,844) | (30,811) | (9,383) |
Purchase of non-controlling interests | (6,330) | (947) | (1,992) |
Repayment of lease liabilities | (33,583) | (34,500) | |
Cash paid due to exercise of put option by non-controlling interests | (21,030) | (6,532) | (142) |
Net cash provided by financing activities | 9,733 | 6,013 | 40,967 |
Effect of exchange rate changes on cash and cash equivalents | 13,340 | 6,295 | (10,565) |
Increase (decrease) in cash and cash equivalents | 132,984 | 100,174 | 22,545 |
Cash and cash equivalents at beginning of year | 368,666 | 268,492 | 245,947 |
Cash and cash equivalents at end of year | 501,650 | 368,666 | 268,492 |
Cash paid (received) in respect of: | |||
Interest paid | 16,571 | 15,733 | 9,061 |
Interest received | 511 | 1,380 | 680 |
Taxes paid (received), net | 44,659 | 39,063 | 23,295 |
B. Non-cash activities: | |||
Dividend payable to Formula’s shareholders | 7,081 | 5,015 | |
Purchase of property and equipment | 315 | 76 | |
Deferred and contingent payments related to business combinations | 5,114 | 19,871 | 200 |
Dividend payable to non-controlling interests | 216 | 1,668 | |
Right-of-use asset recognized with corresponding lease liability | 20,495 | 25,074 | |
Disposal of property | 155 | ||
Issuance of Formula’s ordinary shares as a result of conversion of debentures | 22,471 | 64 | |
Assets and liabilities of subsidiaries consolidated as of acquisition date: | |||
Working capital (other than cash and cash equivalents) | (604) | 1,656 | 2,889 |
Property and equipment | (13,152) | (2,929) | (547) |
Goodwill and intangible assets | (197,258) | (98,194) | (63,819) |
Right-of-use assets | (2,324) | (1,001) | |
Other long-term assets | (8,773) | (50) | (103) |
Liabilities to banks and others | 10,598 | 5,551 | 38 |
Long-term liabilities | 13,739 | 2,180 | 421 |
Lease liabilities | 2,324 | 1,109 | |
Deferred tax liability, net | 18,626 | 7,407 | 5,590 |
Liability to formerly shareholders | 7,596 | 1,060 | 2,053 |
Deferred payments and contingent consideration | 4,536 | 19,965 | 3,582 |
Non-controlling interests at acquisition date | 23,328 | 5,906 | 827 |
Total | $ (141,364) | $ (57,340) | $ (49,069) |
General
General | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of general information about financial statements [text block] [Abstract] | |
GENERAL | NOTE 1:- GENERAL a. General: Formula Systems (1985) Ltd. (“Formula” or the “Company”) was incorporated in Israel and began its business operations in 1985. Since 1991, Formula’s ordinary shares, par value NIS 1.0 per share, have been traded on the Tel-Aviv Stock Exchange (“TASE”), and, in 1997, began trading through American Depositary Shares (“ADSs”) under the symbol “FORTY” on the NASDAQ Global Market in the United States until January 3, 2011, at which date the listing of Formula’s ADSs was transferred to the NASDAQ Global Select Market (“NASDAQ”). Each ADS represents one ordinary share of Formula. The Company is considered an Israeli resident. The controlling shareholder of the Company is Asseco Poland S.A. (“Asseco”), a Polish public company, traded on the Warsaw Stock Exchange. b. Formula is a global information technology holding company engaged, through its investees (collectively, the “Group”) in providing software services, proprietary and non-proprietary software solutions, software product marketing and support, computer infrastructure and integration solutions and training and integration. The Group operates through five directly held subsidiaries; Matrix IT Ltd. (“Matrix”), Sapiens International Corporation N.V (“Sapiens”), Magic Software Enterprises Ltd. (“Magic Software”), Insync Staffing Solutions, Inc. (“Insync”), Michpal Micro Computers (1983) Ltd. (“Michpal”) and Ofek Aerial Photography Ltd. (“Ofek”) and one jointly controlled entity: TSG IT Advanced Systems Ltd. (“TSG”). c. In March 2020, the World Health Organization categorized the novel coronavirus (“COVID-19”) as a pandemic. The COVID-19 pandemic has rapidly changed market and economic conditions globally, impacting the Company’s customers, employees, as well the Group’ s business results of operations, although the COVID-19 has not had a material negative impact on the Group’s business to date. The Company and its subsidiaries remain focused on protecting the health and wellbeing of their employees and the communities in which they operate, while assuring the continuity of their business operations. d. The following table presents the ownership of Formula’s directly held investees as of the dates indicated (the list consists only of active companies): Percentage of ownership December 31, Name of Investee 2020 2019 Matrix 49.28 48.88 Sapiens (1) 43.96 47.91 Magic Software 45.53 45.34 Insync 90.09 90.09 Michpal 100 100 TSG (2) 50.00 50.00 Ofek 86.02 - 1. On October 20, 2020, Sapiens completed a secondary public offering of its ordinary shares on the NASDAQ. Sapiens issued 3,898,304 shares at a price of $29.50 per share before issuance expenses and underwriting discounts. The total proceeds from the issuance amounted to $108,737, net of issuance expenses of $509. Following Sapiens secondary public offering, Formula’s interest in the share capital of Sapiens was diluted by 3.38%. 2. TSG’s results of operations are reflected in the Company’s results of operations using the equity method of accounting. e. Definitions: In these financial statements: The Company - Formula Systems (1985) Ltd. The Group - Formula Systems (1985) Ltd. and its investees. Subsidiaries - Companies that are controlled by the Company (as defined in IFRS 10) and whose accounts are consolidated with those of the Company. Jointly controlled entities - Companies owned by various entities that have a contractual arrangement for joint control and are accounted for using the equity method of accounting. Associates - Companies over which the Company has significant influence and that are not subsidiaries. The Company’s investment therein is included in the financial statements using the equity method of accounting. Investees - Subsidiaries, jointly controlled entities and associates. Interested parties and controlling shareholder - As defined in the Israeli Securities Regulations (Annual Financial Statements), 2010. Related parties - As defined in IAS 24. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of significant accounting policies [text block] [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES The following accounting policies have been applied consistently in the financial statements for all periods presented, unless otherwise stated. 1) Basis of presentation of the financial statements These financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The financial statements for the year ended December 31, 2016 were the Group’s first consolidated financial statements prepared in accordance with IFRS. The date of transition to IFRS was January 1, 2015. For all periods up to and including the year ended December 31, 2015, the Group prepared its financial statements in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Accordingly, the Group’s first consolidated financial statements that comply with IFRS are applicable as of December 31, 2016, together with the comparative period data for the year ended December 31, 2015. The Company’s financial statements have been prepared on a cost basis, except for certain assets and liabilities such as: financial assets measured at fair value through other comprehensive income; contingent liabilities related to business combination and other financial assets and liabilities (including derivatives) which are presented at fair value through profit or loss. The Company has elected to present the profit or loss items using the function of expense method. 2) Use of estimates, judgments and assumptions: The preparation of the consolidated financial statements requires management to make estimates, judgments and assumptions that have an effect on the reported amounts of assets, liabilities, revenues and expenses in the financial statements. Such management estimates and assumptions are related, but not limited to de-facto control, contingent liabilities related to acquisitions, goodwill and identifiable intangible assets and their subsequent impairment analysis, determination of fair value of put options of non-controlling interests, legal contingencies, research and development capitalization, classification of leases, income tax uncertainties, deferred taxes, share-based compensation, as well as the determination of revenue recognition from contracts accounted for based on the estimate of percentage of completion. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Changes in accounting estimates are reported in the period of the change in estimate. 3) 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. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as a change in equity by adjusting the carrying amount of the non-controlling interests with a corresponding adjustment of the equity attributable to equity holders of the Company less / plus the consideration paid or received. Effective control In a situation where the Company holds less than a majority of voting power in a given entity, but that power is sufficient to enable the Company to unilaterally direct the relevant activities of such entity, then the control is exercised. When assessing whether voting rights held by the Company are sufficient to give it power, the Company considers all facts and circumstances, including: the amount of those voting rights relative to the amount and dispersion of other vote holders; potential voting rights held by the Company and other shareholders or parties; rights arising from other contractual arrangements; significant personal ties; and any additional facts and circumstances that may indicate that the Company has, or does not have the ability to direct the relevant activities when decisions need to be made, inclusive of voting patterns observed at previous meetings of shareholders. The Company’s management has concluded that despite the lack of absolute majority of voting power at the general meetings of shareholders of Matrix, Sapiens and Magic Software, in accordance with IFRS 10, these investees are controlled by the Company. The conclusion regarding the existence of control during the years ended December 31, 2020, 2019 and 2018 with respect to Matrix, Sapiens and Magic Software, in accordance with IFRS 10, was made in accordance with the following factors: Matrix i) Governing bodies of Matrix: Decisions of Matrix’s shareholders general meeting are taken by a simple majority of votes represented at the general meeting. The annual (ordinary) general meeting adopts resolutions to elect individual directors, appoint Matrix’s independent auditors for the next year, as well as approve the company’s financial statements and management’s report on operations. In accordance with Matrix’s articles of association, the board of directors of Matrix is responsible for managing its current business operations and is authorized to take substantially all decisions which are not specifically reserved to Matrix’s shareholders by its articles of association, including the decision to pay out dividends. Matrix’s board of directors is composed of 5 members, 3 of whom are independent directors, and one being Formula’s chief executive officer who serves as the chairman of Matrix board of directors. For the last 5 years (i.e., 2016-2020), the Company has consistently reappointed mostly the same members of the board of directors. The only few exceptions were (i) the appointment of Mrs. Yafit Keret, who has replaced Mrs. Michal Leshem in 2018 after nine years of service as an external director in accordance with the Companies Law, 5759-1999 (ii) the retirement of Mr. Pinchas Grinfeld in 2017 and (iii) The appointment of Mr. Yitiel Efrat to serve as a third external director in accordance with the Companies Law, 5759-1999. Mr. Efrat was appointed on December 13, 2017 for a three-year term. ii) Shareholders’ structure of Matrix: Matrix’s shareholders structure is dispersed because, apart from the Company, as of December 31, 2020 there was just one financial institution holding more than 5% of Matrix’s voting power (9% of the votes). There is no evidence that any of the shareholders have or had granted to any other shareholder a voting proxy at the general meeting. Over the last five years (i.e., 2016-2020), Matrix’s general meetings were attended by shareholders representing not more than between 77% and 82% of total voting rights, including the Company’s share power. Bearing in mind that the Company presently holds approximately 49.28% of total voting power, this means that the level of activity of Matrix’s other shareholders is relatively moderate or low. As of December 31, 2020, the attendance by shareholders would have to be higher than 98.6% in order to deprive the Company of an absolute majority of votes at the general meeting. In accordance with voting patterns at Matrix’s shareholders’ meetings in recent years, it is the Company’s management’s belief that achieving such a high attendance seems unlikely. Sapiens i) Governing bodies of Sapiens: Decisions of Sapiens’ shareholders general meeting are taken by a simple majority of votes represented at the general meeting. The annual (ordinary) general meeting adopts resolutions to appoint individual directors, choose Sapiens’ independent auditors for the next year, as well as approve the company’s financial statements and the management’s report on operations. In accordance with Sapiens’ articles of association, the board of directors of Sapiens is responsible for managing its current business operations and is authorized to take substantially all decisions which are not specifically reserved to Sapiens’ shareholders by its articles of association, including the decision to pay out dividends. Sapiens’ board of directors is composed of 6 members, 4 of whom are independent directors, and one being Formula’s chief executive officer who serves as the chairman of Sapiens board of directors. For the last 10 years, the Company has consistently reappointed the same members of the board of directors. Likewise, the previous composition of the board of directors was re-elected during the general meeting that was held in November 2020. ii) Shareholders’ structure of Sapiens: Sapiens’ shareholders structure is dispersed because, apart from the Company, only one financial institution held more than 5% of the voting rights at the general meeting (representing 5.6%). There is no evidence that any shareholders have or had granted to any other shareholder a voting proxy at the general meeting. Over the last five years from 2016 to 2020, Sapiens’ general meetings were attended by shareholders representing in total between 70% and 80% of the total voting power, including the Company’s share power. Bearing in mind that the Company presently holds approximately 43.96% of total voting right, this means that the level of activity of Sapiens’ other shareholders is relatively moderate or low. As of December 31, 2020, the attendance from shareholders would have to be higher than 87.9% in order to deprive the Company of an absolute majority of votes at the general meeting. In accordance with voting patterns at Sapiens’ shareholders’ meetings in recent years, it is the Company’s management’s belief that achieving such a high attendance seems unlikely. Magic Software i) Governing bodies of Magic Software: Decisions of Magic Software’s shareholders’ general meeting are taken by a simple majority of votes represented at the general meeting. The annual (ordinary) general meeting adopts resolutions to elect individual directors, appoint Magic Software’s independent auditors for the next year, as well as to approve Magic Software’s financial statements and the management’s report on operations. In accordance with the Magic Software’s articles of association, the board of directors of Magic Software is responsible for managing Magic Software’s current business operations and is authorized to take substantially all decisions which are not specifically reserved to Magic Software shareholders by its articles of association, including the decision to pay out dividends. Magic Software’s board of directors is composed of 5 members, 3 of whom are independent directors, and one being Formula chief executive officer who also serves as Magic Software chief executive officer. In recent years, the Company has consistently reappointed mostly the same members of the board of directors. The only exception was the appointment of Mr. Avi Zakay in February 2018, who has replaced Mr. Yechezkel Zeira after nine years of service. ii) Shareholders’ structure of Magic Software: Magic Software’s shareholders’ structure is dispersed because, apart from the Company, as of December 31, 2020, there were just three financial institutions holding more than 5% of Magic Software’s voting power (representing 9.9%, 7.7% and 5.4% of the votes). There is no evidence that any of the shareholders have or had granted to any other shareholder a voting proxy at the general meeting. Over the last five years from 2016 to 2020, Magic Software’s general meetings were attended by shareholders representing between 65%-87% of total voting rights. Bearing in mind that the Company presently holds approximately 45.53% of total voting right, this means that the level of activity of Magic Software’s other shareholders is relatively moderate or low. As of December 31, 2020, the attendance by shareholders would have to be higher than 91.1% in order to deprive the Company of an absolute majority of votes at the general meeting. In accordance with voting patterns at Magic Software’s shareholders’ meetings in recent years, it is the Company’s management belief that achieving such a high attendance seems unlikely. The financial statements of the Company and of the investees, after being adjusted to comply with IFRS, are prepared for the same reporting period and using consistent accounting treatment of similar transactions and economic activities. Any discrepancies in the applied accounting policies are eliminated by making appropriate adjustments. Significant intragroup balances and transactions and gains or losses resulting from intragroup transactions are eliminated in full in the consolidated financial statements. Non-controlling interests in subsidiaries, represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position. Changes in the share interest in a subsidiary that do not result in a loss of control are recognized as a change in equity, by adjusting the balance of the non-controlling interests against the equity attributable to the equity holders of the Company, and net of the consideration paid or received. 4) Business combinations and goodwill: Business combinations are accounted for by applying the acquisition method. The cost of the acquisition is measured at the fair value of the consideration transferred on the acquisition date with the addition of non-controlling interests in the acquiree. In each business combination, the Company determines whether to measure the non-controlling interests in the acquiree based on their fair value on the acquisition date or at their proportionate share in the fair value of the acquiree’s net identifiable assets. Direct acquisition costs are carried to the statement of profit or loss as incurred. In a business combination achieved in stages, equity interests in the acquiree that had been held by the acquirer prior to obtaining control are measured at the acquisition date fair value while recognizing a gain or loss resulting from the revaluation of the prior investment on the date of achieving control. Contingent consideration is recognized at fair value on the acquisition date and classified as a financial asset or liability in accordance with IFRS 9, “Financial Instruments”. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. If the contingent consideration is classified as an equity instrument, it is measured at fair value on the acquisition date without subsequent remeasurement. Goodwill is initially measured at cost which represents the excess of the acquisition consideration and the amount of non-controlling interests over the net identifiable assets acquired and liabilities assumed. If the resulting amount is negative, the acquirer recognizes the resulting gain on the acquisition date. 5) Investment in joint arrangements: Joint arrangements are arrangements in which the Company has joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. i. Joint ventures: In joint ventures the parties that have joint control of the arrangement have rights to the net assets of the arrangement. A joint venture is accounted for by using the equity method. ii. Joint operations: In joint operations the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities relating to the arrangement. The Company recognizes in relation to its interest its share of the assets, liabilities, revenues and expenses of the joint operation. The acquisition of interests in a joint operation which represents a business, as defined in IFRS 3, is accounted for using the acquisition method, including the measurement of the identifiable assets and liabilities at fair value, the recognition of deferred taxes arising from this measurement, the accounting treatment of the related transaction costs and the recognition of goodwill or bargain purchase gains. This applies to the acquisition of the initial interest and additional interests in a joint operation that represents a business. 6) Investments in associates: Associates are companies in which the Group has significant influence over the financial and operating policies without having control. The investment in an associate is accounted for using the equity method. 7) Investments accounted for using the equity method: The Group’s investments in associates and joint ventures are accounted for using the equity method. Under the equity method, the investment in the associate or in the joint venture is presented at cost with the addition of post-acquisition changes in the Group’s share of net assets, including other comprehensive income of the associate or the joint venture. Gains and losses resulting from transactions between the Group and the associate or the joint venture are eliminated to the extent of the interest in the associate or in the joint venture. Goodwill relating to the acquisition of an associate or a joint venture is presented as part of the investment in the associate or the joint venture, measured at cost and not systematically amortized. Goodwill is evaluated for impairment as part of the investment in the associate or in the joint venture as a whole. The financial statements of the Company and of the associate or joint venture are prepared as of the same dates and periods. The accounting policies applied in the financial statements of the associate or the joint venture are uniform and consistent with the policies applied in the financial statements of the Group. Upon the acquisition of an associate or a joint venture achieved in stages when the former investment in the acquiree was accounted for pursuant to the provisions of IFRS 9, the Group adopts the principles of IFRS 3 regarding business combinations achieved in stages. Consequently, equity interests in the acquiree that had been held by the Group prior to achieving significant influence or joint control are measured at fair value on the acquisition date and are included in the acquisition consideration while recognizing a gain or loss resulting from the fair value measurement. The equity method is applied until the loss of significant influence in the associate or loss of joint control in the joint venture or classification as investment held for sale. On the date of loss of significant influence or joint control, the Group measures any remaining investment in the associate or the joint venture at fair value and recognizes in profit or loss the difference between the fair value of any remaining investment plus any proceeds from the sale of the investment in the associate or the joint venture and the carrying amount of the investment on that date. 8) Functional currency, presentation currency and foreign currency: i. Functional currency and presentation currency: The presentation currency of these financial statements is the U.S dollars (the “dollar”), since the Company believes that financial statements in U.S dollars provide more relevant information to its investors and users of the financial statements. The functional currency applied by Formula, on a stand-alone basis, until December 31, 2018, was the dollar. Following an examination and reevaluation of the primary economic environment in which it currently operates and expects to continue operating and taking into consideration the recent trends and its forward-looking business strategy, in accordance with the International Accounting Standard 21 (IAS 21), Formula concluded that its functional currency on a stand-alone basis commencing January 1, 2019 is the NIS. The functional currencies applied by Formula’s investees which are consolidated in these financial statements are the currencies of the primary economic environment in which each one of them operates. Assets, including fair value adjustments upon acquisition, and liabilities of an investee which is a foreign operation, are translated at the closing rate at each reporting date. Profit or loss items are translated at average exchange rates for all periods presented. The resulting translation differences are recognized in other comprehensive income (loss). Intragroup loans for which settlement is neither planned nor likely to occur in the foreseeable future are, in substance, a part of the investment in the foreign operation and, accordingly, the exchange rate differences from these loans (net of the tax effect) are recorded in other comprehensive income (loss). Upon the full or partial disposal of a foreign operation resulting in loss of control in the foreign operation, the cumulative gain (loss) from the foreign operation which had been recognized in other comprehensive income is transferred to profit or loss. Upon the partial disposal of a foreign operation which results in the retention of control in the subsidiary, the relative portion of the amount recognized in other comprehensive income is reattributed to non-controlling interests. ii. Transactions, assets and liabilities in foreign currency: Transactions denominated in foreign currency are recorded upon 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 each reporting date into the functional currency at the exchange rate at that date. Exchange rate differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currency and measured at cost 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. 9) Cash equivalents: Cash equivalents are considered highly liquid investments, including unrestricted short-term bank deposits with an original maturity of three months or less from the date of investment or with a maturity of more than three months, but which are redeemable on demand without penalty and which form part of the Group’s cash management. Cash and cash equivalent includes amounts held primarily in New-Israeli Shekel, dollars, Euro, Japanese Yen, Indian Rupee and British Pound. 10) Short-term and restricted deposits: Short-term bank deposits are deposits with an original maturity of more than three months from the date of investment and which do not meet the definition of cash equivalents. The deposits are presented according to their terms of deposit. Restricted deposits include deposits used to secure certain subsidiaries’ ongoing projects, as well as security deposits with respect to leases, and are classified under other short-term and long-term receivables. 11) Inventories: Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises costs of purchase and costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. Inventories are mainly comprised of purchased merchandise and products which consist of educational software kits, computers, peripheral equipment and spare parts. Cost is determined on the “first in - first out” basis. The Group periodically evaluates the condition and aging of its inventories and makes provisions for slow-moving inventories accordingly. No such impairments have been recognized in any period presented. 12) Revenue recognition: IFRS 15 “Revenue from Contracts with Customers” establishes a five-step model to account for revenue arising from contracts with customers and requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers: Step 1 Step 2 Step 3 Step 4 Step 5 Under IFRS 15, revenue from contracts with customers is recognized when the control over the goods or services is transferred to the customer. The transaction price is the amount of the consideration that is expected to be received based on the contract terms, excluding amounts collected on behalf of third parties (such as taxes). In determining the amount of revenue from contracts with customers, the Group evaluates whether it is a principal or an agent in the arrangement. The Group is a principal when the Group controls the promised goods or services before transferring them to the customer. In these circumstances, the Group recognizes revenue for the gross amount of the consideration. When the Group is an agent, it recognizes revenue for the net amount of the consideration, after deducting the amount due to the principal. The Group enters into contracts that can include various combinations of products and software, IT services and hardware, as detailed below, which are generally capable as being distinct from each other and accounted for as separate performance obligations. For contracts with customers that contain multiple performance obligations, the Group accounts for each individual performance obligation separately, if they are distinct from each other. The transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. Stand-alone selling prices of software sales are typically estimated using the residual approach due to the lack of selling software licenses on a stand-alone basis. Stand-alone selling prices of software services are typically determined by considering several external and internal factors including but not limited to, observable transactions when these services are sold on a stand-alone basis. The following is a description of principal activities from which the Group generates its revenues: i. Sale of proprietary licenses without significant related services In the event in which the sale of a proprietary license (perpetual or term-based) is distinct from other significant modification or implementation services, and thereby it constitutes a separate performance obligation, the Group considers whether this performance obligation in granting the license is to provide the customer with either: ● a right to access the entity’s intellectual property in the form in which it exists throughout the licensing period; or ● a right to use the entity’s intellectual property in the form in which it exists at the time of granting the license The vast majority of licenses sold separately by the Group (thus representing a separate performance obligation) are intended to provide the customer with a right to use the intellectual property, which means that revenues from the sale of such licenses are recognized at the point in time at which the control over the license is transferred to the customer. The Group recognizes revenue from software licensing transactions over time when the Group provides the customer a right to access the Group’s intellectual property throughout the license period. ii. Sale of proprietary licenses with significant related services Revenues from contracts that include the sale of proprietary licenses with significant related services (for example, modifications, implementation or customization to customer-specific specifications) are generally accounted by the Group as performance obligations satisfied over time. In such contracts the Group is normally committed to provide the customer with a functional IT system and the customer can only benefit from such functional system, being the final product that would normally be comprised of proprietary licenses and significant related services. The Group considers that a commitment to sell a license under such performance obligation does not satisfy the criteria of being distinct, because the transfer of the license is only part of a larger performance obligation. The Group recognizes revenue from such contracts using cost-based input methods, which recognizes revenue and gross profit as the work is performed based on a ratio between actual costs incurred compared to the total estimated costs for the contract. This is because, in accordance with IFRS 15, revenues may be recognized over the course of transferring control of the supplied goods and services, as long as the entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date throughout the duration of the contract. Provisions for estimated losses on uncompleted contracts are made during the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. When appropriate, the Group also applies a practical expedient permitted under IFRS 15 whereby if the Group has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Group’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided), the Group may recognize revenue in the amount it is entitled to invoice. Deferred revenues, which represent a contract liability, include unearned amounts received under maintenance and support (mainly) and amounts received from customers for which revenues have not yet been recognized. iii. Maintenance services and warranties Post-contract support includes annual maintenance contracts providing for unspecified upgrades for new versions and enhancements on a when-and-if-available basis for an annual fee. The right for an unspecified upgrade for new versions and enhancements on a when-and-if-available basis do not specify the features, functionality and release date of future product enhancements for the customer to know what will be made available and the general timeframe in which it will be delivered. The accounting policy regarding the recognition of post-contract support remained unchanged after the adoption of IFRS 15, as such services, in principle, constitute a separate performance obligation where the customer consumes the benefits of goods and services as they are delivered by the provider, as a consequence of which revenues are recognized over time during the service performance period. The Group considers the post-contract support performance obligation as a distinct performance obligation that is satisfied over time, and as such, it recognizes revenue for post-contract support on a straight-line basis over the period for which technical support is contractually agreed to be provided for the software, typically twelve (12) months. In certain cases, the Group also provides a warranty for goods and services sold (i.e., extended warranties when the Group contractually undertakes to repair any errors in the delivered software within a strictly specified time limit and/or when the scope of which is broader than just an assurance to the customer that the product/service complies with agreed-upon specifications). The Group has ascertained that such warranties granted by the Group meet the definition of service. The conclusion regarding the extended nature of a warranty is made whenever the Group contractually undertakes to repair any errors in the delivered software within a strictly specified time limit and/or when such warranty is more extensive than the minimum required by law. Under IFRS 15, the fact of granting an extended warranty indicates that the Group provides an additional service. As such, the Group recognizes an extended warranty as a |
Business Combination, Significa
Business Combination, Significant Transaction and Sale of Business | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of business combinations [text block] [Abstract] | |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS | NOTE 3:- BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS i. Formula Acquisition of Ofek Aerial Photography Ltd. (“Ofek”) On March 13, 2020, the Company directly acquired 86.02% of the share capital of Ofek, Israel’s market leader in the fields of aerial and satellite mapping, geographic data collection and processing, and provider of services in numerous geographic applications, for a total cash consideration of NIS 27,671 (approximately $7,888), or NIS 14,303 (approximately $3,931) net of acquired cash. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. The results of Ofek’s operations have been included in the consolidated financial statements since March 2020. The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net assets excluding cash acquired $ 4,857 Fixed assets 3,993 Investment in company accounted for at equity method 824 Intangible assets 874 Dividend payable to former shareholder (7,069 ) Deferred tax, net (34 ) Non-controlling interests (995 ) Goodwill 1,481 Total assets acquired net of acquired cash $ 3,931 ii. Sapiens a. Acquisition of Thor Denmark Holding ApS and its subsidiaries (“TIA”) On November 30, 2020 (“the TIA Acquisition Date”), Sapiens completed the acquisition of all of the outstanding shares of TIA, a leading vendor of digital software solutions. TIA offers comprehensive software solutions primarily for Property & Casualty insurers, as well as several innovative extension modules. Additionally, TIA offers a full scope of expert implementation, application management and hosting services, enabling insurers to execute their digital and business strategies. The purchase price amounted to $75,276 in cash (or $72,984 net of acquired cash), subject to net working capital adjustments. Acquisition related costs amounted to $719. The results of TIA’s operations have been included in the consolidated financial statements from the TIA Acquisition Date. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed: Net assets excluding cash acquired $ 4,666 Other long-term assets 4,255 Intangible assets 29,946 Goodwill 57,509 Current liabilities (2,212 ) Deferred revenues (5,742 ) Deferred tax liabilities (7,181 ) Other long-term liabilities (8,257 ) Total assets acquired, net of acquired cash $ 72,948 The following table sets forth the components of intangible assets associated with the acquisition: Developed technology $ 10,517 Customer relationships 19,266 Backlog 163 Total intangible assets $ 29,946 The goodwill from the acquisition of TIA is primarily attributable to potential synergy with Sapiens, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. b. Acquisition of sum.cumo GmbH (“sum.cumo”) On February 6, 2020 (the “sum.cumo Acquisition Date”), Sapiens completed the acquisition of all the outstanding shares of sum.cumo, a German company, which services insurers in the DACH region, helping them to achieve digital transformation of set up their existing business models or to design entirely new business models based on pure digital processes. sum.cumo’s experts in consulting, user experience, marketing and technology enable the region’s insurers to launch highly automated platforms well suited for e-commerce and real-time processing of transactions. The purchase price totaled $22,487 in cash (or $21,506 net of acquired cash). At the acquisition date, the Sapiens issued an aggregate of 173,005 RSUs to certain employees of sum.cumo, valued at a total of $4,400. The value of these grants was not included in the purchase price of sum.cumo, since their vesting is subject to both continued employment and other performance criteria. In addition, sum.cumo’s senior executives have retention-based payments over three years (2020-2023) of up to approximately $2,800. These payments are subject to continued employment, and therefore were not included in the purchase price. Acquisition related costs amounted to $561. The results of sum.cumo’s operations have been included in the consolidated financial statements from the sum.cumo Acquisition Date. The table below presents the fair value that was allocated to sum.cumo’s assets and liabilities based upon fair values as determined by the Company: Net assets excluding cash acquired $ 466 Other long-term assets Intangible assets 9,730 Deferred tax liabilities (3,211 ) Goodwill 14,521 Total assets acquired, net of acquired cash $ 21,506 The goodwill from the acquisition of sum.cumo is primarily attributable to sales growth from future products, new customers and potential synergy with Sapiens, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. c. Acquisition of Delphi Technology Inc. and its subsidiary (“Delphi”) On July 27, 2020 (the “Delphi Acquisition Date”), Sapiens completed the acquisition of Delphi, a leading vendor of software solutions for property & casualty (P&C) carriers, with a focus on the medical professional liability (MPL)/healthcare professional liability (HCPL) markets (sometimes referred to as “medical malpractice”). The total purchase price was $19,600 in cash (or $13,335 net of acquired cash). Acquisition related costs amounted to $299. The results of Delphi’s operations have been included in the consolidated financial statements from the Delphi Acquisition Date. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States. On April 22, 2020, Delphi applied for such aid in the form of U.S. Small Business Administration’s Paycheck Protection Program (“PPP Loan”) in the amount of $1,546. The PPP Loan is scheduled to mature on April 22, 2022, has a 1% interest rate, and is subject to the terms and conditions applicable to all loans made pursuant to the Paycheck Protection Program as administered by the U.S. Small Business Administration under the CARES Act. The PPP Loan was applied for by Delphi prior to the acquisition by Sapiens. The table below presents the fair value that was allocated to Delphi’s assets and liabilities based upon fair values as determined by the Company: Net liabilities excluding cash acquired $ (6,789 ) Intangible assets 7,562 Deferred tax liabilities (2,313 ) Goodwill 14,875 Total assets acquired, net of acquired cash $ 13,335 The goodwill from the acquisition of Delphi is primarily attributable to potential synergy with Sapiens, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. d. Acquisition of Tiful Gemel Ltd. (“Tiful Gemel”) On June 1, 2020 (the “Tiful Gemel Acquisition Date”), Sapiens completed the acquisition of 75% of the outstanding shares of Tiful Gemel, an Israeli company which provides software solutions and managed services related to pension and provident funds in the Israeli market, for a total cash consideration of $1,281. In addition, under the share purchase agreement, Sapiens is committed to acquire the remainder of Tiful Gemel’s outstanding shares on June 1, 2023. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. e. Acquisition of Cálculo S.A.U. (“Cálculo”) On September 27, 2019 (the “Acquisition Date”), Sapiens completed the acquisition of all of the share capital of Cálculo, a Spanish-based company engaged in insurance consulting and managed services, and develops, sells and supports a proprietary core solution to the insurance Spanish market, for a total cash consideration of $5,760 (of which $5,608 were paid in September 2019, and $152 in the first quarter of 2020). In addition, the sellers and senior executives are entitled to performance-based payments relating to achievements of various targets over three years (2019-2021) of up to $1,700. Some of these payments are subject to continued employment, and therefore were not included in the purchase price. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. The results of Cálculo’s operations have been included in the consolidated financial statements since September 2019. The following table summarizes the fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net assets excluding cash acquired $ 47 Intangible assets 1,037 Goodwill 622 Total assets acquired, net of acquired cash $ 1,706 f. Acquisition of Adaptik Corporation Inc. (“Adaptik”) On March 7, 2018, Sapiens completed the acquisition of all of the share capital of Adaptik, a New-Jersey company engaged in the development of software solutions for P&C insurers, (including policy administration, rating, billing, customer and task management and product design), for total cash consideration of $18,179 (of which $17,979 was paid in March 2018 and $200 will be paid in March 2022). In addition, the seller may be entitled to performance-based payments relating to achievement of revenue targets over three years (2018-2020) of up to $3,700, of which $1,300 was paid during 2019 and additional $1,355 was paid during 2020. Such payment entitlements are subject to continued employment and therefore were not included in the purchase price. Acquisition-related costs were approximately $300. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. The result of Adaptik’s operations have been included in the consolidated financial statements since March 2018. The following table summarizes the estimated fair values of the acquired assets and liabilities as of the acquisition date: Net liabilities excluding cash acquired $ (2,817 ) Intangible assets 12,936 Deferred taxes (3,528 ) Goodwill 11,468 Total assets acquired, net of acquired cash $ 18,059 iii. Magic Software a. Acquisition of Aptonet Inc (“Aptonet”) On May 7, 2020, Magic Software acquired all of the share capital of Aptonet, a U.S.-based services company, specializes in IT staffing and recruiting, for a total consideration of $ 4,663, of which $ 3,663 was paid upon closing and the remaining $ 1,000 will be paid in two equal installments, at the end of the 6- and 12-months periods following the closing date. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. The results of Aptonet operations have been included in the consolidated financial statements since May 1, 2020. The goodwill from the acquisition of Aptonet is primarily attributable to potential synergy with Magic Software U.S. IT staffing operations, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. The following table summarizes the provisional fair values of the assets acquired and liabilities at the date of acquisition: Net assets, excluding cash acquired $ 529 Intangible assets, net 1,556 Goodwill 1,785 Total assets acquired, net of acquired cash $ 3,870 b. Acquisition of Stockell Information Systems, Inc (“Stockell”) On September 2, 2020, Magic Software acquired all of the share capital of Stockell, a U.S.-based services company, specializing in IT staffing and recruiting, for a total consideration of $ 7,714, of which $ 6,265 was paid upon closing and the remaining $ 1,449 due 12 months following the closing date. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. The results of Stockell’s operations have been included in the consolidated financial statements since September 1, 2020. The goodwill from the acquisition of Stockell is primarily attributable to potential synergy with Magic Software U.S. IT staffing operations, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. The following table summarizes the provisional estimated (1) Net assets $ 1,051 Intangible assets, net 2,616 Goodwill 4,047 Total assets acquired $ 7,714 (1) The estimated fair values of the tangible and intangible assets referring to acquisition which were made in 2020 are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Group’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Group expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. c. Acquisition of Mobisoft Ltd (“Mobisoft”) and Magic Hands B.V (“Magic Hands”) On July 1, 2020 and in June 2020 Magic Software acquired 70% of the outstanding share capital of Mobisoft and all the outstanding share capital of Magic Hands., respectively. The acquisition of both Mobisoft and Magic Hands individually and in the aggregate, was not material. The aggregate consideration paid for the acquisition of both Mobisoft and Magic Hands was $ 11,340. Magic Software and the seller of Mobisoft both hold mutual options to purchase and sell (respectively) the remaining 30% interest in Mobisoft which may be exercised during the three-year period beginning following the third-year anniversary of the acquisition. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Acquisition related costs were immaterial. Mobisoft and Magic Hands results of operations were included in the consolidated financial statements of the Company since their respective acquisition dates. The following table summarizes the aggregated estimated fair values of the assets acquired and liabilities at each of the dates of acquisition: Net assets, excluding cash acquired $ 1,069 Intangible assets, net 4,553 Goodwill 5,718 Total assets acquired, net of acquired cash $ 11,340 d. Acquisition of NetEffects Inc. (“NetEffects”) On July 1, 2019, Magic Software acquired a all of the share capital of NetEffects, a U.S based services company, engaged in IT staffing and recruiting services, for a total consideration of $12,500, of which $9,400 was paid upon closing, $1,550 was paid during 2020 and the remaining $1,550 will be paid in two installments following the second and third year anniversary of the acquisition. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. The results of operations were included in the consolidated financial statements of the Group commencing July 1, 2019. The goodwill from the acquisition of NetEffects is primarily attributable to potential synergy with Magic Software’s U.S. IT staffing’ operations, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net assets excluding cash acquired $ 91 Intangible assets 8,716 Goodwill 3,526 Total assets acquired net of acquired cash $ 12,333 e. Acquisition of PowWow Inc. (“PowWow”) On April 1, 2019 Magic Software acquired all of the share capital of PowWow, creator of SmartUX™, a leading Low-Code development platform for, mobilizing and modernizing enterprise applications, for a total consideration of $8,443 (net of acquired cash). Total consideration includes an estimated deferred consideration of $2,040 contingent upon PowWow meeting various revenue targets over three years (2020-2022). During 2020, Magic Software reversed the entire contingent amount as its management estimates that PowWow will not meet its revenue targets. Acquisition related costs amounted to $980. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. The results of operations were included in the consolidated financial statements of the Group commencing April 1, 2019. The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net liabilities excluding cash acquired $ (1,557 ) Intangible assets 2,855 Goodwill 7,145 Total assets acquired net of acquired cash $ 8,443 f. Acquisition of OnTarget Group Inc (“OnTarget”) On February 28, 2019, Magic Software acquired all of the share capital of OnTarget, a U.S.-based services company, specializes in outsourcing of software development services, for a total consideration of $12,456. Total consideration consists of $6,000 which was paid upon closing and the remaining amount constitutes a deferred payment contingent upon OnTarget meeting future operating results over four years (2019-2022). During 2020, Magic Software paid an amount of $1,000 with respect to the contingent consideration. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Acquisition related costs were immaterial. OnTarget results of operations were included in the consolidated financial statements of the Company commencing March 1, 2019. The goodwill from the acquisition of OnTaret is primarily attributable to potential synergy with Magic Software’s operations, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net assets excluding cash acquired $ 444 Intangible assets 4,908 Deferred taxes (1,276 ) Goodwill 8,380 Total assets acquired net of acquired cash $ 12,456 g. On October 1, 2019 Magic Software acquired 30% of the share capital of Infinigy Solutions LLC (“Infinigy”), increasing its share capital interest from 70% to 100%, for a total cash consideration of $4,393, which was paid upon closing. Infinigy is U.S.-based services company focused on expanding the development and implementation of technical solutions which deliver design-driven turnkey solutions, combining Architecture and Engineering, or A&E design project management and general contracting competencies, across the wireless communications industry. iv. Matrix a. Acquisition of Gestetnertec Ltd. (“Gestetnertec”) On July 9, 2020, Matrix acquired 51% of the share capital of Gestetnertec, an Israeli-based company and a provider of comprehensive solutions in the area of printing, document production services including, among other things, three-dimensional model printing solutions, for a total consideration of approximately NIS 49,853 million (or $14,475), or NIS 31,576 (approximately $9,169) net of acquired cash. In addition, Matrix and the sellers hold mutual call and put options, respectively, for the remaining 49% interest in Gestetnertec. The fair value of the put option measured on the acquisition date amounted to NIS 61,238 (approximately $17,781). Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. The results of Gestetnertec’s operations have been included in the consolidated financial statements since July 1, 2020. The goodwill from the acquisition of Gestetnertec is primarily attributable to potential synergy with Matrix operations, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. The following table summarizes the provisional estimated (1) Net assets excluding cash acquired $ 12,746 Short-term bank credit (10,598 ) Non-controlling interest (135 ) Liability to acquire non-controlling interests (put option) (17,781 ) Intangible assets, net 16,337 Deferred taxes (4,021 ) Goodwill 12,621 Total assets acquired net of acquired cash $ 9,169 (1) The estimated fair values of the tangible and intangible assets referring to acquisition which were made in 2020 are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Group’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Group expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. b. Acquisition of RightStar Inc. (“RightStar”) On November 16, 2020, Matrix acquired all of the share capital of RightStar. a U.S. based company and a seller and an integrator of BMC and Atlassian Jira solutions, for a total consideration of approximately $3,566 (or ($0.1) million net of acquired cash), of which $3,040 was paid in cash and $526 thousands was paid on January 15, 2021. Sellers may also be entitled to a contingent consideration, estimated as of the acquisition date at $1,032, upon RightStar meeting various operating profit targets. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. The results of RightStar’s operations have been included in the consolidated financial statements since November 2020. The goodwill from the acquisition of RightStar is primarily attributable to potential synergy with Matrix U.S. operations, as well as certain intangible assets that do not qualify for separate recognition. The goodwill is not deductible for income tax purposes. The following table summarizes the provisional estimated (1) Net liabilities excluding cash acquired $ (763 ) Contingent liability in respect of business combinations (1,077 ) Intangible assets, net 354 Deferred taxes (95 ) Goodwill 922 Total liabilities acquired net of acquired cash $ (659 ) (1) The estimated fair values of the tangible and intangible assets referring to acquisition which were made in 2020 are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Group’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Group expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. c. In January 2020, Matrix acquired 40% of the share capital of Network Infrastructure Technologies (NIT), increasing its share capital interest from 60% to 100%, for a total cash consideration of $4,500, which was paid upon closing. d. Acquisition of Techtop Ltd. (“TechTop”) On May 7, 2019, Matrix purchased the net assets of Techtop, (meeting the definition of a business) for a cash consideration of NIS 17,087 (approximately $4,764). TechTop is a leasing Israeli supplier of professional sound and systems. As part of the purchase price allocation, the excess of the purchase price paid over the value of net assets acquired in the amount of NIS 8,602 (approximately $2,398) was allocated to goodwill. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Techtop results of operations were included in the consolidated financial statements of the Company commencing April 1, 2019. e. Acquisition of Medatech Information Technologies Ltd. (“Medatech Technologies”) On February 20, 2019, Matrix acquired all the share capital of Medatech Technologies, an Israeli-based company and a leading system integrator with many years of experience in distributing and implementing Priority ERP software, for NIS 85,000 (approximately $23,500) or NIS 77,753 (approximately $21,496) net of acquired cash. On April 7, 2019, Matrix acquired additional 25% of the issued and outstanding share capital of Medatech Systems Inc., (“Medatech Systems”) a subsidiary of Medatech Technologies, for NIS 5,175 (approximately $1,443) or NIS 2,007 (approximately $560) net of acquired cash. Resulting from the acquisition, Medatech Technologies interest in the issued and outstanding share capital of Medatech Systems increased to 75%. Matrix and the seller both hold mutual options to purchase and sell (respectively) 5% of the remaining share capital of Medatech Systems at the end of the second-year anniversary following the acquisition. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Medatech results of operations were included in the consolidated financial statements of the Company commencing March 1, 2019. The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net assets excluding cash acquired $ 2,340 Intangible assets 7,553 Deferred taxes (2,276 ) Credit from banks and others (5,550 ) Non-controlling interests (434 ) Goodwill 20,423 Total assets acquired net of acquired cash $ 22,056 f. Acquisition of Dana Engineering Ltd. (“Dana Engineering”) On February 6, 2019, Matrix acquired 80% of the issued and outstanding share capital of Dana Engineering, an Israeli-based company providing project management services in the field of national infrastructure in Israel, for total cash consideration of NIS 52,000 (approximately $14,370). Matrix and the seller hold mutual options to purchase and sell (respectively) the remaining 20% interest in Dana Engineering which may be exercised following the second-year anniversary of the acquisition. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Dana Engineering results of operations were included in the consolidated financial statements of the Company commencing February 1, 2019. The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net assets excluding cash acquired $ (9,270 ) Intangible assets 5,311 Deferred taxes (1,138 ) Non-controlling interests (5,235 ) Goodwill 9,746 Total assets acquired net of acquired cash $ (586 ) g. Acquisition of Noah Technologies Ltd. (“Noah Technologies”) On November 13, 2018, Matrix acquired all the share capital of Noah Technologies, an Israeli based company providing engineering solutions, computerized catalogs and IT professional services, for approximately NIS 6,090 (approximately $1,651) in cash or NIS 4,251 (approximately $1,152) net of acquired cash. In accordance with the purchase agreement the seller may also be entitled to receive performance-based payments capped at NIS 4,000 (approximately $1,084), estimated on the date of the acquisition at NIS 3,089 (approximately $837), relating to achievement of certain profitability targets for the years 2019-2021. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Noah Technologies results of operations were included in the consolidated financial statements of the Company commencing December 1, 2018. The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net liabilities excluding cash acquired $ (475 ) Intangible assets 781 Deferred taxes (171 ) Goodwill 1,854 Total assets acquired net of acquired cash $ 1,989 h. Acquisition of Integrity Software 2011 Ltd. (“Integrity Software”) On July 30, 2018, Matrix acquired 65% of the share capital of Integrity Software, an Israeli-based company providing software solutions to the enterprise sector in Israel in the fields of software security, IT infrastructure and virtualization, for approximately NIS 9,000 (approximately $2,454) in cash or NIS 4,881 (approximately $1,331) net of acquired cash. In accordance with the purchase agreement the seller may also be entitled to receive performance-based payments capped at NIS 4,000 (approximately $1,091), estimated on the date of the acquisition at NIS 823 (approximately $224), contingent upon the seller meeting certain profitability targets during the years 2019-2021. Matrix and the seller both hold mutual options to purchase and sell (respectively) 10% of the remaining share capital of Integrity. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Integrity Software results of operations were included in the consolidated financial statements of the Company commencing August 1, 2018. Net liabilities excluding cash acquired $ (1,130 ) Intangible assets 1,316 Deferred taxes (303 ) Non-controlling interests (318 ) Goodwill 1,990 Total assets acquired net of acquired cash $ 1,555 i. Acquisition of Cambium (2014) Ltd. (“Cambium”) On July 25, 2018, Matrix acquired 55% of the share capital of Cambium for a total consideration of NIS 3,126 in cash (approximately $860) or NIS 2,729 net of acquired cash (approximately $750 net of acquired cash). Matrix and the seller hold mutual options to purchase and sell (respectively) 15% of the remaining share capital of Cambium. Due to the put option, the Group recorded a financial liability in an amount of NIS 870 (approximately $239) as of the acquisition date. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Cambium results of operations were included in the consolidated financial statements of the Company commencing August 1, 2018. The following table summarizes the estimated fair values of the acquired assets and assumed liabilities, with reference to the acquisition as of the acquisition date: Net liabilities excluding cash acquired $ (8 ) Intangible assets 365 Deferred taxes (84 ) Non-controlling interests (238 ) Goodwill 715 Total assets acquired net of acquired cash $ 750 j. Acquisition of Pleasant Valley Business Solutions, LLC. (“PVBS”) On March |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Of Detailed Information About Marketable Securities Explanatory [Abstract] | |
MARKETABLE SECURITIES | NOTE 4:- MARKETABLE SECURITIES The following table summarizes the composition of the Group’s investment in marketable securities: December 31, 2020 2019 Convertible bonds designated at fair value through profit or loss (1) 1,238 1,112 Corporate bonds at Fair value through other comprehensive income - 5,488 $ 1,238 $ 6,600 (1) The consolidated statements of profit or loss for the years ended 2018, 2019 and 2020 include gains (losses) from marketable securities designated at fair value through profit or loss in amounts of $53, ($35) and $126, respectively. |
Prepaid Expenses and Other Acco
Prepaid Expenses and Other Accounts Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Of Other Accounts Receivable And Prepaid Expenses [Abstract] | |
PREPAID EXPESNES AND OTHER ACCOUNTS RECEIVAVABLE | NOTE 5:- PREPAID EXPESNES AND OTHER ACCOUNTS RECEIVAVABLE The following table summarizes the composition of the Group’s Prepaid expenses, other accounts receivable and other investments: December 31, 2020 2019 Prepaid expenses and advances to suppliers $ 47,155 $ 37,394 Government departments 29,973 22,134 Dividend receivable from jointly controlled entity - 3,000 Employees 301 488 Related Parties 404 1,278 Other 5,987 1,415 $ 83,820 $ 65,709 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of fair value measurement [text block] [Abstract] | |
FAIR VALUE MEASUREMENT | Note 6:- Fair value measurement In determining fair value, the Group utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. The Group’s financial assets and liabilities measured at fair value on a recurring basis, including accrued interest components, consisted of the following types of instruments as of December 31, 2019 and 2020: Fair value measurements December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Convertible bonds at fair value through profit or loss (Note 4) - 1,238 - 1,238 Dividend preference derivative in TSG (1) - - 1,707 1,707 $ - $ 1,238 $ 1,707 $ 2,945 Liabilities: Foreign currency derivative contracts - 707 - 707 Contingent consideration in respect of business combination - - 18,456 18,456 Liabilities from acquisition of non-controlling interests (put options) - - 64,018 64,018 - $ 707 $ 82,474 $ 83,181 Fair value measurements December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Convertible bonds at fair value through profit or loss (Note 4) - 1,112 - 1,112 Corporate bonds at fair value through other comprehensive income (Note 4) - 5,488 - 5,488 Dividend preference derivative in TSG (1) - - 1,539 1,539 $ - $ 6,600 $ 1,539 $ 8,139 Liabilities: Foreign currency derivative contracts - 67 - 67 Contingent consideration in respect of business combination - - 13,979 13,979 Liabilities from acquisition of non-controlling interests (put options) - - 54,850 54,850 $ - $ 67 $ 68,829 $ 68,896 (1) The fair value of dividend preference derivative in TSG was estimated using the Monte-Carlo simulation technique. |
Investments in Companies Accoun
Investments in Companies Accounted for at Equity Method | 12 Months Ended |
Dec. 31, 2020 | |
Description of accounting policy for investments other than investments accounted for using equity method [text block] [Abstract] | |
INVESTMENTS IN COMPANIES ACCOUNTED FOR AT EQUITY METHOD | Note 7:- Investments in companies accounted for at equity METHOD The following table summarizes the Group’s investments in companies accounted for at equity: December 31, 2020 2019 TSG (Joint venture) 27,165 26,016 Other investments 1,146 5 28,311 26,021 Investment in TSG a. The Company holds directly a 50% share interest in the issued and outstanding share capital of TSG, a joint venture engaged in the fields of command-and-control systems, intelligence, homeland security and cyber security. The Company’s investment in TSG is included in the financial statements using the equity method of accounting. At the acquisition date the Company attributed an amount of $2,140 to a separate component of dividend preference derivative. The dividend preference derivative is measured at fair value through profit or loss and is presented in the consolidated statements of financial position under long-term prepaid expenses, other accounts and other investments. b. The following table summarizes the balances related to the Company’s investment in TSG in the consolidated statements of financial position: December 31, 2020 2019 Investment in companies accounted for at equity method Shares 18,225 18,347 Capital note 8,940 7,669 27,165 26,016 Long-term prepaid expenses, other accounts, and other investments Dividend preference derivative at fair value through profit or loss 1,707 1,539 c. The following table summarizes the changes in the fair value of TSG’s dividend preference derivative: December 31, 2020 2019 Opening balance 1,539 2,733 Increase in fair value recognized in profit or loss 48 93 Currency exchange rate in other comprehensive income 120 213 Decrease due to dividend declared by TSG - (1,500 ) Closing balance 1,707 1,539 d. The following table summarizes the changes in the carrying amount of the Company’s Investment in TSG: January 1, 2018 $ 25,260 Company’s share of profit 365 Company’s share of other comprehensive income 58 December 31, 2018 $ 25,683 Company’s share of profit 1,771 Company’s share of other comprehensive income 62 Company’s Share in dividend declared by TSG (1,500 ) December 31, 2019 $ 26,016 Company’s share of profit 1,318 Company’s share of other comprehensive income (169 ) December 31, 2020 $ 27,165 e. The following table summarizes financial information of TSG: (i) Summarized statement of financial position in accordance with IFRS as of December 31, 2019 and 2020 (as presented in TSG’s financial statements): December 31, 2020 2019 Current assets 51,056 48,340 Noncurrent assets excluding goodwill 4,810 5,507 Current liabilities (26,201 ) (28,436 ) Noncurrent liabilities (8,414 ) (8,625 ) Total equity 21,251 16,786 Accumulated cost of share-based payment (743 ) - $ 20,508 $ 16,786 Company’s share in TSG 50 % 50 % 10,254 8,393 Excess cost of intangible assets net of deferred tax 7,075 7,787 Goodwill 9,836 9,836 Company’s carrying amount of the investment in TSG $ 27,165 $ 26,016 (ii) The following table key highlights of TSG profit or loss in accordance with IFRS for the years ended December 31, 2018, 2019 and 2020 (as presented in TSG’s financial statements): Year ended December 31, 2020 2019 2018 Revenues 77,661 84,350 66,154 Net income 4,059 4,966 3,437 Other comprehensive income (338 ) 124 116 Total comprehensive income 3,721 5,090 3,553 Company’s share in TSG 50 % 50 % 50 % 1,861 2,545 1,776 Amortization of excess cost of intangible assets net of tax (712 ) (712 ) (1,353 ) Company’s share of total comprehensive income 1,149 1,833 423 Company’s share of other comprehensive income (169 ) 62 58 Company’s share of profit 1,318 1,771 365 1,149 1,833 423 |
Property, Plants and Equipment,
Property, Plants and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of property, plant and equipment [text block] [Abstract] | |
PROPERTY, PLANTS AND EQUIPMENT, NET | NOTE 8:- PROPERTY, PLANTS AND EQUIPMENT, NET a. Property, plants and equipment, net, are comprised of the following as of the below dates: December 31, 2020 2019 Cost: Computers, software, furniture, and equipment $ 139,840 $ 110,955 Motor vehicles 8,623 5,022 Buildings 975 975 Leasehold improvements 39,261 31,435 188,699 148,387 Accumulated depreciation: Computers, software, furniture, and equipment $ 103,833 $ 86,802 Motor vehicles 3,875 2,271 Buildings 112 87 Leasehold improvements 21,703 16,168 129,523 105,328 Depreciated cost $ 59,176 $ 43,059 b. Depreciation expenses totaled $10,480, $12,071, and $16,513 for the years ended December 31, 2018, 2019 and 2020, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of intangible assets [text block] [Abstract] | |
INTANGIBLE ASSETS, NET | NotE 9:- Intangible Assets, Net a. Intangible assets, net, are comprised of the following as of the below dates: December 31, 2020 2019 Original amounts: Capitalized Software costs $ 221,220 $ 213,221 Customer relationship 247,445 179,023 Acquired technology 100,159 74,456 Backlog 6,909 6,850 Patent 1,493 4,524 Other intangibles 3,549 1,389 580,775 479,463 Accumulated amortization: Capitalized Software costs 179,587 168,315 Customer relationship 120,165 98,543 Acquired technology 48,087 35,653 Backlog 6,909 6,675 Patent 958 4,243 Other intangibles 2,806 754 358,512 314,183 Total $ 222,263 $ 165,280 b. Amortization expenses totaled $38,254, $41,330 and $44,586 for the years ended December 31, 2018, 2019 and 2020, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of goodwill [text block] [Abstract] | |
GOODWILL | Note 10:- Goodwill The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2019 and 2020: December 31, 2020 2019 Opening balance $ 724,193 $ 640,918 Acquisition of subsidiaries 116,416 54,460 Classifications 3,066 2,977 Foreign currency translation adjustments 28,749 25,838 Closing balance $ 872,424 $ 724,193 The Group performed annual impairment tests as of December 31, 2018, 2019 and 2020 and did not identify any impairment losses (see note 2). |
Short Term Liabilities to Banks
Short Term Liabilities to Banks and Others | 12 Months Ended |
Dec. 31, 2020 | |
Description of accounting policy for financial liabilities [text block] [Abstract] | |
SHORT TERM LIABILITIES TO BANKS AND OTHERS | Note 11:- short term Liabilities to banks and others December 31, December 31, 2020 2020 2019 Interest rate % Currency Bank credit 2.25-3.1 NIS - 580 Bank credit US Prime -0.2 USD - 688 Short-term bank loans Israeli Prime + 0.8 NIS - 868 Short-term bank loans 2.5 NIS 1,259 - Short-term bank loans 1.6 NIS 11,357 28,937 Commercial securities not listed 0.75 NIS 31,104 28,935 Current maturities of long-term loans from banks and other financial institutions (Note 13) 1.8-3.45 NIS 75,856 64,060 Current maturities of long-term loans from banks (Note 13) Libor + 2.2 NIS Linked to USD 800 804 Short-term interest on long-term loans from other financial institutions 2.6-5.5 NIS 68 425 $ 120,444 $ 125,297 |
Other Accounts Payable
Other Accounts Payable | 12 Months Ended |
Dec. 31, 2020 | |
Other Accounts Payable [Abstract] | |
OTHER ACCOUNTS PAYABLE | Note 12:- other accounts payable Other accounts payable are comprised of the following as of the below dates: December 31, 2020 2019 Government institutions $ 35,648 $ 35,775 Accrued royalties to the IIA (see Note 19e) - 223 Accrued expenses and other current liabilities 33,328 27,174 Total $ 68,976 $ 63,172 |
Long term Liabilities to Banks
Long term Liabilities to Banks and Others | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of other liabilities [text block] [Abstract] | |
Long term Liabilities to Banks and Others | Note 13:- Long term Liabilities to Banks and Others a. Long term liabilities to banks and others are comprised of the following as of the below dates: Interest rate Currency Long-term liabilities Current maturities Long-term liabilities net of current maturities Total long-term liabilities net of current maturities % December 31, 2020 December 31, 2019 1.8-5.5 NIS (Unlinked) 255,972 75,856 $ 180,116 $ 161,043 Libor +2.2 NIS Linked to USD 1,000 800 200 1,019 256,972 76,656 $ 180,316 $ 162,062 b. Maturity dates: December 31, 2020 2019 First year (current maturities) $ 76,656 $ 64,864 Second year 69,500 50,460 Third year 60,310 47,733 Fourth year 38,162 38,784 Fifth year and thereafter 12,344 25,085 $ 256,972 $ 226,926 c. Details of liens, guarantees and credit facilities are described in Note 20. |
Debentures
Debentures | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Of Debentures [Abstract] | |
DEBENTURES | NOTE 14:- DEBENTURES The Group’s liabilities under debentures are attributable to debentures issued by Formula and Sapiens. The debentures are all listed for trading on the Tel-Aviv Stock Exchange. a. Debentures are comprised of the following as of the below dates: Effective Interest rate Currency Par value in issuance currency Par Value Unamortized debt premium (discount) and issuance costs, net Current maturities Total long-term debentures, net of current maturities Short-term accrued interest Total short-term and long-term debentures % December 31, 2020 Formula’s Series A 2.4 NIS (Unlinked) NIS 136,844 $ 42,564 365 10,641 32,288 589 43,518 Formula’s Series C 2.5 NIS (Unlinked) NIS 267,000 $ 83,048 (678 ) 10,264 72,106 158 82,528 Sapiens’ Series B Debentures (3.37%) 3.3 NIS (Linked to fix rate of USD) NIS 350,000 $ 118,778 (306 ) 19,796 98,676 6 118,478 $ 244,390 (619 ) 40,701 203,070 753 $ 244,524 Effective Interest rate Currency Par value in issuance currency Par Value Unamortized debt premium (discount) and issuance costs, net Current maturities Total long-term debentures, net of current maturities Short-term accrued interest Total short-term and long-term debentures % December 31, 2019 Formula’s Series A 2.4 NIS (Unlinked) NIS 171,056 $ 49,497 519 9,899 40,117 686 50,702 Formula’s Series C 2.5 NIS (Unlinked) NIS 300,000 $ 86,806 (813 ) 9,549 76,444 163 86,156 Sapiens’ Series B Debentures (3.37%) 3.69 NIS (Linked to fix rate of USD) NIS 245,000 $ 69,287 (539 ) 9,898 58,850 1,167 69,915 $ 205,590 (833 ) 29,346 175,411 2,016 $ 206,773 During the years ended December 31, 2019 and 2020, the Group recorded $5,450 and $6,411, respectively, of interest expenses, and $178 and $135, respectively, as amortization of debt premium, discount and issuance costs, net in respect of the Group’s debentures. b. Aggregate principal annual payments of the debentures: Repayment amount 2021 40,701 2022 40,701 2023 40,701 2024 40,701 2025 and thereafter 81,586 244,390 c. Formula’s debentures i) Formula Systems Series A Secured Debentures On September 16, 2015, Formula issued Formula Systems Series A Secured Debentures in the aggregate principle amount of NIS 102,260 (approximately $26,295), at a purchase price equal to 100% of their par value, payable in eight equal annual installments on July 2 nd nd nd On January 31, 2018, Formula issued additional Formula Systems Series A Secured Debentures in an aggregate principle amount of NIS 150,000 (approximately $44,053) through a private placement to qualified investors in Israel. The gross proceeds received by Formula for the issuance of Formula Systems Series A Secured Debentures in January 2018 were NIS 155,205 (approximately $45,581), out of which NIS 336 was attributed to interest payable (approximately $99). Debt premium of NIS 4,869 (approximately $1,430) net of issuance costs of NIS 782 (approximately $225) were allocated to the Formula Systems Series A Secured Debentures and are amortized as financial income over the remaining term of Formula Systems Series A Secured Debentures due in 2024. The Formula Systems Series A Secured Debentures issued in September 2015 together with the Formula Systems Series A Secured Debentures sold in the private placement, form one single series with identical terms and conditions. The Series A Secured Debentures are nominated in New Israeli Shekel not linked to any currency or index and non-convertible. The Formula Systems Series A Secured Debentures are secured with collateral consist of shares of Matrix, Magic Software and Sapiens (See note 19a). The Formula Systems Series A Secured Debentures are listed for trading on the Tel-Aviv Stock Exchange. As of December 31, 2019 and 2020, the fair value of Formula’s Series A Secured Debentures, based on the quoted market price on the Tel-Aviv Stock Exchange, were approximately $52,138 and $44,229, respectively. ii) Formula Systems Series B Convertible Debentures On September 16, 2015, Formula issued Formula Systems Series B Convertible Debentures, linked to US dollars, in the aggregate principle amount of NIS 125,000 (approximately $32,140), at a purchase price equal to 102% of their par value. The principal amount of Formula Systems Series B Secured Debentures bears a fixed interest rate of 2.74% per annum, payable in one installment together with the remaining unconverted principle amount on March 26, 2019. The Formula Systems Series B Convertible Debentures were convertible, at the election of each holder, into Formula’s ordinary shares, from the date of issuance and until March 10, 2019, at a conversion price of NIS 157 par value per one share, adjusted in events of shares split, reverse shares split, a rights offering, a distribution of bonus shares or a cash dividend. The conversion equity component was valuated at $1,248, allocated to additional paid in capital on the issuance date. Debt discount and issuance costs including early commitment commission were approximately $367, allocated to the Formula Systems Series B Convertible Debentures and are amortized as financial expenses over the term of Formula Systems Series B Convertible Debentures due in 2019. During 2018 and mainly 2019, holders of Formula Systems Series B Convertible Debentures converted an aggregate principal amount of NIS 80,484 into 545,485 of Formula’s ordinary shares, which constitute, in aggregate, approximately 3.57% of Formula’s issued and outstanding share capital following those conversions (an aggregate principle amount of NIS 232 was converted into 1,556 Formula’s ordinary shares in 2018 and principle amount NIS 80,252 was converted into 543,929 Formula’s ordinary shares in 2019). The remaining outstanding Series B Convertible Debentures amounting to NIS 44,516 (or $11,350) and their respective accumulated interest of $1,135 were fully paid on March 26, 2019. The Series B Debentures were listed for trading on the Tel-Aviv Stock Exchange. iii) Formula Systems Series C Secured Debentures On March 31, 2019, Formula issued Formula Systems Series C Secured Debenture in the aggregate principle amount of NIS 300,000 (approximately $82,600), at a purchase price equal to 100% of their par value, payable in five annual installments of NIS 33,000 on December 1 of each of the years 2020 through 2024 and two annual installments of NIS 67,500 on December 1 of each of the years 2025 and 2026. The outstanding principle amount of Formula Systems Series C Secured Debentures bears a fixed annual interest rate of 2.29% (which may vary based on the credit rating of the debentures), payable on December 1 st st On April 12, 2021, Formula issued additional Formula Systems Series C Secured Debentures in an aggregate principle amount of NIS 160,000 (approximately $48,617) through a private placement to qualified investors in Israel. The gross proceeds received by Formula for the issuance of Formula Systems Series C Secured Debentures in April 2021 were NIS 165,920 (approximately $50,416), out of which NIS 1,678 was attributed to interest payable (approximately $510). Debt premium of NIS 4,370 (approximately $1,024) net of issuance costs of NIS 872 (approximately $265) were allocated to the Formula Systems Series C Secured Debentures and are amortized as financial income over the remaining term of Formula Systems Series A Secured Debentures due in 2026. The Formula Systems Series C Secured Debentures issued in March 2019 together with the Formula Systems Series C Secured Debentures sold in April 2021 in a private placement, form one single series with identical terms and conditions. The Formula Systems Series C Secured Debentures are nominated in New Israeli Shekel and are not linked to any currency or index and are non-convertible. The Formula Systems Series C Secured Debentures are secured with collateral consist of shares of Matrix, Magic Software and Sapiens (See note 20a). The Series C Secured Debentures are listed for trading on the Tel-Aviv Stock Exchange. As of December 31, 2019 and 2020 , the fair value of Formula’s Series C Secured Debentures, based on the quoted market price on the Tel-Aviv Stock Exchange, were approximately $90,174 and $86,993, respectively. The offering of Formula’s debentures were made only in Israel and not to U.S. persons (as defined in Rule 902(k) under the Securities Act of 1933, as amended (the “Securities Act”)), in an overseas directed offering (as defined in Rule 903(b)(i)(ii) under the Securities Act), and was exempt from registration under the Securities Act pursuant to the exemption provided by Regulation S thereunder. The sale of Formula debentures was not registered under the Securities Act, and Formula debentures may not be offered or sold in the United States and/or to U.S. persons without registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act. In accordance with the indenture for Formula Systems Series A Secured Debentures and Formula Systems Series C Secured Debentures, Formula has undertaken to maintain a number of conditions and limitations on the manner in which it operates its business, including limitations on its ability to undergo a change of control, distribute dividends, incur a floating charge on its assets, or undergo an asset sale or other change that results in a fundamental change in its operations, and to meet certain financial covenants (see Notes 19a and 19c(1)(i)). d. Sapiens’ Series B Debentures On September 16, 2017 Sapiens issued its unsecured Series B Debentures in an aggregate principal amount of NIS 280,000 (approximately $79,186), linked to the US dollar and payable in eight equal annual payments of $9,898 on January 1 st st st On June 8, 2020, Sapiens issued additional Sapiens’ Series B Debentures in an aggregate principle amount of NIS 210,000 (approximately $60,362) through a public offering in Israel. The gross proceeds received for the issuance of Sapiens’ Series B Debentures in June 2020 were NIS 210,840 (approximately $60,603), out of which approximately NIS 3,006 was attributed to interest payable (approximately $864). Debt discount of NIS 2,166 (approximately $623) and issuance costs of NIS 2,326 (approximately $669) were allocated to Sapiens’ Series B Debentures and are amortized as financial expenses over the remaining term of the Sapiens Series B Debentures due in 2026. Following the raise of the additional NIS 210,000 in Series B Debentures, a $20,000 short-term bank loan taken by Sapiens on March 18, 2020, from a commercial bank was fully repaid on June 9, 2020. Sapiens’ Series B Debentures issued in September 2017 together with the Sapiens’ Series B Debentures issued in June 2020, form one single series with identical terms and conditions. Sapiens’ Series B Debentures are linked to the US Dollar, unsecured and non-convertible. Sapiens’ Series B Debentures are listed for trading on the TASE. As of December 31, 2019 and 2020, the fair value of Sapiens’ Series B Debentures, based on the quoted market price on the Tel-Aviv Stock Exchange, were approximately $60,509 and $102,300, respectively. The offerings of Sapiens’ debentures were made only in Israel and not to U.S. persons (as defined in Rule 902(k) under the Securities Act of 1933, as amended (the “Securities Act”)), in an overseas directed offering (as defined in Rule 903(b)(i)(ii) under the Securities Act), and was exempt from registration under the Securities Act pursuant to the exemption provided by Regulation S thereunder. The sale of Sapiens debentures was not registered under the Securities Act, and the Sapiens debentures may not be offered or sold in the United States and/or to U.S. persons without registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act. In accordance with the indenture for the Sapiens Series B Debentures, Sapiens has undertaken to maintain a number of conditions and limitations on the manner in which it operates its business, including limitations on its ability to undergo a change of control, distribute dividends, incur a floating charge on Sapiens’ assets, or undergo an asset sale or other change that results in a fundamental change in Sapiens’ operations and to meet certain financial covenants (see Note 19c(3)(iii)). |
Related Parties Transactions
Related Parties Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of related party [text block] [Abstract] | |
RELATED PARTIES TRANSACTIONS | Note 15:- RELATED PARTies TRANSACTIONS a) Acquisition of Sapiens Software Solutions (Poland) Sp. Z o.o (formerly “Insseco Sp. Z o.o.”) (“Sapiens Poland”) On August 18, 2015, Sapiens completed the acquisition from Asseco, the parent company of Formula, of all issued and outstanding share capital of Sapiens Poland. Under the share purchase agreement for that acquisition, Under the share purchase agreement for that acquisition, Asseco committed to assign to Sapiens Poland all customer contracts that relate to the intellectual property that Sapiens acquired as part of the acquisition. In the event that Asseco cannot obtain the consent of any customer to the assignment of its contract to Sapiens Poland, Asseco will hold that customer’s contract in trust for the benefit of Sapiens Poland. During the years ended December 31, 2018, 2019 and 2020, Asseco provided back-office services, professional services and fixed assets to Sapiens’ wholly owned subsidiary, Sapiens Poland, in amounts totaling approximately $980, $676 and $521, respectively. During the years ended December 31, 2018, 2019 and 2020, Sapiens Poland performed services as a sub-contractor on behalf of Asseco for clients of Asseco in total amounts of approximately $3,200, $3,400 and $3,100, respectively. For historic reasons, Asseco issues invoices to those clients and then Sapiens in turn invoices Asseco on a back-to-back basis (with no margin to Asseco). As of December 31, 2019 the Group had no trade payable balances due from its transactions with Asseco, as detailed above. As of December 31, 2020 the Group had trade payable balances due from its transactions with Asseco, as detailed above, in an amount of $1,898. As of December 31, 2019 and 2020, the Group had trade receivables balances due from its transactions with Asseco, as detailed above, in amounts of approximately $770 and $1,228, respectively. In addition, during the year ended December 31, 2020 Matrix provided certain software consulting services to Asseco in the field of cyber security amounting to $17. b) Fees paid for board services in affiliates Sapiens paid Formula director fees for the years ended December 31, 2018, 2019 and 2020, of approximately $25.0, $25.3 and $8, respectively, in respect of Mr. Guy Bernstein, Sapiens’ Chairman and Formula’s chief executive officer. Matrix paid Formula director fees for the years ended December 31, 2018, 2019 and 2020, of approximately $29.0, $29.9 and $39.0, respectively, in respect of Mr. Guy Bernstein, Matrix’ Chairman and Formula’s chief executive officer. c) Back-office services During the years ended December 31, 2018, 2019 and 2020, Magic Software provided back-office services to Formula in amounts totaling approximately $112, $177 and $138, respectively. d) Other Transactions The Group’s subsidiaries and affiliates engage from time to time with each other in non-material transactions, in the ordinary course of business, where the amounts involved in, and the nature of the transactions are not material for either of the parties. The Group believes that these transactions are made on an arms’ length basis upon terms and conditions no less favorable to the Group, its subsidiaries and affiliates, as it could obtain from unaffiliated third parties. If Group engages with its subsidiaries and affiliates in transactions which are not in the ordinary course of business, the Group receives the approvals required under the Companies Law. These approvals include audit committee approval, board approval and, in certain circumstances, shareholder approval. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of leases [text block] [Abstract] | |
LEASES | Note 16:- LEASES The Group leases substantially all of its office space and vehicles under operating leases. The Group’s leases have original lease periods expiring between 2021 and 2033. Some leases include one or more options to renew. The Group does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably certain at lease commencement. Lease payments included in the measurement of the lease liability comprise the following: the fixed non-cancellable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Under IFRS 16, all leases with durations greater than 12 months, including non-cancellable operating leases, are now recognized on the statement of financial position. The aggregated present value of lease agreements is recorded as a long-term asset titled operating lease right-of-use assets. The corresponding lease liabilities are classified between operating lease liabilities which are current and long-term. Maturity analysis of undiscounted future lease payments receivable for operating leases: 2021 33,887 2022 28,949 2023 18,550 2024 12,068 2025 10,108 2026 and thereafter 35,725 Total undiscounted cash flows 139,287 Less imputed interest (16,034 ) Present value of lease liabilities 123,253 Depreciation expenses of operating lease right-of-use assets totaled $33,531 and $34,408 for the year ended December 31, 2019 and 2020, respectively. |
Employee Option Plans
Employee Option Plans | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Of Employee Option Plans Explanatory [Abstract] | |
EMPLOYEE OPTION PLANS | Note 17:- Employee Option Plans a) Formula and its subsidiaries grant, from time to time, options, restricted share units or restricted shares to their officers and employees to purchase shares in the respective companies. In general, the options expire ten years after grant. The following table sets forth the breakdown of share-based compensation expense resulting from such grants, as included in the consolidated statements of profit or loss: Year ended December 31, 2020 2019 2018 Cost of revenues $ - $ - $ 2 Research and development expenses - - 4 Selling and marketing expenses - 74 4 General and administrative expenses 7,856 3,800 3,971 $ 7,856 $ 3,874 $ 3,981 b) Formula In August 2017, Formula’s board of directors, following the approval by Formula’s compensation committee, awarded its chief financial officer 10,000 restricted shares under the 2011 plan (the “new restricted shares”). These restricted shares vest on a quarterly basis over a three-year period, commencing on August 17, 2017 and concluding on August 17, 2020, provided that during such time the chief financial officer will continue to serve as (i) an officer of the Company and/or (ii) an officer in one of the directly held affiliates, except that if he fails to meet the service condition due to the request of the board of directors of either Formula or any of its directly held affiliates (other than a termination of his provision of services which is based on actions or omissions by him that will constitute “cause” under his grant agreement with Formula), then, the chief financial officer will be deemed to have complied with clauses (i) or (ii) above. Notwithstanding the foregoing, if a change of control of the Company occurs, then all unvested new restricted shares will immediately become vested. Total fair value of the grant was calculated based on the Formula share price on the grant date and equaled to $371 ($37.1 per share). The total compensation expense that the Company recorded in its statement of profit or loss for the years ended December 31, 2018, 2019 and 2020 in respect of its chief financial officer were $166, $66 and $21, respectively. As of December 31, 2020 Formula chief financial officer holds 10,834 shares. In November 2018, Formula’s board of directors, following the approval by Formula’s compensation committee, awarded its chief operational officer 10,000 restricted shares under the 2011 plan (the “restricted shares”). These restricted shares vest on an annual basis over a four-year period, commencing on November 19, 2018 and concluding on November 19, 2022, provided that during such time the chief operational officer will continue to serve as (i) an officer of the Company and/or (ii) an officer in one of the directly held affiliates. Total fair value of the grant was calculated based on the Formula share price on the grant date and equaled $382 ($38.2 per share). The total compensation expense the Company recorded in its statement of profit or loss for the years ended December 31, 2018, 2019 and 2020 were $25, $191 and $98, respectively. As of December 31, 2020 Formula chief operational officer holds 10,000 restricted shares from this grant, of which 5,000 are fully vested. In November 2020, Formula’s board of directors, following the approval by Formula’s compensation committee, awarded Emil Sharvit (2001) Consulting and Project Management Ltd., through which its chief executive officer, provides services to Formula, 611,771 restricted stock units (“RSUs”) in respect of ordinary shares of the Company. 66.67% of the RSUs (i.e., 407,847 RSUs) are subject to time-based vesting that shall start as of the grant date and shall end at December 31, 2027 subject to the continued engagement of Formula chief executive officer with the Company as of that date (the “Vesting Period”); and up to 33.33% of the RSUs (i.e., 203,924 RSUs as of the date hereof) are subject to performance-based vesting, and shall vest at December 31, 2027 on a pro-rata basis with respect to each fiscal year (starting as of January 1, 2020) during the Vesting Period in which the Target EBITDA (as defined below) is achieved, subject to the continued engagement of Formula chief executive officer with the Company. At the end of the vesting period, the number of performance based RSUs that vests shall be equal to (i) the number of fiscal years in which the Target EBITDA was achieved multiplied by (ii) 25,490.50 RSUs (rounded to the nearest whole number, up to a cap of 203,924 RSUs in total). The “Target EBITDA” in a given fiscal year during the Vesting Period shall mean the Company’s EBITDA in that certain fiscal year (as reflected in the Company’s annual audited consolidated financial statements), excluding the cost attributed to the applicable portion of the RSUs in the Company’s annual audited consolidated financial statements for the applicable fiscal year (as to which the review of performance is made to determine whether one eighth of the Performance Based RSUs (i.e., 25,490.50 RSUs) shall become vested at the end of the Vesting Period). The Target EBITDA shall be not less than 105% of 75% of the Company’s EBITDA in the previous fiscal year, excluding the cost attributed to the applicable portion of the RSUs in the Company’s annual audited consolidated financial statements for such previous fiscal year (the “Previous Year”). Such examination of EBITDA shall be made on the basis of the Company’s annual audited consolidated financial statements as reflected in the Company’s annual report on Form 20-F, and in the event that the Company sells any of its operations, the Target EBITDA shall be adjusted as applicable for future reference by removing the results of the operations that were sold. In the event that with respect to any specific fiscal year (the “Specific Year”), the Target EBITDA is not achieved, the Target EBITDA with respect to such Specific Year will still be deemed to have been met for the purpose of vesting of RSUs in the event that either: (i) the EBITDA in the fiscal year immediately following the Specific Year was at least 110.25% of 75% of the Company’s EBITDA in the year preceding the Specific Year, or (ii) in case that the condition in the foregoing clause (i) was not met, then the EBITDA in the second fiscal year following the Specific Year was at least 115.7625% of 75% of the Company’s EBITDA in the year preceding the Specific Year. Accordingly, in case that either clause (i) or (ii) was met for a certain Specific Year, then the vesting with respect to such Specific Year shall be deemed to have been achieved, and those RSUs shall become vested as of the end of the Vesting Period. In the event that neither of the conditions described in clauses (i) or (ii) was met, the portion of RSUs for the applicable Specific Year shall automatically expire and terminate. Notwithstanding the foregoing, in case the Target EBITDA is met (in accordance with the above terms) in a certain fiscal year, yet the Target EBITDA is less than 105% of 75% of the average EBITDA for the three fiscal years that consist of the subject fiscal year and the two preceding years (excluding the cost attributed to the applicable portion of the RSUs in Company’s annual audited consolidated financial statements for such applicable fiscal years), then regardless of meeting the Target EBITDA, the number of performance-based RSUs that vests shall be reduced by 20%. Total fair value of the grant was calculated based on the Formula share price on the grant date and equaled to ILS 170,864, or $50,054 ($81.8 per share). The total compensation expense the Company recorded in its statement of profit or loss, in accordance with accounting principles, for the year ended December 31, 2020, was $1,191. In addition to the RSU grant terms described above, Formula board of directors has approved, following the approval by Formula’s compensation committee, an adjustment to the above-described RSU grant based on dividends that the Company distributes to its shareholders. During the Vesting Period of the RSUs, in the event that any dividend, in cash or in kind, is distributed to the shareholders of the Company, then in addition to the distribution to all shareholders, there will be an equivalent payment to Formula chief executive officer with respect to all RSUs that were not converted into shares (whether or not vested) in an amount equal to the pro-rata portion of the overall dividend amount that the RSUs constitute out of the issued and outstanding share capital of the Company as of the date of the distribution. For those purposes, the RSUs will be counted as if they are already vested and converted into shares. These special RSU dividend amounts shall be paid and/or set aside by the Company for the benefit of its chief executive officer, all as described below. For the purpose of payment of the Dividend Amounts to Formula chief executive officer, the Vesting Period shall be regarded as if it has commenced on January 1, 2020 (other than with respect to distributions and any related dividend amount which were made prior to the grant of the RSUs and which are explicitly excluded), and will be divided into 32 fiscal quarters (each, referred to as a Fiscal Quarter). The dividend amount within each dividend distributed by the Company to its shareholders will be released to, or set aside for, Formula chief executive officer together with the distribution of the dividend. The portion of the Dividend Amount to be released to Formula chief executive officer will in each case be based on the number of Fiscal Quarters that have lapsed at the time of distribution of the dividend. The remainder of the Dividend Amount will be set aside and paid to Formula chief executive officer on a pro-rata basis upon the expiration of each Fiscal Quarter until the Dividend Amount is released in full at the end of the Vesting Period for the RSUs. In the event of termination of Formula chief executive officer services agreement with the Company, by the Company for Cause (as defined in the services agreement), the RSUs will immediately terminate and become null and void, and all interests and rights of Formula chief executive officer in and to the same will expire. In case of termination of Formula chief executive officer services agreement by the Company not for Cause, or due to the resignation of Formula chief executive officer for Good Reason 1 In the event of resignation by Formula chief executive officer not for Good Reason, Formula chief executive officer RSUs will vest, in an accelerated manner, in such portion equal to the pro-rata portion of the Vesting Period that has already lapsed (based on the full number of Fiscal Quarters that have lapsed form January 1, 2020 until the actual resignation date, including notice period). However, any Performance Based RSUs for which the applicable target was not achieved up until the resignation date (including the notice period) will expire and terminate. Total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Formula equity incentive plan as of December 31, 2019 and 2020 were $198 and $51,940, respectively. c) Matrix In December 2017, Matrix extended its agreement with Revava Management Company Ltd. through which its chief executive officer, Mr. Moti Gutman, provides services to Matrix, for five years’ term starting on January 1, 2018. As part of the new agreement in January 2018, Matrix awarded Mr. Gutman 256,890 (RSUs), which vest on an annual basis over a five-year period, commencing on January 16, 2018 and concludes on December 31, 2022, but not before the publication of Matrix’s financial statements for each respective year, and subject to certain conditions. In 2020, 51,378 restricted share units (RSU) were vested and exercised. As of December 31, 2020 Mr. Gutman holds 154,134 restricted share units (RSU) from this grant. 1 “Good Reason” is a termination due to: (i) a material reduction in Formula chief executive representative’s scope of authorities and responsibilities (excluding, for the avoidance of doubt, as a result of changes in legislation or other legal restrictions which affect the scope of Services under its service agreement), (ii) a material breach by the Company of any provision of the service agreement or its exhibits, or (iii) any acceleration event, in each of (i) to (iii) which is not cured (if curable) by the Company within thirty (30) days of receipt of a written notice about such breach from Formula chief executive officer, provided that during the three (3) months prior notice period with respect to resignation for Good Reason the Company shall be entitled to retract its decision in a manner that removes the basis for a Good Reason. In January 2019, the board of directors of Matrix approved, following the approval by Matrix’s compensation committee, the grant of 1,440,000 options which are exercisable into up to 1,440,000 ordinary shares of Matrix of NIS 1 par value each, to 20 senior officers of Matrix. The exercise price of the options was NIS 41.7 at the date of their grant, subject to adjustments, including upon the distribution of dividends. 50% of the options will be vested on January 1, 2021 with the remaining amount vesting in equal parts on January 1, 2022 and 2023. When the actual exercise will take place, shares will be allotted, according to a net exercise mechanism resulting with Matrix not receiving any cash consideration for the issuance of its shares. In February 2019, the general shareholder meeting of Matrix approved, after obtaining the approval of Matrix’s compensation committee and Matrix board of directors the grant of 80,000 options which are exercisable into up to 80,000 ordinary shares of Matrix of NIS 1 par value, to the President and Vice Chairman of the Matrix board. The exercise price of the options was NIS 43.16 at the date of their grant, subject to adjustments, including upon the distribution of dividends. 50% of the options will vest on January 1, 2021, with the remaining amount vesting in equal parts on January 1, 2022 and 2023. When the actual exercise will take place, shares will be allotted, according to a net exercise mechanism resulting with Matrix not receiving any cash consideration for the issuance of its shares. The fair value of the options was estimated on the date of grant using the Binomial model based on the terms which are: risk-free interest rate is 0.5% -1.6%, early exercise factor is 70% and expected volatility is 24%. The contractual life of the options is 5 years from the date of grant. The following table summarizes Matrix employee stock-based compensation activity during the year ended December 31, 2020: Number of options Weighted Weighted average remaining contractual term Aggregate Outstanding at January 1, 2020 1,725,512 10.17 3.73 17,153 Exercised (51,378 ) - - (689 ) Granted - - - - Outstanding at December 31, 2020 1,674,134 10.70 2.88 19,935 Exercisable at December 31, 2020 811,378 - - 9,386 The aggregate intrinsic value provided on the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on the respective dates. This value would change based on the change in the market value of Matrix’ ordinary shares and the change in the exchange rate between the New Israeli Shekel and dollar. Total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Matrix equity incentive plan as of December 31, 2019 and 2020 were $2,491 and $1,368, respectively. d) Sapiens The following table summarizes Sapiens stock-based compensation activity during the year ended December 31, 2020: Year ended December 31, 2019 Amount Weighted average exercise price Weighted average remaining contractual life Aggregate intrinsic value Outstanding at January 1, 2020 1,869,412 10.25 3.21 23,838 Granted 315,000 26.28 Exercised (603,519 ) 8.63 Expired and forfeited (118,411 ) 11.15 Outstanding at December 31, 2020 1,462,482 14.26 3.17 24,019 Exercisable at December 31, 2020 732,209 10.59 2.29 14,092 In 2018, 2019 and 2020, Sapiens granted 317,000, 155,000 and 315,000 stock options to its employees and directors to purchase its shares, respectively. The weighted average grant date fair values of the options granted during the years ended December 31, 2018, 2019 and 2020 were $3.43, $4.24 and $7.99, respectively. The aggregate intrinsic value provided on the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on the respective dates. This value would change based on the change in the market value of Sapiens’ common shares. The total intrinsic value of options exercised during the years ended December 31, 2018, 2019 and 2020 was $1,641, $2,301 and $11,658, respectively. The options outstanding under Sapiens’ stock option plans as of December 31, 2020 have been separated into ranges of exercise price as follows: Ranges of exercise price Options Weighted Weighted Options Weighted $ (Years) $ $ 1.12 8,408 0.41 1.12 8,408 1.12 8.31-10.07 280,324 1.73 9.17 207,133 9.15 11.07-11.09 682,500 2.81 11.09 426,250 11.09 11.85-15.46 176,250 3.27 12.75 90,418 12.41 24.29-25.4 235,000 5.13 25.12 - - 31.96 80,000 5.60 31.96 - - 1,462,482 3.17 14.26 732,209 10.59 The total equity-based compensation expense related to all of Sapiens’ equity-based awards, recognized for the years ended December 31, 2018, 2019 and 2020, after being adjusted to comply with IFRS, was $2,009 , $1,125 and $4,318, respectively. As of December 31, 2020, there was $6,454 of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a period of up to four years. In connection with Sapiens’ acquisition of sum.cumo, on February 6, 2020 (see Note 3b), Sapiens issued an aggregate of 173,005 RSUs to certain employees of sum.cumo in connection with the acquisition. The value of these grants was not included in the purchase price of sum.cumo, since their vesting is subject to both continued employment and other performance criteria. Sapiens recorded compensation costs related to RSUs of $2,143 for the year ended December 31, 2020, which were included in Selling, marketing, general and administrative expenses in the Company’s consolidated statements of income. e) Magic Software The following table summarizes Magic Software stock-based compensation activity during the year ended December 31, 2020: Number of options Weighted average exercise Weighted average remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2020 119,767 2.58 1.37 1,171 Granted - - Exercised (95,517 ) 2.28 Forfeited - - Outstanding at December 31, 2020 24,250 3.45 1.24 380 Exercisable at December 31, 2020 24,250 3.45 1.24 380 The aggregate intrinsic value provided on the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on the respective dates. This value would change based on the change in the market value of Magic Software’s ordinary shares. Total intrinsic value of options exercised during the years ended December 31, 2018, 2019 and 2020, was $617, $537 and $765 respectively. As of December 31, 2020, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under Magic Software’s plans. The options outstanding as of December 31, 2020, have been separated into ranges of exercise price categories, as follows: Ranges of Exercise price Options outstanding Weighted average remaining contractual life Weighted average exercise price Options exercisable Weighted average exercise price of exercisable options $ (Years) $ $ 2.01-3 18,000 0.77 2.94 18,000 2.94 4.01-5 6,250 2.60 4.94 6,250 4.94 24,250 1.24 3.45 24,250 3.45 |
Employee Benefit Liabilities
Employee Benefit Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of employee benefits [text block] [Abstract] | |
EMPLOYEE BENEFIT LIABILITIES | Note 18:- EMPLOYEE BENEFIT LIABILITIES Employee benefits consist of 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 Israeli companies in the Group are 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. These liabilities are accounted for as a post-employment benefit. The computation of the Group’s employee benefit liability is made according to the current employment contract based on an employee’s salary and employment term which establish the entitlement to receive the compensation. The post-employment employee benefits are normally financed by contributions classified as a defined benefit plan or as a defined contribution plan, as detailed below. 1) Defined contribution plans Section 14 of the Severance Pay Law, 1963 applies to part of the compensation payments, pursuant to which the fixed contributions paid by the Group into pension funds and/or policies of insurance companies release the Group from any additional liability to employees for whom said contributions were made. These contributions and contributions for benefits represent defined contribution plans. 2) Defined benefit plans The Group accounts for that part of the payment of compensation that is not covered by contributions in defined contribution plans, as above, as a defined benefit plan for which an employee benefit liability is recognized and for which the Group deposits amounts in central severance pay funds and in qualifying insurance policies. 3) Other long-term benefits According to Matrix’s agreements with one of its senior officers, he is entitled to an adaptation bonus in an amount of 12 salaries. This liability has been recognized as a defined benefit. b) Composition of defined benefit plans is as follows: December 31, 2020 2019 Defined benefit obligation 113,540 95,692 Fair value of plan assets (98,421 ) (84,053 ) Net defined benefit liability 15,119 11,639 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of commitments and contingent liabilities [text block] [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 19:- Commitments and Contingencies a) Liens 1) Liens have been incurred by Formula over a certain portion of the Matrix, Magic Software and Sapiens’ shares which it held. As of December 31, 2020 Formula has collaterals in connection with Series A Secured Debentures and Series C Secured Debentures issued by Formula on the TASE (see Notes 14). 2) Composition of pledged shares of Matrix, Magic Software and Sapiens owned by Formula as of December 31, 2020: December 31, Formula’s series A secured Debentures Formula’s series C secured debentures Matrix ordinary shares, par value NIS 1.0 per share 4,128,865 6,031,761 Magic Software ordinary shares, par value NIS 0.1 per share 5,825,681 2,411,474 Sapiens common shares, par value €0.01 per share 1,260,266 2,957,590 In January 2020, Following the final repayment by Formula of the loan, the Company unpledged the remaining pledged shares consisting 1,569,098 shares of Matrix, 760,323 shares of Magic Software and 511,920 shares of Sapiens. In accordance with Formula Series C Secured Debentures deed of trust, Formula did not incur any additional liens in connection with its additional Series C Secured Debentures issued in April 2021 (See note 14(c)(iii)). b) Guarantees As of December 31, 2020, the Group provided performance bank guarantees in an aggregate amount of approximately $44,700 as security for performance of various contracts with customers and suppliers. As of December 31, 2020, the Group provided bank guarantees in an aggregate amount of approximately $8,000 as security for rent to be paid for its leased offices. As of December 31, 2020, the Group had restricted bank deposits in an aggregate amount of $861 in favor of the above-mentioned bank guarantees. In addition, The Company and its subsidiaries provided certain cross guaranties in favor of certain subsidiaries in the Group. Matrix, Sapiens, Magic Software and Michpal each provides cross guarantees to its subsidiaries. c) Covenants In connection with the Group’s debentures and credit facility agreements with banks and other financial institutions, as of December 31, 2020, the Group committed to the following: 1) Formula i) Formula’s Debentures In accordance with Formula’s indenture for its Series A and Series C Secured Debentures, Formula has undertaken to maintain the following financial covenants and obligations: a. A covenant not to distribute dividends unless (i) Formula shareholders’ equity attributable to Formula Systems shareholders shall not be less than $290 million, (ii) Formula’s net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) shall not exceed 50% of net CAP (defined as financial indebtedness, net, plus shareholders’ equity), and (iii) the aggregate amount of distributions from January 1, 2016 shall not exceed the aggregate amount of net oncome for the year ended December 31, 2015 together with 75% of accumulated profits from January 1, 2016 until the respective distribution date and (iv) no event of default shall have occurred. b. Financial covenants, including (i) the equity attributable to Formula Systems shareholders, as reported in Formula’s annual or quarterly financial statements, shall not be less than $215 million - as of December 31, 2020 Formula equity attributable to Formula Systems shareholders’ was approximately $503.2 million, (ii) Formula’s net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) shall not exceed 65% of net CAP (defined as financial indebtedness, net, plus total equity) - as of December 31, 2020 Formula’s net financial indebtedness was 1.1% of net CAP, (iii) The ratio of Formula’s net financial indebtedness to the last twelve-months period EBITDA will not exceed 5 (all based on the Company’s quarterly and annual consolidated financial statements) – as of December 31, 2020 the ratio of Formula’s net financial indebtedness to EBITDA was 0.045 and (iv) at all times, Formula’s cash balance on a stand-alone basis will not be less than the semi annual interest payments for the unpaid principal amount of Series A and Series C Secured Debentures – as of December 31, 2020 Formula’s cash balances exceeds the semi annual interest payments amount. c. Standard events of default including among others: 1. Suspension of trading of the debentures on the TASE over a period of 60 days; 2. If the rating of the debentures is less than BBB- by Standard and Poors Maalot or equivalent rating of other rating agencies; 3. Failure to have the debentures rated over a period of 60 days; 4. If there is a change in control without consent of the rating agency; and 5. If Formula fails to continue to control any of its subsidiaries; 2) Matrix In the context of Matrix’s engagements with banks and financial institutions for receiving credit facilities, Matrix has undertaken to maintain the following financial covenants, as they are expressed in its financial statements: (i) The total rate of Matrix financial debts and liabilities to banks with the addition of debts in respect of debentures that have been and/or will be issued by Matrix and shareholders’ loans that have been and/or will be granted to Matrix (collectively, the “debts”) will not exceed 40% of its total balance sheet. (ii) The ratio of Matrix net debt to the annual EBITDA will not exceed 3.5. As of December 31, 2019, Matrix ratio of net debt to EBITDA was 0.59. (iii) Matrix equity shall not be lower than NIS 275 million (approximately $80 million) at all times. As of December 31, 2019 Matrix’s equity was approximately NIS 825 million (approximately $257 million). (iv) Matrix balances of cash and short-term investments in its balance sheet shall not be less than NIS 50 million (approximately $16 million). In the context of Matrix’ issuance of commercial Securities which are not listed, Matrix committed to maintain at all times a cash and short-term investments balances of approximately NIS 100 million (approximately $31 million). As of December 31, 2020, Matrix’s cash and short-term investments were approximately NIS 644 million (approximately $200 million). (v) In the event that Formula ceases to hold 30% of Matrix share capital or is no longer the largest shareholder in Matrix, the credit may be placed for immediate repayment. (vi) Matrix has committed that the rate of ownership and control of Matrix IT-Systems shall never be below 50.1%. (vii) Matrix will not create any pledge on all or part of its property and assets in favor of any third party and will not provide any guarantee to secure any third party’s debts as they are today and as they will be without the banks’ consent (except for a first-rate fixed pledge on an asset which acquisition will be financed by a third party and which the pledge will be in his favor). (viii) Matrix will not sell and/or transfer all or part of its assets to others in any manner whatsoever without the banks’ advance written consent unless it is done in the ordinary course of business. 3) Sapiens In accordance with the indenture for Sapiens’ Series B Debentures, Sapiens has undertaken to maintain a number of conditions and limitations on the manner in which it can operate its business, including limitations on its ability to undergo a change of control, distribute dividends, incur a floating charge on its assets, or undergo an asset sale or other change that results in fundamental change in its operations. Sapiens Series B Debentures deed of trust also requires it to comply with certain financial covenants, as described below. A breach of the financial covenants for more than two successive quarters or a substantial downgrade in the rating of the debentures (below BBB-) could result in the acceleration of Sapiens’ obligation to repay the debentures. The deed of trust includes the following provisions: (i) a negative pledge, subject to certain exceptions; (ii) a covenant not to distribute dividends unless (i) Sapiens equity attributable to Sapiens shareholders’ shall not be less than $160 million, (ii) Sapiens net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) does not exceed 65% of net CAP (defined as financial indebtedness, net, plus total equity), (iii) the amount of accumulated dividends from the issuance date and going forward shall not exceed Sapiens net income for the year ended December 31, 2016 and the first three quarters of the year ended December 31, 2017, plus 75% of Sapiens accumulated profits from September 1, 2017 and up to the date of distribution, and (iv) no event of default shall have occurred. (iii) financial covenants, including (i) the equity attributable to the shareholders of Sapiens, as reported in its annual or quarterly financial statements, will not be less than $120 million – as of December 31, 2020 Sapiens’ shareholders equity was $382 million, and (ii) Sapiens’ net financial indebtedness (financial indebtedness offset by cash, marketable securities deposits and other liquid financial instruments) shall not exceed 65% of net CAP (defined as financial indebtedness, net, plus shareholders equity, including deposits and other liquid financial instruments) – as of December 31, 2020 Sapiens’ net financial indebtedness was (9.75%) of net CAP, and (iii) the ratio of Sapiens’ net financial indebtedness to EBITDA (based on accumulated calculation for the four last quarters) shall not exceed 5.5 – as of December 31, 2020 the ratio of Sapiens’ net financial indebtedness to EBITDA was (0.47). 4) Magic Software Under the terms of the loan with an Israeli financial institution, Magic Software has undertaken to maintain the following financial covenants, as they will be expressed in its consolidated financial statements (in accordance with US GAAP): (i) Total equity attributable to Magic Software’ shareholders shall not be lower than $100 million at all times – as of December 31, 2020 Magic Software shareholders’ equity was $260 million. (ii) Magic Software’s consolidated cash and cash equivalents and marketable securities available for sale shall not be less than $10 million – as of December 31, 2020 Magic Software’s cash and marketable securities available for sale were $88 million. (iii) The ratio of Magic Software’s consolidated total financial debts to consolidated total assets will not exceed 50% - as of December 31, 2020 Magic Software’s financial debts were 5.6% of total assets; (iv) The ratio of Magic Software’s total financial debts less cash, short-term deposits and short-term marketable securities to the annual EBITDA will not exceed 3.25 – as of December 31, 2020 the ratio of Magic Software’s net financial indebtedness to EBITDA was negative (-1.3) (cash exceeds indebtedness) ; and (v) Magic Software shall not create any pledge on all of its property and assets in favor of any third party without the financial institution’s consent. As of December 31, 2020, each of Formula, Matrix, Sapiens and Magic Software was in compliance with all of its financial covenants. d) Legal proceedings 1) In September 2016, an Israeli software company, which was previously involved in an arbitration proceeding with Magic Software in 2015 and won damages from it for $2.4 million, filed a lawsuit seeking damages of NIS 34,106 against Magic Software and one of its subsidiaries. This lawsuit was filed as part of an arbitration proceeding. In the lawsuit, the software company claimed that warning letters that Magic Software sent to its clients in Israel and abroad, warning those clients against the possibility that the conversion procedure offered by the software company may amount to an infringement of Magic Software’s copyrights (the “Warning Letters”), as well as other alleged actions, have caused the software company damages resulting from loss of potential business. The lawsuit is based on rulings given in the 2015 arbitration proceeding in which it was allegedly ruled that the Warning Letters constituted a breach of a non-disclosure agreement (NDA) signed between the parties. Magic Software rejects the claims by the Israeli software company and moved to dismiss the lawsuit entirely. At this point, all the relevant motions have been filed and all witnesses deposed including legal summaries. The Group is unable to make a reasonably reliable estimate of its chances of successfully defending this lawsuit. 2) On November 23, 2020, Olir Trade and Industries Ltd. (“Olir”) filed a derivative action and a motion to certify a derivative action, with the District Court (Economic Division) of Tel Aviv-Jaffa, Israel (Derivative Action No. 58348-11-20) (the “Claim” and the “Motion to Certify”, respectively). In the framework of the Motion to Certify, Olir requested permission to file the Claim, on the Company’s behalf, against each of the Company’s five directors, as well as the Company’s chief executive officer (the “CEO”), Mr. Guy Bernstein, and chief financial officer, Mr. Asaf Berenstin (the “CFO”), as defendants. The Company and the named defendants are all listed as respondents to the Motion to Certify. The Claim challenges the legality, under the Israeli Companies Law, 5759-1999 (the “Companies Law”), of compensation awarded to the Company’s CEO and CFO, including past engagements with the CEO and the recent re-approval by the Company’s compensation committee and board of directors (as reported in the Company’s Report of Foreign Private Issuer on Form 6-K furnished to the Securities and Exchange Commission on November 4, 2020), of the eight-year equity-based award of compensation—in the form of 611,771 restricted share units— to the Company’s CEO. The Claim includes allegations of breaches of fiduciary duties (duty of care and duty of loyalty) and the oppression of minority shareholders and unjust enrichment. The Claim seeks an accounting from the defendants as to the alleged harm caused to the Company, as well as compensation to the Company for such harm. The Claim also seeks a declaratory order preventing the board of directors from using voting powers allegedly granted to it under agreements related to the Company’s ADSs.” The Company rejects all claims made by Olir and believe that all actions taken by its board of directors and its committees were taken in accordance with the Companies Law and based upon advice of legal counsel. All respondents intend to vigorously defend against the Motion to Certify and on May 13, 2021 all respondents filed their responses to the Motion to Certify. At this early stage of the proceedings the Company cannot predict the outcome of the proceedings 3) In addition to the above-described legal proceedings, from time to time, Formula and/or its subsidiaries and affiliates are subject to legal, administrative and regulatory proceedings, claims, demands and investigations in the ordinary course of business, including claims with respect to intellectual property, contracts, employment and other matters. The Group accrues a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in the determination of both the probability and as to whether a loss is reasonably estimable. These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. The Group intends to defend itself vigorously against the above claims, and it generally intends to vigorously defend any other legal claims to which it is subject. While for most litigations, the outcome is difficult to determine, to the extent that there is a reasonable possibility that the losses to which the Group may be subject could exceed the amounts (if any) that it has already accrued, the Group attempts to estimate such additional loss, if reasonably possible, and disclose it (or, if it is an immaterial amount, indicate accordingly). The aggregate provision that the Group has recorded for all other legal proceedings (other than the particular material proceedings described above) is not material. e) Royalty commitments Sapiens Technologies (1982) Ltd. (“Sapiens Technologies”), a wholly owned subsidiary of Sapiens incorporated in Israel, was partially financed under programs sponsored by the Israel Innovation Authority (“IIA”), formerly the Office of the Chief Scientist (“OCS”) for the support of certain research and development activities conducted in Israel. In exchange for participation in the programs by the IIA, Sapiens Technologies agreed to pay 3.5% of total net consolidated license and maintenance revenue and 0.35% of the net consolidated consulting services revenue related to the software developed within the framework of these programs based on an understanding with IIA reached in January 2012. The royalties will be paid up to a maximum amount equaling 100%-150% of the grants provided by the IIA, linked to the dollar, and for grants received after January 1, 1999, bear annual interest at a rate based on LIBOR. As of December 31, 2020, the estimated amount due to IIA amounted to $260. As of December 31, 2020, the Group had a contingent liability to pay royalties of $6,014. f) Insurance The Company and its subsidiaries and affiliates insure themselves in bodily injury and property damage insurance policies, including third party, professional liability and employer’s liability insurance policies. Formula, Sapiens, Magic Software, Insync, Michpal and Ofek directors and officers (D&O) are insured under an “umbrella” policy for insurance of directors and officers including D&O side A DIC policy (another layer of protection for officers) acquired by the Company for itself and its subsidiaries, for a period of 12 months from February 14, 2020. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of share capital, reserves and other equity interest [text block] [Abstract] | |
EQUITY | Note 20:- equity The composition of the Company’s share capital is as follows: December 31, 2020 December 31, 2019 Authorized Issued Outstanding Authorized Issued Outstanding Ordinary shares, NIS 1 par value each 25,000,000 15,862,887 15,294,267 25,000,000 15,862,887 15,294,267 a. Formula’s ordinary shares, par value NIS 1 per share, are traded on the TASE, and Formula’s ADSs, each representing one ordinary share, are traded on the NASDAQ. b. Formula holds 568,620 of its ordinary shares. c. In May 2018, Formula declared a cash dividend of approximately $5,012 (or $0.34 per share) to shareholders of record on June 5, 2018 that was paid on June 20, 2018. d. In December 2018, Formula declared a cash dividend of approximately $5,015 (or $0.34 per share) to shareholders of record on December 31, 2018 that was paid on January 16, 2019. e. In August 2019, Formula declared a cash dividend of approximately $7,953 (or $0.52 per share) to shareholders of record on September 12, 2019 that was paid on September 25, 2019. f. In November 2019, Formula declared a cash dividend of approximately NIS 24,471 (approximately $7,079) or NIS 1.6 per share (approximately $0.46 per share) to shareholders of record on December 24, 2019 that was paid on January 8, 2020. g. In August 2020, Formula declared a cash dividend of approximately NIS 27,071 (approximately $7,881) or NIS 1.77 per share (approximately $0.52 per share) to shareholders of record on September 3, 2020 that was paid on September 16, 2020. h. In February 2021, Formula declared a cash dividend of approximately NIS 33,036 (approximately $10,094) or NIS 2.16 per share (approximately $0.66 per share) to shareholders of record on February 18, 2021 that was paid on March 4, 2021. i. For information concerning Formula’s employees and officers share-based plans, see Note 17. |
Taxes on Income
Taxes on Income | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of income tax [text block] [Abstract] | |
Taxes ON INCOME | Note 21:- Taxes ON INCOME a. Israeli taxation: 1) Corporate tax rate in Israel Taxable income of Israeli companies was generally subject to corporate tax at the rate of 23% in 2018, 2019 and in 2020. However, the effective tax rate payable by a company that derives taxable income from a Preferred Enterprise or Preferred Technological Enterprise or Special Preferred Technological Enterprise (as discussed below) may be considerably lower. 2) Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (the “Law”) Effective January 1, 2011, the Israeli parliament enacted the Law for Economic Policy for 2011 and 2012 (Amended Legislation), and among other things, amended the Law in August 2013 (“the Amendment”). According to the Amendment, a flat corporate tax rate of 16% was established for exporting industrial enterprises (over 25%) that meet minimum requirements which establish that such companies contribute to the country’s economic growth and apply a competitive factor for the Israel Gross Domestic Product. The reduced tax rate will not be program dependent and will apply to the “Preferred Enterprise’s” (as such term is defined in the Investment Law) entire “preferred income”. The Amendment also prescribes a distribution from a Preferred Enterprise out of the “Preferred Income” would be subject to 15% withholding tax for Israeli-resident individuals and non-Israeli residents (subject to applicable treaty rates), or 20% for dividends which are distributed on or after January 1, 2014 and from “Preferred Income” that was produced or accrued after such date. A distribution from a Preferred Enterprise out of the “Preferred Income” would be exempt from withholding tax for an Israeli-resident company. In 2011, Magic Software and one of its Israeli subsidiaries filed a notice to the Israeli tax authorities to apply for the new benefits under the 2011 Amendment, and therefore were subjected to the amended tax rate of 16% for the tax years 2011-2016. As of December 31, 2015, some of the Company Israeli subsidiaries filed a notice to the Israeli tax authorities to apply for the new benefits under the 2011 Amendment and therefore and subject to the amended tax rate of 16%, which was used for 2014-2016 tax years. New Amendment- Preferred Technology Enterprise (“PTE”): In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments (“the 2017 Amendment”) was published and was pending the publication of regulations, in May 2017 regulations were promulgated by the Finance Ministry to implement the “Nexus Principles” based on OECD guidelines published as part of the Base Erosion and Profit Shifting (BEPS) project. Following the publication of the regulations the 2017 Amendment became fully effective. According to the 2017 Amendment, a Preferred Technological Enterprise, as defined in the 2017 Amendment, with total consolidated revenues of the group companies is less than NIS 10 billion, shall be subject to 12% tax rate on income derived from intellectual property (in development area A—a tax rate of 7.5%). In order to qualify as a Preferred technological enterprise certain criterion must be met, such as a minimum ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual revenues derived from exports. The 2017 Amendment further provides that a technology company satisfying certain conditions will qualify as a Special PTE (an enterprise for which, among others, total consolidated revenues of its parent company and all subsidiaries is at least NIS 10 billion) and will thereby enjoy a reduced corporate tax rate of 6% on PTI regardless of the company’s geographic location within Israel. In addition, a Special PTE will enjoy a reduced corporate tax rate of 6% on capital gain derived from the sale of certain “Benefited Intangible Assets” to a related foreign company if the Benefited Intangible Assets were either developed by the Special Preferred Technology Enterprise or acquired from a foreign company on or after January 1, 2017, and the sale received prior approval from the IIA. A Special PTE that acquires Benefited Intangible Assets from a foreign company for more than NIS 500 million will be eligible for these benefits for at least ten years, subject to certain approvals as specified in the Investment Law. Any dividends distributed from income from the preferred technological enterprises will be subject to tax at a rate of 20%. The 2017 Amendment further provides that, in certain circumstances, a dividend distributed to a foreign corporate shareholder, would be subject to a 4% tax rate (if the percentage of foreign investors exceeds 90%). Starting 2017, part of the Group’s taxable income in Israel is entitled to a preferred 12% tax rate in the preferred technological enterprise track under Amendment 73 to the Investment Law. 3) Tax benefits under the Israeli Law for the Encouragement of Industry (Taxes), 1969 It is Formula’s management’s belief that certain of its Israeli investees currently qualify as Industrial Companies within the meaning of the Law for the Encouragement of Industry (Taxes), 1969 (the “Industrial Encouragement Law”). The Industrial Encouragement Law defines an “Industrial Company” as a company that is resident in Israel and that derives at least 90% of its income in any tax year, other than income from defense loans, capital gains, interest and dividends, from an enterprise whose major activity in a given tax year is industrial production. Under the Industrial Encouragement Law, the Company is entitled to amortization of the cost of purchased know-how and patents over an eight-year period for tax purposes as well as accelerated depreciation rates on equipment and buildings. Eligibility for the benefits under the Industrial Encouragement Law is not subject to receipt of prior approval from any governmental authority. 4) Foreign Exchange Regulations Under the Foreign Exchange Regulations, certain Israeli subsidiaries of the Group calculate their tax liability in dollars according to certain orders. The tax liability, as calculated in dollars is translated into NIS according to the exchange rate as of December 31 of each year. 5) Structural changes in Matrix On June 11, 2020, a tax ruling was signed determining that effective December 31, 2019 as part of a merger process, three subsidiaries of Matrix will transfer all their assets and liabilities subject to the provisions of section 103 of the Income Tax Ordinance. b. Non-Israeli investees: Non-Israeli subsidiaries are taxed according to the tax laws in their respective country of residence. Deferred income taxes were provided in relation to undistributed earnings of non-Israeli subsidiaries, which the Group intends to distribute in the near future. The Group intends to permanently reinvest undistributed earnings in the foreign subsidiaries in which earnings arose, in the vast majority of its subsidiaries. If the earnings, for which deferred taxes were not provided, were distributed in the form of dividends or otherwise, the Group would be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and non-Israeli withholding taxes. The amount of undistributed earnings of foreign subsidiaries that are considered to be reinvested as of December 31, 2019 and 2020 was $105,136 and $114,569, respectively. However, a determination of the amount of the unrecognized deferred tax liability for temporary difference related to those undistributed earnings of foreign subsidiaries is not practicable due to the complexity of the structure of our group of investees for tax purposes and the difficulty of projecting the amount of future tax liability. The amount of cash and cash equivalents that were held by the Group’s investees outside of Israel and would have been subject to income taxes if distributed as dividend as of December 31, 2019 and 2020 was $54,388 and $87,331, respectively. c. Tax Reform- United States of America The U.S. Tax Cuts and Jobs Act of 2017 (“TCJA”) was approved by US Congress on December 20, 2017 and signed into law by US President Donald J. Trump on December 22, 2017. This legislation makes complex and significant changes to the U.S. Internal Revenue Code. Such changes include a reduction in the corporate tax rate and limitations on certain corporate deductions and credits, among other changes. The TCJA reduces the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. In addition, the TCJA makes certain changes to the depreciation rules and implements new limits on the deductibility of certain expenses and deduction. The TCJA introduced the rules for tax on the global intangible low-taxed income (“GILTI”) on foreign income in excess of a deemed return on tangible assets of foreign corporations. One of our subsidiaries is subject to GILTI. Except for one US subsidiary which has a share interest in a subsidiary in India, all of the other Group’s subsidiaries in the United States do not have any foreign subsidiaries and, therefore, the remaining provisions of the TCJA have no material impact on the Group’s results of operations. d. Net operating loss carried forward: As of December 31, 2020, Formula and its subsidiaries have cumulative losses for tax purposes totaling approximately $173,180, of which $137,414 was in respect of Israeli subsidiaries and approximately $35,766 of which was in respect of subsidiaries abroad. 1) Formula As of December 31, 2020, Formula stand-alone had cumulative carry forward tax losses in Israel totaling approximately NIS 257,462 (approximately $80,080), which can be carried forward and offset against taxable income in the future for an indefinite period. 2) Matrix As of December 31, 2020, certain subsidiaries of Matrix had operating carry-forward tax losses totaling approximately NIS 94,945 (approximately $29,532), which can be carried forward and offset against taxable income in the future for an indefinite period. 3) Magic Software As of December 31, 2020, certain subsidiaries of Magic Software had operating carry forward tax losses totaling approximately $23,782, which can be carried forward and offset against taxable income in the future for an indefinite period. 4) Sapiens As of December 31, 2020, certain subsidiaries of Sapiens had carry-forward tax losses totaling approximately $30,188. Most of these carry-forward tax losses have no expiration date. 5) Insync As of December 31, 2020 Insync did not have any carry forward tax losses. 6) Michpal As of December 31, 2020 one subsidiary of Michpal had carry-forward tax losses totaling approximately $500, which can be carried forward and offset against taxable income in the future for an indefinite period. 7) Ofek As of December 31, 2020 Ofek did not have any carry forward tax losses. e. Income tax assessments: Formula and its subsidiaries are routinely examined by various tax authorities. Below is a summary of the income tax assessments of Formula and its subsidiaries: 1) Formula Formula has received final tax assessments (or assessments that are deemed final) through the tax year 2017. 2) Matrix Matrix has received final tax assessments through the tax year 2017. Matrix subsidiaries have received final tax assessments (or assessments that are deemed final) through the tax year 2015. 3) Magic Software Magic Software has received final tax assessments through the year 2016. Magic Software subsidiaries have received final tax assessments (or assessments that are deemed final) through the tax year 2015. 4) Sapiens Tax assessments filed by some of Sapiens’ Israeli subsidiaries through the year 2015 are considered to be final. Sapiens is currently under audit in several jurisdictions for the tax years 2015 and onwards. Timing of the resolution of audits is highly uncertain and therefore, as of December 31, 2020, the Company cannot estimate the change in unrecognized tax benefits resulting from these audits within the next 12 months. f. Deferred tax liabilities, net: 1) Presentation in consolidated statements of financial position December 31, 2020 2019 Deferred taxes assets $ 39,750 $ 38,865 Deferred tax liabilities (68,367 ) (53,854 ) $ (28,617 ) $ (14,989 ) 2) Composition December 31, 2020 2019 Net operating losses carried forward $ 5,377 $ 6,115 Intangibles, fixed asset and right-of-use assets (78,885 ) (56,036 ) Lease liability 31,358 22,863 Differences in measurement basis (cash basis for tax purposes) (683 ) (345 ) Other 14,216 12,414 $ (28,617 ) $ (14,989 ) g. Pre-tax income: Year ended December 31, 2020 2019 2018 Domestic (Israel) 106,974 $ 88,942 $ 80,948 Foreign 36,782 30,895 20,379 Total $ 143,756 $ 119,837 $ 101,327 h. Taxes on income (tax benefit) consist of the following: Year ended December 31, 2020 2019 2018 Current taxes $ 23,015 $ 40,181 $ 30,302 Deferred taxes 8,254 (12,980 ) (6,001 ) Total $ 31,269 $ 27,201 $ 24,301 i. Theoretical tax: The following table presents reconciliation between the theoretical tax expense, assuming that all income was taxed at statutory tax rates, and the actual income tax expense, as recorded in the Group’s consolidated statements of profit or loss: Year ended December 31, 2020 2019 2018 Income before income taxes, as per the statement of operations $ 143,756 $ 119,837 $ 101,327 Statutory tax rate in Israel 23 % 23 % 23 % Tax computed at the statutory tax rate 33,064 27,563 23,305 Non-deductible expenses (non-taxable income) net and tax-deductible costs not included in the accounting costs 2,544 792 1,393 Effect of different tax rates (774 ) 1,114 379 Effect of “Approved, Beneficiary or Preferred Enterprise” status (5,426 ) (2,557 ) (1,233 ) Deferred taxes on current losses (utilization of carry forward losses) and temporary differences for which a valuation allowance was provided, net 1,877 1,087 (796 ) Taxes in respect of prior years 280 (569 ) (485 ) Uncertain tax positions 285 1,889 2,703 Other (581 ) (2,118 ) (965 ) Taxes on income $ 31,269 $ 27,201 $ 24,301 j. Uncertain tax positions: A reconciliation of the beginning and ending amount of total unrecognized tax benefits in Formula’s subsidiaries is as follows: Balance as of January 1, 2018 4,024 Decrease related to prior years’ tax positions (198 ) Increase related to current year tax positions 2,775 Balance as of December 31, 2018 6,601 Decrease related to prior years’ tax positions (243 ) Increase related to current year tax positions 1,999 Balance as of December 31, 2019 8,357 Acquisition of subsidiaries 1,057 Decrease related to prior years’ tax positions (1,733 ) Increase related to current year tax positions 1,410 Balance as of December 31, 2020 9,091 Although the Group believes that it has adequately provided for any reasonably foreseeable outcomes related to tax audits and settlement, there is no assurance that the final tax outcome of its tax audits will not be different from that which is reflected in the Group’s income tax provisions. Such differences could have a material effect on the Group’s income tax provision, cash flow from operating activities and net income in the period in which such determination is made. The entire balance of unrecognized tax benefits, if recognized, would reduce the Group’s annual effective tax rate. |
Supplementary Financial Stateme
Supplementary Financial Statement Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplementary Financial Statement Information [Abstract] | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION | Note 22:- Supplementary Financial Statement Information a. Composition of Non-controlling interest in material partially owned subsidiaries: December 31, 2020 2019 Matrix and its subsidiaries $ 147,662 $ 120,225 Sapiens and its subsidiaries 306,684 203,942 Magic Software and its subsidiaries 150,808 150,370 Other 188 157 $ 605,342 $ 474,694 b. The following table provides detailed breakdown of the Group’s financial income and expenses: Year ended December 31, 2020 2019 2018 Financial expenses: Financial expenses related to liabilities in respect of business combinations $ 3,738 $ 1,061 $ 1,108 Interest expenses on loans and borrowings 6,863 6,376 6,891 Financial costs related to Debentures 6,546 5,632 5,479 Interest expenses attributed to IFRS 16 5,367 4,195 - Bank charges, negative foreign exchange differences and other financial expenses 6,930 5,179 2,374 29,444 22,443 15,852 Financial income: Income from marketable securities and embedded derivative 204 747 832 Interest income from deposits, positive foreign exchange differences and other financial income 2,355 3,044 6,730 2,559 3,791 7,562 Financial expenses, net $ 26,885 $ 18,652 $ 8,290 c. Geographical information: 1) The Group’s property and equipment is located as follows: December 31, 2020 2019 Israel $ 44,105 $ 28,446 United States 4,517 4,709 Europe 3,303 1,828 Japan 283 265 Other 6,968 7,811 Total $ 59,176 $ 43,059 2) Revenues: The Group’s revenues classified by geographic area (based on the location of customers) are as follows: Year ended December 31, 2020 2019 2018 Israel $ 1,203,109 $ 1,047,265 $ 893,605 International: United States 501,785 462,803 418,148 Europe 189,152 145,564 141,316 Africa 11,702 15,336 13,726 Japan 14,282 14,925 11,053 Other (mainly Asia pacific) 13,888 15,222 15,140 Total $ 1,933,918 $ 1,701,115 $ 1,492,988 d. Earnings per share: The following table presents the computation of basic and diluted net earnings per share for the Group: Year ended December 31, 2020 2019 2018 Numerator: Basic earnings per share – net income attributable to equity holders of the Company $ 46,776 $ 38,820 $ 32,365 Diluted earnings per share - net income attributable to equity holders of the Company $ 45,969 $ 37,457 $ 33,376 Denominator: Basic earnings per share - weighted average shares outstanding 15,286 15,190 14,740 Effect of dilutive securities 6 151 831 Diluted earnings per share – adjusted weighted average shares outstanding 15,292 15,341 15,571 Basic net earnings per share 3.05 2.56 2.20 Diluted net earnings per share 3.01 2.44 2.14 |
Operating Segments
Operating Segments | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of entity's operating segments [text block] [Abstract] | |
OPERATING SEGMENTS | Note 23: - operating segments a. General: The Group is engaged through six directly held subsidiaries; Matrix; Sapiens; Magic Software; Insync Michpal and Ofek; and one jointly controlled entity: TSG, in providing software services, proprietary and non-proprietary software solutions, software product marketing and support, computer infrastructure and integration solutions and training and integration. Matrix Matrix IT Ltd. is Israel’s leading IT services company. Matrix provides software solutions and services, software development projects, outsourcing, integration of software systems and services, project management services and comprehensive consulting and management services in complex infrastructure projects, urban and environment planning – all in accordance with its customers’ specific needs. Matrix also provides upgrading and expansion of existing software systems. Matrix operates through its directly and indirectly held subsidiaries in the following segments: (1) Information Technology (IT) Software solutions and services, Consulting & Management in Israel; (2) Information Technologies (IT) Software solutions and services in the U.S; (3) Training and integration; (4) Computer and cloud infrastructure and integration solutions; and, (5) Software product marketing and support. Information Technologies (IT) Software solutions and services, Consulting & Management in Israel: The software solutions and services in Israel provided by Matrix consist mainly of providing tailored software solutions and upgrading and expanding mainly existing large-scale software systems. These services include, among others, developing customized software, adapting software to the customer’s specific needs, implementing software and modifying it based on the customer’s needs, outsourcing, software project management, software testing and QA and integrating all or part of the above elements. Furthermore, the activity in this segment includes project management consulting services and multi-disciplinary operational and engineering consulting services, including supervision of complex engineering projects, all according to client specific needs as the scope of work invested in each element varies from one customer to the other. In 2020, activity in Software solutions and value-added services in Israel accounted for approximately 60% of Matrix’s revenues for approximately 53% of its operating income, respectively. Information Technologies (IT) Software solutions and services in the United States: Matrix activities in this segment are primarily providing software solutions and services of Governance Risk and Compliance (“GRC”) experts, including activities on the following topics: risk management, management and prevention of fraud, Anti-Money Laundering, trade surveillance as well as, specialized advisory services in the area of compliance with financial regulation and operational services, through Matrix-IFS (formerly Exzac Inc.), a wholly owned subsidiary of Matrix, as well as providing solutions and specialized technological services in areas such as: portals, BI (Business Intelligence) DBA (Data Base Administration), CRM (Customer Relation Management) and EIM (Enterprise Information Management). Furthermore, the activity in this segment includes dedicated solutions for the GovCon Government contracting market, IT help desk services specializing in healthcare and software product distribution services particularly IBM, BMC and Atlassian products to customers in the public-government sector in the U.S (mainly through RightStar Inc.). During 2020, matrix initiated a new line of business for 3D printing specially for the healthcare sector. The activity in this segment is performed mostly through Matrix IFS, Xtivia Technologies Inc. Matrix global services, wholly owned subsidiaries of Matrix and their respective subsidiaries. In 2020, the activity in the U.S accounted for approximately 9% of Matrix’s revenues and for approximately 18% of its operating income, because of higher operating gross margin in the U.S. Training and integration: Matrix’s activities in this segment consist of operating a network of high-tech training and instruction centers which provide application courses, professional training courses and advanced professional studies in the high-tech industry, courses of soft skills and management training and provision of training and implementation of computer systems. Matrix also outsources IT services based on graduates of its courses. In 2020, activity in training and integration accounted for approximately 4% of Matrix’s revenues and for approximately 5% of its operating income, respectively. Computer and cloud infrastructure and integration solutions: Matrix’s activities in this segment, is primarily providing computer solutions to computer and communications infrastructures, marketing and sale of computers and peripheral equipment to business customers, providing related services, and cloud computing solutions (through the business specializing unit of the Company - Cloud Zone) and a myriad of services regarding Database services and Big data services (through the specialized business unit Data zone). In 2020, activity in Computer and cloud infrastructure and integration solutions accounted for approximately 22% of Matrix’s revenues and for approximately 15% of its operating income, respectively. Software product marketing and support: Matrix’s activities in this segment include marketing, distributing and support for various software products, the principal of which are CRM, computer systems management infrastructures, web world content management, database and data warehouse mining, application integration, database and systems, data management and software development tools. In 2020, activity in software product marketing and support accounted for about 5% of Matrix’s revenues and for approximately 9% of its operating income, respectively. Sapiens Sapiens is a leading global provider of software solutions for the insurance industry. Sapiens’ extensive expertise is reflected in its innovative software platforms, suites, solutions and services for property & casualty (P&C); life, pension & annuity (L&A); reinsurance; financial and compliance (F&C); workers’ compensation (WC); and financial markets. Sapiens offers a full digital suite that provides an end-to-end, holistic and seamless digital experience for carriers, agents, customers and assorted insurance personnel, across multiple devices and technologies. Sapiens’ offerings enable its customers to effectively manage their core business functions – including policy administration, claims and billing –supporting insurers during their digital transformation journeys. Sapiens portfolio also covers underwriting, illustration and electronic application. Furthermore, Sapiens supplies decision management solutions tailored to a variety of financial services providers, so business users across verticals can quickly deploy business logic and comply with policies and regulations throughout their organizations. Its platforms possess modern, modular architecture and are digital-driven empowering customers to respond to the rapidly changing insurance market and frequent regulatory changes, while improving the efficiency of their core operations. Magic Software Magic Software is a global provider of: (i) proprietary application development and business process integration platforms; (ii) selected packaged vertical software solutions; as well as (iii) software services and Information Technologies (“IT”) outsourcing software services. Magic Software’s technology is used by customers to develop, deploy and integrate on-premise, mobile and cloud-based business applications quickly and cost effectively. In addition, Magic Software’s technology enables enterprises to accelerate the process of delivering business solutions that meet current and future needs and allow customers to dramatically improve their business performance and return on investment. With respect to software services and IT outsourcing services, Magic Software offers a vast portfolio of professional services in the areas of infrastructure design and delivery, application development, technology consulting planning and implementation services, integration projects, project management, software testing and quality assurance, engineering consulting (including supervision of engineering projects), support services, cloud computing for deployment of highly available and massively-scalable applications and API’s and supplemental outsourcing services, all according to the specific needs of the customer, and in accordance with the professional expertise required in each case. In addition, Magic Software offers a variety of proprietary comprehensive packaged software solutions through certain of its subsidiaries for (i) enterprise-wide and fully integrated medical platform (“Clicks”), specializing in the design and management of patient-file oriented software solutions for managed care and large-scale health care providers. This platform aims to allow providers to securely access an individual’s electronic health record at the point of care, and it organizes and proactively delivers information with potentially real time feedback to meet the specific needs of physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals and consumers; (ii) enterprise management systems for both hubs and traditional air cargo ground handling operations from physical handling and cargo documentation through customs, seamless electronic data interchange, or EDI communications, dangerous goods, special handling, track and trace, security to billing (“Hermes”); (iii) enterprise human capital management, or HCM, solutions, to facilitate the collection, analysis and interpretation of quality data about people, their jobs and their performance, to enhance HCM decision making (“HR Pulse”); (iv) revenue management and monetization solutions in mobile, wireline, broadband and mobile virtual network operator/enabler, or MVNO/E (“Leap”); and (v) comprehensive systems for managing broadcast channels in the area of TV broadcast management through cloud-based on-demand service or on-premise solutions; Magic Software solutions are used by customers to develop, deploy and integrate on-premise, mobile and cloud-based business applications quickly and cost effectively. In addition, its technology enables enterprises to accelerate the process of delivering business solutions that meet current and future needs and allow customers to dramatically improve their business performance and return on investment. Its software solutions include application platforms for developing and deploying specialized and high-end large-scale business applications (Magic xpa application platform, formerly branded uniPaaS, Appbuilder and Magic SmartUX), an integration platform that allows the integration and interoperability of diverse solutions, applications and systems in a quick and efficient manner (Magic xpi business and process integration platform, formerly branded iBOLT), a hybrid integration platform as a service (IPaaS), which enables customers to accelerate digital transformation on the cloud, on-premises or on both (Magic xpc) and FactoryEye - a proprietary high performance, low-code, flexible, hybrid platform for manufacturers based on existing infrastructure enabling real-time virtualizations of all production data and advanced analytics (based on machine learning) for improved productivity and competitive advantage. These solutions enable Magic Software customers to improve their business performance and return on investment by supporting the affordable and rapid delivery and integration of business applications, systems and databases. Magic Software products and services are available through a global network of regional offices, independent software vendors, system integrators, distributors and value-added resellers as well as original equipment manufacturers and consulting partners in approximately 50 countries. Insync InSync is a U.S based national supplier of employees to Vendor Management Systems (VMS) Workforce Management Program accounts. Insync specializes in providing professionals in the following areas; Accounting and Finance, Administrative, Customer Service, Clinical, Scientific and Healthcare, Engineering, Manufacturing and Operations, Human Resources, IT Technology, LI/MFG, and Marketing and Sales. InSync currently supports more than 30 VMS program customers with employees in over 40 states. Michpal Michpal, an Israeli registered company, is a developer of proprietary, on-premise payroll software solution for processing traditional payroll stubs to Israeli enterprises and payroll service providers. Michpal also developed several complementary modules such as attendance reporting, which are sold to its customers for additional fees. Together with its subsidiaries Unique Software Industries Ltd, a software development and services company, providing integrated solutions in the field of payroll for more than 30 years, including pay-stubs, pension services management, education funds management, and software solutions for managing employee attendance, and Effective Solutions Ltd Michapl also provides consulting services in the fields of operational cost savings and procurement, as well as salary control and monitoring a payroll, labor, pensions, social security and employee income tax matters. As of December 31, 2020, Michpal serves approximately 8,000 customers, most of which are long-term customers. Ofek Founded in 1987, Ofek is one of the leading companies in Israel in the fields of aerial and satellite mapping, geographic data collection and processing, and provider of services in numerous geographic applications. Among Ofek’s customers are many government authorities and foreign government. Ofek employs approximately 100 employees, all situated at Ofek’s headquarter in Natanya, Israel, in multiple areas of expertise: geodetic engineers, software experts, geographers and aerial photo interpreters, GIS and surveying engineers, 3D mapping and data processing experts. The company owns three aerial photography aircrafts equipped with state-of-the-art mapping sensors. Ofek operates worldwide. It has successfully completed projects for various clients (government and private) in Asia, America, Europe, Middle East and Africa, and it constantly involved in ongoing international geographic projects. Ofek aerial photography has accumulated experience in managing and executing NSDI and GIS projects and surveys for detecting, collecting and analyzing diverse geographic cadastral and environmental information. TSG TSG is a global high technology company engaged in high-end technical solutions for protecting the safety of national borders, improving data gathering mechanisms, and enhancing communications channels for military, homeland security and civilian organizations. TSG operates primarily in the defense and homeland security arenas. The nature of military and homeland security actions in recent years, including low intensity conflicts and ongoing terrorist activities, as well as budgetary pressures to focus on leaner but more technically advanced forces, have caused a shift in the defense and homeland security priorities for many of TSG’s major customers. As a result, TSG believes there is a continued demand in the areas of command, control, communications, computer and intelligence (C4I) systems, intelligence, surveillance and reconnaissance (ISR) systems, intelligence gathering systems, border and perimeter security systems, cyber-defense systems. There is also a continuing demand for cost effective logistic support and training and simulation services. TSG believes that its synergistic approach of finding solutions that combine elements of its various activities positions it to meet evolving customer requirements in many of these areas. TSG tailors and adapts its technologies, integration skills, market knowledge and operationally-proven systems to each customer’s individual requirements in both existing and new platforms. By upgrading existing platforms with advanced technologies, TSG provides customers with cost-effective solutions, and its customers are able to improve their technological and operational capabilities within limited budgets. TSG markets its systems and products either as a prime contractor or as a subcontractor to various governments and defense and homeland security contractors worldwide. In Israel, TSG sells its defense, intelligence and homeland security systems and products mainly to the IMOD, which procures all equipment for the Israeli Defense Force (IDF). b) Consolidated Goodwill in material partially owned subsidiaries December 31, 2020 2019 Matrix and its subsidiaries $ 290,662 $ 260,492 Sapiens and its subsidiaries 409,646 316,082 Magic Software and its subsidiaries 135,682 117,743 Other consolidated subsidiaries 36,434 29,876 $ 872,424 $ 724,193 c) Reporting on operating segments The operating segments are identified on the basis of information that is reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated and assess its performance. The CODM have been identified as Formula’s CEO. The CODM assess the performance of the Group based on each of the Group’s directly held investees’ operating income (or loss). Headquarters and finance expenses of Formula are allocated proportionally among the investees. Matrix Sapiens Magic Software Other Adjustments Total Year ended December 31, 2020: Revenues from external customers 1,116,178 382,903 368,357 144,139 (77,659 ) 1, 933,918 Inter-segment revenues 5,316 - 2,837 330 (8,483 ) - Revenues 1,121,494 382,903 371,194 144,469 (86,142 ) 1, 933,918 Unallocated corporate expenses - - - - - - Depreciation and amortization 14,646 28,474 13,939 6,142 (2,103 ) 61,098 Operating income 84,181 35,337 47,757 10,839 (7,473 ) 170,641 Financial expenses, net (26,885 ) Group’s share of profits of companies accounted for at equity, net 1,535 Taxes on income (31,269 ) Net income 114,022 Year ended December 31, 2019: Revenues from external customers 1,005,721 325,674 322,401 131,668 (84,349 ) 1,701,115 Inter-segment revenues 3,986 - 3,229 510 (7,725 ) - Revenues 1,009,707 325,674 325,630 132,178 (92,074 ) 1,701,115 Unallocated corporate expenses - - - - - - Depreciation and amortization 11,713 25,619 14,025 4,148 (2,104 ) 53,401 Operating income 71,552 32,336 33,817 8,227 (7,443 ) 138,489 Financial expenses, net (18,652 ) Group’s share of profits of companies accounted for at equity, net 1,787 Taxes on income (27,201 ) Net income 94,423 Year ended December 31, 2018: Revenues from external customers 878,188 289,707 282,205 109,041 (66,153 ) 1,492,988 Inter-segment revenues 2,869 - 2,170 80 (5,119 ) - Revenues 881,057 289,707 284,375 109,121 (71,272 ) 1,492,988 Unallocated corporate expenses - - - - (2,113 ) (2,113 ) Depreciation and amortization 8,554 26,249 12,562 5,081 (3,712 ) 48,734 Operating income (loss) 61,264 16,799 31,698 4,210 (4,354 ) 109,617 Financial expenses, net (8,290 ) Group’s share of profits of companies accounted for at equity, net 369 Taxes on income (24,301 ) Net income 77,395 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of events after reporting period [text block] [Abstract] | |
SUBSEQUENT EVENTS | NOTE 24:- SUBSEQUENT EVENTS a) On April 13, 2021, Formula concluded the acquisition of all of the share capital of Zap Group Ltd. (“Zap”) for cash consideration of approximately NIS 244 million (approximately $73.9 million) with a contingent amount of up to NIS 60 million in cash (approximately $18.2 million). With approximately 300 employees, Zap Group is Israel’s largest group of consumer websites which manages more than 20 leading consumer websites from diverse content worlds with a total of more than 17 million visits per month, including Zap Price Comparison website, Zap Yellow Pages (the largest business index in Israel) and Zap Rest (Israel’s restaurants index). The websites managed and offered by Zap Group provide small and medium-sized businesses in Israel with a broad and rich advertising platform and offer consumers a user-friendly search experience with a variety of advanced tools, which enable them to make educated purchase decisions in the best and most informed way. b) On April 12, 2021, Formula issued additional Formula Systems Series C Secured Debentures in an aggregate principle amount of NIS 160,000 (approximately $48,617) through a private placement to qualified investors in Israel. The gross proceeds received by Formula for the issuance of Formula Systems Series C Secured Debentures in April 2021 were NIS 165,920 (approximately $50,416), out of which NIS 1,678 was attributed to interest payable (approximately $510). Debt premium of NIS 4,370 (approximately $1,024) net of issuance costs of NIS 872 (approximately $265) were allocated to the Formula Systems Series C Secured Debentures and are amortized as financial income over the remaining term of Formula Systems Series A Secured Debentures due in 2026. The Formula Systems Series C Secured Debentures are nominated in New Israeli Shekel and are not linked to any currency or index and are non-convertible. The Formula Systems Series C Secured Debentures are secured with collateral consist of shares of Matrix, Magic Software and Sapiens (See note 14(c)(iii)). c) In February 2021, Formula declared a cash dividend of approximately NIS 33,036 (approximately $10,094) or NIS 2.16 per share (approximately $0.66 per share) to shareholders of record on February 18, 2021 that was paid on March 4, 2021. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation of the financial statements | 1) Basis of presentation of the financial statements These financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The financial statements for the year ended December 31, 2016 were the Group’s first consolidated financial statements prepared in accordance with IFRS. The date of transition to IFRS was January 1, 2015. For all periods up to and including the year ended December 31, 2015, the Group prepared its financial statements in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Accordingly, the Group’s first consolidated financial statements that comply with IFRS are applicable as of December 31, 2016, together with the comparative period data for the year ended December 31, 2015. The Company’s financial statements have been prepared on a cost basis, except for certain assets and liabilities such as: financial assets measured at fair value through other comprehensive income; contingent liabilities related to business combination and other financial assets and liabilities (including derivatives) which are presented at fair value through profit or loss. The Company has elected to present the profit or loss items using the function of expense method. |
Use of estimates, judgments and assumptions | 2) Use of estimates, judgments and assumptions: The preparation of the consolidated financial statements requires management to make estimates, judgments and assumptions that have an effect on the reported amounts of assets, liabilities, revenues and expenses in the financial statements. Such management estimates and assumptions are related, but not limited to de-facto control, contingent liabilities related to acquisitions, goodwill and identifiable intangible assets and their subsequent impairment analysis, determination of fair value of put options of non-controlling interests, legal contingencies, research and development capitalization, classification of leases, income tax uncertainties, deferred taxes, share-based compensation, as well as the determination of revenue recognition from contracts accounted for based on the estimate of percentage of completion. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Changes in accounting estimates are reported in the period of the change in estimate. |
Consolidated financial statements | 3) 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. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as a change in equity by adjusting the carrying amount of the non-controlling interests with a corresponding adjustment of the equity attributable to equity holders of the Company less / plus the consideration paid or received. Effective control In a situation where the Company holds less than a majority of voting power in a given entity, but that power is sufficient to enable the Company to unilaterally direct the relevant activities of such entity, then the control is exercised. When assessing whether voting rights held by the Company are sufficient to give it power, the Company considers all facts and circumstances, including: the amount of those voting rights relative to the amount and dispersion of other vote holders; potential voting rights held by the Company and other shareholders or parties; rights arising from other contractual arrangements; significant personal ties; and any additional facts and circumstances that may indicate that the Company has, or does not have the ability to direct the relevant activities when decisions need to be made, inclusive of voting patterns observed at previous meetings of shareholders. The Company’s management has concluded that despite the lack of absolute majority of voting power at the general meetings of shareholders of Matrix, Sapiens and Magic Software, in accordance with IFRS 10, these investees are controlled by the Company. The conclusion regarding the existence of control during the years ended December 31, 2020, 2019 and 2018 with respect to Matrix, Sapiens and Magic Software, in accordance with IFRS 10, was made in accordance with the following factors: Matrix i) Governing bodies of Matrix: Decisions of Matrix’s shareholders general meeting are taken by a simple majority of votes represented at the general meeting. The annual (ordinary) general meeting adopts resolutions to elect individual directors, appoint Matrix’s independent auditors for the next year, as well as approve the company’s financial statements and management’s report on operations. In accordance with Matrix’s articles of association, the board of directors of Matrix is responsible for managing its current business operations and is authorized to take substantially all decisions which are not specifically reserved to Matrix’s shareholders by its articles of association, including the decision to pay out dividends. Matrix’s board of directors is composed of 5 members, 3 of whom are independent directors, and one being Formula’s chief executive officer who serves as the chairman of Matrix board of directors. For the last 5 years (i.e., 2016-2020), the Company has consistently reappointed mostly the same members of the board of directors. The only few exceptions were (i) the appointment of Mrs. Yafit Keret, who has replaced Mrs. Michal Leshem in 2018 after nine years of service as an external director in accordance with the Companies Law, 5759-1999 (ii) the retirement of Mr. Pinchas Grinfeld in 2017 and (iii) The appointment of Mr. Yitiel Efrat to serve as a third external director in accordance with the Companies Law, 5759-1999. Mr. Efrat was appointed on December 13, 2017 for a three-year term. ii) Shareholders’ structure of Matrix: Matrix’s shareholders structure is dispersed because, apart from the Company, as of December 31, 2020 there was just one financial institution holding more than 5% of Matrix’s voting power (9% of the votes). There is no evidence that any of the shareholders have or had granted to any other shareholder a voting proxy at the general meeting. Over the last five years (i.e., 2016-2020), Matrix’s general meetings were attended by shareholders representing not more than between 77% and 82% of total voting rights, including the Company’s share power. Bearing in mind that the Company presently holds approximately 49.28% of total voting power, this means that the level of activity of Matrix’s other shareholders is relatively moderate or low. As of December 31, 2020, the attendance by shareholders would have to be higher than 98.6% in order to deprive the Company of an absolute majority of votes at the general meeting. In accordance with voting patterns at Matrix’s shareholders’ meetings in recent years, it is the Company’s management’s belief that achieving such a high attendance seems unlikely. Sapiens i) Governing bodies of Sapiens: Decisions of Sapiens’ shareholders general meeting are taken by a simple majority of votes represented at the general meeting. The annual (ordinary) general meeting adopts resolutions to appoint individual directors, choose Sapiens’ independent auditors for the next year, as well as approve the company’s financial statements and the management’s report on operations. In accordance with Sapiens’ articles of association, the board of directors of Sapiens is responsible for managing its current business operations and is authorized to take substantially all decisions which are not specifically reserved to Sapiens’ shareholders by its articles of association, including the decision to pay out dividends. Sapiens’ board of directors is composed of 6 members, 4 of whom are independent directors, and one being Formula’s chief executive officer who serves as the chairman of Sapiens board of directors. For the last 10 years, the Company has consistently reappointed the same members of the board of directors. Likewise, the previous composition of the board of directors was re-elected during the general meeting that was held in November 2020. ii) Shareholders’ structure of Sapiens: Sapiens’ shareholders structure is dispersed because, apart from the Company, only one financial institution held more than 5% of the voting rights at the general meeting (representing 5.6%). There is no evidence that any shareholders have or had granted to any other shareholder a voting proxy at the general meeting. Over the last five years from 2016 to 2020, Sapiens’ general meetings were attended by shareholders representing in total between 70% and 80% of the total voting power, including the Company’s share power. Bearing in mind that the Company presently holds approximately 43.96% of total voting right, this means that the level of activity of Sapiens’ other shareholders is relatively moderate or low. As of December 31, 2020, the attendance from shareholders would have to be higher than 87.9% in order to deprive the Company of an absolute majority of votes at the general meeting. In accordance with voting patterns at Sapiens’ shareholders’ meetings in recent years, it is the Company’s management’s belief that achieving such a high attendance seems unlikely. Magic Software i) Governing bodies of Magic Software: Decisions of Magic Software’s shareholders’ general meeting are taken by a simple majority of votes represented at the general meeting. The annual (ordinary) general meeting adopts resolutions to elect individual directors, appoint Magic Software’s independent auditors for the next year, as well as to approve Magic Software’s financial statements and the management’s report on operations. In accordance with the Magic Software’s articles of association, the board of directors of Magic Software is responsible for managing Magic Software’s current business operations and is authorized to take substantially all decisions which are not specifically reserved to Magic Software shareholders by its articles of association, including the decision to pay out dividends. Magic Software’s board of directors is composed of 5 members, 3 of whom are independent directors, and one being Formula chief executive officer who also serves as Magic Software chief executive officer. In recent years, the Company has consistently reappointed mostly the same members of the board of directors. The only exception was the appointment of Mr. Avi Zakay in February 2018, who has replaced Mr. Yechezkel Zeira after nine years of service. ii) Shareholders’ structure of Magic Software: Magic Software’s shareholders’ structure is dispersed because, apart from the Company, as of December 31, 2020, there were just three financial institutions holding more than 5% of Magic Software’s voting power (representing 9.9%, 7.7% and 5.4% of the votes). There is no evidence that any of the shareholders have or had granted to any other shareholder a voting proxy at the general meeting. Over the last five years from 2016 to 2020, Magic Software’s general meetings were attended by shareholders representing between 65%-87% of total voting rights. Bearing in mind that the Company presently holds approximately 45.53% of total voting right, this means that the level of activity of Magic Software’s other shareholders is relatively moderate or low. As of December 31, 2020, the attendance by shareholders would have to be higher than 91.1% in order to deprive the Company of an absolute majority of votes at the general meeting. In accordance with voting patterns at Magic Software’s shareholders’ meetings in recent years, it is the Company’s management belief that achieving such a high attendance seems unlikely. The financial statements of the Company and of the investees, after being adjusted to comply with IFRS, are prepared for the same reporting period and using consistent accounting treatment of similar transactions and economic activities. Any discrepancies in the applied accounting policies are eliminated by making appropriate adjustments. Significant intragroup balances and transactions and gains or losses resulting from intragroup transactions are eliminated in full in the consolidated financial statements. Non-controlling interests in subsidiaries, represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position. Changes in the share interest in a subsidiary that do not result in a loss of control are recognized as a change in equity, by adjusting the balance of the non-controlling interests against the equity attributable to the equity holders of the Company, and net of the consideration paid or received. |
Business combinations and goodwill | 4) Business combinations and goodwill: Business combinations are accounted for by applying the acquisition method. The cost of the acquisition is measured at the fair value of the consideration transferred on the acquisition date with the addition of non-controlling interests in the acquiree. In each business combination, the Company determines whether to measure the non-controlling interests in the acquiree based on their fair value on the acquisition date or at their proportionate share in the fair value of the acquiree’s net identifiable assets. Direct acquisition costs are carried to the statement of profit or loss as incurred. In a business combination achieved in stages, equity interests in the acquiree that had been held by the acquirer prior to obtaining control are measured at the acquisition date fair value while recognizing a gain or loss resulting from the revaluation of the prior investment on the date of achieving control. Contingent consideration is recognized at fair value on the acquisition date and classified as a financial asset or liability in accordance with IFRS 9, “Financial Instruments”. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. If the contingent consideration is classified as an equity instrument, it is measured at fair value on the acquisition date without subsequent remeasurement. Goodwill is initially measured at cost which represents the excess of the acquisition consideration and the amount of non-controlling interests over the net identifiable assets acquired and liabilities assumed. If the resulting amount is negative, the acquirer recognizes the resulting gain on the acquisition date. |
Investment in joint arrangements | 5) Investment in joint arrangements: Joint arrangements are arrangements in which the Company has joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. i. Joint ventures: In joint ventures the parties that have joint control of the arrangement have rights to the net assets of the arrangement. A joint venture is accounted for by using the equity method. ii. Joint operations: In joint operations the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities relating to the arrangement. The Company recognizes in relation to its interest its share of the assets, liabilities, revenues and expenses of the joint operation. The acquisition of interests in a joint operation which represents a business, as defined in IFRS 3, is accounted for using the acquisition method, including the measurement of the identifiable assets and liabilities at fair value, the recognition of deferred taxes arising from this measurement, the accounting treatment of the related transaction costs and the recognition of goodwill or bargain purchase gains. This applies to the acquisition of the initial interest and additional interests in a joint operation that represents a business. |
Investments in associates | 6) Investments in associates: Associates are companies in which the Group has significant influence over the financial and operating policies without having control. The investment in an associate is accounted for using the equity method. |
Investments accounted for using the equity method | 7) Investments accounted for using the equity method: The Group’s investments in associates and joint ventures are accounted for using the equity method. Under the equity method, the investment in the associate or in the joint venture is presented at cost with the addition of post-acquisition changes in the Group’s share of net assets, including other comprehensive income of the associate or the joint venture. Gains and losses resulting from transactions between the Group and the associate or the joint venture are eliminated to the extent of the interest in the associate or in the joint venture. Goodwill relating to the acquisition of an associate or a joint venture is presented as part of the investment in the associate or the joint venture, measured at cost and not systematically amortized. Goodwill is evaluated for impairment as part of the investment in the associate or in the joint venture as a whole. The financial statements of the Company and of the associate or joint venture are prepared as of the same dates and periods. The accounting policies applied in the financial statements of the associate or the joint venture are uniform and consistent with the policies applied in the financial statements of the Group. Upon the acquisition of an associate or a joint venture achieved in stages when the former investment in the acquiree was accounted for pursuant to the provisions of IFRS 9, the Group adopts the principles of IFRS 3 regarding business combinations achieved in stages. Consequently, equity interests in the acquiree that had been held by the Group prior to achieving significant influence or joint control are measured at fair value on the acquisition date and are included in the acquisition consideration while recognizing a gain or loss resulting from the fair value measurement. The equity method is applied until the loss of significant influence in the associate or loss of joint control in the joint venture or classification as investment held for sale. On the date of loss of significant influence or joint control, the Group measures any remaining investment in the associate or the joint venture at fair value and recognizes in profit or loss the difference between the fair value of any remaining investment plus any proceeds from the sale of the investment in the associate or the joint venture and the carrying amount of the investment on that date. |
Functional currency, presentation currency and foreign currency | 8) Functional currency, presentation currency and foreign currency: i. Functional currency and presentation currency: The presentation currency of these financial statements is the U.S dollars (the “dollar”), since the Company believes that financial statements in U.S dollars provide more relevant information to its investors and users of the financial statements. The functional currency applied by Formula, on a stand-alone basis, until December 31, 2018, was the dollar. Following an examination and reevaluation of the primary economic environment in which it currently operates and expects to continue operating and taking into consideration the recent trends and its forward-looking business strategy, in accordance with the International Accounting Standard 21 (IAS 21), Formula concluded that its functional currency on a stand-alone basis commencing January 1, 2019 is the NIS. The functional currencies applied by Formula’s investees which are consolidated in these financial statements are the currencies of the primary economic environment in which each one of them operates. Assets, including fair value adjustments upon acquisition, and liabilities of an investee which is a foreign operation, are translated at the closing rate at each reporting date. Profit or loss items are translated at average exchange rates for all periods presented. The resulting translation differences are recognized in other comprehensive income (loss). Intragroup loans for which settlement is neither planned nor likely to occur in the foreseeable future are, in substance, a part of the investment in the foreign operation and, accordingly, the exchange rate differences from these loans (net of the tax effect) are recorded in other comprehensive income (loss). Upon the full or partial disposal of a foreign operation resulting in loss of control in the foreign operation, the cumulative gain (loss) from the foreign operation which had been recognized in other comprehensive income is transferred to profit or loss. Upon the partial disposal of a foreign operation which results in the retention of control in the subsidiary, the relative portion of the amount recognized in other comprehensive income is reattributed to non-controlling interests. ii. Transactions, assets and liabilities in foreign currency: Transactions denominated in foreign currency are recorded upon 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 each reporting date into the functional currency at the exchange rate at that date. Exchange rate differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currency and measured at cost 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. |
Cash equivalents | 9) Cash equivalents: Cash equivalents are considered highly liquid investments, including unrestricted short-term bank deposits with an original maturity of three months or less from the date of investment or with a maturity of more than three months, but which are redeemable on demand without penalty and which form part of the Group’s cash management. Cash and cash equivalent includes amounts held primarily in New-Israeli Shekel, dollars, Euro, Japanese Yen, Indian Rupee and British Pound. |
Short-term and restricted deposits | 10) Short-term and restricted deposits: Short-term bank deposits are deposits with an original maturity of more than three months from the date of investment and which do not meet the definition of cash equivalents. The deposits are presented according to their terms of deposit. Restricted deposits include deposits used to secure certain subsidiaries’ ongoing projects, as well as security deposits with respect to leases, and are classified under other short-term and long-term receivables. |
Inventories | 11) Inventories: Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises costs of purchase and costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale. Inventories are mainly comprised of purchased merchandise and products which consist of educational software kits, computers, peripheral equipment and spare parts. Cost is determined on the “first in - first out” basis. The Group periodically evaluates the condition and aging of its inventories and makes provisions for slow-moving inventories accordingly. No such impairments have been recognized in any period presented. |
Revenue recognition | 12) Revenue recognition: IFRS 15 “Revenue from Contracts with Customers” establishes a five-step model to account for revenue arising from contracts with customers and requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers: Step 1 Step 2 Step 3 Step 4 Step 5 Under IFRS 15, revenue from contracts with customers is recognized when the control over the goods or services is transferred to the customer. The transaction price is the amount of the consideration that is expected to be received based on the contract terms, excluding amounts collected on behalf of third parties (such as taxes). In determining the amount of revenue from contracts with customers, the Group evaluates whether it is a principal or an agent in the arrangement. The Group is a principal when the Group controls the promised goods or services before transferring them to the customer. In these circumstances, the Group recognizes revenue for the gross amount of the consideration. When the Group is an agent, it recognizes revenue for the net amount of the consideration, after deducting the amount due to the principal. The Group enters into contracts that can include various combinations of products and software, IT services and hardware, as detailed below, which are generally capable as being distinct from each other and accounted for as separate performance obligations. For contracts with customers that contain multiple performance obligations, the Group accounts for each individual performance obligation separately, if they are distinct from each other. The transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. Stand-alone selling prices of software sales are typically estimated using the residual approach due to the lack of selling software licenses on a stand-alone basis. Stand-alone selling prices of software services are typically determined by considering several external and internal factors including but not limited to, observable transactions when these services are sold on a stand-alone basis. The following is a description of principal activities from which the Group generates its revenues: i. Sale of proprietary licenses without significant related services In the event in which the sale of a proprietary license (perpetual or term-based) is distinct from other significant modification or implementation services, and thereby it constitutes a separate performance obligation, the Group considers whether this performance obligation in granting the license is to provide the customer with either: ● a right to access the entity’s intellectual property in the form in which it exists throughout the licensing period; or ● a right to use the entity’s intellectual property in the form in which it exists at the time of granting the license The vast majority of licenses sold separately by the Group (thus representing a separate performance obligation) are intended to provide the customer with a right to use the intellectual property, which means that revenues from the sale of such licenses are recognized at the point in time at which the control over the license is transferred to the customer. The Group recognizes revenue from software licensing transactions over time when the Group provides the customer a right to access the Group’s intellectual property throughout the license period. ii. Sale of proprietary licenses with significant related services Revenues from contracts that include the sale of proprietary licenses with significant related services (for example, modifications, implementation or customization to customer-specific specifications) are generally accounted by the Group as performance obligations satisfied over time. In such contracts the Group is normally committed to provide the customer with a functional IT system and the customer can only benefit from such functional system, being the final product that would normally be comprised of proprietary licenses and significant related services. The Group considers that a commitment to sell a license under such performance obligation does not satisfy the criteria of being distinct, because the transfer of the license is only part of a larger performance obligation. The Group recognizes revenue from such contracts using cost-based input methods, which recognizes revenue and gross profit as the work is performed based on a ratio between actual costs incurred compared to the total estimated costs for the contract. This is because, in accordance with IFRS 15, revenues may be recognized over the course of transferring control of the supplied goods and services, as long as the entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date throughout the duration of the contract. Provisions for estimated losses on uncompleted contracts are made during the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. When appropriate, the Group also applies a practical expedient permitted under IFRS 15 whereby if the Group has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Group’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided), the Group may recognize revenue in the amount it is entitled to invoice. Deferred revenues, which represent a contract liability, include unearned amounts received under maintenance and support (mainly) and amounts received from customers for which revenues have not yet been recognized. iii. Maintenance services and warranties Post-contract support includes annual maintenance contracts providing for unspecified upgrades for new versions and enhancements on a when-and-if-available basis for an annual fee. The right for an unspecified upgrade for new versions and enhancements on a when-and-if-available basis do not specify the features, functionality and release date of future product enhancements for the customer to know what will be made available and the general timeframe in which it will be delivered. The accounting policy regarding the recognition of post-contract support remained unchanged after the adoption of IFRS 15, as such services, in principle, constitute a separate performance obligation where the customer consumes the benefits of goods and services as they are delivered by the provider, as a consequence of which revenues are recognized over time during the service performance period. The Group considers the post-contract support performance obligation as a distinct performance obligation that is satisfied over time, and as such, it recognizes revenue for post-contract support on a straight-line basis over the period for which technical support is contractually agreed to be provided for the software, typically twelve (12) months. In certain cases, the Group also provides a warranty for goods and services sold (i.e., extended warranties when the Group contractually undertakes to repair any errors in the delivered software within a strictly specified time limit and/or when the scope of which is broader than just an assurance to the customer that the product/service complies with agreed-upon specifications). The Group has ascertained that such warranties granted by the Group meet the definition of service. The conclusion regarding the extended nature of a warranty is made whenever the Group contractually undertakes to repair any errors in the delivered software within a strictly specified time limit and/or when such warranty is more extensive than the minimum required by law. Under IFRS 15, the fact of granting an extended warranty indicates that the Group provides an additional service. As such, the Group recognizes an extended warranty as a separate performance obligation and allocates a portion of the transaction price to such service. In all cases where an extended warranty is accompanied by a maintenance service, which is even a broader category than the extended warranty itself, revenues are recognized over time because the customer consumes the benefits of such service as it is performed by the provider. If this is the case, the Group continues to allocate a portion of the transaction price to such maintenance service. Likewise, in cases where a warranty service is provided after the project completion and is not accompanied by any maintenance service, then a portion of the transaction price and analogically recognition of a portion of contract revenues will have to be deferred until the warranty service is actually fulfilled. iv. Sale of third-party software licenses and services Third-party software licenses and services include revenues from the sale of third-party software licenses as well as from the provision of services which, due to technological or legal reasons, must be carried out by subcontractors (this applies to hardware and software maintenance and outsourcing services provided by their manufacturers). Revenues from the sale of third-party software licenses are accounted for as sales of goods, which means that such revenues are recognized at the point in time at which control of the license is transferred to the customer. Concurrently, revenues from third-party services, including primarily third-party maintenance services, are recognized over time when such services are provided to the customer. Whenever the Group is involved in the sale of third-party licenses or services, it will consider whether the Group acts as a principal or an agent; however, in most cases the conclusion is that the Group is the main party required to satisfy a performance obligation and therefore the resulting revenues are recognized in the gross amount of consideration. v. Sale of hardware Sale of hardware includes revenues from contracts with customers for the supply of infrastructure. In this category, revenues are recognized basically at the point in time at which control of the equipment is transferred. This does not apply to contracts in which the hardware is not delivered separately from services provided alongside, in such case the sale of hardware is part of a performance obligation involving the supply of a comprehensive system. However, such comprehensive projects are a rare practice in the Group as the sale of hardware is predominantly performed on a distribution basis. In the case of contracts that contain a component of providing a service or equipment, the Group considers whether such arrangements contain a lease component (i.e., whether the Group provides the right to control the use of the identified asset for a period of time in exchange for consideration). The Group has not identified any lease components within contracts concluded with customers. vi. Sale of training and implementation services Revenues from training and implementation services are recognized when the service is provided. revenue from training services in respect of public courses whose operating range is up to 3 months will be recognized at the end of the course period. Revenues from training services in respect of long-term courses will be recognized over the term of the course. Revenues from implementation projects ordered by organizations will be recognized according to actual inputs (actually worked hours). vii. Variable consideration In accordance with IFRS 15, if a contract consideration encompasses any amount that is variable, the Group shall estimate the amount of consideration to which it will be entitled in exchange for transferring promised goods or services to the customer, and shall include a portion or the whole amount of variable consideration in the transaction price but only to the extent that it is highly probable a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Group is party to a number of contracts which provide for penalties for non-performance or improper performance of contractual obligations. Any contractual penalties may therefore affect the consideration, which has been stated as a fixed amount in the contract, and make it subject to change due to such expected penalties. Therefore, as part of estimating the amount of consideration receivable under a contract, the Group has estimated the expected amount of consideration while considering the probability of paying such contractual penalties as well as other factors that might potentially affect the consideration. Apart from contractual penalties, there are no other material factors that may affect the amount of consideration (such as rebates or discounts), but in the event they were identified, they would also affect the amount of revenues recognized by the Group. viii. Allocating the transaction price to performance obligations The Group allocates the transaction price to each performance obligation (or distinct good or service) in an amount that depicts the amount of consideration to which the Group expects to be entitled in exchange for transferring the promised goods or services to the customer. ix. Significant financing component When contracts involve a significant financing component, the Group adjusts the promised amount of consideration for the effects of the time value of money if the timing of payments agreed to by the parties to the contract (either explicitly or implicitly) provide the customer with a significant benefit of financing. The Group has elected to apply the practical expedient allowed by IFRS 15 according to which it does not separate the financing component in transactions whose credit terms are less than one year and recognizes revenue in the amount of the consideration stated in the contract even if the customer pays for the goods or services subsequent to their receipt. The amount of product and service revenue included in the “proprietary software products and related services” line item in 2020 is $28,424 and $485,534, respectively. Of the $485,534 revenue from service, proprietary licenses with significant related services (treated as one performance obligation) amounts to $173,280. The amount of non-proprietary product and service revenue included in the “software services” line item is $5,453 and $1,414,508, respectively. x. Costs of contracts with customers Costs of obtaining a contract Costs of obtaining a contract are those incremental costs incurred by the Group in order to obtain a contract with a customer that it would not have otherwise incurred if the contract had not been obtained. The Group recognizes such costs as an asset if it expects to recover those costs. Such capitalized costs of obtaining a contract shall be amortized over the period when the Group satisfies the performance obligations arising from the contract. Amortization expenses related to costs of obtaining or fulfilling a contract are included in sales and marketing expenses in the consolidated statements of profit or loss. The Group has elected to apply the practical expedient allowed by IFRS 15 according to which costs of obtaining a contract which are expected to be amortized for a period of less than twelve months are expensed to profit or loss as incurred. Commissions to sales and marketing and certain management personnel that are paid based on their attainment of certain predetermined sales or profit goals, are considered by the Group as incremental costs of obtaining a contract with a customer, and are deferred and amortized on a systematic basis, consistent with the transfer of the related performance obligations to the customer. As such, sales commissions paid for initial contracts, which are not commensurate with additional commissions paid for renewal of such contracts, are capitalized and amortized over the expected period of benefit (including expected renewals periods). Sales commissions on initial contracts, which are commensurate with additional commissions paid for the renewal of such contracts, are capitalized and then amortized correspondingly to the recognized revenue of the related initial contracts (not including expected renewals periods). Sales commissions for renewal of such initial contracts are capitalized and then amortized on a straight-line basis over the related contractual renewal period. As a practical expedient, if the expected amortization period is for a period of less than twelve months, the commission fee is expensed to profit and loss as incurred. Costs to fulfill a contract Costs to fulfill a contract are the costs incurred in fulfilling a contract with a customer. The Group recognizes such costs as an asset if such costs are not within the scope of another standard (for example, IAS 2 ‘Inventories’, IAS 16 ‘Property, Plant and Equipment’ or IAS 38 ‘Intangible Assets’) and if such costs meet all of the following criteria: i) the costs relate directly to a contract or to an anticipated contract with a customer, ii) the costs generate or enhance resources of the Group that will be used in satisfying (or in continuing to satisfy) performance obligations in the future, and iii) the costs are expected to be recovered. An impairment loss in respect of capitalized costs of obtaining a contract is recognized in profit or loss when the carrying amount of the asset exceeds the remaining amount of consideration that the Company expects to receive for the goods or services to which the asset relates less the costs that relate directly to providing those goods or services and that have not been recognized as expenses. The Company has elected to apply the practical expedient allowed by the Standard according to which incremental costs of obtaining a contract are recognized as an expense when incurred if the amortization period of the asset is one year or less. |
Government grants | 13) Government grants: Government grants are recognized when there is reasonable assurance that the grants will be received, and the Group will comply with the attached conditions. Government grants received from the Office of the Israel Innovation Authority (“IIA”), formerly the Office of the Chief Scientist (“OCS”), are recognized upon receipt as a liability if future economic benefits are expected from the research project that will result in royalty-bearing sales. A liability for the loan is first measured at fair value using a discount rate that reflects a market participant rate of interest. The difference between the amount of the grant received and the fair value of the liability is accounted for 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. Royalty payments are treated as a reduction of the liability. If no economic benefits are expected from the research activity, the grant receipts are recognized as a reduction of the related research and development expenses. In that event, the royalty obligation is treated as a contingent liability in accordance with IAS 37. At each reporting date, the Group evaluates whether there is reasonable assurance that the liability recognized, in whole or in part, will not be repaid (since the Group will not be required to pay royalties) based on the best estimate of future sales and using the original effective interest method, and if so, the appropriate amount of the liability is derecognized against a corresponding reduction in research and development expenses. Amounts paid as royalties are recognized as settlement of the liability. |
Debentures | 14) Debentures: The Group accounts for outstanding principal amount of debentures as long-term liability, in accordance with IFRS 9, with current maturities classified as a short-term liability. The Group identifies and separates equity components contains in convertible debentures by first determining the liability component, in accordance with IAS 32, based on the fair value of an equivalent non-convertible liability. The conversion component valued is being determined to be the residual amount. Debt issuance costs are capitalized and reported as deferred financing costs, which are amortized over the life of the debentures using the effective interest rate method. |
Taxes on income | 15) Taxes on income: Current or deferred taxes are recognized in profit or loss, except to the extent that they relate to items which are recognized in other comprehensive income or equity. ● Current taxes: The current tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date as well as adjustments required in connection with the tax liability in respect of previous years. ● Deferred taxes: Deferred taxes are computed in respect of temporary differences between the carrying amounts in the financial statements and the amounts attributed for tax purposes. Deferred taxes are measured at the tax rate that is expected to apply when the asset is realized or the liability is settled, based on tax laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is not probable that they will be utilized. Deductible carryforward losses and temporary differences for which deferred tax assets had not been recognized are reviewed at each reporting date and a respective deferred tax asset is recognized to the extent that their utilization is probable. Taxes that would apply in the event of the disposal of investments in investees have not been considered in computing deferred taxes, as long as the disposal of the investments in investees is not probable in the foreseeable future. Also, deferred taxes that would apply in the event of distribution of earnings by investees as dividends have not been considered in computing deferred taxes, since the distribution of dividends does not involve an additional tax liability or since it is the Group’s policy not to initiate distribution of dividends from a subsidiary that would trigger an additional tax liability. Taxes on income that relate to distributions of an equity instrument and to transaction costs of an equity transaction are accounted for pursuant to IAS 12. Deferred taxes are offset if there is a legally enforceable right to offset a current tax asset against a current tax liability and the deferred taxes relate to the same taxpayer and the same taxation authority. |
Leases | 16) Leases: On January 1, 2019, the Company first applied IFRS 16, “Leases” (“the Standard”). The Company elected to apply the provisions of the Standard using the modified retrospective method (without restatement of comparative data). The accounting policy for leases applied effective from January 1, 2019, is as follows The Company accounts for a contract as a lease when the contract terms convey the right to control the use of an identified asset for a period of time in exchange for consideration. i) The Group as lessee For leases in which the Group is the lessee, the Group recognizes on the commencement date of the lease a right-of-use asset and a lease liability, excluding leases whose term is up to twelve months and leases for which the underlying asset is of low value. For these excluded leases, the Group has elected to recognize the lease payments as an expense in profit or loss on a straight-line basis over the lease term. In measuring the lease liability, the Group has elected to apply the practical expedient in the Standard and does not separate the lease components from the non-lease components (such as management and maintenance services, etc.) included in a single contract. Leases which entitle employees to a company car as part of their employment terms are accounted for as employee benefits in accordance with the provisions of IAS 19 and not as subleases. On the commencement date, the lease liability includes all unpaid lease payments discounted at the interest rate implicit in the lease, if that rate can be readily determined, or otherwise using the Group’s incremental borrowing rate. After the commencement date, the Group measures the lease liability using the effective interest rate method. On the commencement date, the right-of-use asset is recognized in an amount equal to the lease liability plus lease payments already made on or before the commencement date and initial direct costs incurred. The right-of-use asset is measured applying the cost model and depreciated over the shorter of its useful life and the lease term. Following are the amortization periods of the right-of-use assets by class of underlying asset: Years Mainly Land 2-24 5 Motor vehicles 2-3 2 The Group tests for impairment of the right-of-use asset whenever there are indications of impairment pursuant to the provisions of IAS 36. ii) Variable lease payments that depend on an index On the commencement date, the Group uses the index rate prevailing on the commencement date to calculate the future lease payments. For leases in which the Group is the lessee, the aggregate changes in future lease payments resulting from a change in the index are discounted (without a change in the discount rate applicable to the lease liability) and recorded as an adjustment of the lease liability and the right-of-use asset, only when there is a change in the cash flows resulting from the change in the index (that is, when the adjustment to the lease payments takes effect). iii) Variable lease payments Variable lease payments that do not depend on an index or interest rate but are based on performance or usage are recognized as an expense as incurred when the Group is the lessee. iv) Lease extension and termination options A non-cancelable lease term includes both the periods covered by an option to extend the lease when it is reasonably certain that the extension option will be exercised and the periods covered by a lease termination option when it is reasonably certain that the termination option will not be exercised. In the event of any change in the expected exercise of the lease extension option or in the expected non-exercise of the lease termination option, the Group remeasures the lease liability based on the revised lease term using a revised discount rate as of the date of the change in expectations. The total change is recognized in the carrying amount of the right-of-use asset until it is reduced to zero, and any further reductions are recognized in profit or loss. v) Lease modifications: If a lease modification does not reduce the scope of the lease and does not result in a separate lease, the Group remeasures the lease liability based on the modified lease terms using a revised discount rate as of the modification date and records the change in the lease liability as an adjustment to the right-of-use asset. If a lease modification reduces the scope of the lease, the Group recognizes a gain or loss arising from the partial or full reduction of the carrying amount of the right-of-use asset and the lease liability. The Group subsequently remeasures the carrying amount of the lease liability according to the revised lease terms, at the revised discount rate as of the modification date and records the change in the lease liability as an adjustment to the right-of-use asset. |
Property, plant and equipment, net | 17) Property, plant and equipment, net: 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. Cost includes spare parts and auxiliary equipment that are used in connection with plant and equipment. The cost of an item of property, plant and equipment comprises the initial estimate of the costs of dismantling and removing the item and restoring the site on which the item is located. Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows: % Land and Buildings 2 - 4 Computers, software and peripheral equipment 20 - 33 (mainly 33) Office furniture and equipment 6 - 33 (mainly 7) Motor vehicles 14 - 15 (mainly 15) Leasehold improvements are amortized using the straight-line method over the term of the lease (including option terms that are deemed to be reasonably assured) or the estimated useful life of the improvements, whichever is shorter. The useful life, the depreciation method and the residual value of an asset are reviewed at least each year-end (at the end of the year) 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. For impairment testing of property, plant and equipment, see Note 2(20) below. |
Research and development costs | 18) Research and development costs: Research expenditures incurred in the process of software development are recognized in profit or loss when incurred. An intangible asset arising from a software development project or from the development phase of an internal project is recognized if the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale; the Group’s intention to complete the intangible asset and use or sell it; the ability to use or sell the intangible asset; how the intangible asset will generate future economic benefits; the availability of adequate technical, financial and other resources to complete the intangible asset; and the ability to measure reliably the respective expenditure asset during its development. The Group establishes technological feasibility upon completion of a detailed program design or a working model. Research and development costs incurred between the completion of a detailed program design and the point at which the product is ready for general release, have been capitalized. Capitalized software costs are measured at cost less any accumulated amortization and any accumulated impairment losses on a product-by-product basis. Amortization of capitalized software costs begin when development is complete, and the product is available for use. The Group considers a product to be available for use when the Group completes its internal validation of the product that is necessary to establish that the product meets its design specifications including functions, features, and technical performance requirements. Internal validation includes the completion of coding, documentation and testing that ensure bugs are reduced to a minimum. The internal validation of the product takes place a few weeks before the product is made available to the market. In certain instances, The Group enters into a short pre-release stage, during which the product is made available to a selected number of customers as a beta program for their own review and familiarization. Subsequently, the release is made generally available to customers. Once a product is considered available for use, the capitalization of costs ceases and amortization of such costs to “cost of sales” begins. Capitalized software costs are amortized on a product-by-product basis by the straight-line method over the estimated useful life of the software product (between 5-7 years). Research and development costs incurred in the process of developing product enhancements are generally charged to expenses as incurred. The Group assesses the recoverability of its capitalized software costs on a regular basis by assessing the net realizable value of these intangible assets based on the estimated future gross revenues from each product reduced by the estimated future costs of completing and disposing of it, including the estimated costs of performing maintenance and customer support over its remaining economical useful life using internally generated projections of future revenues generated by the products, cost of completion of products and cost of delivery to customers over its remaining economical useful life. During the years ended December 31, 2020 , 2019 and 2018, no such unrecoverable amounts were identified. |
Other intangible assets | 19) Other intangible assets: Separately acquired intangible assets are measured on initial recognition at cost, including directly attributable costs. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Expenditures relating to internally generated intangible assets, excluding capitalized development costs, are recognized in profit or loss when incurred. According to management’s assessment, intangible assets with a finite useful life are amortized over their useful life 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 are reviewed at least at each year end. Other intangible assets are comprised mainly of customer-related intangible assets, backlogs, brand names, capitalized courses development costs, non-compete agreements and acquired technology and patent, and are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. The useful life of intangible assets is as follows: Years Customer relationship and backlog 3 – 15 Acquired technology 2 – 8 Patents 10 Gains or losses arising from the derecognition of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss. The useful life of these assets is reviewed annually to determine whether their indefinite life assessment continues to be supportable. If the events and circumstances do not continue to support the assessment, the change in the useful life assessment from indefinite to finite is accounted for prospectively as a change in accounting estimate, and on that date the asset is tested for impairment. Commencing from that date, the asset is amortized systematically over its useful life. |
Impairment of non-financial assets | 20) Impairment of non-financial assets: The Group evaluates the need to record an impairment of non-financial assets (property, plant and equipment, capitalized software costs and other intangible assets, goodwill, investments in joint venture) 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. An impairment loss of an asset, other than goodwill, is reversed only if there have been changes in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. Reversal of an impairment loss, as above, shall not be increased above the lower of the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in prior years and its recoverable amount. The reversal of impairment loss of an asset presented at cost is recognized in profit or loss. The following criteria are applied in assessing impairment of these specific assets: i. Goodwill in respect of subsidiaries: For the purpose of impairment testing, goodwill acquired in a business combination is allocated, at the acquisition date, to each of our cash-generating units that are expected to benefit from the synergies of the combination. The Group reviews goodwill for impairment once a year, on December 31, or more frequently if events or changes in circumstances indicate that there is an 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. ii. Investment in associate or joint venture using the equity method: After application of the equity method, the Group determines whether it is necessary to recognize any additional impairment loss with respect to the investment in associates or joint ventures. The Group determines at each reporting date whether there is objective evidence that the carrying amount of the investment in the associate or the joint venture is impaired. The test of impairment is carried out with reference to the entire investment, including the goodwill attributed to the associate or the joint venture. During the years ended December 31, 2020, 2019 and 2018 no impairment indicators were identified. |
Financial instruments | 21) Financial instruments: A. Financial assets: Financial assets are measured upon initial recognition at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss. The Group classifies and measures the debt instruments in its financial statements on the basis of the following criteria: ● the Group’s business model for the management of financial assets; and ● the contractual cash flow characteristics of the financial asset. i. The Group measures debt instruments at amortized cost when The Group’s business model is to hold the financial assets in order to collect their contractual cash flows, and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. After initial recognition, the instruments in this category are measured according to their terms at amortized cost using the effective interest rate method, less any provision for impairment. On the date of initial recognition, the Group may irrevocably designate a debt instrument as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency, such as when a related financial liability is also measured at fair value through profit or loss. ii. The Group measures debt instruments at fair value through other comprehensive income when The Group’s business model is to hold the financial assets in order to both collect their contractual cash flows and to sell the financial assets, and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Subsequent to the initial recognition, the instruments in this category are measured at fair value. Gains or losses from fair value adjustments, excluding interest and exchange rate differences, are recognized in other comprehensive income. iii. The Group measures debt instruments at fair value through profit or loss when A financial asset which is a debt instrument does not meet the criteria for measurement at amortized cost or at fair value through other comprehensive income. After initial recognition, the financial asset is measured at fair value and gains or losses from fair value adjustments are recognized in profit or loss. iv. Equity instruments and other financial assets held for trading Investments in equity instruments do not meet the above criteria and accordingly are measured at fair value through profit or loss. Other financial assets held for trading such as derivatives, including embedded derivatives separated from the host contract, are measured at fair value through profit or loss unless they are designated as effective hedging instruments. In respect of certain equity instruments that are not held for trading, on the date of initial recognition, the Company made an irrevocable election to present subsequent changes in fair value in other comprehensive income which changes would have otherwise been recorded in profit or loss. These changes will not be reclassified to profit or loss in the future, even when the investment is disposed of. Dividends from investments in equity instruments are recognized in profit or loss when the right to receive the dividends is established. B. Impairment of financial assets: The Group evaluates at the end of each reporting period the loss allowance for financial debt instruments which are not measured at fair value through profit or loss. The Company distinguishes between two types of loss allowances: i. Debt instruments whose credit risk has not increased significantly since initial recognition, or whose credit risk is low - the loss allowance recognized in respect of this debt instrument is measured at an amount equal to the expected credit losses within 12 months from the reporting date; or ii. Debt instruments whose credit risk has increased significantly since initial recognition, and whose credit risk is not low - the loss allowance recognized is measured at an amount equal to the expected credit losses over the instrument’s remaining term. The Group has short-term financial assets such as trade receivables in respect of which the Group applies a simplified approach and measures the loss allowance in an amount equal to the lifetime expected credit losses An impairment loss on debt instruments measured at amortized cost is recognized in profit or loss with a corresponding loss allowance that is offset from the carrying amount of the financial asset, whereas the impairment loss on debt instruments measured at fair value through other comprehensive income is recognized in profit or loss with a corresponding loss allowance that is recorded in other comprehensive income and not as a reduction of the carrying amount of the financial asset in the statement of financial position. The Group applies the low credit risk simplification in the Standard, according to which the Company assumes the debt instrument’s credit risk has not increased significantly since initial recognition if on the reporting date it is determined that the instrument has a low credit risk, for example when the instrument has an external rating of “investment grade”. C. Derecognition of financial assets: The Group derecognizes a financial asset when and only when: i. The contractual rights to the cash flows from the financial asset expire; or ii. The Group has transferred substantially all the risks and rewards deriving from the contractual rights to receive cash flows from the financial asset or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or iii. The Group has retained its contractual rights to receive cash flows from the financial asset but has assumed a contractual obligation to pay the cash flows in full without material delay to a third party. D. Financial liabilities: i. Financial liabilities measured at amortized cost: Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of the financial liability. After initial recognition, the Group measures all financial liabilities at amortized cost using the effective interest rate method, except for: ● Financial liabilities at fair value through profit or loss, such as derivatives; ● Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies; ● Financial guarantee contracts; ● Contingent consideration recognized by an acquirer in a business combination as to which IFRS 3 applies; ii. Financial liabilities measured at fair value through profit or loss: At initial recognition, the Group measures financial liabilities that are not measured at amortized cost at fair value. Transaction costs are recognized in profit or loss. After initial recognition, changes in fair value are recognized in profit or loss. E. Derecognition of financial liabilities: 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 discharges the liability by paying in cash, other financial assets, goods or services or is legally released from the liability. When there is a modification in the terms of an existing financial liability, the Group evaluates whether the modification is substantial. If the terms of an existing financial liability are substantially modified, such modification is accounted for as an extinguishment of the original liability and the recognition of a new liability. The difference between the carrying amounts of the above liabilities is recognized in profit or loss. If the modification is not substantial, the Group recalculates the carrying amount of the liability by discounting the revised cash flows at the original effective interest rate and any resulting difference is recognized in profit or loss. F. Offsetting financial instruments: Financial assets and financial liabilities are offset and the net amount is presented in the statement of financial position if there is a legally enforceable right to set off the recognized amounts and there is an intention either to settle on a net basis or to realize the asset and settle the liability simultaneously. The right of set-off must be legally enforceable not only during the ordinary course of business of the parties to the contract but also in the event of bankruptcy or insolvency of one of the parties. In order for the right of set-off to be currently available, it must not be contingent on a future event, there may not be periods during which the right is not available, or there may not be any events that will cause the right to expire. G. Compound financial instruments: i) Convertible debentures which contain both an equity component and a liability component are separated into two components. This separation is performed by first determining the liability component based on the fair value of an equivalent non-convertible liability. The value of the conversion component is determined to be the residual amount. Directly attributable transaction costs are apportioned between the equity component and the liability component based on the allocation of proceeds to the equity and liability components. ii) Convertible debentures that are denominated in foreign currency contain two components: the conversion component and the debt component. The liability conversion component is initially recognized as a financial derivative at fair value. The balance is attributed to the debt component. Directly attributable transaction costs are allocated between the liability conversion component and the liability debt component based on the allocation of the proceeds to each component. H. Put option granted to non-controlling interests: When the Group grants to non-controlling interests a put option to sell part or all of their interests in a subsidiary, during a certain period, even if such purchase obligation is conditional on the counterparty’s exercise of its contractual right to cause such redemption, if the put option agreement does not transfer to the Group any benefits incidental to ownership of the equity instrument (i.e. the Group does not have a present ownership in the shares concerned) then at the end of each reporting period the non-controlling interests (to which a portion of net profit attributable to non-controlling interests is allocated) are classified as a financial liability, as if such put-able equity instrument was redeemed on that date. The difference between the non-controlling interests carrying amount at the end of the reporting period and the present value of the liability is recognized directly in equity of the Group, under “Additional paid-in capital”. The Group remeasures the financial liability at the end of each reporting period based on the estimated present value of the consideration to be transferred upon the exercise of the put option. If the option is exercised in subsequent periods, the consideration paid upon exercise is treated as settlement of the liability. If the put option expires, the liability is settled and a portion of the investment in the subsidiary disposed of, without loss of control therein. If the Group has present ownership of the non-controlling interests, these non-controlling interests are accounted for as if they are held by the Group, and changes in the amount of the liability are carried to profit or loss. |
Fair value measurement | 22) Fair value measurement: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurement is based on the assumption that the transaction will take place in the asset’s or the liability’s principal market, or in the absence of a principal market, in the most advantageous market. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities measured at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - inputs other than quoted prices included within Level 1 that are observable directly or indirectly. Level 3 - inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data). |
Treasury shares | 23) Treasury shares: Company shares held by the Company and/or by investees are recognized at cost of purchase and presented as a deduction from equity. Any gain or loss arising from a purchase, sale, issue or cancellation of treasury shares is recognized directly in equity. |
Provisions | 24) Provisions: A provision in accordance with IAS 37 is recognized when the Group has a present obligation (legal or constructive) as a result of a past event, 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. When the Group expects part or all of the expense to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense is recognized in the statement of profit or loss net of any reimbursement. Following are the types of provisions included in the financial statements: i. Legal claims: A provision for claims is recognized when the Group has a present legal or constructive obligation as a result of a past event, it is more likely than not that an outflow of resources embodying economic benefits will be required by the Group to settle the obligation and a reliable estimate can be made of the amount of the obligation. ii. Contingent liability recognized in a business combination: A contingent liability in a business combination is measured at fair value upon initial recognition. In subsequent periods, it is measured at the higher of the amount initially recognized less, when appropriate, cumulative amortization, and the amount that would be recognized at the end of the reporting period in accordance with IAS 37. 25) Derivative financial instruments and hedging: From, time to time. the Group enters into contracts for derivative financial instruments such as forward currency contracts and options contracts to hedge risks associated with foreign exchange rates resulting from international activities and interest rate fluctuations. The derivative instruments primarily hedge or offset exposures to Euro, British Pound, Japanese Yen and New Israeli Shekel (“NIS”) exchange rate fluctuations. The Group’s options and forward contracts do not qualify for hedging accounting. Any gains or losses arising from changes in the fair values of the derivatives are recorded immediately in profit or loss as financial income or expense. 26) Employee benefit liabilities: The Group maintains several employee benefit plans: i. Short-term employee benefits: Short-term employee benefits are benefits that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related services. These benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognized when the Group has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made. ii. |
Derivative financial instruments and hedging | 25) Derivative financial instruments and hedging: From, time to time. the Group enters into contracts for derivative financial instruments such as forward currency contracts and options contracts to hedge risks associated with foreign exchange rates resulting from international activities and interest rate fluctuations. The derivative instruments primarily hedge or offset exposures to Euro, British Pound, Japanese Yen and New Israeli Shekel (“NIS”) exchange rate fluctuations. The Group’s options and forward contracts do not qualify for hedging accounting. Any gains or losses arising from changes in the fair values of the derivatives are recorded immediately in profit or loss as financial income or expense. |
Employee benefit liabilities | 26) Employee benefit liabilities: The Group maintains several employee benefit plans: i. Short-term employee benefits: Short-term employee benefits are benefits that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related services. These benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognized when the Group has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made. ii. Post-employment benefits: The plans are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans. Formula’s and its Israeli investees’ (as defined with respect to their Israeli employee contribution plans pursuant to section 14 of Israel’s Severance Pay Law, 1963 (the “Severance Pay Law”)) pay fixed contributions to those plans and will have no legal or constructive obligation to pay further contributions if the fund into which those contributions are paid does not hold sufficient amounts to pay all employee benefits relating to employee service in the current and prior periods. Contributions to the defined contribution plan in respect of severance or retirement pay are recognized as an expense when contributed concurrently with performance of the employee’s services. Formula and its Israeli investees also operate a defined benefit plan in respect of severance or retirement pay to their Israeli employees pursuant to the Severance Pay Law. According to the Severance Pay Law, employees are entitled to severance pay upon dismissal or retirement. The liability for termination of employment is measured using the projected unit credit method. The actuarial assumptions include rates of employee turnover and future salary increases based on the estimated timing of payment. The amounts are presented based on discounted expected future cash flows using a discount rate determined by reference to market yields at the reporting date on high quality corporate bonds that are linked to Israel’s Consumer Price Index with a term that is consistent with the estimated term of the severance pay obligation. In respect of its severance pay obligation to certain of its employees, the Group makes current deposits in pension funds and insurance companies (the “plan assets”). Plan assets comprise assets held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available to the Group’s own creditors and cannot be returned directly to the Group. The liability for employee benefits shown in the statement of financial position reflects the present value of the defined benefit obligation, less the fair value of the plan assets. Remeasurements of the net liability are recognized in other comprehensive income in the period in which they occur. Severance expenses for the years 2018, 2019 and 2020 were $30,318, $37,218 and $35,897, respectively. iii. Other long-term employee benefits: Certain employees of the Group are entitled to benefits in respect of adaptation grants. These benefits are accounted for as other long-term benefits since the Group estimates that these benefits will be utilized and the respective Group’s obligation will be settled during the employment period and more than twelve months after the end of the annual reporting period in which the employees rendered the related service. The Group’s net obligation for other long-term employee benefits, which is computed based on actuarial assumptions, is for the future benefit due to employees for services rendered in the current period and in prior periods and considering expected salary increases. The amount of these benefits is discounted to its present value. The discount rate is determined by reference at the reporting date to market yields on high quality corporate bonds that are linked to the Consumer Price Index and whose term is consistent with the term of the Group’s obligation. Remeasurement of the net obligation is recognized to the statement of comprehensive income in the incurred period. |
Earnings per share | 27) 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. Potential ordinary shares are included in the computation of diluted earnings per share when their conversion decreases earnings per share from continuing operations. 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 its share of earnings per share of the investees multiplied by the number of shares held by the Company. |
Concentration of credit risk | 28) Concentration of credit risk: Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents, short-term bank deposits, restricted cash, trade receivables, marketable securities and foreign currency derivative contracts. The majority of the Group’s cash and cash equivalents, bank deposits, marketable securities and other financial instruments are invested with major banks in Israel, the United States and Europe. Management believes that these financial instruments are held in financial institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. Cash and cash equivalents and short-term deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Generally, these banks deposits may be redeemed upon demand and therefore bear minimal risk. The Group’s marketable securities, which as of December 31, 2019, are solely held by Magic Software, include investments in commercial and government bonds and foreign banks. The Group’s marketable securities are considered to be highly liquid and have a high credit standing. In addition, managements of the Group’s investees limit the amount that may be invested in any one type of investment or issuer, thereby reducing credit risk concentrations and consider their portfolios in foreign banks to be well-diversified (also refer to Note 4). The Group’s trade receivables are generally derived from sales to large organizations located mainly in Israel, North America, Europe and Asia Pacific. The Group performs ongoing credit evaluations of its customers using a reliable outside source to determine payment terms and credit limits which are approved based on the size of the customer and to date has not experienced any material losses. In certain circumstances, Formula and its investees may require letters of credit, other collateral or additional guarantees. From time to time, the Group’s subsidiaries sell certain of its accounts receivable to financial institutions, within the normal course of business. The Group maintains an allowance for doubtful accounts receivable based upon management’s experience and estimate of collectability of each outstanding invoice. The allowance for doubtful accounts is determined with respect to specific debts or which collection is doubtful. The risk of collection associated with accounts receivable is mitigated by the diversity and number of customers. Bad debt expense, net for the years ended December 31, 2018, 2019 and 2020 was $1,723, $1,176 and $3,188 respectively. From time to time, the Group enters into foreign exchange forward and option contracts intended to protect against the changes in value of forecasted non-dollar currency cash flows. These derivative instruments are designed to offset a portion of the Group’s non-dollar currency exposure (see Note 2 (25) above). |
Liquidity risk | 29) Liquidity risk: Liquidity risk arises from managing the Group’s working capital as well as from financial expenses and principal payments of the Group’s debt instruments. Liquidity risk consists of the risk that the Group will have difficulty in fulfilling obligations relating to financial liabilities. The Group’s policy is to ascertain constant cash adequacy needed for settling its liabilities when due. For this purpose, the Group aims to hold cash balances (or adequate credit lines) that will meet anticipated demands. Formula and its investees examine cash flow forecasts on a monthly basis as well as information regarding cash balances. As of the reporting date, these forecasts indicate that the Group can expect sufficient liquid sources for covering its entire liabilities under reasonable assumptions. |
Changes in accounting policies - initial adoption of new financial reporting and accounting standards | 30) Changes in accounting policies - initial adoption of new financial reporting and accounting standards: 1. Amendment to IFRS 3, “Business Combinations”: In October 2018, the IASB issued an amendment to the definition of a “business” in IFRS 3, “Business Combinations” (“the Amendment”). The Amendment clarifies that in order to meet the definition of a “business”, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The Amendment also clarifies that a business can exist without including all of the inputs and processes necessary to create outputs. The Amendment includes an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business, with no need for other assessments. The Amendment is to be applied to business combinations and asset acquisitions for which the acquisition date is on or after January 1, 2020. The initial application of the Amendment did not have a material effect on the Company’s financial statements but it may have an effect on the assessment of the definition of a “business” for acquisitions completed after January 1, 2020. 2. Amendments to IFRS 9, IFRS 7 and IAS 39: In September 2019, the IASB published amendments to IFRS 9, “Financial Instruments”, IFRS 7, “Financial Instruments: Disclosures” and IAS 39, “Financial Instruments: Recognition and Measurement” (collectively - “the Amendment”). The Amendment permits certain temporary reliefs for entities applying hedge accounting for IBOR-based instruments which are affected by the uncertainty involving the expected interest rate benchmark reform. This reform has caused uncertainty relating to the timing and amounts of future cash flows from both hedging instruments and hedged items. The Amendment is applicable for annual periods beginning on January 1, 2020. The adoption of the Amendment did not have an effect on the Company’s financial statements as of January 1, 2020, since the Company does not have any IBOR-based hedge transactions which could be affected by the timing of the above reform. |
Financial statements have been reclassified | 31) Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation. |
General (Tables)
General (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of general information about financial statements [text block] [Abstract] | |
Schedule of the following table presents the ownership of Formula’s directly held investees as of the dates indicated | Percentage of ownership December 31, Name of Investee 2020 2019 Matrix 49.28 48.88 Sapiens (1) 43.96 47.91 Magic Software 45.53 45.34 Insync 90.09 90.09 Michpal 100 100 TSG (2) 50.00 50.00 Ofek 86.02 - |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of significant accounting policies [text block] [Abstract] | |
Schedule of amortization periods of the right-of-use assets | Years Mainly Land 2-24 5 Motor vehicles 2-3 2 |
Schedule of useful life of the assets at annual rates | % Land and Buildings 2 - 4 Computers, software and peripheral equipment 20 - 33 (mainly 33) Office furniture and equipment 6 - 33 (mainly 7) Motor vehicles 14 - 15 (mainly 15) |
Schedule of useful life of intangible assets rates | Years Customer relationship and backlog 3 – 15 Acquired technology 2 – 8 Patents 10 |
Business Combination, Signifi_2
Business Combination, Significant Transaction and Sale of Business (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Ofek Aerial Photography Ltd. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ 4,857 Fixed assets 3,993 Investment in company accounted for at equity method 824 Intangible assets 874 Dividend payable to former shareholder (7,069 ) Deferred tax, net (34 ) Non-controlling interests (995 ) Goodwill 1,481 Total assets acquired net of acquired cash $ 3,931 |
Ofek [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ 4,666 Other long-term assets 4,255 Intangible assets 29,946 Goodwill 57,509 Current liabilities (2,212 ) Deferred revenues (5,742 ) Deferred tax liabilities (7,181 ) Other long-term liabilities (8,257 ) Total assets acquired, net of acquired cash $ 72,948 |
Summary of intangible assets associated with the acquisition and not the amortization | Developed technology $ 10,517 Customer relationships 19,266 Backlog 163 Total intangible assets $ 29,946 |
Acquisition of sum.cumo GmbH (“sum.cumo”) [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ 466 Other long-term assets Intangible assets 9,730 Deferred tax liabilities (3,211 ) Goodwill 14,521 Total assets acquired, net of acquired cash $ 21,506 |
Delphi Technology Inc. and its subsidiary [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities excluding cash acquired $ (6,789 ) Intangible assets 7,562 Deferred tax liabilities (2,313 ) Goodwill 14,875 Total assets acquired, net of acquired cash $ 13,335 |
Calculo S.A.U [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ 47 Intangible assets 1,037 Goodwill 622 Total assets acquired, net of acquired cash $ 1,706 |
Adaptik Corporation [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities excluding cash acquired $ (2,817 ) Intangible assets 12,936 Deferred taxes (3,528 ) Goodwill 11,468 Total assets acquired, net of acquired cash $ 18,059 |
Aptonet Inc [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets, excluding cash acquired $ 529 Intangible assets, net 1,556 Goodwill 1,785 Total assets acquired, net of acquired cash $ 3,870 |
Stockell Information Systems, Inc [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets $ 1,051 Intangible assets, net 2,616 Goodwill 4,047 Total assets acquired $ 7,714 |
Acquisition of Mobisoft Magic Hands [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets, excluding cash acquired $ 1,069 Intangible assets, net 4,553 Goodwill 5,718 Total assets acquired, net of acquired cash $ 11,340 |
NetEffects [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ 91 Intangible assets 8,716 Goodwill 3,526 Total assets acquired net of acquired cash $ 12,333 |
PowWow Inc [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities excluding cash acquired $ (1,557 ) Intangible assets 2,855 Goodwill 7,145 Total assets acquired net of acquired cash $ 8,443 |
OnTarget Group Inc [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ 444 Intangible assets 4,908 Deferred taxes (1,276 ) Goodwill 8,380 Total assets acquired net of acquired cash $ 12,456 |
Gestetnertec Ltd. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ 12,746 Short-term bank credit (10,598 ) Non-controlling interest (135 ) Liability to acquire non-controlling interests (put option) (17,781 ) Intangible assets, net 16,337 Deferred taxes (4,021 ) Goodwill 12,621 Total assets acquired net of acquired cash $ 9,169 |
RightStar Inc. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities excluding cash acquired $ (763 ) Contingent liability in respect of business combinations (1,077 ) Intangible assets, net 354 Deferred taxes (95 ) Goodwill 922 Total liabilities acquired net of acquired cash $ (659 ) |
Acquisition of Medatech Information Technologies Ltd. (“Medatech Technologies”) [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ 2,340 Intangible assets 7,553 Deferred taxes (2,276 ) Credit from banks and others (5,550 ) Non-controlling interests (434 ) Goodwill 20,423 Total assets acquired net of acquired cash $ 22,056 |
Dana Engineering Ltd [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ (9,270 ) Intangible assets 5,311 Deferred taxes (1,138 ) Non-controlling interests (5,235 ) Goodwill 9,746 Total assets acquired net of acquired cash $ (586 ) |
Noah Technologies Ltd. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities excluding cash acquired $ (475 ) Intangible assets 781 Deferred taxes (171 ) Goodwill 1,854 Total assets acquired net of acquired cash $ 1,989 |
Integrity Software 2011 Ltd. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities excluding cash acquired $ (1,130 ) Intangible assets 1,316 Deferred taxes (303 ) Non-controlling interests (318 ) Goodwill 1,990 Total assets acquired net of acquired cash $ 1,555 |
Cambium (2014) Ltd. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities excluding cash acquired $ (8 ) Intangible assets 365 Deferred taxes (84 ) Non-controlling interests (238 ) Goodwill 715 Total assets acquired net of acquired cash $ 750 |
Pleasant Valley Business Solutions, LLC [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities excluding cash acquired $ (793 ) Intangible assets 1,809 Deferred taxes (499 ) Goodwill 7,792 Total assets acquired net of acquired cash $ 8,309 |
Alius Group Inc [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities excluding cash acquired $ (4 ) Intangible assets 2,986 Deferred taxes (806 ) Goodwill 14,190 Total assets acquired net of acquired cash $ 16,366 |
Liram Financial Software Ltd. [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net liabilities $ (751 ) Non-controlling interest (821 ) Intangible assets 4,529 Deferred tax liability (1,042 ) Goodwill 2,404 Total assets acquired $ 4,319 |
Unique Software Industries Ltd [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets excluding cash acquired $ (244 ) Intangible assets 8,425 Deferred tax liability (1,938 ) Goodwill 9,547 Total assets acquired net of acquired cash $ 15,790 |
Effective Solutions Ltd [Member] | |
Business Combination, Significant Transaction and Sale of Business (Tables) [Line Items] | |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition | Net assets $ 692 Non-controlling interests (320 ) Intangible assets 739 Deferred tax liability (170 ) Goodwill 5,232 Total assets acquired net of acquired cash $ 6,173 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Of Detailed Information About Marketable Securities Explanatory [Abstract] | |
Schedule of marketable securities | December 31, 2020 2019 Convertible bonds designated at fair value through profit or loss (1) 1,238 1,112 Corporate bonds at Fair value through other comprehensive income - 5,488 $ 1,238 $ 6,600 |
Prepaid Expenses and Other Ac_2
Prepaid Expenses and Other Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Of Other Accounts Receivable And Prepaid Expenses [Abstract] | |
Schedule of prepaid expenses, other accounts receivable and other investments | December 31, 2020 2019 Prepaid expenses and advances to suppliers $ 47,155 $ 37,394 Government departments 29,973 22,134 Dividend receivable from jointly controlled entity - 3,000 Employees 301 488 Related Parties 404 1,278 Other 5,987 1,415 $ 83,820 $ 65,709 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of fair value measurement [text block] [Abstract] | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | Fair value measurements December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Convertible bonds at fair value through profit or loss (Note 4) - 1,238 - 1,238 Dividend preference derivative in TSG (1) - - 1,707 1,707 $ - $ 1,238 $ 1,707 $ 2,945 Liabilities: Foreign currency derivative contracts - 707 - 707 Contingent consideration in respect of business combination - - 18,456 18,456 Liabilities from acquisition of non-controlling interests (put options) - - 64,018 64,018 - $ 707 $ 82,474 $ 83,181 Fair value measurements December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Convertible bonds at fair value through profit or loss (Note 4) - 1,112 - 1,112 Corporate bonds at fair value through other comprehensive income (Note 4) - 5,488 - 5,488 Dividend preference derivative in TSG (1) - - 1,539 1,539 $ - $ 6,600 $ 1,539 $ 8,139 Liabilities: Foreign currency derivative contracts - 67 - 67 Contingent consideration in respect of business combination - - 13,979 13,979 Liabilities from acquisition of non-controlling interests (put options) - - 54,850 54,850 $ - $ 67 $ 68,829 $ 68,896 |
Investments in Companies Acco_2
Investments in Companies Accounted for at Equity Method (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Description of accounting policy for investments other than investments accounted for using equity method [text block] [Abstract] | |
Schedule of changes in the carrying amount of the company’s investment in TSG | December 31, 2020 2019 TSG (Joint venture) 27,165 26,016 Other investments 1,146 5 28,311 26,021 |
Schedule of investment in TSG equity method | December 31, 2020 2019 Investment in companies accounted for at equity method Shares 18,225 18,347 Capital note 8,940 7,669 27,165 26,016 Long-term prepaid expenses, other accounts, and other investments Dividend preference derivative at fair value through profit or loss 1,707 1,539 |
Schedule of fair value of TSG's dividend preference derivative | December 31, 2020 2019 Opening balance 1,539 2,733 Increase in fair value recognized in profit or loss 48 93 Currency exchange rate in other comprehensive income 120 213 Decrease due to dividend declared by TSG - (1,500 ) Closing balance 1,707 1,539 |
Schedule of the following table summarizes the changes in the carrying amount of the Company’s Investment in TSG | January 1, 2018 $ 25,260 Company’s share of profit 365 Company’s share of other comprehensive income 58 December 31, 2018 $ 25,683 Company’s share of profit 1,771 Company’s share of other comprehensive income 62 Company’s Share in dividend declared by TSG (1,500 ) December 31, 2019 $ 26,016 Company’s share of profit 1,318 Company’s share of other comprehensive income (169 ) December 31, 2020 $ 27,165 |
Summarized statement of financial position in accordance with IFRS as of December 31, 2019 and 2020 (as presented in TSG’s financial statements) | December 31, 2020 2019 Current assets 51,056 48,340 Noncurrent assets excluding goodwill 4,810 5,507 Current liabilities (26,201 ) (28,436 ) Noncurrent liabilities (8,414 ) (8,625 ) Total equity 21,251 16,786 Accumulated cost of share-based payment (743 ) - $ 20,508 $ 16,786 Company’s share in TSG 50 % 50 % 10,254 8,393 Excess cost of intangible assets net of deferred tax 7,075 7,787 Goodwill 9,836 9,836 Company’s carrying amount of the investment in TSG $ 27,165 $ 26,016 |
Schedule of the following table key highlights of TSG profit or loss in accordance with IFRS for the years ended December 31, 2018, 2019 and 2020 (as presented in TSG’s financial statements): | Year ended December 31, 2020 2019 2018 Revenues 77,661 84,350 66,154 Net income 4,059 4,966 3,437 Other comprehensive income (338 ) 124 116 Total comprehensive income 3,721 5,090 3,553 Company’s share in TSG 50 % 50 % 50 % 1,861 2,545 1,776 Amortization of excess cost of intangible assets net of tax (712 ) (712 ) (1,353 ) Company’s share of total comprehensive income 1,149 1,833 423 Company’s share of other comprehensive income (169 ) 62 58 Company’s share of profit 1,318 1,771 365 1,149 1,833 423 |
Property, Plants and Equipmen_2
Property, Plants and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of property, plant and equipment [text block] [Abstract] | |
Disclosure of detailed information about property, plant and equipment [text block] | December 31, 2020 2019 Cost: Computers, software, furniture, and equipment $ 139,840 $ 110,955 Motor vehicles 8,623 5,022 Buildings 975 975 Leasehold improvements 39,261 31,435 188,699 148,387 Accumulated depreciation: Computers, software, furniture, and equipment $ 103,833 $ 86,802 Motor vehicles 3,875 2,271 Buildings 112 87 Leasehold improvements 21,703 16,168 129,523 105,328 Depreciated cost $ 59,176 $ 43,059 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of intangible assets [text block] [Abstract] | |
Schedule of intangible assets, net | December 31, 2020 2019 Original amounts: Capitalized Software costs $ 221,220 $ 213,221 Customer relationship 247,445 179,023 Acquired technology 100,159 74,456 Backlog 6,909 6,850 Patent 1,493 4,524 Other intangibles 3,549 1,389 580,775 479,463 Accumulated amortization: Capitalized Software costs 179,587 168,315 Customer relationship 120,165 98,543 Acquired technology 48,087 35,653 Backlog 6,909 6,675 Patent 958 4,243 Other intangibles 2,806 754 358,512 314,183 Total $ 222,263 $ 165,280 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of goodwill [text block] [Abstract] | |
Schedule of carrying amount of goodwill | December 31, 2020 2019 Opening balance $ 724,193 $ 640,918 Acquisition of subsidiaries 116,416 54,460 Classifications 3,066 2,977 Foreign currency translation adjustments 28,749 25,838 Closing balance $ 872,424 $ 724,193 |
Short Term Liabilities to Ban_2
Short Term Liabilities to Banks and Others (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Description of accounting policy for financial liabilities [text block] [Abstract] | |
Schedule of short term liabilities to banks and others | December 31, December 31, 2020 2020 2019 Interest rate % Currency Bank credit 2.25-3.1 NIS - 580 Bank credit US Prime -0.2 USD - 688 Short-term bank loans Israeli Prime + 0.8 NIS - 868 Short-term bank loans 2.5 NIS 1,259 - Short-term bank loans 1.6 NIS 11,357 28,937 Commercial securities not listed 0.75 NIS 31,104 28,935 Current maturities of long-term loans from banks and other financial institutions (Note 13) 1.8-3.45 NIS 75,856 64,060 Current maturities of long-term loans from banks (Note 13) Libor + 2.2 NIS Linked to USD 800 804 Short-term interest on long-term loans from other financial institutions 2.6-5.5 NIS 68 425 $ 120,444 $ 125,297 |
Other Accounts Payable (Tables)
Other Accounts Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Accounts Payable [Abstract] | |
Schedule of other accounts payable | December 31, 2020 2019 Government institutions $ 35,648 $ 35,775 Accrued royalties to the IIA (see Note 19e) - 223 Accrued expenses and other current liabilities 33,328 27,174 Total $ 68,976 $ 63,172 |
Long term Liabilities to Bank_2
Long term Liabilities to Banks and Others (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of other liabilities [text block] [Abstract] | |
Schedule of long term liabilities to banks and others composition | Interest rate Currency Long-term liabilities Current maturities Long-term liabilities net of current maturities Total long-term liabilities net of current maturities % December 31, 2020 December 31, 2019 1.8-5.5 NIS (Unlinked) 255,972 75,856 $ 180,116 $ 161,043 Libor +2.2 NIS Linked to USD 1,000 800 200 1,019 256,972 76,656 $ 180,316 $ 162,062 |
Schedule of long term liabilities to banks and others maturity dates | December 31, 2020 2019 First year (current maturities) $ 76,656 $ 64,864 Second year 69,500 50,460 Third year 60,310 47,733 Fourth year 38,162 38,784 Fifth year and thereafter 12,344 25,085 $ 256,972 $ 226,926 |
Debentures (Tables)
Debentures (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Of Debentures [Abstract] | |
Schedule of debentures | Effective Interest rate Currency Par value in issuance currency Par Value Unamortized debt premium (discount) and issuance costs, net Current maturities Total long-term debentures, net of current maturities Short-term accrued interest Total short-term and long-term debentures % December 31, 2020 Formula’s Series A 2.4 NIS (Unlinked) NIS 136,844 $ 42,564 365 10,641 32,288 589 43,518 Formula’s Series C 2.5 NIS (Unlinked) NIS 267,000 $ 83,048 (678 ) 10,264 72,106 158 82,528 Sapiens’ Series B Debentures (3.37%) 3.3 NIS (Linked to fix rate of USD) NIS 350,000 $ 118,778 (306 ) 19,796 98,676 6 118,478 $ 244,390 (619 ) 40,701 203,070 753 $ 244,524 Effective Interest rate Currency Par value in issuance currency Par Value Unamortized debt premium (discount) and issuance costs, net Current maturities Total long-term debentures, net of current maturities Short-term accrued interest Total short-term and long-term debentures % December 31, 2019 Formula’s Series A 2.4 NIS (Unlinked) NIS 171,056 $ 49,497 519 9,899 40,117 686 50,702 Formula’s Series C 2.5 NIS (Unlinked) NIS 300,000 $ 86,806 (813 ) 9,549 76,444 163 86,156 Sapiens’ Series B Debentures (3.37%) 3.69 NIS (Linked to fix rate of USD) NIS 245,000 $ 69,287 (539 ) 9,898 58,850 1,167 69,915 $ 205,590 (833 ) 29,346 175,411 2,016 $ 206,773 |
Schedule of aggregate principal annual payments of debentures | Repayment amount 2021 40,701 2022 40,701 2023 40,701 2024 40,701 2025 and thereafter 81,586 244,390 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of leases [text block] [Abstract] | |
Schedule of maturity analysis of undiscounted future lease payments receivable for operating leases | 2021 33,887 2022 28,949 2023 18,550 2024 12,068 2025 10,108 2026 and thereafter 35,725 Total undiscounted cash flows 139,287 Less imputed interest (16,034 ) Present value of lease liabilities 123,253 |
Employee Option Plans (Tables)
Employee Option Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Employee Option Plans (Tables) [Line Items] | |
Schedule of stock-based compensation expense resulting from stock options grants | Year ended December 31, 2020 2019 2018 Cost of revenues $ - $ - $ 2 Research and development expenses - - 4 Selling and marketing expenses - 74 4 General and administrative expenses 7,856 3,800 3,971 $ 7,856 $ 3,874 $ 3,981 |
Schedule of Sapiens’ stock option plans | Ranges of exercise price Options Weighted Weighted Options Weighted $ (Years) $ $ 1.12 8,408 0.41 1.12 8,408 1.12 8.31-10.07 280,324 1.73 9.17 207,133 9.15 11.07-11.09 682,500 2.81 11.09 426,250 11.09 11.85-15.46 176,250 3.27 12.75 90,418 12.41 24.29-25.4 235,000 5.13 25.12 - - 31.96 80,000 5.60 31.96 - - 1,462,482 3.17 14.26 732,209 10.59 |
Schedule of Sapiens’ stock option plans | Ranges of Exercise price Options outstanding Weighted average remaining contractual life Weighted average exercise price Options exercisable Weighted average exercise price of exercisable options $ (Years) $ $ 2.01-3 18,000 0.77 2.94 18,000 2.94 4.01-5 6,250 2.60 4.94 6,250 4.94 24,250 1.24 3.45 24,250 3.45 |
Matrix [Member] | |
Employee Option Plans (Tables) [Line Items] | |
Schedule of Matrix stock-based compensation activity (and not Magic software) | Number of options Weighted Weighted average remaining contractual term Aggregate Outstanding at January 1, 2020 1,725,512 10.17 3.73 17,153 Exercised (51,378 ) - - (689 ) Granted - - - - Outstanding at December 31, 2020 1,674,134 10.70 2.88 19,935 Exercisable at December 31, 2020 811,378 - - 9,386 |
Sapiens [Member] | |
Employee Option Plans (Tables) [Line Items] | |
Schedule of Sapiens stock-based compensation activity (and not Magic software) | Year ended December 31, 2019 Amount Weighted average exercise price Weighted average remaining contractual life Aggregate intrinsic value Outstanding at January 1, 2020 1,869,412 10.25 3.21 23,838 Granted 315,000 26.28 Exercised (603,519 ) 8.63 Expired and forfeited (118,411 ) 11.15 Outstanding at December 31, 2020 1,462,482 14.26 3.17 24,019 Exercisable at December 31, 2020 732,209 10.59 2.29 14,092 |
Magic Software [Member] | |
Employee Option Plans (Tables) [Line Items] | |
Schedule of magic Software stock-based compensation activity | Number of options Weighted average exercise Weighted average remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2020 119,767 2.58 1.37 1,171 Granted - - Exercised (95,517 ) 2.28 Forfeited - - Outstanding at December 31, 2020 24,250 3.45 1.24 380 Exercisable at December 31, 2020 24,250 3.45 1.24 380 |
Employee Benefit Liabilities (T
Employee Benefit Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Matrix [Member] | |
Employee Benefit Liabilities (Tables) [Line Items] | |
Schedule of defined benefit plans | December 31, 2020 2019 Defined benefit obligation 113,540 95,692 Fair value of plan assets (98,421 ) (84,053 ) Net defined benefit liability 15,119 11,639 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of commitments and contingent liabilities [text block] [Abstract] | |
Schedule of composition of pledged shares | December 31, Formula’s series A secured Debentures Formula’s series C secured debentures Matrix ordinary shares, par value NIS 1.0 per share 4,128,865 6,031,761 Magic Software ordinary shares, par value NIS 0.1 per share 5,825,681 2,411,474 Sapiens common shares, par value €0.01 per share 1,260,266 2,957,590 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of share capital, reserves and other equity interest [text block] [Abstract] | |
Schedule of share capital | December 31, 2020 December 31, 2019 Authorized Issued Outstanding Authorized Issued Outstanding Ordinary shares, NIS 1 par value each 25,000,000 15,862,887 15,294,267 25,000,000 15,862,887 15,294,267 |
Taxes on Income (Tables)
Taxes on Income (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of income tax [text block] [Abstract] | |
Schedule of deferred tax liabilities, net | December 31, 2020 2019 Deferred taxes assets $ 39,750 $ 38,865 Deferred tax liabilities (68,367 ) (53,854 ) $ (28,617 ) $ (14,989 ) December 31, 2020 2019 Net operating losses carried forward $ 5,377 $ 6,115 Intangibles, fixed asset and right-of-use assets (78,885 ) (56,036 ) Lease liability 31,358 22,863 Differences in measurement basis (cash basis for tax purposes) (683 ) (345 ) Other 14,216 12,414 $ (28,617 ) $ (14,989 ) |
Schedule of pre-tax income | Year ended December 31, 2020 2019 2018 Domestic (Israel) 106,974 $ 88,942 $ 80,948 Foreign 36,782 30,895 20,379 Total $ 143,756 $ 119,837 $ 101,327 |
ScheduleOfTaxesOnIncomeTaxBenefitTableTextBlock | Year ended December 31, 2020 2019 2018 Current taxes $ 23,015 $ 40,181 $ 30,302 Deferred taxes 8,254 (12,980 ) (6,001 ) Total $ 31,269 $ 27,201 $ 24,301 |
Schedule of theoretical tax expense | Year ended December 31, 2020 2019 2018 Income before income taxes, as per the statement of operations $ 143,756 $ 119,837 $ 101,327 Statutory tax rate in Israel 23 % 23 % 23 % Tax computed at the statutory tax rate 33,064 27,563 23,305 Non-deductible expenses (non-taxable income) net and tax-deductible costs not included in the accounting costs 2,544 792 1,393 Effect of different tax rates (774 ) 1,114 379 Effect of “Approved, Beneficiary or Preferred Enterprise” status (5,426 ) (2,557 ) (1,233 ) Deferred taxes on current losses (utilization of carry forward losses) and temporary differences for which a valuation allowance was provided, net 1,877 1,087 (796 ) Taxes in respect of prior years 280 (569 ) (485 ) Uncertain tax positions 285 1,889 2,703 Other (581 ) (2,118 ) (965 ) Taxes on income $ 31,269 $ 27,201 $ 24,301 |
Schedule of total unrecognized tax benefits | Balance as of January 1, 2018 4,024 Decrease related to prior years’ tax positions (198 ) Increase related to current year tax positions 2,775 Balance as of December 31, 2018 6,601 Decrease related to prior years’ tax positions (243 ) Increase related to current year tax positions 1,999 Balance as of December 31, 2019 8,357 Acquisition of subsidiaries 1,057 Decrease related to prior years’ tax positions (1,733 ) Increase related to current year tax positions 1,410 Balance as of December 31, 2020 9,091 |
Supplementary Financial State_2
Supplementary Financial Statement Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplementary Financial Statement Information [Abstract] | |
Schedule of non-controlling interest in material partially owned subsidiaries | December 31, 2020 2019 Matrix and its subsidiaries $ 147,662 $ 120,225 Sapiens and its subsidiaries 306,684 203,942 Magic Software and its subsidiaries 150,808 150,370 Other 188 157 $ 605,342 $ 474,694 |
Schedule of financial income and expenses | Year ended December 31, 2020 2019 2018 Financial expenses: Financial expenses related to liabilities in respect of business combinations $ 3,738 $ 1,061 $ 1,108 Interest expenses on loans and borrowings 6,863 6,376 6,891 Financial costs related to Debentures 6,546 5,632 5,479 Interest expenses attributed to IFRS 16 5,367 4,195 - Bank charges, negative foreign exchange differences and other financial expenses 6,930 5,179 2,374 29,444 22,443 15,852 Financial income: Income from marketable securities and embedded derivative 204 747 832 Interest income from deposits, positive foreign exchange differences and other financial income 2,355 3,044 6,730 2,559 3,791 7,562 Financial expenses, net $ 26,885 $ 18,652 $ 8,290 |
Schedule of property and equipment located | December 31, 2020 2019 Israel $ 44,105 $ 28,446 United States 4,517 4,709 Europe 3,303 1,828 Japan 283 265 Other 6,968 7,811 Total $ 59,176 $ 43,059 |
Schedule of revenues classified by geographic area (based on the location of customers) | Year ended December 31, 2020 2019 2018 Israel $ 1,203,109 $ 1,047,265 $ 893,605 International: United States 501,785 462,803 418,148 Europe 189,152 145,564 141,316 Africa 11,702 15,336 13,726 Japan 14,282 14,925 11,053 Other (mainly Asia pacific) 13,888 15,222 15,140 Total $ 1,933,918 $ 1,701,115 $ 1,492,988 |
Schedule of computation basic and diluted net earnings per share | Year ended December 31, 2020 2019 2018 Numerator: Basic earnings per share – net income attributable to equity holders of the Company $ 46,776 $ 38,820 $ 32,365 Diluted earnings per share - net income attributable to equity holders of the Company $ 45,969 $ 37,457 $ 33,376 Denominator: Basic earnings per share - weighted average shares outstanding 15,286 15,190 14,740 Effect of dilutive securities 6 151 831 Diluted earnings per share – adjusted weighted average shares outstanding 15,292 15,341 15,571 Basic net earnings per share 3.05 2.56 2.20 Diluted net earnings per share 3.01 2.44 2.14 |
Operating Segments (Tables)
Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure of entity's operating segments [text block] [Abstract] | |
Schedule of goodwill in material partially owned subsidiaries | December 31, 2020 2019 Matrix and its subsidiaries $ 290,662 $ 260,492 Sapiens and its subsidiaries 409,646 316,082 Magic Software and its subsidiaries 135,682 117,743 Other consolidated subsidiaries 36,434 29,876 $ 872,424 $ 724,193 |
Schedule of reporting on operating segments | Matrix Sapiens Magic Software Other Adjustments Total Year ended December 31, 2020: Revenues from external customers 1,116,178 382,903 368,357 144,139 (77,659 ) 1, 933,918 Inter-segment revenues 5,316 - 2,837 330 (8,483 ) - Revenues 1,121,494 382,903 371,194 144,469 (86,142 ) 1, 933,918 Unallocated corporate expenses - - - - - - Depreciation and amortization 14,646 28,474 13,939 6,142 (2,103 ) 61,098 Operating income 84,181 35,337 47,757 10,839 (7,473 ) 170,641 Financial expenses, net (26,885 ) Group’s share of profits of companies accounted for at equity, net 1,535 Taxes on income (31,269 ) Net income 114,022 Year ended December 31, 2019: Revenues from external customers 1,005,721 325,674 322,401 131,668 (84,349 ) 1,701,115 Inter-segment revenues 3,986 - 3,229 510 (7,725 ) - Revenues 1,009,707 325,674 325,630 132,178 (92,074 ) 1,701,115 Unallocated corporate expenses - - - - - - Depreciation and amortization 11,713 25,619 14,025 4,148 (2,104 ) 53,401 Operating income 71,552 32,336 33,817 8,227 (7,443 ) 138,489 Financial expenses, net (18,652 ) Group’s share of profits of companies accounted for at equity, net 1,787 Taxes on income (27,201 ) Net income 94,423 Year ended December 31, 2018: Revenues from external customers 878,188 289,707 282,205 109,041 (66,153 ) 1,492,988 Inter-segment revenues 2,869 - 2,170 80 (5,119 ) - Revenues 881,057 289,707 284,375 109,121 (71,272 ) 1,492,988 Unallocated corporate expenses - - - - (2,113 ) (2,113 ) Depreciation and amortization 8,554 26,249 12,562 5,081 (3,712 ) 48,734 Operating income (loss) 61,264 16,799 31,698 4,210 (4,354 ) 109,617 Financial expenses, net (8,290 ) Group’s share of profits of companies accounted for at equity, net 369 Taxes on income (24,301 ) Net income 77,395 |
General (Details)
General (Details) | 1 Months Ended | ||
Oct. 20, 2020USD ($)$ / sharesshares | Dec. 31, 2020₪ / shares | Dec. 31, 2019₪ / shares | |
Disclosure of general information about financial statements [text block] [Abstract] | |||
Ordinary shares, par value | ₪ / shares | ₪ 1 | ₪ 1 | |
Sapiens issued | shares | 3,898,304 | ||
Share price | $ / shares | $ 29.50 | ||
Total proceeds | $ 108,737 | ||
Net of issuance expenses | $ 509 | ||
Percentage of share capital | 3.38% |
General (Details) - Schedule of
General (Details) - Schedule of the following table presents the ownership of Formula’s directly held investees as of the dates indicated (the list consists only of active companies) | Dec. 31, 2020 | Dec. 31, 2019 | |
Matrix [Member] | |||
General (Details) - Schedule of the following table presents the ownership of Formula’s directly held investees as of the dates indicated (the list consists only of active companies) [Line Items] | |||
Percentage of ownership | 49.28% | 48.88% | |
Sapiens [Member] | |||
General (Details) - Schedule of the following table presents the ownership of Formula’s directly held investees as of the dates indicated (the list consists only of active companies) [Line Items] | |||
Percentage of ownership | [1] | 43.96% | 47.91% |
Magic Software [Member] | |||
General (Details) - Schedule of the following table presents the ownership of Formula’s directly held investees as of the dates indicated (the list consists only of active companies) [Line Items] | |||
Percentage of ownership | 45.53% | 45.34% | |
Insync [Member] | |||
General (Details) - Schedule of the following table presents the ownership of Formula’s directly held investees as of the dates indicated (the list consists only of active companies) [Line Items] | |||
Percentage of ownership | 90.09% | 90.09% | |
Michpal [Member] | |||
General (Details) - Schedule of the following table presents the ownership of Formula’s directly held investees as of the dates indicated (the list consists only of active companies) [Line Items] | |||
Percentage of ownership | 100.00% | 100.00% | |
TSG [Member] | |||
General (Details) - Schedule of the following table presents the ownership of Formula’s directly held investees as of the dates indicated (the list consists only of active companies) [Line Items] | |||
Percentage of ownership | [2] | 50.00% | 50.00% |
Ofek [Member] | |||
General (Details) - Schedule of the following table presents the ownership of Formula’s directly held investees as of the dates indicated (the list consists only of active companies) [Line Items] | |||
Percentage of ownership | 86.02% | ||
[1] | On October 20, 2020, Sapiens completed a secondary public offering of its ordinary shares on the NASDAQ. Sapiens issued 3,898,304 shares at a price of $29.50 per share before issuance expenses and underwriting discounts. The total proceeds from the issuance amounted to $108,737, net of issuance expenses of $509. Following Sapiens secondary public offering, Formula’s interest in the share capital of Sapiens was diluted by 3.38%. | ||
[2] | TSG’s results of operations are reflected in the Company’s results of operations using the equity method of accounting. |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Significant Accounting Policies (Details) [Line Items] | |||
Product and service revenue, description | the “proprietary software products and related services” line item in 2020 is $28,424 and $485,534, respectively. Of the $485,534 revenue from service, proprietary licenses with significant related services (treated as one performance obligation) amounts to $173,280. | ||
Severance expenses | $ 35,897 | $ 37,218 | $ 30,318 |
Bad debt expenses | $ 3,188 | $ 1,176 | $ 1,723 |
Matrix [Member] | |||
Significant Accounting Policies (Details) [Line Items] | |||
Description of governing bodies | Matrix’s board of directors is composed of 5 members, 3 of whom are independent directors, and one being Formula’s chief executive officer who serves as the chairman of Matrix board of directors. For the last 5 years (i.e., 2016-2020), the Company has consistently reappointed mostly the same members of the board of directors. | ||
Description of voting rights | the Company, as of December 31, 2020 there was just one financial institution holding more than 5% of Matrix’s voting power (9% of the votes). There is no evidence that any of the shareholders have or had granted to any other shareholder a voting proxy at the general meeting. Over the last five years (i.e., 2016-2020), Matrix’s general meetings were attended by shareholders representing not more than between 77% and 82% of total voting rights, including the Company’s share power. Bearing in mind that the Company presently holds approximately 49.28% of total voting power, this means that the level of activity of Matrix’s other shareholders is relatively moderate or low. As of December 31, 2020, the attendance by shareholders would have to be higher than 98.6% in order to deprive the Company of an absolute majority of votes at the general meeting. | ||
Sapiens [Member] | |||
Significant Accounting Policies (Details) [Line Items] | |||
Description of voting rights | the Company, only one financial institution held more than 5% of the voting rights at the general meeting (representing 5.6%). There is no evidence that any shareholders have or had granted to any other shareholder a voting proxy at the general meeting. Over the last five years from 2016 to 2020, Sapiens’ general meetings were attended by shareholders representing in total between 70% and 80% of the total voting power, including the Company’s share power. Bearing in mind that the Company presently holds approximately 43.96% of total voting right, this means that the level of activity of Sapiens’ other shareholders is relatively moderate or low. As of December 31, 2020, the attendance from shareholders would have to be higher than 87.9% in order to deprive the Company of an absolute majority of votes at the general meeting. | ||
Magic [Member] | |||
Significant Accounting Policies (Details) [Line Items] | |||
Description of governing bodies | Magic Software’s board of directors is composed of 5 members, 3 of whom are independent directors, and one being Formula chief executive officer who also serves as Magic Software chief executive officer. In recent years, the Company has consistently reappointed mostly the same members of the board of directors. The only exception was the appointment of Mr. Avi Zakay in February 2018, who has replaced Mr. Yechezkel Zeira after nine years of service. | ||
Description of voting rights | the Company, as of December 31, 2020, there were just three financial institutions holding more than 5% of Magic Software’s voting power (representing 9.9%, 7.7% and 5.4% of the votes). There is no evidence that any of the shareholders have or had granted to any other shareholder a voting proxy at the general meeting. Over the last five years from 2016 to 2020, Magic Software’s general meetings were attended by shareholders representing between 65%-87% of total voting rights. Bearing in mind that the Company presently holds approximately 45.53% of total voting right, this means that the level of activity of Magic Software’s other shareholders is relatively moderate or low. As of December 31, 2020, the attendance by shareholders would have to be higher than 91.1% in order to deprive the Company of an absolute majority of votes at the general meeting. |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of amortization periods of the right-of-use assets | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of amortization periods of the right-of-use assets [Abstract] | |
Minimum period amortization of the right-of-use on land asset | 2 years |
Maximum period amortization of the right-of-use on land asset | 24 years |
Amortization of the mainly right-of-use on land asset | 5 years |
Minimum period amortization of the right-of-use on Motor vehicles asset | 2 years |
Maximum period amortization of the right-of-use on Motor vehicles asset | 3 years |
Amortization of the mainly right-of-use on motor vehicles asset | 2 years |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of useful life of the assets at annual rates | 12 Months Ended |
Dec. 31, 2020 | |
Land and Buildings [Member] | Bottom of range [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of the assets at annual rates [Line Items] | |
Useful life of the assets at annual rates, description | 2 |
Land and Buildings [Member] | Top of range [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of the assets at annual rates [Line Items] | |
Useful life of the assets at annual rates, description | 4 |
Computers, software and peripheral equipment [Member] | Bottom of range [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of the assets at annual rates [Line Items] | |
Useful life of the assets at annual rates, description | 20 |
Computers, software and peripheral equipment [Member] | Top of range [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of the assets at annual rates [Line Items] | |
Useful life of the assets at annual rates, description | 33 (mainly 33) |
Office furniture and equipment [Member] | Bottom of range [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of the assets at annual rates [Line Items] | |
Useful life of the assets at annual rates, description | 6 |
Office furniture and equipment [Member] | Top of range [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of the assets at annual rates [Line Items] | |
Useful life of the assets at annual rates, description | 33 (mainly 7) |
Motor vehicles [Member] | Bottom of range [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of the assets at annual rates [Line Items] | |
Useful life of the assets at annual rates, description | 14 |
Motor vehicles [Member] | Top of range [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of the assets at annual rates [Line Items] | |
Useful life of the assets at annual rates, description | 15 (mainly 15) |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of useful life of intangible assets rates | 12 Months Ended |
Dec. 31, 2020 | |
Customer relationship and backlog [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of intangible assets rates [Line Items] | |
Useful life of intangible assets | 15 years |
Customer relationship and backlog [Member] | Bottom of range [member] | |
Significant Accounting Policies (Details) - Schedule of useful life of intangible assets rates [Line Items] | |
Useful life of intangible assets | 3 years |
Acquired technology [Member] | |
Significant Accounting Policies (Details) - Schedule of useful life of intangible assets rates [Line Items] | |
Useful life of intangible assets | 8 years |
Acquired technology [Member] | Bottom of range [member] | |
Significant Accounting Policies (Details) - Schedule of useful life of intangible assets rates [Line Items] | |
Useful life of intangible assets | 2 years |
Patents [Member] | Top of range [member] | |
Significant Accounting Policies (Details) - Schedule of useful life of intangible assets rates [Line Items] | |
Useful life of intangible assets | 10 years |
Business Combination, Signifi_3
Business Combination, Significant Transaction and Sale of Business (Details) | Nov. 16, 2020USD ($) | Feb. 06, 2020USD ($) | Jul. 01, 2019USD ($) | Jul. 25, 2018USD ($) | Mar. 07, 2018USD ($) | Nov. 30, 2020USD ($) | Jul. 27, 2020USD ($) | May 07, 2020USD ($) | Apr. 22, 2020USD ($) | Jan. 31, 2020 | Nov. 30, 2019 | Feb. 20, 2019 | Feb. 06, 2019USD ($) | Nov. 30, 2018USD ($) | Nov. 13, 2018 | Jul. 30, 2018 | Jan. 18, 2018USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2022USD ($) | Jan. 15, 2021USD ($) | Sep. 30, 2020USD ($) | Jul. 09, 2020USD ($) | Jul. 09, 2020ILS (₪) | Jun. 01, 2020USD ($) | May 17, 2020USD ($) | May 17, 2020ILS (₪) | Mar. 13, 2020USD ($) | Mar. 13, 2020ILS (₪) | Oct. 01, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 27, 2019USD ($) | May 07, 2019USD ($) | May 07, 2019ILS (₪) | Apr. 01, 2019USD ($) | Feb. 28, 2019USD ($) | Nov. 30, 2018ILS (₪) | Nov. 25, 2018USD ($) | Jul. 25, 2018ILS (₪) | Mar. 31, 2018USD ($) | Mar. 13, 2018USD ($) | Dec. 27, 2017USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 17,781 | |||||||||||||||||||||||||||||||||||||||||||
Description of business combination | Matrix and the seller hold mutual options to purchase and sell (respectively) the remaining 20% interest in Dana Engineering which may be exercised following the second-year anniversary of the acquisition. | |||||||||||||||||||||||||||||||||||||||||||
Acquisition partially paid amount | $ 1,550 | |||||||||||||||||||||||||||||||||||||||||||
Business Combination of acquisition remaining payment amount | $ 1,550 | |||||||||||||||||||||||||||||||||||||||||||
Contingent transaction amount | $ 1,000 | |||||||||||||||||||||||||||||||||||||||||||
Michpal Micro Computers (1983) Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Share Capital, Percentage | 86.02% | 86.02% | ||||||||||||||||||||||||||||||||||||||||||
Ofek Aerial Photography Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | $ 7,888 | ₪ 27,671 | ||||||||||||||||||||||||||||||||||||||||||
Acquired cash | $ 3,931 | ₪ 14,303 | ||||||||||||||||||||||||||||||||||||||||||
Thor Denmark Holding ApS and subsidiaries [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Acquired cash | $ 72,984 | |||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | 75,276 | |||||||||||||||||||||||||||||||||||||||||||
Acquisition related costs | $ 719 | |||||||||||||||||||||||||||||||||||||||||||
Acquisition of sum.cumo GmbH [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Acquired cash | $ 21,506 | |||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 22,487 | |||||||||||||||||||||||||||||||||||||||||||
Description of business combination | At the acquisition date, the Sapiens issued an aggregate of 173,005 RSUs to certain employees of sum.cumo, valued at a total of $4,400. The value of these grants was not included in the purchase price of sum.cumo, since their vesting is subject to both continued employment and other performance criteria. In addition, sum.cumo’s senior executives have retention-based payments over three years (2020-2023) of up to approximately $2,800. These payments are subject to continued employment, and therefore were not included in the purchase price. Acquisition related costs amounted to $561. | |||||||||||||||||||||||||||||||||||||||||||
Knowledge Price [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 1,032 | |||||||||||||||||||||||||||||||||||||||||||
Description of business combination | In addition, sum.cumo’s senior executives have retention-based payments over three years (2020-2023) of up to approximately $2,800. These payments are subject to continued employment, and therefore were not included in the purchase price. Acquisition related costs amounted to $561. The results of sum.cumo’s operations have been included in the consolidated financial statements from the sum.cumo Acquisition Date. | |||||||||||||||||||||||||||||||||||||||||||
Adaptik Corporation [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | $ 18,179 | $ 200 | $ 17,979 | |||||||||||||||||||||||||||||||||||||||||
Description of business combination | payments are subject to continued employment, and therefore were not included in the purchase price. Acquisition related costs amounted to $561. The results of sum.cumo’s operations have been included in the consolidated financial statements from the sum. | |||||||||||||||||||||||||||||||||||||||||||
Revenue and profitability targets over three years (2018-2020) | $ 3,700 | |||||||||||||||||||||||||||||||||||||||||||
Performance-based payments relating to achievement of revenue targets | $ 1,355 | $ 1,300 | ||||||||||||||||||||||||||||||||||||||||||
Delphi Technology Inc. and its subsidiary [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Acquired cash | $ 13,335 | |||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | 19,600 | |||||||||||||||||||||||||||||||||||||||||||
Acquisition related costs | $ 299 | |||||||||||||||||||||||||||||||||||||||||||
PPP loan amount | $ 1,546 | |||||||||||||||||||||||||||||||||||||||||||
Maturity date | Apr. 22, 2022 | |||||||||||||||||||||||||||||||||||||||||||
Interest rate, percentage | 1.00% | |||||||||||||||||||||||||||||||||||||||||||
Tiful Gemel Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | $ 1,281 | |||||||||||||||||||||||||||||||||||||||||||
Percentage of subsidiary outstanding shares | 75.00% | |||||||||||||||||||||||||||||||||||||||||||
Calculo S.A.U [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | $ 152 | $ 5,608 | $ 5,760 | |||||||||||||||||||||||||||||||||||||||||
Description of business combination | In addition, the sellers and senior executives are entitled to performance-based payments relating to achievements of various targets over three years (2019-2021) of up to $1,700. | |||||||||||||||||||||||||||||||||||||||||||
Stoneriver, Inc [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Description of business combination | Sapiens completed the acquisition of all of the share capital of Adaptik, a New-Jersey company engaged in the development of software solutions for P&C insurers, (including policy administration, rating, billing, customer and task management and product design), for total cash consideration of $18,179 (of which $17,979 was paid in March 2018 and $200 will be paid in March 2022) | |||||||||||||||||||||||||||||||||||||||||||
NetEffects Inc [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Acquired cash | 12,500 | |||||||||||||||||||||||||||||||||||||||||||
Total cash consideration net of acquired cash | $ 4,663 | |||||||||||||||||||||||||||||||||||||||||||
Magic Software [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | $ 0.30 | $ 4,393 | ||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 9,400 | |||||||||||||||||||||||||||||||||||||||||||
Percentage of subsidiary outstanding shares | 30.00% | |||||||||||||||||||||||||||||||||||||||||||
Consideration paid | 3,663 | |||||||||||||||||||||||||||||||||||||||||||
Assets acquired remaining balance | 1,000 | |||||||||||||||||||||||||||||||||||||||||||
Stockell Information Systems, Inc [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | 7,714 | |||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | 6,265 | |||||||||||||||||||||||||||||||||||||||||||
Assets acquired remaining balance | $ 1,449 | |||||||||||||||||||||||||||||||||||||||||||
Pleasant Valley Business Solutions, LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | $ 5,490 | |||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 7,590 | |||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | 0.70 | |||||||||||||||||||||||||||||||||||||||||||
Contingent transaction amount | 2,819 | |||||||||||||||||||||||||||||||||||||||||||
Additional Consideration | $ 1,833 | $ 6,500 | ||||||||||||||||||||||||||||||||||||||||||
Mobisoft and Magic Hands [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ 11,340 | |||||||||||||||||||||||||||||||||||||||||||
PowWow Inc [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Acquired cash | $ 8,443 | |||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 2,040 | |||||||||||||||||||||||||||||||||||||||||||
OnTarget Group Inc [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Acquired cash | $ 12,456 | |||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 6,000 | |||||||||||||||||||||||||||||||||||||||||||
Gestetnertec Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | $ 9,169 | |||||||||||||||||||||||||||||||||||||||||||
Percentage of subsidiary outstanding shares | 51.00% | 51.00% | ||||||||||||||||||||||||||||||||||||||||||
Total cash consideration net of acquired cash | $ 14,475 | |||||||||||||||||||||||||||||||||||||||||||
Cambium (2014) Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | $ 750 | |||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 860 | ₪ 3,126 | ||||||||||||||||||||||||||||||||||||||||||
Description of business combination | Due to the put option, the Group recorded a financial liability in an amount of NIS 870 (approximately $239) as of the acquisition date. | |||||||||||||||||||||||||||||||||||||||||||
Percentage of subsidiary outstanding shares | 55.00% | 49.00% | 49.00% | 55.00% | ||||||||||||||||||||||||||||||||||||||||
RightStar Inc. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration net of acquired cash | $ 3,566 | |||||||||||||||||||||||||||||||||||||||||||
Consideration paid | $ 3,040 | |||||||||||||||||||||||||||||||||||||||||||
Nertwork Infrastructure Technologies [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Description of business combination | Matrix acquired 40% of the share capital of Network Infrastructure Technologies (NIT), increasing its share capital interest from 60% to 100%, for a total cash consideration of $4,500, which was paid upon closing. | |||||||||||||||||||||||||||||||||||||||||||
Techtop Ltd.[Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Assets acquired remaining balance | $ 4,764 | |||||||||||||||||||||||||||||||||||||||||||
Medatech Information Technologies Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Description of business combination | Matrix acquired all the share capital of Medatech Technologies, an Israeli-based company and a leading system integrator with many years of experience in distributing and implementing Priority ERP software, for NIS 85,000 (approximately $23,500) or NIS 77,753 (approximately $21,496) net of acquired cash. On April 7, 2019, Matrix acquired additional 25% of the issued and outstanding share capital of Medatech Systems Inc., (“Medatech Systems”) a subsidiary of Medatech Technologies, for NIS 5,175 (approximately $1,443) or NIS 2,007 (approximately $560) net of acquired cash. Resulting from the acquisition, Medatech Technologies interest in the issued and outstanding share capital of Medatech Systems increased to 75%. Matrix and the seller both hold mutual options to purchase and sell (respectively) 5% of the remaining share capital of Medatech Systems at the end of the second-year anniversary following the acquisition. | |||||||||||||||||||||||||||||||||||||||||||
Dana Engineering Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 14,370 | |||||||||||||||||||||||||||||||||||||||||||
Issued and outstanding, percentage | 80.00% | |||||||||||||||||||||||||||||||||||||||||||
Noah Technologies Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Description of business combination | Matrix acquired all the share capital of Noah Technologies, an Israeli based company providing engineering solutions, computerized catalogs and IT professional services, for approximately NIS 6,090 (approximately $1,651) in cash or NIS 4,251 (approximately $1,152) net of acquired cash. In accordance with the purchase agreement the seller may also be entitled to receive performance-based payments capped at NIS 4,000 (approximately $1,084), estimated on the date of the acquisition at NIS 3,089 (approximately $837), relating to achievement of certain profitability targets for the years 2019-2021. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Noah Technologies results of operations were included in the consolidated financial statements of the Company commencing December 1, 2018. | |||||||||||||||||||||||||||||||||||||||||||
Integrity Software 2011 Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Description of business combination | Matrix acquired 65% of the share capital of Integrity Software, an Israeli-based company providing software solutions to the enterprise sector in Israel in the fields of software security, IT infrastructure and virtualization, for approximately NIS 9,000 (approximately $2,454) in cash or NIS 4,881 (approximately $1,331) net of acquired cash. In accordance with the purchase agreement the seller may also be entitled to receive performance-based payments capped at NIS 4,000 (approximately $1,091), estimated on the date of the acquisition at NIS 823 (approximately $224), contingent upon the seller meeting certain profitability targets during the years 2019-2021. Matrix and the seller both hold mutual options to purchase and sell (respectively) 10% of the remaining share capital of Integrity. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Integrity Software results of operations were included in the consolidated financial statements of the Company commencing August 1, 2018. | |||||||||||||||||||||||||||||||||||||||||||
Alius Group Inc [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | $ 6,241 | |||||||||||||||||||||||||||||||||||||||||||
Percentage of subsidiary outstanding shares | 50.10% | 49.90% | ||||||||||||||||||||||||||||||||||||||||||
Assets acquired remaining balance | $ 3,000 | |||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | 3,241 | $ 13,802 | ||||||||||||||||||||||||||||||||||||||||||
Estimated fair value of contingent payment | $ 2,960 | |||||||||||||||||||||||||||||||||||||||||||
Liram Financial Software Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Percentage of subsidiary outstanding shares | 70.00% | 70.00% | ||||||||||||||||||||||||||||||||||||||||||
Total cash consideration net of acquired cash | $ 4,319 | ₪ 15,260 | ||||||||||||||||||||||||||||||||||||||||||
Remaining interest rate | 30.00% | 30.00% | ||||||||||||||||||||||||||||||||||||||||||
Unique Software Industries Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Description of business combination | Michpal acquired all of the share capital of Unique Software Industries Ltd. (“Unique”), an Israeli-based company and a provider of integrated solutions in the field of payroll, including pay-stubs, pension services management, education funds management, and software solutions for managing employee attendance, for a total cash consideration of NIS 48,650 (approximately $14,049) or NIS 44,945 (approximately $12,979) net of acquired cash. In accordance with the purchase agreement the seller may also be entitled to receive a performance-based payment capped at NIS 12,218 (approximately $3,528), estimated on the date of the acquisition at NIS 9,736 (approximately $2,811), subject to certain milestones to be met by Unique over the following 4 years from the acquisition date. | |||||||||||||||||||||||||||||||||||||||||||
Effective Solutions Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Description of business combination | Due to the put option, a financial liability was recorded in an amount of NIS 3,028 (approximately $808) as of the acquisition date. Acquisition related costs were immaterial. Unaudited pro forma condensed results of operations were not presented, since the acquisition did not meet the criteria set forth in SEC Regulation S-X Rule 11-01. Effective Solutions results of operations were included in the consolidated financial statements of the Company commencing November 1, 2018. | |||||||||||||||||||||||||||||||||||||||||||
Total cash consideration net of acquired cash | $ 6,516 | ₪ 24,000 | ||||||||||||||||||||||||||||||||||||||||||
Issued and outstanding, percentage | 80.00% | 80.00% | ||||||||||||||||||||||||||||||||||||||||||
Remaining interest rate | 20.00% | 20.00% | ||||||||||||||||||||||||||||||||||||||||||
Events After Reporting Period [Member] | Pleasant Valley Business Solutions, LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Consideration paid | $ 670 | |||||||||||||||||||||||||||||||||||||||||||
Events After Reporting Period [Member] | RightStar Inc. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Total cash consideration | $ 526 | |||||||||||||||||||||||||||||||||||||||||||
Israel [Member] | Gestetnertec Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | ₪ | ₪ 61,238,000 | |||||||||||||||||||||||||||||||||||||||||||
Israel, New Shekels | Techtop Ltd.[Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Fair value of total consideration | ₪ | ₪ 17,087 | |||||||||||||||||||||||||||||||||||||||||||
Bottom of range [member] | Magic Software [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Percentage of subsidiary outstanding shares | 70.00% | |||||||||||||||||||||||||||||||||||||||||||
Top of range [member] | Magic Software [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Significant Transaction and Sale of Business (Details) [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Percentage of subsidiary outstanding shares | 100.00% |
Business Combination, Signifi_4
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Ofek Aerial Photography Ltd [Member] $ in Thousands | Mar. 13, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets excluding cash acquired | $ 4,857 |
Fixed assets | 3,993 |
Investment in company accounted for at equity method | 824 |
Intangible assets | 874 |
Dividend payable to former shareholder | (7,069) |
Deferred tax, net | (34) |
Non-controlling interests | (995) |
Goodwill | 1,481 |
Total assets acquired net of acquired cash | $ 3,931 |
Business Combination, Signifi_5
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Sapiens [Member] - Acquisition of Thor Denmark Holding ApS and its subsidiaries [Member] $ in Thousands | Nov. 30, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets excluding cash acquired | $ 4,666 |
Other long-term assets | 4,255 |
Intangible assets | 29,946 |
Goodwill | 57,509 |
Current liabilities | (2,212) |
Deferred revenues | (5,742) |
Deferred tax liabilities | (7,181) |
Other long-term liabilities | (8,257) |
Total assets acquired, net of acquired cash | $ 72,948 |
Business Combination, Signifi_6
Business Combination, Significant Transaction and Sale of Business (Details) - Summary of intangible assets associated with the acquisition and not the amortization - Acquisition of Thor Denmark Holding ApS and its subsidiaries [Member] $ in Thousands | Nov. 30, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Summary of intangible assets associated with the acquisition and not the amortization [Line Items] | |
Developed technology | $ 10,517 |
Customer relationships | 19,266 |
Backlog | 163 |
Total intangible assets | $ 29,946 |
Business Combination, Signifi_7
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Acquisition of sum.cumo GmbH [Member] $ in Thousands | Feb. 06, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets excluding cash acquired | $ 466 |
Intangible assets | 9,730 |
Deferred tax liabilities | (3,211) |
Goodwill | 14,521 |
Total assets acquired, net of acquired cash | $ 21,506 |
Business Combination, Signifi_8
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Delphi Technology Inc. and its subsidiary [Member] $ in Thousands | Jul. 27, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (6,789) |
Intangible assets | 7,562 |
Deferred tax liabilities | (2,313) |
Goodwill | 14,875 |
Total assets acquired, net of acquired cash | $ 13,335 |
Business Combination, Signifi_9
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Calculo S.A.U [Member] $ in Thousands | Sep. 27, 2019USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets excluding cash acquired | $ 47 |
Intangible assets | 1,037 |
Goodwill | 622 |
Total assets acquired, net of acquired cash | $ 1,706 |
Business Combination, Signif_10
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Adaptik Corporation Inc. [Member] $ in Thousands | Mar. 07, 2018USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (2,817) |
Intangible assets | 12,936 |
Deferred taxes | (3,528) |
Goodwill | 11,468 |
Total assets acquired, net of acquired cash | $ 18,059 |
Business Combination, Signif_11
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Aptonet Inc [Member] $ in Thousands | May 07, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets, excluding cash acquired | $ 529 |
Intangible assets, net | 1,556 |
Goodwill | 1,785 |
Total assets acquired, net of acquired cash | $ 3,870 |
Business Combination, Signif_12
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition $ in Thousands | Sep. 02, 2020USD ($) |
Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Abstract] | |
Net assets | $ 1,051 |
Intangible assets, net | 2,616 |
Goodwill | 4,047 |
Total assets acquired | $ 7,714 |
Business Combination, Signif_13
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Mobisoft and Magic Hands [Member] $ in Thousands | Dec. 31, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets, excluding cash acquired | $ 1,069 |
Intangible assets, net | 4,553 |
Goodwill | 5,718 |
Total assets acquired, net of acquired cash | $ 11,340 |
Business Combination, Signif_14
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - NetEffects [Member] $ in Thousands | Jul. 01, 2019USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets excluding cash acquired | $ 91 |
Intangible assets | 8,716 |
Goodwill | 3,526 |
Total assets acquired net of acquired cash | $ 12,333 |
Business Combination, Signif_15
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - PowWow Inc [Member] $ in Thousands | Apr. 01, 2019USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (1,557) |
Intangible assets | 2,855 |
Goodwill | 7,145 |
Total assets acquired net of acquired cash | $ 8,443 |
Business Combination, Signif_16
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - OnTarget Group Inc [Member] $ in Thousands | Feb. 28, 2019USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets excluding cash acquired | $ 444 |
Intangible assets | 4,908 |
Deferred taxes | (1,276) |
Goodwill | 8,380 |
Total assets acquired net of acquired cash | $ 12,456 |
Business Combination, Signif_17
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Gestetnertec Ltd. [Member] $ in Thousands | Jul. 09, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets excluding cash acquired | $ 12,746 |
Short-term bank credit | (10,598) |
Non-controlling interest | (135) |
Liability to acquire non-controlling interests (put option) | (17,781) |
Intangible assets, net | 16,337 |
Deferred taxes | (4,021) |
Goodwill | 12,621 |
Total assets acquired net of acquired cash | $ 9,169 |
Business Combination, Signif_18
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - RightStar Inc. [Member] $ in Thousands | Nov. 16, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (763) |
Contingent liability in respect of business combinations | (1,077) |
Intangible assets, net | 354 |
Deferred taxes | (95) |
Goodwill | 922 |
Total liabilities acquired net of acquired cash | $ (659) |
Business Combination, Signif_19
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Medatech Information Technologies Ltd [Member] - Medatech Information Technologies Ltd [Member] $ in Thousands | Feb. 20, 2019USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets excluding cash acquired | $ 2,340 |
Intangible assets | 7,553 |
Deferred taxes | (2,276) |
Credit from banks and others | (5,550) |
Non-controlling interests | (434) |
Goodwill | 20,423 |
Total assets acquired net of acquired cash | $ 22,056 |
Business Combination, Signif_20
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Dana Engineering Ltd [Member] $ in Thousands | Feb. 06, 2019USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets excluding cash acquired | $ (9,270) |
Intangible assets | 5,311 |
Deferred taxes | (1,138) |
Non-controlling interests | (5,235) |
Goodwill | 9,746 |
Total assets acquired net of acquired cash | $ (586) |
Business Combination, Signif_21
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Noah Technologies Ltd. [Member] $ in Thousands | Nov. 13, 2018USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (475) |
Intangible assets | 781 |
Deferred taxes | (171) |
Goodwill | 1,854 |
Total assets acquired net of acquired cash | $ 1,989 |
Business Combination, Signif_22
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Integrity Software 2011 Ltd. [Member] $ in Thousands | Dec. 31, 2018USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (1,130) |
Intangible assets | 1,316 |
Deferred taxes | (303) |
Non-controlling interests | (318) |
Goodwill | 1,990 |
Total assets acquired net of acquired cash | $ 1,555 |
Business Combination, Signif_23
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Cambium (2014) Ltd. [Member] $ in Thousands | Jul. 25, 2018USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (8) |
Intangible assets | 365 |
Deferred taxes | (84) |
Non-controlling interests | (238) |
Goodwill | 715 |
Total assets acquired net of acquired cash | $ 750 |
Business Combination, Signif_24
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Pleasant Valley Business Solutions, LLC [Member] $ in Thousands | Mar. 13, 2018USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (793) |
Intangible assets | 1,809 |
Deferred taxes | (499) |
Goodwill | 7,792 |
Total assets acquired net of acquired cash | $ 8,309 |
Business Combination, Signif_25
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Alius Group Inc [Member] $ in Thousands | Jan. 18, 2018USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (4) |
Intangible assets | 2,986 |
Deferred taxes | (806) |
Goodwill | 14,190 |
Total assets acquired net of acquired cash | $ 16,366 |
Business Combination, Signif_26
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Liram Financial Software Ltd. [Member] $ in Thousands | May 17, 2020USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities | $ (751) |
Non-controlling interest | (821) |
Intangible assets | 4,529 |
Deferred tax liability | (1,042) |
Goodwill | 2,404 |
Total assets acquired | $ 4,319 |
Business Combination, Signif_27
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Unique Software Industries Ltd [Member] $ in Thousands | Nov. 30, 2019USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net liabilities excluding cash acquired | $ (244) |
Intangible assets | 8,425 |
Deferred tax liability | (1,938) |
Goodwill | 9,547 |
Total assets acquired net of acquired cash | $ 15,790 |
Business Combination, Signif_28
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition - Effective Solutions Ltd [Member] $ in Thousands | Nov. 30, 2018USD ($) |
Business Combination, Significant Transaction and Sale of Business (Details) - Schedule of estimated fair values of the assets acquired and liabilities at the date of acquisition [Line Items] | |
Net assets | $ 692 |
Non-controlling interests | (320) |
Intangible assets | 739 |
Deferred tax liability | (170) |
Goodwill | 5,232 |
Total assets acquired net of acquired cash | $ 6,173 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Detailed Information About Marketable Securities Explanatory [Abstract] | |||
Gains (losses) from marketable securities | $ 126 | $ (35) | $ 53 |
Marketable Securities (Detail_2
Marketable Securities (Details) - Schedule of marketable securities - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of marketable securities [Abstract] | |||
Convertible bonds designated at fair value through profit or loss | [1] | $ 1,238 | $ 1,112 |
Corporate bonds at Fair value through other comprehensive income | 5,488 | ||
Total marketable securities | $ 1,238 | $ 6,600 | |
[1] | The consolidated statements of profit or loss for the years ended 2018, 2019 and 2020 include gains (losses) from marketable securities designated at fair value through profit or loss in amounts of $53, ($35) and $126, respectively. |
Prepaid Expenses and Other Ac_3
Prepaid Expenses and Other Accounts Receivable (Details) - Schedule of prepaid expenses, other accounts receivable and other investments - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of prepaid expenses, other accounts receivable and other investments [Abstract] | ||
Prepaid expenses and advances to suppliers | $ 47,155 | $ 37,394 |
Government departments | 29,973 | 22,134 |
Dividend receivable from jointly controlled entity | 3,000 | |
Employees | 301 | 488 |
Related Parties | 404 | 1,278 |
Other | 5,987 | 1,415 |
Total | $ 83,820 | $ 65,709 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Schedule of financial assets and liabilities measured at fair value on a recurring basis - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Assets: | |||
Convertible bonds at fair value through profit or loss (Note 4) | $ 1,238 | $ 1,112 | |
Corporate bonds at fair value through other comprehensive income (Note 4) | 5,488 | ||
Dividend preference derivative in TSG | [1] | 1,707 | 1,539 |
Total financial assets | 2,945 | 8,139 | |
Liabilities: | |||
Foreign currency derivative contracts | 707 | 67 | |
Contingent consideration in respect of business combination | 18,456 | 13,979 | |
Liabilities from acquisition of non-controlling interests (put options) | 64,018 | 54,850 | |
Total financial liabilities | 83,181 | 68,896 | |
Fair value measurements, Level 1 [Member] | |||
Assets: | |||
Convertible bonds at fair value through profit or loss (Note 4) | |||
Corporate bonds at fair value through other comprehensive income (Note 4) | |||
Dividend preference derivative in TSG | [1] | ||
Total financial assets | |||
Liabilities: | |||
Foreign currency derivative contracts | |||
Contingent consideration in respect of business combination | |||
Liabilities from acquisition of non-controlling interests (put options) | |||
Total financial liabilities | |||
Fair value measurements, Level 2 [Member] | |||
Assets: | |||
Convertible bonds at fair value through profit or loss (Note 4) | 1,238 | 1,112 | |
Corporate bonds at fair value through other comprehensive income (Note 4) | 5,488 | ||
Dividend preference derivative in TSG | [1] | ||
Total financial assets | 1,238 | 6,600 | |
Liabilities: | |||
Foreign currency derivative contracts | 707 | 67 | |
Contingent consideration in respect of business combination | |||
Liabilities from acquisition of non-controlling interests (put options) | |||
Total financial liabilities | 707 | 67 | |
Fair value measurements, Level 3 [Member] | |||
Assets: | |||
Convertible bonds at fair value through profit or loss (Note 4) | |||
Corporate bonds at fair value through other comprehensive income (Note 4) | |||
Dividend preference derivative in TSG | [1] | 1,707 | 1,539 |
Total financial assets | 1,707 | 1,539 | |
Liabilities: | |||
Foreign currency derivative contracts | |||
Contingent consideration in respect of business combination | 18,456 | 13,979 | |
Liabilities from acquisition of non-controlling interests (put options) | 64,018 | 54,850 | |
Total financial liabilities | $ 82,474 | $ 68,829 | |
[1] | The fair value of dividend preference derivative in TSG was estimated using the Monte-Carlo simulation technique. |
Investments in Companies Acco_3
Investments in Companies Accounted for at Equity Method (Details) - TSG [Member] | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Investments in Companies Accounted for at Equity Method (Details) [Line Items] | |
Percentage of share holds by group | 50.00% |
Acquisition amount | $ 2,140 |
Investments in Companies Acco_4
Investments in Companies Accounted for at Equity Method (Details) - Schedule of changes in the carrying amount of the company’s investment in TSG - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of changes in the carrying amount of the company’s investment in TSG [Abstract] | ||
TSG (Joint venture) | $ 27,165 | $ 26,016 |
Other investments | 1,146 | 5 |
Total | $ 28,311 | $ 26,021 |
Investments in Companies Acco_5
Investments in Companies Accounted for at Equity Method (Details) - Schedule of investment in TSG equity method - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investment in companies accounted for at equity method | ||
Shares | $ 18,225 | $ 18,347 |
Capital note | 8,940 | 7,669 |
Total | 27,165 | 26,016 |
Long-term prepaid expenses, other accounts, and other investments | ||
Dividend preference derivative at fair value through profit or loss | $ 1,707 | $ 1,539 |
Investments in Companies Acco_6
Investments in Companies Accounted for at Equity Method (Details) - Schedule of fair value of TSG's dividend preference derivative - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of fair value of TSG's dividend preference derivative [Abstract] | ||
Opening balance | $ 1,539 | $ 2,733 |
Increase in fair value recognized in profit or loss | 48 | 93 |
Currency exchange rate in other comprehensive income | 120 | 213 |
Decrease due to dividend declared by TSG | (1,500) | |
Closing balance | $ 1,707 | $ 1,539 |
Investments in Companies Acco_7
Investments in Companies Accounted for at Equity Method (Details) - Schedule of the following table summarizes the changes in the carrying amount of the Company’s Investment in TSG - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of the following table summarizes the changes in the carrying amount of the Company’s Investment in TSG [Abstract] | |||
Beginning balance | $ 26,016 | $ 25,683 | $ 25,260 |
Company’s share of profit | 1,318 | 1,771 | 365 |
Company’s share of other comprehensive income | (169) | 62 | 58 |
Company’s Share in dividend declared by TSG | (1,500) | ||
Ending balance | $ 27,165 | $ 26,016 | $ 25,683 |
Investments in Companies Acco_8
Investments in Companies Accounted for at Equity Method (Details) - Schedule of statement of financial position - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments in Companies Accounted for at Equity Method (Details) - Schedule of statement of financial position [Line Items] | ||||
Current assets | $ 1,160,870 | $ 965,504 | ||
Noncurrent liabilities | (12,191) | (8,311) | ||
Total equity | 1,108,543 | 896,334 | $ 805,397 | $ 772,922 |
Working capital | 10,254 | 8,393 | ||
Goodwill | 872,424 | 724,193 | ||
Company’s carrying amount of the investment in TSG | 28,311 | 26,021 | ||
Tsg [Member] | ||||
Investments in Companies Accounted for at Equity Method (Details) - Schedule of statement of financial position [Line Items] | ||||
Current assets | 51,056 | 48,340 | ||
Noncurrent assets excluding goodwill | 4,810 | 5,507 | ||
Current liabilities | (26,201) | (28,436) | ||
Noncurrent liabilities | (8,414) | (8,625) | ||
Total equity | 21,251 | 16,786 | ||
Accumulated cost of share-based payment | (743) | |||
Working capital | $ 20,508 | $ 16,786 | ||
Company’s share in TSG | 50.00% | 50.00% | ||
Excess cost of intangible assets net of deferred tax | $ 7,075 | $ 7,787 | ||
Goodwill | 9,836 | 9,836 | ||
Company’s carrying amount of the investment in TSG | $ 27,165 | $ 26,016 |
Investments in Companies Acco_9
Investments in Companies Accounted for at Equity Method (Details) - Schedule of highlights of TSG profit or loss in accordance - TSG [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investments in Companies Accounted for at Equity Method (Details) - Schedule of highlights of TSG profit or loss in accordance [Line Items] | |||
Revenues | $ 77,661 | $ 84,350 | $ 66,154 |
Net income | 4,059 | 4,966 | 3,437 |
Other comprehensive income | (338) | 124 | 116 |
Total comprehensive income | $ 3,721 | $ 5,090 | $ 3,553 |
Company’s share in TSG | 50.00% | 50.00% | 50.00% |
Company's share of total comprehensive income before amortization of excess cost of intangible assets net of tax | $ 1,861 | $ 2,545 | $ 1,776 |
Amortization of excess cost of intangible assets net of tax | (712) | (712) | (1,353) |
Company’s share of total comprehensive income | 1,149 | 1,833 | 423 |
Company’s share of other comprehensive income | (169) | 62 | 58 |
Company’s share of profit | 1,318 | 1,771 | 365 |
Operating results total | $ 1,149 | $ 1,833 | $ 423 |
Property, Plants and Equipmen_3
Property, Plants and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of property, plant and equipment [Abstract] | |||
Depreciation expenses | $ 16,513 | $ 12,071 | $ 10,480 |
Property, Plants and Equipmen_4
Property, Plants and Equipment, Net (Details) - Schedule of property, plants and equipment - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Cost: | ||
Cost | $ 188,699 | $ 148,387 |
Accumulated depreciation: | ||
Accumulated depreciation | 129,523 | 105,328 |
Depreciated cost of property, plant and equipment | 59,176 | 43,059 |
Computers, software, furniture and equipment [Member] | ||
Cost: | ||
Cost | 139,840 | 110,955 |
Accumulated depreciation: | ||
Accumulated depreciation | 103,833 | 86,802 |
Motor vehicles [Member] | ||
Cost: | ||
Cost | 8,623 | 5,022 |
Accumulated depreciation: | ||
Accumulated depreciation | 3,875 | 2,271 |
Buildings [Member] | ||
Cost: | ||
Cost | 975 | 975 |
Accumulated depreciation: | ||
Accumulated depreciation | 112 | 87 |
Leasehold improvements [Member] | ||
Cost: | ||
Cost | 39,261 | 31,435 |
Accumulated depreciation: | ||
Accumulated depreciation | $ 21,703 | $ 16,168 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of intangible assets [text block] [Abstract] | |||
Amortized expenses | $ 44,586 | $ 41,330 | $ 38,254 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of intangible assets, net - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Intangible Assets, Net (Details) - Schedule of intangible assets, net [Line Items] | ||
Original amounts | $ 580,775 | $ 479,463 |
Accumulated amortization | 358,512 | 314,183 |
Total | 222,263 | 165,280 |
Capitalized Software costs [Member] | ||
Intangible Assets, Net (Details) - Schedule of intangible assets, net [Line Items] | ||
Original amounts | 221,220 | 213,221 |
Accumulated amortization | 179,587 | 168,315 |
Customer related Intangible Assets [Member] | ||
Intangible Assets, Net (Details) - Schedule of intangible assets, net [Line Items] | ||
Original amounts | 247,445 | 179,023 |
Accumulated amortization | 120,165 | 98,543 |
Acquired technology [Member] | ||
Intangible Assets, Net (Details) - Schedule of intangible assets, net [Line Items] | ||
Original amounts | 100,159 | 74,456 |
Accumulated amortization | 48,087 | 35,653 |
Backlog and non-compete agreement [Member] | ||
Intangible Assets, Net (Details) - Schedule of intangible assets, net [Line Items] | ||
Original amounts | 6,909 | 6,850 |
Accumulated amortization | 6,909 | 6,675 |
Patent [Member] | ||
Intangible Assets, Net (Details) - Schedule of intangible assets, net [Line Items] | ||
Original amounts | 1,493 | 4,524 |
Accumulated amortization | 958 | 4,243 |
Other intangibles [Member] | ||
Intangible Assets, Net (Details) - Schedule of intangible assets, net [Line Items] | ||
Original amounts | 3,549 | 1,389 |
Accumulated amortization | $ 2,806 | $ 754 |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of carrying amount of goodwill - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of carrying amount of goodwill [Abstract] | ||
Opening balance | $ 724,193 | $ 640,918 |
Closing balance | 872,424 | 724,193 |
Acquisition of subsidiaries | 116,416 | 54,460 |
Classifications | 3,066 | 2,977 |
Foreign currency translation adjustments | $ 28,749 | $ 25,838 |
Short Term Liabilities to Ban_3
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Short term liabilities to banks and others | $ 120,444 | $ 125,297 |
Bank credit [Member] | ||
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Interest rate % | 2.25-3.1 | |
Currency | NIS | |
Short term liabilities to banks and others | 580 | |
Bank credit 1 [Member] | ||
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Interest rate % | US Prime -0.2 | |
Currency | USD | |
Short term liabilities to banks and others | 688 | |
Short-term bank loans [Member] | ||
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Interest rate % | Israeli Prime + 0.8 | |
Currency | NIS | |
Short term liabilities to banks and others | 868 | |
Short-term bank loans 1 [Member] | ||
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Interest rate % | 2.5 | |
Currency | NIS | |
Short term liabilities to banks and others | $ 1,259 | |
Short-term bank loans 2 [Member] | ||
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Interest rate % | 1.6 | |
Currency | NIS | |
Short term liabilities to banks and others | $ 11,357 | 28,937 |
Commercial securities not listed [Member] | ||
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Interest rate % | 0.75 | |
Currency | NIS | |
Short term liabilities to banks and others | $ 31,104 | 28,935 |
Current maturities of long-term loans from banks and other financial institutions [Member] | ||
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Interest rate % | 1.8-3.45 | |
Currency | NIS | |
Short term liabilities to banks and others | $ 75,856 | 64,060 |
Current maturities of long-term loans from banks [Member] | ||
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Interest rate % | Libor + 2.2 | |
Currency | NIS Linked to USD | |
Short term liabilities to banks and others | $ 800 | 804 |
Short-term interest on long-term loans from other financial institutions [Member] | ||
Short Term Liabilities to Banks and Others (Details) - Schedule of short term liabilities to banks and others [Line Items] | ||
Interest rate % | 2.6-5.5 | |
Currency | NIS | |
Short term liabilities to banks and others | $ 68 | $ 425 |
Other Accounts Payable (Details
Other Accounts Payable (Details) - Schedule of other accounts payable - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Accounts Payable (Details) - Schedule of other accounts payable [Line Items] | ||
Other accounts payable | $ 68,976 | $ 63,172 |
Government Institutions [Member] | ||
Other Accounts Payable (Details) - Schedule of other accounts payable [Line Items] | ||
Other accounts payable | 35,648 | 35,775 |
Accrued royalties to the IIA [Member] | ||
Other Accounts Payable (Details) - Schedule of other accounts payable [Line Items] | ||
Other accounts payable | 223 | |
Accrued expenses and other current liabilities [member] | ||
Other Accounts Payable (Details) - Schedule of other accounts payable [Line Items] | ||
Other accounts payable | $ 33,328 | $ 27,174 |
Long term Liabilities to Bank_3
Long term Liabilities to Banks and Others (Details) - Schedule of long term liabilities to banks and others composition - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Long term Liabilities to Banks and Others (Details) - Schedule of long term liabilities to banks and others composition [Line Items] | ||
Long-term liabilities | $ 256,972 | |
Current maturities | 76,656 | |
Long-term liabilities net of current maturities | $ 180,316 | |
Total long-term liabilities net of current maturities | $ 162,062 | |
NIS (Unlinked) [Member] | ||
Long term Liabilities to Banks and Others (Details) - Schedule of long term liabilities to banks and others composition [Line Items] | ||
Currency | NIS (Unlinked) | |
Long-term liabilities | $ 255,972 | |
Current maturities | 75,856 | |
Long-term liabilities net of current maturities | $ 180,116 | |
Total long-term liabilities net of current maturities | 161,043 | |
NIS (Unlinked) [Member] | Minimum [Member] | ||
Long term Liabilities to Banks and Others (Details) - Schedule of long term liabilities to banks and others composition [Line Items] | ||
Interest rate | 1.80% | |
NIS (Unlinked) [Member] | Maximum [Member] | ||
Long term Liabilities to Banks and Others (Details) - Schedule of long term liabilities to banks and others composition [Line Items] | ||
Interest rate | 5.50% | |
NIS (Linked to USD) [Member] | ||
Long term Liabilities to Banks and Others (Details) - Schedule of long term liabilities to banks and others composition [Line Items] | ||
Currency | NIS Linked to USD | |
Long-term liabilities | $ 1,000 | |
Current maturities | 800 | |
Long-term liabilities net of current maturities | $ 200 | |
Total long-term liabilities net of current maturities | $ 1,019 |
Long term Liabilities to Bank_4
Long term Liabilities to Banks and Others (Details) - Schedule of long term liabilities to banks and others maturity dates - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of long term liabilities to banks and others maturity dates [Abstract] | ||
First year (current maturities) | $ 76,656 | $ 64,864 |
Second year | 69,500 | 50,460 |
Third year | 60,310 | 47,733 |
Fourth year | 38,162 | 38,784 |
Fifth year and thereafter | 12,344 | 25,085 |
Total | $ 256,972 | $ 226,926 |
Debentures (Details)
Debentures (Details) - USD ($) $ in Thousands | Jun. 08, 2020 | Mar. 31, 2019 | Jan. 31, 2018 | Sep. 17, 2017 | Sep. 16, 2015 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debentures (Details) [Line Items] | ||||||||
Interest expenses | $ 6,411 | $ 5,450 | ||||||
Amortization of debt premium, discount and issuance costs, net | 135 | 178 | ||||||
Debentures amount | 60,346 | 81,676 | $ 45,356 | |||||
Series A Secured Debentures [Member] | ||||||||
Debentures (Details) [Line Items] | ||||||||
Public offering, description | Formula issued Formula Systems Series A Secured Debentures in the aggregate principle amount of NIS 102,260 (approximately $26,295), at a purchase price equal to 100% of their par value, payable in eight equal annual installments on July 2nd of each of the years 2017 through 2024. The Formula Systems Series A Secured Debentures bear a fixed interest rate of 2.8% per annum (which may vary based on the credit rating of the debentures), payable on July 2nd and January 2nd of each of the years 2016 through 2024. Issuance costs including early commitment commission of approximately NIS 1,246 (approximately $320), were allocated to the Formula Systems Series A Secured Debentures and are amortized as financial expenses over the term of Series A Secured Debentures due in 2024. | |||||||
Debentures amount | $ 26,295 | |||||||
Description of debentures | Formula issued additional Formula Systems Series A Secured Debentures in an aggregate principle amount of NIS 150,000 (approximately $44,053) through a private placement to qualified investors in Israel. The gross proceeds received by Formula for the issuance of Formula Systems Series A Secured Debentures in January 2018 were NIS 155,205 (approximately $45,581), out of which NIS 336 was attributed to interest payable (approximately $99). Debt premium of NIS 4,869 (approximately $1,430) net of issuance costs of NIS 782 (approximately $225) were allocated to the Formula Systems Series A Secured Debentures and are amortized as financial income over the remaining term of Formula Systems Series A Secured Debentures due in 2024. | |||||||
Fair value of debentures | $ 44,229 | 52,138 | ||||||
Series B Convertible Debentures [Member] | ||||||||
Debentures (Details) [Line Items] | ||||||||
Public offering, description | Formula issued Formula Systems Series B Convertible Debentures, linked to US dollars, in the aggregate principle amount of NIS 125,000 (approximately $32,140), at a purchase price equal to 102% of their par value. The principal amount of Formula Systems Series B Secured Debentures bears a fixed interest rate of 2.74% per annum, payable in one installment together with the remaining unconverted principle amount on March 26, 2019. The Formula Systems Series B Convertible Debentures were convertible, at the election of each holder, into Formula’s ordinary shares, from the date of issuance and until March 10, 2019, at a conversion price of NIS 157 par value per one share, adjusted in events of shares split, reverse shares split, a rights offering, a distribution of bonus shares or a cash dividend. | |||||||
Description of debentures | During 2018 and mainly 2019, holders of Formula Systems Series B Convertible Debentures converted an aggregate principal amount of NIS 80,484 into 545,485 of Formula’s ordinary shares, which constitute, in aggregate, approximately 3.57% of Formula’s issued and outstanding share capital following those conversions (an aggregate principle amount of NIS 232 was converted into 1,556 Formula’s ordinary shares in 2018 and principle amount NIS 80,252 was converted into 543,929 Formula’s ordinary shares in 2019). The remaining outstanding Series B Convertible Debentures amounting to NIS 44,516 (or $11,350) and their respective accumulated interest of $1,135 were fully paid on March 26, 2019. | |||||||
Debentures amount | $ 32,140 | |||||||
Conversion component valued | $ 1,248 | |||||||
Commission | 367 | |||||||
Series C Secured Debentures [Member] | ||||||||
Debentures (Details) [Line Items] | ||||||||
Description of debentures | Formula issued Formula Systems Series C Secured Debenture in the aggregate principle amount of NIS 300,000 (approximately $82,600), at a purchase price equal to 100% of their par value, payable in five annual installments of NIS 33,000 on December 1 of each of the years 2020 through 2024 and two annual installments of NIS 67,500 on December 1 of each of the years 2025 and 2026. The outstanding principle amount of Formula Systems Series C Secured Debentures bears a fixed annual interest rate of 2.29% (which may vary based on the credit rating of the debentures), payable on December 1st and June 1st of each of the years 2019 through 2026. Issuance costs including early commitment commission of approximately NIS 3,355 (approximately $924) were allocated to Formula Systems Series C Secured Debentures and are amortized as financial expenses over the term of Formula Systems Series C Secured Debentures due in 2026. | |||||||
Fair value of debentures | $ 86,993 | 90,174 | ||||||
Debt Instrument, Description | Formula issued additional Formula Systems Series C Secured Debentures in an aggregate principle amount of NIS 160,000 (approximately $48,617) through a private placement to qualified investors in Israel. The gross proceeds received by Formula for the issuance of Formula Systems Series C Secured Debentures in April 2021 were NIS 165,920 (approximately $50,416), out of which NIS 1,678 was attributed to interest payable (approximately $510). Debt premium of NIS 4,370 (approximately $1,024) net of issuance costs of NIS 872 (approximately $265) were allocated to the Formula Systems Series C Secured Debentures and are amortized as financial income over the remaining term of Formula Systems Series A Secured Debentures due in 2026. | |||||||
Sapiens' Series B Debentures [Member] | ||||||||
Debentures (Details) [Line Items] | ||||||||
Description of debentures | Sapiens issued additional Sapiens’ Series B Debentures in an aggregate principle amount of NIS 210,000 (approximately $60,362) through a public offering in Israel. The gross proceeds received for the issuance of Sapiens’ Series B Debentures in June 2020 were NIS 210,840 (approximately $60,603), out of which approximately NIS 3,006 was attributed to interest payable (approximately $864). Debt discount of NIS 2,166 (approximately $623) and issuance costs of NIS 2,326 (approximately $669) were allocated to Sapiens’ Series B Debentures and are amortized as financial expenses over the remaining term of the Sapiens Series B Debentures due in 2026. Following the raise of the additional NIS 210,000 in Series B Debentures, a $20,000 short-term bank loan taken by Sapiens on March 18, 2020, from a commercial bank was fully repaid on June 9, 2020. | Sapiens issued its unsecured Series B Debentures in an aggregate principal amount of NIS 280,000 (approximately $79,186), linked to the US dollar and payable in eight equal annual payments of $9,898 on January 1st of each of the years 2019 through 2026. The outstanding principal amount of Sapiens’ Series B Debentures bear a fixed interest rate of 3.37% per annum (which may vary based on the credit rating of the debentures), payable on January 1st and July 1st of each of the years 2018 through 2025, with one final interest payment on January 1, 2026. Debt discount and issuance costs were approximately $956, allocated to Sapiens’ Series B Debentures discount and are amortized as financial expenses over the term of Series B Debentures due in 2026. | ||||||
Fair value of debentures | $ 102,300 | $ 60,509 |
Debentures (Details) - Schedule
Debentures (Details) - Schedule of debentures - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debentures (Details) - Schedule of debentures [Line Items] | ||
Par Value | $ 244,390 | $ 205,590 |
Unamortized debt premium (discount) and issuance costs, net | (619) | (833) |
Current maturities | 40,701 | 29,346 |
Total long-term debentures, net of current maturities | 203,070 | 175,411 |
Short-term accrued interest | 753 | 2,016 |
Total short-term and long-term debentures | $ 244,524 | $ 206,773 |
Formula’s Series A Secured Debentures (2.8%) [Member] | ||
Debentures (Details) - Schedule of debentures [Line Items] | ||
Effective Interest rate | 2.40% | 2.40% |
Currency | NIS (Unlinked) | NIS (Unlinked) |
Par value in issuance currency | NIS 136,844 | NIS 171,056 |
Par Value | $ 42,564 | $ 49,497 |
Unamortized debt premium (discount) and issuance costs, net | 365 | 519 |
Current maturities | 10,641 | 9,899 |
Total long-term debentures, net of current maturities | 32,288 | 40,117 |
Short-term accrued interest | 589 | 686 |
Total short-term and long-term debentures | $ 43,518 | $ 50,702 |
Formula’s Series C Secured Debentures (2.3%) [Member] | ||
Debentures (Details) - Schedule of debentures [Line Items] | ||
Effective Interest rate | 2.50% | 2.50% |
Currency | NIS (Unlinked) | NIS (Unlinked) |
Par value in issuance currency | NIS 267,000 | NIS 300,000 |
Par Value | $ 83,048 | $ 86,806 |
Unamortized debt premium (discount) and issuance costs, net | (678) | (813) |
Current maturities | 10,264 | 9,549 |
Total long-term debentures, net of current maturities | 72,106 | 76,444 |
Short-term accrued interest | 158 | 163 |
Total short-term and long-term debentures | $ 82,528 | $ 86,156 |
Sapiens’ Series B Debentures (3.37%) [Member] | ||
Debentures (Details) - Schedule of debentures [Line Items] | ||
Effective Interest rate | 3.30% | 3.69% |
Currency | NIS (Linked to fix rate of USD) | NIS (Linked to fix rate of USD) |
Par value in issuance currency | NIS 350,000 | NIS 245,000 |
Par Value | $ 118,778 | $ 69,287 |
Unamortized debt premium (discount) and issuance costs, net | (306) | (539) |
Current maturities | 19,796 | 9,898 |
Total long-term debentures, net of current maturities | 98,676 | 58,850 |
Short-term accrued interest | 6 | 1,167 |
Total short-term and long-term debentures | $ 118,478 | $ 69,915 |
Debentures (Details) - Schedu_2
Debentures (Details) - Schedule of aggregate principal annual payments of debentures $ in Thousands | Dec. 31, 2020USD ($) |
Schedule of aggregate principal annual payments of debentures [Abstract] | |
2021 | $ 40,701 |
2022 | 40,701 |
2023 | 40,701 |
2024 | 40,701 |
2025 and thereafter | 81,586 |
Total | $ 244,390 |
Related Parties Transactions (D
Related Parties Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Parties Transactions (Details) [Line Items] | |||
Performed services sub-contractor | $ 3,100 | $ 3,400 | $ 3,200 |
Due from its transactions with Asseco | 1,898 | ||
Trade receivables balances due from related parties | 1,228 | 770 | |
Services provided to Asseco | 17 | ||
Back office services amount | 138 | 177 | 112 |
Sapiens [Member] | |||
Related Parties Transactions (Details) [Line Items] | |||
Services obtained from Asseco | 521 | 676 | 980 |
Fees paid for board services in affiliates | 8 | 25.3 | 25 |
Matrix [Member] | |||
Related Parties Transactions (Details) [Line Items] | |||
Fees paid for board services in affiliates | $ 39 | $ 29.9 | $ 29 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of leases [text block] [Abstract] | ||
Lease periods expiring term | The Group’s leases have original lease periods expiring between 2021 and 2033. | |
Depreciation expenses of operating lease right-of-use assets | $ 34,408 | $ 33,531 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of maturity analysis of undiscounted future lease payments receivable for operating leases $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Leases (Details) - Schedule of maturity analysis of undiscounted future lease payments receivable for operating leases [Line Items] | |
Total undiscounted cash flows | $ 139,287 |
Less imputed interest | (16,034) |
Present value of lease liabilities | 123,253 |
2021 [Member] | |
Leases (Details) - Schedule of maturity analysis of undiscounted future lease payments receivable for operating leases [Line Items] | |
Total undiscounted cash flows | 33,887 |
2022 [Member] | |
Leases (Details) - Schedule of maturity analysis of undiscounted future lease payments receivable for operating leases [Line Items] | |
Total undiscounted cash flows | 28,949 |
2023 [Member] | |
Leases (Details) - Schedule of maturity analysis of undiscounted future lease payments receivable for operating leases [Line Items] | |
Total undiscounted cash flows | 18,550 |
2024 [Member] | |
Leases (Details) - Schedule of maturity analysis of undiscounted future lease payments receivable for operating leases [Line Items] | |
Total undiscounted cash flows | 12,068 |
2025 [Member] | |
Leases (Details) - Schedule of maturity analysis of undiscounted future lease payments receivable for operating leases [Line Items] | |
Total undiscounted cash flows | 10,108 |
2026 and thereafter | |
Leases (Details) - Schedule of maturity analysis of undiscounted future lease payments receivable for operating leases [Line Items] | |
Total undiscounted cash flows | $ 35,725 |
Employee Option Plans (Details)
Employee Option Plans (Details) $ / shares in Units, ₪ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2020shares | Feb. 28, 2019 | Jan. 31, 2019 | Nov. 30, 2018shares | Dec. 31, 2017 | Aug. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2020ILS (₪) | Feb. 06, 2020shares | |
Employee Option Plans (Details) [Line Items] | |||||||||||
Description of options vest | As of December 31, 2020 Formula chief financial officer holds 10,834 shares. | ||||||||||
Total fair value of grant | $ 50,054 | ₪ 170,864 | |||||||||
Fair value of grant share price per share (in Dollars per share) | $ / shares | $ 81.8 | ||||||||||
Total equity-based compensation expense | $ 1,191 | ||||||||||
EBITDA percentage, description | (i) the EBITDA in the fiscal year immediately following the Specific Year was at least 110.25% of 75% of the Company’s EBITDA in the year preceding the Specific Year, or (ii) in case that the condition in the foregoing clause (i) was not met, then the EBITDA in the second fiscal year following the Specific Year was at least 115.7625% of 75% of the Company’s EBITDA in the year preceding the Specific Year. Accordingly, in case that either clause (i) or (ii) was met for a certain Specific Year, then the vesting with respect to such Specific Year shall be deemed to have been achieved, and those RSUs shall become vested as of the end of the Vesting Period. In the event that neither of the conditions described in clauses (i) or (ii) was met, the portion of RSUs for the applicable Specific Year shall automatically expire and terminate. | ||||||||||
Preceding years | 2 years | ||||||||||
Number of vested percentage | 20.00% | ||||||||||
Unrecognized compensation costs | $ 51,940 | $ 198 | |||||||||
Selling, marketing, general and administrative expenses | 224,188 | 200,870 | $ 182,472 | ||||||||
2011 Plan [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
Number of restricted shares (in Shares) | shares | 611,771 | 10,000 | 10,000 | ||||||||
Description of options vest | 66.67% of the RSUs (i.e., 407,847 RSUs) are subject to time-based vesting that shall start as of the grant date and shall end at December 31, 2027 subject to the continued engagement of Formula chief executive officer with the Company as of that date (the “Vesting Period”); and up to 33.33% of the RSUs (i.e., 203,924 RSUs as of the date hereof) are subject to performance-based vesting, and shall vest at December 31, 2027 on a pro-rata basis with respect to each fiscal year (starting as of January 1, 2020) during the Vesting Period in which the Target EBITDA (as defined below) is achieved, subject to the continued engagement of Formula chief executive officer with the Company. At the end of the vesting period, the number of performance based RSUs that vests shall be equal to (i) the number of fiscal years in which the Target EBITDA was achieved multiplied by (ii) 25,490.50 RSUs (rounded to the nearest whole number, up to a cap of 203,924 RSUs in total). The “Target EBITDA” in a given fiscal year during the Vesting Period shall mean the Company’s EBITDA in that certain fiscal year (as reflected in the Company’s annual audited consolidated financial statements), excluding the cost attributed to the applicable portion of the RSUs in the Company’s annual audited consolidated financial statements for the applicable fiscal year (as to which the review of performance is made to determine whether one eighth of the Performance Based RSUs (i.e., 25,490.50 RSUs) shall become vested at the end of the Vesting Period). | These restricted shares vest on an annual basis over a four-year period, commencing on November 19, 2018 and concluding on November 19, 2022, provided that during such time the chief operational officer will continue to serve as (i) an officer of the Company and/or (ii) an officer in one of the directly held affiliates. Total fair value of the grant was calculated based on the Formula share price on the grant date and equaled $382 ($38.2 per share). The total compensation expense the Company recorded in its statement of profit or loss for the years ended December 31, 2018, 2019 and 2020 were $25, $191 and $98, respectively. As of December 31, 2020 Formula chief operational officer holds 10,000 restricted shares from this grant, of which 5,000 are fully vested. | These restricted shares vest on a quarterly basis over a three-year period, commencing on August 17, 2017 and concluding on August 17, 2020, provided that during such time the chief financial officer will continue to serve as (i) an officer of the Company and/or (ii) an officer in one of the directly held affiliates, except that if he fails to meet the service condition due to the request of the board of directors of either Formula or any of its directly held affiliates (other than a termination of his provision of services which is based on actions or omissions by him that will constitute “cause” under his grant agreement with Formula), then, the chief financial officer will be deemed to have complied with clauses (i) or (ii) above. | ||||||||
Total fair value of grant | $ 371 | ||||||||||
Fair value of grant share price per share (in Dollars per share) | $ / shares | $ 37.1 | ||||||||||
Total equity-based compensation expense | $ 21 | 66 | 166 | ||||||||
Maximum [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
EBITDA, percentage | 105.00% | ||||||||||
EBITDA decreasing, percentage | 75.00% | ||||||||||
Minimum [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
EBITDA, percentage | 75.00% | ||||||||||
EBITDA decreasing, percentage | 105.00% | ||||||||||
Matrix [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
Description of options vest | Matrix approved, following the approval by Matrix’s compensation committee, the grant of 1,440,000 options which are exercisable into up to 1,440,000 ordinary shares of Matrix of NIS 1 par value each, to 20 senior officers of Matrix. The exercise price of the options was NIS 41.7 at the date of their grant, subject to adjustments, including upon the distribution of dividends. 50% of the options will be vested on January 1, 2021 with the remaining amount vesting in equal parts on January 1, 2022 and 2023. | ||||||||||
Unrecognized compensation costs | $ 1,368 | 2,491 | |||||||||
Fair value options, exercise factor | 70.00% | ||||||||||
Fair value options, expected volatility | 24.00% | ||||||||||
Options expire periods | 5 years | ||||||||||
Matrix [Member] | Mr. Moti Gutman [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
Description of options vest | Matrix extended its agreement with Revava Management Company Ltd. through which its chief executive officer, Mr. Moti Gutman, provides services to Matrix, for five years’ term starting on January 1, 2018. As part of the new agreement in January 2018, Matrix awarded Mr. Gutman 256,890 (RSUs), which vest on an annual basis over a five-year period, commencing on January 16, 2018 and concludes on December 31, 2022, but not before the publication of Matrix’s financial statements for each respective year, and subject to certain conditions. In 2020, 51,378 restricted share units (RSU) were vested and exercised. As of December 31, 2020 Mr. Gutman holds 154,134 restricted share units (RSU) from this grant. | ||||||||||
Matrix [Member] | Maximum [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
Fair value options, risk-free interest rate | 1.60% | ||||||||||
Matrix [Member] | Minimum [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
Fair value options, risk-free interest rate | 0.50% | ||||||||||
Sapiens [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
Number of restricted shares (in Shares) | shares | 173,005 | ||||||||||
Total equity-based compensation expense | $ 4,318 | $ 1,125 | $ 2,009 | ||||||||
Unrecognized compensation costs | $ 6,454 | ||||||||||
Options expire periods | 4 years | ||||||||||
Employees and directors to purchase shares description | In 2018, 2019 and 2020, Sapiens granted 317,000, 155,000 and 315,000 stock options to its employees and directors to purchase its shares, respectively. | ||||||||||
Weighted average grant date fair values of options (in Dollars per share) | $ / shares | $ 7.99 | $ 4.24 | $ 3.43 | ||||||||
Intrinsic value of options exercised | $ 11,658 | $ 2,301 | $ 1,641 | ||||||||
Selling, marketing, general and administrative expenses | 2,143 | ||||||||||
Magic [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
Intrinsic value of options exercised | $ 765 | $ 537 | $ 617 | ||||||||
General Assembly [Member] | Matrix [Member] | |||||||||||
Employee Option Plans (Details) [Line Items] | |||||||||||
Description of options vest | Matrix approved, after obtaining the approval of Matrix’s compensation committee and Matrix board of directors the grant of 80,000 options which are exercisable into up to 80,000 ordinary shares of Matrix of NIS 1 par value, to the President and Vice Chairman of the Matrix board. The exercise price of the options was NIS 43.16 at the date of their grant, subject to adjustments, including upon the distribution of dividends. 50% of the options will vest on January 1, 2021, with the remaining amount vesting in equal parts on January 1, 2022 and 2023. |
Employee Option Plans (Detail_2
Employee Option Plans (Details) - Schedule of stock-based compensation expense resulting from stock options grants - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Option Plans (Details) - Schedule of stock-based compensation expense resulting from stock options grants [Line Items] | |||
Total stock-based compensation expense | $ 7,856 | $ 3,874 | $ 3,981 |
Cost of revenues [Member] | |||
Employee Option Plans (Details) - Schedule of stock-based compensation expense resulting from stock options grants [Line Items] | |||
Total stock-based compensation expense | 2 | ||
Research and development expenses [Member] | |||
Employee Option Plans (Details) - Schedule of stock-based compensation expense resulting from stock options grants [Line Items] | |||
Total stock-based compensation expense | 4 | ||
Selling and marketing expenses [Member] | |||
Employee Option Plans (Details) - Schedule of stock-based compensation expense resulting from stock options grants [Line Items] | |||
Total stock-based compensation expense | 74 | 4 | |
General and administrative expenses [Member] | |||
Employee Option Plans (Details) - Schedule of stock-based compensation expense resulting from stock options grants [Line Items] | |||
Total stock-based compensation expense | $ 7,856 | $ 3,800 | $ 3,971 |
Employee Option Plans (Detail_3
Employee Option Plans (Details) - Schedule of Matrix stock-based compensation activity (and not Magic software) - Matrix [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Employee Option Plans (Details) - Schedule of Matrix stock-based compensation activity (and not Magic software) [Line Items] | |
Number of options, Outstanding at beginning of year | shares | 1,725,512 |
Weighted average exercise price, Outstanding at beginning of year | $ / shares | $ 10.17 |
Weighted average remaining contractual term, Outstanding at beginning of year | 3 years 266 days |
Aggregate intrinsic value, Outstanding at beginning of year | $ | $ 17,153 |
Number of options, Exercised | shares | (51,378) |
Weighted average exercise price, Exercised | $ / shares | |
Weighted average remaining contractual term, Exercised | |
Aggregate intrinsic value, Exercised | $ | $ (689) |
Number of options, Granted | shares | |
Weighted average exercise price, Granted | $ / shares | |
Weighted average remaining contractual term, Granted | |
Aggregate intrinsic value, Granted | $ | |
Number of options, Outstanding at end of year | shares | 1,674,134 |
Weighted average exercise price, Outstanding at end of year | $ / shares | $ 10.70 |
Weighted average remaining contractual term, Outstanding at end of year | 2 years 321 days |
Aggregate intrinsic value, Outstanding at end of year | $ | $ 19,935 |
Number of options, Exercisable at end of year | shares | 811,378 |
Weighted average exercise price, Exercisable at end of year | $ / shares | |
Weighted average remaining contractual term, Exercisable at end of year | |
Aggregate intrinsic value, Exercisable at end of year | $ | $ 9,386 |
Employee Option Plans (Detail_4
Employee Option Plans (Details) - Schedule of Sapiens stock-based compensation activity (and not Magic software) - Sapiens [Member] $ / shares in Units, $ in Thousands | Jan. 01, 2020USD ($)$ / sharesshares |
Employee Option Plans (Details) - Schedule of Sapiens stock-based compensation activity (and not Magic software) [Line Items] | |
Amount of options, Outstanding at beginning of year | shares | 1,869,412 |
Weighted average exercise price, Outstanding at beginning of year | $ / shares | $ 10.25 |
Weighted average remaining contractual life, Outstanding at beginning of year | 3 years 76 days |
Aggregate intrinsic value, Outstanding at beginning of year | $ | $ 23,838 |
Amount of options, Granted | shares | 315,000 |
Weighted average exercise price, Granted | $ / shares | $ 26.28 |
Amount of options, Exercised | shares | (603,519) |
Weighted average exercise price, Exercised | $ / shares | $ 8.63 |
Amount of options, Expired and forfeited | shares | (118,411) |
Weighted average exercise price, Expired and forfeited | $ / shares | $ 11.15 |
Amount of options, Outstanding at end of year | shares | 1,462,482 |
Weighted average exercise price, Outstanding at end of year | $ / shares | $ 14.26 |
Weighted average remaining contractual life, Outstanding at end of year | 3 years 62 days |
Aggregate intrinsic value, Outstanding at end of year | $ | $ 24,019 |
Amount of options, Exercisable at end of year | shares | 732,209 |
Weighted average exercise price, Exercisable at end of year | $ / shares | $ 10.59 |
Weighted average remaining contractual life, Exercisable at end of year | 2 years 105 days |
Aggregate intrinsic value, Exercisable at end of year | $ | $ 14,092 |
Employee Option Plans (Detail_5
Employee Option Plans (Details) - Schedule of Sapiens’ stock option plans | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Employee Option Plans (Details) - Schedule of Sapiens’ stock option plans [Line Items] | |
Options outstanding (in Shares) | shares | 1,462,482 |
Weighted Average remaining contractual Term | 3 years 62 days |
Weighted average exercise price | $ 14.26 |
Options Exercisable (in Shares) | shares | 732,209 |
Weighted Average Exercise price of Options Exercisable | $ 10.59 |
Exercise Price Range 1.12 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ stock option plans [Line Items] | |
Ranges of exercise price | $ 1.12 |
Options outstanding (in Shares) | shares | 8,408 |
Weighted Average remaining contractual Term | 149 days |
Weighted average exercise price | $ 1.12 |
Options Exercisable (in Shares) | shares | 8,408 |
Weighted Average Exercise price of Options Exercisable | $ 1.12 |
Exercise Price Range 8.31-10.07 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ stock option plans [Line Items] | |
Ranges of exercise price, lower limit | 8.31 |
Ranges of exercise price, upper limit | $ 10.07 |
Options outstanding (in Shares) | shares | 280,324 |
Weighted Average remaining contractual Term | 1 year 266 days |
Weighted average exercise price | $ 9.17 |
Options Exercisable (in Shares) | shares | 207,133 |
Weighted Average Exercise price of Options Exercisable | $ 9.15 |
Exercise Price Range 11.07-11.09 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ stock option plans [Line Items] | |
Ranges of exercise price, lower limit | 11.07 |
Ranges of exercise price, upper limit | $ 11.09 |
Options outstanding (in Shares) | shares | 682,500 |
Weighted Average remaining contractual Term | 2 years 295 days |
Weighted average exercise price | $ 11.09 |
Options Exercisable (in Shares) | shares | 426,250 |
Weighted Average Exercise price of Options Exercisable | $ 11.09 |
Exercise Price Range 11.85-15.46 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ stock option plans [Line Items] | |
Ranges of exercise price, lower limit | 11.85 |
Ranges of exercise price, upper limit | $ 15.46 |
Options outstanding (in Shares) | shares | 176,250 |
Weighted Average remaining contractual Term | 3 years 98 days |
Weighted average exercise price | $ 12.75 |
Options Exercisable (in Shares) | shares | 90,418 |
Weighted Average Exercise price of Options Exercisable | $ 12.41 |
Exercise Price Range 24.29-25.4 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ stock option plans [Line Items] | |
Ranges of exercise price, lower limit | 24.29 |
Ranges of exercise price, upper limit | $ 25.4 |
Options outstanding (in Shares) | shares | 235,000 |
Weighted Average remaining contractual Term | 5 years 47 days |
Weighted average exercise price | $ 25.12 |
Options Exercisable (in Shares) | shares | |
Weighted Average Exercise price of Options Exercisable | |
Exercise Price Range 31.96 [Member] | |
Employee Option Plans (Details) - Schedule of Sapiens’ stock option plans [Line Items] | |
Ranges of exercise price | $ 31.96 |
Options outstanding (in Shares) | shares | 80,000 |
Weighted Average remaining contractual Term | 5 years 219 days |
Weighted average exercise price | $ 31.96 |
Options Exercisable (in Shares) | shares | |
Weighted Average Exercise price of Options Exercisable |
Employee Option Plans (Detail_6
Employee Option Plans (Details) - Schedule of magic Software stock-based compensation activity - Magic [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Employee Option Plans (Details) - Schedule of magic Software stock-based compensation activity [Line Items] | |
Number of options, Outstanding at beginning of year | 119,767 |
Weighted average exercise price, Outstanding at beginning of year (in Dollars per share) | $ / shares | $ 2.58 |
Weighted average remaining contractual term, Outstanding at beginning of year | 1 year 135 days |
Aggregate intrinsic value, Outstanding at beginning of year (in Dollars) | $ | $ 1,171 |
Granted | |
Granted (in Dollars per share) | $ / shares | |
Exercised | (95,517) |
Exercised (in Dollars per share) | $ / shares | $ 2.28 |
Forfeited | |
Forfeited (in Dollars per share) | $ / shares | |
Number of options, Outstanding at end of year | 24,250 |
Weighted average exercise price, Outstanding at end of year | 3.45 |
Weighted average remaining contractual term, Outstanding at end of year | 1 year 87 days |
Aggregate intrinsic value, Outstanding at end of year (in Dollars) | $ | $ 380 |
Number of options, Exercisable at end of year | 24,250 |
Weighted average exercise price, Exercisable at end of year (in Dollars per share) | $ / shares | $ 3.45 |
Weighted average remaining contractual term, Exercisable at end of year | 1 year 87 days |
Aggregate intrinsic value, Exercisable at end of year (in Dollars) | $ | $ 380 |
Employee Option Plans (Detail_7
Employee Option Plans (Details) - Schedule of options outstanding separated into ranges of exercise price categories - Magic [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Employee Option Plans (Details) - Schedule of options outstanding separated into ranges of exercise price categories [Line Items] | |
Options outstanding (in Shares) | shares | 24,250 |
Weighted average remaining contractual life | 1 year 87 days |
Weighted average exercise price | $ 3.45 |
Options Exercisable (in Shares) | shares | 24,250 |
Weighted Average Exercise price of Options Exercisable | $ 3.45 |
Exercise Price Range 2.01-3 [Member] | |
Employee Option Plans (Details) - Schedule of options outstanding separated into ranges of exercise price categories [Line Items] | |
Ranges of Exercise price, lower limit | 2.01 |
Ranges of Exercise price, upper limit | $ 3 |
Options outstanding (in Shares) | shares | 18,000 |
Weighted average remaining contractual life | 281 days |
Weighted average exercise price | $ 2.94 |
Options Exercisable (in Shares) | shares | 18,000 |
Weighted Average Exercise price of Options Exercisable | $ 2.94 |
Exercise Price Range 4.01-5 [Member] | |
Employee Option Plans (Details) - Schedule of options outstanding separated into ranges of exercise price categories [Line Items] | |
Ranges of Exercise price, lower limit | 4.01 |
Ranges of Exercise price, upper limit | $ 5 |
Options outstanding (in Shares) | shares | 6,250 |
Weighted average remaining contractual life | 2 years 219 days |
Weighted average exercise price | $ 4.94 |
Options Exercisable (in Shares) | shares | 6,250 |
Weighted Average Exercise price of Options Exercisable | $ 4.94 |
Employee Benefit Liabilities (D
Employee Benefit Liabilities (Details) - Schedule of defined benefit plans - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of defined benefit plans [Abstract] | ||
Defined benefit obligation | $ 113,540 | $ 95,692 |
Fair value of plan assets | (98,421) | (84,053) |
Net defined benefit liability | $ 15,119 | $ 11,639 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2020shares | Sep. 30, 2016USD ($) | Dec. 31, 2020USD ($)shares | Sep. 30, 2016ILS (₪) | |
Commitments and Contingencies (Details) [Line Items] | ||||
Aggregate security amount | $ 44,700 | |||
Bank guarantees amount | 8,000 | |||
Restricted bank deposits | $ 861 | |||
Description of financial covenants | (iii)financial covenants, including (i) the equity attributable to the shareholders of Sapiens, as reported in its annual or quarterly financial statements, will not be less than $120 million – as of December 31, 2020 Sapiens’ shareholders equity was $382 million, and (ii) Sapiens’ net financial indebtedness (financial indebtedness offset by cash, marketable securities deposits and other liquid financial instruments) shall not exceed 65% of net CAP (defined as financial indebtedness, net, plus shareholders equity, including deposits and other liquid financial instruments) – as of December 31, 2020 Sapiens’ net financial indebtedness was (9.75%) of net CAP, and (iii) the ratio of Sapiens’ net financial indebtedness to EBITDA (based on accumulated calculation for the four last quarters) shall not exceed 5.5 – as of December 31, 2020 the ratio of Sapiens’ net financial indebtedness to EBITDA was (0.47). | |||
Lawsuit seeking damages | ₪ | ₪ 34,106 | |||
Estimated amount due to OCS | $ 260 | |||
Contingent liability | $ 6,014 | |||
CEO [Member] | ||||
Commitments and Contingencies (Details) [Line Items] | ||||
Restricted shares | shares | 611,771 | |||
Matrix [Member] | ||||
Commitments and Contingencies (Details) [Line Items] | ||||
Issued unpledged shares to financial institution's | shares | 1,569,098 | |||
Description of liability to financial institution | (i)The total rate of Matrix financial debts and liabilities to banks with the addition of debts in respect of debentures that have been and/or will be issued by Matrix and shareholders’ loans that have been and/or will be granted to Matrix (collectively, the “debts”) will not exceed 40% of its total balance sheet. (ii)The ratio of Matrix net debt to the annual EBITDA will not exceed 3.5. As of December 31, 2019, Matrix ratio of net debt to EBITDA was 0.59. (iii)Matrix equity shall not be lower than NIS 275 million (approximately $80 million) at all times. As of December 31, 2019 Matrix’s equity was approximately NIS 825 million (approximately $257 million). (iv)Matrix balances of cash and short-term investments in its balance sheet shall not be less than NIS 50 million (approximately $16 million). In the context of Matrix’ issuance of commercial Securities which are not listed, Matrix committed to maintain at all times a cash and short-term investments balances of approximately NIS 100 million (approximately $31 million). As of December 31, 2020, Matrix’s cash and short-term investments were approximately NIS 644 million (approximately $200 million). (v)In the event that Formula ceases to hold 30% of Matrix share capital or is no longer the largest shareholder in Matrix, the credit may be placed for immediate repayment. (vi)Matrix has committed that the rate of ownership and control of Matrix IT-Systems shall never be below 50.1%. (vii)Matrix will not create any pledge on all or part of its property and assets in favor of any third party and will not provide any guarantee to secure any third party’s debts as they are today and as they will be without the banks’ consent (except for a first-rate fixed pledge on an asset which acquisition will be financed by a third party and which the pledge will be in his favor). (viii)Matrix will not sell and/or transfer all or part of its assets to others in any manner whatsoever without the banks’ advance written consent unless it is done in the ordinary course of business. | |||
Magic Software [Member] | ||||
Commitments and Contingencies (Details) [Line Items] | ||||
Issued unpledged shares to financial institution's | shares | 760,323 | |||
Description of liability to financial institution | (i)Total equity attributable to Magic Software’ shareholders shall not be lower than $100 million at all times – as of December 31, 2020 Magic Software shareholders’ equity was $260 million. (ii)Magic Software’s consolidated cash and cash equivalents and marketable securities available for sale shall not be less than $10 million – as of December 31, 2020 Magic Software’s cash and marketable securities available for sale were $88 million. (iii)The ratio of Magic Software’s consolidated total financial debts to consolidated total assets will not exceed 50% - as of December 31, 2020 Magic Software’s financial debts were 5.6% of total assets; (iv)The ratio of Magic Software’s total financial debts less cash, short-term deposits and short-term marketable securities to the annual EBITDA will not exceed 3.25 – as of December 31, 2020 the ratio of Magic Software’s net financial indebtedness to EBITDA was negative (-1.3) (cash exceeds indebtedness) ; and (v)Magic Software shall not create any pledge on all of its property and assets in favor of any third party without the financial institution’s consent. | |||
Damages amount | $ 2,400 | |||
Sapiens [Member] | ||||
Commitments and Contingencies (Details) [Line Items] | ||||
Issued unpledged shares to financial institution's | shares | 511,920 | |||
Royalty commitments, description | Sapiens Technologies (1982) Ltd. (“Sapiens Technologies”), a wholly owned subsidiary of Sapiens incorporated in Israel, was partially financed under programs sponsored by the Israel Innovation Authority (“IIA”), formerly the Office of the Chief Scientist (“OCS”) for the support of certain research and development activities conducted in Israel. In exchange for participation in the programs by the IIA, Sapiens Technologies agreed to pay 3.5% of total net consolidated license and maintenance revenue and 0.35% of the net consolidated consulting services revenue related to the software developed within the framework of these programs based on an understanding with IIA reached in January 2012. The royalties will be paid up to a maximum amount equaling 100%-150% of the grants provided by the IIA, linked to the dollar, and for grants received after January 1, 1999, bear annual interest at a rate based on LIBOR. | |||
Description of financial covenants | (ii)a covenant not to distribute dividends unless (i) Sapiens equity attributable to Sapiens shareholders’ shall not be less than $160 million, (ii) Sapiens net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) does not exceed 65% of net CAP (defined as financial indebtedness, net, plus total equity), (iii) the amount of accumulated dividends from the issuance date and going forward shall not exceed Sapiens net income for the year ended December 31, 2016 and the first three quarters of the year ended December 31, 2017, plus 75% of Sapiens accumulated profits from September 1, 2017 and up to the date of distribution, and (iv) no event of default shall have occurred. | |||
Formula [Member] | ||||
Commitments and Contingencies (Details) [Line Items] | ||||
Royalty commitments, description | a.A covenant not to distribute dividends unless (i) Formula shareholders’ equity attributable to Formula Systems shareholders shall not be less than $290 million, (ii) Formula’s net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) shall not exceed 50% of net CAP (defined as financial indebtedness, net, plus shareholders’ equity), and (iii) the aggregate amount of distributions from January 1, 2016 shall not exceed the aggregate amount of net oncome for the year ended December 31, 2015 together with 75% of accumulated profits from January 1, 2016 until the respective distribution date and (iv) no event of default shall have occurred. b.Financial covenants, including (i) the equity attributable to Formula Systems shareholders, as reported in Formula’s annual or quarterly financial statements, shall not be less than $215 million - as of December 31, 2020 Formula equity attributable to Formula Systems shareholders’ was approximately $503.2 million, (ii) Formula’s net financial indebtedness (financial indebtedness offset by cash, marketable securities, deposits and other liquid financial instruments) shall not exceed 65% of net CAP (defined as financial indebtedness, net, plus total equity) - as of December 31, 2020 Formula’s net financial indebtedness was 1.1% of net CAP, (iii) The ratio of Formula’s net financial indebtedness to the last twelve-months period EBITDA will not exceed 5 (all based on the Company’s quarterly and annual consolidated financial statements) – as of December 31, 2020 the ratio of Formula’s net financial indebtedness to EBITDA was 0.045 and (iv) at all times, Formula’s cash balance on a stand-alone basis will not be less than the semi annual interest payments for the unpaid principal amount of Series A and Series C Secured Debentures – as of December 31, 2020 Formula’s cash balances exceeds the semi annual interest payments amount. c.Standard events of default including among others: 1.Suspension of trading of the debentures on the TASE over a period of 60 days; 2.If the rating of the debentures is less than BBB- by Standard and Poors Maalot or equivalent rating of other rating agencies; 3.Failure to have the debentures rated over a period of 60 days; 4.If there is a change in control without consent of the rating agency; and 5.If Formula fails to continue to control any of its subsidiaries; |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of composition of pledged shares | Dec. 31, 2020shares |
Matrix [Member] | |
Commitments and Contingencies (Details) - Schedule of composition of pledged shares [Line Items] | |
Formula’s series A secured Debentures | 4,128,865 |
Formula’s series C secured debentures | 6,031,761 |
Magic Software [Member] | |
Commitments and Contingencies (Details) - Schedule of composition of pledged shares [Line Items] | |
Formula’s series A secured Debentures | 5,825,681 |
Formula’s series C secured debentures | 2,411,474 |
Sapiens [Member] | |
Commitments and Contingencies (Details) - Schedule of composition of pledged shares [Line Items] | |
Formula’s series A secured Debentures | 1,260,266 |
Formula’s series C secured debentures | 2,957,590 |
Equity (Details)
Equity (Details) ₪ / shares in Units, $ / shares in Units, ₪ in Thousands, $ in Thousands | Feb. 28, 2021USD ($)$ / shares | Feb. 28, 2021ILS (₪)₪ / shares | Dec. 31, 2020shares | Aug. 31, 2020USD ($)$ / shares | Aug. 31, 2020ILS (₪)₪ / shares | Dec. 24, 2019$ / shares | Nov. 30, 2019USD ($) | Nov. 30, 2019ILS (₪)₪ / shares | Aug. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares | May 31, 2018USD ($)$ / shares |
Equity (Details) [Line Items] | |||||||||||
Ordinary shares | 568,620 | ||||||||||
Dividend payables | $ 7,881 | ₪ 27,071 | $ 7,079 | ₪ 24,471 | $ 7,953 | $ 5,015 | $ 5,012 | ||||
Dividend per share | (per share) | ₪ 2.16 | $ 0.52 | ₪ 1.77 | $ 0.46 | ₪ 1.6 | $ 0.52 | $ 0.34 | $ 0.34 | |||
Events After Reporting Period [Member] | |||||||||||
Equity (Details) [Line Items] | |||||||||||
Dividend payables | $ 10,094 | ₪ 33,036 | |||||||||
Dividend per share | (per share) | $ 0.66 | ₪ 2.16 |
Equity (Details) - Schedule of
Equity (Details) - Schedule of share capital - shares | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of share capital [Abstract] | ||
Authorized | 25,000,000 | 25,000,000 |
Issued | 15,862,887 | 15,862,887 |
Outstanding | 15,294,267 | 15,294,267 |
Taxes on Income (Details)
Taxes on Income (Details) ₪ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2020ILS (₪) | Dec. 31, 2019USD ($) | Dec. 31, 2018 | Dec. 31, 2016 | |
Taxes on Income (Details) [Line Items] | |||||
Statutory tax rate in Israel | 23.00% | 23.00% | 23.00% | 23.00% | |
Description of income taxes | Effective January 1, 2011, the Israeli parliament enacted the Law for Economic Policy for 2011 and 2012 (Amended Legislation), and among other things, amended the Law in August 2013 (“the Amendment”). According to the Amendment, a flat corporate tax rate of 16% was established for exporting industrial enterprises (over 25%) that meet minimum requirements which establish that such companies contribute to the country’s economic growth and apply a competitive factor for the Israel Gross Domestic Product. | Effective January 1, 2011, the Israeli parliament enacted the Law for Economic Policy for 2011 and 2012 (Amended Legislation), and among other things, amended the Law in August 2013 (“the Amendment”). According to the Amendment, a flat corporate tax rate of 16% was established for exporting industrial enterprises (over 25%) that meet minimum requirements which establish that such companies contribute to the country’s economic growth and apply a competitive factor for the Israel Gross Domestic Product. | |||
Preferred income tax rate | 15.00% | 15.00% | |||
Applicable tax rate | 20.00% | 20.00% | |||
Filed notice, description | In 2011, Magic Software and one of its Israeli subsidiaries filed a notice to the Israeli tax authorities to apply for the new benefits under the 2011 Amendment, and therefore were subjected to the amended tax rate of 16% for the tax years 2011-2016. As of December 31, 2015, some of the Company Israeli subsidiaries filed a notice to the Israeli tax authorities to apply for the new benefits under the 2011 Amendment and therefore and subject to the amended tax rate of 16%, which was used for 2014-2016 tax years. | In 2011, Magic Software and one of its Israeli subsidiaries filed a notice to the Israeli tax authorities to apply for the new benefits under the 2011 Amendment, and therefore were subjected to the amended tax rate of 16% for the tax years 2011-2016. As of December 31, 2015, some of the Company Israeli subsidiaries filed a notice to the Israeli tax authorities to apply for the new benefits under the 2011 Amendment and therefore and subject to the amended tax rate of 16%, which was used for 2014-2016 tax years. | |||
Undistributed earnings of foreign subsidiaries and affiliates | $ 114,569 | $ 105,136 | |||
Cash and cash equivalents held by the Group's investees outside of Israel | $ 87,331 | $ 54,388 | |||
Federal corporate income tax rate, description | The TCJA reduces the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. | The TCJA reduces the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. | |||
Cumulative losses for tax purposes | $ 173,180 | ||||
Cumulative losses for tax purposes | ₪ | ₪ 94,945 | ||||
Israeli subsidiaries [Member] | |||||
Taxes on Income (Details) [Line Items] | |||||
Cumulative losses for tax purposes | 137,414 | ||||
Preferred Technology Enterprise [Member] | |||||
Taxes on Income (Details) [Line Items] | |||||
Description of new amendment tax rate | According to the 2017 Amendment, a Preferred Technological Enterprise, as defined in the 2017 Amendment, with total consolidated revenues of the group companies is less than NIS 10 billion, shall be subject to 12% tax rate on income derived from intellectual property (in development area A—a tax rate of 7.5%). In order to qualify as a Preferred technological enterprise certain criterion must be met, such as a minimum ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual revenues derived from exports. The 2017 Amendment further provides that a technology company satisfying certain conditions will qualify as a Special PTE (an enterprise for which, among others, total consolidated revenues of its parent company and all subsidiaries is at least NIS 10 billion) and will thereby enjoy a reduced corporate tax rate of 6% on PTI regardless of the company’s geographic location within Israel. In addition, a Special PTE will enjoy a reduced corporate tax rate of 6% on capital gain derived from the sale of certain “Benefited Intangible Assets” to a related foreign company if the Benefited Intangible Assets were either developed by the Special Preferred Technology Enterprise or acquired from a foreign company on or after January 1, 2017, and the sale received prior approval from the IIA. A Special PTE that acquires Benefited Intangible Assets from a foreign company for more than NIS 500 million will be eligible for these benefits for at least ten years, subject to certain approvals as specified in the Investment Law. Any dividends distributed from income from the preferred technological enterprises will be subject to tax at a rate of 20%. The 2017 Amendment further provides that, in certain circumstances, a dividend distributed to a foreign corporate shareholder, would be subject to a 4% tax rate (if the percentage of foreign investors exceeds 90%). Starting 2017, part of the Group’s taxable income in Israel is entitled to a preferred 12% tax rate in the preferred technological enterprise track under Amendment 73 to the Investment Law. | ||||
Formula [Member] | |||||
Taxes on Income (Details) [Line Items] | |||||
Cumulative losses for tax purposes | $ 80,080 | ||||
Income tax assessments, description | Formula Formula has received final tax assessments (or assessments that are deemed final) through the tax year 2017. | Formula Formula has received final tax assessments (or assessments that are deemed final) through the tax year 2017. | |||
Formula [Member] | Israeli subsidiaries [Member] | |||||
Taxes on Income (Details) [Line Items] | |||||
Cumulative losses for tax purposes | $ 35,766 | ||||
Israel, New Shekels | Israel, New Shekels | |||||
Taxes on Income (Details) [Line Items] | |||||
Cumulative losses for tax purposes | ₪ | ₪ 257,462 | ||||
Matrix [Member] | |||||
Taxes on Income (Details) [Line Items] | |||||
Cumulative losses for tax purposes | $ 29,532 | ||||
Income tax assessments, description | Matrix subsidiaries have received final tax assessments (or assessments that are deemed final) through the tax year 2015. | Matrix subsidiaries have received final tax assessments (or assessments that are deemed final) through the tax year 2015. | |||
Magic Software [Member] | |||||
Taxes on Income (Details) [Line Items] | |||||
Cumulative losses for tax purposes | $ 23,782 | ||||
Sapiens [Member] | |||||
Taxes on Income (Details) [Line Items] | |||||
Cumulative losses for tax purposes | $ 30,188 | ||||
Income tax assessments, description | Tax assessments filed by some of Sapiens’ Israeli subsidiaries through the year 2015 are considered to be final. | Tax assessments filed by some of Sapiens’ Israeli subsidiaries through the year 2015 are considered to be final. | |||
Michpal [Member] | |||||
Taxes on Income (Details) [Line Items] | |||||
Cumulative losses for tax purposes | $ 500 |
Taxes on Income (Details) - Sch
Taxes on Income (Details) - Schedule of deferred tax liabilities, net - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of deferred tax liabilities, net [Abstract] | ||
Deferred taxes assets | $ 39,750 | $ 38,865 |
Deferred tax liabilities | (68,367) | (53,854) |
Total | (28,617) | (14,989) |
Net operating losses carried forward | 5,377 | 6,115 |
Intangibles, fixed asset and right-of-use assets | (78,885) | (56,036) |
Lease liability | 31,358 | 22,863 |
Differences in measurement basis (cash basis for tax purposes) | (683) | (345) |
Other | $ 14,216 | $ 12,414 |
Taxes on Income (Details) - S_2
Taxes on Income (Details) - Schedule of pre-tax income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Taxes on Income (Details) - Schedule of pre-tax income [Line Items] | |||
Total | $ 143,756 | $ 119,837 | $ 101,327 |
Domestic (Israel) [Member] | |||
Taxes on Income (Details) - Schedule of pre-tax income [Line Items] | |||
Total | 106,974 | 88,942 | 80,948 |
Foreign [Member] | |||
Taxes on Income (Details) - Schedule of pre-tax income [Line Items] | |||
Total | $ 36,782 | $ 30,895 | $ 20,379 |
Taxes on Income (Details) - S_3
Taxes on Income (Details) - Schedule of taxes on income (tax benefit) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of taxes on income (tax benefit) [Abstract] | |||
Current taxes | $ 23,015 | $ 40,181 | $ 30,302 |
Deferred taxes | 8,254 | (12,980) | (6,001) |
Total | $ 31,269 | $ 27,201 | $ 24,301 |
Taxes on Income (Details) - S_4
Taxes on Income (Details) - Schedule of theoretical tax expense - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of theoretical tax expense [Abstract] | |||
Income before income taxes, as per the statement of operations | $ 143,756 | $ 119,837 | $ 101,327 |
Statutory tax rate in Israel | 23.00% | 23.00% | 23.00% |
Tax computed at the statutory tax rate | $ 33,064 | $ 27,563 | $ 23,305 |
Non-deductible expenses (non-taxable income) net and tax-deductible costs not included in the accounting costs | 2,544 | 792 | 1,393 |
Effect of different tax rates | (774) | 1,114 | 379 |
Effect of “Approved, Beneficiary or Preferred Enterprise” status | (5,426) | (2,557) | (1,233) |
Deferred taxes on current losses (utilization of carry forward losses) and temporary differences for which a valuation allowance was provided, net | 1,877 | 1,087 | (796) |
Taxes in respect of prior years | 280 | (569) | (485) |
Uncertain tax positions | 285 | 1,889 | 2,703 |
Other | (581) | (2,118) | (965) |
Taxes on income | $ 31,269 | $ 27,201 | $ 24,301 |
Taxes on Income (Details) - S_5
Taxes on Income (Details) - Schedule of total unrecognized tax benefits - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of total unrecognized tax benefits [Abstract] | |||
Beginning Balance | $ 8,357 | $ 6,601 | $ 4,024 |
Decrease related to prior years' tax positions | (1,733) | (243) | (198) |
Acquisition of subsidiaries | 1,057 | ||
Increase related to current year tax positions | 1,410 | 1,999 | 2,775 |
Ending Balance | $ 9,091 | $ 8,357 | $ 6,601 |
Supplementary Financial State_3
Supplementary Financial Statement Information (Details) - Schedule of non-controlling interest in material partially owned subsidiaries - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Supplementary Financial Statement Information (Details) - Schedule of non-controlling interest in material partially owned subsidiaries [Line Items] | ||
Non-controlling interest | $ 605,342 | $ 474,694 |
Matrix and its subsidiaries [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of non-controlling interest in material partially owned subsidiaries [Line Items] | ||
Non-controlling interest | 147,662 | 120,225 |
Sapiens and its subsidiaries [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of non-controlling interest in material partially owned subsidiaries [Line Items] | ||
Non-controlling interest | 306,684 | 203,942 |
Magic Software and its subsidiaries [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of non-controlling interest in material partially owned subsidiaries [Line Items] | ||
Non-controlling interest | 150,808 | 150,370 |
Other [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of non-controlling interest in material partially owned subsidiaries [Line Items] | ||
Non-controlling interest | $ 188 | $ 157 |
Supplementary Financial State_4
Supplementary Financial Statement Information (Details) - Schedule of financial income and expenses - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Financial expenses: | |||
Financial expenses related to liabilities in respect of business combinations | $ 3,738 | $ 1,061 | $ 1,108 |
Interest expenses on loans and borrowings | 6,863 | 6,376 | 6,891 |
Financial costs related to Debentures | 6,546 | 5,632 | 5,479 |
Interest expenses attributed to IFRS 16 | 5,367 | 4,195 | |
Bank charges, negative foreign exchange differences and other financial expenses | 6,930 | 5,179 | 2,374 |
Financial expenses | 29,444 | 22,443 | 15,852 |
Financial income: | |||
Income from marketable securities and embedded derivative | 204 | 747 | 832 |
Interest income from deposits, positive foreign exchange differences and other financial income | 2,355 | 3,044 | 6,730 |
Financial income | 2,559 | 3,791 | 7,562 |
Financial expenses, net | $ 26,885 | $ 18,652 | $ 8,290 |
Supplementary Financial State_5
Supplementary Financial Statement Information (Details) - Schedule of property and equipment located - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Supplementary Financial Statement Information (Details) - Schedule of property and equipment located [Line Items] | ||
Property and equipment | $ 59,176 | $ 43,059 |
Israel [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of property and equipment located [Line Items] | ||
Property and equipment | 44,105 | 28,446 |
United States [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of property and equipment located [Line Items] | ||
Property and equipment | 4,517 | 4,709 |
Europe [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of property and equipment located [Line Items] | ||
Property and equipment | 3,303 | 1,828 |
Japan [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of property and equipment located [Line Items] | ||
Property and equipment | 283 | 265 |
Other [Member] | ||
Supplementary Financial Statement Information (Details) - Schedule of property and equipment located [Line Items] | ||
Property and equipment | $ 6,968 | $ 7,811 |
Supplementary Financial State_6
Supplementary Financial Statement Information (Details) - Schedule of revenues classified by geographic area (based on the location of customers) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplementary Financial Statement Information (Details) - Schedule of revenues classified by geographic area (based on the location of customers) [Line Items] | |||
Revenues | $ 1,933,918 | $ 1,701,115 | $ 1,492,988 |
Israel [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of revenues classified by geographic area (based on the location of customers) [Line Items] | |||
Revenues | 1,203,109 | 1,047,265 | 893,605 |
United States [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of revenues classified by geographic area (based on the location of customers) [Line Items] | |||
Revenues | 501,785 | 462,803 | 418,148 |
Europe [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of revenues classified by geographic area (based on the location of customers) [Line Items] | |||
Revenues | 189,152 | 145,564 | 141,316 |
Africa [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of revenues classified by geographic area (based on the location of customers) [Line Items] | |||
Revenues | 11,702 | 15,336 | 13,726 |
Japan [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of revenues classified by geographic area (based on the location of customers) [Line Items] | |||
Revenues | 14,282 | 14,925 | 11,053 |
Other (mainly Asia pacific) [Member] | |||
Supplementary Financial Statement Information (Details) - Schedule of revenues classified by geographic area (based on the location of customers) [Line Items] | |||
Revenues | $ 13,888 | $ 15,222 | $ 15,140 |
Supplementary Financial State_7
Supplementary Financial Statement Information (Details) - Schedule of computation basic and diluted net earnings per share - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||
Basic earnings per share – net income attributable to equity holders of the Company (in Dollars) | $ 46,776 | $ 38,820 | $ 32,365 |
Diluted earnings per share - net income attributable to equity holders of the Company (in Dollars) | $ 45,969 | $ 37,457 | $ 33,376 |
Denominator: | |||
Basic earnings per share - weighted average shares outstanding | 15,286 | 15,190 | 14,740 |
Effect of dilutive securities | 6 | 151 | 831 |
Diluted earnings per share – adjusted weighted average shares outstanding | 15,292 | 15,341 | 15,571 |
Basic net earnings per share (in Dollars per share) | $ 3.05 | $ 2.56 | $ 2.20 |
Diluted net earnings per share (in Dollars per share) | $ 3.01 | $ 2.44 | $ 2.14 |
Operating Segments (Details)
Operating Segments (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Information Technologies (IT) Software solutions and services, Consulting & Management in Israel [Member] | |
Operating Segments (Details) [Line Items] | |
Description of factors used to segments | In 2020, activity in Software solutions and value-added services in Israel accounted for approximately 60% of Matrix’s revenues for approximately 53% of its operating income, respectively. |
Information Technologies (IT) Software solutions and services in the U.S [Member] | |
Operating Segments (Details) [Line Items] | |
Description of factors used to segments | In 2020, the activity in the U.S accounted for approximately 9% of Matrix’s revenues and for approximately 18% of its operating income, because of higher operating gross margin in the U.S. |
Training and integration [Member] | |
Operating Segments (Details) [Line Items] | |
Description of factors used to segments | In 2020, activity in training and integration accounted for approximately 4% of Matrix’s revenues and for approximately 5% of its operating income, respectively. |
Computer infrastructure and integration solutions [Member] | |
Operating Segments (Details) [Line Items] | |
Description of factors used to segments | In 2020, activity in Computer and cloud infrastructure and integration solutions accounted for approximately 22% of Matrix’s revenues and for approximately 15% of its operating income, respectively. |
Software Product Marketing And Support [Member] | |
Operating Segments (Details) [Line Items] | |
Description of factors used to segments | In 2020, activity in software product marketing and support accounted for about 5% of Matrix’s revenues and for approximately 9% of its operating income, respectively. |
Michpal [Member] | |
Operating Segments (Details) [Line Items] | |
Description of factors used to segments | As of December 31, 2020, Michpal serves approximately 8,000 customers, most of which are long-term customers. |
Operating Segments (Details) -
Operating Segments (Details) - Schedule of goodwill in material partially owned subsidiaries - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Segments (Details) - Schedule of goodwill in material partially owned subsidiaries [Line Items] | ||
Goodwill | $ 872,424 | $ 724,193 |
Matrix [Member] | ||
Operating Segments (Details) - Schedule of goodwill in material partially owned subsidiaries [Line Items] | ||
Goodwill | 290,662 | 260,492 |
Sapiens [Member] | ||
Operating Segments (Details) - Schedule of goodwill in material partially owned subsidiaries [Line Items] | ||
Goodwill | 409,646 | 316,082 |
Magic [Member] | ||
Operating Segments (Details) - Schedule of goodwill in material partially owned subsidiaries [Line Items] | ||
Goodwill | 135,682 | 117,743 |
Ofek [Member] | ||
Operating Segments (Details) - Schedule of goodwill in material partially owned subsidiaries [Line Items] | ||
Goodwill | $ 36,434 | $ 29,876 |
Operating Segments (Details) _2
Operating Segments (Details) - Schedule of reporting on operating segments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Segments (Details) - Schedule of reporting on operating segments [Line Items] | |||
Revenues from external customers | $ 1,933,918 | $ 1,701,115 | $ 1,492,988 |
Inter-segment revenues | |||
Revenues | 1,933,918 | 1,701,115 | 1,492,988 |
Unallocated corporate expenses | (2,113) | ||
Depreciation and amortization | 61,098 | 53,401 | 48,734 |
Operating income (loss) | 170,641 | 138,489 | 109,617 |
Financial expenses, net | (26,885) | (18,652) | (8,290) |
Group's share of profits of companies accounted for at equity, net | 1,535 | 1,787 | 369 |
Taxes on income | (31,269) | (27,201) | (24,301) |
Net income | 114,022 | 94,423 | 77,395 |
Matrix [Member] | |||
Operating Segments (Details) - Schedule of reporting on operating segments [Line Items] | |||
Revenues from external customers | 1,116,178 | 1,005,721 | 878,188 |
Inter-segment revenues | 5,316 | 3,986 | 2,869 |
Revenues | 1,121,494 | 1,009,707 | 881,057 |
Unallocated corporate expenses | |||
Depreciation and amortization | 14,646 | 11,713 | 8,554 |
Operating income (loss) | 84,181 | 71,552 | 61,264 |
Sapiens [Member] | |||
Operating Segments (Details) - Schedule of reporting on operating segments [Line Items] | |||
Revenues from external customers | 382,903 | 325,674 | 289,707 |
Inter-segment revenues | |||
Revenues | 382,903 | 325,674 | 289,707 |
Unallocated corporate expenses | |||
Depreciation and amortization | 28,474 | 25,619 | 26,249 |
Operating income (loss) | 35,337 | 32,336 | 16,799 |
Magic Software [Member] | |||
Operating Segments (Details) - Schedule of reporting on operating segments [Line Items] | |||
Revenues from external customers | 368,357 | 322,401 | 282,205 |
Inter-segment revenues | 2,837 | 3,229 | 2,170 |
Revenues | 371,194 | 325,630 | 284,375 |
Unallocated corporate expenses | |||
Depreciation and amortization | 13,939 | 14,025 | 12,562 |
Operating income (loss) | 47,757 | 33,817 | 31,698 |
Other [Member] | |||
Operating Segments (Details) - Schedule of reporting on operating segments [Line Items] | |||
Revenues from external customers | 144,139 | 131,668 | 109,041 |
Inter-segment revenues | 330 | 510 | 80 |
Revenues | 144,469 | 132,178 | 109,121 |
Unallocated corporate expenses | |||
Depreciation and amortization | 6,142 | 4,148 | 5,081 |
Operating income (loss) | 10,839 | 8,227 | 4,210 |
Adjustments [Member] | |||
Operating Segments (Details) - Schedule of reporting on operating segments [Line Items] | |||
Revenues from external customers | (77,659) | (84,349) | (66,153) |
Inter-segment revenues | (8,483) | (7,725) | (5,119) |
Revenues | (86,142) | (92,074) | (71,272) |
Unallocated corporate expenses | (2,113) | ||
Depreciation and amortization | (2,103) | (2,104) | (3,712) |
Operating income (loss) | $ (7,473) | $ (7,443) | $ (4,354) |
Subsequent Events (Details)
Subsequent Events (Details) - Events After Reporting Period [Member] ₪ / shares in Units, $ / shares in Units, $ in Thousands | Apr. 13, 2021 | Apr. 12, 2021 | Feb. 28, 2021USD ($) | Feb. 28, 2021ILS (₪)₪ / shares | Feb. 28, 2021$ / shares |
Subsequent Events (Details) [Line Items] | |||||
Description of acquisition | Formula concluded the acquisition of all of the share capital of Zap Group Ltd. (“Zap”) for cash consideration of approximately NIS 244 million (approximately $73.9 million) with a contingent amount of up to NIS 60 million in cash (approximately $18.2 million). With approximately 300 employees, Zap Group is Israel’s largest group of consumer websites which manages more than 20 leading consumer websites from diverse content worlds with a total of more than 17 million visits per month, including Zap Price Comparison website, Zap Yellow Pages (the largest business index in Israel) and Zap Rest (Israel’s restaurants index). | ||||
Description of public offering | Formula issued additional Formula Systems Series C Secured Debentures in an aggregate principle amount of NIS 160,000 (approximately $48,617) through a private placement to qualified investors in Israel. The gross proceeds received by Formula for the issuance of Formula Systems Series C Secured Debentures in April 2021 were NIS 165,920 (approximately $50,416), out of which NIS 1,678 was attributed to interest payable (approximately $510). Debt premium of NIS 4,370 (approximately $1,024) net of issuance costs of NIS 872 (approximately $265) were allocated to the Formula Systems Series C Secured Debentures and are amortized as financial income over the remaining term of Formula Systems Series A Secured Debentures due in 2026. | ||||
Cash dividend declared | $ 10,094 | ₪ 33,036 | |||
Dividend per share | (per share) | ₪ 2.16 | $ 0.66 |