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Note 14 - Investment in Equity-accounted Investees

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

14. INVESTMENT IN EQUITY-ACCOUNTED INVESTEES

Following are the entity wise details of equity-accounted investees:

		*% of ownership interest*								*Carrying amount*
Name of entity		*September 30, 2021*				*December 31, 2020*				*September 30, 2021*				*December 31, 2020*
a) CSS Corp LP			61.35	%			0	%			25,006				-
b) Immaterial associates											-				111
Carrying amount of investment in equity-accounted investees											25,006				111

		*Three months ended September 30, 2021*				*Three months ended September 30, 2020*				*Nine months ended September 30, 2021*				*Nine months ended September 30, 2020*
Aggregate amounts of the group’s share of loss of equity-accounted investees			(46	)			(5	)			(1	)			(25	)

a) CSS Corp LP

On February 25, 2021, the Company announced a $25 million strategic minority investment in CSS Corp. (“CSS”), a new-age IT services and technology support solutions company that harnesses the power of AI, automation, analytics, cloud, and digital to address customer needs. Through this investment, Startek acquired an indirect beneficial interest in CSS of approximately 26%, with Capital Square Partners (“CSP” or “CSP Fund”), a Singapore-based Private Equity Fund Manager, and the Company’s majority shareholder, acquiring the majority controlling stake.

The Company and CSP Alpha Holdings Pte. Ltd., a subsidiary of the Company, participated in this transaction by (i) contributing $25 million to acquire approximately 62.5%* in CSS Corp LP, and (ii) paying $5 million to CSP Management Limited to acquire certain call options. These call options to acquire a controlling stake in CSS are only exercisable by the Company during the period from August 19, 2022, to April 19, 2023, without any obligation and are currently considered to be not substantive.

*Subsequently reduced to 61.35%

The Company has assessed CSS Corp LP to be a variable interest entity (‘VIE’) and per ASC 810-10-25-44 concluded that it is not the primary beneficiary. Amongst other factors, the Company’s basis of this conclusion is that it lacks the power to direct or control any significant activities of the VIE and that the design and structure of the VIE were not specifically for the benefit of the Company. Further, CSS Corp LP’s objectives as an investment company is an extension of the investment activities of CSP Fund. The Company has accordingly, accounted for this transaction under the equity-accounted investee method of accounting in accordance with ASC 323-30-S99-1. The Company's share of profit/loss of equity-accounted investee is accounted under the “equity method” as per which the share of profit/(loss) of equity-accounted investee has been added to the cost.

Summarised financial position		*September 30, 2021*				*December 31, 2020*
Current assets			55				-
Non-current assets			40,772				-
Current and non-current liabilities			(68	)			-
Net assets			40,759				-

Reconciliation to carrying amounts		*September 30, 2021*				*December 31, 2020*
Opening net assets			-				-
Acquired during the year			40,750				-
Share of profit of equity-accounted investees			9				-
Other comprehensive income			-				-
			40,759				-

Company share in %			61.35	%			0	%
Company share			25,006				-
Carrying amount of investment in equity-accounted investee			25,006				-

Summarized statement of comprehensive income		*Three months ended September 30, 2021*				*Three months ended September 30, 2020*				*Nine months ended September 30, 2021*				*Nine months ended September 30, 2020*
Revenue			-				-				-				-
Other income			(67	)			-				72				-
Expenses			(9	)			-				(63	)			-
Profit for the period			(76	)			-				9				-
Other comprehensive income			-				-				-				-
Total comprehensive income for the period			(76	)			-				9				-
Aggregate amounts of the Company share of profit/ (loss) of equity-accounted investee			(46	)			-				6				-

b) Individually immaterial associates

The Company has individually immaterial investments in equity-accounted investee in Australia. It has 33.33% interest in Queensland Partnership Group Pty. Ltd and 16.67% interest in Services Queensland Partnership in Australia. The Company's share of profit/loss of equity-accounted investee, is accounted under the “equity method” as per which the share of profit of equity-accounted investee has been added to the cost.

		September 30, 2021				December 31, 2020
Carrying amount of individually immaterial investment in equity-accounted investee			-				111

		*Three months ended September 30, 2021*				*Three months ended September 30, 2020*				*Nine months ended September 30, 2021*				*Nine months ended September 30, 2020*
Aggregate amounts of share of:
Loss of equity-accounted investee			-				(5	)			(7	)			(25	)
Other comprehensive income			-				-				-				-
			-				(5	)			(7	)			(25	)