CASH AND CASH EQUIVALENTS AND SHORT TERM INVESTMENTS

Cash and Cash Equivalents

For the purpose of reporting cash and cash equivalents, the Company considers all liquid investments purchased with an original maturity of three months or less to be cash equivalents.

As of June 30, 2014, the total cash and cash equivalent and short term investments balance were $769.8 million. Of that amount, $700.6 million was held by Indian subsidiaries consisting of $95.4 million held in U.S. dollars and $605.2 million held in Indian rupees. The Company believes that the amount of cash and cash equivalents outside the U.S. will not have a material impact on liquidity.

At June 30, 2014 and December 31, 2013, approximately $33.5 million and $33.2 million, respectively, were held in JPMorgan Chase Bank NA through a sweep account. At June 30, 2014 approximately $6.6 million was held in Bank of America. At June 30, 2014, $42.5 million in term deposits with an original maturity of three months or less were held with the Punjab National Bank. At year end, December 31, 2013, $29.8 million in term deposits with an original maturity of three months or less were held with the Bank of India and Punjab National Bank. The remaining amounts of cash and cash equivalents were held in bank and fixed deposits with various banking and financial institutions.

Short-term investments

The Company’s short-term investments consist of short-term mutual funds, which have been classified as available-for-sale and are carried at estimated fair value. Fair value is determined based on quoted market prices. Unrealized gains and losses, net of taxes, on available-for-sale securities are reported as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity. Net realized gains or losses resulting from the sale of these investments, and losses resulting from decline in fair values of these investments that are other than temporary declines, are included in other income. The cost of securities sold is determined using the weighted-average method.

Short-term investments include term deposits with an original maturity exceeding three months and whose maturity date is within one year from the date of the balance sheet. Term deposits were $367.8 million and $340.3 million at June 30, 2014 and December 31, 2013, respectively.

Short-term investments also include Fixed Maturity Plans (FMPs) of mutual funds, which are classified as held to maturity securities and are reported at cost. During the quarter ended June 30, 2014, the Company’s Indian subsidiaries invested $ 16.8 million in Fixed Maturity Plans (FMPs) of mutual funds.

Non-current term deposits with banks

Non-current term deposits with banks include deposits with maturity exceeding one year from the date of the balance sheet. As at June 30, 2014 and December 31, 2013 non-current term deposits with banks were none and $0.16 million, respectively.

The following table summarizes short-term investments as at June 30, 2014 and December 31,2013:


	2014		2013
	June 30		December 31
	(In thousands)
Investments in mutual funds at fair value	$	214,299	$	149,828
Term deposits with banks		367,805		340,349
Fixed Maturity Plans (FMPs) of mutual funds, at cost		16,764		—

Total	$	598,868	$	490,177

Held to maturity securities

Investments in held-to-maturity securities (“HTM”) of the Company consist of investments in the units of FMPs of mutual funds in Indian subsidiaries.


Description	As of June 30, 2014		As of December 31, 2013
	(In thousands)
Aggregate fair value of the investment	$	16,784		—
Less: Gross unrecognized holding gain		20		—

Net carrying amount		16,764		—