CEVA Holdings LLC – Quarter One 2017 Interim Financial Statements
11
Notes to the U audited Co de sed Co solidated I te i Fi a cial State e ts
1. General Information
CEVA Holdi gs LLC the Co pa
a d its su sidia ies olle ti el , the G oup o CEVA design, implement and operate complete end- to-end Freight Management and Contract Logistics solutions for multinational and small and medium sized companies on a local, regional
and global level. CEVA Holdings LLC was incorporated on 28 March 2013 in the Republic of the Marshall Islands. The address of its registered office is co The
Trust Company of the Marshall Islands, Inc., Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands. CEVA Holdings LLC is the immediate parent of CEVA Group Plc, a company incorporated on 9 August 2006 in England and Wales as a UK
pu li o pa ith li ited lia ilit . Pu sua t to the LLC Ag ee e t, Apollo Glo al Ma age e t LLC Apollo a d its affiliates hold a majority of the voting power of the Company and have the right to elect a majority of the respective boards of the Company and CEVA Group
Plc.
Ce tai ajo o po ate a tio s the Co pa s Boa d e ui e app o al of a ajo it of the Ma age s ot desig ated Apollo. These unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Board of Managers on
3 May 2017.
2. Basis of Preparation
The unaudited condensed consolidated interim financial information for the three months ended 31 March 2017 has been prepared on a goi g o e asis a d i a o da e ith IA“ , I te i fi a ial epo ti g . The u audited o de sed o solidated i te im financial
information should be read in conjunction with the annual financial statements of CEVA Holdings LLC for the year ended 31 December 2016, which have been prepared in accordance with International Financial Reporting Standards IFRS as adopted by the European Union and in
accordance with IFRIC interpretations. As from 2016, the Company policy for the
p ese tatio of sha e ased o pe satio “BC osts i the i o e state e t has changed; this is related to the issuance of shares and grant of equity awards to certain members of management under the Companys 2013 Long-
Term Incentive Plan. These costs are now presented in a similar manner to specific items – they are separated out in the income statement
as spe ifi ite s a d “BC . These a e o -cash expenses and Management believes that this presentational accounting policy change will help investors to better understand the underlying performance of the company. There was no impact on reported results for the three
months ended 31 March 2016 as a result of this change.
3. Accounting Policies
The accounting policies applied are consistent with those applied in the consolidated financial statements of CEVA Holdings LLC as at and for the year ended 31 December 2016, and as described in those consolidated financial statements which can be found at
www.cevalogistics.com , except as described above.
New and amended standards adopted by the Group
There were no new standards and amendments that the Group needed to adopt for the first time for the financial year beginning on 1 January 2017.
New standards and interpretations not yet adopted A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2017,
and have not been applied in preparing these unaudited condensed consolidated interim financial statements: IF‘“ , “ha e Based Pa e ts – Clarifies the standard in relation to the accounting for cash-settled share-based payment transactions that
include a performance condition, the classification of share-based payment transactions with net settlement features, and the accounting for modifications of share-based payment transactions from cash-settled to equity-settled. The new standard, subject to EU endorsement,
requires application for annual periods beginning on or after 1 January 2018. IF‘“ , Fi a ial I st u e ts – Addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS
9 was issued in November 2009 and October 2010, and further amended in July 2014. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories:
those measured as at fair value and those measured at amortized cost. The determination is made at initial recognition. The classification depe ds o the e tit s usi ess odel fo a agi g its fi a ial i st u e ts a d the o t a tual ash flo ha a te isti s of the
instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair
alue optio is take fo fi a ial lia ilities, the pa t of a fai alue ha ge due to a e tit s o edit isk is e o ded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. IFRS 9 relaxes the requirements for
hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item a d hedgi g i st u e t a d fo the hedged atio to e the sa e as the o e management actually use for risk management purposes.
Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. IFRS 9 also introduces a single
CEVA Holdings LLC – Quarter One 2017 Interim Financial Statements
12 impairment model and removes the need for a triggering event to be necessary for recognition of impairment losses. The new standard
e ui es appli atio fo a ual pe iods egi i g o o afte Ja ua . The G oup is et to assess IF‘“ s full i pa t;
IFRS 15, ‘e e ue f o Co t a ts ith Custo e s – The new standard will be effective for annual periods beginning on or after 1 January 2018 with retrospective application. This new standard on revenue recognition supersedes IAS 18 Revenue, IAS 11 Construction Contracts
and related interpretations. The Group is assessing the impact of the standard; IF‘“ , Leases – The new standard addresses the definition of a lease, recognition and measurement of leases and establishes principles
for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors. A key change arising from IFRS 16 is that most operating leases will be accounted for on balance sheet for lessees such as CEVA. The standard replaces IAS 17
Leases , a d elated i te p etatio s. The sta da d is effective for annual periods beginning on or after 1 January 2019 and earlier appli atio is pe itted su je t to EU e do se e t a d the e tit adopti g IF‘“ ‘e e ue f o o t a ts ith usto e s at the same
time. The Group is currently assessing the impact of IFRS 16; IA“ , “tate e t of Cash flo s – The amendments clarify IAS 7 to improve information provided to users of financial statements about an
entitys financing activities. They are effective for annual periods beginning on or after 1 January 2017, with earlier application being permitted, subject to EU endorsement;
IA“ , I o e Ta es – The amendments to IAS 12 clarify the treatment for the recognition of deferred tax assets for unrealized losses. They are effective for annual periods beginning on or after 1 January 2017, with earlier application being permitted, subject to EU
endorsement; IFRIC 22, Fo eig Cu e
T a sa tio s a d Ad a e Co side atio - This interpretation addresses foreign currency transactions: the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset
or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The new interpretation, subject to EU endorsement, requires application for annual periods beginning on or after 1 January 2018.
The Group is assessing the impact of the impact of IFRIC 22.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.
4. Critical Accounting Estimates and Judgments
