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2016-04-14 10:45:01 CEST 2016-04-14 10:45:01 CEST REGULATED INFORMATION Norvestia - Company AnnouncementNORVESTIA’S VOLUNTARY CHANGE IN ACCOUNTING PRINCIPLEHelsinki, Finland, 2016-04-14 10:45 CEST (GLOBE NEWSWIRE) -- Norvestia Oyj Stock Exchange Release 14 April 2016 at 11:45 NORVESTIA’S VOLUNTARY CHANGE IN ACCOUNTING PRINCIPLE 1. Norvestia’s voluntary change in accounting principle since 1 January 2016 Valuing investments in associates at fair value through profit or loss Norvestia’s Board has decided to apply the venture capital organization exemption of the IAS 28 standard and to value associates and joint ventures at fair value through profit or loss in Norvestia’s consolidated IFRS financial statements according to the IAS 39 standard from 1 January 2016. As a result, all Norvestia’s investments will be valued at fair value through profit or loss. Norvestia considers the valuation of investments at fair value to give more meaningful information about the real value of investments and to better describe the company’s business, the company’s way of reviewing its investments and making decisions relating to them. Similarly, investments in unlisted private equity funds previously booked as available-for-sale financial assets will be reclassified as financial assets at fair value through profit or loss. Thus, in future any change in value will be recognized directly in profit or loss, and not in the statement of comprehensive income. Norvestia believes that classifying investments as assets at fair value through profit or loss better describes their nature and the accumulation of returns taking into account the company’s business. The change in question is a voluntary change in accounting principle according to the IAS 28 standard which requires that comparative figures be presented retrospectively according to the new accounting principles, including the balance sheet at the beginning of the first comparative period. The presentation of the balance sheet and income statement has been clarified as described below and the information on comparative periods has been presented according to the new balance sheet and income statement formulas. The balance sheets and income statements created in accordance with the new accounting principles for 2015 and for interim financial periods which ended 31 March 2015, 30 June 2015 and 30 September 2015, as well as the opening balance 1 January 2015 of the comparative period are presented below. Clarification of presentation of balance sheet and income statement Again, the presentation of Norvestia’s balance sheet and income statement has been clarified to better describe the company’s business. In the balance sheet Norvestia’s investments have been divided into the investment portfolio (non-current assets) and into financial assets held for trading (current assets). Investments are further divided in the respective portfolios according to their nature and risks into six different categories: Growth Equity, investments in private equity funds, loan receivables from Growth Equity investments, investments in listed shares and funds as well as interest-bearing investments. In the income statement the company’s returns will be presented as gains from investment activities with realized and unrealized returns separately in their own lines. Because all investments are now valued at fair value through profit or loss, the unrealized fair value movements of investments will no longer be recognized in the comprehensive income. 2. Significant discretion used by management in preparing consolidated financial statements a. Determining fair values The company’s management must use its discretion in determining the fair values of unlisted companies it has invested in. The discretion is related to both selecting the most suitable valuation method and determining the assumptions used in the selected methods. Valuation methods are selected investment by investment. b. Venture capital organization status Norvestia’s management has determined, in connection with Norvestia’s new strategy, that its subsidiary Norvestia Industries Oy is a venture capital organization defined in the IAS 28 standard, in which case valuing investments in associates and joint ventures at fair value is possible in the consolidated financial statements. Norvestia Industries Oy mainly focuses on private equity investment activities by investing in unlisted growth companies with the aim of contributing to the increase in their value by actively participating in company development and making a return mainly though the value increase of its portfolio companies in the medium and long term. Norvestia to cease publishing Net Asset Value monthly Norvestia has until now published its Net Asset Value monthly, but due to the change in accounting principle the company will no longer publish Net Asset Value reports. After the change the Group’s shareholders’ equity presented on quarterly Interim Reports will correspond with the company’s Net Asset Value which better describes the company’s business and the real value of investments. THE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE ON OPENING BALANCE SHEET old adjustme adjuste nt d 1 000 € 1/1/201 1/1/201 5 5 Assets NON-CURRENT ASSETS Intangible assets 5 5 Tangible assets 15 15 Interests in associates 7,276 -7,276 0 Available-for-sale financial assets 4,560 -4,560 0 Investment portfolio Growth Equity investments 0 11,884 11,884 Investments in private equity funds 0 2,108 2,108 Loan receivables from Growth Equity 1,875 1,875 investments 13,731 2,156 15,887 CURRENT ASSETS Financial assets held for trading Investments in listed shares 65,415 65,415 Other financial assets at fair value through 52,048 -52,048 0 profit or loss Investments in funds 0 29,695 29,695 Investments in interest-bearing instruments 0 22,353 22,353 Receivables 2,997 2,997 Cash and cash equivalents 14,089 14,089 134,549 0 134,549 148,280 2,156 150,436 Shareholders' equity and liabilities SHAREHOLDERS' EQUITY Share capital 53,608 53,608 Share premium 6,896 6,896 Fair value reserve 888 -888 0 Retained earnings 80,079 1,825 81,904 Result for the period 5,399 787 6,186 146,870 1,724 148,594 NET DEFERRED TAX LIABILITIES 1,041 432 1,473 CURRENT LIABILITIES 369 369 148,280 2,156 150,436 All investments of the Group will be classified as financial assets at fair value through profit or loss from 1 January 2016. The adjustments above result from the change in accounting principle and from the clarification of presentation of the balance sheet described above. Deferred tax liability will be allocated to the change in value of Growth Equity investments. ADJUSTED QUARTERS FOR 2015 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, ADJUSTED EUR 1,000 1/1-31/3/2015 1/4-30/6/2015 1/1-30/6/2015 Realized gains from investments 506 1,538 2,044 Fair value movements of 13,261 -4,305 8,956 investments, unrealized Dividends 1,850 2,898 4,748 Interest income 232 196 428 Total investment income 15,849 327 16,176 Personnel expenses -635 -229 -864 Depreciation and impairment -2 -2 -4 charges Other operating expenses -193 -235 -428 OPERATING PROFIT/LOSS 15,019 -139 14,880 Financial income and expenses 283 -103 180 RESULT BEFORE TAXES 15,302 -242 15,060 Income taxes* -2,605 642 -1,963 RESULT FOR THE PERIOD 12,697 400 13,097 * Based on the result for the period Earnings per share, EUR 0.83 0.03 0.86 Change to previously reported 0.02 0.13 0.15 earnings per share, EUR EUR 1,000 1/7-30/9/2015 1/1-30/9/2015 1/1-31/12/2015 Realized gains from investments 2,695 4,739 1,847 Fair value movements of -6,288 2,668 22,659 investments, unrealized Dividends 63 4,811 4,907 Interest income 199 627 843 Total investment income -3,331 12,845 30,256 Personnel expenses -236 -1,100 -1,689 Depreciation and impairment -2 -6 -9 charges Other operating expenses -216 -644 -1,041 OPERATING PROFIT/LOSS -3,785 11,095 27,517 Financial income and expenses -70 110 157 RESULT BEFORE TAXES -3,855 11,205 27,674 Income taxes* 812 -1,151 -2,638 RESULT FOR THE PERIOD -3,043 10,054 25,036 * Based on the result for the period Earnings per share, EUR -0.20 0.66 1.63 Change to previously reported 0.09 0.24 0.84 earnings per share, EUR CONSOLIDATED STATEMENT OF FINANCIAL POSITION, ADJUSTED EUR 1,000 31/03/2015 30/06/2015 30/09/201 31/12/2015 5 Assets NON-CURRENT ASSETS Intangible assets 3 3 2 2 Tangible assets 14 19 17 17 Investment portfolio Growth Equity investments 12,497 13,978 15,652 28,379 Investments in private 2,230 3,406 3,985 4,217 equity funds Loan receivables from 1,875 1,875 1,660 1,660 Growth Equity investments 16,619 19,281 21,316 34,275 CURRENT ASSETS Financial assets held for trading Investments in listed 82,245 65,773 62,210 74,762 shares Investments in funds 33,515 33,407 31,215 32,876 Investments in 21,955 16,968 18,550 17,111 interest-bearing securities Receivables 3,977 1,129 1,052 657 Cash and cash equivalents 12,324 25,466 24,987 15,263 154,016 142,743 138,014 140,669 170,635 162,024 159,330 174,944 Shareholders' equity and liabilities SHAREHOLDERS' EQUITY Share capital 53,608 53,608 53,608 53,608 Share premium 6,896 6,896 6,896 6,896 Retained earnings 88,090 83,495 83,495 83,495 Result for the period 12,697 13,097 10,054 25,036 161,291 157,096 154,053 169,035 NET DEFERRED TAX LIABILITIES 4,179 3,531 2,713 4,067 CURRENT LIABILITIES 5,165 1,397 2,564 1,842 170,635 162,024 159,330 174,944 CONSOLIDATED STATEMENT OF CASH FLOWS, ADJUSTED EUR 1,000 1/1-31/3/2015 1/4-30/6/2015 1/1-30/6/2015 CASH FLOW FROM OPERATING ACTIVITIES Result before taxes 15,302 -242 15,060 Adjustments: Unrealized gains -10,990 2,510 -8,480 Other operations 2 38 40 which do not include cash transactions Interest income -244 -196 -440 Dividend income -1,850 -2,898 -4,748 2,220 -788 1,432 Changes in working capital Change in shares -9,995 16,363 6,368 and other investments Change in -980 2,848 1,868 receivables Change in current 4,795 -3,768 1,027 liabilities -6,180 15,443 9,263 Dividends received 1,850 2,898 4,748 Interest received 244 196 440 Received and paid taxes 101 -5 96 CASH FLOW FROM OPERATING -1,765 17,744 15,979 ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES Investments in intangible and - -7 -7 tangible assets CASH FLOW FROM INVESTING - -7 -7 ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES Dividends paid - -4,595 -4,595 CASH FLOW FROM FINANCING - -4,595 -4,595 ACTIVITIES CHANGE IN CASH AND CASH -1,765 13,142 11,377 EQUIVALENTS Cash and cash equivalents at the 14,089 12,324 14,089 beginning of the period Cash and cash equivalents at the 12,324 25,466 25,466 end of the period 1/7-30/9/2015 1/1-30/9/2015 1/1-31/12/2015 CASH FLOW FROM OPERATING ACTIVITIES Result before taxes -3,855 11,205 27,674 Adjustments: Unrealized gains 2,801 -5,679 -23,180 Other operations 2 42 45 which do not include cash transactions Interest income -200 -640 -855 Dividend income -63 -4,811 -4,907 -1,315 117 -1,223 Changes in working capital Change in shares -880 5,488 -2,746 and other investments Change in 77 1,945 2,214 receivables Change in current 1,168 2,195 1,472 liabilities 365 9,628 940 Dividends received 63 4,811 4,907 Interest received 200 640 855 Received and paid taxes -7 89 83 CASH FLOW FROM OPERATING -694 15,285 5,562 ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES Loan receivables from Growth 215 215 215 Equity investments Investments in intangible and - -7 -8 tangible assets CASH FLOW FROM INVESTING 215 208 207 ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES Dividends paid - -4,595 -4,595 CASH FLOW FROM FINANCING - -4,595 -4,595 ACTIVITIES CHANGE IN CASH AND CASH -479 10,898 1,174 EQUIVALENTS Cash and cash equivalents at the 25,466 14,089 14,089 beginning of the period Cash and cash equivalents at the 24,987 24,987 15,263 end of the period CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, ADJUSTED EUR Share Share Retained Result for the Total 1,000 capital premium earnings period Shareh 53,608 6,896 81,904 6,186 148,594 olders ' equit y 1 Janua ry 2015 Alloca 6,186 -6,186 0 tions Result 12,697 12,697 for the perio d Shareh 53,608 6,896 88,090 12,697 161,291 olders ' equit y 31 March 2015 Shareh 53,608 6,896 81,904 6,186 148,594 olders ' equit y 1 Janua ry 2015 Alloca 6,186 -6,186 0 tions Divide -4,595 -4,595 nd Result 13,097 13,097 for the perio d Shareh 53,608 6,896 83,495 13,097 157,096 olders ' equit y 30 June 2015 Shareh 53,608 6,896 81,904 6,186 148,594 olders ' equit y 1 Janua ry 2015 Alloca 6,186 -6,186 0 tions Divide -4,595 -4,595 nd Result 10,054 10,054 for the perio d Shareh 53,608 6,896 83,495 10,054 154,053 olders ' equit y 30 Septe mber 2015 Shareh 53,608 6,896 81,904 6,186 148,594 olders ' equit y 1 Janua ry 2015 Alloca 6,186 -6,186 0 tions Divide -4,595 -4,595 nd Result 25,036 25,036 for the perio d Shareh 53,608 6,896 83,495 25,036 169,035 olders ' equit y 31 Decem ber 2015 Norvestia will publish 20 April 2016 its Interim Report for 1 January–31 March 2016 prepared according to the new accounting principles. Norvestia Oyj Juha Kasanen Managing Director DISTRIBUTION Nasdaq Helsinki Main media www.norvestia.fi |
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