2016-04-14 10:45:01 CEST
2016-04-14 10:45:01 CEST
REGULATED INFORMATION
Norvestia - Company Announcement
NORVESTIA’S VOLUNTARY CHANGE IN ACCOUNTING PRINCIPLE
Helsinki, 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
© 2024 Nasdaq, Inc. All Rights Reserved |