Annual Report 2015
6. Net gains from venture capital and private equity investments
thousand euros 1 Jan-31 Dec 2015 1 Jan-31 Dec 2014
Venture capital and private equity funds
Venture capital 21,011 -5,219
Later stage 38,863 3,687
Funds of funds 11,721 1,451
Direct venture capital and private equity investments
Venture capital 10,293 -10,252
Later stage 26,910 -29,332
Total 108,797 -39,666
Net gains from venture capital and private equity investments consist of changes in fair value:
Realised 53,478 2,563
Unrealised 55,319 -42,229
Total 108,797 -39,666
Net gains from venture capital and private equity investments comprise realised and unrealised changes in fair value, including interest income and dividend income from direct investments.
7. Employee benefit costs
thousand euros 1 Jan-31 Dec 2015 1 Jan-31 Dec 2014
Salaries and fees 3,633 3,217
Pension expenses 568 555
Other personnel expenses 217 155
Total 4,418 3,927
1 Jan-31 Dec 2015 1 Jan-31 Dec 2014
Average number of employees during the financial year 31 31
thousand euros 1 Jan-31 Dec 2015 1 Jan-31 Dec 2014
Salaries and fees of key management
Board of Directors 129 121
CEO 219 242
Management Group 994 1,136
Salaries and fees of Management Group include those of the CEO and his deputy
The remunerations paid to the members of the Board of Directors of Finnish Industry Investment Ltd are decided by the Annual General Meeting (AGM). The company's AGM held on 17 April 2015 decided on the following monthly amounts: Chairman of the Board: 1 500 euros, Deputy Chairman of the Board: 850 euros, and other members of the Board: 700 euros; 'and in addition to the monthly remuneration, all members 500 euros per meeting for meetings of the Board of Directors and for meetings of committees set by the Board of Directors.
The Board of Directors decides on the remuneration principles, total pay and bonus scheme for the CEO and other members of the parent company's Management Group. The Management Group comprises the CEO and on the average five other member during the financial year. All the company's personnel were inclued in the bonus scheme during 2015.
The pension plan for the CEO complies with the Finnish Employee Pension Act. The CEO has a six-month period of notice, whereafter he is, under certain conditions, entitled to a reimbursement equivalent to 6 months' salary.
8. Other operating expenses
Other operating expenses include auditors' fees by type of services provided:
thousand euros 1 Jan-31 Dec 2015 1 Jan-31 Dec 2014
Audit fees 37 25
Tax advice 5 0
Other fees 56 14
Total 98 39
9. Income taxes
thousand euros 1 Jan-31 Dec 2015 1 Jan-31 Dec 2014
Current income tax for the financial year -2,779
Adjustments relating to previous years
Deferred tax (note 12):
Temporary differences originated and reversed -19,156 5,712
Income tax presented in the income statement -21,936 5,712
Reconciliation between income tax expense and tax calculated at the domestic tax rate of 20 %.
thousand euros 1 Jan-31 Dec 2015 1 Jan-31 Dec 2014
Profit before income tax 108,358 -31,386
Tax calculated at domestic tax rate -21,672 6,277
Income not subject to tax -77 -104
Expenses not deductible for tax purposes 12 2
Difference between net income from venture capital and private equity funds and taxable income -199 -463
Income tax presented in the income statement -21,936 5,712
10. Tangible and intangible assets
The carrying amout of tangible and intangible assets at 31 December 2105 was 223 thousand euros (331 thousand euros at 31 December 2014). The only significant change in the carrying amounts results from depreciation and amortisation charged according to plan.
11. Current liabilities
thousand euros 31 Dec 2015 31 Dec 2014 1 Jan 2014
Accounts payable 281 153 179
Accruals relating to employee benefits 1,483 1,102 1,022
Tax liabilities 2,779
Other 119 139 240
Total 4,663 1,394 1,440
12. Deferred tax
thousand euros Changes in fair values of venture capital and private equity funds Changes in fair values of direct investments Changes in fair values of financial securities Tax losses Other items Total
Deferred tax assets
1 January 2014 1,904 8,059 76 5,417 1,204 16,659
Recognised in income statement 2,520 6,898 17 -732 1 8,703
31 December 2014 4,423 14,957 93 4,685 1,204 25,362
Recognised in income statement -1,290 -6,292 424 -4,685 -1,197 -13,039
31 December 2015 3,134 8,666 517 0 7 12,324
Other items consist of deductible temporary differences mainly originating from exits of direct investments that have taken place prior to the reporting period.
thousand euros Changes in fair values of venture capital and private equity funds Changes in fair values of direct investments Changes in fair values of financial securities Total
Deferred tax liabilities
1 January 2014 8,783 2,595 2,281 13,659
Recognised in income statement 1,894 367 730 2,991
31 December 2014 10,677 2,962 3,012 16,651
Recognised in income statement 2,832 3,726 -439 6,118
31 December 2015 13,508 6,688 2,573 22,769
13. Commitments
Minimun lease payments based on non-cancellable leases are as follows:
thousand euros 31 Dec 2015 31 Dec 2014 1 Jan 2014
Not later than one year 486 504 501
In 1-5 years 2,307 975 1,344
Later than 5 years 629
Total 3,422 1,479 1,845
Remaining investment commitments
thousand euros 31 Dec 2015 31 Dec 2014 1 Jan 2014
Venture capital and private equity funds 263,600 255,480 273,266
Portfolio companies 1,395 500 400
Total 264,994 255,980 273,666
14. Related parties
Related parties of the group comprise the parent company and its subsidiaries and associates.
Related parties also comprise the members of the Board of Directors, CEO and other members of the Management Group.
Salaries and fees of management are disclosed in note 7. Employee benefit costs.
Transactions with related parties:
Finnish Industry Investment Ltd has charged a management fee from Start Fund I Ky, amounting to 117 thousand euros in 2015 (179 thousand euros in 2014).
Finnish Industry investment Ltd has charged a consulting fee from Tesi Fund Management Oy, amounting to 315 thousand euros in 2015 (303 thousand euros in 2014).
Furthermore, Finnish Industry Investment Ltd has investment commitments towards Start Fund I Ky, amounting to 1 639 thousand euros at 31 December 2015 (2 365 thousand euros in 2014)
15. Subsidiaries
The following table presents the parent company and companies in which the group has control at 31 December 2015:
Parent Country of registration Nature of business Holding by the parent (%) Holding by the group (%) Treatment in consolidated financial statements
Finnish Industry Investment Suomi Venture capital and private equity investment
Subsidiaries
Start Fund Management Oy Finland Management company 100% 100% Consolidated
Tesi Fund Management Oy Finland Management company 100% 100% Consolidated
Tesi Industrial Management Oy Finland Venture capital and private equity investment 100% 100% At fair value through profit or loss
Start Fund I Ky Finland Venture capital and private equity investment 100% 100% At fair value through profit or loss
Aker Arctic Technology Oy Finland 1) 66.4 % 66.4 % At fair value through profit or loss
Akac Inc. Canada 1) 66.4 % At fair value through profit or loss
1) Company specialised in the design of and technical consultation for icebreakers and other ships operating in the arctic areas.
16. Subsequent events
The poor performance of the real economy, possibly over a prolonged period, might weaken the growth prospects and growth in value of investments in companies and funds, while also hampering exit opportunities. This could result in lower investment valuations.
Investments will focus on companies seeking growth and internationalisation. Future development of the venture capital and private equity market will be through channelling international capital and expertise into Finland alongside the catalysing risk financing that Finnish Industry Investment offers.

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