Annual Report 2015
3. Transition to IFRSs
Finnish Industrial Investment (FII) publishes its first financial statements prepared in accordance with IFRSs for the financial year ended 31 December 2015 and presents comparative information for the financial year ended 31 December 2014. In these consolidated financial statements FII applies IFRS 1 First-time adoption of International Financial Reporting Standards, and the date of transition to IFRSs is 1 January 2014. Previous consolidated financial statements have been prepared in accordance with the Finnish accounting framework (”FAS”).
The most sinificant changes to accounting policies applied when preparing the consolidated financial statements are as follows:
•Venture capital and private equity investments and financial securities are designated as at fair value throuhg profit or loss in accordance with IAS 39 Financial instruments: recognition and measurement. The changes resulting from this are presented in the income statements under net gains from venture capital and private equity investments. Under FAS, these financial assets were measured at the lower of cost or fair value.
•In accordance with IFRS 10 Consolidated financial statements, FII measures the investees that it controls at fair value through profit or loss, except for operative subsidiaries that conduct investment-related operations or provide investment management services. The consolidation of Aker Arctic Technologies Oy by using the acquisition method under FAS has been cancelled, and the investment in this company is measured at fair value through profit or loss in the IFRS financial statemensts. Similar procedures apply to Start Fund I Ky. Note 16 Group companies specifies the treatment of subsidiaries in the consolidated financial statements under IFRSs.
•Deferred tax assets and liabilities are acounted for in accordance with IAS 12 Income taxes.
The following tables show the impact of the transition to IFRSs. The presentation of the consolilated balance sheet and income statement under IFRS differs from that under FAS. The information under FAS has been reclassified to reflect the presentation under IFRSs. The items in the column 'IFRS adjustments' mainly result from the changes in accounting policies specified above.
Consolidated balance sheet
thousand euros Note FAS 31 Dec 2013 IFRS adjustments IFRS- 1 Jan 2014 FAS 31 Dec 2014 IFRS-adjustments IFRS 31 Dec 2014
ASSETS
Non-current assets
Venture capital and private equity investments 1 368,508 51,354 419,863 346,045 68,118 414,163
Tangible and intangible assets 449 -32 417 9,323 -8,991 331
Deferred tax assets 2 3,294 13,365 16,659 3,294 22,068 25,362
Non-current assets, total 372,252 64,687 436,939 358,662 81,195 439,857
Current assets
Inventory 89 -89 0
Receivables 1,103 -386 717 4,340 -4,208 132
Financial securities 186,775 11,412 198,188 237,389 15,060 252,449
Cash and cash equivalents 1,397 -4 1,393 4,966 -2,896 2,071
Current assets, total 189,275 11,022 200,297 246,784 7,867 254,651
Assets, total 561,527 75,710 637,236 605,446 89,062 694,508
EQUITY AND LIABILITIES
Equity attributable to the shareholders of the parent company
Equity
Share capital 253,992 253,992 333,992 333,992
Share premium acccount 215,855 215,855 215,855 215,855
Retained earnings 89,875 62,413 152,289 46,714 79,902 126,615
Equity, total 559,723 62,413 622,137 596,561 79,902 676,463
Minority interests 3,499 -3,499 0
Liabilities
Non-current liabilities
Deferred tax liabilities 2 13,659 13,659 84 16,567 16,651
Non-current liabilities, total 13,659 13,659 84 16,567 16,651
Current liabilities
Accounts payable and other liabilities 1,804 -363 1,440 5,301 -3,907 1,394
Current liabilities, total 1,804 -363 1,440 5,301 -3,907 1,394
Liabilities, tota 1,804 13,296 15,100 5,385 12,660 18,045
Equity and liabilities, total 561,527 75,710 637,236 605,446 89,062 694,508
The impact of the IFRS transition on the equity
thousand euros 1 Jan 2014 31 Dec 2014
Equity under FAS 559,723 596,561
IFRS adjustments (net of deferred tax):
IAS 39 Financial instruments: recognition and measurement 58,344 79,135
IFRS 10 Consolidated financial statements 4,095 794
Other IFRS adjustments -25 -27
Equity under IFRS 622,137 676,463
Consolidated statement of comprehensive income
thousand euros Note FAS 1 Jan 2014-31 Dec 2014 IFRS adjustments IFRS 1 Jan 2014 - 31 Dec 2014
Net sales 10,350 -10,350 0
Net gains from investments 3 -45,548 5,882 -39,666
Net gains from investments, total -35,197 -4,468 -39,666
Net gains from financial securities 10,746 3,648 14,394
Income from fund management 337 179 516
Other operating income, total 11,083 3,827 14,910
Materials and services -4,185 4,185 0
Employee benefit costs -7,423 3,497 -3,927
Depreciation and amortisation -2,874 2,719 -155
Other operating expenses -4,290 1,707 -2,583
Operating profit ( loss) -42,887 11,466 -31,421
Finance income and expenses, total 41 -7 35
Profit / (loss) before income tax -42,846 11,460 -31,386
Income tax -142 5,854 5,712
Minority interests -174 174 0
Profit / (loss) for the financial year -43,162 17,488 -25,674
Total comprehensive income (loss) for the financial year -43,162 17,488 -25,674
1. The carrying amount of venture capital and private equity investments increased by 51,4 million euros compared to FAS balance sheet as a result of their measurement at fair value at the date of transition 1 January 2014. IFRS adjustments also include an amont of 4,1 million euros that results from cancelling the consolidation of venture capital and private equity investments.
2. Further details of deferred tax at the date of transition 1 January 2014 recognised in accordance with IFRS are presented in note 12 Deferred tax.
3.Net gains from venture capital and private equity investments, i.e realised and unrealised changes in fair value, were 5.9 million euros higher than under FAS. The income statement layout used under FAS differs significantly from that used under IFRS, because the items relating to net gains were presented under Other operating income and Finance income and expenses under FAS. The information in the FAS column has been reclassified to reflect the presentation under IFRS.
Consolidated cash flow statement
The most significant adujustments made to the cash flow statement under FAS related to the cancellation of the cash flows and
cash and cash equivalent balances of Aker Arctic Technologies Oy's operations for the purposes of IFRS cash flow statement.
Also the presentation of the cash flow statement has been amended. Under IFRS, operating cash flows include all the cash flows from venture capital and private equity investments and financial securities.

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