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ANNUAL REPORT 2014

E Notes to the Balance sheet

E1 Loans and receivables from credit institutions
              Finnvera Group Finnvera plc
(EUR 1,000) 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Payable on demand 634,614 250,271 549,942 215,646
Other 56,304 26,172 20,252 26,172
Total 690,918 276,443 570,194 241,818
 
E2 Loans and receivables from customers
              Finnvera Group Finnvera plc
(EUR 1,000) 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Loans 4,592,991 3,649,525 1,265,155 1,409,500
- Subordinated loans 0 39,404 26,557 37,026
- Other loans 4,678,704 3,711,272 1,324,311 1,473,626
- Impairment losses -85,712 -101,152 -85,712 -101,152
Loans to Group companies     927,570 130,516
Guarantee receivables 38,740 46,023 38,740 46,023
Receivables from export credit guarantee and special guarantee operations 11,238 15,305 11,238 15,305
- Fee and commission receivables 498 605 498 605
- Recovery receivables 10,740 14,700 10,740 14,700
Total 4,642,969 3,710,853 2,242,703 1,601,344
Impairment losses on loans        
Impairment losses at the beginning of the period 101,152 92,546 101,152 92,546
- Impairment losses on individually assessed loans 59,365 56,815 59,365 56,815
- Impairment losses on collectively assessed loans 41,787 35,731 41,787 35,731
Impairment losses recognised during the period -1,250 24,891 -1,249 24,891
- Impairment losses on individually assessed loans 6,355 20,399 6,355 20,399
- Impairment losses on collectively assessed loans -2,538 6,056 -2,538 6,056
- Reversal of impairment losses -7,734 -4,754 -7,734 -4,754
- Other changes 2,668 3,190 2,668 3,190
Credit losses materialised on loans where impairment losses have been recognised -14,190 -16,285 -14,190 -16,285
Impairment losses at the end of the period 85,712 101,152 85,712 101,152
- Impairment losses on individually assessed loans 46,464 59,365 46,464 59,365
- Impairment losses on collectively assessed loans 39,248 41,787 39,248 41,787
An impairment loss on loans and other receivables is recognised when objective evidence of their impairment exists. The objective evidence of a customer's ability to fulfil its obligations is based on the customers' risk classification as well as on the Company's experience and the management's estimate of effect of defaults on the recovery of loan receivables.
E3 Investments
        Finnvera Group Finnvera plc
(EUR 1,000) 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Debt securities, available-for-sale *)        
Certificates of deposits 0 0 0 0
Commercial papers 128,954 119,549 128,954 119,549
Local authority paper 392,218 181,754 392,218 181,754
Bonds 413,549 24,889 413,549 24,889
Other 0 0 0 0
Total 934,721 326,191 934,721 326,191
Investments in Group companies        
Acquisition cost at 31 Dec     172,818 167,818
- Acquisition cost at 1 Jan     167,818 164,784
- Investments     10,000 10,000
- Sales     0 -6,966
- Other deductions     -5,000 0
Accumulated impairment losses at 31 Dec     -13,003 -9,003
- Accumulated impairment losses at 1 Jan     -9,003 0
- Impairment losses during the period     -4,000 -9,003
Total     159,815 158,815
Associates **)        
Acquisition cost at 31 Dec 67,523 75,157 349 349
- Acquisition cost at 1 Jan 75,157 67,700 349 425
- Investments 9,878 9,488 0 0
- Sales -17,512 -2,031 0 -76
Equity adjustments at 31 Dec -3,953 3,037 0 0
Total 63,570 78,195 349 349
Other shares ***)        
At fair value through profit or loss 51,581 43,572 0 0
Available-for-sale 15,553 74,447 14,520 15,246
Total 67,134 118,019 14,520 15,246
Investment property 0 0 0 0
Investments total 1,065,425 522,405 1,109,404 500,602
*) Debt securities not publicly quoted.
**) Investments in associates includes the following associated companies that are accounted for using the equity method:
Name Year Carrying amount Ownership Assets Liabilities Carrying net sales Profit/
loss
    EUR 1,000   EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000
Kiinteistö Oy Kajaanin 2014 349 36.43 % 1,593 9 110 -5
Kauppakatu 1 2013 349 36.43 % 1,595 7 107 0
 
***) Other shares that are publicly quoted: Finnvera Group Finnvera plc
(EUR 1,000) 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
- Other shares 1,485 59,727 451 526
 
E4 Intangible assets
          Finnvera Group Finnvera plc
(EUR 1,000)             31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Acquisition cost at 31 Dec 38,650 37,142 38,487 36,962
- Acquisition cost at 1 Jan 37,142 35,869 36,962 35,712
- Additions 1,552 1,293 1,543 1,271
- Disposals -44 -20 -19 -20
Accumulated amortization and impairment losses at 31 Dec -35,222 -34,569 -35,108 -34,472
- Accumulated amortization and impairment losses at 1 Jan -34,569 -33,889 -34,472 -33,809
- Amortization for the period -653 -680 -636 -663
Carrying amount at 1 Jan 2,572 1,980 2,490 1,903
Carrying amount at 31 Dec 3,427 2,572 3,379 2,490
 
E5 Property, plant and equipment
(EUR 1,000)       Finnvera Group Finnvera plc
  Properties Other tangible Total Properties Other tangible Total
31 Dec 2014            
Acquisition cost at 31 Dec 7,054 10,894 17,948 7,054 10,894 17,948
- Acquisition cost at 1 Jan 7,704 10,803 18,507 7,704 10,803 18,507
- Additions 0 91 91 0 91 91
- Disposals -650 -1 -651 -650 -1 -651
Accumulated amortization and impairment losses at 31 Dec -6,883 -9,723 -16,606 -6,883 -9,723 -16,606
- Accumulated amortization and impairment losses at 1 Jan -6,871 -9,367 -16,237 -6,871 -9,367 -16,237
- Amortization for the period -12 -356 -369 -12 -356 -369
Carrying amount at 1 Jan 834 1,437 2,270 834 1,437 2,270
Carrying amount at 31 Dec 171 1,171 1,342 171 1,171 1,342
31 Dec 2013            
Acquisition cost at 31 Dec 7,704 10,803 18,507 7,704 10,803 18,507
- Acquisition cost at 1 Jan 7,997 10,298 18,295 7,997 10,298 18,295
- Additions 0 529 529 0 529 529
- Disposals -293 -24 -317 -293 -24 -317
Accumulated amortization and impairment losses at 31 Dec -6,871 -9,367 -16,237 -6,871 -9,367 -16,237
- Accumulated amortization and impairment losses at 1 Jan -6,851 -8,943 -15,794 -6,851 -8,943 -15,794
- Amortization for the period -20 -423 -443 -20 -423 -443
Carrying amount at 1 Jan 1,146 1,355 2,501 1,146 1,355 2,501
Carrying amount at 31 Dec 834 1,437 2,270 834 1,437 2,270
 
E6 Other assets
          Finnvera Group Finnvera plc
(EUR 1,000)             31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Credit loss receivables from the state and the ERDF       19,713 6,516 19,713 6,516
Other       4,345 5,030 7,783 5,894
Total 24,059 11,546 27,496 12,410
The state and the European Regional Development Fund (ERDF) has granted Finnvera commitments to partially compensate Finnvera for the credit and guarantee losses. The commitments enable Finnvera to take higher risks in domestic business than financiers operating on commercial grounds.
E7 Prepayments and accrued income
              Finnvera Group Finnvera plc
(EUR 1,000)             31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Interest and interest subsidy receivables       31,158 15,736 14,713 764
Fee and commission receivables       6,799 6,847 6,583 6,672
Reinsurance premiums paid in advance       27,616 24,903 27,616 24,903
Security given for derivatives       74,220 18,700 74,220 18,700
Prepayments and other accrued income       9,082 2,929 2,775 2,913
Total 148,875 69,115 125,907 53,952
 
E8 Tax assets and liabilities
              Finnvera Group
(EUR 1,000)                 31 Dec 2014 31 Dec 2013
Income tax assets           190 98
Deferred tax assets at 31 Dec           0 0
- Deferred tax assets at 1 Jan           0 0
- Increase/decrease to income statement during the period           0 0
- Increase/decrease to other items in comprehensive income during the period           0 0
Tax assets total     190 98
Current income tax liabilities           253 688
Deferred tax liabilities at 31 Dec           2,609 3,645
- Deferred tax liabilities at 1 Jan           3,645 4,230
- Increase/decrease to income statement during the period           -924 -436
- Increase/decrease to other items in comprehensive income during the period           -113 -149
Tax liabilities total     2,862 4,333
Deferred tax liability arisen when the venture capital investments of subsidiaries engaged in venture capital investment are carried at fair value and investments in funds are carried at fair value. Finnvera plc is exempt from income tax.
E9 Liabilities to credit and other institutions
(EUR 1,000) Finnvera Group Finnvera plc
  Nominal
value
Change in
fair value
Carrying
amount
Nominal
value
Change in
fair value
Carrying
amount
31 Dec 2014            
Credit institutions 0 0 0 0 0 0
Other institutions            
- At fair value through profit or loss 34,428 1,341 35,769 0 0 0
- At amortized cost 2,419,517 0 2,419,517 0 0 0
Total 2,453,945 1,341 2,455,286 0 0 0
31 Dec 2013            
Credit institutions 0 0 0 0 0 0
Other institutions            
- At fair value through profit or loss 34,549 1,334 35,883 0 0 0
- At amortized cost 2,107,553 0 2,107,553 0 0 0
Total 2,142,102 1,334 2,143,436 0 0 0
 
E10 Debt securities in issue
(EUR 1 000) Finnvera Group Finnvera plc
  Nominal
value
Change in
fair value
Carrying
amount
Nominal
value
Change in
fair value
Carrying
amount
31 Dec 2014            
Bonds            
- At fair value through profit or loss 2,545,897 18,243 2,564,141 2,545,897 18,243 2,564,141
- At amortized cost 0 0 0 0 0 0
Total 2,545,897 18,243 2,564,141 2,545,897 18,243 2,564,141
Average interest rate     0.18%     0.18%
31 Dec 2013            
Bonds            
- At fair value through profit or loss 1,055,418 4,452 1,059,870 1,055,418 4,452 1,059,870
- At amortized cost 0 0 0 0 0 0
Total 1,055,418 4,452 1,059,870 1,055,418 4,452 1,059,870
Average interest rate     0.30%     0.30%
Liabilities have been measured at fair value when they have been hedged with derivatives (fair value option). An amount equaling the nominal value of a liability is repaid at the maturity date. The change in fair value does not include the change in credit risk because the liabilities have been guaranteed by the state of Finland, whose credit risk has not changed.
E11 Derivatives
(EUR 1,000) Finnvera Group Finnvera plc
  Fair value Nominal value Fair value Nominal value
  Positive Negative Total Positive Negative Total
31 Dec 2014            
Contracts entered in hedging purposes            
- Interest rate swaps and foreign exchange derivatives 51,434 106,232 2,545,897 51,434 103,794 2,545,897
Total 51,434 106,232 2,545,897 51,434 103,794 2,545,897
31 Dec 2013            
Contracts entered in hedging purposes            
- Interest rate swaps and foreign exchange derivatives 8,159 31,272 1,089,967 8,159 29,915 1,055,418
Total 8,159 31,272 1,089,967 8,159 29,915 1,055,418
Derivatives hedge liabilities. The derivative contracts and the liabilities hedged with them have been measured at fair value and the changes in their fair values have been recognized in the income statement (fair value option).
E12 Other liabilities
              Finnvera Group Finnvera plc
(EUR 1,000) 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Grants under repayment obligation 24,466 27,679 24,466 27,679
Grant from the Ministry of Employment and the Economy to Seed Fund Vera Ltd for venture capital investments 5,000 0 5,000 0
Prepayments received for ERDF financing 18,758 18,601 18,758 18,601
Other 2,545 8,457 2,481 3,509
Total 50,769 54,738 50,705 49,790
 
E13 Provisions
              Finnvera Group Finnvera plc
(EUR 1,000) 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Provision for export credit guarantee losses at 1 Jan 13,536 2,870 13,536 2,870
Provisions made during the period 1,209 12,975 1,209 12,975
Provisions used during the period 0 -2,144 0 -2,144
Other change -13,536 -165 -13,536 -165
Provision for export credit guarantee losses at 31 Dec 1,209 13,536 1,209 13,536
Impairment losses on guarantees at 1 Jan 51,020 41,688 51,020 41,688
- of which individually assessed guarantees 32,564 26,010 32,564 26,010
- of which collectively assessed guarantees 18,456 15,678 18,456 15,678
Guarantee losses realized during the period on which an impairment loss has been earlier recognized -9,319 -6,226 -9,319 -6,226
Individually assessed impairment losses recognized during the period 11,235 15,089 11,235 15,089
Collectively assessed impairment losses recognized during the period 1,764 2,778 1,764 2,778
Reversal of impairment losses -1,441 -2,490 -1,441 -2,490
Other change 108 181 108 181
Impairment losses on guarantees at 31 Dec 53,367 51,020 53,367 51,020
- of which individually assessed guarantees 33,147 32,564 33,147 32,564
- of which collectively assessed guarantees 20,220 18,456 20,220 18,456
Other provisions 700 1,045 700 1,045
Total 55,276 65,601 55,276 65,601
A provision for export credit guarantee losses is recognised when the Group has a constructive and legal obligation to pay a guarantee indemnity, the realisation of the obligation is probable and it can be measured reliably.

A provision for domestic guarantee losses is recognised when objective evidence exists of impairment of guarantees' value. The objective evidence of a customer's ability to fulfil its obligations is based on the customers' risk classification as well as on the Company's experience and the management's estimate of effect of defaults on the recovery of loan receivables.
E14 Operating leases
            Finnvera Group Finnvera plc
(EUR 1,000) 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Finnvera as the lessee, premises        
Non-cancellable minimum lease payments payable for premises eased under
operating lease contracts
       
Within one year 376 532 0 532
Between one and five years 6,162 8,178 0 8,178
Later than five years 5,893 0 0 0
Total 12,431 8,710 0 8,710
Finnvera as the lessor, premises        
Non-cancellable minimum lease payments payable for premises eased under
operating lease contracts
       
Within one year 99 122 0 122
Between one and five years 0 0 0 0
Later than five years 0 0 0 0
Total 99 122 0 122
 
E15 Accruals and deferred income
            Finnvera Group Finnvera plc
(EUR 1,000) 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Interest 16,087 14,065 1,411 512
Advance interest payments received 13,234 807 13,234 807
Guarantee premiums paid in advance *) 284,718 286,443 284,718 286,443
Other accruals and deferred income 37,883 6,302 35,969 6,063
Total 351,923 307,616 335,333 293,824
*) Premiums on export guarantees are usually collected in advance for the entire guarantee period.
E16 Subordinated liabilities, Finnvera plc
          Finnvera Group
Loan Purpose of use Interest rate% Loan period Balance (EUR 1,000)
(EUR 1,000)       31 Dec 2014 31 Dec 2013
Subordinated loan 2009-1 Increase in the share capital of Seed Fund Vera Ltd *) 0 15 years 13,639 20,529
Subordinated loan 2009-2 Increase in the share capital of Veraventure Ltd *) 0 15 years 7,500 7,500
Subordinated loan 2009-3 Raising Finnvera plc’s capital adequacy and improving the financing options **) 0 15 years 50,000 50,000
Subordinated loan 2013 Increase in the share capital of Seed Fund Vera Ltd *) 0 15 years 10,000 10,000
Subordinated loan 2014 Increase in the share capital of Seed Fund Vera Ltd *) 0 15 years 5,000  
* The loans are to be used as investment raising the share capital of Seed Fund Vera Ltd and Veraventure Ltd. The loans will be paid back in one instalment at the end of the loan period, provided that the restricted equity and other non-distributable items, as shown in the balance sheet, remain fully covered after the repayment. In the event that the venture capital company’s financing operations show a loss, the corresponding amount will be deducted from the loan principals to be recovered. The loan granted in 2009 for raising the share capital of Seed Fund Vera Ltd was cancelled EUR 6,890 million in 2014 because of the loss shown by Seed Fund Vera Ltd for the financial year 2013.
** The loan is to be used for raising the capital adequacy of Finnvera plc and for improving the company’s capacity to meet the demand for its products, especially counter-cyclical loans and guarantees, owing to the prolonged financial crisis. The loan will be repaid in one instalment at maturity, provided that the company’s unrestricted equity and total subordinated liabilities at the time of payment exceed the loss recorded on the balance sheet adopted for the latest financial period or on a balance sheet included in more recent financial statements.
E17 Financial instruments classification and fair values
(EUR 1,000) Finnvera Group Finnvera plc
Financial assets Loans and receivables Financial instruments carried at fair value Available
for sale
Total Fair value Loans and receivables Financial instruments carried at fair value Available
for sale
Total Fair value
31 Dec 2014                    
Loans and receivables from credit institutions 690,918     690,918 690,902 570,194     570,194 570,194
Loans and receivables from customers 4,642,969     4,642,969 4,737,704 2,242,703     2,242,703 2,241,732
Debt securities     934,721 934,721 934,721     934,721 934,721 934,721
Derivatives   51,434   51,434 51,434   51,434   51,434 51,434
Investments in associates   35,369 28,201 63,570 63,570     349 349 349
Shares and participations   51,581 15,553 67,134 67,134     14,520 14,520 14,520
Other financial assets 131,894     131,894 131,894 104,769     104,769 104,769
Total 31 Dec 2014 5,465,781 138,384 978,474 6,582,640 6,677,359 2,917,666 51,434 949,589 3,918,690 3,917,718
31 Dec 2013                    
Loans and receivables from credit institutions 276,443     276,443 276,443 241,818     241,818 241,818
Loans and receivables from customers 3,710,853     3,710,853 3,929,693 1,601,344     1,601,344 1,600,284
Debt securities     326,191 326,191 326,191     326,191 326,191 326,191
Derivatives   8,159   8,159 8,159   8,159   8,159 8,159
Investments in associates   78,195   78,195 78,195     349 349 349
Shares and participations   43,572 74,447 118,019 118,019     15,246 15,246 15,246
Other financial assets 47,819     47,819 47,819 32,673     32,673 32,673
Total 31 Dec 2013 4,035,115 129,925 400,638 4,565,678 4,784,519 1,875,835 8,159 341,786 2,225,780 2,224,720
The fair value of Finnfund, included in available for sale, cannot be determined reliably; the shares have therefore been valued at the original acquisition price.
(EUR 1,000) Finnvera Group Finnvera plc
Financial liabilities   Financial instruments carried at fair value Other financial liabilities Total Fair value   Financial instruments carried at fair value Other
financial liabilities
Total Fair value
31 Dec 2014                    
Liabilities to other institutions   35,769 2,419,517 2,455,285 2,510,812       0 0
Debt securities in issue   2,564,141   2,564,141 2,564,141   2,564,141   2,564,141 2,564,141
Derivatives   106,232   106,232 106,232   103,794   103,794 103,794
Other financial liabilities     343,004 343,004 343,004     328,302 328,302 328,302
Subordinated liabilities     86,139 86,139 86,139     86,139 86,139 86,139
Total 31 Dec 2014   2,706,141 2,848,659 5,554,800 5,610,327   2,667,935 414,441 3,082,376 3,082,376
31 Dec 2013                    
Liabilities to other institutions   35,883 2,107,553 2,143,436 2,227,067       0 0
Debt securities in issue   1,059,870   1,059,870 1,059,870   1,059,870   1,059,870 1,059,870
Derivatives   31,272   31,272 31,272   29,915   29,915 29,915
Other financial liabilities     304,298 304,298 304,298     290,698 290,698 290,698
Subordinated liabilities     88,029 88,029 88,029     88,029 88,029 88,029
Total 31 Dec 2013   1,127,025 2,499,880 3,626,905 3,710,536   1,089,785 378,727 1,468,512 1,468,512

Classifications

Under IFRS rules, financial assets can be classified into four main categories: loans and receivables, financial assets at fair value through profit or loss, available-for-sale financial assets and held-to-maturity financial investments. Financial assets at fair value through profit or loss can be further divided into the following categories: classified as held for trading and upon initial recognition designated by the entity as at fair value through profit or loss. The Group has no financial assets to be held for trading or held until maturity.

Under IFRS rules, the Group's financial liabilities can be classified into two main categories: Financial liabilities at fair value through profit or loss and other financial liabilities. Other financial liabilities are measured at amortised cost using the effective interest method. Financial liabilities at fair value through profit or loss are presented in the same manner as financial assets, classified as being held for trading and upon initial recognition designated by the entity as at fair value through profit or loss. The Group has no financial liabilities to be held for trading.

Fair value measurement principles

1. Debt securities
The fair value of debt securities are based on the market quote on the end date of the financial period or the value of the discounted market interest rate on the end date of the financial period.

2. Derivatives
The fair values of interest rate and currency swaps and currency futures are specified using a method based on the current value of cash flows, in which the market interest rates on the end date of the financial period and other market information serve as the accounting principle. The Group uses common valuation techniques in determining the fair value of these instruments. Fair values are equivalent to average market prices in situations where the Group would transfer or sell derivatives in the course of normal business under market conditions on the end date of the financial period. The credit risk related to derivatives is mitigated by means of collateral arrangements. Fair values are monitored on a daily basis using calculations from counterparties and those made in-house.

3. Investments in associates
The fair value of subsidiaries involved in venture capital investment is determined using a valuation technique approved by the Board of Directors that complies with the International Equity and Venture Capital Valuation (IPEV) Guidelines and recommendations for early stage ventures. In this technique, the determination of the investment's fair value is based on the valuation and investments made by outside investors as well as on the portfolio company valuation approved by the fund's Board of Directors. The valuation of companies is done continuously throughout the year, with valuations being updated on a biannually basis, for Group reporting in a separate process, where investments are examined by investment portfolio.
The basis for valuation is the value to be determined based on the previous round of investments. If necessary, this value can be adjusted in accordance with change factors in the portfolio company its performance and its operating environment. In accordance with State aid regulations, all investment rounds include private investors, with whom investments are made under mutually applicable conditions and at a valuation approved by private investors. In determining the value of a holding, attention is also given to the impact that any options and rights of exchange may have on the holding value If fair value cannot be determined reliably, venture capital investments shall be measured at amortised cost using the effective interest method. Initial investments less than a year old are measured at their book value. When fair values decrease, valuation can be based on an estimate made by the administrative company. Fund investments are also made in accordance with IPEV Guidelines.
The valuation of fund portfolio companies is done by private fund administration companies, which report their valuations to the funds' boards of directors and investors.

4. Shares and participations
Shares and reserve shares listed on the NASDAQ OMX Helsinki stock exchange that are classified as available-for-sale shares and participations are measured at the exchange rate on the date of the financial statements. Unlisted shares classified as available-for-sale shares and participations are measured using the effective interest method. Because their measurement using fair value measurement models has not been possible, nor could the fair value of investments otherwise be reliably determined. The most significant item of this kind comprehends the shares for the Finnish Fund for Industrial Cooperation Ltd. (EUR 13.67 million).

5. Financial liabilities at fair value through profit or loss
The fair value of liabilities are calculated using a method based on the current value of cash flows. In this method, market interest rates on the end date of the financial period and other accounting information serve as the accounting principle. The company's own credit risk is also taken into consideration in the measurement of liabilities.
E18 Hierarchy for carrying financing instruments at fair value
(EUR 1,000) Finnvera Group Finnvera plc
Financial assets 31 Dec 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Loans and other assets            
- Loans and receivables from credit institutions   690,918     570,194  
- Loans and receivables from customers   4,628,137 14,833   2,227,871 14,833
Financial instruments carried at fair value            
- Derivatives   51,434     51,434  
- Investments in associates     35,369      
- Shares and holdings     51,581      
Available-for-sale            
- Debt securities   934,721     934,721  
- Other shares and participations     28,201     349
- Shares and holdings 1,485   14,068 451   14,068
Total 1,485 6,305,210 144,052 451 3,784,219 29,250
Financial liabilities 31 Dec 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Financial instruments carried at fair value            
- Liabilities to other institutions   35,769        
- Debt securities in issue   2,564,141     2,564,141  
- Derivatives   106,232     103,794  
Other financial liabilities            
- Liabilities to other institutions   1,059,870     1,059,870  
- Subordinated liabilities   86,139     86,139  
Total   3,852,150     3,813,944  
 
  Finnvera Group Finnvera plc
Financial assets 31 Dec 2013 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Loans and other assets            
- Loans and receivables from credit institutions   276,443     241,818  
- Loans and receivables from customers   3,696,880 13,973   1,587,371 13,973
Financial instruments carried at fair value            
- Derivatives   8,159     8,159  
- Investments in associates     78,195     0
- Shares and holdings     43,572     0
Available-for-sale            
- Debt securities   326,191     326,191  
- Other shares and participations     0     349
- Shares and holdings 59,727   14,720 526   14,720
Total 59,727 4,307,673 150,459 526 2,163,540 29,041
Financial liabilities 31 Dec 2013 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Financial instruments carried at fair value            
- Liabilities to other institutions   35,883        
- Debt securities in issue   1,059,870     1,059,870  
- Derivatives   31,272     29,915  
Other financial liabilities            
- Liabilities to other institutions   2,107,553     0  
- Subordinated liabilities   88,029     88,029  
Total   3,322,607     1,177,814  

Hierarchy levels
Level 1: Investments in quoted shares and funds traded on the active market are valued at market price.
Level 2: The fair values of interest rate and currency swaps, currency futures and liabilities are specified using a method based on the current value of cash flows, in which the market interest rates at the closing of the financial period and other market information serve as the accounting principle. The fair values of debt securities are based on the market quote of the investments at the closing of the financial period or on the value discounted using the market interest rate at the closing of the financial period.
Level 3: The fair value of venture capital investments made by subsidiaries engaged in venture capital investment is based on the valuation and investments made by outside investors as well as on the portfolio company valuation approved by the fund. The method used complies with the International Private Equity and Venture Capital Valuation Guidelines (IPEV) for early-stage enterprises.

Transfers between levels 1 and 2
There were no transfers between the fair-value hierarchy levels 1 and 2 during the financial period under review or the preceding financial period.
E19 Specification of events at hierarchy
LEVEL 3, Financial assets Finnvera Group Finnvera plc
(EUR 1,000) 31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Financial assets carried at fair value        
Balance at 1 Jan 136,137 124,679 14,720 14,230
Profits and losses entered in the income statement, in total -6,973 -2,668 -169 -61
Acquisitions 22,538 19,639 0 624
Sales -22,753 -5,512 -482 -55
Other -79 -1 0 -18
Balance at 31 Dec 128,870 136,137 14,068 14,720
Profits and losses entered in the income statement for the instruments held by Finnvera -6,087 751 0 0
 
E20 Financial instruments set off in the balance sheet or subject to netting agreements
        Finnvera Group / Finnvera plc
(EUR 1,000) Gross recognised financial assets Gross recognised financial liabilities set of in the balance sheet Net carrying amount in the balance sheet Financial instruments*) Financial instruments received as
collateral*)
Cash received as
collateral*)
Net
amount*)
Financial assets 31 Dec 2014              
Derivatives 51,434 0 51,434 -51,434 0 -27,000 -27,000
Total 51,434 0 51,434 -51,434 0 -27,000 -27,000
Financial liabilities 31 Dec 2014              
Derivatives 103,794 0 103,794 -1,147 0 -74,220 28,428
Total 103,794 0 103,794 -1,147 0 -74,220 28,428
Financial assets 31 Dec 2013              
Derivatives 8,159 0 8,159 -7,029 0 0 1,130
Total 8,159 0 8,159 -7,029 0 0 1,130
Financial liabilities 31 Dec 2013              
Derivatives 29,915 0 29,915 -7,029 0 -18,700 4,186
Total 29,915 0 29,915 -7,029 0 -18,700 4,186
*) Sums not subject to netting but included in the main netting agreements and similar arrangements.
E21 Equity
      Finnvera Group Finnvera plc
(EUR 1,000)     31 Dec 2014 31 Dec 2013 31 Dec 2014 31 Dec 2013
Parent company's equity   196,605   196,605   196,605   196,605
Reserves                
- Share premium 51,036   51,036   51,036   51,036  
- Fair value reserve -99 50,937 518 51,554 -236 50,800 -71 50,965
Tied equity   247,542   248,159   247,405   247,570
Non-restricted reserves                
- Reserve for domestic operations 135,089   137,172   135,089   137,172  
- Reserve for export credit guarantee and special guarantee operations 435,628   357,825   435,628   357,825  
- Reserve for venture capital investments 16,619 587,335 17,225 512,223 16,619 587,335 17,225 512,223
Retained earnings                
- Profit/loss for previous periods 6,871   527   504   504  
- Profit/loss for the period 108,864 115,736 82,064 82,590 101,227 101,731 75,719 76,223
Unrestricted equity   703,071   594,813   689,066   588,445
Total   956,013   848,566   936,471   836,015
Equity attributable to the parent company's shareholders   950,613.2   842,971.6        
Share of equity held by non-controlling interests   5,399.5   5,594.0        
 
Share capital and ownership:     31 Dec 2014 31 Dec 2013
Owner                    
          Share capital Shares, nb Ownership Share capital Shares, nb Ownership
          (EUR 1,000)     (EUR 1,000)    
- The state         196,605 11,565 100% 196,605 11,565 100%

Reserves:

Share premium

The share premium reserve has been formed before the new regulations of the Companies' Act came into force on 1 September 2006. The reserve includes the difference of EUR 42.9 million between the acquisition cost and the nominal value of KERA's shares and EUR 0.1 million that was generated in the transfer of assets of Takuukeskus and the acquisition of Fide Oy's shares as well as EUR 8.1 million generated by the raise of share capital of Finnvera as the shares of Finnish Export Credit Ltd were acquired.

Reserve for domestic operations and fund for export credit guarantee and special guarantee operations

In 2006 the laws regulating the operations of Finnvera Plc were amended so that separate funds to cover future losses from domestic operations and from export credit guarantee and special guarantee operations were established in equity. Losses from export credit guarantee and special guarantee operations will be covered by resources from the State Guarantee Fund only when the export credit guarantee and special guarantee fund is insufficient. The retained earnings from the domestic operations were transferred to the fund for domestic operations and the retained earnings from the export credit guarantee and special guarantee operations were transferred to the fund for export credit guarantee and special guarantee operations.

Reserve for venture capital investments

In 2011, a fund for venture capital investments was established in the unrestricted equity on the balance sheet. The purpose is to monitor the assets allocated for venture capital investments in accordance with ERDF operational programmes. The Ministry of Employment and the Economy has allocated to Finnvera the sum of EUR 17.5 million, to be used for venture capital investments in accordance with ERDF operational programmes during the programme period 2007–2013. These assets have been recorded in the above fund.

Fair value reserve

The reserve includes the fair value change of available-for-sale financial assets. The items recognized in the fair value reserve are taken to the income statement when an available-for-sale financial asset is disposed of or an impairment loss on such an asset is recognised.
The Group’s objectives and principles for capital management are presented in the Risk Management section.

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