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NOTE 11
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FINANCIAL INSTRUMENTS
|
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The table below is an overview of carrying and fair value of the Company's financial instruments and their classification in the financial statements. It is the starting point for additional information on the Company's financial risk and refers to notes to follow.
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Financial instruments measured at fair value over profit and loss
|
Financial instruments measured at amortised cost
|
||||||
|
NOK 1 000
|
Lending and receivables
|
Financial obligation
|
TOTAL
|
Fair value
|
|||
|
Non-current assets
|
|||||||
|
Investments in subsidiaries
|
8 610 741
|
8 610 741
|
8 610 741
|
||||
|
Loans to group companies
|
675 967
|
675 967
|
675 967
|
||||
|
Non-current shares and ownership in other companies
|
51 599
|
51 599
|
51 599
|
||||
|
Other non-current receivables
|
67 040
|
67 040
|
67 040
|
||||
|
Total 2012
|
8 662 340
|
743 007
|
9 405 347
|
9 405 347
|
|||
|
Total 2011
|
6 538 248
|
629 637
|
7 167 885
|
7 167 885
|
|||
|
Current assets
|
|||||||
|
Short-term receivable on group companies
|
64 648
|
64 648
|
64 648
|
||||
|
Other short-term receivables
|
131 351
|
131 351
|
131 351
|
||||
|
Listed shares
|
3 476 584
|
3 476 584
|
3 476 584
|
||||
|
Unlisted shares and investments in other equity instruments
|
5 574 122
|
5 574 122
|
5 574 122
|
||||
|
Hedge funds
|
3 062 694
|
3 062 694
|
3 062 694
|
||||
|
Investments in debt instruments
|
155 088
|
155 088
|
155 088
|
||||
|
Bank deposits
|
911 028
|
911 028
|
911 028
|
||||
|
Total 2012
|
12 268 488
|
1 107 027
|
13 375 515
|
13 375 515
|
|||
|
Total 2011
|
11 427 992
|
1 366 109
|
12 794 101
|
12 794 101
|
|||
|
Long-term debt
|
|||||||
|
Long-term interest-bearing debt
|
2 493 514
|
2 493 514
|
2 493 514
|
||||
|
Total 2012
|
2 493 514
|
2 493 514
|
2 493 514
|
||||
|
Total 2011
|
3 323 266
|
3 323 266
|
3 323 266
|
||||
|
Short-term debt
|
|||||||
|
Trade accounts payable
|
5 378
|
5 378
|
5 378
|
||||
|
Public duties etc.
|
9 752
|
9 752
|
9 752
|
||||
|
Debt to group companies
|
272 498
|
272 498
|
272 498
|
||||
|
Other short-term debt
|
11 508
|
11 508
|
11 508
|
||||
|
Total 2012
|
299 136
|
299 136
|
299 136
|
||||
|
Total 2011
|
222 640
|
222 640
|
222 640
|
||||
|
Fair value hierachy - Financial assets and liabilities
|
|||||||
|
Ferd classifies instruments measured at fair value in the balance sheet by a fair value hierachy. The hierarchy has the following levels:
|
|||||||
|
Level 1: Valuation based on quoted prices in active markets for identical assets without adjustments. An active market is characterised by the fact that the security is traded with adequate frequency and volume in the market. The price information shall be continuously updated and represent expected sales proceeds. Only listed shares owned by Ferd Invest are considered to be level 1 investments.
|
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|
Level 2: Investments where there are quoted prices, but the markets do not meet the requirements for being characterised as active. In addition, investments where the valuation can be fully derived from the value of other quoted prices, including the value of underlying securities, interest rate level, exchange rate etc. Financial derivatives like interest rate swaps and currency futures are also considered to be level 2 investments. Some funds in Ferd's hedge fund portfolio are considered to meet the requirements of level 2. These funds comprise composite portfolios of shares, unit trust funds, interest securities, raw materials and other negotiable derivatives. For such funds the value (NAV) is reported on a continuous basis, and the reported NAV is applied on transactions in the fund.
|
|||||||
|
Level 3: All Ferd's other securities are valued on level 3. The valuation is based on valuation models where parts of the utilised information cannot be observed in the market. Securities valued on the basis of quoted prices or reported value (NAV), but where significant adjustments are required, are assessed on level 3. Shares with little or no trading, where an internal valuation is required to determine the fair value, are assessed on level 3. For Ferd this concerns all venture investments, private equity investments and funds where reported NAV need to be adjusted. A reconciliation of the movements of assets on level 3 is shown in a separate table.
|
|||||||
|
The table shows at what level in the valuation hierarchy the different measurement methods for the Group's financial instruments at fair value is considered to be:
|
|||||||
|
NOK 1 000
|
Level 1
|
Level 2
|
Level 3
|
Total 2012
|
|||
|
Investments in subsidiaries
|
8 610 741
|
8 610 741
|
|||||
|
Non-current shares and ownership in other companies
|
51 599
|
51 599
|
|||||
|
Listed shares
|
3 476 584
|
3 476 584
|
|||||
|
Unlisted shares and investments in other equity instruments
|
6 448
|
5 567 674
|
5 574 122
|
||||
|
Hedge funds
|
1 600 948
|
1 461 746
|
3 062 694
|
||||
|
Investment in debt instruments
|
155 088
|
155 088
|
|||||
|
Total 2012
|
3 476 584
|
1 762 484
|
15 691 760
|
20 930 828
|
|||
|
NOK 1 000
|
Level 1
|
Level 2
|
Level 3
|
Total 2011
|
|||
|
Investments in subsidiaries
|
6 483 565
|
6 483 565
|
|||||
|
Non-current shares and ownership in other companies
|
54 683
|
54 683
|
|||||
|
Listed shares
|
2 895 122
|
|
|
2 895 122
|
|||
|
Unlisted shares and investments in other equity instruments
|
9 042
|
|
4 548 984
|
4 558 026
|
|||
|
Hedge funds
|
|
1 371 510
|
1 477 781
|
2 849 291
|
|||
|
Investments in debt instruments
|
|
1 125 553
|
|
1 125 553
|
|||
|
Total 2011
|
2 904 164
|
2 497 063
|
12 565 013
|
17 966 239
|
|||
|
Reconciliation of movements in assets on level 3
|
|||||||
|
NOK 1 000
|
Opening bal. 1 Jan. 2012
|
Purchases
|
Sales
|
Transfers from level 3
|
Recognised in P/L 2012
|
Closing bal. 31 Dec. 2012
|
|
|
Investments in subsidiaries
|
6 483 565
|
469 949
|
- 5 100
|
|
1 662 327
|
8 610 741
|
|
|
Non-current shares and ownership in other companies
|
54 683
|
- 3 084
|
51 599
|
||||
|
Unlisted shares and investments in other equity instruments
|
4 548 984
|
186 454
|
- 390 765
|
- 6 448
|
1 229 449
|
5 567 674
|
|
|
Hedge funds
|
1 477 781
|
690 982
|
- 490 577
|
- 375 735
|
159 295
|
1 461 746
|
|
|
Total
|
12 565 013
|
1 347 385
|
- 886 442
|
- 382 183
|
3 047 987
|
15 691 760
|
|
|
NOK 1 000
|
Opening bal. 1 Jan. 2012
|
Purchases
|
Sales
|
Transfers from level 3
|
Recognised in P/L 2012
|
Closing bal. 31 Dec. 2012
|
|
|
Investments in subsidiaries
|
781 410
|
- 243 023
|
6 483 565
|
||||
|
Non-current shares and ownership in other companies
|
38 598
|
16 085
|
|
54 683
|
|||
|
Listed shares
|
6 976
|
|
|
|
- 6 976
|
|
|
|
Unlisted shares and investments in other equity instruments
|
4 928 026
|
215 635
|
- 856 169
|
- 6 976
|
268 468
|
4 548 984
|
|
|
Hedge funds
|
683 823
|
1 521 043
|
- 689 884
|
|
- 37 201
|
1 477 781
|
|
|
Total
|
11 602 601
|
2 534 173
|
-1 546 053
|
- 6 976
|
- 18 732
|
12 565 013
|
|
|
Investments in unlisted shares managed in-house are valued on the basis of an earnings multiple, adjusted by a liquidity discount reduction and the addition of a control premium. The corrections are made directly on the multiple. Finally, the equity value is calculated by deducting net interest-bearing debt.
|
|||||||
|
Some subsidiaries are valued in the same manner as unlisted shares, cf. above. The valuation of other subsidairies is based on the companies' recorded equity and adjusted for value changes not recognised. Underlying investments are valued according to the same principles as in Ferd AS, whereas investment properties are valued by discounting future expected cash flows.
|
|||||||
|
A significant part of venture investments constitutes companies with no positive cash flows. This implies a greater degree of uncertainty in the valuations of the companies. Valuations are based on international guidelines (EVCA guidelines), i.e., the lower of cost and fair value unless a transaction at a higher value has taken place.
|
|||||||
|
The valuation of investments in externally managed private equity and hedge funds is based on value reports received from the funds. The hedge funds in the SI portfolio are adjusted for estimated discount on the funds based on estimates made by brokers.
|
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