2014 FINANCIAL STATEMENTS

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2014

FINANCIAL

STATEMENTS

Contents

Board of Directors’ report 2014 . . . 2

Consolidated statement of comprehensive income, IFRS . . . . 8

Consolidated balance sheet, IFRS . . . 9

Consolidated cash flow statement, IFRS . . . 10

Statement of changes in shareholders’ equity, IFRS . . . 11

Notes to the consolidated financial statements, IFRS . . . 12

Parent company income statement, FAS . . . 33

Parent company balance sheet, FAS . . . 34

Parent company cash flow statement, FAS . . . 35

Parent company’s notes to financial statements, FAS . . . 36

Review of accounting books and journal types . . . 42

Signatures for Annual Reports . . . 42

Auditors’ note . . . 42

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Oras Invest, an industrial owner

Oras Invest is a family company with 70 years of tradition in industrial entrepreneurship. Oras Invest focuses its ownership on industrial companies, in which it has a substantial under-standing of the industry, business characteristics and devel-opment potential. The aim is to create long-term sustainable value growth.

Group structure

Oras Oy (100%) has been a subsidiary of Oras Invest Group and Uponor Corporation (22.6%), Kemira Oyj (18.2%) and Tikkurila Oyj (18.1%) associated companies of Oras Invest

Group for the whole financial period.

The Oras Group is a subgroup of the Oras Invest Group. The Oras Group consists of 100% owned companies in 13

European countries, with Oras Ltd as the parent company. The financial statements of the consolidated Group have been prepared according to IFRS, International Financial Reporting Standards. The financial statements of the parent, Oras Invest Ltd, have been prepared according to FAS, Finnish Accounting Standards.

Oras Invest Group financial performance

In Oras Invest Group’s financial statements Oras Group is fully consolidated (ownership 100%), and Uponor Corporation, Kemira Oyj and Tikkurila Oyj are accounted for by the equity method as associated companies.

Oras Group is preparing its own consolidated financial statements. Full financial statements are available from Oras Ltd’s headquarters.

The Net Asset Value (NAV) at the end of the year 2014 was EUR 732 million (776). NAV consists of the market values of the holdings in Uponor, Tikkurila and Kemira, and the value of Oras Group calculated as EBITDA × 8 less net debt. Total Shareholder Return (TSR) for the financial period was –6% (26%).

Oras Invest Group’s liquid assets on December 31, 2014 were EUR 31.2 million (95.0). The balance sheet total was EUR 634.8 million (698.4) and the shareholders’ equity EUR 356.3 million (315.3).

Oras Invest Ltd net sales and operating result

Oras Invest Ltd continued to receive royalties from Oras Ltd. The royalty is based on the utility value of patents owned by Oras Invest Ltd. At an annual level, this generated net sales of EUR 0.4 million (0.7). The net sales of the parent company during the financial period were EUR 0.6 million (0.9).

Oras Invest Ltd’s income from dividends during the financial period was EUR 27.7 million. During the year 2014, Uponor Corporation paid a dividend of EUR 0.38 per share, which means that Oras Invest Ltd received EUR 6.3 million (6.3). Kemira Oyj paid a dividend of EUR 0.53 per share, which means that the total amount of dividends from Kemira was EUR 15.0 million (15.0). Tikkurila Oyj paid a dividend of EUR 0.80 per share, which means that Oras Invest Ltd received EUR 6.4 million (6.1). Oras Ltd paid out no dividends (no dividends in

2013), but paid EUR 4.0 million as group contribution to Oras Invest Ltd (4.6).

The results of the parent company Oras Invest Ltd for the financial period were EUR 27.7 million (27.4).

Financial status and financing

The liquid assets of Oras Invest Ltd at December 31, 2014 were EUR 0.05 million (0.05). The balance sheet total was EUR 630.6 million (635.6). The shareholders’ equity was EUR 511.1 million (485.0) and the dividends distributed totaled EUR 1.5 million.

The liquidity of the company was good. During the financial period the interest bearing loans were amortised with EUR 26.2 million.

At the end of 2014, total loans of Oras Invest Ltd amounted to EUR 118.9 million (145.1). The debts to investments at market value ratio was 14% (16%).

Changes in industrial holdings

During the financial period there were no changes in the industrial holdings.

R&D, environment and safety

Oras Invest Ltd is an industrial owner, and has no R&D or environmental activities. The activities of the industrial holdings are presented as a part of the respective financial statements.

Main events after the year-end

There were no major events after the year-end.

Oras Invest Outlook 2015

As an industrial owner, Oras Invest’s outlook is directly related to the guidance’s published by its industrial holdings and are presented as part of the respective financial statements.

Risks

The main risks at Oras Invest Ltd arise from the long-term ownership in the core investments. As there is a high exposure to a specific industry, changed market conditions may have an effect on the profitability of the companies. The industry-specific risk is shared by four industrial holdings.

Oras Invest Ltd’s holdings are in companies where the home currency is euro. That is why the currency risk in Oras Invest Ltd is indirect, and it arises from the international operations of each of the owned companies.

As the result of changing conditions in the financial market it may happen that new funding is not available or its cost is increasing. The interest rate risk is managed with derivative contracts.

The normal risks related to the industrial operations and product liability of Oras Group are covered by insurance.

There are no ongoing litigations that could result in significant liability for damages.

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Shares

The share capital of the company is as follows:

2014 2013

A shares (1 vote/share) 217,350 217,350

All shares have an equal right to dividends and the company’s assets.

Dividend proposal

The Board of Directors proposes that Oras Invest Ltd distributes a EUR 9.20 dividend per share, totaling EUR 1,999,620. The remainder of the profit for the year will remain in retained earnings.

No material changes have taken place in the company’s financial position after the balance sheet date. The liquidity of the company is good and the proposed dividend does not endanger the cash position of the company.

Organization, management and

the auditors of the company

The Board of Directors: Pekka Paasikivi (chairman), Ulf Mattsson, Kaj Paasikivi, Vesa Puttonen, Frank Stangenberg-Haverkamp and Christoph Vitzthum.

CEO: Jari Paasikivi

Auditors: Authorized Public Accountant Heikki Ilkka (Ernst & Young Oy) and Ernst & Young Oy with Authorized Public Accountant Minna Toivonen as the responsible auditor.

ORAS INVEST LTD KEY FIGURES

FAS 2014 2013 2012

Net sales EUR million 0.6 0 .9 1 .7

Operating profit EUR million –1.5 –0 .7 –0 .1

Profit for the financial period EUR million 27.7 27 .4 28 .1 Shareholders’ equity EUR million 511.1 485 .0 459 .1

Total assets EUR million 630.6 635 .6 639 .8

Shareholders’ equity/total assets % 81.0 76 .3 71 .8

Average number of personnel 4 4 4

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ORAS GROUP

■ Revenue EUR 258.1 million (2013: 156.7, pro-forma net sales 2013: 252.7) ■ Equity ratio 36.5% (26.1%)

■ Operative EBITDA EUR 36.3 million (pro-forma 2013: 28.5)

■ The structural integration is completed, implementation of common systems and tools continues

■ Oras Group strategy “Our way forward 2015–2017” was presented to the personnel and the implementation began

Sales growth was achieved in key markets, especially in Germany and Finland. The company’s position in the profes-sional channel was strengthened during the year.

An assortment of electronic products using Oras technology was introduced under the Hansa brand (HANSASENSeTION) in March. A second wave of HANSASEN-SeTION followed later in the year. The design-oriented part of the Hansa line-up was launched on the Nordic markets as a new choice for designers and architects. A strategic product portfolio road map was created and the results of the first Oras Group product development efforts will be presented at the ISH trade fair in March 2015.

Operating profit was EUR 24.6 million (8.8). Operating profit includes EUR 2.2 million in one-time expenses.

Oras Group’s balance sheet total was EUR 248.3 million (315.9). Group equity was EUR 90.7 million (82.5) and the equity ratio was 36.5% (26.1). Group contribution to Oras Invest Ltd of EUR 4.0 million is recorded through equity (4.6). The balance sheet as per December 31, 2013 included EUR 69.5 million short term loans. These were paid in January 2014.

Productivity in the manufacturing units improved. The main focus was and continues to be on delivery performance

and quality. Significant synergies were indentified and realized in purchasing. The development of the logistics network to serve the new constellation began. Oras Group’s capital expenditure totalled EUR 4.4 million (3.8).

The whole office staff organization was put on place at the end of February. The target setting process and personal development discussions were started in line with the new organization. Sales teams were merged in countries with double organizations. In Norway the Leksvik office was closed and the Norwegian operations are now centralized in Oslo.

A comprehensive study on company culture was conducted and the development of a common company culture for Oras Group was started. As a part of this work, new company values were defined. The implementation of company values continues in workshops in which the whole personnel will participate.

Oras Group’s operating profit was EUR 24.6 million (8.8), or 9.5% of net sales (5.6%). Profit of the financial period was EUR 15.6 million (5.8).

The Board of Directors proposes to the Annual General Meeting that no dividend will be distributed.

ORAS GROUP KEY FIGURES

IFRS 2014 2013 2012

Operating profit EUR million 24.6 8 .8 17 .2

Profit for the financial period EUR million 15.6 5 .8 14 .0

Shareholders’ equity EUR million 90.7 82 .5 43 .2

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UPONOR GROUP

■ Net sales: EUR 1,023.9 (906.0) million ■ Operating profit, EBIT: EUR 63.4 (50.2) million ■ Cash flow before financing: EUR 45.1 (67.2) million ■ Gearing: 27.6 (33.7)

■ Earnings per share: EUR 0.50 (0.38)

In 2014, the construction markets in Europe and North America developed as mirror images of one another. An exceptionally cold winter in North America slowed activity in the early months of the year but, as the snow melted, activity gained strength. Meanwhile, in Europe, the mild winter provided a jump-start for the industry, but this early momentum was largely lost by mid-summer.

Uponor’s 2014 net sales from continuing operations amounted to EUR 1,023.9 (2013: 906.0) million, up 13.0% year on year.

Building Solutions – Europe’s net sales declined by –0.1%. A key reason for this flattish development was the weaker-than-anticipated market conditions in Germany in the latter part of the year, which slowed growth. Building Solutions – North America reported continued strong growth. Uponor was successful in growing net sales in both the residential and commercial markets, and in expanding its geographical presence in the U.S. For the first time, Uponor Infra’s net sales for 2014 included a full 12 months of figures for the businesses that have been combined since the establishment of the joint-venture with KWH Pipe on 1 July 2013. Reported growth from 2013 was therefore considerable, rising by 34.4%. Compared to the historic 2013 net sales levels achieved by the combined businesses, there was a decline of 2.2%.

The consolidated full-year gross profit ended at EUR 340.1 (EUR 320.1) million. The gross profit margin came to 33.2% (35.3%). The main influencer for this trend was an increased share of infrastructure solutions business after the estab-lishment of Uponor Infra.

Consolidated operating profit came to EUR 63.4 (50.2) million. The operating profit margin improved to 6.2% (5.5%) of net sales. Operating profit included EUR 4.3 (5.0) million in non-recurring items, of which EUR 3.7 million was reported

in Building Solutions – Europe and EUR 0.6m (net) in Uponor Infra. Operating profit improved in all segments. The biggest contributor was Building Solutions – North America, with a 27.4% improvement in euro terms from last year.

Profit for the period totalled EUR 36.0 (26.8) million, of which continuing operations accounted for EUR 36.3 (27.1) million.

Earnings per share were EUR 0.50 (0.38), and EUR 0.50 (0.38) for continuing operations.

Consolidated cash flow from operations was EUR 75.7 (92.1) million, while cash flow before financing came to EUR 45.1 (67.2) million. Comparison with the 2013 cash flow is impacted by significant positive one-time effects from the first time consolidation of the former KWH Pipe business in the middle of the peak of the season in 2013. In line with the profit improvement, net cash from operations in 2014 improved from EUR 87.9 million to EUR 99.0 million.

Gross investments into fixed assets totalled EUR 35.7 (33.9) million, an increase of EUR 1.8 million year on year. Net invest-ments totalled EUR 32.1 (30.4) million.

The economic outlook in Uponor’s key markets is likely to remain twofold in 2015: demand in North America, representing one fourth of Group net sales, is expected to remain lively and offer room for continued construction industry growth. The European markets, on the other hand, are expected to remain flat, although supported by growing confidence in a gradual revival of the European economy. However, this scenario is subject to certain risks, some of which are geopolitical.

The Board proposes to the Annual General Meeting that a dividend of EUR 0.42 per share will be distributed, totalling EUR 30.7 million.

UPONOR KEY FIGURES

IFRS 2014 2013 2012

Net sales EUR million 1,023.9 906 .0 811 .5

Operating profit* EUR million 63.4 50 .2 57 .7

Profit for the financial period* EUR million 36.3 26 .8 32 .8 Shareholders’ equity EUR million 297.9 219 .7 207 .3

Average number of personnel 4,127 3,649 3,098

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TIKKURILA GROUP

■ Revenue EUR 618.4 (2013: 653.0) million ■ Operating profit (EBIT) EUR 63.7 (71.5) million

■ Cash flow after capital expenditure EUR 49.9 (66.9) million ■ Gearing 24.6% (23.4%)

■ Earnings per share EUR 1.10 (1.14)

The market conditions were exceptionally difficult in Russia, which is the single biggest market of Tikkurila. There the uncertain economic situation, together with the drop in consumer confidence and the weakened purchasing power, lowered the demand for paints and increased the relative market share of lower quality and price grade paints. All in all, financial growth in Tikkurila’s area of operation remained weak.

Tikkurila Group’s revenue decreased by 5 percent in 2014. Exchange rate fluctuations reduced revenue by 8 percent, particularly due to the weakened Russian ruble and other currencies in the adjacent countries. In addition, the Swedish krona decreased the euro-denominated revenue. Lower sales volumes decreased revenue by 2 percent. Sales price increases and changes in the sales mix increased revenue by 5 percent.

Operating profit (EBIT) totaled EUR 63.7 (71.5) million, equaling 10.3 (10.9) percent of revenue. The decline in revenue and weakening of key currencies had a negative impact on profitability. Fixed costs were at the previous year’s level.

Tikkurila’s financial position and liquidity remained at a good level during the review period, and the gearing continued to trend down. Foreign exchanges rate changes resulted in significant negative translation difference in equity, primarily caused by the strong depreciation of the Russian ruble. Cash flow from operations in January–December totaled EUR 75.9 (79.2) million. Net working capital totaled

EUR 73.1 (81.1) million at the end of the review period. The net cash flow from the investing activities was EUR –26.1 (–12.3) million, when taking into account the acquisitions and divestments. Cash flow after capital expenditure totaled EUR 49.9 (66.9) million at the end of the review period. Acquisi-tions conducted in 2014 weakened the cash flow by EUR 14.4 million in total. At the end of December, the equity ratio was 49.5 (50.1) percent, and gearing was 24.6 (23.4) percent.

Tikkurila complemented its product range for professionals, in particular, as well as our technologies and competence in functional and energy-efficient products and solutions which extend the lifecycle of structures by acquiring the Swedish KEFA Drytech in June and the Danish ISO Paint Nordic in October. The products of the acquired companies help prevent mold and reduce the amount of heating or cooling energy needed in buildings, for example. The combined revenue of the acquired businesses totaled little less than EUR 10 million in 2013.

Tikkurila is the leading paints and coatings professional in the Nordic region and Russia. With its roots in Finland, Tikkurila now operates in 16 countries. Tikkurila’s high-quality products and extensive services ensure the best possible user experience in the market.

The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.80 per share will be distributed, totaling EUR 35.2 million.

TIKKURILA KEY FIGURES

IFRS 2014 2013 2012

Operating profit EUR million 63.7 71 .5 66 .3

Profit for the financial period EUR million 48.3 50 .1 40 .7 Shareholders’ equity EUR million 192.7 208 .1 198 .9

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KEMIRA GROUP

■ Revenue in 2014: EUR 2,136.7 million (2013: EUR 2,229.1 million) ■ Operative EBITDA: EUR 252.9 million (251.9)

■ Operative earnings per share: EUR 0.63 (0.70)

■ Cash flow after investing activities EUR 75.2 million (195.7)

Kemira Group’s revenue was EUR 2,136.1 million (2,229.1). Organic revenue growth was 3% mainly due to sales volumes growth in Paper and Oil & Mining segments.

Following our strategy to shift focus towards growing differentiated product lines, Kemira accomplished the integration of three acquisitions: 3F polymer business, Soto Industries paper chemical business and BASF AKD emulsion business. The impact of acquisitions on the Group level was 3% or approximately EUR 70 million on the revenues in 2014. In addition, Kemira divested several commodity product line based businesses at the end of 2013 and in the beginning of 2014. The divestments included aluminum and coagulant business in Brazil (closed on December 11, 2013), chemical distribution business in Denmark (closed on January 2, 2014), formic acid and its derivatives business in Finland (closed on March 6, 2014) and some other small commodity businesses in Denmark, Romania and Mexico. The impact of divest-ments on the Group level was –9% or approximately EUR 200 million on the revenues in 2014. Currency exchange had a –1% impact.

Geographically, the revenue was split as follows: EMEA 55% (57%), the Americas 39% (37%), and Asia Pacific 6% (6%). According to Kemira’s strategy, mature markets are important for Kemira’s all segments, whereas the focus in the emerging markets is on selective expansion. In the emerging markets, Asia Pacific, especially China and Indonesia are the key markets for the paper chemicals. Brazil and Uruguay will remain important markets for the bleaching chemicals used in pulp industry. Oil & Mining is targeting expansion in selected countries in South America as well as in the Middle East and Africa.

Operative EBITDA increased slightly to 252.9 million (251.9). Operative EBITDA in local currencies, excluding acquisitions and divestments increased 2%, mainly due to higher sales volumes. The positive impact related to acquisitions was EUR 14 million and could largely compensate for the divestment impact of EUR –17 million. The operative EBITDA margin improved to 11.8% (11.3%). Margin improved mainly as a result of sales volume growth and divestments of margin dilutive businesses.

Cash flow from the operating activities in 2014 decreased to EUR 74.2 million (200.3) mainly due to hedging settle-ments, higher working capital and settlement related to the old alleged infringement of competition law. Cash flow after the investing activities decreased to EUR 75.2 million (195.7) including proceeds of EUR 122 million related to the divestment of formic acid business. Comparable period included proceeds of EUR 98 million received from the divestment of shares in JV Sachtleben and EUR 81 million from the divestment of the food and pharmaceuticals businesses. 12-month rolling average net working capital ratio decreased to 9.9% of the revenue (10.9% on December 31, 2013). At the end of the period, Kemira Group’s net debt increased to EUR 486 million (456 on December 31, 2013) as a result of lower cash flow and unfavorable currency exchange fluctuations, especially related to U.S. dollar.

The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.53 per share will be distributed, totalling approximately EUR 81 million.

KEMIRA KEY FIGURES

IFRS 2014 2013 2012

Net sales* EUR million 2,136.7 2,229 .1 2,240 .9

EBITDA excl . non-recurring items* EUR million 252.9 251 .9 249 .4 Profit for the financial period* EUR million 95.8 –25 .9 22 .4 Shareholders’ equity EUR million 1,163.3 1,125 .7 1,260 .6 Total assets EUR million 2,295.7 2,211 .0 2,462 .3 Shareholders’ equity/total assets % 50.7 50 .9 51 .2

Average number of personnel 4,285 4,632 5,043

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CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

IFRS

Oras Invest Group

(EUR 1,000) Note 1 Jan – 31 Dec 2014 1 Jan – 31 Dec 2013

Net sales 3 258,109 156,698

Change in inventories of finished goods and work in progress 779 –5,016

Other operating income 4 596 676

Materials and services 106,083 58,325

Personnel expenses 5 66,937 40,507

Depreciation and impairment 6 9,193 6,004

Other operating expenses 54,124 39,364

Operating profit 23,147 8,158

Financial income and expense 7 –5,707 –5,000

Share of profit of an associate 33,349 9,591

Profit before tax 50,789 12,749

Income tax expense 8 –5,580 –1,697

Net profit for the period 45,209 11,052

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss:

Re-measurements on defined benefit pensions –2,948 Deferred taxes related to items that will not be reclassified to profit or loss 774

Share of other comprehensive income of an associate –6,482 4,321

Items that may be reclassified subsequently to profit or loss:

Change on cash flow hedges –1,005 1,966

Deferred taxes from other comprehensive items 206 –541 Share of other comprehensive income of an associate 7,500 –10,297 Exchange rate differences on translation of foreign operations –316 –771

Other comprehensive income for the period –2,271 –5,322

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CONSOLIDATED BALANCE SHEET

IFRS

Oras Invest Group

(EUR 1,000) Note 31 Dec 2014 31 Dec 2013

ASSETS

Non-current assets

Goodwill 9 24,609 25,359

Intangible assets 9 56,110 58,968

Property, plant and equipment 10 30,665 32,339

Investments in associated companies 12 383,312 376,605

Financial assets 13 9,010 9,265

Receivables 14 2,899 6,476

Deferred tax asset 15 10,237 11,600

Other non-current assets 16 3,252

516,842 523,864

Current assets

Inventories 17 42,607 40,076

Accounts receivable and other receivables 18 44,147 39,482

Cash and non-current deposits 19 31,187 95,010

117,941 174,568

Total assets 634,783 698,432

SHAREHOLDERS’ EQUITY AND LIABILITIES Shareholders’ equity

Share capital 20 6,521 6,521

Other capital reserves 20 20,297 20,289

Foreign currency translation reserve 20 –1,126 1,498

Fair value reserve 20 –2,076 –10,877

Other invested capital 20 39,000 39,000

Retained earnings 20 293,671 258,860 356,287 315,291 Liabilities Non-current liabilities Interest-bearing liabilities 23 105,013 141,514 Provisions 22 4,361 4,612

Employee benefit liabilities 21 19,206 16,330

Deferred tax liability 15 18,314 19,413

Other non-current liabilities 24 4,076 4,687

150,970 186,556

Current liabilities

Accounts payable and other liabilities 25 55,752 48,060

Interest-bearing liabilities 23 70,901 147,386

Provisions 22 65 320

Employee benefit liabilities 21 808 819

127,526 196,585

Total liabilities 278,496 383,141

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CONSOLIDATED CASH FLOW STATEMENT

IFRS

Oras Invest Group

(EUR 1,000) 1 Jan – 31 Dec 2014 1 Jan – 31 Dec 2013

CASH FLOW FROM OPERATIONS

Profit before taxes 50,789 12,749

Non-cash adjustments

Depreciation and impairment 9,193 6,004

Change in financial instruments –86 –150

Financial income –27,923 –27,514

Financial expense 6,019 5,183

Share of profit of an associate –5,688 17,751

Unrealised exchange rate gains and losses 36 139

Other non-cash items –325 1,995

Other adjustmets –41 –123

Cash flow from operations before change in working capital 31,974 16,034 Change in trade and other non-interest bearing receivables (–/+) 1,049 1,950

Change in inventories (–/+) –2,531 2,421

Change in trade and other non-interest bearing liabilities (+/–) 2,475 1,729 Cash flow from operations before financial items and taxes 32,967 22,134 Interests paid and other financial items –6,166 –5,493

Interests received 673 16

Dividends received 27,697 27,382

Income taxes paid –5,131 –4,353

Cash flow from operations 50,040 39,686

CASH FLOW FROM INVESTMENTS

Proceeds from sale of intangible and tangible assets 169 458 Investments in intangible and tangible assets –5,003 –3,255

Development expenditures –574

Acquisition of subsidiaries 744 –71,451

Cash flow from investments –4,090 –74,822

CASH FLOW FROM FINANCING

Increase in non-current interest-bearing liabilities 75,000 56,000 Increase in current interest-bearing liabilities 3,800 72,547 Repayment of non-current interest-bearing liabilities –110,970 –44,400 Repayment of current interest-bearing liabilities –75,865 –3,175

Change in non-current financing receivables –283

Equity contribution 39,000

Dividends paid –1,500 –1,499

Cash flow from financing –109,535 118,190

Net change in cash and cash equivalents –63,585 83,054 Cash and cash equivalents at 1 January 95,010 12,581

Exchange rate difference on cash –238 –625

Cash and cash equivalents at 31 December 31,187 95,010* * Reference is made to note 28 Contingent liabilities on year 2013

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STATEMENT OF CHANGES IN

SHAREHOLDERS’ EQUITY

IFRS

Oras Invest Group (EUR 1,000) 2014 Balance at 1 January Total comprehensive income for the period Other equity

distribution Dividends paid

Transfers between reserves and other

adjustments Balance at 31 December

Share capital 6,521 6,521 Premium reserve 12,884 12,884 Invested unrestricted equity fund 6,100 6,100 Other reserves 1,305 8 1,313 Foreign currency translation reserve 1,498 –2,624 –1,126

Fair value reserve –10,877 8,801 –2,076

Other invested capital 39,000 39,000

Retained earnings 258,860 36,761 –446 –1,500 –4 293,671 Total 315,291 42,938 –446 –1,500 4 356,287 2013 Balance at 1 January Total comprehensive income for the period Increase of other invested

capital Dividends paid

Transfers between reserves and other

adjustments Balance at 31 December

Share capital 6,521 6,521 Premium reserve 12,884 12,884 Invested unrestricted equity fund 6,100 6,100 Other reserves 1,305 1,305 Foreign currency translation reserve 8,191 –6,693 1,498

Fair value reserve –7,927 –2,950 –10,877

Other invested capital 39,000 39,000

Retained earnings 244,989 15,373 –1,499 –3 258,860

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Corporate information

Oras Invest Group is an international industrial group. Group’s parent company, Oras Invest Ltd, is domiciled in Rauma in the Republic of Finland. Its address is: P.O.Box 40 / Isometsäntie 2, FI-26101 Rauma, Finland. The company’s shares are not listed on stock exchange. Its company registration number is 1908260–8. Oras Invest board has approved the publication of these financial statements in its meeting of 31 March 2015.

Oras Invest Group consists of 100% owned Oras Group and the associated companies Uponor Corporation (22.64%), Kemira Oyj (18.20%) and Tikkurila Oyj (18.07%). Oras Group develops, manufactures and markets user-friendly, water and energy saving sanitary fittings. The headquarters and manufacturing plant of Oras Group are domiciled in Rauma. Other manufacturing units are located in Germany, Poland and Czech Republic. Sales offices are located in Nordic countries, several Middle and Southern European countries and in Eastern Europe.

Oras Invest Group acquired German Hansa Armaturen GmbH (former Hansa Metallwerke AG) with its subsidiaries on 30 September 2013. The consolidated income statement of Oras Invest Group for 2013 includes three months result of Hansa.

Related to Hansa acquisition, some changes have been made in the Oras Invest Group internal legal structure. During the year 2014 there have been structuring activities in Germany, Poland, Belgium, France and Czech Republic. Oras Invest Group incorporated its Swedish operations; this new company was established on 30 November 2014.

Accounting principles

The consolidated financial statements for the period 1. 1. 2014–31. 12. 2014 are prepared in accordance with the International Financial Reporting Standards (IFRS) including International Accounting Standards (IAS) and their SIC and IFRIC interpretations valid on 31 December 2014. In the Finnish Accounting Act and ordinances based on the provisions of the Act, IFRS refer to the standards and to their interpreta-tions adopted in accordance with the procedures laid down in regulation (EC) No 1606/2002 of the European Parliament and of the Council. The consolidated financial statements include also additional information required by the Finnish Accounting Act and Company’s Act.

The consolidated financial statements are presented in thousands of euros (tEUR), and they are based on the historical cost convention unless otherwise specified in the accounting principles section below.

Use of estimates and judgement

The preparation of consolidated financial statements under IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of financial statements, as well as the reported amounts of income and

expenses during the reporting period. The use of judgement is needed in the application of accounting policies. Although these estimates are based on the management’s best knowledge of current events and actions, actual result may ultimately differ from those estimates.

Consolidation principles

Subsidiaries

The consolidated financial statements include the parent company, Oras Invest Ltd, and those companies in which Oras Invest Ltd has direct or indirect control of over 50% of the voting rights or otherwise has power to govern the financial and operating policies. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Subsidiaries acquired or established during the year are included from the time when the Group has obtained control.

Intra-group shareholdings are eliminated using the acqui-sition cost method. Accordingly, the assets and liabilities of an acquired company are measured at fair value on the date of acquisition. The excess of the acquisitions cost over fair value of the net assets has been recorded as goodwill. Based on the First-Time-Adoption of IFRS 1, any company acquisitions made prior to the IFRS transition date (1 January 2009) are not adjusted for IFRS. Intra-group transactions, receivables, liabilities, unrealised gains and dividends between group companies are eliminated in the consolidated financial statements. Unrealised losses are not eliminated in case of impairment.

Investment in an associate

Associated companies are entities over which the group has 20–50% of the voting rights, or over which the group otherwise exercises significant influence. Holdings in associated companies are included in the consolidated financial statements using the equity method. Accord-ingly, the share of the post-acquisition profits and losses of associated companies is recognised in the income statement to the extent of the group’s holding in the associated companies. When the group’s share of losses of an associated company exceeds the carrying amount, it is reduced to nil and any recognition of further losses ceases, unless the group has an obligation to satisfy the associated company’s obligations.

Goodwill represents the excess of the cost of an acquisition over the value of the net assets of the acquired company on the date of acquisition. Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.

After application of the equity method, it is determined whether there is any objective evidence that the investment in the associate is impaired. If this is the case the amount of impairment is calculated as the difference between the

1. ACCOUNTING PRINCIPLES FOR THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE

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Notes to the consolidated financial statements, IFRS recoverable amount of the associate and its carrying value and the amount is recognised in the “share of profit of an associate” in the income statement. During 2013 the company divested its associated company Kiinteistö Oy Kaivopuiston Teknologiakylä.

Foreign currency translations

Figures for the performance and financial position of the group units are measured in the main currency of the unit’s operating environment. The consolidated financial state-ments are in euros, which is the parent company’s functional and presentation currency.

Foreign currency transactions are translated using the exchange rates on the transaction date. Outstanding receiv-ables and payreceiv-ables in foreign currencies are stated using the exchange rates on the balance sheet date. Exchange rate gains and losses on actual business operations are treated as sales adjustment items or adjustment items to materials and services. Exchange rate gains and losses on financing are entered as exchange rate differences in financial income and expenses.

In the consolidated financial statements, the income statements of the Group’s foreign subsidiaries are converted into euros using monthly average exchange rates quoted for the reporting period. All balance sheet items are converted into euros using exchange rates quoted on the balance sheet date. The resulting conversion difference and other conversion differences resulting from the conversion of subsidiaries´ equity are shown as separate item in the equity. Realised conversion differences in connection with the redemption of material shares in subsidiaries are recognised as income or expense in exchange rate differences in the income statement.

Exchange rate differences on translation of foreign operations as well as share of other comprehensive items of investment in an associate related to translation difference are recorded through comprehensive income in Oras Invest Group. Accordingly, foreign currency translation reserve consists of these items.

Non-current assets held for sale

and discontinued operations

Non-current assets held for sale and assets related to discontinued operations are formed once the company, according to a single co-ordinated plan, decides to dispose of a separate significant business unit, whose net assets, liabilities and financial results can be separated operationally and for financial purposes. Non-current assets held for sale are shown separately in the consolidated balance sheet. Profit or loss from a discontinued operation and gains or losses on its disposal are shown separately in the consolidated income statement. Assets related to non-current assets held for sale and discontinued operations are assessed at book value, whether it is lower, at fair value less costs to sell. Depre-ciation from these assets has been discontinued at the date of classifying assets as non-current assets held for sale and discontinued operations. In 2014 or 2013 there were no assets held for sale or discontinued operations in Oras Invest Group.

Income recognition

Sales of products are recognised as income once the risk and benefits related to ownership of the sold products have been transferred to the buyer, according to the agreed delivery terms, and the group no longer has possession of, or control over, the products. Sales of services are recognised as income once the service has been rendered. Net sales comprise the invoiced value for the sale of good and services net of direct taxes, sales rebated and exchange rate differences.

Research and development

Research costs are expensed as incurred and they are included in the consolidated income statement under other operating expenses. Development costs are expensed as incurred, unless the criteria for capitalising these costs as assets are met accordance with IAS 38. Product development costs are capitalised in the balance sheet as intangible assets from the moment the product can be technically imple-mented, applied commercially and expected to generate future economic benefits. Capitalized development costs comprise the material, work and testing of expenditure that is the direct result of the process of completing the products for its intended use.

Depreciation and amortisation expenses are recognized from the moment the item is ready for use. Items that are not yet ready for use are tested each year for impairment. Capitalized development costs are measured after the original recognition after impairment and acquisition cost depreciation have been deducted from them. The useful life of capitalized development costs has been changed from ten years to five years during 2013. Capitalized costs are recognized as straight-line depreciation.

Employee benefits

The Group’s pension schemes comply with each country’s local rules and regulations. Pensions are classified as defined contribution plans or defined benefits plans. Most of the employee benefits in the Group apply defined contribution plans. Within the defined contribution plan, pension contri-butions are paid directly to insurance companies and once the contributions have been paid; the Group has no further payment obligations. These contributions are recognised in the income statement for the accounting period during which such contributions are made.

In addition to defined benefit pensions, the Group has other non-current employee benefits, such as long-service benefit and one off payment provision. These plans are classified as defined benefit plans. The defined benefit liability or asset, which has arisen from the difference between the present value of the obligations and the fair value of plan assets, has been entered in the statement of financial position. The obligations for defined benefit plans are based on actuarial calculations. The defined benefit obligation is measured as the present value of the estimated future cash flows using interest rates of government securities that have maturity terms approximating the terms of related liabilities or similar non-current interests. Actuarial gains or losses of defined benefit plans as well as the realized return on plan assets after deducting the net interest costs are recognized

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Notes to the consolidated financial statements, IFRS in other comprehensive income in the period in which they occur.

Financing costs

Financing costs are recognised in the income statement as they incur.

Income taxes

Income taxes in the consolidated income statement comprise taxes based on taxable income recognised for the period by each group company on an accrual basis, according to local tax regulations including tax adjustments from the previous periods and changes in deferred tax. Deferred tax assets or liabilities are calculated using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, using the tax rate effective on the balance sheet date. Deferred tax assets are recognised to the extent that it appears probable that future taxable profit will be available against which the temporary differences can be utilised.

Intangible assets

Other intangible assets include trademarks, patents, customer relationships, capitalised development costs and software licenses. Intangible assets are recognised in the balance sheet at historical costs less accumulated amortization according to the expected useful life and any impairment losses.

Property, plant and equipment

Group companies’ property, plant and equipment are measured at historical cost minus accumulated depreciation and any impairment losses. Ordinary repair and maintenance costs are charged to the income statement during the financial period in which they are incurred. The cost of major renovations is included in the asset’s carrying amount when it is probable that the Group will derive future economic benefits in excess of the originally assessed standard of performance of the existing asset.

Gains or losses on disposal, divestment or removal from use of property, plant and equipment are based on the difference between the net gains and the balance sheet value. Gains are shown under operating income and losses under other operating expenses.

Depreciation and amortization

Intangible and tangible assets are valued at acquisition cost less accumulated depreciation or amortization during the useful life of the assets and possible impairment losses. Depreciation is calculated on a straight-line basis on the acquisition cost over the asset’s expected useful life as follows:

Intangible assets 3–25 years

Buildings 10–50 years

Structures 10 years

Machinery and equipment 3–12 years Other tangible assets 10–30 years

Government grants

Grants received from the Government and other sources are entered into the income statement as adjustment for

expenses. Grants connected with the acquisition of intan-gible or tanintan-gible assets are deducted from the acquisition cost.

Impairment

The balance sheet values of assets are assessed for impairment on a regular basis. Should any indication of an impaired asset exist, the asset’s recoverable amount shall be assessed. The recoverable amount is the fair value of the asset minus sales-related expenditure or a higher value in use. The value in use refers to the estimated future net cash flows, discounted at their present value, that arise from the assets in question or the unit generating cash flows. The need for impairment is examined at the level of units generating cash flows, in other words, at the lowest unit level which is largely independent of other units and the cash flows of which can be separated from other cash flows.

The impairment loss is recognised in the income statement when the book value of the asset is higher than the recoverable amount. The useful life of the asset to be depreciated is reassessed in connection with the recognition of the impairment loss. An impairment loss recognized in connection with other assets than goodwill will be reversed if there have been changes in the assessments used for determining the recoverable amount. The impairment loss to be reversed may, however, not exceed the book value the asset would have without the recognition of the impairment loss. Any impairment loss on goodwill is not reversed.

Goodwill is assessed for impairment on yearly basis during the preparation of annual financial statements.

The impairment tests performed did not reveal any need to recognize impairment losses. The pre-tax discount rate (WACC) used in the testing was 8.2%.

Leases

Leases in which the lessor carries the ownership-related risks and benefits are classified as operating leases. Lease payments made on the basis of operating leases are recog-nized in the income statement.

Oras Invest Group has no financial leases.

Inventories

Inventories are measured at acquisition cost or at net realisable value, whichever is lower. The net realisable value is the price received on the date of sale, less expense. In addition to the cost of materials and direct labour, an appro-priate proportion of production overheads are included in the inventory value of finished products and work in progress.

Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions may be connected with such matters as restructuring operations, loss-making contracts, court cases or warranty costs. Changes in provisions are included in relevant expenses on the income statement.

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Notes to the consolidated financial statements, IFRS

Cash and short-term deposits

Cash and short-term deposits include cash in hand and deposits that can be withdrawn on request.

For the purpose of consolidated cash flows, cash and cash equivalents include also funds classified as other current financial assets.

Financial assets

Financial assets at fair value

through profit and loss

Financial assets at fair value through profit and loss include financial assets held for trading and measured at fair value. Derivative instruments, for which hedge accounting is not applied, are included in financial assets at fair value through profit and loss. Fair value is determined using market prices at the balance sheet date or the present value of estimated future cash flows. Changes in the fair value of financial assets are recorded through comprehensive profit and loss. Unrealised and realised gains and losses are included in the income statement in the period in which they occur.

Loans and receivables

Loans and receivables include accounts receivable and other receivables which are measured at acquisition cost. Accounts receivable are carried to original invoice amount. A provision for impairment of accounts receivable is established if there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probable bankruptcy of the debtor or default in payments are considered as probable indicators for the impairment of accounts receivable.

Available-for-sale financial investments

Available-for-sale financial assets consist mainly of holdings in listed companies. After initial measurement, available-for-sale investments are subsequently measured at fair value with unrealized gain or losses recognised as other comprehensive income in the fair value reserve.

When the available-for-sale investments are sold, the cumulative change in the fair value is transferred from equity and recognized together with realized gains and losses in profit and loss. The cumulative change in the fair value is also transferred to profit or loss when the assets are impaired and the impairment loss is recognized.

Other investments than listed holdings classified as available-for-sale assets are measured at acquisition price.

Financial liabilities

Financial liabilities at fair value through profit and loss are measured at their fair value. This group includes those deriva-tives whose fair value is negative.

Other financial liabilities are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate method. Transaction costs are included in the original book value of financial liabilities. Other financial liabilities include non-current and current interest-bearing liabilities and accounts payable.

Derivative contracts and hedge accounting

The Group uses derivative contracts to decrease currency and interest risks. Derivatives are used for hedging purposes and are initially recognized in the balance sheet at fair value and are subsequently re-measured at fair value on each balance sheet date. Hedge accounting is applied to those derivatives that meet the requirements of IAS 39. Hedge programmes are documented according to the requirements of IAS 39, and the efficiency of financing derivatives is tested both at the inception of, and during, the hedge.

Derivatives are classified as either cash flow hedges or hedges that hedge accounting is not applied to. Hedge accounting has been applied for new financial derivative contracts from 2011 onwards. For derivatives, that hedge accounting is not applied to, the changes in fair value are recognized under financial items in the income statement. Changes in fair value of financial derivatives, which are classified as cash flow hedges, are recognized in other comprehensive income in the fair value reserve to the extent that the hedge is effective. Accumulated fair value changes in the other comprehensive income are released into the income statement in the period during which the hedged cash flow affects the result.

Hedge accounting is not applied to commodity derivatives.

Dividends

Dividends paid by the group are recognised for the period during which their payment is approved by the shareholders in the Annual General Meeting.

Application of new IFRS standards

and interpretations

The Group has adopted the following new or amended standard as of 1 January 2014:

– IFRS 10 Consolidated financial statements: The standard establishes control as the base for consolidation and provides guidance on how to apply principles of control when it is challenging to assess.

– IFRS 12 Disclosure of Interests in Other Entities: The standard includes disclosure requirements for all forms of interest in other entities.

– IAS 27 (revised 2011) Separate Financial Statements: The revised standard includes the requirements for separate financial statements that are left after the control provisions of IAS 27 have been included in the new IFRS 10. – Amendment to IAS 32 Financial instruments: Presentation:

The amendment clarifies the conditions for net presen-tation of financial assets and liabilities and introduces some additional application guidance.

In the fiscal year 2015, depending on when they become effective, the Group will introduce the following new or revised standards and interpretations published by IASB: – IFRS 9 Financial Instruments, effective for accounting

periods beginning on or after 1 January 2018.

– IFRS 15 Revenue from Contracts with Customers, effective for accounting periods beginning on or after January 2017.

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Notes to the consolidated financial statements, IFRS – Amendment to IAS 19 Defined Benefit Plans: Employee

Contributions, effective for accounting periods beginning on or after 1 July 2014.

– Improvements to IFRS 2010–2012 and 2011–2013 (Annual Improvements), effective for the accounting periods beginning on or after 1 July 2014, however it is estimated that these improvements have no significant impact on reported figures.

It is anticipated that the publication of any other amended and new standards and interpretations have no material impact on the reported figures 2014 or in future years for the Group.

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2. BUSINESS COMBINATIONS

2014

During the financial year 2014 there were no business acquisitions.

2013

The effect of business

combination, tEUR Recognised in 2013

Proforma of the financial year 2013 Net sales 28,241 124,261 EBIT –699 4,559

Proforma of the financial year 2013 presents the effect of business combination if the acquisition made in 2013 had been consolidated to the consolidated financial statements since 1 January 2013.

Hansa acquisition

Oras Invest Group signed on 16 September 2013 an agreement for the purchase of German Hansa Armaturen GmbH with its subsidiaries. Hansa develops, manufactures and markets sanitary fittings. Its key areas are in Central Europe. The ownership and control have been transferred to Oras Invest Group on 30 September 2013, which is also the date of consolidation.

The acquisition cost is calculated on the basis of the Hansa’s balance sheet as per 30 September 2013 prepared, in accordance with IFRS and the Oras Invest Group’s accounting principles.

The goodwill of 24,609 tEUR arising from the acquisition is mainly attributable to the acquired workforce, future products and customers, geographical reach and potential synergies that will benefit the Oras business. None of the goodwill recognized is tax deductible.

The following table summarizes the consideration paid for Hansa Armaturen GmbH with its subsidiaries and the amounts of the assets acquired and liabilities recognized at the acquisition date.

Consideration, tEUR

Cash 154,487

Total consideration transferred 154,487 Consideration paid in cash 154,487 Acquired cash and cash equivalents –83,786

Cash flow effect 70,701

The assets and liabilities arising from the acquisition, tEUR Property, plant and equipment 10,762

Intangible assets 58,207

Deferred tax assets 10,206

Inventories 22,534

Trade and other receivables 35,236 Cash and cash equivalents 83,786

Total assets 220,731

Provisions 3,883

Pension benefit obligation 15,972 Interest-bearing liabilities 12,515 Trade and other liabilities 39,485 Deferred tax liabilities 18,998

Total liabilities 90,853

Total identifiable net assets 129,878

Goodwill 24,609

The acquisition related costs have been recorded as other operating expenses in the consolidated statement of comprehensive income for financial year 2013.

The net sales included in the consolidated statement of comprehensive income since 1 October 2013 was contributed by Hansa by 28,241 tEUR. Hansa contributed EBIT of –699 tEUR over the same period 2013.

If Hansa would have been consolidated from 1 January 2013, the consolidated statement of comprehensive income would show net sales of 252,718 tEUR and EBIT 8,416 tEUR for year 2013.

NOTES TO CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(EUR 1,000) 2014 2013

3. NET SALES

Sales of goods 258,109 156,698

Total 258,109 156,698

4. OTHER OPERATING INCOME

Gains from sales of fixed assets 106 344

Rental income 2 2

Grants 95 129

Other items 393 201

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(EUR 1,000) 2014 2013

5. EMPLOYEE BENEFITS

Salaries, wages and bonuses 55,009 33,192

Pension expenses, defined contribution plans 4,388 2,892

Pension expenses, defined benefit plans 141 436

Other social security expenses 7,399 3,987

Total 66,937 40,507

Number of personnel

Average number of personnel during fiscal year 1,432 1,034 Number of personnel 31 .12 .

white-collar workers 617 638

blue-collar workers 807 801

Total 1,424 1,439

6. DEPRECIATION AND AMORTISATION

Depreciation and amortization by asset category

Trademark 1,181 295

Intangible rights 30 31

Other intangible assets 316 167

Customer relationships 1,596 399

Capitalized development costs 384 580

Buildings and structures 1,214 954

Machinery and equipment 4,420 3,536

Other tangible assets 52 42

Total 9,193 6,004

During year 2013 the useful lives of capitalized development costs have been reassessed and in income statement has been recorded as one-time cost of 406 tEUR depreciation .

7. FINANCIAL INCOME AND EXPENSES

Financial income

Dividend income from others 37 41

Interest income 202 152

Exchange rate differences 18

Change of fair value of financial instruments 83 147

Other financial income 27 8

Total 367 348

Financial expenses

Interest expenses 5,390 5,020

Exchange rate differences 76

Other financial expenses 684 252

Total 6,074 5,348

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(EUR 1,000) 2014 2013

8. INCOME TAXES

Current year and previous years taxes

Taxes based on taxable income for fiscal year 4,436 2,320

Taxes from previous fiscal years –92 40

Deferred taxes 1,236 –663

Total 5,580 1,697

Tax reconciliation

Profit before taxes 50,789 12,749

Share of profit of an associate 33,348 9,591

17,441 3,158 Taxes calculated at parent company's tax rate (20 .0%) 3,488 774 Differing tax rates of foreign subsidiaries 1,391 59

Non-deductible expenditure 631 1,071

Tax-exempt income –181 –98

Tax-exempt dividends –7 –9

Change in tax legislation –103

Taxes from previous years –92 40

Other items 350 –37

Total 5,580 1,697

Effective tax rate % 10.99% 13 .31%

Oras Invest Ltd and Oras Ltd have a tax issue related to the previous years . The companies have challenged the tax decisions and continues the appeal process .

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NOTES TO CONSOLIDATED BALANCE SHEET

9. GOODWILL AND INTANGIBLE ASSETS

2014

(EUR 1,000) Goodwill Trademark Intangible rights

Other intangible assets Customer relation-ships Capitalized

develop-ment costs Total Acquisition cost on 1 Jan 25,359 17,721 1,229 6,371 39,900 2,316 92,896

Conversion difference –2 –2

Increases 5 645 650

Decreases 0

Other changes –750 –750

Acquisition costs 31 Dec 24,609 17,721 1,234 7,014 39,900 2,316 92,794 Accumulated amortisation

and impairment 1 Jan 295 1,101 5,739 399 1,035 8,569

Conversion difference –1 –1

Amortisation 1,181 30 316 1,596 384 3,507

Impairment 0

Cumulative amortisation on disposals and

transfers 0

Accumulated amortisation

and impairment 31 Dec 1,476 1,131 6,054 1,995 1,419 12,075 Book value 1 January 25,359 17,426 128 632 39,501 1,281 84,327 Book value 31 December 24,609 16,245 103 960 37,905 897 80,719

2013

(EUR 1,000) Goodwill Trademark Intangible rights

Other intangible assets Customer relation-ships Capitalized

develop-ment costs Total

Acquisition cost on 1 Jan 1,173 2,162 1,853 5,188

Conversion difference 0

Increases 4 42 573 619

Decreases –110 –110

Acquisition 25,359 17,721 52 4,167 39,900 87,199

Other changes 0

Acquisition costs 31 Dec 25,359 17,721 1,229 6,371 39,900 2,316 92,896 Accumulated amortisation

and impairment 1 Jan 1,056 1,953 455 3,464

Conversion difference 0

Amortisation 295 31 167 399 580 1,472

Impairment 0

Acquisition 14 3,619 3,633

Cumulative amortisation on disposals and

transfers 0

Accumulated amortisation

and impairment 31 Dec 295 1,101 5,739 399 1,035 8,569

Book value 1 January 0 0 117 209 0 1,398 1,724

Book value 31 December 25,359 17,426 128 632 39,501 1,281 84,327

Oras Invest Group acquired Hansa on September 30, 2013 and goodwill amounting to 25,359 tEUR was recognized as a result of purchase price allocation. During 2014 purchase price was adjusted and amount of goodwill as of December 31, 2014 is

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Notes to the consolidated financial statements, IFRS 24,609 tEUR. In connection of acquisition of Hansa, customer relationships and trademark value was identified. Apart from goodwill, Oras Invest Group does not have any other intangible assets with indefinite useful lives.

According to the IFRS 3 standard, goodwill is not depre-ciated, but it is tested at least annually for any impairment. If a unit’s carrying value does not exceed goodwill amount, impairtment is booked.

Impairment test is carried out at Oras Group level as the synergies obtained from the acquisition will benefit the whole Oras Group. Cash flow forecasts related to goodwill cover a period of five years. Terminal value is calculated from the fifth year’s cash flow. Cash flow forecasts are based on the strategic plans approved by the management. Key assumptions of the

plans relate to growth and profitability development of the markets and the product offerings. A cash-generating unit’s useful life has been assumed to be indefinite, since this unit has been estimated to impact on the accrual of cash flows for an undetermined period. The discount rate used is based on the interest rate level reflecting the average yield requirement for the cash generating unit. The discount rate (pre-tax) used was 8.2 per cent. The 2014 goodwill impairment test indicated that there was no need to record impairment.

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10. PROPERTY, PLANT AND EQUIPMENT

2014 (EUR 1,000) Land Buildings and structures Machinery and equipment Other tangible assets Advance payments and work in progress Total Acquisition cost on 1 Jan 1,905 36,137 101,257 3,501 851 143,651

Conversion difference –10 –216 –322 –4 –552

Increases 57 1,270 1,383 32 1,611 4,353

Decreases –26 –2,019 –443 –2,488

Other changes 1,337 –1,337 0

Acquisition costs 31 Dec 1,952 37,165 101,636 3,086 1,125 144,964 Accumulated depreciation

and impairment 1 Jan 25,335 83,181 2,796 111,312

Conversion difference –86 –230 –3 –319

Depreciation 1,214 4,420 52 5,686

Impairment 0

Cumulative depreciation on disposals and

transfers –26 –1,983 –371 –2,380

Accumulated depreciation

and impairment 31 Dec 26,437 85,388 2,474 114,299

Book value 1 January 1,905 10,802 18,076 705 851 32,339 Book value 31 December 1,952 10,728 16,248 612 1,125 30,665

2013 (EUR 1,000) Land Buildings and structures Machinery and equipment Other tangible assets Advance payments and work in progress Total Acquisition cost on 1 Jan 590 18,611 61,585 3,101 642 84,529

Conversion difference –6 –132 –229 –1 –368

Increases 63 442 5 2,700 3,210

Decreases –2 –165 –859 –5 –1,031

Acquisition 1,323 17,760 37,391 399 437 57,310

Other changes 2,927 1 –2,927 1

Acquisition costs 31 Dec 1,905 36,137 101,257 3,501 851 143,651 Accumulated depreciation

and impairment 1 Jan 11,249 47,421 2,402 61,072

Conversion difference –42 –64 –106

Depreciation 954 3,536 42 4,532

Impairment 0

Acquisition 13,284 32,907 357 46,548

Cumulative depreciation on disposals and

transfers –110 –619 –5 –734

Accumulated depreciation

and impairment 31 Dec 25,335 83,181 2,796 111,312

Book value 1 January 590 7,362 14,164 699 642 23,457 Book value 31 December 1,905 10,802 18,076 705 851 32,339

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11. BOOK VALUES AND FINANCIAL ASSETS AND LIABILITIES BY ITEM GROUPS

Values 31 December 2014 Balance item (EUR 1,000)

Financial items at fair value through profit

and loss receivablesLoans and

Financial items available for sale Derivative contracts under hedge accounting Loans and

borrow-ings Book value Fair value

IFRS 7 Fair value hierarchy level

Non-current financial assets

Other shares 305 305 305

Financial assets 18 18 18 1

Receivables 2,899 2,899 2,899

Current financial assets

Accounts receivable and other

receivables 44,147 44,147 44,147

Value by item groups 0 47,046 323 0 0 47,369 47,369 Non-current financial liabilities

Interest-bearing non-current liabilities 105,013 105,013 105,013

Derivative contracts 4,076 4,076 4,076 2

Current financial liabilities

Interest-bearing current liabilities 70,901 70,901 70,901

Derivative contracts 529 529 529 2

Accounts payable and other liabilities 55,223 55,223 55,223

Value by item groups 529 0 0 4,076 231,137 235,742 235,742

Values 31 December 2013 Balance item (EUR 1,000)

Financial items at fair value through profit

and loss receivablesLoans and

Financial items available for sale Derivative contracts under hedge accounting Loans and

borrow-ings Book value Fair value

IFRS 7 Fair value hierarchy level

Non-current financial assets

Other shares 305 305 305

Financial assets 18 18 18 1

Derivative contracts 3,252 3,252 3252 2

Receivables 6,476 6,476 6476

Current financial assets

Accounts receivable and other

receivables 39,482 39,482 39,482

Value by item groups 0 45,958 323 3,252 0 49,533 49,533 Non-current financial liabilities

Interest-bearing non-current liabilities 141,514 141,514 141,514

Derivative contracts 1,500 1,500 1,500 2

Other non-current derivatives 3,187 3,187 3,187

Current financial liabilities

Interest-bearing current liabilities 147,386 147,386 147,386

Derivative contracts 632 107 739 739 2

Accounts payable and other liabilities 47,321 47,321 47,321

Value by item groups 632 0 0 1,607 339,408 341,647 341,647

Determination and Hierarchy of Fair Values

Level 1: the measure of instrument is based on quoted prices in active markets for identical assets or liabilities . Level 2: the measure for the instrument include also other than quoted prices observable for the assets or liability, either directly or indirectly by using valuation techniques .

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(EUR 1,000) 2014 2013

12. INVESTMENTS IN ASSOCIATED COMPANIES

Acquisition 1 Jan 376,605 400,353

Share of profit 33,349 9,591

Dividends received –27,660 –27,342

Share of other comprehensive income 1,018 –5,976

Decreases –21

Book value 31 Dec 383,312 376,605

Associated company Kiinteistö Oy Kaivopuiston Teknologiakylä was divested during the year 2013 .

Group’s associated companies and their assets, liabilities, net sales and profit/loss

(EUR 1,000) Assets Liabilities Net sales Profit/loss Ownership (%) Uponor Corporation 681,800 383,900 1,023,900 36,000 22 .64 Kemira Oyj 2,295,700 1,132,400 2,136,700 95,800 18 .20 Tikkurila Oyj 389,809 197,151 618,406 48,272 18 .07

Closing price per

share 31 Dec 2014 Total market value of the ownership 31 Dec 2014

Uponor Corporation 11 .49 190,410

Kemira Oyj 9 .885 279,530

Tikkurila Oyj 14 .49 115,479

Total 585,419

(EUR 1,000) 2014 2013

13. OTHER NON-CURRENT FINANCIAL ASSETS

Shares 323 323

Pension plan assets 8,687 8,942

Total 9,010 9,265

Shares

Acquisition 1 Jan 323 328

Exchange rate difference –4 –7

Assets available for sale – changes in value 4 2

Book value 31 Dec 323 323

Other non-current financial assets include other shares, which are booked at acquisition value since it has not been possible to determine the fair value reliably . In total these are 305 tEUR .

14. OTHER NON-CURRENT RECEIVABLES

Arrangement fee 219 382

Tax receivables 2,507 3,245

Other non-current receivables 173 2,849

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15. DEFERRED TAXES

Deferred tax asset from the tax loss carry forwards has been recognized in 2014 up to the amount that company expects to be utilized . Tax loss carry forwards of which deferred tax asset has not been recognized amounts to 6,239 tEUR (7,080 tEUR 2013) . 2014

(EUR 1,000) 1 Jan 2014

Exchange rate

difference the period 31 Dec 2014Change of

Deferred tax assets

Investments in financial instruments 662 148 810

Intangible and tangible assets 894 –6 –26 862

Employee benefits 1,743 –7 833 2,569

Internal margins 300 –45 255

Provisions 259 –4 –54 201

Tax losses carried forward 7,000 –1,910 5,090

Other temporary differences 742 3 –295 450

Total 11,600 –14 –1,349 10,237

Deferred tax liabilities

Accumulated depreciation difference and untaxed

reserve 855 –5 –84 766

Intangible and tangible assets 18,455 –992 17,463

Investments and financial instruments 32 –11 21

Other temporary differences 71 –1 –6 64

Total 19,413 –6 –1,093 18,314

Deferred taxes on 31 Dec 2014 net –7,813 –8 –256 –8,077 2013

(EUR 1,000) 1 Jan 2013

Exchange rate

difference Acquisition the period 31 Dec 2013Change of

Deferred tax assets

Investments in financial instruments 1,445 –783 662

Intangible and tangible assets 73 –9 770 60 894

Employee benefits 269 –5 1,634 –155 1,743

Internal margins 205 207 –112 300

Provisions 153 2 93 11 259

Tax losses carried forward 7,000 7,000

Other temporary differences 161 –4 502 83 742

Total 2,306 –16 10,206 –896 11,600

Deferred tax liabilities

Accumulated depreciation difference

and untaxed reserve 1,037 –5 –177 855

Intangible and tangible assets 342 –1 18,926 –812 18,455

Investments and financial instruments 55 30 –53 32

Other temporary differences 5 42 24 71

Total 1,439 –6 18,998 –1,018 19,413

Deferred taxes on 31 Dec 2013, net 867 –10 –8,792 122 –7,813

(EUR 1,000) 2014 2013

16. OTHER NON-CURRENT ASSETS

Cross-currency derivative 3,252

(26)

(EUR 1,000) 2014 2013

17. INVENTORIES

Materials and supplies 20,417 18,665

Work in progress 7,022 7,188

Finished goods 15,168 14,223

Total 42,607 40,076

Inventories are stated at the lower of cost or likely net realisable value .