Basis for preparation

These interim financial statements are prepared in accordance with IAS 34 Interim Financial Reporting and are VVO’s first interim financial statements prepared in accordance with IFRS. The comparative information on the previous periods converted to comply with IFRS and the resulting changes compared to the FAS-based interim financial statements are presented above in this interim report.

The preparation of IFRS financial statements requires application of judgement by management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. Management has to make judgements also when applying the accounting policies of the Group. As the estimates and related assumptions are based on management’s view at the end of the interim period, they include risks and uncertainties. Actual results may differ from the estimates and assumptions used. Below are presented the items of the interim financial statement where has been applied judgement by management, as well as the assumptions about the future and other uncertainty factors in estimates at the end of the reporting period, which may have a significant risk and cause effects to the carrying amounts of assets and liabilities of VVO Group within the next financial year.

• Classification of properties in Group’s operating activities as well as classification of investment property acquisitions either as business combinations or asset acquisitions.

• Recognition principle of deferred taxes

• Classification of financial instruments

• Classification of long-term leases into operating leases

• Exemptions applied in the transition

• Fair value measurement of investment property: In the consolidated financial statements determination of fair values of investment property is the area that involves the most significant uncertainty factors arising from the estimates and assumptions that have been used. The determination of the fair value of investment property requires significant management discretion and assumptions, particularly with respect to market prices and amounts of future rental income. VVO uses valuation techniques that are appropriate under those circumstances, and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

The figures for the income statement and balance sheet are consolidated. The figures in the report are rounded, and consequently the sum of individual figures may deviate from the aggregate amount presented. The interim report is unaudited.