F.3. Investments

Carrying values of investment:

In CZK million, for the year ended 31 December	Investment properties	Loans	Available-for-sale	Fair value through profit or loss	Other investments
Balance as at 1 January 2014	63	2,645	64,873	19,607	181
Purchases	–	36,706	15,410	1,410	555
Disposals	–	(33,161)	(22,015)	(6,643)	(734)
Fair value gains/losses recorded in the income statements	–	–	362	(3)	–
Fair value gains/losses recorded in other comprehensive income	–	–	3,153	–	–
Movement in impairment allowance	–	19	–	–	–
Accrued interest	–	104	2,012	245	–
Foreign exchange adjustments	–	(61)	1,175	–	–
Other movements	–	–	(1)	(4)	–
Balance as at 31 December 2014	63	6,252	64,969	14,612	2
Purchases	–	41,672	12,151	1,613	–
Disposals	–	(43,919)	(16,259)	(5,133)	–
Fair value gains/losses recorded in the income statements	–	–	(31)	233	–
Fair value gains/losses recorded in other comprehensive income	–	–	1,165	–	–
Movement in impairment allowance	(11)	98	–	–	–
Accrued interest	–	20	(260)	(15)	–
Foreign exchange adjustments	–	(10)	297	–	–
Other movements	6	2	–	39	(2)
Balance as at 31 December 2015	58	4,115	62,032	11,349	–

XLS

F.3.1. Investment properties

The fair value of investment property is based on the valuation of an independent valuator who holds recognised and relevant professional qualification and has recent experience in the location and category of the investment property being valued. Based on the analysis of inputs used for valuation, considering the limited cases where the inputs would be observable in active markets, the Company proceeded to classify the whole category at level 3. As at 31 December 2015, there are buildings outstanding in the amount of CZK 58 million. Building in the amount CZK 6 million was reclassified from held for sale category. For details please refer to F.6. Based on the external valuation, decrease in revaluation in the amount CZK 11 million was recognised on building and corresponding land on Kříženeckého náměstí in Prague.

In CZK million, as at 31 December	2015	2014
Carrying amount as at the beginning of the year	63	63
Reclassification to/from assets held for sale	6	–
Revaluation	(11)	–
Carrying amount as at the end of the year	58	63

XLS

F.3.2. Loans and other investments

In CZK million, as at 31 December	2015	2014
Loans
Bonds	905	886
Loans to subsidiaries	875	909
Other loans	2,335	4,457
Total	4,115	6,252
Current portion	2,334	4,937
Non-current portion	1,781	1,315

XLS

Decrease of other loans in 2015 is caused by decrease of reverse REPO operations from CZK 4,400 million in 2014 to CZK 2,300 million in 2015.

In CZK million, as at 31 December	2015	2014
Other investments	–	2
Total	–	2
Current portion	–	2

XLS

The fair value of loans and other investments:

In CZK million, as at 31 December	2015	2014
Loans	4,311	6,462
Bonds	1,101	1,096
Loans to subsidiaries	875	909
Other loans	2,335	4,457
Other investments	–	2
Total	4,311	6,464

XLS

In CZK million, as at 31 December 2015	Level 1	Level 2	Level 3	Total
Loans
Bonds	–	1,101	–	1,101
Loans to subsidiaries	–	875	–	875
Other loans	–	2,335	–	2,335
Total	–	4,311	–	4,311

In CZK million, as at 31 December 2014	Level 1	Level 2	Level 3	Total
Loans
Bonds	–	1,096	–	1,096
Loans to subsidiaries	–	909	–	909
Other loans	–	4,400	57	4,457
Other investments	–	2	–	2
Total	–	6,407	57	6,464

XLS

Based on the decision of management of the Company receivables towards Kreditní banka in the net book value of CZK 57 million were written off in 2015.

F.3.3. Available-for-sale financial assets

In CZK million, as at 31 December	2015	2014
Unquoted equities at cost	4	4
Equities at fair value	2,061	2,230
Quoted	2,061	2,230
Bonds	53,427	56,357
Quoted	53,427	56,357
Investment fund units	6,540	6,378
Total	62,032	64,969
Current portion	5,828	9,158
Non-current portion	56,204	55,811

XLS

Based on clarification of definition of quoted and unquoted instruments unquoted bonds in the amount of CZK 16,092 million were reclassified from unquoted bonds to quoted bonds in 2014.

Fair value measurement as at the end of the reporting period:

In CZK million, as at 31 December 2015	Level 1	Level 2	Level 3	Total
Unquoted equities at cost	–	–	4	4
Equities at fair value	2,061	–	–	2,061
Quoted	2,061	–	–	2,061
Bonds	39,546	11,856	2,025	53,427
Quoted	39,546	11,856	2,025	53,427
Investment fund units	6,324	216		6,540
Total	47,931	12,072	2,029	62,032

In 2015 investment fund units in the amount CZK 216 million were purchased to the level 2 portfolio.

In CZK million, as at 31 December 2014	Level 1	Level 2	Level 3	Total
Unquoted equities at cost	–	–	4	4
Equities at fair value	2,230	–	–	2,230
Quoted	2,230	–	–	2,230
Bonds	40,265	10,355	5,737	56,357
Quoted	40,265	10,355	5,737	56,357
Investment fund units	6,378	–	–	6,378
Total	48,873	10,355	5,741	64,969

XLS

There was a transfer in the amount of CZK 183 million from Level 2 into Level 1 in 2014.

The following table presents the changes in Level 3 instruments for the year ended 31 December.

In CZK million, as at 31 December	2015	2014
Opening balance	5,741	4
Transfers into Level 3	317	5,137
Total gains or losses	590	600
in income statement	34	36
in other comprehensive income	556	564
Purchases	178	–
Settlements	(2,841)	–
Transfer out of Level 3	(1,956)	–
Closing balance	2,029	5,741

XLS

In 2015 corporate bonds in the amount CZK 317 million were reclassified from Level 2 to Level 3 in connection with the situation when a stress in the financial markets had an impact on availability of observable market inputs, namely level of credit spreads.

In 2014, corporate bonds in the amount of CZK 4,309 million were reclassified from Level 2 to Level 3 in connection with the situation when a stress in the financial markets had an impact on availability of observable market inputs, namely level of credit spreads. In 2015, the analysis was performed and securities in the amount CZK 1,700 million were reclassified back to the level 2. Further in 2014 an analysis was carried out in order to better harmonize the criteria for pricing and levelling. As a result, government bonds in the amount of CZK 828 million were reclassified from Level 2 to Level 3 in 2014 as a result of unavailable market information about its future yields. In 2015, analysis was performed and securities in the amount CZK 256 million were reclassified to the level 2.

	2015	2014
Transfer into Level 1 from Level 2	–	183
Transfer into Level 2 from Level 3	1,956	–
Transfer into Level 3 from Level 2	317	5,137

XLS

Maturity of available-for-sale financial assets – bonds in fair value:

In CZK million, as at 31 December	2015	2014
Up to 1 year	5,828	9,158
Between 1 and 5 years	20,113	20,484
Between 5 and 10 years	13,470	13,431
More than 10 years	14,016	13,284
Total	53,427	56,357

XLS

Realised gains and losses, and impairment losses on available-for-sale financial assets:

In CZK million, as at 31 December 2015	Realised gains	Realised losses	Impairment losses
Equities	23	–	(144)
Bonds	256	(143)	–
Investment fund units	363	–	(225)
Total	642	(143)	(369)

In CZK million, as at 31 December 2014	Realised gains	Realised losses	Impairment losses
Equities	191	(191)	(83)
Bonds	344	(118)	–
Investment fund units	346	(2)	(97)
Total	881	(311)	(180)

XLS

F.3.4. Financial assets at fair value through profit or loss

In CZK million, as at 31 December	Financial assets held-for-trading		Financial assets designated at fair value through profit or loss		Total financial assets at fair value through profit or loss
	2015	2014	2015	2014	2015	2014
Bonds	–	–	3,194	7,043	3,194	7,043
Quoted	–	–	3,194	7,043	3,194	7,043
Derivatives	69	77	288	88	357	165
Unit-linked investments	–	–	7,798	7,404	7,798	7,404
Allocated to policyholders	–	–	7,593	7,112	7,593	7,112
Not allocated to policyholders	–	–	205	292	205	292
Total	69	77	11,280	14,535	11,349	14,612
Current portion	–	–	–	–	1,014	3,825
Non-current portion	–	–	–	–	10,335	10,787

XLS

Based on clarification of definition of quoted and unquoted instruments unquoted bonds in the amount of CZK 4,537 million were reclassified from unquoted bonds to quoted bonds in 2014.

Certain portion of unit-linked investment is not as at year end allocated to policyholders and stay available for new unit linked insurance contracts.

Fair value measurement as at the end of the reporting period:

In CZK million, as at 31 December 2015	Level 1	Level 2	Level 3	Total
Bonds	2,443	751	–	3,194
Quoted	2,443	751	–	3,194
Derivatives	2	355	–	357
Unit-linked investments	6,049	1,723	26	7,798
Total	8,494	2,829	26	11,349

In 2015 Unit-linked investment fund units in the amount CZK 1,539 million were reclassified from level 1 to level 2 and CZK 26 million were reclassified from level 2 to level 3 in relation to the frequency of an officially published valuation of the fund units.

In CZK million, as at 31 December 2014	Level 1	Level 2	Level 3	Total
Bonds	2,506	4,537	–	7,043
Quoted	2,506	4,537	–	7,034
Derivatives	12	153	–	165
Unit-linked investments	7,373	31	–	7,404
Total	9,891	4,721	–	14,612

XLS

	2015	2014
Transfer into Level 1 from Level 2	–	23
Transfer into Level 2 from Level 1	1,539	–
Transfer into Level 3 from Level 2	26	–

XLS