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 2013	65	1,019	68,048	22,082	381
Purchases	—	11,639	19,547	1,672	472
Disposals	—	(10,171)	(25,603)	(4,856)	(672)
Fair value gains/losses recorded in the income statements	(1)	—	(434)	224	—
Fair value gains/losses recorded in other comprehensive income	—	—	(284)	—	—
Movement in impairment allowance	—	4	(47)	—	—
Accrued interest	—	89	2,022	505	—
Foreign exchange adjustments	—	65	1,633	—	—
Other movements	(1)	—	(9)	(20)	—
Balance as at 31 December 2013	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

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 2014, there is one building outstanding in the amount of CZK 63 million.

In CZK million, as at 31 December	2014	2013
Carrying amount as at the beginning of the year	63	65
Reclassification to/from assets held for sale	—	(1)
Net impairment loss of the period	—	(1)
Revaluation of the period	—	—
Carrying amount as at the end of the year	63	63

XLS

F.3.2. Loans and other investments

In CZK million, as at 31 December	2014	2013
Loans
Unquoted bonds	886	865
Loans to subsidiaries	909	1,232
Other loans	4,457	548
Total	6,252	2,645
Current portion	4,937	1,721
Non-current portion	1,315	924

XLS

On 30 May 2014, a one year loan was provided to the subsidiary PALAC KRIZIK a.s. in the amount of CZK 537 million.

A short-term loan to a subsidiary Apollo Business Centre IV a.s. was provided in 2013 in the amount of CZK 1,232 million and was partially repaid in the amount of CZK 840 million. The outstanding balance of CZK 372 million as at 31 December 2014 has been transformed into a loan with maturity in 2019.

Increase of other loans is caused mainly by reverse REPO operations in the total amount of CZK 4,400 million.

In CZK million, as at 31 December	2014	2013
Other investments
Deposits under reinsurance business accepted	2	2
Term deposits with credit institutions	—	179
Total	2	181
Current portion	2	181

XLS

The fair value of loans and other investments:

In CZK million, as at 31 December	2014	2013
Loans	6,462	2,775
Unquoted bonds	1,096	1,006
Loans to subsidiaries	909	1,221
Other loans	4,457	548
Other investments	2	181
Deposits under reinsurance business accepted	2	2
Term deposits with credit institutions	—	179
Total	6,464	2,956

XLS

In CZK million, as at 31 December 2014	Level 1	Level 2	Level 3	Total
Loans
Unquoted bonds	—	1,096	—	1,096
Loans to subsidiaries	—	909	—	909
Other loans	—	4,400	57	4,457
Other investments
Deposits under reinsurance business accepted	—	2	—	2
Total	—	6,407	57	6,464

XLS

In CZK million, as at 31 December 2013	Level 1	Level 2	Level 3	Total
Loans
Unquoted bonds	—	1,006	—	1,006
Loans to subsidiaries	—	1,221	—	1,221
Other loans	—	491	57	548
Other investments
Deposits under reinsurance business accepted	—	2	—	2
Term deposits with credit institutions	—	179	—	179
Total		2,899	57	2,956

XLS

F.3.3. Available-for-sale financial assets

In CZK million, as at 31 December	2014	2013
Unquoted equities at cost	4	4
Equities at fair value	2,230	2,489
Quoted	2,230	2,489
Bonds	56,357	55,358
Quoted	40,265	35,594
Unquoted	16,092	19,764
Investment fund units	6,378	7,022
Total	64,969	64,873
Current portion	9,158	7,517
Non-current portion	55,811	57,356

XLS

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

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	—	—	40,265
Unquoted	—	10,355	5,737	16,092
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.

In CZK million, as at 31 December 2013	Level 1	Level 2	Level 3	Total
Unquoted equities at cost	—	—	4	4
Equities at fair value	2,489	—	—	2,489
Quoted	2,489	—	—	2,489
Bonds	35,594	19,764	—	55,358
Quoted	35,594	—	—	35,594
Unquoted	—	19,764	—	19,764
Investment fund units	7,022	—	—	7,022
Total	45,105	19,764	4	64,873

XLS

There was a transfer in the amount of CZK 159 million from Level 2 into Level 1 in 2013.

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

In CZK million, as at 31 December	2014	2013
Opening balance	4	51
Transfers into Level 3	5,137	—
Total gains or losses	600	—
in income statement	36	—
in other comprehensive income	564	—
Settlements	—	(1)
Impairment	—	(46)
Closing balance	5,741	4

XLS

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.

Further 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 as a result of unavailable market information about its future yields. In the year 2013 impairment on Level 3 available-for-sale financial assets has been booked. The impairment reflected the changes of inputs for fair value measurement of a specific impaired asset.

	2014	2013
Transfer into Level 1 from Level 2	183	159
Transfer into Level 3 from Level 2	5,137	—

XLS

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

In CZK million, as at 31 December	2014	2013
Up to 1 year	9,158	7,517
Between 1 and 5 years	20,484	23,421
Between 5 and 10 years	13,431	9,876
More than 10 years	13,284	14,544
Total	56,357	55,358

XLS

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

In CZK million, as at 31 December 2014	Realised gains	Realised losses	Impairment losses
Equities	191	(191)	(83)
Bonds	345	(118)
Investment fund units	346	(2)	(97)
Other available for sale financial assets	378	(15)
Total	1,260	(326)	(180)

XLS

In CZK million, as at 31 December 2013	Realised gains	Realised losses	Impairment losses
Equities	350	(456)	(194)
Bonds	674	(187)	—
Investment fund units	459	(131)	(18)
Other available for sale financial assets	36	(453)	(96)
Total	1,519	(1,227)	(308)

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
	2014	2013	2014	2013	2014	2013
Bonds	—	—	7,043	8,132	7,043	8,132
Quoted	—	—	2,506	2,687	2,506	2,687
Unquoted	—	—	4,537	5,445	4,537	5,445
Derivatives	77	119	88	167	165	286
Unit-linked investments	—	—	7,404	11,189	7,404	11,189
Allocated to policyholders	—	—	7,112	10,652	7,112	10,652
Not allocated to policyholders	—	—	292	537	292	537
Total	77	119	14,535	19,488	14,612	19,607
Current portion	—	—	—	—	3,825	1,046
Non-current portion	—	—	—	—	10,787	18,561

XLS

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 2014	Level 1	Level 2	Level 3	Total
Bonds	2,506	4,537	—	7,043
Quoted	2,506	—	—	2,506
Unquoted	—	4,537	—	4,537
Derivatives	12	153	—	165
Unit-linked investments	7,373	31	—	7,404
Total	9,891	4,721	—	14,612

XLS

There was a transfer into Level 1 from Level 2 in the amount of CZK 23 million in 2014.

In CZK million, as at 31 December 2013	Level 1	Level 2	Level 3	Total
Bonds	2,687	5,445	—	8,132
Quoted	2,687	—	—	2,687
Unquoted	—	5,445	—	5,445
Derivatives	18	268	—	286
Unit-linked investments	11,183	6	—	11,189
Total	13,888	5,719		19,607

XLS

There were no significant transfers between Level 1 and Level 2 fair value measurement categories in 2013.