KEY TERMS

NET ASSET VALUE

The net asset value of the Group is of central importance to an investment company such as Norvestia. The report on net asset value report is a calculation of the difference between the fair value of Norvestia’s assets and that of its liabilities. Thus, the dividend-adjusted change in net asset value in a given period indicates the return on investments. The net asset value also corresponds to shareholder’s equity according to IFRS without minority share.

Norvestia's net asset value is calculated and published monthly.

Discount in net asset value, expressed as percentages, is the difference between the net asset value per share and the price of the B share.

IFRS

In accordance with EU regulation number 1606/2002 companies whose shares are publicly traded in the member countries of ETA-zone are obliged to prepare the consolidated financial statement in accordance with IFRS. Norvestia has prepared its consolidated financial statement in accordance with IFRS since 2005. The financial statement of the parent company are prepared in accordance with the Finnish accounting standards, FAS.

TAXATION

Investment companies pay tax on realized returns at the prevailing corporate tax rate. Deferred tax liability is calculated on unrealized gains, i.e. the value by which the fair value of the company's assets exceeds their purchase value. The deferred tax liability for 2008 and 2009 has been calculated at a tax rate of 26%.

When comparing an investment company such as Norvestia with investment funds for example, the differences in taxation should be taken into account. This applies to taxation on both profit distribution and appreciation. The effects of taxation are taken fully into account in Norvestia's reports on net asset value. Dividends received by Norvestia from Finnish listed companies are tax-free.

VOLATILITY

Volatility or standard deviation measures statistically the extent of daily fluctuations in the value of the portfolio and so indicates the risk level associated with it. Generally speaking, the higher the volatility, or the larger the fluctuations in value, the higher the risk and vice versa.

The average volatility of the OMX Helsinki CAP yield index calculated on monthly observations was 32.0% in 2009. Volatility in Norvestia's dividend-adjusted net asset value was 7.4%. Low volatility is part of Norvestia’s strategy, which generally presupposes low risk levels and steady returns.

SHARPE RATIO

The Sharpe ratio is a measure of risk-adjusted return developed by Nobelist William Sharpe. Mathematically the ratio is calculated by dividing the return exceeding the risk-free rate by the volatility of the return. The greater the investment’s Sharpe ratio, the higher its risk-adjusted return. The Sharpe ratio can be used to compare returns between investments with different risks. If an investment has generated returns below the risk-free rate its Sharpe ratio is negative.