You always know a Felt Cruiser when you see one. For years Felt has stood above the rest when it comes to creating these bikes with unique design themes and styles that grab your attention. The 2013 Cruiser line has been updated, with new bikes that bring the famous Felt quality and attention to detail to more consumers at even lower price points.
Look through the Cruiser lineup, and you’re sure to find more than one Felt Cruiser that speaks to you.
The style may be the first thing you notice about a Felt Cruiser, but once you own one, it’s the quality that stands out. From the materials we use to the way we build our frames to the customized components, these bikes are built to be ridden—and built to last.
When it comes to components, Felt refuses to cut corners. Every Felt Cruiser component is either designed in-house or specially selected to fit the needs of a particular bike. Custom grips, semiintegrated headsets, CNC-machined aluminum chain wheels, custom matched valve and embossed saddle covers—these are just some of the things you’ll find that set Felt Cruisers apart.
Felt is taking that attention to detail a step further this year with the 2013 introduction of a whole new series of Cruisers. New for 2013, Felt is offering a line of 29” Cruisers in addition to our standard Cruisers. Combining all of the style and aesthetic appeal of our traditional Cruisers with the comfort and versatility of 29” wheels, the 29” Cruiser Series will take your next bike adventure to a new level.
The Cantilever frame is the foundation of each of the new 29” Cruisers. Each frame is constructed from either aluminum—the best choice for riders who want light weight and maximum corrosion-resistance—or hi-tensile steel, which offers strength and durability at a more affordable price.
Felt’s state of the art construction methods allow us to incorporate the swoopy lines and tube shapes that make our cruisers so unique. So whether you prefer the ride of 29” wheels, high style, or simple, laid-back comfort, there’s a Felt Cruiser with your name all over it.
The Claire is a subtle blend of modern components with Victorian graphics and sensibilities. The orange cantilever frame and cream colored tires are perfect contrasts. A single speed transmission and coaster brake make for a simple to operate bike with no hassles and no messy gears. High handlebars and a springer saddle combine for a silky ride. Riding off into the sunset has never been prettier, or more fun!
The Felt LUV 26 is a perfect choice – durable, beautiful, and easy to ride. The 3 speed Shiman coaster brake are breeze to operate and are nearly maintenance free. Upright handlebars and a shock absorbing seat allow the rider to maintain a comfortable and stable position. The pink paint is complimented by delicate graphics and matching accessories. Stylish fenders are visually stunning and keep road grime off of the rider.
The Beaumont is as much 1962 as black and white TV or microwave dinners. With classic black paint and chrome, and a gorgeous springer fork, the Beaumont looks like the cruisers you used to ride around the neighborhood as a kid. The sweeping frame and fenders give a stylish jet-age silhouette while the upright handlebars and spring saddle deliver a silky ride. The Beaumont will have you whistling down the block.
The Felt Bixby is perfectly suited for your next commute to the office or trip to the beach. The sturdy cantilever frame and fun, modern graphics are distinctly Felt and will turn some heads wherever you are going. The balloon tires and upright handlebars make for a smooth ride and allow you to take in the scenery as the miles pass by. Remember, life is a journey, not a destination!
The Heritage looks like a bike straight out of the 40’s. With ample black paint and chrome, and a gorgeous springer fork, the Heritage is as graceful as it is efficient. The sweeping frame and fenders give a stylish silhouette while the upright handlebars and spring saddle give a silky ride. Setting this bike apart from other cruisers is the external seven speed drivetrain so you relive racing home before your favorite radio program starts!
From the knobby skinwall tires, to the vinyl padset, to the racing green paint, the Rail is the Cruiser adaptation of a 1980’s BMX racer. Built with oversized 29” wheels, the Rail’s surefooted performance and ride comfort will make any outing a blast. Modern refinements are abundant, like the Shimano 3 speed hub. Cro-Mo cranks and an aluminum wheelset complete this Cruiser build – 80’s clothes sold separately.
The Burner pays homage to the pioneers of mountain biking, incorporating the look of the first mountain bikes with contemporary refinements and technology. The result is a one of a kind cruiser. The Burner uses a high quality Cantilever aluminum frame that saves weight and improves ride quality. Plus, the massive 29” tires wrapped in aggressive knobby tires can grab on to almost any surface.
Copyright 2018 Felt Racing, LLC and Felt GmbH. All rights reserved. Specifications subject to change without notice.
The European Bank for Reconstruction and Development (the Bank), whose principal office is located in London, is an international organisation formed under the Agreement Establishing the Bank dated 29 May 1990 (the Agreement). At 31 December 2015, the Bank’s members comprised 64 countries, together with the European Union and the European Investment Bank.
The status, privileges and immunities of the Bank and persons connected with the Bank in the United Kingdom are confirmed and supplemented in the Headquarters Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Bank (Headquarters Agreement). The Headquarters Agreement was signed in London at the start of the Bank’s operations on 15 April 1991.
The Bank’s activities are primarily Banking and Treasury. Banking activities represent investments in projects that, in accordance with the Agreement, are made for the purpose of assisting the countries in which the Bank invests in their transition to a market economy, while applying sound banking principles. The main investment products are loans, share investments and guarantees. Treasury activities include raising debt finance, investing surplus liquidity, managing the Bank’s foreign exchange and interest rate risks and assisting clients in asset and liability management matters.
Information on the financial performance of Banking and Treasury operations is prepared regularly and provided to the chief operating decision-maker. On this basis, Banking and Treasury operations have been identified as the operating segments.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing the performance of the operating segments, is the President.
The President assesses the performance of the operating segments based on the net profit for the year, which is measured in a manner consistent with the financial statements. The segment information provided to the President for the operating segments for the year ended 31 December 2015 and 31 December 2014 is as follows:
Interest income accrued on impaired financial assets during 2015 was €30 million (2014: €13 million).54
Front-end and commitment fees of €104 million (2014: €101 million) received in 2015, together with related direct costs of €6 million (2014: €5 million), have been deferred on the balance sheet. They will be recognised in interest income over the period from disbursement to repayment of the related loan, in accordance with IAS 18. In 2015, €160 million (2014: €140 million) of previously deferred fees and direct costs were recognised in interest income.
On exit of an equity investment, the cumulative gain/loss is realised with a corresponding reversal of the cumulative unrealised gain/loss recorded prior to the exit.
During the year the Bank sold €1.1 billion of debt securities held at amortised cost (2014: €3.1 billion).
Treasury balance sheet management activities are primarily concerned with the management of market and currency risks across the Bank’s balance sheet together with short-term liquidity management. The financial performance of these activities is affected by the currency basis spreads used in the valuation of swaps through which Treasury funds the Bank’s rouble-denominated loan portfolio. These swaps are used for funding purposes and so will be held to maturity, therefore any unrealised valuation losses or gains caused by the volatility in currency basis spreads will reverse over time. A €24 million gain was recognised in 2015 relating to these spreads (2014: €57 million loss).
The profit deriving from the Bank’s debt buyback activities is unpredictable as it typically occurs through the Bank responding to investors looking to exit private placement holdings of the Bank’s debt.
In 2015 Treasury decided to create a high quality Sovereign bond portfolio to be actively managed as part of its liquidity management strategy. The income from this portfolio is recognised at fair value through profit or loss.
The hedging practices and accounting treatment are disclosed under “Derivative financial instruments and hedge accounting” in the Accounting Policies section of the report.
The fair value movement on non-qualifying and ineffective hedges represents an accounting adjustment in respect of hedging relationships undertaken by the Bank that either do not qualify for hedge accounting or do not fully offset when measured in accordance with IFRS. This unrealised adjustment does not reflect economic substance, inasmuch as the reported losses would not be realised in cash if the hedging relationships were terminated. The adjustment will reverse over time as the underlying deals approach their maturities.
The Bank applies hedge accounting where there is an identifiable, one-to-one relationship between a hedging derivative instrument and a hedged cash instrument. These relationships predominantly arise within the context of the Bank's borrowing activities in which the Bank's issued bonds are combined with swaps to achieve floating-rate debt in the currency sought by the Bank. While such hedges are matched in cash flow terms, accounting rules may require different valuation methodologies to be applied to such cash flows. In particular, a pricing component of currency swaps (known as the basis swap spread) is not applied to the related hedged bond. This component is a feature of supply and demand requirements for other currencies relative to the US dollar or the euro. Such differences can create hedge ineffectiveness or hedge failures under IFRS, the combined effect of which is reported within this line of the income statement. For the year this resulted in a loss of €166 million, comprising losses of €740 million on the derivative hedging instruments and gains of €574 million on the hedged items (2014: a loss of €22 million comprising gains of €882 million on the derivative hedging instruments and losses of €904 million on the hedged items).
In addition to the one-to-one hedge relationships for which the Bank applies hedge accounting, the Bank also hedges interest rate risk across total assets and liabilities on a portfolio basis, for which hedge accounting is not applied. This activity results in the gains or losses arising on the hedging derivative instruments being recognised in the periods in which they occur while the offsetting impact deriving from the hedged cash instruments will accrue over a different timescale in keeping with the interest rates applicable to the specific periods for those instruments. For the year this resulted in a gain of €1 million (2014: loss of €12 million).
The combined effect of all the hedging activities described above was a loss of €165 million for the year (2014: loss of €34 million).
The Bank hedges on an annual basis to minimise the exchange rate risk associated with incurring administrative expenses in the pound sterling. In 2015 a €6 million loss was recognised as ineffectiveness in the income statement arising from cash flow hedges (2014: nil).
The Bank’s expenses are predominantly incurred in the pound sterling. The pound sterling equivalent of the Bank’s general administrative expenses, excluding depreciation and amortisation, totalled £308 million (2014: £279 million).
Direct costs of €6 million (2014: €5 million) relating to loan origination in 2015 have been deferred on the balance sheet in accordance with IAS 18. These figures will be recognised in interest income over the period from disbursement to repayment of the related loans.
The following fees for work performed by the Bank’s external auditor were included in overhead expenses:
Cash and cash equivalents are those placements and advances which have an original tenor equal to, or less than, three months. “Current” is defined as those assets maturing, or liabilities due, within the next 12 months. All other assets or liabilities are “non-current”.
The collateralised placement held at the end of 2015 was current (2014: all collateralised placements were non-current).
Included within “Other” above are deferred fair value amounts related to banking derivative instruments that have a determinable return. Specifically, these relate to banking derivatives that are valued using valuation techniques other than observable market data. On initial recognition, the difference between the transaction price and the value derived from the valuation technique is deferred. These amounts are recognised in profit when market data becomes observable, when the underlying equity is exited or when the derivative is exercised. At 31 December 2015, net gains of €88 million were deferred (2014: €26 million).
At 31 December 2015 the Bank categorised 85 loan investments at amortised cost as impaired, with operating assets totalling €1.2 billion (2014: 86 loans totalling €1.2 billion).
Summarised financial information on share investments where the Bank owned greater than, or equal to, 20 per cent of the investee share capital at 31 December 2015 (venture capital associates), is detailed under note 31, “Related parties”.
Treasury holds two strategic share investments for the purposes of accessing hedging and risk management products in the currencies of underdeveloped markets. These are in the Currency Exchange Fund N.V. and the Frontier Clearing Fund. The Bank also has a purely nominal shareholding in SWIFT as membership is required to participate in this international payments system.
The Bank’s outstanding debts evidenced by certificates and related fair value hedging swaps are summarised below, both in the currency of the bond and the currency obtained after currency swap hedges have been taken into account.
Where the swap counterparty exercises a right to terminate the hedging swap prior to legal maturity, the Bank is committed to exercise the same right with its issued bond.
During the year the Bank redeemed €0.5 billion of bonds and medium-term notes prior to maturity (2014: €1.3 billion), generating a net gain of €8 million (2014: €5 million).
The Bank’s capital stock is divided into paid-in shares and callable shares. Each share has a par value of €10,000. At the Bank’s Annual Meeting in May 2010, the Board of Governors approved a two-step increase in the authorised capital stock of the Bank: a €1.0 billion increase in authorised paid-in shares and a €9.0 billion increase in authorised callable capital shares, amounting to a €10.0 billion aggregate increase in the authorised capital stock of the Bank (collectively referred to as the second capital increase). Resolution No. 126 authorised the increase in authorised capital stock by 100,000 paid-in shares, each share having a par value of €10,000, taking the authorised capital stock of the Bank to €21.0 billion. Resolution No. 128 authorised the increase in the authorised capital stock of the Bank by 900,000 callable shares, each share having a par value of €10,000. These shares were originally subject to redemption in accordance with the terms of Resolution No. 128, but such provisions were removed under the terms of Resolution No. 183 approved by the Board of Governors at the 2015 Annual Meeting. The increase in callable capital became effective in April 2011.
Payment for the paid-in shares issued as part of the original authorised capital stock, and as part of the first capital increase and subscribed to by members, is made over a period of years determined in advance. Payment for the paid-in shares issued under the second capital increase was by way of a reallocation of net income previously allocated to surplus for other purposes, namely for the payment of such paid-in shares, pursuant to Article 36.1 of the Agreement and approved by Board of Governors Resolution No. 126, dated 14 May 2010. Article 6.4 of the Agreement states that payment of the amount subscribed to the callable capital is subject to call by the Bank, taking account of Articles 17 and 42 of the Agreement, only as and when required by the Bank to meet its liabilities. Article 42.1 states that in the event of the termination of the Bank’s operations, the liability of all members for all uncalled subscriptions to the capital stock will continue until all claims of creditors, including all contingent claims, have been discharged.
The Agreement allows for a member to withdraw from the Bank, in which case the Bank is required to repurchase the former member’s shares. No member has ever withdrawn its membership. The stability in the membership reflects the fact that the members are 64 countries and two inter-governmental organisations, and that the purpose of the Bank is to foster the transition process in politically qualifying countries from central Europe to Central Asia and the SEMED region.
Moreover, there is a financial disincentive to withdrawing membership. The upper limit of the amount of the repurchase price of the former member’s shares is the amount of its paid-in capital, yet a former member remains liable for its direct obligations and its contingent liabilities to the Bank for as long as any part of the loans, share investments or guarantees contracted before it ceased to be a member are outstanding. Were a member to withdraw from the Bank, the Bank would be able to impose conditions and set dates in respect of payments for shares repurchased. If, for example, paying a former member would have adverse consequences for the Bank’s financial position, the Bank could defer payment until the risk had passed, and indefinitely if appropriate. If a payment was then made to a former member, the member would be required to repay, on demand, the amount by which the repurchase price would have been reduced if the losses for which the former member remained liable had been taken into account at the time of payment.
Under the Agreement, payment for the paid-in shares of the initial capital stock subscribed to by members was made in five equal annual instalments. Of each instalment, up to 50 per cent was payable in non-negotiable, non-interest-bearing promissory notes or other obligations issued by the subscribing member and payable to the Bank at par value upon demand. Under Resolution No. 59, payment for the paid-in shares subscribed to by members under the first capital increase was made in eight equal annual instalments. Under Resolution No. 126, payment for the paid-in shares issued to members under the second capital increase was made in one instalment immediately following approval of Resolution No. 126.
A statement of capital subscriptions showing the amount of paid-in and callable shares subscribed to by each member, together with the amount of unallocated shares and votes, is set out in the following table. Under Article 29 of the Agreement, the voting rights of members that have failed to pay any part of the amounts due in respect of their capital subscription are proportionately reduced until payment is made.
The special reserve is maintained, in accordance with Article 16 of the Agreement, for meeting certain defined losses of the Bank. The special reserve has been established, in accordance with the Bank’s financial policies, by setting aside 100 per cent of qualifying fees and commissions received by the Bank associated with loans, guarantees and underwriting the sale of securities. In 2011 the Board of Directors decided that for the foreseeable future the size of the special reserve was adequate.
In 2005, the Bank created a loan loss reserve (LLR) within members’ equity, to set aside an amount of retained earnings equal to the difference between the impairment losses expected over the life of the loan portfolio and the amount recognised through the Bank’s income statement on an incurred loss basis. During 2015, the Board of Directors approved an additional one-off reallocation of €660 million to the LLR following the change in the estimates used for calculating unidentified impairment losses. This amount was based on the release to the income statement of €329 million62 and the corresponding release to the LLR due to the changes in estimated lifetime portfolio losses. The impact of this one-off reallocation, together with the normal movements recognised in the year, resulted in the LLR increasing by a net total of €421 million in 2015.
The general reserve represents all reserves except those amounts allocated to the special and loan loss reserves and it primarily comprises retained earnings. It also includes the retention of internal tax paid in accordance with Article 53 of the Agreement. This requires that all Directors, Alternate Directors, officers and employees of the Bank are subject to an internal tax imposed by the Bank on salaries and emoluments paid by the Bank and which is retained for its benefit. At the end of the year internal tax amounted to €109 million (2014: €101 million).
The hedging reserve includes foreign exchange revaluation amounts on designated hedging instruments held by the Bank for the purposes of hedging its estimated future pound sterling operating expenditure. At 31 December 2015 there were no qualifying designated hedging instruments.
The Bank’s reserves are used to determine, in accordance with the Agreement, what part of the Bank’s net income will be allocated to surplus or other purposes and what part, if any, will be distributed to its members. For this purpose, the Bank uses unrestricted general reserves.
Article 36 of the Agreement relates to the allocation and distribution of the Bank’s net income and states: “No such allocation, and no distribution, shall be made until the general reserve amounts to at least ten per cent of the authorised capital stock”. This figure is currently €3.0 billion (2014: €3.0 billion).
The SEMED Investment Special Fund (ISF) was established in 2012 with a net income allocation of €1.0 billion, to be used to finance EBRD special operations in the SEMED region. This amount was ring-fenced within the Bank’s restricted reserves, to be drawn upon by the Fund as necessary to finance its operations. As each country within the SEMED region obtains recipient membership status of the Bank, the resources held within the Fund in respect of that country are to be returned to the Bank’s ordinary capital resources. On 30 October 2015 the Fund’s remaining resources were transferred back to the Bank following the granting of recipient country status to Egypt and the Fund was terminated. Under IFRS accounting rules, the resources transferred to the SEMED ISF remained on the Bank’s balance sheet at all times because the Bank did not divest itself of the risks and rewards of those resources.
During 2015 €230 million of the contingent liability of €330 million set aside in restricted reserves at 31 December 2014 was activated and transferred in relation to the New Safe Confinement Project in Chernobyl. The remaining €100 million contingent liability was reduced to €81 million at 31 December 2015 (as explained in note 30). In addition, the Board of Governors approved a transfer of €130 million of net income to be allocated to the EBRD Shareholder Special Fund. These amounts were reflected in the 2015 income statement, underneath net profit for the year from continuing operations.
The Bank leases its Headquarters building in London and some of its Resident Office buildings in the countries in which it invests. These are standard operating leases and include renewal options, periodic escalation clauses and are mostly non-cancellable in the normal course of business without the Bank incurring substantial penalties. The most significant lease is that for the Bank’s Headquarters building. Rent payable under the terms of this lease is reviewed every five years and is based on market rates. The last review was conducted in December 2011.
Minimum future lease payments under long-term non-cancellable operating leases and payments made under such leases during the year are shown below:
The Bank had entered into sub-lease arrangements for two floors of its Headquarters building, which expired on 22 January 2015.
There are two retirement plans in operation. The Final Salary Plan (FSP) is a defined benefit scheme, to which only the Bank contributes. The Money Purchase Plan (MPP) is a defined contribution scheme to which both the Bank and staff contribute, with Plan members making individual investment decisions. Both plans provide a lump sum benefit on leaving the Bank or at retirement age, such that retirement plan obligations to staff once they have left the Bank or retired are minimal (being limited to inflation adjustments on undrawn or deferred benefits under each plan).
A qualified actuary performs a full actuarial valuation of the FSP at least every three years using the projected unit method, with a more high-level interim valuation performed annually. The most recent interim valuation was carried out on 30 June 2015 which, for the purposes of IAS 19: Employee Benefits, was rolled forward to 31 December. The present value of the defined benefit obligation and current service cost was calculated using the projected unit credit method.
The primary risk associated with the FSP is that its assets will fall short of its liabilities. This risk, encompassing market risk and credit risk associated with its investments and the liquidity risk associated with the payment of defined obligations as they fall due is borne by the Bank as the FSP is fully funded by the Bank. Responsibility for the investment strategy of the Scheme rests with the Retirement Plan Investment Committee (RPIC).
The aim of investment risk management is to minimise the risk of an overall reduction in the value of the FSP assets and to maximise the opportunity for gains across the whole investment portfolio. This is achieved through asset diversification to reduce exposure to market risk and credit risk to an acceptable level. For example, the non-cash and government bond investment holdings held by the FSP are fund-based investments that diversify their exposure to a number of underlying investments.
The RPIC passively manages credit risk by selecting investment funds that invest in gilts rather than corporate bonds. To mitigate against market risk the RPIC meets quarterly with the FSP’s investment adviser to review the performance of all of the funds against their benchmarks. No asset-liability matching strategies are undertaken in relation to the FSP.
If, at the effective date of any actuarial valuation, the value of the plan’s assets is less than the liabilities, it is the Bank’s policy to review the funding status of the FSP and decide if a recovery plan should be put in place. Typically, such a recovery plan would include either anticipated investment out-performance, additional contributions from the Bank, or both. In the event that the plan assets are estimated to have fallen below 90 per cent of the defined benefit obligation (DBO), the Bank would expect to make additional contributions to restore the funding of the plan to at least 90 per cent as soon as possible.
These sensitivity analyses have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as the assumptions may be correlated.
The charge recognised under the MPP was €19 million (2014: €16 million) and is included in “General administrative expenses”.
The Bank maintains a medical retirement benefit plan to provide staff retiring from the Bank, aged 50 or over and with at least seven years’ service, with a lump sum benefit to help purchase medical insurance cover. The total charge for the year was €3 million (2014: €4 million).
On 28 November 2014, the Board of Governors adopted Resolution No. 175 Net Income Reallocation for the New Safe Confinement Project in Chernobyl. The resolution pledged net income to State Specialised Enterprise Chernobyl NPP (SSE ChNPP) of up to €450 million in order to help resolve a €615 million shortfall in the finances of the Chernobyl Shelter Fund (CSF). Of this €450 million, €120 million was transferred to SSE ChNPP in 2014 and a further €230 million was transferred in 2015. These amounts were recognised in the Income Statement in 2014 and 2015 respectively.
Up to €100 million will be reallocated to SSE ChNPP from the Bank’s net income by 30 June 2016 (or such later date that the Board of Directors may determine, on or before that date), subject to receipts by CSF from donors other than G7 countries and the European Commission falling below €100 million. This represents a contingent liability to the Bank, dependent on CSF’s receipt of additional commitments from other donors. As at 31 December 2015, CSF had received commitments from other donors totalling €19 million, reducing the Bank’s contingent liability to €81 million.
It is highly unlikely that any amounts reallocated to SSE ChNPP would subsequently be reimbursed to the Bank.
Key management personnel comprise: members of the Bank’s Executive Committee, Managing Directors and the Director of the President’s Office.
In pound sterling terms, salaries and other benefits paid to key management personnel in 2015 amounted to £14 million (2014: £12 million). This comprises salary and employee benefits of £11 million (2014: £10 million) and post-employment benefits of £3 million (2014: £2 million).
The Bank has invested in a number of venture capital associates that it accounts for at fair value through profit or loss. At 31 December 2015, according to the 2014 audited financial statements (and where these are not available, the most recent unaudited management information) from the investee companies, these venture capital associates had total assets of €33.1 billion (2014: €34.7 billion) and total liabilities of €24.5 billion (2014: €26.2 billion). For the year ended 31 December 2015, these associates had income of €5.1 billion (2014: €6.7 billion) and made a net loss before tax of €1.0 billion (2014: net profit before tax of €784 million).
In addition, as at 31 December 2015, the Bank had outstanding €45 million (2014: €152 million) of financing to these companies on which it had received €1 million (2014: €16 million) of interest income during the year.
Special Funds are established in accordance with Article 18 of the Agreement Establishing the Bank and are administered under the terms of the rules and regulations for each such Special Fund. At 31 December 2015 the Bank administered 18 Special Funds (2014: 18 Funds) with aggregate pledged contributions amounting to €1.6 billion (2014: €1.3 billion).
The Bank acts as manager and administrator of the Special Funds for which it receives management and cost recovery fees. In 2015 these fees amounted to €3.6 million (2014: €1.4 million) of which €2.3 million was payable at 31 December 2015 (2014: €0.3 million).
The Bank pays for guarantees from certain Special Funds in respect of specific exposures arising in its trade finance portfolios for which it paid €0.1 million in 2015 (2014: €0.1 million). In addition, the Bank also benefits from fee-free guarantee arrangements with certain Special Funds for losses which it could potentially incur in its investment activities. The provision of these guarantees qualifies such Special Funds as ‘unconsolidated structured entities’ within the meaning of IFRS 12. The Bank’s only exposure to these Special Funds would arise in the period between recognising a guarantee receivable on its balance sheet and the settlement of that receivable.
Audit fees payable to the Bank's auditor for the 2015 audits of the Special Funds totalled €0.1 million (2014: €0.1 million).
The financial statements of each Special Fund are approved separately by the Board of Governors at the Bank’s Annual Meeting.
In addition to the Bank’s ordinary operations and the Special Funds programme, the Bank administers numerous bilateral and multilateral contribution agreements to provide technical assistance and investment support grants in the existing and potential countries in which it invests. These grants focus primarily on project preparation, project implementation (including goods and works), advisory services and training. The resources provided through these contribution agreements are held separately from the ordinary capital resources of the Bank and are subject to external audit.
Following a proposal by the G-7 countries for a multilateral programme of action to improve safety in nuclear power plants in the countries in which the Bank invests, the Nuclear Safety Account (NSA) was established by the Bank in March 1993. The NSA funds are in the form of grants and are used for funding safety improvement measures.
At their Denver Summit in June 1997, the G-7 countries and the EU endorsed the setting up of the Chernobyl Shelter Fund (CSF). The CSF was established on 7 November 1997, when the rules of the CSF were approved by the Board of Directors. It became operational on 8 December 1997, when the required eight contributors had entered into contribution agreements with the Bank. The objective of the CSF is to assist Ukraine in transforming the existing Chernobyl sarcophagus into a safe and environmentally stable system.
In 1999, in pursuit of their policy to accede to the EU, Lithuania, Bulgaria and the Slovak Republic gave firm commitments to close and decommission their nuclear power plant units with RBMK and VVER 440/230 reactors by certain dates. In response to this, the European Commission announced its intention to support the decommissioning of these reactors with substantial grants over a period of 8 to 10 years, and invited the Bank to administer three International Decommissioning Support Funds (IDSFs). On 12 June 2000, the Bank’s Board of Directors approved the rules of the Ignalina, Kozloduy and Bohunice IDSFs and the role of the Bank as their administrator. The funds will finance selective projects to help carry out the first phase of decommissioning the designated reactors. They will also finance measures to facilitate the necessary restructuring, upgrading and modernisation of the energy production, transmission and distribution sectors and improvements in energy efficiency that are a consequence of the closure decisions.
In 2001, the Nordic Investment Bank hosted a meeting with participants from Belgium, Finland, Sweden, the European Commission and IFIs with activities in the Northern Dimension Area (NDA). At this meeting, participants agreed to establish the Northern Dimension Environmental Partnership (NDEP) to strengthen and coordinate financing of important environmental projects with cross-border effects in the NDA. On 11 December 2001, the Bank’s Board of Directors approved the rules of the NDEP Support Fund and the role of the Bank as fund manager.
In 2013 the European Commission requested the Bank to set up a multi-lateral fund for financing of the projects dealing with the uranium mining legacy in Central Asia. In May 2015, the Bank’s Board of Directors approved the Rules of the Environmental Remediation Account (ERA) and the role of the Bank as fund manager.
The cash balances belonging to each of the funds in the table above are managed by the Bank on their behalf.
Audit fees payable to the Bank’s auditor for the 2015 audits of these funds were €0.5 million (2014: €0.5 million).
The SEMED ISF, established in 2012, was terminated in October 2015 following the graduation of Egypt to recipient membership status of the Bank. While all operations undertaken by the SEMED ISF have always been recognised as part of the Bank’s financial results for IFRS reporting purposes, because of the distinction between “ordinary operations” and “special operations” contained within the ‘Agreement Establishing the Bank’, the Bank has formerly disclosed an income statement and balance sheet for “ordinary operations” only within its financial report. With the termination of the SEMED ISF during the year, this disclosure is no longer considered useful or relevant. However a final set of financial statements will be separately prepared and audited for the Fund itself.
There have been no material events since the reporting period that would require adjustment to these financial statements.
Since that date, observable movements in the value of the Bank’s listed equities in 2016 have resulted in a decline of approximately €260 million while movements in the exchange rates of the Russian rouble, Turkish lira and Ukrainian hryvnia have reduced the fair value of the Bank’s unlisted equity investments and associated derivatives by approximately €100 million. These losses of €360 million will be recognised in the 2016 financial statements.
On 24 February 2016 the Board of Directors reviewed the financial statements and authorised them for issue. These financial statements will be submitted for approval to the Annual Meeting of the Board of Governors to be held on 11-12 May 2016.
50 Interest expense and similar charges and allocation of the return on capital equates to the interest expense and similar charges on the face of the income statement.
51 Advanced countries are Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovak Republic and Slovenia.
53 Other member countries of the Organisation for Economic Co-operation and Development which are not classed as Advanced or Early/Intermediate. www.oecd.org/about/membersandpartners/
54 This interest income equates to the unwinding of the discount on expected future cash flows from impaired financial assets.
55 The net release of general provisions on sovereign and non-sovereign loan investments during the year of €337 million includes a one-off release of €329 million due to a change in estimation techniques, as highlighted in
56 Comprised of €266 million of new provisions against €57 million of released provisions (2014: €368 million against €44 million respectively).
57 Provisions raised in the non-euro currencies create foreign exchange exposures which Treasury hedges. To the extent these hedges are transacted at different rates to the rates applied by the Bank’s accounting system to
translate the provisions into the euro equivalent amounts, the difference is recognised as part of the overall provision charge in the income statement.
59 This movement in fair value relates to a hedge adjustment to fixed rate loans which qualify for hedge accounting for interest rate risk.
61 The voting power of members who have failed to pay any part of the amount due in respect of their obligations in relation to paid-in shares has been adjusted down by a percentage corresponding to the percentage which
the unpaid amount due bears to the total amount of paid-in shares subscribed to by that member. Consequently the overall number of exercisable votes is lower than the total amount of subscribed shares.
62 These adjustments to estimates are described in the Critical accounting estimates and judgements section of the report.
64 Trade finance guarantees represent stand-by letters of credit issued in favour of confirming banks that have undertaken the payment risk of issuing banks in the countries where the Bank invests.
1. Bullet placement is much more important than the bullet itself. There are two critical areas of a human which contain major organs and vitals which, if shot, can stop a man in his tracks or kill him.
2. The thoracic cavity is the "center of mass" in a human. This area contains the heart, major veins and arteries, the trachea, bronchi and lungs, the esophagus, and structures of the nervous system including the paired vagus nerves. To imagine the area that this encompasses it starts above the diaphragm (just below the sternum) and makes (from a frontal view) a dome shape up to the first lateral rib. This is a pretty large target area. A shot in one area of the thoracic cavity is little different any another, unless you hit the heart.
* The problem with shots in the thoracic cavity is that a determined fighter or a man on drugs will be less than impressed with anything you throw at him in this area. Even if you destroy a person's heart they still have 20 to 30 seconds of full cognitive and physical ability with which they could severely hurt or even kill you. Additionally the heart is a very small target and completely destroying the heart with one bullet is nearly impossible, which means that they will likely have even more time before their eventual fate is achieved. For all these reasons, many have the self-defense rule: "shoot until the threat ends." But you must determine for yourself what your protocol will be.
* Body armor is also a factor. Just hitting a man in the chest (unless you hit him in the exact same place every time) is just going to deplete your magazine.
* Bullet penetration is a very key factory in bullet selection. This penetration does a few things for you. At less than optimal angles, the bullet will still reach vitals, and it will give your bullet a chance to possibly hit their spine, which (depending on where it lands) can incapacitate them completely or at least part of their body, enough so you may be able to get away.
3. The second major area is the cranial cavity. This area is much simpler; it contains the brain and upper spine.
* While the brain is an obvious target, there are still some considerations in shot placement. The front of the cranium (above the eyebrows) is one of the hardest bones in the body, it is also not a flat target (it is angled back slightly, or on the sides: angled to the side). There have been instances where bullets have ricocheted off a person's forehead.
* Luckily, just below this bone (below the eyebrows), down to the top of the upper-jaw is a very soft area with cartilage and holes which lead directly to the lower brain, the medulla oblongata, and the upper spine. The brain is the largest target, and a bullet in there will mean lights out, but flinching and minor movements have been known to occur when a brain shot is incurred. The medulla oblongata and the upper spine is how those flinching signals are sent to the body. A bullet through either one of those, and there is no way the body might accidentally pull a trigger or move in some other potentially detrimental way.
* In a situation which requires the immediate and unquestioned incapacitation of a person, a shot through an approximately 3-inch (above the upper-jaw to eyebrows) by 5-inch (the outside edges of the eyes) window in the head is essential. This 3x5-inch area is about the same no matter what angle the person is facing you at (from the rear and the sides it is about the same size and about the same level on the head).
4. For practice, replacing the circular chest target with a dome-shaped 11x7-inch target and the head with a 3x5-inch target will get you a more realistic targeting area. When scoring (to compare your improvements) or competing, a shot breaking the line of either cavity is good. The size of the grouping should matter less than getting the hits in quickly; and when shooting at the cranial cavity, only a guaranteed shot should be taken (you should always take more time for a cranial shot than a thoracic shot). But keep in mind, "remember your worst day at the range, you will be twice as bad when you are in a gun fight." So a general rule of a hand-sized grouping in the thoracic is optimal.