SAV-Rahoitus Plc

BOARD OF DIRECTORS’ REPORT 2011-2012

BOARD OF DIRECTORS’ REPORT, ACCOUNTING PERIOD 1.7.2011 – 30.6.2012 The SAV-Rahoitus Group consists of SAV-Rahoitus Plc and its fully owned subsidiary Savlex Oy. SAV-Rahoitus Plc is a Finnish finance provider that specialises in vehicle financing. Similarly to previous years, the Company’s activities during the accounting period were based on financing customers in vehicle purchases and granting loans against vehicles. The accounting period was th the Company’s 7 period since the merger in which Suomen Autovakuutus Oy and Suomen Automaailma Oy became Suomen Autovakuus Oy. The Company later changed its name to SAVRahoitus Plc. Savlex Oy specialises in debt collection and in the realisation of vehicles that have come to the possession of the parent company through hire purchase settlements by selling them to consumer customers. The subsidiary also implements the vehicle sales connected with the refinancing (SAVluotto and SAV-ennakko) of SAV-Rahoitus Plc’s vehicles. The Company has no fixed place of business. Vehicle sales are implemented as intermediated sales through partner car dealers. The accounting period is the subsidiary’s third period. Group’s Economic Development The consolidated net sales in the accounting period were EUR 5 258 thousand (previous period 5 259). The net sales remained on the same level as in the previous accounting period. The parent company’s share of the net sales was EUR 2 332 thousand (44.4%). The share of the subsidiary was EUR 2 926 thousand (55.6%). The Group’s loss before taxes was EUR 163 thousand (previous period EUR +574 thousand) and loss after taxes EUR 145 thousand (previous period EUR +408 thousand). All major sources of income were reduced owing to decrease in the number loan and financing contracts granted from the Company’s own balance sheet. As the parent company had amortised liabilities in accordance with a loan repayment schedule agreed on with finance providers, a significant number (810) of the new contracts had to be financed from contingent assets. In contracts financed by contingent assets, the finance provider receives 35% of the loan establishment fees and the Company’s share is only 65%. The interest earnings for the loan period and the handling charges are also divided between the Company and the finance provider. The expense items that increased most significantly were commissions to vehicle dealers (increase EUR 147 thousand) and IT costs (increase EUR 49 thousand). The expense item that decreased most significantly was the use of external services (total decrease EUR 98 thousand). Compared with the previous accounting period, net financing decreased by EUR 330 thousand. Total net financing for the accounting period was EUR 419 thousand (previous period EUR 749 thousand). Net financing was affected negatively by penalty interests due to prolonged financing negotiations, reduction in the balance sheet, and the non-recurring expenses incurred in the sale of receivables. The total of the consolidated balance sheet was EUR 13 666 thousand (previous period EUR 19 279 thousand), of which shareholders’ equity accounted for a total of EUR 4 063 thousand (previous period EUR 4 208 thousand). The consolidated balance sheet decreased by 29.1%, i.e. EUR 5 614 thousand in one year. The decrease in the consolidated balance sheet was due to the sale of receivables to implement the loan repayment schedule. Parent Company’s Economic Development The parent company SAV-Rahoitus Plc’s net sales was EUR 2 332 thousand (previous period EUR 3 047 thousand) including sales to subsidiary Savlex Oy. The net sales decreased by 23.5%. The decrease in the net sales was due to a decrease in the volumes of sold financing contracts. The parent company’s result before taxes and extraordinary items was EUR 119 thousand (previous period EUR 908 thousand). The parent company paid group contributions amounting to EUR 224 thousand (previous period EUR 450 thousand) to its subsidiary. After extraordinary items and taxes, the loss recorded was EUR 83 thousand (previous period EUR +315 thousand).

1.7.11 – 30.6.12

1.7.10 - 30.6.11

1.7.09 - 30.6.10

5 258 t€ - 582 t€ -10.0 % -163 t€ -3.1 % -147 t€ -3.51 % 29.73 %

5 259 t€ - 175 t€ - 3.33 % 574 t€ 10.9 % 408 t€ 10.19 % 21.83 %

8 469 t€ - 215 t€ - 2.54 % 704 t€ 8.3 % 520 t€ 14.15 % 18.10 %

Group Net sales Operating profit % of net sales Profit before taxes % of net sales Profit for the period ROE Equity ratio

Development of Sales by Main Products SAV-luotto, loan against vehicle The total number of new loans granted to consumer customers was 391 (previous period 464). The number of all credit contracts at the end of the accounting period was 924 (previous period 1 199) and the total receivables EUR 1 600 thousand (previous period EUR 1 966 thousand). The SAV-ennakko figures are included in the SAV-luotto figures. SAV-rahoitus, vehicle financing More than 400 vehicle dealers act as regular credit brokers for SAV-Rahoitus via an Extranet service. A total of 3 332 (previous period 4 149) new SAV-rahoitus contracts were signed. of which 810 were transferred to Svea Ekonomi through a refinancing agreement. The total number of financing contracts at the end of the accounting period was 4 029 (previous period 5 635), 1 016 (previous period 788) as off-balance-sheet contracts. The total amount of receivables was EUR 9 458 thousand (previous period EUR 14 580 thousand), EUR 3 503 thousand (previous period EUR 3 149 thousand) as contingent liabilities. SAV-limiitti, hire purchase financing between individuals The SAV-limiitti online service guides an individual buyer and seller through the process of concluding a hire purchase contract and enables the seller to transfer the contract to SAVRahoitus in the same way as a vehicle dealer. So far, the utilisation rate of the service is not very high; only 22 new contracts were concluded. At the end of the accounting period, the total number of SAV-limiitti contracts was 39 and the amount of receivables EUR 180 thousand. Vehicle Sales A total of 239 (previous period 275) vehicles were sold through Savlex Oy, of which 84 (previous period 81) were trade-in vehicles from customers. Deposit Bank Operations as the Goal In February 2010, SAV-Rahoitus filed an application for a deposit bank permit to the Financial Supervisory Authority (FIN-FSA). Owing to insufficient initial capital and the fact that the period set for the application was drawing to a close, the permit application was withdrawn in November 2010. The Company has announced that it will renew the application as soon as it has sufficient initial capital. The decision of the Company’s Extraordinary General Meeting to amend the Articles of Association to meet the requirements of carrying on banking business has been filed with the National Board of Patents and Registration of Finland, but the amendment to the Articles of Association will not enter into force until the permit has been granted. The permit application aims at replacing loan capital acquired through banks with deposited funds. This would reduce the cost and facilitate the availability of loan capital. During the accounting period, the Company has actively carried out negotiations to accrue initial capital to allow the commencement of the permit process again. The IT systems created for banking operations have been kept in readiness and the permit application documentation has been updated.

Organisation and Personnel The organisation of the parent company was reduced by two: Sales Manager and one clerical employee. The organisation of the subsidiary was restructured to meet the new business strategy, which meant winding up the whole sales organisation. SAV-Rahoitus Oy’s Administrative Manager also acted as Managing Director of the subsidiary. One debt collector from the parent company was transferred to the subsidiary. The whole customer service and part of the accounting staff, a total of 5 persons, are located in Seinäjoki. The Back Office is responsible for customer service and credit documentation management. The group management is located in Helsinki. The average number of personnel in the accounting period was 11, nine in the parent company and two in the subsidiary.

Personnel

Salaries and fees Average number of personnel

1.7.11 – 30.6.12 Group 546 736.73 €

1.7.10 – 30.6.11 Group 563 542.09 €

1.7.09 – 30.6.10 Group 520 692.33 €

11

15

16

Board of Directors and Management The Board of Directors of the parent company was consisted of Jarmo Ellonen, Antti Lehtonen and Markku E. Rentto. Markku E. Rentto acted as Chairman of the Board. The Board of Directors held a total of 12 meetings during the accounting period. The Managing Director of the Company was Harri Kalliokoski. The Board of Directors of the subsidiary consisted of Antti Lehtonen as Chairman of the Board and Harri Kalliokoski as the member. The Board of Directors held six meeting during the accounting period. Ari Vainionpää acted as Managing Director of the subsidiary. Shares and Share Capital At the end of the accounting period, the total number of shares of the parent company was 2 251 456. All the shares bear equal rights and obligations. The share capital of the Company is EUR 3 775 115.19. The General Meeting authorised the Board to issue a maximum of 2 000 000 new shares. The authorisation is valid until 27 September 2012. The earlier issuing rights were cancelled. Risks Going Concern The Consolidated financial statements have been drawn up in compliance with the Going Concern principle based on the assumption that the Company’s activities will continue for a minimum period of 12 months. The principle is further based on the assumption that the Company will be able to implement sales of financial and loan products to new clienteles and to pay its debts in the normal course of business. The Going Concern principle is based on the business plan confirmed by the Board of Directors and on the assumption that the financing agreement will be extended. The main risks are related to the following: - Extension of the financing agreement - Unpredictable costs caused by financing arrangements - Maintenance of profitability when contingent financing is used to a significant extent in sales to new clients. All the above factors include uncertainty that may affect the Company’s ability to continue activities on the basis of the financial standing shown by the financial statements.

Strategic Risks According to the parent company’s strategy, the focus of the Company’s activities is on vehicle financing. There are several large well-established competitors in the same sector which have considerably stronger resources than the Company. Flexibility, cost efficiency and product innovations have enabled the Company to succeed in the financial market. As products and processes can be copied easily, development work has to be continuous and proactive. Marketing the SAV-rahoitus product (vehicle financing) takes place through vehicle dealers. Compared with the major actors in the market, the Company is still fairly unknown, and therefore its growth greatly depends on retailers. The risk has been reduced by focusing on the retailer and customers segment that the Company’s large-scale competitors are not interested in and by developing products and processes that suit this segment. In order to reduce dependency on vehicle dealers, the Company has developed online sales channels for consumer customers. The new processes that guide hire purchase procedures are, however, still fairly unfamiliar to the public, and it will take time to establish them. The promotion of the SAV-limiitti product is supported by the cooperation that the Company started with the Sanoma Group’s Oikotie Service in 2011 and with Nettiauto web portal in 2012. The parent company still intends to apply to the Financial Supervisory Authority for a credit institution permit. In addition to sufficient initial capital, the prerequisite of the permit is that the terms of all the standards and other regulations set for deposit banks are fulfilled. These terms concern e.g. leverage ratio, processes, systems, organisation and financial management. The Company has invested significant economic resources in the new future business activities, for example by creating a banking system. The permit is conditional. The re-filing of the permit application has been prepared by updating the documentation of the previous application. To the Company’s knowledge, there are no such factors that could prevent granting the permit if the Company meets the leverage ratio requirement. The assets as per financial statements include the bank permit application. Owing to the Company’s financial situation, there is uncertainty concerning its capitalization. If the uncertainty is realised, the item will immediately be recognised as expense. Operative Risks Advanced IT applications and systems are both resources and risks for the Company. The sales of all the products to new clients, contract management and customer services depend on the functionality of the IT system. The risk has been reduced by securing Internet connections and data stores and by outsourcing certain services. The geographical division of the operations into two locations also reduces the risk. The plan to become a deposit bank has required consistent continuity and recovery planning in the Company’s own systems and in outsourced services. Financial Risks The availability and price of capital continues to play an important role in view of both the growth and the profitability of the Company. The reduction of the Company’s balance sheet is due to decrease in debt financing after the Company amortised liabilities in accordance with an agreed on loan repayment schedule. Contingent financing cooperation with Svea Ekonomi continued in the financing of new hire purchase contracts. Svea Ekonomi purchases all the financing contracts that SAV-Rahoitus does not finance through its own fundraising. The credit risk for the transferred contracts remains with SAV-Rahoitus. During the accounting period, a total of 810 contracts were transferred to Svea Ekonomi, i.e. 21.3% of the sales to new clients. At the end of the accounting period, the contingent liabilities amounted to EUR 3 0503 thousand. The agreement with all the financing banks is valid until 31 January 2013. The bank loans have valid repayment schedules. In accordance with the terms of the agreement, negotiations on a new financing agreement will start in November 2012. As the financial statements show, the Company’s financing is short-term financing. Therefore, there is significant uncertainty concerning the going concern of the Company.

The Company continues to carry on negotiations with new potential finance providers to acquire both equity and loan capital. At the end of the accounting period, the interest rate of loan capital was 5.3%. The Company’s loan capital mainly consists of floating rate loans but the outgoing financing is subject to a fixed interest rate. Possible price increase of the loan capital can only transferred to new contracts. Credit losses In accordance with its strategy, the Company also finances older vehicles, a segment with a higher than normal credit loss risk in the sector. The pricing of the Company’s products is designed to cover the higher risk. The net credit losses amounted to EUR 315 thousand. In the previous accounting period, the amount was EUR 340 thousand. The net credit losses for the accounting period accounted for 2.8% (previous period 2.0%) of the receivables at the end of the accounting period. The relative increase in the losses is due to the reduction of the balance sheet. An item that can be regarded as similar to a credit loss was the capital loss amounting to EUR 129 thousand on the sales of vehicles that had come to the possession of the Company through hire purchase settlements. Based on the above, the credit losses and similar items amounted to EUR 444 thousand (previous period EUR 469 thousand), i.e. 4.0% (previous period 2.8%) of the receivables at the end of the accounting period. During the accounting period, reimbursements of receivables that had been recorded as credit losses totalling EUR 208 thousand were recognised as revenue (previous period EUR 191 thousand). SAV-Rahoitus is responsible for the contingent financing contracts. Their collection is carried out by Svea Rahoitus until they are called in, after which the receivable can be returned to SAVRahoitus. Returned contracts are subject to normal collection measures and the credit losses are included in the above credit loss figures. Events in the Current Accounting Period The bank loan repayment schedule and the lack of additional financing means that the sales of financing contracts to new clients will partly be transferred to contingent financing. This will reduce income and weaken profitability. The bank loan repayment schedule will also require that existing receivables are sold. Competition in the financing of older vehicles is tightening and the number of new contracts has fallen. The Company will increase the volume of sales to new clients by continuing the development of new products and processes and by expanding the distribution network. The Company will continue negotiations concerning its capital structure in order to acquire additional capital for growth and the credit institution permit. The permit application process to the Financial Supervisory Authority will be continued as soon as the Company has received irrevocable underwriting commitments for additional capital and its initial capital is established as sufficient. Board of Directors’ Proposal on the Use of the Profit The distributable funds are EUR 232 231.47. The Board of Directors will propose to the General Meeting of 26 September 2012 that no dividends are distributed and that the loss is transferred to the retained earnings account. Helsinki 3.9.2012 SAV-Rahoitus Plc Board of Directors

SAV-Rahoitus Plc BALANCE SHEET BOOK 01.07.2011–30.06.2012

Contents Cover Page Consolidated Income Statement Consolidated Balance Sheet Consolidated Cash Flow Statement Income Statement Balance Sheet Cash Flow Statement Notes Signatures List of Accounting Books and Voucher Types Auditors’ Report

Page 1 2 3-4 5 6 7-8 9 10-17 18 19 20

The accounting documentation shall be kept until at least 30 June 2018.

GROUP

INCOME STATEMENT 1.7.201130.06.2012 NET SALES

1.7.201030.06.2011

5 258 026.39

5 258 562.82

91.95

9 816.76

-3 146 738.01 -279 887.26 -40 339.87 -3 466 965.14

-3 071 784.45 36 034.89 -9 559.20 -3 045 308.76

-546 736.73

-563 542.09

-111 125.13 -10 947.84 -668 809.70

-104 866.30 -25 817.78 -694 226.17

-143 351.08 -143 351.08

-92 279.76 -92 279.76

-1 560 634.71

-1 611 580.44

-581 642.29

-175 015.55

1 354 694.20

1 737 097.20

-48 741.92

0

-886 816.02 419 136.26

-988 269.57 748 827.63

PROFIT/LOSS BEFORE EXTRAORDINARY ITEMS

-162 506.03

573 812.08

PROFIT/LOSS BEFORE CLOSING ENTRIES AND TAXES

-162 506.03

573 812.08

22 545.33 -5 058.17 17 487.16

-165 474.56 0 -165 474.56

-145 018.87

408 337.52

Other operating income Materials and services Materials, equipment and goods Purchases during the accounting period Increase/decrease in stocks Outsourced and subcontracted services MATERIALS AND SERVICES, TOTAL Personnel expenses Salaries and fees Indirect employee expenses Pension expenses Other indirect employee expenses PERSONNEL EXPENSES, TOTAL Depreciation and amortisation Planned depreciation DEPRECIATION AND AMORTISATION, TOTAL Other operating expenses OPERATING PROFIT (LOSS) Financial income and expenses Other interest and financial income from others Amortisation on investments held as noncurrent assets Interest and other financial expenses Interest expenses FINANCIAL INCOME AND EXPENSES, TOTAL

Income taxes Taxes for the period Deferred tax liabilities INCOME TAXES, TOTAL

PROFIT/LOSS FOR THE ACCOUNTING PERIOD

GROUP BALANCE SHEET ASSETS NON-CURRENT ASSETS Intangible assets Intangible rights Other capitalised long-term expenses Acquisitions in progress

30.6.2012

30.6.2011

119 709.76 1 359 033.09 0.00 1 478 742.85

144 602.60 102 847.74 1 073 733.93 1 321 184.27

35 802.98 35 802.98

38 333.51 38 333.51

1 514 545.83

1 359 517.78

223 106.09 223 106.09

502 993.35 502 993.35

5 079 618.79 10 503.20 218 130.66 5 308 252.65

7 843 239.22 3 895.94 169 996.60 8 017 131.76

6 206 863.16 0.00 55 496.84 283 212.25 6 545 572.25

9 012 787.53 0.00 105 316.81 201 546.40 9 319 650.74

74 040.89

80 040.46

CURRENT ASSETS, TOTAL

12 150 971.88

17 919 816.31

ASSETS, TOTAL

13 665 517.71

19 279 334.09

Intangible assets, total

Tangible assets Machinery and equipment Tangible assets, total

NON-CURRENT ASSETS, TOTAL CURRENT ASSETS Inventories Materials and supplies Receivables Long-term Trade receivables Loan receivables Other receivables Long-term receivables, total

Short-term Trade receivables Loan receivables Other receivables Accrued income Short-term receivables, total

Cash and bank receivables

GROUP

BALANCE SHEET SHAREHOLDERS’ EQUITY AND LIABILITIES

30.6.2012

30.6.2011

SHAREHOLDERS’ EQUITY Share capital Total

Retained earnings (losses) Profit/loss for the accounting period SHAREHOLDERS’ EQUITY, TOTAL

LIABILITIES Current Loans from financial institutions Trade payables Other payables Deferred tax liabilities Accrued expenses Current liabilities, total

LIABILITIES, TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES, TOTAL

3 775 115.19 3 775 115.19

3 775 115.19 3 775 115.19

433 184.27 -145 018.87

24 846.75 408 337.52

4 063 280.59

4 208 299.46

9 307 867.85 94 415.00 64 170.56 13 064.46 122 719.25 9 602 237.12

14 237 359.67 173 852.65 183 901.86 8 006.29 467 914.16 15 071 034.63

9 602 237.12

15 071 034.63

13 665 517.71

19 279 334.09

Consolidated Cash Flow Statement Cash flow from operations Profit (loss) before extraordinary items (+/–) Adjustments to operating profit (+/-) Planned depreciation Financial income and expenses Cash flow before changes in working capital Change in working capital: Increase/decrease in short-term interest-free trade receivables Increase/decrease in inventories Increase/decrease in short-term interest-free debts Cash flow from operations before financing items and taxes

1.7.2011-30.06.2012

1.7.2010-30.06.2011

-162 506.03

573 812.08

143 351.08 -419 136.26 -438 291.21

92 279.76 -748 827.63 -82 735.79

5 920 065.48 258 180.11 -387 373.95

2 838 270.81 -36 034.89 -643 740.21

5 352 580.43

2 075 759.92

Paid interests and fees for other finance charges Interests from operations Paid direct taxes (-) Cash flow before extraordinary items Cash flow from operations (A)

-1 218 360.08 1 360 207.90 -165 056.87 5 329 371.38 5 329 371.38

-750 379.01 1 740 334.67 -244 134.43 2 821 581.15 2 821 581.15

Cash flow from investments: Investments in tangible and intangible assets (-) Capital gains from intangible and tangible assets Cash flow from investments (B):

-295 879.13 0.00 -295 879.13

-597 819.24 0.00 -597 819.24

Cash flow from financing: Proceeds from short-term borrowings Repayments of short-term borrowings (-) Paid dividends and other distribution of profits (-) Cash flow from financing (C)

406.69 -5 039 898.51 0.00 -5 039 491.82

100 000.00 -2 410 272.96 0.00 -2 310 272.96

Change in cash flows (A+B+C) increase (+) / decrease (-)

-5 999.57

-86 511.05

Liquid funds at the beginning of the accounting period Liquid funds at the end of the accounting period

80 040.46 74 040.89

166 551.50 80 040.45

Income Statement, Parent Company SAV-Rahoitus Plc Currency unit EURO

NET SALES Other operating income Materials and services Materials, equipment and goods Purchases during the accounting period Outsourced and subcontracted services MATERIALS AND SERVICES, TOTAL

Personnel expenses Salaries and fees Indirect employee expenses Pension expenses Other indirect employee expenses PERSONNEL EXPENSES, TOTAL

Depreciation and amortisation Planned depreciation DEPRECIATION AND AMORTISATION, TOTAL

Other operating expenses

OPERATING PROFIT (LOSS) Financial income and expenses Other interest and financial income from Group Companies from others Interest and other financial expenses to others FINANCIAL INCOME AND EXPENSES, TOTAL

PROFIT (LOSS) BEFORE EXTRAORDINARY ITEMS Extraordinary items Extraordinary expenses EXTRAORDINARY ITEMS, TOTAL

PROFIT (LOSS) BEFORE CLOSING ENTRIES AND TAXES

Income taxes Taxes for the period INCOME TAXES, TOTAL

PROFIT (LOSS) FOR THE ACCOUNTING PERIOD

1.7.2011 30.6.2012

01.07.2010 - 30.06.2011

2 332 421.27

3 046 705.98

50.00

0.00

-436 535.73 0.00 -436 535.73

-714 212.82 -9 378.75 -723 591.57

-472 196.95

-486 730.57

-94 416.97 -7 761.52 -574 375.44

-89 720.57 -22 123.00 -598 574.14

-141 205.51 -141 205.51

-90 328.00 -90 328.00

-1 481 205.51

-1 476 825.25

-300 850.92

157 500.85

1 354 617.02 -48 741.92

644.00 1 737 089.64

-886 182.50 419 692.60

-986 728.24 751 005.40

118 841.68

908 392.42

-224 000.00 -224 000.00

-450 000.00 -450 000.00

-105 158.32

458 392.42

22 545.33 22 545.33

-143 547.96 -143 547.96

-82 612.99

314 844.46

Balance Sheet, Parent Company SAV-Rahoitus Plc

Currency unit EURO

30.6.2012

30.6.2011

119 709.76 1 359 033.09 0.00 1 478 742.85

144 602.60 102 847.74 1 073 733.93 1 321 184.27

29 366.36 29 366.36

32 478.31 32 478.31

2 500.00 2 500.00

2 500.00 2 500.00

1 510 609.21

1 356 162.58

5 079 618.79 10 503.20 218 130.66 5 308 252.65

7 843 239.22 3 895.94 169 996.60 8 017 131.76

6 149 523.89 276 157.59 55 496.84 282 325.55 6 754 593.87

9 000 471.65 383 015.69 105 316.81 197 062.76 9 685 866.91

23 779.85

55 142.65

12 095 536.37

17 758 141.32

13 606 145.58

19 114 303.90

ASSETS NON-CURRENT ASSETS Intangible assets Intangible rights Other capitalised long-term expenses Acquisitions in progress Intangible assets, total

Tangible assets Machinery and equipment Tangible assets, total

Investments Shares in group companies

NON-CURRENT ASSETS, TOTAL

CURRENT ASSETS Receivables Long-term Trade receivables Loan receivables Other receivables Long-term receivables, total

Short-term Trade receivables Receivable from group companies Other receivables Accrued income Short-term receivables, total

Cash and bank receivables CURRENT ASSETS, TOTAL

ASSETS, TOTAL

Currency unit EURO

30.6.2012

30.6.2011

3 775 115.19 3 775 115.19

3 775 115.19 3 775 115.19

314 844.46 -82 612.99

0.00 314 844.46

4 007 346.66

4 089 959.65

30 793.44 30 793.44

30 793.44 30 793.44

9 307 867.85 87 657.74 56 146.11 116 333.78 9 568 005.48

14 237 359.67 152 194.70 167 480.38 436 516.06 14 993 550.81

9 568 005.48

14 993 550.81

13 606 145.58

19 114 303.90

SHAREHOLDERS’ EQUITY AND LIABILITIES SHAREHOLDERS’ EQUITY Share capital

Retained earnings (losses) Profit (loss) for the accounting period SHAREHOLDERS’ EQUITY, TOTAL

ACCUMULATED APPROPRIATIONS Depreciation difference Total

LIABILITIES Current Loans from financial institutions Trade payables Other payables Accrued expenses Current liabilities, total

LIABILITIES, TOTAL

SHAREHOLDERS’ EQUITY AND LIABILITIES, TOTAL

Cash Flow Statement, Parent Company SAV-Rahoitus Plc 1.7.201130.06.2012

1.7.201030.06.2011

118 841.68

908 392.42

141 205.51 -419 692.60 0.00 -159 645.41

90 328.00 -751 005.40 0.00 247 715.02

5 549 498.73 0.00 -63 419.45 5 326 433.87

2 072 795.73 0.00 -192 905.40 2 127 605.35

-1 217 726.56 1 360 130.72 -165 056.87 5 303 781.16

-748 837.68 1 740 971.11 -243 482.37 2 876 256.41

5 303 781.16

2 876 256.41

-295 652.14 0.00

-597 819.24 0.00

-295 652.14

-597 819.24

Cash flow from financing: Proceeds from short-term borrowings Repayments of short-term borrowings (-) Paid dividends and other distribution of profits (-)

406.69 -5 039 898.51 0.00

100 000.00 -2 410 272.96 0.00

Cash flow from financing (C)

-5 039 491.82

-2 310 272.96

-31 362.80

-31 835.79

55 142.65 23 779.85

86 978.43 55 142.65

Cash flow from operations: Profit (loss) before extraordinary items (+/–) Adjustments to operating profit (+/-) Planned depreciation Financial income and expenses Other adjustments Cash flow before changes in working capital Change in working capital: Increase/decrease in short-term interest-free trade receivables Increase/decrease in inventories Increase/decrease in short-term interest-free debts Cash flow from operations before financing items and taxes Paid interests and fees for other finance charges Interests from operations Paid direct taxes (-) Cash flow before extraordinary items Cash flow from extraordinary items (net) Cash flow from operations (A) Cash flow from investments: Investments in tangible and intangible assets (-) Capital gains from tangible and intangible assets Repayments of loan receivables Cash flow from investments (B)

Change in cash flows (A+B+C) increase (+) / decrease (-) Liquid funds at the beginning of the accounting period Liquid funds at the end of the accounting period

NOTES TO FINANCIAL STATEMENTS Accounting principles The fixed assets have been valued at their direct acquisition cost less planned depreciation. The depreciation periods are: *Development expenses 5 years *Intangible rights 5 years *Other capitalised long-term expenses 5 years *Machinery and equipment 25% of the net expenditure Intangible rights include the system development work related to cooperation with Oikotie. Other capitalised long-term expenses include consultation services and IT investments for the bank permit application and banking operations, as well as investments in the renovation of the hire purchase web site and system (Extranet II). The Company cancelled its application for a deposit bank permit in November 2010 owing to the lack of initial capital and the fact that the period set for the application was drawing to a close. The Company has announced that it will renew the application as soon as it has sufficient initial capital. In spite of the postponement of the expected yield from the investments made for the bank permit and banking operations, the Company started to enter depreciations for them in June 2012. Inventories are valued at acquisition cost. The Company has a fully owned (100%) subsidiary, Savlex Oy. The consolidated financial statements includes the parent company’s fully owned subsidiary Savlex Oy, domicile Helsinki as from its date of establishment 11 June 2009. The consolidated financial statements have been drawn up as a combination of the group companies’ income statements and balance sheets and the information in their notes. The group’s internal transactions and ownerships have been eliminated. Revenue recognition principles For the part of the sales of the main products, SAV-luotto (loan financing against vehicle) and SAV-rahoitus (hire purchase financing for vehicle purchases), the contract establishment costs are recognised in net sales when the contract has been concluded with the customer and SAV-Rahoitus Plc’s payout has taken place. The rest of the contract is recognised monthly in accordance with the called in interest revenues and handling charges. For the part of the SAV10 Product (unsecured down payment) the contract-specific down payment is recognised when the contract has been concluded and the partner providing the products has transferred the amount to SAV-Rahoitus Plc. In case of the SAV-10 product, the recognition of the SAV-rahoitus product to be sold, recognition takes place as described above concerning the main products. The recognition of the hire purchase contracts transferred to Svea Ekonomi Ab, Filial i Finland, takes place as per individual contracts. For the part of the establishment fee, SAV-Rahoitus Plc’s share (65% of the establishment fee) is recognised in net sales when the contract has been concluded with the customer, the contract has been transferred to Svea Ekonomi, and SAV-Rahoitus Plc’s payout has taken place. SAV-Rahoitus Plc’s share of financing interests and handling charges is recognised monthly in accordance with the called in interest revenues and handling charges.

Receivables, valuation principles If a customer fails to pay the debt and attempts to collect the debt through the Company’s own collection measures fail, the debt is transferred to a collection agency. An impulse for valuation is the situation in which a customer has failed to pay an instalment on a debt and the collection of the debt by the Company or a collection agency has failed. In this situation, the Company utilises the possibility to realise the vehicle held as collateral, followed by settlement as per the Hire Purchase Act. According to the estimate of the Company, settlement can be completed in about 6 months from the date on which the customer has failed to pay an instalment. The Company’s accounting principle has been to recognise the receivable from the customer as a credit loss, if no payments have been received towards the unearned receivable within 6 months. After the debt has been recognised as a credit loss, the instalments paid by the customer are recognised on accrual basis. The recognition of the total receivable is possible on special grounds (for instance, improved financial standing and a new agreement on the payment schedule). In certain cases, SAV-Rahoitus does not, however, consider the realisation of a vehicle held as collateral through settlement procedure a sensible business procedure. Instead, the receivable is collected through a distrainable court order applied for by an independent collection agency. The collection agency monitors the collection procedure and transfers the payments made by the debtor to the Company. The Company’s accounting principle is that all such receivables that are subject to distraint on the basis of court order towards which no payments have been made during the past two accounting periods are recognised as credit losses. More recent debts under collection are recognised as credit losses on the basis of a statistical probability estimate on the success of collection measures. If, during the current accounting period, one or more payments have been received towards a receivable under collection by court order, the receivable is valued at 85% of its value, and if one or more payments have been received during the previous accounting period, the receivable is valued at 60% of its value. The receivables which no court order cannot be applied for on the basis of ambiguities concerning the receivable or the debtor are recognised in full as credit losses when a minimum of three years have passed since the latest payment.

Notes on Income Statement 1) Notes on personnel

Group 30.6.2012

Group 30.6.2011

Parent company 30.6.2012

Parent company 30.6.2011

Salaries and fees In-kind benefits Pension expenses Other indirect employee expenses Total

521 316.20 25 420.53 111 125.13 10 947,84 668 809.70

543 523.11 23 949.78 103 775.92 22 977.36 694 226.17

454 426,42 17 770,53 94 416,97 7 761.52 574 375.44

473 926,59 16 734,78 88 630,19 19 282,58 598 574.14

Management and Board of Directors, salaries and fees Average number of employees

145 500.00 11

94 000.00 15

145 500.00 9

94 000.00 12

24 600.00

43 764.62

24 600.00

41 798.12

2) Auditors’ fees, specification Auditing fees

Notes on Balance Sheet Changes in fixed assets in accounting 3) period:

Group

Group

Parent company

Parent company

30.6.2012

30.6.2011

30.6.2012

30.6.2011

Intangible rights, depreciation plan 5 yrs straight-line depreciation Acquisition cost, 1 July 144 602.60 254 809.50 Increases/decreases 31 293.35 36 299.76 Acquisition cost, 30 June 175 895.95 291 109.26

144 602.60 31 293.35 175 895.95

254 809.50 36 299.76 291 109.26

Accumulated depreciations, 1 July Depreciations for the period Accumulated depreciations, 30 June

146 506.66 56 186.19 90 320.47

94 939.74 51 566.92 146 506.66

146 506.66 56 186.19 90 320.47

94 939.74 51 566.92 146 506.66

Carrying amount, 30 June

119 709.76

144 602.60

119 709.76

144 602.60

Other capitalised long-term expenses, depreciation plan 5 yrs Acquisition cost, 1 July 102 847.74 137 144.93 102 847.74 Increases/decreases 211 609.21 0.00 211 609.21 Transfer from other items 1 119 806.66 0.00 1 119 806.66 Acquisition cost, 30 June 1 434 263.61 137 144.93 1 434 263.61

137 144.93 0.00 0.00 137 144.93

Accumulated depreciations, 1 July Depreciations for the period Accumulated depreciations, 30 June

34 297.19 75 230.52 109 527.71

6 868.19 27 429.00 34 297.19

1 359 033,09

102 847,74 1 359 033,09

102 847,74

Acquisitions in progress, prepayments Acquisition cost, 1 July 1 073 733.93 Increases/decreases 46 072.73 -1 119 Transfer from/to other items 806,66 Acquisition cost, 30 June 1 073 733.93

280 829.10 1 073 733.93 560 760.23 46 072.73 -1 119 232 144.60 806.66 1 073 733.93 1 073 733.93

280 829.10 560 760.23 232 144.60 1 073 733.93

Carrying amount, 30 June

1 073 733.93

0.00

1 073 733.93

Machinery and equipment, depreciation plan, max depreciation percent as per Act on Taxation of Business Income Acquisition cost, 1 July 42 887.59 85 545.95 Increases 11 404.79 758.95 Decreases 1 513.01 0.00 Acquisition cost, 30 June 52 779.37 86 304.90

32 478.31 6 676.85 0.00 39 155.16

75 136.67 758,95 0,00 75 895.62

Accumulated depreciations, 1 July Depreciations for the period Accumulated depreciations, 30 June

30 448.41 16 976.39 47 424.80

34 687.55 13 283.84 47 971.39

30 448.41 9 788.80 40 237.21

32 085.23 11 332.08 43 417.31

Carrying amount, 30 June

35 802.98

38 333.51

29 366.36

32 478.31

Carrying amount, 30 June

34 297.19 75 230.52 109 527.71

0.00

6 868.19 27 429.00 34 297.19

4) Shareholders’ equity Restricted shareholders’ equity Share capital 1.7. Increase in share capital Share capital 30.6.

Share premium reserve 1.7. Share issue, transfer Share premium reserve 30.6. Restricted shareholders’ equity,Total Unrestricted shareholders’ equity Fund for invested unrestricted equity 1.7. Share issue, transfer Fund for invested unrestricted equity 30.6. Retained earnings 1.7. Dividend distribution Share issue, transfer to shareholders’ equity Retained earnings 30.6. Profit/loss for the accounting period Unrestricted shareholders’ equity, Total Shareholders’ equity, Total Distributable shareholders’ equity

Group 30.6.2012

Group 30.6.2011

Parent company 30.6.2012

Parent company 30.6.2011

3775115.19 0.00 3 775 115.19 3 775 115.19

254 000.00 3 521 115.19 3 775 115.19 3 775 115.19

3775115.19 0.00 3 775 115.19 3 775 115.19

254 000.00 3 521 115.19 3 775 115.19 3 775 115.19

0,00 0.00 0.00

126 538.66 -126 538.66 0.00

0.00 0.00 0.00

126 538.66 -126 538.66 0.00

3 775 115.19

3 775 115.19

3 775 115.19

3 775 115.19

0,00 0.00

1 967 597.65 -1 967 597.65

0.00 0.00

1 967 597.65 -1 967 597.65

0,00

0.00

0.00

0.00

433 184.27 0.00

1 451 825.63 0.00

314844.46 0.00

1 426 978.88 0.00

0.00 433 184.27

1 426 978.88 24 846.75

0.00 314 844.46

1 426 978.88 0.00

-145 018.87

408 337.52

-82 612.99

314 844.46

288 165.40 4 063 280.59

433 184.27 4 208 299.46

232 231.47 4 007 346.66

314 844.46 4 089 959.65

288 165.40

433 184.27

232 231.47

314 844.46

Group 30.6.2012

Group 30.6.2011

Parent company 30.6.2012

Parent company 30.6.2011

9 307 867.85 40 000.00 15 050 000.00

14 237 359.67 150 000.00

9 307 867.85 40 000.00

14 237 359.67 150 000.00

17 050 000.00

15 000 000.00

17 000 000.00

3 502 831.89

3 148 860.96

3 502 831.89

3 148 860.96

Group 30.6.2012

Group 30.6.2011

Parent company 30.6.2012

Parent company 30.6.2011

70 907.66

Payable later

57 925.70 55 125.22

Total

113 050.92

5) Debts with a business mortgage as collateral Loans from financial institutions Other current liabilities Business mortgages

6) Other liabilities and commitments Repurchase commitments

Rental liabilities, payable amounts

Payable in the following accounting period

63 407.66

92 737.27

53 252.15 55 125.22

163 644.93

108 377.37

156 144.93

92 737.27

7) Covenant terms and conditions The Company has, related to the Financing Agreement, covenant terms and conditions with the main finance providers concerning the stability of the ownership structure, equity ratio, distribution of profit, and scope of business activities. The Company has met all the terms and conditions.

8) Financing and receivables The Company’s loans from financial institutions have been presented as short-term liabilities but the aim is that financing will continue on a long-term basis. The agreement with all the financing banks is valid until 31 January 2013. The bank loans have valid repayment schedules. The Company continually carries out negotiations with possible finance providers in order to acquire both equity-based and debt financing. The Company will continue cooperation with Svea Ekonomi in applying contingent financing to new hire purchase contracts. Svea Ekonomi purchases all the financing contracts that SAV-Rahoitus does not finance through its own fundraising. The credit risk for the transferred contracts remains with SAVRahoitus. The Going Concern Principle related to financing is presented in more detail in the Board of Directors’ Report. The Company’s receivables are partly long-term but in practice they accumulate faster than the payment periods in the contracts. The average repayment period of the hire purchase contracts is about 18 months.

9) Accrued income and expenses in detail

Material items Accrued income Contract management, insurance contribution Employer’s statutory insurance contribution Income taxes Interest income Insurance income Other Total Accrued expenses Holiday pay expenses Personnel expense accruals Interest expenses Income taxes Other accrued expenses Total

10) Group receivables and liabilities

Group sales receivables Other group receivables

Group 30.6.2012

Group 30.6.2011

Parent company 30.6.2012

Parent company 30.6.2011

0.00

0.00

0.00

0.00

4 721.47 164 994.52 11 516.13 1 890.53 100 089.60 283 212.25

3 150.30 150 400.05 17 029.83 3 004.82 27 961.40 201 546.40

3 834.77 164 994.52 11 516.13 1 890.53 100 089.60 282 325.55

0.00 150 400.05 11 516.13 1 890.53 26 628.06 190 434.77

26 722.51 17 349.30 60 579.19 0.00

26 365.16 26 748.10 392 123.25 21 163.69

21 672.32 16 014.02 60 579.19 0.00

23 139.09 19 739.76 392 123.25 0.00

18 068.25 122 719.25

18 068.25 484 468.45

18 068.25 116 333.78

1 513.96 436 516.06

Parent company 30.6.2012 267 247.59 0.00 267 247.59

Parent company 30.6.2011 243 361.81 139 653.88 383 015.69

11) The deferred tax liabilities are due to the depreciation differences recognised for the parent company in 2010.

12) The SAV Group carries on financial institution activities, and interest income is one of the Group’s major income items. In the Income Statement, interest income is reported in financial income and expenses as an item after the operating profit. Therefore the operating profit does not give a full picture of the Group’s result and financial standing, which should be estimated taking financial income and expenses into account. For the same reason, the Group also presents a Pro Forma Income Statement, which complies, when applicable, with the income statement of a credit institution. The Group’s revenue recognition principles do not, however, comply with the principles of credit institutions.

13) SAV-Rahoitus Plc has given its subsidiary Savlex Oy a Support Letter, by which the parent company secures the continuity of the subsidiary’s activities and its financing for the next 12 months.

The Group also presents a Pro Forma Income Statement, as the regular income statement of a limited liability company does not necessarily provide a sufficient and correct picture of the Group’s result and financial status. In the way it is implemented technically, the SAV-Rahoitus Plc’s Loan Product contains the purchase and sale of the vehicle held as collateral at the same price. The transaction is recognised in the consolidated income statement as a sale and a purchase of the same amount, and this increases the Group’s net sales considerably. Essential for the Group in these transaction is, however the financing income connected with the transaction and recognised in net sales. Considering the sector in which the Group operates, the Board of Directors is of the opinion that the below Pro Forma Income Statement, which complies, when applicable, with the income statement of a credit institution, gives a more appropriate picture of how the Group’s result is formed. PRO FORMA INCOME STATEMENT, GROUP

1.7.201130.6.2012

1.7.201030.6.2011

Interest income Other financial income INCOME FROM FINANCING OPERATIONS

1 353 744 2 001 630

1 736 725 2 422 717

3 355 374

4 159 442

-873 699 -147 100 -130 262 -363 886 0 -1 514 947

-988 270 0 -96 950 -339 882 0 -1 425 102

1 840 427

2 734 340

192 000 -124 371

259 855 -218 289

Interest expenses Commissions Other financial expenses Credit losses Non-recurring credit losses FINANCING OPERATION EXPENSES GROSS PROFIT FROM FINANCING OPERATIONS Insurance sales Insurance purchases GROSS PROFIT FROM INSURANCE SALES Vehicle sales Vehicle purchase Change in inventories GROSS PROFIT FROM VEHICLE SALES INCOME, TOTAL Other operating income Costs connected with income*) Personnel expenses Depreciations Other operating expenses PROFIT BEFORE TAXES Taxes for the period Deferred tax liabilities PROFIT FOR THE PERIOD

67 630 3 064 396 -3 022 367 -279 887

41 567 2 575 990 -2 853 496 36 035

-237 859

-241 470

6 611 770

6 995 288

1 043 -4 941 572 -668 810 -143 351 -1 021 586

10 189 -4 460 851 -694 226 -92 280 -1 184 307

-162 506 17 487 0 -145 019

573 812 -165 475 0 408 338

*) In the Pro Forma Income Statement, the costs connected with income consist of financing operation expenses, insurance purchases, vehicle purchases and change in inventories specified above.

The Company also presents a Pro Forma Income Statement, as the regular income statement of a limited liability company does not necessarily provide a sufficient and correct picture of the Company’s result and financial status. Considering the sector in which the Group operates, the Board of Directors is of the opinion that the below Pro Forma Income Statement, which complies, when applicable, with the income statement of a credit institution, gives a more appropriate picture of how the Company’s result is formed PROFORMA INCOME STATEMENT, PARENT COMPANY Interest income Other financial income INCOME FROM FINANCING OPERATIONS Interest expenses Commissions Other financial expenses Credit losses Non-recurring credit losses FINANCING OPERATION EXPENSES GROSS PROFIT FROM FINANCING OPERATIONS Insurance sales Insurance purchases GROSS PROFIT FROM INSURANCE SALES Vehicle sales Vehicle purchases Change in inventories GROSS PROFIT FROM VEHICLE SALES INCOME, TOTAL Other operating income Costs connected with income*) Personnel expenses Depreciations Other operating expenses Extraordinary items PROFIT BEFORE TAXES Direct taxes PROFIT FOR THE PERIOD

1.7.201130.6.2012

1.7.201030.6.2011

1 353 714 1 937 722

1 737 369 2 422 717

3 291 436

4 160 086

-873 066 -147 100 -129 899 -363 886

-986 728 0 -96 847 -339 882

-1 513 951

-1 423 457

1 777 485

2 736 629

191 158 -124 371

258 186 -217 289

66 787

40 897

203 542 -312 165 0

365 803 -496 924 0

-108 623

-131 121

3 686 135

4 784 075

953 -1 950 486 -574 375 -141 206 -902 179

365 -2 137 670 -598 574 -90 328 -1 049 475

-224 000

-450 000

-105 158 22 545

458 392 -143 548

-82 613

314 844

*) In the Pro Forma Income Statement, the costs connected with income consist of financing operation expenses, insurance purchases, vehicle purchases and change in inventories specified above.

Signatures on the Financial Statements Helsinki 03.09.2012

Markku E. Rentto

Antti Lehtonen

Jarmo Ellonen

Chairman of the Board of Directors

Board Member

Board Member

Harri Kalliokoski Managing Director

Auditor’s Note The report on the audit has been issued today. Helsinki 03.09.2012

Pauli Salminen, Authorised Public Accountant KPMG Oy Ab

List of books of account and voucher types and storage methods General ledger Journal ledger

CD recording CD recording

Purchase invoices Sales invoices Memo vouchers

Voucher type 10, 40 Voucher type 9394 Voucher type 91 Voucher type 90

Payroll accounting + vouchers

Voucher type 95

Bank vouchers

Accounts payable specifications Accounts receivable specifications Inventory accounting specifications Fixed assets accounting specifications

CD recording CD recording CD recording CD recording CD recording CD recording CD recording CD recording CD recording

KPMG Oy Ab PO Box 1037 00101 Helsinki FINLAND

Mannerheimintie 20 B 00100 Helsinki FINLAND Telephone +358 20 760 3000 Telefax +358 20 760 3641 www.kpmg.fi

This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.

AUDITOR’S REPORT To the Annual General Meeting of SAV-Rahoitus Oyj We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of SAV-Rahoitus Oyj for the financial period 1.7.2011– 30.6.2012. The financial statements comprise the consolidated balance sheet, income statement and cash flow statement and notes to the consolidated financial statements, as well as the parent company’s balance sheet, income statement, cash flow statement and notes to the financial statements. Responsibility of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of financial statements and report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company’s accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner. Auditor’s Responsibility Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Liability Companies Act or the articles of association of the company. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.

KPMG Oy Ab, a Finnish limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.

Business ID 1805485-9 Domicile Helsinki

ABCD SAV-Rahoitus Oyj Auditor’s report 3 September 2012

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company’s financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements. Emphasis of Matter Without changing our opinion we draw your attention to following: As can be read in the financial statements the company’s financing is short-term. Therefore a significant uncertainty might relate to company’s going concern. The assets presented in the financial statements include an intangible asset (relates to a bank license) and because of the financing situation presented in the previous paragraph there is an uncertainty concerning the capitalization of those costs. If the uncertainty realizes the capitalized amount is to be expensed. All issues presented above include uncertainty which can affect company’s ability to continue the operations on the financial basis presented in the financial statements. Helsinki, 3 September 2012 KPMG OY AB PAULI SALMINEN Authorized Public Accountant

2