An operating segment is a component of VVO Group that engages in business activities from which it may earn revenues and incur expenses. Separate financial information is available about it and VVO’s chief operating decision-maker evaluates it on a regular basis in order to make decisions on the allocation of resources to the segment and to assess its performance.
VVO Group’s business operations are divided into two segments: VVO Non-subsidised and VVO State-subsidised.
The VVO Non-subsidised segment contains the Group’s parent company VVO Group plc and the group companies VVO Kodit Oy, VVO Vuokra-asunnot Oy, VVO Vuokratalot Oy and VVO Palvelut Oy, as well as those other group companies in whose apartments the restrictions on the determination of rent, related to the ARAVA and interest subsidy legislation, will end by the close of 2017. The division of Korkotukikiinteistöt Oy into seven receiving companies took effect on 1 September 2015. Some of the housing included in the VVO Non-subsidised segment is subject to property-specific restrictions in accordance with the ARAVA Act.
Until 30 September 2015, VVO Asunnot Oy was included in the VVO State-subsidised segment. The company’s division into fourteen receiving companies took effect on 1 October 2015. As a result of the division, some of the companies were transferred to the VVO Non-subsidised segment.
The Group companies in whose apartments the restrictions on the determination of rent, related to the ARAVA and interest subsidy legislation, will end after 2017 belong to the VVO State-subsidised segment. The companies of the VVO State-subsidised segment are subject to the profit distribution restriction, and they can pay their owner an eight per cent return on own funds invested in them that have been confirmed by the Housing Finance and Development Centre of Finland (ARA). The return payable from the annual profits of companies subject to revenue recognition restrictions totals approximately EUR 3 million. Some of the housing in the VVO State-subsidised segment is not subject to property-specific restrictions in accordance with the ARAVA Act.
The principles for preparing operating segment information are the same as the accounting principles for the Group.
Group consolidation measures include mainly expenses, assets and liabilities of the Group’s joint operations.