FINANCIAL STATEMENTS 2010 - Finnlines

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caused Finnlines a loss of time charter hires and expenses in total EUR 326,211, as SSI terminated the charters in summer 2009. Since the parties could not reach an agreement, Finn- lines started arbitration proceedings against SSI for payment of the outstanding time charter hires and expenses. Finnlines has received SSI’s counter claim in the amount of EUR 1,182,298. Finnlines considers the basis of the counter claim groundless. The charters are subject to Finnish law and the place of arbitration is Helsinki. The arbitration panel has not yet decided the time for the main hearing of the arbitration proceedings. In 2008, the Administrative Court of Helsinki rendered decisions based on which it can be argued that the Finnish Act on Fairway Dues in force until 1 January 2006 has contained provisions which according to EU law were discriminatory. The Com- pany has been charged excessive fairway dues during 2001- 2005. The Company has been refunded the fairway dues only for 2005, amounting to EUR 2.8 million by the Finnish Customs. The Company is preparing the claim for damages and restitution against the Finnish State for the years 2001-2004 at the District Court of Helsinki. The amount of the claim is approximately EUR 8.5 million and has not been recognised as revenue. The Com- pany has also filed applications for reversals in the Supreme Ad- ministrative Court concerning the fairway dues decisions of the Finnish Customs. Any amounts received as a result of a success- ful application to the Supreme Administrative Court would be deducted from the claim for damages or restitution. Finnlines’ German subsidiary has been taken to the City Court of Lübeck in December 2009 by its former Managing Di- rector regarding the termination of his Service Agreement. The Company considers the legal grounds for the termination to be valid. The process is under way. ENVIRONMENT AND SAFETY The objectives of Finnlines' environmental policy are to provide safe, top-quality services while taking into account the environmental impacts in every aspect of operations. Transports and routes are regularly optimised to achieve the highest possible utilisation rate on both southbound and north- bound voyages, which minimises environmental stress per trans- ported cargo unit. Finnlines is in the process of looking at effec- tive and technically feasible solutions for reduction of emissions. The six new ships to be delivered from China in 2011-2012 will be equipped with a rudder/propeller combination technology that is designed to achieve a significant decrease in fuel consumption. Sulphur content of marine fuel has reduced step by step. As of 1 January 2010, there has been a maximum 0.1 per cent sulphur limit on all marine fuel used in EU ports while the ship is at berth for at least two hours. Finnlines’ ships have complied with this regulation for many years. In the Emissions Control Areas, i.e. the Baltic Sea, North Sea and English Channel, the sulphur content limit for heavy fuel oil was reduced from 1.5 per cent to 1.0 percent on 1 July 2010. Finnlines’ ships run on low-sulphur fuel also when operating outside the Emissions Control Areas. In 2010, all Finnlines-owned ro-pax and ro-ro ships were in- 6 FINNLINES PLC Financial Statements 2010 (figures in EUR thousand, if not stated otherwise) corporated into the environmental certificate issued by LRQA (Lloyd's Register Quality Assurance). Finnsteve has also started to build up an environmental system in accordance with the ISO 14 001 standard. All vessels have been certified in accordance with the Interna- tional Safety Management Code (ISM code). All ships and port facilities also comply with the requirements of the International Ship and Port Facility Security Code (ISPS). In its annual report Finnlines publishes a report of environmental and safety issues. CORPORATE GOVERNANCE Finnlines applies the Finnish Corporate Governance Code for listed companies updated in autumn 2010. The Corporate Gov- ernance Statement can be reviewed at the corporate website (www.finnlines.com). EVENTS AFTER THE REPORTING PERIOD Finnsteve-companies (Finnsteve Oy Ab, Containersteve Oy Ab and FS-Terminals Oy Ab) started co-operation negotiations in the ports of Kotka, Turku and Helsinki with all personnel groups during the last quarter of 2010. These negotiations have resulted in the termination of about 160 employments in total. OUTLOOK FOR 2011 In 2010 import and export volumes started to recover which influ- enced positively the performance of the Company. For 2011 the Company expects that this positive trend will continue. The tough competition in the port of Helsinki has negatively in- fluenced the volumes and the price levels of port operations services. The Port Operations segment has made significant losses since the opening of the new Vuosaari Harbour in autumn 2008. The port operation companies have been compelled to cut the number of personnel, of which considerable savings are expected. However, substantial part of them will realise in 2012 due to long notice periods. During 2011 the Company will take the delivery of major part of its newbuildings and will during the year have a modern optimized fleet to meet future demand and challenges. The Company has during 2009 and 2010 been reshaped and optimized both with respect to efficiency and cost. Based upon the expected market development and the state of the Company the Board of Directors expects improved result in 2011. DIVIDEND DISTRIBUTION PROPOSAL The Board of Directors will propose to the Annual Shareholders’ Meeting that no dividend be paid out for 2010 due to the still un- certain financial business environment and the ongoing invest- ment programme. However, the Board expects dividends to be paid from the financial year 2011 onwards on the condition that there are no negative surprises in the Company’s business environment.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, IFRS EUR 1,000 Note 1 Jan-31 Dec 2010 1 Jan-31 Dec 2009 Revenue 3 561,108 494,411 Other income from operations 6 4,287 13,413 Materials and services 7 -202,964 -162,553 Personnel expenses 8 -110,635 -108,763 Depreciation, amortisation and other write-offs 9 -60,322 -61,012 Other operating expenses 10 -165,850 -199,113 Total operating expenses -539,770 -531,441 Result before interest and taxes 25,625 -23,617 Financial income 11 3,793 3,922 Financial expense 11 -25,734 -31,724 Result before taxes 3,683 -51,419 Income taxes 12 -1,450 9,713 Result for the reporting period 2,234 -41,706 Other comprehensive income: Exchange differences on translating foreign operations -7 -255 Change on hedging reserve 1,418 -723 Deferred tax revaluation -1,481 Income tax relating to components of other comprehensive income -369 188 Total comprehensive income 3,276 -43,977 Result attributable to: Parent company shareholders 2,243 -41,637 Non-controlling interest -9 -69 2,234 -41,706 Total comrehensive income attributable to: Parent company shareholders 3,285 -43,908 Non-controlling interest -9 -69 3,276 -43,977 Result attributable to parent company shareholders calculated as earnings per share (EUR/share) 13 Undiluted earnings per share * 0.05 -0.96 Diluted earnings per share * 0.05 -0.96 * Key indicators per share have been retroactively adjusted with the share issue adjustment factor in 2009. In EPS calculation the hybrid bond interest is deducted from the result in 2009. All figures in the Consolidated Financial Statements have been rounded and, consequently, the sum of individual figures may deviate from the sum presented. See notes starting on page 11. (figures in EUR thousand, if not stated otherwise) FINNLINES PLC Financial Statements 2010 7
Page 1 and 2: FINANCIAL STATEMENTS 2010
Page 3 and 4: BOARD OF DIRECTORS’ REPORT THE CO
Page 5: elated to this. Other significant r
Page 9 and 10: CONSOLIDATED STATEMENT OF CHANGES I
Page 11 and 12: NOTES TO THE CONSOLIDATED FINANCIAL
Page 13 and 14: ated companies are consolidated usi
Page 15 and 16: egory includes assets held for trad
Page 17 and 18: In defined benefit plans, the emplo
Page 19 and 20: Segment assets, liabilities and inv
Page 21 and 22: 8. PERSONNEL EXPENSES EUR 1,000 201
Page 23 and 24: 13. EARNINGS PER SHARE UNDILUTED Un
Page 25 and 26: Assets leased through finance lease
Page 27 and 28: Main factors used in calculating va
Page 29 and 30: 21. DEFERRED TAX ASSETS AND LIABILI
Page 31 and 32: EUR 1,000 2010 2009 Significant ite
Page 33 and 34: 26. PROVISIONS EUR 1,000 2010 2009
Page 35 and 36: Finance lease liabilities Finance l
Page 37 and 38: 31. PENSION LIABILITIES The Group
Page 39 and 40: Hedge Accounting The Group has orde
Page 41 and 42: The Group had an interest rate swap
Page 43 and 44: COMMODITY RISK The Group is exposed
Page 45 and 46: with the Helsinki Court of Appeal a
Page 47 and 48: In April 2009, Finnlines Plc's subs
Page 49 and 50: Shares outstanding 31 December 2005
Page 51 and 52: CALCULATION OF KEY RATIOS, IFRS Ear
Page 53 and 54: PROFIT AND LOSS ACCOUNT, PARENT COM
Page 55 and 56: CASH FLOW STATEMENT, PARENT COMPANY
Page 57 and 58:
NOTES TO THE FINANCIAL STATEMENTS,
Page 59 and 60:
8. EXTRAORDINARY ITEMS EUR 2010 200
Page 61 and 62:
14. INVENTORIES EUR 2010 2009 Bunke
Page 63 and 64:
18. ACCUMULATED APPROPRIATIONS EUR
Page 65 and 66:
CONTINGENCIES AND COMMITMENTS EUR 1
Page 67 and 68:
BOARD'S PROPOSAL FOR THE USE OF THE
Page 69 and 70:
AUDITOR'S REPORT TO THE ANNUAL GENE
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FINANCIAL STATEMENTS 2010 - Finnlines

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