FINANCIAL STATEMENTS 2010 - Finnlines
FINANCIAL STATEMENTS 2010 - Finnlines FINANCIAL STATEMENTS 2010 - Finnlines
2010 2009 Defined benefits plans Defined benefits plans Main actuarial assumptions Finland Discount rate, %, management 4.8 5.0 Discount rate, %, other personnel 4.8 4.8 Expected return on assets, % 4.3 5.4 Expected salary increase rate, % 4.0 4.0 Rate of inflation, % 2.0 2.0 Expected remaining employment time in years 5.0 6.0 Main actuarial assumptions Germany Discount rate, % 4.8 4.5 Expected return on assets, % 4.5 5.5 Expected salary increase rate, % 2.0 2.0 Future increases in pensions, % 2.0 3.0 Rate of inflation, % 2.0 2.0 Expected remaining employment time in years 10.0 10.0 Calculation of the present value of defined benefit obligations EUR 1,000 2010 2009 2008 2007 2006 Present value of the obligation 8,054 9,103 8,391 9,132 7,052 Fair value of plans assets -4,476 -5,346 -5,382 -6,191 -3,704 3,578 3,757 3,009 2,941 3,348 The costs for the defined benefit plans valid on 31 December 2010 are estimated at EUR 0.3 (0.6) million in 2011. 32. FINANCIAL RISK MANAGEMENT The management of financial risks aims to reduce the volatility in earnings, the statement of financial position and cash flow, while se- curing effective and competitive financing for the Group. The main financial risks are currency risk, interest rate risk, credit risk, liquid- ity risk, funding risk and fuel price risk. For risk management the Group may use currency forwards, currency loans, interest rate swaps and fuel price clauses included in customer contracts. The Group’s risk management principles are approved by the Board of Direc- tors, and the responsibility for their implementation lies with the Group Finance, with the exception of the fuel price clauses, which are the responsibility of the business units. CURRENCY RISK The Group operates internationally and is therefore exposed to transaction risks through different currency positions. The main foreign currencies used by the Group are USD and SEK. Currency risks arise from commercial transactions, monetary items in the statement of financial position and net investments in foreign subsidiaries. Transaction risk In 2010, over 90 per cent of sales were invoiced in EUR, and the rest in SEK, DKK, NOK, USD and GBP. Purchases are mainly paid in EUR. Bunker purchases are made in USD. Bunker price clauses included in customer contracts cover to big extent this USD risk. Cur- rency positions are reviewed for each currency every 12 months in connection with annual budgeting. The Group’s business units may make internal derivative contracts with the Group Finance to hedge a specific activity. In such cases too, the Group Finance decides, according to the principles approved by the Board of Directors, on any hedging to be made with an external counterpart based on the whole Group’s net currency position. All of the Group’s interest-bearing liabilities on the end of the reporting period were in EUR. 38 FINNLINES PLC Financial Statements 2010 (figures in EUR thousand, if not stated otherwise)
Hedge Accounting The Group has ordered six ro-ro vessels from the Chinese Jinling shipyard. These vessels will be paid partly in USD but the instalments have been fully hedged against EUR. The Group applies hedge accounting in accordance with IAS 39 to these derivative contracts for the spot part of the currency forward. It is considered as hedging of cash flow from a highly probable transaction. The following table shows the duration and fair values of the hedging instruments. The maturities of the forward contracts are in accordance with the peri- ods when the hedged cash flows are expected to occur. EUR 1,000 Fair value Spot price * Interest element ** Hedge accounting 2010 Jinling vessel order USD / EUR-hedging Due 2007 -1,473 -1,091 Due 2008 -3,706 -2,922 Due 2011 608 233 293 Due 2012 49 7 40 -4,522 -3,773 333 * Spot part (net) of the currency forward contract is under hedge accounting and changes are booked in other comprehensive income including gross value change of EUR +1,418 thousand of the instruments and deferred tax change of EUR -369 thousand. ** Interest element of the currency forward contract, non-hedge accounting, through P&L. EUR 1,000 Fair value Spot price * Interest element ** Hedge accounting 2009 Jinling vessel order USD / EUR-hedging Due 2007 -1,473 -1,091 Due 2008 -3,706 -2,922 Due 2010 -244 -272 124 Due 2011 -434 -537 292 -5,856 -4,822 416 * Spot part (net) of the currency forward contract is under hedge accounting and changes are booked in other comprehensive income including gross value change of EUR -723 thousand of the instruments and deferred tax of EUR +188 thousand. ** Interest element of the currency forward contract, non-hedge accounting, through P&L. Changes in fair value from sources other than derivatives under hedge accounting are recognised through profit or loss and presented under financial items. (figures in EUR thousand, if not stated otherwise) FINNLINES PLC Financial Statements 2010 39
- Page 1 and 2: FINANCIAL STATEMENTS 2010
- Page 3 and 4: BOARD OF DIRECTORS’ REPORT THE CO
- Page 5 and 6: elated to this. Other significant r
- Page 7 and 8: CONSOLIDATED STATEMENT OF COMPREHEN
- 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: 31. PENSION LIABILITIES The Group
- 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
<strong>2010</strong> 2009<br />
Defined benefits plans Defined benefits plans<br />
Main actuarial assumptions<br />
Finland<br />
Discount rate, %, management 4.8 5.0<br />
Discount rate, %, other personnel 4.8 4.8<br />
Expected return on assets, % 4.3 5.4<br />
Expected salary increase rate, % 4.0 4.0<br />
Rate of inflation, % 2.0 2.0<br />
Expected remaining employment time in years 5.0 6.0<br />
Main actuarial assumptions<br />
Germany<br />
Discount rate, % 4.8 4.5<br />
Expected return on assets, % 4.5 5.5<br />
Expected salary increase rate, % 2.0 2.0<br />
Future increases in pensions, % 2.0 3.0<br />
Rate of inflation, % 2.0 2.0<br />
Expected remaining employment time in years 10.0 10.0<br />
Calculation of the present value of defined benefit obligations<br />
EUR 1,000 <strong>2010</strong> 2009 2008 2007 2006<br />
Present value of the obligation 8,054 9,103 8,391 9,132 7,052<br />
Fair value of plans assets -4,476 -5,346 -5,382 -6,191 -3,704<br />
3,578 3,757 3,009 2,941 3,348<br />
The costs for the defined benefit plans valid on 31 December <strong>2010</strong> are estimated at EUR 0.3 (0.6) million in 2011.<br />
32. <strong>FINANCIAL</strong> RISK MANAGEMENT<br />
The management of financial risks aims to reduce the volatility in earnings, the statement of financial position and cash flow, while se-<br />
curing effective and competitive financing for the Group. The main financial risks are currency risk, interest rate risk, credit risk, liquid-<br />
ity risk, funding risk and fuel price risk. For risk management the Group may use currency forwards, currency loans, interest rate swaps<br />
and fuel price clauses included in customer contracts. The Group’s risk management principles are approved by the Board of Direc-<br />
tors, and the responsibility for their implementation lies with the Group Finance, with the exception of the fuel price clauses, which are<br />
the responsibility of the business units.<br />
CURRENCY RISK<br />
The Group operates internationally and is therefore exposed to transaction risks through different currency positions. The main foreign<br />
currencies used by the Group are USD and SEK. Currency risks arise from commercial transactions, monetary items in the statement<br />
of financial position and net investments in foreign subsidiaries.<br />
Transaction risk<br />
In <strong>2010</strong>, over 90 per cent of sales were invoiced in EUR, and the rest in SEK, DKK, NOK, USD and GBP. Purchases are mainly paid in<br />
EUR. Bunker purchases are made in USD. Bunker price clauses included in customer contracts cover to big extent this USD risk. Cur-<br />
rency positions are reviewed for each currency every 12 months in connection with annual budgeting.<br />
The Group’s business units may make internal derivative contracts with the Group Finance to hedge a specific activity. In such cases<br />
too, the Group Finance decides, according to the principles approved by the Board of Directors, on any hedging to be made with an<br />
external counterpart based on the whole Group’s net currency position.<br />
All of the Group’s interest-bearing liabilities on the end of the reporting period were in EUR.<br />
38 FINNLINES PLC Financial Statements <strong>2010</strong> (figures in EUR thousand, if not stated otherwise)
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