FINANCIAL STATEMENTS 2010 - Finnlines

The Group had an interest rate swap made in 2007, which matured in 2010 and where the Group swapped six-month Euribor inter-
est for fixed three-year interest. The nominal value of the interest rate swap was EUR 120 million. At the end of thereporting period the
group had no open interest rate swap contracts. Table in Note 27. Interest-bearing liabilities, shows the dates of interest rate changes
of the Group’s variable-rate liabilities and the effective interest rates of liabilities.
The following table shows the Group’s sensitivity to variations in market interest rates. The following assumptions were made when cal-
culating the sensitivity:
• The variation in the interest rate is assumed to be +/-0.50 per cent from the interest rate of individual instruments at the end of the re-
porting period.
• The analysis includes the instruments with an interest adjustment date within the following 12 months.
• The position includes variable-rate loans from financial institutions, commercial papers and interest rate derivative instrument, the
fair value of which is shown separately in the table.
• The position excludes finance lease obligations and instalment debts, because the change in finance costs caused by the interest
rate variation is not relevant to these.
• When calculating the sensitivity, it is assumed that the variable-rate debt portfolio remains unchanged for the whole year (no instal-
ments, no new debt) and that the interest rate changes as stated above on the next interest change date of the debt instrument.
• It is assumed that if a variable-rate instrument is fully amortised within the next 12 months, this instrument would be reacquired at a
new prevailing interest rate according to the above.
EUR 1,000 Change in Profit & Loss
Sensitivity at closing date 2010, change in interest rates,
increasing/decreasing 0.5% from valid rate of the instrument at 31 Dec 2010
Debt portfolio -2,436/+2,436
-2,436/+2,436
Change before tax effect.
EUR 1,000 Change in Profit & Loss
Sensitivity at closing date 2009, change in interest rates,
increasing/decreasing 0.5% from valid rate of the instrument at 31 Dec 2009
Debt portfolio -2,151/+2,151
Interest rate swap +307/-307
-1,845/+1,845
Change before tax effect.
The Group has no significant interest-bearing assets, and therefore the Group’s result for the reporting period, generated from the as-
sets and cash flows, is not substantially exposed to changes in market interest rates.
CREDIT RISK
The Group is exposed to credit risk from its commercial receivables and receivables from financial institutions based on short-term in-
vestment of liquid funds as well as derivative transactions. The Group policy sets out the credit rating requirements and investment
principles related to customers, investment transactions and derivative contract counterparts. The Group has no significant concentra-
tions of credit risk, since it has a broad clientele distributed across various sectors. The Group makes derivative contracts and invest-
ment transactions only with counterparts with high credit ratings. The credit ratings and credit limits of credit customers are constantly
monitored. Credit losses in 2010 were on a low level (0.2 per cent of revenue). Note 23. Current Receivables, shows the analysis of ac-
counts receivable by age and realised credit losses.
(figures in EUR thousand, if not stated otherwise)
FINNLINES PLC Financial Statements 2010
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