FINANCIAL STATEMENTS 2010 - Finnlines

elated to this.
Other significant risk factors, which may affect our business
are listed below. The presentation order of the risk factors is not
intended to be an indication of the probability of their occurrence
or of their potential effect on our business.
• Macroeconomic development
• Accidents
• Changes in laws and regulations
• Relations with the trade unions
• Increase in the interest rates
• Increase in the fuel prices
• Market behaviour
Wherever possible, the Company has taken all the measures
needed for minimizing the risks.
More detailed information on Finnlines' risks and risk manage-
ment can be found in Financial Statements included in the com-
pany's Annual Report.
The legal cases are presented under Legal proceedings.
The risk management procedures of the Group are more
widely presented on the Group’s Internet pages under Corporate
Governance.
LEGAL PROCEEDINGS
The Helsinki District Court rendered on 3 March 2010 its judg-
ment in the action initiated by Mutual Pension Insurance Com-
pany Ilmarinen against Finnlines Plc. The District Court approved
Ilmarinen’s claim to have the resolution of the Annual General
Meeting 2008 amended so that the minimum dividend instead of
EUR 180,216.39 should have been EUR 17,181,000. In addition,
the District Court ordered Finnlines to compensate Ilmarinen’s
legal costs by an amount of EUR 300,035.15 together with inter-
est at statutory rate. As Finnlines has assessed Ilmarinen’s claim
not being justifiable, no amount relating to the claim has been re-
corded. Finnlines filed an appeal with the Helsinki Court of Ap-
peal against the judgement by the Helsinki District Court in April
2010 and the case is under process.
Taxation of internal vessel sales carried out in 2007 by Finn-
lines’ Swedish subsidiary includes uncertainties. The decision
of the tax authorities was that a SEK 97.2 million (EUR 9.5) tax
debt should be paid. The Company appealed against this deci-
sion and requested postponement of the payment of the tax debt,
which was granted. The Appeal Court rendered its decision on
10 January 2011 in favour of the tax authorities and the tax debt
became payable. The Company submitted on 8 February 2011
the leave for appeal at the Administrative High Court and exten-
sion of the postponement of the payment of the tax debt. Both
submissions are under process. As the Company recorded a de-
ferred tax liability due to the temporary timing difference in the tax
year in question, this matter does not have any significant effect
on the Company’s result.
At the end of March 2009, there was an oil spill on MS
Finneagle on the way from Kapellskär to Naantali. As a result, ap-
(figures in EUR thousand, if not stated otherwise)
proximately 4 m 3 of light fuel oil leaked from the vessel into the
sea between the Åland Sea and the Port of Naantali. The Com-
pany immediately started its own investigations and was working
in cooperation with the authorities in order to clarify the matter.
The Finnish authorities finalised their investigations late autumn.
The district prosecutor of the District Court of Turku decided in
December on the non-prosecution of the Captain of the vessel
for spoiling of environment. The vessel or the Company has not
received any notice or information on any environmental damage.
The former management of Finnlines’ port operations subsidi-
ary had been summoned to the Helsinki District Court to answer
for infringing the Occupational Safety and Health Act and Work-
ing Hours Act in the port of Helsinki. The Helsinki District Court
rendered its decision on 3 March 2010 sentencing the former
management to pay fines. Finnlines port operations subsidi-
ary has taken rectifying measures in the follow-up system of the
working hours in order to avoid any infringements in the future.
Finnlines addressed material appeals to the Finnish Customs
and the Port of Helsinki for rectification of the paid fairway and
port dues based on incorrect tonnage certificates of the Star-
class vessels issued by the Swedish and Finnish maritime au-
thorities. The Port of Helsinki has refunded the excess paid har-
bour dues entirely totalling EUR 2.7 million and Finnish Customs
EUR 3.1 million.
Two former and 37 current employees of the Company, repre-
sented by the Union of Salaried Employees, have brought an ac-
tion against the Company at the District Court of Helsinki. They
claim that the Company is to adhere to the general increases
of the collective agreement and to pay the increases accord-
ingly retroactively and in the future. The Company considers the
claims groundless. The process is under way.
Finnlines’ port operations subsidiaries received summons on
2 February 2011 from 16 employees on weekly resting times and
compensation thereof. The claims derive from years 2008 and
2009. The claims might be amended with claims arising from
2010 but this is yet uncertain. The claimants also claim penalty
interest and legal expenses. The Company considers the claims
groundless. The process is under way.
Finnlines received information on the last day of January 2010
that the Finnish Transport Workers' Union (“Union”) has filed le-
gal actions against Finnlines’ port operations subsidiary for com-
pensation of weekend work. The legal actions are handled in
three District Courts in Finland and concern 393 employees of
the port subsidiary represented by the Union. The claim is based
on weekly resting times and compensation thereof. The employ-
ees claim that they have not received sufficient weekly rest/ com-
pensation from 2008-2009. The case raised in the District Court
of Kotka resulted in a judgement by default in favour of the de-
fendant company. The total amount of all the claims is not firmly
specified by the Union but could now be estimated to be about
EUR 0.5 million in maximum. The Company considers the basis
of the actions groundless.
Sub-chartering of MS Birka Transporter and MS Birka
Exporter to Scandinavian Shipping Investment A/S (’SSI’)
FINNLINES PLC Financial Statements 2010
5