Kesko's Annual Report 2009

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138 Kesko financial statements 2009 Parent's cash flow statement (FAS) € 1 Jan.-31 Dec. 2009 1 Jan.-31 Dec. 2008 Cash flow from operating activities Profit before extraordinary items Adjustments: 127,304,287.13 175,010,668.09 Depreciation according to plan 22,431,800.30 22,542,266.17 Financial income and expenses -11,208,558.82 -37,555,785.57 Other adjustments -86,901,943.53 -115,916,129.96 Change in working capital 51,625,585.08 44,081,018.73 Interest-free short-term trade receivables, increase/decrease (-/+) 5,013,184.12 4,314,998.23 Interest-free short-term debt, increase/decrease (+/-) -7,364,940.23 3,239,414.65 -2,351,756.11 7,554,412.88 Interests paid -24,886,896.53 -39,864,151.14 Interests received 50,091,388.56 72,980,921.01 Dividends received 15,919.30 6,220,481.75 Taxes paid -31,500,126.37 -62,090,706.16 -6,279,715.04 -22,753,454.54 Cash flow from operating activities 42,994,113.93 28,881,977.07 Cash flow from investing activities Purchases of other investments - -50,000.00 Investments in tangible and intangible assets -25,407,912.38 -28,940,941.87 Increase in long-term receivables - -61,937,039.62 Decrease in long-term receivables 14,727,559.87 - Subsidiary disposed 30,401,356.84 149,729,156.38 Associated company disposed 140,000.00 1,388,000.00 Proceeds from other investments - 223,047.00 Proceeds from sale of tangible and intangible assets 164,968,531.04 141,294,028.63 Cash flow from investing activities 184,829,535.37 201,706,250.52 Cash flow from financing activities Decrease in current creditors -165,768,732.94 -106,807,060.53 Increase in non-current creditors 17,681,692.46 - Decrease in non-current creditors - -4,618,842.74 Increase/decrease (-/+) in short-term interest-bearing receivables 248,003,649.29 45,784,249.44 Short-term money market investments -98,162,726.19 -18,400,959.74 Dividends paid -97,850,410.00 -156,428,592.00 Group contributions received and paid 21,584,005.65 99,866,000.00 Increase in share capital 4,577,454.34 379,018.16 Others -14,532,339.74 10,549,067.77 Cash flow from financing activities -84,467,407.13 -129,677,119.64 Change in liquid assets 143,356,242.17 100,911,107.95 Liquid assets at 1 January 282,031,553.81 181,120,445.86 Liquid assets at 31 December 425,387,795.98 282,031,553.81
Kesko financial statements 2009 Notes to the parent's financial statements Principles used for preparing the parent's financial statements Kesko Corporation's financial statements have been prepared in compliance with the Finnish Accounting Standards (FAS). Non-current assets Intangible assets Intangible assets are stated in the balance sheet at cost less depreciation according to plan. Depreciation plan Other capitalised expenditure 5–14 years Tangible assets Tangible assets are stated in the balance sheet at cost less depreciation according to plan. Depreciation plan Depreciation according to plan is calculated on a straight line basis so as to write off the cost of tangible assets over their estimated useful lives. The periods adopted for depreciation are as follows: Buildings 15–33 years Fixtures and fittings 8 years Machinery and equipment 8 years or machinery and equipment purchased since 1999 25% reducing balance method Transportation fleet 5 years Information technology equipment 3–5 years Other tangible assets 5–14 years Land has not been depreciated. The total of depreciation according to plan and the change in depreciation reserve comply with the Finnish tax legislation. The change in depreciation reserve has been treated as appropriations in the parent company. Valuation of financial assets Marketable securities have been valued at lower of cost or net realisable value. Foreign currencies Items denominated in foreign currencies have been translated into Finnish currency at the average exchange rate of the European Central Bank at the balance sheet date. If a receivable or a debt is tied to a fixed rate of exchange, it has been used for translation. Exchange rate differences have been recognised in profit or loss. Derivative financial instruments Interest rate derivative contracts Interest rate derivatives are used to modify loan durations. The target duration is three years and it is allowed to vary between one and a half and four years. Cash flows arising from interest rate derivative contracts are recognised during the financial year as interest income or expenses, according to the maturity date. In the financial statements, open forward agreements, futures, options and swaps are stated at market values. Unrealised revaluation is not stated as income. Any valuation losses are included in interest expenses. 139 Currency derivative contracts Currency derivative instruments are used for hedging against translation and transaction risks. Forward exchange contracts are valued at the exchange rate of the balance sheet date. The rate differences arising from open derivative contracts are reported in financial items. If a derivative instrument has been used to hedge a foreign-currency-denominated asset, the value change has been recognised against that of the asset item. The premiums of option contracts are included in the balance sheet accruals until they expire, or if a value change at the balance sheet date so requires, recognition in profit or loss. Commodity derivatives Kestra Kiinteistöpalvelut Oy, a Kesko Corporation subsidiary, uses electricity derivatives to balance the energy costs of the Group and its retailers. Kesko's subsidiaries engaged in the agricultural trade use grain derivatives to hedge against the grain price risk. Kesko Corporation is an external counterparty in electricity and grain derivative contracts made with the bank, and internally hedges the corresponding price with the subsidiary. At no stage does Kesko Corporation have derivative positions, and thus there are no effects on profit or loss. The electricity price risk is reviewed on a 3-year time span. With respect to derivative contracts hedging the price of electricity supplied during the financial year, changes in value are recognised in Kesko under interest income and expenses. The unrealised gains and losses of contracts hedging future purchases are not recognised through profit or loss. With respect to grain derivative contracts, the open contracts in the income statement are recognised at market prices. Valuation differences related to open contracts are recognised in Kesko under financial items. Pension plans The pension insurances of Kesko Corporation's personnel are arranged through the Kesko Pension Fund. The Fund's A department, which provides supplementary pension benefits, was closed on 9 May 1998. The job-based retirement age agreed for some of the personnel is 60 or 62 years. Pensions are expensed in the income statement. Provisions Provisions stated in the balance sheet include items bound to by agreements or otherwise, but remain unrealised. Changes in provisions are included in the income statement. Rent liabilities for vacant rented premises no longer used for the Group business operations, as well as the losses resulting from renting the premises to outsiders, are included in provisions. Income tax Income tax includes the income tax payments for the period based on the profit for the period, and taxes payable for prior periods, or tax refunds. Deferred taxes are not included in the parent's income statement and balance sheet.
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Kesko’s year
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2 Kesko’s year 2009 Kesko in brie
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4 Kesko’s year 2009 Review by the
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6 Kesko’s year 2009 Year 2009 in
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Kesko is a highly valued listed tra
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uct and service benefits to custome
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the Pirkka magazine continued to in
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16 Kesko’s year 2009 K-food store
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18 Kesko’s year 2009 High-quality
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Kesko’s home and speciality goods
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Year 2009 In 2009, the net sales of
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Market shares and competitors Hyper
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28 Kesko’s year 2009 Products and
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30 Kesko’s year 2009 Through its
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32 Kesko’s year 2009 Responsibili
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VV-Auto and Konekesko make up the c
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market for agricultural machinery i
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Market shares VV-Auto Finland: Volk
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Real estate operations indicators f
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44 Kesko’s year 2009 Kesko is a g
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46 Kesko’s year 2009 The widest v
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Principles and indicators of respon
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effective stakeholder interaction w
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compare the responsibility practice
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member and expiring at the close of
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Decision-making, activities and mee
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A written managing director’s ser
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made by the Remuneration Committee
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programmes, for their competitive t
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the Audit Committee, and reports on
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Mikko Kosonen b. 1957, D.Sc. (Econ.
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Notice period and severance pay: 6
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Report by the Board of Directors Ja
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In January-December, two new K-raut
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The retail sales of the K-rauta and
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Significant risks and uncertainties
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Group performance indicators Kesko
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Net sales by segment, continuing op
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Calculation of performance indicato
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Consolidated Financial Statements C
Page 89 and 90: Consolidated statement of cash flow
Page 91 and 92: NOTE 1 Accounting policies for the
Page 93 and 94: Foreign currency items The consolid
Page 95 and 96: Other intangible assets The cost of
Page 97 and 98: exceed 10 percent of the higher rat
Page 99 and 100: cating resources, has been identifi
Page 101 and 102: Segment information 2008 Income sta
Page 103 and 104: Net assets of discontinued operatio
Page 105 and 106: Exchange differences recognised in
Page 107 and 108: Goodwill and intangible rights by s
Page 109 and 110: Property, plant and equipment inclu
Page 111 and 112: NOTE 18 Finance lease receivables K
Page 113 and 114: NOTE 20 Kesko financial statements
Page 115 and 116: A total amount of €12.6 million (
Page 117 and 118: Kesko financial statements 2009 Rev
Page 119 and 120: NOTE 29 Finance lease liabilities K
Page 121 and 122: Group as the lessor Minimum lease p
Page 123 and 124: Movements in quantities and exercis
Page 125 and 126: NOTE 41 Financial risk management W
Page 127 and 128: Liquidity risk and sensitivity anal
Page 129 and 130: Kesko financial statements 2009 Bre
Page 131 and 132: Fair values of derivative financial
Page 133 and 134: with regard to business operations,
Page 135 and 136: In addition, the other operating ex
Page 137 and 138: Owned by other Group companies Domi
Page 139: Parent's balance sheet (FAS) € 31
Page 143 and 144: € million 2009 2008 Accumulated d
Page 145 and 146: Increase in share capital During th
Page 147 and 148: Signatures Signatures Helsinki, 4 F
Page 149 and 150: the record date, and whose custodia
Page 151 and 152: Share performance indicators Tradin
Page 153 and 154: Prices and trading of Kesko A and B
Page 155 and 156: Share capital and shares Kesko fina
Page 157 and 158: Information about Kesko for investo
Page 159 and 160: Kenkäkesko Ltd Kutojantie 4, FI-02
Page 161 and 162: Operations control system (ERP Ente
Page 163: www.kesko.fi Business ID 0109862-8
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Kesko's Annual Report 2009

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