Stock exchange release
16.2.2010 at 11.00 a.m. EET
Fingrid Group's annual review and financial statements 2009
Operating environment
Power system operation
Electricity consumption in Finland in 2009 totalled 81.1 terawatt hours (87.2
terawatt hours in 2008), which was 7.0 per cent below that in 2008. The economic
recession decreased the need for electricity by industries in particular. A
total of 62.8 terawatt hours (65.4 terawatt hours) of electricity was
transmitted in Fingrid's grid, representing 77 per cent of the electricity
consumption in Finland.
A total of 2.7 terawatt hours (3.7 terawatt hours in 2008) of electricity was
imported from Sweden to Finland, and 4.1 terawatt hours (4.2 terawatt hours) was
exported from Finland to Sweden in 2009.
Electricity transmissions on the Estlink connection between Finland and Estonia
consisted of imports from the Baltic countries to Finland with the exception of
short export periods in the summer. The volume of electricity imports to Finland
on the Estlink connection was 1.8 terawatt hours (2.3 terawatt hours), and 0.1
terawatt hours of electricity was exported from Finland.
Electricity imports from Russia to Finland totalled 11.7 terawatt hours (10.9
terawatt hours) in 2009.
--------------------------------------------------------------------------------
| Power system operation | 2009 | 2008 |
--------------------------------------------------------------------------------
| Electricity consumption in Finland TWh | 81.1 | 87.2 |
--------------------------------------------------------------------------------
| Fingrid's transmission volume TWh | 62.8 | 65.4 |
--------------------------------------------------------------------------------
| Fingrid's loss energy volume TWh | 1.0 | 1.0 |
--------------------------------------------------------------------------------
| Electricity transmissions Finland-Sweden | | |
--------------------------------------------------------------------------------
| exports to Sweden TWh | 4.1 | 4.2 |
--------------------------------------------------------------------------------
| imports from Sweden TWh | 2.7 | 3.7 |
--------------------------------------------------------------------------------
| Electricity transmissions Finland-Estonia | | |
--------------------------------------------------------------------------------
| exports to Estonia TWh | 0.1 | |
--------------------------------------------------------------------------------
| imports from Estonia TWh | 1.8 | 2.3 |
--------------------------------------------------------------------------------
| Electricity transmissions Finland-Russia | | |
--------------------------------------------------------------------------------
| imports from Russia TWh | 11.7 | 10.9 |
--------------------------------------------------------------------------------
Promotion of electricity market
Congestions in the transmission grid in Southern Scandinavia complicated the
access of Norwegian hydropower to the Nordic electricity market. The area prices
of electricity often became segregated, although the price differences were not
usually very great. There was a uniform spot price in the Nordic electricity
market for only 25 per cent of the time. However, between Finland and Sweden
there was a uniform price for 95 per cent of the time.
The price level in the spot market in 2009 was below that in 2008. The average
system price was 35 euros per megawatt hour (45 €/MWh in 2008). The average area
price for Finland was close to this, i.e. 37 €/MWh (51 €/MWh).
--------------------------------------------------------------------------------
| Electricity market | 2009 | 2008 |
--------------------------------------------------------------------------------
| Nord Pool system price, average €/MWh | 35.02 | 44.74 |
--------------------------------------------------------------------------------
| Area price Finland, average €/MWh | 36.98 | 51.02 |
--------------------------------------------------------------------------------
| Congestion income in the Nordic countries | 79.5 | 244.1 |
| million € | | |
--------------------------------------------------------------------------------
| Congestion income between Finland and Sweden | 1.1 | 1.3 |
| million € | | |
--------------------------------------------------------------------------------
| Congestion hours between Finland and Sweden % | 4.6 | 2.5 |
--------------------------------------------------------------------------------
| Fingrid's share of the congestion income in the | 4.9 | 23.2 |
| Nordic countries million € | | |
--------------------------------------------------------------------------------
Adequacy of transmission system
Eight major substations and approx. 270 kilometres of new transmission lines
were completed for Fingrid in 2009. The autumn was the busiest period in terms
of commissioning of new transmission facilities in Fingrid's history. Fingrid
also brought to conclusion a project which had lasted for several years,
replacement of aluminium towers on 400 kilovolt lines.
In the spring, Fingrid launched the planning of a sizeable capital investment
project together with the Estonian transmission system operator Elering. A
transmission link of 650 megawatts is being planned between Finland and Estonia.
The costs of the project are approx. 300 million euros. The 140-kilometre long
link based on direct current technology is due to be ready in an expedited
schedule in 2014 or even at the end of 2013. The completion time is influenced
above all by the opening of the electricity market in the Baltic countries and
by the potential investment subsidy granted by the European Union.
In February, the transmission system operators in the area of the Baltic Sea
completed a shared transmission grid plan, which examined the linking of the
Baltic countries to the electricity market in the Nordic countries and
Continental Europe. The results were utilised in the market integration plan for
the Baltic region, launched by the EU. The plan suggests that in addition to the
EstLink 2 transmission connection between Finland and Estonia, connections from
the Baltic countries to Sweden and Poland should also be constructed.
Fingrid's gross capital expenditure in 2009 was 136 million euros (88 million
euros in 2008).
Financial result
Revenue of the Fingrid Group in 2009 was 359 million euros (382 million euros in
2008). Other operating income was 2 million euros (3 million euros). Grid
revenue decreased slightly despite the 4.5 per cent tariff increase carried out
at the beginning of the financial year. This was due to a reduction in
industrial electricity consumption in Finland.
Revenue from the sales of balance power decreased on the previous year to 92
(105) million euros. Correspondingly, the purchases of balance power also
decreased to 85 (95) million euros. Cross-border transmission income exceeded
the level of 2008 by approx. 2 million euros because of a growth of just under 1
TWh in electricity imports from Russia. Revenue from the power reserve
operations grew on account of an elevated power reserve compensation. Fingrid's
share of the Nordic congestion income decreased by 18 million euros as there
were less Nordic transmission capacity restrictions and because of a changed
division of congestion income as agreed by the Nordic TSOs. Fingrid's portion of
the European inter-TSO compensations grew by 4 million euros. Depreciation, loss
energy, maintenance management and reserve costs rose from the previous year.
Net income from the feed-in tariff for peat remained at about the same level as
in the previous year. The corresponding changes during the last quarter of the
financial year are shown in the table below (in million euros).
--------------------------------------------------------------------------------
| Revenue and other | 1-12/09 | 1-12/08 | 10-12/09 | 10-12/08 |
| operating income | | | | |
--------------------------------------------------------------------------------
| Grid service | 188 | 189 | 57 | 53 |
| revenue | | | | |
--------------------------------------------------------------------------------
| Sales of balance | 92 | 105 | 26 | 28 |
| power | | | | |
--------------------------------------------------------------------------------
| Cross-border | 24 | 22 | 6 | 6 |
| transmission | | | | |
--------------------------------------------------------------------------------
| ITC income | 28 | 23 | 6 | 7 |
--------------------------------------------------------------------------------
| Power reserve | 13 | 11 | 4 | 3 |
--------------------------------------------------------------------------------
| Feed-in tariff for | 3 | 0.4 | 3 | 0.1 |
| peat | | | | |
--------------------------------------------------------------------------------
| Congestion income | 5 | 23 | 1 | 2 |
--------------------------------------------------------------------------------
| Other revenue | 5 | 9 | 0.5 | 2 |
--------------------------------------------------------------------------------
| Other operating | 2 | 3 | 1 | 1 |
| income | | | | |
--------------------------------------------------------------------------------
| Revenue and other | 361 | 385 | 105 | 103 |
| income total | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Costs | 1-12/09 | 1-12/08 | 10-12/09 | 10-12/08 |
--------------------------------------------------------------------------------
| Depreciation | 65 | 59 | 16 | 15 |
--------------------------------------------------------------------------------
| Purchase of balance | 85 | 95 | 25 | 27 |
| power | | | | |
--------------------------------------------------------------------------------
| ITC charges | 16 | 15 | 4 | 4 |
--------------------------------------------------------------------------------
| Power reserve | 13 | 10 | 3 | 3 |
--------------------------------------------------------------------------------
| Feed-in tariff for | 3 | 0.1 | 3 | 0.0 |
| peat | | | | |
--------------------------------------------------------------------------------
| Purchase of loss | 52 | 50 | 15 | 13 |
| energy | | | | |
--------------------------------------------------------------------------------
| Reserves | 21 | 20 | 5 | 5 |
--------------------------------------------------------------------------------
| Maintenance | 18 | 15 | 6 | 6 |
| management | | | | |
--------------------------------------------------------------------------------
| Personnel | 20 | 20 | 6 | 6 |
--------------------------------------------------------------------------------
| Other costs | 19 | 19 | 5 | 6 |
--------------------------------------------------------------------------------
| Costs total | 312 | 302 | 89 | 84 |
--------------------------------------------------------------------------------
Operating profit excluding the change in the fair value of electricity
derivatives was 49 (83) million euros during the financial year. In the last
quarter, operating profit excluding the change in the fair value of electricity
derivatives was 16 (19) million euros.
The IFRS operating profit of the Group was 51 (68) million euros. Of the change
in the fair value of electricity derivatives, +2 (-14) million euros were
recognised in the income statement and a total of 16 (-44) million euros in
equity and to reduce the tax receivables.
The Group's profit for the year was 25 (28) million euros. The company's Board
of Directors will propose to the Annual General Meeting of Shareholders that
2,022.29 euros of dividend per share to be paid, totalling 6,724,119.67 euros
The return on investment was 3.9 (5.8) per cent and the return on equity 5.7
(6.6) per cent. The equity ratio was 27.2 (26.7) per cent at the end of the
review period.
The cash flow from the operations of the Group deducted by capital expenditure
and dividends was -74 (22) million euros.
The Fingrid Group and Fingrid Oyj employed 260 persons, including temporary
employees, at the end of 2009. The corresponding figure a year before was 249
persons.The increase in the number of personnel was due to more numerous capital
investment projects.
There have been no material events or changes in Fingrid's business or financial
situation after the closing of the financial year.
The revival of electricity consumption in Finland is crucially influenced by the
recovery of exports by the energy-intensive industries in Finland and
consequently by the increased utilisation rates of industrial capacity. This is
reflected directly in Fingrid's grid revenue. It continues to be difficult to
anticipate the developments in the money and capital markets.
Fingrid is making capital investments totalling 1,600 million euros in the
transmission grid and reserve power in the next 10 years. The investments on an
annual level are about 100 - 200 million euros. The investment programme aims at
retaining high system security and promoting the functioning of the electricity
market, and this takes into account the policy decisions made in in the climate
and energy strategy of Finland. The extensive capital investments have a
negative impact on cash flow and will require additional borrowing. This is why
Fingrid will have to raise its transmission tariffs in the coming years.
These financial statements have been audited.
The financial statements and annual review are appended to this stock exchange
release, and a separate corporate governance statement of Fingrid Oyj has also
been provided.
Additional information:
CEO Jukka Ruusunen, +358 30 395 5140 or +358 40 593 8428
CFO Tom Pippingsköld,
+358 30 395 5157 or +358 40 519 5041
English translation
FINGRID OYJ
ANNUAL REVIEW AND FINANCIAL STATEMENTS
1 January 2009 - 31 December 2009
CONTENTS
1. Annual review
Report of the Board of Directors
Key indicators
The Board of Directors' proposal for the distribution of profit
2. Financial statements
Consolidated financial statements (IFRS)
Income statement
Balance sheet
Statement of changes in equity
Cash flow statement
Notes to the financial statements
Parent company financial statements (FAS)
Profit and loss account
Balance sheet
Cash flow statement
Notes to the financial statements
3. Signatures for the annual review and for the financial statements
1. REPORT OF THE BOARD OF DIRECTORS
Operating environment
Power system operation
Electricity consumption in Finland in 2009 totalled 81.1 terawatt hours (87.2
terawatt hours in 2008), which was 7.0 per cent below that in 2008. The
temperature adjusted electricity consumption decreased by 8.5 per cent. The
economic recession decreased the need for electricity by industries in
particular. A total of 62.8 terawatt hours (65.4 terawatt hours) of electricity
was transmitted in Fingrid's grid, representing 77 per cent of the electricity
consumption in Finland.
Electricity transmission between Finland and Sweden mainly consisted of exports
from Finland to Sweden with the exception of the early summer and autumn. The
replacement of overhead ground wires on the cross-border lines in the north and
the construction of the Fenno-Skan direct current link in the south restricted
the transmission capacity made available to the electricity market for several
weeks. A total of 2.7 terawatt hours (3.7 terawatt hours in 2008) of electricity
was imported from Sweden to Finland, and 4.1 terawatt hours (4.2 terawatt hours)
was exported from Finland to Sweden in 2009.
Electricity transmission on the Estlink connection between Finland and Estonia
consisted of imports from the Baltic countries to Finland with the exception of
short export period in the summer. The transmission grid in Estonia occasionally
restricted the transmission capacity made available from Finland to Estonia.
Fingrid took care of the operation of the Estlink connection together with
Elering, the transmission system operator in Estonia. The volume of electricity
imports to Finland on the Estlink connection was 1.8 terawatt hours (2.3
terawatt hours), and 0.1 terawatt hours of electricity was exported from
Finland.
Electricity imports from Russia to Finland totalled 11.7 terawatt hours (10.9
terawatt hours) in 2009. The transmission capacity was in use almost fully with
the exception of a service interruption in August.
--------------------------------------------------------------------------------
| Power system operation | 2009 | 2008 |
--------------------------------------------------------------------------------
| Electricity consumption in Finland TWh | 81.1 | 87.2 |
--------------------------------------------------------------------------------
| Fingrid's transmission volume TWh | 62.8 | 65.4 |
--------------------------------------------------------------------------------
| Fingrid's loss energy volume TWh | 1.0 | 1.0 |
--------------------------------------------------------------------------------
| Electricity transmissions Finland-Sweden | | |
--------------------------------------------------------------------------------
| exports to Sweden TWh | 4.1 | 4.2 |
--------------------------------------------------------------------------------
| imports from Sweden TWh | 2.7 | 3.7 |
--------------------------------------------------------------------------------
| Electricity transmissions Finland-Estonia | | |
--------------------------------------------------------------------------------
| exports to Estonia TWh | 0.1 | |
--------------------------------------------------------------------------------
| imports from Estonia TWh | 1.8 | 2.3 |
--------------------------------------------------------------------------------
| Electricity transmissions Finland-Russia | | |
--------------------------------------------------------------------------------
| imports from Russia TWh | 11.7 | 10.9 |
--------------------------------------------------------------------------------
Promotion of electricity market
Congestions in the transmission grid in Southern Scandinavia complicated the
access of Norwegian hydropower to the Nordic electricity market. The area prices
of electricity often became segregated, although the price differences were not
usually very large. There was a uniform spot price in the Nordic electricity
market for only 25 per cent of the time. However, between Finland and Sweden
there was a uniform price for 95 per cent of the time.
The price level in the spot market in 2009 was below that in 2008. The average
system price was 35 €/MWh (45 €/MWh in 2008). The average area price for Finland
was close to this, i.e. 37 €/MWh (51 €/MWh).
Progress was made in market integration in the Nordic countries and Continental
Europe. Since November, the transmission capacity between Germany and Denmark
has been distributed to the market using the principle of implicit auctioning.
European Market Coupling Company (EMCC) administers the system together with the
electricity exchanges. This procedure ensures that the transmission capacity is
used as efficiently as possible.
At the request of the Ministry of Employment and the Economy, Fingrid examined
the possibility of dividing Finland into two price or bidding areas for
electricity. In the report published in November, Fingrid did not deem such
division necessary, at least not at this point. However, managing transmission
congestions within Finland will depend crucially on the location of the new
generation capacity and will call for more comprehensive counter trade than at
present, and activity from electricity producers to participate in counter
trade. In 2009, Fingrid used 0.7 million euros for counter trade (0.1 million
euros in 2008).
--------------------------------------------------------------------------------
| Electricity market | 2009 | 2008 |
--------------------------------------------------------------------------------
| Nord Pool system price, average €/MWh | 35.02 | 44.74 |
--------------------------------------------------------------------------------
| Area price Finland, average €/MWh | 36.98 | 51.02 |
--------------------------------------------------------------------------------
| Congestion income in the Nordic countries | 79.5 | 244.1 |
| million € | | |
--------------------------------------------------------------------------------
| Congestion income between Finland and Sweden | 1.1 | 1.3 |
| million € | | |
--------------------------------------------------------------------------------
| Congestion hours between Finland and Sweden % | 4.6 | 2.5 |
--------------------------------------------------------------------------------
| Fingrid's share of the congestion income in the | 4.9 | 23.2 |
| Nordic countries million € | | |
--------------------------------------------------------------------------------
Adequacy of transmission system
Eight major substations and approx. 270 kilometres of new transmission lines
were completed for Fingrid in 2009. The autumn was the busiest period in terms
of commissioning of new transmission facilities in Fingrid's history. Fingrid
also completed a project which had lasted for several years, a replacement of
aluminium towers on 400 kilovolt lines.
In the spring, Fingrid launched the planning of a sizeable capital investment
project together with the Estonian transmission system operator Elering. A
transmission link of 650 megawatts is being planned between Finland and Estonia.
The costs of the project are approx. 300 million euros. The 140-kilometre long
link based on direct current technology is due to be ready in an expedited
schedule in 2014 or even at the end of 2013. The completion time is influenced
above all by the opening of the electricity market in the Baltic countries and
by the potential investment subsidy granted by the European Union.
In February, the transmission system operators in the Baltic Sea area completed
a shared transmission grid plan, which examined the linking of the Baltic
countries to the electricity market in the Nordic countries and Continental
Europe. The results were utilised in the market integration plan for the Baltic
region, launched by the EU. The plan suggests that in addition to the EstLink 2
transmission connection between Finland and Estonia, connections from the Baltic
countries to Sweden and Poland should also be constructed.
The establishment of ENTSO-E stabilised grid planning within the Baltic Sea
region into a continuous process involving nine TSO organisations. On a European
level, the regional plans are integrated into a Ten Year Network Development
Plan updated every second year. The first plan will be completed in summer 2010.
Fingrid's gross capital expenditure in 2009 was 136 million euros (88 million
euros in 2008). Of this amount, a total of 126 (81) million euros were used for
the transmission grid and 5 (5) million euros for reserve power. IT-related
capital expenditure was approximately 4 (2) million euros.
Research and development were allocated a total of 1.3 (0.9) million euros. In
terms of grid technology, the most significant R&D input was used on the
moisture monitoring of transformers and on the measurement and prevention of
corrosion in guy wire rods. Related to corporate operations, the issues studied
included the magnitude of disadvantage inflicted by outages on grid customers
and the reliability of data systems and telecommunications in power cut
situations.
Financial result
Revenue of the Fingrid Group in 2009 was 359 million euros (382 million euros in
2008). Other operating income was 2 million euros (3 million euros). Grid
revenue decreased slightly despite the 4.5 per cent tariff increase carried out
at the beginning of the financial year. This was due to a reduction in
industrial electricity consumption in Finland.
Revenue from the sales of balance power decreased on the previous year to 92
(105) million euros. Correspondingly, the purchases of balance power also
decreased to 85 (95) million euros. Cross-border transmission income exceeded
the level of 2008 by approx. 2 million euros because of a growth of just under 1
TWh in electricity imports from Russia. Revenue from the power reserve
operations grew on account of an elevated power reserve compensation. Fingrid's
share of the Nordic congestion income decreased by 18 million euros as there
were less Nordic transmission capacity restrictions and because of a changed
division of congestion income as agreed by the Nordic TSOs. Fingrid's portion of
the European inter-TSO compensations grew by 4 million euros. Depreciation, loss
energy, maintenance management and reserve costs rose from the previous year.
Net income from the feed-in tariff for peat remained at about the same level as
in the previous year. The corresponding changes during the last quarter of the
financial year are shown in the table below (in million euros).
--------------------------------------------------------------------------------
| Revenue and other | 1-12/09 | 1-12/08 | 10-12/09 | 10-12/08 |
| operating income | | | | |
--------------------------------------------------------------------------------
| Grid service revenue | 188 | 189 | 57 | 53 |
--------------------------------------------------------------------------------
| Sales of balance | 92 | 105 | 26 | 28 |
| power | | | | |
--------------------------------------------------------------------------------
| Cross-border | 24 | 22 | 6 | 6 |
| transmission | | | | |
--------------------------------------------------------------------------------
| ITC income | 28 | 23 | 6 | 7 |
--------------------------------------------------------------------------------
| Power reserve | 13 | 11 | 4 | 3 |
--------------------------------------------------------------------------------
| Feed-in tariff for | 3 | 0.4 | 3 | 0.1 |
| peat | | | | |
--------------------------------------------------------------------------------
| Congestion income | 5 | 23 | 1 | 2 |
--------------------------------------------------------------------------------
| Other revenue | 5 | 9 | 0.5 | 2 |
--------------------------------------------------------------------------------
| Other operating | 2 | 3 | 1 | 1 |
| income | | | | |
--------------------------------------------------------------------------------
| Revenue and other | 361 | 385 | 105 | 103 |
| income total | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Costs | 1-12/09 | 1-12/08 | 10-12/09 | 10-12/08 |
--------------------------------------------------------------------------------
| Depreciation | 65 | 59 | 16 | 15 |
--------------------------------------------------------------------------------
| Purchase of balance | 85 | 95 | 25 | 27 |
| power | | | | |
--------------------------------------------------------------------------------
| ITC charges | 16 | 15 | 4 | 4 |
--------------------------------------------------------------------------------
| Power reserve | 13 | 10 | 3 | 3 |
--------------------------------------------------------------------------------
| Feed-in tariff for | 3 | 0.1 | 3 | 0.0 |
| peat | | | | |
--------------------------------------------------------------------------------
| Purchase of loss | 52 | 50 | 15 | 13 |
| energy | | | | |
--------------------------------------------------------------------------------
| Reserves | 21 | 20 | 5 | 5 |
--------------------------------------------------------------------------------
| Maintenance | 18 | 15 | 6 | 6 |
| management | | | | |
--------------------------------------------------------------------------------
| Personnel | 20 | 20 | 6 | 6 |
--------------------------------------------------------------------------------
| Other costs | 19 | 19 | 5 | 6 |
--------------------------------------------------------------------------------
| Costs total | 312 | 302 | 89 | 84 |
--------------------------------------------------------------------------------
Operating profit excluding the change in the fair value of electricity
derivatives was 49 (83) million euros during the financial year. In the last
quarter, operating profit excluding the change in the fair value of electricity
derivatives was 16 (19) million euros.
The IFRS operating profit of the Group was 51 (68) million euros. Of the change
in the fair value of electricity derivatives, +2 (-14) million euros were
recognised in the income statement and a total of 16 (-44) million euros in
equity and to reduce the tax receivables.
The Group's profit for the year was 25 (28) million euros.
The return on investment was 3.9 (5.8) per cent and the return on equity 5.7
(6.6) per cent. The equity ratio was 27.2 (26.7) per cent at the end of the
review period. Revenue of the parent company was 356 (382) million euros and
profit for the financial year 5 (6) million euros.
Financing
The financial position of the Group continued to be satisfactory. As a result of
the international crisis in the financial market, the margins of corporate
funding first rose considerably, followed by a decrease halfway through the
financial year. In 2009, Fingrid managed its long-term funding by withdrawing a
long-term loan of 30 million euros from the Nordic Investment Bank (NIB) and by
issuing a total of 104 million euros worth of bonds, in form of private
placements. Because of the global recession, both short-term and long-term
interest rates have decreased during the financial year. The company has
increased the hedging level of its interest costs by entering into primarily
interest rate cap contracts extending over the next 3 to 5 years.
The net financial costs excluding the change in the fair value of derivatives
decreased considerably to 20 (29) million euros. Interest income was 4 (11)
million euros. The net financial costs in accordance with the IFRS were 18 (31)
million euros, including the positive change of 3 (-2) million euros in the fair
value of derivatives.
The cash flow from the operations of the Group deducted by capital expenditure
and dividends was -74 (22) million euros.
The financial assets at 31 December 2009 totalled 204 (206) million euros. The
interest-bearing borrowings, including derivative liabilities, totalled 1,001
(933) million euros, of which 685 (678) million euros were long-term and 316
(255) million euros were short-term. The counterparty risk arising from the
currency derivative contracts and interest rate derivative contracts was 25 (10)
million euros.
The company has a fully undrawn revolving credit facility of 250 million euros.
International rating agencies updated Fingrid's credit ratings in 2009. On 15
April 2009, Fitch Ratings affirmed Fingrid Oyj's long-term issuer default
rating (IDR) of AA-, a short-term IDR of F-1+ and a senior unsecured debt rating
of AA. Fitch Ratings assessed Fingrid's outlook to be negative. Standard &
Poor's Rating Services (S&P) updated Fingrid's credit opinion on 17 July
2009.The long-term rating issued by S&P is A+ and the short-term rating is A-1.
S&P assessed Fingrid's outlook to be stable. Moody's Investors Service
downgraded Fingrid's long-term rating from Aa3 to A1 on 9 October 2009.
Fingrid's short-term rating remained at P-1. Moody's assessed Fingrid's outlook
to be negative.
Personnel and rewarding systems
The Fingrid Group and Fingrid Oyj employed 260 persons, including temporary
employees, at the end of 2009. The corresponding figure a year before was 249
persons. The increase in the number of personnel was due to more numerous
capital investment projects.
Of the personnel employed by the company, 22.7 per cent (21 per cent in 2008)
were women and 77.3 (79) per cent were men at the end of the year. Among
permanent personnel, those in age group 24 - 29 years of age numbered 24 (30) in
2009, 30 - 34 years 33 (34), 35 - 39 years 40 (38), 40 - 44 years 31 (31), 45 -
49 years 42 (37), 50 - 54 years 35 (37), 55 - 59 years 23 (26), and age group 60
- 65 years 17 (16).
During 2009, a total of 15,317 (11,820) hours were used for personnel training,
with an average of 59 (49) hours per person. Employee absences on account of
illness in 2009 accounted for 1.8 per cent of the total working hours. In
addition to a compensation system which is based on the requirements of each
position, Fingrid applies quality and incentive bonus schemes.
Board of Directors and corporate management
Fingrid Oyj's Annual General Meeting was held in Helsinki on 19 March 2009. Arto
Lepistö, Industrial Counsellor, was elected as Chairman of the Board, Timo
Rajala, President and CEO, as First Deputy Chairman of the Board, and Timo
Karttinen, Executive Vice President, as Second Deputy Chairman of the Board. The
other Board members elected were Ari Koponen, Vice President, Ritva Nirkkonen,
Fund Raising Manager, Anja Silvennoinen, Senior Vice President, Energy, and
Risto Autio, Director, Alternatives.
PricewaterhouseCoopers Oy was elected as the auditor of the company, with
Authorised Public Accountant Juha Tuomala serving as the responsible auditor.
The Board of Directors has two committees: an audit committee and a remuneration
committee. The members of the audit committee in 2009 were Ritva Nirkkonen
(Chairperson), Risto Autio, Arto Lepistö and Anja Silvennoinen. The remuneration
committee consisted of Arto Lepistö (Chairman), Timo Rajala and Timo Karttinen.
Jukka Ruusunen serves as President & CEO of the company.
An account of the governance and control systems of the company, required by the
Finnish Corporate Governance Code, has been provided separately. The account and
other information required by the Code are also available on the company's
website at www.fingrid.fi.
Internal control, risk management, internal audit
Fingrid's internal control is based on independent internal audit, internal
operating principles and guidelines, financial reporting, supervision,
documentation, and transparent processes and procedures. Internal control
intends to make sure that Fingrid works efficiently and productively, that
financial reporting is reliable, and that the laws, regulations and the
company's own procedural guidelines are followed.
The Board of Directors approves the risk management policy and any changes in
it. The Board approves the risk management measures as part of the corporate
strategy, performance indicators, action plan and budget. The audit committee of
the Board of Directors obtains an annual report of the foremost risks pertaining
to the company's operations and of their management.
The internal auditor monitors issues such as adherence to the internal rules of
the company, acts and official regulations, and reports his findings concerning
the company's procedural guidelines, authorisation and rules to the audit
committee. The audit committee of the Board of Directors examines the
functioning of internal control and reports to the Board of Directors.
As part of internal control, internal audit audited issues such as the company's
data security and personnel administration together with the related processes
in 2009. Internal audit is also responsible for auditing business risk
management, and it reports the results of its work to the audit committee.
With regard to the foremost corporate-level risks, the main content of risk
management has been specified as part of the strategy work of the executive
management group as well as in the operating principles, and in the procedural
guidelines concerning risk management. These risks are monitored, co-ordinated
and managed by the executive management group, but each function and/or business
process is responsible for implementing its own risk management. The executive
management group identifies and assesses regularly the strategic risks
pertaining to personnel and expertise, corporate finances, customers and
stakeholders, and business processes. The financial administration of the Group
is responsible for the control structures relating to the financial reporting
process.
Foremost risks and factors of uncertainty
The foremost business risks of the company include risks relating to the
functioning of the power system, such as a major disturbance or a power
shortage, and incorrect or unanticipated capital expenditure projects, for
example due to a change in regional electricity consumption or generation. Also,
risks related to official regulation, such as changes in the Finnish or the
European regulation, can weaken the financial position of the company or its
opportunities to pursue the objectives related to the development of the
electricity market. Other significant risks include counterparty risk as well as
risks pertaining to the price of electricity and changes in the interest rate
level. Other risks include personnel risks related to issues such as electrical
safety.
Fingrid is prepared for a wide-spread disturbance concerning Finland or the
Nordic power system by means of various reserves, procedural guidelines,
contingency plans, and exercises. In its strategy, the company also focuses on
the versatile utilisation of the operation control system, expedited disturbance
management, and management of power shortage situations. A wide-spread
disturbance in the power system may be caused by several simultaneous faults in
the grid, inoperability of Fingrid's operation control system, insufficiency of
production capacity, or an external event which prevents grid operation entirely
or partially.
The objective is to avoid incorrect or unanticipated capital expenditure by
updating the grid plans regularly, by means of constant interaction with the
customers, and by conducting co-operation with the other transmission system
operators.
Fingrid's operations are subject to official regulation and supervised by the
Energy Market Authority. The company aims to establish well-working and
transparent co-operation and interaction with the various stakeholders, to
contribute actively to the reports and task forces of authorities, and to focus
on working within ENTSO-E, the European organisation of transmission system
operators.
An unanticipated increase in costs or decrease in income is restricted by
enhancing financial control in the Group and assessment concerning financial
latitude. Derivatives are used for hedging against changes in the price of
electricity or the interest rate level, and the counterparty risk involved in
the obligations of parties which have a contractual relationship with Fingrid is
limited contractually by using various limits and by regularly monitoring the
financial standing of the counterparties.
The expertise and occupational safety risks pertaining to personnel risks are
limited by allocated training programmes for both the company's own personnel
and service providers and by auditing the work sites systematically in order to
attain the best practices and to enhance occupational safety.
As part of its corporate social responsibility, Fingrid has identified the risks
that have a major impact on society. These include a major disturbance or an
extensive disturbance with a long duration, diminished confidence in the
electricity market, postponement of cross-border line construction projects,
delayed reinforcement programme for the trunk grid, and unexpected and long-term
restrictions in transmission capacity.
In its selected strategic focal areas, Fingrid has also taken the management of
these risks into account and made preparations for the risks in its action plan
using various means, such as those described above in conjunction with a major
disturbance. The company aims to contribute to the integration of the European
electricity market and intensification of market mechanisms by constructing new
cross-border transmission connections and by publishing market information which
has bearing on the transparency of the market. The company prepares and
allocates resources for projects which reinforce the cross-border connections
and the trunk grid, and takes environmental impacts into account in planning and
construction with a long time span. Long-term restrictions in transmission
capacity inflict financial disadvantage on the customers and society. This
disadvantage is minimised by securing the critical items in the transmission
grid and on the cross-border connections and by means of efficient outage
planning, for example by optimising the timing of outages so that the financial
impact on the customers is kept to a minimum.
Share capital and capital loans
The minimum share capital of the company is 55,900,000 euros and the maximum
share capital is 223,600,000 euros, within which limits the share capital may be
increased or lowered without amending the Articles of Association. At present,
the share capital is 55,900,000 euros. The shares of the company are divided
into series A shares and series B shares.
The number of series A shares is 2,078 and the number of series B shares is
1,247. The votes and dividends related to the shares are described in more
detail in the notes to the financial statements and in the Articles of
Association available on the website of the company.
The company had a capital loan of 30 million euros, which was redeemed in
accordance with the loan terms on 30 November 2009.
Environment and corporate social responsibility
The environmental principles of the company have been described in Fingrid Oyj's
way of working in environmental matters, published on the company's website. The
primary environmental impacts of Fingrid's operations are caused by transmission
lines which constitute the backbone of the electricity transmission system
together with areas required by these plus substations serving as nodes in the
transmission grid.
Fingrid has a total of 26,739 tonnes of creosote-impregnated and CCA-impregnated
wooden towers and cable trench covers, categorised as hazardous waste. The
related disposal costs of approx. 2 million euros have been entered in the
financial statements under provisions for liabilities and charges, which in turn
have been added correspondingly to property, plant and equipment. Equipment used
in Fingrid's substations contains 25.5 tonnes of sulphur hexafluoride (SF6 gas),
which is categorised as a greenhouse gas. However, no provision has been made
for the disposal costs of this gas because it can be re-used after cleaning.
Fingrid serves as the issuing body for guarantees of origin of electricity in
Finland. The guarantee is included in the system required by the RES-E directive
of the European Union.
Events after the closing of the financial year and estimate of future outlook
There have been no material events or changes in Fingrid's business or financial
situation after the closing of the financial year.
The revival of electricity consumption in Finland is crucially influenced by the
recovery of exports by the energy-intensive industries in Finland and
consequently by the increased utilisation rates of industrial capacity. This is
reflected directly in Fingrid's grid revenue. It continues to be difficult to
anticipate the developments in the money and capital markets.
Fingrid is making capital investments totalling 1,600 million euros in the
transmission grid and reserve power in the next 10 years. The investments on an
annual level are about 100 - 200 million euros. The investment programme aims at
retaining high system security and promoting the functioning of the policy
decisions made in the climate and energy strategy of Finland. The extensive
capital investments have a negative impact on cash flow and will require
additional borrowing. This is why Fingrid will have to raise its grid
transmission tariffs in the coming years.
--------------------------------------------------------------------------------
| CONSOLIDATED KEY | | 2005 | 2006 | 2007 | 2008 | 2009 |
| INDICATORS | | | | | | |
--------------------------------------------------------------------------------
| | | IFRS | IFRS | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Extent of | | | | | | |
| operations | | | | | | |
--------------------------------------------------------------------------------
| Turnover | millio | 316.7 | 351.3 | 334.6 | 382.3 | 358.9 |
| | n € | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | millio | 63.3 | 69.6 | 79.2 | 87.9 | 135.6 |
| expenditure, gross | n € | | | | | |
--------------------------------------------------------------------------------
| - of turnover | % | 20.0 | 19.8 | 23.7 | 23.0 | 37.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Research and | millio | 1.6 | 1.2 | 1.2 | 0.9 | 1.3 |
| development | n € | | | | | |
| expense | | | | | | |
--------------------------------------------------------------------------------
| - of turnover | % | 0.5 | 0.4 | 0.4 | 0.2 | 0.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel, average | | 228 | 238 | 241 | 241 | 251 |
--------------------------------------------------------------------------------
| Personnel, end of | | 231 | 233 | 244 | 249 | 260 |
| year | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Salaries and | millio | 12.7 | 13.8 | 14.6 | 15.8 | 16.0 |
| bonuses, total | n € | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profitability | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | millio | 110.0 | 79.5 | 90.7 | 68.4 | 50.8 |
| | n € | | | | | |
--------------------------------------------------------------------------------
| - of revenue | % | 34.7 | 22.6 | 27.1 | 17.9 | 14.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before | millio | 75.1 | 51.5 | 56.5 | 37.5 | 33.2 |
| taxes | n € | | | | | |
--------------------------------------------------------------------------------
| - of revenue | % | 23.7 | 14.7 | 16.9 | 9.8 | 9.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | % | 8.7 | 6.4 | 7.3 | 5.8 | 3.9 |
| investment (ROI) | | | | | | |
--------------------------------------------------------------------------------
| Return on equity | % | 16.9 | 10.4 | 10.3 | 6.6 | 5.7 |
| (ROE) | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financing and | | | | | | |
| financial position | | | | | | |
--------------------------------------------------------------------------------
| Equity ratio | % | 23.9 | 25.5 | 27.5 | 26.7 | 27.2 |
--------------------------------------------------------------------------------
| Interest-bearing | millio | 797.9 | 766.3 | 754.6 | 726.7 | 797.5 |
| net borrowings | n € | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share-specific | | | | | | |
| indicators | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share | € | 16,761 | 11,531 | 12,616 | 8,379 | 7,417 |
--------------------------------------------------------------------------------
| Dividends per | € | 1,995 | 2,082 | 2,156 | 2,018 | 2,022* |
| share | | | | | | |
--------------------------------------------------------------------------------
| Equity per share | € | 106,43 | 115,952 | 129,338 | 125,600 | 134,676 |
| | | 9 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of shares | | | | | | |
| at 31 Dec | | | | | | |
--------------------------------------------------------------------------------
| - Series A shares | qty | 2,078 | 2,078 | 2,078 | 2,078 | 2,078 |
--------------------------------------------------------------------------------
| - Series B shares | qty | 1,247 | 1,247 | 1,247 | 1,247 | 1,247 |
--------------------------------------------------------------------------------
| Total | qty | 3,325 | 3,325 | 3,325 | 3,325 | 3,325 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *The Board of Directors' proposal to the | | | |
| General Annual Meeting. | | | |
--------------------------------------------------------------------------------
CALCULATION OF KEY INDICATORS
Profit before taxes + interest and other finance costs
Return on investment, % = --------------------------------------- x 100
Balance sheet total - non-interest-bearing liabilities
(average for the year)
Profit for the financial year
Return on equity, %= --------------------------------------- x 100
Shareholders' equity (average for the year)
Shareholders' equity
Equity ratio, % = --------------------------------------- x 100
Balance sheet total - advances received
Profit for the financial year
Earnings per share, € = ----------------------------------------
Average number of shares
Dividends for the financial year
Dividends per share, € = ----------------------------------------
Average number of shares
Shareholders' equity
Equity per share, € = ----------------------------------------
Number of shares at closing date
Interest-bearing net borrowings, € = Interest-bearing borrowings - cash and cash
equivalents
THE BOARD OF DIRECTORS' PROPOSAL FOR THE DISTRIBUTION OF PROFIT
Fingrid Oyj's distributable funds in the financial statements are 7,710,698.26
euros. After the closing of the financial year, there have not been essential
changes in the financial position of the company, nor does the proposed dividend
distribution threaten the solvency of the company according to the Board of
Directors.
The company's Board of Directors will propose to the Annual General Meeting of
Shareholders that
- 2,022.29 euros of dividend per share to be paid in accordance with article 5
of the Articles of Association, totalling 6,724,119.67 euros
- 986,578.59 euros to be carried over as unrestricted equity.
--------------------------------------------------------------------------------
| 2. Financial statements | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED FINANCIAL STATEMENTS | | |
| (IFRS) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF | | 1 Jan - 31 Dec | 1 Jan - 31 Dec |
| COMPREHENSIVE INCOME | | 2009 | 2008 |
--------------------------------------------------------------------------------
| | Notes | 1,000 € | 1,000 € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| REVENUE | 2 | 358,938 | 382,309 |
--------------------------------------------------------------------------------
| Other operating income | 3 | 2,248 | 2,508 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Raw materials and | 4 | -188,468 | -188,634 |
| consumables used | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Employee benefits expenses | 5 | -19,803 | -19,584 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Depreciation | 6 | -64,612 | -59,484 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Other operating expenses | 7,8,9 | -37,522 | -48,751 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| OPERATING PROFIT | | 50,780 | 68,365 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Finance income | 10 | 4,084 | 11,035 |
--------------------------------------------------------------------------------
| Finance costs | 10 | -21,911 | -42,398 |
--------------------------------------------------------------------------------
| Finance income and costs | | -17,827 | -31,363 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Portion of profit of | 10 | 284 | 514 |
| associated companies | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES | | 33,238 | 37,516 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Income taxes | 11 | -8,575 | -9,658 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| PROFIT FOR THE FINANCIAL | | 24,663 | 27,859 |
| YEAR | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OTHER COMPREHENSIVE INCOME | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow hedges | 12 | 11,760 | -32,515 |
--------------------------------------------------------------------------------
| Translation reserve | 12 | 456 | -581 |
--------------------------------------------------------------------------------
| Available-for-sale | 12 | 8 | -19 |
| financial assets | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE INCOME FOR THE | 36,886 | -5,258 |
| YEAR | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit attributable to: | | | |
--------------------------------------------------------------------------------
| Equity holders of parent | | 24,663 | 27,859 |
| company | | | |
--------------------------------------------------------------------------------
| Total comprehensive income | | | |
| attributable to: | | | |
--------------------------------------------------------------------------------
| Equity holders of the | | 36,886 | -5,258 |
| company | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Earnings per share, € | 14 | 7,417 | 8,379 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share for profit attributable |
| to the equity holders of the parent company |
--------------------------------------------------------------------------------
| Undiluted earnings per | 14 | 7,417 | 8,379 |
| share, € | | | |
--------------------------------------------------------------------------------
| Diluted earnings per share, | 14 | 7,417 | 8,379 |
| € | | | |
--------------------------------------------------------------------------------
Notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | 31 Dec 2009 | 31 Dec 2008 |
--------------------------------------------------------------------------------
| | Notes | 1,000 € | 1,000 € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Intangible assets: | | | |
--------------------------------------------------------------------------------
| Goodwill | 16 | 87,920 | 87,920 |
--------------------------------------------------------------------------------
| Other intangible assets | 17 | 88,039 | 85,274 |
--------------------------------------------------------------------------------
| | | 175,960 | 173,194 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Property, plant and equipment: | 18 | | |
--------------------------------------------------------------------------------
| Land and water areas | | 11,410 | 10,832 |
--------------------------------------------------------------------------------
| Buildings and structures | | 76,877 | 55,916 |
--------------------------------------------------------------------------------
| Machinery and equipment | | 412,155 | 392,202 |
--------------------------------------------------------------------------------
| Transmission lines | | 607,996 | 570,483 |
--------------------------------------------------------------------------------
| Other property, plant and | | 3,253 | 2,628 |
| equipment | | | |
--------------------------------------------------------------------------------
| Advance payments and purchases in | | 69,447 | 81,081 |
| progress | | | |
--------------------------------------------------------------------------------
| | | 1,181,139 | 1,113,141 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investments: | 19 | | |
--------------------------------------------------------------------------------
| Equity investments in associated | | 7,110 | 6,370 |
| companies | | | |
--------------------------------------------------------------------------------
| Available-for-sale investments | | 329 | 324 |
--------------------------------------------------------------------------------
| | | 7,439 | 6,694 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Receivables: | | | |
--------------------------------------------------------------------------------
| Finance receivables | 24 | 11,740 | 1,205 |
--------------------------------------------------------------------------------
| Deferred tax assets | 27 | 6,711 | 8,664 |
--------------------------------------------------------------------------------
| | | 18,451 | 9,868 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS | | 1,382,988 | 1,302,897 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories | 20 | 5,415 | 4,628 |
--------------------------------------------------------------------------------
| Finance receivables | 24 | 2,115 | 3,029 |
--------------------------------------------------------------------------------
| Trade receivables and other | 21 | 54,184 | 44,930 |
| receivables | | | |
--------------------------------------------------------------------------------
| Financial assets recognised in | 22 | 199,766 | 200,040 |
| income statement at fair value | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 23 | 4,105 | 6,104 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS | | 265,585 | 258,730 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | | 1,648,573 | 1,561,628 |
--------------------------------------------------------------------------------
Notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | 31 Dec 2009 | 31 Dec 2008 |
--------------------------------------------------------------------------------
| | Notes | 1,000 € | 1,000 € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS | |
| OF THE PARENT COMPANY | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share capital | 26 | 55,922 | 55,922 |
--------------------------------------------------------------------------------
| Share premium account | 26 | 55,922 | 55,922 |
--------------------------------------------------------------------------------
| Revaluation reserve | 26 | -11,392 | -23,159 |
--------------------------------------------------------------------------------
| Translation reserve | 26 | 88 | -368 |
--------------------------------------------------------------------------------
| Retained earnings | 26 | 347,255 | 329,303 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL EQUITY | | 447,796 | 417,621 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 27 | 121,774 | 112,796 |
--------------------------------------------------------------------------------
| Borrowings | 29 | 685,379 | 678,336 |
--------------------------------------------------------------------------------
| Provisions | 30 | 1,921 | 1,955 |
--------------------------------------------------------------------------------
| Other liabilities | 31 | 17,787 | 35,361 |
--------------------------------------------------------------------------------
| | | 826,862 | 828,448 |
--------------------------------------------------------------------------------
| CURRENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Borrowings | 29 | 315,974 | 254,522 |
--------------------------------------------------------------------------------
| Trade payables and other | 32 | 57,940 | 61,037 |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | 373,915 | 315,559 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | | 1,200,776 | 1,144,007 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES | | 1,648,573 | 1,561,628 |
--------------------------------------------------------------------------------
Notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY, 1,000 € | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Note | Share | Share | Revalua | Trans | Retaine | Total |
| | s | capit | premiu | tion | lation | d | |
| | | al | m | reserve | reserve | earning | |
| | | | accoun | | | s | |
| | | | t | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to equity holders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity 1 | | 55,92 | 55,922 | 9,375 | 213 | 308,614 | 430,048 |
| Jan 2008 | | 2 | | | | | |
--------------------------------------------------------------------------------
| Dividend | 15 | | | | | -7,169 | -7,169 |
| distributio | | | | | | | |
| n | | | | | | | |
--------------------------------------------------------------------------------
| Total | 12 | | | -32,535 | -581 | 27,859 | -5,258 |
| comprehensi | | | | | | | |
| ve income | | | | | | | |
| for the | | | | | | | |
| year | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity 31 | | 55,92 | 55,922 | -23,159 | -368 | 329,303 | 417,621 |
| Dec 2008 | | 2 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity 1 | | 55,92 | 55,922 | -23,159 | -368 | 329,303 | 417,621 |
| Jan 2009 | | 2 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividend | 15 | | | | | -6,711 | -6,711 |
| distributio | | | | | | | |
| n | | | | | | | |
--------------------------------------------------------------------------------
| Total | 12 | | | 11,768 | 456 | 24,663 | 36,886 |
| comprehensi | | | | | | | |
| ve income | | | | | | | |
| for the | | | | | | | |
| year | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity 31 | | 55,92 | 55,922 | -11,392 | 88 | 347,255 | 447,796 |
| Dec 2009 | | 2 | | | | | |
--------------------------------------------------------------------------------
Notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW | | 1 Jan - 31 Dec | 1 Jan - 31 Dec |
| STATEMENT | | 2009 | 2008 |
--------------------------------------------------------------------------------
| | Notes | 1,000 € | 1,000 € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operating | | | |
| activities: | | | |
--------------------------------------------------------------------------------
| Profit for the financial year | 26 | 24,663 | 27,859 |
--------------------------------------------------------------------------------
| Adjustments: | | | |
--------------------------------------------------------------------------------
| Business transactions not | | 62,841 | 73,162 |
| involving a payment | | | |
| transaction* | | | |
--------------------------------------------------------------------------------
| Interest and other finance | | 21,911 | 42,398 |
| costs | | | |
--------------------------------------------------------------------------------
| Interest income | | -4,080 | -11,024 |
--------------------------------------------------------------------------------
| Dividend income | | -4 | -11 |
--------------------------------------------------------------------------------
| Taxes | | 8,575 | 9,658 |
--------------------------------------------------------------------------------
| Changes in working capital: | | | |
--------------------------------------------------------------------------------
| Change in trade receivables | | -5,376 | 2,489 |
| and other receivables | | | |
--------------------------------------------------------------------------------
| Change in inventories | | -787 | 173 |
--------------------------------------------------------------------------------
| Change in trade payables and | | 707 | 2,144 |
| other liabilities | | | |
--------------------------------------------------------------------------------
| Change in provisions | 30 | -34 | -52 |
--------------------------------------------------------------------------------
| Financial assets at fair value | | -3,081 | 2,075 |
| | | | |
--------------------------------------------------------------------------------
| Interests paid | | -43,703 | -40,843 |
--------------------------------------------------------------------------------
| Interests received | | 7,157 | 8,951 |
--------------------------------------------------------------------------------
| Taxes paid | 11 | -1,956 | -2,329 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow from operating | | 66,833 | 114,649 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing | | | |
| activities: | | | |
--------------------------------------------------------------------------------
| Purchase of property, plant | 18 | -127,585 | -83,551 |
| and equipment | | | |
--------------------------------------------------------------------------------
| Purchase of intangible assets | 17 | -6,937 | -3,106 |
--------------------------------------------------------------------------------
| Purchase of other assets | 19 | 1 | |
--------------------------------------------------------------------------------
| Proceeds from sale of | 18 | 116 | 158 |
| property, plant and equipment | | | |
--------------------------------------------------------------------------------
| Repayment of loans receivable | | | 110 |
--------------------------------------------------------------------------------
| Dividends received | 10 | 4 | 647 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow from investing | | -134,400 | -85,742 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
| activities: | | | |
--------------------------------------------------------------------------------
| Withdrawal of loans | | 365,396 | 354,438 |
--------------------------------------------------------------------------------
| Repayment of loans | | -293,391 | -382,016 |
--------------------------------------------------------------------------------
| Dividends paid | 26 | -6,711 | -7,169 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow from financing | | 65,294 | -34,747 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net change in cash and cash | | -2,273 | -5,840 |
| equivalents | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents 1 | | 206,144 | 211,984 |
| Jan | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents 31 | 22,23 | 203,871 | 206,144 |
| Dec | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Notes to consolidated cash | | | |
| flow statement | | | |
--------------------------------------------------------------------------------
| Adjustments: | | | |
--------------------------------------------------------------------------------
| *Business transactions not | | 62,841 | 73,162 |
| involving a payment | | | |
| transaction | | | |
--------------------------------------------------------------------------------
| - Depreciation | | 64,612 | 59,484 |
--------------------------------------------------------------------------------
| - Capital gains/losses (-/+) | | 183 | -87 |
| on property, plant and | | | |
| equipment | | | |
| and intangible assets | | | |
--------------------------------------------------------------------------------
| - Portion of profit of | | -284 | -514 |
| associated companies | | | |
--------------------------------------------------------------------------------
| - Gains/losses from the | | -1,670 | 14,279 |
| valuation of assets and | | | |
| liabilities | | | |
| recognised in income statement | | | |
| at fair value | | | |
--------------------------------------------------------------------------------
Notes are an integral part of the financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING PRINCIPLES OF CONSOLIDATED FINANCIAL STATEMENTS
Fingrid Oyj is a Finnish public limited company established in accordance with
Finnish law. Fingrid's consolidated financial statements have been drawn up in
accordance with the International Financial Reporting Standards (IFRS) as
adopted by the EU. Fingrid's registered office is in Helsinki at address P.O.
Box 530 (Arkadiankatu 23 B), 00101 Helsinki.
A copy of the consolidated financial statements is available on the internet at
www.fingrid.fi or at Fingrid Oyj's head office.
The amounts in the financial statements are in thousands of euros and based on
the original acquisition costs unless otherwise stated in the accounting
principles or notes.
Fingrid Oyj's Board of Directors has accepted the publication of these financial
statements in its meeting on 12 February 2010. In accordance with the Finnish
Companies Act, the shareholders have an opportunity to adopt or reject the
financial statements in the shareholders' meeting held after their publication.
The shareholders' meeting can also amend the financial statements.
Primary business areas
Fingrid Oyj is the national transmission system operator responsible for the
main electricity transmission grid in Finland. The company's responsibilities
are to develop the main grid, to maintain a continuous balance between
electricity consumption and generation, to settle the electricity deliveries
between the parties on a nation-wide level, and to promote the electricity
market. The company is also in charge of the cross-border transmission
connections to the other Nordic countries and Russia.
The consolidated financial statements contain the parent company Fingrid Oyj and
its fully-owned subsidiary Finextra Oy. The consolidated associated companies
are Porvoon Alueverkko Oy (ownership 33.3%) and Nord Pool Spot AS (ownership
20.0%). The Group has no joint ventures.
All intercompany transactions, internal margins on inventories and property,
plant and equipment, internal receivables and liabilities as well as internal
profit distribution are eliminated in consolidation. Ownership of shares between
the Group companies is accounted for under the purchase method of accounting.
The associated companies are consolidated using the equity method of accounting.
The portion corresponding to the Group's ownership in the associated companies
is eliminated of unrealised profits between the Group and its associated
companies. If necessary, the accounting principles applied by the associated
companies have been adjusted to correspond to the principles applied by the
Group.
Use of estimates
When the consolidated financial statements are drawn up in accordance with the
IFRS, the company management needs to make estimates and assumptions which have
an impact on the amounts of assets, liabilities, income and expenses recorded
and conditional items presented. These estimates and assumptions are based on
historical experience and other justified assumptions which are believed to be
reasonable in the conditions which constitute the foundation for the estimates
of the items recorded in the financial statements. The actual amounts may differ
from these estimates. In the financial statements, estimates have been used for
example in the drawing up of impairment testing calculations, when specifying
the economic lives of tangible and intangible asset items, and in conjunction
with deferred taxes, provisions, and valuation of assets and liabilities related
to benefit-based pensions.
Segment reporting
The entire business of the Fingrid Group is deemed to comprise transmission
system operation in Finland with system responsibility, only constituting a
single segment. There are no essential differences in the risks and
profitability of individual products and services. This is why segment reporting
in accordance with the IFRS 8 standard is not presented.
Revenue and sales recognition
Sales recognition takes place on the basis of the supply of the service.
Electricity transmission is recognised once the transmission has taken place.
Balance power services are recognised on the basis of the supply of the service.
Connection fees are recognised on the basis of the relevant time. Indirect taxes
and discounts, among others, are deducted from the sales income when calculating
revenue.
Contributions
Contributions received from the EU or other parties are recognised in the income
statement at the same time as the related expenses. Contributions received are
presented in other operating income.
Pension schemes
The pension security of the Group's personnel is arranged by an outside pension
insurance company. The Group has both contribution-based pension schemes in
accordance with IAS 19 and benefit-based schemes. Pension premiums paid for
contribution-based schemes are charged to the income statement in the year to
which they relate. In contribution-based schemes, the Group has no legal or
factual obligation to pay additional premiums if the party receiving the
premiums is unable to pay the pension benefits. The present value of the
commitment at the closing date is recorded as a liability in the balance sheet
of benefit-based pension schemes. The fair value of the assets included in the
scheme is deducted from this present value, and it is adjusted by unrecorded
actuarial gains and losses and by expenses based on retroactive long-term work
performance. The amount of the commitment resulting from benefit-based schemes
is based on annual calculations by impartial actuaries, with the calculations
employing the projected unit credit method. The present value of the commitment
is determined by discounting the estimated future cash flows by an interest rate
which corresponds to the interest rate of high-quality bonds issued by business
enterprises. Actuarial gains and losses, which result from empirical adjustments
and changes in actuarial assumptions and which exceed 10% of the fair value of
the assets included in the scheme or 10% of the present value of the commitment
resulting from a benefit-based scheme (depending on which of these two is
higher), are recognised in the income statement at fair value.
Research and development
Research and development by the Group aim to intensify intra-company operations.
No new services or products sold separately are created as a result of R&D. This
is why R&D costs are recorded in the income statement as expenses in the
accounting year in which they are created.
Leases
Lease obligations where the risks and rewards incident to ownership remain with
the lessor are recorded as other leases. Lease obligations paid on the basis of
other leases are recorded in other operating expenses, and they are recognised
in the income statement as equally large items during the lease period. The
other leases primarily concern office facilities, land areas and network leases.
In accordance with the principles of standard IAS 17 Leases, those leases where
the company is transferred substantially all the risks and rewards incident to
ownership are categorised as finance leases.
Foreign currency transactions
The consolidated financial statements are presented in euros, which is the
currency used by the parent company. Commercial flows and financial items
denominated in foreign currencies are booked at the foreign exchange mid-rate
quoted by the European Central Bank (ECB) at the transaction value date.
Receivables and liabilities denominated in foreign currencies are translated at
the mid-rate quoted by ECB at the closing day and recognised in the financial
statements. Foreign exchange gains and losses from business are included in
corresponding items above operating profit. Foreign exchange gains and losses
from financial instruments are recorded at net amounts in finance income and
costs.
Foreign exchange gains and losses from translating the income statement items of
the foreign associated company to the mid-rate and from translating its balance
sheet items to the rate at the closing date are presented as a separate item in
shareholders' equity.
Income taxes
Taxes presented in the consolidated income statement include the Group
companies' accrual taxes for the profit of the financial year, tax adjustments
from previous financial years and changes in deferred taxes. In accordance with
IAS 12, the Group records deferred tax assets as non-current receivables and
deferred tax liabilities as non-current liabilities.
Deferred tax assets and liabilities are recorded of all temporary differences
between the tax values of asset and liability items and their carrying amounts
using the liability method. Deferred tax is recorded using tax rates valid at
the closing date.
The largest temporary differences result from the depreciation of property,
plant and equipment and from financial instruments. No deferred tax is recorded
of the undistributed profits of the foreign associated company, because
receiving the dividend does not cause a tax impact by virtue of a Nordic tax
agreement (and the difference will not likely be realised in the foreseeable
future). The deferred tax asset from temporary differences is recorded up to an
amount which can likely be utilised against taxable income created in the
future.
Earnings per share
The Group has calculated the undiluted earnings per share in accordance with
standard IAS 33. The undiluted earnings per share are calculated using the
weighted average number of shares outstanding during the financial year.
Since Fingrid has no option systems or benefits bound to the shareholders'
equity nor other equity financial instruments, there is no dilution effect.
Goodwill and other intangible assets
Goodwill created as a result of the acquisition of enterprises and businesses is
composed of the excess of the acquisition cost over the identifiable net assets
of the acquired business valued at fair value. Goodwill is allocated to
cash-generating units and it is tested annually for impairment. With associated
companies, goodwill is included in the value of the investment in the associated
company.
Other intangible assets comprise computer systems and land use rights. Computer
systems are valued at the original acquisition cost and depreciated on a
straight line basis during their estimated economic lives. Land use rights with
unlimited economic lives are not depreciated but tested annually for impairment.
The depreciation periods of intangible assets are as follows:
Computer systems 3 years
Subsequent expenses relating to intangible assets are only capitalised if their
financial benefit for the company increases above the former performance level.
In other cases, the expenses are recorded in the income statement when they
materialise.
Emission rights
Emission rights acquired free of charge are valued in intangible assets at their
nominal value, and purchased emission rights are recorded at the acquisition
cost. A liability is recorded of emission rights to be returned. If the Group
has a sufficient volume of emission rights to cover the return obligations, the
liability is recognised at the carrying amount corresponding to the emission
rights in question. If there are not sufficient emission rights to cover the
return obligations, the liability is recognised at the market price of the
emission rights in question. No depreciation is recorded of emission rights.
They are derecognised in the balance sheet at the time of transfer when the
actual emissions have been ascertained. The expense resulting from the liability
is recorded in the income statement under the expense item Materials and
services. Capital gains from emissions rights are recorded under Other operating
income.
Property, plant and equipment
Land areas, buildings, transmission lines, machinery and equipment constitute
most of the property, plant and equipment. These are recognised in the balance
sheet at the original acquisition cost less accumulated depreciation and
potential impairment. Interest expenses during the construction period are not
capitalised. If an asset is made up of several parts with economic lives of
different lengths, the parts are recorded as separate items.
The revised standard IAS 23 Borrowing Costs requires that borrowing costs that
are directly attributable to the acquisition, construction or production of a
qualifying asset are included in the acquisition cost of that asset. The Group
has applied the revised standard to those qualifying assets the capitalisation
of whose borrowing costs has commenced at 1 January 2009, when the value of the
assets exceeds 50,000 euros and when the completion of the investment takes more
than 12 months. Borrowing costs capitalised to the acquisition cost are
calculated on the basis of the average borrowing cost of the Group.
When a separately recorded part of property, plant and equipment is renewed, the
costs relating to the new part are capitalised. Other subsequent costs are
capitalised only if it is likely that the future financial benefit relating to
the asset benefits the Group and the acquisition cost of the asset can be
determined reliably. Repair and maintenance costs are recognised in the income
statement once they have materialised.
Straight-line depreciation is recorded of property, plant and equipment on the
basis of their economic lives. Depreciation on property, plant and equipment
taken into use during the financial year is calculated asset-specifically from
the month of introduction. Land and water areas are not depreciated. The
expected economic lives are verified at each closing date, and if they differ
significantly from the earlier estimates, the depreciation periods are amended
accordingly.
The depreciation periods of property, plant and equipment are as follows:
Buildings and structures
Substation buildings and separate buildings 40 years
Substation structures 30 years
Buildings and structures at gas turbine power plants 20 years
Separate structures 15 years
Transmission lines
Transmission lines 400 kV 40 years
Direct current lines 40 years
Transmission lines 110-220 kV 30 years
Creosote-impregnated towers and related disposal expenses 30 years
Aluminium towers of transmission lines (400 kV) 10 years
Optical ground wires 10-20 years
Machinery and equipment
Substation machinery 10-30 years
Gas turbine power plants 20 years
Other machinery and equipment 3-5 years
Gains or losses from the sale or disposition of property, plant and equipment
are recorded in the income statement under either other operating income or
expenses. Property, plant and equipment are derecognised in the balance sheet
when the planned depreciation period has expired, the asset has been sold,
scrapped or otherwise disposed of to an outsider.
Impairment
The carrying amounts of asset items are assessed at the closing date to detect
potential impairment. If impairment is detected, the recoverable amount of the
asset is estimated. An asset is impaired if the balance sheet value of the asset
or of a cash-generating unit exceeds the recoverable amount. Impairment losses
are recorded in the income statement.
The asset items subject to depreciation are examined for impairment also when
events or changes in circumstances suggest that the amount corresponding to the
carrying amount of the asset items may not be recovered.
The impairment loss of a cash-generating unit is first allocated to reduce the
goodwill of the cash-generating unit and thereafter to reduce in proportion the
other asset items of the unit.
The recoverable amount of intangible assets and property, plant and equipment is
defined so that it is the higher of the fair value reduced by the costs
resulting from sale or the value in use. When defining the value in use, the
estimated future cash flows are discounted at their present value based on
discount rates which reflect the average capital cost of the said
cash-generating unit before taxes. The specific risk of the assets in question
is also considered in the discount rates.
An impairment loss relating to property, plant and equipment and intangible
assets other than goodwill is reversed if a change has taken place in the
estimates used for defining the recoverable amount of the asset. An impairment
loss is reversed at the most up to an amount which would have been defined as
the carrying amount of the asset (reduced by depreciation) if no impairment loss
had been recorded of it in the previous years. An impairment loss recorded of
goodwill is not reversed.
Available-for-sale investments
Available-for-sale investments are long-term assets unless executive management
intends to sell them within 12 months from the closing date. Publicly quoted
securities are classified as available-for-sale investments and recorded at fair
value, which is the market value at the closing date. Changes in fair value are
recorded in the shareholders' equity until the investment is sold or otherwise
disposed of, in which case the changes in fair value are recorded in the income
statement. Permanent impairment of assets is recorded in the income statement.
Unlisted securities are recorded at the acquisition cost as their fair values
are not reliably available.
Inventories
Inventories are entered at the lower of the acquisition cost or net realisable
value. The acquisition cost is determined using the FIFO principle. The net
realisable value is the estimated market price in normal business reduced by the
estimated future costs of completing and estimated costs required by sale.
Inventories consist of material and fuel inventories.
Loans receivables and other receivables
Loans receivables and other receivables are recorded initially at fair value.
The amount of bad receivables is estimated based on the risks of individual
items. An impairment loss of receivables is recorded when there is valid
evidence that the Group will not receive all of its receivables at the original
terms (e.g. due to the debtor's serious financial problems, likelihood that the
debtor will go bankrupt or subject to other financial rearrangements, and
negligence of due dates of payments by more than 90 days). Impairment losses are
recorded directly to reduce the carrying amount of receivables and under item
Other operating expenses.
Derivative instruments
Trading derivatives are classified as a derivatives asset or liability.
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into are subsequently re-measured at their fair value. The
method of recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument, and if so, the nature of the
item being hedged. The company uses derivative contracts only for hedging
purposes according to a specific risk management policy.
Electricity derivatives
The company enters into electricity derivative contracts in order to hedge its
electricity purchases in accordance with the loss energy forecast.
The company applies hedge accounting for electricity derivatives based on cash
flow hedging of loss energy purchases. The company documents at the inception of
the contract the relationship between the hedged item and the hedging
instrument. Similarly are the risk management objectives and strategy
documentated for undertaking various hedging transactions. The effective portion
of changes in the fair values of instruments that are designated and qualify as
cash flow hedges are recorded in equity. The gain or loss relating to the
ineffective portion is recognised immediately in the income statement within
other gains and losses. Amounts accumulated in equity are reclassified to profit
or loss in the periods when the hedged item affects profit and loss. Changes in
fair value of instruments which are designated and qualify for hedge accounting
are recorded in equity, hedging reserve. Changes in the fair values of other
electricity derivatives continue to be recorded in the income statement. Hedge
accounting is applied to publicly quoted annual and quarterly instruments bought
by the company. When a hedging instrument expires, is sold or no longer meets
the criteria for hedge accounting, any cumulative gain or loss existing in
equity at that time remains in equity, and is recognised only when the forecast
transaction is ultimately recognised in the income statement within other gains
and losses.
Instruments quoted at Nord Pool ASA are valued at the market prices at the
closing date. Bilateral price hedging contracts are valued using the price of a
comparable instrument at Nord Pool ASA.
Interest rate and foreign exchange derivatives
The company enters into derivative contracts in order to hedge the financial
risks (interest rate and foreign exchange exposures) in accordance with the
primary principles for financing approved by the Board of Directors. Fingrid
does not apply hedge accounting to the derivatives.
Derivative assets and liabilities are recognised at the original acquisition
cost. Derivatives are measured at fair value at the closing date, and their
change in fair value is recorded in the income statement in finance income and
costs. The fair values of derivatives at the closing date are based on different
calculation methods. Foreign exchange forwards have been measured at the forward
prices. Interest rate and cross-currency swaps have been measured at the present
value on the basis of the yield curve of each currency. Interest rate options
have been valued by using generally accepted option pricing models in the
market.
Financial securities
Financial securities at fair value through profit or loss are financial assets
held for trading. The category includes money market securities and investments
in short-term money market funds. Financial securities are recorded in the
balance sheet at fair value at the settlement day. Subsequently financial
securities are measured in the financial statements at fair value, and their
change in fair value is recognised in the income statement in finance income and
costs.
Financial assets recognised in the income statement at fair value primarily
comprise certificates of deposit, commercial papers and municipality bills with
maturities of 3 - 6 months, and investments in short-term money market funds.
Financial securities are derecognised when they mature, are sold or otherwise
disposed of.
Assets in this category are classified as current assets.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and bank deposits. Bank deposits
are classified as held-to-maturity assets and they are recognised at the
original acquisition cost. In the financial statements, bank deposits are
measured at the amortised acquisition cost.
Cash and cash equivalents are derecognised when they mature, are sold or
otherwise disposed of.
Assets in this category are classified as current assets.
Borrowings
Borrowings include bond and commercial paper issuance and loans raised by the
company, recognised initially at fair value net of the transaction costs
incurred. Transaction costs consist of bond prices above or below par value,
credit fees, commissions and administrative fees. Borrowings are subsequently
carried at amortised cost; any difference between the proceeds and the
redemption value is recognised in the income statement over the period of the
borrowings using the effective interest rate method. Borrowings are derecognised
when they mature and are repaid.
Provisions
A provision is recorded when the Group has a legal or factual obligation based
on an earlier event and it is likely that fulfilling the obligation will require
a payment, and the amount of the obligation can be estimated reliably.
The provisions are valued at the present value of costs required to cover the
obligation. The discounting factor used in calculating the present value is
chosen so that it reflects the market view of the time value of money at the
assessment date and of the risks pertaining to the obligation.
Fingrid uses creosote-impregnated and CCA-impregnated wooden towers and cable
trench covers. Decree YMA 711/2001 by the Finnish Ministry of the Environment
categorises decommissioned impregnated wood as hazardous waste. A provision was
recorded in 2004 of the related disposal costs materialising in the future
decades.
Dividend distribution
The Board of Directors' proposal concerning dividend distribution is not
recorded in the financial statements. This is only recorded after a decision
made by the Annual General Meeting of Shareholders.
Application of new or revised IFRS standards and IFRIC interpretations
Application of new and revised standards and interpretations as from 1 January
2009
Revision of standard IAS 1 Presentation of Financial Statements. The revised
standard changes the presentation of events so that the statement of total
comprehensive income presents those items recognised directly in equity that do
not involve business transactions with the owners. The calculation concerning
changes in equity has also been amended to conform to the revised standard.
IFRS 8 Operating Segments (replaces standard IAS 14). In accordance with the new
standard, segment reporting is based on internal reporting by executive
management and on the principles applied to it. The IFRS 8 standard has no
impact on the information presented by the company, because due to Fingrid's
nature of activities and the corporate governance structure the reported
operating segment is the whole Group.
Revision of standard IAS 23 Borrowing Costs. The definition of borrowing costs
has been revised so that interest costs are determined using the effective
interest method specified in standard IAS 39 Financial Instruments: Recognition
and Measurement. The revised standard eliminates the possibility to recognise
borrowing costs, which are attributable to the acquisition, construction or
production of a qualifying asset, as an expense. These borrowing costs must be
capitalised as part of the acquisition cost of the asset in question. The Group
has earlier recognised borrowing costs as an expense in that financial year in
which they are created. This change has no material impact on the profit of the
reporting period.
IFRS 7 Financial instruments: amendments of the presentation of Financial
Instruments in the financial statements. The improvement introduces a three
level hierarchy of the fair value presentation of derivative instruments.
The following new or revised standards and interpretations, which came into
effect in 2009, have no material impact on the consolidated financial
statements:
Annual Improvements to IFRSs 2008, IAS 32 (Amendment), Financial Instruments:
Presentation and IAS 1 Presentation of Financial Statements - Puttable at Fair
Value and Obligations Arising on Liquidation, IAS 27 (Amendment), Consolidated
and separate financial statements, IAS 39 (Amendment), Financial instruments:
Recognition and measurement - Eligible Hedged Items, IFRS 2 (Amendment),
Share-based payment, IFRS 3 Business Combinations, IFRIC 13 Customer Loyalty
Programmes, IFRIC 16 (Amendment), Hedges of a net investment in a foreign
operation, IFRIC 17 Distributions of Non-cash Assets to Owners, IFRIC 18
Transfers of Assets from Customers, IFRIC 9 and IAS 39 (Amendment), Reassessment
of embedded derivatives on reclassification.
The Group will adopt the following standards and interpretations in 2010:
Annual Improvements to IFRSs 2009. Through the Annual improvement process the
minor and less urgent changes of the standards are collected into a complete
ensamble and carried out once a year. The project includes changes for a total
of 12 standards. The Group estimates that these changes of standards do not have
a significant impact on the Group's future financial statements.
2. INFORMATION ON REVENUE AND SEGMENTS
--------------------------------------------------------------------------------
| REVENUE, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transmission revenue | 187,850 | 189,120 |
--------------------------------------------------------------------------------
| Sale of balance power | 92,497 | 104,790 |
--------------------------------------------------------------------------------
| ITC income | 27,904 | 22,767 |
--------------------------------------------------------------------------------
| Cross-border transmission | 24,353 | 22,409 |
--------------------------------------------------------------------------------
| Peak load power | 13,469 | 10,887 |
--------------------------------------------------------------------------------
| Congestion income | 4,855 | 23,173 |
--------------------------------------------------------------------------------
| Feed-in tariff for peat | 3,408 | 358 |
--------------------------------------------------------------------------------
| Other operating revenue | 4,602 | 8,805 |
--------------------------------------------------------------------------------
| Total | 358,938 | 382,309 |
--------------------------------------------------------------------------------
Through the grid services, a customer obtains the right to transmit electricity
to and from the main grid through its connection point. Grid service is agreed
by means of a grid service contract signed between a customer connected to the
main grid and Fingrid. Fingrid charges a consumption fee, use of grid fee,
connection point fee and market border fee for the grid service. The contract
terms are equal and public.
Transmission services on the cross-border connections to the other Nordic
countries enable participation in the Nordic Elspot and Elbas exchange trade.
Fingrid makes transmission services on the cross-border connections from Russia
available to all electricity market parties. The transmission service is
intended for fixed electricity imports. When making an agreement on transmission
services from Russia, the customer reserves a transmission right (in MW) for a
period of time to be agreed upon separately. The smallest unit that can be
reserved is 50 MW. The contract terms are equal and public.
Each electricity market party must ensure that its electricity balance is in
balance by making an agreement with either Fingrid or some other party. Fingrid
buys and sells balance power in order to balance the hourly power balance of an
electricity market party (balance provider). Balance power trade and pricing of
balance power are based on a balance service agreement with equal and public
terms and conditions.
Fingrid is responsible for the continuous power balance in Finland by buying and
selling regulating power in Finland. The balance providers can participate in
the Nordic balancing power market by submitting bids of their available
capacity. The terms and conditions of participation in the regulating power
market and the pricing of balancing power are based on the balance service
agreement.
The congestion income is revenues that the transmission system operator receives
from market actors for use of transmission capacity for those transmission
links, on which the operational reliability of the power system restricts the
power transmission. Fingrid receives a contractual portion of the Nordic
congestion income.
ITC-compensation are income and/or costs for Fingrid, which the transmission
system operator receives for the use of its grid by other European transmission
operators and/or pays to other transmission system operators when using their
grid when servicing its own customers.
Peak load power includes condensing power capacity, when it is under threat of
being closed down, to be kept in readiness for use (peak load power) and the
feed-in tariff for peat includes compensation for peat condensing power.
Information on segments is not presented, because the entire business of the
Fingrid Group is deemed to comprise transmission system operation in Finland
with system responsibility, only constituting a single segment. There are no
essential differences in the risks and profitability of individual products and
services.
--------------------------------------------------------------------------------
| 3. OTHER OPERATING INCOME, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Rental income | 1,751 | 1,618 |
--------------------------------------------------------------------------------
| Contributions received | 105 | 129 |
--------------------------------------------------------------------------------
| Other income | 392 | 761 |
--------------------------------------------------------------------------------
| Total | 2,248 | 2,508 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 4. MATERIALS AND SERVICES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Purchases during financial year | 169,427 | 171,534 |
--------------------------------------------------------------------------------
| Change in inventories, increase (-) or decrease | -787 | 173 |
| (+) | | |
--------------------------------------------------------------------------------
| Materials and consumables | 168,640 | 171,707 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| External services | 19,828 | 16,927 |
--------------------------------------------------------------------------------
| Total | 188,468 | 188,634 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 5. EMPLOYEE BENEFITS EXPENSES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Salaries and bonuses | 16,028 | 15,766 |
--------------------------------------------------------------------------------
| Pension expenses - contribution-based schemes | 2,800 | 2,398 |
--------------------------------------------------------------------------------
| Pension expenses - benefit-based schemes (note 28) | -340 | 83 |
--------------------------------------------------------------------------------
| Other additional personnel expenses | 1,314 | 1,337 |
--------------------------------------------------------------------------------
| Total | 19,803 | 19,584 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Salaries and bonuses of top management (note 37) | 1,358 | 1,126 |
--------------------------------------------------------------------------------
The Group uses a compensation system, of which the general principles have been
approved by the Board of Directors on 23 October 2007. The principles for the
bonus programme for the Executive Management Group have additionally been
determined in a meeting held on 12 December 2007 by the Remuneration Committee.
The base salary and the profit-based compensation for the Executive Management
Group, is based on the strategic indicators of the company. The members of the
Executive Management Group are paid a bonus decided by the Remuneration
Committee of the Board of Directors, of which the maximum amount is 20 % for the
President & CEO, 15 % for the Vice President and 10 % for the other members of
the Management Executive Group of the annual salary. The system changes from a
one-year to a three-year review period as of 1 January 2010, when the
compensation will be based on a three-year average of the strategic indicators
from 2008 until 2010.
--------------------------------------------------------------------------------
| Number of salaried employees in the company during the | |
| financial year: | |
--------------------------------------------------------------------------------
| Personnel, average | 251 | 241 |
--------------------------------------------------------------------------------
| Personnel, 31 Dec | 260 | 249 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 6. DEPRECIATION, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Intangible assets | 3,665 | 1,833 |
--------------------------------------------------------------------------------
| Buildings and structures | 2,997 | 2,628 |
--------------------------------------------------------------------------------
| Machinery and equipment | 31,760 | 30,477 |
--------------------------------------------------------------------------------
| Transmission lines | 25,824 | 24,146 |
--------------------------------------------------------------------------------
| Other property, plant and equipment | 367 | 399 |
--------------------------------------------------------------------------------
| Total | 64,612 | 59,484 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 7. OTHER OPERATING EXPENSES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contracts, assignments etc. undertaken externally | 30,696 | 26,327 |
--------------------------------------------------------------------------------
| Gains/losses from measuring electricity | -1,683 | 14,213 |
| derivatives at fair value | | |
--------------------------------------------------------------------------------
| Rental expenses | 2,199 | 2,100 |
--------------------------------------------------------------------------------
| Foreign exchange gains and losses | -289 | -57 |
--------------------------------------------------------------------------------
| Other expenses | 6,599 | 6,168 |
--------------------------------------------------------------------------------
| Total | 37,522 | 48,751 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 8. AUDITORS FEES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Auditing fee | 34 | 57 |
--------------------------------------------------------------------------------
| Other fees | 8 | 25 |
--------------------------------------------------------------------------------
| Total | 42 | 82 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9. RESEARCH AND DEVELOPMENT, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Research and development expenses | 1 302 | 950 |
--------------------------------------------------------------------------------
| Total | 1 302 | 950 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 10. FINANCE INCOME AND COSTS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest income on held-for-trading financial | -3,982 | -10,709 |
| assets | | |
--------------------------------------------------------------------------------
| Interest income on cash and cash equivalents and | -98 | -316 |
| bank deposits | | |
--------------------------------------------------------------------------------
| Dividend income | -4 | -11 |
--------------------------------------------------------------------------------
| | -4,084 | -11,035 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest expenses on borrowings | 24,932 | 38,471 |
--------------------------------------------------------------------------------
| Net financial expenses on interest and foreign | -863 | 1,584 |
| exchange derivatives | | |
--------------------------------------------------------------------------------
| Gains from measuring derivative contracts at fair | -16,637 | -7,346 |
| value | | |
--------------------------------------------------------------------------------
| Losses from measuring derivative contracts at | 13,973 | 9,349 |
| fair value | | |
--------------------------------------------------------------------------------
| Net foreign exchange gains and losses | 22 | -54 |
--------------------------------------------------------------------------------
| Other finance costs | 548 | 394 |
--------------------------------------------------------------------------------
| | 21,974 | 42,398 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capitalised finance costs, borrowing costs (note | -63 | |
| 18) | | |
--------------------------------------------------------------------------------
| Total | 17,827 | 31,363 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Portion of profit of associated companies | -284 | -514 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 11. INCOME TAXES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Direct taxes | 1,779 | 2,070 |
--------------------------------------------------------------------------------
| Deferred taxes (note 27) | 6,796 | 7,588 |
--------------------------------------------------------------------------------
| Total | 8,575 | 9,658 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Reconciliation of income tax: | | |
--------------------------------------------------------------------------------
| Profit before taxes | 33,238 | 37,516 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tax calculated in accordance with statutory tax | 8,642 | 9,754 |
| rate in Finland 26 % | | |
--------------------------------------------------------------------------------
| Non-deductible expenses and tax-free income | -67 | -96 |
--------------------------------------------------------------------------------
| Tax expense in income statement | 8,575 | 9,658 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 12. TAXES RELATED TO OTHER ITEMS IN TOTAL COMPREHENSIVE INCOME, 1,000 € |
--------------------------------------------------------------------------------
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| | Before | Tax | After | Before | Tax | After |
| | taxes | impact | taxes | taxes | impact | taxes |
--------------------------------------------------------------------------------
| Cashflow hedges | 15,891 | -4,132 | 11,760 | -43,940 | 11,424 | -32,515 |
--------------------------------------------------------------------------------
| Translation | 456 | | 456 | -581 | | -581 |
| reserve | | | | | | |
--------------------------------------------------------------------------------
| Items related to | 11 | -3 | 8 | -26 | 7 | -19 |
| long-term asset | | | | | | |
| items available | | | | | | |
| for sale | | | | | | |
--------------------------------------------------------------------------------
| Total | 16,358 | -4,135 | 12,224 | -44,547 | 11,431 | -33,116 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 13. OTHER ITEMS IN TOTAL COMPREHENSIVE INCOME, 1,000 € |
--------------------------------------------------------------------------------
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| | Recognise | Re-cla | Total | Recognised | Re-clas | Total |
| | d in | ssific | | in other | sificat | |
| | other | ation | | total | ion | |
| | total | | | compr. | | |
| | compr. | | | income | | |
| | income | | | items | | |
| | items | | | | | |
--------------------------------------------------------------------------------
| Cashflow | | | | -37,638 | -5,123 | -32,515 |
| hedges | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | -37,638 | -5,123 | -32,515 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 14. EARNINGS PER SHARE | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the financial year, 1,000 € | 24,663 | 27,859 |
--------------------------------------------------------------------------------
| Weighted average number of shares, qty | 3,325 | 3,325 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Undiluted earnings per share, € | 7,417 | 8,379 |
--------------------------------------------------------------------------------
| Diluted earnings per share, € | 7,417 | 8,379 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 15. DIVIDEND PER SHARE | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| After the closing date, the Board of Directors has proposed that a dividend |
| of 2,022.29 (2008: 2,018.26) euros per share be distributed, totalling 6.7 |
| (2008: 6.7) million euros. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 16. GOODWILL, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost at 1 Jan | 87,920 | 87,920 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 87,920 | 87,920 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 87,920 | 87,920 |
--------------------------------------------------------------------------------
The entire business of the Fingrid Group comprises transmission system operation
in Finland with system responsibility, which the full goodwill of the Group
concerns.
In impairment testing, the recoverable amount from business is defined by means
of value in use. The cash flow forecasts used in impairment calculations are
based on ten year strategic financial estimates. The cash flows used in the
imparement test are based on income and expenses deriving from the business
operations and replacement capital expenditure according to the capital
expenditure programme. The estimated cash flows cover the following ten year
period. The expected cash flows during the subsequent years are estimated by
extrapolating the expected cash flows using a growth estimate of zero per cent.
The discount rate before taxes used in the calculations is 6.0%. The discout
rate is based on the financial targets of the company.
According to the view of the management, reasonable changes in the primary
assumptions used in the calculations will not lead to a need for recording
impairment losses.
--------------------------------------------------------------------------------
| 17. INTANGIBLE ASSETS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Land use rights | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 78,935 | 77,726 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 3,179 | 1,253 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | | -44 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 82,114 | 78,935 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 82,114 | 78,935 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other intangible assets | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 18,370 | 16,869 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 3,252 | 1,501 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 21,623 | 18,370 |
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -12,032 | -10,199 |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -3,665 | -1,833 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 5,925 | 6,338 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 88,039 | 85,274 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 18. PROPERTY, PLANT AND EQUIPMENT, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Land and water areas | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 10,832 | 10,758 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 583 | 74 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | -4 | |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 11,410 | 10,832 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 11,410 | 10,832 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Buildings and structures | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 73,883 | 67,642 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 23,959 | 6,240 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 97,842 | 73,883 |
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -17,967 | -15,339 |
--------------------------------------------------------------------------------
| Decreases, depreciation according to plan 1 Jan - | | |
| 31 Dec | | |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -2,997 | -2,628 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 76,877 | 55,916 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Machinery and equipment | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 612,269 | 600,885 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 51,714 | 11,384 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 663,983 | 612,269 |
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -220,068 | -189,590 |
--------------------------------------------------------------------------------
| Decreases, depreciation according to plan 1 Jan - | | |
| 31 Dec | | |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -31,760 | -30,477 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 412,155 | 392,202 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transmission lines | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 806,702 | 762,644 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 63,626 | 44,469 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | -417 | -411 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 869,911 | 806,702 |
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -236,219 | -212,457 |
--------------------------------------------------------------------------------
| Decreases, depreciation according to plan 1 Jan - | 128 | 384 |
| 31 Dec | | |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -25,824 | -24,146 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 607,996 | 570,483 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other property, plant and equipment | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 12,838 | 12,569 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 991 | 270 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 13,830 | 12,838 |
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -10,210 | -9,811 |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -367 | -399 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 3,253 | 2,628 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Advance payments and purchases in progress | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 81,081 | 58,289 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 84,961 | 80,076 |
--------------------------------------------------------------------------------
| Transfers to other property, plant, and equipment | -96,659 | -57,285 |
| and to other intangible assets 1 Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Borrowing costs capitalised in the financial year | 63 | |
| (note 10) | | |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 69,447 | 81,081 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 69,447 | 81,081 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 1,181,138 | 1,113,141 |
--------------------------------------------------------------------------------
Item Advance payments and purchases in progress contains the advance payments of
noncurrent property, plant and equipment and intangible assets, and acquisition
costs caused by capital investments in progress.
--------------------------------------------------------------------------------
| 19. INVESTMENTS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Available-for-sale investments | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 324 | 350 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | -7 | |
--------------------------------------------------------------------------------
| Changes in fair value 1 Jan - 31 Dec | 11 | -26 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 329 | 324 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The changes in fair value are recorded in equity | | |
| (note 26). | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity investments in associated companies | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 6,370 | 7,074 |
--------------------------------------------------------------------------------
| Portion of profit 1 Jan - 31 Dec | 284 | 514 |
--------------------------------------------------------------------------------
| Translation differences 1 Jan - 31 Dec | 456 | -581 |
--------------------------------------------------------------------------------
| Dividends 1 Jan - 31 Dec | | -637 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 7,110 | 6,370 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 7,439 | 6,694 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Goodwill contained in the carrying amount of | 3,245 | 3,245 |
| associated companies at 31 Dec | | |
--------------------------------------------------------------------------------
There are no such essential temporary differences with associated companies of
which deferred tax assets or liabilities would have been recorded.
Financial summary of associated companies, 1,000 €
--------------------------------------------------------------------------------
| 2008 | Assets | Liabilitie | Revenue | Profit/los | Ownership |
| | | s | | s | (%) |
--------------------------------------------------------------------------------
| Nord Pool Spot AS, | 319,03 | 304,048 | 11,878 | 2,550 | 20.0 |
| Lysaker, Norway | 7 | | | | |
--------------------------------------------------------------------------------
| Porvoon Alueverkko | 5,824 | 5,829 | 4,406 | -60 | 33.3 |
| Oy, Porvoo, Finland | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2009 | Assets | Liabilitie | Revenue | Profit/los | Ownership |
| | | s | | s | (%) |
--------------------------------------------------------------------------------
| Nord Pool Spot AS, | 292,04 | 273,554 | 12,346 | 1,215 | 20.0 |
| Lysaker, Norway | 9 | | | | |
--------------------------------------------------------------------------------
| Porvoon Alueverkko | 5,931 | 5,832 | 5,066 | 96 | 33.3 |
| Oy, Porvoo, Finland | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Subsidiary shares | | | | Ownership | Ownership |
| 31 Dec 2009 | | | | (%) | (%) |
--------------------------------------------------------------------------------
| Finextra Oy, | | | | 100 | 100 |
| Helsinki, Finland | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 20. INVENTORIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Materials and consumables at 1 Jan | 5,318 | 4,626 |
--------------------------------------------------------------------------------
| Work in progress | 97 | 2 |
--------------------------------------------------------------------------------
| Total | 5,415 | 4,628 |
--------------------------------------------------------------------------------
The cost of inventories recognised as expense was 0.5 (2008: 0.4) million euros.
--------------------------------------------------------------------------------
| 21. TRADE RECEIVABLES AND OTHER RECEIVABLES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Trade receivables | 39,419 | 39,127 |
--------------------------------------------------------------------------------
| Trade receivables from associated companies | 777 | 844 |
| (note 37) | | |
--------------------------------------------------------------------------------
| Prepayments and accrued income | 13,956 | 4,923 |
--------------------------------------------------------------------------------
| Other receivables | 32 | 37 |
--------------------------------------------------------------------------------
| Total | 54,184 | 44,930 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Essential items included in prepayments and accrued | 2009 | 2008 |
| income | | |
--------------------------------------------------------------------------------
| Accruals of sales | 8,996 | 3,868 |
--------------------------------------------------------------------------------
| Accruals of purchases/prepayments | 533 | 693 |
--------------------------------------------------------------------------------
| Interest receivable | 3,917 | |
--------------------------------------------------------------------------------
| Rents/prepayments | 205 | 226 |
--------------------------------------------------------------------------------
| Total | 13,650 | 4,787 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Age distribution of trade receivables | 2009 | 2008 |
--------------------------------------------------------------------------------
| Unmatured trade receivables | 39,840 | 38,086 |
--------------------------------------------------------------------------------
| Trade receivables matured by 1-30 days | 274 | 986 |
--------------------------------------------------------------------------------
| Trade receivables matured by 31-60 days | 3 | |
--------------------------------------------------------------------------------
| Trade receivables matured by more than 60 days | 79 | 899 |
--------------------------------------------------------------------------------
| Total | 40,196 | 39,970 |
--------------------------------------------------------------------------------
On 31 December 2009 or on 31 December 2008, the company did not have matured
trade receivables of which impairment losses would have been recorded. Based on
earlier payments, the company expects to receive the matured receivables in less
than 3 months.
Receivables where the due dates have been renegotiated are not included in
matured trade receivables.
--------------------------------------------------------------------------------
| Trade receivables and other receivables broken down | 2009 | 2008 |
| by currencies, 1,000 € | | |
--------------------------------------------------------------------------------
| EUR | 54,174 | 44,917 |
--------------------------------------------------------------------------------
| GBP | 7 | |
--------------------------------------------------------------------------------
| SEK | 4 | 13 |
--------------------------------------------------------------------------------
| Total | 54,184 | 44,930 |
--------------------------------------------------------------------------------
The fair value of trade receivables and other receivables does not differ
essentially from the balance sheet value.
--------------------------------------------------------------------------------
| 22. FINANCIAL ASSETS RECOGNISED AT FAIR VALUE, 1,000 | 2009 | 2008 |
| € | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Certificates of deposit | 74,881 | 78,856 |
--------------------------------------------------------------------------------
| Commercial papers | 124,885 | 121,184 |
--------------------------------------------------------------------------------
| Total | 199,766 | 200,040 |
--------------------------------------------------------------------------------
Financial assets are recognised at fair value and the change in fair value is
presented in the income statement in finance income and costs.
--------------------------------------------------------------------------------
| 23. CASH AND CASH EQUIVALENTS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and bank accounts | 1,812 | 239 |
--------------------------------------------------------------------------------
| Pledged accounts | 592 | 5,865 |
--------------------------------------------------------------------------------
| Money market deposits | 1,700 | |
--------------------------------------------------------------------------------
| Total | 4,105 | 6,104 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 24. CARRYING AMOUNTS OF FINANCIAL ASSETS AND LIABILITIES BY |
| MEASUREMENT CATEGORIES, 1,000 € |
--------------------------------------------------------------------------------
| Balance | Loans and | Assets/ | Availabl | Financial | Total | Note |
| sheet | other | liabiliti | e-for-sa | assets/ | | |
| item | receivabl | es | le | liabiliti | | |
| 31 Dec | es | recognise | financia | es | | |
| 2009 | | d in | l assets | measured | | |
| | | income | | at | | |
| | | statement | | amortised | | |
| | | at fair | | cost | | |
| | | value | | | | |
--------------------------------------------------------------------------------
| Non-curre | | | | | | |
| nt | | | | | | |
| financial | | | | | | |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Available | | | 329 | | 329 | 19 |
| -for-sale | | | | | | |
| investmen | | | | | | |
| ts | | | | | | |
--------------------------------------------------------------------------------
| Derivativ | | 11,740 | | | 11,740 | 31 |
| e | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Current | | | | | | |
| financial | | | | | | |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Derivativ | | 2,115 | | | 2,115 | 31 |
| e | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Other | 1 | | | | 1 | |
| financial | | | | | | |
| receivabl | | | | | | |
| es | | | | | | |
--------------------------------------------------------------------------------
| Trade | 54,184 | | | | 54,184 | 21 |
| receivabl | | | | | | |
| es and | | | | | | |
| other | | | | | | |
| receivabl | | | | | | |
| es | | | | | | |
--------------------------------------------------------------------------------
| Cash and | | | | | | |
| cash | | | | | | |
| equivalen | | | | | | |
| ts | | | | | | |
| recognise | | | | | | |
| d in | | | | | | |
--------------------------------------------------------------------------------
| income | | 199,766 | | | 199,766 | 22 |
| statement | | | | | | |
| at fair | | | | | | |
| value | | | | | | |
--------------------------------------------------------------------------------
| Cash in | 4,105 | | | | 4,105 | 22 |
| hand and | | | | | | |
| bank | | | | | | |
| receivabl | | | | | | |
| es | | | | | | |
--------------------------------------------------------------------------------
| Financial | 58,290 | 213,621 | 329 | | 272,239 | |
| Assets | | | | | | |
| Total | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-curre | | | | | | |
| nt | | | | | | |
| financial | | | | | | |
| liabiliti | | | | | | |
| es | | | | | | |
--------------------------------------------------------------------------------
| Borrowing | | | | 679,124 | 679,124 | 29 |
| s | | | | | | |
--------------------------------------------------------------------------------
| Derivativ | | 6,255 | | | 6,255 | 29,31 |
| e | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Current | | | | | | |
| financial | | | | | | |
| liabiliti | | | | | | |
| es | | | | | | |
--------------------------------------------------------------------------------
| Borrowing | | | | 315,974 | 315,974 | 29 |
| s | | | | | | |
--------------------------------------------------------------------------------
| Trade | 45,548 | | | 8,665 | 54,213 | 32 |
| payables | | | | | | |
| and other | | | | | | |
| liabiliti | | | | | | |
| es | | | | | | |
--------------------------------------------------------------------------------
| Financial | 45,548 | 6,255 | | 1,003,763 | 1,055,56 | |
| liabiliti | | | | | 6 | |
| es total | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | Loans | Assets/ | Availa | Financial | Total | Note |
| item | and | liabilit | ble- | assets/ | | |
| 31 Dec 2008 | other | ies | for-sa | liabiliti | | |
| | receiv | recognis | le | es | | |
| | ables | ed in | financ | measured | | |
| | | income | ial | at | | |
| | | statemen | assets | amortised | | |
| | | t at | | cost | | |
| | | fair | | | | |
| | | value | | | | |
--------------------------------------------------------------------------------
| Non-current | | | | | | |
| financial | | | | | | |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Available-for-s | | | 324 | | 324 | 19 |
| ale investments | | | | | | |
--------------------------------------------------------------------------------
| Derivative | | 1,205 | | | 1,205 | 31 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Current | | | | | | |
| financial | | | | | | |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Derivative | 1,857 | 1,097 | | | 2,954 | 31 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Other financial | 74 | | | | 74 | |
| receivables | | | | | | |
--------------------------------------------------------------------------------
| Trade | 44,930 | | | | 44,930 | 21 |
| receivables and | | | | | | |
| other | | | | | | |
| receivables | | | | | | |
--------------------------------------------------------------------------------
| Cash and cash | | 200,040 | | | 200,040 | 22 |
| equivalents | | | | | | |
| recognised in | | | | | | |
| income | | | | | | |
| statement at | | | | | | |
| fair value | | | | | | |
--------------------------------------------------------------------------------
| Cash in hand | 6,104 | | | | 6,104 | 22 |
| and bank | | | | | | |
| receivables | | | | | | |
--------------------------------------------------------------------------------
| Financial | 52,965 | 202,342 | 324 | | 255,632 | |
| assets total | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current | | | | | | |
| financial | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Borrowings | | | | 660,353 | 660,353 | 29 |
--------------------------------------------------------------------------------
| Derivative | | 17,982 | | | 17,982 | 29,31 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Current | | | | | | |
| financial | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Borrowings | | | | 251,327 | 251,327 | 29 |
--------------------------------------------------------------------------------
| Derivative | | 3,195 | | | 3,195 | 29,31 |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Trade payables | 42,713 | | | 13,610 | 56,323 | 32 |
| and other | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Financial | 42,713 | 21,177 | | 925,291 | 989,181 | |
| liabilities | | | | | | |
| total | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 25. FAIR VALUE | 2009 | 2008 |
| HIERARCHY, | | |
| 1,000 € | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| | Level 1 | Level | Level | Level 1 | Level 2 | Level 3 |
| | | 2 | 3 | | | |
--------------------------------------------------------------------------------
| Financial assets | | | | | | |
| held at fair | | | | | | |
| value | | | | | | |
--------------------------------------------------------------------------------
| Available-for-sal | 48 | 265 | | 37 | 265 | |
| e investments | | | | | | |
--------------------------------------------------------------------------------
| Derivatives | | 11,567 | | | 3,667 | |
--------------------------------------------------------------------------------
| Financial assets | | 199,76 | | | 200,040 | |
| recognised at | | 6 | | | | |
| fair value | | | | | | |
--------------------------------------------------------------------------------
| Financial assets | 48 | 211,59 | | 37 | 203,972 | |
| held at fair | | 8 | | | | |
| value total | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial | | | | | | |
| liabilities held | | | | | | |
| at fair value | | | | | | |
--------------------------------------------------------------------------------
| Derivatives | | 1,391 | | | 22,314 | |
--------------------------------------------------------------------------------
| Electricity | 17,605 | | | 35,236 | | |
| forward | | | | | | |
| contracts, Nord | | | | | | |
| Pool Clearing | | | | | | |
--------------------------------------------------------------------------------
| Electricity | | 182 | | | 125 | |
| forward | | | | | | |
| contracts, others | | | | | | |
--------------------------------------------------------------------------------
| Financial | 17,605 | 1,574 | | 35,236 | 22,439 | |
| liabilities held | | | | | | |
| at fair value | | | | | | |
| total | | | | | | |
--------------------------------------------------------------------------------
Fair value measurement of assets and liabilities are categorised in a
three-level hierarchy in the fair value presentation. The appropriate hierarchy
is based on the input data of the instrument. The level is determined on the
basis of the lowest level of input for the instrument in its entirety that is
significant to the fair value measurement.
Level 1: inputs are publicly quoted in active markets.
Level 2: inputs are not publicly quoted and are observerable market parameters
either directly or indirectly.
Level 3: inputs are unobserverable market parameters.
26. EQUITY
Equity is composed of the share capital, share premium account, fair value
reserve (incl. hedge and revaluation reserves), translation reserve, and
retained earnings. The hedge reserve includes the changes in the fair value of
hedging instruments for loss energy. The fair value reserve includes the changes
in the fair value of available-for-sale investments. The translation reserve
includes translation differences in the net capital investments of associated
companies in accordance with the purchase method of accounting. The profit for
the financial year is recorded in retained earnings.
--------------------------------------------------------------------------------
| Share capital and share premium account, | Share | Share | Total |
| 1,000 € | capital | premium | |
| | | account | |
--------------------------------------------------------------------------------
| 1 Jan 2008 | 55,922 | 55,922 | 111,845 |
--------------------------------------------------------------------------------
| Change | | | |
--------------------------------------------------------------------------------
| 31 Dec 2008 | 55,922 | 55,922 | 111,845 |
--------------------------------------------------------------------------------
| Change | | | |
--------------------------------------------------------------------------------
| 31 Dec 2009 | 55,922 | 55,922 | 111,845 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The share capital is broken down as | Number | Of all | Of votes |
| follows: | of | shares | % |
| | shares | % | |
| | qty | | |
--------------------------------------------------------------------------------
| Series A shares | 2,078 | 62.49 | 83.32 |
--------------------------------------------------------------------------------
| Series B shares | 1,247 | 37.51 | 16.68 |
--------------------------------------------------------------------------------
| Total | 3,325 | 100.00 | 100.00 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of shares, qty | Series | Series | Total |
| | A shares | B shares | |
--------------------------------------------------------------------------------
| 1 Jan 2009 | 2,078 | 1,247 | 3,325 |
--------------------------------------------------------------------------------
| Change | | | |
--------------------------------------------------------------------------------
| 31 Dec 2009 | 2,078 | 1,247 | 3,325 |
--------------------------------------------------------------------------------
The maximum number of shares is 13,000 as in 2008. The shares have no par value.
Series A shares confer three votes each at a shareholders' meeting and series B
shares one vote each. When electing members of the Board of Directors, series A
share confers 10 votes each at a shareholders' meeting and each series B share
one vote each.
Series B shares have the right before series A shares to obtain the annual
dividend specified below from the funds available for profit distribution. After
this, a corresponding dividend is distributed to series A shares. If the annual
dividend cannot be distributed in some year, the shares confer a right to
receive the undistributed amount from the funds available for profit
distribution in the subsequent years; however so that series B shares have the
right before series A shares to receive the annual dividend and the
undistributed amount.
The shareholders' meeting decides on the annual dividend.
The determination of the dividend: the amount of the annual dividend is
calculated on the basis of calendar years so that the subscription price of the
share added by amounts paid in conjunction with potential increases of share
capital and reduced by potential amounts paid in refunds of equity, is
multiplied by the dividend percentage; however so that the minimum dividend is
6%. The dividend percentage is defined on the basis of the yield of the 30-year
German Government Bond.
The dividend proposal for the year 2009 is 6.012 %.
There are no minority interests.
--------------------------------------------------------------------------------
| Shareholders by different categories | Number | Of all | Of votes |
| | of | shares | % |
| | shares | % | |
| | qty | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Public enterprises | 834 | 25.08 | 33.44 |
--------------------------------------------------------------------------------
| Private enterprises | 844 | 25.38 | 33.57 |
--------------------------------------------------------------------------------
| Public organisations | 410 | 12.33 | 16.44 |
--------------------------------------------------------------------------------
| Financial and insurance institutions | 1,237 | 37.20 | 16.55 |
--------------------------------------------------------------------------------
| Total | 3,325 | 100.00 | 100.00 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders | Number | Of all | Of votes |
| | of | shares | |
| | shares | % | % |
| | qty | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum Power and Heat Oy | 834 | 25.08 | 33.44 |
--------------------------------------------------------------------------------
| Pohjolan Voima Oy | 834 | 25.08 | 33.44 |
--------------------------------------------------------------------------------
| Republic of Finland | 410 | 12.33 | 16.44 |
--------------------------------------------------------------------------------
| Varma Mutual Pension Insurance Company | 405 | 12.18 | 5.41 |
--------------------------------------------------------------------------------
| Mutual Pension Insurance Company Ilmarinen | 350 | 10.53 | 4.68 |
--------------------------------------------------------------------------------
| Tapiola Mutual Pension Insurance Company | 150 | 4.51 | 2.01 |
--------------------------------------------------------------------------------
| Suomi Mutual Life Assurance Company | 75 | 2.26 | 1.00 |
--------------------------------------------------------------------------------
| Pohjola Insurance Ltd | 75 | 2.26 | 1.00 |
--------------------------------------------------------------------------------
| Mandatum Life Insurance Company Limited | 54 | 1.62 | 0.72 |
--------------------------------------------------------------------------------
| Tapiola General Mutual Insurance Company | 50 | 1.50 | 0.67 |
--------------------------------------------------------------------------------
| Tapiola Mutual Life Assurance Company | 35 | 1.05 | 0.47 |
--------------------------------------------------------------------------------
| If P&C Insurance Company Ltd | 25 | 0.75 | 0.33 |
--------------------------------------------------------------------------------
| Tapiola Corporate Life Insurance Company | 12 | 0.36 | 0.16 |
| Ltd | | | |
--------------------------------------------------------------------------------
| Imatran Seudun Sähkö Oy | 10 | 0.30 | 0.13 |
--------------------------------------------------------------------------------
| Fennia Life Insurance Company | 6 | 0.18 | 0.08 |
--------------------------------------------------------------------------------
| Total | 3,325 | 100.00 | 100.00 |
--------------------------------------------------------------------------------
Share premium account
The share premium account includes the difference between the counter value of
the shares and the value obtained. According to the Finnish Companies Act the
premium fund means tied equity. The share capital can be increased by
transferring funds from the premium fund account. The premium fund account can
be decreased in order to cover losses or it can under certain conditions be
returned to the owners.
Fair value reserves
The fair value reserves include the changes in the fair value of derivative
instruments used for hedging cash flow (hedge reserve) and the changes in the
fair value of available-for-sale investments (publicly quoted and unquoted
securities) (revaluation reserve).
--------------------------------------------------------------------------------
| Hedge reserve, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 Jan | -23,211 | 9,304 |
--------------------------------------------------------------------------------
| Changes in fair value during financial year | 15,891 | -43,940 |
--------------------------------------------------------------------------------
| Taxes | -4,132 | 11,424 |
--------------------------------------------------------------------------------
| Hedge reserve 31 Dec | -11,452 | -23,211 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revaluation reserve, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 Jan | 52 | 71 |
--------------------------------------------------------------------------------
| Changes in fair value during financial year | 11 | -26 |
--------------------------------------------------------------------------------
| Taxes on changes in fair value during financial | -3 | 7 |
| year | | |
--------------------------------------------------------------------------------
| Revaluation reserve 31 Dec | 60 | 52 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Translation reserve, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| Translation reserve 31 Dec | 88 | -368 |
--------------------------------------------------------------------------------
| The translation reserve includes the translation differences resulting from |
| converting the financial statements of the foreign associated company. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividends, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| Dividends paid | 6,724 | 6,711 |
--------------------------------------------------------------------------------
| The proposal for dividend distribution for the | | |
| financial year 2009 is presented in note 15. | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Retained earnings, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| Profit from previous financial years | 322,592 | 301,445 |
--------------------------------------------------------------------------------
| Profit for the financial year | 24,663 | 27,859 |
--------------------------------------------------------------------------------
| Retained earnings 31 Dec | 347,255 | 329,303 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 27. DEFERRED TAX ASSETS AND LIABILITIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax assets | | |
--------------------------------------------------------------------------------
| Valuation of derivative contracts and other | | |
| financial | | |
--------------------------------------------------------------------------------
| assets and liabilities at fair value | 6,198 | 11,152 |
--------------------------------------------------------------------------------
| Other temporary differences | 513 | 526 |
--------------------------------------------------------------------------------
| | 6,711 | 11,678 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | |
--------------------------------------------------------------------------------
| Accumulated depreciation difference | 103,074 | 100,355 |
--------------------------------------------------------------------------------
| Tangible and intangible assets | 14,997 | 12,557 |
--------------------------------------------------------------------------------
| Valuation of derivative contracts and other | | |
| financial | | |
--------------------------------------------------------------------------------
| assets and liabilities at fair value | 2,683 | 1,851 |
--------------------------------------------------------------------------------
| Other temporary differences | 1,019 | 1,047 |
--------------------------------------------------------------------------------
| | 121,774 | 115,810 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total* | 115,063 | 104,132 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *Deferred net tax liability is broken down in the | | |
| balance sheet as follows: | | |
--------------------------------------------------------------------------------
| Deferred tax assets | 6,711 | 11,678 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 121,774 | 115,810 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax assets | | |
--------------------------------------------------------------------------------
| Deferred tax asset to be recovered after more than | 5,334 | 10,269 |
| 12 months | | |
--------------------------------------------------------------------------------
| Deferred tax asset to be recovered within 12 | 1,378 | 1,409 |
| months | | |
--------------------------------------------------------------------------------
| | 6,711 | 11,678 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax liabilities | | |
--------------------------------------------------------------------------------
| Deferred tax liability to be recovered after more | 119,889 | 113,815 |
| than 12 months | | |
--------------------------------------------------------------------------------
| Deferred tax liability to be recovered within 12 | 1,885 | 1,995 |
| months | | |
--------------------------------------------------------------------------------
| | 121,774 | 115,810 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 115,063 | 104,132 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Changes in deferred | | | | |
| taxes in 2009: | | | | |
--------------------------------------------------------------------------------
| | 31 Dec | Recorded in | Recorded in | 31 Dec |
| | 2008 | income | other | 2009 |
| | | statement | comprehensive | |
| | | at fair | income | |
| | | value | | |
--------------------------------------------------------------------------------
| Deferred tax assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Provisions | 508 | -9 | | 500 |
--------------------------------------------------------------------------------
| Current financial | 1,408 | -32 | | 1,376 |
| assets | | | | |
--------------------------------------------------------------------------------
| Non-current financial | 548 | -353 | | 196 |
| assets | | | | |
--------------------------------------------------------------------------------
| Derivate liabilities | 1,039 | -437 | | 601 |
--------------------------------------------------------------------------------
| Electricity | 8,155 | | -4,132 | 4,024 |
| derivatives | | | | |
--------------------------------------------------------------------------------
| Other items | 19 | -4 | | 15 |
--------------------------------------------------------------------------------
| Total | 11,678 | -835 | -4,132 | 6,711 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Accumulated | -100,355 | -2,719 | | -103,074 |
| depreciations | | | | |
| difference | | | | |
--------------------------------------------------------------------------------
| Tangible and | -12,557 | -2,440 | | -14,997 |
| intangible assets | | | | |
--------------------------------------------------------------------------------
| Available-for-sale | -36 | | -3 | -39 |
| investments | | | | |
--------------------------------------------------------------------------------
| Other receivables | -57 | -963 | | -1,020 |
--------------------------------------------------------------------------------
| Financial assets | -949 | 801 | | -148 |
| recognised in income | | | | |
| statement at fair | | | | |
| value | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | -865 | -913 | | -1,778 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Trade payables and | -990 | 272 | | -718 |
| other liabilities | | | | |
--------------------------------------------------------------------------------
| Total | -115,810 | -5,961 | -3 | -121,774 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred net | -104,132 | -6,796 | -4,135 | -115,062 |
| liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Changes in deferred | | | | |
| taxes in 2008: | | | | |
--------------------------------------------------------------------------------
| | 31 Dec | Recorded in | Recorded in | 31 Dec |
| | 2007 | income | equity | 2008 |
| | | statement at | | |
| | | fair value | | |
--------------------------------------------------------------------------------
| Deferred tax assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Provisions | 522 | -14 | | 508 |
--------------------------------------------------------------------------------
| Current financial | 1,317 | 91 | | 1,408 |
| assets | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 741 | -1,607 | | -865 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Derivate liabilities | | 1,039 | | 1,039 |
--------------------------------------------------------------------------------
| Electricity | | | 8,155 | 8,155 |
| derivatives | | | | |
--------------------------------------------------------------------------------
| Other items | 40 | -21 | | 19 |
--------------------------------------------------------------------------------
| Total | 2,620 | -512 | 8,155 | 10,264 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Accumulated | -91,846 | -8,509 | | -100,355 |
| depreciation | | | | |
| difference | | | | |
--------------------------------------------------------------------------------
| Tangible and | -10,134 | -2,425 | | -12,557 |
| intangible assets | | | | |
--------------------------------------------------------------------------------
| Available-for-sale | -43 | | 7 | -36 |
| investments | | | | |
--------------------------------------------------------------------------------
| Non-current financial | -1,287 | 1,836 | | 548 |
| assets | | | | |
--------------------------------------------------------------------------------
| Other receivables | -106 | 50 | | -57 |
--------------------------------------------------------------------------------
| Derivate assets | -2,657 | 2,657 | | |
--------------------------------------------------------------------------------
| Financial assets | -409 | -540 | | -949 |
| recognised in income | | | | |
| statement at fair | | | | |
| value | | | | |
--------------------------------------------------------------------------------
| Trade payables and | -845 | -145 | | -990 |
| other liabilities | | | | |
--------------------------------------------------------------------------------
| Electricity | -3,269 | | 3,269 | |
| derivatives | | | | |
--------------------------------------------------------------------------------
| Total | -110,596 | -7,076 | 3,276 | -114,396 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred net | -107,976 | -7,588 | 11,431 | -104,132 |
| liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 28. PENSION COMMITMENTS | | |
--------------------------------------------------------------------------------
The most important pension scheme of the Group is a contribution-based scheme in
accordance with TyEL (Finnish Employee Pensions Act), where the benefits are
determined directly on the basis of the beneficiary's earnings.
The Group has a benefit-based supplementary pension scheme covering those born
between 1945 and 1949 who have worked at Fingrid at least as of 1 September
1997. These persons can retire at certain discretionary conditions at the
earliest at an age of 60 and at the earliest in 2006. The payment of the
supplementary pension will finish when the person reaches old age pension and at
the latest at the age of 63, after which the person's pension will be composed
of the statutory pensions incurred by that time.
--------------------------------------------------------------------------------
| Benefit-based pension expense in income statement, | 2009 | 2008 |
| 1,000 € | | |
--------------------------------------------------------------------------------
| Expenses based on service during financial year | 46 | 115 |
--------------------------------------------------------------------------------
| Expected return on scheme assets | -35 | -83 |
--------------------------------------------------------------------------------
| Interest expenses | 36 | 87 |
--------------------------------------------------------------------------------
| Other | 24 | |
--------------------------------------------------------------------------------
| Actuarial gains (-) and losses (+) | -164 | -36 |
--------------------------------------------------------------------------------
| Total | -94 | 83 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Benefit-based pension liability in balance sheet, | 2009 | 2008 |
| 1,000 € | | |
--------------------------------------------------------------------------------
| Present value of funded obligations | | 600 |
--------------------------------------------------------------------------------
| Fair value of scheme assets | | -593 |
--------------------------------------------------------------------------------
| Deficit/surplus | | 7 |
--------------------------------------------------------------------------------
| Unrecognised net actuarial gains (+) and losses (-) | | -7 |
--------------------------------------------------------------------------------
| Net liability | | 171 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Changes in present value of benefit obligations, | 2009 | 2008 |
| 1,000 € | | |
--------------------------------------------------------------------------------
| Present value of benefit obligations 1 Jan | 600 | 1,543 |
--------------------------------------------------------------------------------
| Service cost | 46 | 115 |
--------------------------------------------------------------------------------
| Interest cost on benefit obligations | 36 | 87 |
--------------------------------------------------------------------------------
| Other | -681 | |
--------------------------------------------------------------------------------
| Actuarial gains (+) and losses (-) | | -1,144 |
--------------------------------------------------------------------------------
| Present value of benefit obligations 31 Dec | | 600 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fair value of plan assets, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| Fair value of plan assets 1 Jan | 593 | 1,507 |
--------------------------------------------------------------------------------
| Expected return on plan assets | 35 | 83 |
--------------------------------------------------------------------------------
| Contributions by employer | 77 | 138 |
--------------------------------------------------------------------------------
| Other | -705 | |
--------------------------------------------------------------------------------
| Actuarial gains (+) and losses (-) | | -1,135 |
--------------------------------------------------------------------------------
| Fair value of plan assets 31 Dec | | 593 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Principal actuarial assumptions used | | |
--------------------------------------------------------------------------------
| Discount rate (%) | 5.00 | 5.50 |
--------------------------------------------------------------------------------
| Expected return on scheme assets (%) | 5.00 | 5.50 |
--------------------------------------------------------------------------------
| Rate of increase in future compensation levels (%) | 3.30 | 3.30 |
--------------------------------------------------------------------------------
| Future pension increases (%) | 0.00 | 0.00 |
--------------------------------------------------------------------------------
| Inflation (%) | 2.00 | 2.00 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 29. BORROWINGS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| Non-current | Fair | Balance | Fair | Balance |
| | value | sheet | value | sheet |
| | | value | | value |
--------------------------------------------------------------------------------
| Capital loan* | | | 31,888 | 30,000 |
--------------------------------------------------------------------------------
| Bonds | 638,106 | 627,655 | 601,175 | 601,728 |
--------------------------------------------------------------------------------
| Loans from financial | 53,139 | 51,469 | 29,277 | 28,625 |
| institutions | | | | |
--------------------------------------------------------------------------------
| Derivative liabilities | 7,595 | 6,255 | 18,792 | 17,982 |
--------------------------------------------------------------------------------
| | 698,839 | 685,379 | 681,132 | 678,336 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Current | Fair | Balance | Fair | Balance |
| | value | sheet | value | sheet |
| | | value | | value |
--------------------------------------------------------------------------------
| Current portion of long-term | 95,594 | 94,304 | 78,483 | 77,496 |
| borrowings maturing within | | | | |
| a year | | | | |
--------------------------------------------------------------------------------
| Derivative liabilities | | | 4,015 | 3,195 |
--------------------------------------------------------------------------------
| Other loans / Commercial | 222,371 | 221,671 | 176,315 | 173,831 |
| papers (international and | | | | |
| domestic) | | | | |
--------------------------------------------------------------------------------
| | 317,965 | 315,974 | 258,812 | 254,522 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Total | 1,016,80 | 1,001,353 | 939,945 | 932,858 |
| | 4 | | | |
--------------------------------------------------------------------------------
*The fair value of capital loan has been presented assuming that they are
redeemed on the first possible repurchase date.
The fair values of borrowings are based on the present values of cash flows.
Loans raised in various currencies are measured at the present value on the
basis of the yield curve of each currency. The discount rate includes the
company-specific and loan-specific risk premium. Borrowings denominated in
foreign currencies are translated into euros at the mid-rate quoted by ECB at
the closing day.
Derivative liabilities balance sheet value and fair value differ in terms of
related accruals, which are recorded in the balance sheet under trade payables
and other liabilities.
--------------------------------------------------------------------------------
| Capital loan included in borrowings, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| | | Maturity date | Interest | | |
--------------------------------------------------------------------------------
| EUR | 30,000 | 30.11.2029 | 6.388% | | 30,000 |
--------------------------------------------------------------------------------
| Total | | | | | 30,000 |
--------------------------------------------------------------------------------
Fingrid Oyj decided to redeem, according to the terms and conditions of the loan
agreement, capital loan at 100 % and the accrued interest coupon on 30 November
2009.
--------------------------------------------------------------------------------
| Bonds included in borrowings, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| International: | Maturity | Interest | | |
| | date | | | |
--------------------------------------------------------------------------------
| EUR | 25,000 | 06.04.2009 | variable | | 25,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 10,000 | 31.03.2010 | interest rate | 10,000 | 10,000 |
| | | | structure | | |
--------------------------------------------------------------------------------
| EUR | 10,000 | 16.03.2011 | 3.625 % | 10,000 | 10,000 |
--------------------------------------------------------------------------------
| EUR | 25,000 | 23.03.2011 | variable | 25,000 | 25,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 15,000 | 24.03.2011 | variable | 15,000 | 15,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 20,000 | 07.04.2011 | variable | 20,000 | 20,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 25,000 | 16.03.2012 | variable | 25,000 | 25,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 25,000 | 12.04.2012 | variable | 25,000 | 25,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 10,000 | 16.04.2013 | variable | 10,000 | 10,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 20,000 | 28.04.2013 | variable | 20,000 | 20,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 20,000 | 15.10.2013 | 4.30 % | 20,000 | 20,000 |
--------------------------------------------------------------------------------
| EUR | 24,000 | 02.07.2014 | variable | 24,000 | 24,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 18,000 | 11.11.2014 | variable | 18,000 | |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 8,000 | 11.11.2014 | variable | 8,000 | |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 10,000 | 20.11.2014 | 3.26 % | 10,000 | |
--------------------------------------------------------------------------------
| EUR | 20,000 | 11.04.2017 | variable | 20,000 | 20,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| EUR | 25,000 | 11.04.2017 | variable | 25,000 | 25,000 |
| | | | interest | | |
--------------------------------------------------------------------------------
| | | | | 285,000 | 274,000 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| FIM | 160,000 | 19.08.2013 | 5.20 % | 26,906 | 26,906 |
--------------------------------------------------------------------------------
| | | | | 26,906 | 26,906 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| USD | 30,000 | 23.03.2009 | variable | | 21,556 |
| | | | interest | | |
--------------------------------------------------------------------------------
| | | | | | 21,556 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| JPY | 3,000,000 | 15.07.2009 | 1.84 % | | 23,783 |
--------------------------------------------------------------------------------
| JPY | 1,000,000 | 12.07.2010 | 2.00 % | 7,510 | 7,928 |
--------------------------------------------------------------------------------
| JPY | 2,000,000 | 16.10.2010 | 1.022 % | 15,020 | 15,855 |
--------------------------------------------------------------------------------
| JPY | 3,000,000 | 05.07.2011 | 1.31 % * | 22,529 | 23,783 |
--------------------------------------------------------------------------------
| JPY | 3,000,000 | 25.07.2012 | 1.3575 % ** | 22,529 | 23,783 |
--------------------------------------------------------------------------------
| JPY | 3,000,000 | 20.04.2015 | 1.45 % | 22,529 | 23,783 |
--------------------------------------------------------------------------------
| | | | | 90,117 | 118,915 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CHF | 39,000 | 15.03.2010 | 2.24 % | 26,287 | 26,263 |
--------------------------------------------------------------------------------
| CHF | 39,000 | 22.05.2012 | 2.475 % | 26,287 | 26,263 |
--------------------------------------------------------------------------------
| | | | | 52,575 | 52,525 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CZK | 750,000 | 05.05.2010 | variable | 28,331 | 27,907 |
| | | | interest | | |
--------------------------------------------------------------------------------
| | | | | 28,331 | 27,907 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOK | 170,000 | 19.11.2014 | 4.68 % | 20,482 | |
--------------------------------------------------------------------------------
| NOK | 200,000 | 17.10.2016 | 5.15 % | 24,096 | 20,513 |
--------------------------------------------------------------------------------
| NOK | 200,000 | 11.04.2017 | 5.16 % | 24,096 | 20,513 |
--------------------------------------------------------------------------------
| NOK | 200,000 | 10.11.2017 | 5.12 % | 24,096 | |
--------------------------------------------------------------------------------
| NOK | 200,000 | 12.11.2019 | 5.37 % | 24,096 | |
--------------------------------------------------------------------------------
| | | | | 116,867 | 41,026 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SEK | 225,000 | 03.04.2012 | variable | 21,947 | 20,699 |
| | | | interest | | |
--------------------------------------------------------------------------------
| SEK | 225,000 | 11.04.2012 | variable | 21,947 | 20,699 |
| | | | interest | | |
--------------------------------------------------------------------------------
| SEK | 100,000 | 21.03.2013 | variable | 9,754 | 9,200 |
| | | | interest | | |
--------------------------------------------------------------------------------
| SEK | 200,000 | 03.04.2013 | 3.70 % | 19,508 | 18,399 |
--------------------------------------------------------------------------------
| SEK | 175,000 | 04.04.2014 | 4.30 % | 17,070 | 16,099 |
--------------------------------------------------------------------------------
| SEK | 220,000 | 01.12.2015 | interest | 24,779 | 24,135 |
| | | | rate | | |
| | | | structure | | |
--------------------------------------------------------------------------------
| | | | | 115,005 | 109,232 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bonds, long-term total | | | 627,655 | 601,728 |
--------------------------------------------------------------------------------
| Bonds, short-term total | | | 87,147 | 70,339 |
--------------------------------------------------------------------------------
| Tota | | | | 714,802 | 672,067 |
| l | | | | | |
--------------------------------------------------------------------------------
*call option not exercised 5 July 2004
**call option not exercised 25 July 2006
--------------------------------------------------------------------------------
| Maturity of non-current borrowings, | | | | |
| 1,000 € | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| | 2010 | 2011 | 2012 | 2013 | 2014 | 2014+ | Total |
--------------------------------------------------------------------------------
| Bonds | 87,14 | 92,52 | 142,71 | 106,16 | 97,552 | 188,694 | 714,802 |
| | 7 | 9 | 1 | 9 | | | |
--------------------------------------------------------------------------------
| Loans from | 7,156 | 7,156 | 9,156 | 11,156 | 4,000 | 20,000 | 58,626 |
| financial | | | | | | | |
| institutions | | | | | | | |
--------------------------------------------------------------------------------
| Total | 94,30 | 99,68 | 151,86 | 117,32 | 101,552 | 208,694 | 773,428 |
| | 4 | 6 | 7 | 6 | | | |
--------------------------------------------------------------------------------
Capital structure
The corporate finances are planned over a long time span, and the company is
ensured sufficient latitude and independent power of decision in the management
of finances. The company aims to secure sufficient cash flow for the long-term
development of transmission capacity, secured operational reliability and
development of the electricity market so that the tariff level remains moderate.
The company pursues as low average capital costs as possible by utilising a
lower cost through debt financing as compared to equity cost. However, the goal
is to keep the cash flow and debt service ratios of the company at such a level
that the company retains its high credit rating. The high credit rating enables
the company to tap the international and domestic money and capital markets.
--------------------------------------------------------------------------------
| 30. PROVISIONS FOR LIABILITIES AND CHARGES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Provisions 1 Jan | 1,955 | 2,007 |
--------------------------------------------------------------------------------
| Provisions used | -34 | -52 |
--------------------------------------------------------------------------------
| Provisions 31 Dec | 1,921 | 1,955 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 31. DERIVATIVE CONTRACTS, | 2009 | 2008 |
| 1,000 € | | |
--------------------------------------------------------------------------------
| Interest rate and currency | Net fair | Nominal | Net fair | Nominal |
| derivatives | value | value | value | value |
| | 31 Dec | 31 Dec | 31 Dec | 31 Dec 2008 |
| | 2009 | 2009 | 2008 | |
--------------------------------------------------------------------------------
| Cross-currency swaps | -1,391 | 399,576 | -22,314 | 367,266 |
--------------------------------------------------------------------------------
| Forward contracts | 218 | 14,079 | 1,097 | 19,418 |
--------------------------------------------------------------------------------
| Interest rate swaps | 223 | 191,000 | 199 | 134,000 |
--------------------------------------------------------------------------------
| Interest rate options, | 11,125 | 750,000 | 2,371 | 330,000 |
| bought | | | | |
--------------------------------------------------------------------------------
| Total | 10,176 | 1,354,654 | -18,648 | 850,684 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Electricity derivatives | Net fair | Volume | Net fair | Volume |
| | value | TWh | value | TWh |
| | 31 Dec | 31 Dec | 31 Dec | 31 Dec 2008 |
| | 2009 | 2009 | 2008 | |
--------------------------------------------------------------------------------
| Electricity forward | -17,528 | 3.61 | -35,232 | 3.52 |
| contracts, designated as | | | | |
| hedge accounting, Nord Pool | | | | |
| Clearing | | | | |
--------------------------------------------------------------------------------
| Electricity forward | -77 | 0.02 | -4 | 0.00 |
| contracts, Nord Pool | | | | |
| Clearing | | | | |
--------------------------------------------------------------------------------
| Electricity forward | -182 | 0.02 | -125 | 0.07 |
| contracts, others | | | | |
--------------------------------------------------------------------------------
| Total | -17,787 | 3.65 | -35,361 | 3.59 |
--------------------------------------------------------------------------------
The fair values of financial derivatives are included in the balance sheet in
non-current and current borrowings, interest and other financial liabilities,
and noncurrent and current financial and other receivables.
Interest rate options included in financial derivatives are interest rate cap
contracts with identical structures. The reference rate of the contract is the 6
month Euribor, and at the effective date a contract includes 6 or 8 caplets. The
option premium has been paid in full to the counterparty at the contract date.
Electricity forward contracts, others, includes bilateral financial and physical
purchase commitments concerning electricity purchases, not cleared separately by
a clearing organisation. The derivatives hedge future electricity losses.
The net fair value of derivatives indicates the realised profit/loss if they had
been reversed on the last business day of 2009.
Maturity of derivative contracts:
--------------------------------------------------------------------------------
| Nominal | 2010 | 2011 | 2012 | 2013 | 2014 | 2014+ | Total |
| value, 1,000 | | | | | | | |
| € | | | | | | | |
--------------------------------------------------------------------------------
| Interest rate | 10,00 | 10,00 | 55,000 | 80,000 | 36,000 | | 191,000 |
| swaps | 0 | 0 | | | | | |
--------------------------------------------------------------------------------
| Interest rate | 150,0 | 20,00 | 30,000 | 185,00 | 345,00 | 20,000 | 750,000 |
| options | 00 | 0 | | 0 | 0 | | |
--------------------------------------------------------------------------------
| Cross-currenc | 77,14 | 22,52 | 92,711 | 29,263 | 37,552 | 140,37 | 399,576 |
| y swaps | 7 | 9 | | | | 4 | |
--------------------------------------------------------------------------------
| Forward | 12,54 | 1,533 | | | | | 14,079 |
| contracts | 6 | | | | | | |
--------------------------------------------------------------------------------
| Total | 249,6 | 54,06 | 177,71 | 294,26 | 418,55 | 160,37 | 1,354,65 |
| | 93 | 2 | 1 | 3 | 2 | 4 | 4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TWh | 2010 | 2011 | 2012 | 2013 | 2014 | 2014+ | Total |
--------------------------------------------------------------------------------
| Electricity | 1.14 | 0.95 | 0.79 | 0.51 | 0.26 | | 3.65 |
| derivatives | | | | | | | |
--------------------------------------------------------------------------------
| Total | 1.14 | 0.95 | 0.79 | 0.51 | 0.26 | | 3.65 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 32. TRADE PAYABLES AND OTHER LIABILITIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Trade payables | 28,047 | 24,693 |
--------------------------------------------------------------------------------
| Trade payables to associated companies | 146 | 133 |
--------------------------------------------------------------------------------
| Interest liabilities | 8,665 | 13,610 |
--------------------------------------------------------------------------------
| Value added tax | 3,169 | 4,324 |
--------------------------------------------------------------------------------
| Electricity tax | 559 | 389 |
--------------------------------------------------------------------------------
| Accruals | 16,767 | 17,278 |
--------------------------------------------------------------------------------
| Other debt | 589 | 610 |
--------------------------------------------------------------------------------
| Total | 57,940 | 61,037 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Essential items included in accruals | 2009 | 2008 |
--------------------------------------------------------------------------------
| Personnel expenses | 4,028 | 4,120 |
--------------------------------------------------------------------------------
| Accruals of sales and purchases | 12,727 | 13,141 |
--------------------------------------------------------------------------------
| Other | 12 | 17 |
--------------------------------------------------------------------------------
| Total | 16,767 | 17,278 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 33. COMMITMENTS AND CONTINGENT LIABILITIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Pledges | | |
--------------------------------------------------------------------------------
| Pledge covering property lease agreements | 46 | 46 |
--------------------------------------------------------------------------------
| Pledged account in favour of the Customs Office | 150 | 154 |
--------------------------------------------------------------------------------
| Pledged account covering electricity exchange | 396 | 5,664 |
| purchases | | |
--------------------------------------------------------------------------------
| | 592 | 5,865 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Unrecorded investment commitments | 177,277 | 219,213 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other financial commitments | | |
--------------------------------------------------------------------------------
| Counterguarantee in favour of an associated company | 1,700 | 1,700 |
--------------------------------------------------------------------------------
| Credit facility commitment fee and commitment fee: | | |
--------------------------------------------------------------------------------
| Commitment fee for the next year | 158 | 158 |
--------------------------------------------------------------------------------
| Commitment fee for subsequent years | 255 | 409 |
--------------------------------------------------------------------------------
| | 2,113 | 2,268 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Donation of five-year professorship to Helsinki | 120 | 240 |
| University of Technology | | |
| for 2006 - 2010 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 34. OTHER LEASE AGREEMENTS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minimum rental obligations of other irrevocable | | |
| lease agreements: | | |
--------------------------------------------------------------------------------
| In one year | 1,793 | 2,012 |
--------------------------------------------------------------------------------
| In more than one year and less than five years | 3,840 | 5,083 |
--------------------------------------------------------------------------------
| In more than five years | 1,869 | 2,333 |
--------------------------------------------------------------------------------
| Total | 7,501 | 9,428 |
--------------------------------------------------------------------------------
The foremost lease agreements of the Group relate to office premises. The
durations of the lease agreements range from less than one year to ten years,
and the contracts can usually be extended after the original date of expiration.
The index, renewal and other terms of the different agreements vary.
The Group has rented for instance several land areas and some 110 kilovolt
transmission lines and circuit breaker bays.
--------------------------------------------------------------------------------
| 35. LEGAL PROCEEDINGS AND PROCEEDINGS BY AUTHORITIES | | |
--------------------------------------------------------------------------------
There are no ongoing legal proceedings or proceedings by authorities that would
have a material impact on the business of the company. In relation to
transmission line projects there are several complaints made to different
instances of justice. According to the management of the company there are no
ongoing legal proceedings or other such legal proceedings relating to other
areas, which final outcome would have a material impact on the financial
position of the Group.
In December 2008 the Market Court reached a decision concerning Fingrid´s appeal
to the Energy Market Authority´s decision 13 December 2007 "Determination of the
methodology for the assessment of the return of the grid owners' grid operations
transmission services pricing for the review period starting on 1 January 2008
and ending on 31 December 2011". The Energy Market Authority has in turn
appealed the decision to the Supreme Administrative Court.
--------------------------------------------------------------------------------
| 36. RISK MANAGEMENT | | | | | |
--------------------------------------------------------------------------------
The objective of Fingrid's risk management is to make preparations for
cost-effective measures providing protection against damage and loss relating to
risks and to make the entire personnel committed to considering the risks
pertaining to the company, its various organisational units and each employee.
In order to fulfil these objectives, risk management must be continuous and
systematic. The significance of individual risks or risk entities is assessed
against the present level of protection, taking into account the probability of
a disadvantageous event, its financial impact and impact on corporate image or
on the attainment of the business goals. The Board of Directors approves the
primary principles for risk management and any amendments to them. The Board of
Directors approves the primary action for risk management as part of the
corporate strategy, indicators, operating plan, and budget. The control
committee of the Board of Directors receives a situation report of the major
risks relating to the operations of the company and of the management of such
risks.
FINANCIAL RISK MANAGEMENT
Fingrid Oyj is exposed to market, liquidity and credit risks when managing the
financial position of the company. The company's objective is to reduce risks
such that the fluctuations of Fingrid's cash flow remain low.
Primary principles for financing
The Board of Directors of Fingrid Oyj approves the primary principles for
financing, stating the guidelines for external funding, financial asset
management, market, liquidity, refinancing and credit risks.
Risk management execution and reporting
The treasury is responsible for executing the external funding, the financial
asset management and manages the market risks which the company is exposed to.
The financial activities of the company are reported four times a year to the
Board of Directors. The treasury is responsible for identifying, measuring and
reporting the financial risks, which the company may be exposed to.
Risk management processes
The treasury is in charge of risk management monitoring, systems and models as
well as methods, for risk calculation and assessment. The internal audit
additionally ensures that there is compliance with the primary principles for
financing activities and the internal guidelines.
Market risks
Fingrid Oyj uses derivative agreements in order to hedge market risks such as
foreign exchange, interest rate risk and commodity risks. Derivatives are only
used for hedging purposes, and therefore the company does not enter into any
deals for market speculation. The hedging instruments are defined in the primary
principles for financing or in the loss power procurement policy, and chosen in
order to achieve efficient hedging of a risk exposure.
Foreign exchange risk
The functional currency of the company is the euro. The basic rule of the
company is to hedge against foreign exchange risks, but can according to the
primary principals for financing, leave an exposure unhedged, which may not
exceed 10 % of the financial assets.
Transaction exposure
The company issues securities in the domestic and international money and
capital markets. The loan portfolio of the company is distributed between
different convertible currencies and the total debt portfolio and the related
interest rate flows are hedged against currency risk.
The foreign exchange risk of each bond is done in conjunction with the
underlying debt issuance. Business related currency risks are small and they are
hedged. Therefore there is no sensitivity analysis presentation. During the
financial year the company used foreign exchange forwards and cross currency
swaps for hedging the transaction exposure. The tables below first illustrate
currency distribution and the hedging rate of the interest bearing debt of the
company and then the sensitivity analysis of the euro against the foreign
currencies, which also proves that the company does not have any open foreign
exchange risk.
--------------------------------------------------------------------------------
| Currency distribution and hedging degree of borrowings, 1,000 € | |
--------------------------------------------------------------------------------
| Currency | Carryi | Portio | Hedgin | Currency | Carryin | Portion | Hedging |
| distribu | ng | n % | g | distribu | g | % | degree |
| tion | amount | | degree | tion | amount | | |
| 31 Dec | | | | 31 Dec | | | |
| 2009 | | | | 2008 | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| EUR | 592,20 | 60 | | EUR | 522,829 | 57 | |
| | 3 | | | | | | |
--------------------------------------------------------------------------------
| CHF | 52,575 | 5 | 100 | CHF | 52,525 | 6 | 100 |
--------------------------------------------------------------------------------
| CZK | 28,331 | 3 | 100 | CZK | 27,907 | 3 | 100 |
--------------------------------------------------------------------------------
| JPY | 90,117 | 9 | 100 | JPY | 118,915 | 13 | 100 |
--------------------------------------------------------------------------------
| NOK | 116,86 | 12 | 100 | NOK | 41,026 | 5 | 100 |
| | 7 | | | | | | |
--------------------------------------------------------------------------------
| SEK | 115,00 | 12 | 100 | SEK | 109,232 | 12 | 100 |
| | 5 | | | | | | |
--------------------------------------------------------------------------------
| USD | | | | USD | 39,246 | 4 | 100 |
--------------------------------------------------------------------------------
| Total | 995,09 | 100 | 100 | Total | 911,681 | 100 | 100 |
| | 8 | | | | | | |
--------------------------------------------------------------------------------
The sensitivity analysis of foreign exchange rate is measured as a 10 % change
between the euro and the currency in question. The company's result will not be
subject to exchange rate differentials, since the debt denominated in foreign
currencies are hedged against foreign exchange changes. In the figures presented
in the tables below, a negative figure would increase foreign exchange loss and
a positive figure would correspondingly increase foreign exchange gain.
--------------------------------------------------------------------------------
| Exchange rate changes, 1,000 € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 31 Dec | Bonds | Commerc | Total | Cross-c | Forward | Total | Net |
| 2009 | | ial | | urrency | contrac | | exposur |
| | | papers | | swaps | ts | | e |
| | | | | | | | Total |
--------------------------------------------------------------------------------
| CH | +10 % | -6,03 | | -6,033 | 6,033 | | 6,033 | 0 |
| F | | 3 | | | | | | |
--------------------------------------------------------------------------------
| | -10 % | 4,936 | | 4,936 | -4,936 | | -4,936 | 0 |
--------------------------------------------------------------------------------
| CZ | +10 % | -3,16 | | -3,164 | 3,164 | | 3,164 | 0 |
| K | | 4 | | | | | | |
--------------------------------------------------------------------------------
| | -10 % | 2,588 | | 2,588 | -2,588 | | -2,588 | 0 |
--------------------------------------------------------------------------------
| JP | +10 % | -10,2 | | -10,20 | 10,209 | | 10,209 | 0 |
| Y | | 09 | | 9 | | | | |
--------------------------------------------------------------------------------
| | -10 % | 8,354 | | 8,354 | -8,354 | | -8,354 | 0 |
--------------------------------------------------------------------------------
| NO | +10 % | -13,1 | | -13,15 | 13,158 | | 13,158 | 0 |
| K | | 58 | | 8 | | | | |
--------------------------------------------------------------------------------
| | -10 % | 10,76 | | 10,765 | -10,765 | | -10,76 | 0 |
| | | 5 | | | | | 5 | |
--------------------------------------------------------------------------------
| SE | +10 % | -12,7 | | -12,73 | 12,738 | | 12,738 | 0 |
| K | | 38 | | 8 | | | | |
--------------------------------------------------------------------------------
| | -10 % | 10,42 | | 10,422 | -10,422 | | -10,42 | 0 |
| | | 2 | | | | | 2 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Exchange rate changes, 1,000 | | | | | |
| € | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 31 Dec | Bonds | Commerc | Total | Cross-c | Forward | Total | Net |
| 2008 | | ial | | urrency | contrac | | exposur |
| | | papers | | swaps | ts | | e |
| | | | | | | | |
| | | | | | | | Total |
--------------------------------------------------------------------------------
| CH | +10 % | -5,89 | | -5,896 | 5,896 | | 5,896 | 0 |
| F | | 6 | | | | | | |
--------------------------------------------------------------------------------
| | -10 % | 4,824 | | 4,824 | -4,824 | | -4,824 | 0 |
--------------------------------------------------------------------------------
| CZ | +10 % | -3,11 | | -3,117 | 3,117 | | 3,117 | 0 |
| K | | 7 | | | | | | |
--------------------------------------------------------------------------------
| | -10 % | 2,550 | | 2,550 | -2,550 | | -2,550 | 0 |
--------------------------------------------------------------------------------
| JP | +10 % | -12,9 | | -12,94 | 12,947 | | 12,947 | 0 |
| Y | | 47 | | 7 | | | | |
--------------------------------------------------------------------------------
| | -10 % | 10,59 | | 10,592 | -10,592 | | -10,59 | 0 |
| | | 2 | | | | | 2 | |
--------------------------------------------------------------------------------
| NO | +10 % | -4,31 | | -4,317 | 4,317 | | 4,317 | 0 |
| K | | 7 | | | | | | |
--------------------------------------------------------------------------------
| | -10 % | 3,532 | | 3,532 | -3,532 | | -3,532 | 0 |
--------------------------------------------------------------------------------
| SE | +10 % | -11,7 | | -11,70 | 11,701 | | 11,701 | 0 |
| K | | 01 | | 1 | | | | |
--------------------------------------------------------------------------------
| | -10 % | 9,573 | | 9,573 | -9,573 | | -9,573 | 0 |
--------------------------------------------------------------------------------
| US | +10 % | -2,39 | -1,993 | -4,386 | 2,393 | 1,993 | 4,386 | 0 |
| D | | 3 | | | | | | |
--------------------------------------------------------------------------------
| | -10 % | 2,154 | 1,794 | 3,948 | -2,154 | -1,794 | -3,948 | 0 |
--------------------------------------------------------------------------------
Translation exposure
The company holds an equity investment in an associated company denominated in a
foreign currency. This translation risk is unhedged. The sensitivity analysis
(10 % changes) is presented in the following table. The table shows a 10 %
change of the Norwegian krone and the impact of the change on the company's
equity.
--------------------------------------------------------------------------------
| Translation exposure, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| | | Equity | Equity |
| | | 31 Dec 2009 | 31 Dec 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOK | +10 % | 429 | 340 |
--------------------------------------------------------------------------------
| | -10 % | -351 | -278 |
--------------------------------------------------------------------------------
Interest rate risk
The company is only exposed to interest rate risk in euros, because the interest
bearing debt are both in terms of principal and interest payments hedged against
exchange rate risk, and the financial assets are denominated in euros. The
interest-bearing liabilities are mainly linked to floating rates.
Interest rate risk is managed in accordance with the main principles of
financing so that 30 - 70 % of the interest costs are hedged over the next five
years. When the interest rates are high, the hedging level is kept close to the
lower limit of the range, and when the interest rates are low, the hedging level
is kept close to the upper limit of the range. The specified low level of
interest rates is 3 % or less, and high level of interest rates is 5 % or more.
At the end of 2009, 50 % of the interest costs for the next five years were
hedged, and correspondingly 35 % were hedged at the end of 2008.
The sensitivity of the interest rate risk is measured as a 1 percentage unit
interest rate fluctuation and by using the CfaR method (Cashflow at Risk). The
assumed fluctuation in interest rates is the effect of a 1 percentage unit
fluctuation during the next 12 months from the closing date. The analysis of
interest rate sensitivity is carried out on borrowings including exchange rate
hedging, the derivatives portfolio hedging the interest rate exposure, and on
cash and cash equivalents, which result in a net debt position exposed to
interest rate fluctuations.
--------------------------------------------------------------------------------
| Interest rate sensitivity, | 2009 | | 2008 | |
| 1,000 € | | | | |
--------------------------------------------------------------------------------
| | -1%-unit | +1%-unit | -1%-unit | +1%-unit |
--------------------------------------------------------------------------------
| Borrowings | 7,664 | -7,664 | 6,586 | -6,586 |
--------------------------------------------------------------------------------
| Interest rate derivatives | -442 | 442 | -235 | 2,772 |
--------------------------------------------------------------------------------
| Borrowings total | 7,222 | -7,222 | 6,351 | -3,814 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | -1,740 | 1,740 | -1,448 | 1,448 |
--------------------------------------------------------------------------------
| Net borrowings total | 5,482 | -5,482 | 4,903 | -2,366 |
--------------------------------------------------------------------------------
The following table presents how the CfaR method is used for measuring the
impact of borrowings, derivatives, and cash and cash equivalents, with a given
confidence level and a time horizon of 12 months, on the cash flow of the
company. The other finance costs of the company are not included in the
calculation.
--------------------------------------------------------------------------------
| Cashflow at Risk, | | 2009 | | | | 2008 |
| 1,000 € | | | | | | |
--------------------------------------------------------------------------------
| | | 31 Dec 2009 | | | 31 Dec 2008 |
--------------------------------------------------------------------------------
| Confidence level | Net finance | Confidence level | Net finance costs |
| | costs | | |
--------------------------------------------------------------------------------
| 96 % | | min. | 12,306 | 96 % | | min. | 25,121 |
--------------------------------------------------------------------------------
| | | max. | 20,073 | | | max. | 30,971 |
--------------------------------------------------------------------------------
| 98 % | | min. | 11,908 | 98 % | | min. | 24,766 |
--------------------------------------------------------------------------------
| | | max. | 20,720 | | | max. | 31,277 |
--------------------------------------------------------------------------------
Commodity risk
The company is exposed to price and volume risk through transmission losses.
Loss energy purchases are hedged in accordance with the loss energy purchasing
principles accepted by the Board of Directors. The time span of price hedging is
five years, divided into three parts: basic, budgetary and operative hedging.
Moreover, the company has operative instructions for physical electricity
purchases, instructions for price hedging and control room instructions. For
hedging of loss energy purchases, the company uses Nord Pool ASA's electricity
derivative contracts and bilateral contracts.
If the market prices of electricity derivatives had been 20 % higher or lower on
the closing date, the change in the fair value of electricity derivatives would
have been 30.7 million euros higher or lower (28.3 million euros in 2008).
Liquidity risk and refinancing risk
Fingrid is exposed to liquidity and refinancing risk deriving from redemption of
loans, payments and fluctuations in cash flow from operating activities.
The liquidity of the company must be arranged so that 100 % of the refinancing
need for the next 12 months is covered by means of liquid assets and available
long-term committed credit lines; however, so that the refinancing need may not
account for more than 45 % of the total amount of the company's debt financing.
As back-up for the liquidity the company has a revolving credit facility of 250
million euros. The revolving credit facility will mature on 16 November 2012.
The revolving credit facility has not been drawn.
The company's funding is carried out through debt issuance programmes. The
company operates in the international capital market by issuing bonds under the
Medium Term Note Programme: The Programme size is 1.5 billion euros. Short-term
funding is arranged through commercial paper programmes; a Euro Commercial Paper
Programme of 600 million euros and a domestic commercial paper programme of 150
million euros. The refinancing risk is reduced by an even maturity profile so
that the refinancing need over periods of 12 months
in excess of one year must not exceed 30 % of the company's amount of debt
financing. Contactual repayments and interest costs of borrowings are presented
in the next table. The interest rate percentages of variable-interest loans are
defined using the zero coupon curve. The repayments and interest amounts are
undiscounted values. Finance costs relating to cross-currency swaps, interest
rate swaps and forward contracts are often paid in net amounts depending on
their nature. In the following table, they are presented in gross amounts.
Fingrid's existing loan agreements, debt or commercial paper programmes are
uncollateralized. Neither does any of these agreements or programmes include any
financial covenants.
Contractual repayments and interest costs of borrowings and payments and
receivables of financial derivatives,
which are paid in cash 1,000 €
--------------------------------------------------------------------------------
| 31 | | 2010 | 2011 | 2012 | 2013 | 2014 | 2014+ | Total |
| Dec | | | | | | | | |
| 2009 | | | | | | | | |
| | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Bonds | - | 87,14 | 92,529 | 142,71 | 106,16 | 97,552 | 188,69 | 714,802 |
| | repa | 7 | | 1 | 9 | | 4 | |
| | y | | | | | | | |
| | ment | | | | | | | |
| | s | | | | | | | |
--------------------------------------------------------------------------------
| | - | 16,28 | 18,046 | 17,422 | 15,207 | 12,012 | 22,627 | 101,603 |
| | inte | 9 | | | | | | |
| | rest | | | | | | | |
| | cost | | | | | | | |
| | s | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Loans | - | 7,156 | 7,156 | 9,156 | 11,156 | 4,000 | 20,000 | 58,626 |
| from | repa | | | | | | | |
| finan | y | | | | | | | |
| ci | ment | | | | | | | |
| al | s | | | | | | | |
--------------------------------------------------------------------------------
| insti | - | 982 | 1,316 | 1,410 | 1,192 | 964 | 2,620 | 8,484 |
| tutio | inte | | | | | | | |
| ns | rest | | | | | | | |
| | cost | | | | | | | |
| | s | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Comme | - | 221,6 | | | | | | 221,671 |
| r | repa | 71 | | | | | | |
| cial | y | | | | | | | |
| paper | ment | | | | | | | |
| s | s | | | | | | | |
--------------------------------------------------------------------------------
| | - | 829 | | | | | | 829 |
| | inte | | | | | | | |
| | rest | | | | | | | |
| | cost | | | | | | | |
| | s | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cross | - | 79,96 | 36,259 | 107,47 | 39,178 | 46,019 | 158,75 | 467,646 |
| -cur | pay | 5 | | 0 | | | 4 | |
| rency | ment | | | | | | | |
| swaps | s | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inte | - | 1,843 | 3,441 | 3,631 | 3,062 | 764 | | 12,741 |
| rest | pay | | | | | | | |
| rate | ment | | | | | | | |
| swaps | s | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Forwa | - | 7,496 | 1,501 | | | | | 8,997 |
| rd | pay | | | | | | | |
| contr | ment | | | | | | | |
| ac | s | | | | | | | |
| ts | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Guara | - | 1,700 | | | | | | 1,700 |
| n | pay | | | | | | | |
| tee | ment | | | | | | | |
| commi | s | | | | | | | |
| t | | | | | | | | |
| ment* | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | 425,0 | 160,24 | 281,80 | 175,96 | 161,31 | 392,69 | 1,597,09 |
| | | 79 | 9 | 0 | 5 | 1 | 5 | 9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cross | - | 87,83 | 32,962 | 103,08 | 37,928 | 45,443 | 158,01 | 465,264 |
| -cur | rece | 4 | | 4 | | | 3 | |
| rency | i | | | | | | | |
| swaps | vabl | | | | | | | |
| | es | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inte | - | 2,419 | 3,709 | 3,487 | 2,527 | 723 | | 12,865 |
| rest | rece | | | | | | | |
| rate | i | | | | | | | |
| swaps | vabl | | | | | | | |
| | es | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Forwa | - | 7,672 | 1,531 | | | | | 9,203 |
| rd | rece | | | | | | | |
| contr | i | | | | | | | |
| a | vabl | | | | | | | |
| cts | es | | | | | | | |
--------------------------------------------------------------------------------
| Total | | 97,92 | 38,203 | 106,57 | 40,455 | 46,166 | 158,01 | 487,332 |
| | | 5 | | 1 | | | 3 | |
--------------------------------------------------------------------------------
| Grand | | 327,1 | 122,04 | 175,23 | 135,51 | 115,14 | 234,68 | 1,109,76 |
| total | | 54 | 6 | 0 | 0 | 5 | 2 | 7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *Counterguarantee in favour of an associated company. No payment claims |
| have been presented to Fingrid. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 31 | | 2009 | 2010 | 2011 | 2012 | 2013 | 2013+ | Total |
| Dec | | | | | | | | |
| 2008 | | | | | | | | |
| | | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Capit | - | 30,00 | | | | | | 30,000 |
| al | repay | 0 | | | | | | |
| loans | ments | | | | | | | |
--------------------------------------------------------------------------------
| | - | 2,882 | | | | | | 2,882 |
| | inte | | | | | | | |
| | rest | | | | | | | |
| | costs | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Bonds | - | 70,33 | 87,95 | 93,783 | 141,44 | 104,50 | 170,15 | 668,175 |
| | repay | 9 | 3 | | 4 | 5 | 1 | |
| | ments | | | | | | | |
--------------------------------------------------------------------------------
| | - | 19,46 | 15,86 | 15,321 | 13,081 | 10,025 | 17,909 | 91,670 |
| | inte | 5 | 9 | | | | | |
| | rest | | | | | | | |
| | costs | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Loans | - | 7,156 | 7,156 | 7,156 | 7,156 | 7,156 | | 35,782 |
| from | repay | | | | | | | |
| finan | ments | | | | | | | |
| cial | | | | | | | | |
--------------------------------------------------------------------------------
| insti | - | 1,138 | 811 | 702 | 423 | 162 | | 3,236 |
| tutio | inte | | | | | | | |
| ns | rest | | | | | | | |
| | costs | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Comme | - | 173,8 | | | | | | 173,830 |
| r | repay | 30 | | | | | | |
| cial | ments | | | | | | | |
| paper | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| | - | 3,434 | | | | | | 3,434 |
| | inte | | | | | | | |
| | rest | | | | | | | |
| | costs | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cross | - pay | 60,48 | 84,28 | 37,241 | 106,36 | 36,658 | 124,46 | 449,499 |
| -cur | ments | 9 | 3 | | 5 | | 2 | |
| rency | | | | | | | | |
| swaps | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inte | - pay | 1,987 | 1,636 | 1,632 | 1,215 | 751 | | 7,221 |
| rest | ments | | | | | | | |
| rate | | | | | | | | |
| swaps | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Forwa | - pay | 18,32 | | | | | | 18,321 |
| rd | ments | 1 | | | | | | |
| contr | | | | | | | | |
| a | | | | | | | | |
| cts | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | 389,0 | 197,7 | 155,83 | 269,68 | 159,25 | 312,52 | 1,484,04 |
| | | 41 | 08 | 5 | 5 | 7 | 3 | 9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cross | - | 54,86 | 85,63 | 30,665 | 97,941 | 32,272 | 111,38 | 412,763 |
| -cur | recei | 6 | 5 | | | | 4 | |
| rency | vable | | | | | | | |
| swaps | s | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inte | - | 1,711 | 1,885 | 2,148 | 1,081 | 860 | | 7,685 |
| rest | recei | | | | | | | |
| rate | vable | | | | | | | |
| swaps | s | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Forwa | - | 19,37 | | | | | | 19,375 |
| rd | recei | 5 | | | | | | |
| contr | vable | | | | | | | |
| a | s | | | | | | | |
| cts | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | 75,95 | 87,52 | 32,813 | 99,022 | 33,132 | 111,38 | 439,823 |
| | | 2 | 0 | | | | 4 | |
--------------------------------------------------------------------------------
| Grand | | 313,0 | 110,1 | 123,02 | 170,66 | 126,12 | 201,13 | 1,044,22 |
| total | | 88 | 89 | 2 | 3 | 5 | 9 | 6 |
--------------------------------------------------------------------------------
Credit risk
Credit risk arises from a counterparty not fulfilling its contractual
commitments towards Fingrid. Such commitments arise in the company's operations
and financial activities.
Credit risk in operations
The company measures and monitors its counterparty risks as part of business
monitoring and reporting. The credit rating and payment behaviour of all
counterparties and suppliers are regularly monitored. The company has no
significant credit risk concentrations. The company did not incur credit losses
or rearrange the terms of trade receivables during the financial year.
Credit risk in financing
The company is exposed to credit risk through derivative agreements and
financial investments. The company only has derivatives outstanding and invests
its funds within the permitted risk limits. There is an upper limit in euros for
each counterparty. The company signs the International Swap Dealers
Association's (ISDA) Master Agreement with each counterparty before entering
into a derivative transaction. The company has not received any collaterals
decreasing the credit risks covering the financial assets or derivative
contracts. The counterparty risks of financial instruments did not incur any
losses during the financial year.
37. RELATED PARTY TRANSACTIONS
Fingrid Group's related parties comprise associated companies Porvoon Alueverkko
Oy and Nord Pool Spot AS, the biggest owners Fortum Power and Heat Oy and
Pohjolan Voima Oy with their group companies, and top management with its
related parties. The top management is composed of the Board of Directors,
President, and management team.
The company has not lent money to the top management, and the company has no
transactions with the top management. Fingrid Oyj has granted Porvoon Alueverkko
Oy a counter guarantee of 1.7 million euros.
Business with related parties is conducted at market prices.
--------------------------------------------------------------------------------
| Employee benefits of top management, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| Salaries and other short-term employee benefits | 1,358 | 1,126 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transactions with associated companies, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| Sales | 4,208 | 3,788 |
--------------------------------------------------------------------------------
| Purchases | 38,464 | 52,083 |
--------------------------------------------------------------------------------
| Receivables | 777 | 844 |
--------------------------------------------------------------------------------
| Liabilities | 252 | 176 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transactions with related parties, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
| Sales | 86,417 | 95,582 |
--------------------------------------------------------------------------------
| Purchases | 63,741 | 57,153 |
--------------------------------------------------------------------------------
| Receivables | 7,840 | 8,208 |
--------------------------------------------------------------------------------
| Liabilities | 1,082 | 855 |
--------------------------------------------------------------------------------
General procurement principles
The group follows three alternative procurement methods when purchasing goods or
services. When the costs and value of the purchase are less than 5,000 euros, an
oral call for bid is usually made in addition to a written order or a purchasing
contract. When the procurement exceeds 5,000 euros but is below the values
applied to public procurements, bids are requested and competitive bidding is
arranged. When the limits for public procurements concerning Fingrid (0.4
million euros for goods and services and approx. 5 million euros for
construction projects) are exceeded, the company applies the public procurement
procedure.
38. EMISSION RIGHTS
Fingrid was granted emission rights in total 126.3 thousand tonnes for the years
2008-2012, of which Olkiluoto power station was granted a share of 112.3
thousand tonnes. As a rule, the emission rights held by Fingrid at 31 December
correspond at least to the annual CO2 emissions.
--------------------------------------------------------------------------------
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| | tCO2 | tCO2 |
--------------------------------------------------------------------------------
| Emission rights received free of charge | 25.26 | 25.26 |
--------------------------------------------------------------------------------
| Emission volumes, Olkiluoto | 1 | 1 |
--------------------------------------------------------------------------------
| Emission volumes, other power plants total | 2 | 2 |
--------------------------------------------------------------------------------
| Sales of emission rights | 22 | 15 |
--------------------------------------------------------------------------------
39. EVENTS AFTER CLOSING DATE
The Group management is not aware of such essential events after the closing
date that would affect the financial statements.
PARENT COMPANY FINANCIAL STATEMENTS (FAS)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PARENT COMPANY PROFIT AND | Notes | 1 Jan - 31 Dec | 1 Jan - 31 Dec |
| LOSS ACCOUNT | | 2009 | 2008 |
| | | € | € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TURNOVER | 2 | 355,754,732.51 | 382,229,533.99 |
--------------------------------------------------------------------------------
| Other operating income | 3 | 2,247,927.52 | 2,508,339.28 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Materials and services | 4 | -185,368,475.60 | -188,546,066.57 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Staff expenditure | 5 | -19,586,964.26 | -19,500,943.64 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Depreciation and | 6 | -74,041,085.44 | -68,775,922.62 |
| amortisation expense | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Other operating expenses | 7,8 | -39,395,433.28 | -34,561,619.82 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING PROFIT | | 39,610,701.45 | 73,353,320.62 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Finance income and costs | 9 | -22,437,872.95 | -32,089,027.56 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PROFIT BEFORE EXTRAORDINARY | | 17,172,828.50 | 41,264,293.06 |
| ITEMS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PROFIT BEFORE PROVISIONS AND | | 17,172,828.50 | 41,264,293.06 |
| TAXES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Provisions | 10 | -10,458,806.18 | -32,727,823.79 |
--------------------------------------------------------------------------------
| Income taxes | 11 | -1,760,024.05 | -2,066,073.31 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PROFIT FOR THE FINANCIAL | | 4,953,998.27 | 6,470,395.96 |
| YEAR | | | |
--------------------------------------------------------------------------------
Notes are an integral part of the financial statements.
PARENT COMPANY BALANCE SHEET
--------------------------------------------------------------------------------
| ASSETS | Notes | 31 Dec 2009 | 31 Dec 2008 |
| | | € | € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Intangible assets | | | |
--------------------------------------------------------------------------------
| Goodwill | 12 | 49,321,109.29 | 55,754,297.46 |
--------------------------------------------------------------------------------
| Other non-current expenses | 13 | 75,675,200.97 | 75,152,925.49 |
--------------------------------------------------------------------------------
| | | 124,996,310.26 | 130,907,222.95 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tangible assets | 14 | | |
--------------------------------------------------------------------------------
| Land and water areas | | 11,410,363.85 | 10,831,759.91 |
--------------------------------------------------------------------------------
| Buildings and structures | | 76,826,448.30 | 55,862,651.91 |
--------------------------------------------------------------------------------
| Machinery and equipment | | 410,010,446.70 | 390,000,149.49 |
--------------------------------------------------------------------------------
| Transmission lines | | 607,692,130.64 | 570,470,701.80 |
--------------------------------------------------------------------------------
| Other tangible assets | | 117,516.35 | 107,377.76 |
--------------------------------------------------------------------------------
| Advance payments and | | 69,383,522.87 | 81,081,134.39 |
| purchases in progress | | | |
--------------------------------------------------------------------------------
| | | 1,175,440,428.71 | 1,108,353,775.26 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investments | 15 | | |
--------------------------------------------------------------------------------
| Equity investments in Group | | 504,563.77 | 504,563.77 |
| companies | | | |
--------------------------------------------------------------------------------
| Equity investments in | | 6,641,360.21 | 6,641,360.21 |
| associated companies | | | |
--------------------------------------------------------------------------------
| Other shares and equity | | 850,172.53 | 721,405.83 |
| investments | | | |
--------------------------------------------------------------------------------
| | | 7,996,096.51 | 7,867,329.81 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS | | 1,308,432,835.48 | 1,247,128,328.02 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inventories | 16 | 5,414,746.79 | 4,627,709.26 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Receivables | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current receivables | | | |
--------------------------------------------------------------------------------
| Trade receivables | | 39,418,784.93 | 39,126,644.80 |
--------------------------------------------------------------------------------
| Receivables from Group | | 274,500.00 | 274,500.00 |
| companies | | | |
--------------------------------------------------------------------------------
| Receivables from associated | 17 | 777,395.89 | 843,612.07 |
| companies | | | |
--------------------------------------------------------------------------------
| Other receivables | | 31,875.78 | 36,657.35 |
--------------------------------------------------------------------------------
| Prepayments and accrued | 18, | 26,030,991.45 | 15,937,528.78 |
| income | 19 | | |
--------------------------------------------------------------------------------
| | | 66,533,548.05 | 56,218,943.00 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial assets | 20 | 199,198,409.69 | 196,391,703.87 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash in hand and bank | 20 | 4,104,878.38 | 6,103,687.98 |
| receivables | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS | | 275,251,582.91 | 263,342,044.11 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | | 1,583,684,418.39 | 1,510,470,372.13 |
--------------------------------------------------------------------------------
Notes are an integral part of the financial statements.
PARENT COMPANY BALANCE SHEET
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND | Notes | 31 Dec 2009 | 31 Dec 2008 |
| LIABILITIES | | € | € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY | 21 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share capital | | 55,922,485.55 | 55,922,485.55 |
--------------------------------------------------------------------------------
| Share premium account | | 55,922,485.55 | 55,922,485.55 |
--------------------------------------------------------------------------------
| Profit from previous | | 2,756,699.99 | 2,997,002.30 |
| financial years | | | |
--------------------------------------------------------------------------------
| Profit for the financial | | 4,953,998.27 | 6,470,395.96 |
| year | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL SHAREHOLDERS' EQUITY | | 119,555,669.36 | 121,312,369.36 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ACCUMULATED PROVISIONS | 22 | 396,440,121.32 | 385,981,315.14 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| PROVISIONS FOR LIABILITIES | 30 | 1,921,446.78 | 1,955,246.78 |
| AND CHARGES | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Capital loan | 23 | | 30,000,000.00 |
--------------------------------------------------------------------------------
| Bonds | 24, 25 | 642,275,696.72 | 624,280,418.73 |
--------------------------------------------------------------------------------
| Loans from financial | | 51,468,925.24 | 28,625,355.58 |
| institutions | | | |
--------------------------------------------------------------------------------
| | | 693,744,621.96 | 682,905,774.31 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Bonds | 24 | 85,620,380.48 | 73,475,810.01 |
--------------------------------------------------------------------------------
| Loans from financial | | 7,156,430.23 | 7,156,430.35 |
| institutions | | | |
--------------------------------------------------------------------------------
| Trade payables | | 28,047,324.19 | 24,692,701.31 |
--------------------------------------------------------------------------------
| Liabilities to Group | 26 | 507,844.15 | 259,243.05 |
| companies | | | |
--------------------------------------------------------------------------------
| Liabilities to associated | 27 | 145,775.79 | 132,554.00 |
| companies | | | |
--------------------------------------------------------------------------------
| Other liabilities | 28 | 225,934,339.97 | 177,902,946.29 |
--------------------------------------------------------------------------------
| Accruals | 29 | 24,610,464.16 | 34,695,981.53 |
--------------------------------------------------------------------------------
| | | 372,022,558.97 | 318,315,666.54 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | | 1,065,767,180.93 | 1,001,221,440.85 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL SHAREHOLDERS' EQUITY AND | 1,583,684,418.39 | 1,510,470,372.13 |
| LIABILITIES | | |
--------------------------------------------------------------------------------
Notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Notes | 1 Jan - 31 Dec 2009 | 1 Jan - 31 Dec 2008 |
| | € | € |
--------------------------------------------------------------------------------
| PARENT COMPANY CASH FLOW | |
| STATEMENT | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operating | | | |
| activities: | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the financial year | 21 | 4,953,998.27 | 6,470,395.96 |
--------------------------------------------------------------------------------
| Adjustments: | | | |
--------------------------------------------------------------------------------
| Business transactions not | | 84,682,467.57 | 101,417,010.61 |
| involving a payment transaction* | | | |
--------------------------------------------------------------------------------
| Interest and other finance costs | | 27,473,511.58 | 42,952,140.99 |
--------------------------------------------------------------------------------
| Interest income | | -5,021,363.87 | -10,102,322.91 |
--------------------------------------------------------------------------------
| Dividend income | | -14,274.76 | -760,790.52 |
--------------------------------------------------------------------------------
| Taxes | | 1,760,024.05 | 2,066,073.31 |
--------------------------------------------------------------------------------
| Changes in working capital: | | | |
--------------------------------------------------------------------------------
| Change in trade receivables and | | -2,002,886.10 | 1,088,300.63 |
| other receivables | | | |
--------------------------------------------------------------------------------
| Change in inventories | | -787,037.53 | 172,816.92 |
--------------------------------------------------------------------------------
| Change in trade payables and | | -2,875,633.98 | 3,663,674.31 |
| other liabilities | | | |
--------------------------------------------------------------------------------
| Change in provisions | | -33,800.00 | -52,100.00 |
--------------------------------------------------------------------------------
| Interests paid | | -43,770,686.88 | -40,859,549.96 |
--------------------------------------------------------------------------------
| Interests received | | 7,157,252.84 | 8,950,797.92 |
--------------------------------------------------------------------------------
| Taxes paid | 11 | -1,929,912.98 | -2,281,871.58 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow from operating | | 69,591,658.21 | 112,724,575.68 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing | | | |
| activities: | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Purchase of tangible assets | 14 | -126,679,634.58 | -83,777,788.58 |
--------------------------------------------------------------------------------
| Purchase of intangible assets | 13 | -7,649,031.55 | -2,764,660.75 |
--------------------------------------------------------------------------------
| Investments in other assets | 15 | -128,766.70 | -114,315.00 |
--------------------------------------------------------------------------------
| Proceeds from sale of tangible | 14 | 116,312.00 | 157,800.00 |
| assets | | | |
--------------------------------------------------------------------------------
| Repayment of loans receivable | | | 109,619.43 |
--------------------------------------------------------------------------------
| Dividends received | 9 | 14,274.76 | 760,790.52 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow from investing | | -134,326,846.07 | -85,628,554.38 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
| activities: | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Withdrawal of short-term loans | | 231,448,563.85 | 354,438,029.45 |
--------------------------------------------------------------------------------
| Repayment of short-term loans | | -263,142,195.23 | -330,605,523.55 |
--------------------------------------------------------------------------------
| Withdrawal of long-term loans | | 133,947,413.73 | |
--------------------------------------------------------------------------------
| Repayment of long-term loans | | -30,000,000.00 | -51,675,223.17 |
--------------------------------------------------------------------------------
| Dividends paid | 21 | -6,710,698.27 | -7,169,262.65 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash flow from financing | | 65,543,084.08 | -35,011,979.92 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net change in cash and cash | | 807,896.22 | -7,915,958.62 |
| equivalents | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents 1 Jan | | 202,495,391.85 | 210,411,350.47 |
--------------------------------------------------------------------------------
| Cash and cash equivalents 31 Dec | 20 | 203,303,288.07 | 202,495,391.85 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Notes to parent company cash | | | |
| flow statement | | | |
--------------------------------------------------------------------------------
| Adjustments: | | | |
--------------------------------------------------------------------------------
| *Business transactions not | | 84,682,467.57 | 101,417,010.61 |
| involving a payment transaction | | | |
--------------------------------------------------------------------------------
| - Depreciation | | 74,041,085.44 | 68,775,922.62 |
--------------------------------------------------------------------------------
| - Increase or decrease in | | 10,458,806.18 | 32,727,823.79 |
| accumulated depreciation | | | |
| difference | | | |
--------------------------------------------------------------------------------
| - Capital gains/losses (-/+) on | | 182,575.95 | -86,735.80 |
| tangible and intangible assets | | | |
--------------------------------------------------------------------------------
Notes are an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS OF PARENT COMPANY
1. ACCOUNTING PRINCIPLES
Fingrid Oyj's financial statements have been drawn up in accordance with Finnish
Accounting Standards (FAS). The items in the financial statements are valued at
original acquisition cost.
Foreign currency transactions
Commercial flows and financial items denominated in foreign currencies are
booked at the foreign exchange mid-rate quoted by the European Central Bank
(ECB) at the transaction value date. Interest-bearing liabilities and assets and
the derivatives hedging these items are valued at the mid-rate quoted by ECB at
the closing day. Realised foreign exchange gains and losses of interest-bearing
liabilities and assets and of the related derivatives are booked under finance
income and costs at maturity. The realised foreign exchange rate differences of
derivatives hedging commercial flows adjust the corresponding item in the income
statement.
Interest rate and foreign exchange derivatives
In accordance with the financial policy, interest rate and cross-currency swaps,
foreign exchange forwards and interest rate options are used for hedging
Fingrid's interest and foreign exchange exposure of balance sheet items,
interest flows and commercial flows. The accounting principles for derivatives
are the same as for the underlying items. The interest flow of interest rate and
cross-currency swaps and interest rate options is accrued and booked under
interest income and expenses. The interest portion of forward foreign exchange
contracts hedging the interest-bearing liabilities and assets is accrued over
their maturity and booked under finance income and costs. Up-front paid or
received premiums for interest rate options are accrued over the hedging period.
Electricity derivatives
Fingrid hedges the loss energy purchases by using bilateral contracts and
electricity exchange products, such as forwards, futures and options. The price
differentials arising from these contracts are booked at maturity adjusting the
loss energy purchases in the income statement. Up-front paid or received
premiums for options are accrued over the hedging period.
Research and development expenses
Research and development expenses are entered as annual expenses.
Valuation of fixed assets
Fixed assets are capitalised under immediate acquisition cost. Planned
straight-line depreciation on the acquisition price is calculated on the basis
of the economic lives of fixed assets. Depreciation on fixed assets taken into
use during the financial year is calculated asset-specifically from the month of
introduction.
The depreciation periods are as follows:
Goodwill 20 years
Other non-current expenses
Rights of use to line areas 30-40 years
Other rights of use according to economic lives, maximum 10 years
Computer systems 3 years
Buildings and structures
Substation buildings and separate buildings 40 years
Substation structures 30 years
Buildings and structures at gas turbine power plants 20 years
Separate structures 15 years
Transmission lines
Transmission lines 400 kV 40 years
Direct current lines 40 years
Transmission lines 110-220 kV 30 years
Creosote-impregnated towers and related disposal expenses* 30 years
Aluminium towers of transmission lines (400 kV) 10 years
Optical ground wires 10-20 years
Machinery and equipment
Substation machinery 10-30 years
Gas turbine power plants 20 years
Other machinery and equipment 3-5 years
* The disposal expenses are discounted at present value and added to the value
of fixed assets and booked under provisions for liabilities and charges.
Goodwill is depreciated over a 20-year period, since power transmission
operation is a long-term business in which income is accrued over several
decades.
Emission rights
Emission rights are treated in accordance with the net procedure in conformance
with statement 1767/2005 of the Finnish Accounting Board.
Valuation of inventories
Inventories are entered according to the FIFO principle at the acquisition cost,
or at the lower of replacement cost or probable market price.
Cash in hand, bank receivables and financial securities
Cash in hand and bank receivables include cash assets and bank balances.
Financial securities include certificates of deposit, commercial papers,
treasury bills and investments in short-term money-market funds. Quoted
securities and comparable assets are valued at the lower of original acquisition
cost or probable market price.
Interest-bearing liabilities
Fingrid's non-current interest-bearing liabilities consist of loans from
financial institutions and bonds issued under the international and domestic
Debt Issuance Programmes. The current interest-bearing liabilities consist of
commercial papers issued under the domestic and international programmes and of
the current portion of noncurrent debt and bonds maturing within a year. The
outstanding notes under the programmes are denominated in euros and foreign
currencies. Fingrid has both fixed and floating rate debt and debt with interest
rate structures. The interest is accrued over the maturity of the debt. The
differential of a bond issued over or under par value is accrued over the life
of the bond. The arrangement fees of the revolving credit facilities are as a
rule immediately entered as expenses and the commitment fees are accrued over
the maturity of the facility.
Financial risk management
The principles applied to the management of financial risks are presented in the
notes of the Group under item 36.
Income taxes
The taxes include the accrued tax corresponding to the profit of the financial
year as well as adjustments of taxes for previous financial years.
Deferred taxes
Deferred tax assets and liabilities are not recorded in the profit and loss
statement or balance sheet. Information concerning these is presented in the
notes.
--------------------------------------------------------------------------------
| 2. REVENUE BY BUSINESS AREAS | | |
--------------------------------------------------------------------------------
The business of Fingrid Oyj comprises entirely transmission grid business with
system responsibility. Because of this there is no division of revenue into
separate business areas.
--------------------------------------------------------------------------------
| REVENUE, 1, 000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transmission revenue | 187,850 | 189,120 |
--------------------------------------------------------------------------------
| Sale of balance power | 92,497 | 104,790 |
--------------------------------------------------------------------------------
| ITC income | 27,904 | 22,767 |
--------------------------------------------------------------------------------
| Cross-border transmission | 24,353 | 22,409 |
--------------------------------------------------------------------------------
| Peak load power | 13,469 | 10,887 |
--------------------------------------------------------------------------------
| Congestion income | 4,855 | 23,173 |
--------------------------------------------------------------------------------
| Service fee for feed-in tariff | 225 | 278 |
--------------------------------------------------------------------------------
| Other operating revenue | 4,602 | 8,805 |
--------------------------------------------------------------------------------
| Total | 355,755 | 382,230 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 3. OTHER OPERATING INCOME, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Rental income | 1,751 | 1,618 |
--------------------------------------------------------------------------------
| Contributions received | 105 | 129 |
--------------------------------------------------------------------------------
| Other income | 392 | 761 |
--------------------------------------------------------------------------------
| Total | 2,248 | 2,508 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 4. MATERIALS AND SERVICES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Purchases during the financial year | 117,360 | 121,616 |
--------------------------------------------------------------------------------
| Loss energy purchases | 52,067 | 49,918 |
--------------------------------------------------------------------------------
| Change in inventories, increase (-) or | -787 | 173 |
| decrease (+) | | |
--------------------------------------------------------------------------------
| Materials and supplies | 168,640 | 171,707 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Grid service charges | 54 | 46 |
--------------------------------------------------------------------------------
| Other external services | 16,675 | 16,793 |
--------------------------------------------------------------------------------
| Services | 16,728 | 16,839 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 185,368 | 188,546 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 5. STAFF EXPENDITURE, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Salaries and bonuses | 16,028 | 15,766 |
--------------------------------------------------------------------------------
| Pension expenses | 2,244 | 2,398 |
--------------------------------------------------------------------------------
| Other additional personnel expenses | 1,314 | 1,337 |
--------------------------------------------------------------------------------
| Total | 19,587 | 19,501 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Salaries and bonuses of the members of the Board of | 376 | 341 |
| Directors and President | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Arto Lepistö, Chairman of the Board | 23 | 21 |
--------------------------------------------------------------------------------
| Timo Rajala, 1st Deputy Chairman of the Board | 17 | 15 |
--------------------------------------------------------------------------------
| Timo Karttinen, 2nd Deputy Chairman of the Board | 17 | 15 |
--------------------------------------------------------------------------------
| Ari Koponen, Member of the Board | 12 | 11 |
--------------------------------------------------------------------------------
| Ritva Nirkkonen, Member of the Board | 14 | 13 |
--------------------------------------------------------------------------------
| Anja Silvennoinen, Member of the Board | 13 | 13 |
--------------------------------------------------------------------------------
| Risto Autio, deputy Member of the Board | 12 | 5 |
--------------------------------------------------------------------------------
| Jorma Tammenaho, deputy Member of the Board | 7 | 13 |
--------------------------------------------------------------------------------
| Jussi Hintikka, deputy Member of the Board | 5 | 6 |
--------------------------------------------------------------------------------
| Pekka Kettunen, deputy Member of the Board | 5 | 6 |
--------------------------------------------------------------------------------
| Kari Koivuranta, deputy Member of the Board | 5 | 4 |
--------------------------------------------------------------------------------
| Jukka Mikkonen, deputy Member of the Board | 5 | 4 |
--------------------------------------------------------------------------------
| Juha Laaksonen, deputy Member of the Board | 5 | 5 |
--------------------------------------------------------------------------------
| Timo Ritonummi, deputy Member of the Board | 5 | 5 |
--------------------------------------------------------------------------------
| Tapio Kuula, former Chairman of the Bord | | 4 |
--------------------------------------------------------------------------------
| Timo Koivuniemi, former deputy Member of the Board | | 1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Jukka Ruusunen, President & CEO | 228 | 200 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Pension commitments: | | |
--------------------------------------------------------------------------------
| Pension commitments are described in the notes of the Group under item 28. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of salaried employees in the company during the | | |
| financial year: | | |
--------------------------------------------------------------------------------
| Personnel, average | 251 | 241 |
--------------------------------------------------------------------------------
| Personnel, 31 Dec | 260 | 249 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 6. DEPRECIATION ACCORDING TO PLAN, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Goodwill | 6,433 | 6,433 |
--------------------------------------------------------------------------------
| Other noncurrent expenses | 7,127 | 5,188 |
--------------------------------------------------------------------------------
| Buildings and structures | 2,995 | 2,626 |
--------------------------------------------------------------------------------
| Machinery and equipment | 31,666 | 30,383 |
--------------------------------------------------------------------------------
| Transmission lines | 25,821 | 24,146 |
--------------------------------------------------------------------------------
| Total* | 74,041 | 68,776 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *Depreciation on the electricity grid (notes 13 and | 61,172 | 53,839 |
| 14) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 7. OTHER OPERATING EXPENSES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contracts, assignments etc. undertaken externally | 30,683 | 26,324 |
--------------------------------------------------------------------------------
| Grid rents | 431 | 449 |
--------------------------------------------------------------------------------
| Other rental expenses | 1,768 | 1,652 |
--------------------------------------------------------------------------------
| Other expenses | 6,513 | 6,137 |
--------------------------------------------------------------------------------
| Total | 39,395 | 34,562 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 8. AUDITORS FEES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Auditing fee | 34 | 57 |
--------------------------------------------------------------------------------
| Other fees | 8 | 25 |
--------------------------------------------------------------------------------
| Total | 42 | 82 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9. FINANCE INCOME AND COSTS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividend income from Group companies | -10 | -114 |
--------------------------------------------------------------------------------
| Dividend income from others | -4 | -647 |
--------------------------------------------------------------------------------
| Interest and other finance income from Group | | -4 |
| companies | | |
--------------------------------------------------------------------------------
| Interest and other finance income from others | -5,021 | -10,098 |
--------------------------------------------------------------------------------
| | -5,036 | -10,863 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest and other finance costs to Group companies | 2 | 15 |
--------------------------------------------------------------------------------
| Interest and other finance costs to others | 27,471 | 42,937 |
--------------------------------------------------------------------------------
| | 27,474 | 42,952 |
--------------------------------------------------------------------------------
| Total | 22,438 | 32,089 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 10. PROVISIONS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Difference between depreciation according to plan | 10,459 | 32,728 |
| and depreciation carried out in taxation | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 11. INCOME TAXES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income taxes for the financial year | 1,760 | 2,066 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 1,760 | 2,066 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax assets and liabilities, 1,000 € | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax assets | | |
--------------------------------------------------------------------------------
| On temporary differences | 500 | 508 |
--------------------------------------------------------------------------------
| | 500 | 508 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | |
--------------------------------------------------------------------------------
| On temporary differences | 440 | 458 |
--------------------------------------------------------------------------------
| On provisions | 103,074 | 100,355 |
--------------------------------------------------------------------------------
| | 103,514 | 100,813 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 103,015 | 100,305 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 12. GOODWILL, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost at 1 Jan | 128,664 | 128,664 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 128,664 | 128,664 |
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -72,909 | -66,476 |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -6,433 | -6,433 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 49,321 | 55,754 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accumulated depreciation difference 1 Jan | -55,754 | -62,187 |
--------------------------------------------------------------------------------
| Increase in depreciation difference reserve 1 Jan - | | |
| 31 Dec | | |
--------------------------------------------------------------------------------
| Decrease in depreciation difference reserve 1 Jan - | 6,433 | 6,433 |
| 31 Dec | | |
--------------------------------------------------------------------------------
| Accumulated depreciation in excess of plan 31 Dec | -49,321 | -55,754 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 13. OTHER NON-CURRENT EXPENSES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cost at 1 Jan | 128,824 | 126,085 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 7,649 | 2,808 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | | -69 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 136,473 | 128,824 |
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -53,671 | -48,509 |
--------------------------------------------------------------------------------
| Decreases, depreciation according to plan 1 Jan - 31 | | 26 |
| Dec | | |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -7,127 | -5,188 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec* | 75,675 | 75,153 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accumulated depreciation difference 1 Jan | -65,057 | -67,230 |
--------------------------------------------------------------------------------
| Increase in depreciation difference reserve 1 Jan - | -3,996 | -3,059 |
| 31 Dec | | |
--------------------------------------------------------------------------------
| Decrease in depreciation difference reserve 1 Jan - | 7,127 | 5,231 |
| 31 Dec | | |
--------------------------------------------------------------------------------
| Accumulated depreciation in excess of plan 31 Dec | -61,927 | -65,057 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *Net capital expenditure in electricity grid, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 73,747 | 67,685 |
--------------------------------------------------------------------------------
| Carrying amount 1 Jan | -67,685 | -69,525 |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | 6,654 | 3,086 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | | 44 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 12,715 | 1,290 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 14. TANGIBLE ASSETS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Land and water areas | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 10,832 | 10,758 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 583 | 74 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | -4 | |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 11,410 | 10,832 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Buildings and structures | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 72,205 | 65,965 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 23,959 | 6,240 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 96,164 | 72,205 |
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -16,342 | -13,716 |
--------------------------------------------------------------------------------
| Decreases, depreciation according to plan 1 Jan - | | |
| 31 Dec | | |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -2,995 | -2,626 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 76,826 | 55,863 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accumulated depreciation difference 1 Jan | -9,231 | -9,101 |
--------------------------------------------------------------------------------
| Increase in depreciation difference reserve 1 Jan | -3,504 | -2,757 |
| - 31 Dec | | |
--------------------------------------------------------------------------------
| Decrease in depreciation difference reserve 1 Jan | 2,995 | 2,626 |
| - 31 Dec | | |
--------------------------------------------------------------------------------
| Accumulated depreciation in excess of plan 31 Dec | -9,740 | -9,231 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Machinery and equipment | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 588,811 | 577,433 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 51,676 | 11,377 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 640,486 | 588,811 |
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -198,810 | -168,427 |
--------------------------------------------------------------------------------
| Decreases, depreciation according to plan 1 Jan - | | |
| 31 Dec | | |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -31,666 | -30,383 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 410,010 | 390,000 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accumulated depreciation difference 1 Jan | -87,667 | -77,046 |
--------------------------------------------------------------------------------
| Increase in depreciation difference reserve 1 Jan | -88,502 | -41,004 |
| - 31 Dec | | |
--------------------------------------------------------------------------------
| Decrease in depreciation difference reserve 1 Jan | 31,666 | 30,383 |
| - 31 Dec | | |
--------------------------------------------------------------------------------
| Accumulated depreciation in excess of plan 31 dec | -144,504 | -87,667 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transmission lines | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 806,686 | 762,628 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 63,331 | 44,469 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | -417 | -411 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 869,600 | 806,686 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accumulated depreciation according to plan 1 Jan | -236,215 | -212,453 |
--------------------------------------------------------------------------------
| Decreases, depreciation according to plan 1 Jan | 128 | 384 |
| - 31 Dec | | |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | -25,821 | -24,146 |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 607,692 | 570,471 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accumulated depreciation difference 1 Jan | -168,272 | -137,690 |
--------------------------------------------------------------------------------
| Increase in depreciation difference reserve 1 | -116,356 | -54,819 |
| Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Decrease in depreciation difference reserve 1 | 26,002 | 24,237 |
| Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Accumulated depreciation in excess of plan 31 | -258,625 | -168,272 |
| Dec | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other tangible assets | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 107 | 100 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 10 | 7 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 118 | 107 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Advance payments and purchases in progress | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 81,081 | 58,289 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 84,961 | 80,076 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | -96,659 | -57,285 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 69,384 | 81,081 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total* | 1,175,440 | 1,108,354 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *Net capital expenditure in electricity grid, | 2009 | 2008 |
| 1,000 € | | |
--------------------------------------------------------------------------------
| Carrying amount 31 Dec | 1,098,811 | 1,029,072 |
--------------------------------------------------------------------------------
| Carrying amount 1 Jan | -1,029,072 | -1,000,588 |
--------------------------------------------------------------------------------
| Depreciation according to plan 1 Jan - 31 Dec | 54,518 | 50,752 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | 293 | 27 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 124,550 | 79,264 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 15. INVESTMENTS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity investments in Group companies | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 505 | 505 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 505 | 505 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity investments in associated companies | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 6,641 | 6,641 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | | |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 6,641 | 6,641 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other shares and equity investments | | |
--------------------------------------------------------------------------------
| Cost at 1 Jan | 721 | 607 |
--------------------------------------------------------------------------------
| Increases 1 Jan - 31 Dec | 135 | 114 |
--------------------------------------------------------------------------------
| Decreases 1 Jan - 31 Dec | -7 | 0 |
--------------------------------------------------------------------------------
| Cost at 31 Dec | 850 | 721 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 7,996 | 7,867 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 16. INVENTORIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Materials and supplies | 5,318 | 4,626 |
--------------------------------------------------------------------------------
| Work in progress | 97 | 2 |
--------------------------------------------------------------------------------
| Total | 5,415 | 4,628 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 17. RECEIVABLES FROM ASSOCIATED COMPANIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current: | | |
--------------------------------------------------------------------------------
| Trade receivables | 777 | 844 |
--------------------------------------------------------------------------------
| Total | 777 | 844 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 18. PREPAYMENTS AND ACCRUED INCOME, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interests and other financial items | 19,902 | 11,760 |
--------------------------------------------------------------------------------
| Accruals of sales and purchases | 5,618 | 3,815 |
--------------------------------------------------------------------------------
| Taxes | 306 | 136 |
--------------------------------------------------------------------------------
| Other | 205 | 226 |
--------------------------------------------------------------------------------
| Total | 26,031 | 15,938 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 19. UNRECORDED EXPENSES AND PAR VALUE | 2009 | 2008 |
| DIFFERENTIALS ON THE ISSUE OF LOANS INCLUDED IN | | |
| PREPAYMENTS AND ACCRUED INCOME, 1,000 € | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Par value differentials | 3,833 | 4,014 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 20. CASH AND CASH EQUIVALENTS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Certificates of deposit | 74,590 | 77,138 |
--------------------------------------------------------------------------------
| Commercial papers | 124,609 | 119,254 |
--------------------------------------------------------------------------------
| | 199,198 | 196,392 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank Deposits | 1,700 | |
--------------------------------------------------------------------------------
| Cash in hand and bank receivables* | 2,405 | 6,103 |
--------------------------------------------------------------------------------
| | 4,105 | 6,103 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 203,303 | 202,494 |
--------------------------------------------------------------------------------
| *includes pledged bank accounts (note 31) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 21. SHAREHOLDERS' EQUITY, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share capital 1 Jan | 55,922 | 55,922 |
--------------------------------------------------------------------------------
| Share capital 31 Dec | 55,922 | 55,922 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share premium account 1 Jan | 55,922 | 55,922 |
--------------------------------------------------------------------------------
| Share premium account 31 Dec | 55,922 | 55,922 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit from previous financial years 1 Jan | 9,467 | 10,166 |
--------------------------------------------------------------------------------
| Dividend distribution | -6,711 | -7,169 |
--------------------------------------------------------------------------------
| Profit from previous financial years 31 Dec | 2,757 | 2,997 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the financial year | 4,954 | 6,470 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity 31 Dec | 119,556 | 121,312 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distributable shareholders' equity | 7,711 | 9,467 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of shares, qty | Series | Series | Total |
| | A | B shares | |
| | shares | | |
--------------------------------------------------------------------------------
| 1 Jan 2009 | 2,078 | 1,247 | 3,325 |
--------------------------------------------------------------------------------
| 31 Dec 2009 | 2,078 | 1,247 | 3,325 |
--------------------------------------------------------------------------------
Series A shares confer three votes each at a shareholders' meeting and series B
shares one vote each. When electing members of the Board of Directors, series A
share confers 10 votes each at a shareholders' meeting and each series B share
one vote each.
Series B shares have the right before series A shares to obtain the annual
dividend specified below from the funds available for profit distribution. After
this, a corresponding dividend is distributed to series A shares. If the annual
dividend cannot be distributed in some year, the shares confer a right to
receive the undistributed amount from the funds available for profit
distribution in the subsequent years; however so that series B shares have the
right over series A shares to receive the annual dividend and the undistributed
amount.
The shareholders' meeting decides on the annual dividend.
The determination of the dividend: the amount of the annual dividend is
calculated on the basis of calendar years so that the subscription price of a
share, added by amounts paid in conjunction with potential increases of share
capital and reduced by potential amounts paid in refunds of equity, is
multiplied by the dividend percentage; however so that the minimum dividend is
6%. The dividend percentage is defined on the basis of the yield of the 30-year
German Government Bond.
The dividend proposal for the year 2009 is 6.012 %.
There are no minority interests.
--------------------------------------------------------------------------------
| 22. ACCUMULATED PROVISIONS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accumulated depreciation in excess of plan, the | 396,440 | 385,981 |
| difference between depreciation | | |
| according to plan and depreciation carried out in | | |
| taxation | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 23. CAPITAL LOAN, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debenture of capital loan nature 1999 | | 30,000 |
--------------------------------------------------------------------------------
| Total | | 30,000 |
--------------------------------------------------------------------------------
The terms of the capital loan fulfil the requirements of Chapter 5, Section 1 of
the Companies Act (29.9.1978). The principal and interest for capital loan can
be repaid only after debts with higher claim in the event of the liquidation or
bankruptcy of the company.
The capital loan was publicly quoted and registered in the book-entry system of
Finnish Central Securities Depository Ltd.
Debenture of capital loan nature 1999
Fingrid Oyj decided to redeem, according
to the terms and conditions of the loan agreement, the capital loan at 100 % and
the accrued interest coupon on 30 November 2009.
--------------------------------------------------------------------------------
| 24. BONDS, 1,000 € | | | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Internationa | | Maturity | Interest | | |
| l: | | date | | | |
--------------------------------------------------------------------------------
| EUR | 25,000 | 06.04.2009 | variable interest | | 25,000 |
--------------------------------------------------------------------------------
| EUR | 10,000 | 31.03.2010 | interest rate | 10,000 | 10,000 |
| | | | structure | | |
--------------------------------------------------------------------------------
| EUR | 10,000 | 16.03.2011 | 3.625 % | 10,000 | 10,000 |
--------------------------------------------------------------------------------
| EUR | 25,000 | 23.03.2011 | variable interest | 25,000 | 25,000 |
--------------------------------------------------------------------------------
| EUR | 15,000 | 24.03.2011 | variable interest | 15,000 | 15,000 |
--------------------------------------------------------------------------------
| EUR | 20,000 | 07.04.2011 | variable interest | 20,000 | 20,000 |
--------------------------------------------------------------------------------
| EUR | 25,000 | 16.03.2012 | variable interest | 25,000 | 25,000 |
--------------------------------------------------------------------------------
| EUR | 25,000 | 12.04.2012 | variable interest | 25,000 | 25,000 |
--------------------------------------------------------------------------------
| EUR | 10,000 | 16.04.2013 | variable interest | 10,000 | 10,000 |
--------------------------------------------------------------------------------
| EUR | 20,000 | 28.04.2013 | variable interest | 20,000 | 20,000 |
--------------------------------------------------------------------------------
| EUR | 20,000 | 15.10.2013 | 4.30 % | 20,000 | 20,000 |
--------------------------------------------------------------------------------
| EUR | 24,000 | 02.07.2014 | variable interest | 24,000 | 24,000 |
--------------------------------------------------------------------------------
| EUR | 18,000 | 11.11.2014 | variable interest | 18,000 | |
--------------------------------------------------------------------------------
| EUR | 8,000 | 11.11.2014 | variable interest | 8,000 | |
--------------------------------------------------------------------------------
| EUR | 10,000 | 20.11.2014 | 3.26 % | 10,000 | |
--------------------------------------------------------------------------------
| EUR | 20,000 | 11.04.2017 | variable interest | 20,000 | 20,000 |
--------------------------------------------------------------------------------
| EUR | 25,000 | 11.04.2017 | variable interest | 25,000 | 25,000 |
--------------------------------------------------------------------------------
| | | | | 285,000 | 274,000 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| FIM | 160,000 | 19.08.2013 | 5.20 % | 26,910 | 26,910 |
--------------------------------------------------------------------------------
| | | | | 26,910 | 26,910 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| USD | 30,000 | 23.03.2009 | variable interest | | 24,476 |
--------------------------------------------------------------------------------
| | | | | | 24,476 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| JPY | 3,000,00 | 15.07.2009 | 1.84 % | | 24,000 |
| | 0 | | | | |
--------------------------------------------------------------------------------
| JPY | 1,000,00 | 12.07.2010 | 2.00 % | 10,215 | 10,215 |
| | 0 | | | | |
--------------------------------------------------------------------------------
| JPY | 2,000,00 | 16.10.2010 | 1.022 % | 15,504 | 15,504 |
| | 0 | | | | |
--------------------------------------------------------------------------------
| JPY | 3,000,00 | 05.07.2011 | 1.31 % * | 28,200 | 28,200 |
| | 0 | | | | |
--------------------------------------------------------------------------------
| JPY | 3,000,00 | 25.07.2012 | 1.3575 % ** | 25,400 | 25,400 |
| | 0 | | | | |
--------------------------------------------------------------------------------
| JPY | 3,000,00 | 20.04.2015 | 1.45 % | 21,563 | 21,563 |
| | 0 | | | | |
--------------------------------------------------------------------------------
| | | | | 100,881 | 124,881 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CHF | 39,000 | 15.03.2010 | 2.24 % | 25,000 | 25,000 |
--------------------------------------------------------------------------------
| CHF | 39,000 | 22.05.2012 | 2.475 % | 25,000 | 25,000 |
--------------------------------------------------------------------------------
| | | | | 50,000 | 50,000 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CZK | 750,000 | 05.05.2010 | variable interest | 24,902 | 24,902 |
--------------------------------------------------------------------------------
| | | | | 24,902 | 24,902 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOK | 170,000 | 19.11.2014 | 4.68 % | 20,166 | |
--------------------------------------------------------------------------------
| NOK | 200,000 | 17.10.2016 | 5.15 % | 24,620 | 24,620 |
--------------------------------------------------------------------------------
| NOK | 200,000 | 11.04.2017 | 5.16 % | 24,620 | 24,620 |
--------------------------------------------------------------------------------
| NOK | 200,000 | 10.11.2017 | 5.12 % | 23,725 | |
--------------------------------------------------------------------------------
| NOK | 200,000 | 12.11.2019 | 5.37 % | 23,725 | |
--------------------------------------------------------------------------------
| | | | | 116,856 | 49,240 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SEK | 225,000 | 03.04.2012 | variable interest | 24,194 | 24,194 |
--------------------------------------------------------------------------------
| SEK | 225,000 | 11.04.2012 | variable interest | 24,142 | 24,142 |
--------------------------------------------------------------------------------
| SEK | 100,000 | 21.03.2013 | variable interest | 10,560 | 10,560 |
--------------------------------------------------------------------------------
| SEK | 200,000 | 03.04.2013 | 3.70 % | 21,305 | 21,305 |
--------------------------------------------------------------------------------
| SEK | 175,000 | 04.04.2014 | 4.30 % | 18,811 | 18,811 |
--------------------------------------------------------------------------------
| SEK | 220,000 | 01.12.2015 | interest rate | 24,336 | 24,336 |
| | | | structure | | |
--------------------------------------------------------------------------------
| | | | | 123,347 | 123,347 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bonds, long-term total | | | 642,276 | 624,280 |
--------------------------------------------------------------------------------
| Bonds, short-term total | | | 85,620 | 73,476 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | | | | 727,896 | 697,756 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *call option not exercised 5 July 2004 | | | |
--------------------------------------------------------------------------------
| **call option not exercised 25 July 2006 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 25. LOANS FALLING DUE FOR PAYMENT IN FIVE YEARS OR | 2009 | 2008 |
| MORE, 1,000 € | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital loan | | 30,000 |
--------------------------------------------------------------------------------
| Bonds | 187,589 | 182,950 |
--------------------------------------------------------------------------------
| Loans from financial institutions | 20,000 | |
--------------------------------------------------------------------------------
| Total | 207,589 | 212,950 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 26. LIABILITIES TO GROUP COMPANIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current: | | |
--------------------------------------------------------------------------------
| Other debts | 508 | 259 |
--------------------------------------------------------------------------------
| Total | 508 | 259 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 27. LIABILITIES TO ASSOCIATED COMPANIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current: | | |
--------------------------------------------------------------------------------
| Trade payables | 146 | 133 |
--------------------------------------------------------------------------------
| Total | 146 | 133 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 28. OTHER LIABILITIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current: | | |
--------------------------------------------------------------------------------
| Other loans / Commercial papers (international and | 221,671 | 172,649 |
| domestic) | | |
--------------------------------------------------------------------------------
| Value added tax | 3,169 | 4,324 |
--------------------------------------------------------------------------------
| Electricity tax | 559 | 389 |
--------------------------------------------------------------------------------
| Other debts | 537 | 541 |
--------------------------------------------------------------------------------
| Total | 225,934 | 177,903 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 29. ACCRUALS, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current: | | |
--------------------------------------------------------------------------------
| Interests and other financial items | 11,602 | 17,621 |
--------------------------------------------------------------------------------
| Salaries and additional personnel expenses | 4,028 | 4,120 |
--------------------------------------------------------------------------------
| Accruals of sales and purchases | 8,980 | 12,955 |
--------------------------------------------------------------------------------
| Total | 24,610 | 34,696 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 30. PROVISIONS FOR LIABILITIES AND CHARGES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Creosote-impregnated and CCA-impregnated wooden | 1,921 | 1,955 |
| towers, disposal expenses | | |
--------------------------------------------------------------------------------
| Total | 1,921 | 1,955 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 31. COMMITMENTS AND CONTINGENT LIABILITIES, 1,000 € | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Rental liabilities | | |
--------------------------------------------------------------------------------
| Liabilities for the next year | 1,793 | 2,012 |
--------------------------------------------------------------------------------
| Liabilities for subsequent years | 5,709 | 7,417 |
--------------------------------------------------------------------------------
| | 7,501 | 9,428 |
--------------------------------------------------------------------------------
| Pledges | | |
--------------------------------------------------------------------------------
| Pledge covering property lease agreements | 46 | 46 |
--------------------------------------------------------------------------------
| Pledged account in favour of the Customs Office | 150 | 154 |
--------------------------------------------------------------------------------
| Pledged account covering electricity exchange | 396 | 5,664 |
| purchases | | |
--------------------------------------------------------------------------------
| | 592 | 5,865 |
--------------------------------------------------------------------------------
| Other financial commitments | | |
--------------------------------------------------------------------------------
| Counterguarantee in favour of an associated company | 1,700 | 1,700 |
--------------------------------------------------------------------------------
| Credit facility commitment fee and commitment fee: | | |
--------------------------------------------------------------------------------
| Commitment fee for the next year | 158 | 158 |
--------------------------------------------------------------------------------
| Commitment fee for subsequent years | 255 | 409 |
--------------------------------------------------------------------------------
| | 2,113 | 2,268 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Donation of five-year professorship to Helsinki | 120 | 240 |
| University of Technology for 2006 - 2010 | | |
--------------------------------------------------------------------------------
32. LEGAL PROCEEDINGS AND PROCEEDINGS BY AUTHORITIES
There are no ongoing legal proceedings or proceedings by authorities that would
have a material impact on the business of the company. In relation to
transmission line projects there are several complaints made to different
instances of justice. According to the management of the company there are no
ongoing legal proceedings or other such legal proceedings relating to other
areas, which final outcome would have a material impact on the financial
position of the Group.
In December 2008 the Market Court reached a decision concerning Fingrid´s appeal
to the Energy Market Authority´s decision 13 December 2007 "Determination of the
methodology for the assessment of the return of the grid owners' grid operations
transmission services pricing for the review period starting on 1 January 2008
and ending on 31 December 2011". The Energy Market Authority has in turn
appealed the decision to the Supreme Administrative Court.
33. SEPARATION OF BUSINESSES IN ACCORDANCE WITH THE ELECTRICITY MARKET ACT
Balance power and regulating power
Each electricity market party must ensure
that its electricity balance is in balance by making an agreement with either
Fingrid or some other party. Fingrid buys and sells balance power in order to
balance the hourly power balance of an electricity market party (balance
provider). Balance power trade and pricing of balance power are based on a
balance service agreement with equal and public terms and conditions.
Fingrid is responsible for the continuous power balance in Finland by buying and
selling regulating power in Finland. The balance providers can participate in
the Nordic balancing power market by submitting bids of their available
capacity. The terms and conditions of participation in the regulating power
market and the pricing of balancing power are based on the balance service
agreement.
Management of balance operation
In accordance with a decision by the Energy
Market Authority, Fingrid Oyj shall separate the duties pertaining to national
power balance operation from the other businesses by virtue of Chapter 7 of the
Electricity Market Act.
The profit and loss account of the balance operation unit is separated by means
of cost accounting as follows:
Income direct
Separate costs direct
Production costs matching principle
Administrative costs matching principle
Depreciation matching principle in accordance with Fingrid Oyj's
depreciation principles
Finance income and costs on the basis of imputed debt
Income taxes based on result
The average number of personnel during 2009 was 14 (12). The operating profit
was -5.1 (6.5) per cent of turnover.
--------------------------------------------------------------------------------
| MANAGEMENT OF BALANCE OPERATION, | 1 Jan - 31 Dec | 1 Jan - 31 Dec |
| SEPARATED PROFIT AND LOSS ACCOUNT | 2009 | 2008 |
| | 1,000 € | 1,000 € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TURNOVER* | 97,122 | 110,609 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Materials and services* | -99,177 | -100,932 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Staff expenditure | -1,145 | -1,226 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Depreciation and amortisation expense | -908 | -486 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Other operating expenses | -829 | -779 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| OPERATING PROFIT | -4,936 | 7,186 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PROFIT BEFORE PROVISIONS AND TAXES | -4,936 | 7,186 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Provisions | 295 | 38 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Income taxes | | -1,878 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| PROFIT FOR THE FINANCIAL YEAR | -4,641 | 5,345 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *Turnover includes 4.2 (5.8) million euros of sales of balance power to |
| balance provider Fingrid Oyj, and Materials and services includes 3.7 (6.4) |
| million euros of its purchases. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MANAGEMENT OF BALANCE OPERATION, SEPARATED BALANCE SHEET | |
--------------------------------------------------------------------------------
| ASSETS | 31 Dec 2009 | 31 Dec 2008 |
| | 1,000 € | 1,000 € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Intangible assets | | |
--------------------------------------------------------------------------------
| Other non-current expenses | 680 | 394 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Tangible assets | | |
--------------------------------------------------------------------------------
| Machinery and equipment | 726 | 965 |
--------------------------------------------------------------------------------
| Advance payments and purchases in | 64 | 578 |
| progress | | |
--------------------------------------------------------------------------------
| | 791 | 1,543 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS | 1,471 | 1,937 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT ASSETS | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current receivables | | |
--------------------------------------------------------------------------------
| Trade receivables | 976 | 18 |
--------------------------------------------------------------------------------
| Receivables from Group companies | 12,113 | 16,954 |
--------------------------------------------------------------------------------
| | 13,090 | 16,972 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Cash in hand and bank receivables | 1 | 1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS | 13,091 | 16,973 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 14,562 | 18,910 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND LIABILITIES | 31 Dec 2009 | 31 Dec 2008 |
| | 1,000 € | 1,000 € |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY | | |
--------------------------------------------------------------------------------
| Share capital | 32 | 32 |
--------------------------------------------------------------------------------
| Share premium account | 286 | 286 |
--------------------------------------------------------------------------------
| Profit from previous financial years | 15,979 | 10,634 |
--------------------------------------------------------------------------------
| Profit for the financial year | -4,641 | 5,345 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL SHAREHOLDERS' EQUITY | 11,656 | 16,297 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ACCUMULATED PROVISIONS | -290 | 4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | |
--------------------------------------------------------------------------------
| Trade payables | 2,739 | 2,321 |
--------------------------------------------------------------------------------
| Other liabilities | 457 | 289 |
--------------------------------------------------------------------------------
| | 3,196 | 2,609 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 3,196 | 2,609 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| TOTAL SHAREHOLDERS' EQUITY AND | 14,562 | 18,910 |
| LIABILITIES | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transmission system operation
Transmission system operation is deemed to cover the entire business of Fingrid
Oyj, including system responsibility, which in turn includes balance operation.
Therefore, Fingrid Oyj's financial statements represent the financial statements
of transmission system operation.
--------------------------------------------------------------------------------
| 34. KEY INDICATORS OF TRANSMISSION SYSTEM OPERATION | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on investment (ROI) in transmission system | 3.2 | 6.2 |
| operation, % | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | profit before extraordinary items + interest and |
| | other finance costs + interest |
| | portions of leasing fees and rents of electricity |
| | grid |
--------------------------------------------------------------------------------
| Return on investment % | = ---------------------------------------- x 100 |
--------------------------------------------------------------------------------
| | balance sheet total - non-interest-bearing |
| | liabilities + leasing and rent liabilities |
| | related to electricity grid (average for the year) |
--------------------------------------------------------------------------------
35. EMISSION RIGHTS
Fingrid was granted emission rights totaling 126.3 thousand tonnes for the years
2008 - 2012, of which Olkiluoto power station was granted a share of 112.3
thousand tonnes. As a rule, the emission rights held by Fingrid at 31 December
correspond at least to the annual CO2 emissions.
--------------------------------------------------------------------------------
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| | tCO2 | tCO2 |
--------------------------------------------------------------------------------
| Emission rights received free of charge | 25.26 | 25.26 |
--------------------------------------------------------------------------------
| Emission volumes, Olkiluoto | 1 | 1 |
--------------------------------------------------------------------------------
| Emission volumes, other power plants total | 2 | 2 |
--------------------------------------------------------------------------------
| Sales of emission rights | 22 | 15 |
--------------------------------------------------------------------------------
3. Signatures for the annual review and for the financial statements
Helsinki, 12 February 2010
Arto Lepistö, Chairman
Timo Rajala, 1st Deputy Chairman
Timo Karttinen, 2nd Deputy Chairman
Ari Koponen
Ritva Nirkkonen
Anja Silvennoinen
Risto Autio
Jukka Ruusunen, President & CEO
Auditor's notation
The financial statements for the financial year 2009 have been prepared in
accordance with Generally Accepted Accounting Principles. A report on the audit
carried out has been submitted today.
Helsinki, 15 February 2010
PricewaterhouseCoopers Oy
Authorised Public Accountants
Juha Tuomala, Authorised Public Accountant
