Board of directors' report

Board of directors' 2006 Finavia group organization The deveploment of Finavia's business environment in 2006 Finavia's service objectives Finavia's environmental work Profit deveploment Financial effects of the separation of the flight safety authority Finavia group profit 2006 Finavia income distribution Capital investments 2006 Financing 2006 Personnel Changes in administration Operating risks and risk management Group structure and changes in the group relationships during the financial year Material events after the financial year and prospects for 2007 Income statement Balance sheet Cash flow statement Signatures of the financial statements and annual report Auditors' report

FINANCING 2006

The Government authorized Finavia to take out a new long-term loan up to a maximum of EUR 40 million. In addition to this, Finavia was authorized to give personal securities without requiring countersecurity to a maximum of EUR 60 million as collateral on loans taken out by property companies connected to Finavia’s field of activity or its subsidiary companies providing airport and air navigation services.

Finavia did not take out any new long-term loans last year or give personal securities on behalf of loans taken out by its subsidiaries. Th ree companies belonging to the Group raised long-term capital totalling EUR 26.3 million without a personal security from Finavia.

The interest-bearing loans of Finavia and its subsidiaries totalled EUR 222.3 million at the end of the year, which included the instalments to be paid during 2007. Longterm interest-bearing loans totalled EUR 219.3 million at the end of the year and short-term interest-bearing loans EUR 3.0 million. A total of EUR 26.3 million was taken out in new loans and EUR 15.1 million was repaid on old loans. The amount of interest-bearing loans increased by EUR 10.8 million on the previous year.

Finavia’s interest-bearing loans at the end of the year stood at EUR 116.4 million, which includes the repayments for 2007. Finavia repaid its loan portfolio during the year to the sum of EUR 8.5 million.

The average rate of interest on Finavia’s interest-bearing loans was around 3.59 % at the end of the year. According to the Group’s interest rate risk policy, 25–100 % of the loan portfolio must be secured. Finavia’s hedging rate at the end of 2006 was 35 %. The impact of hedged agreements has been taken into account in calculating the average rate of interest of the loans. The short and long-term interest rate investments included in the balance sheet also reduce the Group’s open interest rate risk. Interest rate investments and derivatives together covered around three quarters of the Group’s interest rate risk.

Finavia’s financial position weakened slightly during the year. Operating cash flow before investments was EUR 59.7 million, which was EUR 5.2 million less than the previous year. Cash flow after investments stood at EUR 3.3 million. Capital gains of around EUR 2.0 million were entered against long-term securities investments held as liquid assets.

All financial investments have been valued in the financial statements in profit or loss at the lower of acquisition price or probable redemption price.