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

OPERATING RISKS AND RISK MANAGEMENT

Risk management is part of Finavia’s internal control system. The Board of Directors has approved the Group’s risk management policy which specifies the vision, objectives, operational principles, responsibilities and reporting of risk management. Finavia takes business risks relating to the implementation of the strategy, which can be managed to an acceptable level or the effects were they to materialize are reasonable. Finavia was included until the end of 2005 in the State’s loss protection scheme in which the state is responsible for losses exceeding the own risk of the company concerned. Finavia’s liability for damages was limited by a Government decision (29 December 2005): to EUR 50 million in airport services and EUR 5 million per year in security inspection activities, separately for both. The state is responsible for losses exceeding these amounts.

Starting from 2006, with the exception of statutory insurances for personnel and motor vehicles, Finavia has acquired insurance from competitive markets. Finavia’s assets and activity have been insured in accordance with an insurance policy approved by the Board of Directors.

Finavia aims to further develop risk management as part of management. Safety functions and security functions play a significant role in Finavia’s risk management. The Board of Directors appointed an audit committee from among its midst to assist in managing the monitoring task that is the duty of the Board. Th e audit committee prepares, guides and assesses issues relating to risk management, internal monitoring systems, financial reporting organizations, audits and internal auditing in accordance with the rules of procedure. The audit committee met fourtimes during the year.

The internal auditing unit assists the audit committee by producing information through the auditing work on the functioning and adequacy of monitoring systems and risk management. The internal auditing unit observes in its operations the operating guidelines drawn up for it, which have been approved by the management and Board of Directors of Finavia. Th e internal auditing unit is also committed to observing international professional standards for internal auditing.

The most significant risks affecting Finavia’s finances and operations concern factors impacting on the development of international air traffic that include, for example, changes in the price of oil, possible international disturbances and the global development of the economy. There are also risk factors for the abovementioned reasons associated with the investments in the new terminal required by the strong growth in traffic to Asia, and they have been taken into consideration by phasing the additional construction and by preparing the terminal for alternative uses.