Notes to the Consolidated Financial Statement




 21. Provisions  

 

Changes in provisions during 2010:

€ 000

Restructuring provision

Unprofitable agreements

Total

1 Jan 2010

895

157

1,052

Increase in provisions

-

79

79

Provisions used

-895

-103

-998

Reversals of unused provisions

-

-

-

31 Dec 2010

0

133

133

 

Changes in provisions during 2009:

€ 000

Restructuring provision

Unprofitable agreements

Total

1 Jan 2009

0

432

432

Increase in provisions

895

157

1,052

Provisions used

-

-432

-432

Reversals of unused provisions

-

-

-

31 Dec 2009

895

157

1,052

 

Restructuring provision

 

The restructuring provision is associated with restructuring of entities in connection with acquisitions and the reorganisation of unprofitable business operations.

To improve its operating conditions, the company launched measures in 2009 for rationalising its site network in line with market requirements, and concentrating its expertise into fewer but larger units. In this way, customers' needs will be met more effectively. The measures encompassed the closure of the company's offices in Kuopio, Turku, Lahti and Vaasa, and the reduction of personnel in certain departments of the Pori unit. Due to these measures, the company made an operational restructuring provision of EUR 0.9 million in its financial statements for 2009. This provision was eliminated according to plan in 2010.

Unprofitable agreements

 

A loss provision is created for fixed-price projects if it becomes apparent that the completion of the project will require significantly more work input than has been estimated in connection with selling the project and can be invoiced from the customer on the basis of the agreement.

On the balance sheet date of 31 December 2010, there were six fixed-price projects for which loss provisions had been recorded on the basis of remaining work.