Smart way to smart products

Etteplan Oyj

Etteplan is a specialist in industrial equipment engineering and technical product information solutions and services. Our customers are global leaders in their fields and operate in areas like the automotive, aerospace and defence industries as well as the electricity generation and power transmission sectors, and material flow management.

Etteplan has comprehensive competence in electronics and embedded systems development, automation and electrical design, mechanical design and technical product information solutions and services.

Etteplan's strength lies in its highly skilled employees who, being located near to the customers, are able to develop close, long term business relationships. We implement solutions globally according to customer needs.

In 2010, Etteplan had turnover of EUR 104.8 million. The company currently has approximately 1,600 employees. Etteplan's shares are listed on NASDAQ OMX Helsinki Ltd under the ETT1V ticker. ■

product's lifecycle

Etteplan's engineering areas

SYSTEMS AND PRODUCTS

Plant Engineering

Electrical Power System

Smart way to smart products

Etteplan in 2010	4
Annual management review	6
CEO's review	8
Business review	10
Personnel	14
Responsibility	16
Information for the Shareholders	17
Investor information	18

FINANCIAL STATEMENTS 2010	19
Review by the Board of Directors January 1 - December 31, 2010	21
Consolidated Statement of Comprehensive Income	24
Consolidated Statement of Financial Position	25
Consolidated Statement of Cash Flows	26
Consolidated Statement of Changes in Equity	27
Notes to the Consolidated Financial Statements	28
Formulas for the Key Figures	52
Parent Company's Income Statement	53
Parent Company's Balance Sheet	53
Parent Company's Cash Flow Statement	54
Parent Company's Accounting Policies	54
Notes to Parent Company's Financial Statements	55
Shares and Shareholders	60
Board of Directors Dividend Proposal	62
Auditor's Report	62
Corporate Governance	63
Board of Directors	68

Management Group 69

Etteplan in 2010

• Demand for technical design services and product information recovered.
• Revenue increased and operating profit improved significantly.
• Adjustment measures enhanced the cost structure.
• Operating cash flow was positive, but at low level.
• Dividend proposal by Board of Directors is EUR 0.10 per share.

Key figures from continuing operations (EUR MILLION)

	2010	2009
Revenue	104.8	98.7
Operating profit	6.1	-3.6
Earnings per share, EUR	0.19	-0.17
Operating cash flow	1.5	2.1
Cash flow after investments	-0.6	0.1
Gross investments	2.5	4.8
Net gearing %	24.1	20.8
Personnel, average	1,594	1,765

Revenue and Operating profit 2006–2010 (EUR million)

97.6 125.2 134.2 98.7 104.8

6.7 10.8 13.8 -3.6 6.1

Earnings per share 2006–2010 (EUR)

Dividends 2006–2010 (EUR/share)

*) proposal by Board of Directors

Smart way to smart products

Vision

Strategy

values

Growth Strategy

Etteplan's clientele consists of global industrial companies that are leaders in their fields. Etteplan aims to offer competence of the whole company effectively to the use of the current and new customers. Etteplan seeks competitive advantage from its versatile cutting edge competence of engineering design areas, ability to manage engineering processes effectively and customer-oriented operational practice.

Strong clientele and new service solutions act as the sources of Etteplan Oyj's organic growth. In company acquisitions the aim, also in the future, is to concentrate on increasing competence capital and clientele. The company aims to improve its current strong market position and to ensure at least 10% average annual organic growth.

Annual management review

The 2010 results were fairly satisfactory in the prevailing economic conditions, where demand in spite of growth was low in comparison with the peak years. Thanks to operation adjustments and execution of strategic development projects carried out in 2009 and 2010, flexibility of our operations has improved and we are more capable than ever of supporting our customers with cost-efficient service solutions.

Demand and the factors driving it

The year 2010 was a time of recovery in demand for technical design services, which are a cyclical business whose growth is intensely dependent on developments in industry. The background for this sensitivity to economic fluctuations is the increase in flexibility of industrial companies' own operations with the help of service companies. In 2010, Etteplan continued to develop its global operating model in order to respond efficiently to the growing need for flexibility as changes in demand become larger and the cycles of changes grow shorter than before.

Even though there was fluctuation in the demand for design services in 2010 and the quantity of services was despite growth at a relatively low level, the factors steering demand have not changed. Technology transfer closer to the target market, requirements for improved costefficiency, increased intelligence and eco-efficiency in machinery and equipment, and an aging population are still trends that make machinery and equipment design a growing industry.

Strategy

We took a close look at our strategy and objectives in 2010. According to our conclusions, our earlier analysis of the trends in the marketplace and the economy has not changed. Our customers still expect us to introduce new solutions to optimize the life cycle of machinery and equipment and, at the same time, produce design services in a cost-efficient manner. Environmental load, recyclability, and producibility related to the use of machinery and equipment, along with management of the entire life cycle, are areas in which product development competence and cost-efficient services in design and technical product information are a necessity. Our conclusion indicates that mere renting of design capacity does not bring these benefits to our customers in full, although we will continue to lease out design capacity as part of the delivery model for our services.

A great many matters related to usability and life-cycle optimization are determined by the machinery and equipment's product development phase. Through thousands of product development projects, Etteplan has accumulated competence that we will continue to productize for our customers in accordance with our strategy this financial year.

We will continue to develop and productize operational services as a part of our customers' order-delivery process in order to achieve savings in our solutions where technical design and product information are concerned. Our objective is to increase the proportion of our revenue accounted for by productized operational services. In operational services, the customer gains cost benefits from our services, and provision of the service is an ongoing business for us. Our main strength in operational services is our knowledge of the customer's product lines and the ability to improve on the design processes.

Success in provision of operational services and delivery of product development projects requires us to make larger investments so that we can ensure sufficient project management capabilities. One indication of our growing investments is the new Project Office and Staffing -function that was established in early 2011.

In line with our vision, we want to be the number one partner for each customer. In the strategic area of "customer-focus," we took development steps by setting up a sales organization at the beginning of the year 2010 and by enhancing our sales process and customer management. We expect these investments to improve our market position further in 2011. Total sales to our 30 largest customers grew faster than our revenue in 2010.

Competitiveness and pricing

Pricing power based on unit prices alone is contracting in staffing business. The international deflationary cycle is evident in design work, too. Success in the current operating environment requires the ability to produce extensive service, independent of time and place, with lower overall prices than ever before. We have succeeded in 2010 by, e.g., providing our customers with 24/5 services in technical product information via utilization of our units in China.

A global operation model that includes an offshoring function is a key prerequisite for improved competitiveness. In the financial year, our customers benefited from offshoring activities not only via affordable prices but also through localization services and successful transfer of technology. We took significant development steps in 2010 by strengthening our units in China and increasing our ownership in them.

Flexibility

The strategic period has seen Etteplan focus on using its competence and design capacity more effectively. The recession in 2009 and the inconsistent recovery of demand in early 2010 were a challenge to efficient utilization of our design capacity. Our utilization rate was not yet sufficient, in spite of our adjustment and development measures. Increasing flexibility and efficiency in resourcing of our assignments with the help of our skilled personnel constitute a central area for development for us throughout the strategic period 2010–2012. We have purposefully transferred our designers to our own premises from our customers' sites whenever possible. This improves our flexibility.

An increase in demand for design services and our intensified sales improve the utilization rate of our design capacity. However, the risk is overheating of the cyclical design sector. Etteplan's goal is the resolute implementation of its strategy according to which the company focuses on provision of demanding design services in the Nordic countries and also increasing of the amount of basic design in the company's units in China. We experienced increasing competition for design resources particularly in Sweden in the latter half of the year. Such competition for resources may bring with it overheating and expensive excess capacity once demand evens out. We are working to avoid this trend. We can ensure flexibility in both our customers' business operations and our own through our offshoring activities. As we expand to countries with more affordable design services and technical product information and with growing markets, we are better able to sustain jobs in the Nordic countries as well.

We further streamlined our operating structure in early 2011. Our expertise and operational services have different delivery models and operating logic. However, services are provided with the same design personnel and by transcending organizational boundaries. This is why we have decided to combine the production of our design services into one entity. The new structure will create flexibility and answer better to the need for an improvement in invoicing rate.

Growth, profitability, and cash flow

In the 21st century, Etteplan has grown through not only organic growth but also outsourcing of industrial companies' design units and acquisitions. Etteplan's strong historic growth stopped due to the global economic recession in 2009–2010. In the course of 2010, almost all of Etteplan's customer industries recovered, but demand was still at a modest level compared to past. Etteplan is well positioned to respond to growth in demand for technical design and product information services, and we are able to increase our design capacity without a significant addition to our fixed costs.

Our targeted organic growth level is still an average of 10 percent per year. In view of the improved market situation and our stronger market position, that goal is realistic.

Etteplan improved its profitability in 2010. Our objective is to improve our profitability further, and, in the current market situation, we have a good opportunity to do just that.

Profitable organic growth, strengthening of the cash flow, and the ensuing improvement of the balance sheet structure are our goals in 2011. If these objectives are reached, the company's position in the consolidation trend of the industry will be enhanced considerably. ■

Etteplan participates in the development of Europe's rail traffic management system that aims to achieve a well functioning cross border train operation in Europe.

■ CEO' sreview

Etteplan's President and CEO Matti Hyytiäinen says that recovery of the world's economy manifested as improved demand in all of our key customer industries. Demand remained at a significantly lower level

Dear Shareholder,

As 2010 began, the lowest point in demand for design services had been passed. Demand recovered in almost all of our key customer industries in the course of 2010 but still remained far from the peak level of 2008. We predict that future changes in demand in the design industry will be larger than ever and take place more rapidly than before. Our mission is to be a versatile top expert in machinery and equipment design while simultaneously acting as a costefficient buffer for customers amid changes in the global economy and the ensuing variation in demand.

Key to success in this industry is to function as a partner that customers can trust as they contract for a growing number of services in technical design and product information such that our customers' own global delivery chain becomes more streamlined and efficient. In 2010, Etteplan invested in the development of its operations by, for example, making possible a global 24/5 service.

I am relatively satisfied with the result we achieved, which is a consequence of favorable development of clientele and of our operation adjustments begun in 2009. I am particularly pleased that a growing number of our customers utilized our China-offshoring operation model and used it to obtain cost savings in their business. In order to shoulder our social responsibility here in the Nordic countries by employing skilled engineers in demanding customer assignments, we must, alongside our customers, spread out to countries with more affordable production costs. The alteration in the behavior of our clientele and the availability of competent engineers in Europe explain why basic design is being transferred to countries with lower costs.

In 2010, we continued to implement our development programs in order to ensure our competitiveness. We have established a sales organization, proceeded with various ICT system projects, and consolidated our organizational structure to follow an ever more integrated model – these are recent investments that we will continue in year 2011.

Currently, machinery and equipment manufacturers have a positive outlook for the future, which enables improvement in the demand for design services. In 2011, however, the prevailing uncertainty in the global economy requires alertness, agility, and the ability to make quick decisions when necessary.

Our strategy states that our growth is based on company acquisitions and organic growth. In 2011, we will focus on organic growth for which we have a good opportunity due to the evolving needs of our clientele.

We will continue to invest in the development of our operation model, so that we can be the number one partner for each customer. Good partnerships have been and will remain a prerequisite for profitable growth and our foundation for creation of value for our shareholders. In our expert business, the implementation of partnerships is carried out through our competent personnel.

Matti Hyytiäinen

President and CEO

Expertise services – Smart products

Expertise services aim to improve competitiveness of customers' products by offering flexibly special technical competence that represents field's best development and experience.

Expertise services support the customer in demanding product development projects whose objectives are to increase the efficiency of the product innovation process, enhance the usability of machinery and equipment, and boost the cost-efficiency of manufacturing. The services cover both development of new products and design services related to the modernization of old products. In addition to expertise services in the area of machinery and equipment design, Etteplan provides industrial and technical infrastructure design services that include, for example, plant engineering services. Expertise services also include special competence requiring testing and analysis services by which Etteplan serves customers manufacturing trains, movable machines, motors and cars. These services are produced to increase energy efficiency and to improve emission management.

Service areas

• energy-efficient solutions for machinery and equipment
• testing and analysis services
• innovation and product development services for medical technology
• requirement specifications and calculation services for machinery and equipment
• product development services for the aerospace and defense equipment industry
• design of embedded systems
• services related to the design and development of industrial infrastructure

A year of improving profitability

Demand for Etteplan´s products and services began to grow again in 2010, after the recession. We adjusted our business operations to the weaker demand during the recession in 2009, and the objective for our business in 2010 was to focus on improving Etteplan's profitability and maintaining the company's strong market position.

During the financial year, Etteplan's business operations were divided into two service areas: expertise and operational services. This organization of the services was well received by the customers, and Etteplan continued the productization of the company's service products in accordance with this division for the rest of the period under review.

Etteplan's key customer industries include:

• Industrial machinery and components
• Medical technology
• Steel and forest industry
• Energy and power transmission
• Aerospace and defense equipment industry
• Transportation and automotive industry
• Cleantechnology

Consolidation of the design industry, which slowed down during the recession in 2009, picked up again in Sweden, with new and even larger companies emerged in the field as a result. In spite of this consolidation, the design sector is still fragmented and competition is often local. Etteplan remained the market leader in machinery and equipment design as well as technical product information in Finland and was among the five largest companies providing machinery and equipment design in Sweden.

Increased revenue and improved operating profit

Etteplan's revenue started to grow slightly in the second quarter, and growth continued in the second half of the year. Full-year revenue grew, to total EUR 104.8 million (1–12/2009: EUR 98.7 million). Demand for design services intensified quickly in keeping with the increasing order books of our customers'. The increased demand manifested itself as design assignments and revenue, matching the development of the order books and of sales by machinery and equipment manufacturer.

Our operating profit before financing items, taxes, and intangible asset items improved, and operating profit came to EUR 6.1 million (1–12/2009: EUR -3.6 million). The reason for the improved result was that the demand began to grow and the company had adapted its capacity and cost structure to the situation of reduced demand that had been evident since the peak year of 2008. The improvement in operating profit was also influenced by our market position which was strengthened during the recession in 2009.

Demand for expertise services grew

The operating environment

The market trend turned at the beginning of 2010. Demand for expertise services, which had deteriorated steadily throughout 2009, began to grow in early 2010 and improved throughout the year. However, demand at the end of the year was still significantly lower than in 2008. Improved order books of customers were manifested in Etteplan's operations as a rapidly growing number of requests for offers. In the field of expertise services, the customer industries developed inconsistently, but by the latter half of the year demand for design services in all customer industries had started to grow. The demand for expertise services was strongest in assignments related to improvements of eco-efficiency and infrastructure projects.

Etteplan's expertise services are provided for all Etteplan customers mainly from the units in Sweden. Sweden's economy and industrial companies showed more intense growth than Finland's, with the Swedish export industry having significantly more success in 2010 than the year before. The Swedish krona increased in value, but that did not weaken demand, because the overall competitiveness of a machine or equipment designed for export is more important than the rate of exchange. Etteplan provides versatile support for its expertise services customers by influencing, e.g., the overall profitability and eco-efficiency of its machines.

Business review

In early 2010, expertise services were made into a separate service portfolio. Etteplan participated in various product development projects with diversified design input during the period under review. In medical technology, Etteplan boosted its position by winning several new customers and assignments in the Stockholm region. Previously, the majority of Etteplan's medical technology customers had been located in Southern Sweden, Finland, and Denmark. Analysis and testing services related to improvements in energy-efficiency succeeded very well during the review period, since emission control is a key area of development for engine and vehicle manufacturers. The unit that provides analysis and testing services also took part in the execution of projects requiring top-notch air-conditioning systems in 2010. In the period under review, Etteplan strengthened its operating model and design capacity of embedded systems. The number of assignments in the energy and power transmission sector was at a good level, apart from wind energy projects, whose number and overall volume decreased significantly. The number of assignments in the aerospace and defense equipment industry was low in the beginning of year but grew toward the latter half of the year. The number of plant engineering design projects increased during the period under review, but the projects were smaller in size than in preceding years.

In December 2010, Etteplan established an innovation group around the latest developments in efficiency of accumulators, batteries, and energy use. The target customers include electric and hybrid vehicle and other automotive manufacturers and their subcontractors; accumulator, and battery manufacturers; and the entire machinery and equipment industry in general. The service concept covers, e.g., the following areas of competence: battery systems for electric and hybrid vehicles, high power batteries, modeling and simulation of batteries, failure analysis, factory audits, and fuel cells. This new competence can be utilized extensively in Etteplan's customer assignments in the course of 2011.

The most significant assignments of 2010 included delivery of a Data Acquisition System (SW and HW) to Parker Hannifin's test benches, development of a new air-conditioning system for Volvo's passenger cars, and design of an assembly line for Ericsson to Estonia. Etteplan participated in several factory design projects, with the clients including such companies as Nokian Tyres Plc, Andritz Oy and Metso Power Oy, Rautaruukki Raahe, Outokumpu Oyj and BDX Industri AB.

Focus 2011

Demand for expertise services continued to grow as 2011 arrived. Etteplan's objective is to grow organically and, at the same time, strengthen its market position in all of its service areas during 2011. Among the areas of growth are design services for medical technology and expertise services related to improvements in eco-efficiency. Other goals for 2011 include productization of expertise services, investments in organic growth, and an increase in the representation of offshoring operations in the service portfolios.

Expertise services have a good opportunity for organic growth in 2011.

New demand for operational services

The operating environment

For the most part, the trend in the demand for operational services followed that for expertise services during 2010. In operational services, the most significant areas of growth in demand involved equipment manufacturers for paper machines and mining industry. However, the demand for design and technical product information services in portfolio of operational services remained low in comparison with the peak year of 2008.

In an economic downturn, expertise and operational services have different cycles as customers

Operational services – Smart way

The aim of operational services is to increase efficiency of customers' technical design and product information as well as to release customer organisation's resources to its own core business. Services are based on Etteplan's long experience and customer references in developing and managing design processes. Operational services include productized design and technical product information outsourcing services, project deliveries and supply of design capacity.

The operational services combine a costefficient design process, design resources, and all of Etteplan's versatile competence in the various technical design areas and technical product information into one competitive service. In addition, technical design and product information's operational services produced in Etteplan's units in China provide our customers significant flexibility in operations and cost effective way of operating. Technical design and product information services are produced from units in China to our customers to Europe. Etteplan also efficiently supports its customers that are transferring their operations to Asia in technology transfer with versatile technical design and product information solutions and localization services.

Service products

• Etteplan LEAN The smart way to manage and develop order-to-delivery process.
• Etteplan EASY The smart way to manage and deliver routine engineering tasks.
• Etteplan INFO The smart way to create, manage and deliver technical product documentation.
• Etteplan CORE The smart way to reduce product costs.
• Etteplan CSC The easy way to access the China Supply Chain.

often continue with their product development projects (expertise services) regardless of declining order books. In spite of the small difference in the stages involved, the business trends in expertise and operational services follow the development of the order books and revenue of our customers.

Business review

Operational services continued to benefit from consolidation decisions made to Etteplan by customers regarding technical design and product information services in 2010. This trend was especially visible in Finland, where Etteplan is the market leader. The company provides operational services to its customers from all countries where Etteplan operates. In Finland, machinery and equipment manufacturers showed increasing interest in operational service packages in which selected phases of the order-delivery process are outsourced. In Sweden, the staffing service applies a traditional method of operation that still dominates biggest part of the operations in design industry.

The development of operational services over the course of the financial year was based on Etteplan's long and well-established customer relationships – with, among others, ABB Oy, Konecranes Plc, Metso's various units, KONE Oyj, and Outotec Oyj.

The trend in operational services was positive among small and medium-sized enterprises (SME). Etteplan has several significant customer relationships with medium-sized companies that were strengthened as these companies expanded their international business operations. Etteplan is capable of providing versatile support for its customers, thanks to the company's offshoring operations, localization services, and services that support technology transfer. This was evident in the growing number of assignments in the SME-sector. Examples of important customers included The Switch and Normet Oy.

At the beginning of 2010, a sales organization that includes Etteplan's new product managers was established as a part of the operational services. Product sales started well, and the company received several new service-product pilot projects. In its operational services, the company invested in the development of sales through training programs as well as in process and information system developments.

Focus 2011

Demand for operational services continued to grow in early 2011. Areas of growth include, e.g., equipment manufacturers for forest industry and mining industry as well as manufacturers of movable working machines.

Etteplan will continue its productization and investments in product sales in 2011. The objective is to increase the share of product sales in total revenue.

Operational services have good opportunities to grow organically in 2011.

New partnerships were concluded during the period under review

Sjöland & Thyselius (S&T)

As far as expertise services offered to the aerospace and defense equipment industry are concerned, operations involving expertise services were enhanced through the signing of a cooperation agreement with Sjöland & Thyselius Holding AB. With this cooperation agreement, concluded in the summer of 2010, the companies jointly focused on, during the period under review, high technology product development services for machine and equipment manufacturers developing renewable energy sources, aviation, space and defense equipment industries as well as car and train manufacturing companies.

Cooperation offers customers a combination where versatile expertise of different engineering areas and S&T's STARCS wind tunnel offering of measuring, calculation and testing services, are combined. Examples of potential design subjects include optimization of air intakes in airplane engines, design of wind turbines in wind power plants, and aerodynamic design of trains. The collaboration took off well in 2010, and one example of it was projects executed for the Defense Materiel Administration (FMV) in Sweden.

Intertek

In 2010, Etteplan signed cooperation agreements with the Finnish and Chinese units of Intertek Inc. The aim of the cooperation is to provide a service portfolio that supports customers' operations on new markets effectively.

Global machine and equipment manufacturers broaden their operations by entering new markets with new product launches and production transfers closer to new markets. New market entries require design of products and production and equipment manufacturing according to country's authority regulations and standards. Design needs to be based on up-to-date and accurate information of authority regulations and standards that often change quickly. Intertek can provide this information to Etteplan's customer projects enabling high quality and time saving in technical design work and product information management.

The first joint projects were started in the end of the year.

Offshoring

Etteplan continued to pursue activities according to its strategy in order to strengthen the global delivery process. The company increased its ownership of Etteplan Vataple Technology Centre, Ltd. in China to 70 percent in the beginning of July. Our operations are based on high-quality design services close to the customer, combined with cost-efficient use of Etteplan's units in China.

Etteplan's offshoring service is part of the operational services range. Customers' interest in Etteplan's offshoring services increased during the period under review, and the number of offshoring clients was approximately 60 during the period.

The business environment of our customers continued to change rapidly. Increasing competition and shifting of the focus of demand to Asia in many sectors have led, at an accelerating rate, to more decisions by our customers to renew their production structures and operating methods. At the same time, our customers concentrated even more intensely than before on their core business. To this transition in the operating environment Etteplan brought new service solutions. Operational and expertise services in technical design and product information offered our customers significant flexibility in operations and cost-efficient methods of operation. During the review period, we also provided localization services, related to transfer of production, to customers that already have production in place in Asian markets or that have decided to transfer part of their production to that region. We received good feedback from many customers concerning our global delivery model as our collaboration expanded to encompass ever more comprehensive solutions in technical design and product information.

As its newest service solution, Etteplan offers its customers a new service launched late in 2010. Called Etteplan CSC, it combines the design and procurement of materials and components from China into a single solution. The service is aimed especially at companies in the SME-sector that find it challenging to combine subcontractor relationships in China with high-quality design and localization services. At the end of 2010, Etteplan executed the first project comprising this new service product.

Enterprise Solutions

Enterprise Solutions unit was established during the year to support Etteplan's selected global key customers. The unit's objective is to improve the competitiveness of its customers' business by providing, in the areas of technical design and product information, comprehensive expertise and operational service solutions that can be adapted to the international business environment. By setting up this new unit, we continued our investments in supporting our customers' global business.

The unit achieved results, e.g., by expanding our customer relationships to cover the offshoring service, concluding new framework agreements, and extending the contents of old ones.

Outlook for 2011

Current market outlook of machinery and equipment manufacturers is positive. The development of Etteplan's customers' order books influences quickly the development of Etteplan's revenue.

We expect the revenue and operating profit for the year 2011 to grow compared to year 2010.

Potential acquisitions in 2011 are not included in the estimate.

During the decades Etteplan has accumulated customers' trust and significant expertise in different areas of machinery and equipment design.

Etteplan's success is based on competent experts

In the course of 2010, Etteplan's personnel were heavily influenced by developments in the external operating environment. In the beginning of the year, there were approximately 200 temporary layoffs still in effect in Finland, and in Sweden the remainder of the personnel reductions decided upon during 2009 were executed. Management of personnel changes is a demanding task in a cyclical service business, and, as far as the scope is concerned, it was a significant undertaking at Etteplan during the 2010 financial year. Maintenance of competent personnel forms the key success factor of business operations that are based on expertise.

Operating environment

In 2010, turnover of personnel in the entire company was at a moderate level, but there was great variation from one country to the next. In Finland, personnel turnover remained low, but in Sweden it grew as expected while the market was recovering and companies in the design industry were engaged in highly visible recruitment campaigns. Sweden has stricter labor legislation than Finland, which has prompted design industry companies to seek flexibility in their operations through, e.g., increased internal subcontracting. At the same time, collaboration between staffing agencies and design companies in the sector has increased. Etteplan focused on recruiting competent personnel by offering permanent jobs. Simultaneously, the company also aimed to move basic design and technical product information work to its units in China. By means of this arrangement, we aimed to control the cost effects of the rigid Swedish labor market in our labor-intensive business. At the same time, we gave our employees opportunity for permanent employment.

Etteplan implemented a successful recruitment campaign in Sweden, and the lack of competent designers that emerged in the middle of the year was corrected in the fall. In Finland, Etteplan is recognized as the market leader. This is why we receive multitude of job applications.

In China, Etteplan recruits and trains young engineers who are graduating from universities. The European-style additional technical training and the English-language work environment offered by Etteplan are significant benefits that have made the company into a competitive employer. Etteplan has good recruitment channels in China, and the company is able to recruit and train whole design teams at a time.

Since there were a large number of employees laid off in Finland at the beginning of the year, a survey of well-being at work was conducted in Finland in 2010 and measures were initiated to improve the situation of people in risk groups. The follow-up study of risk groups, completed in early 2011, indicated that well-being at work had already improved somewhat in the groups at risk. Actions to enhance well-being at work will continue in 2011. Sickness-related absences remained at a low level throughout the company in 2010.

Development of the organizational structure

The company's management structure and operating procedures were specified during 2010. They were supported by the change in organization, implemented at the start of the year, and the ensuing new management appointments during the rest of 2010. Changing the organizational structure was a gradual move toward a new, integrated method of operation. In early 2011, the company announced the next step in support of the implementation of its strategy, aimed at ever

Etteplan carried out a successful recruitment campaign in Sweden in fall 2010.

closer integration of the operations. In 2010, Etteplan's design services were divided into two service portfolios – expertise services and operational services. This division by type of services was well received by the customers, and design services were productized in accordance with this categorization in 2010. The service division remains unchanged. As services were provided by utilizing the competence and expertise of the whole company despite the division of services, Etteplan Engineering and Etteplan Technology -divisions were combined to one entity, Etteplan Operations. The objective behind this combination is ever better cooperation that transcends the current boundaries between the various units and countries.

Development projects

Etteplan continued to implement its strategy throughout the organization through electronic learning in the first half of the year. E-learning modules and an electronic discussion forum addressing the themes of the strategy were published in support of the strategy work. The financial year also saw Etteplan begin extensive sales training for managers and superiors.

Etteplan published a new, common intranet for the entire Group in the spring of 2010. This new intranet, shared by all, replaced the previous, country-specific intranets. The goal with the new intranet is to communicate matters concerning the whole Group to the personnel ever more efficiently and to support the execution of its strategy by means of a common business platform for the entire company.

In a decentralized operating environment, the development of electronic systems is a key to the success of the company's business operations. In the course of the financial year, Etteplan continued to add its employees, one country at a time, to the Group's common personnel information system, implement the electronic competence-management system, and train both supervisors and their subordinates. The company also introduced a common resource management system.

Follow-up of the number of development discussions continued. The figure began to decline slightly and stood at nearly 80 percent.

personnel structure

At the end of the period under review, the company employed, in total, 1,569 persons, 608 of them abroad. Sweden accounted for 474 of all personnel and China for 134. The various age groups are represented in a balanced way in the age distribution of the personnel. ■

) continuing operations 2006 2007 2008 2009* 2010* 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 1,389 1,570 1,763 1,765 1,594

average number of personnel age distribution, december 31, 2010

Etteplan wants to be a competitive employer in all countries where it operates.

Responsibility

Environmental responsibility

Etteplan aims at promoting sustainable development and corporate responsibility diversely with its operations. Etteplan produces sustainable solutions for its customers, and taking into consideration the sustainable development and environmental effects is a natural part of Etteplan's operations. Decreasing the environmental load, ensuring the recyclability, efficiency of producibility and management of whole life cycle in matters related to the use of customers' machines and equipments are areas where Etteplan's technical design solutions affect our environment globally. By developing and designing more energy efficient products for its customers, Etteplan promotes its customers' possibilities to sustainable way of operating.

Increase in the eco-efficiency is one of the key factors guiding operations in machinery and equipment design. Etteplan is constantly developing its operating models and services and aims to integrate sustainable development and environmental considerations in them. Etteplan has a number of services focused on sustainability and environment technology. These include services focused on renewable energy supply, energy efficiency, emission control and waste processing among others. Etteplan's electrical technical product information's distribution channels enable quick and safe information transmission without burdening the environment with printing, copying and transportation of documents.

Certified management systems, ISO 9001 and ISO 14001 form the basis of implementation and management of sustainability principles.

Social responsibility

Etteplan is a significant Finnish employer that has grown over approximately 27 years from a small engineering company to an international company employing ca. 1,600 engineers. Information regarding personnel structure, development of personnel and work well-being can be found on pages 14 and 15 of annual report.

In customer work Etteplan emphasizes professional way of working, genuine partnership as well as secrecy of customers' confidential information and high level of data protection.

Financial responsibility

In Etteplan financial responsibility means profitable business. With profitable business the company can improve customers' business operations, increase the value of the investment by a shareholder and offer permanent jobs for its personnel. In 2010 Etteplan achieved its important financial goals to improve operating profit and at the same time sustain a positive cash flow. One of the main reasons for the improved operating profit was the fixed costs' saving program that commenced in 2009 and was continued in 2010.

Information for shareholders

General meeting of shareholders

The Etteplan Oyj Annual General Meeting will be held on March 31, 2011, starting at 1 p.m. at premises of the Company in Vantaa at the address of Ensimmäinen Savu, 01510 Vantaa.

Invitation to the General Meeting of Shareholders shall be published according to Etteplan Oyj's Articles of Association in the company´s website at www.etteplan.com.

Right to attend

Every shareholder who by March 21, 2011, has been registered as a shareholder in the list of shareholders kept by Euroclear Finland Ltd has the right to participate in the Annual General Meeting.

Notification of attendees

To be able to participate in the Annual General Meeting, the shareholder must register for this no later than 4 p.m. on March 25, 2011, via either registration(at)etteplan.com or +358 10 307 2006. The shareholder may also send written registration, to the address Etteplan Oyj, Yhtiökokous, Terveystie 18, 15860 Hollola, Finland. The letter must arrive before the registration deadline.

To vote by proxy at the meeting, the shareholder must deliver a proxy form to the company before the registration deadline.

Payment of dividend

The Board will propose to the Annual General Meeting that a dividend of EUR 0.10 per share be paid for the 2010 fiscal year. If the Annual General Meeting approves the Board's proposal on the payment of dividends, a dividend will be paid to each shareholder who on the balance date of April 5, 2011, is registered in the list of shareholders maintained by Euroclear Finland Ltd. The dividend payment date proposed by the Board is April 12, 2011.

Shareholder register information

Shareholders should notify the particular register holding their Book Entry Account about changes in address or account numbers for payment of dividends and other matters related to their holdings in the share.

Financial information 2011

Etteplan Oyj publishes financial reports and releases in Finnish and English. Financial reports and releases will be made available for viewing and printing at www.etteplan.com immediately after publication.

Annual report is available in electronic format in Finnish and in English. The annual report is published on company's web pages at www. etteplan.com. A printed annual report can be ordered from Group Communications, tel. +35810 307 3423 or by e-mail from CorpComm(at) etteplan.com.

Interim reports 2011

Etteplan Oyj will publish three interim reports in 2011, as follows:

Interim report for 1–3/2011 on May 5, 2011 Interim report for 1–6/2011 on August 11, 2011 Interim report for 1–9/2011 on November 7, 2011

Investor information

Etteplan as an invest

Etteplan has comprehensive competence in electronics and embedded systems development, automation and electrical design, mechanical design and technical product information solutions and services.

Etteplan's shares are listed in NASDAQ OMX Helsinki's Small cap market capitalization group in the Industrials sector under the ETT1V ticker. The total number of shares was 20,179,414 on December 31, 2010.

Etteplan's Investor Relations policy

The ultimate objective of Etteplan's Investor Relations is to produce accurate, sufficient and up-to-date information about the development of Etteplan's strategy, business operations, markets and financial position to ensure that the capital markets have relevant information about the company and its shares in order to determine the fair value of Etteplan's shares. To reach this objective Etteplan annually publishes three interim reports, a financial statement release, an annual report and stock exchange releases. The web pages serve as an archive for all current and historical data about factors affecting the value of Etteplan's shares.

Publication of financial information

Prospects

Information on Etteplan's prospects and result forecast is published in the financial statement release for the financial year (and repeated also in the annual report) and in the interim reports. The prospects are approved by the Board of Directors. Etteplan does not publish quarterly result forecasts.

Market estimates

The company will review, upon request by an analyst, his or her earnings model or report only for factual accuracy or information that is in the public domain. Etteplan does not comment or take any responsibility for estimates or forecasts published by capital market representatives.

Silent period

Etteplan observes a two-week silent period preceding the publication of its results. During this time the company's representatives do not meet with investors or analysts, or comment on the company's financial position.

Investor Relations contact

President and CEO Matti Hyytiäinen, Chief Financial Officer Per-Anders Gådin and Vice President, HR and Communications Outi-Maria Liedes are responsible for Etteplan's investor relations.

Meeting requests with the top management can be addressed to Executive Assistant Katariina Martikainen, tel. +358 10 307 2006 or katariina.martikainen(at)etteplan.com.

Analysts following Etteplan

Swedbank AB

Petri Karhunkoski P.O. Box 1107 (Mannerheimintie 14 B) FI-00101 Helsinki, Finland Tel. +358 20 746 9158

Evli Bank Plc

Antti Kansanen P.O. Box 1081 (Aleksanterinkatu 19 A) FI-00101 Helsinki, Finland Tel. +358 9 4766 9149

Nordea Bank Plc

Pasi Väisänen Aleksis Kiven katu 9, Helsinki FI-00020 Nordea, Finland Tel. +358 9 1655 9943

Pohjola Bank Plc

Henri Parkkinen P.O. Box 308 (Teollisuuskatu 1b) FI-00101 Helsinki, Finland Tel. +358 10 252 4409

FINANCIAL STATEMENTS 2010	19
Review by the Board of Directors January 1 - December 31, 2010	21
Consolidated Statement of Comprehensive Income	24
Consolidated Statement of Financial Position	25
Consolidated Statement of Cash Flows	26
Consolidated Statement of Changes in Equity	27
Notes to the Consolidated Financial Statements	28
Company profile & Accounting Policy Applied	28
Management of Financial Risks	32
Discontinuing Operations	36
Business Combinations	37
Notes to the Consolidated Income Statement	38
Notes to the Consolidated Balance Sheet	41
Other Notes	49
Key Figures	51
Formulas for the Key Figures	52
Parent Company's Income Statement	53
Parent Company's Balance Sheet	53
Parent Company's Cash Flow Statement	54
Parent Company's Accounting Policies	54
Notes to the Income Statement, Parent Company	55
Notes to the Balance Sheet, Parent Company	56
Shares and Shareholders	60
Board of Directors Dividend Proposal	62
Auditor's Report	62

Review by the Board of Directors January 1 – December 31, 2010

Business operations

Demand for design services turned to an increase in the beginning of year 2010. The growth was uneven in Etteplan's different customer industries in the beginning of the year. During the second half of the year the demand for design services developed evenly and grew in all central customer industries. The strongest improvement in demand was among equipment manufacturers in forest and mining industries. In spite the growth in demand for design services, the demand was still at a low level compared to peak year 2008.

The utilization rate of company's design capacity was on a satisfactory level during the year. During 2009, Etteplan adjusted its operations to correspond with the decreased demand situation. The adjustment measures improved company's operations' cost efficiency in year 2010. In the end of 2010 company had unused design capacity that enables organic growth in 2011 without a significant increase in fixed costs.

The amount of personnel reductions implemented as temporary layoffs in Finland decreased from 200 employees in the beginning of the year to fewer than 50 employees during the review period. In Sweden recruitment commenced in the second half of the year. The slow availability of manpower restricted the organic growth in Sweden in the second half of the year.

Etteplan increased its ownership in Etteplan Vataple Technology Centre, Ltd. (EVTC), located in Kunshan, China, from 40 percent to 70 percent on July 1, 2010. Etteplan's China offshoring service's position became an established part of Etteplan's services in 2010. Technical design and product information services were produced from China to almost 60 customers during the year.

Company renewed its legal structure in Finland during 2010. The business operations were concentrated to Etteplan Design Center Oy in Finland. Group administration units continue their operations in the parent company Etteplan Oyj.

Revenue

In 2010, Etteplan's revenue for continuing operations amounted to EUR 104.8 million (1-12/2009: EUR 98.7 million). The improvement in revenue was due to the strengthened demand situation and Etteplan's good market position.

Result

Operating profit for continuing operations was EUR 6.1 million (1-12/2009: EUR -3.6 million). The improved demand situation for design services, adjustment of business operations as well as saving measures influenced the improved operating profit.

Profit for continuing operations before taxes for the financial year was EUR 5.8 million (1-12/2009: EUR -4.3 million). Taxes amounted to EUR 1.4 million (EUR -1.0 million). The income tax rate calculated on profit before taxes in the consolidated income statement was 24.6% (23.5%).

The profit for continuing operations for the financial year was EUR 4.3 million (1-12/2009: EUR -3.3 million). Earnings per share were EUR 0.19 (EUR -0.17). Equity per share was EUR 1.48 (EUR 1.20). Return on investment was 17.0% (-8.6%).

Profit for the financial period for discontinuing operations was EUR 0.1 million (EUR 1-12/2009: EUR -11.1 million).

Result for the review period was EUR 4.4 million (1-12/2009: EUR -14.4 million).

Financial position and operating cash flow

Total assets on December 31, 2010, were EUR 67.7 million (December 31, 2009: EUR 61.7 million). Goodwill on the balance sheet was EUR 36.0 million (December 31, 2009: EUR 31.2 million). The increase in goodwill was due to changes in currency rates and the increased ownership in EVTC. The Group's cash and cash equivalents stood at EUR 5.0 million (December 31, 2009: EUR 6.7 million). The Group's financial liabilities amounted to EUR 12.1 million (December 31, 2009: EUR 11.6 million) at period end. The equity ratio was 43.6% (December 31, 2009: 38.5%). Operating cash flow was EUR 1.5 million (1-12/2009: EUR 2.1 million). The cash flow after investments was EUR -0.6 million (1-12/2009: EUR 0.1 million).

Capital expenditure

The Group's gross investments in the period under review were EUR 2.5 million (1-12/2009: EUR 4.8 million).

Personnel

The number of the Group's personnel averaged 1,594 (1-12/2009: 1,765) during the review period and was 1,569 (December 31, 2009: 1,544) at end of the year. Outside Finland, the Group employed 608 people (December 31, 2009: 571) at period end.

Incentive plan for key personnel

The Etteplan Oyj Board of Directors decided on a share-based incentive plan for key personnel in March 2008. The plan includes three earnings periods: calendar years 2008, 2009 and 2010. The plan had a target group of 37 people in 2008, 39 people in 2009 and 33 people in 2010.

The Board of Directors of Etteplan Oyj has in its meeting, on February 11, 2009, made a resolution, pursuant to the authorization granted to it by the Annual General Meeting of Shareholders' held March 28, 2008, upon disposal of 41,177 company-held shares as the remuneration for the 2008 earnings period for 36 employees who were part of share-based incentive plan in 2008.

The Board of Directors of Etteplan Oyj has in its meeting, on February 10, 2010, made a resolution that there will be no disposal of company-held shares for the 2009 earnings period.

The Board of Directors of Etteplan Oyj has in its meeting, on February 14, 2011, made a resolution, that there will be no disposal of company-held shares for the 2010 earnings period.

Estimate of operating risks and uncertainty factors

Etteplan's financial results are exposed to number of strategic, operational and financial risks. A description of risks can be found in Etteplan's annual report 2010 on page 66. A detailed financial risk analysis can be found in Etteplan's annual report 2010 on page 32.

External risks

During the period under review, economic development on the whole and unpredictable changes in customers' business operations continued to be a risk.

Internal risks

Etteplan does not foresee changes in its internal risk position compared to previously stated.

Annual General Meeting

The Annual General Meeting of Shareholders of Etteplan Oyj was held on March 24, 2010 at premises of the Company in Vantaa. In accordance with the proposal of the Board of Directors´ Nomination and Compensation Committee Tapio Hakakari, Heikki Hornborg, Robert Ingman and Pertti Nupponen were re-elected as members of the Board of Directors as well as Satu Rautavalta and Teuvo Rintamäki were elected as new members of the Board of Directors.

The Annual General Meeting approved the Financial Statements for financial year 2009 and discharged members of the Board of Directors and the CEO from liability.

The auditor elected was PricewaterhouseCoopers Oy, Authorized Public Accounting Firm with Authorized Public Accountant Mr Mika Kaarisalo as the main responsible auditor. The fees for the auditor are paid according to invoice by the principles approved by the Board of Directors.

The Annual General Meeting authorized the Board of Directors to decide to issue maximum of 4,000,000 shares through issuance of shares, option rights or other special rights entitling to shares under Chapter 10, Section 1 of the Companies Act in one or more issues. The authorization includes a right to issue new shares or assign company's own shares held by the company.

The authorization is effective for a period of five (5) years from the resolution of the Annual General Meeting, i.e. from March 24, 2010 to March 24, 2015. The authorization replaced the previous authorization. The Board of Directors did not use the authorization in 2010.

The Annual General Meeting resolved, in accordance with proposal of the Board of Directors, to grant the Board the authority to acquire the company's own shares in one or more lots using the company's unrestricted equity. A maximum of 2,000,000 of the company's own shares can be acquired. The Board of Directors shall have the right to decide who the shares are acquired from or, the Board of Directors has the right to decide on a directed acquisition of own shares.

The authorization is valid for 18 months from the date of the decision of the Annual General Meeting starting on March 24, 2010 and ending on September 24, 2011. The authorization replaced the previous authorization. The Board of Directors did not use the authorization in 2010.

The Annual General Meeting adopted a resolution to amend the articles of association's paragraph 9 as follows:

"9 § Invitation to the General Meeting of Shareholders

Invitation to the General Meeting of Shareholders shall be published in the company's website no earlier than two (2) calendar months and no later than three (3) weeks prior to the meeting, but no later than nine (9) days before the record date of the General Meeting. The Board of Directors may also decide to publish the invitation to the General Meeting of Shareholders in a one Finnish national newspaper determined by the Board of Directors."

Dividend

The Annual General Meeting passed a resolution, in accordance with the proposal of the Board of Directors, that a dividend of EUR 0.04 per share be paid from the financial year 2009. The remaining funds shall be left to the unrestricted equity. The dividend was paid to the shareholders registered in the shareholders' register maintained by Euroclear Finland Ltd as the record date. The record date of the payment of dividend was March 29, 2010. The dividend was paid on April 7, 2010.

Shares, share price development and share buy-back

The Etteplan Oyj share (ETT1V) is quoted in the Nordic NASDAQ OMX's Small Cap market capitalization group in the "Industrials" sector.

The company's share capital on December 31, 2010, was EUR 5,000,000.00, and the number of shares outstanding was 20,179,414. There were no changes in the share capital during the period under review. The company has one series of shares. All shares confer an equal right to dividends and the company's funds.

The number of Etteplan Oyj shares traded during the financial year was 2,466,130 to a total value of EUR 7.1 million. The share price low was EUR 2.40, the high EUR 3.30, the average EUR 2.86, and the closing price EUR 2.74. Market capitalization on December 31, 2010 was EUR 54.0 million, and there were 1,873 shareholders.

The company held 471,302 of its own shares on December 31, 2010. In January-December 2010, the company did not acquire its own shares, but 2,004 shares were returned from the share-based incentive plan during the report period. The company has not disposed company-held shares in January-December 2010.

Major events after the review period

Etteplan's operational structure was streamlined to correspond even better with the opportunities offered by operating environment. The business was organized, as of February 1, 2011, in a way that production of design services was combined into one entity, Etteplan Operations.

Etteplan's design services continue to include two service portfolios: expertise services and operational services. Expertise services aim to improve competitiveness of customers' products by offering flexibly special technical competence that represents field's best development and experience. The aim of operational services is to increase efficiency of customers' technical design and product information as well as to release customer organization's resources to its own core business. The service portfolios received good reception from customers and Etteplan continues to offer and productize services according to this service division.

As of February 1, 2011 Etteplan Oyj's Management Group consists of Matti Hyytiäinen, President and CEO; Niclas Gräns, Vice President, Partner Network; Per-Anders Gådin, CFO; Peter Jahn, Vice President, Etteplan Enterprise Solutions; Outi-Maria Liedes, Vice President, HR & Communications and Juha Näkki, Vice President, Etteplan Operations.

An agreement has been made with Pia Björk, Vice President, Operations Development that her employment in the company ended as the operations of Operations Development -unit ended on January 31, 2011.

Outlook

Current market outlook of machinery and equipment manufacturers is positive. The development of Etteplan's customers' order books influences quickly the development of Etteplan's revenue.

We expect the revenue and operating profit for the year 2011 to grow compared to year 2010.

Potential acquisitions in 2011 are not included in the estimate.

Board's proposal for distribution of 2010 profits

The parent company's distributable shareholders' equity according to the balance sheet on December 31, 2010, is EUR 10,928,531.54.

The Board of Directors will propose to the Annual General Meeting, which will convene on March 31, 2011, that on the dividend payout date a dividend of EUR 0.10 per share be paid on the company's externally owned shares, to a total amount of EUR 2,017,941.40 at most, and that the remaining profit be transferred to retained earnings. It is the Board's opinion that the proposed distribution of dividends will not endanger the company's solvency. In accordance with the Board's proposal, the record date for the dividend payout is April 5, 2011 and the date of dividend payout is April 12, 2011.

Annual General Meeting in 2011

Etteplan Oyj's 2011 Annual General Meeting will be held in Vantaa, Finland, on March 31, 2011, starting at 1 p.m. Summons to the AGM will be published as a separate release.

Etteplan Oyj Board of Directors

Consolidated Statement of Comprehensive Income

EUR 1 000	Note	1.1.–31.12.2010	1.1.–31.12.2009
Continuing operations
Revenue	6	104 786	98 700
Other operating income	8	1 161	392
Materials and services	9	-9 847	-8 077
Staff costs	10	-73 368	-75 851
Other operating expenses		-15 185	-17 155
Depreciation and amortization	17,18	-1 494	-1 596
Operating profit/loss		6 054	5,8 % -3 587	-3,6 %
Financial income	12	761	341
Financial expenses	13	-758	-925
Share of the result of associates		-291	-134
Profit before taxes		5 766	-4 304
Income taxes	15	-1 420	1 017
Profit/loss for the financial year continuing operations		4 347	-3 287
Discontinuing operations
Profit/loss for the financial year, discontinuing operations	3	102	-11 067
Result for the financial year		4 448	-14 354

Other compre hensive income
Currency translation differences		2 620	1 245
Fair value adjustment available-for-sale assets		139	0
Other comprehensive income for the year, net of tax		2 759	1 245
Total comprehensive income for the year		7 208	-13 109
Profit /loss attributable to
Equity holders of the company		4 422	-14 403
Non-controlling interest		27	49
		4 448	-14 354
Total compre hensive income attributable to
Equity holders of the company		7 159	-13 164
Non-controlling interest		49	55
		7 208	-13 109
Earnings per share calculated from the result of parent	company share	holders

Continuing operations
Basic earnings per share, EUR	16	0,19	-0,17
Diluted earnings per share, EUR	16	0,19	-0,17
Discontinuing operations
Basic earnings per share, EUR	16	0,01	-0,56
Diluted earnings per share, EUR	16	0,01	-0,56

Consolidated Statement of Financial Position

EUR 1 000	Note	31.12.2010	31.12.2009
ASSETS
Non-current assets
Tangible assets	17	1 625	1 458
Goodwill	19	36 028	31 184
Other intangible assets	18	967	1 042
Shares in associated companies	20	18	0
Investments available-for-sale	21	620	691
Other long-term receivables		4	3
Deferred tax assets	32	476	950
Non-current assets, total		39 738	35 329
Current assets
Trade and other receivables	23	22 894	18 645
Current tax assets	24	4	1 079
Cash and cash equivalents	25	5 018	6 650
Current assets, total		27 916	26 375
TOTAL ASSETS		67 653	61 704
EQUITY AND LIABILITIES
Capital attributable to equity holders
Share capital	26	5 000	5 000
Share premium account	26	6 701	6 701
Unrestricted equity fund	26	2 584	2 590
Own shares	26	-1 958	-1 949
Cumulative translation adjustment		63	-2 534
Other reserves		10 139	10 000
Retained earnings		2 312	18 148
Profit/loss for the financial year		4 422	-14 403
Capital attributable to equity holders, total		29 264	23 554
Non-controlling interest		101	135
Equity, total		29 365	23 689
Non-current liabilities
Deferred tax liability	32	264	150
Financial liabilities	28	6 780	7 626
Non-current liabilities, total		7 044	7 776
Current liabilities
Financial liabilities	28	5 322	3 959
Trade and other payables	30	25 085	24 401
Reserves	33	106	1 435
Current income tax liabilities	31	731	445
Current liabilities, total		31 244	30 239
Liabilities, total		38 288	38 016
TOTAL EQUITY AND LIABI LITIES		67 653	61 704

Consolidated Statement of Cash Flows

EUR 1 000	1.1.–31.12.2010	1.1.–31.12.2009
Operating cas h flow
Cash receipts from customers	102 248	129 302
Operating expenses paid	-99 027	-126 232
Operating cash flow before financial items and taxes	3 221	3 070
Interest and payment paid for financial expenses	-1 582	-632
Interest received	32	197
Income taxes paid	-166	-557
Operating cash flow (A)	1 505	2 078
Investing cas h flow
Purchase of tangible and intangible assets	-768	-139
Disposals of subsidiaries	0	93
Acquisition of subsidiaries	-2 320	-966
Acquisition of associates	-113	0
Proceeds from sale of tangible and intangible assets	27	30
Loan receivables, increase	0	-977
Loan receivables, decrease	1 065	0
Proceeds from sale of investments	2	3
Investing cash flow (B)	-2 107	-1 956
Cash flow after investments (A+B)	-602	122
Financing cas h flow
Purchase of own shares	0	-44
Short-term loans, increase	513	0
Short-term loans, decrease	-207	-3 251
Long-term loans, increase	2 165	2 528
Hybrid loan, increase	0	10 000
Long-term loans, decrease	-3 336	-3 112
Dividend paid and other profit distribution	-788	-1 574
Financing cash flow (C)	-1 653	4 547
Variation in cash (A+B+C) increase (+) / decrease (-)	-2 255	4 669

Assets in the beginning of the financial period	6 650	1 879
Exchange gains or losses on cash and cash equivalents	622	102
Assets at the end of the financial period	5 017	6 650

Consolidated Statement of Changes in Equity

EUR 1 000	Share Capital	Share Premium Account	Unrestricted Equity fund	Own shares	Cumulative Translation Adjustment	Other reserves	Retained Earnings	Total	Non controlling interest	Equity total
Equity 1.1.2009	5 000	6 701	2 474	-2 025	-5 188	0	19 959	26 921	79	27 000
Dividends							-1 574	-1 574		-1 574
Purchase of own shares				-44				-44		-44
Shares to be issued			116	120			-179	57		57
Hybrid loan						10 000	-59	9 941		9 941
Change in translation difference									6	6
Changes in ownership					1 410			1 410		1 410
Comprehensive income for the financial period					1 245		-14 403	-13 159	49	-13 109
Equity 31.12.2009	5 000	6 701	2 590	-1 949	-2 534	10 000	3 745	23 554	135	23 689

EUR 1 000	Share Capital	Share Premium Account	Unrestricted Equity fund	Own shares	Cumulative Translation Adjustment	Other reserves	Retained Earnings	Total	Non controlling interest	Equity total
Equity 1.1.2010	5 000	6 701	2 590	-1 949	-2 534	10 000	3 745	23 554	135	23 689
Dividends							-788	-788		-788
Purchase of own shares				-9				-9		-9
Shares to be issued			-6				10	4		4
Hybrid loan							-654	-654		-654
Fair value reserve available-for-sale assets						139		139		139
Changes in ownership									-83	-83
Comprehensive income for the financial period					2 597		4 422	7 018	49	7 068
Equity 31.12.2010	5 000	6 701	2 584	-1 958	63	10 139	6 734	29 264	101	29 365

COMPANY PROFILE

The parent company of Etteplan Group is Etteplan Oyj ("the Company"), a Finnish public limited company established under Finnish law. The Company is domiciled in Hollola. Etteplan's shares are listed on the NASDAQ OMX Helsinki Ltd under the ETT1V ticker.

Etteplan is a specialist in industrial equipment engineering and technical product information solutions and services. Etteplan's customers are global leaders in their fields and operate in areas like the automotive, aerospace and defence industries as well as the electricity generation and power transmission sectors, and material flow management.

A copy of the consolidated financial statements can be obtained from the Company's website at www.etteplan.com or from the head office of the Group's parent company at the address Terveystie 18, 15860 Hollola, Finland.

The Etteplan Oyj Board of Directors approved these financial statements for publication at its meeting on February 14, 2011.

According to the Finnish Limited Liability Companies Act, the shareholders have the opportunity to approve or reject the financial statements at the Annual General Meeting held after the publication. Furthermore, the Annual General Meeting can decide on the modification of the financial statements.

1. ACCOUNTING POLICY APPLIED IN THE CONSOLIDATED FINANCIAL STATEMENTS

Basis for preparation

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and in conformity with the international accounting standards (IAS/IFRS) in force on December 31, 2010 as well as the interpretations of the International Financial Reporting Interpretations Committee (SIC and IFRIC). In the Finnish Accounting Act and the regulations based on it, "International Financial Reporting Standards" refers to the standards and the interpretations issued regarding them that have been approved for application within the EU in accordance with the procedure prescribed in EU regulation (EC) 1606/2002. The notes to the consolidated financial statements also comply with Finnish accounting and company legislation. Figures in the financial statement are presented in thousands of euros and, unless otherwise stated in the accounting policy, based on historical costs.

In preparing these consolidated financial statements, the Group has followed the same accounting policies as in the annual financial statements for 2009 except for the effect of changes required by the adoption of the following new standards, interpretations and amendments to existing standards and interpretations on January 1, 2010:

– IFRS 3 Business Combinations (revised) The revised standard has been adopted in the beginning of the financial year 2010 and it has changed the accounting of business combinations since January 1, 2010. For example, all payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the statement of comprehensive income. There is a choice on an acquisition-to-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the noncontrolling interest's proportionate share of the acquiree's net assets. All acquisition-related costs are expensed. According to the standard, acquisitions made before the standard is applied will not be amended retrospectively. Therefore, application of the standard does not affect the income statement or balance sheet of financial year 2009.

The revised standard was applied to the acquisition of the controlling interest in Etteplan Vataple Technology Centre, Ltd on July 1, 2010. This acquisition has occurred in stages. The revised standard requires goodwill to be determined only at the acquisition date rather than at the previous stages. The previously held equity interest has been adjusted to fair value on July 1, 2010 and the resulting gain recorded in the income statement. The fair value of the non-controlling interest is measured at the non-controlling interest's proportionate share of the acquiree's net assets.

– IAS 27 Consolidated and Separate Financial Statements (revised)

The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. Profit or loss as well as all items included in the Statement of Comprehensive Income are allocated to the equity holders of the parent company and the non-controlling interest, even if this leads to the non-controlling interest to be negative.

The revised standard was applied to the acquisition of the controlling interest in Etteplan Vataple Technology Centre, Ltd on July 1, 2010. The acquired company's result allocated to the non-controlling interest was negative.

The following standards and interpretations that came into force in 2010 have been adopted. They did not have an effect on the Group's result of operations or balance sheet position:

IFRIC 12 Service Concession Arrangements
IFRIC 15 Agreements for Construction of Real Estate

– IFRIC 16 Net Investment in a Foreign Operation

– IFRIC 17 Distribution of Non-cash Assets to Owners

– IFRIC 18 Transfers of Assets from Customers

– IFRIC 9 and IAS 39: Reassessment of Embedded Derivatives on Reclassification (amendment)

– IAS 38 Intangible Assets (amendment)

– IAS 39 Financial instruments: Recognition and Measurement (amendment)

– IAS 7 Statement of Cash Flows (amendment)

– IAS 17 Leases (amendment)

IAS 18 Revenue (amendment)
IAS 36 Impairment of Assets (amendment)

– IFRS 5 Measurement of Non-current Assets (or Disposal Groups) Classified as Held-for-sale (amendment)

– IFRS 2 Group Cash-settled and Share-based Payment Transactions (amendment).

The following standards and interpretations have been published and were in force in the financial year beginning on January 1, 2011. In the view of the Company's management, they do not have a significant effect on the Group's result or balance sheet position:

– IAS 24 Related Party Disclosures (revised)

– IAS 32 Financial Instruments: Presentation (amendment)

– IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

– IFRIC 14 Prepayments of a Minimum Funding Requirement (amendment).

In preparing the consolidated financial statements in accordance with the IFRS system, the Company's management must make estimates and assumptions that have an effect on the amounts of assets and liabilities in the balance sheet as well as on income and expenses for the financial year. The estimates are based on the management's current best knowledge, and therefore the outcomes may deviate from these estimates. Information about the matters in which the management has exercised judgment in the application of the Group accounting principles, and which have the greatest impact on the figures disclosed in the financial statements, is presented under "Critical accounting judgments and key sources of uncertainty."

Subsidiaries

The consolidated financial statements include the financial statement information of Etteplan Oyj and subsidiaries belonging to the Group, from which all intra-Group transactions, internal receivables, and liabilities as well as internal distribution

of profit have been eliminated. The accounting policies applied in the financial statements of the subsidiaries have been adjusted, if necessary, in accordance with the accounting policies of Etteplan Oyj. Subsidiaries are companies in which the Group has a controlling interest. Controlling interest is generated when the Group has more than half of the voting power or otherwise holds a controlling interest. Control means the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Group has increased its share of Etteplan Vataple Technology Centre, Ltd (EVTC) from 40 percent to 70 percent on July 1, 2010. From that date onwards EVTC has been included in the consolidated financial statement as a subsidiary.

Intra-Group share ownership has been eliminated according to the acquisition cost method.

Subsidiaries acquired during the financial year have been included in the consolidated financial statements from the time when the Group obtained control. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the statement of comprehensive income. On an acquisition-by-acquisition basis, the Group recognizes any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets. In the consolidated financial statements, the non-controlling interest in subsidiaries has been stated as a separate item. The allocation of profit for the financial year to equity-holders of the parent and to non-controlling interest is presented in the income statement, and the non-controlling interest is shown in the consolidated balance sheet under equity, separately from the parent shareholders' equity.

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss. If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income are reclassified to profit or loss where appropriate.

Subsidiaries divested during the financial year are reported as discontinuing operation, if they are real separate businesses or geographically separated businesses, in the consolidated financial statements up to the date of sale. This includes all revenues, costs, translation differences and the losses if the booked value is higher than the selling price.

Etteplan Vataple Technology Centre, Ltd has been consolidated using the equity method until June 30, 2010. The Group has acquired a 24 percent share of Teknogram Signal AB on October 29, 2010. The associated company has not been consolidated into the Group's financial statements in 2010, because it does not have significant effect on the Group's result.

If the Group's share of associates' losses exceeds the carrying amount, Group's share will be booked to zero value in balance sheet and losses in excess of the carrying amount are not consolidated unless the Group has committed to fulfilling the obligations of the associates. The Group's share of the associated companies' result is disclosed separately after operating profit.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions. The financial information, which the chief operating decision-maker uses as a basis for decision making, does not differ substantially from the information presented in the consolidated statement of comprehensive income and statement of financial position.

Etteplan business in 2010 is conducted in two operating segments; Engineering and Technology. These operating segments have the same longterm financial result, they offer the same kind of services, use same procedures and processes, have same customers and use same sales methods and methods of providing services. Therefore they are reported as one segment according to IFRS 8.12.

Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in euros, the currency of the business environment and the presentation currency of the Group's parent company. Foreign-currency transactions have been translated into the functional currency at the exchange rate prevailing at the transaction date. Foreign-currency-denominated receivables and liabilities in the balance sheet on the balance sheet date have been translated into euros at the exchange rate for the balance sheet date. Exchange differences resulting from transactions denominated in a foreign currency are recorded in the corresponding accounts in the income statement above operating profit. Exchange differences in financing transactions are recorded in financial income and expenses.

The balance sheet items of subsidiaries outside the euro zone have been translated into euros at the exchange rate for the balance sheet date and their income statement items at the average exchange rate for the financial year. Translating the profit for the financial year with different rates in the income statement and the balance sheet leads to a translation difference that is recorded in equity. Cumulative translation differences on postacquisition equity items, which have arisen on the elimination of the acquisition cost of foreign subsidiaries, are recorded in equity.

Tangible assets

The property, plant, and equipment items have been measured for the balance sheet at cost less accumulated depreciation and impairment. Property, plant, and equipment items are depreciated on a straight-line basis over the estimated useful life. Land areas are not depreciated, because they are not considered to have a carrying period. The

useful lives of property, plant, and equipment items are:

computers	3 years
vehicles	5 years
office furniture	5 years
renovation of premises	5/7 years

Maintenance and repair costs are expensed when they are incurred. Major basic improvement investments are capitalized and depreciated in the income statement over their useful life. The useful lives of assets are checked at the end of each financial year. Capital gains and losses from the retirement and sale of property, plant, and equipment items are included in either other operating income or expenses.

Assets leased under agreements that are classified as finance leases have been capitalized under property, plant, and equipment in the consolidated balance sheet at the fair value of the leased asset or the present value of the minimum lease payments, whichever is lower. Lease obligations arising from finance lease agreements are presented in non-current and current liabilities. Finance leases lead to depreciation and interest expenses on assets that are capitalized during the relevant financial periods. Assets acquired under a finance lease agreement are depreciated over their useful life. If the Group does not assume ownership of the asset at the end of the lease period, depreciation is recorded over the lease period or the useful life, whichever is shorter.

Intangible assets Goodwill

Goodwill corresponds to that part of the acquisition cost which exceeds the Group's share of the fair value, on the date of purchase, for the net asset value of the acquired subsidiary. The goodwill arising from the combination of businesses prior to January 1, 2004 corresponds to the carrying amount according to the FAS system, used previously, which has been used as the deemed cost. Neither the classification of these acquisitions nor their treatment in the financial statements has been adjusted in preparation of the Group's opening IFRS balance sheet. Goodwill is measured at historical cost less impairment. Goodwill is not amortized but is tested for impairment annually and whenever there is objective evidence of goodwill impairment. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units that are expected to benefit from the business combination in which the goodwill arose, taking into account the current organization and level of reporting.

Other intangible assets

Intangible assets include software licenses, intangible rights and intangible assets acquired in business combination; order backlog and technology. Intangible assets are recorded in the balance sheet at historical cost. Intangible assets acquired in business combination are recognized at fair value at the acquisition date. Assets with limited useful lives are amortized on a straight-line basis over their useful lives. The depreciation periods of other intangible assets are:

software	3 to 7 years
other intangible assets	3 to 7 years

Research and development

Etteplan participates in its customers' product development. Customers' product development assignments represent Etteplan's daily business and the intellectual property rights are owned by Etteplan's customers. Therefore, the Company does neither follow nor report any research or development costs.

Impairment of assets

Goodwill is not amortized but is tested for impairment annually and whenever there is objective evidence of goodwill impairment. If there is objective evidence of goodwill impairment, the recoverable amount is determined for that cash-generating unit to which the goodwill relates. That cash-generating unit is the smallest possible independent cash-generating group of assets. The recoverable amount is the utility value of the capital, the estimated future net cash flow discounted to present value from the cash-generating unit in question. The essential assumptions for impairment tests are presented in Note 22 to the financial statements ("Impairment testing"). Material acquisitions of companies and goodwill arising from them are presented in Note 4 ("Business combinations").

The assets from which amortization has been recognized are always tested for impairment if there is objective evidence of goodwill impairment. On each balance sheet date, it is evaluated whether there is objective evidence of goodwill impairment in the financial assets recognized in the balance sheet. The recoverable amount for financial assets is either their fair value or the present value of future cash flows.

Lease agreements

Lease agreements in which all risks and rewards incident to ownership remain with the lessor are treated as other lease agreements (operating leases). Contractual lease payments are entered as expenses in the income statement over the lease period.

Leases that transfer essentially all risks and rewards incident to ownership are classified as finance leases. The fair value of leased assets is recorded, at the inception of the lease, under assets in the balance sheet and as a finance lease liability on the liabilities side. If the fair value cannot be determined, the value is calculated as the present value of minimum lease payments. In calculation of the present value, the discount rate applied is either the internal rate of return in the lease or, if this cannot be determined, the interest rate on incremental borrowing as determined by the management. Assets acquired under finance leases are depreciated over their useful life or the lease period, whichever is shorter.

Discontinued operations and non-current assets held for sale

A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale, and

A. Represents a separate major line of business or geographical area of operations

B. Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations,

C. Is a subsidiary acquired exclusively with a view to resale.

The results of discontinued operations as well as amounts related to assets held for sale and recognized in other comprehensive income statement are presented separately on the face of the Consolidated statement of comprehensive income. Assets held for sale, disposal groups that are classified as held for sale, and the liabilities included in disposal groups held for sale are presented separately on the face of the Consolidated statement of financial position.

Receivables

Receivables are entered in the balance sheet at cost or at the lower fair value. Receivables are assessed regularly in terms of collectability and available collateral. If a credit loss is observed on a trade receivable, the credit loss is recorded in other operating expenses in the income statement.

Recognition of income

Revenue includes income from design activities and sales of materials for projects, adjusted for indirect taxes, discounts, and exchange differences on currency-denominated sales.

Income from services

As a rule, services are recognized when the service is rendered.

Income from sales of materials

Sales of materials are recognized when the risks and rewards incident to ownership have been transferred to the buyer. Generally this takes place on assignment of materials.

Government grants

Government grants that are intended to compensate costs are recognized as income over the same period as the related costs are recognized. These government grants are presented in other operating income.

Long-term projects

Contracts whose outcome can be assessed reliably are recognized as income and expenses on the basis of the percentage of completion at the time of calculation. A contract's percentage of completion is evaluated on the basis of project progress, which, in turn, is determined from the ratio of the costs that have materialized to the estimated total cost of the contract. In the case of contracts whose outcome cannot be assessed reliably, project expenditure is expensed for the period in which it arises. Likewise, the amount of income recognized from a project does not exceed expenditure. The total loss on a contract that will probably result in a loss is expensed immediately.

Interests and dividends

Interest income has been recorded according to the effective interest rate method. Dividend income is recognized when the shareholder gains the right to receive payment.

Employee benefits Pension obligations

The Group's pension arrangements are defined contribution plans. In such plans, the Group makes fixed payments to an external insurance company. The Group does not have a legal or constructive obligation to make additional payments, if the recipient cannot pay the pension benefits in question. The payments for defined contribution plans are expensed in the accounting period to which they are allocated.

Termination benefits

Termination benefits are recorded as a liability and an expense when employment is terminated before the normal retirement of the employee or when the employee is paid compensation as a consequence of voluntary redundancy. Termination benefits are recorded when the Company is demonstrably committed to the termination of employment in accordance with a detailed formal plan or has made a compensation proposal to the employee to promote voluntary redundancy. Benefits falling due later than 12 months from the balance sheet date are discounted to their present value.

Profit-sharing and bonus plans

The Group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the Company's shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

Share-based incentive plan

In 2008, the Etteplan Oyj Board of Directors decided on a share-based incentive plan for senior management and other key employees. The plan included three earnings periods: calendar years 2008, 2009 and 2010. The share-based incentive plan offered the target group the opportunity to receive Etteplan Oyj shares as remuneration.

In accounting, share-based incentive plans are treated as arrangements that are settled partly as shares and partly as cash. The part of a remuneration earned that the participants receive as Etteplan Oyj shares is treated as an arrangement that is settled as shares and recorded in shareholders' equity; the part of a remuneration earned that is paid in cash to pay off taxes and other levies is recorded in liabilities. Debt on the balance sheet is measured at fair value on the balance sheet date.

The Group has hedged against a potential share price risk between the date of granting and the date of payment related to share remunerations granted. The plan is hedged through buyback of treasury shares.

Income taxes

The taxes in the consolidated income statement include the current tax for Group companies, corrections to taxes from previous financial periods, and the change in deferred taxes. Current tax is calculated on taxable income according to the tax rate in force in each country concerned. In the case of items entered directly in shareholders' equity, the tax effect is recognized in equity.

Deferred taxes are recognized on all temporary differences between carrying amounts and their taxable values. The most significant temporary differences arise from the amortization of tangible assets and from lease agreements and the provisions of foreign subsidiaries. Deferred taxes are determined by using the tax base in force on the balance sheet date or the enacted tax base at the time of tax base transition.

Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. It is valued at the end of each financial year whether the conditions for recognizing a deferred tax asset are met.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority.

Shareholders' equity

Shareholders' equity includes the share capital, the share premium fund, the invested unrestricted shareholders' equity fund, and other equity items in accordance with the legislation of the relevant countries. When Etteplan Oyj buys back its own shares, the compensation paid for the shares and the buyback costs reduce shareholders' equity. Etteplan Oyj has one series of shares.

Hybrid loan

Etteplan Oyj issued a EUR 10 million hybrid loan in November 2009. A hybrid loan is an equity bond that is subordinated to the Company's other debt instruments, but is senior to other equity instruments. The loan is unsecured and unguaranteed. The loan is perpetual and has no specific maturity date. The Company decides, if and when to repay the loan. The coupon rate of the loan is 9.5% per annum. The interest on a hybrid loan is paid, if the Annual General Meeting decides to pay a dividend. If a dividend is not paid, the Company decides separately on whether to pay interest. Unpaid interest accumulates. Hybrid loan holders have no control over the Company and no right to vote at shareholders' meetings.

Financial assets and liabilities

The Group's financial assets and liabilities are classified into the following categories in accordance with IAS 39, Financial Instruments: financial assets at fair value through profit or loss, loans and receivables, and available-for-sale financial assets.

Regular purchases and sales of financial assets are recognized on the trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognized when the rights to receive cash flows from the invest-

ments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortized cost using the effective interest method.

Financial assets at fair value through profit or loss include financial assets classified as availablefor-sale maturing within 12 months. Those assets are measured at fair value on the basis of published price quotations in well-functioning markets. Both realized and unrealized profits and losses due to changes in fair value are recognized in the income statement in the financial year in which they have arisen.

Other receivables are financial assets with fixed or measurable payments that are not quoted on well-functioning markets and are not held for trading. They are measured at the periodized cost and included under "Trade receivables and other receivables" in the balance sheet. If a receivable falls due no later than within 12 months, it is recorded in current financial assets; if it is payable in more than 12 months, it is recorded in non-current financial assets.

Available-for-sale financial assets are assets that have not been classified in another category. They are included in non-current assets unless the Company intends to hold them for less than 12 months from the balance sheet date, in which case they are presented in current assets. Available-for-sale financial assets comprise shares that are measured at fair value or, when the fair value cannot be reliably measured, at historic cost. Changes in the fair value of the available-for-sale financial assets are recorded in the statement of other comprehensive income in the fair value reserve taking into account the tax effect. When the investments are sold or their value is permanently impaired, the accumulated fair value adjustments are included in the income statement.

Cash and cash equivalents include cash in hand and deposits held at call with banks. Items included under cash and cash equivalents have maturities of three months or less from the date of acquisition. Cash and cash equivalents are derecognized when the Group's contractual right to receive cash flows has expired or essentially all of the risks and rewards incident to ownership have been transferred from the Group.

Financial liabilities are classified as financial liabilities recognized at fair value through profit or loss or as other financial liabilities. Financial liabilities are recognized at fair value on the basis of the compensation originally received. Transaction costs have been included in the fair value of the financial liabilities carried at amortized cost.

Financial liabilities recognized at fair value through profit or loss are liabilities from derivative contracts which do not fulfill the terms of hedge accounting. Other financial liabilities are measured at amortized cost using the effective interest method. Financial debts are included in current and non-current debts and may be either interestbearing or non-interest-bearing.

Derivative contracts are originally entered in the books under purchase costs representing their fair value. Following the acquisition, derivative contracts are measured at fair value. Group uses derivatives to hedge against interest rate and currency risks. Interest rate swaps are used to hedge against changes in market rates of interest. Currency forward contracts are used to hedge receivables and debts in foreign currencies. Group does not currently comply with the hedging policies of IAS 39. The changes in the fair values of derivatives are entered under financial income and expenses. Detailed specification is disclosed in Note 2.

On the balance sheet date, the Group determines whether, there is evidence of impairment of a financial asset item or group. An impairment loss is recognized on trade receivables, if there is evidence that the receivables cannot be recovered in full.

Operating profit/loss

Operating profit/loss is an item in the income statement that is obtained by adding other operating income to revenue, then deducting operational expenses, depreciation, and impairment losses. Operating profit/loss includes exchange rate differences on items related to operations.

Critical accounting judgments and key sources of uncertainty

Forward-looking estimates and assumptions are made in preparation of the financial statements. The outcomes may deviate from these estimates and assumptions. In addition, judgment must be exercised in the application of the accounting policy. The estimates are based on the management's best knowledge on the balance sheet date. Any changes to estimates and assumptions are entered in the accounts in the financial period when the estimate or assumption is amended.

The key assumptions concerning the future and uncertainties concerning the estimates made on the balance sheet date that cause a risk of changes in the carrying amounts of assets and liabilities during the next financial period are as follows:

Fair value measurement

In business combinations, tangible assets have been compared with the market prices of equivalent assets, and decline in the value of acquired assets due to various factors has been estimated. The fair value measurement of intangible assets is based on estimates of asset-related cash flows. The management believes that the estimates and assumptions are sufficiently precise for use as the basis for fair value measurement. Any indications of impairment of tangible and intangible assets are reviewed annually.

Customer agreements and

accounts in acquisitions

Acquirees in general have a limited number of major customer accounts and agreements. In the management's view, these customer accounts and agreements cannot as a rule be considered to constitute an asset item that is to be recorded in the balance sheet, because the customer agreements are by nature nonbinding framework agreements and thus cannot be treated or sold separately. With respect to customer agreements and accounts, it must also be taken into account that they are valid until further notice and a probable useful life cannot be reliably set for them.

Impairment testing

The Group tests goodwill and intangible assets with unlimited useful lives for impairment annually. Indications of impairment are evaluated in the manner described above. Recoverable amounts for cash-generating units are based on value-in-use calculations. Estimates are required in making these calculations.

Values recorded in the balance sheet in the end of the financial year are 36,028 thousand euros (2009: 31,184 thousand euros). Sensitivity analysis is disclosed in Note 22 Impairment testing.

2. MANAGEMENT OF FINANCIAL RISKS

In its business operations, Etteplan Group is exposed to several types of financial risks: interest, foreigncurrency, financing and liquidity, counterparty and credit risks.

The objective of financial risk management is to protect the Group from unfavorable changes in the financial market and thus contribute as much as possible to guaranteeing the Company's profit and shareholders' equity, and to guarantee sufficient liquidity in a cost-efficient manner. In management of financial risks, various financial instruments are used within the framework of authorizations issued by the Group's Board of Directors. Etteplan Group uses only such instruments whose market value and risk profile can be monitored constantly and reliably.

Management of financial risks has been centralised with the Group's financial department, which is responsible for identification and evaluation of, and

protection against, the Group's financial risks. Furthermore, the financial department is responsible, in a centralized fashion, for funding of the Group, and it provides the management with information about the financial situation of the Group and the business units.

Foreign-currency risk

The Group is exposed to foreign-currency risks related to different currencies, which come about as a result of foreign-currency-denominated commercial transactions and from translation of foreign-currency-denominated balance sheet items into the reporting currency. The most significant of the foreign-currency risks are related to the Swedish krona.

Transaction risk

The majority of Etteplan Group's business operations are handled in the currency of the project country of the respective Group company. This means that both sales and costs are in the same currency, hence there is no transaction risk. In the period under review, the Group did not have significant transaction risks generated from the currency flow in foreign currencies. The Group did not take steps to protect itself against transaction risks during the review period.

Translation risk

The Group is exposed to a translation risk caused by fluctuations in foreign currency exchange rates, when it translates balance sheet items of subsidiaries based outside the euro area into its reporting currency. Main risk is with goodwill booked in Swedish Krona (SEK). In the period under review, the Group took new loans in SEK in order to better balance the translation risk in goodwill.

The goodwill booked in SEK at December 31, 2010 was EUR 23,587 thousand (2009: EUR 20,378 thousand).

Sensitivity analysis

Table "Sensitivity analysis of main currency" presents a sensitivity analysis in the main currency pair on the transaction and translation risk, i.e. the effect of reasonable potential changes in exchange rates on the Group's profit or loss before tax and equity on 31 December 2010. The foreign currency denominated receivables and liabilities recognized in the balance sheet on the reporting date, as well as the net investments in subsidiaries, have been taken into account in the effect of exchange rate changes on the balance sheet fair values. In the analysis, the change in exchange rate has been estimated to be +/- 10 percent from reporting date, and other factors are estimated to remain unchanged.

Sensitivity analysis of main currency

	Effect on EBIT	Effect on Equity
EUR 1 000	2010 2009	2010 2009
SEK +/- 10%	+/- 101 +/- 784	2 145 1 864

Interest risk

Etteplan Group is exposed to interest risk in two ways: because of changes in value for balance sheet items (i.e., a price risk) and cash flow risk caused by changes in market interest rates.

The Group manages the interest risk by diversifying its loan portfolio to include loans with fixed and variable interest rates, and with interest rate derivative contracts. On the balance sheet date, the total amount of interest-bearing debt excluding leasing liabilities was EUR 11,235 thousand, of which EUR 4,062 thousand was in the form of fixed-interest loans and EUR 3,214 thousand was covered with a contract in which the interest range is between 3.56 and 4.45 percent.

If interest rates would increase with 1 percent Etteplan-group's interests would increase with EUR 74 thousand per annum.

Financing and liquidity risk

Etteplan Group aims to guarantee solid liquidity in all market conditions through efficient cash management and by investing liquid funds in only those targets that have low risk and can be sold for cash easily.

The Group uses credit limits tied to cash-pool arrangements for short-term financing. On the balance sheet date, the Group had EUR 16,000 thousand of agreed credit limits, of which EUR 0 was in use.

The Group aims to minimize its refinancing risk by applying a balanced maturity schedule for its loan portfolio, ensuring sufficient maturity of loans, and using several banks as sources of financing.

The Company has two different kind of financial covenants related to different loans. Breaching 25% equity ratio linked covenant calls for renegotiations of the loan terms (mainly interest) with the bank. According to financial statements in 2010 this term of covenant was not breached.

Breaching interest-bearing debt/EBITDA (excluding onetime costs) covenant has an affect on margin level of debts. Breaching the limit of 2.5 would increase margin level to 0.2% - 0.4% and breaching the limit of 3.5 calls for renegotiations of the loan terms (mainly interest) with the bank. According to financial statements in 2010 this term of covenant was not breached.

Counterparty and credit risk

Financial instrument contracts that Etteplan Group has concluded with banks have the associated risk of the counterparty being unable to fulfill its obligations under the contract. Credit risk related to business operations arises out of a customer's inability to perform its contractual obligations.

In order to minimize the counterparty risk, the Group has concluded its significant financing contracts with leading Nordic banks that have a good credit rating.

A considerable proportion of the Group's business operations focus on large, financially solid companies that operate internationally. The largest individual customer accounts for less than 10 percent of the Group's revenue. Credit risk is also reduced by the customer companies being divided among several different sectors of operation.

The Group aims to guarantee that services are sold to only those with an appropriate credit rating. The Group controls credit risk systematically, and overdue sales receivables are assessed on a weekly basis. The Company strives to control the effects of increased financial uncertainty by actively monitoring its receivables and by working to enhance its debt collection processes.

The maximum customer credit risk exposure is the book value of accounts receivable.

Capital risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the Group monitors capital on the basis of the net gearing ratio. This ratio is calculated as net debt divided by equity. Net debt is calculated as total borrowings less cash and cash equivalents.

To ensure sufficient flexibility, the goal is to keep the net gearing ratio within 20–100%.

The following table sets out the Group's net gearing ratio:

EUR 1 000	2010	2009
Total borrowings	12,102	11,585
Less: cash and cash equivalents	-5,018	-6,650
Net debt	7,084	4,935
Total equity	29,365	23,689
Net gearing ratio	24.1%	20.8%

Financial instruments by category

EUR 1 000	Note	Loans and receivables	Fair value trough P&L	Available for-sale	Other financial liabilities	Total
31.12.2010

Assets as per balance sheet
Available-for-sale financial assets	21			620		620
Trade and other receivables	23,24	22 898				22 898
Cash and cash equivalents	25	5 018				5 018
Financial assets total		27 916	0	620	0	28 536
Liabilities as per balance sheet
Borrowings (excluding finance lease liabilities)	28				11 235	11 235
Finance lease liabilities	29				867	867
Derivatives (non-hedge accounting)*			55			55
Trade and other payables (including accrued income tax, excluding advances received)	30,31				25 477	25 477
Financial liabilities total		0	55	0	37 579	37 634

31.12.2009
Assets as per balance sheet
Available-for-sale financial assets	21			691		691
Trade and other receivables	23,24	18 629				18 629
Cash and cash equivalents	25	6 650				6 650
Financial assets total		25 279	0	691	0	25 970
Liabilities as per balance sheet
Borrowings (excluding finance lease liabilities)	28				10 969	10 969
Finance lease liabilities	29				615	615
Derivatives (non-hedge accounting)*			146			146
Trade and other payables (including accrued income tax, excluding advances received)	30,31				24 538	24 538
Financial liabilities total		0	146	0	36 122	36 268

* IFRS 7 fair value hierarchy level 2; Other fair valuation techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

fair values of financial assets and liabilities
		Book value	Fair value		Book value	Fair value
		31.12.2010	31.12.2010		31.12.2009	31.12.2009
Assets as per balance sheet
Available-for-sale financial assets		620	620		691	691
Trade and other receivables		22 898	22 898		18 629	18 629
Cash and cash equivalents		5 018	5 018		6 650	6 650
Financial assets total		28 536	28 536		25 970	25 970

		Book value	Fair value		Book value	Fair value
		31.12.2010	31.12.2010		31.12.2009	31.12.2009
Liabilities as per balance sheet
Borrowings (excluding finance lease liabilities)		11 235	11 235		10 969	10 969
Finance lease liabilities		867	867		615	615
Trade and other payables		25 477	25 477		24 538	24 538
Financial liabilities total		37 579	37 579		36 122	36 122

	Nominal	Book	Fair	Nominal	Book	Fair
	value	value	value	value	value	value
	31.12.2010	31.12.2010	31.12.2010	31.12.2009	31.12.2009	31.12.2009
Derivatives (non-hedge accounting) as per balance sheet
Currency swaps	0	0	0	1 317	-6	-6
Interest rate swaps	0	0	0	4 500	1	1
Interest rate options	8 679	-55	-55	8 679	-141	-141
Derivatives total	8 679	-55	-55	14 496	-146	-146

Maturity analysis of financial liabilities

31.12.2010	Less than 1 year	1–5 years
Borrowings (excluding finance lease liabilities)	4 869	6 366
Finance lease liabilities	453	416
Interest payments	185	140
Derivatives	55	0
Trade and other payables	25 030	0

3. Discontinuing operations

The selling of majority holdings in Etteplan Tech AB that provides mainly design services for automotive industry in Sweden (18.9.2009), and business in Italy (11.12.2009) are treated as discontinuing operations starting from time of sale.

The result of sold units, losses on disposals and effect to cash flow were following:

EUR 1 000	2010	2009

Income statement

Incomes	522	15 322
Expenses	-294	-18 724
Result before taxes	228	-3 401
Income taxes	-126	442
Result after taxes	102	-2 960
Loss on disposal before taxes	0	-8 234
Income taxes	0	127
Loss on disposal after taxes	0	-8 107
Total loss for discontinuing operations	0	-11 067

Cash flow statement
Operating cash flow	0	-2 484
Investing cash flow	0	1 275
Financing cash flow	0	1 080
Change in cash	0	-129

Effect of discontinuing operations to Etteplan 's financial position
Assets
Property, plant and equipment	0	74
Other intangible assets	0	7 155
Receivables	0	3 751
Cash and cash equivalents	0	-131
Assets total	0	10 849

Liabilities
Financial liabilities	0	233
Trade and other payables	0	3 282
Liabilities total	0	3 515

4. Business combinations

Etteplan Oyj increased its ownership of Etteplan Vataple Technology Centre, Ltd (EVTC), located in Kunshan, from 40 to 70 percent on July 1, 2010. Etteplan used its option right to buy the majority of the share capital of EVTC according to the contract that came into force on April 8, 2008. Etteplan's Kunshan and Shanghai units provide the company's customers significant flexibility in operations and cost effective operating models in operational and expertise services in the areas of technical design and product information. Service offering covers also localisation services related to production transfer to customers that already have production in the Asian market or have made the decision to transfer production there. Units in China produce services for over 20 customers in Europe and Asia and employ approximately 125 people. Vataple Group Ltd. continues as minor shareholder in EVTC and participates in the long term development of the company. Vataple Group is responsible for recruiting personnel and taking care of governmental matters in China.

The goodwill of EUR 1,644 thousand arising from the acquisition is attributable to the synergies and economies of scale expected from combining the operations of the group and the acquired company. Most of the sales from the acquired company is done via other group companies.

None of the goodwill recognized is expected to be deductible for income tax purposes. The following table summarises the consideration paid for EVTC and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date of the non-controlling interest in EVTC.

Consideration transferred :
Cash	1 004
Translation difference	-57
Total consideration transferred	947

Fair value of identifiable assets acquired and liabilities assumed :
Tangible assets	194
Intangible assets	102
Order backlog (intangible assets)	40
Technology (intangible assets)	207
Trade and other receivables	354
Cash	389
Total assets	1 286

Non-current liabilities	11
Current liabilities	705
Trade and other liabilities	848
Liabilities total	1 564

Total identifiable net assets	-278

Formation of Goodwill :
Cash transferred	1 004
Translation difference	-57
Fair value of the non-controlling interest measured at the non-controlling interest's proportionate share of the acquiree's net assets.	-83
Fair value of equity interest in EVTC held before the business combination	503
Total identifiable net assets	278
Goodwill	1 644

Acquisition-related costs EUR 10 thousand are included in other operating expenses in the consolidated income statement for the year ended December 31, 2010.

The group recognized a gain of EUR 493 thousand as a result of measuring at fair value its 40% equity interest in EVTC held before the business combination. The gain is included in other operating income in the group's statement of comprehensive income for the year ending December 31, 2010.

The revenue included in the consolidated statement of comprehensive income since 1 July, 2010 contributed by EVTC was EUR 136 thousand. EVTC contributed loss of EUR 91 thousand over the same period.

Had EVTC been consolidated from January 1, 2010, the consolidated statement of comprehensive income would show revenue of EUR 104,937 thousand and profit of EUR 4,494 thousand.

In year 2010 additional purchase prices from previous acquisitions were paid and some additions booked, because management estimates that payments are probable and additional purchase prices can be estimated in a reliable way. The fair values of the asset and liability items booked on the acquisitions in year 2008 did not differ materially from the book values prior to the business combinations.

Additional purchase prices booked and paid in 2010 and 2009 relate to acquisitions made in Finland and Sweden.

Details of additional purc hase price and goodwill booked are as follows :
EUR 1 000	2010	2009
Purchase consideration:
Booked additional purchase price	284	3 699
Total purchase consideration	284	3 699
Goodwill	284	3 699

Notes to the Consolidated Income Statement

EUR 1 000	2010	2009
5. Segment reporting
The group has one reporting segment, which mainly operates in three geographical areas; Finland, Sweden and China. The external revenue of each geographical area is presented according to the location of the seller. Non-current assets are presented according to the location of the asset. Etteplan China operations mainly sell their services through other group companies thus these sales are included in the sales from Finland and Sweden in the table below. Revenue
Finland	57 952	54 681
Sweden	46 256	42 559
China	578	1 460
Total	104 786	98 700

Non-current assets *
Finland	12 688	13 061
Sweden	23 753	20 593
China	2 179	31
Shares in associated companies	18	0
Total	38 638	33 684

*Other non-current assets excluding financial instruments, deferred tax assets and assets related to compensation after termination of employment contract. The revenue from any one customer is neither larger nor equal to 10 percent of the group's total revenue.

6. Revenue
Revenue from rendering of services	104 114	97 430
Revenue from sales of goods	672	1 270
Total	104 786	98 700

Turnover consists of design business and the sales of materials related to projects adjusted with indirect taxes, discounts and differences in exchange rates.

7. Long -term projects
Amount of project revenue recognized during the period	2 536	830
Cumulative expenses and income recognized by the end of the period	1 026	1 152
Advances received	163	41
8. Other operating income
Administrative services	0	117
Contributions received	0	129
Sales profit of tangible and intangible assets	26	99
Unrealized gain at fair value, previously owned EVTC equity interest	493	0
Other operating income	642	47
Total	1 161	392

9. Materials and services
Materials	2 210	2 107
Services from associates	239	327
Services from others	7 398	5 643
Materials and services, total	9 847	8 077

Notes to the Consolidated Income Statement

EUR 1 000	2010	2009
10. Number of personnel and staff expenses
Personnel
At year-end	1 569	1 544
Personnel, average	1 594	1 765
Personnel by category
Design personnel	1 508	1 487
Administration personnel	61	57
Personnel, total	1 569	1 544

Staff costs
Wages and salaries	56 049	56 774
Pension costs - defined contribution plans	8 433	8 366
Share-based payments settled in shares	0	57
Share-based payments settled in cash	0	131
Other indirect employee costs	8 886	10 524
Staff costs, total	73 368	75 851
Employee benefits of the Board of Directors and top management are disclosed in item Related party transactions.
11. Audit fees
Auditing	67	77
Other services	75	52
Total	142	129

12. Financial income
Dividend income from assets held for sale	6	19
Interest income from loans and other receivables	69	146
Unrealized gain at fair value, derivatives	91	0
Foreign exchange gain	596	176
Financial income, total	761	341
13. Financial expenses
Interest on borrowings	430	596
Leasing interest expenses	36	39
Loss on disposal of group companies	10	144
Foreign exchange loss	228	55
Unrealized loss at fair value, derivatives	0	43
Other financial expenses	54	48
Financial expenses, total	758	925

14. Translation differences recognized on income statement
Translation differences included in revenue	41	0
Translation differences included in purchases and expenses	-43	3
Foreign exchange gain	596	176
Foreign exchange loss	-228	-55
Total translation differences recognized on income statement	366	125

Notes to the Consolidated Income Statement

EUR 1 000	2010	2009
15. Income tax expenses
Tax on income from operations	-1 009	-580
Tax corrections for previous accounting periods	-8	5
Change in deferred tax asset	-406	916
Change in deferred tax liability	3	676
Income taxes in income statement	-1 420	1 017
Reconciliation between the Income tax in Income Statement and the theoretical amount of tax that would arise using the Group's domestic tax rate (2010: 26%, 2009: 26%).
Accounting profit before tax	5 766	-4 304

Income tax expense
Mathematical tax based on parent company's tax rate	-1 499	1 119

Differences (net)
Effect of different tax rates	17	-11
Calculated tax based on non-decuctible items on unit's tax rate	-128	307
Calculated tax based on non-taxable items on unit's tax rate	155	-267
Tax corrections for previous accounting periods	-8	-4
Unrecognized tax on loss for the period	-28	76
Effect of tax rate change on deferred taxes at the start of period (net)	0	-53
Other tax difference	71	-150
Income tax expense	-1 420	1 017

16. Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders for the financial year by the weighted average number of externally owned shares during the financial year. In the calculation the shares purchased by the Company are excluded. When calculating profit attributable to equity holders interest expenses from hybrid loan adjusted with tax effect have been taken into account.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to reflect the conversion of all dilutive effect ordinary shares.

Continuing operations	2010	2009

Profit for the financial year continuing operations (EUR 1 000)	4 347	-3 287
Non-controlling interest	27	49
Hybrid loan interest adjusted with tax effect	-654	-59
Profit attributable to equity holders continuing operations (EUR 1 000)	3 720	-3 296

Weighted average number of shares (1 000 pcs)	19 709	19 659

Basic earnings per share (€ per share)	0,19	-0,17

Weighted average number of shares (1 000 pcs)	19 709	19 659
Dilution due to share based remunerations	0	25
The diluted weighted avarage number of shares for the calculation of earnings per share	19 709	19 684

Diluted earnings per share (€ per share)	0,19	-0,17

Discontinuing operations	2010	2009

Profit attributable to equity holders discontinuing operations (EUR 1 000)	102	-11 067
Weighted average number of shares (1 000 pcs)	19 709	19 659
Basic earnings per share (€ per share)	0,01	-0,56

Profit used to determine diluted earnings per share (EUR 1 000)	102	-11 067

Weighted average number of ordinary shares for diluted earnings per share (1 000 pcs)	19 709	19 684

Diluted earnings per share (€ per share)	0,01	-0,56

17. Tangible assets

Tangible assets 2010
	Land and water	Machinery and equipment	Machinery and equipment, financing lease	Other tangible assets	Total
Acquisition cost at 1.1.	19	8 360	2 581	294	11 255
Translation difference	0	308	0	0	308
Acquisitions	0	347	0	0	347
Additions	0	100	819	2	921
Business disposals	0	0	0	0	0
Disposals	0	-3	0	0	-3
Acquisition cost 31.12.	19	9 112	3 400	296	12 828

Cumulative depreciation 1.1.	0	-7 616	-1 988	-193	-9 796
Translation difference	0	-286	0	0	-286
Cumulative depreciation on acquisitions	0	-152	0	0	-152
Cumulative depreciation on disposals	0	1	0	-7	-6
Cumulative depreciation on business disposals	0	0	0	0	0
Depreciation for the financial period	0	-370	-566	-26	-962
Cumulative depreciation 31.12.	0	-8 423	-2 553	-227	-11 203
Book value 31.12.2010	19	689	847	69	1 625

Tangible assets 2009

	Land and	Machinery and	Machinery and equipment,	Other tangible
	water	equipment	financing lease	assets	Total
Acquisition cost at 1.1.	19	10 555	2 331	268	13 173
Translation difference	0	234	0	0	234
Additions	0	55	251	26	332
Business disposals	0	-1 162	0	0	-1 162
Disposals	0	-1 322	0	0	-1 322
Acquisition cost 31.12.	19	8 360	2 581	294	11 255

Cumulative depreciation 1.1.	0	-9 080	-1 454	-156	-10 689
Translation difference	0	-209	0	0	-209
Cumulative depreciation on disposals	0	1 144	0	-7	1 137
Cumulative depreciation on business disposals	0	1 088	0	0	1 088
Depreciation for the financial period	0	-559	-535	-30	-1 124
Cumulative depreciation 31.12.	0	-7 616	-1 988	-193	-9 796
Book value 31.12.2009	19	744	594	101	1 458

18. Intangible assets

Intangible assets 2010

		Other	Advance
	Intangible rights	intangible assets	payments	Total
Acquisition cost at 1.1.	5 573	0	0	5 573
Translation difference	37	0	0	37
Acquisitions	155	247	0	402
Additions	101	0	4	105
Business disposals	0	0	0	0
Disposals	-1	0	0	-1
Reclassifications between items	0	0	0	0
Acquisition cost 31.12.	5 866	247	4	6 117
Cumulative depreciation 1.1.	-4 531	0	0	-4 531
Translation difference	-34	-1	0	-35
Cumulative depreciation on acquisitions	-53	0	0	-53
Cumulative depreciation on business disposals	0	0	0	0
Cumulative depreciation on disposals	0	0	0	0
Depreciation for the financial period	-473	-59	0	-532
Cumulative depreciation 31.12.	-5 090	-60	0	-5 150
Book value 31.12.2010	776	186	4	967

Intangible assets 2009
	Intangible rights	Other intangible assets	Advance payments	Total
Acquisition cost at 1.1.	5 789	0	50	5 839
Translation difference	8	0	0	8
Additions	50	0	8	58
Business disposals	-331	0	0	-331
Disposals	-2	0	0	-2
Reclassifications between items	58	0	-58	0
Acquisition cost 31.12.	5 573	0	0	5 573

Cumulative depreciation 1.1.	-4 279	0	0	-4 279
Translation difference	-7	0	0	-7
Cumulative depreciation on business disposals	307	0	0	307
Cumulative depreciation on disposals	7	0	0	7
Depreciation for the financial period	-558	0	0	-558
Cumulative depreciation 31.12.	-4 531	0	0	-4 531
Book value 31.12.2009	1 042	0	0	1 042

19. Goodwill

Goodwill 2010

	Goodwill	Consolidated goodwill	Total
Acquisition cost at 1.1.	688	30 496	31 184
Translation difference	44	2 881	2 926
Additions	0	1 928	1 928
Business disposals	0	-10	-10
Acquisition cost 31.12.	732	35 296	36 028

Book value 31.12.2010	732	35 296	36 028

Goodwill 2009
	Goodwill	Consolidated goodwill	Total
Acquisition cost at 1.1.	670	32 537	33 207
Translation difference	18	1 422	1 440
Additions	0	3 699	3 699
Business disposals	0	-7 162	-7 162
Acquisition cost 31.12.	688	30 496	31 184
Book value 31.12.2009	688	30 496	31 184
20. Investments in associates		2010	2009

Acquisition cost at 1.1.	134	17
Translation difference	-117	0
Additions	122	0
Reclassifications from loan receivables	-121	117
Acquisition cost 31.12.	18	134

Adjustments to equity at carrying amount 1.1.	-134	0
Translation difference	425	0
Share of profit/loss in associates	-291	-134
Adjustments to equity at carrying amount 31.12.	0	-134

Book value, end of the period 18 0

The group's share of the result of its associate in financial year 2009 and its aggregated assets and liabilities were as follows:

	Assets	Liabilities	Revenue	Profit (+) / Loss (-)	Interest held
Etteplan Vataple Technology Centre, Ltd	619	1 359	420	-805	40%

The group has recognized its share of the associate's loss in total until June 30, 2010, after which the company has been included in the consolidated financial statements. In 2009 the group has recognized losses amounting to EUR 134 thousand. Losses exceeding the carrying amount of the investment, amounting to EUR 188 thousand, have not been recognized in 2009, because the group has not committed to fulfilling the obligations of the associate. The value of the investment has been booked to zero on 31.12.2009.

21. Investments available -for -sale	2010	2009
Acquisition cost 1.1.	691	411
Fair value adjustments	188	0
Business disposals	0	-1
Disposals	-3	-1
Impairment	-257	0
Reclassification between items	0	281
Acquisition cost 31.12.	620	691

Impairment includes impairment of non-controlling interest in Etteplan Tech AB (19,9 %, date of sale 18.9.2009). Reclassifications between items in 2009 include transfer from group shares non-controlling interest of Etteplan Tech AB and the owner of Italian operations Etteplan RA Oy (19 %, date of sale 11.12.2009). Noncontrolling interests are valued according to group's share to companies' equities.

Fair value hierarchy

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs which have a significant effect on the recorded fair values that are not based on observable market data.

Fair value measurements of available-for-sale financial assets as at 31.12.2010

	Level 1	Level 2	Level 3	Total
Listed shares	84	0	0	84
Premises	0	480	0	480
Unlisted shares	0	0	56	56
Total	84	480	56	620

Reconciliation of fair value measurements of available-for-sale financial assets:

	Listed shares	Premises	Unlisted shares	Total
Opening balance at 1.1.2010	18	369	303	691
Writedowns recognized through income statement	0	0	-257	-257
Gains recognized in other comprehensive income	72	111	6	188
Reclassifications between items	-6	0	6	0
Disposals	-1	0	-2	-3
Closing balance 31.12.2010	84	480	56	620

The fair value measurement of available-for-sale financial assets has been adopted in financial year 2010.

Unlisted equity securities are valued at historic cost, when their fair value cannot be measured reliably and they are not intended to be actively traded on the active markets. Amounts of these shares recognized in the balance sheet are minor and do not have essential effect on the consolidated balance sheet. Investments available-for-sale are classified as non-current assets as they are not expected to be realized during the next twelve months after the reporting date and selling them is not necessary for gaining working capital.

22. Impairment testing

Goodwill is allocated to cash-generating units for determination of impairment. In impairment testing the recoverable amount is defined as value-in-use. The impairment test has been done in Q4 after budgets for 2011 were done and are based on goodwill as per September 30, 2010. The calculations are based on profit after tax. Cash flows after tax are based on budget figures approved by management for a next five year period. While defining the cash flow, the attention is paid on anticipated price and margin development, costs, net working capital and investment needs. Management determined these based on past performance and its expectations of market development.

The key assumptions used for value -in-use calculations are as follows :
Key Assumptions	2010	2009
Growth rate year 2–5	4–5 %	3–5 %
Growth rate after 5 years	1 %	1 %
Discount rate Sweden and Finland	7,9 %	8,0 %
Discount rate China	8,2 %	-

The recoverable amount is compared with the goodwill of the cash-generating unit. An impairment loss is booked as cost in the income statement, if the recoverable amount is lower than book value. No impairment loss has been booked during the financial year.

The discount rate is determined based on the weighted average cost of capital (WACC) that depicts the overall costs of shareholders' equity and liabilities. WACC is based on risk free interest in each country the CGUs have their operations. The discount rate is determined after tax because cash flows analysed are after tax also.

Impairment testing has been executed for CGU's where group's goodwill has been allocated. Basis for allocating goodwill is the lowest level where the goodwill is monitored for internal purposes, but no larger than any operating segment. Due to organizational changes January 1, 2010, the former CGU Sweden Operations have been divided into to CGUs Engineering and Technology. In 2010 Etteplan aquired a controlling post in Etteplan Vataple Technology Centre, Ltd. This lead to goodwill being allocated to Etteplan China operations.

Cash Generating Units (CGUs) where goodwill has been allocated for 2009:

EUR 1 000 000	2009
Etteplan Sweden operations	20,3
Plant Engineering Finland	5,5
Technical product information	5,4
Total	31,2

Cash Generating Units (CGUs) where goodwill has been allocated for 2010:

2010
15,9
7,0
5,2
5,4
1,7
35,2

Sensitivity analysis

According to impairment testing the recoverable amounts exceeded the carrying amounts as follows in 2009:
EUR 1 000 000	2009
Etteplan Sweden operations	16,5
Plant Engineering Finland	10,3
Technical product information	3,6
Total	30,4

According to impairment testing the recoverable amounts exceeded the carrying amounts as follows in 2010:

EUR 1 000 000	2010
Engineering Sweden	12,1
Technology Sweden	6,3
Plant Engineering Finland	18,7
Technical product information	3,5
China operations	1,8
Total	42,4

In connection with impairment testing sensitivity analyses have been performed using following variables, which individually doesn't lead to impairments:

• 0-growth in net sales

• Decrease of profitability (EBIT) by 3 percentage

• Increase of discount rate by 4 percentage

According to management understanding no potential changes in key variables would lead to impairment losses. However, if at the same time realized, for example, 0-growth in net sales and decrease of profitability by 3% it would lead to an impairment loss booking of 7,0 MEUR in Technology Sweden.

EUR 1 000 23. Trade and other receivables	2010	2009
Trade receivables	16 305	13 298
Allowances for doubtful trade receivables	-40	-657
Other receivables	658	1 019
Prepayments and accrued income	5 970	4 986
Trade and other receivables, total	22 894	18 645

Main items included in prepayments and accrued income
Receivables for revenue recognized in part prior to project completion	131	449
Accruals of personnel expenses	3	137
Prepaid office rents	233	240
Prepaid leasing	42	15
Other prepayments and accrued income on sales	4 752	3 305
Other prepayments and accrued income on expenses	810	840
Prepayments and accrued income, total	5 970	4 986

Aging analysis of trade receivables
Not due	13 993	10 482
Due 1 to 90 days	2 227	2 084
Due 91 to 120 days	36	61
Due more than 120 days	49	670
Total	16 305	13 298

Aging analysis of allowance for doubtful trade receivables
Not due	0	-227
Due 1 to 90 days	0	-43
Due 91 to 120 days	-20	0
Due more than 120 days	-20	-388
Total	-40	-657
Movements on the group provision for impairment of trade receivables are:
1.1.	-657	-491
Provision for receivables impairment, decrease (+) / increase (-)	617	-166
31.12.	-40	-657

Analysis of receivables by currency
EUR	12 264	8 649
SEK	10 253	9 785
CNY	377	212
Total	22 894	18 645

24. Income tax receivables
Accrued income tax	4	1 079
25. Cash and cas h equivalents
Bank accounts and cash	5 018	6 650
Total	5 018	6 650

Cash and cash equivalents in the balance sheet are corresponding with the financial assets in Cash flow statement.

26. Equity

Shareholders' equity

Shareholders' equity consists of share capital, share premium fund, unrestricted equity reserve, treasury shares, translation differences, other reserves, retained earnings and non-controlling interest. Translation differences contains translation differences arising from the conversion of financial statements of foreign units. Other reserves include a hybrid loan amounting to EUR 10,000 thousand (2009: EUR 10,000 thousand) and the fair value reserve including fair value adjustments of available-for-sale assets amounting to EUR 139 thousand (2009: 0).

Shares and share capital

The fully paid and registered share capital of the company at the end of the financial year was 5,000,000 EUR and number of shares was 20,179,414. No changes occurred during financial year. The company has one series of shares. Each share entitles its holder to one vote in the shareholders' meeting and gives an equal right to dividends.

Shares are listed on the NASDAQ OMX Helsinki Ltd under code ETT1V. The share has no nominal value and there is no maximum number of shares. All issued shares are fully paid.

The number of treasury shares held and controlled by the company in the end of the financial year was 471,302 (2009: 468,298). During the financial year the company has not acquired or disposed of own shares. From the Group's incentive plan 2,004 pcs of own shares were returned to the Group.

The authorization by Board of Directors for acquisitions and disposals of treasury shares and increasing the share capital through a rights issue is disclosed in Shares and Shareholders.

The Board of Directors has proposed a dividend of EUR 0.10 to be paid.

27. Incentive plan for key personnel

The Etteplan Oyj Board of Directors decided on a share-based incentive plan for key personnel in March 2008. The plan included three earnings periods: calendar years 2008, 2009 and 2010. Rewards were paid as a combination of shares and cash. The cash payment was to cover the taxes and fiscal fees arising from sharebased rewards. From the incentive plan earned shares may not be disposed, pledged or otherwise used during the engagement period. The engagement period was two years beginning from the reception of remuneration. The plan had a target group of 37 people in 2008, 39 people in 2009 and 33 people in 2010. The remuneration paid from the plan corresponded to the value of about 720,000 Etteplan Oyj shares at maximum. If employment was terminated during the earnings or ownership period, the key person was not entitled to shares.

The 2008 reporting period was the first earnings period in the scheme, which used consolidated revenue (with a weight of 50%) and operating profit (50%) as earnings criteria.

The Board of Directors of Etteplan Oyj made in its meeting held on February 11, 2009 a resolution upon disposal of company-held shares pursuant to the authorization granted to it by the Annual General Meeting of Shareholders' held on March 28, 2008. The authorization was renewed in the Annual General Meeting on March 26, 2009.

In accordance with the decision by the Board of Directors, Etteplan Oyj, on April 30, 2009, disposed 41,177 company-held shares as the remuneration for the 2008 earnings period for 36 employees who were part of share-based incentive plan in 2008. The price per share of the transferred shares was EUR 2.89, which was the volume weighted average quotation of Etteplan Oyj share on April 30, 2009. Accordingly, the total transaction price of the transferred shares was EUR 119,001.53. In addition, a monetary part and capital transfer tax, totalling at EUR 180,723.97, were paid out of the plan. The remuneration earned in 2008 was paid on April 30, 2009. Of the disposed shares 890 were returned to the company.

The reporting period 2009 was the second earnings period in the scheme, which used consolidated operating cash flow (with a weight of 50%) and operating profit (50%) as earnings criteria. The Board of Directors of Etteplan Oyj made in its meeting, on February 10, 2010, a resolution that there will be no disposal of company-held shares for the 2009 earnings period.

The reporting period 2010 was the third earnings period in the scheme, which used consolidated operating cash flow (with a weight of 50%) and operating profit (50%) as earnings criteria. The Board of Directors of Etteplan Oyj has in its meeting, on February 14, 2011, made a resolution that there will be no disposal of company-held shares for the 2010 earnings period.

Expenses from employee benefits include equity -settled and cas h-settled cas h-based payments	2010	2009
Equity-settled	0	116
Settled in equity in future	0	-59
Total	0	57

Cash settled	0	181
Settled in cash in future	0	-50
Total	0	131
EUR 1 000	2010	2009
28. Borrowings
Non-current
Loans from financial institutions	4 804	4 614
Pension loans	1 562	2 813
Finance lease liabilities	414	199
Total	6 780	7 626

EUR 1 000	2010	2009
Analysis by currency
EUR	4 444	7 626
SEK	2 336	0
Total	6 780	7 626

Current
Loans from financial institutions	3 619	2 086
Cheque account with overdraft facility	0	207
Pension loans	1 250	1 250
Finance lease liabilities	453	416
Total	5 322	3 959
Analysis by currency
EUR	4 237	3 542
SEK	65	416
CNY	1 020	0
Total	5 322	3 959

29. Due dates of the financial leasing liabilities
Minimum lease payments
Within a year	477	434
More than one year but no more than 5 years	424	203
Minimum rentals, total	901	637
Future financing cost	-37	-21
Present value	864	616

Present value aging
Within a year	452	416
More than one year but no more than 5 years	412	199
Present value, total	864	616
The average interest rate of the finance lease agreements in year 2010 was 4.5 % (2009: 5.1%)


30. Trade and other payables
Advances received	121	121
Advances received, long-term projects	163	41
Trade payables to associates	0	92
Trade payables to others Derivatives	6 106 55	3 998 146
Accrued expenses	13 034	15 827
Tax payables	4 782	3 138
Other payables	824	1 037
Trade and other current payables	25 085	24 401

Main items included in accrued expenses
Interest liabilities	42	112
Accrued employee expenses	10 412	11 443
Other accrued expenses	2 580	4 272
Main items included in accrued expenses, total	13 034	15 827

Analysis by currency
EUR	15 491	13 732
SEK	9 502	10 561
CNY	89	107
Other	3	0
Total	25 085	24 401

31. Income tax payables Accrued income tax	731	445

32. Deferred Taxes

Deferred Taxes 2010 Deferred tax assets

		Discontinuing
	1.1.2010	Translation difference	In income statement	operations in P&L	In equity	M&A	31.12.2010
Confirmed loss	553	57	-176	0	0	0	434
Other timing differences	398	-0	-230	-126	0	0	42
Total	950	57	-406	-126	0	0	476

Deferred tax liabilities

	1.1.2010	Translation difference	In income statement	In equity	M&A	31.12.2010
Depreciation and amortization in excess of scheduled and discretionary provisions	122	14	13	0	0	149
Other timing differences	29	-9	-16	49	62	115
Total	150	5	-3	49	62	264

Deferred Taxes 2009

Deferred tax assets

	Discontinuing
	1.1.2009	Translation difference	In income statement	operations in P&L	In equity	M&A	31.12.2009
Confirmed loss	0	19	666	0	0	-132	553
Other timing differences	191	11	250	127	21	-202	398
Total	191	30	916	127	21	-334	950

Deferred tax liabilities

	1.1.2009	Translation difference	In income statement	Discontinuing operations in P&L	In equity	M&A	31.12.2009
Depreciation and amortization in excess of scheduled and discretionary provisions	1 447	74	-614	-39	0	-746	122
Other timing differences	90	3	-62	0	0	-2	29

Total	1 537	77	-676	-39	0	-748	150

In 2010 the group recognized a tax asset amounting to EUR 434 thousand (2009: EUR 553 thousand) for tax loss carry-forwards, for which a future taxable profit is probable regardless of losses in 2009. The company estimates that the remainder of the confirmed losses will be utilized in the financial year 2011.

At December 31, 2010 the group had gross losses carried forward of EUR 1,453 thousand (2009: EUR 1,233 thousand) of which a deferred tax asset has not been recognized. These losses have no expiry date.

33. Provisions
2010	Warranty provision	Reorganization provision	Other provisions	Total
Provisions 1.1.2010	187	1 198	50	1 435
Utilized during the period	-74	-258	0	-332
Unused amount reversed	-113	-834	-50	-997
Additional provisions	0	0	0	0
Provisions 31.12.2010	0	106	0	106

Provisions include estimated costs related to reorganization in Swedish operations EUR 106 thousand (2009: EUR 1,198 thousand). The remaining provision relates to a rent agreement that expires in May 2013.

Other Notes

EUR 1 000	2010	2009
34. Pledges , mortgages and guarantees
For own debts
Other contingencies	34	55
Loan guarantees for group companies	2 133	0

Leasing liabilities
For payment under one year	1 197	983
For payment 1–5 years	1 489	1 107

Total	4 853	2 145

35. Related -party transactions

The Group's related-party includes parent company, subsidiaries and associated companies. Related-party includes also Board of Directors, Management Group and CEO.

As the transactions with related-party are recognized those business transactions which are not eliminated in consolidation. Related-party transactions are priced according to Group's normal pricing basis and sales conditions.

Group companies 31.12.2010
Company	Domicile	Group's holding
Parent company Etteplan Oyj	Hollola, Finland
Etteplan Design Center Oy	Hollola, Finland	100%
Etteplan Industry AB	Västerås, Sweden	100%
Lutab AB	Stockholm, Sweden	100%
Etteplan Sweden Holding AB	Göteborg, Sweden	100%
Etteplan AB	Göteborg, Sweden	100%
Cool Engineering AB	Göteborg, Sweden	100%
Etteplan IT AB	Västerås, Sweden	70%
Innovation Team Sweden AB	Halmstad, Sweden	91%
Etteplan Consulting (Shanghai) Co., Ltd.	Shanghai, China	100%
Etteplan Vataple Technology Centre, Ltd	Kunshan, China	70%

Associated companies

Teknogram Signal AB (from October 29, 2010 onwards) Hedemora, Sweden 24%

The Company started to renew its legal structure in Finland from April 1, 2010 and the concentration of business operations to Etteplan Design Center Oy was completed on July 1, 2010. In Sweden, business operations will be concentrated to four legal companies in phases during year 2011. Group administration units continue their operations in the parent company Etteplan Oyj. Change in legal structure does not impact the content of financial reporting in 2010. Legal structure change will have an impact on parent company's balance sheet.

The following group companies have been merged on 30.6.2010:	Domicile	Merged to
Etteplan EC Oy	Hollola, Finland	Etteplan Design Center Oy
Etteplan EE Oy	Pori, Finland	Etteplan Design Center Oy
Etteplan EI Oy	Pori, Finland	Etteplan Design Center Oy
Etteplan LI Oy	Hollola, Finland	Etteplan Design Center Oy
Etteplan KL OY	Jyväskylä, Finland	Etteplan Design Center Oy
Etteplan Metals Processing Oy	Hollola, Finland	Etteplan Design Center Oy
Etteplan Production Lines Oy	Hollola, Finland	Etteplan Design Center Oy
Etteplan ED Oy	Hyvinkää, Finland	Etteplan Design Center Oy
Etteplan Technical Information Oy	Tampere, Finland	Etteplan Design Center Oy
LCA Engineering Oy	Kouvola, Finland	Etteplan Design Center Oy
Eteco Oy	Lempäälä, Finland	Etteplan Design Center Oy
Aerospace Engineering Sweden AB	Göteborg, Sweden	Etteplan Sweden Holding AB

Etteplan Holdings B.V, domiciled in Amsterdam in The Netherlands has been liquidated on June 30, 2010.

Other Notes

The following transactions were carried out wit h related parties :
EUR 1 000	2010	2009
Sales of goods and services to related parties
Associated companies	399	0
Other related parties	54	7
Total	454	7
Purchases of goods and services from related parties
Associated companies	287	256
Key personnel	81	95
Other related parties	311	344
Total	679	695

Receivables from related parties
Other related parties	15	0
Total	15	0
Loans to related parties
Associated companies	0	92
Total	0	92

Key management compensation Key management of Etteplan Oyj includes the Board of Directors, CEO and Management Group.
Salaries and fees paid
EUR 1 000	2010	2009
Members of the Board
Heikki Hornborg, Chairman of the Board	39	232
Tapani Mönkkönen, vice-chairman until March 24, 2010	20	26
Matti Virtaala until March 24, 2010	20	26
Tapio Hakakari	20	26
Pertti Nupponen	19	25
Robert Ingman	20	0
Satu Rautavalta March 24, 2010 onwards	0	0
Teuvo Rintamäki March 24, 2010 onwards	0	0
	137	335
CEO and other Members of the Management Group
Matti Hyytiäinen	300	328
Other members of the Management Group	892	1 065
Salaries and fees total	1 329	1 728
The annual emolument for an executive member of the Board of Directors passes by the Annual General Meeting.
Stock options to the key management
Stock options have not been granted for the company's management during 2010.
Information on key management holdings

1 000 pcs	Shares 31.12.2010
Hyytiäinen Matti, CEO	25
Hornborg Heikki, Chairman of the Board	1088
Hakakari Tapio, Member of the Board	200
Ingman Robert, Member of the Board	20
Nupponen Pertti, Member of the Board	2
Rautavalta Satu, Member of the Board March 24, 2010 onwards	2
Rintamäki Teuvo, Member of the Board March 24, 2010 onwards	27
Björk Pia, Member of the Management Group until January 31, 2011	2
Gräns Niclas, Member of the Management Group	1
Gådin Per-Anders, Member of the Management Group	5
Jahn Peter, Member of the Management Group January 8, 2010 onwards	0
Liedes Outi-Maria, Member of the Management Group	2
Näkki Juha, Member of the Management Group	2
Total	1 376

36. Events after the balance sheet date

The Group's management is not aware of any events after the balance sheet date that could have a material impact on the Group's financial position or the figures or calculations reported in these financial statements.

37. Key figures for financial trends
	2010	2009	2008
EUR 1 000, Financial period 1.1.–31.12.	IFR S	IFR S	IFR S
Revenue	104 786	98 700	134 215
Increase in revenue, %	6,2	-26,5	22,7
Operating profit	6 054	-3 587	13 757
% of revenue	5,8	-3,6	10,3
Profit before taxes and non-controlling interest	6 057	-4 170	12 797
% of revenue	5,8	-4,2	9,5
Profit for the financial year	4 347	-3 287	9 045
Return on equity, %	16,4	-13,0	32,1
Return on investment, % *)	17,0	-8,6	31,8
Equity ratio, %	43,6	38,5	34,2
Gross investments	2 538	4 763	12 082
% of revenue	2,4	4,8	9,0
Net gearing, %	24,1	20,8	54,6
Personnel, average	1 594	1 765	1 763
Personnel at year end	1 569	1 544	1 749
Wages and salaries	56 049	56 962	68 344

*) Return on investment calculated from profit before taxes

38. Key figures for shares
	2010	2009	2008
EUR 1 000, Financial period 1.1.–31.12.	IFR S	IFR S	IFR S
Earnings per share, EUR	0,19	-0,17	0,45
Equity per share, EUR	1,48	1,20	1,37
Dividend per share	0,10*)	0,04	0,08
Dividend per profit, %	53	-24	18
Effective dividend return, %	3,6	1,4	5,4
P/E-ratio, EUR	14,4	-16,5	6,9
Share price lowest	2,40	2,58	2,30
highest	3,30	3,40	5,35
average for the year	2,86	2,94	4,16
Market capitalization	54 000	54 597	55 105
Number of shares traded	2 466	2 604	8 192
Percentage of shares traded	13	13	41
Adjusted average number of shares during the financial year, (1 000)	19 709	19 659	19 950
Adjusted average number of shares at year end, (1 000)	19 709	19 710	19 684

*) proposal by the Board of Directors

Formulas for the Key Figures

Return on equity (ROE)

(Profit before taxes and non-controlling interest - taxes) x 100 (Shareholders' equity + minority interest) average

Return on investment (ROI), before taxes

(Profit before taxes and non-controlling interest + interest and other financial expenses) x 100 (Balance sheet total – non-interest bearing debts) average

Debt-equity ratio, %

(Interest-bearing debts – cash and cash equivalent and marketable securities) x 100 Shareholders' equity + non-controlling interest

Equity ratio, %

(Shareholders' equity + non-controlling interest) x 100 Balance sheet total – advances received

Earnings per share

(Profit before taxes and non-controlling interest – taxes – non-controlling interest - Hybrid loan interest adjusted with tax effect) Average number of shares during the financial year

Equity per share

Shareholders' equity Adjusted number of shares at the end of the financial year

Dividend per share

Dividend for year Adjusted number of shares during the financial year

Dividend as percentage of earnings

Dividend per share x 100 Earnings per share

Effective dividend yield, %

Dividend per share x 100 Adjusted last traded share price

Price/earnings ratio (P/E)

Adjusted last traded share price Earnings per share

Share price trend

For each financial year, the adjusted low and high actual traded prices are given as well as the average price for the financial year adjusted for share issues.

Average price = Total turnover of shares in euros Number of shares traded during the financial year

Market capitalization

Number of outstanding shares at year-end x last traded price of year

Trend in share turnover, in volume and percentage figures

The trend in turnover of shares is given as the number of shares traded during the year and as the percentage of traded shares relative to issued stock during the year.

Parent Company's Income Statement

EUR 1 000		1.1.–31.12.2010	1.1.–31.12.2009
	Note	FAS	FAS
Revenue	1	12 655	46 492
Other operating income	2	3 136	1 818
Materials and services	3	-6 850	-23 817
Staff costs	4	-5 491	-14 803
Depreciation and amortization expenses	11,12	-450	-836
Other operating expenses		-3 019	-8 403
Operating profit/loss		-18	452
Financial income and expenses	6,7	578	-6 510
Profit before extraordinary items		560	-6 059
Extraordinary items	8	2 000	0
Profit before appropriations and taxes		2 560	-6 059
Appropriations	9	130	10
Income taxes	10	-300	-1
Net profit/loss for the financial year		2 390	-6 050

Parent Company's Balance Sheet

EUR 1 000	Note	31.12.2010 FAS	31.12.2009 FAS
ASSETS
Non-current assets
Intangible assets	11	505	1 000
Tangible assets	12	53	499
Investments
Shares in group companies	13	38 859	38 429
Other investments	13	46	303
Investments, total		38 905	38 732
Non-current assets, total		39 463	40 231
Current assets
Current receivables	14	11 725	21 309
Cash and cash equivalents	15	3 319	4 431
Current assets, total		15 044	25 740
TOTAL ASSETS		54 508	65 972

EQUITY AND LIABILITIES
Equity
Share capital	16	5 000	5 000
Share premium account	16	6 701	6 701
Unrestricted equity fund	16	2 584	2 590
Retained earnings	16	5 954	12 791
Net profit/loss for the financial year	16	2 390	-6 050
Equity, total		22 630	21 033
APPR OPRIATI ONS	17	0	164

MAN DATORY PROVISIONS	21	0	237
Liabilities
Non-current liabilities	18	16 366	17 427
Current liabilities	19,20	15 512	27 111
Liabilities, total		31 878	44 538
TOTAL EQUITY AND LIABILITIES		54 508	65 972

Parent Company's Cash Flow Statement

EUR 1 000	1.1.–31.12.2010	1.1.–31.12.2009
Operating cas h flow
Cash receipts from customers	8 506	56 388
Operating expenses paid	-9 184	-70 028
Operating cash flow before financial items and taxes	-678	-13 640
Interest and payment paid for financial expenses	-1 429	-618
Dividends received	1 477	5 487
Interest received	84	152
Income taxes paid	-2	2
Operating cash flow (A)	-548	-8 617

Investing cas h flow
Purchase of tangible and intangible assets	-55	-90
Acquisition of subsidiaries	-1 700	-599
Disposal of subsidiaries	0	7
Proceeds from sale of tangible and intangible assets	5	9
Loans granted	0	-977
Loan receivables, decrease	1 065
Change of cash equivalents	4 599	8 093
Proceeds from sale of investments	0	1
Investing cash flow (B)	3 914	6 444

Financing cas h flow
Purchase of own shares	0	6
Short-term loans, increase	513	0
Short-term loans, decrease	-2 738	-2 453
Long-term loans, increase	2 176	12 500
Long-term loans, decrease	-3 336	-3 023
Dividend paid and other profit distribution	-788	-1 574
Group contribution	0	1 115
Financing cash flow (C)	-4 173	6 571

Variation in cash (A+B+C) increase (+) / decrease (-)	-807	4 398

Assets in the beginning of the financial period	4 431	33
Exchange gains or losses on cash and cash equivalents	370
Cash and cash equivalents in intra-group reorganizations	-675
Assets at the end of the financial period	3 319	4 431

Parent company's Accounting Policies

BASIS OF PREPARATION

The financial statements of the parent company, Etteplan Oyj, have been prepared in accordance with Finnish accounting and company legislation (FAS).

RECOGNITION OF INCOME AND CONSTRUCTION CONTRACTS

The revenue includes income from design activities and sales of materials for projects until March 31, 2010. The parent company's accounting principles for recognition of income and construction contracts correspond to those applied in the consolidated financial statements. Business activities of Etteplan Oyj were transferred to Etteplan Design Center Oy on April 1, 2010. Group administration activities remain in the parent company. This change in legal structure effects the comparability of accounting period 2010 to previous accounting periods especially in revenue.

RESEARCH AND DEVELOPMENT EXPENDITURE

Research and development expenditure is recorded under expenses for the year in which it is incurred.

MEASUREMENT OF NON-CURRENT ASSETS

Non-current assets have been capitalized in the balance sheet at cost less depreciation according to plan and with possible impairment loss. Depreciation according to plan is based on the estimated useful life of the asset item. Land areas are not depreciated because they are not considered to have a carrying period. The useful lives of other tangible and intangible assets are:

software	5 years
computers	3 years
vehicles	5 years
office furniture	5 years
renovation of premises	5 years

Maintenance and repair costs are expensed when they are incurred. Major basic improvement investments are capitalized and depreciated in the income statement over their useful life. Capital gains and losses arising on the retirement and sale of non-current assets are included either in other operating income or under expenses.

INCOME TAXES

Taxes in the income statement include taxes based on taxable earnings for the period as well as corrections to taxes for previous periods. Current tax is calculated on taxable income using the tax rate that is in force in each country.

ACCUMULATED APPROPRIATIONS IN THE PARENT COMPANY

Postponed depreciations of machinery and equipment amount to a total of 96 thousand euros. The associated deferred tax assets are not recorded in the parent company's balance sheet.

PENSION AGREEMENTS

Pension security for the employees of the parent company has been arranged with external pension insurance companies. Pension expenses are recorded as expenses in the year in which they are incurred.

LEASE AGREEMENTS

Contractual lease payments are entered as expenses in the income statement over the lease period.

Notes to the Income Statement, Parent Company

EUR 1 000	2010	2009
1. Revenue Finland	12 655	46 492
Turnover consists of design business

2. Other operating income Insurance compensations	0	0
Administrative services	0	117
Sales profit of tangible and intangible assets	5	6
Other operating income	3 131	1 695
Other operating income, total	3 136	1 818
3. Materials and services
Materials	23	59
Services from others	6 827	23 758
Materials and services, total	6 850	23 817
4. Number of personnel and staff expenses
Personnel
At year-end	27	326
Personnel, average	100	347
Personnel by category
Design personnel	0	301
Administration personnel	27	25
Personnel, total	27	326
Staff costs
Wages and salaries	4 620	12 196
Pension costs - defined contribution plans Other indirect employee costs	658 213	2 024 582
Staff costs, total	5 491	14 803

5. Audit fees
Auditing	35	29
Other services Total	33 68	41 70

6. Financial income
Dividend income
Intra-Group dividend income Dividend income from others	1 472 5	3 669 18
Total	1 477	3 687
Other financial income
Intra-Group	117	72
Others	523	79
Total	640	151
Foreign exchange gain	515	71
Financial income, total	2 632	3 910

7. Financial expenses Interest on borrowings from group entities	81	77
Interest on borrowings from others	1 303	617
Loss on disposal of group companies	85	9 166
Impairment on receivables	257	488
Foreign exchange loss	287	23
Other financial expenses	41	49
Financial expenses, total	2 054	10 420
8. Extraordinary items
Group contributions received	2 000	0
9. Appropriations
increase (-) / decrease (+) in depreciation in excess of plan	130	10

10. Income tax expenses
Tax on income from operations Tax corrections for previous accounting periods	298 2	0 1
Income taxes in income statement	300	1
		55

11. Intangible assets, parent company

Intangible assets 2010
	Intangible rights	Goodwill	Advance payments	Total
Acquisition cost at 1.1.	4 339	379	0	4 718
Additions	41	0	4	45
Reclassifications between items	-1 653	0	0	-1 653
Acquisition cost 31.12.	2 727	379	4	3 110

Cumulative depreciation 1.1.	-3 434	-284	0	-3 718
Cumulative depreciation reclassifications	1 536	0	0	1 536
Depreciation for the financial period	-348	-76	0	-423
Cumulative depreciation 31.12.	-2 246	-360	0	-2 606

Carrying value 31.12.	481	19	4	505

Intangible assets 2009
	Intangible rights	Goodwill	Advance payments	Total
Acquisition cost at 1.1.	4 248	379	50	4 677
Additions	33	0	8	41
Reclassifications between items	58	0	-58	0
Acquisition cost 31.12.	4 339	379	0	4 718

Cumulative depreciation 1.1.	-2 965	-208	0	-3 174
Depreciation for the financial period	-469	-76	0	-545
Cumulative depreciation 31.12.	-3 434	-284	0	-3 718

Carrying value 31.12.	905	95	0	1 000

12. Tangible assets, parent company

Tangible assets 2010

	Machinery and equipment	Other tangible assets	Total
Acquisition cost at 1.1.	4 015	197	4 212
Reclassifications between classes	-2 969	-146	-3 115
Additions	0	0	0
Disposals	0	0	0
Acquisition cost 31.12.	1 046	51	1 097

Cumulative depreciation 1.1.	-3 586	-127	-3 713
Cumulative depreciation, reclassifications	2 595	100	2 695
Depreciation for the financial period	-20	-6	-26
Cumulative depreciation 31.12.	-1 011	-33	-1 044

Carrying value 31.12.	35	18	53

Tangible assets 2009

	Machinery and equipment	Other tangible assets	Total
Acquisition cost at 1.1.	3 997	171	4 168
Additions	22	26	48
Disposals	-4	0	-4
Acquisition cost 31.12.	4 015	197	4 212

Cumulative depreciation 1.1.	-3 325	-97	-3 422
Depreciation for the financial period	-261	-30	-291
Cumulative depreciation 31.12.	-3 586	-127	-3 713

Carrying value 31.12.	430	70	499

13. Investments, parent company

Investments 2010
	Equity in Group entities	Other shares and equity interests	Total
Acquisition cost 1.1.	38 429	303	38 732
Increases	450	0	450
Decreases	-20	0	-20
Impairment	0	-257	-257
Acquisition cost 31.12.	38 859	46	38 905

Carrying value 31.12.	38 859	46	38 905
Investments 2009
	Equity in Group entities	Other shares and equity interests	Total
Acquisition cost 1.1.	44 117	21	44 138
Increases	3 783	0	3 783
Decreases	-9 188	0	-9 188
Reclassifications between items	-281	281	0
Acquisition cost 31.12.	38 429	303	38 732

Carrying value 31.12.	38 429	303	38 732
EUR 1 000		2010	2009
14. Trade and other receivables
From group companies
Trade receivables		911	485
Dividend receivables		0	0
Other receivables		808	1 401
Internal bank account receivables		7 126	11 726
Group contribution receivables		2 000	0
Total		10 845	13 611

From others
Trade receivables		8	5 952
Allowance for doubtful current trade receivables		0	-59
Other receivables from associates		0	117
Other short-term receivables		19	504
Current prepayments and accrued income		854	1 183
Total		881	7 696

Main items included in prepayments and accrued income
Receivables for revenue recognized in part prior to project completion		0	231
Accruals of personnel expenses		3	30
Prepaid office rents		0	17
Other prepayments and accrued income on sales		556	314
Other prepayments and accrued income on expenses		295	591
Total		854	1 183

15. Cash and cas h equivalents
Bank accounts and cash		3 319	4 431

Total 3 319 4 431

Cash and cash equivalents in the balance sheet are corresponding with the financial assets in Cash flow statement.

EUR 1 000	2010	2009
16. Equity
Share capital 1.1.	5 000	5 000
Share capital 31.12.	5 000	5 000
Share premium account 1.1.	6 701	6 701
Share premium account 31.12.	6 701	6 701
Unrestricted equity fund 1.1.	2 590	2 474
Share issue	-6	117
Decreases	0	0
Unrestricted equity fund 31.12.	2 584	2 590

Treasury shares 1.1.	-1 949	-2 084
Additions	0	-44
Disposals	0	178
Other changes	-9	0
Treasury shares 31.12.	-1 958	-1 949

Retained earnings 1.1.	8 691	16 493
Dividends paid	-788	-1 574
Gain on share-based payments	10	-179
Retained earnings 31.12.	7 912	14 740
Profit/loss for the financial year	2 390	-6 050

Shareholders' equity total	22 630	21 033
Distributable funds 31.12.
Retained earnings	7 912	14 740
Treasury shares	-1 958	-1 949
Unrestricted equity fund	2 584	2 590
Profit/loss for financial year	2 390	-6 050
Distributable funds 31.12.	10 928	9 331

Shares 1000 pcs	2010	2009
Number of shares 1.1.	20 179	20 179
Number of shares 31.12.	20 179	20 179
17. Accumulated appropriations
Depreciation in excess of plan	0	164

EUR 1 000	2010	2009
18. Non -current liabilities
Loans from financial institutions	4 804	4 614
Pension loans	1 562	2 813
Hybrid loan	10 000	10 000
Total	16 366	17 427

19. Current liabilities To others
Loans from financial institutions	2 599	2 086

Cheque account with overdraft facility	0	207
Pension loans	1 250	1 250
Total	3 849	3 543
To group companies
Internal bank account liabilities	6 754	9 284
Total	6 754	9 284

EUR 1 000	2010	2009
20. Trade and other current liabilities
To others
Advances received	0	56
Trade payables	870	884
Other liabilities	102	1 068
Accrued expenses	3 219	6 222
Total	4 191	8 230

To group companies
Trade payables	137	154
Other	581	5 900
Total	718	6 054

Main items included in accrued expenses
Interest liabilities	118	110
Tax liabilities	298	0
Accrued employee expenses	888	2 713
Other accrued expenses	1 915	3 399
Total	3 219	6 222

21. Mandatory provisions

	Decrease of
2010 1.1.2010	provisions	31.12.2010
Provisions
Provisions for unprofitable orders/contracts 187	-187	0
Other provisions 50	-50	0
Yhteensä 237	-237	0

EUR 1 000	2010	2009
22. Pledges , mortgages and guarantees
Other contingencies	28	55
Guarantees for group companies	2 133	0

Leasing liabilities
For payment in next financial year	790	717
For payment later	1 052	579
Total	4 004	1 350

Etteplan Oyj has given a parent company guarantee for a loan of EUR 1,587 thousand, of which EUR 1,020 thousand is in use, for Etteplan Vataple Technology Centre, Ltd.

Etteplan Oyj has given a parent company guarantee for a loan of EUR 227 thousand, of which EUR 0 is in use, for Etteplan Consulting (Shanghai) Co., Ltd.

Shares and Shareholders

Share capital and shares

On 31 December 2010, Etteplan Oyj's share capital, entered in the trade register and paid in full, was EUR 5,000,000 and the number of shares was 20,179,414. There were no changes in the share capital during the report period January 1 – December 31, 2010. The company has one series of shares. Each share confers the right to one vote at the General Meeting and the same right to a dividend.

Dividend

The Annual General Meeting passed a resolution in accordance with the proposal of the Board of Directors to pay a dividend for the 2009 financial year of EUR 0.04 per share, or a total of EUR 788,351.20. The remaining profit was retained in non-restricted equity. The record date of the payment of dividend was March 29, 2010. The dividend was paid on April 7, 2010.

Current authorizations

Authorization to raise the share capital

The Annual General Meeting on March 24, 2010 granted the Board of Directors the authorization to decide upon an issue of no more than 4,000,000 shares with a share issue or by granting option rights or other specific rights, referred to in Chapter 10, Article 1 of the Companies Act, giving entitlement to shares in one or more lots. The authorization includes the right to decide to issue either new shares or company held shares. The authorization is valid for five years from the time of the Annual General Meeting resolution – i.e., from March 24, 2010, through March 24, 2015. The authorization replaces the previous authorization. The Board has not used its authorization.

Authorization to acquire and dispose own shares

The Annual General Meeting on March 24, 2010 authorized the Board of Directors to acquire company's own shares in one or more lots using the company's unrestricted equity. A maximum of 2,000,000 of the company's own shares can be acquired. The Board of Directors shall have the right to decide who the shares are acquired from or, the Board of Directors has the right to decide on a directed acquisition of own shares. The authorization is valid for 18 months from the date of the decision of the Annual General Meeting starting on March 24, 2010 and ending on September 24, 2011. The authorization replaces the previous authorization. The Board has not used its authorization.

Etteplan Oyj held 471,302 of its own shares on December 31, 2010. In January – December 2010 the company did not acquire its own shares but 2,004 shares were returned from the share-based incentive plan during the report period. The company has not disposed company-held shares in January – December 2010.

Option rights

The company does not currently have a share option program.

Share-based incentive plan

The Board of Directors of Etteplan Oyj has in its meeting held on February 11, 2009 made a resolution upon disposal of company-held shares pursuant to the authorization granted to it by the Annual General Meeting of Shareholders' held on March 28, 2008. The authorization was renewed in the Annual General Meeting on March 26, 2009.

In accordance with the decision by the Board of Directors, Etteplan Oyj has, on April 30, 2009, disposed 41,177 company-held shares as the remuneration for the 2008 earnings period for 36 employees who were part of share-based incentive plan in 2008. The price per share of the transferred shares was EUR 2.89, which was the volume weighted average quotation of Etteplan Oyj share on April 30, 2009. Accordingly, the total transaction price of the transferred shares was EUR 119,001.53. In addition, a monetary part and capital transfer tax, totalling at EUR 180,723.97, were paid out of the plan. The remuneration earned in 2008 was paid on April 30, 2009. For the earnings period 2008, 890 of the disposed shares have been returned to the company.

The Board of Directors of Etteplan Oyj has in its meeting, on February 10, 2010, made a resolution that there will be no disposal of company-held shares for the 2009 earnings period.

The Board of Directors of Etteplan Oyj has in its meeting, on February 14, 2011, made a resolution that there will be no disposal of company-held shares for the 2010 earnings period.

Share quote

The Etteplan share (ETT1V) is quoted in the Nordic NASDAQ OMX's Small Cap market capitalization group in the "Industrials" sector.

Share price trend and turnover

The number of Etteplan Oyj shares traded during the financial year was 2,466,130, to a total value of EUR 7.1 million. The share price low was EUR 2.40, the high EUR 3.30, the average EUR 2.86, and the closing price EUR 2.74. Market capitalization on December 31, 2010 was EUR 54.0 million, and there were 1,873 shareholders.

Shareholders

At the end of 2010, the company had 1,873 registered shareholders. In total, 566,031 shares, or 2.81% of all shares, were entered in the administrative register. On 31 December 2010, the members of the company's Board of Directors and the President and CEO owned a total of 1,491,079 shares, or 7.39% of the total share capital.

In accordance with the Securities Markets Act, Chapter 2, Article 9, Etteplan Oyj has not issued any notifications of changes in shareholding during the financial year. ■

Major shareholders, 31 December, 2010

Name	Number of shares	Proportion of shares and votes , %
Mönkkönen Tapani	4 075 600	20,20
Ingman Group Oy Ab	3 700 000	18,34
Fincorp Ab	2 207 080	10,94
Hornborg Heikki	1 088 320	5,39
Varma Mutual Pension Insurance Company	821 328	4,07
Alfred Berg Finland Fund	501 699	2,49
Etteplan Oyj	471 302	2,34
Tuori Klaus	351 000	1,74
Alfred Berg Small Cap Fund	331 090	1,64
Hakakari Tapio/Webstor Oy	326 180	1,62
Aktia Capital Small Cap Fund	298 200	1,48
Evli Bank Plc.	267 895	1,33
Tuori Aino	256 896	1,27
Kempe Anna	220 000	1,09
Svenska Handelsbanken AB (Publ), Filialverksamheten i Finland	207 628	1,03
Nordea Bank Finland Plc.	206 946	1,03
Tuori Kaius	177 370	0,88
Alfred Berg Optimal Small Cap Fund	170 421	0,84
Lisboa de Castro Palacios Hietala M	150 544	0,75
The Seafarer's Pension Fund	126 610	0,63
Other shareholders	4 223 305	20,93
Total	20 179 414	100,00

Nominee-registrated shares	566 031	2,81

Breakdown of shareholdings by size class, 31 December, 2010

Number of shares	Share holders	Proportion of share holders , %	Number of shares	Proportion of shares and votes , %
1–100	130	6,94	7 814	0,04
101–500	791	42,23	272 083	1,35
501–1 000	394	21,04	324 280	1,61
1 001–5 000	412	22,00	980 174	4,86
5 001–10 000	70	3,74	528 694	2,62
10 001–50 000	41	2,19	896 683	4,44
50 001–100 000	10	0,53	773 598	3,83
100 001–500 000	19	1,01	4 002 061	19,83
500 001–	6	0,32	12 394 027	61,42
Total	1 873	100,00	20 179 414	100,00

Breakdown of shareholdings by owner group, 31 December, 2010

Name of the sector	Share holders	Number of shares	Number of nominee registrated shares	Proportion of shares and votes , %
National economy total (domestic sector)
Companies	128	7 126 761	7 695	35,36
Financial and insurance institutions	19	1 754 194	558 336	11,46
Public sector entities	9	1 250 308	0	6,20
Households	1 686	9 114 042	0	45,17
Non-profit institutions	10	89 206	0	0,44
Foreigners
European Union	16	201 120	0	1,00
Other countries and international organizations	5	77 752	0	0,39
Total	1 873	19 613 383	566 031	100,00

Board of Directors dividend proposal

At December 31, 2010, the parent company's distributable shareholders' equity amounted to EUR 10.9 million, of which the net profit for the financial year was EUR 2.4 million.

The Board of Directors proposes that from the distributable funds at the disposal of the Annual General Meeting, a dividend of EUR 0.10 per share be paid for the financial period 2010 on the company's externally owned shares, to a total amount of EUR 2.0 million.

Dividend will not be paid out to shares that are company-held on the record date of dividend payout, April 5, 2011. No substantial changes have occurred in the financial position of the company since the end of the financial year. The company's liquidity is good and the Board of Directors judges that the proposed distribution of dividend will not endanger the company's solvency.

It is proposed that the dividend be paid on April 12, 2011.

Vantaa, February 14, 2011

Heikki Hornborg Tapio Hakakari Robert Ingman Chairman of the Board Member of the Board Member of the Board

Pertti Nupponen Satu Rautavalta Teuvo Rintamäki

Member of the Board Member of the Board Member of the Board

Auditor's Report

To the Annual General Meeting of Etteplan Oyj

We have audited the accounting records, the financial statements, the report of the Board of Directors and the administration of Etteplan Oyj for the year ended on December 31, 2010. The financial statements comprise the consolidated statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company's balance sheet, income statement, cash flow statement and notes to the financial statements.

Responsibility of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.

Auditor's Responsibility

Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or whether they have violated the Limited Liability Companies Act or the articles of association of the company.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion on the Consolidated Financial Statements

In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

Opinion on the Company's Financial Statements and the Report of the Board of Directors

In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.

Turku, February 28th 2011

PricewaterhouseCoopers Oy Authorised Public Accountants

Mika Kaarisalo Authorised Public Accountant

Corporate Governance Statement

This corporate governance statement has been prepared in accordance with recommendation 54 of the Finnish Corporate Governance Code. The corporate governance statement has been prepared as a part of annual report and it is also available separately on the company's web pages www.etteplan.com. Etteplan's Board of Directors' has reviewed this corporate governance statement. Etteplan Oyj's external auditor, PricewaterhouseCoopers Oy, has checked that this statement has been issued and that the description of the main features of the internal control and risk management systems pertaining to the financial reporting process is consistent with Etteplan Oyj's financial statements.

General governance principles

Etteplan Oyj is a Finnish public limited company that in its decisionmaking and governance complies with the Finnish Companies Act, other legislation concerning publicly listed companies, and the Articles of Association of Etteplan Oyj.

Etteplan is a publicly listed company that abides by the regulations of NASDAQ OMX Helsinki Ltd. The Company is committed to compliance with the corporate governance code for listed Finnish companies, published by the Securities Market Association on 15 June 2010 except with reference to the Audit Committee (recommendations 24-27), because the Company does not have an Audit Committee.

Supervision and management of the Company is divided among the General Meeting of Shareholders, the Board of Directors, and the CEO.

GENERAL MEETING

The shareholders exercise their decision-making power at the General Meeting. The Company must hold one Annual General Meeting for shareholders annually, by the end of June. If necessary, an Extraordinary Meeting of Shareholders is held. A shareholder may exercise his/her right to speak, ask questions and vote at the General Meeting. The matters to be considered at the Annual General Meeting (AGM) are specified in section 8 of Etteplan's Articles of Association and in Chapter 5, Section 3 of the Companies Act.

Decisions by the AGM are published without delay after the meeting by a stock exchange release and on the Company's website at www. etteplan.com.

Information on General Meetings to Shareholders

The Board shall convene the Annual General Meeting or an Extraordinary General Meeting with a summons to be published on the Company's website at www.etteplan.com. The summons must list the agenda for the meeting. The Board may also decide to publish the invitation to the General Meeting in a one Finnish national newspaper, determined by the Board. The summons to a meeting and the Board's proposals for the meeting are also published as a stock exchange release.

The notice of the General Meeting includes a proposal for the agenda of the meeting. The notice of the General Meeting, documents to be submitted to the General Meeting and draft resolutions to the General Meeting will be available on the Company website at least three weeks before the General Meeting.

The Company will disclose on its website the date by which a shareholder shall notify the Board of Directors of the Company of an issue that he or she demands to be included in the agenda of the Annual General Meeting.

The minutes of the General Meeting shall be posted on the Company website within two weeks of the General Meeting. The documents related to the General Meeting shall be available on the Company website at least for three months after the General Meeting.

Organization of the General Meeting

According to Company's Articles of Association the General Meeting shall be held in the Company's domicile or in Lahti, Vantaa or in Helsinki as decided by the Board of Directors of the Company.

To be able to participate in General Meeting, a shareholder must be registered in the list of Etteplan Oyj's shareholders, maintained by Euroclear Finland Ltd. A nominee-registered shareholder who intends to take part in General Meeting is advised to request the necessary instructions regarding entry in the company's shareholder register and the issuing of proxy documents from their account holder. A notification by a holder of nominee-registered shares for temporary inclusion in the Company's shareholders' register is perceived as prior notice of participation in the General Meeting.

Shareholders must register for a General Meeting in advance, within the time prescribed in the summons. A shareholder may participate in a General Meeting personally or through a duly authorized proxy. The proxy must present a power-of-attorney form for such authorization. Upon registration for a General Meeting, the shareholder must report to the Company any powers of attorney issued. The shareholder and proxy may have an assistant present at the meeting.

Attendance of the Board of Directors, Managing Director and Auditor at the General Meeting

The Chairman of the Board of Directors and a sufficient number of members of the Board and its Committees as well as the CEO shall attend the General Meeting. In addition, the Auditor shall be present at the Annual General Meeting.

Attendance of a prospective Director at a General Meeting

A person proposed for the first time as Director shall participate in the General Meeting that decides on his or her election unless there are well-founded reasons for absence.

Shareholder agreements

A shareholder agreement is an agreement among the shareholders of a company on the company's governance and management. A shareholder agreement can be made when a company is established or during the time of its operation. A shareholder agreement is binding between the unless the company is included in the agreement. In general the Board of Directors approves a shareholder agreement on behalf of the company.

Etteplan has not made a shareholder agreement nor is the Company aware of possible shareholder agreements.

BOARD

GOVERNANCE shareholders. A shareholder agreement does not bind the company itself The Board of Directors is responsible for the Company's management and for the due organization of the Company's operations in accordance with the relevant legislation and the Company's Articles of Association. The Board of Directors controls and monitors the Company's operations and management; appoints and dismisses the CEO; and approves the major decisions affecting the Company's strategy, capital expenditures, organization, remuneration and bonus systems covering the management, and finances.

Charter of the Board

As part of the Company's corporate governance, the Etteplan Oyj Board of Directors has approved written rules of procedure to control Board work. The Board's rules of procedure complement the stipulations of the Finnish Companies Act and the Articles of Association of the Company.

Meetings of the Board

The Board meets as often as appropriate fulfilment of its obligations requires. The Etteplan Board of Directors met 8 times in 2010. In addition to the members of the Board, the Company's CEO attended Board meetings as the Secretary to the Board. The average attendance percentage at the meetings was 95.8%.

Performance evaluation of the Board

On an annual basis, the Board of Directors assesses its activities and work practices. The Board specifies the criteria to be used in the assessment, which is carried out as internal self-evaluation. The results of these activities are handled by the Board.

Composition of Directors

The Annual General Meeting elects the Board of Directors members. The Nomination and Remuneration Committee of the Board of Directors of Etteplan Oyj prepares a list of proposed members of the Board of Directors for consideration by the Annual General Meeting. The Boardproposed candidates are reported upon in the summons to the meeting and on the Company's website.

According to the Articles of Association, the Board of Directors shall have a minimum of three and a maximum of seven members. The Board of Directors shall be elected for a term of one year at the Annual General Meeting.

In accordance with the proposal of the Board of Directors´ Nomination and Remuneration Committee the Annual General Meeting held on 24 March 2010 re-elected Tapio Hakakari, Heikki Hornborg, Robert Ingman and Pertti Nupponen as members of the Board of Directors as well as Satu Rautavalta and Teuvo Rintamäki were elected as new members of the Board of Directors.

The Board of Directors of Etteplan Oyj has in its meeting on March 24, 2010 elected Heikki Hornborg as Chairman of the Board.

Independence of Directors

The majority of the Directors shall be independent of the Company. In

addition, at least two of the Directors representing this majority shall be independent of significant shareholders of the Company.

The Board shall evaluate the independence of the Directors and report which of them are independent of the Company and which are independent of significant shareholders.

Tapio Hakakari, Robert Ingman, Pertti Nupponen, Satu Rautavalta and Teuvo Rintamäki are independent of the Company.

Tapio Hakakari, Heikki Hornborg, Pertti Nupponen, Satu Rautavalta and Teuvo Rintamäki are independent of significant shareholders.

Information reported on Directors

Biographical details and information on the holdings of the Board of Directors are presented on the Company's website at www.etteplan.com and in Annual Report 2010 on page 68.

BOARD COMMITTEES

Nomination and Remuneration Committee

The Board of Directors of Etteplan Oyj has appointed a Nomination and Remuneration Committee among the Directors. The Board has confirmed the central duties and operating principles of the committee in a written chapter. The Nomination and Remuneration Committee reports regularly on its work to the Board.

The task of the Nomination and Remuneration Committee is to assist the Board of Directors in matters related to the appointment and compensation of the Company's CEO, the deputy CEO and other executives. In addition, the committee prepares for the Annual General Meeting a proposal on the number of Board members, Board composition and Board member compensation. The committee also recommends, prepares and proposes to the Board the CEO's and the deputy CEO's nomination, salary and compensation, and further evaluates and provides the Board and the CEO with recommendations concerning management and employees rewards and compensation systems.

The committee consists of three Board members. It convenes on a regular basis at least once a year. The Committee Chairman provides the Board with the proposals made by the committee.

Since the Annual General Meeting of 2010, Tapio Hakakari has been Chairman of the Nomination and Remuneration Committee and Heikki Hornborg and Robert Ingman as members of the Committee. Tapio Hakakari and Robert Ingman are independent of the Company.

The Nomination and Remuneration Committee met 3 times during 2010. All members of the Nomination and Remuneration Committee attended all the meetings.

CEO

The Board of Directors appoints the CEO and terminates this employment, as well as monitors the CEO's activities. The parent Company's CEO furthermore acts as the Group's Chief Executive Officer. The CEO is responsible for managing the Group's day-to-day operations in accordance with the rules and instructions issued by the Board of Directors. The CEO may take measures that are unusual and far-reaching with regard to the scope and nature of the Company's operations, but only with authorization from the Board of Directors. The CEO is responsible for ensuring that the Company's accounting complies with the applicable legislation and that its asset management is arranged in a reliable manner.

A written CEO agreement, which has been approved by the Board, has been drawn up for the CEO.

Matti Hyytiäinen has been the Company's President and CEO since

the beginning of 2008. He is not a member of the Board of Directors, but he attends Board meetings as the Secretary to the Board. Matti Hyytiäinen's biographical details and information on the holdings are presented on the Company's Web site at www.etteplan.com and in Annual Report 2010 on page 69.

OTHER EXECUTIVES

The CEO appoints members to the Management Group who, individually and jointly, are appropriate from the standpoint of line operations. The Management Group assists the CEO and also develops and monitors all matters entrusted to the Company's management, including those connected with the Group and business unit strategies, acquisitions and major capital expenditures, divestments, the Company's image, monthly reporting, interim reports, investor relations, and the main principles of the human resource policy. The Board of Directors approves the appointment of the Management Group members.

The members of the Management Group in 2010 have been Matti Hyytiäinen, President and CEO; Pia Björk, Vice President, Operations Development and M & A; Niclas Gräns, Vice President, Per-Anders Gådin, Chief Financial Officer; Peter Jahn, Vice President, Outi-Maria Liedes, Vice President, HR and Communications; and Juha Näkki, Vice President.

Biographical details and information on the holdings of the members of the Management Group are presented on the Company's Web site at www.etteplan.com and in Annual Report 2010 on page 69.

REMUNERATION

Principles applied to remuneration schemes

The goal of remuneration schemes is to promote competitiveness and long-term financial success of the Company and to contribute to the favourable development of shareholder value. Remuneration schemes are based on predetermined and measurable performance and result criteria.

The task of Board's Nomination and Remuneration Committee is to assist the Board of Directors in matters related to the remuneration of the Company's CEO, the deputy CEO and other executives and to prepare matters related to the reward schemes for employees.

Decision-making process

The General Meeting shall decide on the remuneration payable for Board and Committee work as well as the basis for its determination. The Nomination and Remuneration Committee has been assigned the duty of preparing the remuneration of the Board. The Board of Directors shall decide on the remuneration of the CEO as well as other compensation payable to him or her. The compensation principles for the Management Group are determined by the CEO in cooperation with the Board of Directors.

Remuneration of the Board of Directors

According to the resolution passed by the Annual General Meeting of 2010, the remuneration for each member of the Board of Directors is 600 euros per meeting and for the Chairman of the Board of Directors 1,200 euros per meeting. In addition, each member of the Board receives 1,300 euros per month and the Chairman of the Board of Directors 2,600 euros per month. In addition daily allowances and travel expenses are paid to the Board members according to the Company's travel policy.

No separate remuneration is paid for the Nomination and Remuneration Committee members. Daily allowances and travel expenses are paid for the meetings to the committee members according to the Company's travel policy.

Remuneration for Board and Committee work is not paid in the form of Company shares and the Board members are not in the target group of Company's share-based incentive plan.

Remuneration of the CEO and other executives

The CEO's compensation consists of a basic salary and a yearly bonus decided annually by the Board on the basis of the corporation's financial result and other key targets. The maximum amount of yearly bonus is decided annually. In addition the CEO has car and phone benefits. Matti Hyytiäinen belongs to the target group of a share-based incentive plan for the key employees of Etteplan Group. Statutory retirement age applies to the CEO. In the event of dismissal, the CEO is at the most entitled to receive compensation equivalent to 18 months' salary which includes the salary for a six-month term of notice.

The system of compensation for the members of the Management Group includes a base salary and a profit-related bonus. The principles for profit-related bonus are decided annually. In 2010 the profit-related bonus was based on the Company's profit and the result within the member's area of responsibility. The maximum of the yearly bonus is 25-100 percent of the recipient's annual salary depending on the member's duties. Members of the Management Group are included in the share-based incentive plan for the Company's key personnel. No separate agreement has been made regarding early retirement for members of the Management Group. In the event of dismissal, a Management Group member is at the most entitled to receive compensation equivalent to 10 months' salary which includes the salary for a four-month term of notice.

Information on the service contract of the CEO

In 2010, President and CEO Matti Hyytiäinen's basic salary was EUR 255,417. In 2010, his car and phone benefits totaled to EUR 15,840. In addition, EUR 28,600 performance based bonus was paid to President and CEO in 2010.

The bonus for share-based incentive plan accrued from 2008 and paid in April 2009 was 4 451 Etteplan Oyj shares together with an estimated cash bonus to cover taxes and similar charges arising from the receipt of shares. According to the resolution made by the Board of Directors of Etteplan Oyj no company-held shares were disposed for the 2009 and 2010 earnings periods.

In 2010 no additional accrual basis pension insurance policy was paid for the President and CEO.

Share-based incentive plan

In 2008, the Etteplan Oyj Board of Directors decided on a new sharebased incentive plan for senior management and other key employees. The plan, launched at the beginning of 2008, comprises 37 people in 2008, 39 in 2009 and 33 in 2010. The share-based incentive plan offers the target group the opportunity to receive Etteplan Oyj shares as remuneration for achieving the set targets.

The plan includes three earnings periods: calendar years 2008, 2009, and 2010. The amount of remunerations paid is tied to objectives that are set annually. The Board is authorized to make decisions related to the share-based incentive plan by earnings period. At the beginning of GOVERNANCE each earnings period, the Board of Directors reviews the target group and specifies the maximum number of shares per person that can be earned. Remunerations paid out from the incentive plan are paid in three instalments, as company shares and partly in cash. The part paid in cash covers the taxes and tax-like fees paid for the remuneration. An earnings period is followed by a mandatory two-year ownership period. During three earnings periods, the remunerations correspond to the value of about 720,000 Etteplan Oyj shares at maximum.

If employment is terminated during the earnings or ownership period, the shares must be returned to the Company without compensation.

Etteplan Oyj has, on 30 April 2009, disposed 41,177 company-held shares as the remuneration for the 2008 earnings period for 36 employees who were part of share-based incentive plan in 2008. The Company did not dispose company-held shares for the 2009 and 2010 earnings periods to the employees who were part of share-based incentive plan.

Remuneration Statement

A remuneration statement is available on Company's webpage at www. etteplan.com. The statement is updated regularly.

INTERNAL CONTROL, RISK MANAGEMENT AND INTERNAL AUDIT

The objective of Etteplan Oyj's internal control and risk management is to ensure that the Company's operations are efficient and profitable, its information is reliable, and it complies with appropriate regulations and operating principles. The objectives also include identification, assessment, and monitoring of risks related to business operations. Internal audit helps to improve the efficient fulfilment of the Board's supervision obligation.

Operating principles of internal control

The Board ensures that the Company has defined the operating principles of internal control and monitors the function of such control.

Organization of risk management

Management and mitigation of the impact of risks is one of the Group's main principles of operation. The Board of Directors and the Management Group monitor the development of risks and concentrations of risk. The Group's financial administration operations monitor and assess operational and financial risks and take measures to avert them in cooperation with the Board of Directors, the Management Group, and the management personnel responsible for design work.

Risks related to Etteplan Group's business operations are divided into external and internal risks, and the risks are monitored according to this classification.

External risks

External risks include risks concerning economic development on the whole and unpredictable changes in customers' order books, which are classified as the greatest risk in the Company's business operations.

Internal risks

Internal risks include strategic and operating risks, as well as financing risks.

Etteplan's most significant strategic risks relate to development of business operations and acquisitions. The Company aims to manage these risks by following its acquisitions policy and applying procedures and models that have been prepared on the basis of this policy. In addition to acquisitions, organic growth is an important part of the growth objectives for Etteplan's business.

Etteplan's greatest operating risks are related to commissions and personnel. The Company's commissions involve risk of services or performances including a professional error, omissions, or other negligence that could cause significant financial or other damage. In order to contain operating risks, the Company applies the following procedures: application of quality management systems, codes of practice, and acceptance procedures; coupled with training of personnel; and compliance with instructions on management of quotes and contracts, particularly in delimitation of contractual liability. The Company has a liability insurance program that encompasses the entire Group. However, the insurance does not cover all liability risks. The Company's business is based on professional personnel. Availability of competent professionals is an important factor in ensuring profitable growth and continued high-quality business operations.

Reviews concerning financing risks are presented in the notes to the consolidated financial statements in the Annual Report 2010 on page 32.

Internal audit

Etteplan Group does not have separate internal audit function. The Board can engage external advisors to perform evaluations relating to control environment or other activities.

Description of the main features of the internal control and risk management systems pertaining to the financial reporting process

Etteplan prepares consolidated financial statements and interim reports in accordance with the International Financial Reporting Standards, as adopted by EU, the Securities Markets Acts as well as the appropriate Financial Supervision Authority Standards and NASDAQ OMX Helsinki Ltd's rules. The Report of the Board of Directors of Etteplan and parent company financial statements are prepared in accordance with Finnish Accounting Act and the opinions and guidelines of the Finnish Accounting Board.

Etteplan Group has a group level accounting policies and instructions that are applicable for all group companies and according to which group financial reporting is prepared. Together with reporting calendar and schedules, accounting policies and instructions form the framework for timely and correct group reporting. Etteplan's business operations are in all material respects located in Finland and Sweden and both countries have local accounting and financial reporting organisations, systems and reporting to the Group. Internal control and risk management systems and practices as described below are designed to ensure that the financial reports as disclosed by the Company give essentially correct information about the Company finances.

Etteplan has a common group consolidation system. Accounting data is transferred from the local accounting systems either automatically or manually and correctness is controlled by the group accounting team. Common chart of accounts forms the basis of group reporting. Group accounting, consolidation and published financial reports are prepared by the centralised team.

Internal control over financial reporting

Proper arrangement and monitoring of internal control is the responsibility of the local management in accordance with the group framework. Etteplan Board has approved operating principles of internal control, which have been prepared in accordance with the Code recommendation 48. Operating principles include the main features of risk management process, summary of risks, control objectives and common control points for financial reporting as well as roles and responsibilities in executing and monitoring internal control in Etteplan.

Internal controls over financial reporting process at the country and group level has been focus area in 2009. Etteplan finance organisation has analysed process risks and defined control objectives for external financial reporting process. Existing control points in the process have been documented. These control points include for example reconciliations, authorizations, analysis, and segregation of key accounting duties. The work has been led by the Group CFO.

According to its annual clock, Management Group has monthly meetings where also financial performance and financial reporting is analysed. Prior to these meetings, financial reports have been analysed in the division level to detect any irregularities or errors. Group level financial reports are prepared to the Etteplan Board on a monthly basis. The Board also reviews and approves interim financial reports, annual results report and financial statements.

Etteplan does not have separate internal audit function. The Board can engage external advisors to perform evaluations relating to control environment or other activities.

INSIDER ADMINISTRATION

The Etteplan Oyj Board of Directors has approved insider regulations for the Company. The regulations are based on the Finnish Securities Markets Act, and they comply with the standards of Financial Supervision and the Guidelines issued by the NASDAQ OMX Helsinki Ltd, which took effect on 9 October 2009. In accordance with the Finnish Securities Markets Act, Etteplan Oyj's insiders are defined to consist of insiders with the duty to declare their interests, permanent company-specific insiders, and project-specific insiders.

Because of the nature of their position, also among Etteplan's statutory insiders are the members of the Board of Directors, the CEO, and the Chief Auditor from the chosen auditing firm (a company of independent public accountants). Moreover, the members of the Management Group are entered in the public insider register.

The Company maintains a permanent company-specific insider register, which includes front-line managers for business operations, financial administration personnel, and those working for the Company on the basis of an employment or other contract who receive insider information.

A project-specific insider register is created by decision of the Board of Directors, the CEO, or the Management Group.

The Company's insider guidelines direct insiders to restrict their trading in the Company's shares to times when the markets have as precise information as possible on the factors influencing the value of shares in the Company. Consequently, Etteplan's public and permanent companyspecific insiders may trade in Etteplan securities only within a window of six weeks following announcements of financial results, provided that the person concerned is not registered in a project-specific insider register.

Maintenance of the public insider register of Etteplan Oyj is the responsibility of the Chief Financial Officer, who is responsible for compliance with insider regulations and fulfilment of duties to report. Etteplan Oyj's insider registers are maintained by the Company's head office, which updates the information that, as required by law, is entered in the public insider register for Euroclear Finland Ltd pertaining to insiders with the duty to declare.

Information on insider holdings

Information about the holdings of Etteplan Oyj insiders with the duty to declare is retained at the company's web sites at www.etteplan.com. The insider registers of issuers are on public display at Euroclear Finland Ltd (previously Finnish Central Securities Depository), Urho Kekkosen katu 5 C, FI-00100 Helsinki, Finland.

AUDIT

The primary duty of statutory auditing is to verify that the financial statements give correct and sufficient information about the Group's profit and financial situation for the financial year. Etteplan Oyj's financial year is the calendar year. The auditor is responsible for auditing the Company's accounts and the correctness of its financial statements during the financial year, and for issuing an auditor's report to the Annual General Meeting.

A summary of the Group's audit report is compiled for the Board of Directors. Also, the auditors of all Group companies report separately to the management of each company within the Group. The auditor attends at least one meeting of the Board of Directors in the relevant financial year.

The Annual General Meeting elects one regular auditor to audit corporate governance and accounts. The auditor must be a firm of independent public accountants so authorized by the Central Chamber of Commerce. In 2010, the Annual General Meeting elected PricewaterhouseCoopers Oy, a firm of authorized public accountants, with Mika Kaarisalo, APA, acting as Chief Auditor. The auditor's term ends at the conclusion of the first Annual General Meeting after the election.

Auditing was opened for competitive bidding at the beginning of 2009.

Audit fees and services not related to auditing

According to the resolution made by the Annual General Meeting 2010 the fees for the auditor are paid according to invoice by the principles approved by the Board of Directors.

The audit fees paid in 2010 totalled 67,032 euros (in 2009: 76,861 euros). In addition, 74,527 euros was paid to the firm for services not related to auditing (in 2009: 52,469 euros).

COMMUNICATIONS

It is Etteplan Oyj's principle to be open, truthful, and quick in all communications. The primary objective of the Company's investor information is to provide the market with information about the Group's operations and financial standing. The goal is to give all stakeholder groups correct and uniform information in a regular and balanced manner.

Silent period

Etteplan Oyj follows a so-called silent period before publication of interim reports and financial statement releases. The duration of the silent period is two weeks.

Distribution of investor information

Etteplan publishes all of its investor information on the Company's Web site at www.etteplan.com. Financial releases will be made available for viewing and printing immediately after publication. They will be published in Finnish and English. ■

■

Board of Directors

ROBERT INGMAN

TEUVO RINTAMÄKI

HEIKKI HORNBORG b. 1949, M.Sc. (Eng.)

• Chairman of the Board of Directors from 2008, Board member 1985–1991 and from 1997, member of Nomination and Remuneration Committee. Independent of significant shareholders.
• Chief Executive Officer of Etteplan Oyj 1985–1989 and 1997–2007, Technical Director and Plant Manager of Lohja Caravans Oy 1991–1997, Technical Director of Wärtsilä Sanitec Oy 1989–1991 and Production Manager of Kone Oy 1982–1985
• Chairman of the Board of Directors: Finnish Association of Consulting Firms SKOL 2008–
• Member of the Board of Directors: Confederation of Finnish Industries EK 2010–, The Federation of Finnish Technology Industries 2011–
• Number of Etteplan shares, 31 December 2010: 1 088 320

TAPIO HAKAKARI b. 1953, LL.M.

• Board member from 2004, Chairman of Nomination and Remuneration Committee. Independent of the company and significant shareholders.
• Director, Secretary to the Board of Directors of KONE Corporation, 1998– 2006, Director Administration of KCI Konecranes Plc, 1994–1998, worked for KONE Corporation 1983–1994
• Chairman of the Board of Directors: Enfo Oyj 2007–, Esperi Care Oy 2006–2010
• Vice Chairman of the Board of Directors: Cargotec Corporation 2009– (member of the Board since 2005)
• Member of the Board of Directors: Martela Oyj 2003–, Hollming Oy 2008–, Havator Holding Oy 2007–2010, Suomen Autoteollisuus Oy 2005–2009
• Number of Etteplan shares, 31 December 2010: 200 000
• Number of Etteplan shares, 31 December 2010 owned by Webstor Oy (controlling power exercised alone): 126 180

ROBERT INGMAN b. 1961, M.Sc. (Eng.), M.Sc. (Economics)

• Board member from 2009, member of Nomination and Remuneration
Committee. Independent of the company.
• Managing Director of Arla Ingman Oy Ab since 2007
• Managing Director of Ingman Foods Oy Ab in 1997–2006 and CFO of Oy Hj. Ingman Ab, Kotisaari-Ingman Oy Ab in 1986–1997
• Chairman of the Board of Directors: Ingman Group Oy Ab 2008–
• Member of the Board of Directors: Digia Oyj 2010–, Evli Pankki Oyj 2010–
• Number of Etteplan shares, 31 December 2010: 20 000

PERTTI NUPPONEN b. 1961, D.Sc. (Econ. & Bus. Adm.), M.Sc. (Tech.)

• Board member from 2005. Independent of the company and significant shareholders.
• Group Vice President, Scandinavian and Eastern Branch of Consolis SAS from 2010
• Group Vice President, Scandinavian Branch of Consolis SAS 2006– 2010, Chief Financial Officer of Consolis Oy Ab 2002–2005, Senior Vice President, Corporate Development of Sanitec Oyj Abp 2000–2002 and Vice President, Controlling of Sanitec Oyj Abp 1998–1999
• Chairman of the Board of Directors: Spaencom A/S, Denmark 2008–
• Number of Etteplan shares, 31 December 2010: 2 000

SATU RAUTAVALTA b. 1970, M.Sc. (Economics)

• Board member from 2010. Independent of the company and significant shareholders.
• Director, Operations, Oy Orasel Ltd since 2010

PERTTI NUPPONEN

• Marketing manager, Oy Orasel Ltd 2007-2010, Independent consultant 2004–2007, Sales Secretary, Marketing Coordinator of KCI Konecranes Oyj, Houston Texas and Hyvinkää Finland 1997–2003
• Member of the Board of Directors: Movelift Oy 2003–
• Number of Etteplan shares, 31 December 2010: 2 000

TEUVO RINTAMÄKI b. 1955, M.Sc. (Economics)

• Board member from 2010. Independent of the company and significant shareholders.
• Advisor, Independent Investor since 2008
• CFO of Konecranes Plc 1999–2007, Executive Director of Konecranes region Western Europe 1997–1999, Financial Director of Konecranes Group 1994-1996, Financial Director of KONE Crane Division 1988–1994, Executive Vice President of R&M Materials Handling Inc. (Springfield Ohio, USA) 1986–1988 and Controller and Financial Manager in various operating units of KONE Oy 1980–1986
• Main positions of trust: none
• Number of Etteplan shares, 31 December 2010: 27 128

Management Group

MATTI HYYTIÄINEN b. 1960, M.Sc. (Economics)

• Chairman of the Management Group from 2008
• President and CEO of Etteplan Oyj from 2008
• Senior Vice President, Escalator Business, KONE Corporation 2002– 2007, Executive Vice President, Perlos Corporation 2001–2002, Managing Director of KONE China 1996–2000 and Managing Director of KONE Indonesia 1994–1996
• Member of the Board of Directors: PKC Group Oyj 2010–, Prewise Group Oy 2004–
• Number of Etteplan shares, 31 December 2010: 25 451

NICLAS GRÄNS b. 1967, M.Sc. (EP)

• Member of the Management Group from 2010
• Vice President of Etteplan Oyj from 2010
• Director of Energy and Other Industries, Etteplan 2009, Manager of Etteplan Industry AB 2005–2008, Manager of ProTang AB 2000–2004 and Sales Manager, Business Unit Manager of ABB 1992–2000
• Main positions of trust: none
• Number of Etteplan shares, 31 December 2010: 890

PER-ANDERS GÅDIN b. 1965, M.Sc. (EP), BBA

• Member of the Management Group from 2009
• CFO, Vice President of Etteplan Oyj from 2009
• CFO of Etteplan Industry AB 2002–2008, Manager of Etteplan Industry AB 1999–2002 and Project Manager of ABB 1993–1998
• Main positions of trust: none
• Number of Etteplan shares, 31 December 2010: 5 490

PETER JAHN b. 1964, graduate

• Member of the Management Group from 2010
• Vice President of Etteplan Oyj from 2010
• Director of Sales, Global Key Accounts EMEA, Intertek Plc Commercial & Electrical 2009–2010, Location Manager in Finland, Intertek Plc. Commercial & Electrical 2007–2008, Area Manager, Intertek Semko AB 2006, Managing Director, Jahn Technologies Ky, Intertek Semko AB, Intertek Sales Agent 2003–2006, Account Group Manager, Elektrobit Oyj 2002–2003, Sales Support Manager, Siemens AG, IC Training Institute, München 2000–2002
• Main simultaneous positions of trust: none
• Number of Etteplan Oyj shares, 31 December 2010: 0

OUTI-MARIA LIEDES b. 1956, M.Sc. (Eng.), MBA

• Member of the Management Group from 2008
• Vice President, Human Resources and Communications of Etteplan Oyj from 2008
• Independent consultant 2007, Managing Director, Stockholm School of Economics Executive Education Finland 2003–2006, Senior Vice President, Corporate Communications and IR, KONE Corporation 2002–2003 and Senior Vice President, Corporate Communications and IR, Partek Oyj 2001–2002
• Main positions of trust: none
• Number of Etteplan shares, 31 December 2010: 2 226

JUHA NÄKKI b. 1973, M.Sc. (Eng.)

• Member of the Management Group from 2008, Member of the Extended Management Group from 2006
• Vice President of Etteplan Oyj from 2005
• Marine Business Manager of KONE Corporation 2004-2005, Sales Manager of Evac Oy 2002–2004, Project Coordinator, HVAC Engineering and System Responsible Engineer of Kvaerner Masa-Yards 1999–2002
• Main positions of trust: none
• Number of Etteplan shares, 31 December 2010: 2 226

Smart way to smart products

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Etteplan Oyj — Annual Report 2010

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Etteplan Oyj

Etteplan's engineering areas

SYSTEMS AND PRODUCTS

Contents

Etteplan in 2010

Key figures from continuing operations (EUR MILLION)

Revenue and Operating profit 2006–2010 (EUR million)

Earnings per share 2006–2010 (EUR)

Dividends 2006–2010 (EUR/share)

Smart way to smart products

Vision

Growth Strategy

Annual management review

Demand and the factors driving it

Strategy

Competitiveness and pricing

Flexibility

Growth, profitability, and cash flow

Dear Shareholder,

Matti Hyytiäinen

Expertise services – Smart products

Service areas

A year of improving profitability

Etteplan's key customer industries include:

Increased revenue and improved operating profit

Demand for expertise services grew

The operating environment

Business review

Focus 2011

New demand for operational services

The operating environment

Operational services – Smart way

Service products

Business review

Focus 2011

New partnerships were concluded during the period under review

Sjöland & Thyselius (S&T)

Intertek

Offshoring

Enterprise Solutions

Outlook for 2011

Etteplan's success is based on competent experts

Operating environment

Development of the organizational structure

Development projects

personnel structure

*) continuing operations 2006 2007 2008* 2009* 2010* 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 1,389 1,570 1,763 1,765 1,594

average number of personnel age distribution, december 31, 2010

Responsibility

Environmental responsibility

Social responsibility

Financial responsibility

Information for shareholders

General meeting of shareholders

Right to attend

Notification of attendees

Payment of dividend

Shareholder register information

Financial information 2011

Interim reports 2011

Investor information

Etteplan as an invest

Etteplan's Investor Relations policy

Publication of financial information

Prospects

Market estimates

Silent period

Investor Relations contact

Analysts following Etteplan

Swedbank AB

Evli Bank Plc

Nordea Bank Plc

Pohjola Bank Plc

Review by the Board of Directors January 1 – December 31, 2010

Business operations

Revenue

Result

Etteplan Oyj Annual Report 2010

) continuing operations 2006 2007 2008 2009* 2010* 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 1,389 1,570 1,763 1,765 1,594