Tulikivi CORPORATION STOCK EXCHANGE RELEASE
83900 Juuka 3 March 2005, at 17.30 pm

ADOPTION OF IFRS REPORTING BY TULIKIVI

As from 1 January 2005, the Tulikivi Group has applied
IFRS standards (International Financial Reporting
Standards) in its reporting. The financial statements for
the year ended 31 December 2005 will be the first IFRS
financial statements and the interim report for the
quarter ended 31 March 2005 will be the first IAS 34
compliant interim financial report The Tulikivi Group’s
date of transition to IFRS is 1 January 2004.

Tulikivi has adopted IFRS 1 (First-time Adoption of
International Financial Reporting Standards) and the
following exemptions permitted by it: Business
combinations, employee benefits and cumulative translation
differences. The accompanying financial information has
been compiled in accordance with IAS/IFRS standards in
force at the date of this release.

This release provides information on the effects of the
adoption of IFRS on the balance sheet at the date of
transition and on the 2004 income statement and balance
sheet, which were originally presented in accordance with
Finnish Accounting Standards (FAS). The Tulikivi Group’s
accounting policies are included in the 2004 annual
financial statements. The release also presents
reconciliations of equity at 1 January 2004 and at each
quarter end for 2004 and a reconciliation of the net
profit for 2004 for each quarter and for the whole year
The effects of the adoption of IFRS are as follows
(referenced to the reconciliations):

(1) Pension obligations

When determining pension obligations at the date of
transition, the disability element of the Finnish TEL
pension scheme has been accounted for as a defined benefit
plan in accordance with IAS 19. The actuarially calculated
disability obligation of EUR 12 million has been
recognised in the balance sheet at the date of transition
In December 2004 the Ministry of Social Affairs and Health
approved certain changes to the accounting of obligations
for disabilities. The changes are effective on 1 January
2006 As a result of these changes, the disability element
of TEL is accounted for as a defined contribution plan
under IFRS The resulting material reduction in pension
obligations has been recognised as a non- recurring gain
in the 2004 IFRS income statement, amounting to EUR 11
million. The disability obligation is under EUR 01 million
in the IFRS balance sheet at 31 December 2004.

(2) Amortization of goodwill

In accordance with IFRS 3, goodwill is no longer amortized
on a systematic basis but tested annually for impairment
in accordance with IAS 36 This change improves earnings
before tax in 2004 by EUR 03 million.

(3) Intangible assets

In accordance with IAS 38, intangible assets arising from
development shall be recognised if certain criteria are
met Based on this, intangible assets arising from the
development of new products and production methods in 2004
and meeting the criteria, were activated in the 2004 FAS
financial statements. In accordance with IAS 38,
expenditure on advertising and promotional activities is
recognised as an expense when the goods have been
delivered or the service rendered Under FAS, certain such
expenditure has been allocated over a period when it has
been estimated that economic benefits will mainly flow in
the subsequent financial period. This change reduces
inventories at the date of transition by EUR 01 million
and other receivables by EUR 03 million at 31 December
2004 It also increases other operating expenses in the
IFRS income statement by EUR 02 million.

(4) Income taxes

In accordance with IAS 12, deferred tax liabilities and
assets shall be recognised, as a rule, for all taxable
temporary differences. In the IFRS income statement,
changes in deferred tax liabilities and assets arising
from these differences have been added to the change in
deferred tax liabilities under FAS. This resulted in a net
increase of EUR 04 million in the deferred tax liability.
The corresponding changes are included in the deferred tax
liabilities and assets in the IFRS balance sheet In 2004
the Group recognised an additional amount on the purchase
of shares in a subsidiary A deferred tax liability of EUR
01 million was recognised, relating to this additional
purchase price, allocated to stone reserves.

(5) Property, plant and equipment

An amount of EUR 05 million, representing the portion of
the additional purchase price of shares in a subsidiary,
allocated to stone reserves, is included in property,
plant and equipment in the IFRS balance sheet, whereas it
is included in intangible assets in the FAS balance sheet.
In addition, tangible assets have been increased in the
IFRS balance sheet by the related deferred tax liability
of EUR 01 million.

(6) Events after the balance sheet date

A dividend of EUR 46 million has been recognised in the
first quarter in the FAS financial statements and in the
second quarter in the IFRS balance sheet, in accordance
with IAS 10.

Cash flow statement

There are no material differences between the FAS cash
flow statement and the IFRS cash flow statement.

Segment reporting

The operations of the Tulikivi Group consist of the
fireplace business and the architectural stone business.
This is the primary segment reporting format of the Group.

The secondary segment reporting format is based on the
geographical location of the clients. The geographical
segments are: Finland, Rest of Europe and the USA The
reporting of assets is based on their location.

IFRS RECONCILIATIONS
EUR million

1.RECONCILIATION OF EQUITY

Jan Mar Jun Sep Dec
1 31 30 30 31
2004
2004 2004 2004 2004
Equity under FAS 24.4 20.4 20.9 22.1 23.2
IAS 19 Employee benefits -1.2 -1.2 -1.2 -1.2
(1)
IFRS 3 Business compination 0.1 0.2 0.2 0.3
(2)
IAS 38 Intangible
assets (3) -0.1 -0.3 -0.2 -0.2 -0.3
0.4 0.4 0.3 0.3
IAS 12 Income taxes (4)
IAS 10 Events after the 4.6
balance
sheet date (6)
Equity under IFRS 23.5 24.0 20.0 21.2 23.2

2.RECONCILIATION OF PROFIT
OR LOSS FOR 2004
Q1/ Q2/ Q3/ Q4/ 2004
2004 2004 2004 2004
Profit of loss for the
period under FAS 0.6 0.5 1.2 1.2 3.5
IAS 19 Employee benefits 1.1 1.1
(1)
IFRS 3 Business
compination (2) 0.1 0.1 0.1 0.3
IAS 38 Intangible assets(3) -0.2 0.1 -0.1 -0.2
IAS 12 Income taxes (4) -0.1 -0.3 -0.4
Profit and loss for the 0.5 0.6 1.2 2.0 4.3
period under IFRS

2 RECONCILIATION OF PROFIT
OR LOSS FOR 2004
Q1/ Q2/ Q3/ Q4/ 2004
2004 2004 2004 2004
Profit of loss for the
period under FAS 0.6 0.5 1.2 1.2 3.5
IAS 19 Employee benefits (1) 1.1 1.1
IFRS 3 Business
compination (2) 0.1 0.1 0.1 0.3
IAS 38 Intangible assets(3) -0.2 0.1 -0.1 -0.2
IAS 12 Income taxes (4) -0.1 -0.3 -0.4
Profit and loss for the 0.5 0.6 1.2 2.0 4.3
period under IFRS

FAS IFRS- IFRS
Jan- ad- Jan-
Dec jus- Dec
3 CONSOLIDATED INCOME 2004 ments 2004
STATEMENT
EUR million
Sales 55.3 55.3
Other operating income 0.5 0.5
Increase/decrease inventories 0.5 0.5
in finished goods and in work
in progress
Production for own use 0.8 0.8

Raw materials and consumables 9.0 0.1 8.9
(3)
External services 7.0 7.0
Personnel expenses (1) 20.1 1.1 19.0
Depreciation (2) 4.3 0.3 4.0
Other operating expenses 11.7 -0.3 12.0
Operating profit (3) 5.0 1.2 6.2
Percentage of sales 9.1 11.4

Finance costs-net -0.1 -0.1
Profit before tax 4.9 1.2 6.1
Percentage of sales 8.8 11.1
Direct taxes (4) 1.4 -0.4 1.8
Profit for the year 3.5 0.8 4.3

FAS IFRS
Key financial rations Jan to Jan
Dec to
Dec
2004 2004

Earnings per share. EUR 0.38 0.48

4. CONSOLIDATED BALANCE SHEET
IFRS- IFRS IFRS- IFRS
ad- 1 FAS ad- 31
FAS just- Jan. 31 just- Dec.
1 ments 2004 Dec. ments 2004
Jan.
2004 2004

Assets
Non current assets
Property, plant and
equipment(4,5) 16.2 0.1 16.3 15.5 0.6 16.1
Goodwill (2) 0.6 0.6 0.3 0.3 0.6
Other intangible assets (5) 3.3 -0.1 3.2 3.8 -0.5 3.3
Investment properties 0.2 0.2 0.2 0.2
Available-for-sale investment 0.1 0.1 0.1 0.1
Deferred income tax assets 0.7 0.4 1.1 0.6 0.1 0.7
(4)
Total non-current assets 21.1 0.4 21.5 20.5 0.5 21.0
Current assets
Inventories (3) 7.0 -0.1 6.9 7.5 7.5
Trade and other
receivables (3) 7.1 7.1 7.6 -0.3 7.3
Prepaid expenses 0.3 0.3
Financial assets
at fair value through profit 0.7 0.7 0.7 0.7
or loss
Cash and cash eguivalents 5.8 5.8 5.1 5.1
Total current assets 20.6 -0.1 20.5 21.2 -0.3 20.9
Total assets 41.7 0.3 42.0 41.7 0.2 41.9

Equity and liabilities
Share capital 6.2 6.2 6.2 6.2
Share prenium fund 5.4 5.4 5.4 5.4
Retained earnings 12.8 -0.9 11.9 11.6 11.6
Total equity 24.4 -0.9 23.5 23.2 23.2

Non-current liabilities
Deferred income tax 0.7 0.7 0.5 0.2 0.7
liabilities (4)
Retirement benefit 1.2 1.2
obligations (1)
Provisions 0.1 0.1 0.2 0.2
Interest-bearing debt 5.0 5.0 6.1 6.1
Other debt 0.4 0.4
Total non-current liabilities 5.8 1.2 7.0 7.2 0.2 7.4

Current liabilities
Trade and other payables 8.4 8.4 8.8 8.8
Current income
tax liabilities 0.3 0.3
Short-term interest- 2.8 2.8 2.5 2.5
bearing debt
Total current liabilities 11.5 11.5 11.3 11.3

Total liabilities 17.3 1.2 18.5 18.5 0.2 18.7

Total equity and liabilities 41.7 0.3 42.0 41.7 0.2 41.9

KEY FINANCIAL RATIOS FAS IFRS
31Dec. 31Dec.
2004 2004

Return on equity, % 14.7 18.7
Return on capital employed, % 16.2 19.8
Current ratio 1.9 1.9
Equity ratio, % 55.6 55.3
Gearing, % 12.1 12.1
Equity per share, EUR 0.38 0.48
Interest-bearing debt, EUR million 8.6 8.6

The method of calculating the key financial ratios is the same as in the 2004 FAS financial statements.

TULIKIVI CORPORATION
Board of Directors

Distribution: The Helsinki Stock Exchange
Central Media

Additional information: Tulikivi Oyj, 83900 Juuka,
tel 013- 681 111,
www.tulikivi.com
Chairman of Board of Directors Matti Virtaala
Managing Director Juha Sivonen