Restatement of Prior Year Results: Finnish TEL System Note 1 Accounting Principles Note 2 Financial Risk Management Note 3 Segment Information Note 4 Acquisitions and Disposals Note 5 Other Operating Income & Expense Note 6 Staff Costs Note 7 Net Financial Items Note 8 Income Taxes Note 9 Valuation Provisions Note 10 Depreciation, Amortisation and Fixed Asset Impa Note 11 Fixed Assets Note 12 Biological Assets Note 13 Associated Companies Note 14 Available-for-Sale Investments Note 15 Other Non-Current Assets Note 16 Inventories Note 17 Receivables Note 18 Shareholders' Equity Note 19 Minority Interests Note 20 Post-Employment Benefits Note 21 Borrowings Note 22 Other Provisions Note 23 Operative Liabilities Note 24 Financial Instruments Note 25 Cumulative Translation Adjustment Note 26 Commitments and Contingencies Note 27 Principal Subsidiaries as at 31 December 2004 Note 28 Employee Bonus and Equity Incentive Schemes Note 29 Related Party Transactions Note 30 Earnings per Share and Equity per Share Note 31 Post-Balance Sheet Events Note 1 Accounting Principles Note 2 Other Operating Income Note 3 Materials and Services Note 4 Personnel Expenses Note 5 Other Operating Expenses Note 6 Net Financial Items Note 7 Depreciation According to Plan Note 8 Extraordinary Items Note 9 Fixed Assets Note 10 Depreciation Reserve Note 11 Receivables from Management Note 12 Long-term Investments and Loan Receivables Note 13 Inventories Note 14 Short-term Receivables Note 15 Interest-bearing Receivables Note 16 Shareholders' Equity Note 17 Long-term Liabilities Note 18 Short-term Borrowings Note 19 Other Current Liabilities Note 20 Commitments and Contingent Liabilities Note 21 Fair Value of Open Financial Instruments

Notes to the Consolidated Financial Statements

Commitments

	As at 31 December
EUR million	2002	2003	2004
On Own Behalf
Pledges given (1)	0.8	3.8	0.8
Mortgages	111.4	103.5	118.8
On Behalf of Associated Companies
Mortgages	1.0	0.8	0.8
Guarantees	59.3	48.4	209.3
On Behalf of Others
Pledges given	0.3	2.2	-
Mortgages	-	10.9	-
Guarantees	16.8	13.1	6.8
Other Commitments, own
Operating leases, in next 12 months	41.5	34.3	32.6
Operating leases, after next 12 months	237.2	171.2	159.2
Pension liabilities	2.7	3.0	2.2
Other contingencies	71.5	95.9	92.5
Total	542.5	487.1	623.0
Pledges given	1.1	6.0	0.8
Mortgages	112.4	115.2	119.6
Guarantees	76.1	61.5	216.1
Operating leases	278.7	205.5	191.8
Pension liabilities	2.7	3.0	2.2
Other contingencies	71.5	95.9	92.5
Total	542.5	487.1	623.0

(1) Pledged assets consist of marketable securities, inventories and fixed assets.

Other Contingencies include a contingent liability, relating to exposure to hazardous substances and environmental matters, pursuant to certain indemnification provisions granted in connection with the 1994 divestment of the Tarkett Group, the flooring business of the former Stora Kopparberg Bergslags AB. The Group’s maximum aggregate liability under the hazardous substance indemnification is limited to USD 62.5 (EUR 45.9) million, under the on-site environmental indemnification, SEK 328 (EUR 36.4) million, and under the off-site environmental indemnification, without limit. One off-site indemnification matter is pending, but is expected to be closed shortly, and a further three on-site matters are outstanding. Stora Enso does not expect any further claims and estimates that the aggregate liability for the environmental liabilities will not exceed EUR 1.0 million; however, the limitations period for claims to occur does not expire until 2024.

Outstanding balances under binding Purchase Agreements amount to EUR 4 362 (EUR 1 990) million, of which contracts for materials and services amount to EUR 3 868 (EUR 1 610) million and for capital expenditure commitments, EUR 494 (EUR 379) million. The principal commitment for materials relates to wood supplied from the Group’s Swedish forest Associate, Bergvik Skog AB, and Group risk management of power supplies by entering into long-term fixed price contracts; the principal service commitments relate to shipping and terminal facilities. The Kabel Mill take or pay power supply contract also provides for a penalty clause of EUR 40 million for early termination; it was also the largest contract in 2003, then valued at EUR 288 million. Stora Enso Oyj has also signed a 15 year take or pay contract with Nordsjöfrakt AB for the operation of ships between Finland and Sweden, thus the Group‘s commitment of EUR 217 million is also its contingent liability in the event of early termination.

The largest contract for capital expenditure in 2004 amounted to EUR 233 million for the new paper machine to be supplied to Kvarnsveden Mill in Sweden; the two largest contracts in 2003 were EUR 67.1 million for a new recovery boiler at Skoghall Mill in Sweden and EUR 38.0 million for the rebuild of PM 6 at Maxau Mill in Germany.

Purchase Agreement Commitments as at 31 December 2004

	Type of		Years	Contract	Scheduled Contract Payments
EUR million	Supply	Country	Left	Total	2005	2006-7	2008-9	2010 +
Materials & Supplies
Stora Enso Skog AB	Wood	Sweden	14	1 738	138	257	251	1 092
Stora Enso Oyj	Gas	Finland	1	60	60	0	0	0
Stora Enso North America Corp	Electricity	USA	14	118	14	29	32	43
Stora Enso Kabel GmbH & Co KG	Electricity	Germany	7	224	32	64	64	64
Stora Enso Langerbrugge NV	Electricity	Belgium	2	43	22	21	0	0
Stora Enso Reisholz GmbH & Co KG	Electricity	Germany	7	104	16	32	32	24
Stora Enso Kvarnsveden AB	Electricity	Sweden	9	153	17	34	34	68
Stora Enso Baienfurt GmbH & Co KG	Electricity	Germany	6	111	19	37	37	18
Stora Enso Transport & Distribution AB	Shipping	Sweden	10	80	8	16	16	40
Stora Enso Transport & Distribution AB	Shipping	Denmark	10	135	13	27	27	68
Stora Enso Oyj	Shipping	Sweden	15	217	13	26	26	152
Stora Enso Transport & Distribution Ltd	Terminal	UK	15	218	15	29	29	145
Others	-	-	-	667	205	230	68	164
				3 868	572	802	616	1 878
Capital Expenditure
Stora Enso Kvarnsveden AB	Machinery	Sweden	-	233	220	13	-	-
Stora Enso Skoghall AB	Machinery	Sweden	-	44	44	-	-	-
Others	-	-	-	217	185	32	-	-
				494	449	45	-	-
Total Contractual Commitments				4 362	1 021	847	616	1 878

Guarantees are made in the ordinary course of business on behalf of associated companies and occasionally others; the guarantees, entered into with financial institutions and other credit guarantors, generally obligate the Group to make payment in the event of default by the borrower. The guarantees have off-Balance Sheet credit risk representing the accounting loss that would be recognised at the reporting date if counterparties failed to perform completely as contracted. The credit risk amounts are equal to the contract sums, assuming the amounts are not paid in full and are irrecoverable from other parties.

Stora Enso Oyj has guaranteed the liabilities of many of its subsidiaries up to a maximum of EUR 748.5 (EUR 966.3) million as of 31 December 2004.

Stora Enso Oyj guaranteed the pension liabilities of its Swedish subsidiaries at the time of the 1998 merger; as of 31 December 2004, this guarantee amounted to EUR 258.4 (EUR 252.8) million, but maturity dates cannot be determined with any certainly.

Stora Enso Reisholz GmbH & Co. KG in Germany has given a guarantee to an energy supplier such that should it close its mill, it will pay compensation of EUR 1 million per annum until 2011.

Stora Enso Transport and Distribution AB, Sweden, has a time charter party with Wagenborg Scheepvaart B.V. of the Netherlands (“WSBV”) concerning three vessels; WSBV has, in turn, chartered the three vessels from owners in Denmark. At the expiry of the three charter parties in 2015, Stora Enso Oyj has guaranteed to pay the owners an amount equal to the difference between the stipulated loss value and the net sale price obtained by the owners, however, always limited to 6/21 of the original facility amount. The maximum Group exposure under this guarantee amounted to EUR 32.8 (EUR 32.8) million at the year end.

The Group leases office and warehouse space under various non-cancellable operating leases, some of which contain renewal options. The future cost for contracts exceeding one year and for non-cancellable operating leasing contracts are:

Repayment Schedule of Operating Lease Commitments

	As at 31 December
EUR million	2002	2003	2004
Less than 1 year	41.5	34.3	32.6
1-2 years	42.4	26.0	27.1
2-3 years	25.7	21.2	22.8
3-4 years	19.3	17.8	18.9
4-5 years	18.5	16.9	17.1
Over 5 years	131.3	89.3	73.3
	278.7	205.5	191.8

Contingent Liabilities

Stora Enso is party to legal proceedings that arise in the ordinary course of business and which primarily involve claims arising out of commercial law. The Group is also involved in administrative proceedings relating primarily to competition law. The Directors do not consider that liabilities related to such proceedings, before insurance recoveries, if any, are likely to be material to the Group financial condition or results of operations.

In May 2004 Stora Enso was the subject of inspections carried out by the European Commission and the Finnish Competition Authority at locations in Europe and received subpoenas issued by the US Department of Justice as part of preliminary anti-trust investigations into the paper industry in Europe and the US. The investigations by the authorities in both jurisdictions are at a fact-finding stage only and no formal allegations have been made against the Group or any of its employees. Coincident with these investigations, Stora Enso was named in a number of class action lawsuits filed in the US. No provisions have been made.

Stora Timber Finance B.V. has been found responsible for soil pollution at the Port of Amsterdam, but has appealed the decision to the Court of Appeal in Amsterdam; EUR 2.4 million was recorded as a provision at 31 December 2003.