vestas.com vestas.com

Annual report 2009

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Vestas Wind Systems A/S

Alsvej 21DK-8940 Randers SVDenmark

Tel: +45 9730 0000Fax: +45 9730 0001

vestas@vestas.com

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­Vestas­annual­report­2009004 StrongfoundationforTriple15006 FinancialhighlightsfortheGroup007 Non-financialhighlightsfortheGroup009 Overview

014 Managementreport030 Corporategovernance

050 Non-financialissues

064 Consolidatedaccounts

120 AnnualaccountsforVestasWindSystemsA/S131 Shareholdersandthestockexchange136 Informationaboutthecompany138 Index

ThisannualreportisavailableinDanishandEnglish.Incaseofdoubt,theDanishversionshallapply.

Strong­foundation­for­Triple15

In2009,Vestasincreaseditsrevenueby10percenttoEUR6.6bn,recordinga28percentEBITincreasetoEUR856m;thiswasthebestfinancialperformanceever.Theimprovementwasachievedinaverydifficultmarket,inwhichthecreditsqueezeaffectednotonlytheheadlines,butalsoVestas'day-to-dayoper-ationsand,notleast,ourorderintake,whichwillmake2010anevengreaterchallengethan2009turnedouttobe.

On27October2009,Vestasdefinedthefinancialtargets–Triple15–foritsNo.1inModernEnergystrategy;VestasaimstoachieveanEBITmarginof15percentandrevenueofEUR15bnnolaterthan2015.Thistranslatesintoanaverageannualgrowthofatleast15percentandasubstantialimprovementoftheEBITmargin.StronggrowthandahigherEBITmarginarepre-requisitesforVestastoretainitsmarket-leadingpositioninwindpowerandtherebycreatetheworld'sstrongestenergybrandastheNo.1inModernEnergy.

Havingamuchmoreefficientandcustomer-orientedorganisa-tionwithnewwindturbinesandserviceproductsisthefoun-dationfromwhichweaimtoachievethetargets,andwehavealreadytakenanumberofsteps:Thealignmentofourproductionandsalesbusinessunitsisunderway,weareadoptingamoreregionalstructureinVestasandwehaveannouncednewwindturbinesfortheonshoreandoffshoresegments.Weretainahigh

levelofinvestmentindevelopmentactivitiesaroundtheworldbecausewindpowerisahigh-technologyraceinwhichday-by-daycompetitionisbecomingmoreandmorefierce.

Intheyearsahead,large,experiencedandfinanciallystrongcom-panieswilljointherace,havingrealisedthatVestas'vision,Wind,OilandGas,isabouttobecomeareality.Retainingourmarketleadershipandthepositionasa“pureplay”spokespersonformodernenergywillonlybepossiblethroughcloserelationsandcollaborationwithourexistingandnewcustomersaroundtheworld.Consequently,dramaticallyimprovedcustomersatisfac-tionisparamountforustoaccomplishTriple15.

COP15didnotturnouttobetheglobalandsupranationalclimatebreakthroughthatVestashadhopedfor.Ontheotherhand,thelargenumberofheadsofstatesandgovernmentsfromaroundtheworldattendingtheconferenceclearlyshowedthattheclimateandtheenvironment,orcleanair,waterandenergy,arenowattheverytopoftheinternationalagenda,underpinnedbythemanynationaltargetsandinitiatives.ThisisgoodnewsforVestasandwindpowerbecausemodernenergyisoneofthekeystothesolutionforgenerationstocome.Nootherformofrenew-ableenergyiscurrentlyabletomatchwindpower,forwhichthepriceofMWhwillcontinuetofall.

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Furthermore,VestaswillcontinuetopromoteafixedpriceofCO2,whichwouldgivetheenergysectorthepredictabilityrequiredtocarryoutthelarge-scaleinvestmentsininfrastructure.Overthenext25years,anincreaseintheglobalpopulationoftwobillionpeoplewillraisethepriceoffossilfuels,therebyaddingfurtherstrengthtothecompetitivenessofmodernenergy.Alsointheshortterm,thepriceoffossilfuelswillgoup,tothebenefitofwindpowerproliferation.

Theyear'sorderintakewassignificantlylowerthanoriginallyplanned,andorderswerereceivedmuchlaterintheyearthanex-pected.Itisonlynowatthebeginningof2010,thatthemarketforbankfundingtrulyappearstobeapproachinganormaltrend,althoughthebanksarenowfarmorecriticalandrequiremuchmoredocumentationthantheydidpreviously.Weappreciatethistrend,althoughitprolongsthecontractnegotiationprocessconsiderably,asitisclearlytotheadvantageoffinanciallystrongqualitymanufacturerssuchasVestasandthushelpstomatureourindustry.

Thepresententrybarriersareconsiderablyhigherthantheywereafewyearsback,eventhoughmorebanksandfinancialinstitu-tionswillenterthewindpowermarketinthefutureasknowledgeofwindpowerincreases.Awindpowerplantisa“greenbond”withapredictablecashflowprovidedthattheturbinesareinthe

rightlocation,arehandledcorrectlyandgivenoptimumservice.Ourwindpowertrackrecordofmorethan30yearsandourwilltoconstantimprovementandchangearethebuildingblocksforTriple15.

Vestasisintensifyingitseffortstoenhancesafety,reduceourenvironmentalfootprintanduseofEarth'sresourcesinordertostrengthenourreputationasaresponsibleemployerandcom-petitivecollaborationpartner.InadditiontomoreMWhperkilowindpowerplant,moreenergy-friendlybuildingsandvehiclesarethewayforward.Vestasmusthaveworld-classsafetyatitssites;ourcustomersdemandit,andouremployeesareentitledtoit.

“Failureisnotanoption”isVestas'mission–andthatappliesalsotoTriple15.

BentErikCarlsen DitlevEngelChairmanofthe PresidentandCEOBoardofDirectors

Triple 15EBIT

15REV

15yEAR

006 Vestasannualreport2009

Financial­highlights­for­the­Group

mEUR 2009 2008 2007 2006 2005

HigHligHts

income statement

Revenue 6,636 6,035 4,861 3,854 3,583

Grossprofit 1,441 1,179 825 461 84

Profitbeforefinancialincomeandexpenses,depreciationandamortisation(EBITDA) 1,074 803 579 328 9

Operatingprofit/(loss)(EBIT) 856 668 443 201 (116)

Profit/(loss)offinancialitems (48) 46 0 (40) (42)

Profit/(loss)beforetax 809 714 443 161 (158)

Profit/(loss)fortheyear 579 511 291 111 (192)

Balance sheet

Balancesheettotal 6,435 5,308 4,296 3,654 3,085

Equity 3,364 1,955 1,516 1,262 962

Provisions 356 274 305 265 239

Averageinterest-bearingposition(net) (55) 395 179 (299) (560)

Networkingcapital 1,235 299 (68) 122 498

Investmentsinproperty,plantandequipment 606 509 265 153 95

Cash flow statement

Cashflowfromoperatingactivities (34) 277 701 598 148

Cashflowfrominvestingactivities (808) (680) (317) (144) (137)

Cashflowfromfinancingactivities 1,075 (91) (54) (101) (46)

Changeincashatbankandinhandlesscurrentportionofbankdebt 233 (494) 330 353 (35)

Ratios

Financial ratios1)

Grossmargin(%) 21.7 19.5 17.0 12.0 2.4

EBITDAmargin(%) 16.2 13.3 11.9 8.5 0.3

EBITmargin(%) 12.9 11.1 9.1 5.2 (3.2)

Returnoninvestedcapital(ROIC)(%) 23.9 34.1 30.9 11.9 (13.2)

Solvencyratio(%) 52.3 36.8 35.3 34.5 31.2

Returnonequity(%) 21.8 29.4 21.0 10.0 (18.1)

Gearing(%) 10.4 6.3 9.9 13.8 51.2

share ratios1)

Earningspershare 2.9 2.8 1.6 0.6 (1.1)

Bookvaluepershare 16.5 10.6 8.2 6.8 5.5

Price/bookvalue 2.6 3.9 9.0 4.7 2.5

P/E-value 14.6 14.8 47.1 52.8 (12.7)

Cashflowfromoperatingactivitiespershare (0.2) 1.5 3.8 3.2 0.8

Dividendpershare 0.0 0.0 0.0 0.0 0.0

Payoutratio(%) 0.0 0.0 0.0 0.0 0.0

Shareprice31December(EUR) 42.6 40.7 74.0 32.0 13.9

Averagenumberofshares 197,723,281 185,204,103 185,204,103 182,722,520 174,911,173

Numberofsharesattheendoftheyear 203,704,103 185,204,103 185,204,103 185,204,103 174,911,173

1) Theratioshavebeencalculatedinaccordancewiththeguidelinesfrom”DenDanskeFinansanalytikerforening”(TheDanishSocietyofFinancialAnalysts)(RecommendationsandFinancialratios2005),refertonote1totheconsolidatedaccounts.

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Non-financial­highlights­for­the­Group

2009 2008 2007 2006 2005

KEy FigUREs1)

occupational health & safety

Industrialinjuries(number) 306 534 534 525 472

–ofwhichfatalindustrialinjuries(number) 0 0 0 1 0

Products

MWproducedandshipped2) 6,131 6,160 4,974 4,313 3,900

Utilisation of resources

Consumptionofmetals(tonnes) 202,624 187,478 170,505 164,413 143,170

Consumptionofotherrawmaterials,etc.(tonnes) 126,600 129,207 111,541 93,983 82,592

Consumptionofenergy(MWh) 537,165 458,296 372,037 330,106 227,907

–ofwhichrenewableenergy(MWh) 263,611 172,800 139,983 124,841 118,603

–ofwhichrenewableelectricity(MWh) 238,462 167,311 138,035 124,841 118,603

Consumptionofwater(m3) 521,005 474,958 554,516 343,084 226,410

–ofwhichwaterofnon-drinkingwaterquality(m3) 102,528 103,066 14,809 14,954 0

Waste disposal

Volumeofwaste(tonnes) 97,471 96,632 89,643 82,739 67,313

-ofwhichcollectedforrecycling(tonnes) 34,303 30,254 28,422 27,593 17,266

Emissions

EmissionofCO2(tonnes) 50,523 41,832 32,798 28,396 18,406

local community

Environmentalaccidents(number) 10 16 15 7 4

Breachesofinternalinspectionconditions(number) 3 5 5 6 5

Employees

Averagenumberofemployees 20,832 17,924 13,820 11,334 10,300

Numberofemployeesattheendoftheyear 20,730 20,829 15,305 12,309 10,618

indiCatoRs1)

occupational health and safety

Incidenceofindustrialinjuriesperonemillionworkinghours3) 8.1 15.6 20.8 25.3 33.8

Absenceduetoillnessamonghourly-paidemployees(%) 2.8 3.3 3.6 3.2 4.1

Absenceduetoillnessamongsalariedemployees(%) 1.3 1.1 1.4 1.5 1.5

Products

CO2savingsover20yearsontheMWproducedandshipped(milliontonnesofCO2) 163 164 143 124 112

Utilisation of resources

Renewableenergy(%) 49 38 37 38 52

Renewableelectricityforownactivities(%) 85 68 66 68 75

Employees

Womenatmanagementlevel(%) 19 17 N/C4) N/C N/C

Non-Danesatmanagementlevel(%) 46 42 N/C N/C N/C

Management system5)

ISO14001(%) 97 100 80 76 75

OHSAS18001(%) 97 98 84 77 63

1) Accountingpoliciesfornon-financialhighlightsfortheGroup,seepage60.Commentsonnon-financialissuesfortheGroup,seepages50-59.2) Tobeabletobetterillustratetheconnectionbetweenphysicalproductionandresourceconsumption,productsarenowcalculatedasMWproducedandshippedinstead ofaspreviouslyMWdelivered.3) Pleasenotethataccountingpolicieshavebeenchangedasfrom2009,seepage101intheannualreport2008.4) Notcalculated(N/C)fortheyear.5) TheproductionfacilitiesinHohhot,InnerMongolia,China,areexpectedcertifiedbytheendoffirsthalf-year2010.

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Overview

+2%

+28%

+10%+13%

-48%

-0.5%

-0.5%

Vestasshippedatotalof3,320windturbines–anincreaseof2percent.

Vestasshippedwindturbineswithanaggregatecapacityof6,131MW–areductionof0.5percent.

VestasrealisedarevenueofEUR6.6bn–anincreaseof10percent. Profitfortheyear

wasEUR579m–anincreaseof13percent.

Thenumberofemployeeswas20,730–areductionof0.5percent.

Theincidenceofindustrialinjuriesperonemillionworkinghourswas8.1–areductionof48percent.

2009ATAGlANCE

VestasreportedanEBITofEUR856m–anincreaseof28percent.

010 Vestasannualreport2009

FUll yEaR 2009 VestasrecordedrevenueofEUR6,636min2009,anincreaseof10percentrelativeto2008.

TheGroupreportedanoperatingprofit,EBIT,ofEUR856min2009,equivalenttoanEBITmarginof12.9percent,against11.1percentin2008.TheimprovedEBITmarginwastheresultofmoreefficientoperationsandbetterpricesandcontractualconditions.

RevenueintheservicebusinessamountedtoEUR504mwithanEBITmarginof15percent.

ThegrossprofitamountedtoEUR1,441min2009correspond-ingtoagrossmarginof21.7percent.ThisisanincreasefromEUR1,179mand19.5percentin2008

Attheendof2009,theGroup'snetworkingcapitalamountedtoEUR1,235m,whichcorrespondsto19percentofrevenue,against5percentin2008.Thelargeincreaseisduetolowerprepaymentscausedbythedelayedorderintake.

TheGroupachievedareturnoninvestedcapitalof23.9percentin2009,against34.1percentin2008.

In2009,Vestasshipped3,320windturbineswithanaggre-gatecapacityof6,131MW,against6,160MWand3,250windturbinesin2008.Atotalof4,764MWwasdeliveredtoVestas'customers.

Theintakeoffirmandunconditionalordersfortheyearwas3,072MW,against6,019MWin2008.Thebacklogoffirmandunconditionalordersamountedto1,747MWattheendof2009.Europeaccountedfor75percent,Americasfor21percentandAsia/Pacificfor4percent.ThevalueofthebacklogoffirmandunconditionalordersamountedtoEUR2.2bnat31December2009,againstEUR5.2bnatyear-end2008.

Vestas'totalassetsincreasedfromEUR5,308min2008toEUR6,435min2009.

FoURtH qUaRtER 2009VestasgeneratedrevenueofEUR2,506minthefourthquarterof2009,correspondingto38percentoftotalrevenueandanincreaseof1percentrelativetothefourthquarterof2008.Fourth-quarterrevenuefellshortofexpectationswhichisprima-rilyduetothedelayedorderintake.

Europeaccountedfor83percentofrevenueinthefourthquar-ter.TheAmericasandAsia/Pacificaccountedfor6percentand11percentofrevenue,respectively.ServicerevenueamountedtoEUR140minthefourthquarter.VestasreportedanEBITofEUR458m,equivalenttoanEBITmarginof18.3percent,against15.4percentinthefourthquar-terof2008.

ThegrossprofitwasEUR625m,againstEUR524mintheyear-earlierperiod.

Vestasshipped1,233windturbineswithanaggregatecapacityof2,439MWinthefourthquarterof2009.

Thequarterlyorderintakewas1,022MW,ofwhich55percenthasbeenannouncedpublicly.

TheGroupgeneratedacashinflowfromoperationsofEUR346m,andnetinvestmentsamountedtoEUR165m.ThefreecashflowamountedtoEUR185m.

WarrantyprovisionsinthefourthquarteramountedtoEUR89m,correspondingto3.6percentofrevenue.Theincidenceofindustrialinjurieswas4.0peronemillionwork-inghoursinthefourthquarter.

Inthefourthquarter,thenumberofemployeesrosefrom20,256to20,730.

Revenue and EBIT (mEUR)

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

20092008200720062005

3,5

83

(11

6)

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1

44

3

66

8

85

6

3,8

54

4,8

61

6,0

35 6

,63

6

Net working capital (mEUR)

-200

0

200

400

600

800

1,000

1,200

1,400

20092008200720062005

49

8

29

9

1,2

35

(68

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non-FinanCial issUEsIn2009,VestasintensifieditseffortstoensurethelowestcostperMWhproduced,CostofEnergy,measurednotonlyineuroandcent,butalsointermsoftheimpactonthelocalcommunitiesandsocietyingeneral,includingtheenvironment,theclimateandEarth'sresourcesaswellasthenumberofindustrialinjuries.

Safetyfirst· Vestasisbuildingaworld-classsafetyculture.

Asgreenasitgets· Vestas'productionandproductsmustbeasgreenaspossible.

CodeofConduct· Vestas'employeesandcollaborationpartnersmustknowwhatiscorrectVestasbehaviour.

In2009,Vestasmarkedlyimprovedontheincidenceofindus-trialinjuries,thusregistering8.1injuriesperonemillionworkinghours,whichis48percentlowerthanin2008.

In2009,theshareofrenewableenergywas49percentandtheshareofrenewableelectricitywas85percent.Comparedto2008,thismarksanimprovementof11and17percentagepoints,respectively.

In2009,Vestas'updatedCodeofConductwasmadeavailabletoallemployeesviae-learning,informationmaterialin18lan-guages,presentations,etc.

InSeptember2009,VestasjoinedtheUNGlobalCompactinitia-tiveandfollowsthetengenerallyrecognisedprinciplesinrespectofhumanrights,labourstandards,theenvironmentandanti-corruption.

oUtlooK FoR 2010In2010,VestasexpectstoachieveanEBITmarginof10-11percentandrevenueofEUR7bnagainstpreviouslyexpected10-12percentandEUR7-8bn,respectively.Thenarrowingisduetothefactthattheyear'sexpectedorderintakeoffirmanduncon-ditionalordersof8,000-9,000MWisanticipatedtomaterialisesolateintheyearthatitisconsideredunlikelythatrevenuewillreachEUR8bn.

Adjustedforinputprices,ingeneralVestasexpectsthatpricesandconditionsremainunchangedin2010relativeto2009.TheslowdowninprofitabilityimprovementisduetoVestashavingexcesscapacityandthefarmajorityofrevenue,andespeciallyprofit,beingexpectedinthesecondhalfoftheyear.Networkingcapitalisexpectedtofluctuateheavilyin2010andisexpectedtoamountto15percentofannualrevenueattheendoftheyear.

Investmentsinproperty,plantandequipmentandintangibleassetsareexpectedtobeEUR250mandEUR350m,respec-tively.Thecompletionin2010ofrecentyears'largeinvestmentsintheUSAandChinawillleadtolowerinvestmentsinproperty,plantandequipmentthanin2009.

Guidance for 2010 (EURm)

Orderintake,firmandunconditionalorders(MW) 8,000-9,000

Revenue 7,000

-ofwhichservicerevenue 600

EBITmargin(%) 10-11

EBITmargin,service(%) 15

Financialitems,net (25)

Taxrate(%) 28

Networkingcapital(%) 15

Investments,property,plantandequipment 250

Investments,intangibleassets 350

Warrantyprovisions 3,0

Incidenceofindustrialinjuries 7.0

Customerloyalty(index) 70

Shareofgreenenergy(%) 55

Qualitylevel,year-end(Sigma) 5

Revenue and EBIT - fourth quarter (mEUR)

-300

0

300

600

900

1,200

1,500

1,800

2,100

2,400

2,700

Q4 2009Q4 2008Q4 2007Q4 2006Q4 2005

1,4

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(46

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12

7

23

1

38

2

45

8

1,3

97

1,8

84

2,4

81

2,5

06

Incidence of industrial injuries (per one million working hours)

0

5

10

15

20

25

30

35

20092008200720062005

33

.8

25

.3

20

.8

15

.6

8.1

12.9% In2009,VestasachievedanEBITmarginof12.9percent.

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Management­report015 No.1inModernEnergy015 Wind,OilandGas015 Failureisnotanoption015 TheWillpower016 Managementfocus019 Businessdevelopment021 Riskmanagement025 Vestas'financialperformance027 Outlookfor2010027 Eventsafterthebalancesheetdate

Corporate­Governance031 Managementstructure033 Remuneration034 Danishcorporategovernancerecommendations040 CompetenciesandfiduciarypositionsofthemembersoftheBoard045 Competenciesandfiduciarypositionsofthemembersofthe

ExecutiveManagement046 PresidentsoftheGroup'sbusinessunits

V52-850kWV60-850kW

V90-1.8/2.0MWV90-3.0MW

V82-1.65MWV80-2.0MW

V100-1.8MWV112-3.0MWonshoreV112-3.0MWoffshore

014 Vestasannualreport2009

Management­report

VESTAS'PRODUCTPROGRAMME

6­MWThe6.0MWoffshoreturbine,whichisunderdevelopment,mustdramaticallyreducetheCostofEnergy–priceperMWh–comparedwithallknowncompetingproducts.

49%ofVestas'energyconsumptionin2009wasgreen–anincreaseof11percentagepoints.

Index 64Vestasachievedacustomerloyaltyindexof64in2009–anincreasefrom52in2008.

”ThrOuGh­SiGNiFiCaNTly­iMprOVed­CuSTOMer­iNSiGhT­aNd­OpeN­CuSTOMer­dialOGue,­VeSTaS­aiMS­TO­aChieVe­a­Sharp­iMprOVeMeNT­iN­CuSTOMer­lOyalTy,­WhiCh­iS­a­prerequiSiTe­FOr­VeSTaS­TO­aCCOMpliSh­Triple15.”DITlEVENGEl,PRESIDENTANDCEO

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1. no. 1 in ModERn EnERgyVestas'strategyiscalledNo.1inModernEnergy.ToVestas,beingNo.1meansbeingthebest,andbeingthebestmeansmaintain-ingworldclasssafetystandardsatallVestas'sites,havingthemostsatisfiedcustomers,thebestperformingwindpowerplantsandthegreenestproduction.Beingthemarket-leaderinwindpower,Vestasaimstocreatetheworld'sstrongestenergybrand.

Windpowerismodernenergybecauseitisfinanciallycompeti-tive,predictable,independent,fastandclean.

VestasaimstoprovideitscustomerswiththelowestcostperMWhproduced,“CostofEnergy”,andoptimumsecurityforthecapitalinvestedinawindpowerplant,“BusinessCaseCertainty”–Vestasdeliversaspromised.Underthe“Easytoworkwith”principle,VestasalsoendeavourstobecomeamoreflexibleandknowledgeablebusinesspartnerbecausesignificantlyimprovedcustomerloyaltyisaprerequisiteforVestastoretainitsmarket-leadingposition.

Alargenumberofinitiativesaimedatoptimisinginternalpro-cessesandsharplyenhancedfocusoncollaborationwithcus-tomersandsuppliers,willsupporttheabove-mentionedimprove-ments,andcombinedwithnewproductsthiswillhelpbuildthefoundationforstronggrowthinrevenueandprofitabilityintheyearsahead.ThusVestasmustachieveanEBITmarginof15percentandrevenueofEUR15bnnolaterthan2015–Triple15.

Beingtheindustry'sleadingplayerandapure-playspokesperson,Vestasaimstoensurethatwindpowerremainsatthetopofthepoliticalagenda.Thisisachievedthroughdialoguewithpoliticians,publicservants,interestgroupsandNGOstheworldoverandthroughadviceandinformationtothepublicaboutthepotentialofwindpower,bothinindividualmarketsandworldwide.

Vestas'financialprioritiesreflectitsconstantfocusonprofit-ability.

1. EBITmargin2. Networkingcapital3. RevenueInspiteofthefinancialcrisis,VestasimproveditsEBITmarginin2009,continuingthestreakthatbeganin2005.TheGroupreportedanoperatingprofit,EBIT,ofEUR856min2009,equiva-lenttoanEBITmarginof12.9percent,against11.1percentin2008.

Attheendof2009,theGroup'snetworkingcapitalamountedtoEUR1,235m,whichcorrespondsto19percentofrevenue.Attheendof2008,networkingcapitalamountedtoEUR299m,or5percentofrevenue.Revenuein2009amountedtoEUR6,636m,anincreaseofEUR601m,or10percentrelativeto2008.

Wind, oil and gas Wind,OilandGasisVestas'vision,whichexpressestheambitionofmakingwindanenergysourceonaparwithfossilfuels.

Attheendof2009,windpoweraccountedforlessthan2percentoftheworld'scombinedelectricityproduction.WindpoweriscurrentlythebestmeansamongrenewablesourcesofenergyofensuringthatglobaltemperatureincreasescausedbyCO2emissionsarekeptatamaximumoftwodegrees.Theneces-sityoflimitingtemperatureincreaseswasrecognisedbytheUN

membercountriesattheCOP15conferenceonclimatechangeinCopenhagen,Denmark,inDecember2009.

Vestasexpectsthat,ifthenecessarypoliticaldecisionsonanationalandinternationalleveltoexpandthepowergridandappointsitesaremadenow,windpowercanmakeupatleast10percentoftotalelectricityproductionby2020.Thattranslatesintoinstalledwindpowercapacityofatleast1,000,000MW,ascomparedwithapprox150,000MWattheendof2009.

FailURE is not an oPtionVestas'mission,Failureisnotanoption,expressestheorganisa-tion'scommitmenttoconstantlyseekingimprovementsandtoconsistentlyfollowinguponandrectifyingerrorsinastructuredmanner.ThemissionalsomirrorsVestas'uncompromisingstanceonsafety,whichisgiventopprioritynomatterwhatthecontext.

Theambitiontoattaina6Sigmaqualitylevelthroughoutthevaluechainnolaterthanin2015underlinesthiscommitmenttoconstantimprovement.Attheendof2008,Vestasandthevastmajorityofitssuppliershadreached4Sigma.Thetargetfortheendof2010is5Sigma.Theimprovementsaretobeachievedthroughmassiveinvestmentsintrainingandfacilitiesforthedevelopmentandtestingofwindturbinesandcomponents.Vestasthereforeworkscloselywithallsupplierstodeliveropti-mumqualityandreliabilitytoitscustomersand,byextension,thelowestCostofEnergyandhighestBusinessCaseCertainty.

OwingtoVestas'systematicapproachtoriskmanagementrela-tivetocustomersandsuppliers,allidentifiedrisksarecosted,anddecisionsaremadeonthebasisoffacts.

Asaresultofthededicatedeffortbymanysuppliers,thequalityandabilitytosupplyhasbeensignificantlyimprovedinrecentyears.However,customerreturnsandVestas'reputationcon-tinuetosufferunderunsatisfactoryqualitymanagementbyafewsuppliers.Asaresult,quality-enhancingendeavoursarebeingscaledupthroughtheestablishmentofagroupstafffunctioninchargeofVestas'qualitymeasures.

tHE WillPoWER Vestas'employeeshaveusedtheirwillpower,imaginationandabilitytoconstantlydevelopthewindturbinetechnologyandtheVestasorganisationtomaintainVestas'leadingpositionintheindustry.ThisisexpressedbythesculptureentitledtheWill-power,whichhasbeenplacedatanumberofVestas'locations.

Vestasseekstopromoteaculturecharacterisedbyindepend-entinitiativeandcollaborationinwhichthedynamicsandsenseofresponsibilitythatusuallycharacteriseasmallcompanyareretained.Thesolidfoundationofthesculpturealsoexpressesthereliability,commonsenseandtrustworthinessthatisthecorner-stoneofallVestas'activities.

TheupdatedCodeofConductthatVestasintroducedin2009istoensurethatallemployeesandotherspersonsactingonbehalfofVestasknowwhatiscorrectVestasbehaviour.Vestas'CodeofConductcanbedownloadedfromvestas.comunderAboutVestas/Principles/Sustainability.

Vestas'CodeofConducthasbeenmadeavailabletoallemploy-eesviae-learning,informationmaterialin18languages,presen-tations,etc.Furthermore,allemployeeshavebeeninformedaboutVestas'Ethicsline,whichmaybeusedtoreportanyviolationofthecompany'spoliciesandtoseekguidanceifanemployeefacesadilemma.Furthermore,e-learningmoduleshavebeentailored >>

016 Vestasannualreport2009

andaremandatoryforselectedemployeegroupsandavailabletoeveryone.AllnewemployeeswillbeintroducedtotheCodeofConductaspartoftheinductionprogramme.

Vestas'standardsandgoalsbuildonrecognisedframeworkagreementsestablishedbyinternationalorganisationssuchastheUN,IlOandOECD.In2009,VestasjoinedtheUNGlobalCompactinitiativeandfollowsthetengenerallyrecognisedprin-ciplesinrespectofhumanrights,labourstandards,theenviron-mentandanti-corruption.Atleastonceayear,Vestaswillsubmitaprogressreport,CommunicationonProgress,onGlobalCom-pactdevelopments.Theprogressreportfor2009isshownunderthesectionNon-financialissuesonpages50-59.

ManagEMEnt FoCUsVestas'management'soverallfocusisoncustomers,colleagues,CostofEnergyandshareholders.Successintheseareasisapre-requisiteforretainingtheleadershippositioninfiercecompeti-tionwithsomeoftheworld'slargestcorporations.

Customers Vestasexpectsthatlargecustomerswillcometorepresentalargerproportionofthenewcapacityinthefuture,especiallyinmaturemarkets.Revenuein2009wasdistributedamong201customers,against228in2008.ThegenerallyhigherdegreeofprofessionalismamongitscustomersplacesevergreaterdemandsonallpartsofVestas.

ByestablishingtheindependentgroupstafffunctionGroupMarketing&CustomerInsightin2009,Vestasintensifieditseffortstobuildastrongcustomer-orientedculturethroughouttheorganisation.Throughsignificantlyimprovedcustomerinsightandopencustomerdialogue,Vestasaimstoachieveasharpimprovementincustomerloyalty,whichisaprerequisiteforVestastoaccomplishTriple15.

GroupMarketing&CustomerInsightistoprovidesupporttothesalesbusinessunitsandstandardisecustomer-relatedactivitiessothatthemostexpedientworkmethodsandprocessesareappliedthroughoutVestas,makingthecompanyabetterpartnertoitscustomers.Furthermore,thefunctionisresponsibleforproductlaunchesandprogressiveaccumulationofknowledgeaboutcustomerneedstoensurefasterandbetterfollowuponcollaborationwitheachcustomerandthatcustomer'ssatisfac-tionwithVestas.

Inordertoensureuniform,highqualityinallpartsofthecol-laborationwithVestas'largestinternationalcustomers,aKeyAccountManagementprogrammewaslaunchedin2009,comprisingallsalesbusinessunits.Inaddition,customerswillbecomemoreinvolvedinproductdevelopmentandwillgenerallyhavebetteraccesstoinformationanddatarelatingtobusinessandtechnology.

CustomerloyaltysurveyAsinpreviousyears,Vestasconductedaloyaltysurveyamongitscustomersin2009.Atotalof684personsfrom155customersparticipatedinthesurvey.

Withaloyaltyindexof64,Vestas'almostachieveditstargetindexof65–animprovementfrom52in2008.Theimprove-mentprovesthatVestas'continuingfocusonenhancingcus-tomerrelationsanddeliveringbetterturbineperformanceandservicehasproducedresults.Vestasaimsforacustomerloyaltyindexof70in2010,andthetargetindexfor2012isaminimumof75.

ColleaguesSince2005,Vestashasrecruited10,112employees,net,andat31December2009,the20,730employeeshadanaveragesen-iorityof3.7years,with48percentoftheemployeeshavinglessthantwoyears'seniority.Thetrainingandretentionofnewandexistingemployeesisthereforeakeypriorityarea.

Vestas employees at 31 December 2009

Europe americasasia/

Pacific total

Productionunits 7,471 735 2,109 10,315

Salesandserviceunits 4,170 1,404 2,013 7,587

R&D 1,182 54 254 1,490

Others 1,338 0 0 1,338

Total 14,161 2,193 4,376 20,730

Production units

50%

R&D

7%

Sales and service units

37%

Others

6%

Tothatend,Vestashasexpandeditsmanagementdevelopmentprogrammesandgivengreaterprioritytoin-houserecruitmentoffuturemanagers.Thein-houserecruitmentofmanagersissup-portedbyinitiativessuchasVestas'HighPotentialprogramme,whichselectsandsupportsemployeeswiththepotentialtotakeamanagerialpositionintheorganisationwithinafewyears.

AprerequisiteforsustainingprogressisforVestastobecomeamoreinternationalbusinesswithamuchhighernumberofnon-Danishemployeesinmanagementpositions.Furthermore,Vestasaimstohavemorewomenexecutives.Attheendof2009,Danesheld54percentofthepositionsintop-2,500,and19percentwerewomen.Inaddition,Vestasaimstohavemanynationalitiesatalllocationsinordertocreateatrulyglobalbusi-ness,whichalsohasextensivelocalinsightandunderstanding.

Duetothecapacitybuild-upintheUSAandalackofgrowthindemandinanumberofmarketsinNorthernEurope,regrettablyVestaswascompelledtoadjustitsfactorycapacityin2009.Asaresult,Vestashadtolayoff1,567employeesinDenmarkandtheUK.

Inspiteofthelay-offsin2009,theheadcountwasapproxi-matelythesameasin2008duetotheexpansionsintheUSAandChina.Goingforward,Vestasexpectsitsheadcounttoriseatalowerratethanitsbusinessvolumebecauseofenhancedeffi-ciency,improvedturbineperformanceandeconomiesofscale.

Vestaswillcontinuetorecruitemployeesunderthe“Peoplebeforemegawatt”principle,becausethecostsofwell-educatedexcesscapacityarelowerthanthecostsofremedyingfaultsduetoarushedstaffinflowcausedbystrongMWgrowth.lay-offswillbeameasureoflastresortforVestasduetothesubstantiallossofknow-howandexperienceassociatedwithsuchlay-offs.

EmployeesatisfactionsurveyAsinpreviousyears,inNovember2009VestasconductedasatisfactionsurveyamongallemployeesinordertoidentifyandselectpriorityareasbothlocallyandatGrouplevel.17,748

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employees,equaltoaworld-classresponserateof92,partici-patedinthesurvey.In2008,theresponseratewas86.Althoughtheresultsshowareaswhichcanbeimproved,themainconclu-sionisthatVestas'employeesareveryloyalanddedicated,asalsowitnessedbythehighresponserate.

Tofollowuponthesurvey,actionplansaredrawnupwithspecificimprovementinitiativesatalllevelsoftheorganisationtoensurethateveryoneknowsboththeoveralltargetsandprioritiesandthelocalactionplansforTriple15.

SafetycultureInaccordancewithVestas'mission,Failureisnotanoption,theultimategoalistoreducethenumberofindustrialinjuriestozero.Forthefourthyearrunning,in2009Vestasagainachievedthelowestincidenceofindustrialinjuriesever.

Theincidenceofindustrialinjuriesperonemillionworkinghourswas8.1,decliningfrom15.6in2008.Thetargetfor2010istoachieveanincidenceof7.0industrialinjuriesperonemillionworkinghoursandfor2012thetargetis3.0orless.Thisambi-tioncallsfordedicatedmanagementofthesafetyinitiatives,notonlyatVestasbutalsoatVestas'businesspartners.

Vestasmusthaveworld-classsafetyatallofitssites,andtoachievethatVestaswillcontinueitscomprehensivemanagementtrainingprogramme.Thetrainingprogrammeisbasedonfivesafetyprinciplesthatwillguidetheemployeesintheireverydaywork:

· Allindustrialinjuriescanbeprevented.· Everyhazardcanbemanaged.· Managementisaccountableforsafety.· Peoplearethemostimportantcomponentinasafetyeffort.· WorkingsafelyisaconditionofemploymentatVestas.

Animportantpartofthetrainingprogrammeis"safetywalks”,inwhichVestasfocusesonsafetyattheworkplaceaspartoftheday-to-daymanagementtodemonstratevisibleinvolvementinsafetyaspectsandincreasesafetyawarenessthroughouttheGroup.

Toemphasisetheprioritygiventosafety,theincidenceofindus-trialinjuriesisoneofthecriteriaintheglobalemployeebonusscheme.

Vestas'globalbonusschemeAllVestasemployeesarecoveredbyabonusschemeaimedatconsolidatingaperformance-basedcorporateculture.Thedis-bursementofbonusinVestas'globalbonusprogrammedependsonanumberoftargets:InVestas'14businessunits,thedis-bursementofbonusdependsontheperformanceofeachindivid-ualunit(30percentweighting)andtheGroup'sperformance(70percentweighting).Foremployeesoftheparentcompany,bonusiscalculatedexclusivelyonthebasisoftheGroup'sperformance.

For2009,thefollowingtargetsappliedatGrouplevel:AnEBITmarginof13percent(50percentweighting),anetworkingcapitalofamaximumof10percentofrevenue(20percentweighting),revenueofEUR7.2bn(10percentweighting)andacustomerloyaltyindexof65(20percentweighting).Vestasex-pectsthebonuspaidoutfor2009tobeapproxEUR60m.

Inthemeasurementofbonusin2010,theGrouptargetshavethefollowingweightings:AnEBITmarginof10percent(40percentweighting),anetworkingcapitalof15percent(20percent

weighting),revenueofEUR7bn(20percentweighting)andacustomerloyaltyindexof70(20percentweighting).

Inthelongerterm,bonuspaymentswillbemorecloselylinkedtotheday-to-dayperformanceofeachemployee.Thebonusdis-bursementisbasedonnationallegislationandissubjecttolocaladjustments.

In2010,Vestaswillextenditsoptionschemetocompriseabout250employees.Thenewparticipantsincludeanumberofman-agers,seniorspecialistsandprojectmanagers.Untilnow,theoptionprogrammehasonlycoveredtheExecutiveManagement,PresidentsofthebusinessunitsandSeniorVicePresidentsofthegroupstafffunctions.

Cost of EnergyVestasismakingadedicatedefforttoreducetheCostofEnergymeasuredbothasthepriceofMWhandtheenvironmentalfoot-print.Vestasmustconsistentlymanufactureandservicemorerobustandreliablewindpowerplants,therebyincreasingthecompetitivestrengthandthevalueofwindpower.ThefuturegrowthisunderpinnedbythefactthatthepriceoffossilfuelsandCO2emissionsissettorisedramatically.

Vestashasabroadproductportfolio,whichisoptimisedregularlytoensurethebestpossibleoutputandreturnfromwindpowerplantsunderanywindandtransmissionconditions.InFebruary2009,theGroupbegantomarketitstwonewwindturbines;theV100-1.8MWandtheV112-3.0MW,whichwillbereadyfordeliverytositeswithmediumandlowwindsin2010and2011,respectively.TheprototypeofthenewV60-850kWturbinefromVestas'HohhotfactoryinInnerMongolia,China,waspresentedinApril2009,andthefirstorderforthisturbinewasreceivedinDecember2009.

The6MWoffshoreturbine,whichiscurrentlybeingdeveloped,mustdramaticallyreducetheCostofEnergycomparedwithallknowncompetingproducts.CombinedwiththelaunchoftheV112-3.0MWoffshoreturbine,thenew6MWoffshoreturbineunderpinsVestas'commitmenttooffshoreoperations,inwhichVestashadanestimatedaccumulatedmarketshareof40percentattheendof2009.OfVestas'totalinstalledMWattheendof2009,offshoreaccountsfor2percent.

WindpowerplantsgeneratepowerwithoutemittingCO2,NOxandSOxandwithoutconsuminganywater.In2008,Vestasresolvedtostepupitsenvironmentaleffortsunderthe“Asgreenasitgets”principle.Vestaswillmakewindturbineproductionasgreenaspossible,partlyinordertosavemoney,partlytomaintaintheindustry'smostsustainableproductionandtherebystrengthenitscompetitiveness.Vestashassubsequentlyjoinedcommonini-tiativessuchastheUNGlobalCompactandtheWorldBusinessCouncilforSustainableDevelopmentandimplementedagreenelectricitypolicy,agreencarpolicyandagreenbuildingpolicy.

In2010,theseinitiativesareintendedtocontributetoincreas-ingVestas'shareofrenewableenergyto55percentthroughanincreaseintheshareofrenewableelectricitytoatleast90percent.Theoriginaltargetfor2010was50percent.ThetargetsareambitiousbecauserenewableelectricityisnotcurrentlyaccessibleatallVestas'units.

In2009,theshareofgreenenergywas49percentandtheshareofrenewableelectricitywas85percent.FurtherdetailsareprovidedinthesectionNon-financialissuesonpages50-59. >>

018 Vestasannualreport2009

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VESTAS'ORGANISATIONAlSTRUCTURE

GroupStafffunctions

VestasPeople&Culture VestasAmericas

VestasAsiaPacific

VestasCentralEurope

VestasChina

VestasMediterranean

Finance&IT

VestasNorthernEurope

VestasQualityManagement

VestasOffshore

ProductionUnit1

ProductionUnit2

VestasSpareParts&Repair

VestasTechnology

President

ProcessExcellence

People&Culture

SupplyChainManagement

ProductionEngineering

ORGANISATIONAlSTRUCTUREINAPRODUCTIONBUSINESSUNIT

ExecutiveManagement

ORGANISATIONAlSTRUCTUREINASAlESBUSINESSUNIT

President

GovernmentRelations

Marketing&CustomerInsight

legal&ContractReview

Communications

VestasQualityManagement&ProcessExcellence

People&Culture

Operations FinanceKeyAccountManagement

Sales

VestasBlades

VestasControlSystems

VestasNacelles

VestasTowers

riSk­MaNaGeMeNT

tax RisKs

intERnal ContRol RisKs

ExCHangE RatE RisKs

liqUidity RisKs

intEREst RatE RisK

CREdit RisKs

CoMModity RisKs

sUPPliER RisKs

PRodUCt RisKs

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Formorethantenyears,Vestashassystematicallyappliedlifecycleassessmentstoidentifytheenvironmentalfootprintofthewindturbinesthroughouttheirlifetime,includingmanufacture,transportanddismantlingoftheturbines.Theassessmentsiden-tify,evaluateandfocusonthepotentialenvironmentalimprove-ments.Overaturbine'slifetime,itonlyemits5-8gramsofCO2perkWhproduced,includingtheenergy-intensiveproductionofsteel,whichrepresentsthebiggestproportionofrawmaterialsusedinawindturbine.

Theassessmentsshowthattherelationshipbetweenconsump-tionofmaterialsformanufacturingawindturbineandtheenergysubsequentlygeneratedbytheturbineispivotalfortheenviron-mentalimpact.Vestas'large-scaleinvestmentsindevelopmentandresearchmustthereforeleadtomore“MWhperkilogramturbine”inordertoreduceVestas'impactontheenvironment,theclimate,Earth'sresourcesanditssurroundingsingeneral.Meas-uredusingtheseparameters,Vestas'newV112-3.0MWturbineoutperformstheV90-2.0MWturbine,whichhasalsobeende-velopedforlowwinds,bymorethan20percent.

Atthesametime,Vestasendeavourstoensurethatasmuchoftheproductaspossiblecanberecycled.Approx80percentofaV90-3.0MWturbineonan80-metretowercanberecycled,thussignificantlyreducingthewindturbine'soverallenvironmentalimpact.

Forfurtherdetails,seethesectionNon-financialissuesonpages50-59orvestas.com,whereallthelifecycleassessmentsareavailable.Forfurtherinformationabouttargetsforfactoriesandsalesunits,referenceismadetothe50sitedescriptions,whicharealsoavailableonvestas.comunderAboutVestas/Principles/Sustainability.

shareholdersVestasaimstogiveitsownersalong-termcompetitivereturnoninvestmentandopenlyinformitsstakeholdersaboutthedevelopmentsinVestaswithdueconsiderationtothelimitationsapplicabletoalistedcompanyandthecompany'scommercialcompetitiveness.Vestasintendstohaveanincreasinglyinter-nationalcircleofownersthatreflectsthegeographicaldiversifi-cationofitsoperations.

BUsinEss dEvEloPMEntorganisational changesInordertosafeguardthecompany'scompetitivestrengthintheyearsahead,itisessentialthattheVestasorganisationcaneffectivelyhandlefuturegrowthandavoidacorrespondingincreaseincostsandcomplexity.Consequently,VestasisintheprocessofaligningtheGroup'sbusinessunitstoensureconsist-encyofstructure,departments,jobdescriptionsandworkproce-duresacrosstheGroup.Thechangesarebeingmadetoincreasetransparency,ensureacleardistributionofresponsibilities,re-duceVestas'responsetimeandlowerthecostlevel.

In2009,thesechangesweremadeinVestas'fourproductionbusinessunits,whilethenewstructurewillbeimplementedinallsalesbusinessunitsduringthefirsthalfof2010,atwhichtimeasimilarchangeprocesswillbelaunchedinthegroupstafffunctionsandinVestasTechnologyR&D.Concurrentlywiththealignment,anumberofchangeswillbemadetoVestas'governancestructure;anumberofforumswillbecloseddownandotherswillbeestab-lished,eachwithclearlydefinedresponsibilitiesandduties.

At1January2009,twonewbusinessunitswereestablished:VestasChinaandVestasSpareParts&Repair.TheVestasChina

salesbusinessunitfocusesexclusivelyonChinaandthehugegrowthpotentialinthatmarket.

TheVestasSpareParts&Repairbusinessunitwillhelpconsoli-dateVestas'serviceandsparepartsactivities.TheunitistosupportVestas'serviceorganisationinallmarketsandhelptoensureimprovedqualityandgreaterreliability,whilealsomakingVestasamoreflexibleandfast-respondingbusinesspartnertoallcustomers.

In2009,fivegroupstafffunctionswereestablished:GroupMar-keting&CustomerInsight,GroupForecasting&Planning,GroupEngagementOffice,GroupQualityandVestasExcellence.

GroupMarketing&CustomerInsightistohelpbuildastrongcustomercultureinVestas.Closercustomerrelationsandinsightintotheirneedscombinedwithimprovedwindturbineperform-anceareexpectedtopavethewayforsignificantlyimprovedcustomerloyalty.

TheaimofGroupForecasting&Planningistoensureclosecol-laborationbetweenthesalesandtheproductionbusinessunits.

GroupEngagementOfficeistoimplementexecutivemanage-ment'sstrategyatthetacticalandoperationallevelsbyidentify-ingandexecutingin-houseinitiatives.

ThegroupstafffunctionGroupQualityistoensureenhancedfocusonquality,includingtheuseofSixSigma,inallpartsofVestas.Thenecessaryimprovementsaretobeachievedthroughclosecollaborationwithlocalqualityfunctions,whichhavebeenstrengthenedinconnectionwiththealignmentofthebusinessunitstructure.

TheVestasExcellencefunctionconsistsofeightcentres,whichinacombinedeffortwiththebusinessunitsaretoidentify,organiseandoptimiseworkmethodsandproceduresatVestastoensurethatthebestsolutionsareconsistentlyappliedacrosstheGroup.ThecentresarealsoresponsibleforensuringaconstantfocusonimprovingprofitabilitythroughoutVestas.Theeightcentresare:

· SalesExcellence· SourcingExcellence· ProductionExcellence· QualityExcellence· Transport&logisticsExcellence· ConstructionExcellence· ServiceExcellence· ProcessExcellence

In2009,thecentreshelpedliftVestas'earnings,demonstratingthecontinuedpotentialforsubstantialsavingsinallpartsofthevaluechain.

Knowledge resourcesInordertoensurethatVestas'combinedknowledgeresourcesaredevelopedandexploitedinthebestpossibleway,in2009VestasimplementedaclearstructurefortheGroup'sbusinessprocedures,includingdistributionofresponsibilities.

GlobalprocessownersoftheGroup'skeyprocesseshavebeenappointedtomapandharmonisebusinessprocessestoensurebusinesscontinuity.Thiswillhelpbreakdownsilosandincreasetransparency.Effortsaimedatincreasingtransparencyandimprovingknowledge-sharingareanchoredinProcessExcel-lence.

020 Vestasannualreport2009

In2009,Vestasalsodevelopedguidelinesandtoolsthatsupportthealignmentandprocessimprovementefforts,basedonleanandSixSigmamethods.Theseinitiativesaimtoensurecontinu-ousimprovementofallprocessesinVestasandthatbestprac-ticeisconsistentlysharedacrosstheorganisationwithaviewtomeetingVestas'strategicgoals.

Also,in2009Vestasfurtherintensifieditscollaborationwithleadinguniversitiesandothereducationalinstitutions.Inthisway,Vestasaimstoretainitstechnologicalleadershippositionintheindustry.

suppliersVestasworkscloselywithitssupplierstoimprovetheprofes-sionallevelofthesupplychain,enablingthesupplyofcompon-entsatcompetitivepricesthatreflectthequalityandtimelinessofthedelivery.Againstthisbackground,in2005VestaslaunchedSixSigmaastheGroup'skeyqualityimprovementtool.ThesystemhasbeenimplementedatVestas'ownfactoriesandatitssuppliersandisaimedatreducingvariancesinprocessesand,byextension,harmonisingthequalitylevel.

SixSigmaprovidesacommonanduniformapproachtoinnov-ationandprocessdesign,focusingoncontinuousimprovementsthatbuildonthesystematiccollectionofdata.Inclosecoopera-tionwitheachsupplier,Vestasidentifiescentralspecificationsthatarecrucialforproductreliabilityandperformance.Theseparametersaremonitoredinanongoingprocesswithaviewtolaunchingimprovementinitiatives.

Vestashasstationedsomeofitsownemployeeswithmanysuppliersinordertoadjustrelevantprocessesearlyandcost-effectively.In2009,anumberofsuppliersbecamemoredeeplyinvolvedinVestas'productdevelopmentforthepurposeofreducingcostsandimprovingquality.

Efficiency improvementsOptimisedresourceutilisationandgreaterproductivityarepre-requisitesforVestastoretainitscompetitivestrength,minimisetheenvironmentalfootprintofitsownproductionandretainitsmarket-leadingposition.Duringthefirstquarterof2010,Vestaswilladjustitsproductioncompletelytoa“maketoorder”pro-cess,whichrequiresthatallsupplierscanalwaysdeliverontime.Theobjectiveistomanufacturewithaminimumofinventorieswithoutincreasingthetimefromreceiptofordertoshipmentandinstallation.

ProductionExcellencemustensureacommonapproachtopro-ductionbasedontheleanandSixSigmaproductivitysystems.Auniformapproachtoproduction,includingjointprocessesforimprovementinitiatives,facilitatestheidentificationofsynergiesandexchangeofbestpracticeexperiencebetweenfactoriesandbusinessunits.Thegoalistoachieveworld-classproduction.

AkeyprerequisiteforachievingbestpracticeandsynergieswasaccomplishedwhentheneworganisationalstructureinVestas'productionbusinessunitswasimplementedin2009.

Inordertoensurethenecessaryemployeeinvolvement,bothfactorymanagementandemployeesreceiveleanandSixSigmatraining.In2009,around3,000employeesparticipatedintrain-ingcourses,thuscontributingtobuildingacorporatecultureinwhichallemployeesconsistentlyendeavourtoimprovethequal-ityandreduceleadtimes,costsanderrors.

In2009,Vestascontinuedtobuildontheimprovementsachievedintheprecedingyears.Forexample,VestasSpareParts&Repairimplementedafullleanconversion,whichledtosignifi-cantlyimprovedleadtimesforVestas'keycomponents.

Atallfuturefactories,operationswillbeplannedaccordingtothenewprinciplesfromtheonsetofproduction.Commonoptimis-ationprinciplesandsimilarorganisationsimprovethepossibilityofcommunicatingacrosstheorganisation,leadingtogreatermobilityamongVestas'employees.

service Focusingonmaximumoutputandreturnfromthewindpowerplantsthroughmeticulouslyplannedserviceinspections,Vestas'serviceorganisationhelpsensuremoresatisfiedcustomers.ThiswasachievedconcurrentlywiththeGroupbuildingamoreprofit-ableservicebusiness.

Sincethebeginningof2008,Vestashasinvestedsubstantialresourcesinenhancingtheserviceorganisation'sefficiencyand,byextension,thereliabilityofthewindpowerplants.Themeantimebetweenserviceinspectionsofeachturbinewasimprovedin2009comparedto2008,whenthemeantimewasdoubled.VestasPerformance&DiagnosticsCentreregularlymonitorsmorethan15,500turbines,orabout26,600MW,allowingtheserviceorganisationtomakepreventiveretrofittingandrepairs.MeticulousplanningofserviceinspectionsproducesenhancedoperationsandhigherproductionoutputandtherebystrongerearningsforthecustomersandVestas.

Everyday,Vestasincreasesthenumberofwindturbinesmoni-tored.Attheendof2009,theseturbinesaccountedfor69percentofVestas'totalinstalledcapacity.Analysesofdatafromthewindturbineswhichcombinedrepresenttheworld'slargestwindpowerplantbyfaralsoprovideinputforthedesignofupgradepackageswhich,subjecttoservicecontractsconcluded,areim-plementedorofferedinconnectionwithsoftwareupgradesforinstalledturbines.

Therecentlyestablishedbusinessunit,VestasSpareParts&Repair,supportsallofVestas'operationalserviceunitsandwillcontributetofurtheroperationalimprovementsandbetterleadtimesforsparepartsandrepairs.Responsiblefortheglobalsup-plyofsparepartsandrepairsofkeycomponentstoVestas'ser-viceorganisation,thisunitisheadquarteredinRanders,Denmark,andin2009itopeneddepartmentsinBristol,UK,andinBarce-lona,Spain.In2010,VestasplanstoopenaservicedepartmentforrepairsinColorado,USA.

Vestasexpectsthatinfuture,theservicebusinesswillgrowatleastasfastastheotheractivities.

implementation of saPVestashasnowlaunchedtheEnterpriseResourcePlanningsys-temSAPinallsevensalesbusinessunits,inallgroupstafffunc-tions,inVestasTechnologyR&DandinVestasPeople&Culture.TheimplementationofSAPhasmadeVestasbettercapableofadaptingtoaconstantlychangingworldandmarket.Uniformandvaliddatahaveimprovedtransparencybetweenthedepartments,increasedtheretentionofknowledgeresources,andmadeVestasabletoactfasterandmoresafely.

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qualityVestassecuresandregularlyimprovesthequalityofitsprod-uctsandservices.ThestructureofthequalityorganisationisdesignedwiththeaimofensuringthatqualityisincorporatedintheplanningofallGroupservicesandavoidingfaultsreachingVestas'customers.Theeffortisnowstrengthenedbytheestab-lishmentofthenewgroupstafffunction,GroupQuality.

Inaddition,Vestas'qualitymanagementsystemensuresthattheorganisationmaintainsupdatedandstrongprocesses.Thesys-temisauditedsothatallpartsarereviewedatleastonceeverythreeyears.

PatentsProtectingthelargenumberoftechnologiesdevelopedbyVestasisparamountforVestastoretainitstechnologyleadershippos-ition,anditisthereforeakeycontributortoretainingoperationalfreedom.

Asintheprecedingyears,in2009Vestasonceagainincreaseditspatentinvestments,recordinganincreaseinthenumberofnewpatentapplicationsfrom153in2008to165in2009.Since2005,Vestashasthusincreasedthenumberofannualpa-tentapplicationsmorethantenfold.Vestasexpectstomaintainthehighlevelintheyearsahead.

Vestaswasnotinvolvedinlitigationconcerningpatentsand/orotherintellectualpropertyrightsin2009.

development facilitiesInordertoretainitstechnologicalleadershipposition,Vestasinvestsheavilyindevelopmentfacilitiesandhumanresources.Bytheendof2010,VestaswillthushaveincreasedtheheadcountinVestasTechnologyR&Dbyapprox500to2,000.In2009,thenumberofR&Demployeesrosefrom1,345to1,490.

ThetargetforVestas'developmentactivitiesistohavethelow-estCostofEnergymeasuredpartlyasthepriceperMWh,partlyasthetotalenvironmentalcosts.Agreenproductionisconsid-eredanincreasinglyimportantstrategiccompetitiveparameter.

TheextensionofthebladetechnologycentreontheIsleofWight,UK,commencedin2009.Thecentreisexpectedtobecomeoperationalinthethirdquarterof2011.Inaddition,anewdevel-opmentcentrewasestablishedinHouston,Texas,USA,andanewR&DofficewasopenedinBoston,Massachusetts,USA.TheBostonofficehastakenoverkeyemployeesfromePowerllC,whichhasthreedecadesofexperienceinmotorandgeneratortechnology.

Furthermore,inadditiontobladeproductionandnacelleassem-bly,Vestas'newfacilitiesinBrighton,Colorado,USA,willalsobehousingR&Demployeesfrom2010.

Finally,anexpansionofVestasTechnologyR&D'sheadquartersinAarhus,Denmark,willbecomeoperationalinMay2010,atwhichtimeitwillbeabletohouse900employees.

Attheendof2009,VestashademployeesworkingwithresearchandproductdevelopmentintheUSA,EuropeandAsia.In2009,VestasspentatotalamountofEUR249monwindpowertechnologydevelopment.Goingforward,Vestaswillcon-tinuetoinvestthenecessaryfundstoretainitstechnologicalleadershipposition.

new production facilitiesAnongoingincreaseofproductioncapacityisnecessaryforVestastoaccomplishitslong-termgrowthtargets.Thiscapacityincreasewillbeachievedpartlythroughenhancedproductionefficiency,partlythroughconstructionofnewproductionfacil-ities.

Intheperiod2005-2009,VestasinvestedatotalofEUR2.3bnespeciallyinitstwolargestmarkets,theUSAandChina,inordertofulfilthegeneralrulethat“NorthAmericaissuppliedfromtheUSA”,“EuropefromEurope”and“Asia/PacificfromAsia”.ThisregionalstructuregivesVestasmorecompetitivestrength,re-ducestheenvironmentalandclimatecostsandimprovesVestas'currencymixbetweenincomeandexpenses.

AnewfoundryisnowreadytobecommissionedinXuzhou,Jiangsu,China.VestasisnowtheonlywindturbinemanufacturerwithitsownfoundryinChina.Atthebeginningoftheyear,VestascompletedconstructionofthefactoryinHohhot,InnerMongo-lia,China,forproductionoftheV60-850kWturbine,whichistailoredspecificallytolocalwindandtransmissionconditionsofthatarea.

InPueblo,Colorado,USA,Vestashascompletedtheconstructionoftheworld'slargesttowerfactory.In2010,VestaswillopenanacelleassemblyfactoryandabladefactoryinBrighton,Colo-rado,USA.

Attheendof2010,theUSfactoriesareexpectedtobeabletogenerateanannualoutputof3,000MW,contributingtosafe-guardingVestas'competitivestrengthintheNorthAmericanmarket.Vestas'totalfactorycapacitywillbe10,000MWattheendof2010.

Closedown of production facilitiesInconnectionwiththeproductioncapacityadjustmentsintheNorthernEuropeanmarkets,thebladefactoryontheIsleofWight,UK,wascloseddownin2009.ThedecisionwasmadeasaresultoftheestablishmentofVestas'newfactoriesintheUSmarket,whichhaduntilthenbeenservedbytheIsleofWightfactory.Continuedtransportstoothercontinentswerenotafinanciallyorenvironmentallysustainablesolution.Inaddition,VestasexpectedthatsalesofonshoreturbinesintheUKandotherNorthernEuropeanmarketswouldbeinsufficienttoretainproductionfacilitiesontheIsleofWight.Partoftheformerbladefactorywillhenceforthbeincludedinthebladetestcentrecur-rentlybeingestablishedontheIsleofWight.

InApril2009,VestascompletedthesaleofitstowerfactoryinCampbeltown,Scotland.SecuringcontinuedproductionandretentionofjobsinCampbeltown,thesalewaseffectedbecausetheproductswhichthefactorywasoriginallydimensionedtomanufacturewerenolongerinsufficientdemand.

RisK ManagEMEnt In2009,Vestasfurtherimproveditsriskmanagementprocessrelatingtoproduction,salesandfinancialreporting.Amongotherthings,EnterpriseRiskManagementwaslaunchedinallbusinessunits,whichensuressystematicidentificationandhandlingofrelevantrisksthroughoutVestas'valuechain.

TheimplementationofaBusinessContinuityManagementprogrammecontinuedin2009.Theprogrammeisintendedtostrengthenthehandlingofpotentialunforeseeneventsinrela-tiontoVestas'business. >>

26,600 MW VestasPerformance&DiagnosticsCentremonitorsabout26,600MW

022 Vestasannualreport2009

>> Vestascontinuouslymonitorsriskdevelopmentsandactivitiesaimedatmitigatingsuchrisks.ThisisachievedbystrengtheningtheinternalreportingproceduresofthebusinessunitsandatGrouplevel.Tothisend,anumberofriskcommitteeswereestab-lishedin2009tomakeVestas'managerscapableofrespondingtorisksagainstthebackgroundofanupdated,globaloverview.ThelaunchofSAPisacriticalfactorinthiscontext.

Theincreasinglystandardisedapproachtoriskmanagementmeantthatthepredicteddeclineininsurancepremiumswasachievedin2009,whilstVestashasachievedsignificantlyimprovedcoverageandinsuranceconditions.Vestasexpectstoretainthelevelin2010.

Commercial risksSupplierrisksVestascontinuouslyextendscollaborationswithkeysuppliers.Introducingintegratedproductdevelopmentwithparticipationofallproductionbusinessunitsandseveralsuppliersandteamsinchargeofandwithexpertiseinalimitedcomponentcategory,Vestascreatedfocusontheprocurementprocess.ThisallowsVestastobettercontrolcrucialprocurementriskcomponents.

Supplierlimitationsaregraduallysolvedthroughachangeofmaterialsusedinmainturbinecomponentsandcontinuedcom-petenceandriskmanagement,whichincludesmonitoringofthefinancialpositionofexistingandprospectivesuppliers.

Thecreditsqueezehastriggeredcomponentabundance,buttheabruptslowdowningrowthmayrepresentafinancialchallengetoanumberofsuppliers.Vestasaimstoalwayshaveatleasttwosuppliersofallcomponents;inthemajorityofcases,thisgoaliscurrentlyaccomplished.

ProductrisksInrecentyears,Vestashasspentsubstantialresourcesoncon-tinuousimprovementsofproductsandprocessesinitsproductdevelopmentefforts.

In2009,Vestasfocusedonlaunchingamanagementandreport-ingstructurethatmayensureconsistentproductimprovements.Improvementsareachievedthroughchangestodesign,produc-tion,installationandmaintenanceand,notleast,throughexten-siveinvestmentsintestfacilities.

Furthermore,Vestasdedicatedsubstantialresourcestoresearchanddevelopmentofnewproductsandtechnologiestomeetfuturemarketneeds.Vestasisintheprocessofintensifyingcollaborationswithitscustomersinthedevelopmentprocess.Safety,lowestCostofEnergyandBusinessCaseCertaintyarethecornerstonesofalldevelopmentactivities.

TheseinitiativeswillboostVestas'futurecompetitivestrengthwhilstreducingproductrisks.

SalesrisksThetrendtowardscustomersbecominglargerandlargerisexpectedtocontinue,althoughtheproliferationofwindpowerinnewmarketswillleadtoanear-termincreaseinthenumberofcustomersintheseregions.MeasuredintermsoftotalMWorderintakeduringtheperiod2008-2009,thetenlargestcustomersrepresented41percentofthetotalorderintake.

Thecreditsqueezehasshiftedthebalanceofsupplyanddemand,andthereiscurrentlyexcesscapacityinthemarket.Ontheotherhand,moreandmorefinancialinstitutionsareintensify-

ingtheirrequirementstothewindturbinemanufacturers,whichprovidesanadvantagetothefinanciallystrongqualitysuppliers.

In2009,Vestasinvestedsubstantialresourcesinbuildingclosecustomerrelationsandingainingbetterinsightintocustomerconditions,theaimbeingtoboostVestas'competitivestrengthandmitigatesalesrisks.Theseinitiativescomprisedtheestab-lishmentofthegroupstafffunctionGroupMarketing&CustomerInsight.

AsVestas'graduallyimprovesitsabilitytoidentifyandmanageprojectrisks,thecompanyisabletoundertakelargerandmorecomplextasks.Atthesametime,eachindividualprojectrepre-sentsasmallerproportionoftotalrevenue,thusreducingtheorder-specificrisk.

Vestasretainsitsstrategyofnotrelyingonanysinglemarketorcustomer.

Inspiteofthedifficultmarketsituation,Vestashasnotsufferedanymateriallossesondebtors,oneofthereasonsbeingVestas'contractualworkwithitsbusinesspartners.

In2009,noorderswerecancelledorpostponed.

ReputationrisksUnfavourablemediacoverageofVestas,whetherjustifiedornot,maybecostlytotheshareholdersintheformofafallingshareprice,decliningsalesandearnings.

Agoodreputationisakeycompetitionparameterinrespectofrecruitment,retention,salesandinfluenceinsocietyingen-eral.Vestas'dedicationtoenhancesafety,quality,earningsandsustainabilityofitsproductionareallinitiativesthatstrengthenVestas'reputation.Similarly,openanddisciplinedstakeholderrelationsareimportantinordertoidentifymisunderstandingsandalignthesociety'sexpectationstoVestas,whichendeavourstodeliveraspromisedandtherebytobuildtheall-importanttrustworthiness.

Financial risks and internal control environmentTheoverallresponsibilityfortheGroup'sriskmanagementandinternalcontrolenvironmentinrelationtofinancialreportingrestswithVestas'BoardofDirectorsandExecutiveManagement,includingcompliancewithapplicablelegislationandotherfinan-cialreportingregulations.

TheBoardofDirectorsbelievesthatthemanagement'sstate-mentsarecrucialtogoodriskmanagementandinternalcontrolinrelationtothefinancialreportingprocess.TheBoardofDirect-ors',theAuditCommittee'sandtheExecutiveManagement'spositionongoodriskmanagementandinternalcontrolsinrela-tiontofinancialreportingisthereforeregularlyemphasisedinVestas.

Vestas'riskmanagement,includinginternalcontrolsinrelationtothefinancialreportingprocess,isdesignedwithaviewtoeffect-ivelyminimisingtheriskoferrorsandomissions.

Vestas'BoardofDirectors,AuditCommitteeandExecutiveMan-agementregularlyassesssignificantrisksandinternalcontrolsinrelationtotheGroup'soperationsandtheirpotentialimpactonthefinancialreporting.Vestas'riskmanagementandinternalcontrolenvironmentisdevelopedandenhancedinanongoingprocessinordertoconsistentlyaccommodatingtheneedsofalargecompanyundergoingstrongglobalgrowth.

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ControlenvironmentAtleastonceayear,theBoardofDirectorsassessestheGroup'sorganisationalstructureandstaffinginkeyareas.

Vestas'BoardofDirectorsandExecutiveManagementestablishandapproveoverallpolicies,proceduresandcontrolsinkeyareasinrelationtothefinancialreporting.Thisrequiresawell-definedorganisationalstructure,unambiguousreportinglines,authorisa-tionandcertificationproceduresandadequatesegregationofduties.

TheBoardofDirectorshasadoptedpolicies,manuals,pro-cedures,etc.inkeyareas,includinginrelationtothefinancialreportingandCodeofConduct.

Eachyear,Vestas'BoardofDirectorsandAuditCommitteeassesstheneedforaninternalauditfunction.Vestasbelievesthatthereisnoneedforaninternalauditfunctionbecauseanumberoftheassignmentsthatwouldnormallybeundertakenbyinternalauditarehandledbyaninternalcompliancedepart-ment,whichispartofGroupFinance&Operations.

TheExecutiveManagementmonitorscompliancewithrelevantlegislationandotherfinancialreportingregulationsandprovi-sions.FindingsarereportedcontinuouslytotheAuditCommitteeandtheBoardofDirectors.

FinancialrisksBasedonVestas'riskmanagementpolicy,GroupFinance&Operationspreparesadescriptionofthekeyrisksrelatingtothefinancialreportingprocessaswellasmeasurestakentocontrolriskseitherbyeliminationormitigation.

GroupFinance&Operationsworksproactivelywithanchoringriskmanagementthroughouttheorganisation,includingensuringsystematicidentificationandmanagementofallrelevantrisks.

Aspartoftheriskassessment,Vestas'BoardofDirectorsandExecutiveManagementannuallyassesstheriskoffraudandthemeasurestobetakentoreduceand/oreliminatesuchrisks,includingassessinganypossibilityofthegeneralmanagementoverridingcontrolsandmanipulatingthefinancialreporting.

ControlactivitiesGroupFinance&Operationsisresponsiblefortheimplementa-tionandmonitoringofVestas'globalfinancialprocesses.ThishelpstoensureauniformdesignandstructureoftheGroup'sinternalcontrols.TheobjectiveoftheGroup'scontrolactivitiesistoensurecompliancewiththetargets,policies,manuals,proced-ures,etc.definedbytheExecutiveManagement.Furthermore,theactivitieshelpensurethatanyerrors,deviationsandshort-comingsareprevented,discoveredandrectified.

Vestascontinuouslyimplementsglobalfinancialprocessesandcontrolsaimedatfurthermitigatingtheriskofincorrectreport-ing.In2009,thisimplementationprimarilycomprisedthesalesbusinessunitsandgroupstafffunctions,butwillalsocovertheproductionunitsgoingforward.Bytheendof2010,Vestaswillthushaveimplementedupdatedglobalfinancialprocessesandcontrolsforallprincipalunits.

InformationandcommunicationVestas'internalrules,adoptedbytheBoardofDirectors,laydown,amongotherthings,overallrequirementsonfinancialreportingandexternalfinancialreportinginaccordancewithcur-rentlegislationandapplicableregulations.

Theinformationsystemsaredesignedtoidentify,collectandcommunicaterelevantinformation,reports,etc.onanongoingbasisandonalllevelstofacilitateaneffective,reliableworkflowandtheperformanceofcontrols.Thisisdonewithdueconsider-ationtotheconfidentialityrequiredinalistedcompany.Inthisway,Vestascanensurethatthecompanyisconsistentlyabletoreportreliablyandcarryoutcontrolinordertoeffectivelyman-agethecompanyoperationally,financiallyandinaccordancewithcurrentlegislationandregulations.

MonitoringMonitoringtakesplacebymeansofregularandperiodicassess-mentsandcontrolsatalllevelsoftheGroup.Thescopeandfrequencyofsuchperiodicassessmentsdependmainlyontheriskassessmentsandontheeffectivenessoftheregularcontrols.

In2007,Vestasestablishedawhistleblowerfunction,whichwasrelaunchedunderthenameEthicslinein2009.Thepurposeofthefunctionistoensurethatnoinformationissuppressedorremainsundisclosed,anditprovidesaccessforemployeestoreportanyincidenceofneglect,illegalactsoractsthatarecon-trarytoVestas'policiesandguidelines.

Vestas'BoardofDirectorsandAuditCommitteereceivereportsfromthemanagementoncompliancewiththeguidelines,etc.andinformationonanynotedweaknesses,omissionsorcasesofnon-compliancewithadoptedpolicies,businessproceduresorinternalcontrols.

other financial risksExchangeraterisksThebusinessactivitiesofVestasinvolveexchangerateriskslinkedtothepurchaseandsaleofgoodsandservicesoutsidetheeurozone.Vestaspursuesapolicyofhedgingexchangeraterisksassoonasacommitmentinforeigncurrencyisagreed.However,thisappliesonlytonetexposureineachindividualcur-rency.Exchangeraterisksareprimarilyhedgedthroughforeignexchangeforwardcontracts.

Exchangerateadjustmentofinvestmentsinoverseassubsid-iariesandassociatedcompaniesabroadistakendirectlytoshareholders'equity.Vestasbelievesthatcontinuousexchangeratehedgingofsuchlong-terminvestmentsisnottheoptimalsolutionwithregardtobalancingtotalriskagainsttotalcost.

MostofVestas'productionunitsandsuppliersarecurrentlylo-catedintheeurozone.Vestas'expansionintheUSAandChinawill,however,increasetheGroup'scostsoutsidetheeurozone.IncombinationwithahigherdegreeofsourcingfromcountrieswhosecurrenciesarenotlinkedtotheEUR,theinvestmentsintheUSAandChinaensureanimprovedcurrencymixbetweenin-comeandexpenses,makingVestaslesssensitivetofluctuationsincurrenciessuchastheUSDrelativetoEUR.

Attheendof2009,68percentoftheemployeesand71percentofthenon-currentassetswerelocatedinEurope.RevenuegeneratedinEuroperepresented68percentoftotalrevenuein2009comparedwith60percentin2008.AmericasandAsia/Pacificwillcometorepresentagreaterproportionofrevenuegoingforward.

InterestrateriskVestas'primaryinterestrateriskconsistsofinterestratefluctu-ations,whichmayinfluencetheGroup'sdebtandleaseobliga-tions.ManagingtheinterestrisksinvolvesthemonitoringofdurationandmaximuminterestrateriskonVestas'netdebts. >>

024 Vestasannualreport2009

>>

DISTRIBUTIONOFANNUAlREVENUE

2,772

1,304

AmericasAsia/Pacific

Europe

5

Africa

Costofsales78.3%–EUR5,195m

Sellinganddistributionexpenses3.5%

–EUR232m

Corporationtax3.5%–EUR230m

Financialitems0.7%–EUR48m

Profitfortheyear8.7%–EUR579m

Researchanddevelopmentcosts1.4%

–EUR92m

Administrativeexpenses3.9%

–EUR261m

683

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Vestasuseshedginginstrumentstolimitinterestraterisks.Theaveragenetinterest-bearingpositionwasEUR(55)min2009,againstEUR395min2008.Thenetinterest-bearingpositionattheendof2009wasEUR137m.

TaxrisksVestaspursuesanactive,butnotanaggressive,taxpolicy.Basedonitsbroad,internationalproductionandsalesplatforms,Vestasmaintainsawell-documentedtransferpricingsystemthatgivesatrueandfairview,ref.internationalrulesbasedontheOECDguidelinesandlocallegislation.However,transferpricingmayalwaysbechallengedduetotheinterpretationofinternationalguidelinesadoptedbylocalauthorities.

CreditrisksThefinancialcrisishassharpenedVestas'focusoncustomers'abilitytopay.Inaddition,Vestasisexposedtocreditrisksincon-nectionwithdeliveringproductstocustomersincertaincoun-tries.Developmentsinthecustomerportfoliotowardsagreaterproportionoflarge,internationalenterpriseswillreducethisrisk.Receivablesaretypicallyhedgedbypaymentguarantees.

Theuseoffinancialinstrumentsinvolvesariskthatthecounter-partymaynotbeabletomeethisobligationsatmaturity.Vestasminimisesthisriskbyonlyusingfinancialinstitutionswithhighcreditratings.Thebanksmusthavealong-termcreditratingfromStandard&Poor's(A),Moody's(A2)orFitch(A).Furthermore,Vestashasin-houselimitsastothesizeoftheGroup'sbalancewithasinglebank.

Todate,allofVestas'financialbusinesspartnershavebeenabletohonourthecontractsenteredinto.

liquidityrisksGroupTreasuryisinchargeofensuringthatsubstantialcapitalre-sourcesareinplaceatalltimesthroughacombinationofliquiditymanagement,non-committedandcommittedcreditfacilitiesandotherdebtinstruments.Vestasmanagesitsliquidityriskthroughcashpoolsystemsinvariouscurrenciesandbyusingshort-termoverdraftfacilitiesinanumberoffinancialinstitutions.Inthelongerterm,Vestasexpectstobeabletofinanceitsorganicgrowththroughcashflowsfromoperations,asthecreditcrisisin2009,however,necessitateddrawingsonthebankfacilities.On28April2009,Vestasincreaseditssharecapitalby10percentreceiv-ingnetproceedsofEUR792m,whichgaveVestasthefinanciallatitudetomakeacquisitionsinordertostrengthenitstechnologyplatform,whileexpandingitsfacilitiesintheUSAandChina.

CommodityrisksTominimisethepotentialimpactandreducerisksinconnectionwithfluctuationsinpricesofcommoditiessuchascopperandnickel,Vestashasenteredintolong-termagreementswithfixedpricescoveringpartsofVestas'needs.Ingeneral,however,Vestasseekstoincorporatecommoditypricedevelopmentsintoitssalescontracts.Thefinalprojectpricetypicallydependsondevel-opmentsinanumberofkeyparameters,especiallycommodityprices.Whereacustomerseekscertaintyforthefinalprojectprice,thisisreflectedinapremiumthatcompensatesVestasfortheriskundertaken.

vEstas' FinanCial PERFoRManCElevel of activityIn2009,Vestasshipped3,320windturbineswithanaggregatecapacityof6,131MW,against3,250windturbinesand6,160MWin2008.Atotalof4,764MWwasdeliveredtoVestas'cus-tomers.

Theorderintakefortheyearwas3,072MW,ofwhichannouncedordersaccountedfor65percent.In2008,theorderintakewas6,019MW.Thedeclineintheorderintakeisduetothecreditcri-siswhichhasdelayedanumberofprojects.Thebacklogofordersamountedto1,747MWattheendof2009.Europeaccountedfor75percent,theAmericasfor21percentandAsia/Pacificfor4percent.longerterm,Vestasexpectsamoreevendistributionbetweentheregions.Thevalueofthebacklogoffirmanduncon-ditionalordersamountedtoEUR2,2bnat31December2009.

income statementRevenueIn2009,revenueincreasedby10percenttoEUR6.6bn;belowtheexpectedrevenueofEUR7.2bn.Thelowerrevenueisprimar-ilyduetothedelayedorderintake.Accountingfor68percentofrevenue,EuropewasonceagainVestas'largestmarketoverall.TheAmericasaccountedfor21percentofrevenue,andAsia/Pacificfor11percent.

Distribution of revenue 2009 (mEUR)

Europe 4,547

Americas 1,372

Asia/Pacific 717

total 6,636

Europe

68%

Asia / Pacific

11%

Americas

21%

largeenergycompaniesandutilitiesaccountedfor58percentofrevenue,against45percentin2008.

RevenueintheservicebusinessamountedtoEUR504min2009,anincreaseof27percentrelativeto2008.TheEBITmar-ginwas15percent.

Vestasoperateswiththreetypesofcontracts:“supply-only”,“supply-and-installation”and“turnkey”.Theunderlyingoperatingriskislowestwhendealingwithsupply-onlyorders,buttheydo,however,increasequarter-on-quarterfluctuationsinrevenueandEBITasthistypeoforderisnotrecognisedasrevenueuntiltheturbineshavebeendeliveredaccordingtothecontractualterms.

Severalbanksnowrequirethatonesupplierisresponsibleforthewholeproject,whichmeansthatrecentyears'trendtowardsmoresupply-onlyordershasturned.Revenuefromsupply-and-installationandturnkeyorders,inwhichVestasisresponsibleforinstallingandconnectingtheturbinestothepowergridandfortheentireprojectincludingallengineeringworks,respectively,isrecognisedastheworkisperformed,whichprovidesamorebalancedincomeflow.However,theunderlyingoperatingriskishigherthanitisforsupply-onlyorders.Thedevelopmentto-wardshighercomplexity,raisestheentrybarriers.Therearenodifferencesbetweenthecontracttypesintermsofthepaymentprofile.

GrossprofitVestas'grossprofitamountedtoEUR1,441min2009,againstEUR1,179min2008.Thegrossmarginthusincreasedto21.7 >>

026 Vestasannualreport2009

percentagainst19.5percentin2008.Theimprovedgrossmar-ginwastheresultofmoreefficientoperationsandbetterpricesandcontractualconditions.

ResearchanddevelopmentcostsIn2009,researchanddevelopmentcostsamountedtoEUR92m,adeclineofEUR27magainst2008.Thedecreaseisduetoincreasedcapitalisationofdevelopmentprojects,whichmorethanoffsetstheincreaseintotalresearchanddevelopmentcosts.Researchanddevelopmentcostsarefurtherdescribedinnote7totheconsolidatedaccounts.

OperatingprofitTheGroupreportedanoperatingprofit,EBIT,ofEUR856min2009,anincreaseofEUR188mrelativeto2008.TheEBITmar-ginwas12.9percentin2009,against11.1percentin2008.

FinancialitemsandtaxFinancialitemsin2009representedanexpenseofEUR48m,againstanetincomeofEUR46min2008.TaxfortheyearamountedtoEUR230m.Theeffectivetaxratewas28percent.Attheendof2009,deferredtaxassetsdeductedbydeferredtaxliabilityamountedtoEUR(11)magainstEUR52min2008.

Taxmattersarespecifiedinnotes10,15and20totheconsoli-datedaccounts.

Balance sheetVestas'totalassetsincreasedfromEUR5,308min2008toEUR6,435min2009.

Non-currentassetsNon-currentassetsamountedtoEUR2,400mattheendof2009,anincreaseofEUR637mrelativetotheendof2008.

InventoriesInventoriesamountedtoEUR1,663mattheendof2009,anincreaseofEUR51mrelativetotheendof2008.

NetworkingcapitalAttheendof2009,theGroup'snetworkingcapitalamountedtoEUR1,235m,whichcorrespondsto19percentofrevenue,against5percentin2008.Thelargeincreasewasduetolowerprepaymentscausedbythedelayedorderintake.

TheGroupachievedareturnoninvestedcapitalof23.9percentin2009,against34.1percentin2008.Thisdecreaseisduetothenegativedevelopmentinnetworkingcapitalandlarge-scaleinvestments.

TradereceivablesTradereceivablesamountedtoEUR525mattheendof2009,andecreaseofEUR413mrelativetotheendof2008.

ConstructioncontractsConstructioncontracts,whichcompriseprojectscurrentlybeinginstalled,forwhichthetotalprojecthasnotfinallybeentrans-ferredtothecustomer,amountedtoEUR1,032m,net,at31December2009.

ProvisionsIn2009,VestasmadewarrantyprovisionsofEUR233m.Thisequals3.5percentofrevenue,whichislowerthanin2008whenprovisionsrepresented4.0percentofrevenue.

MW delivered

2009 2008

Europe

Spain 762 650

Italy 419 376

Germany 320 449

Greece 177 152

France 157 253

Poland 145 48

Sweden 144 120

UnitedKingdom 122 82

Turkey 111 150

Portugal 84 36

Bulgaria 64 9

Denmark 57 22

Belgium 49 10

Ireland 45 9

Romania 43 0

TheNetherlands 26 242

Hungary 25 37

TheCzechRepublic 22 6

Croatia 0 42

Austria 0 14

total Europe 2,772 2,707

americas

USA 749 1,345

Canada 380 285

Brazil 51 79

Chile 94 0

Aruba 30 0

Uruguay 0 10

total americas 1,304 1,719

asia/Pacific

China 584 596

India 97 162

Azerbaijan 2 0

Australia 0 159

Japan 0 80

Taiwan 0 76

SouthKorea 0 73

Philippines 0 8

total asia/Pacific 683 1,154

africa

Kenya 5 0

total africa 5 0

total world 4,764 5,580

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Vestasmakesprovisionsforallcostsassociatedwithturbinerepairs,andanyreimbursementisnotoffsetunlessawrittenagreementhasbeenmadewiththesuppliertothateffect.

ThedevelopmentisduetothefactthatVestasconstantlyimprovesthereliabilityofitsturbinesowingtoincreasedinvest-mentsindevelopment,testingandmonitoringofwindpowerplants.Triple15includes3percentforprovisions.

Thetypicalwarrantyperiodiscurrentlytwoyearsasopposedtopreviously,uptofiveyears,andthatreducesVestas'riskexpo-sure.

ChangesinequityVestas'equityamountedtoEUR3,364mattheendof2009comparedwithEUR1,955mat31December2008.Vestashasdefinedalong-termsolvencyratiotargetofatleast40percent.At31December2009,thesolvencyratiowas52percent.

CashflowandinvestmentsIn2009,cashflowsfromoperatingactivitiesbeforethechangeinworkingcapitalrosebyEUR259mtoEUR903m.AfteranincreaseinworkingcapitalofEUR937m,cashflowsdeclinedbyEUR311mtoEUR(34)m.CashflowsforinvestmentsrosetoEUR808m,ofwhichEUR227minintangibleassets.ThefreecashflowwasEUR233m,againstEUR(494)min2008.

oUtlooK FoR 2010In2010,VestasexpectstoachieveanEBITmarginof10-11percentandrevenueofEUR7bnagainstpreviouslyexpected10-12percentandEUR7-8bn,respectively.Thespecificationisduetothefactthattheyear'sexpectedorderintakeoffirmandunconditionalordersof8,000-9,000MWnowisanticipatedtomaterialisesolateintheyearthatitisconsideredunlikelythatrevenuewillreachEUR8bn.Europewillaccountforalmosthalfoftheexpected2010orderintakeof8,000-9,000MW,whereastheAmericasandAsia/Pacificwillaccountfor30percentand20percent,respectively.

Adjustedforinputprices,ingeneralVestasexpectsthatpricesandconditionsremainunchangedin2010relativeto2009.TheslowdowninprofitabilityimprovementisduetoVestashavingexcesscapacityandthefarmajorityofrevenue,andespeciallyprofit,beingexpectedinthesecondhalfoftheyear.Quarter-on-quartersdistributionisthusexpectedtobemoreimbalancedthanin2009.Networkingcapitalisexpectedtofluctuateheavilyin2010andisexpectedtoamountto15percentofannualrev-enueattheendoftheyear.

RevenueintheservicebusinessisexpectedtorisetoEUR600mwithanEBITmarginonalevelwiththatachievedin2009.

Investmentsinproperty,plantandequipmentandintangibleassetsareexpectedtobeEUR250mandEUR350m,respect-ively.Thecompletionin2010ofrecentyears'largeinvestmentsintheUSAandChinawillleadtolowerinvestmentsinproperty,plantandequipmentthanin2009.

FinancialitemsareexpectedtoamounttoEUR(25)m.Theeffectivetaxrateisexpectedtobe28percent.Warrantyprovi-sionsareexpectedtofallto3percentin2010.

Vestasexpectstorecruit1,300employees,net,in2010,ofwhich500willbeemployedwithVestasTechnologyR&D.Attheendof2010,Vestasthusexpectstohaveapprox22,000employees.

EvEnts aFtER tHE BalanCE sHEEt datEordersIn2010,Vestashasannouncedan80MWorderforGermany.

Acompleteoverviewofannouncedordersisavailableatvestas.com/investor.Vestasonlydisclosesfirmanduncondi-tionalordersandinrelationtocompanyannouncements,theordervaluemustbeaboveEUR66m.

Us tax creditInconnectionwiththeinvestmentsinColorado,USA,VestashasreceivedamanufacturingincentivetaxcreditofEUR36m.

Extraordinary general MeetingOn14January2010,VestasWindSystemsA/SheldanExtra-ordinaryGeneralMeetingforthepurposeofamendingArticle4(6)ofthecompany'sArticlesofAssociationconcerningthedeadlineforshareholders'rightstoincludeaspecificmatterontheagendaforthecompany'sAnnualGeneralMeeting.

TheBoardofDirectorshadproposedthattheexistingdeadlinewaschangedtoadeadlineofsixweeks,whichisconsistentwiththedeadlinesetoutinthenewDanishCompaniesAct.Thepro-posedresolutionwasadoptedunanimously.

3,072 MW Orderintakein2009amountedto3,072MW

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030 Vestasannualreport2009

Corporate­governance

1.6 + 0.6*+ 0.8**

1.2 + 0.7*+ 0.7**

1.4 + 0.7*+ 0.7**

NUMBEROFEXECUTIVEMANAGEMENTMEMBERSANDREMUNERATIONINMEUR

2007

2008

2009

* Bonusexpensed.** Sharebasedremuneration,seenote6totheconsolidated

accounts.

0.7

0.8

0.9

NUMBEROFBOARDMEMBERSANDREMUNERATIONINMEUR

2007

2008

2009

General MeetInG

Board of dIrectors

executIve ManaGeMent

Auditors

BoardCommittee–Manufacturing&

Excellence

BoardCommittee–People&Compensation

BoardCommittee–Technology

BoardCommittee–Audit

GroupstafffunctionsBusinessunits

”iN­Order­TO­SaFeGuard­The­COMpaNy'S­COMpeTiTiVe­STreNGTh­iN­The­yearS­ahead,­iT­iS­piVOTal­ThaT­VeSTaS'­OrGaNiSaTiON­CaN­eFFeCTiVely­haNdle­FuTure­GrOWTh­aNd­aVOid­a­SiMilar­iNCreaSe­iN­COSTS­aNd­COMplexiTy.”BENTERIKCARlSEN,CHAIRMAN

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TheBoardofDirectorsandtheExecutiveManagementofVestasWindSystemsA/Sbelievethatcorporategovernanceinitiativesshouldbeaconstantprocessandaddresstheprinciplesofcor-porategovernanceinanongoingprocesswithdueconsiderationtocurrentlegislation,practicesandrecommendations.Suchevaluationincludesareviewofthecompany'sbusinessconcept,businessprocedures,goals,organisation,capitalposition,stake-holderrelations,risksandexerciseofthenecessarycontrol.

TheBoardofDirectorsfindsthatVestasisruninafinancially,sociallyandenvironmentallyresponsiblemanner,andthatitsownersandthecapitalmarketsareprovidedwithaninsightofVestasthroughopenanddirectcommunications.

In2009,VestasgeneratedrevenueofEUR6.6bn,andinlightofthisdevelopmentandthechallengesthatVestasisfacing,itisimportantfortheGrouptohaveclearmanagementguidelines.

Basedonresultsachievedtodate,theongoingcapacityexpan-sion,theidentifiedsavingsandefficiencyimprovementmeas-ures,includingtheorganisationalalignmentoftheproductionandsalesbusinessunits,andimprovedwindturbineoutputandthedevelopmentofserviceproducts,theBoardofDirectorsandtheVestasGovernmentresolvedatthestrategyseminarheldinSeptembertodefineandannouncethefinancialtargetstobemetnolaterthan2015–Triple15.

ManagEMEnt stRUCtUREVestasWindSystemsA/SisaDanishlimitedliabilitycompanywithatwo-tiermanagementsysteminwhichtheBoardofDirect-orsandtheExecutiveManagementhandlethemanagementofthecompany'saffairs.ThecompanyisalsotheparentcompanyoftheVestasGroup.ThemanagementofthecompanyandtheGroupisgovernedbythecompany'sArticlesofAssociation,theDanishCompaniesActandotherapplicableDanishrulesandregulations.

Inordertosafeguardthecompany'scompetitivestrengthintheyearsahead,itispivotalthatVestas'organisationcaneffectivelyhandlefuturegrowthandavoidasimilarincreaseincostsandcomplexity.Furthermore,clearlydefinedresponsibilitiesareaprerequisiteforVestastodeliverthesamehighqualitytoallcus-tomersineverycontext.

Consequently,VestasisintheprocessofaligningtheGroup'sbusinessunitsinordertoreduceorganisationalcomplexitysothatdepartments,jobdescriptionsandworkprocessesarethesameacrosstheGroup.Theseinitiativesaredescribedindetailunder“BusinessDevelopment”onpage19inthemanagementreport.

general MeetingTheGeneralMeetingisthesuprememanagementbodyofVestasWindSystemsA/Sandisthesupremeauthorityinallcompanymatters,subjecttothelimitslaiddownbyDanishlegislationandthecompany'sArticlesofAssociation.

TheGeneralMeetingisheldatleastonceayearandisconvenedbynolessthaneightdays'andnomorethanfourweeks'notice,ref.Article4(4)oftheArticlesofAssociation.

Allshareholdersareentitled,incompliancewithafewformalrequirements,tohaveequalaccesstosubmitproposals,attend,voteandspeakatgeneralmeetings.TheBoardofDirectorsinvitesallshareholderstoexercisetheirvotingrightsincon-nectionwiththecompany'sAnnualGeneralMeetingeitherby

attending,usingtheproxyformorbygivingproxytotheBoardofDirectorsandinthatwaygiveitastrongmandatetoserveVestas'bestinterest.

InformationabouttheAnnualGeneralMeetingin2010ispro-videdin“GeneralMeeting”onpage133.

AuditorsPursuanttoArticle11(1)ofthecompany'sArticlesofAssocia-tion,Vestas'annualreportmustbeauditedbyoneortwoauditfirmstobeappointedbytheshareholdersfortheperioduntilthenextAnnualGeneralMeeting.In2009,PricewaterhouseCoop-ersandKPMGwereappointedasthecompany'sauditorsforthe2009financialyear.

Board of directorsTheBoardofDirectorsdealswiththeoverallmanagementofthecompany,including:

· appointingtheExecutiveManagement;· layingdownguidelinesforandexercisingcontroloftheworkperformedbytheExecutiveManagement;

· ensuringresponsibleorganisationofthecompany'sbusiness;· definingthecompany'sbusinessconceptandstrategy;· ensuringsatisfactorybookkeepingandfinancialreporting;· ensuringthenecessaryproceduresforriskmanagementandinternalcontrolsareimplemented;and

· ensuringthatanadequatecapitalcontingencyprogrammeisinplaceatalltimes.

BoardmembersareelectedbytheshareholdersinconnectionwiththeAnnualGeneralMeeting.TheexistingBoardmemberselectedbytheGeneralMeetingwereelectedin2009,andtheirelectiontermexpiresin2010.

BoardmemberselectedbytheGeneralMeetingmayberecom-mendedforelectionbytheshareholdersorbytheBoardofDirectors.WhenproposingcandidatesforBoardmembership,theBoardofDirectorsstrivestoensurethatthey:

· areabletoactindependentlyofspecialinterests;· representabalancebetweencontinuityandrenewal;· matchthecompany'ssituation;and· haveindustryinsightandthecommercialandfinancialskillsrequiredtoallowthemtoperformtheirtasksinthebestpos-siblemanner.

PursuanttoDanishlegislation,anumberofemployeerepre-sentativesareelectedfortermsoffouryears.Theexistingrep-resentativeswereelectedtotheBoardofDirectorsin2008,andtheirelectiontermrunsuntil2012.AdescriptionoftheDanishsystemconcerningemployeerepresentativesisavailableatvestas.com/investor.

TheBoardofDirectorscurrentlyconsistsof12members,ofwhicheightareelectedbytheGeneralMeetingandfourareelectedbyandamongtheemployees.AnoverviewoftheBoardmembersisshownonpage35.

In2009,theGeneralMeetingelectedtwonewBoardmembers:HåkanEriksson,whoisemployedasGroupChiefTechnologyOfficeratTelefonaktiebolagetlMEricssonandheadofEricssonSiliconValley,andOlaRollén,whoisemployedasPresidentandCEOofHexagonAB. >>

AllBoardmemberselectedbytheGeneralMeetingarecon-sideredindependentofthecompany,exceptJørnAnkærThom-sen,whoisassociatedwithoneofthelawfirmsthatprovidelegaladvicetothecompany.Moreover,theemployeerepresentativescannotbeconsideredindependentmembersduetotheiremploy-mentwiththeVestasGroup.

In2009,theBoardofDirectorsheldatotalofeightmeetingsandatwo-daystrategyseminar.

Annually,theBoardofDirectorsvisitssomeofVestas'facilitiesandmeetsdecision-makingofficialsoftheregioninquestion.

In2009,theBoardofDirectorswenttotheUSAtovisitVestas'newfacilitiesinColoradoandVestasAmericas'headquartersinPortland,Oregon.Duringthevisit,theBoardofDirectorsheldmeetingswiththegovernorsofColoradoandOregonandthemayorofPortland.

AssessmentoftheworkperformedbytheBoardofDirectorsPursuanttotherulesofprocedurefortheBoardofDirectors,theBoardofDirectorsmustevaluateitsworkandcollaborationonceayear.TheevaluationconsistsoftheChairmanconductingadiscussionamongtheentireBoardofDirectors,normallytakingplaceattheBoardmeetinginconnectionwithapprovaloftheinterimreportforthethirdquarter.

BoardcommitteesThepurposeofVestas'BoardcommitteesistopreparedecisionsandrecommendationsforevaluationandapprovalbytheentireBoardofDirectors.Thecommitteesarenotauthorisedtomakeindependentdecisions;insteadtheyreportandmakerecommen-dationstothecombinedBoardofDirectors.

VestashasestablishedfourpermanentBoardcommittees.EachoftheseconsistsofthreememberselectedfortermsofoneyearbyandamongtheBoardmembers.

ThechairmanofeachcommitteeisappointedbytheBoardfortermsofoneyear,andtheelectionusuallytakesplaceattheBoardmeetingheldimmediatelyaftertheGeneralMeeting.Thecommitteesholdthenecessaryannualnumberofmeetings.Attherequestofthecommittees,othermembersofmanage-mentmayalsoparticipateinthesemeetings.

People&CompensationCommitteeThePeople&CompensationCommitteesupportstheBoardonoverallstaff-relatedtopics,includingassessmentofremuner-ation.In2009,thecommitteeheldfivemeetings.

AuditCommitteeTheAuditCommitteeassiststheBoardinassessmentsandcon-trolsrelatingtoauditing,accountingpolicies,systemsofinternal

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>>

controls,financialreporting,proceduresforhandlingcomplaintsregardingaccountingandauditingandtheneedforaninternalauditfunction.In2009,thecommitteeheldfivemeetings.

AllmembersoftheAuditCommitteemeetthedefinitionofinde-pendencyofauditcommitteememberssetoutintheDanishAuditors'Act.ThechairmanalsomeetstherequirementsundertheAuditors'Actonaccountingqualifications.

Manufacturing&ExcellenceCommitteeTheManufacturing&ExcellenceCommitteesupportstheBoardintheevaluationoftechnicalmatters.Thecommitteealsosup-portstheBoardinmattersconcerningproduction,includingtheongoingimprovementsthatVestasExcellenceisinvolvedin.In2009,thecommitteeheldfourmeetings.

TechnologyCommitteeTheTechnologyCommitteeassiststheBoardintheevaluationoftechnologicalmatters,IPRstrategyandproductdevelopmentplans.In2009,thecommitteeheldfivemeetings.

Executive ManagementTheExecutiveManagementofVestasWindSystemsA/Sisresponsiblefortheday-to-daymanagementofthecompany,observingtheguidelinesandrecommendationsissuedbytheBoardofDirectors.TheExecutiveManagementisalsorespon-sibleforpresentingproposalsforthecompany'soverallobjective,strategiesandactionplansaswellasproposalsfortheoveralloperating,investment,financingandliquiditybudgetstotheBoardofDirectors.

Business unitsTheVestasGroupconsistsof14businessunits,allofwhichreportdirectlytotheExecutiveManagementofVestasWindSystemsA/S.Thepresidentsoftheindividualbusinessunitsareresponsiblefortheoverallandday-to-daymanagementoftheirspecificbusinessareas.

Eachbusinessunithasaboardofdirectors,whoseobjectiveistoensurecollaborationacrosstheGroup.EachboardconsistsofthreetosixmembersandincludesmembersoftheExecutiveManagementofVestasWindSystemsA/S,theSeniorVicePres-identofGroupFinance&Operationsandanumberofemployeesofthebusinessunitsinwhichtheemployeeshavedecidedtoexercisetheirrightstoelectemployeerepresentatives.TheorganisationalstructureofVestas'salesandproductionbusinessunitsisshownonpage18inthemanagementreport.

vestas governmentTheVestasGovernmentconsistsoftheExecutiveManagementandthePresidentsofthe14businessunits.

TheVestasGovernmentholdsaconferencecallonceaweekandgovernmentmeetingsonceeveryquarterwithpersonalatten-dance.Onceeveryyear,VestasarrangesastrategyseminarattendedbytheBoardofDirectorsandallGovernmentmembers.TheGovernmentisresponsibleforensuringtheimplementationofVestas'strategyasdefinedbytheBoardofDirectorsincol-laborationwiththeExecutiveManagement.

group staff functionsThetenSeniorVicePresidentsofthegroupstafffunctionsinVestasWindSystemsA/SallreportdirectlytotheExecutiveManagementofVestasWindSystemsA/Sandareresponsiblefortheoverallandday-to-daymanagementoftheirspecificstafffunctions.NoSeniorVicePresidenthasbeenappointedforthe

groupstafffunctionVestasExcellence,butHenrikNørremark,ExecutiveVicePresidentandCFO,hastheoverallresponsibility.

REMUnERation VestasisaglobalcompanybasedinScandinavia,whichisreflectedintheGroup'sremunerationprinciples.Vestas'globalremunerationsystemforExecutiveManagement,BusinessUnitPresidents,SeniorVicePresidents,andothersenioremployeesisbasedonMercer'sInternationalPositionEvaluationSystem.MercerRewardSurveysareusedasthebenchmark.

Forallotheremployeegroups,locallybasedstatisticsareusedasthebasisfortheremuneration.

TheremunerationpolicyformembersoftheBoardofDirectorsandExecutiveManagementofVestasWindSystemsA/Sreflectstheinterestsoftheshareholdersandthecompany,takingintoconsiderationanyspecificmatters,includingtheassignmentsandtheresponsibilityundertaken.Inaddition,theremunerationpolicyhelpstopromotelong-termgoalsforsafeguardingthecompany'sinterests.Thepolicycanbedownloadedatvestas.com/investor.

Remuneration to the Board of directorsMembersoftheBoardofDirectorsreceiveafixedbasicremu-neration.Boardmemberselectedbytheemployeesreceivethesameremunerationastheboardmemberselectedbytheshare-holders.TheChairmanreceivesatriplebasicremunerationandtheDeputyChairmanreceivesadoublebasicremunerationfortheirextendedboardduties.

Inadditiontothebasicremuneration,theBoardmembersreceivecommitteeremunerationforsittingononeoftheboardcommit-tees.Thisremunerationisdeterminedusingthesameprinciplesasforthebasicremuneration,andthecommitteechairmanreceivesdoublecommitteeremuneration.

For2009,Boardmembers'totalremunerationamountedtoEUR0.9m,inclusiveofcommitteeremuneration.Nospecialfeeshavebeenpaid.

TheBoardmembersarenotcomprisedbyanyincentivepro-gramme(optionprogramme,bonusschemeorsimilar)orbyVestas'pensionscheme,andincaseofatakeover,thedirectorswillnotreceiveanycompensation.

Remuneration to the Executive ManagementTheBoardofDirectorsbelievesthatacombinationoffixedandperformance-basedpaytotheExecutiveManagementhelpsensurethatthecompanycanattractandretainkeyemployees.AtthesametimetheExecutiveManagementisgivenafurtherincentivetocreateshareholdervaluethroughpartlyincentive-basedpay.

MembersoftheExecutiveManagementareemployedunderexecutiveservicecontracts,andalltermsoftheirremunerationarefixedbytheBoardofDirectors.MembersoftheExecutiveManagementreceiveacompetitiveremunerationpackageconsistingofthreecomponents:afixedsalary,abonusandshareoptions.

Thefixedsalaryisbasedonamarketlevel,thebonusisbasedontheresultsfortheyear,andtheshareoptionsfocusonretentionandlong-termvaluecreationfortheshareholders.

034 Vestasannualreport2009

>> In2009,atotalofEUR1.4mwaspaidinsalariestotheExecutiveManagement.Inaddition,EUR0.7mwasexpensedinbonusandEUR0.7mwasexpensedasshare-basedpaymenttotheExecu-tiveManagement,ref.note6totheconsolidatedaccounts.

BasedonproposalsfromthePeople&CompensationCommitteefortheremunerationoftheExecutiveManagement,theChair-manandDeputyChairmanoftheBoardofDirectorsannuallyassessandapprovetheremunerationtoensurethatitisinlinewiththeconditionsincomparablecompanies.

TheservicecontractsforthemembersoftheExecutiveManage-mentcontaina24month-noticeofterminationwhichisnormalforexecutivesinDanishcompanies.ThemembersoftheExecu-tiveManagementwillnotreceiveanycompensationintheeventofterminationinconnectionwithachangeofownershipofthecompany'svotingmajorityorifthecompanyisdissolvedthroughamergerordemerger.Theirnoticeofterminationwill,however,bechangedto36months.

share-based incentive programme for 2007 to 2009In2007,anoptionprogrammefortheExecutiveManagementandselectedexecutiveswasestablishedforthefinancialyears2007to2009.Moreinformationaboutthisoptionprogrammeisavailableinnote30totheconsolidatedaccounts.

In2009,theBoardofDirectorsresolvedtoexpandtheexistingincentiveprogrammetwiceinconnectionwiththeemploymentandappointmentofnewPresidentsandSeniorVicePresidents,ref.companyannouncementsNos.1/2009of7January2009and23/2009of27October2009.

Atotalof53,828optionswereissued.TheallotmentwasmadeinconnectionwiththeBoardofDirectors'approvalofthisannualreport.ThetermsandconditionsoftheoptionsareequivalenttothetermsandconditionsoftheoptionsissuedinMay2007.

Grant of options

year of grant

number of options granted

Exercise price (dKK)

Exercise period

2007 207,952 380.50 2010-2012

2008 189,002 380.50 2012-2014

2009 183,126 380.50 2013-2015

Onexerciseoftheoptions,theparticipantsmustinvest50percentoftheafter-taxgaininVestasshares,whichmustbeheldforatleastthreeyears.

share-based incentive programme for 2010 to 2012 AttheAnnualGeneralMeetingin2009,Vestasdisclosedthatthecompany'soptionprogrammewouldbeexpandedintheautumnof2009toincludealargergroupofemployees.Againstthatbackground,atitsmeetinginOctober2009theBoardofDirectorsresolvedtosetoutthedetailedguidelinesfortheincen-tiveprogrammefortheyears2010to2012forallparticipants,includingtheExecutiveManagement.

Theparticipantswillbeallottedoptionsatapresentvaluecor-respondingtoadefinedpercentageoftheirfixedgrosssalaryforthe2010financialyear.ThetotalpresentvalueisEUR15.9m.Onexerciseoftheoptions,participantsreportingdirectlytotheExecutiveManagementmustinvest50percentoftheafter-taxgaininVestasshares,whichmustbeheldforatleastthreeyears.

TheexercisepricefortheoptionsisdeterminedbythePeople&CompensationCommitteeatDKK320.60,correspondingtotheaveragestockexchangequotationpriceontheNASDAQOMXCopenhagen(alltrades)intheperiod11to22January2010.FurtherinformationabouttheincentiveprogrammeisavailableincompanyannouncementNo.23/2009of27October2009.

BonusAllVestasemployeeshavebeencoveredbyabonusprogrammesince1January2008.Theglobalbonusprogrammefor2008builtontheGroup'stargetsforEBITmargin,networkingcapital,customerloyalty,marketshareandresultsinthebusinessunitofeachemployee.

Basedontheresultsachievedin2008,bonusofEUR0.3mwaspaidtotheExecutiveManagementandEUR38mtotheotheremployeesin2009.

Vestasexpectsthebonuspaidoutfor2009tobeapproxEUR60m.

danisH CoRPoRatE govERnanCE RECoMMEndationsAsalistedcompany,VestasmustcomplywiththerulesapplyingtocompanieslistedonNASDAQOMXCopenhagen,whichincludeanationalcodeoncorporategovernance.

Pursuanttoclause4.3ofthe“Rulesforissuersofshares–NASDAQOMXCopenhagen”,Danishcompaniesmuststatehowtheyaddressthe“Recommendationsforcorporategovernance”basedonthe“complyorexplain”principle.Therecommendationsspecifythatitisequallylegitimatetoprovideanexplanationortocomplywithaspecificrecommendation,asthekeyissueistocre-atetransparencyincorporategovernancematters.

FurtherinformationonVestas'positiononeachindividualrecom-mendationisprovidedatvestas.com/investor.

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BentErikCarlsen,ChairmanTorstenErikRasmussen,DeputyChairmanEllySmedegaardRexFreddyFrandsenHåkanErikssonJørgenHunoRasmussen

JørnAnkærThomsenKimHvidThomsenKurtAnkerNielsenMichaelAbildgaardlisbjergOlaRollénSussieDvingeAgerbo

PEoPlE & CoMPEnsation CoMMittEEBentErikCarlsen,ChairmanJørnAnkærThomsenTorstenErikRasmussen

aUdit CoMMittEEKurtAnkerNielsen,ChairmanFreddyFrandsenTorstenErikRasmussen

ManUFaCtURing & ExCEllEnCE CoMMittEEFreddyFrandsen,ChairmanKimHvidThomsenOlaRollén

tECHnology CoMMittEEBentErikCarlsen,ChairmanHåkanErikssonJørgenHunoRasmussen

DitlevEngel,PresidentandCEOHenrikNørremark,ExecutiveVicePresidentandCFOAndersSøe-Jensen,VestasOffshoreBjarneRavnSørensen,VestasControlSystemsFinnStrømMadsen,VestasTechnologyR&DHansJørnRieks,VestasCentralEuropeJensTommerup,VestasChinaJuanAraluce,VestasMediterranean

KlausSteenMortensen,VestasNorthernEuropeKnudBjarneHansen,VestasTowersMarthaWyrsch,VestasAmericasOleBorupJacobsen,VestasBladesPhilJones,VestasSpareParts&RepairRoaldSteenJakobsen,VestasPeople&CultureSeanSutton,VestasAsiaPacificSørenHusted,VestasNacelles

REPoRting to tHE PREsidEnt and CEo MortenAlbæk,GroupMarketing&CustomerInsightPeterCBrun,GroupGovernmentRelationsPeterWenzelKruse,GroupCommunications

REPoRting to tHE ExECUtivE viCE PREsidEnt and CFo HenrikHaldHellmuth,GroupTreasuryJanPilgaard,GroupFinance&OperationsJohnSkatDalgaard,GroupEngagementOfficeJørgenPeterNielsen,ContractReviewRobertPaulFritz,GroupQualityTorbenBonde,GroupITTommyRahbekNielsen,GroupForecasting&Planning

THEBOARDOFDIRECTORSOFVESTASWINDSySTEMSA/S

BOARDCOMMITTEES

THEEXECUTIVEMANAGEMENTOFVESTASWINDSySTEMSA/S

SENIORVICEPRESIDENTSFORTHEGROUPSTAFFFUNCTIONS

THEVESTASGOVERNMENT

DitlevEngel,PresidentandCEO HenrikNørremark,ExecutiveVicePresidentandCFO

036 Vestasannualreport2009

WE aRE MaKing a dEdiCatEd EFFoRt to KEEP Wind PoWER at tHE toP oF tHE gloBal EnERgy agEnda, as ModERn EnERgy is PREsEntly tHE BEst solUtion to tHE CliMatE and EnERgy CHallEngEs.

BentErikCarlsen,Chairman

WE nEEd to EstaBlisH long-tERM, staBlE national sCHEMEs tHat PRovidE tHE indUstRy WitH tHE oPPoRtUnitiEs to Plan and invEst in EMPloyEEs, tECHnology and PRodUCtion FaCilitiEs.

EllySmedegaardRex

WitH oUR no. 1 in ModERn EnERgy stRatEgy, WE intEnd to BUild tHE WoRld's stRongEst EnERgy BRand. as a sPoKEsPERson FoR oUR indUstRy, tHis MEans tHat WE MUst ConsolidatE oUR lEadERsHiP Position.

TorstenErikRasmussen

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ovER tHE Past 25 yEaRs, WE HavE iMPRovEd tHE EFFiCiEnCy oF oUR Wind tURBinEs By a FaCtoR oF 100. WE HavE By FaR tHE laRgEst dEvEloPMEnt dEPaRtMEnt in tHE Wind PoWER indUstRy, and EvERy day WE sEEK to EnHanCE tHE REliaBility and oUtPUt oF oUR Wind PoWER Plants.

JørgenHunoRasmussen

oUR Wind, oil and gas vision UndERlinEs oUR aMBition oF assUMing lEadERsHiP in tHE EFFoRts to MaKE Wind an EnERgy soURCE on a PaR WitH Fossil FUEls.

FreddyFrandsen

in oRdER to aCCoMPlisH oUR vision, tHE Cost oF EnERgy MUst BE REdUCEd, i.E. tHE PRiCE PER MWH PRodUCEd. vEstas' 6.0 MW oFFsHoRE tURBinE, WHiCH is CURREntly BEing dEvEloPEd, MUst dRaMatiCally REdUCE tHE Cost oF EnERgy CoMPaREd WitH all KnoWn CoMPEting PRodUCts.

HåkanEriksson

038 Vestasannualreport2009

tHRoUgH iMPRovEd PRodUCt qUality and MUCH ClosER CUstoMER RElations, vEstas PRovidEs BUsinEss CasE CERtainty. vEstas KEEPs its PRoMisEs.

JørnAnkærThomsen

in sPitE oF tHE CREdit sqUEEzE, vEstas aCHiEvEd its BEst-EvER FinanCial PERFoRManCE, tHEREBy Consolidating its FoUndation FoR aCCoMPlisHing tRiPlE15 – aMong otHER tHings tHRoUgH signiFiCant invEstMEnts in tECHnology and PRodUCt dEvEloPMEnt.

KurtAnkerNielsen

CUstoMER loyalty is iMPoRtant. vEstas' FUtURE dEPEnds on loyal and satisFiEd CUstoMERs. ConsEqUEntly, WE nEEd to stEP UP oUR CUstoMER RElations at all lEvEls, and WE EndEavoUR to BECoME a MoRE FlExiBlE and oPEn CollaBoRation PaRtnER.

KimHvidThomsen

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tRiPlE15 is aMBitioUs, BUt WitH oUR FinanCial PRioRitiEs – EBit MaRgin, nEt WoRKing CaPital and REvEnUE – WE HavE PREvioUsly PRovEd tHat it is PossiBlE to aCHiEvE aMBitioUs goals to tHE BEnEFit oF tHE CoMPany and oUR sHaREHoldERs.

MichaelAbildgaardlisbjerg

saFEty FoR tHE EMPloyEEs is alWays givEn toP PRioRity at vEstas. ConsEqUEntly, WE WoRK WitH dEdiCation and stRUCtURE to EnHanCE saFEty and REdUCE tHE nUMBER oF injURiEs – WitH tHE UltiMatE goal oF avoiding injURiEs altogEtHER.

OlaRollén

at vEstas, ManagEMEnt is alWays REsPonsiBlE FoR saFEty, BUt EaCH EMPloyEE also sHaREs in tHE REsPonsiBility. in all WoRK PRoCEssEs, laCK oF ConsidERation Can Easily lEad to UnnECEssaRy RisKs.

SussieDvingeAgerbo

040 Vestasannualreport2009

CoMPEtEnCiEs and FidUCiaRy Positions oF tHE MEMBERs oF tHE BoaRd oF diRECtoRs ThemembersoftheBoardofDirectorshaveinformedthecompanyofthefollowingcompetenciesandfiduciarypositionsinDanishandforeigncompaniesandorganisations.

Bent Erik Carlsen (b. 1945), ChairmanDirector,B.CarlsenShippingApS(Denmark)2008–.MemberoftheBoardsinceSeptember1996andre-electedsince1996,latestin2009.Theelectiontermexpiresin2010.

CompetenciesEducation1972 B.Com.(marketing),

CopenhagenBusinessSchool(Denmark)1978 B.Com.(managementaccounting),

CopenhagenBusinessSchool(Denmark)– VariousmanagementcoursesINSEAD(Denmark)

Formerpositions1969–1972 SalesManager,ColonEmballageA/S(Denmark)1972–1979 ManagingDirector,

EurocardDenmarkA/S(Denmark)1979–1981 ManagingDirector,

Winther&HeideEftf.A/S(Denmark)1981–1983 MemberoftheEuropeanManagement,

Airliquide(France)1983–1988 ManagingDirector,

AktieselskabetDanskIlt-&Brintfabrik(Denmark)1988–1990 ManagingDirector,FroSaldaturaS.A.(Italy)1990–1992 ManagingDirector,

l'AirliquideBelgesa-nv(Belgium)1992–1999 ManagingDirector,HedeNielsenA/S(Denmark)1999–2002 ManagingDirector,

AirliquideScandinavia(Denmark)2002–2008 GroupExecutiveVicePresident

A.P.Møller-MærskA/S(Denmark)

FiduciarypositionsChairmanoftheBoardsof:MaerskContainerIndustry(China),MaerskContainerIndustryA/S(Denmark)andRostiA/S(Denmark).

DeputyChairmanoftheBoardof:DanskSupermarkedA/S(Denmark).

MemberoftheBoardsof:F.SallingA/S(Denmark),F.SallingHoldingA/S(Denmark),InvesteringsforeningenValueinvestDanmark(Denmark),NorfolklineHoldingB.V.(TheNetherlands),OdenseStaalskibsværftA/S(Denmark)andSvitzerA/S(Denmark).

PositionsoftrustChairmanof:VestasWindSystemsA/S'People&CompensationCommittee(Denmark)andVestasWindSystemsA/S'TechnologyCommittee.

IndependencyComplieswiththeCommitteeonCorporateGovernance'sdefinitionofindependency.1)

torsten Erik Rasmussen (b. 1944), deputy ChairmanManagingDirectorandCEO,MorganManagementApS(Denmark)1997–.MemberoftheBoardsinceJanuary1998andre-electedsince1998,latestin2009.Theelectiontermexpiresin2010.

CompetenciesEducation1961–1964 Commercialeducation,

Dalhofflarsen&HornemanA/S(Denmark)1964–1966 Militaryservice,RoyalDanishlifeGuards(Denmark)

anddischargedasFirstlieutenant(R)19671972 MBA,IMEDE,lausanne(Switzerland)1985 InternationalSeniorManagers'Program,

HarvardBusinessSchool(USA)

Formerpositions1967–1971 DepartmentManagerandlaterDirector,

NorthernSoft-&HardwoodCo.ltd.(Congo)1973 ManagementAssistant,

lEGOSystemA/S(Denmark)1973–1975 FinanceandAdministrationDirector,

lEGOlANDA/S(Denmark)1975–1977 logisticsManager,lEGOSystemA/S(Denmark)1977 VicePresident,logistics,

lEGOSystemA/S(Denmark)1978–1980 PresidentandCEO,

lEGOOverseasA/S(Denmark)1981–1997 ExecutiveVicePresident,Operationsandmember

oftheGroupManagement,lEGOA/S(Denmark)

FiduciarypositionsChairmanoftheBoardsof:BallApS(Denmark),BallHoldingApS(Denmark),BallInvestApS(Denmark),CPDInvestApS(Denmark),EVOInvestA/S(Denmark),OaseOutdoorsApS(Denmark)andOutdoorHoldingA/S(Denmark).

DeputyChairmanoftheBoardsof:A/SDetØstasiatiskeKompagni(Denmark)andTKDevelopmentA/S(Denmark).

MemberoftheBoardsof:AcadiaPharmaceuticalsA/S(Denmark),AcadiaPharmaceuticalsInc.(USA),ColoplastA/S(Denmark),ECCO(Thailand)Co.ltd.(Thailand),ECCO(Xiamen)Co.ltd.(China),ECCOSkoA/S(Denmark),ECCOSlovakiaa.s.(Slovakia),MorganInvestApS(Denmark),PTECCOIndonesia(Indonesia),SchurInternationalA/S(Denmark),SchurInternationalHoldingA/S(Denmark),VolaA/S(Denmark)andVolaHoldingA/S(Denmark).

PositionsoftrustMemberof:AcadiaPharmaceuticalsInc.'sCompensationCommittee(USA),AcadiaPharmaceuticalsInc.'sCorporateGovernanceCommittee(USA),VestasWindSystemsA/S'People&CompensationCommittee(Denmark)andVestasWindSystemsA/S'AuditCommittee(Denmark).

IndependencyComplieswiththeCommitteeonCorporateGovernance'sdefinitionofindependency.1)

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Elly smedegaard Rex (b. 1955)Serviceassistant,VestasWindSystemsA/S(Denmark)1999–.Electedbycompanyemployees.MemberoftheBoardsinceApril2008.Theelectiontermexpiresin2012.

CompetenciesEducation1973 Dentalnurse(Denmark).

Formerpositions1974 Shopassistant,lemEl(Denmark) Shopassistant,Stop(Denmark)1980–1983 Host,Ølstrupparishcommunitycentre(Denmark)1983–1985 Dentalnurse,TandlægerneiNygade(Denmark) Dentalnurse,TandlægeBidstrup(Denmark)1986 Host,Ølstrupparishcommunitycentre(Denmark)1987–1990 Officemanager,SommerlandVest(Denmark)1991–1993 Dentalnurse,TandlægerneiNygade(Denmark)1993–1994 Officemanager,SommerlandVest(Denmark)1995–1996 Kitchenassistant,ROFI-CentretRingkøbing (Denmark) Kitchenassistant,VedersøMejerikro(Denmark)1997–1998 Officemanager,TroldeparkenSommerlandVest (Denmark)1998–1999 Kitchenassistant,ROFI-CentretRingkøbing (Denmark)

IndependencyDoesnotcomplywiththeCommitteeonCorporateGovernance'sdefinitionofindependency1)duetoemploymentwithVestas.

Freddy Frandsen (b. 1944)Director.MemberoftheBoardsinceApril2004andre-electedsince2004,latestin2009.Theelectiontermexpiresin2010.

CompetenciesEducation1967 ElectronicEngineer,

EngineeringCollegeofAarhus(Denmark)– VariousmanagementcoursesINSEAD(Denmark)

Formerpositions1967–1973 Engineer,IndustryDepartment,

Bruun&SørensenA/S(Denmark)1973–1987 DivisionalDirector,SkakoA/S(Denmark)1987–1989 ManagingDirector,

Kverneland-DanmarkA/S(Denmark)1989–1993 ManagingDirector,PedershaabA/S(Denmark)1993–2005 ManagingDirector,

AalborgIndustriesA/S(Denmark)

FiduciarypositionsChairmanoftheBoardof:HansFølsgaardA/S(Denmark).

MemberoftheBoardsof:Aktieselskabetaf1.november1998(Denmark),Anpartsselskabetaf8.februar2005(Denmark),OdenseStaalskibsværftA/S(Denmark),PolarisInvestIIApS(Denmark),PolarisManagementA/S(Denmark),SvejsemaskinefabrikkenMigatronicA/S(Denmark)andAalborgUniversity(Denmark).

Positionsoftrust:Chairmanof:VestasWindSystemsA/S'Manufacturing&ExcellenceCommittee.

Memberof:Thenon-profitfoundation:UtzonFoundation(Denmark),FølsgaardFonden(Denmark),NordsøenForskerpark/Ocenarium(Denmark)andVestasWindSystemsA/S'AuditCommittee(Denmark).

IndependencyComplieswiththeCommitteeonCorporateGovernance'sdefinitionofindependency1),andcomplieswiththeDanishauditlaw'sdefinitionofauditcommitteemembers'independency2).

Håkan Eriksson (b. 1961)GroupChiefTechnologyOfficer,TelefonaktiebolagetlMEricsson(Sweden)andHeadofEricssonSiliconValley(USA)2009–.MemberoftheBoardsinceMarch2009.Theelectiontermexpiresin2010.

CompetenciesEducation1981–1985 MScengineering(electrical),linköpingInstituteof

Technology,linköpingUniversity(Sweden)2005 HonoraryPhD,linköpingInstituteofTechnology,

linköpingUniversity(Sweden)

Formerpositions1986–1992 EmployedwithEricssonRadioSystemsAB (Sweden)1992–1995 Manager,SystemsResearchandDevelopment

department,EricssonRadioSystemsAB(Sweden)1995–1997 Director,SystemsDesignandManagement

EricssonResearchCanada(Canada)1997–1998 VicePresident,BusinessandTechnology

Development,EricssonRadioSystemsAB(Sweden)

1998–2003 VicePresidentandGeneralManager,EricssonResearch,EricssonRadioSystemsAB(Sweden)

2003–2009 SeniorVicePresidentandGeneralManager,Research&Development,TelefonaktiebolagetlMEricsson(Sweden)

FiduciarypositionsMemberoftheBoardsof:AnotoGroupAB(Sweden)andlinköpingUniversity(Sweden).

PositionsoftrustMemberof:KungligaIngenjörsvetenskapsakademien(Sweden),StatensITRåd(Sweden)andVestasWindSystemsA/S'TechnologyCommittee(Denmark).

IndependencyComplieswiththeCommitteeonCorporateGovernance'sdefinitionofindependency.1)

042 Vestasannualreport2009

>> jørgen Huno Rasmussen (b. 1952)PresidentandCEO,FlSmidth&Co.A/S(Denmark)2004–.MemberoftheBoardsinceJanuary1998andre-electedsince1998,latestin2009.Theelectiontermexpiresin2010.

CompetenciesEducation1976 MScengineering(civil),

theTechnicalUniversity(Denmark)1977 B.Com.(organisation),

CopenhagenBusinessSchool(Denmark)1980 lich.tech.,theTechnicalUniversity(Denmark)

Formerpositions1979–1982 ProjectManager,

A.Jespersen&SønA/S(Denmark)1982–1983 Manager,IndustrialConstruction,

Chr.Islef&Co.A/S(Denmark)1983–1986 DepartmentManager,

H.Hoffmann&SønnerA/S(Denmark)1986–1988 DirectorofInternationalOperations,

H.Hoffmann&SønnerA/S,(Denmark)1988–2003 ManagingDirector,HoffmannA/S(Denmark)2000–2003 DirectorandmemberoftheGroupManagement,

VeidekkeASA(Norway)

FiduciarypositionsChairmanoftheBoardsof:Aktieselskabetaf1.januar1990,Valby(Denmark),FFEInvestA/S(Denmark),FlSmiljøA/S(Denmark),FlSPlastA/S(Denmark),FlSmidthDorr-OliverEimcoDenmarkApS(Denmark),FlSmidthFinansA/S(Denmark),FlSmidthInc.(USA),FlSmidthPrivateltd.(India),FlSmidthMaterialsHandlingA/S(Denmark),FlSmidthMineralsHoldingApS(Denmark)andSlFRomerXVApS(Denmark).

DeputyChairmanoftheBoardof:CembritHoldingA/S(Denmark).

MemberoftheBoardof:lFIA/S(Denmark).

PositionsoftrustMemberof:TheGeneralCounciloftheConfederationofDanishIndustries(Denmark),thelundbeckfoundation(Denmark),therepresentativesoftheTryghedsgruppen(Denmark),theBoardoftheCopenhagenIndustriesEmployers'Federation(Denmark)andVestasWindSystemsA/S'TechnologyCommittee(Denmark).

IndependencyComplieswiththeCommitteeonCorporateGovernance'sdefinitionofindependency.1)

jørn ankær thomsen (b. 1945)Attorneyatlawandpartner,GorrissenFederspiel(Denmark)1976–.MemberoftheBoardsinceApril2004andre-electedsince2004,latestin2009.Theelectiontermexpiresin2010.

CompetenciesEducation1970 Masteroflaw,UniversityofCopenhagen(Denmark)

Formerpositions1970–1974 DeputyjudgeandJuniorassociate(Denmark)and

lawyerin1974

FiduciarypositionsChairmanoftheBoardsof:AidaA/S(Denmark),Aktieselskabetaf1.juli2009A/S(Denmark),Aktieselskabetaf26.november1984(Denmark),AktieselskabetSchouw&Co.(Denmark),CarlsenByggecenterløgtenA/S(Denmark),CarlsenSupermarkedløgtenA/S(Denmark),DanishIndustrialEquipmentA/S(Denmark),DanskeInvestManagementA/S(Denmark),DB2001A/S(Denmark),DenProfessionelleForeningDanskeInvestInstitutional(Denmark),F.M.J.A/S(Denmark),FibertexA/S(Denmark),FåmandsforeningenDanskeInvestInstitutional(Denmark),GAMHoldingA/S(Denmark),GAMWoodA/S(Denmark),GivescoA/S(Denmark),InvesteringsforeningenDanskeInvest(Denmark),InvesteringsforeningenDanskeInvestAlmenBolig(Denmark),InvesteringsforeningenDanskeInvestSelect(Denmark),KildebjergRyA/S(Denmark),KroneErhvervsinvesteringA/S(Denmark),KroneKapitalA/S(Denmark),løgtenMidtA/S(Denmark),MartinProfessionalA/S(Denmark),OPAOrtopædiskPrivathospitalAarhusA/S(Denmark),PlaceringsforeningenProfilInvest(Denmark),SchouwFinansA/S(Denmark),SpecialforeningenDanskeInvest(Denmark),SøndergaardGiveA/S(Denmark)andTh.C.Carlsen,løgtenA/S(Denmark).

MemberoftheBoardsof:A/SP.Grene(Denmark),ASMFoodsAB(Sweden),BiomarGroupA/S(Denmark),CarlettiA/S(Denmark),DanCakeA/S(Denmark),EjendomsselskabetBlomstervej16A/S(Denmark),GFKHoldingApS(Denmark),GFKJURA883A/S(Denmark),GivescoBakeryA/S(Denmark),Hydra-GreneA/S(Denmark),Hydra-GreneHoldingA/S(Denmark),KroneKapitalIA/S(Denmark),KroneKapitalIIA/S(Denmark)andKroneKapitalIIIA/S(Denmark).

PositionsoftrustMemberof:JensEskildsenoghustruMaryAntonieEskildsenmemorialfoundation(Denmark),KøbmandTh.C.CarlsensMemorialfoundation(Denmark),OttoMønstedsKollegium(Denmark)andVestasWindSystemsA/S'People&CompensationCommittee.

IndependencyDoesnotcomplywiththeCommitteeonCorporateGovernance'sdefinitionofindependency1)duetoconnectiontooneofthelawfirmsactingasconsultanttothecompany.

Kim Hvid thomsen (b. 1963)SeniorShopSteward,VestasNacellesA/S(Denmark)1985–.Electedbygroupemployees.MemberoftheBoardsinceMay1996andre-electedsince1996,latestin2008.Theelectiontermexpiresin2012.

CompetenciesEducation1984 Industrytechnician(Denmark)

Formerpositions1981–1984 Industrytechniciantrainee,

TimMaskinfabrik(Denmark)1985 IndustrytechnicianK.P.Komponenter(Denmark)

FiduciarypositionsDeputyChairmanoftheBoardof:MetalSkjern-Ringkøbing(Denmark).

MemberoftheBoardof:UddannelsescenterRingkøbing-Skjern(Denmark).

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Positionsoftrust:Memberof:VestasWindSystemsA/S'Manufacturing&ExcellenceCommittee(Denmark).

IndependencyDoesnotcomplywiththeCommitteeonCorporateGovernance'sdefinitionofindependency1)duetoemploymentwithVestas.

Kurt anker nielsen (b. 1945)Director.MemberoftheBoardsinceApril2006andre-electedsince2006,latestin2009.Theelectiontermexpiresin2010.

CompetenciesEducation1972 MSc(EconomicsandBusinessAdministration),

CopenhagenBusinessSchool(Denmark)

Formerpositions1972–1973 BusinessEconomist,CarlsbergA/S(Denmark)1973–1974 ManagementConsultant,Booz,Allenand

HamiltonofScandinavia(Denmark)1974–1977 Economist,NovoIndustriA/S(Denmark)1977–1984 HeadofCorporatePlanning,

NovoIndustriA/S(Denmark)1984–1985 Director,CorporatePlanningandCommunications,

NovoIndustriA/S(Denmark)1985–1989 VicePresidentCorporateFinance,

NovoIndustriA/S(Denmark)1989–2000 ChiefFinancialOfficer,

NovoNordiskA/S(Denmark)1996–2000 DeputyCEO,NovoNordiskA/S(Denmark)2000–2003 CEO,NovoA/S(Denmark)

FiduciarypositionsChairmanoftheBoardof:RelianceA/S(Denmark).

DeputyChairmanoftheBoardof:NovozymesA/S(Denmark).

MemberoftheBoardsof:lifecyclePharmaA/S(Denmark),NovoNordiskA/S(Denmark),NovoNordiskFonden(Denmark)andZymoGeneticsInc.(USA).

PositionsoftrustChairmanof:lifeCyclePharmaA/S'AuditCommittee(Denmark),NovoNordiskA/S'AuditCommittee(Denmark),NovozymesA/S'AuditCommittee(Denmark),VestasWindSystemsA/S'AuditCommittee(Denmark)andZymoGeneticsInc.'sAuditCommittee(USA).

IndependencyComplieswiththeCommitteeonCorporateGovernance'sdefinitionofindependency.1)ComplieswiththeDanishauditlaw'sdefinitionofauditcommitteemembers'independency2)anddemandforqualificationswithinfinancialaccounting.

Michael abildgaard lisbjerg (b. 1974)SkilledWorker–Production,VestasNacellesA/S(Denmark)2001–.Electedbygroupemployees.MemberoftheBoardsinceApril2008.Theelectiontermexpiresin2012.

CompetenciesEducation1995 AutoMechanic(Denmark)1996–1999 Militaryservice,RoyalDanishlifeGuards

(Denmark)anddischargedastechnicalsergeant1998 HigherPreparatoryCourse-singlesubject

(Denmark)

Formerpositions1999–2001 NordiskDækImportA/S(Denmark)

IndependencyDoesnotcomplywiththeCommitteeonCorporateGovernance'sdefinitionofindependency1)duetoemploymentwithVestas.

ola Rollén (b. 1965)PresidentandCEO,HexagonAB(Sweden)2000–.MemberoftheBoardsinceMarch2009.Theelectiontermexpiresin2010.

CompetenciesEducation1989 BSc(Econ),StockholmUniversity(Sweden)

Formerpositions1990–1998 CEOandmemberoftheBoardofDirectors, KanthalAB(Sweden)1998–1999 ExecutiveVicePresident, AvestaSheffieldltd(England)1999–2000 CEO,SandvikMaterialsTechnologyand memberofGroupManagement,SandvikAB (Sweden)

PositionsoftrustMemberof:VestasWindSystemsA/S'Production&ExcellenceCommittee(Denmark).

IndependencyComplieswiththeCommitteeonCorporateGovernance'sdefinitionofindependency.1)

sussie dvinge agerbo (b. 1970)People&Cultureemployee,VestasWindSystemsA/S(Denmark)1990–.Electedbycompanyemployees.MemberoftheBoardsinceNovember2005andre-electedsince2005,latestin2008.Theelectiontermexpiresin2012.

CompetenciesEducation1989-1992 Commercialuppersecondaryexamination

(Denmark)andofficeassistant1995 languagesecretary,English,Openeducationat

HIHHerning(Denmark)1997 languagesecretary,German,Openeducationat

HIHHerning(Denmark)2003 ITAdministrator,RingkøbingBusinessCollege/

VestjyskBusinessCollege,Skjern(Denmark)

IndependencyDoesnotcomplywiththeCommitteeonCorporateGovernance'sdefinitionofindependency1)duetoemploymentwithVestas.

1) TheCommitteeonCorporateGovernance'sdefinitionofindependencyisavailableatvestas.com/investor.2) TheDanishauditlaw'sdefinitionofauditmembers'independencyisavailableatvestas.com/investor.

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ditlev Engel (b. 1964) PresidentandCEO,VestasWindSystemsA/S(Denmark)2005–.MemberoftheExecutiveManagementsinceMay2005.

CompetenciesEducation1990 BachelorofCommerce(Managementaccounting), CopenhagenBusinessSchool(Denmark)1997 GeneralManagementProgram–INSEAD(France)

Formerpositions1990–1992 VicePresidentofHempelHongKongltd.

(HongKong)1992–1995 VicePresidentofHempelHaiHongltd.

(HongKong)1995–1997 PresidentofHempelNorgeAS(Norway)1997–1999 PresidentofHempelHaiHongltd.(China)1999–2000 ExecutiveVicePresidentofHempelA/S

(Denmark)2000–2005 GroupPresidentandCEOofHempelA/S

(Denmark)PositionsoftrustMemberof:TheGeneralCounciloftheConfederationofDanishIndustries(Denmark),theIndustrialPolicyCommitteeoftheConfederationofDanishIndustries(Denmark),theInternationalAdvisoryPanel(IAP)onEnergyoftheSingaporeanMinistryofTradeandIndustry(Singapore)andtheIndustryAdvisoryGroupoftheInternationalEnergyAgency(France).

Industrialadviserto:EQT(Sweden).

Henrik nørremark (b. 1966)ExecutiveVicePresidentandCFO.VestasWindSystemsA/S(Denmark)1993–.MemberoftheExecutiveManagementsinceMarch2004.

CompetenciesEducation1991 BachelorofCommerce(Managementaccounting), HerningBusinessSchool(Denmark)

Formerpositions1986–1991 AuditorwithKrøyerPedersen(Denmark)1991–1993 FinancialControlleratWindTurbineMaintenance

Corporation(Denmark)1993–1994 FinancialControlleratVestasWindSystemsA/S

(Denmark)1994–1995 FinancialControlleratVestas–AmericanWind

Technology,Inc.(Denmark)1995–1999 GroupFinancialControlleratVestasWind

SystemsA/S(Denmark)1999–2004 ManagingDirectorofVestas–AmericanWind

Technology,Inc.(USA)

CoMPEtEnCiEs and FidUCiaRy Positions oF tHE MEMBERs oF tHE ExECUtivE ManagEMEntThemembersoftheExecutiveManagementhaveinformedthecompanyofthefollowingcompetenciesandfiduciarypositionsinotherDanishandforeigncompaniesandorganisations.

046 Vestasannualreport2009

PREsidEnts oF tHE gRoUP's BUsinEss Units

AndersSøe-Jensen,VestasOffshore.JoinedVestasin2006.

BjarneRavnSørensen,VestasControlSystems.JoinedVestasin1998.

KlausSteenMortensen,VestasNorthernEurope.JoinedVestasin2007.

KnudBjarneHansen,VestasTowers.JoinedVestasin1989.

MarthaWyrsch,VestasAmericas.JoinedVestasin2009.

FinnStrømMadsen,VestasTechnologyR&D.JoinedVestasin2005.

SeanSutton,VestasAsiaPacific.JoinedVestasin2009.

SørenHusted,VestasNacelles.JoinedVestasin1991.

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HansJørnRieks,VestasCentralEurope.JoinedVestasin1993.

OleBorupJakobsen,VestasBlades.JoinedVestasin1995.

PhilJones,VestasSpareParts&Repair.JoinedVestasin2009.

JensTommerup,VestasChina.JoinedVestasin2009.

JuanAraluce,VestasMediterranean.JoinedVestasin2007.

RoaldSteenJakobsen,VestasPeople&Culture.JoinedVestasin2003.

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Non-financial­issues051 ClobalCompact052 Safetyfirst053 Asgreenasitgets055 CodeofConduct057 Non-financialhighlightsfortheGroup058 GlobalCompact'stenprinciples060 Accountingpolicies061 Theindependentauditor'sstatement

050 Vestasannualreport2009

Non-financial­issues

163 milliontonnesofCO2willbesavedbytheturbinesproducedandshippedbyVestasin2009

CODEOFCONDUCT

Updatedglobalprincipleshavebeenrolledoutin2009.Infuture,allnewemployeeswillbetrainedinCodeofConduct.

vestas' safety principles:· Allinjuriescanbeprevented.

· Everyhazardcanbemanaged.

· Managementisaccountableforsafety.

· Peoplearethemostcriticalelementina

safetyeffort.

· Workingsafetyisaconditionof

employment.

VESTASJOINEDTHEGlOBAlCOMPACTIN2009

80%ofaV90-3.0MWturbinecanberecycledtoday

7Blade

factories

3Tower

factories

5Electronics

andcontrolsfactories

8Nacelleassembly

factories

8Component

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2Warehouseandsupply

centres

17Salesandservice

units

50SITEDESCRIPTIONSFOR

VESTAS'MAJORACTIVITIES

AREAVAIlABlEAT

VESTAS.COM

49%ofVestas'totalenergyconsumptionin2009wasgreen

48%reductioninincidenceofindustrialinjuriesfrom2008to2009

0.05 milliontonnesofCO2wasemittedbyVestasin2009

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gloBal CoMPaCtThechallengeswefaceasasocietycallforsolutionsanddedi-catedeffortsbymanydifferentplayerswiththecommonaimofstrivingforamorebalancedworld.Vestasthuscontinuouslyworksonimprovingitsinteractionwithallitsstakeholders.

ToVestas,lowestCostofEnergyinvolveswindpowerconsist-entlybecomingincreasinglycompetitive,butalsothatwindpowershouldhaveaslittleimpactaspossibleontheenviron-ment,theclimate,Earth'sresourcesandthesurroundingsingen-eral.Inthisway,windpowerbenefitsnotonlyVestas'customers,employeesandshareholders,butthewholeofsocietyingeneral.

Energyisaprerequisiteforgrowthandprosperitythroughouttheworld.Therearecurrently1.5billionpeoplewithoutaccesstoelectricity.Duringthenextgeneration,theworld'spopulationwillgrowbytwobillion,andeveryonewillwanttohaveunlimitedaccesstoelectricity.

Windpowerispartofthesolutiontothismassivechallengebe-causeitisfinanciallycompetitive,predictable,local,fastandclean.

Today'swindpowerisfinanciallycompetitivecomparedwiththeconventionalformsofenergy,manyofwhicharebeingdepleted.Windpowerispredictablebecausewindisfreeand,overlongerperiodsoftime,blowssteadily.Becausewindpowerislocal,itreducesdependenceonimportedenergy.Windpowercanbeinstalledquicklyandonalargescale,anditemitsnohazardousparticlesorgreenhousegases.Furthermore,mostofthematerialsusedinawindturbinecanberecycled.Finally,windpowercreatesmanyjobs,thusactingasadirectcatalystforgrowthandprosperity.

Beingthemarketleader,Vestashasputwindpoweratthetopoftheglobalenergyagenda,andwewillcontinueoureffortstodis-seminateknowledgeaboutwindtoallcornersoftheEarthnowandinthefuture.

InSeptember2009,wejoinedtheUNGlobalCompact.Hence-forth,VestaswillthereforeonaquarterlybasisreportonitsachievementsinareascoveredbytheGlobalCompact.Themostimportantareasare:

· SafetyfirstVestasisbuildingaworld-classsafetyculture.

· AsgreenasitgetsVestas'productionandproductsmustbeasgreenaspossible.

· CodeofConductVestas'employeesandbusinesspartnersmustknowwhatiscorrectVestasbehaviour.

AllareasrequireadedicatedeffortbyallVestasemployeesthroughouttheworld.Throughcloseandconsistentmanage-mentfollow-uponalevelwithfinancialreportingfromthebusi-nessunitstotheVestasGovernment,wewillmakesurethatwereachourgoals.

AsthemanyinitiativesareincorporatedintoprocessesandroutinesinallpartsofVestas,localdepartmentsarebeingsetuptobeinchargeofsustainability.NewinitiativeswillinitiallybemanagedcentrallybyVestasPeople&Culture.Eachofour14businessunitscurrentlyhavetheirownenvironment,healthandsafetyorganisation.

WewillcontinueoursustainabilityeffortsandourworkwiththetenGlobalCompactprincipleswithundiminisheddedicationin2010.

DitlevEngelPresidentandCEO

052 Vestasannualreport2009

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SAFETY CULTURE

saFEty FiRstVestasisbuildingaworld-classsafetyculturewiththeultimategoalofzeroaccidents.Ourcustomersdemandit,andouremploy-eesareentitledtoit.Consequently,theincidenceofindustrialinjuriesisacomponentofVestas'globalbonusscheme.AsVestasisitselfonlyasmallpartofthesupplychain,require-ments,adviceandguidancetomanysuppliersarebeinginten-sifiedinorderforthemtoprovidesaferworkplaces.

Vestas'comprehensivemanagementtrainingprogrammeisbasedonfivesafetyprinciples:

· AllindustrialinjuriescanbepreventedTheultimategoalofavoidingindustrialinjuriesaltogetherisarealisticgoal,whichVestasisaimingtoachievebygivingtopprioritytosafetynomatterwhatthecontext.

· EveryhazardcanbemanagedItisimpossibletoeliminateallrisksataworkplace,butmeticu-lousmappingofpotentialrisksandsubsequentdisciplinedplanningandexecutionoftheworkprocesscanmakethework-placesafe.

· ManagementisaccountableforsafetyManagementisalwaysaccountableforthesafeexecutionofworkprocesses,irrespectiveoflevel.Allmanagersmustperson-allyleadbyexample.

· PeoplearethemostimportantcomponentinasafetyeffortAllemployeesshouldactivelythinkandactunderthe“Safetyfirst”principle.

· WorkingsafelyisaconditionofemploymentatVestasAllemployeesmustfollowVestas'safetyinstructionstoensurepersonalsafetyandthesafetyofothers.

Formorethantenyears,Vestashasworkedsystematicallytomakethecompanyasafeworkplace.Physicalfacilitiesandtools,manualsandinstructions,educationandtrainingaswellasplan-ningandorganisationcombinedwithtraininginpersonalleader-ship,behaviour,safetywalksandcontrolsformthecornerstoneofsafetyendeavoursatalllocations.

Theresultsspeakforthemselves:Theincidenceofindustrialinjuriesperonemillionworkinghourswas8.1in2009,declin-ing48percentfrom2008whichisasignificantimprovement.Theincidenceratehasfallenby76percentfrom33.8industrialinjuriesperonemillionworkinghoursin2005.

In2010,thetargetistoachieveanincidenceof7.0industrialinjuriesperonemillionworkinghoursandfor2012,thetargetis3.0orless.

Health & safety management systemReportsonandmeasurestopreventinjuriesbuildonVestas'OHSAS18001certificationfrom2000.In2009,allVestasunitswerecertifiedwiththeexceptionofthefactoryinHohhot,InnerMongolia,China.Vestas'unitsmustbecertifiedwithinsixmonthsaftercommencingoperations.Attheendof2009,97percentofallVestas'employeesworkedatcertifiedlocations.

Vestas' safety culture Incidence of industrial injuries (per one million working hours)

0

5

10

15

20

25

30

35

20092008200720062005

33

.8

25

.3

20

.8

15

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as gREEn as it gEtsVestas'productionandproductsmustbeasgreenaspossible.Partlytosavemoneyforexpensiverawmaterialsandenergy,partlybecause“green”willbeafuturestrategiccompetitiveparameter.

ThroughrecyclinginVestas'productionandrecyclingofmateri-alsfromdismantledwindturbinesaswellasproductionofmoreMWhperkilogramwindturbine,VestasseekstoreduceitsuseofEarth'slimitedresources.Atthesametime,Vestasminimisesitssensitivitytounstablerawmaterialsprices.

Thelong-termobjectiveiswindturbinesbuiltfromeasilyaccess-ibleandrenewablematerials.Thisobjectivecanonlybeaccom-plishedthroughclosecollaborationwiththemanysuppliers.

Formorethantenyears,Vestashaspreparedlifecycleassess-ments.Throughfivephasesofthelifetimeofawindturbinefromcradletograve,theseassessmentsidentifythewindturbine'sgreatestenvironmentalimpactandmeasurestoreducesuchimpact:

· rawmaterialsandsuppliers· Vestas'production· transportandinstallation· operationandserviceover20years· dismantling

Cost of EnergySteelandcastironaccountforabout85percentoftheweightofaV90-3.0MWwindturbine,thetotalweightofwhichisupto

350tonnes.Tothiscomesaconcretefoundationofsome1,200tonnes,anditrequirestenlorrieswithpilotcarstotransporteachwindturbine.Manyturbinesalsoneedtobetransportedbyshipandtrain,andthefinalinstallationrequiresanumberofmobilecranes.Windturbineproductionisthusverymaterialandtrans-port-intensive,requiringmuchenergy.

AtVestas,whichcurrentlycontrols9percentofitstotalenergyconsumptionduringthelifetimeofawindturbine,effortsarededicatedtoreducingtheconsumptionofwaterandenergyandtheproductionofwaste.Suppliersofcomponentsandrawmaterialsaccountfor83percentoftheenergyconsumption,andtransportandinstallationaccountfor8percent.

Thegreatertheoutputrelativetoweight–MWhperkilogramofwindturbine–themoreeffectivelyVestasexploitstherawmaterialsusedtomanufactureawindturbine.Inthisway,Vestasincreasesitspositivecontributiontoreducingemissionsofhaz-ardousparticlesandgreenhousegases.MeasuredintermsofMWhperkilogramofwindturbine,thenewV112-3.0MWturbineisthusmorethan20percentmoreeffectivethanthecompara-bleV90-2.0MWturbine.

Asrenewableenergybecomesmorewidespread,theenviron-mentalimpactfromtheenergyusedbysupplierswillgraduallybereduced.Thebiggesteffectwillbeachievedinironoreminingandsteelprocessing.

80percentofaV90.3.0MWturbinecanberecycled,andafterlessthansevenmonths,thewindturbineisenergy-neutral,whichmeansthatitwillcontributetoreducingcarbonemissionsfor >>

ENERGyPRODUCTIONDURINGTHElIFECyClEOFAWINDTURBINE

Thefigureshowstheoverallactivitiesduringthelifecycleofawindturbinefromextractionofrawmaterialsandconsumptionofresourcestothefinaldismantlingprocess.Positivevaluesindicateenergyproductionandrecycling,primarilyofsteel.Negativevaluesindicateenergyconsumption.

Raw materials and resources

Landfill/Incineration

Recycling

Waste

Suppliers Vestas Transport and installation

Renewable energy

+2,433%-83% -9% -8%

+27%

054 Vestasannualreport2009

morethan19years.Duringitslifetime,theV90-3.0MWwindturbineonlyemits5gramsofCO2perkWh,derivingfromproduc-tionandinstallationoftheturbine.

Bycomparison,aneffectivemoderncoal-firedpowerplantemits790gramsofCO2perkWh.Overtheyears,thedifferencegrowstomorethan200,000tonnesofCO2foraV90-3.0MWoffshoreturbine.TheaverageannualCO2emissionpercapitainOECDcountriesisapprox11tonnes.

MetalsrepresentalargeshareofVestas'product.Theconsump-tionofmetalishighlydependentonthedegreeofinsourcingatVestas'foundriesandtowerfactories.Atthetowerfactories,anincreaseinthedegreeofinsourcingandthusmetalconsumptionwasrecordedin2009,andthatisthemainreasonforthe8percentincreaseinoverallconsumptionofmetals.

Water consumptionVestasuseswaterinitsproductionprocess,especiallycool-ingwateratthefourfoundries.In2009,waterconsumptionincreasedby11percentfrom474,958m3to521,005m3.TheincreasewasascribabletothenewfactoriesinChina,theUSAandSpain.Vestas'bladefactoriesconsumeabout220,000m3ofwater,primarilyforairhumidificationandwashingofbladesaftergrinding.

Asmuchofthewateraspossiblemustberecycledinclosedcir-cuits,andthewateringofoutdoorareasandotherusesmustbeminimised,whichispartofVestas'newbuildingpolicy.

Waste disposalThevolumeofwaste,includingthevolumeofwastesenttore-cycling,isconsideredakeyindicatorofhowVestas'affectstheenvironment.

Vestasendeavoursnottogenerateanywaste.In2009,thetotalvolumeofwastewas97,471tonnes,against96,632tonnesin2008.In2009,35percentofthetotalvolumeofwastewasrecycled,against31percenttheyearbefore.Thevolumeofwasteshouldbeviewedrelativetotheproductionanddeliveryof6,131MWin2009and6,160MWin2008.

Theuseofsuppliersandthedegreeofinsourcingaffectthevol-umesthatVestascontrolsitself.Inaddition,theinfrastructureforrecyclingVestas'waste,whichconsistsprimarilyofsand,metals,wood,paper,oil,plasticandcomposites,hasnotbeendevelopedtothesamelevelinallcountriesinwhichVestasoperates.Therecyclingofcompositesusedinthebladesrepresentsthefinal,hugechallenge.

AbouthalfofVestas'wastemeasuredintonnesissandfromthemouldingprocesses.Followingtheinstallationofafacilityforre-cyclingofmouldingsandinthefoundryatlidköping,Sweden,in2009,mouldingsandisnowbeingrecycledatallVestas'found-ries.80to90percentofthemouldingsandisbeingrecycledonsite,whichreducesnotonlyrawmaterialsconsumptionandthetotalwastevolumebutalsotransportcosts.Atthefoundryinlidköping,mouldingsandforlandfillsrelatingtotheproductionvolumewasreducedbyabout2,100tonnes,correspondingtoareductionof17percent.

Energy consumptionAspartofitsenvironmentinitiatives,Vestashasimplementedagreenbuildingpolicy,agreencarpolicyandagreenelectricitypolicy.

VestaswillhenceforthbuildgreeninaccordancewithlEEDplatinumplus,whichisthehigheststandardinenvironmentallysustainableconstruction.lEEDspecifiesrequirementsforfactors

Energy consumption (MWh) Index Waste disposal (tonnes) Index

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8

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2

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4

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Shareofrecycling Wastedisposalindex-linkedinrelationtoMWproducedandshipped

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suchasinsulation,light,sound,energytypes,rainwatercatch-mentandwaterrecycling.Thefuture-proofbuildingswillbe5-10percentmoreexpensivethanstandardconstruction,buttheywillhelpVestasavoidrisingcostsforincreasinglyexpensivewater,heatandelectricity.

Inconnectionwiththegreenbuildingpolicy,VestashasjoinedtheWorldBusinessCouncilManifestoforEnergyEfficiencyinBuildings,whosesubscribersworkproactivelyforlowerenergyconsumption.

AllnewvehiclesboughtorleasedbyVestasmustbeenviron-mentallyfriendly.Dieselcarswithparticlefiltersisthepreferredchoice,asthesecarscauselesspollutionandCO2emissionsthanpetrol-fuelledcars.Requirementsforexternaltransportsupplierswillalsobesharpenedintheyearsahead.

Theuseofrenewableenergycombinedwithlowerenergycon-sumptionandgreateroutputperkilogramofturbineisthemosteffectivewayofreducingVestas'CO2emissions.

Consequently,55percentofVestas'energyconsumptionmustcomefromrenewableenergysourcesby2010.Thisisonlypossi-ble,ifatleast90percentofitselectricityconsumptionisgener-atedbyrenewablesources.Theoriginalrenewableenergytargetfor2010was50percent.

Withthesetargets,Vestasaimstocontributetogreaterdemandforrenewableelectricity.Byprocuringrenewableelectricityandincollaborationwithpowersuppliersandauthorities,Vestasseekstoensurebetteraccesstorenewableelectricity.

In2009,itwasnotpossibletobuyrenewableelectricityinsuf-ficientvolumesfromChina,partsoftheUSAandIndia.Conse-

quently,compensationfromawindpowerplantestablishedinIndiabyVestasisincludedinthefigure.Thegeneratedrenewableelec-tricityhasbeenusedtobalanceelectricityconsumptioninmarketswhereVestasiscurrentlyunabletobuyrenewableelectricity.

In2009,contractsweresignedinrespectofdeliveryof17,500MWhofrenewableelectricityforthefollowingunits:Sales&ServiceinAustralia,Portugal,SwedenandtheUSA,thefoundryinGuldsmedshyttan,Sweden,andthebladefactoryinWindsor,USA.Vestas'shareofrenewableelectricitythusrosefrom68percentin2008to85percentin2009.In2010,Vestasexpectstoenterintocontractsfor40,000MWhofrenewableelectricity.

In2009,Vestas'overallenergyconsumptionroseby17percent,primarilyduetotheincreaseinproductionatVestasBlades'newfactories.Whenindex-linkedtoproducedandshippedMW,Vestas'energyconsumptionandCO2emissionsalsorose,be-causeenergyconsumptionandCO2emissionsaremorecloselylinkedtoproductionfacilitiesthatarenotfullyutilisedthantheyaretothelevelofactivity.

Environment management systemIn2009,97percentofVestashadbeencertifiedaccordingtotheISO14001standard,asmeasuredbythenumberofworkplaces.Theaimisforallnewunitstobecertifiedwithinsixmonthsaftercommencingoperations.Vestashassystematicallyworkedwithenvironmentandhealth&safetystandardssince2000,whenVestasreceiveditsfirstISO14001certification.

CodE oF CondUCtAsVestasgraduallygrowsbiggerandbiggerwithemployeesandbusinesspartnerswithwidelydifferentculturalbackgrounds,religiousbeliefsandpoliticalconvictions,itisbecomingmoreandmoreimportanttohaveaformalsetofcommonvalues.The

Emission of CO2 (tonnes) Index LCA distributed CO2 emissions (%)

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updatedCodeofConductthatVestasimplementedin2009istoensurethatallemployeesandotherpersonsactingonbehalfofVestasknowwhatiscorrectVestasbehaviour.

Vestas'CodeofConductsetstheframeworkfortheworkwiththeUNGlobalCompact,theInternationalBillofHumanRightsandtheInternationallabourOrganization'sconventions.VestaswillworkproactivelytoensurethatitsbusinesspartnersalsorespecttheCodeofConduct,includingthebanonchildlabourandforcedlabour,freedomofassociation,therighttocollectivebargainingandrespectfortheindividualregardlessofrace,colour,religion,politicalconviction,gender,age,nationalorigin,sexualorienta-tion,maritalstatusordisability.

Vestas'supplychaincoversmorethan1,000businesspartnersthroughouttheworld,givingVestasgoodopportunitiestohelpdisseminatetheUNGlobalCompactandothersimilarinitiatives,eventhoughtherearelargenationalandculturaldifferencesamongthebusinesspartners.Vestas'long-termeffortsinvolveacombinationofrequirements,adviceandguidanceinthefieldsofsafety,theenvironment,humanrights,labourrights,ethics,etc.withtheaimofensuringthatnotonlyVestas'production,butthewholeproductandthepreparationthereof,issustainableinthebroadestsense.

FormoreinformationonsustainabilityinrelationtoVestas'busi-nesspartners,seevestas.comunderAboutVestas/Principles/Suppliers.

Theworkalsoinvolvesactiveeffortsagainstbriberyandcorrup-tionandclearrulesandpoliciesforreceivinggiftsandsimilarissueswiththeaimofpreventingabuse.During2010,Vestaswilldevelopananti-corruptionprogrammeandtraininginthisarea.

AlargenumberofinitiativesaremadetoensurecompliancewiththeVestasCodeofConduct:

· In2009,theupdatedCodeofConducthasbeenmadeavailabletoallemployeesthroughe-learning,informationmaterialin18languages,presentations,etc.

· CodeofConductwillbecomepartoftheinductionprogrammeforallnewemployees.

· E-learningprogrammesonfraud,bribery,competitorintel-ligenceandgifts,etc.havebeendevelopedforselectedem-ployeegroups.

· Anumberoflegalexpertshavereceivedspecialtraininginhan-dlingmattersdealingwithanynon-compliancewiththeCodeofConduct.

· Vestas'whistleblowerschemehasbeenre-launchedunderthenameEthicsline.

Vestas'CodeofConductcanbedownloadedfromvestas.comunderAboutVestas/Principles/Sustainability.

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KEy FigUREs1)

occupational health & safety

Industrialinjuries(number) 306 534 534 525 472

–ofwhichfatalindustrialinjuries(number) 0 0 0 1 0

Products

MWproducedandshipped2) 6,131 6,160 4,974 4,313 3,900

Utilisation of resources

Consumptionofmetals(tonnes) 202,624 187,478 170,505 164,413 143,170

Consumptionofotherrawmaterials,etc.(tonnes) 126,600 129,207 111,541 93,983 82,592

Consumptionofenergy(MWh) 537,165 458,296 372,037 330,106 227,907

–ofwhichrenewableenergy(MWh) 263,611 172,800 139,983 124,841 118,603

–ofwhichrenewableelectricity(MWh) 238,462 167,311 138,035 124,841 118,603

Consumptionofwater(m3) 521,005 474,958 554,516 343,084 226,410

–ofwhichwaterofnon-drinkingwaterquality(m3) 102,528 103,066 14,809 14,954 0

Waste disposal

Volumeofwaste(tonnes) 97,471 96,632 89,643 82,739 67,313

-ofwhichcollectedforrecycling(tonnes) 34,303 30,254 28,422 27,593 17,266

Emissions

EmissionofCO2(tonnes) 50,523 41,832 32,798 28,396 18,406

local community

Environmentalaccidents(number) 10 16 15 7 4

Breachesofinternalinspectionconditions(number) 3 5 5 6 5

Employees

Averagenumberofemployees 20,832 17,924 13,820 11,334 10,300

Numberofemployeesattheendoftheyear 20,730 20,829 15,305 12,309 10,618

indiCatoRs1)

occupational health and safety

Incidenceofindustrialinjuriesperonemillionworkinghours3) 8.1 15.6 20.8 25.3 33.8

Absenceduetoillnessamonghourly-paidemployees(%) 2.8 3.3 3.6 3.2 4.1

Absenceduetoillnessamongsalariedemployees(%) 1.3 1.1 1.4 1.5 1.5

Products

CO2savingsover20yearsontheMWproducedandshipped(milliontonnesofCO2) 163 164 143 124 112

Utilisation of resources

Renewableenergy(%) 49 38 37 38 52

Renewableelectricityforownactivities(%) 85 68 66 68 75

Employees

Womenatmanagementlevel(%) 19 17 N/C4) N/C N/C

Non-Danesatmanagementlevel(%) 46 42 N/C N/C N/C

Management system5)

ISO14001(%) 97 100 80 76 75

OHSAS18001(%) 97 98 84 77 63

1) Accountingpoliciesfornon-financialhighlightsfortheGroup,seepage60.Commentsonnon-financialissuesfortheGroup,seepages50-59.2) Tobeabletobetterillustratetheconnectionbetweenphysicalproductionandresourceconsumption,productsarenowcalculatedasMWproducedandshippedinstead ofaspreviouslyMWdelivered.3) Pleasenotethataccountingpolicieshavebeenchangedasfrom2009,seepage101intheannualreport2008.4) Notcalculated(N/C)fortheyear.5) TheproductionfacilitiesinHohhot,InnerMongolia,China,areexpectedcertifiedbytheendoffirsthalf-year2010.

058 Vestasannualreport2009

Principles Commitment systems actions Performance

HUMan RigHts

Principle 1Businessesshouldsupportandrespecttheprotectionofinternationallyproclaimedhumanrights.

Principle 2Businessesmustmakesuretheyarenotcom-plicitinhumanrightsabuses.

Vestasrecogniseseveryhumanbeingasfreeandequalindignityandrightsatthework-place.WearecommittedtohumanrightsandemployeerightsasexpressedintheUniversalDeclarationofHumanRightsandtheIntern-ationallabourOrganizationconventions.

Vestasbelievesthatallemployeesareentitledtoasafeandsecureworkplace.ThereforeVestasiscommittedtocontinuousimprove-mentinoccupationalhealthandsafety.

TheVestasCodeofConductisaglobalsetofprinciplesforcorrectVestasbehaviour.

EthicslineisasystemwhereemployeescanreportonviolationsofVestas'policiesoraskquestionsonethicaldilemmas.

VestasoperatesanoccupationalhealthandsafetymanagementsystemfullycertifiedaccordingtoOHSAS18001.

Vestashasstartedtoharmoniseitseffortsinrelationtoresponsiblesuppliermanagementacrossbusinessunits.

VestashasjoinedtheUNGlobalCompactinitiative.

Vestas'updatedCodeofConducthasbeenmadeavailabletoallemployeesthroughe-learning,informationmaterialin18lan-guages,presentations,etc.

Vestashasre-launcheditswhistleblowersys-tem,underthenameEthicsline.

AgroupoflegalexpertswithinVestashavebeentrainedinVestas'CodeofConduct.

In2009,Vestas'updatedCodeofConducthasbeenmadeavailabletoallemployees.

Theincidenceofindustrialinjuriesperonemil-lionworkinghourswas8.1in2009,adecreaseof48percentrelativeto2008.

FiveunitswerecertifiedaccordingtoOHSAS18001in2009.AllVestasunitswiththeexceptionofHohhot,InnerMongolia,China,arenowcertifiedaccordingtoOHSAS18001.

laBoUR standaRds

Principle 3Businessesshouldupholdthefreedomofasso-ciationandtheeffectiverecognitionoftherighttocollectivebargaining.

Principle 4Businessesshouldupholdtheeliminationofallformsofforcedandcompulsorylabour.

Principle 5Businessesshouldsupporttheeffectiveaboli-tionofchildlabour.

Principle 6Businessesshouldupholdtheeliminationofdiscriminationinrespectofemploymentandoccupation.

Vestasiscommittedtorespectfreedomofassociationandtherighttocollectivebargain-ing.

Usingforcedorchildlabourinanyofouroper-ationsisnotaccepted.

Vestasemphasisestheimportancethatevery-oneistreatedequallywithdignityandrespectregardlessofrace,colour,religion,politicalconviction,gender,age,nationalorigin,sexualorientation,maritalstatusordisability.

TheVestasCodeofConductisaglobalsetofprinciplesforcorrectVestasbehaviour.

EthicslineisasystemwhereemployeescanreportonviolationsofVestas'policiesoraskquestionsonethicaldilemmas.

Vestashasstartedtoharmoniseitseffortsinrelationtoresponsiblesuppliermanagementacrossbusinessunits.

VestashasjoinedtheUNGlobalCompactinitiative.

Vestas'updatedCodeofConducthasbeenmadeavailabletoallemployeesthroughe-learning,informationmaterialin18langua-ges,presentations,etc.

Vestashasre-launcheditswhistleblowersys-tem,underthenameEthicsline.

AgroupoflegalexpertswithinVestashavebeentrainedinVestas'CodeofConduct.

EnviRonMEnt

Principle 7Businessesshouldsupportaprecautionaryapproachtoenvironmentalchallenges.

Principle 8Businessesshouldundertakeinitiativestopro-motegreaterenvironmentalresponsibility.

Principle 9Businessesshouldencouragethedevelop-mentanddiffusionofenvironmentallyfriendlytechnologies.

Vestasiscommittedtodevotingthenecessarycareasregardstodevelopment,manufacture,serviceproceduresanddisposal.Vestasisalsodedicatedtointegratingconsiderationforthesurroundingsintheplanningandperformanceofactivitiesandtointegratingenvironmentalconsiderationsinitsdevelopmentofproductsandprocesses.

Vestasoperatesanenvironmentalmanage-mentsystemfullycertifiedaccordingtoISO14001.Withinsixmonthsofproduction,anewsiteisexpectedtobecertified.lifecycleassessmentsareusedtomapandevaluatethepotentialimpactofthewindtur-bineontheexternalenvironmentthroughoutitslifetime.

Vestaspreparesquarterlyreportstomonitordevelopmentoftargets.

VestasmaintainsaCostofEnergyprogrammetodesignlighterandmoreintelligentturbinestoreducetheamountofmaterialusedperMWhproduced.

InordertoreduceitsCO2emissions,Vestashasadoptedanewcarpolicyandanewbuildingpolicy.

Vestas'targetistohaveashareofrenewableenergyof55percentandashareofrenewableelectricityofatleast90percentin2010.

Seenon-financialhighlightsonpage57.

anti-CoRRUPtion

Principle 10Businessesshouldworkagainstcorruptioninallitsforms,includingextortionandbribery.

Vestastakesaclearstandonbriberyandfacili-tationpayments.EmployeesmustnotengageinbriberyofanykindandVestasdoesnotper-mitfacilitationspayments.

TheVestasCodeofConductisaglobalsetofprinciplesforcorrectVestasbehaviour.

Vestashasasystemwhereemployeesmustreportwhentheyhavebeenaskedfororofferedabriberyorfacilitationpayment.

ThroughEthicslineVestasemployeescanreportonviolationsofVestas'policiesoraskquestionsonethicaldilemmassuchasbriberytheycandoitanonymously.Theycancallinonatoll-freenumberorreport/askquestionsonline.

Vestas'updatedCodeofConducthasbeenmadeavailabletoallemployeesthroughe-learning,informationmaterialin18lan-guages,presentations,etc.

Vestashasre-launcheditswhistleblowersys-tem,underthenameEthicsline.

Atotalof88reportswereregisteredinEthics-linein2009.

gloBal CoMPaCt's tEn PRinCiPlEsTheUNGlobalCompactisastrate-gicpolicyinitiativeforbusinessesthatarecommittedtoaligningtheiroperationsandstrategieswithtenuniversallyacceptedprinciplesintheareasofhumanrights,labourstandards,environmentandanti-corruption.

WiththeparticipationinGlobalCompact,Vestascommitstoreportandpublishitsprogresswithintheseareasatleastonceayear.

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Principles Commitment systems actions Performance

HUMan RigHts

Principle 1Businessesshouldsupportandrespecttheprotectionofinternationallyproclaimedhumanrights.

Principle 2Businessesmustmakesuretheyarenotcom-plicitinhumanrightsabuses.

Vestasrecogniseseveryhumanbeingasfreeandequalindignityandrightsatthework-place.WearecommittedtohumanrightsandemployeerightsasexpressedintheUniversalDeclarationofHumanRightsandtheIntern-ationallabourOrganizationconventions.

Vestasbelievesthatallemployeesareentitledtoasafeandsecureworkplace.ThereforeVestasiscommittedtocontinuousimprove-mentinoccupationalhealthandsafety.

TheVestasCodeofConductisaglobalsetofprinciplesforcorrectVestasbehaviour.

EthicslineisasystemwhereemployeescanreportonviolationsofVestas'policiesoraskquestionsonethicaldilemmas.

VestasoperatesanoccupationalhealthandsafetymanagementsystemfullycertifiedaccordingtoOHSAS18001.

Vestashasstartedtoharmoniseitseffortsinrelationtoresponsiblesuppliermanagementacrossbusinessunits.

VestashasjoinedtheUNGlobalCompactinitiative.

Vestas'updatedCodeofConducthasbeenmadeavailabletoallemployeesthroughe-learning,informationmaterialin18lan-guages,presentations,etc.

Vestashasre-launcheditswhistleblowersys-tem,underthenameEthicsline.

AgroupoflegalexpertswithinVestashavebeentrainedinVestas'CodeofConduct.

In2009,Vestas'updatedCodeofConducthasbeenmadeavailabletoallemployees.

Theincidenceofindustrialinjuriesperonemil-lionworkinghourswas8.1in2009,adecreaseof48percentrelativeto2008.

FiveunitswerecertifiedaccordingtoOHSAS18001in2009.AllVestasunitswiththeexceptionofHohhot,InnerMongolia,China,arenowcertifiedaccordingtoOHSAS18001.

laBoUR standaRds

Principle 3Businessesshouldupholdthefreedomofasso-ciationandtheeffectiverecognitionoftherighttocollectivebargaining.

Principle 4Businessesshouldupholdtheeliminationofallformsofforcedandcompulsorylabour.

Principle 5Businessesshouldsupporttheeffectiveaboli-tionofchildlabour.

Principle 6Businessesshouldupholdtheeliminationofdiscriminationinrespectofemploymentandoccupation.

Vestasiscommittedtorespectfreedomofassociationandtherighttocollectivebargain-ing.

Usingforcedorchildlabourinanyofouroper-ationsisnotaccepted.

Vestasemphasisestheimportancethatevery-oneistreatedequallywithdignityandrespectregardlessofrace,colour,religion,politicalconviction,gender,age,nationalorigin,sexualorientation,maritalstatusordisability.

TheVestasCodeofConductisaglobalsetofprinciplesforcorrectVestasbehaviour.

EthicslineisasystemwhereemployeescanreportonviolationsofVestas'policiesoraskquestionsonethicaldilemmas.

Vestashasstartedtoharmoniseitseffortsinrelationtoresponsiblesuppliermanagementacrossbusinessunits.

VestashasjoinedtheUNGlobalCompactinitiative.

Vestas'updatedCodeofConducthasbeenmadeavailabletoallemployeesthroughe-learning,informationmaterialin18langua-ges,presentations,etc.

Vestashasre-launcheditswhistleblowersys-tem,underthenameEthicsline.

AgroupoflegalexpertswithinVestashavebeentrainedinVestas'CodeofConduct.

EnviRonMEnt

Principle 7Businessesshouldsupportaprecautionaryapproachtoenvironmentalchallenges.

Principle 8Businessesshouldundertakeinitiativestopro-motegreaterenvironmentalresponsibility.

Principle 9Businessesshouldencouragethedevelop-mentanddiffusionofenvironmentallyfriendlytechnologies.

Vestasiscommittedtodevotingthenecessarycareasregardstodevelopment,manufacture,serviceproceduresanddisposal.Vestasisalsodedicatedtointegratingconsiderationforthesurroundingsintheplanningandperformanceofactivitiesandtointegratingenvironmentalconsiderationsinitsdevelopmentofproductsandprocesses.

Vestasoperatesanenvironmentalmanage-mentsystemfullycertifiedaccordingtoISO14001.Withinsixmonthsofproduction,anewsiteisexpectedtobecertified.lifecycleassessmentsareusedtomapandevaluatethepotentialimpactofthewindtur-bineontheexternalenvironmentthroughoutitslifetime.

Vestaspreparesquarterlyreportstomonitordevelopmentoftargets.

VestasmaintainsaCostofEnergyprogrammetodesignlighterandmoreintelligentturbinestoreducetheamountofmaterialusedperMWhproduced.

InordertoreduceitsCO2emissions,Vestashasadoptedanewcarpolicyandanewbuildingpolicy.

Vestas'targetistohaveashareofrenewableenergyof55percentandashareofrenewableelectricityofatleast90percentin2010.

Seenon-financialhighlightsonpage57.

anti-CoRRUPtion

Principle 10Businessesshouldworkagainstcorruptioninallitsforms,includingextortionandbribery.

Vestastakesaclearstandonbriberyandfacili-tationpayments.EmployeesmustnotengageinbriberyofanykindandVestasdoesnotper-mitfacilitationspayments.

TheVestasCodeofConductisaglobalsetofprinciplesforcorrectVestasbehaviour.

Vestashasasystemwhereemployeesmustreportwhentheyhavebeenaskedfororofferedabriberyorfacilitationpayment.

ThroughEthicslineVestasemployeescanreportonviolationsofVestas'policiesoraskquestionsonethicaldilemmassuchasbriberytheycandoitanonymously.Theycancallinonatoll-freenumberorreport/askquestionsonline.

Vestas'updatedCodeofConducthasbeenmadeavailabletoallemployeesthroughe-learning,informationmaterialin18lan-guages,presentations,etc.

Vestashasre-launcheditswhistleblowersys-tem,underthenameEthicsline.

Atotalof88reportswereregisteredinEthics-linein2009.

060 Vestasannualreport2009

aCCoUnting PoliCiEs FoR non-FinanCial HigHligHts FoR tHE gRoUPVestashasselectedanumberofnon-financialkeyfiguresthatarerelevanttounderstandingVestas'development,resultsandfinancialposition.Thesekeyfiguresaremonitoredclosely,andspecifictargetshavebeendefinedforrelevantindicators.

AllVestas'whollyownedcompaniesarecoveredbythereport.ThesamemeasurementandcalculationmethodsareappliedatallVestassites.

safety and healthOccupationalhealth&safetyismeasuredforallactivitiesundertheorganisationalstructure.Industrialinjuriesofallemployeesarestatedonthebasisofregistrationofincidentsthathavecausedmorethanoneday'sabsence.

For2009,injuriesandworkinghoursforexternalsupervisedemployeesarealsoincluded.Theincidenceofinjuriesisdefinedasthenumberofinjuriesperonemillionworkinghours.Thenumberofworkinghoursismeasuredonthebasisofdailytimecardsregisteredinthepayrollsystemforhourly-paidemployeesandprescribedworkinghoursforsalariedemployees.Forexter-nalsupervisedemployees,theinjuriesarereportedbyVestas,andworkinghoursarereportedbythesubcontractor.

Absenceduetoillnessisdefinedashoursabsentduetoillness,exclusiveofabsencecausedbyindustrialinjuries,maternityleaveandchild'sfirstdayofillness.Absenceduetoillnessismeasuredbymeansofregistrationsinthepayrollsystembasedondailytimecards(hourly-paidemployees)andabsencerecords(sala-riedemployees),respectively.

Management systemsPercentagesofVestascertifiedaccordingtoISO14001andOHSAS18001,respectively,isstatedonthebasisofthenumberofemployeesinthecertifieddepartments.

Consumption of resourcesMetalsandotherrawmaterialsarestatedonthebasisofcon-sumptionfrominventoriestomanufacturinginthefirstphaseofproductionandtoservicingofwindturbines,respectively,asrecordedinthecompany'sordinaryregistrationsystems.MetalsincludeonlytheamountofmetalthatisprocessedatVestas.

Consumablesarestatedonthebasisofdecentralisedlistsofquantitiesdeliveredpersiteinthefinancialyear.RelevancehasmainlybeendeterminedonthebasisofVestas'sectorassess-mentofmaterialenvironmentalimpacts,followedbyaselectioninrelationtoquantitiesconsumedcomparedwiththeactivitiescarriedoutatthesites.

Electricity,gasanddistrictheatingaremeasuredonthebasisofquantitiesconsumedaccordingtodirectmeterreadingspersiteincludingrelatedadministration.Consumptionofelectricitycompriseselectricitypurchasedexternallyandconsumptionofproductionfromownwindturbines.Oilforheatingisstatedonthebasisofexternalpurchasesadjustedforinventoriesatthebeginningandattheendoftheperiod.Fuelfortransporthasbeenrecognisedonthebasisofsupplierstatements.Electricityfromrenewableenergysourcesiscalculatedonthebasisofsup-plierstatements.

Renewableenergyisenergygeneratedfromnaturalresources,whichareallnaturallyreplenished–suchaswind,sunlight,waterandgeothermalheat.Nuclearpowerisnotconsideredtobere-newableenergy.

Consumptionofelectricityfromnon-renewablesourcespur-chasedasaresultofnotbeingabletopurchaserenewableelec-tricityatsomelocations,isintheGroupstatementbalancedwithrenewableelectricityproducedbywindpowerplantsownedbyVestasandsoldtothelocalgrid.

Theconsumptionofwaterisstatedasmeasuredconsumptionoffreshwater.Wateroflessqualitythandrinkingwaterispartofthefreshwaterconsumptionandisprimarilyusedforwateringoftheoutdoorareasandprocesswater.Coolingwaterfromstreams,rivers,lakes,etc.thatissolelyusedforcoolingandreleasedtothestreamafterusewithoutfurthercontaminationthanahighertemperature,isnotincluded.

Waste and emissionsWasteincludingwasteforrecyclingisstatedonthebasisofweightslipsreceivedfromthewasterecipientsfordeliverieseffectedintheaccountingperiod,apartfromafewtypesofwasteandnon-significantvolumeswhichareestimatedonthebasisofsubscriptionarrangementandload.

EmissionofCO2iscalculatedonthebasisofdeterminedamountsoffuelforowntransportandthedirectconsumptionofoilandgas,withtheusageofstandardfactorspublishedbytheDanishEnergyAuthority.

MW produced and shippedProducedandshippedMWisstatedastheaccumulatedeffectofwindturbinesthatwereproducedandshippedtothecustomersintheaccountingperiod.

Co2 savings from the produced and shipped MW CO2savingsarecalculatedonthebasisofacapacityfactorof30percentoftheproducedandshippedMW,anexpectedlifetimeof20yearsoftheproducedandshippedMW,andthelatestupdatedstandardfactorfromtheInternationalEnergyAgency(IEA)ofaverageCO2emissionforelectricityintheworld,atpresent507gramsofCO2perkWh.

Breaches of internal control conditionsBreachesofinternalinspectionconditionsarestatedasthecon-ditionsforwhichmeasurementsarerequired,andwheremeas-urementsshowbreachesofstatedconditions.

Environmental accidentsAccidentalreleaseofsubstancethatVestasconsiderstohaveanirreversibleimpactontheenvironment.

Employees and diversityThenumberofemployeesiscalculatedasthenumberofemploy-eeswhohaveadirectcontractwithVestasandpermanentstaffemployedthroughthirdparties.Theaveragenumberofemploy-eesiscalculatedasthenumberofactiveemployeesattheendofamonthdistributedonthe12monthsoftheyear.Employeeinformationisdeterminedonthebasisofextractsfromthecom-pany'sordinaryregistrationsystemswithspecificationofnation-ality,sexandIPElevel(MercersInternationalPositionEvaluation).

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tHE indEPEndEnt aUditoR's statEMEnt ConCERning non-FinanCial HigHligHts FoR 2009 WehavemadeanassessmentofVestasWindSystemsA/S'non-financialkeyfiguresandindicatorsfor2009,statedonpage7,intheannualreportfor2009.

Criteria for the preparation of reporting on non-financial issuesPages7,15-19and50-60oftheannualreportfor2009includetheManagement'sreasonsforchoiceofthenon-financialhigh-lightsrelevantforintegrationintheannualreportpage7.Thenon-financialkeyfiguresandindicatorshavebeenincludedintheannualreportfor2009accordingtotheaccountingpoliciesfornon-financialhighlightsfortheGroupappliedanddescribedonpage60.

Thepreparationofthereportingonnon-financialissuesandnon-financialhighlightsistheresponsibilityoftheCompanyManagement.Ourresponsibilityistoexpressanopiniononthereportingonnon-financialkeyfiguresandindicatorsbasedonourassessment.

Basis of opinionOurworkhasbeenplannedandperformedinaccordancewiththeInternationalStandardonAssuranceEngagements,ISAE3000(otherassurancethanauditorreviewofhistorical,financialinformation)toobtainreasonableassurancethatthedatastatedonpage7havebeencomputedinaccordancewiththecriteriaforthepreparationofreportingonnon-financialhighlights.

Basedonanassessmentofmaterialityandrisk,ourworkhascomprisedaccountingtechnicalanalyses,inquiriesandspot-checksofsystems,dataandunderlyingdocumentation,includingtestthattheguidelinesformeasurementandstatementofdatahavebeenfollowed.Wehaveassessedtheexpediencyoftheinternalrecordingandreportingsystemasbasisforconsistentrecordingandreportingonthenon-financialenvironmentalandoccupationalhealth&safetydata.

opinionInouropinion,thenon-financialkeyfiguresandindicatorsincludedonpage7oftheannualreportfor2009havebeenstatedinaccordancewiththecriteriamentioned.

søren skov larsenStateAuthorised

PublicAccountant

Birgitte MogensenStateAuthorised

PublicAccountant

Copenhagen,10February2010

PricewaterhouseCoopersStatsautoriseretRevisionsaktieselskab

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Consolidated­accounts­064 Incomestatement065 Statementofcomprehensiveincome066 Balancesheet068 Statementofchangesinequity069 Cashflowstatement070 Notestotheconsolidatedaccounts113 legalentities116 Management'sstatement117 Theindependentauditors'report

064 Vestasannualreport2009

mEUR note 2009 2008

Revenue 3,4 6,636 6,035

Costofsales 5,6 (5,195) (4,856)

gross profit 1,441 1,179

Researchanddevelopmentcosts 5,6,7 (92) (119)

Sellinganddistributionexpenses 5,6 (232) (181)

Administrativeexpenses 5,6 (261) (211)

operating profit 856 668

Incomefrominvestmentsinassociates 14 1 0

Financialincome 8 14 66

Financialexpenses 9 (62) (20)

Profit before tax 809 714

Corporationtax 10 (230) (203)

Profit for the year 579 511

Distributedasfollows:

ShareholdersinVestasWindSystemsA/S 579 511

579 511

Earnings per share (EPs) 11

Earningspershare(EUR) 2.94 2.77

Earningspershare(EUR),diluted 2.94 2.76

ConsolidatEd inCoME statEMEnt 1 janUaRy – 31 dECEMBER

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mEUR 2009 2008

Profit for the year 579 511

ExchangerateadjustmentfromconversiontoEUR 2 0

Exchangerateadjustmentsrelatingtoforeignentities 13 (43)

Fairvalueadjustmentsofderivativefinancialinstruments (8) (38)

Fairvalueadjustmentsofderivativefinancialinstrumentstransferredtotheincomestatement(costofsales) 38 (4)

Taxonderivativefinancialinstruments (8) 10

Othercomprehensiveincomeaftertax 37 (75)

total comprehensive income 616 436

Distributedasfollows:

ShareholdersinVestasWindSystemsA/S 616 436

616 436

ConsolidatEd statEMEnt oF CoMPREHEnsivE inCoME 31 dECEMBER

066 Vestasannualreport2009

ConsolidatEd BalanCE sHEEt 31 dECEMBER – assEts

mEUR note 2009 2008

Goodwill 320 320

Completeddevelopmentprojects 99 60

Software 73 62

Developmentprojectsinprogress 320 202

total intangible assets 12 812 644

landandbuildings 661 433

Plantandmachinery 230 159

Otherfixturesandfittings,toolsandequipment 216 167

Property,plantandequipmentinprogress 354 271

total property, plant and equipment 13 1,461 1,030

Investmentsinassociates 14 1 1

Otherreceivables 19 16 25

Deferredtax 15 110 63

total other non-current assets 127 89

total non-current assets 2,400 1,763

Inventories 16 1,663 1,612

Tradereceivables 17 525 938

Constructioncontractsinprogress 18 1,032 482

Otherreceivables 19 234 181

Corporationtax 20 93 49

Investments 0 121

Cashatbankandinhand 28 488 162

total current assets 4,035 3,545

total assets 6,435 5,308

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ConsolidatEd BalanCE sHEEt 31 dECEMBER – EqUity and liaBilitiEs

mEUR note 2009 2008

Sharecapital 21 27 25

Otherreserves (41) (78)

Retainedearnings 3,378 2,008

total equity 3,364 1,955

Deferredtax 15 121 9

Provisions 22 82 85

Pensionobligations 23 2 2

Financialdebts 24 339 14

total non-current liabilities 544 110

Prepaymentsfromcustomers 123 106

Constructioncontractsinprogress 18 598 1,383

Tradepayables 1,062 1,030

Provisions 22 151 178

Financialdebts 24 12 109

Otherliabilities 25 436 395

Corporationtax 20 145 42

total current liabilities 2,527 3,243

total liabilities 3,071 3,353

total equity and liabilities 6,435 5,308

068 Vestasannualreport2009

ConsolidatEd statEMEnt oF CHangEs in EqUity 1 janUaRy – 31 dECEMBER

Otherreserves

mEURShare

capitalTranslation

reserve

Cashflowhedgingreserve Reserves Total

Equity at 1 january 2009 25 (50) (28) 2,008 1,955

Capitalincrease 2 0 0 800 802

Costsofcapitalincrease 0 0 0 (10) (10)

Acquisitionoftreasuryshares 0 0 0 (1) (1)

Sharebasedpayment 0 0 0 2 2

Totalcomprehensiveincomefortheyear 0 15 22 579 616

Equity at 31 december 2009 27 (35) (6) 3,378 3,364

Otherreserves

mEURShare

capitalTranslation

reserve

Cashflowhedgingreserve Reserves Total

Equity at 1 january 2008 25 (7) 4 1,494 1,516

Capitalincrease 0 0 0 0 0

Costsofcapitalincrease 0 0 0 0 0

Acquisitionoftreasuryshares 0 0 0 0 0

Sharebasedpayment 0 0 0 3 3

Totalcomprehensiveincomefortheyear 0 (43) (32) 511 436

Equity at 31 december 2008 25 (50) (28) 2,008 1,955

Refertotheparentcompany'sstatementofchangesinequityonpage123forinformationaboutwhichreservesareavailablefordistribution.Forproposeddistributionofprofit,refertotheparentcompany'sannualaccountsonpage121.

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ConsolidatEd CasH FloW statEMEnt 1 janUaRy – 31 dECEMBER

mEUR note 2009 2008

Profitfortheyear 579 511

Adjustmentsfornon-cashtransactions 26 461 258

Interestreceived,etc. 8 32

Interestpaid,etc. (31) (9)

Corporationtaxpaid (114) (148)

Cashflowfromoperatingactivitiesbeforechangeinworkingcapital 903 644

Changeinworkingcapital 27 (937) (367)

Cash flow from operating activities (34) 277

Purchaseofintangibleassets (227) (169)

Purchaseofproperty,plantandequipment (606) (509)

Purchaseofothernon-currentassets 0 (12)

Disposalofproperty,plantandequipment 15 10

Disposalofothernon-currentassets 10 0

Cash flow from investing activities (808) (680)

Capitalincrease 792 0

Acquisitionoftreasuryshares (1) 0

Repaymentofnon-currentliabilities 0 (91)

Raisingofnon-currentliabilities 284 0

Cash flow from financing activities 1,075 (91)

Change in cash at bank and in hand less current portion of bank debt 233 (494)

Cashatbankandinhandlesscurrentportionofbankdebtat1January 219 763

Exchangerateadjustmentsofcashatbankandinhand 27 (50)

Cash at bank and in hand less current portion of bank debt at 31 december 479 219

Thebalanceisspecifiedasfollows:

Cashatbankandinhandwithoutdisposalrestrictions 468 150

Cashatbankandinhandwithdisposalrestrictions 28 20 12

Investments 0 121

Totalcashatbankandinhand 488 283

Currentportionofbankdebt 24 (9) (64)

479 219

070 Vestasannualreport2009

notEs to tHE ConsolidatEd aCCoUnts

note Page

1 Groupaccountingpolicies................................................................................................................................................................................................................................................................... 071 2 Criticalaccountingjudgementsandestimates..................................................................................................................................................................................................................... 078 3 Segmentinformation............................................................................................................................................................................................................................................................................. 080 4 Revenue.......................................................................................................................................................................................................................................................................................................... 082 5 Amortisation,depreciationandimpairmentlosses............................................................................................................................................................................................................ 082 6 Staffcosts..................................................................................................................................................................................................................................................................................................... 083 7 Researchanddevelopmentcosts.................................................................................................................................................................................................................................................. 083 8 Financialincome....................................................................................................................................................................................................................................................................................... 084 9 Financialexpenses.................................................................................................................................................................................................................................................................................. 08410 Corporationtax.......................................................................................................................................................................................................................................................................................... 08411 Earningspershare(EPS)..................................................................................................................................................................................................................................................................... 08512 Intangibleassets...................................................................................................................................................................................................................................................................................... 08613 Property,plantandequipment......................................................................................................................................................................................................................................................... 08814 Investmentsinassociates.................................................................................................................................................................................................................................................................. 08915 Deferredtax................................................................................................................................................................................................................................................................................................. 08916 Inventories.................................................................................................................................................................................................................................................................................................... 09017 Tradereceivables...................................................................................................................................................................................................................................................................................... 09018 Constructioncontractsinprogress............................................................................................................................................................................................................................................... 09119 Otherreceivables...................................................................................................................................................................................................................................................................................... 09120 Corporationtax.......................................................................................................................................................................................................................................................................................... 09121 Sharecapital................................................................................................................................................................................................................................................................................................ 09222 Provisions...................................................................................................................................................................................................................................................................................................... 09323 Pensionobligations................................................................................................................................................................................................................................................................................. 09524 Financialdebts........................................................................................................................................................................................................................................................................................... 09725 Otherliabilities........................................................................................................................................................................................................................................................................................... 09826 Adjustmentfornon-cashtransactions....................................................................................................................................................................................................................................... 09827 Changeinnetworkingcapital........................................................................................................................................................................................................................................................... 09828 Cashatbankandinhand..................................................................................................................................................................................................................................................................... 09929 FeestoauditorsappointedbytheAnnualGeneralMeeting......................................................................................................................................................................................... 09930 Management'soptionprogrammeandshareholdings.................................................................................................................................................................................................... 09931 Relatedpartytransactions................................................................................................................................................................................................................................................................. 10232 Governmentgrants................................................................................................................................................................................................................................................................................. 10233 Mortgagesandsecurity........................................................................................................................................................................................................................................................................ 10334 Contractualobligations........................................................................................................................................................................................................................................................................ 10335 Contingentliabilities............................................................................................................................................................................................................................................................................... 10436 Derivativefinancialinstruments,riskandcapitalmanagement................................................................................................................................................................................ 10437 Subsequentevents................................................................................................................................................................................................................................................................................. 11138 Newaccountingregulations.............................................................................................................................................................................................................................................................. 112

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notEs to tHE ConsolidatEd aCCoUnts

gRoUP aCCoUnting PoliCiEsTheConsolidatedaccountshavebeenpreparedinaccordancewiththeInternationalFinancialReportingStandards(IFRS)asadoptedbytheEuropeanUnionandincompliancewiththeInternationalFinancialReportingStandards(IFRS)asissuedbytheIASB.

Theparentcompany'sannualaccountshavebeenpreparedinaccord-ancewiththeprovisionsoftheDanishFinancialStatementsActapply-ingtolistedcompanies.

TheannualreporthasbeenpreparedinaccordancewiththeadditionalDanishdisclosurerequirementsforannualreportsoflistedcompanies.ReferenceismadetothedisclosurerequirementsforannualreportsoflistedcompanieslaiddownbytheNASDAQOMXCopenhagen,theDan-ishFinancialStatementsActandtheDanishStatutoryOrderonAdop-tionofIFRSissuedpursuanttotheDanishFinancialStatementsAct.

Basis of preparationTheannualreporthasbeenpreparedunderthehistoricalcostmethod,exceptforthederivativefinancialinstrumentsforhedgingpurposes.

Non-currentassetsandgroupsofassetsheldforsalearemeasuredatthelowerofcarryingamountpriortothereclassificationandfairvaluelesssellingcosts.

Theaccountingpoliciesasdescribedbelowhavebeenappliedconsist-entlyoverthefinancialyearandinrespectofthecomparativefigures.

Theaccountingpoliciesremainunchangedfrom2008exceptfortheimplementationofthenewaccountingstandardsspecifiedbelow.

TheannualreportispresentedinmillionEUR.

implementation of new international Financial Reporting standardsWitheffectfrom1January2009,theVestasGrouphasimplementedamendmentstoIAS1presentationoftheconsolidatedfinancialstate-ments,IAS23borrowingcosts,IAS27consolidatedfinancialstate-ments,IAS32&39financialinstruments,IFRS1first-timeadoptionofIFRS,IFRS7financialinstrumentsdisclosures,IFRS8operatingsegments,IFRIC13customerloyaltyprogrammesandimprovementstoIFRSs(May2008).

Theamendmentsandinterpretationshavenotaffectedrecognitionandmeasurement.ApartfromtheamendmentstoIAS1andtheimplementationofIFRS8,theyhaveneitherresultedtochangesintheGroup'saccountingpoliciesnorchangestothenotedisclosures.

TheamendmentstoIAS1onlyresultedtothechangeintheequitynotebyseparatelydisclosingthestatementofcomprehensiveincome/totalrecognisedincomeandexpenses,immediatelyaftertheincomestatement.Thus,theequitynoteonlyshowstransactionswiththeshareholdersofVestas.

TheimplementationofIFRS8hasresultedtochangesinthedisclosurerequirementsasdescribedbelow,andpresentedinnote3tothecon-solidatedfinancialstatements.

Thenewstandardsandinterpretationsdonotaffectearningspershareanddilutedearningspershare.

Thedescriptionofnewstandardsandinterpretationsthatarenotyeteffectivehasbeenincludedinnote38totheconsolidatedaccounts.

Consolidated accounts and business combinationsTheconsolidatedaccountscompriseVestasWindSystemsA/S(theparentcompany)andtheenterprisesinwhichVestasWindSystemsA/Sdirectlyorindirectlyholdsmorethan50percentofthevotesorotherwiseexercisescontrol(subsidiaries).VestasWindSystemsA/SanditssubsidiariestogetherarereferredtoastheGroup.

Enterprisesthatarenotsubsidiaries,butinwhichtheGroupholdsbe-

tween20percentand50percentofthevotesorotherwiseexercisessignificantinfluenceonoperationalandfinancialmanagement,areclassifiedasassociates.

AnoverviewofGrouplegalentitiesisprovidedonpages113–115.

Theconsolidatedaccountsarepreparedfromthefinancialstatementsoftheparentcompanyandsubsidiariesbycombiningaccountingitemsofauniformnaturewithsubsequenteliminationofintercompanyincomeandexpenses,shareholdings,intercompanybalancesanddivi-dendsaswellasunrealisedprofitsandlossesontransactionsbetweenconsolidatedenterprises.

TheconsolidatedaccountsarebasedonfinancialstatementspreparedundertheaccountingpoliciesoftheVestasGroup.

Onpurchaseofnewenterprises,theacquisitionmethodofaccountingisapplied.Costismeasuredasconsiderationpaidwithadditionofthefairvalueofequityinstrumentsissuedplusexpensesdirectlyattribut-abletotheacquisition.Identifiableassets,liabilitiesandcontingentliabilitiesacquiredorassumeduponabusinesscombinationareinitiallymeasuredatfairvalueatthetimeofacquisition.Anypositivediffer-encesbetweencostandfairvalueoftheGroup'sshareoftheidentifi-ablenetassetsacquiredarerecognisedasgoodwill.

Newlyacquired,soldorwound-upenterprisesarerecognisedinthecon-solidatedincomestatementfromthetimeofacquisitionoruntilthetimeofdisposal.Comparativefiguresarenotrestatedfornewlyacquired,soldorwound-upenterprises.However,comparativefiguresintheincomestatementarerestatedinrespectofdiscontinuedoperations.

Goodwillfromacquiredenterprisesmay,duetochangestothemeas-urementofnetassets,beadjustedforaperiodofuptooneyearfollow-ingthedateofacquisitionwheregoodwillhasbeendeterminedonaprovisionalbasisatfirstrecognition.Subsequently,goodwillisadjustedonlyasaresultofchangesinestimatesofconditionalconsiderationandtherealisationofdeferredtaxassetsofacquiredenterpriseswhichwerenotrecognisedatthetimeofacquisition.

Profitsorlossesondisposalorwindingupofsubsidiariesarecalculatedasthedifferencebetweenthesalessumorproceedsfromwindingupandthecarryingamountofnetassetsatthetimeofsale,includinggoodwillandestimatedexpensestosellorwindup.Profitorlossesarerecognisedintheincomestatement.

Theassets,liabilitiesandtransactionsofsubsidiariesarerecognisedfullyintheconsolidatedaccounts.Minorityinterests'sharesofprofitfortheyearandofequityofsubsidiariesthatarenotfullyownedareincludedintheGroup'sprofitfortheyearandequity,respectively,butareshownseparately.

translation policiesFunctionalcurrencyandpresentationcurrencyAssets,liabilitiesandtransactionsofeachofthereportingentitiesoftheGrouparemeasuredinthecurrencyoftheprimaryeconomicenvir-onmentinwhichtheentityoperates(thefunctionalcurrency).Trans-actionsincurrenciesotherthanthefunctionalcurrencyaretransactionsinforeigncurrencies.ThefunctionalcurrencyoftheparentcompanyisDanishkroner(DKK);however,duetotheGroup'sinternationalrela-tions,theconsolidatedaccountsarepresentedineuro(EUR).

TranslationintopresentationcurrencyThebalancesheetistranslatedintothepresentationcurrencyattheEURrateatthebalancesheetdate.Thetransactiondateratesarebasedonaverageratesfortheindividualmonthstotheextentthatthisdoesnotmateriallydistortthepresentationoftheunderlyingtransaction.

TranslationoftransactionsandamountsTransactionsinforeigncurrenciesareinitiallytranslatedintothefunc-tionalcurrencyattheexchangeratesatthedatesoftransaction.Ex-changeadjustmentsarisingduetodifferencesbetweenthetransaction

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dateratesandtheratesatthedatesofpaymentarerecognisedasfinancialincomeorfinancialexpensesintheincomestatement.Receiv-ables,payablesandothermonetaryitemsinforeigncurrenciesnotsettledatthebalancesheetdatearetranslatedattheexchangeratesatthebalancesheetdate.Exchangeadjustmentsarisingduetodiffer-encesbetweentheratesatthebalancesheetdateandthetransactiondateratesarerecognisedasfinancialincomeorfinancialexpensesintheincomestatement.

TranslationofgroupenterprisesOnrecognitionintheconsolidatedaccountsofforeignenterpriseswithafunctionalcurrencythatdiffersfromthepresentationcurrencyoftheGroup,incomestatementsaretranslatedattransactiondaterates,andbalancesheetitemsaretranslatedattheexchangeratesatthebalancesheetdate.Thetransactiondateratesarebasedonaverageratesfortheindividualmonthstotheextentthatthisdoesnotmateriallydistortthepresentationoftheunderlyingtransaction.Exchangeadjustmentsarisingonthetranslationoftheopeningequityofforeignenterprisesatexchangeratesatthebalancesheetdateandonthetranslationofin-comestatementsfromtransactiondateratestoexchangeratesatthebalancesheetdatearerecogniseddirectlyinequityundertheseparatetranslationreserve.

Exchangeadjustmentsofbalanceswithforeignenterprisesthataretreatedaspartofthetotalnetinvestmentintheenterpriseinquestionarerecogniseddirectlyinequityintheconsolidatedaccounts.Similarly,exchangegainsandlossesonthepartofloansandderivativefinancialinstrumentsenteredintoinordertohedgethenetinvestmentinfor-eignenterpriseswithanotherfunctionalcurrencythanthepresentationcurrencyoftheGroup,whicheffectivelyhedgeagainstcorrespondingexchangegains/lossesonthenetinvestmentintheenterprise,arerecogniseddirectlyinequityunderaseparatetranslationreserveintheconsolidatedaccounts.

Onrecognitionintheconsolidatedaccountsofassociateswithfunc-tionalcurrenciesthatdifferfromthepresentationcurrencyoftheGroup,theshareofresultsfortheyeararetranslatedataverageex-changerates,andthesharesofequityincludinggoodwillaretranslatedattheexchangeratesatthebalancesheetdate.Exchangeadjustmentsarisingonthetranslationoftheshareoftheopeningequityofforeignassociatesatexchangeratesatthebalancesheetdateandonthetranslationoftheshareofresultsfortheyearfromaverageexchangeratestoexchangeratesatthebalancesheetdatearerecogniseddirectlyinequityundertheseparatetranslationreserve.

Ondisposalofforeignentities,infullorinpart,oronrepaymentofbalancestreatedaspartofthenetinvestment,theshareoftheaccu-mulatedexchangeadjustmentsrecogniseddirectlyinandattributabletoequity,isrecognisedintheincomestatementatthesametimeasanyprofitorlossonthedisposal.

derivative financial instrumentsDerivativefinancialinstrumentsarerecognisedandmeasuredinthebalancesheetatfairvalue.Positiveandnegativefairvaluesofderiva-tivefinancialinstrumentsareincludedinotherreceivablesandotherpayables,respectively,andpositiveandnegativevaluesaresetoffonlywheretheenterprisehastherightandintentiontosettleseveralfinan-cialinstrumentsonanetbasis.

Fairvaluesofderivativefinancialinstrumentsarecalculatedonthebasisofmarketdataaswellasrecognisedvaluationmethods.

Changesinthefairvaluesofderivativefinancialinstrumentsthataredesignatedandqualifyasfairvaluehedgesofarecognisedassetorarecognisedliabilityarerecognisedintheincomestatementasareanychangesinthevalueofthehedgedassetorthehedgedliabilityrelatedtothehedgedrisk.

Accordingtotheagreementsenteredintothehedgingoffuturecashflows,exceptforcurrencyhedging,aretreatedasfairvaluehedgesofarecognisedassetorarecognisedliability.

Changesinthefairvaluesofderivativefinancialinstrumentsthataredesignatedandqualifyashedgesofexpectedfuturecashflowsandeffectivelyhedgechangesinthevalueofthehedgeditemarerecog-nisedinequity.Profitsorlossesonsuchhedgingtransactionsaretrans-ferredfromequityonrealisationofthehedgeditemandarerecognisedinthesameentryasthehedgeditem.However,onhedgingofproceedsfromfutureborrowing,profitsorlossesonhedgingtransactionsaretransferredfromequityoverthetermoftheloan.

Changesinthefairvaluesofderivativefinancialinstruments,desig-natedandqualifyashedgesofnetinvestmentsinforeignsubsidiariesorassociatesandeffectivelyhedgeagainstexchangeadjustmentsintheseenterprises,arerecogniseddirectlyinequityunderthecashflowhedgingreserve.

Changesinthefairvaluesofderivativefinancialinstrumentsthatdonotqualifyforhedgeaccountingarerecognisedastheyariseinfinan-cialincomeandexpensesintheincomestatement.

segment informationTheGrouphasadoptedIFRS8whichisrequiredforallannualreportsandinterimfinancialstatementsstarting1January2009orlater.ImplementationofIFRS8hasnotresultedtochangesinVestas'policyinmeasuring/valuingtheamountsincludedinsegmentreporting.How-ever,thecompositionofthereportablesegmentin2009comparedto2008haschangedandthereareadditionalnarrativedisclosures.Themeasureofprofitorloss,revenuesandexpensesincludedinsegmentalreportingarethesameasthoseusedintheconsolidatedaccountsandremainunchangedfrom2008.

ThereportablesegmentsidentifiedmakeupmostoftheGroup'sexternalrevenue,whichissolelyderivedfromthesaleofwindturbinegeneratorsandassociatedserviceactivity.ThereportablesegmentsareanaggregationofoperatingsegmentswithintheVestasGroupasprescribedbyIFRS8.ThereportablesegmentsaredeterminedbasedontheGroup'smanagementstructuresandtheconsequentreportingtotheChiefOperatingDecisionMaker,theExecutiveManagement.Thus,theyaredeterminedbasedonbothgeographicalsegmentsandbusinessunits(productionandsalesbusinessunits)oftheGroup.Theremainingoperatingsegmentsnotincludedintheidentifiedreportablesegmentsareincludedunderallotheroperatingsegments.

Theproductionbusinessunitsareclassifiedasonereportableseg-mentbecausetherevenuesgeneratedbytheseunitsaredrivenbytheGroup'stransferpricingpolicyandareconsistentacrosstheGroup.Secondly,Vestasonlysellsoneproduct-windturbines-andrevenueisrecognisedlargelybasedonthedeliveryofacompletewindturbinenotonthebasisoftheindependentsaleofthethreemainproducts(blades,nacelleandtower)thatmakeupthewindturbine.

Incomeandexpensesincludedinprofitfortheyearareallocatedtotheextentthattheycanbedirectlyorindirectlyattributedtothesegmentsonareliablebasis.Expensesallocatedaseitherdirectlyorindirectlyattributablecomprise:costofsales,researchanddevelopmentcosts,sellinganddistributionexpensesandadministrativeexpenses.

Theincomeandexpensesallocatedasindirectlyattributabletothesegmentsareallocatedbymeansofsharingkeysdeterminedonthebasisoftheutilisationofkeyresourcesinthesegment.

Non-currentsegmentassetscomprisethenon-currentassetsuseddirectlyforsegmentoperations,includingintangibleassets,property,plantandequipmentandinvestmentsinassociates.

Currentsegmentassetscomprisethecurrentassetsuseddirectlyforsegmentoperations,includinginventories,tradereceivables,otherreceivablesandprepayments.

AllothersegmentsprimarilycompriseincomeandexpensesrelatingtotheGroup'sadministrativefunctions.

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Inter-companybalancesprimarilycomprisearms'lengthtransactionsbetweenoperatingsegmentsmakingupthereportablesegments.Thesebalancesareeliminatedtoarriveatthefiguresintheconsoli-datedaccounts.

share-based paymentsThevalueoftheservicesreceivedinexchangeforthegrantingofoptionsismeasuredatthefairvalueoftheoptions.

Equitysettledshareoptionsgrantedtoemployeesaremeasuredatfairvalueatthetimeofgrantingandarerecognisedinstaffexpensesintheincomestatementoverthevestingperiod.Thecounteritemisrecog-niseddirectlyinequity.

Oninitialrecognitionoftheshareoptions,thenumberofoptionsexpectedtovestisestimated.Subsequently,theestimateofthenumberofvestedoptionsisrevisedsothatthetotalrecognisedisbasedontheactualnumberofoptionsvested.

Thefairvalueoftheoptionsgrantedisestimatedusinganoptionpri-cingmodel(Black-Scholes).Indeterminingfairvalue,termsandcondi-tionsrelatingtotheshareoptionsgrantedaretakenintoaccount.

government grantsGovernmentgrantscomprisegrantsforinvestments,researchanddevelopmentprojects,etc.Grantsarerecognisedwhenthereisreason-ablecertaintythattheywillbereceived.

Grantsforinvestmentsandcapitaliseddevelopmentprojectsaresetoffagainstthecostoftheassetstowhichthegrantsrelate.Othergrantsarerecognisedindevelopmentcostsintheincomestatementsoastooffsettheexpensesforwhichtheycompensate.

income statementRevenueRevenuecomprisessaleofwindturbinesandwindpowersystems,after-salesserviceandsaleofspareparts.

Contractstodeliverlargewindpowersystemswithahighdegreeofcustomisationarerecognisedinrevenueasthesystemsarecon-structedbasedonthestageofcompletionoftheindividualcontract(turnkeyandsupply-and-installationprojects).Wheretheprofitfromacontractcannotbeestimatedreliably,revenueisonlyrecognisedequal-lingtheexpensesincurredtotheextentthatitisprobablethattheexpenseswillberecovered.Saleofindividualwindturbinesandsmallwindpowersystemsbasedonstandardsolutions(supply-onlyprojects)aswellassparepartssalesarerecognisedintheincomestatementprovidedthattheriskhasbeentransferredtothebuyerpriortotheyearend,andprovidedthattheincomecanbemeasuredreliablyandisexpectedtobereceived.

Servicesales,comprisingserviceandmaintenanceagreementsaswellasextendedwarrantiesregardingwindturbinesandwindpowersys-temssold,arerecognisedintheincomestatementoverthetermoftheagreementastheagreedservicesareprovided.

CostofsalesCostofsales,includingwarrantycosts,comprisetheexpensesincurredtoachieverevenuefortheyear.Costcomprisesrawmaterials,consum-ables,directlabourcostsandindirectexpensessuchassalaries,rentalandleaseexpensesaswellasdepreciationofproductionfacilities.

Furthermore,provisionsforlossesonconstructioncontractsareincludedincostofsales.

ResearchanddevelopmentcostsResearchanddevelopmentcostscomprisedevelopmentcoststhatdonotqualifyforcapitalisation,aswellasamortisationofandimpairmentlossesoncapitaliseddevelopmentcosts.

SellinganddistributionexpensesSellinganddistributionexpensescompriseexpensesincurredforthesaleanddistributionofproductssoldduringtheyearaswellasforsalescampaigns,etc.carriedoutduringtheyear.Alsoincludedare,expensesrelatingtosalesstaff,advertisingandexhibitionsanddepre-ciationarerecognised.

AdministrativeexpensesAdministrativeexpensescompriseexpensesincurredduringtheyearformanagementandadministrationoftheGroup,includingexpensesforadministrativestaff,Management,officepremises,officeexpensesanddepreciation.

IncomefrominvestmentsinassociatesTheproportionateshareoftheresultsofassociatesafterminorityinter-estsandtaxandaftereliminationoftheproportionateshareofintercom-panyprofits/lossesisrecognisedintheconsolidatedincomestatement.

FinancialincomeandexpensesFinancialincomeandexpensescompriseinterest,exchangegainsandlossesandimpairmentlossesonsecurities,debtandforeigncurrencytransactions,amortisationoffinancialassetsandliabilities,includingfinanceleaseobligations,aswellasextrapaymentsandrepaymentsundertheon-accounttaxationscheme.

Borrowingcostsrelatedtoconstructionofqualifyingassetsarerecog-nisedaspartoftheassets'costprice.

CorporationtaxTaxfortheyearconsistsofcurrenttaxanddeferredtaxfortheyear.Thetaxattributabletotheprofitfortheyearisrecognisedintheincomestatement,whereasthetaxattributabletoequitytransactionsisrecog-niseddirectlyinequity.

TotheextentthattheVestasGroupachievesanytaxallowanceinthecalculationofthetaxableincomeinDenmarkorabroadasaresultofshare-basedpaymentschemes,thetaxeffectoftheschemesisrecog-nisedincurrenttaxfortheyear.However,wherethetotaltaxallowanceexceedsthetotalcostoftheschemeforaccountingpurposes,thetaxeffectoftheexcessallowanceisrecogniseddirectlyinequity.

Balance sheetIntangibleassetsGoodwillGoodwillisinitiallyrecognisedinthebalancesheetatcost.Subse-quently,goodwillismeasuredatcostlessaccumulatedimpairmentlosses.Goodwillisnotamortised.

ThecarryingamountofgoodwillisallocatedtotheGroup'scash-generatingunits.Identificationofcash-generatingunitsisbasedonmanagementstructureandinternalfinancialmanagement.Manage-mentassessesthatthesmallestcash-generatingunitstowhichthecarryingamountofgoodwillcanbeallocatedaretheGroup'sgeo-graphicalsegments,Europe,AmericasandAsia/Pacific.

Thecarryingamountofgoodwillistestedatleastannuallyforimpair-ment,togetherwiththeothernon-currentassetsofthecash-gener-atingunittowhichgoodwillhasbeenallocated,andiftherecoverableamountislowerthanthecarryingamount,goodwilliswrittendowntoitslowerrecoverableamountintheincomestatement.

Therecoverableamountisusuallycalculatedasthenetpresentvalueofexpectedfuturenetcashflowsfromtheenterpriseortheactivity(cash-generatingunit)towhichthegoodwillhasbeenallocated.Alter-natively,therecoverableamountiscalculatedasfairvaluelesscoststosell.Impairmentlossesongoodwillarerecognisedinaseparatelineintheincomestatement.

DevelopmentprojectsandsoftwareDevelopmentprojectsthatareclearlydefinedandidentifiableandinrespectofwhichtechnicalfeasibility,sufficientresourcesandapoten-

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tialfuturemarketorapplicationintheenterprisecanbedemonstrated,andwhereitistheintentiontomanufacture,marketorusetheproject,arerecognisedasintangibleassets.Thisappliesifcostcanbemeas-uredreliablyandsufficientcertaintyexiststhatfutureearningsorthenetsellingpricecancovercostofsales,sellinganddistributionandadministrativeexpensesaswellasresearchanddevelopmentcosts.Otherdevelopmentcostsarerecognisedintheincomestatementasincurred.

Recogniseddevelopmentcostsaremeasuredatcostlessaccumulatedamortisationandimpairmentlosses.Developmentcostscomprisesalaries,amortisationandotherexpensesattributabletotheGroup'sdevelopmentactivities.

Followingcompletionofthedevelopmentwork,developmentprojectsareamortisedonastraight-linebasisovertheestimatedusefullife.Theamortisationperiodisthreetofiveyears.Thebasisofamortisationiscalculatednetofanyimpairmentlosses.

Thecarryingamountofdevelopmentprojectsinprogressistestedforimpairmentatleastannuallyandwherethecarryingamountexceedsthenetpresentvalueofthefuturenetcashflowsexpectedtobegener-atedbythedevelopmentproject,theprojectiswrittendowntoitsrecoverableamountintheincomestatement.

Patentsandlicencesincludedindevelopmentprojectsaremeasuredatcostlessaccumulatedamortisationandimpairmentlosses.Patentsandlicencesareamortisedoverthepatentperiodortermofagree-ment,thelifeofthedevelopmentprojectortheestimatedusefullife,whicheverisshorter.Thebasisofamortisationiscalculatednetofanyimpairmentlosses.

Softwareismeasuredatcostlessaccumulatedamortisationandimpairmentlosses.Costincludesbothdirectinternalandexternalex-penses.Softwareisamortisedonastraight-linebasisoverfiveyears.Thebasisofamortisationiscalculatednetofanyimpairmentlosses.

Borrowingcoststhataredirectlyattributabletotheacquisition,con-structionorproductionofaqualifyingassetformpartofthecostofthatasset.Allotherborrowingcostsarerecognisedasexpensesinthefinancialyearinwhichtheyareincurred.Aqualifyingassetisanassetthatnecessarilytakesasubstantialperiod,morethanthreemonths,oftimetogetreadyforitsintendeduseorsale.

Intangibleassetswithanindefiniteusefullifeare,however,notamort-ised,butaretestedannuallyforimpairment.

Property,plantandequipmentlandandbuildings,plantandmachineryaswellasotherfixturesandfittings,toolsandequipmentaremeasuredatcostlessaccumulateddepreciationandimpairmentlosses.

Costcomprisesthecostofacquisitionandexpensesdirectlyrelatedtotheacquisitionupuntilthetimewhentheassetisreadyforuse.Inthecaseofassetsofownconstruction,costcomprisesdirectandindirectexpensesformaterials,components,sub-suppliersandlabour.Estimatedexpensesfordismantlinganddisposingoftheassetandforre-establishmentareaddedtocosttotheextentthattheyarerecognisedasaprovision.Whereindividualcomponentsofanitemofproperty,plantandequipmenthavedifferentusefullives,thecostoftheitemisbrokendownintoseparatecomponentswhicharedepre-ciatedseparately.

Thecostofassetsheldunderfinanceleasesiscalculatedatthelowerofthefairvalueoftheleasedassetandthenetpresentvalueofthefutureminimumleasepaymentscomputedbyapplyingtheinterestrateimplicitintheleaseoranapproximatedvaluethereofasthedis-countrate.

Subsequentexpenses,e.g.inconnectionwiththereplacementofcom-ponentsofanitemofproperty,plantandequipment,arerecognisedin

thecarryingamountoftheassetinquestionwhenitisprobablethattheexpensesincurredwillresultinfutureeconomicbenefitstotheGroup.Thecarryingamountofthereplacedcomponentsisderecog-nisedinthebalancesheetandrecognisedintheincomestatement.Allotherexpensesincurredforordinaryrepairsandmaintenancearerecognisedintheincomestatementasincurred.

Borrowingcoststhataredirectlyattributabletotheacquisition,con-structionorproductionofaqualifyingassetformpartofthecostofthatasset.Allotherborrowingcostsarerecognisedasexpensesinthefinancialyearinwhichtheyareincurred.Aqualifyingassetisanassetthatnecessarilytakesasubstantialperiod,morethanthreemonths,oftimetogetreadyforitsintendeduseorsale.

Depreciationiscalculatedonastraight-linebasisovertheexpectedusefullivesoftheassets,whichare:

Buildings,includinginstallations...........................................................25–40yearsPlantandmachinery......................................................................................... 3–10yearsPower-operatedtoolsofownconstructionandnewlymanufacturedtestandexhibitionturbines...........................................3–5yearsOtherfixturesandfittings,toolsandequipment...............................3–5years

landisnotdepreciated.

Thebasisofdepreciationiscalculatedtakingintoaccounttheresidualvalueoftheassetlessanyimpairmentlosses.Theresidualvalueisdeterminedatthetimeofacquisitionandisreassessedannually.Wheretheresidualvalueexceedsthecarryingamountoftheasset,depreci-ationisdiscontinued.

Ifthedepreciationperiodortheresidualvaluehaschanged,theeffectondepreciationisrecognisedprospectivelyasachangeofaccountingestimate.

Depreciationisrecognisedintheincomestatementascostofsales,researchanddevelopmentcosts,sellinganddistributionexpensesaswellasadministrativeexpensestotheextentthatdepreciationisnotincludedinthecostofassetsofownconstruction.

leasesForaccountingpurposes,leaseobligationsareclassifiedaseitherfinanceoroperatingleaseobligations.

Aleaseisclassifiedasafinanceleasewhenittransferssubstantiallyallrisksandrewardsoftheleasedassetasiftheassethadbeenowned.Otherleasesareclassifiedasoperatingleases.

Financeleaseassetsarecapitalisedunderproperty,plantandequip-mentandaredepreciatedovertheirexpectedusefullivesinaccord-ancewiththeperiodslistedabove.Thecorrespondingfinanceleaseobligationsarerecognisedinliabilities.Operatingleaseexpensesarerecognisedonastraight-linebasisintheincomestatementovertheleaseterm.

ImpairmentofassetsGoodwillandintangibleassetswithindefiniteusefullivesaretestedannuallyforimpairment,initiallybeforetheendoftheyearofacquisi-tion.Similarly,developmentprojectsinprogressaretestedannuallyforimpairment.

Thecarryingamountofgoodwillistestedforimpairmenttogetherwiththeothernon-currentassetsofthecash-generatingunittowhichgood-willhasbeenallocated,andiftherecoverableamountislowerthanthecarryingamount,goodwilliswrittendowntoitslowerrecoverableamountintheincomestatement.Impairmentlossesongoodwillarerecognisedinaseparatelineintheincomestatement.

Deferredtaxassetsrelatingtotaxlosscarry-forwardsarereviewedonanannualbasisandareonlyrecognisedwhenitisprobablethattheywillbeutilisedinfutureperiods.

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Thecarryingamountsofothernon-currentassetsarereviewedonanannualbasistodeterminewhetherthereisanyindicationofimpair-ment.Ifso,therecoverableamountoftheassetiscalculated.Therecoverableamountisthehigherofthefairvalueoftheassetlessesti-matedcoststosellandvalueinuse.Valueinuseiscalculatedasthenetpresentvalueofexpectedfuturenetcashflowsfromtheassetorthecash-generatingunittowhichtheassethasbeenallocated.

Anyimpairmentlossisrecognisedwherethecarryingamountofanassetoracash-generatingunit,respectively,exceedstherecoverableamountoftheassetorthecash-generatingunit.Impairmentlossesarerecognisedintheincomestatementincostofsales,researchanddevelopmentcosts,sellinganddistributionexpensesandadministra-tiveexpenses,respectively.Impairmentlossesongoodwillarepre-sentedinaseparatelineintheincomestatement.

Impairmentlossesongoodwillarenotreversed.Impairmentlossesonotherassetsarereversedonlytotheextentofchangesintheassump-tionsandestimatesunderlyingtheimpairmentcalculation.Impairmentlossesarereversedonlytotheextentthatthenewcarryingamountoftheassetdoesnotexceedthecarryingamountoftheassetafterdepreciation/amortisationhadtheassetnotbeenimpaired.

InvestmentsinassociatesInvestmentsinassociatesaremeasuredinthebalancesheetattheproportionateshareofthenetassetvalueoftheassociatescalculatedundertheGroup'saccountingpolicieswithdeductionoradditionofaproportionateshareofunrealisedintercompanyprofitsandlossesandwithadditionofthecarryingamountofgoodwill.

AssociateswithnegativenetassetvaluesaremeasuredatEUR0.AnylegalorconstructiveobligationoftheGrouptocoverthenegativebal-anceoftheassociateisrecognisedinprovisions.

Receivablesfromassociatesaremeasuredatamortisedcost.Provi-sionsaremadeforbaddebts.

InventoriesInventoriesaremeasuredatthelowerofcostusingtheweightedaver-agemethodandnetrealisablevalue(NRV).

Thecostofgoodsforresale,duties,rawmaterialsandconsumablescomprisesdirectcostsandtransportationexpenses.

Thecostofworkinprogresscomprisesthecostofrawmaterials,consumables,directlabourandindirectproductioncosts.Indirectproductioncostscomprisethecostofmaterialsandlabouraswellasmaintenanceanddepreciationofthemachinery,factorybuildingsandequipmentusedinthemanufacturingprocesstogetherwithcostsoffactoryadministrationandmanagement.

TheNRVofinventoriesismeasuredatsalespricelesscostsofcomple-tionandsellingcostsincurred.NRVisdeterminedtakingintoaccountmarketability,obsolescenceanddevelopmentintheexpectedsellingprice.

TradereceivablesTradereceivablesandotherreceivablesaremeasuredatamortisedcost.Provisionsaremadeforbaddebts.

Prepaymentsrecognisedasassetscompriseprepaidexpensescon-cerningsubsequentfinancialyearsandaremeasuredatcost.

ConstructioncontractsinprogressConstructioncontractsinprogresscomprisesagreementstodeliverlargewindpowersystemswithahighdegreeofcustomisation(turnkeyandsupply-and-installationprojects).

Constructioncontractsinprogressaremeasuredatthesellingpriceoftheworkperformedbasedonthestageofcompletionlessinterimbill-

ingandexpectedlosses.Constructioncontractsarecharacterisedbythewindpowersystemsdeliveredbeingcustomisedtoahighdegree.Thestageofcompletionismeasuredbytheproportionthatthecon-tractexpensesincurredtodatebeartotheestimatedtotalcontractexpenses.Whereitisprobablethattotalcontractexpenseswillexceedtotalrevenuesfromacontract,theexpectedlossisrecognisedimme-diatelyasanexpenseintheincomestatement.

Thevalueofself-constructedcomponentsisrecognisedin”Construc-tioncontractsinprogress”upondeliveryofthecomponentstothespe-cificwindpowersystemsconstructionsite.

Whereitisprobablethatthetotalexpensesofaconstructioncontractinprogresswillexceedtotalrevenuesfromthecontract,theexpectedlossforconstructioncontractsinprogressisrecognisedimmediatelyasanexpenseandanobligation.

Prepaymentsfromcustomersarerecognisedasliabilities.

Aconstructioncontractinprogressforwhichthesellingpriceoftheworkperformedexceedsinterimbillingsandexpectedlossesisrecognisedasanasset.Constructioncontractsinprogressforwhichinterimbillingsandexpectedlossesexceedthesellingpricearerecognisedasaliability.

Expensesrelatingtosalesworkandthesecuringofcontractsarerecognisedintheincomestatementasincurred.

InvestmentsSharesandbondsincludedintheGroup'stradingportfolioarerecog-nisedundercurrentassetsatthetradedateandaremeasuredatfairvalue,inlinewiththeGroup'sinvestmentpolicies,correspondingtothemarketpriceforquotedsecurities.Changesinfairvaluearerecognisedintheincomestatementasfinancialincomeorfinancialexpense.

EquityTreasurysharesPurchaseandsalessumsaswellasdividendsrelatingtotreasurysharesarerecogniseddirectlyinretainedearningsinequity.Areduc-tionofcapitalbycancellationoftreasurysharesreducesthesharecapitalbyanamountequaltothenominalvalueoftheshares.

ProceedsfromthesaleoftreasurysharesandtheissuingofnewsharesinVestasWindSystemsA/Srelatingtotheexerciseofshareoptionsoremployeesharesarerecogniseddirectlyinequity.

DividendAproposeddividendisrecognisedasaliabilityatthetimeofadoptionattheAnnualGeneralMeeting(declarationdate).Thedividenddistribu-tionproposedfortheyearisdisclosedasaseparateequityitem.

Interimdividendisrecognisedasaliabilityatthetimeofresolution.

TranslationreserveThetranslationreserveintheconsolidatedaccountscomprisesex-changeadjustmentsarisingonthetranslationofthefinancialstate-mentsofforeignenterprisesfromtheirfunctionalcurrenciesintothepresentationcurrencyoftheGroup(EUR).

Uponfullorpartrealisationofthenetinvestment,exchangeadjust-mentsarerecognisedintheincomestatement.

CashflowhedgingreserveThecashflowhedgingreserveintheconsolidatedaccountscomprisesgainsandlossesonfairvalueadjustmentsofforwardexchangecon-tractsconcerningfuturetransactionsaswellashedginginconnectionwithcommodities.

Thecashflowhedgingreservealsoincludesfairvalueadjustmentsofinterestrateswaps,outstandingatthebalancesheetdate,enteredintotohedgeagainsttheinterestraterisksonloanswithfloatinginterestrates.

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>> CorporationtaxanddeferredtaxCurrenttaxliabilitiesandreceivablesarerecognisedinthebalancesheetattheamountscalculatedonthetaxableincomefortheyearadjustedfortaxontaxableincomesforprioryearsandfortaxespaidonaccount.

Deferredtaxismeasuredusingthebalancesheetliabilitymethodinrespectofalltemporarydifferencesbetweenthecarryingamountandthetaxbaseofassetsandliabilities.Deferredtaxis,however,notrecognisedinrespectoftemporarydifferencesconcerninggoodwillnotdeductiblefortaxpurposes,officepremisesandotheritems–apartfrombusinessacquisitions–wheretemporarydifferenceshavearisenatthetimeofacquisitionwithoutaffectingtheprofitfortheyearorthetaxableincome.Incaseswherethecomputationofthetaxbasemaybemadeaccordingtodifferenttaxrules,deferredtaxismeasuredonthebasisofManagement'sintendeduseoftheassetandsettlementoftheliability,respectively.

Deferredtaxassets,includingthetaxbaseoftaxlosscarry-forwards,arerecognisedinothernon-currentassetsatthevalueatwhichtheassetisexpectedtoberealised,eitherbyeliminationoftaxonfutureearningsorbyset-offagainstdeferredtaxliabilitieswithinthesamelegaltaxentityandjurisdiction.

Adjustmentaremadetodeferredtaxtotakeaccountoftheeliminationofunrealisedintercompanyprofitsandlosses.

Deferredtaxismeasuredonthebasisofthetaxrulesandtaxratesoftherespectivecountriesthatwillbeeffectivewhenthedeferredtaxisexpectedtocrystalliseascurrenttaxbasedonthelegislationatthebalancesheetdate.Changestodeferredtaxduetochangestotaxratesarerecognisedintheincomestatementexceptforitemsrecog-niseddirectlyinequity.

ProvisionsProvisionsarerecognisedwhen-inconsequenceofaneventthathasoccurredbeforeoronthebalancesheetdate–thecompanyhasalegalorconstructiveobligationanditisprobablethattherewillbeanoutflowoftheGroup'sfinancialresourcestosettletheobligation.

ProvisionsaremeasuredatManagement'sbestestimateoftheex-pensesrequiredtosettletheobligation.Discountingisappliedwhererelevant.

Warrantyprovisionsarerecognisedsystematicallyandcomprisewarrantyobligationsmadeinrespectofdeliveredwindturbinesandwindpowersystemsbasedonexperience.Atthestartofthewarrantyperiod,calculatedprovisionsaremadeforeachtypeofwindturbineandarereducedoverthewarrantyperiodaswarrantycostsarein-curred.Subsequently,periodicreviewsareperformedbasedonanover-allassessmentoftheneedforprovisions.

Restructuringcostsarerecognisedasliabilitieswhenadetailed,formalrestructuringplanhasbeenannouncedtothoseaffectedbynolaterthanthebalancesheetdate.Onacquisitionofenterprises,restruc-turingprovisionsintheacquiredenterprisearerecognisedingoodwillonlywherearestructuringobligationrelatingtotheacquiredenterpriseexistsatthetimeofacquisition.

Aprovisionforloss-makingcontractsismadewheretheexpectedbenefitstotheGroupfromthecontractarelowerthantheunavoid-ablecostsofmeetingobligationsunderthecontract(loss-makingcontracts).Expectedlossesonconstructioncontractsinprogressare,however,recognisedinconstructioncontractsinprogress.

PensionobligationsObligationsrelatingtodefinedcontributionplanswheretheGroupcon-tinuouslymakesfixedpensioncontributionstoindependentpensionfundsarerecognisedintheincomestatementintheperiodtowhichtheyrelate,andanycontributionsoutstandingarerecognisedinthebalancesheetinotherpayables.

Fordefinedbenefitplans,anannualactuarialcalculationismadeofthenetpresentvalueofthefuturebenefitsunderthedefinedbenefitplan.Netpresentvalueiscalculatedbasedonassumptionsofthefuturedevelopmentine.g.salarylevel,interestrates,inflationandmortality.Thenetpresentvalueiscalculatedonlyforbenefitsearnedbyemploy-eesfromtheiremploymenttodatewiththeGroup.Theactuariallycalculatednetpresentvaluelessthefairvalueofanyplanassetsisrec-ognisedinthebalancesheetinpensionobligationsinaccordancewiththecorridormethod.

Intheincomestatement,thepensionexpensefortheyearisrecognisedbasedontheactuarialestimatesandfinancialexpectationsatthebe-ginningoftheyear.Furthermore,ashareoftheaccumulatedactuarialgainsorlossesatthebeginningofthefinancialyearisrecognisedifitexceedsthehigherof10percentofthepensionobligationsand10percentofthefairvalueofthepensionassets.Theamountisrecognisedintheincomestatementovertheemployees'estimatedaverageremain-ingperiodofemploymentwiththeGroup.Thenon-recognisedpartofactuarialgains/lossesisdisclosedinthenotes.UponthechangetoIFRS,accumulatedactuarialgainsandlosseswerefullyrecognisedintheopeningbalancesheetat1January2005.

Intheeventofchangesinbenefitspayableforemployees'pastser-vicestotheGroup,achangeismadetotheactuariallycalculatednetpresentvalue,whichisclassifiedaspastservicecost.Pastservicecostischargedtotheincomestatementimmediatelyiftheemployeeshavealreadyearnedtherighttothechangedbenefit.Otherwise,pastservicecostisrecognisedintheincomestatementovertheperiodinwhichtheemployeesearntherighttothechangedbenefit.

Whereapensionplanconstitutesanetasset,theassetisrecognisedonlytotheextentthatitoffsetsnon-recognisedactuariallosses,futurerepaymentsfromtheplan,orifitwillleadtoareductioninfuturecontri-butionsundertheplan.

Otherlong-termstaffbenefitsaresimilarlyrecognisedbyusinganactuarialcalculation,butwithoutapplyingthecorridormethod.Accord-ingly,allactuarialgainsandlossesarerecognisedimmediatelyintheincomestatement.Otherlong-termstaffobligationsincludeanniversarybonuses.

Financialdebtsloansfromcreditinstitutions,etc.arerecognisedinitiallyatthefairvalueoftheproceedsreceivednetoftransactionexpensesincurred.Subsequently,theloansaremeasuredatamortisedcostusingtheeffec-tiveinterestmethod.Accordingly,thedifferencebetweentheproceedsandthenominalvalueisrecognisedinfinancialexpensesintheincomestatementovertheloanperiod.

Financialdebtsalsoincludethecapitalisedremainingleaseobligationsonfinanceleasesmeasuredatamortisedcost.

PrepaymentsfromcustomersPrepaymentsfromcustomersrecognisedinliabilitiesaremeasuredatcostandcompriseprepaymentsreceivedforwindturbinesorwindpowersystemsorderedbutnotyetdeliveredandserviceprepaymentsreceivedinrespectofwindturbinesandwindpowersystemsdelivered.

OtherdebtOtherdebtsaremeasuredatamortisedcost.

Deferredincomeismeasuredatcostandcomprisespaymentsreceivedinrespectofincomeinsubsequentyears.

Cash flow statementThecashflowstatementshowstheGroup'scashflowsfortheyear,brokendownbyoperating,investingandfinancingactivities,changesfortheyearincashandcashequivalentsaswellastheGroup'scashandcashequivalentsatthebeginningandendoftheyear.

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Financial ratiosEBITmargin:Profit/lossbeforeincomefromassociates,financialincomeandexpensesandtaxasapercentageofrevenue.

EBITDAmargin:Profit/lossbeforefinancialincomeandexpenses,depreciationandamortisation,incomefromassociates,financialincomeandexpensesandtaxasapercentageofrevenue.

Gearing(%):Interest-bearingliabilitiesatyearenddividedbyequityatyear-end.

Grossmargin(%):Grossprofit/lossasapercentageofrevenue.

Returnonequity(%):Profit/lossaftertaxfortheyeardividedbyaverageequity.

Returnoninvestedcapital(ROIC)(%):Operatingprofit/lossaftertax(effectivetaxrate)asapercentageofaverageproperty,plantandequipmentandintangibleassets,inventoriesandreceivableslessnon-interestbearingdebtincludingprovisions.

Solvencyratio(%):Equityatyearenddividedbytotalassets.

share ratiosBookvaluepershare:Equityatyearenddividedbythenumberofsharesatyear-end.

Cashflowfromoperatingactivitiespershare:Cashflowsfromoperatingactivitiesdividedbyaveragenumberofshares.

Dividendpershare:Dividendpercentagemultipliedbythenominalvalueoftheshare.

Earningspershare(EPS):Profit/lossfortheyeardividedbytheaveragenumberofsharesincirculation.

Payoutratio:Totaldividenddistributiondividedbyprofit/lossfortheyear.

P/Eratio:TheofficialclosingpriceontheNASDAQOMXCopenhagendividedbyearningspersharefortheyear.

Price/bookvalue:TheofficialclosingpriceontheNASDAQOMXCopenhagendividedbyyear-endbookvaluepershare.

terminology used in accounting policiesIFRS:InternationalFinancialReportingStandards

IAS:InternationalAccountingStandards

IASB:InternationalAccountingStandardsBoard

IFRIC/SIC:InternationalFinancialReportingInterpretationsCommittee/StandingInterpretationsCommittee

Cashflowsrelatingtoacquiredenterprisesarerecognisedfromthedateofacquisition.Cashflowsrelatingtoenterprisesdisposedofarerecogniseduntilthedateofdisposal.

CashflowsfromoperatingactivitiesCashflowsfromoperatingactivitiesarecalculatedasthenetprofit/lossfortheyearadjustedfornon-cashoperatingitemssuchasdepre-ciation,amortisationandimpairmentlosses,provisionsandchangesinworkingcapital,interestreceivedandpaidandcorporationtaxpaid.Workingcapitalcomprisescurrentassetslessshort-termdebt,whichdoesnotincludecurrentbankloans.

CashflowsfrominvestingactivitiesCashflowsfrominvestingactivitiescomprisecashflowsfrombusinessacquisitionsandsalesandfromacquisitionsanddisposalsofintan-gibleassets,property,plantandequipmentaswellasothernon-currentassets.Thecashfloweffectofbusinessacquisitionsandsalesisshownseparately.

Theestablishmentoffinanceleasesaretreatedasnon-cashtrans-actions.

CashflowsfromfinancingactivitiesCashflowsfromfinancingactivitiescomprisechangestotheamountorcompositionoftheGroup'ssharecapitalandrelatedexpensesaswellastheraisingofloans,repaymentofinterest-bearingdebt,acquisitionofsharesfortreasuryandsaleoftreasurysharestogetherwithdistri-butionofdividendstoshareholders.

Cashflowsfromfinanceleaseassetsarerecognisedasinterestpay-mentsandrepaymentsofdebts.

CashatbankandinhandCashatbankandinhandcomprisecashatbankandinhandandcur-rentbankdebt.

AssetsandshorttermdebtsthatareincludedascashathandandinbankinthecashflowstatementarethoseincludedintheGroup'scashmanagement.

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2 CRitiCal aCCoUnting jUdgEMEnts and EstiMatEsWhenpreparingtheannualreportoftheVestasGroup,ManagementmakesanumberofaccountingestimatesandassumptionswhichformthebasisofrecognitionandmeasurementoftheGroup'sassetsandliabilities.Themostsignificantaccountingestimatesandjudgementsaredescribedbelow.TheGroup'saccountingpoliciesaredescribedindetailinnote1totheconsolidatedaccounts.

Critical judgementsUseofpercentage-of-completionmethodManagementperformscriticalaccountingestimatesinconnectionwithincome-recognition.Providedthatcertaincriteriainrespectofprojectcomplexity,etc.aremet,revenuefromprojectsinprogressisrecog-nisedunderthepercentage-of-completionmethodcorrespondingtothesellingpriceoftheworkperformedbasedonthestageofcomple-tion(turnkeyandsupply-and-installationprojects).Whereprojectsdonotqualifyforrecognitionunderthepercentage-of-completionmethod,totalrevenueisnotrecogniseduntilthepointintimewhentheriskistransferredtothebuyer(supply-onlyprojects).

Delays,etc.mayresultinmaterialtimingdeviationsintheGroup'srev-enuerecognition,andthusearnings,comparedtoexpectations.

Critical estimatesThecalculationofthecarryingamountsofcertainassetsandliabilitiesrequiresjudgements,estimatesandassumptionsrelatingtofutureevents.

TheestimatesandassumptionsmadearebasedonexperienceandotherfactorsthatManagementconsidersreasonableinthecircum-stances,butthatareinherentlyuncertainandunpredictable.Theassumptionsmaybeincompleteorinaccurateandunexpectedeventsorcircumstances,mayarise.Furthermore,thecompanyissubjecttorisksanduncertaintieswhichmayresultinactualamountsdeviatingfromtheseestimates.SpecialrisksoftheVestasGrouphavebeendescribedonpage21oftheManagementreport,andintheindividualnotestotheconsolidatedaccounts.

Itmaybenecessarytochangeestimatesmadepreviouslyduetochangesintheassumptionsonwhichthepreviousestimateswerebasedorduetonewknowledgeorsubsequentevents.

WarrantyprovisionsTheproductwarranties,whichinthegreatmajorityofcasescovercom-ponentdefects,functionalerrorsandanyfinanciallossessufferedbythecustomerinconnectionwithunplannedsuspensionofoperations,areusuallygrantedforatwo-yearperiodfromdeliveryoftheturbine.Incertaincases,awarrantyofuptofiveyearsisgranted.Forthecus-tomer,thespecificwarrantyperiodandthespecificwarrantytermsarepartofthebasisoftheindividualcontract.

Warrantyprovisionsincludeonlystandardwarranty,whereasservicespurchasedinadditiontothestandardwarrantyareincludedinprepay-mentsfromcustomers.

Inadditiontotheabove,provisionsaremadeforupgradesofturbinessoldduetotypefaults,etc.whereVestashasawarrantyobligationatthedateofprovision.Suchprovisionswillalsoincludeturbinessoldinprioryears,butwheretypefaults,etc.areidentifiedlater.Moreover,itshouldbeemphasisedthatthecomplexityofsomeofthetypefaults,etc.identifiedmayleadtoadjustmentsofpreviousestimates,upwardsaswellasdownwards,inthelightoffactualinformationaboutpopula-tionsize,costsofrepairandthetimingofsuchrepair.

Itisestimatedthat30–35percentofthewarrantyprovisionsmadefortheyearrelatetoadjustmentsofestimatesinpreviousyearsofprovisionsforserialfaults,etc.Includedinthis,isthecostofupgradesofturbinessoldinpreviousyear,commercialsettlementsandproactiveupgradingaswellasnewinformationabouttheserialfaultsinquestion.

TotalwarrantyprovisionsofEUR233mhavebeenmadein2009,correspondingto3.5percentoftheGroup'sannualrevenue.

Forfurtherinformationonwarrantyprovisionsandrelatedproductrisks,referenceismadetopage27oftheManagementreportandtonote22totheconsolidatedaccounts.

Managementassessesthelikelyoutcomeofpendingandfuturenego-tiationswithsub-suppliersforcompensation.Compensationfromsub-suppliersmayberecognisedonlywhenawrittenagreementwiththesub-supplierhasbeenmade.

Thecarryingamountofwarrantyprovisionsat31December2009isEUR161m(2008:EUR183m).

ImpairmentofassetsGoodwillIntheannualimpairmenttestofgoodwill,anestimateismadetodeter-minehowpartsoftheenterprise(cash-generatingunits)relatedtothegoodwillwillbeabletogeneratesufficientfuturepositivenetcashflowstosupportthevalueofgoodwill,trademarkswithanindefiniteusefullifeandothernetassetsoftheenterpriseinquestion.

Theestimateofthefuturefreenetcashflowsisbasedonbudgetsandbusinessplansforthecomingfiveyearsandonprojectionsforsubse-quentyears.Keyparametersarerevenuedevelopment,profitmargin,proposedcapitalexpenditureaswellasgrowthexpectationsforthefol-lowingyears.Budgetsandbusinessplansforthecomingfiveyearsarebasedonspecificfuturebusinessinitiativesforwhichtherisksrelatingtokeyparametershavebeenassessedandrecognisedinestimatedfuturefreecashflows.Projectionsforyearsfollowingthenextfive-yearperiodarebasedongeneralexpectationsandrisks.

Thediscountratesusedtocalculatetherecoverableamountarebeforetaxandreflecttherisk-freeinterestrateoftheindividualgeographicalsegmentsandrelatedrisk.TheproportionofequityinrelationtotheGroup'sfuturecapitalstructureisexpectedtocontinuetobehigh.

Foradescriptionoftheimpairmenttestofintangibleassets,refertonote12totheconsolidatedaccounts.

Thecarryingvalueofgoodwillat31December2009isEUR320m(2008:EUR320m).

DevelopmentprojectsFinisheddevelopmentprojectsarereviewedonanannualbasistodeter-minewhetherthereisanyindicationofimpairment.Ifthisisindicated,animpairmenttestiscarriedoutfortheindividualdevelopmentprojects.Fordevelopmentprojectsinprogress,however,anannualimpairmenttestisalwaysperformed.Theimpairmenttestisperformedonthebasisofvariousfactors,includingfutureuseoftheproject,thefairvalueoftheestimatedfutureearningsaswellasinterestrateandrisks.

Thecarryingvalueofdevelopmentprojectsinprogressandfinisheddevelopmentprojectsat31December2009areEUR419m(2008:EUR262m).

ReceivablesReceivablesaremeasuredatamortisedcostlessprovisionsforbaddebtsbasedoncustomers'inabilitytopay.Iftheabilitytopaychangesinfuture,furtherprovisionsmayberequired.Managementmakesanalysesbasedoncustomers'expectedabilitytopay,historicaldataonpaymentpatterns,doubtfuldebts,customerconcentrations,custom-ers'creditstandingandsecurityreceivedaswellaseconomictrendsinthecompany'ssaleschannels.

Itisestimatedthattheprovisionsmadearesufficienttomeetbaddebts.Thefinancialuncertaintyrelatedtoprovisionsforbaddebtsisconsideredlimited.

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Thecarryingvalueofreceivablesat31December2009isEUR

1,807m(2008:EUR1,626m).

Deferredtax

TheVestasGrouprecognisesdeferredtaxassets,includingthetax

valueoftaxlosscarry-forwards,whereManagementassessesthatthe

taxassetsmaybeutilisedintheforeseeablefutureforset-offagainst

futurepositivetaxableincome.Theassessmentismadeonanannual

basisandisbasedonbudgetsandbusinessplansforthefutureyears,

includingplannedbusinessinitiatives.

ThevalueofrecogniseddeferredtaxassetsamountstoEUR110m

(2008:EUR63m),ofwhichEUR18m(2008:EUR14m)relatestotax

losscarry-forwards.Ofthetotaltaxcarry-forwards,EUR14misex-

pectedtoberealisedwithin12months,andEUR4misexpectedtobe

realisedlaterthan12monthsafterthebalancesheetdate.Thevalue

ofnon-recognisedtaxassets(primarilytaxlosscarry-forwards)totals

EUR26m(2008:EUR37m),whichisnotexpectedtobeutilisedinthe

foreseeablefuture.

ForfurtherdescriptionoftheGroup'staxassets,refertonote15tothe

consolidatedaccounts.

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3 sEgMEnt inFoRMation

2009Europe

salesunitsAmericas

salesunitsAsia/Pacific

salesunitsProduction

unitsTotalreportable

segments

External revenue

Windturbinesandwindpowersystems 4,217 1,256 653 0 6,126

Service 324 116 64 0 504

Other 0 0 0 6 6

total external revenue 4,541 1,372 717 6 6,636

Internalrevenue 655 142 67 5,249 6,113

total segment revenue 5,196 1,514 784 5,255 12,749

Otheroperatingincome 0 0 0 0 0

Reportable segments' operating results (EBit) 247 67 (41) 269 542

Financial items (net) (63) (27) (5) (62) (157)

other segment items

Depreciationandamortisation 20 12 6 94 132

Impairmentlosses(recognisedintheincomestatement) 0 0 0 1 1

Impairmentlosses(recognisedinequity) 0 0 0 0 0

Reversalofimpairmentlosses(recognisedintheincomestatement) 0 0 0 0 0

Reversalofimpairmentlosses(recognisedinequity) 0 0 0 0 0

Warrantyprovisionsfortheyear 5 0 1 0 6

Share-basedpayments 3 0 0 0 3

Additionstoproperty,plantandequipmentandintangibleassets 48 11 25 441 525

Additionstoinvestmentsinassociates 0 0 0 0 0

Investmentsinassociates 1 0 0 0 1

Noncurrentassets(excludingdeferredtax,pensions,etc.) 122 20 64 1,077 1,283

Segmentassets 1,986 512 609 2,046 5,153

Externalrevenuespecifiedbycountries:

USA - 909 - - -

Germany 1,080 - - - -

Spain 873 - - - -

China - - 424 - -

ExternalrevenueinDenmark 124

ExternalrevenueoutsideDenmark 6,512

USA China Others Total

Non-currentassetslocatedinDenmark(excludingdeferredtax,pensions,etc.) - - - 1,349

Non-currentassetslocatedoutsideDenmark(excludingdeferredtax,pensions,etc.) 231 265 429 925

Externalrevenuespecifiedbycountrycomprisesallcountrieswithexternalrevenuethataccountformorethan10percentoftheGroup'stotalexternalrevenue.Thegivenamountscomprisetotalrevenuegeneratedfromthecoun-triesspecified.

Nosinglecustomeraccountsformorethan10percentoftheGroup'stotalexternalrevenue.NoneoftheGroup'sassetsareclassifiedasheld-for-sale.Noneofthewrite-downsmadeonasingleassetismaterialinitself.Thenon-currentassetsinallothercountriesdonotindividuallyexceed10percentoftotalnon-currentassetsfortheGroupexceptfortheUSAandChina.

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2008Europe

salesunitsAmericas

salesunitsAsia/Pacific

salesunitsProduction

unitsTotalreportable

segments

External revenue

Windturbinesandwindpowersystems 3,292 1,515 817 0 5,624

Service 284 67 45 0 396

Other 0 0 0 15 15

total external revenue 3,576 1,582 862 15 6,035

Internalrevenue 512 107 36 4,375 5,030

total segment revenue 4,088 1,689 898 4,390 11,065

Otheroperatingincome 0 0 0 0 0

Reportable segments' operating results (EBit) 142 66 (13) 257 452

Financial items (net) 2 2 (4) (35) (35)

other segment items

Depreciationandamortisation 20 10 4 56 90

Impairmentlosses(recognisedintheincomestatement) 0 0 0 0 0

Impairmentlosses(recognisedinequity) 0 0 0 0 0

Reversalofimpairmentlosses(recognisedintheincomestatement) 0 0 0 0 0

Reversalofimpairmentlosses(recognisedinequity) 0 0 0 0 0

Warrantyprovisionsfortheyear 3 0 6 0 9

Share-basedpayments 3 0 0 0 3

Additionstoproperty,plantandequipmentandintangibleassets 20 11 33 350 414

Additionstoinvestmentsinassociates 0 0 0 0 0

Investmentsinassociates 1 0 0 0 1

Noncurrentassets(excludingdeferredtax,pensions,etc.) 101 20 48 750 919

Segmentassets 1,614 622 474 1,767 4,477

Externalrevenuespecifiedbycountries:

USA - 1,289 - - -

Germany 890 - - - -

Spain 743 - - - -

China - - 424 - -

ExternalrevenueinDenmark 124

ExternalrevenueoutsideDenmark 5,911

USA China Others Total

Non-currentassetslocatedinDenmark(excludingdeferredtax,pensions,etc.) - - - 974

Non-currentassetslocatedoutsideDenmark(excludingdeferredtax,pensions,etc.) 123 121 457 701

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3 sEgMEnt inFoRMation (ContinUEd)

Reconciliations 2009 2008

Reportablesegments'EBIT 542 452

Allotheroperatingsegments'EBIT*) 314 216

Consolidated operating profit (EBit) 856 668

Reportablesegments'revenue 12,749 11,065

Allothersegments'revenue 1,114 742

Eliminationofinternalrevenue (7,227) (5,772)

Consolidated revenue 6,636 6,035

Reportablesegments'assets 5,153 4,477

Allothersegments'assets 2,385 2,120

Elimination (1,103) (1,289)

Consolidated total assets 6,435 5,308

*)Includesparentcompanyincome(managementfee,service,royaltyandotherrentalincomefromgroupcompanies)reducedbuycostsrelatedtoVestasTechnologyR&Dandgroupstafffunctions.

4 REvEnUE

2009 2008

Saleofwindturbinesandwindpowersystems 6,126 5,624

Saleofservice 504 396

Other 6 15

6,636 6,035

Saleofwindturbinesandwindpowersystemsarespecifiedasfollows:

Revenueusingpercentage-of-completionmethod(turnkeyandsupply-and-installationprojects) 4,582 3,620

Revenueusingcompletedcontractmethod(supply-onlyprojects) 1,544 2,004

6,126 5,624

5 aMoRtisation, dEPRECiation and iMPaiRMEnt lossEs

2009 2008

Amortisation,depreciationandimpairmentlossesofnon-currentassetsarespecifiedasfollows:

Amortisation,intangibleassets 60 32

Impairmentlosses,intangibleassets 0 0

Depreciation,property,plantandequipment 151 103

Impairmentlosses,property,plantandequipment 1 0

Gainsandlossesonsoldproperty,plantandequipment 6 0

218 135

–andhavebeenexpensedasfollows:

Costofsales 122 89

Researchanddevelopmentcosts 52 29

Sellinganddistributionexpenses 25 1

Administrativeexpenses 19 16

218 135

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6 staFF Costs

2009 2008

Staffcostsarespecifiedasfollows:

Wagesandsalaries,etc. 852 805

Share-basedpayment 2 3

Pensionschemes 41 42

Othersocialsecurityexpenses 72 62

967 912

Attributableto:

Board of directors

Boardremuneration 1 1

1 1

Executive Management

Wagesandsalaries,etc. 2 2

Share-basedpayment 1 1

3 3

other executives (vestas government)

Wagesandsalaries,etc. 5 5

Share-basedpayment 1 2

Pensionschemes 0 0

6 7

BoardofDirectorsandExecutiveManagementarenotcoveredbyanypensionschemes.

Averagenumberofemployees 20,832 17,924

Numberofemployees31December 20,730 20,829

7 REsEaRCH and dEvEloPMEnt Costs

2009 2008

Researchanddevelopmentcostsexpensedintheyeararespecifiedasfollows:

Researchanddevelopmentcosts 249 227

Capitaliseddevelopmentprojects (199) (132)

Amortisationofdevelopmentprojects 42 24

Impairmentlossesofdevelopmentprojects 0 0

92 119

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8 FinanCial inCoME

2009 2008

Exchangerateadjustments 0 33

Investments(bonds) 0 1

Depositsandreceivables:

–Interestincome 6 28

–Otherfinancialincome 2 4

Hedgeineffectiveness(cashflowhedge) 6 0

Hedgeineffectiveness(fairvaluehedge) 0 0

14 66

9 FinanCial ExPEnsEs

2009 2008

Exchangerateadjustments 29 0

Financialdebts,whichismeasuredatamortisedcost:

–Interestexpenses 14 9

–Otherfinancialexpenses 17 0

Hedgeineffectiveness(cashflowhedge) 0 10

Hedgeineffectiveness(fairvaluehedge) 0 0

Changeindiscountingofprovisions 2 1

62 20

10 CoRPoRation tax

2009 2008

Currenttaxonprofitfortheyear 154 99

Deferredtaxonprofitfortheyear 62 105

Taxonprofitfortheyear 216 204

Changeincorporationtaxrate 0 0

Adjustmentsrelatingtopreviousyears(net) 14 (1)

Corporation tax in the consolidated income statement 230 203

Taxonentriesincomprehensiveincomerelatedtodeferredtax 8 (10)

tax on entries in comprehensive income 8 (10)

total corporation tax for the year 238 193

Computationofeffectivetaxrate:

CorporationtaxrateinDenmark 25% 25%

Adjustmentrelatingtopreviousyears 2% 0%

Deviationinforeignsubsidiaries'taxratescomparedtotheDanishtaxrate(net) 1% 3%

Non-taxdeductibleexpenses 0% 0%

Non-taxableincome 0% 0%

Provisionsfortaxlosscarry-forwards 0% 0%

Changeincorporationtaxrate 0% 0%

Effective tax rate 28% 28%

VestasWindSystemsA/SisjointlytaxedwithallitsDanishsubsidiaries.ThecurrentDanishcorporationtaxisallo-catedtothejointlytaxedenterprisesinproportiontotheirtaxableincomes.Enterprisesthatutilisetaxlossesofotherenterprisespayajointtaxcontributiontotheparentcompanycorrespondingtothetaxvalueoftheutilisedtaxlosses,whereasenterpriseswhosetaxlossesareutilisedbyotherenterprisesreceiveajointtaxcontributionfromtheparentcompanycorrespondingtothetaxvalueoftheutilisedlosses(fullallocation).Thejointlytaxedenterpriseshaveadoptedtheon-accounttaxationscheme.

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11 EaRnings PER sHaRE (EPs)

2009 2008

Profit for the year 579 511

Weightedaveragenumberofordinaryshares 197,723,281 185,204,103

Weightedaveragenumberoftreasuryshares (757,641) (736,393)

Weightedaveragenumberofordinarysharesoutstanding 196,965,640 184,467,710

Dilutiveeffectofoutstandingoptions 0 626,385

average number of shares outstanding including dilutive effect of options 196,965,640 185,094,095

Earningspershare(EPS) 2.94 2.77

Earningspershare(EPS-D),diluted 2.94 2.76

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12 intangiBlE assEts

2009 Goodwill

Completeddevelopment

projects Software

Developmentprojectsin

progress Total

Costat1January 320 126 75 202 723

Exchangerateadjustments 0 0 0 0 0

Additions 0 0 28 199 227

Disposals 0 0 0 0 0

Transfers 0 81 0 (81) 0

Cost at 31 december 320 207 103 320 950

Amortisationandimpairmentlossesat1January 0 66 13 0 79

Exchangerateadjustments 0 0 (1) 0 (1)

Amortisationfortheyear 0 42 18 0 60

Impairmentlossesfortheyear 0 0 0 0 0

Reversalofamortisationofdisposalsintheyear 0 0 0 0 0

Transfers 0 0 0 0 0

amortisation and impairment losses at 31 december 0 108 30 0 138

Carrying amount at 31 december 320 99 73 320 812

Internallygeneratedassetsincludedabove 0 99 71 320 490

Amortisationperiod 3–5years 5years

2008 Goodwill

Completeddevelopment

projects Software

Developmentprojectsin

progress Total

Costat1January 320 203 40 105 668

Exchangerateadjustments 0 0 (1) 0 (1)

Additions 0 1 36 132 169

Disposals 0 (113) 0 0 (113)

Transfers 0 35 0 (35) 0

Cost at 31 december 320 126 75 202 723

Amortisationandimpairmentlossesat1January 0 155 6 0 161

Exchangerateadjustments 0 0 (1) 0 (1)

Amortisationfortheyear 0 24 8 0 32

Impairmentlossesfortheyear 0 0 0 0 0

Reversalofamortisationofdisposalsintheyear 0 (113) 0 0 (113)

Transfers 0 0 0 0 0

amortisation and impairment losses at 31 december 0 66 13 0 79

Carrying amount at 31 december 320 60 62 202 644

Internallygeneratedassetsincludedabove 0 60 61 202 323

Amortisationperiod 3–5years 5years

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12 intangiBlE assEts (ContinUEd)

goodwillAt31December2009,managementcompletedimpairmenttestingofthecarryingamountofgoodwill.TheimpairmenttestingwasdoneinfourthquarterbasedonthebudgetsandbusinessplansapprovedbytheBoardofDirectorsandtheExecutiveManagementaswellasotherassumptionsadjusted,asrequired,tocomplywithIAS36.

ThemainpartofthecarryingamountofgoodwillintheVestasGrouparoseinconnectionwiththemergerbetweenVestasWindSystemsA/SandNEGMiconA/Sin2004whenVestasacquiredNEGMiconA/S.

Forthepurposeoftheimpairmenttest,thecarryingamountofgoodwillat1January2004plusgoodwillfromsub-sequentacquisitionshavebeenallocatedtothecashflowgeneratingunits:Europe,AmericasandAsia/Pacific.At31December2009,goodwillofthethreeunitsamountedtoEUR229m,EUR84mandEUR7m,respectively.

Whenperformingimpairmenttestsofcash-generatingunits,therecoverableamount(valueinuse)calculatedasthediscountedvalueofexpectedfuturecashflowsiscomparedtothecarryingamountofeachofthecash-gener-atingunits.

Expectedfuturecashflowsarebasedonbudgetsandbusinessplansforthenextfiveyears.

Forallsegments,thekeyparametersarerevenue,EBIT,workingcapitalinvestments,capitalinvestmentsinpro-gressandcontractedaswellasgrowthassumptions.

Therevenuegrowthratefrom2008to2009was10percent,andintheperiod2005–2008theaveragegrowthamountedto27percentperyear.

Thegrowthrateusedintheimpairmentmodelfortheyearsafter2011is2.5percent,which,tobeprudent,issignificantlylowerthantheexpectedgrowthrateincludedinNo.1inModernEnergy'sTriple15targets.

At31December2009,thenetworkingcapitalasapercentageofrevenueamountedto19percent.Intheperiod2005–2008thenetworkingcapitalasapercentageofrevenuemovedfrom14to5percent.ItisVestas'expect-ationthatthenetworkingcapitalgoingforwardwillnotexceed20percentofrevenue,whichhasbeenincludedintheimpairmenttest.

BudgetsandbusinessplansforthenextfiveyearsarebasedonVestas'investmentsinprogressandcontractedinvestments,andtherisksrelatingtothekeyparametershavebeenassessedandrecognisedintheexpectedfuturecashflows.ThefirstfiveyearsarebasedonthestrategyNo.1inModernEnergyandTriple15approvedbymanagement.Projectionsforyearsixonwardsarebasedongeneralmarketexpectationsandrisks.

Theterminalvalueafterthefiveyearsisdeterminedtakingintoaccountgeneralgrowthexpectationsfortheseg-mentsinquestion.

Thediscountratesusedtocalculatetherecoverableamountarebeforetaxandreflecttherisk-freeinterestrateoftheindividualgeographicalsegmentsandrelatedrisk.TheproportionofequityinrelationtotheGroup'sfuturecapitalstructureisexpectedtocontinuetobehigh.

Discountratesbeforetax(%) Growthinterminalperiod(%)

2009 2008 2009 2008

Europe 13.6 16.1 3.0 2.5

Americas 13.6 16.9 3.0 2.5

Asia/Pacific 12.7 17.8 3.0 2.5

Itismanagement'sassessmentthatprobablechangestothefundamentalassumptionswillnotresultinthecarry-ingamountofgoodwillexceedingtherecoverableamountinanyofthesegments.

development projectsRecognisedcompleteddevelopmentprojectsanddevelopmentprojectsinprogresscomprisedevelopmentandtestingofnewwindturbines.ThenewwindturbinesareexpectedtoresultincompetitiveadvantagesandthusastrengtheningoftheGroup'smarketposition.

Thevaluesofthedevelopmentprojectsrecognisedhavebeencomparedtoexpectedsalesoftheindividualturbinetypes.Thishasnotgivenrisetoanyvalueadjustmentoftherecognisedvalueofdevelopmentprojectsin2009.

softwareSoftwarecomprisesexpensesforacquiringsoftwarelicencesandowndevelopment.Thevalueoftherecognisedsoftwarehasbeencomparedtotheexpectedvalueinuse.Noindicatorsofimpairmenthavebeenidentified.

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13 PRoPERty, Plant and EqUiPMEnt

2009landandbuildings

Plantandmachinery

Otherfixturesandfittings,

toolsandequipment

Property,plantand

equipmentinprogress Total

Costat1January 514 324 303 271 1,412

Exchangerateadjustments 1 4 2 (4) 3

Additions 81 77 119 329 606

Disposals (2) (24) (32) (1) (59)

Transfers 174 40 27 (241) 0

Cost at 31 december 768 421 419 354 1,962

Depreciationandimpairmentlossesat1January 81 165 136 0 382

Exchangerateadjustments 1 2 0 0 3

Depreciationfortheyear 26 41 84 0 151

Impairmentlossesfortheyear 0 1 0 0 1

Reversalofdepreciationofdisposalsintheyear (1) (17) (18) 0 (36)

Transfers 0 (1) 1 0 0

depreciation and impairment losses at 31 december 107 191 203 0 501

Carrying amount at 31 december 661 230 216 354 1,461

Assetsheldunderfinanceleasesincludedabove 1 0 1 0 2

Depreciationperiod 25–40years 3–10years 3–5years

2008landandbuildings

Plantandmachinery

Otherfixturesandfittings,

toolsandequipment

Property,plantand

equipmentinprogress Total

Costat1January 330 306 193 118 947

Exchangerateadjustments (4) (11) (4) 2 (17)

Additions 82 52 110 265 509

Disposals (2) (17) (7) (1) (27)

Transfers 108 (6) 11 (113) 0

Cost at 31 december 514 324 303 271 1,412

Depreciationandimpairmentlossesat1January 69 163 77 0 309

Exchangerateadjustments (2) (8) (3) 0 (13)

Depreciationfortheyear 16 29 58 0 103

Impairmentlossesfortheyear 0 0 0 0 0

Reversalofdepreciationofdisposalsintheyear (2) (13) (2) 0 (17)

Transfers 0 (6) 6 0 0

depreciation and impairment losses at 31 december 81 165 136 0 382

Carrying amount at 31 december 433 159 167 271 1,030

Assetsheldunderfinanceleasesincludedabove 0 1 4 0 5

Depreciationperiod 25–40years 3–10years 3–5years

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14 invEstMEnts in assoCiatEs

2009 2008

Costat1January 2 2

Exchangerateadjustments 0 0

Additions 0 0

Disposals 0 0

Disposals,disposalsofcompanies 0 0

Cost at 31 december 2 2

Valueadjustmentsat1January (1) (1)

Exchangerateadjustments 0 0

Shareofprofit 1 0

Dividend (1) 0

Disposals 0 0

value adjustments at 31 december (1) (1)

Carrying amount at 31 december 1 1

Summaryaccountinginformationconcerningassociatesownedat31December:

Revenue 1 2

Profitfortheyear 0 0

Totalassets 5 5

Totalliabilities 2 2

15 dEFERREd tax

2009 2008

Deferredtaxat1January(net) 54 151

Exchangerateadjustments 2 (6)

Deferredtaxonprofitfortheyear (62) (105)

Adjustmentrelatingtopreviousyears 3 4

Changesincorporationtaxrate 0 0

Taxonentriesincomprehensiveincome (8) 10

deferred tax at 31 december (net) (11) 54

Taxbaseoftaxlosscarry-forwards(net) 18 14

Intangibleassets 1 0

Property,plantandequipment 4 2

Currentassets 42 12

Provisions 9 11

Other 36 24

deferred tax assets 110 63

Intangibleassets 87 34

Property,plantandequipment (4) (21)

Currentassets 20 (26)

Provisions (9) (9)

BalanceoftaxlossesforrecaptureinforeignsubsidiariesunderDanishjointtaxation 24 26

Other 3 5

Provision for deferred tax 121 9

deferred tax asset at 31 december (net) (11) 54

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15 dEFERREd tax (ContinUEd)

Noprovisionismadefordeferredtaxregardingundistributedearningsinsubsidiaries,astheGroupcontrolsthereleaseoftheobligation.

Iftheearningsweretobedistributed,thiswouldreleaseacurrenttaxchargeofEUR38mfor2009(2008:EUR20m).

Deferredtaxassetsarerecognisedfortaxlosscarry-forwardscorrespondingtoearningsthatarelikelytobegener-atedinthefuture.Theassessmenthasbeenmadeconsideringtheabilitytoutilisetaxcarry-forwardsinpreviousyearsaswellasfutureexpectations.Ofthetotaltaxcarry-forwardsEUR0m(2008:EUR5m)aresubjecttoexpirylimits,however,theseareallexpectedtobeutilisedwithinthesettimelimit.DeferredtaxassetsamountingtoEUR26m(2008:EUR37m)havenotbeenrecognisedinthebalancesheet,astheirutilisationisnotassessedtobesufficientlycertain,primarilybecauseofVestas'earningsexpectationsinsomecountries.

Ofthetotaldeferredtaxrelatingtotaxlosscarry-forwardsincludedinthedeferredtaxassets,anamountofEUR0m(2008:EUR0m)relatestoDenmark.Ofthetax-losscarry-forwardsnotedaboveEUR0m(2008:EUR0m)relatestoDenmark.Forfurtherdescriptionoftheutilisationoftax-losscarry-forwards,refertonote2tothecon-solidatedaccounts.

16 invEntoRiEs

2009 2008

Rawmaterialsandconsumables 797 809

Workinprogress 220 332

Finishedgoods 625 453

Prepaymentsforgoods 21 18

1,663 1,612

Inventoriesusedfortheyear,whichareincludedincostsofsales 3,873 3,299

Write-downsofinventoriesintheyear 86 21

Reversalofwrite-downsintheyear 22 12

Thereversalofwrite-downsintheyearisduetogoodssoldatahighervaluethanthewrittendowncarryingamount.

17 tRadE RECEivaBlEs

2009 2008

Tradereceivables 525 938

Fairvalueofsecurityreceivedfortradereceivablesbalancesoutstandingasat31December 170 160

Write-downsincludedintradereceivables,developedasfollows:

Write-downsat1January 0 6

Write-downsintheyear (1) 0

Realisedintheyear 1 (6)

Reversals 0 0

Write-downs at 31 december 0 0

Alltradereceivablesareexpectedtobereceivedwithin12months.

Theagedistributionofreceivablesisasfollows:

Notoverdue 467 770

0–60daysoverdue 33 136

61–120daysoverdue 8 22

121–180daysoverdue 3 9

Morethan180daysoverdue 14 1

525 938

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17 tRadE RECEivaBlEs (ContinUEd)

Ofthetotalwrite-downsoftradedebtorsofEUR1m(2008:lessthanEUR1m),thatisbasedonanindividualassessmentofeachreceivable,lessthanEUR1m(2008:lessthanEUR1m)relatestocompaniesinbankruptcy,whiletheremainingamountrelatestocompanieswithsuspensionofpayments.

Tradereceivablesaremainlyowedbycompanieswithintheenergysector.Thecreditriskisdependentonthedevelopmentwithinthissector.Vestasdoesnothaveasinglesignificanttradedebtornorarethetradereceivablesconcentratedinspecificcountries.

18 ConstRUCtion ContRaCts in PRogREss

2009 2008

Salesvalueofconstructioncontractsinprogress 3,216 1,800

Progressbillings (2,782) (2,701)

434 (901)

–whichareincludedasfollows:

Constructioncontractsinprogress(assets) 1,032 482

Constructioncontractsinprogress(liabilities) (598) (1,383)

434 (901)

Retentions 20 18

Allreceivablesrelatingtoconstructioncontractsinprogressareexpectedtobereceivedwithin12months.

19 otHER RECEivaBlEs

2009 2008

Prepayments 18 33

Supplierclaims 17 4

Otherreceivables 215 169

250 206

–specifiedasfollows:

0–1years 234 181

>1year 16 25

250 206

OtherreceivablesstatedaboveprincipallycompriseVATandinsurancereceivables.

20 CoRPoRation tax

2009 2008

Corporationtax1January 7 (38)

Exchangerateadjustments (2) (1)

Corporationtaxfortheyear (154) (99)

Adjustmentsrelatingtopreviousyears (17) (3)

Corporationtaxpaidintheyear 114 148

Corporation tax at 31 december (52) 7

Corporationtax(assets) 93 49

Corporationtax(liabilities) (145) (42)

(52) 7

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21 sHaRE CaPital

2009 2008

Thesharecapitalcomprisesof203,704,103sharesofDKK1.00 203,704,103 185,204,103

Numberofsharesat1January 185,204,103 185,204,103

Capitalincrease 18,500,000 0

number of shares at 31 december 203,704,103 185,204,103

Sharesoutstanding 202,945,740 184,467,710

Treasuryshares 758,363 736,393

number of shares at 31 december 203,704,103 185,204,103

Thesharecapitalwasincreasedby18,500,000sharesofDKK1.00in2009andby10,292,930sharesofDKK1.00in2006.Exceptfortheseincreases,thesharecapitalhasbeenunchangedintheperiod2005–2009.

Allsharesrankequally.

2009 2008 2009 2008 2009 2008

Numberofshares

Numberofshares

Nominalvalue(DKK)

Nominalvalue(DKK)

%ofsharecapital

%ofsharecapital

Treasurysharesat1January 736,393 736,393 736,393 736,393 0.4 0.4

Purchases 21,970 0 21,970 0 0.0 0.0

treasury shares at 31 december 758,363 736,393 758,363 736,393 0.4 0.4

TheBoardofDirectorshasbeenauthorisedattheAnnualGeneralMeetingtoallowVestasWindSystemsA/Stoacquiretreasurysharesamountingtoatotalnominalvalueof10percentofthecompany'ssharecapitalduringtheperiodupuntilthenextAnnualGeneralMeetingon17March2010.

VestasWindSystemsA/Shasacquiredtreasurysharesin2009,atanominalvalueofDKK22katasharepriceofDKK339.17correspondingtoanacquisitionsumofEUR1mandin2007,atnominalvaluesofDKK569kandDKK28katsharepricesofDKK378.54andDKK357.90respectively,correspondingtoanacquisitionsumofEUR30m.

TreasurysharesareacquiredwithaviewtousingthemfortheGroup'sshareoptionprogrammes.

Thesharecapitalhasbeenfullypaid.

Nodividendhasbeenpaidoutin2009and2008relatingtothefinancialyears2008and2007.

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22 PRovisions

2009 2008

Warranty provisions

Warrantyprovisionsat1January 183 232

Exchangerateadjustments 0 (2)

Warrantyprovisionsfortheyear 233 240

Utilisedwarrantyprovisionsduringtheyear (257) (262)

Reversedwarrantyprovisionsduringtheyear 0 (6)

Adjustmenttopreviouslyrecognisedwarrantyprovisions 0 (20)

Adjustmentsrelatingtothechangeindiscountingofwarrantyprovisions 2 1

Warranty provisions at 31 december 161 183

Thewarrantyprovisionsareexpectedtobeconsumedasfollows:

0–1year 111 128

>1year 50 55

161 183

Theproductwarranties,whichinthegreatmajorityofcasescovercomponentdefects,functionalerrorsandanyfinanciallossessufferedbythecustomerinconnectionwithunplannedsuspensionofoperations,areusuallygrantedforatwo-yearperiodfromdeliveryofthewindturbine.Incertaincases,awarrantyofuptofiveyearsisgranted.Forthecustomer,thespecificwarrantyperiodandthespecificwarrantytermsarepartofthebasisoftheindividualcontract.

Warrantyprovisionsincludeonlystandardwarranty,whereasservicespurchasedinadditiontothestandardwar-rantyareincludedinprepaymentsfromcustomers.Referenceismadetopage27ofthemanagementreportandnote2totheconsolidatedaccountsforfurtherinformationonVestas'warrantyprovisions.

Inadditiontotheabove,provisionsaremadeforupgradestowindturbinessoldduetotypefaults,etc.whereVestashasawarrantyobligationatthedateofprovision.Suchprovisionswillalsoincludewindturbinessoldinprioryears,butwheretypefaults,etc.areidentifiedlater.Moreover,itshouldbeemphasisedthatthecomplexityofsomeofthetypefaults,etc.identifiedmayleadtoadjustments,upwardsaswellasdownwards,ofpreviousestimatesinlightoffactualinformationaboutpopulationsize,costsofrepairsandthetimingofsuchrepairs.

Itisestimatedthat30–35percentofthewarrantyprovisionsmadefortheyearrelatetoadjustmentsofpreviousyears'estimatesofprovisionsforserialfaults,etc.Includedinthisisthecostforupgradesofwindturbinessoldinpreviousyears,commercialsettlementsandproactiveupgradingaswellasnewinformationabouttheserialfaultsinquestion.

Product riskslackofreliabilityinseveralofVestas'productshaspreviouslyledtomajorwarrantyprovisions,andinrecentyears,Vestashasinvestedsignificantresourcesinimprovingtheproductsandincreasingtheirreliability.Thisworkcom-prisesdesign,production,installationandcontinuousmaintenance.

ThegoaloftheseinitiativesistoreduceVestas'warrantycosts,tosecurecustomerreturns,toincreasethecom-petitivenessoftheGroup'sproductsandtoimprovesupplierearnings.

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22 PRovisions (ContinUEd)

2009 2008

other provisions

Otherprovisionsat1January 80 68

Exchangerateadjustments 1 2

Otherprovisionsfortheyear 51 52

Utilisedotherprovisionsduringtheyear (60) (42)

Adjustmenttopreviouslyrecognisedotherprovisions 0 0

other provisions at 31 december 72 80

Otherprovisionsincludecompensationregardingagreementsmadetopurchasewindturbinepartswhicharenotexpectedtobefulfilledinaccordancewiththecontractuallyagreedparametersandprovisionsforonerousservicecontracts.Theprovisionshavebeencalculatedbasedonmanagement'sbestestimateandareexpectedtobesettledin2013atthelatest.

Otherprovisionsareexpectedtobepayableasfollows:

0–1year 40 50

>1year 32 30

72 80

Theprovisionsareexpectedtobepayableasfollows:

0–1year 151 178

>1year 82 85

233 263

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23 PEnsion oBligations

TheVestasGroup'sentitieshavedifferentpensionschemesandseveranceprogrammeswhichhavebeenadaptedtothelabourmarketvariablesoftheindividualcountries.Approx99percentoftheGroup'spensionexpensesrelatetodefinedcontributionplans,whichincludesnofurtherobligationstothecompanyotherthanthecontri-butionspaid.

Theotherplansaredefinedbenefitplans,themajorityofwhichhaverelatedplanassetsinindependentpensionfunds.Thedefinedbenefitplanswilltypicallysecuretheemployeescoveredbyapensionbasedonfinal-salary.

Underdefinedcontributionplans,anemployercommitstopayingacertaincontribution(e.g.afixedamountorafixedpercentageoftheirsalary).Underadefinedcontributionplan,theGroupdoesnotcarrytheriskrelatingtothefuturedevelopmentininterestrate,inflation,mortalityanddisablement.

Underdefinedbenefitplans,anemployercommitstopayingacertainbenefit(e.g.aretirementbenefitasafixedamountorafixedpercentageoftheemployee'sfinalsalary).Underadefinedbenefitplan,theGroupcarriestheriskrelatingtothefuturedevelopmentininterestrate,inflation,mortalityanddisablement.

ThepensionobligationofDanishandsomeforeignentitiesarecoveredbyinsurance.Foreignentitieswhoseobligationsarenotorareonlypartlycoveredbyinsurance(definedbenefitplans)calculatetheirobligations,usingactuaries,atnetpresentvalueatthebalancesheetdate.Thesepensionplansarefullyorpartlycoveredthroughpensionfundsfortheemployees.IntheconsolidatedaccountsanamountofEUR2m(2008:EUR2m)hasbeenrecognisedinliabilitiesinrespectoftheGroup'sobligationstowardscurrentandpreviousemployeesafterdeduc-tingplanassets.

2009 2008

Thefollowingamountshavebeenrecognisedintheconsolidatedincomestatement:

Definedcontributionplans 48 41

Definedbenefitplans 2 1

50 42

Thecosthasbeenrecognisedinthefollowingitems:

Costofsales 29 24

Researchanddevelopmentcosts 5 4

Sellinganddistributionexpenses 5 4

Administrativeexpenses 11 10

50 42

Netpresentvalueofcovereddefinedbenefitplans (8) (7)

Netpresentvalueofuncovereddefinedbenefitplans (2) (3)

Netpresentvalueofdefinedbenefitplans (10) (10)

Fairvalueofplanassets 7 7

Surplus/(deficit)cover (3) (3)

Non-recognisedactuarial(gains)/losses 1 1

net obligation recognised in the balance sheet (2) (2)

Developmentinnetpresentvalueofdefinedbenefitplanobligations:

Netpresentvalueofdefinedbenefitplanobligationsat1January 10 10

Exchangeadjustments 0 0

Pensionexpensesrelatingtocurrentfinancialyear 0 0

Calculatedinterestonobligations 0 1

Actuarialgains/(losses) (1) 0

lossonreductionsandfulfilment 0 0

Pensionexpensesrelatingtopriorfinancialyears 0 0

Pensionspaid 1 (1)

net present value of defined benefit plan obligations at 31 december 10 10

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23 PEnsion oBligations (ContinUEd)

2009 2008

Developmentinfairvalueofpensionassets:

Pensionassetsat1January 7 8

Exchangerateadjustments 0 0

Estimatedreturnonplanassets 1 1

Actuarialgains/(losses) 0 (1)

PaidinbytheVestasGroup 0 0

Pensionspaid (1) (1)

Pension assets at 31 december 7 7

Pensionexpensesrecognisedintheincomestatement:

Pensionexpensesrelatingtocurrentfinancialyear 1 1

Calculatedinterestonobligation 1 0

Estimatedreturnonplanassets 0 0

Recognisedactuarial(gain)/lossfortheyear 0 0

Pensionexpensesrelatingtopriorfinancialyears 0 0

lossonreductionsandfulfilment 0 0

total recognised for defined benefit plans 2 1

Pensionassetsbreakdownasfollows:

Europeanshares 2 2

Europeanbonds 4 4

Cashfunds 1 1

7 7

Returnonpensionassets:

Estimatedreturnonplanassets 0 1

Actualreturnonplanassets 0 0

Actuarialgain/(loss)onplanassets 0 (1)

TheGroupexpectstopaylessthanEUR1mtothedefinedbenefitplanin2010.

Theaverageassumptionsunderlyingactuarialcalculationsatthebalancesheetdateareasfollows:

Discountrate(%) 5.3 5.3

Estimatedreturnonpensionfunds(%) 5.6 6.3

Estimatedrateofpayincrease(%) 4.3 4.0

Estimatedpensionincrease(%) 2.0 2.0

Theestimatedreturnontheplanassetshasbeendeterminedbasedonthecompositionoftheassetsandgeneralexpectationswithrespecttoeconomictrends.

2009 2008 2007 2006 2005

Actuariallycalculatedpensionobligations (10) (10) (10) (11) (10)

Pensionassets 7 7 8 7 7

deficit cover (3) (3) (2) (4) (3)

Changestoobligationsbasedonexperience 0 0 0 0 0

Changestopensionassetsbasedonexperience 0 0 0 0 0

TherearenorestrictionsonthetypesofthepensionassetswhichVestasisallowedtoinvestintomeetthepensionobligations.ThepensionassetsincludenoVestasshares,receivablesfromoranypropertyleasedbyVestas.Allrelevantassumptionsrelatingtotheactuarialcalculationsexcludeimmaterialcosts.

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24 FinanCial dEBts

2009 2008

Financialdebtsarerecognisedinthebalancesheetasfollows:

Current liabilities

Mortgagedebt 3 3

Bankdebtanddebttocreditinstitutions 9 106

12 109

non-current liabilities

Mortgagedebt 8 11

Debttocreditinstitutions 331 3

339 14

1–5years 302 7

>5years 37 7

Financial debts 351 123

Fairvalue 351 123

Nominalvalue 351 123

ItisGrouppolicytoendeavourandensureanappropriatedevelopmentinthefinancialratioswithaview,forexample,tomaintainingtheGroup'screditratingandtocomplyingwiththeagreedrequirementsintheGroup'sfinancingagreements.

Thefairvalueiscalculatedasthepresentvalueofagreedcashflowsusingacurrentmarket-basedinterestrate.

Obligationsrelatingtoassetsheldunderfinanceleasesareincludedinmortgagedebtanddebttocreditinstitu-tionsasfollows:

2009 2008

Minimumleasepayment Interest

Carryingamount

Minimumleasepayment Interest

Carryingamount

0–1year 1 0 1 2 0 2

1–5years 0 0 0 2 0 2

>5years 0 0 0 0 0 0

1 0 1 4 0 4

Weightedeffectiveinterestrateat31December(%) 7.9 6.0

ThefairvalueoffinancialdebtsamountstoEUR1m(2008:EUR4m).

ThefinanceleaseagreementsoftheGroupmainlyrelatetoservicevansandrunforuptothreeyearsafterthebalancesheetdate.

Theleaseagreementswillnotresultinanyrestrictionsinrelationtoraisingofotherdebtsordividendpayments.

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25 otHER liaBilitiEs

2009 2008

Staffcost 157 103

Taxesandduties 181 131

Accruals 0 24

Otherpayables 98 137

436 395

26 adjUstMEnt FoR non-CasH tRansaCtions

2009 2008

Amortisationanddepreciationfortheyearofintangibleassetsandproperty,plantandequipment,includinggainsandlossesonsaleofnon-currentassets 218 135

Shareofprofitinassociates (1) 0

Warrantyprovisionsintheyear(net) (22) (49)

Pensionprovisionsintheyear 0 0

Otherprovisionsintheyear (8) 12

Exchangerateadjustment (6) (1)

Financialincome (14) (66)

Financialexpenses 62 20

Corporationtaxfortheyear 230 203

Costofshare-basedpayments 2 3

Otheradjustments 0 1

461 258

27 CHangE in nEt WoRKing CaPital

2009 2008

Changeininventories (51) (505)

Changeinreceivables (191) (524)

Changeinprepaymentsfromcustomers (768) 397

Changeintradepayables 32 141

Changeinotherliabilities 41 124

(937) (367)

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28 CasH at BanK and in Hand

Cashatbankandinhandwithdisposalrestrictions,EUR20m(2008:EUR12m),primarilyconsistofprepaymentsfromcustomersregardingprojects,andtheamountsarereleasedinlinewiththefulfilmentoftherelatedcontrac-tualobligations.

29 FEEs to aUditoRs aPPointEd By tHE annUal gEnERal MEEting

2009 2008

Audit:

PricewaterhouseCoopers 2 2

KPMG 2 2

total audit 4 4

Non-auditservices:

PricewaterhouseCoopers

Otherassurancestatements 0 0

Taxassistance 0 1

Otherservices 1 1

1 2

KPMG

Otherassurancestatements 0 0

Taxassistance 4 0

Otherservices 1 1

5 1

total non-audit services 6 3

Vestas'auditorscanbeused,withincertainparameters,forcertainnon-auditservicesandmayoftenbetheobviouschoiceduetobusinessknowledge,confidentialityandcostsconsideration.Vestashasacomprehensivepolicyfornon-auditservicesensuringthattheprovisionofnon-auditservicestotheGroupdoesnotimpairtheauditors'independenceorobjectivity.TheAuditCommitteeisresponsibleforthedevelopmentandmaintenanceofthispolicyandmonitorscompliance.

In2009and2008,otherservicesincludefeesmainlyforotherassistanceinaccounting.

30 ManagEMEnt's oPtion PRogRaMME and sHaREHoldings

option programme

Ashareoptionprogrammewasestablishedin2006fortheExecutiveManagement,theVestasGovernmentandotherselectedexecutivesoftheGroup,totalling20people.Optionsweregrantedbasedontheachievementofspecifiedtargetsfor2006and2007.Themarketvalue,basedontheBlack-Scholesvaluationmodelcalculatedatthedateofgrant/establishmentoftheprogramme,amountedtoEUR3m.

In2007,anewoptionprogrammewasintroducedforthesamemembersasinthe2006programme.Thepro-grammegranted580,080options,whichwerevalued,basedontheBlack-Scholesvaluationmodel,on15May2007atamarketvalueofEUR12m.155,102oftheoptions,valuedatEUR3m,wereallocatedtotheExecutiveManagement.

Themembersmayexercisetheiroptionsinspecifiedperiodsandchoosetopurchasethecompany'ssharesattherelevantstrikepricedependingontheprogramme.ExerciseoftheoptionscanonlyoccurintheperiodswhereexecutivesareallowedtotradesharesinaccordancewiththeGroup'sinternalrules,beingwithinthefourweeksfol-lowingthecompanyannouncementoftheannualreportandquarterlyfinancialreports.

OptionsareallottedtomemberswhentheBoardofDirectorsapprovesthefinalannualreportforeachyearexceptforoptionsallottedin2007.Theallotmentfor2007wason15May2007whentheprogrammewasannounced.Nooptionsexpiredin2009.

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30 ManagEMEnt's oPtion PRogRaMME and sHaREHoldings (ContinUEd)

ThesharepricesandtheexercisepricesarebasedontheclosingsharepricesobtainedfromBloombergFinancialMarketsonthedaytheoptionsweregranted.TheriskfreeinterestrateisestimatedastheeffectiveinterestrateonaDanishgovernmentbondwiththesameeconomiclife,inthiscasetwo,five,sixandseven-yearbonds.Thefuturevolatility,whichmeansmovementintheshares'totalyield,iscalculatedbasedonhistoricweeklyclosingsharepri-cesforaperiodoftwoandthreeyearsforthe2006and2007programmes,respectively.

2006 programmeAlltheoptionsallottedin2006havelapsed.56,448optionswerethenetallottedamountin2007withavalueofEUR1matgrant.Themembersoftheschemeloosetherighttotheoptions,iftheyterminatetheiremploymentbeforetheendofthevestingperiod.Theoptionscanbeexercisedbetweentwoandfouryearsaftertheyhavebeenallotted.Optionsallottedin2007canbeexercisedfrom2010to2012.Therewillbenomorenewallotmentsfromthisprogramme.

2007 programmeTheoptionsallottedtothemembersoftheschemesfor2007,2008and2009arevaluedbasedontheequiva-lentof60percentoftheir2006annualsalary.For2008and2009,memberswillonlybeallottedoptionsiftheyarestillemployedwhentheBoardofDirectorsapprovestheannualreportfortherespectiveyears.207,952and189,002optionswereallottedin2007and2008,respectively,leaving183,126optionstobeallottedfor2009.

Threenewmemberswereaddedtotheprogrammeon7January2009andweregranted21,970optionsatavalueestimatedtobeEUR1m.Afurtherfourmemberswereaddedtotheschemeon27October2009andweregranted31,858optionswithanestimatedvalueofEUR1m.InbothcasesthedateofallotmentoftheoptionswillbetheBoardofDirector'sapprovaloftheannualreportfor2009buttheserviceperiodsstartinJanuary2009andOctober2009,respectively.ThetermsandconditionsoftheoptionsarethesameasthetermsandconditionsoftheoptionsgrantedinMay2007exceptthattheoptionsarevaluedbasedontheequivalentof60percentoftheir2009annualsalary.

Theoptionscanbeexercisedwithintwoyearswhenthreeyearshaveelapsedaftertheyhavebeenallotted.Thisfive-yearperiodaftertheallotmentofoptionsisreferredtoasvestingperiod.Theexerciseoftheoptionscanonlyoccur,ifthemembersthemselveshavenotterminatedtheiremploymentatthetimeoftheexercise.Optionsallot-tedin2007,2008and2009canbeexercisedfrom2010to2012,2012to2014and2013to2015,respect-ively.Themembersoftheschemeloosetherighttotheoptions,iftheyterminatetheiremploymentbeforetheendofeachofthethreeallotments'vestingperiod.Onexercisingtheoptionstheparticipantsmustinvest50percentoftheprofitaftertaxinVestasshares,whichmustbeheldforatleastthreeyears.

ThefairvalueatthegrantdatehasbeencalculatedundertheBlack-Scholesoptionpricingmodeladjustedfordilu-tionofsharecapitalbasedonthefollowingassumptions:

2007programme2009grant

(October)

2007programme2009grant

(January)

2007programme2007and2008

grant

2006programme2007grant

Sharepriceatgrant(DKK) 337.00 303.50 380.50 167.00

Volatility(%) 65 88 44 54

Exerciseprice(DKK) 380.5 380.5 380.5 147.6

Risk-freeinterestrateforoptions(%) 3.47 3.27 4.30 3.80

Annualdividendpershare(DKK) 0 0 0 0

yearstoexpiry 5 5 5 5

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30 ManagEMEnt's oPtion PRogRaMME and sHaREHoldings (ContinUEd)

Grantdate

GroupExecutive

Managementpcs

Otherexecutives

pcsTotal

pcs

Exercisepriceperoption

DKK

Fairvalueperoption

DKK

Totalfairvalue

tEUR

Totalfairvalue

tEUR

outstanding at 1 january 2008 171,480 465,048 636,528 12,985

Granted2007programme 0 0 0 - - - -

lapsed2006programme 0 (2,193) (2,193) 147.6 89 (26) -

lapsed2007programme 0 (22,163) (22,163) 380.5 152–165 (471) -

Exercised 0 0 0 - - -

Expired 0 0 0 - - -

outstanding at 31 december 2008 171,480 440,692 612,172 12,488 12,617

outstanding at 1 january 2009 171,480 440,692 612,172 12,488

Granted2007programme(Jan) 0 21,970 21,970 380.5 206.9 611 -

Granted2007programme(Oct) 0 31,858 31,858 380.5 189.9 813 -

lapsed2006programme 0 (2,295) (2,295) 147.6 89 (26) -

lapsed2007programme 0 (21,566) (21,566) 380.5 152-165 (458) -

Exercised 0 0 0 - - -

Expired 0 0 0 - - -

outstanding at 31 december 2009 171,480 470,659 642,139 13,428 13,355

Numberofexercisableoptionsat31December2008 0 0 0

Numberofexercisableoptionsat31December2009 0 0 0

Averageremaininglifeoftheoptionsoutstandingat31December2009isthreeyears(2008:fouryears).Nooptionshavebeenexercisedintheyear.

Management's holdings of vestas sharesTheinternalrulesregardingthetradinginVestassharesfortheBoardofDirectors,theExecutiveManagementandcer-tainemployeesonlyallowtradinginthefourweeksfollowingthepublicationoftheannualreportandquarterlyreports.

Balanceat1January

Purchasedintheyear

Soldintheyear

Balance31December

Marketvalue*)

tEUR

the Board of directors

BentErikCarlsen 98,120 - - 98,120 4,180

TorstenErikRasmussen 3,837 - - 3,837 163

EllySmedegaardRex 0 - - 0 0

FreddyFrandsen 3,653 - - 3,653 156

HåkanEriksson 0 - 0 0

JørgenHunoRasmussen 500 - - 500 21

JørnAnkærThomsen 0 - - 0 0

KimHvidThomsen 2,657 - - 2,657 113

KurtAnkerNielsen 1,600 - - 1,600 68

MichaelAbildgaardlisbjerg 150 - - 150 6

OlaRollén 0 200 - 200 9

SussieDvingeAgerbo 2,400 - - 2,400 102

112,917 200 - 113,117 4,818

Executive Management

DitlevEngel 224 - - 224 10

HenrikNørremark 3,213 - - 3,213 137

3,437 - - 3,437 147

*)Thecalculationoftheyear-endmarketvalueisbasedonthesharepricequotedontheNASDAQOMXCopenhagenattheendoftheyear(DKK317.00).

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31 RElatEd PaRty tRansaCtions

VestasWindSystemsA/Shasnoshareholderswithcontrollinginfluence.

TherelatedpartiesoftheVestasGroupincludetheBoardofDirectorsofthecompany,theExecutiveManagement,andotherexecutives(VestasGovernment),togetherwithclosemembersofthefamilyoftheseindividuals.Further-more,relatedpartiesincludeentitieswhicharesignificantlyinfluencedbytheafore-mentionedindividuals.

transactions with the Board of directors, Executive Management and other executivesTransactionswiththeExecutiveManagementonlyconsistofnormalmanagementremuneration,seenote6totheconsolidatedaccounts.

TransactionswiththeBoardofDirectors,ExecutiveManagementandotherexecutivesintheyearcomprisethefol-lowing:

PurchaseofnormallegalservicesforEUR1.1matarm'slengthbasis(2008:EUR1.9m)fromthelawfirmGorrissenFederspiel,whereJørnAnkærThomsenisapartner.TheoutstandingbalancepayabletoGorrissenFederspielat31December2009amountedtoEUR0.1m(2008:EUR0.1m).

Fivepeople(2008:six)coveredbythedefinitionofrelatedpartieshavedirectlyorindirectlyfullorpartownershipofwindturbineswhereacompanyintheVestasGroupperformsservicework.Thesetransactionstakeplaceatarm'slengthandintotalamountedtoEUR0.4min2009(2008:EUR0.5m).Theoutstandingamountofpurchasesfromrelatedpartiesat31December2009amountedtoEUR0m(2008:lessthanEUR0.3m).

TherehavebeennoothertransactionswithanymembersoftheBoardofDirectorsandtheExecutiveManagementinVestasWindSystemsA/Sorotherexecutivesduringtheyear.

WiththeexceptionoftheBoardmemberselectedbytheemployees,nomembersoftheBoardofDirectorshavebeenemployedbytheGroupin2009.

transactions with associates and joint venturesRelatedpartiesalsoincludeassociatesoverwhomVestasWindSystemsA/Shascontrolorsignificantinfluence.

TheVestasGroup'sassociatesandrelatedshareholdingsarelistedunder”legalentities”onpages113–115.

Outstandingbalanceswithassociateshaveresultedfromstandardbusinesstransactionsregardingpurchaseandsaleofgoodsandservices.NointerestiscalculatedontheoutstandingbalancesandthetransactionsareenteredintowiththesametradingconditionsasfortheGroup'sothercustomersandsuppliers.

32 govERnMEnt gRants

TheGrouphasreceivedanumberofgovernmentgrants,ofwhichEUR2mhasbeenoffsetagainstincurredexpenses(2008:EUR1m)andEUR27mhasbeenoffsetagainstnon-currentassets(2008:lessthanEUR1m).

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33 MoRtgagEs and sECURity

AssecurityfortheGroup'smortgageloans,mortgagedeedsregisteredtothemortgagorandall-moneymortgageshavebeensecuredonlandandbuildings,plantandmachineryaswellasotherfixturesandfittings,toolsandequip-ment.SomeoftheGroup'sotherproperty,plantandequipmenthasbeenplacedassecurity.

Furthermore,theGrouphasissuedmortgagedeedsregisteredtothemortgagorandall-moneymortgageswhicharesecuredontheaforementionedproperties.Thesemortgagedeedsregisteredtothemortgagorandall-moneymortgagesareallinthepossessionoftheGroup.

Assecurityforcreditfacilities,theGrouphasgivensecurityinitscashatbankandinhandandothercurrentassets.

2009 2008

Totalmortgageloans 11 14

Mortgagedeedsandall-moneymortgages:

Nominalvalueofmortgagedeedsandall-moneymortgages 10 10

Carryingamountofpledgedassets 25 21

Othermortgagedeedsandall-moneymortgagesinthepossessionoftheGroup 109 113

Thecarryingamountsofthecollateralsoutstandingasat31Decemberarespecifiedbelow:

lettersofcredit 0 14

Bankguarantees 198 250

198 264

34 ContRaCtUal oBligations

2009 2008

Theminimumleaseobligationsrelatingtooperatingleasesfalldue:

0–1year 37 49

1–5years 73 68

>5years 65 72

Operatingleasescompriseirrevocableoperatingleasesregardingbuildingsandvehicles.Themainobligationre-latestobuildingsinGermanyandrunsforupto23yearsafterthebalancesheetdate.Theleaseagreementswillnotresultinanyrestrictionsinrelationtoraisingofotherdebtsorpaymentofdividends.

CostsrecognisedintheincomestatementrelatingtooperatingleasesamounttoEUR49min2009(2008:EUR20m).

TheGrouphasenteredintobindingcontractsconcerningpurchaseofplanttobedeliveredin2010andthereafteratavalueofEUR97m(2008:EUR267m).

TheGrouphasenteredintobindingcontractsconcerningpurchaseofcomponentsforproductiontobedeliveredin2010andthereafteratatotalvalueofEUR3,099m(2008:EUR3,317m).

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35 ContingEnt liaBilitiEs

Pending lawsuitsVestasisinvolvedinsomelitigationproceedings.However,itistheopinionofmanagementthatsettlementorcon-tinuationoftheseproceedingswillnothaveamaterialeffectonthefinancialpositionoftheGroup.

36 dERivativE FinanCial instRUMEnts, RisK and FinanCial ManagEMEnt

the group's policy for managing financial risksTheVestasGroupisexposedtochangesinexchangerates,interestratesandcommoditypricesduetoitsinvest-mentsandfinancingoperations.Managementidentifiesthelevelandconcentrationofrisksandinitiatespoliciestoaddressthese,throughcontinuousbusinessreviews.Moreover,theGroupisexposedtocreditandliquidityrisks.ItistheGroup'spolicynottoengageinanyactivespeculationinfinancialrisks.Accordingly,theGroup'sfinancialmanagementisdirectedsolelyatmanagingoreliminatingfinancialrisksrelatingtooperationsandfunding.

TheGroup'spolicyformanagingfinancialrisksremainsunchangedfromlastyear.Thecarryingamountsofthefinancialinstrumentsarereasonableapproximationsoftheirfairvalues.

Credit risksTheGroup'screditriskprimarilyrelatestoreceivablesandbankbalances,investmentsaswellasderivativefinancialinstruments.

CreditrisksrelatingtoreceivablesarisewhenVestasmakessalesforwhichnoprepaymenthasbeenreceived.ItisVestas'policytohedgeuncertaintiesofpaymentbywayoflettersofcredit,bankguarantees,creditinsurance,con-ditionalsale,etc.Securityreceivedistakenintoaccountintheassessmentofanyprovisionforbaddebts.

Vestas'customers'creditworthinessisreviewedinconnectionwiththeclosingofcontracts.IfVestasdoesnotreceivesecurityforthepayments,thetotalcontractamountplusVAT,orifthecustomerdoesnothaveadequatecreditratingfromS&P,Moody'sorFitch,amoredetailedassessmentofthecustomer'screditworthinessisper-formedbythesalesunit,ContractReviewBoardandGroupTreasurypriortothesigningofthecontracttomitigateanyriskstoVestas.

91percent(2008:82percent)ofVestas'customershavenotexceededthedeadlineforpaymentat31December2009.Historically,Vestas'customershavepaidwithinthepaymentperiodagreedupon.Tradereceivablesoverduebymorethan180daysareimmaterial.

Vestassellswindturbines,windpowersystemsandservicetocompanies,whicharewellpositionedinnationalandinternationalmarkets.Thesecompaniesareconsideredtobereputablecompanies.Alloutstandingtradedebtorsareowedbyreputablecompanies.Inlightofthecreditsqueezemanagementdoesnotanticipateanydefaultsinrelationtoongoingprojectsandforfirmorderssigned.

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Creditrisksrelatingtobankbalances,investmentsaswellasderivativefinancialinstrumentsariseduetouncer-taintyastowhetherthecounterpartywillbeabletomeetitsobligationswhentheyaredue.TheGroupminimisesthisriskbyonlyusingfinancialinstitutionswithahighcreditstandingasbrokersforthepurchaseandsaleoffinan-cialinstruments.Furthermore,internallyVestashassetlimitsfortheGroup'stotalbalancewitheachbank.

Vestas'policyregardingplacementoffundswithbanksisthattheymusthaveaminimumlong-termcreditratingfromeitherS&P,Moody'sorFitchasfollows:

Credit Rating agency Rating

S&P A

Moody's A2

Fitch A

ThekeybankersofVestasare:

NordeaBankDanmarkA/S

CommerzbankAG

SociétéGénérale

BancoEspañoldeCrédito

Vestasusestwooftheabovebankswhenpurchasingandsellingfinancialinstruments.Inlightofthefinancialcrisis,managementcanconfirmthatVestas'bankdepositsaresecuredanditsfinancialinstrumentsremainunaffected.

Nobankbalancesorderivativefinancialinstrumentsareoverdueorwrittendownduetothecounterparty'sinabilitytopay.Therearenohistoriclossesrelatedtobankbalancesandderivativefinancialinstrumentsduetothecounter-party'sinabilitytopay.

2009 2008

Maximumcreditriskwithouttakingintoaccountsecurityreceivedfortradereceivables 525 938

Maximumcreditriskrelatedtobankbalances,securitiesandderivativefinancialinstruments 490 298

Maximumcreditriskrelatedtoconstructioncontractsandotherreceivables 1,282 688

2,297 1,924

liquidity risksliquidityriskistheriskthatVestasisunabletomeetitsobligationsastheyfallduebecauseofinabilitytorealiseassetsorobtainadequatefunding.TheGroupensuresthatastrongliquiditypositionismaintainedinordertoser-viceitsfinancialobligationsastheyfalldue,bothundernormalandmorepressingconditions.

GroupTreasuryisinchargeofensuringthatsubstantialcapitalresourcesareinplaceatalltimesthroughacombi-nationofliquiditymanagement,non-committedandcommittedcreditfacilitiesandotherdebtinstruments.Vestasmanagesitsliquidityriskthroughcashpoolsystemsinvariouscurrenciesandbyusingshort-termoverdraftfacili-tiesinanumberoffinancialinstitutions.Vestasexpectstobeabletofinanceitsorganicgrowththroughcashflowsfromoperations.ThecurrentcreditsqueezehasnotimpactedonVestas'abilitytomeetitsobligations.

However,itisnaturallynotpossibletoguaranteethatVestaswillalwaysbeabletomaintainitscreditratingortocomplywiththeminimumrequirementsinthefinancingagreements.ThenoccurrenceofeithereventualitywouldbelikelytohaveasignificantadverseeffectontheGroup.

ThevalueofcashassetswithdisposalrestrictionswasEUR20mat31December2009(2008:EUR12m).

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Thefollowingtableshowsthetimingofcashflowsrelatedtofinancialobligations,assetsandhedginginstruments.

2009Carryingamount Fairvalue <1year 1–5years

Morethan5years

Totalcashflows

Measured at amortised cost (loans and other debt)

Mortgagedebts 11 11 3 3 8 14

Bankdebtanddebttocreditinstitutions 340 340 9 306 32 347

Tradepayables 1,062 1,062 1,062 0 0 1,062

Otherliabilities 423 423 423 0 0 423

1,836 1,836 1,497 309 40 1,846

derivative financial instruments

InterestSWAPS(gross):

Floating-rateobligation 0 0 0 0 0 0

Fixed-rateobligation 1 1 1 0 0 1

Currencyhedgingagreements:

Cashflowhedges 10 10 9 1 0 10

Fairvaluehedges 2 2 2 0 0 2

13 13 12 1 0 13

total financial liabilities 1,849 1,849 1,509 310 40 1,859

Measured at amortised cost (receivables and deposits)

Tradereceivables 525 525 525 0 0 525

Constructioncontractsandotherreceivables 1,282 1,282 1,266 16 0 1,282

1,807 1,807 1,791 16 0 1,807

derivative financial instruments

InterestSWAPS(gross):

Floating-rateassets 0 0 0 0 0 0

Currencyhedgingagreements:

Cashflowhedges 1 1 1 0 0 1

Fairvaluehedges 0 0 0 0 0 0

1 1 1 0 0 1

total financial assets 1,808 1,808 1,792 16 0 1,808

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2008Carryingamount Fairvalue <1year 1–5years

Morethan5years

Totalcashflows

Measured at amortised cost (loans and other debt)

Mortgagedebts 13 13 3 5 11 19

Bankdebtanddebttocreditinstitutions 109 109 106 3 1 110

Tradepayables 1,030 1,030 1,030 0 0 1,030

Otherliabilities 321 321 321 0 0 321

1,473 1,473 1,460 8 12 1,480

derivative financial instruments

InterestSWAPS(gross):

Floating-rateobligation 1 1 2 1 0 3

Fixed-rateobligation 0 0 0 0 0 0

Currencyhedgingagreements:

Cashflowhedges 41 41 27 15 0 42

Fairvaluehedges 7 7 9 0 0 9

49 49 38 16 0 54

total financial liabilities 1,522 1,522 1,498 24 12 1,534

Measured at amortised cost (receivables and deposits)

Tradereceivables 938 938 938 0 0 938

Constructioncontractsandotherreceivables 688 688 663 25 0 688

1,626 1,626 1,601 25 0 1,626

derivative financial instruments

InterestSWAPS(gross):

Floating-rateassets 1 1 2 1 0 3

Currencyhedgingagreements:

Cashflowhedges 15 15 16 0 0 16

Fairvaluehedges 0 0 0 0 0 0

16 16 18 1 0 19

total financial assets 1,642 1,642 1,619 26 0 1,645

Cashatbankandinhandandinvestmentsaremeasuredatfairvalueandanyadjustmentsaremadethroughtheincomestatement.

Cashflowsforhedgedassetsandhedgedliabilitiesaswellthehedginginstrumentarerecognisedintheincomestatementinthesameperiod.

Foradescriptionofcashflowsrelatingtooperatingleases,referenceismadetonote34totheconsolidatedaccounts.

Thecarryingamountsofderivativefinancialinstrumentsareincludedinotherreceivablesandotherliabilities,asappropriate.

Asageneralrule,thefairvalueoffinancialliabilitiesandfinancialassetsiscalculatedusingdiscountedcashflowmodelsbasedonthemarketinterestratesandcreditconditionsatthebalancesheetdate.

Financialinstrumentsmeasuredatfairvaluearecategorisedintothefollowinglevelsofthefairvaluehierarchy:level1: Observablemarketpricesforidenticalinstruments.level2: Valuationtechniquesprimarilybasedonobservablepricesortradedpricesforcomparableinstruments.level3: Valuationtechniquesprimarilybasedonunobservableprices.ThefairvalueofVestas'forwardexchangecontractsaswellasofotherderivativefinancialinstruments(commodityinstruments)ismeasuredaccordingtolevel2asthefairvaluecanbeestablisheddirectlybasedonexchangeratespublishedandforwardinterestratesspecifiedatthebalancesheetdate.Fairvalueofbondsismeasuredaslevel1becausethefairvalueissetfromthesharepriceinanopenmarket.

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Market risksVestas'marketrisksrelatingtofinancialinstrumentscomprise:currencyrisks,interestraterisksandcommoditypricerisks.

Currency risks TheGroup'sbusinessactivitiesinvolveanumberofcurrencyrisksinconnectionwithpurchasesandsalesofgoodsandservicesinforeigncurrencies.ItisGrouppolicytohedgethecurrencyriskatthetimeofenteringintoabindingagreementinforeigncurrency.Onlythenetexposureforeachcurrencyishedged.Thecurrencyriskisprimarilyhedgedbyforwardexchangecontractsandcurrencyswapagreements.

In2009,VestasinvestedinproductionfacilitiesensuringthatcustomersinEuropearesuppliedfromEurope,customersinAmericasfromNorthAmericaandthoseinAsia/PacificfromAsia.ThisensuressignificantreductioninthecurrencyriskfortheGroup.

ExchangeadjustmentsrelatingtoinvestmentsinGroupsubsidiariesandassociatesabroadwithadifferentfunc-tionalcurrencythanthatoftheparentcompanyarerecogniseddirectlyinequity.Relatedcurrencyrisksarenothedgedas,intheGroup'sopinion,hedgingofsuchlong-terminvestmentswillnotbeoptimalfromanoverallriskandcostperspective.

TheisolatedeffectsoftheexchangeratechangesconsideredprobablebyManagement,(10percent)increase,at31DecemberagainsttheEURarespecifiedasfollows:

2009 2008

USD: Equity 7 4

Profitfortheyear 1 3

CAD: Equity 6 9

Profitfortheyear 1 1

GBP: Equity 10 20

Profitfortheyear 1 (1)

Onlycurrencieswithmaterialeffectoncomprehensiveincomeandincomestatementarespecifiedabove.Theaboveanalysisisbasedontheassumptionthatallothervariables,interestratesinparticular,remainconstant.Theexpectationsarebasedoncurrentlyavailablemarketdata.

Acorrespondingdeclineintheexchangeratesfortheabovecurrencieswillhavethesamebutoppositeeffectforbothequityandprofitfortheyear.Thedifferencesbetweenthe2009and2008valuesaresolelyduetodiffer-encesinthenominalamountsintheindividualcurrencies.

Currency hedging agreements relating to future transactions (cash flow hedges)ThefollowingnetoutstandingforwardexchangecontractsoftheGroupat31December,whicharepubliclytraded,areusedandqualifyascashflowshedges:

2009 2008

Nominalprincipalamount*)

Accumulatedcapital

gain/lossrecognised

inequity

Fairvalueofprincipal

amount

Termtomaturity

(months),upto

Nominalprincipalamount*)

Accumulatedcapital

gain/lossrecognised

inequity

Fairvalueofprincipal

amount

Termtomaturity

(months),upto

USD 133 (9) 142 17 504 (33) 537 29

SEK (20) 0 (20) 15 5 0 5 5

CAD 1 0 1 6 60 9 51 10

GBP (5) 0 (5) 7 (9) (1) (8) 12

EUR (109) 0 (109) 17 (560) 0 (560) 29

0 (9) 9 0 (25) 25

*)Positiveprincipalamountsofforwardexchangecontractsaresalesofthecurrencyinquestion,andnegativeprincipalamountsarepurchases.

TheGroup'scashflowhedgesrelateprimarilytonetcashflowsoutsideeuro-basedcountries,primarilyinAmericanandCanadiandollarsaswellasSwedishkroner(USD,CADandSEK,respectively)withequivalentsinDanishkroner(DKK)andeuro(EUR).

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36 dERivativE FinanCial instRUMEnts, RisK and FinanCial ManagEMEnt (ContinUEd)

Currency hedging agreements relating to assets and liabilities recognised in the balance sheet (fair value hedges)ThefollowingnetoutstandingforwardexchangecontractsoftheGroupat31Decemberareusedandqualifyasfairvaluehedgingofassetsandliabilitiesincludedinthebalancesheet.

2009 2008

Nominalprincipalamount*)

Accumulatedcapital

gain/lossrecognised

intheincomestatement

Fairvalueofprincipal

amount

Termtomaturity

(months),upto

Nominalprincipalamount*)

Accumulatedcapital

gain/lossrecognised

intheincomestatement

Fairvalueofprincipal

amount

Termtomaturity

(months),upto

USD (6) 0 (6) 4 (34) 0 (34) 15

SEK 0 0 0 - (30) (3) (27) 12

NOK 0 0 0 - (42) (5) (37) 12

CAD 40 0 40 6 0 0 0 -

INR 55 (1) 56 4 0 0 0 -

EUR 89 0 (89) 6 106 0 106 15

0 (1) 1 0 (8) 8

*)Positiveprincipalamountsofforwardexchangecontractsaresalesofthecurrencyinquestion,andnegativeprincipalamountsarepurchases.

Gains/(losses)onderivativefinancialinstrumentsfortheyearusedforhedgingoffairvaluesamountedtoEUR(3)m(2008:EUR0m).

FairvalueadjustmentscausedbymovementsinthehedgedriskonhedgedinstrumentsamountedtoEUR0m(2008:EUR0m).

TheVestasGroup'sfairvaluehedgesrelatetoreceivablesoutsideeuro-basedcountries,primarilyinSwedishandNor-wegiankroneraswellasAmericanandAustraliandollars(SEK,NOK,USDandAUD),withequivalentsineuro(EUR).

Allfairvaluechangesarerecognisedintheincomestatement.

Commodity price risksVestasusescopperandnickel,amongotherrawmaterials,fortheproductionofwindturbines.Wheretherisksofpricechangesonsuchrawmaterialsarenottransferredtothecustomer,Vestas'grossmarginperwindturbinecanbeaffectedbydevelopmentsincopperandnickelprices.Inordertohedgethisrisk,Vestasentersintoforwardcon-tractstopurchasecopperandnickelatafixedpriceatatimecorrespondingtothetimewhenVestaspurchasestherawmaterials.Thesecontractsareenteredintowithbanksandaresettledonacashbasis.

TheVestasGrouphedges80percentofthevaluesofexpectedcopperandnickelpurchasesforthepurposeofwindturbineproductionbymeansofforwardcontracts.

ThefairvalueofthecommodityhedgesoutstandingatthebalancesheetdateamountstoEUR0m(2008:EUR0m),whichhasbeenrecognisedinequity.

Theisolatedeffectsofa10percentincreaseordeclineinthepricecurveforcopperandnickelat31Decemberarespecifiedasfollows:

2009 2008

10 per cent increase

Equity 0 1

Profitfortheyear 0 0

10 per cent decline

Equity 0 (1)

Profitfortheyear 0 0

Theaboveanalysisisbasedontheoutstandinghedgeinstrumentsatthebalancesheetdate.

Thehedgingofcopperandnickelisconsideredtobeaneffectivecashflowhedgeandchangesinthevalueofthesearerecognisedinthestatementofcomprehensiveincome.Thesensitivityanalysesarepreparedontheassumptionthatallotherfactorsarekeptconstant.

Thedifferencebetweenthe2009and2008valuesaresolelyduetodifferencesinthevolumesofcopperandnickelpurchased.

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interest rate risksTheGroup'sinterestrateriskrelatestointerestratefluctuationsthatcanaffecttheGroup'scashflowsrelatedtointerestpaymentsandreceiptsandthefairvalueoffinancialinstruments.TheGroupcoverstheriskrelatedtochangedcashflowsonnetdebt.ItistheGroup'spolicytohedgethisriskonGrouploans.Hedgingisusuallymadebyenteringintointerestrateswapswherefloating-rateloansareconvertedintofixed-interestloans.

sensitivity analysis – interest rate risksVestasexpectsthelevelofinterestratesintheeurozonetobeaffectedbychangesintheUSA.BasedontrendsintheUSA,Vestasexpectsthatthelevelofinterestratesintheeurozonemayincreaseordeclinebyupto1percent-agepoint.Anincreaseordeclineof1percentagepointinthelevelofinterestrates,inrelationtoSWAPSout-standingatthebalancesheetday,willhavethefollowingeffectonequityandtheincomestatement.

2009 2008

1 percentage point increase

Equity 2 2

Profitfortheyear 2 2

1 percentage point decline

Equity (2) (2)

Profitfortheyear (2) (2)

TheGroup'sinterest-bearingfinancialassetsandliabilitieshavethefollowingtermtocontractualreviewormatur-ity,dependingonwhichdateoccursfirst.Thedifferencesinbetween2008and2009valuesaresolelyduetodif-ferencesintheinterestbearingassetsandliabilities.

Timeofreview/maturity

2009 <1year 1–5years >5years TotalFixed-interest

part

Effectiveinterestrate(%)

Financial liabilities

Mortgagedebt 3 1 7 11 8 4.9

Bankdebtanddebttocreditinstitutions 9 301 30 340 9 2.0

12 302 37 351 17

Financial assets

Tradereceivables 525 0 0 525

525 0 0 525

Timeofreview/maturity

2008 <1year 1–5years >5years TotalFixed-interest

part

Effectiveinterestrate(%)

Financial liabilities

Mortgagedebt 3 4 6 13 9 4.7

Bankdebtanddebttocreditinstitutions 106 3 1 110 1 4.9

109 7 7 123 10

Financial assets

Tradereceivables 938 0 0 938

938 0 0 938

Theeffectiveinterestrateswerecalculatedatthebalancesheetdate.

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interest rate hedging agreements (cash flow hedges)ItisGroup'spolicytohedgeallinterestraterisksonGrouploans.Hedgingisusuallymadebyenteringintointerestrateswapswherefloating-rateloansareconvertedintofixed-rateloans.

Thefairvalueoftheinterestrateswapsenteredintotohedgetheinterestrateriskonfloating-rateloansout-standingatthebalancesheetdateamountstoEUR1m(2008:EUR1m),whichhasbeenrecognisedinequity.TheprincipalofinterestrateswapsenteredintoamountstoEUR0m(2008:EUR0m)andtheremainingtimetomaturityofupto7months(2008:19months).

Financial management InconnectionwithfinancialmanagementitistheGroup'sobjectivetocreatethenecessarystabilitytoimplementstrategicdevelopmentworkwhileinthelongtermachievingacompetitivereturnforthecompany'sshareholders.Atthesametime,theGrouphastheobjectiveofreducingcostofcapital.

TheGroup'spossiblemethodsofmaintainingorchangingitscapitalstructureare:adjustmentofthedividendslevel;sharebuy-backs;issuingofnewshares;newborrowing,changeoftheleveloffundingfromprepaymentsreceivedandcreditgrantedbysuppliersorthesaleofassetstoreducedebts.

TheGroupassessesitsfinancialpositiononthebasisofthedebt-equityratiocalculatedinaccordancewiththeguidelinesissuedbytheDanishSocietyofFinancialAnalysts.ItisVestas'long-termtargettomaintainasolvencyratioofatleast40percent.

37 sUBsEqUEnt EvEnts

ordersIn2010,Vestashasannouncedan80MWorderforGermany.

Acompleteoverviewofannouncedordersisavailableatvestas.com/investor.Vestasonlydisclosesfirmanduncon-ditionalordersandinrelationtocompanyannouncements,theordervaluemustbeaboveEUR66m.

Us tax creditInconnectionwiththeinvestmentsinColorado,USA,VestashasreceivedamanufacturingincentivetaxcreditofEUR36m.

Extraordinary general MeetingOn14January2010,VestasWindSystemsA/SheldanExtraordinaryGeneralMeetingforthepurposeofamen-dingArticle4(6)ofthecompany'sArticlesofAssociationconcerningthedeadlineforshareholders'rightstoincludeaspecificmatterontheagendaforthecompany'sAnnualGeneralMeeting.

TheBoardofDirectorshadproposedthattheexistingdeadlinewaschangedtoadeadlineofsixweeks,whichisconsistentwiththedeadlinesetoutinthenewDanishCompaniesAct.Theproposedresolutionwasadoptedunanimously.

share-based incentive programmeAttheannualgeneralmeetingheldon26March2009,itwasnotifiedthatthecompany'soptionprogrammeintheautumnof2009willbeexpandedtoincludealargergroupofexecutivesincludingallVicePresidents,ChiefSpecialists,ChiefProjectManagersandSeniorVicePresidentsinallbusinessunitsaswellasVicePresidents,ChiefSpecialistsandChiefProjectManagersinVestasWindSystemsA/S.ExecutiveManagement,PresidentsandSeniorVicePresidentsinVestasWindSystemsA/S,reportingdirectlytotheExecutiveManagementareincludedinearlierprogrammes.Moreinformationabouttheoptionprogrammecanbefoundonpage34oftheannualreport.

112 Vestasannualreport2009

notEs to tHE ConsolidatEd aCCoUnts (MEUR)

nEW aCCoUnting REgUlationsThefollowingstandardsandinterpretationshavebeenadoptedbyIASBandapprovedbytheEU,buthavenotyetbecomeeffectiveandthereforenotimplemented:

amendment to ias 27 ”Consolidated and separate Financial statements”Theamendmentimpliesthatiftheenterpriseacquiresorsellsowner-shipsharesinasubsidiarywithoutlosingcontrol,thedifferencebetweentheacquisitionpriceorthesalesprice,respectively,andthecarryingamountofsameshouldbeshownasanequitytransaction.Theapplicationoftheamendedstandardisnotexpectedtohaveanymate-rialeffectontheannualreportforfuturefinancialyears.

amendment to ias 39 ”Financial instruments: Recognition and Measurement”Theamendmentstatesthatthetimevalueofanoptioncannotre-flecttheriskhedgedandthattheinflationelementofafinancialitemcanonlybehedgedifstipulatedbycontract.TheapplicationoftheamendedstandardisnotexpectedtohaveanymaterialeffectontheAnnualReportforfuturefinancialyears.

iFRs 3 “Business Combinations”TheamendmenttoIFRS3includes:· Transactioncostsarerecognisedinthestatementofincomeastheyincur

· Asageneralrule,adjustmentsofcontingentconsiderationarerecog-nisedinthestatementofincome

· Possibilityofrecognisinggoodwillattachedtotheminorityinterest· Existingrelationsbetweenbuyerandtheenterprisetakenovermustalsobevaluedatfairvalue.

Moreover,thestandardincludesamendmentsinthefollowingareas:· Recognitionandmeasurementofidentifiableassetsandliabilities· New/moredisclosurerequirements.

Theapplicationoftheamendedstandardwillhavenomaterialeffectontheannualreportforfuturefinancialyears.

iFRiC 12 ”service Concession arrangements”Theinterpretation,effectivefrom1January2010orlater,describestheaccountingtreatmentofconcessionagreements.Theinterpreta-tioniscurrentlynotrelevanttoVestas.

iFRiC 15 ”arrangements for the Construction of Real Estate”Theobjectivesoftheinterpretationistoclarifythedefinitionofcon-structioncontractsandtheclarificationofwhenaconstructioncontractshouldbetreatedunderIAS11orIAS18andtoprovidemoreguidanceonhowtoaccountforrevenuewhentheagreementfortheconstruc-tionofrealestatefallswithinthescopeofIAS18.Theinterpretationiseffectiveforaccountingperiodsbeginning1January2010orlater.

iFRiC 17 ”distributions of non-cash assets to owners”Impliedthatdividenddistributedasnon-cashassetsmustbemeas-uredatfairvalue.Theinterpretationisnotexpectedtobeofanyimpor-tancetoVestas.

iFRiC 18 ”transfers of assets from Customers”Theinterpretationappliestotheaccountingfortransfersofitemsofproperty,plantandequipmentfromcustomerseithertoconnecttoanetworkortoprovideongoingaccesstosupplyofgoodsorservices.

TheinterpretationisofimportancemainlytoenterprisesenteringintooutsourcingagreementsorrunningautilitycompanyandisnotexpectedtohaveanyrelevancetoVestas.

IASBhasissuedthefollowingamendmentstostandardsandnewinter-pretationswhichhavenotyetbeenapprovedbytheEU:

amendment to iFRs 1 ”First-time adoption of international Financial Reporting standards”ThisamendmenteasesthetransitiontoIFRSforoilandgasenter-prises.ThestandardwillbeofnoimportancetoVestas.

amendment to iFRs 2 ”share-based Payment”Thisamendmentclarifiesthattheparentcompany'spaymentofcashandcashequivalentswhichisbasedonthepriceofitsownshares,sharesinthesubsidiaryorathirdgroupenterpriseisclassifiedasshare-basedpaymentintheenterpriseinwhichtheemployeeisem-ployed.As,atthepresenttime,Vestasdoesnothaveanysuchshare-basedpayments,theapplicationoftheamendedstandardisnotex-pectedtohaveanyeffectontheannualreportforfuturefinancialyears.

iFRs 9 ”Financial instruments: Classification and Measurement”Thenumberofcategoriesoffixedassetinvestmentsisreducedtotwo–amortisedcostcategoryorthefairvaluemodel.Theclassificationismadeonthebasisofthenatureofthebusinessmodelandthechar-acteristicsoftheinstrument,respectively.TheimplementationofthestandardisnotexpectedtohaveanymaterialeffectontherecognitionofthefixedassetinvestmentsofVestas.

amendment to ias 32 ”Financial instruments: disclosure and Presentation”Theamendmenthastheeffectthatrightsissuesdenominatedinacurrencyotherthanthefunctionalcurrencyoftheenterprisewillbeclassifiedasanequityinstrumentwhentheamountstobereceivedbytheenterpriseareconstantlyinforeigncurrenciesandwhentherightsissuesareofferedtoallshareholdersonaproratabasis.

Vestasdoesnotintendtomakeanyrightsissuesdenominatedinacurrencyotherthanthefunctionalcurrencyoftheenterprise.TheimplementationoftheamendedIAS32isthereforenotexpectedtohaveanyeffectontheannualreportforfuturefinancialyears.

annual improvements to ten existing standards and two existing interpretationsTheseconstituteonlyminoramendmentsandclarificationswhicharenotexpectedtohaveanymaterialeffectontheAnnualReportforfuturefinancialyears.

iFRiC 19 ”Extinguishing Financial liabilities with Equity instruments”Theinterpretationstateshowtoaccountforanon-contractualconver-sionofdebtintoequityindebtor'sfinancialstatements.Theinterpreta-tionisnotexpectedtobeofanyimportancetoVestas.

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name Place of registered office share capital votes and ownership

Parent company

vestas Wind systems a/s Randers, denmark tdKK 203,704 -

Production units

vestas Blades a/s Randers, denmark tdKK 91,000 100%

VestasBladesDeutschlandGmbH lauchhammer,Germany tEUR 26 100%

VestasBladesItaliaS.r.l. Taranto,Italy tEUR 21,364 100%

VestasWindTechnology(China)Co.ltd. Tianjin,China tCNy 945,516 100%

VestasBladesAmericaInc. Windsor(CO),USA tUSD 12,000 100%

VestasBladesSpainS.l.U. Madrid,Spain tEUR 23,000 100%

vestas Control systems a/s Randers, denmark tdKK 12,000 100%

VestasControlSystemsSpainS.l.U. Olvega,Spain tEUR 384 100%

vestas nacelles a/s Randers, denmark tdKK 300,000 100%

VestasNacellesItaliaS.r.l. Taranto,Italy tEUR 16,423 100%

VestasNacellesDeutschlandGmbH lübeck,Germany tEUR 25 100%

VestasNacellesSpainS.A. Viveiro,Spain tEUR 601 100%

VestasNacellesAmericaInc. Windsor(CO),USA tUSD 20,000 100%

VestasCastingsMagdeburgGmbH Magdeburg,Germany tEUR 260 100%

VestasCastingsGuldsmedshyttanAB Guldsmedshyttan,Sweden tSEK 11,000 100%

VestasCastingsKristiansandAS Kristiansand,Norway tNOK 62,797 100%

VestasCastings(Xuzhou)Co.ltd. Xuzhou,China tCNy 172,119 100%

vestas towers a/s Randers, denmark tdKK 55,000 100%

VestasTorresSpainS.l.U. Zaragoza,Spain tEUR 500 100%

VestasTowersAmericaInc. Windsor(CO),USA tUSD 20,000 100%

VestasTowersMediterraneanS.l. Madrid,Spain tEUR 2,060 100%

1) Companiesofimmaterialinteresthavebeenleftoutoftheoverview.

lEgal EntitiEs1)

114 Vestasannualreport2009

name Place of registered office share capital votes and ownership

sales and service units

vestas americas a/s Randers, denmark tdKK 50,000 100%

Vestas-AmericanWindTechnologyInc. Portland(OR),USA tUSD 105,856 100%

Vestas-CanadianWindTechnologyInc. Kincardine(ON),Canada tCAD 92,010 100%

vestas asia Pacific a/s Randers, denmark tdKK 33,000 100%

VestasAsiaPacificWindTechnologyPte.ltd. Singapore,Singapore tSGD 10,000 100%

Vestas-AustralianWindTechnologyPty.ltd. Melbourne,Australia tAUD 53,000 100%

VestasKoreaWindTechnologyCorp. Seoul,SouthKorea tKRW 500,000 100%

VestasNewZealandWindTechnologyltd. Wellington,NewZealand tNZD 100 100%

VestasTaiwanltd. TapeiCity,Taiwan tTWD 500 100%

VestasWindTechnology(Beijing)Co.ltd. Beijing,China tCNy 8,171 100%

Vestas-DanishWindTechnologyA/S Ringkøbing,Denmark tDKK 30,000 100%

VestasWindTechnologyIndiaPvtlimited Chennai,India tINR 1,490,150 100%

VestasWindTechnologyJapanCo.ltd. Tokyo,Japan tJPy 110,000 100%

vestas Central Europe a/s Randers, denmark tdKK 57,000 100%

VestasDeutschlandGmbH Husum,Germany tEUR 16,873 100%

VestasServicesGmbH Husum,Germany tEUR 47,390 100%

VestasBeneluxB.V. Rheden,TheNetherlands tEUR 1,362 100%

VestasÖsterreichGmbH Schwechat,Austria tEUR 7,035 100%

VestasCzechias.r.o. Olivova,CzechRepublic tCZK 200 100%

VestasHungaryKft. Budapest,Hungary tHUF 500 100%

VestasBulgariaEOOD Sofia,Bulgaria tBGN 5 100%

VestasCEURomaniaS.R.l Bucharest,Romania tRON 570 100%

VestasCentralEuropeZagrebd.o.o Zagreb,Croatia tHRK 20 100%

VestasSlovakiaspolS.r.o. Bratislava,Slovakia tEUR 5 100%

vestas Mediterranean a/s Randers, denmark tdKK 50,000 100%

VestasItaliaS.r.l. Rome,Italy tEUR 3,000 100%

VestasHellasWindTechnologyS.A. Athens,Greece tEUR 510 100%

VestasEólicaSAU Madrid,Spain tEUR 12,680 100%

VestasFranceSAS Montpellier,France tEUR 5,040 100%

VestasPorServiçosdeTecnologíaEólicalda. lisbon,Portugal tEUR 6,000 100%

VestasMexicoS.A.deC.V. Condesa,Mexico tMXN 156 100%

VestasdoBrasilltda. SaoPaolo,Brazil tBRl 2,502 100%

VestasArgentinaS.A. BuenosAires,Argentina tARS 66 100%

VestasChileTurbinasEólicalimitade Santiago,Chile tClP 5,080 100%

VestasRüzgarEnerjisiSistemleriSanayiveTicaretltd.Sirket Istanbul,Turkey tTRy 11,500 100%

vestas northern Europe a/s Randers, denmark tdKK 100,000 100%

Vestas-CelticWindTechnologyltd. Warrington,England tGBP 8,200 100%

VestasNorthernEuropeAB Malmö,Sweden tSEK 1,000 100%

VestasPolandSp.z.o.o. Szczecin,Poland tPlN 435 100%

NEGMiconUKltd. Cheltenham,England tGBP 4,000 100%

VestasNorthernEurope(Ireland)ltd. Dublin,Ireland tEUR 2,000 100%

vestas offshore a/s Randers, denmark tdKK 97,000 100%

VestasOffshoreTheNetherlandsB.V. Ijmuiden,TheNetherlands tEUR 18 100%

VestasOffshoreUKltd. Warrington,England tGBP 11,500 100%

VestasOffshoreBelgiumN.V. Brussels,Belgium tEUR 62 100%

VestasOffshoreFranceSAS Paris,France tEUR 20 100%

lEgal EntitiEs

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name Place of registered office share capital votes and ownership

other subsidiaries and associates

vestas spare Parts & Repair a/s Randers, denmark tdKK 50,000 100%

VestasSparePartsBelgium Bruxelles,Belgium tEUR 500 100%

VestasSpareParts&RepairUK,ltd. Bristol,England tGBP 1,000 100%

VestasSpareParts&Repair,S.l. Barcelona,Spain tEUR 3 100%

VestasWindTechnology(China)Co.ltd. Hohhot,China tCNy 321,799 100%

VestasIndiaHoldingA/S Randers,Denmark tDKK 267,110 100%

WindPowerInvestA/S Ringkøbing,Denmark tDKK 25,000 100%

VestasTechnology(UK)limited IsleofWight,England tGBP 90 100%

VestasTechnologyR&DSingaporePte.ltd. Singapore,Singapore tSGD 1,500 100%

VestasTechnologyR&DChennaiPte.ltd. Chennai,India tINR 40,000 100%

VestasTechnologyR&DAmericasInc. Houston(TX),USA tUSD 1,000 100%

GREPA/S Randers,Denmark tDKK 12,000 100%

GREPSvenskaAB Falkenberg,Sweden tSEK 1,824 100%

GREPUSAInc. California,USA tUSD 2,001 100%

GREPWindPowerInc. California,USA tUSD 1,100 100%

Pecsa,PlantasEólicasDeCanariasSociedadAnónima lasPalmas,Spain tEUR 1,496 49.8%2)

PlantaEólicaEuropeaS.A. Tarifa,Spain tEUR 1,199 44.0%2)

Windco,llC California,USA tUSD 39 38.0%2)

2) Associates(windpowerplants).

116 Vestasannualreport2009

ManagEMEnt's statEMEnt

TheExecutiveManagementandBoardofDirectorshavetodayconsideredandadoptedtheAnnualReportofVestasWindSystemsA/Sforthefinancialyear2009.

Theconsolidatedfinancialstatementsarepreparedinac-cordancewithInternationalFinancialReportingStandardsasadoptedbytheEU,andtheFinancialStatementsoftheparentcompany,VestasWindSystemsA/S,arepreparedinaccordancewiththeDanishFinancialStatementsAct.Moreover,theconsoli-datedfinancialstatementsandtheparentcompany'sfinancialstatements(“theFinancialStatements”)arepreparedinaccord-ancewithadditionalDanishdisclosurerequirementsforlistedcompanies.Themanagementreportisalsopreparedinaccord-ancewithDanishdisclosurerequirementsforlistedcompanies.

Inouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionat31December2009oftheGroupandtheparentcompanyandoftheresultsoftheGroupandparentcom-pany'soperationsandconsolidatedcashflowsforthefinancialyear1January–31December2009.

Inouropinion,themanagementreportincludesatrueandfairaccountofthedevelopmentintheoperationsandfinancialcircum-stancesoftheGroupandtheparentcompany,oftheresultsfortheyearandofthefinancialpositionoftheGroupandtheparentcompanyaswellasadescriptionofthemostsignificantrisksandelementsofuncertaintyfacingtheGroupandtheparentcompany.

WerecommendthattheannualreportbeapprovedattheAnnualGeneralMeeting.

Randers,10February2010

ditlev EngelPresidentandCEO

Henrik nørremarkExecutiveVicePresident

andCFO

Board of directors

Executive Management

Bent Erik CarlsenChairman

torsten Erik RasmussenDeputyChairman

Freddy Frandsen Håkan ErikssonElly smedegaard Rex

Kim Hvid thomsen Kurt anker nielsenjørn ankær thomsen

ola Rollén sussie dvinge agerbo

Michael abildgaard lisbjerg

jørgen Huno Rasmussen

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tHE indEPEndEnt aUditoRs' REPoRt

to tHE sHaREHoldERs oF vEstas Wind systEMs a/sWehaveauditedtheannualreportofVestasWindSystemsA/Sforthefinancialyear1Januaryto31December2009whichcomprisestheconsolidatedfinancialstatements,theparentcompanyfinancialstatements(“theFinancialStatements”)andthemanagementreport.Thefinancialstatementscomprisestatementsofincome,statementsofcomprehensiveincome,bal-ancesheets,statementsofchangesinequityandnotesincludingsignificantaccountingpoliciesfortheGroupandtheparentcom-panyaswellasconsolidatedcashflowstatement.

Theconsolidatedfinancialstatementsarepreparedinaccord-ancewithInternationalFinancialReportingStandards(IFRS)asadoptedbytheEUandtheparentcompany'sfinancialstate-mentsarepreparedinaccordancewiththeDanishFinancialStatementsAct.Moreover,thefinancialstatementsandthemanagementreportarepreparedinaccordancewithadditionalDanishdisclosuresrequirementsforlistedcompanies.

Theauditdidnotcomprisethe”Non-financialhighlightsfortheGroup”and”Non-financialissues”onpages7and50–60,respec-tively,inrespectofwhichaseparatestatementhasbeenissuedonpage61.

Management's responsibilityManagementisresponsibleforthepreparationandfairpres-entationofthefinancialstatementsinaccordancewiththeabove-mentionedlegislationanddisclosurerequirements.Thisresponsibilityincludes:designing,implementingandmaintaininginternalcontrolrelevanttothepreparationandfairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.Theresponsibilityalsoincludesse-lectingandapplyingappropriateaccountingpolicies,andmakingaccountingestimatesthatarereasonableinthecircumstances.Furthermore,themanagementisresponsibleforpreparingamanagementreportthatincludesatrueandfairaccountinaccordancewithDanishdisclosurerequirementsforlistedcom-panies.

auditors' responsibility and basis of opinionOurresponsibilityistoexpressanopinionontheannualreportbasedonouraudit.WeconductedourauditinaccordancewithDanishAuditingStandards.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassurancewhethertheannualreportisfreefrommaterialmisstatements.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresintheannualreport.Thepro-ceduresselecteddependontheauditor'sjudgment,includingtheassessmentoftherisksofmaterialmisstatementoftheannualreport,whetherduetofraudorerror.Inmakingthoseriskassess-ments,theauditorconsidersinternalcontrolrelevanttotheen-tity'spreparationandfairpresentationofconsolidatedfinancialstatementsandparentcompany'sfinancialstatementsandtothepreparationofamanagementreportthatincludesatrueandfairaccountinordertodesignauditproceduresthatareappropri-ateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity'sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresenta-tionoftheannualreport.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Ourauditdidnotresultinanyqualification.

opinionInouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionat31December2009oftheGroupandoftheresultsoftheGroup'soperationsandconsolidatedcashflowsforthefinancialyear1Januaryto31December2009inaccord-ancewithInternationalFinancialReportingStandards(IFRS)asadoptedbytheEUandadditionalDanishdisclosurerequire-mentsforlistedcompanies.Moreover,inouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionat31December2009oftheparentcompanyandoftheresultsoftheParentCompany'soperationsforthefinancialyear1Januaryto31December2009inaccordancewiththeDanishFinancialStatementsActandadditionalDanishdisclosurerequirementsforlistedcompanies.Furthermore,inouropinion,themanage-mentreportincludesatrueandfairaccountinaccordancewithDanishdisclosurerequirementsforlistedcompanies.

Carsten gernerStateAuthorised

PublicAccountant

jesper KoefoedStateAuthorised

PublicAccountant

søren skov larsenStateAuthorised

PublicAccountant

torben ahle PedersenStateAuthorised

PublicAccountant

Copenhagen,10February2010

PricewaterhouseCoopersStatsautoriseretRevisionsaktieselskab

Aarhus,10February2010

KPMgStatsautoriseretRevisionspartnerselskab

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annual­accounts­for­Vestas­Wind­Systems­a/S120 Accountingpolicies121 Incomestatement122 Balancesheet123 Statementofchangesinequity124 Notestotheannualaccounts

Shareholders­and­the­stock­exchange132 Sharecapital132 Ownership133 InvestorRelations133 GeneralMeeting135 Companyannouncements

information­about­the­company136 Informationaboutthecompany

index138 Index

120 Vestasannualreport2009

aCCoUnting PoliCiEs FoR vEstas Wind systEMs a/sTheannualaccountshavebeenpreparedinaccordancewiththeprovisionsoftheDanishFinancialStatementsAct(DKGAAP)applyingtoenterprisesofreportingclassD,aswellastherequirementslaiddownbyNASDAQOMXCopenhageninrespectofthefinancialreportingofcompanieslistedonthestockex-change.

VestasWindSystemsA/S'functionalcurrencyisDanishkroner(DKK),butduetotheinternationalrelationsoftheGrouptheannualaccountsarepresentedineuro(EUR).

Foradoptedaccountingpoliciesrefertonote1totheconsoli-datedaccountsonpage71.Thedenominationoftheitemsintheparentcompany'sannualaccountscomplieswiththerequirementsoftheDKGAAPbutconformstothecontentsoftheaccountingpoliciesaccordingtoIFRS.Refertothesection”Terminology”foradescriptionofthemaindifferencesbetweenDKGAAPandIFRSinthedenominationoftheitems.

Theaccountingpoliciesappliedareunchangedfromthoseappliedinthepreviousyear.

TheaccountingpoliciesoftheparentcompanydeviatefromtheGroup'saccountingpoliciesinthefollowingareas:

investments in subsidiaries Investmentsinsubsidiariesarerecognisedandmeasuredintheannualreportoftheparentcompanyundertheequitymethod.

Onacquisitionofsubsidiaries,thedifferencebetweencostofacquisitionandnetassetvalueoftheenterpriseacquiredisdeterminedatthedateofacquisitionaftertheindividualassetsandliabilitieshavingbeenadjustedtofairvalue(theacquisitionmethod)andallowingfortherecognitionofanyrestructuringpro-visionsrelatingtotheenterpriseacquired.

Anyremainingpositivedifferencesinconnectionwiththeacqui-sitionofsubsidiariesareincludedintheitem”Investmentsinsub-sidiaries”.Theitem”Shareofprofitinsubsidiariesaftertax”intheincomestatementincludestheproportionateshareoftheprofitaftertaxlessgoodwillamortisation.

Theitem”Investmentsinsubsidiaries”inthebalancesheetincludetheproportionateownershipshareofthenetassetvalueoftheenterprisescalculatedundertheaccountingpoliciesoftheparentcompanywithdeductionoradditionofunrealisedintercompanyprofitsorlossesandwithadditionofanyremainingvalueofpositivedifferences(goodwill).

SubsidiarieswithanegativenetassetvaluearemeasuredatEUR0,andanyreceivablesfromthesearewrittendownbytheparentcompany'sshareofthenegativenetassetvalue.Anylegalorconstructiveobligationoftheparentcompanytocoverthenega-tivebalanceofthecompanyisrecognisedinprovisions.

Thetotalnetrevaluationofinvestmentsinsubsidiariesistrans-ferredupondistributionofprofitto”Reserveundertheequitymethod”underequity.

Gainsandlossesondisposalsorwindingupofsubsidiariesarecalculatedasthedifferencebetweenthesalesvalueorcostofwindingupandthecarryingamountofthenetassetsatthedateofacquisitionincludinggoodwillandexpectedcostofdisposalorwindingup.Thegainsorlossesareincludedintheincomestate-ment.

goodwillGoodwillisincludedintheitem”Goodwill”orintheitem”Invest-mentsinsubsidiaries”andisamortisedovertheestimatedusefullifedeterminedonthebasisofManagement'sexperiencewiththeindividualbusinessareas.Goodwillisamortisedonastraight-linebasisovertheamortisationperiod,whichismaximum20years,andwhichwillbelongestforenterprisesacquiredforstra-tegicpurposeswithalong-termearningsprofile.

annual­accounts­for­Vestas­Wind­Systems­a/S

tERMinology

Netrevenue(DKGAAP):Revenue(IFRS)Fixedassets(DKGAAP):Non-currentassets(IFRS)Provisions(DKGAAP):Non-currentandcurrentliabilities(IFRS)long-termdebt(DKGAAP):Non-currentliabilities(IFRS)Short-termdebt(DKGAAP):Currentliabilities(IFRS)

121Vestasannualreport2009 Ves

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mEUR note 2009 2008

net revenue 1 1,140 893

Costofsales 2 (431) (408)

gross profit 709 485

Sellinganddistributionexpenses 2 0 0

Administrativeexpenses 2,3 (303) (233)

operating profit 406 252

Shareofprofitinsubsidiariesaftertax 4 174 246

Financialincomeandexpenses(net) 5 111 82

Profit before tax 691 580

Corporationtax 6 (127) (85)

Profit for the year 564 495

Proposeddistributionofprofit:

Reservefornetrevaluationundertheequitymethod 66 (190)

Retainedearnings 498 685

Dividends 0 0

Profit for the year 564 495

inCoME statEMEnt 1 janUaRy – 31 dECEMBER FoR vEstas Wind systEMs a/s

122 Vestasannualreport2009

mEUR note 2009 2008

Intangibleassets 7 504 337

Property,plantandequipment 8 334 283

Investmentsinsubsidiaries 9 1,604 1,491

total fixed assets 2,442 2,111

Inventories 10 7 8

Receivablesfromsubsidiaries 2,753 3,385

Otherreceivables 11 34 35

Corporationtax 0 9

Prepaymentsandaccruedincome 1 2

total receivables 2,788 3,431

Investments 0 121

Cashatbankandinhand 359 2

total current assets 3,154 3,562

total assets 5,596 5,673

Sharecapital 27 25

Reservefornetrevaluationundertheequitymethod 341 262

Retainedearnings 2,898 1,586

total equity 3,266 1,873

Warrantyprovisions 13 150 163

Deferredtax 12 113 39

Otherprovisions 14 6 10

total provisions 269 212

Mortgagedebt 15 8 8

Debttocreditinstitutions 15 330 0

total long-term debt 338 8

Short-termshareofmortgagedebtanddebttocreditinstitutions 15 0 102

Tradepayables 75 38

Payablestosubsidiaries 1,508 3,354

Corporationtax 34 0

Otherliabilities 106 86

total short-term debt 1,723 3,580

total debt 2,061 3,588

total equity and liabilities 5,596 5,673

Mortgagesandsecurity 16

Contractualobligations 17

Contingentliabilities 18

Relatedpartytransactions 19

Currencyandinterestraterisksandtheuseofderivativefinancialinstruments 20

Subsequentevents 21

BalanCE at 31 dECEMBER FoR vEstas Wind systEMs a/s - assEts, EqUity and liaBilitiEs

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2009mEUR Sharecapital

Reserveunderthe

equitymethodRetainedearnings Total

Equity at 1 january 25 262 1,586 1,873

ExchangerateadjustmentsfromconversiontoEUR 0 0 1 1

Exchangerateadjustmentsrelatingtoforeignentities 0 13 0 13

Reversaloffairvalueadjustmentsofderivativefinancialinstruments,recognisedintheincomestatement 0 0 38 38

Fairvalueadjustmentsofderivativefinancialinstruments 0 0 (8) (8)

Share-basedpayments 0 0 2 2

Taxonchangesinequity 0 0 (8) (8)

Profitfortheyear 0 66 498 564

Capitalincrease 2 0 800 802

Costsofcapitalincrease 0 0 (10) (10)

Acquisitionoftreasuryshares 0 0 (1) (1)

Equity at 31 december 27 341 2,898 3,266

2008mEUR Sharecapital

Reserveunderthe

equitymethodRetainedearnings Total

Equity at 1 january 25 495 931 1,451

ExchangerateadjustmentsfromconversiontoEUR 0 0 (1) (1)

Exchangerateadjustmentsrelatingtoforeignentities 0 (43) 0 (43)

Reversaloffairvalueadjustmentsofderivativefinancialinstruments,recognisedintheincomestatement 0 0 (4) (4)

Fairvalueadjustmentsofderivativefinancialinstruments 0 0 (38) (38)

Share-basedpayments 0 0 3 3

Taxonchangesinequity 0 0 10 10

Profitfortheyear 0 (190) 685 495

Acquisitionoftreasuryshares 0 0 0 0

Equity at 31 december 25 262 1,586 1,873

statEMEnt oF CHangEs in EqUity 1 janUaRy – 31 dECEMBER FoR vEstas Wind systEMs a/s

124 Vestasannualreport2009

1 nEt REvEnUE

Thenetrevenueintheparentcompanyconsistsofmanagementfee,service,royaltyandrentalincomefromotherGroupcompanies.

2 staFF Costs

2009 2008

Staffcostsarespecifiedasfollows:

Wagesandsalaries,etc. 211 143

Pensionschemes 11 8

Othersocialsecuritycosts 1 1

223 152

ForinformationregardingremunerationtotheBoardofDirectorsandtotheExecutiveManagementseenote6totheconsolidatedaccounts.Pensionschemesintheparentcompanyconsistsolelyofdefinedcontributionplansandthecompanydoesthereforenotcarrytheactuarialriskortheinvestmentrisk.Foroptionprogramme,seenote30totheconsolidatedaccounts.

Averagenumberofemployees 2,261 1,776

3 FEEs to aUditoRs aPPointEd By tHE annUal gEnERal MEEting

2009 2008

Audit:

PricewaterhouseCoopers 1 1

KPMG 1 1

total audit 2 2

Non-auditservices:

PricewaterhouseCoopers

Otherassurancestatements 0 0

Taxassistance 0 0

Otherservices 1 1

1 1

KPMG

Otherassurancestatements 0 0

Taxassistance 0 0

Otherservices 1 1

1 1

total non-audit services 2 2

Vestas'auditorscanbeused,withincertainparameters,forcertainnon-auditservicesandmayoftenbetheobviouschoiceduetobusinessknowledge,confidentialityandcostsconsideration.Vestashasacomprehensivepolicyfornon-auditservicesensuringthattheprovisionofnon-auditservicestotheGroupdoesnotimpairtheauditors'independenceorobjectivity.TheAuditCommitteeisresponsibleforthedevelopmentandmaintenanceofthispolicyandmonitorscompliance.

In2008and2009,otherservicesincludefeesmainlyforotherassistanceinaccounting.

notEs to tHE annUal aCCoUnts FoR vEstas Wind systEMs a/s (MEUR)

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4 sHaRE oF PRoFit in sUBsidiaRiEs

2009 2008

Shareofprofitinsubsidiariesbeforetax 290 379

Shareoftaxofsubsidiaries (102) (119)

Amortisationofgoodwill (14) (14)

174 246

5 FinanCial inCoME and ExPEnsEs

2009 2008

Financialincomefromsubsidiaries 130 107

Financialexpensestosubsidiaries (3) (47)

Exchangerateadjustments 2 18

Investments(bonds) 0 1

Otherfinancialincome 1 19

Otherfinancialexpenses (19) (16)

111 82

6 CoRPoRation tax

2009 2008

Currenttaxonprofitfortheyear 47 0

Deferredtaxonprofitfortheyear 102 83

Changetotaxrate 0 0

Jointtaxationcontribution (20) 0

Adjustmentsrelatingtopreviousyears(net) (2) 2

total corporation tax for the year 127 85

Taxonentriesinequityrelatingtodeferredtax 8 (10)

tax on entries in equity 8 (10)

total tax for the year 135 75

7 intangiBlE assEts

2009

Completeddevelopment

projects Goodwill Software

Developmentprojectsin

progress Total

Costat1January 184 19 67 203 473

Additions 0 0 27 199 226

Disposals 0 0 0 0 0

Transfers 81 0 0 (81) 0

Cost at 31 december 265 19 94 321 699

Amortisationat1January 124 5 7 0 136

Amortisationfortheyear 42 1 16 0 59

Impairmentfortheyear 0 0 0 0 0

Reversalofamortisationofdisposalsintheyear 0 0 0 0 0

amortisation at 31 december 166 6 23 0 195

Carrying amount at 31 december 99 13 71 321 504

Amortisationperiod 3–5years 5–20years 3–5years

notEs to tHE annUal aCCoUnts FoR vEstas Wind systEMs a/s (MEUR)

126 Vestasannualreport2009

8 PRoPERty, Plant and EqUiPMEnt

2009landandbuildings

Plantandmachinery

Otherfixturesandfittings,

toolsandequipment

Property,plantandequipment

inprogress Total

Costat1January 252 18 25 51 346

Additions 6 0 13 56 75

Disposals 0 0 (1) 0 (1)

Transfers 48 6 8 (62) 0

Cost at 31 december 306 24 45 45 420

Depreciationat1January 47 7 9 0 63

Depreciationfortheyear 12 2 9 0 23

Reversalofamortisationondisposalsintheyear 0 0 0 0 0

depreciation at 31 december 59 9 18 0 86

Carrying amount at 31 december 247 15 27 45 334

Assetsheldunderfinanceleasesincludedaboveamountto 0 0 0 0 0

Depreciationperiod 25–40years 3–10years 3–5years

9 invEstMEnts in sUBsidiaRiEs

2009

Costat1January 1,229

ExchangerateadjustmentsfromconversiontoEUR 0

Additions 34

Disposals 0

Cost at 31 december 1,263

Valueadjustmentsat1January 262

Exchangerateadjustments 13

Profitsharesfortheyearaftertax 188

Dividend (108)

Disposals 0

Amortisationofgoodwill (14)

value adjustments at 31 december 341

Carrying amount at 31 december 1,604

Remainingpositivedifferenceincludedintheabovecarryingamountat31December 194

ThelegalentitiesintheVestasGrouparelistedonpages113–115intheconsolidatedaccounts.

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10 invEntoRiEs

2009 2008

Rawmaterialsandconsumables 7 8

Workinprogress 0 0

Finishedgoods 0 0

7 8

11 RECEivaBlEs

Thecarryingamountofreceivablesapproximatestheirfairvalue.

12 dEFERREd tax

2009 2008

Deferredtaxat1January (39) 57

Deferredtaxonprofitfortheyear (102) (83)

Taxonentriesinequity (8) 10

Changeincorporatetaxrate 0 0

Adjustmentrelatingtopreviousyears 36 (23)

deferred tax at 31 december (net) (113) (39)

13 WaRRanty PRovisions

2009 2008

Warrantyprovisionsat1January 163 164

Warrantyprovisionsfortheyear 228 231

Usedwarrantyprovisionsfortheyear (241) (232)

Warranty provisions at 31 december 150 163

Thewarrantyprovisionsareexpectedtobepayableasfollows:

0–1year 103 114

1–5years 47 49

150 163

Theproductwarranties,whichinthegreatmajorityofcasescoverbothcomponentdefects,functionalerrorsandanyfinanciallossessufferedbythecustomerinconnectionwithunplannedsuspensionofoperations,areusuallygrantedforatwo-yearperiodfromdeliveryofthewindturbine.Incertaincases,awarrantyofuptofiveyearsisgranted.Tothecustomer,thespecificwarrantyperiodandthespecificwarrantytermsarepartofthebasisoftheindividualcontract.

Warrantyprovisionsonlyincludestandardwarranty,whereasservicespurchasedinadditiontothestandardwar-rantyareincludedinprepaymentsfromcustomers.Referenceismadetopage27oftheManagementreportandnote2totheconsolidatedaccountsforfurtherinformationonVestas'warrantyprovisions.

Inadditiontotheabove,provisionsaremadeforupgradesofwindturbinessoldduetotypefaults,etc.whereVestashasawarrantyobligationatthedateofprovision.Suchprovisionswillalsoincludewindturbinessoldinprioryears,butwheretypefaults,etc.areidentifiedlater.Moreover,itshouldbeemphasisedthatthecomplexityofsomeoftheidentifiedtypefaults,etc.mayleadtoadjustmentsofpreviousestimates,upwardsaswellasdownwards,affectedbyfactualinformationaboutpopulationsize,costsofrepairandthetimingofsuchrepair.

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128 Vestasannualreport2009

14 otHER PRovisions

2009 2008

Otherprovisionsat1January 9 12

Provisionsfortheyear 1 0

Usedotherprovisionsduringtheyear (4) (1)

Adjustmentrelatingtopreviousyearsprovisions 0 (1)

other provisions at 31 december 6 10

Otherprovisionsareexpectedtobepayableasfollows:

0–1year 1 5

>1year 5 5

6 10

15 long-tERM dEBt

2009 2008

Short-termshareoflong-termdebtbreaksdownasfollows:

Mortgagedebt 0 0

Debttocreditinstitutions 0 102

0 102

long-termdebtbreaksdownasfollows:

1-5years 302 2

>5years 36 6

338 8

16 MoRtgagEs and sECURity

Assecurityforthecompany'smortgageloans,mortgagedeedsregisteredtothemortgagorandall-moneymortgageshavebeensecuredonlandandbuildings,plantandmachineryaswellasotherfixturesandfittings,toolsandequipment.

Furthermore,thecompanyhasissuedmortgagedeedsregisteredtothemortgagorandall-moneymortgagessecuredontheabove-mentionedproperties.Thesemortgagedeedsandall-moneymortgagesareallinthepossessionofthecompany.

2009 2008

Totalmortgageloans 8 8

Mortgagedeedsandall-moneymortgagesrelatingtothecompany'smortgageloans:

Nominalvalueofmortgagedeedsandall-moneymortgages 10 10

Carryingamountofpledgedassets 25 21

Othermortgagedeedsandall-moneymortgagesinthepossessionofthecompany 109 113

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17 ContRaCtUal oBligations

2009 2008

Theleaseobligationrelatingtooperatingleasesfallsdue:

0–1year 2 2

1–5years 1 3

>5years 0 0

Operatingleasescompriseirrevocableoperatingleasesregardingbuildings,carsandofficeequipment.Themainobligationsrelatetobuildings.

18 ContingEnt liaBilitiEs

2009 2008

Providedworkandpaymentguarantees 164 220

Guaranteesforbankdebtofsubsidiaries 35 34

Inadditiontothis,theparentcompanyprovidesperformancebondsinconnectionwithprojectsuppliesinsubsidia-ries,andtheirwarrantyobligationstocustomers.

ThecompanyisofajointtaxationwithitsDanishsubsidiaries.Astheadministrativecompanyforthesubsidiariesincludedinthejointtaxation,thecompanyisliableforthetaxobligationsoftheincludedsubsidiaries.

Forpendinglawsuitsrefertonote35totheconsolidatedaccounts.

19 RElatEd PaRty tRansaCtions

Fortransactionswithrelatedpartiesrefertonote31totheconsolidatedaccounts.

20 CURREnCy and intEREst RatE RisKs and tHE UsE oF dERivativE FinanCial instRUMEnts

Fortheuseofderivativefinancialinstrumentsandrisksandcapitalmanagementrefertonote36totheconsolidatedaccounts.

21 sUBsEqUEnt EvEnts

Forsubsequenteventsrefertonote37totheconsolidatedaccounts.

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Shareholders­and­the­stock­exchange

OMXNORDIC40INDEXTOP15IN2009

Company share turnover (mEUR)

NokiaOyj 57,310Ericsson,Telefonab.lM 32,053Hennes&MauritzAB,H&M 23,340NordeaBankAB 22,601VestasWindSystemsA/S 20,948SwedbankAB 15,209AtlasCopcoAB 14,431Volvo,AB 14,172TeliaSoneraAB 12,815NovoNordiskA/S 12,218A.P.Møller-MærskA/S 12,078SkandinaviskaEnskildaBankenAB 11,948AstraZenecaPlC 11,603SandvikAB 11,563SKF,AB 9,941

Financial calendar 2010

17.03. AnnualGeneralMeeting

28.04. DisclosureofQ1/2010

18.08. DisclosureofQ2/2010

26.10. DisclosureofQ3/2010

andexpectationsfor2011

43analystscoveringtheVestasshare

44roadshowdaysin2009

45IReventsin2009

119,672registeredVestasshareholdersasper31December2009

Scandinavia

Europe

USA

DISTRIBUTIONOFANAlySTSCOVERINGTHEVESTASSHARE

132 Vestasannualreport2009

VestasaimstosafeguardtheGroup's–andbyextensiontheshareholders'–long-terminterests.ThatcanonlybeachievedthroughacloseandpositivecollaborationwithallofVestas'stakeholders.

Managementthereforeengagesinanongoingdialoguewith,amongothers,theshareholders,whoaregivenanopportunitytoexpresstheirviewsaboutthecompany'soperationsandstra-tegicandcommercialdevelopment.

Inordertoensurethatallstakeholdersaretreatedalike,nodis-tinctionismadebetweeninternalandexternalcommunication.AllcommunicationfromVestasunderpinstheoverallpictureofthebusiness,itsgoalsandcorporateculture,andallcommunica-tionisbasedonwhatservesVestas'bestinterest.

Vestas'InvestorRelationsdepartmentendeavourstoensurethatallstakeholdersaregivenatrueandadequateviewofVestas.ThisisachievedamongotherthingsbyannouncinginformationaboutVestaswhichisconsideredtohaveanotableimpactonthepricingofVestas'sharesasquicklyaspossible,simultaneouslytoallstakeholdersandpursuanttoDanishlegislationforlistedcompanies.

Duringafour-weekperiodaheadofthepublicationoffinancialreports,communicationwithVestas'stakeholdersissubjecttorestrictions.Duringthese“closedperiods”,Vestas'communicationwithitsstakeholdersislimited.Nocommentsaremadeonfinan-cialresults,forecastsormarketoutlook.

StakeholderswishingtoreceivecompanyannouncementsandpressreleasesfromVestasWindSystemsA/Sbyemail,maysub-scribetoVestas'newsserviceatvestas.com/investor.

sHaRE CaPitalVestasWindSystemsA/S'sharesarelistedonNASDAQOMXCopenhagenunderthesymbolVWS.Vestashasonefreelynego-tiableshareclassandatotalof203,704,103sharesattheendof2009.

Atthecompany'sgeneralmeetings,eachsharecarriesonevote.Accordingly,allshareholdersareentitled,incompliancewithafewformalrequirements,tohaveequalaccesstosubmitpro-posals,attend,speakandvoteatgeneralmeetings,ref.VestasWindSystemsA/S'ArticlesofAssociation,whichareavailableatvestas.com/investor.

Capital increaseInApril2009,VestasannouncedthattheGroupwouldusetheauthorityinArticle3(2)ofthecompany'sArticlesofAssociationtoissue18,500,000newshares.

ThesharecapitalincreasewasfullysubscribedatapriceofDKK323.00pershareinaprivateplacementtoinstitutionalandpro-fessionalinvestorsinDenmarkandinternationally.ThecompanyreceivednetproceedsofEUR792mfromthecapitalincrease.

share turnoverIn2009,theVestassharewasthemosttradedshareonNASDAQOMXCopenhagenwithaturnoverofEUR21bn.

Furthermore,theVestassharewasthefifthmosttradedshareintheOMXNordic40index.OMXNordic40isashareindexcomprisingthe40mosttradedsharesfromfourequitymarketsmanagedbytheOMXGroupintheNordiccountries;Denmark,Finland,IcelandandSweden.

share price performanceAttheendof2009,theshareclosedatDKK317.00,equaltoamarketcapitalisationofEUR8.7bn.During2009,thepriceoftheVestasshareroseby4percent.

authorities granted to the Board of directorsTheArticlesofAssociationofVestascontaintwoauthoritiesgrantedtotheVestasBoardofDirectorsconcerninganincreaseofthecompany'ssharecapital,ref.Article3oftheArticlesofAssociation.Theauthorisationsarevaliduntil1January2011andconcern:

· IssuanceofemployeesharesforatotalnominalamountofDKK1,776,895.00.

· IssuanceofwarrantsforatotalnominalamountofDKK368,000.00.

Furthermore,theBoardofDirectorsdeterminesthetermsofthewarrantsissuedandcapitalincreasescarriedoutinaccordancewiththeauthorities,ref.Article3(1-3)oftheArticlesofAssoci-ation.

MoredetailedinformationabouttheauthoritiesissetoutinVestasWindSystemsA/S'ArticlesofAssociation,whichareavailableatvestas.com/investor.

Sincethecompany'sestablishmentin1986,everyyeartheBoardofDirectorshasbeenauthorisedbytheshareholdersattheannualgeneralmeetingtoletthecompanyacquiretreasurysharesintheperioduntilthenextannualgeneralmeetingwithinatotalnominalvalueofupto10percentofthecompany'ssharecapitalfromtimetotime,ref.section48oftheDanishPublicCompaniesAct.

oWnERsHiPAttheendoftheyear,Vestashad119,672registeredshare-holders,whocombinedrepresented177,286,826shares,or87percentofVestas'sharecapital.At31December2009,56percentofVestas'sharecapitalwasheldbythecompany's50larg-estshareholders,includingcustodianbanks.

VestasintendstoincreaseinternationalownershipsothatthegroupofownersreflectstheinternationalnatureofVestas'operations.Basedontheinformationavailableasat31Decem-ber2009,anestimated68percentofVestas'totalsharecapital,includingsharesnotregisteredbyname,areestimatedtobeheldbyinternationalshareholders.Attheendof2008,internationalshareholdersheldapprox60percent.

Share capital distribution at 31 December (%)

2009 2008 2007 2006 2005

Internationalshareholders 60 54 58 48 46

Danishshareholders 27 35 31 42 47

Shareholdersnotregisteredbyname 13 11 11 10 7

International

shareholders 60%

Shareholders not

registered by name 13%

Danish

shareholders 27%

Distribution 2009

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Major shareholdersOn12March2009and24August2009,respectively,ATPandATPInvest,Denmark,andMarsicoCapitalManagementllC,USA,announcedthattheyhadreducedtheirshareholdingstobelow5percentofthesharecapital.Attheendof2009,noshareholdershaveannouncedholdingmorethan5percentofthesharecapi-tal(asrequiredbysection55oftheDanishCompaniesAct).

the company's holding of treasury sharesIn2009,Vestasincreaseditsportfoliooftreasurysharesby21,970shares.Theshareswereacquiredundertheexistingauthoritygrantedbytheshareholdersatthegeneralmeetingtoacquireupto10percentofthecompany'ssharecapital.

Attheendof2009,Vestashadaportfolioconsistingof758,363treasurysharesacquiredin2006,2007and2009.Vestasacquiredtreasurysharestocoveritsoptionprogrammeforexecutives,ref.note30totheconsolidatedaccounts.

vestas shares held by managementAt31December2009,membersofVestas'BoardofDirectorsheldatotalof113,117Vestasshares,andVestas'ExecutiveManagementheld3,437Vestasshares.At31December2009,thesesharesrepresentedacombinedmarketvalueofapproxEUR5.0m,ref.note30totheconsolidatedaccounts.

ThemembersofVestas'BoardofDirectorsandExecutiveMan-agementareregisteredontheVestasinsiderlist.Asageneralrule,theymayonlytradeinVestassharesduringafour-weekperiodfollowingthereleaseoftheannualreport,quarterlyreportsorotherfinancialannouncements,ref.thecompany'sinternalrules.

Themanagementhasadutytoreportanysharetransactions,andalistofannouncedinsidertransactionsmadeduringtheyearisavailableatvestas.com/investor.

invEstoR RElationsVestas'InvestorRelationsdepartmentaimstobevisibleandaccessibletoexistingandpotentialshareholdersandotherstake-holderswithdueconsiderationtolegislativerequirementsandbasedoncorporategovernancestandards.Inordertokeepinter-estintheVestasshareatahighlevel,InvestorRelationsregularlyprovidesinformationtothecompany'sstakeholdersbymeansof:

· broaddistributionofthecompany'sfinancialreportsandcom-panyannouncements;

· arrangementoflivewebcastsinconnectionwiththecompany'spresentationoffinancialresults;

· aninformativewebsite;· roadshowactivityfollowingeachfinancialpresentation;· meetingsforinvestorsandanalysts,investorseminars,exhibi-tions,conferencecalls,capitalmarketsdays,companyvisitsandotherarrangements;

· distributionofinformationtothecompany'sregisteredshare-holders;and

· dailycontactandcorrespondencethroughtheInvestorRela-tionsdepartment.

VestasaimstoimprovecommunicationswithitsshareholdersinordertoinformthemaboutVestas'goalsandtosafeguardlong-termshareholderinterests.

However,inordertooptimisecommunicationsitisnecessaryforVestastoknowtheidentityofitsshareholders.VestasthereforerecommendsthatitsshareholdershavetheirVestassharesreg-isteredbynameinthecompany'sregisterofshareholders.

Registration of vestas sharesVestas'sharesareregisteredinthenameoftheholder,ref.Vestas'ArticlesofAssociation.Manyoftheshareholders'rightscanonlybeexercisedifthesharesareregisteredbyname.

Shareholderscanhavetheirsharesregisteredbynamebycon-tactingtheircustodybank.Theadvantagesofregistrationofthesharesbynameare:

· shareholdersmayexercisetheirshareholderrights;· twiceannually,shareholderswillreceivethe“Shareholderinformation”fromVestas,whichcontainsinformationabouttheGroup'scurrentstatus;

· shareholderscanaccessVestas'InvestorPortalviavestas.com/investor.

ViatheInvestorPortal,Vestas'registeredshareholderscanonline:

· viewthesizeoftheirownportfolioofregisteredVestasshares;· subscribetospecificinformationandindicatehowtheywishtoreceivesuchinformation;

· registerforgeneralmeetings;and· voteatgeneralmeetingsinadvancebygivingproxytoothers.

Additionalinformationisprovidedintheleaflet“BecomeanactiveVestasshareholder”,whichisavailableatvestas.com/investor.

gEnERal MEEtingVestas'generalmeetingisthesuprememanagementbodyofthecompany,andshareholdersmayexercisetheirrightstomakedecisionsinthecompanyatthegeneralmeeting.

TheBoardofDirectorsinvitesallshareholderstoexercisetheirinfluenceandasksthatallshareholdersensurethattheirholdingofVestassharesisregisteredbynameinthecompany'sregisterofshareholders.TheBoardofDirectorsrecommendsthatallshareholdersexpresstheiropinionsbyvotingatthenextgeneralmeeting,eitherby:

· attendingthemeeting;· votingviatheInvestorPortal;· fillinginandreturningaproxyform;or· givingproxytotheBoardofDirectorsandinthatwaygivingmanagementastrongmandatetoserveVestas'bestinterest.

vestas' annual general Meeting 2010TheAnnualGeneralMeetingofVestasWindSystemsA/Swillbeheldon17March2010at2p.m.(CET)attheConcertHall(Musikhuset)inAarhus,Denmark.ThenoticeoftheAnnualGen-eralMeetingandthecompleteproposalswillbepublishedon23February2010.

dividendIngeneral,theintentionoftheBoardofDirectorsistorecommendadividendpayoutratioof25-30percentoftheprofitfortheyear.However,distributionofdividendswillalwaysbedecidedwithdueconsiderationfortheGroup'splansforgrowthandliquidityrequirements.Vestas'BoardofDirectorsbelievesthatasolvencyratioofatleast40percentisaprerequisiteforpayingdividend.

TheBoardofDirectorsintendstoproposetothecompany'sAnnualGeneralMeetingthat,basedonthecomprehensiveinvestmentsandtheneedforstrongcapitalresources,nodivi-dendbepaidinrespectof2009.

134 Vestasannualreport2009

CoMPany annoUnCEMEnts1)

07.01.2009 01/2009 Expansionofincentiveprogramme16.01.2009 02/2009 FrauddetectedbytheSpanishsubsidiary,VestasEólicaS.A.U.,hasbeenreportedtothe

authoritiesinBarcelona,Spain16.01.2009 03/2009 Vestasreceiveslarge3MWorderforRomania11.02.2009 04/2009 annual report 200812.03.2009 05/2009 Majorshareholderannouncement–ATPandATPInvest26.03.2009 06/2009 VestasWindSystemsA/S'annualgeneralmeetingon26March200931.03.2009 07/2009 Vestasreceives74MWorderinItaly01.04.2009 08/2009 Vestasreceivesorderfor228MWinRomania28.04.2009 09/2009 interim financial report, first quarter 200928.04.2009 10/2009 Issueofupto18,500,000newsharesinaprivateplacement28.04.2009 11/2009 SharecapitalincreaseofDKK18,500,000newshareswillbecompleted04.05.2009 12/2009 RegistrationofsharecapitalincreaseofnominallyDKK18,500,000completed29.05.2009 13/2009 Disclosurerequirementregardingsharecapitalandnumberofvotes…10.07.2009 14/2009 Vestasreceivesordersfor75MWforwindenergyprojectsinChina30.07.2009 15/2009 Vestasreceives165MWoffshoreorderinBelgium31.07.2009 16/2009 Vestasreceivesorderfor82MWinCyprus07.08.2009 17/2009 Vestasreceivesorderfor111MWinAustralia18.08.2009 18/2009 interim financial report, second quarter 200924.08.2009 19/2009 Majorshareholderannouncement–MarsicoCapitalManagement,llC26.08.2009 20/2009 Vestasreceivesorderfor77MWforSpain17.09.2009 21/2009 Vestasreceivesorderfor99MWinIndia27.10.2009 22/2009 interim financial report, third quarter 200927.10.2009 23/2009 Sharebasedincentiveprogrammefor2010to201228.10.2009 24/2009 Vestasreceivesorderfor102MWinMexico23.12.2009 25/2009 Vestasreceives140MWorderforBulgariaandRomania30.12.2009 26/2009 Vestas'financialcalendar30.12.2009 27/2009 Vestasreceives96MWorderforPoland

06.01.2010 01/2010 Vestasreceives80MWorderforGermany14.01.2010 02/2010 VestasWindSystemsA/S'ExtraordinaryGeneralMeetingon14January2010

1)FirmandunconditionalorderswithavalueofmorethanEUR66maredisclosedascompanyannouncements.

VESTASBASICDATA

Stockexchange.......................................NASDAQOMXCopenhagenISINcode......................................................DK0010268606Tickersymbol............................................vwsSharecapital............................................DKK203,704,103Nominaldenomination......................DKK1.00Numberofshares..................................203,704,103Shareclasses...........................................one

PURCHASEOFVESTASSHARES

StakeholdersinDenmarkcanbuyVestassharesonline,forexampleviaInternetbankingorthroughanyDanishbank.StakeholderswhodonotliveinDenmarkmustcontactoneofthemajorinternationalbanksintheircountryforfurtherinformation.

INVESTORRElATIONS

VestasWindSystemsA/SInvestorRelationsAlsvej218940RandersSVDenmarkTel.:+4597300000Email:ir@Vestas.com

NEWSSERVICE

StakeholderswhowishtoreceivecompanyannouncementsandpressreleasesfromVestasWindSystemsA/SbyemailmayregisterthroughVestas'newsserviceatvestas.com/investor.Furthermore,itisalsopossibletoreceivealertsregardingwebcastsandshareinformationbyemailorSMSthroughVestas'newsservice

136 Vestasannualreport2009

information­about­the­company

CoMPany REg. no.10403782

CoMPanyvestas Wind systems a/sAlsvej218940RandersSVDenmark

Tel: +4597300000Fax:+4597300001vestas@vestas.comwww.vestas.com

BoaRd oF diRECtoRsBentErikCarlsen,ChairmanTorstenErikRasmussen,DeputyChairmanEllySmedegaardRexFreddyFrandsenHåkanErikssonJørgenHunoRasmussenJørnAnkærThomsenKimHvidThomsenKurtAnkerNielsenMichaelAbildgaardlisbjergOlaRollénSussieDvingeAgerbo

ExECUtivE ManagEMEntDitlevEngel,PresidentandCEOHenrikNørremark,ExecutiveVicePresidentandCFO

laWyERsGORRISSENFEDERSPIElH.C.AndersensBoulevard121553CopenhagenVDenmark

ReedSmithllPTwoEmbarcaderoCenter,Suite2000SanFrancisco,CA94111USA

aUditoRsPricewaterhouseCoopersStatsautoriseretRevisionsaktieselskabStrandvejen44    2900HellerupDenmark

KPMGStatsautoriseretRevisionspartnerselskabVærkmestergade258100AarhusCDenmark

BanKsNordeaBankDanmarkA/SStrandgade30900CopenhagenCDenmark

CommerzbankAGPOBox5271530GreshamStreetlondonEC2D2XyUK

SociétéGénérale29,BoulevardHaussmann75009ParisFrance

BancoEspañoldeCréditoPaseodelaCastellana,10328046MadridSpain

137Vestasannualreport2009 Ves

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salEs BUsinEss Unitsvestas americas1881SWNaitoParkwayPortland,OR97201USATel: +15033272000Fax:+15033272001vestas-americas@vestas.com

vestas asia Pacific1HarbourFrontPlaceHarbourFrontTowerOne#09-01Singapore098633Tel: +6563036500Fax:+6562786500vestas-asiapacific@vestas.com

vestas Central EuropeChristoph-Probst-Weg220251HamburgGermanyTel: +49(0)406945450Fax:+49(0)4069454550vestas-centraleurope@vestas.com

vestas China20thFloor,PingAnInternationalFinancialCentreNo.1-3,XinyuanSouthRoad100027ChaoyangDistrict,BeijingChinaTel: +861059232000Fax:+861059232001vestas-china@vestas.com

vestas MediterraneanEdificioVestasCalleArroyodeValdebebas428050MadridSpainTel: +34913628200Fax:+34915670052vestas-mediterranean@vestas.com

vestas northern EuropeGrophusgatan521586MalmöSwedenTel: +4640376700Fax:+4640376720vestas-northerneurope@vestas.com

vestas offshoreAlsvej218940RandersSVDenmarkTel: +4597300000Fax:+4597305001vestas-offshore@vestas.com

PRodUCtion BUsinEss Unitsvestas BladesSmedHansensVej196940lemDenmarkTel: +4597300000Fax:+4597306623vestas-blades@vestas.com

vestas Control systemsFrankrigsvej158450HammelDenmarkTel: +4597300000Fax:+4597308601vestas-controlsystems@vestas.com

vestas nacellesSmedSørensensVej36950RingkøbingDenmarkTel: +4597300000Fax:+4597306567vestas@vestas.com

vestas towersEngdraget206800VardeDenmarkTel: +4597300000Fax:+4597301841vestas-towers@vestas.com

BUsinEss Unitsvestas People & CultureToldbodgade398930RandersNØDenmarkTel: +4597300000Fax:+4597300001vestas@vestas.com

vestas spare Parts & Repairlangelandsvej88940RandersSVDenmarkTel: +4597300000Fax:+4597300001vestas@vestas.com

vestas technology R&dHedeager428200AarhusNDenmarkTel: +4597300000Fax:+4597303999vestas@vestas.com

138 Vestasannualreport2009

index

Accountingpolicies,consolidatedaccounts........................................................71

Accountingpolicies,non-financialhighlights......................................................60

Accountingpolicies,VestasWindSystemsA/S............................................ 120

AnnualaccountsforVestasWindSystemsA/S............................................ 120

Asgreenasitgets................................................................................................................53

Auditors.......................................................................................................................... 31,136

Balancesheet.................................................................................................................26,66

Banks........................................................................................................................................ 136

Boardcommittees.......................................................................................................32,35

BoardofDirectors........................................................................................................31,35

Bonus............................................................................................................................................17

Capitalincrease.................................................................................................................. 132

Cashflowstatement..................................................................................................27,69

CodeofConduct.....................................................................................................................55

Competenciesandfiduciarypositions...........................................................40,45

Corporategovernancerecommendations............................................................34

CostofEnergy................................................................................................................17,53

Customerloyaltysurvey...................................................................................................16

Developmentfacilities.......................................................................................................21

Dividend.................................................................................................................................. 133

EBITmargin...............................................................................................................................26

Employees.................................................................................................................................16

Energyconsumption...........................................................................................................54

Environmentmanagementsystem...........................................................................55

Equity............................................................................................................................................27

Ethicsline..........................................................................................................................56,59

ExecutiveManagement...........................................................................................33,35

Failureisnotanoption.......................................................................................................15

Financialitems........................................................................................................................26

Financialrisks.................................................................................................................22,23

Generalmeeting........................................................................................................ 31,133

GlobalCompact.....................................................................................................................51

GlobalCompact'stenprinciples..................................................................................58

Grossprofit...............................................................................................................................25

Healthandsafetymanagement..................................................................................52

HighlightsfortheGroup,financial................................................................................. 6

HighlightsfortheGroup,non-financial....................................................................... 7

Incentiveprogrammes..............................................................................................34,99

Incomestatement.......................................................................................................25,64

Inventories........................................................................................................................26,90

InvestorRelations.................................................................................................133,134

Knowledgeresources.........................................................................................................19

lawyers................................................................................................................................... 136

legalentities....................................................................................................................... 113

Majorshareholders......................................................................................................... 133

Mission.........................................................................................................................................15

MWdelivered...........................................................................................................................26

Networkingcapital.....................................................................................................26,98

No.1inModernEnergy.....................................................................................................15

Notestotheconsolidateaccounts............................................................................70

Operatingprofit......................................................................................................................26

Outlookfor2010..................................................................................................................27

Ownership.............................................................................................................................. 132

Patents.........................................................................................................................................21

PresidentsoftheGroup'sbusinessunits...............................................................46

Provisions..........................................................................................................................26,93

Remuneration.................................................................................................................33,99

Reports/statements.............................................................................................. 61,116

Revenue..............................................................................................................................25,64

Riskmanagement.................................................................................................................21

Safetyfirst.................................................................................................................................52

Service..........................................................................................................................................20

Sharecapital............................................................................................................... 92,132

Shareturnover..................................................................................................................... 132

Triple15.......................................................................................................................................... 4

Vision............................................................................................................................................15

Wastedisposal.......................................................................................................................54

Waterconsumption.............................................................................................................54

Willpower....................................................................................................................................15

vestas.com vestas.com

Annual report 2009

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Vestas Wind Systems A/S

Alsvej 21DK-8940 Randers SVDenmark

Tel: +45 9730 0000Fax: +45 9730 0001

vestas@vestas.com