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Notes

Note 1Accounting policies and valuation principles

The principal accounting policies applied in the preparation of these consolidated accounts are set out below. These policies have been applied consistently to all the years presented, unless otherwise stated.

1.1. BASIS OF PREPARATION

The consolidated accounts for the Studsvik Group have been prepared in accordance with the Annual Accounts Act, RFR 1.2, Supplementary accounting rules for groups and International Financial Reporting Standards (IFRS) as adopted by the EU. The consolidated accounts have been prepared in accordance with the historical cost method except as regards remeasurement of land and buildings, available for sale financial assets and financial assets and liabilities carried at fair value through profit or loss.

Preparing statements in accordance with IFRS requires the use of a number of important accounting estimates. Furthermore, the management must make certain judgements when applying the Group's accounting policies. The areas that entail a high degree of judgement, which are complex or of such a nature that assumptions and estimates are critical to the consolidated accounts are specified in note 3.

Standards, amendments and interpretations that have come into force and are applied by the Group

  • IFRS 7 (Amendment), Financial instruments - Disclosures (applies from January 1, 2009). The amendment requires enhanced disclosure on fair value measurement and liquidity risk. In particular, the amendment requires disclosure on fair value measurement per level in a valuation hierarchy. Since this amendment only implies additional disclosure, it has no impact on earnings per share.
  • IAS 1 (revised), Presentation of financial statements (applies from January 1, 2009). The revised standard forbids the presentation of income and expense items (i.e. changes in equity that do not arise from transactions with shareholders) in the statement of changes in equity, but requires that "changes in equity that do not arise from transactions with shareholders" be reported separately from changes in equity arising from transactions with shareholders in a statement of comprehensive income. The Group therefore presents all shareholder-related changes in equity in the report on the Group's changes in equity, while all changes in equity not arising from transactions with shareholders are presented in the consolidated statement of comprehensive income. Comparative information has been restated so that it conforms with the revised standard. Since this accounting policy amendment only affects the presentation it has no impact in the earnings per share.
  • The Group capitalizes borrowing costs that are directly attributable to purchase, construction or production of an asset that takes a substantial period of time to get ready for its intended use or sale, as a part of the cost of that asset, in the cases where the first date of capitalization is January 1, 2009 or later. This accounting policy amendment is a consequence of the application of the transition provisions in IAS 23, Borrowing costs (2007). Comparative information has thereby not been restated. The accounting policy amendment has no material impact on earnings per share. In 2008 and 2009 the Group capitalizes borrowing costs attributable to investment in the new waste facility in the United Kingdom.

Standards, amendments and interpretations in force, but which are not relevant to the Group
The following standards, amendments and interpretations of published standards are compulsory for financial years starting on January 1, 2009 or later, but are not relevant to the Group:

  • IFRS 2, Share-based payment.

Standards, amendments and interpretation of existing standards that as yet have not come into force and that are not applied in advance by the Group
The following new standards and amendments and interpretations of existing standards have been published and are compulsory for the Group's accounting for the financial year starting on January 1, 2010 or later, but have not been applied in advance by the Group.

  • IAS 27 (amendment), Consolidated and separate financial statements (applies from July 1, 2009). The revised standard requires that the effects of all transactions with shareholders with non-controlling interests that do not result in a change in control are accounted for as equity transactions and these transactions no longer give rise to goodwill or profit or loss. The standard also states that when a parent company loses the controlling interest any remaining participation must be remeasured to fair value and a gain or loss be recognized in the income statement. The Group will apply IAS 27 (amendment) prospectively for transactions with non-controlling interests from January 1, 2010.
  • IFRS 3 (revised), Business combinations (applies from July 1, 2009). The revised standard continues to prescribe the acquisition method of accounting for business combinations but with some material amendments. For example all payments made to purchase a business are recognized at fair value on the acquisition date, while subsequent conditional payments are classified as liabilities that are thereafter revalued via the income statement. An accounting policy choice can be made, on a transaction by transaction basis, to measure a non-controlling interest in the acquired business at fair value or the non-controlling interest's proportionate share of net assets of the acquiree. All transaction costs referring to acquisitions must be recognized as an expense. The Group will apply IFRS 3 (revised) prospectively for all business combinations from January 1, 2010.
  • IAS 38 (amendment), Intangible assets. The amendment is part of the IASB's annual improvements project, published in April 2009 and the Group will apply IAS 38 (amendment) from the same date as IFRS 3 (revised). The amendment provides clarification on fair value measurement of an intangible asset acquired in a business combination. Under the amendment intangible assets are grouped and treated as one asset if they have similar useful lives. The amendment will have no material impact on the Group's financial reporting.
  • IFRS 5 (amendment), Non-current assets held for sale and discontinued operations. The amendment is part of the IASB's annual improvements project, published in April 2009. The amendment clarifies that IFRS 5 specifies the disclosure requirements for non-current assets (or disposal groups) classified as non-current assets held for sale or discontinued operations. It also clarifies that the general requirements of IAS 1 still apply, in particular points 15 (to give a true and fair view) and 125 (sources of estimation uncertainty). The Group will apply IFRS 5 (amendment) from January 1, 2010. It is not expected to have any material impact on the Group's financial reporting.
  • IAS 1 (amendment), Presentation of financial statements. The amendment is a part of the IASB's annual improvements project published in April 2009. The amendment clarifies that the potential settlement of a liability by the issue of equity is not relevant to its classification as current or non-current. By changing the definition of a current liability, the amendment allows a liability to be classified as non-current (on condition that the entity has an unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the balance sheet date) despite the fact that the counterparty could at any time require settlement in shares. The Group will apply IAS 1 (amendment) from January 1, 2010. It is not expected to have any material impact on the Group's financial reporting.

Interpretations of existing standards that as yet have not come into force and
that are not relevant to the Group

The following interpretations of existing standards have been published and are compulsory for the Group for financial years starting on January 1, 2009 or later, but are not relevant to the Group.

  • IFRS 2 (amendment), Group cash-settled and share based payment transactions. The amendment means that IFRIC 8, Scope of IFRS 2, and IFRIC 11, IFRS 2 - Group and treasury share transactions, are bedded into the standard. In addition, the previous guideline in IFRIC 11 is supplemented regarding the classification of inter-company transactions, which is not addressed in the interpretation. This new guideline is not expected to have any material impact on the Group's financial reporting.
  • IFRIC 17, Distributions of non-cash assets to owners (applies to the financial year starting on July 1, 2009 or later). The interpretation is a part of the IASB's annual improvements project published in April 2009. This interpretation provides guidance on accounting for agreements under which a company distributes non-cash assets to the shareholders. An amendment has also been made to IFRS 5 which requires that assets can only be classified as held for distribution if they are available for distribution in their current condition and the distribution is highly probable. The Group will apply IFRIC 17 from January 1, 2010, but this is not expected to have any material impact on the Group's financial reporting.

1.2 PARENT COMPANY

The Parent Company has prepared its annual accounts in accordance with the Annual Accounts Act (ÅRL) and the Swedish Financial Reporting Board recommendation RFR 2.2, Accounting for Legal Entities. RFR 2:2 means that the Parent Company, in its separate financial statements, must apply all the IFRS and statements adopted by the EU as far as possible, subject to the Annual Accounts Act and taking into account the connection between accounting and taxation. The recommendation specifies the exemptions and additions that must be made in relation to IFRS. The differences between the Group's and the Parent Company's accounting policies are presented below. The main differences between the accounting policies applied by the Group and the Parent Company are:

Shares and participations in subsidiaries
Investments in subsidiaries are recorded at the lower of acquisition cost and fair value. Assessments are made as to whether the book amount corresponds to fair value and the book amount is written down if the impairment is deemed permanent.

Income
The Parent Company's income includes dividends received from subsidiaries and other internal transactions that are eliminated in the consolidated accounts.

Leases
All leases, regardless of whether they are finance or operating leases, are recorded as rental agreements (operating leases).

Pensions
Pension obligations refer to defined contribution plans and are covered by insurance arrangements.

Taxes
The accumulated values of accelerated depreciation and other untaxed reserves are presented in the parent company balance sheet under the item Untaxed reserves with no deduction for the deferred tax. Changes in the untaxed reserves are shown on a separate line in the parent company income statement. The consolidated accounts, however, divide untaxed reserves into deferred tax liability and equity.

Group contributions and shareholders' contributions for legal entities
The company reports group contributions and shareholders' contributions in accordance with UFR 2. Shareholders' contributions are recognized directly in the equity of the recipient and capitalized in shares and participations by the giver, to the extent there is no impairment loss. Group contributions are reported in accordance with their financial significance. This means that group contributions made for the purpose of minimizing the Group's total tax are recognized directly in retained earnings, less the current tax effect.

1.3 CONSOLIDATED ACCOUNTS

Subsidiaries
Subsidiaries are all the companies in which the Group has the power to govern financial and operating policies, generally accompanying a shareholding of more than half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets provided in payment, equity instruments issued and liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets, liabilities and contingent liabilities acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.

Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated, but any losses are regarded as an indication of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Transactions with minority shareholders
The Group policy is to state transactions with minority shareholders as transactions with a third party. Divestments to minority shareholders generate gains and losses for the Group that are recognized in the income statement. For minority share acquisitions in which the purchase price exceeds the acquired share of the carrying amount of the subsidiary's net assets, the difference is recognized as goodwill. For divestments to minority shareholders in which the purchase price received differs from the carrying amount of the interest in the divested net assets, a gain or loss arises. This gain or loss is recognized in the income statement.

Associated companies
Associated companies are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20 per cent and 50 per cent of the voting rights. Investments in associated companies are accounted for in accordance with the equity method and initially recorded at acquisition cost. The Group's carrying amount for investments in associated companies includes goodwill identified on acquisition, net of any impairment.

The Group's share of the post-acquisition profit or loss of an associated company is recognized in the income statement and its share of post-acquisition changes in reserves is recognized in the Reserves item. The cumulative post-acquisition changes are adjusted against the carrying amount of the investment. When the Group's share of losses in an associated company equals or exceeds its interest in the associated company, including any unsecured receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associated company.

Unrealized gains on transactions between the Group and its associated companies are eliminated in relation to the Group's holding in the associated company. Unrealized losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associated companies have been amended where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses on participations in associated companies are recognized in the income statement.

1.4 SEGMENT REPORTING

Operating segments must be reported in line with the internal reports submitted to the chief operating decision maker. The chief operating decision maker has been identified as the President.

1.5 FOREIGN CURRENCY TRANSLATION

Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (functional currency). The consolidated financial statements are presented in SEK, which is the parent company's functional and presentation currency.

Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. An exception is when the transactions qualify as cash flow hedges, in which case the gains/losses are classified as equity.

Foreign exchange gains and losses attributable to loans and cash and cash equivalents are recognized in the income statement as financial income or expense. All other exchange rate gains and losses are recorded in the item Other gains/losses - net in the income statement.

Translation differences for non-monetary financial assets and liabilities are recorded as part of fair value gains/losses. Translation differences for non-monetary financial assets and liabilities, such as shares recognized at fair value in the income statement, are recorded in the income statement as part of fair value gains/losses.

Group companies
The results and financial position of all the Group companies (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the Group's presentation currency as follows:

  • Assets and liabilities for each balance sheet presented are translated at closing rates.
  • Income and expenses for each income statement are translated at average exchange rates.
  • All exchange rate differences arising are recorded in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders' equity. When a foreign business is sold, fully or partly, the currency differences reported in equity are transferred to the income statement and recognized as part of the capital gain/loss. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

1.6 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost of acquisition less depreciation. The cost of acquisition includes expenditure that is directly attributable to the acquisition of the asset, expenditure for dismantling and restoration is added to the cost of acquisition and reported as a separate component.

Subsequent expenditure is included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount for the replaced part is removed from the balance sheet. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their acquisition cost or revalued amounts to their residual values over their estimated useful lives as follows.

  • Buildings 25-50 years
  • Machinery 3-20 years
  • Equipment and fixtures and fittings 3-15 years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing sales proceeds with the carrying amount and are recorded under Other gains/losses - net in the income statement.

 

1.7 INTANGIBLE ASSETS

Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary/associated company at the date of acquisition. Goodwill on acquisition of subsidiaries is included in Intangible assets. Goodwill on acquisition of associated companies is included in the value of investments in associated companies and tested for impairment as part of the value of the total investment. Goodwill that is disclosed separately is tested annually for impairment and recognized at cost less accumulated impairment losses. Goodwill impairment loss is not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units when tested for impairment. Allocation is to the cash-generating units or groups of cash-generating units that are expected to benefit from the business combination giving rise to the goodwill item. The Group allocates goodwill to all segments in all countries where the Group operates.

Computer software
Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These capitalized costs are amortized over the estimated useful life (normally 10 years).

Costs associated with developing or maintaining computer software are recognized as an expense as incurred.

Development costs for software recognized as an asset are amortized over the estimated useful life.

Rights of tenancy and similar rights
Rights of tenancy and similar rights consist mainly of customer relations and contracts. Documents to verify their capitalization could be business plans, budgets or the company's assessments of future outcomes. An individual assessment is made for each item. Amortization starts when the asset is ready for use and subsequently continues over the estimated useful life.

1.8 IMPAIRMENT LOSSES ON NON-FINANCIAL ASSETS

Assets that have an indefinite useful life, such as goodwill, are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less selling costs and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Assets other than financial assets and goodwill for which an impairment loss has previously been recognized, are tested to establish if any reversal should be made.

1.9 FINANCIAL ASSETS

The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables and financial assets available for sale. The classification depends on the purpose for which the financial asset­ was acquired. The management determines the classification of financial assets when they are first reported.

Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if it is acquired mainly for the purpose of selling in the short term. Derivatives are classified as held for trading if they are not designated as hedging instruments. Assets in this category are classified as current assets.

Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Group's loans and receivables comprise Trade and other receivables and Cash and cash equivalents in the balance sheet (notes 21 and 24).

Available for sale financial assets
Available for sale financial assets are any non-derivative financial assets designated on initial recognition as available for sale or not classified in any of the other categories. They are included in non-current assets, unless management intends to dispose of the asset within 12 months of the balance sheet date.

1.10 OFFSET OF FINANCIAL INSTRUMENTS

Financial assets and liabilities are offset and recognized net in the balance sheet only if there is a legally enforceable right to set off the recognized amounts and an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously.

1.11 IMPAIRMENT LOSSES ON FINANCIAL ASSETS

a) Assets carried at amortized cost
The Group assesses at the close of each accounting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is impaired, and impairment losses are recognized, only if there is objective evidence as a result of one or more events that occurred after the initial recognition of the asset (a loss event) and this event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably measured.

The criteria the Group uses to establish if there is objective evidence of impairment include:

  • significant financial difficulty of the issuer or debtor,
  • a breach of contract, such as a default or delinquency in payments of interest or principal,
  • the Group grants to the borrower, for financial or legal reasons associated with the borrower's financial difficulty, a concession that the Group would not consider under different circumstances,
  • it is probable that the borrower will file for bankruptcy or other financial reorganization,
  • cessation of an active market for the asset in question due to financial difficulties, or
  • observable data that indicate the existence of a measurable decrease in the estimated future receivables from a group of financial assets after initial recognition of these assets, even if the decrease cannot yet be identified with any of the individual financial assets in the group, including:
    (i) negative changes in the payment status of borrowers in the group, or
    (ii) domestic or local economic conditions that are linked to payment defaults for assets in the group.

The Group first assesses whether there is objective evidence of impairment. The impairment is estimated as the difference between the carrying amount of the asset and the present value of estimated future cash flows (excluding future credit losses that have not yet occurred), discounted at the original effective interest rate of the financial asset. The carrying amount of the asset is written down and the impairment loss is recognized in the consolidated income statement. If a loan or investment held to maturity has a variable interest rate, the current contractual effective interest rate is used as the discount rate when impairment has been established. As a practical solution, the Group can establish impairment loss on the basis of the fair value of the instrument using an observable market price.

If the impairment loss decreases in a subsequent period and the decrease can be related objectively to an event occurring after the impairment was recognized (for example an improvement in the debtor's creditworthiness), the previously recognized impairment loss is reversed through the consolidated income statement.

b) Assets classified as available for sale financial assets
The Group assesses at the close of each accounting period whether there is objective evidence that a financial asset or group of financial assets is impaired. For debt instruments the Group applies the criteria specified under a) above. As regards equity instruments classified as available for sale financial assets, a significant or prolonged decline in the fair value of an equity instrument below its cost is considered to be objective evidence of impairment loss. If such evidence exists for available for sale financial assets, the cumulative loss - measured as the difference between the cost of acquisition and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss - is removed from equity and recognized in the income statement. Impairment losses previously recognized in the income statement on equity instruments are not reversed through the income statement. If, however, the fair value of a debt instrument available for sale increases and this increase can be objectively related to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through the income statement.

1.12 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Derivatives are recognized in the balance sheet on the date of the contract at fair value, both initially and on subsequent remeasurement. The method of reporting the gain or loss arising on revaluation depends on whether the derivative is identified as a hedging instrument, and, if so, the nature of the hedged item. The Group identifies certain derivatives as either:

  • a hedge of the fair value of a recognized asset or liability or a firm commitment (fair value hedge),
  • a hedge of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge).

When the transaction is entered into, the Group documents the relationship between the hedging instrument and the hedged item, as well as the Group's risk management objective and strategy for undertaking the hedge. The Group also documents its assessment, both when the hedge is undertaken and on a continuous basis, of whether the derivative instruments used in hedging transactions are effective in offsetting the changes in the fair value or cash flows of the hedged items.

Information on the fair value of the different derivative instruments used for hedging purposes is given in note 20. The entire fair value of a derivative designated as a hedging instrument is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Derivative instruments held for trading are always classified as current assets or current liabilities.

Cash flow hedging
The effective portion of the change in fair value of a derivative instrument identified as a cash flow hedge and satisfying the criteria for hedge accounting, are reported in other comprehensive income. The gain or loss referring to the ineffective portion is recognized immediately in the income statement in the item Other net gains/losses.  When a hedging instrument matures or is sold or when the hedge no longer fulfils the criteria for hedge accounting and accumulated gains or losses referring to the hedge are in equity, these gains/losses remain in equity and are recognized in revenue at the time when the forecast transactions are ultimately reported in the income statement. When a forecast transaction is no longer expected to occur, the accumulated gains or losses deferred in equity must immediately be taken to the income statement item Other net gains/losses.

1.13 INVENTORIES

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads. Borrowing costs are not included. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

1.14 TRADE RECEIVABLES

Trade receivables are initially recognized at fair value and thereafter at amortized cost, applying the effective interest method, less any provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or other financial reorganization and default or delinquency in payment (more than 30 days overdue), are regarded as indicators of impairment of a trade receivable. The size of the provision is the difference between the carrying amount of the asset and the present value of estimated future cash flows, discounted using the original effective interest rate. The carrying amount of the asset is reduced by using a depreciation account and the loss is recorded in the income statement under 'Selling expenses'. When a trade receivable cannot be collected it is written off against the depreciation account for trade receivables. Recovery of amounts previously written of are credited to Selling expenses in the income statement.

1.15 CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash in hand, bank balances and other short-term liquid investments with original maturities of three months or less of the date of acquisition.

1.16 SHARE CAPITAL

Ordinary shares are classified as equity.

Transaction costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

1.17 TRADE PAYABLES

Trade payables are commitments to pay for goods or services acquired in the operating activities from suppliers. Trade payables are classified as current liabilities if they fall due for payment within one year or less (or during a normal operating cycle if that is longer). If not, they are recorded as non-current liabilities. Trade payables are initially recognized at fair value and thereafter at amortized cost, applying the effective interest method.

1.18 BORROWINGS

Borrowings are initially recognized at fair value, net after transaction costs. Borrowings are thereafter recognized at amortized cost and any difference between the amount received (net of transaction costs) and repayment amount is recognized in the income statement allocated over the period of the loan, applying the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

1.19 CURRENT AND DEFERRED INCOME TAX

Tax expense for the period includes current and deferred tax. Tax is reported in the income statement, except when the tax refers to items reported in other comprehensive income or directly in equity. In that case the tax is also reported in other comprehensive income and equity respectively.

The current tax expense is calculated on the basis of the tax laws that have been enacted or substantively enacted on the balance sheet date in the countries in which the parent company's subsidiaries and associated companies operate and generate taxable revenues. The management regularly assesses claims made in tax returns for situations where applicable tax rules are subject to interpretation and, where deemed appropriate, makes provision for amounts that will probably have to be paid to the tax authorities.

Deferred tax is recognized in its entirety, using the balance sheet method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated accounts. However, the deferred tax is not recognized if it arises as a consequence of a transaction constituting the initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

Deferred tax assets are recognized to the extent it is probable that future taxable profit will be available against which the temporary differences can be applied.

Deferred tax is calculated on all temporary differences arising on participations in subsidiaries and associated companies, apart from when the time of reversal of the temporary difference can be controlled by the Group and it is probable that the temporary difference will not be reversed in the foreseeable future.

1.20 EMPLOYEE BENEFITS

Pension obligations
The Group companies operate various pension schemes. The schemes are generally funded through payments to insurance companies or trustee-administered funds, in which the payments are determined on the basis of periodic actuarial calculations. The Group has both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate legal entity. The Group has no legal or constructive obligation to pay further contributions if this legal entity does not have sufficient assets to pay all employee benefits associated with the employees' service in the current or prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan. It is characteristic of defined benefit plans that they define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and for unrecognized costs for past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability.

Actuarial gains and losses as a result of experience adjustments and changes in actuarial assumptions are reported in other comprehensive income in the period in which they arise.

Past service costs are recognized immediately in the income statement, unless the changes in the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past service costs are recognized in income by amortization on a straight-line basis over the vesting period.

For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that cash refund or a reduction in the future payments is available to the Group.

Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the balance sheet date are discounted to present value.

Profit-sharing and bonus plans
The Group recognizes a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit that can be attributed to the parent company's shareholders after certain adjustments. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

1.21 PROVISIONS

Provisions for environmental restoration measures, future waste management costs, restructuring costs and other legal requirements are recognized when: the Group has a present legal or constructive obligation as a result of past events; it is more probable than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. No provision has been made for future operating losses.

If there are a number of similar obligations, the probability that an outflow of resources will be required to settle the obligations will be assessed overall for the entire group of obligations. A provision is reported even if the probability of an outflow for a particular item in this group of obligations is minor.

The provisions are recognized at the present value of the amount expected to be needed to settle the obligation. A discount rate before tax is used here which reflects a current market assessment of the time-dependent value of money and the risks associated with the provision. The increase in provision due to the passing of time is recorded as interest expense.

1.22 REVENUE RECOGNITION

Revenue comprises the fair value of the consideration received or receivable for goods and services sold in the Group's operating activities.  Revenue is reported exclusive of value added tax, returns and discounts and after elimination of sales within the Group.

The Group recognizes revenue when its amount can be reliably measured, it is probable that the future economic benefits will flow to the company and special criteria are fulfilled for each of the Group's operations as described below. The revenue amount is not regarded as possible to measure reliably until all obligations concerning the sale have been fulfilled or otherwise extinguished. The Group bases its assessments on historical outcomes, taking into consideration the type of customer, type of transaction and special circumstances in each individual case.

The Group uses the percentage of completion method to determine the appropriate amount to recognize in a given period. The stage of completion is measured by reference to the contract costs incurred up to the balance sheet date as a percentage of total estimated costs for each contract.

The Group presents as an asset the gross amount due from customers for contract work for all contracts in progress for which costs incurred plus recognized profits exceed­ progress billings. Progress billings not yet paid by customers and retention are included in Trade and other receivables.

The Group presents as a liability the gross amount due to customers for contract work for all contracts in progress for which progress billings exceed costs incurred plus recognized profits.

Sales of contract services are recognized in the accounting period in which the services are rendered, by reference to completion on the balance sheet date as a proportion of the total services to be provided.

Interest income is recognized on a time-proportion basis using the effective interest method. When the value of a receivable is impaired, the Group reduces the carrying amount to the recoverable amount, which is the estimated future cash flow, discounted at the original effective interest rate for the instrument, and continues to reverse the discount effect as interest income. Interest income on impaired loans is recorded at the original effective interest rate.

Dividend income is recognized when the right to receive payment is established.

1.23 LEASES

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (less any lease incentives) are charged to the income statement on a straight-line basis over the lease term.

The Group leases some property, plant and equipment. Leases on non-current assets, in which the Group holds the financial risks and rewards incident to legal ownership, are classified as finance leases. At the start of the lease term finance leases are recorded in the balance sheet at the lower of the leased asset's fair value and present value of the minimum lease payments.

Each lease payment is allocated between amortization of the debt and financial costs for achieving a fixed rate of interest on the reported debt. The corresponding payment liabilities, less financial expenses, are included in the balance sheet items Non-current borrowing and Current borrowing. The interest component of the financial expenses is allocated over the lease term in the income statement so that each accounting period is charged with an amount equivalent to a fixed interest rate on the reported debt in the respective period. Non-current assets held as finance leases are depreciated over the shorter of the useful life of the asset and the lease term.

1.24 DIVIDENDS

Dividend distribution to the parent company's shareholders is recognized as a liability in the Group's financial statements in the period in which the dividends are approved by the parent company's shareholders.

 



 

Note 2Financial risk management

2.1 FINANCIAL RISK FACTORS
Through its operations the Group is exposed to a number of different financial risks: market risk (covering currency risk, fair value interest rate risk, cash-flow interest rate risk and price risk), credit risk and liquidity risk. The financial risks also include the company's ability to uphold financial key ratios (covenants) that regulate borrowing. The Group's overall risk management policy focuses on the unpredictability of financial markets and aims to minimize potential adverse effects on the Group's financial performance. The Group uses derivative instruments to hedge certain risk exposure.

Risk management is handled by a central treasury function in accordance with policies determined by the Board of Directors. The central function identifies, evaluates and hedges financial risk in close cooperation with the Group's operating units. The Board of Directors draws up written policies, both for overall risk management and for specific areas, such as currency risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments and investment of surplus liquidity.

Market risk
Price risk
The Group's largest single cost item is personnel, which accounts for 55 per cent (50) of total costs. Other expenses vary. The Group's risk exposure as regards purchases is therefore of less significance.

Currency risk
The Group operates internationally and is exposed to currency risk arising from various currency exposures, above all in US dollars (USD), euros (EUR) and pounds sterling (GBP). Currency risk arises through future business transactions, reported assets and liabilities and net investment in foreign operations.

The Board of Directors has drawn up policies and guidelines for how currency risk is to be managed in the Group. To minimize the currency risk arising on business transactions and for reported assets and liabilities, the companies use different forms of currency derivatives issued by external banks. Currency risk arises when future business transactions or reported assets and liabilities are denominated in a currency that is not the functional currency of the unit.

At Group level only external foreign currency derivative contracts are classified as hedges of gross amounts of specific assets, liabilities or future transactions.

If the Swedish krona had weakened by 10 per cent against the US dollar, all other variables being constant, the year's profit as at December 31, 2009 would have been SEK 3.9 million (2.2) lower, mainly as a result of the Group's total costs in USD being somewhat higher than the corresponding income in USD. In addition, the low capacity utilization of the facilities in the USA has contributed to the losses of the US operations. Equity would have been SEK 25.5 million (32.3) higher, mainly due to translation of the Group's net investments in the USA.

If the Swedish krona had weakened by 10 per cent against the euro, all other variables being constant, the year's profit as at December 31, 2009 would have been SEK 6.4 million (2.5) higher, mainly as a result of positive net earnings in the German operations. Equity would have been SEK 10.8 million (9.4) higher, mainly due to translation of the Group's net investments in Germany.

If the Swedish krona had weakened by 10 per cent against the pounds sterling, all other variables being constant, the year's profit as at December 31, 2009 would have been SEK -2.6 million (0.5) higher, mainly as a result of the year's operating losses in the United Kingdom. Equity would have been SEK -0.6 million (3.0) higher, mainly as a result of translation of the Group's net investment in the United Kingdom.

Interest rate risk referring to cash flows and fair values
Since the Group does not have any material interest-bearing assets, the Group's income and cash flow from operating activities are in all essentials independent of changes in market interest rates.

The Group's interest rate risk arises through long-term borrowings. Borrowing at variable interest rates exposes the Group to cash flow interest rate risk. Borrowing at fixed interest rates exposes the Group to fair value interest rate risk. In 2009 and 2008 there were no loans at variable interest rates. The Group's contractual repricing dates for interest rates are shown in note 29.

The Group analyses its interest rate exposure regularly. Different scenarios are simulated, taking into account refinancing, renewals of existing positions, alternative funding and hedging. With these scenarios as a base, the Group calculates the impact on earnings of a given interest rate change. For each simulation the same interest rate change is used for all currencies. The scenarios are only simulated for debt constituting the largest interest-bearing positions.

Simulations carried out show that the impact on earnings of a change of 0.1 percentage point would be a maximum increase or decrease respectively of SEK 0.3 million (0.4).

If the interest rate on borrowings in US dollars on December 31, 2009 had been 0.5 percentage points higher/lower, all other variables being constant, the profit after tax for the financial year would have been SEK 0.7 million (0.0) lower/higher, as an effect of higher/lower interest expense in connection with renegotiation of new interest fixing periods.

If the interest rate on borrowings in pounds sterling on December 31, 2009 had been 0.5 percentage points higher/lower, all other variables being constant, the profit after tax for the financial year would have been SEK 0.3 million (0.0) lower/higher, as an effect of higher/lower interest expense in connection with renegotiation of new interest fixing periods.

If the interest rate on borrowings in euros on December 31, 2009 had been 0.5 percentage points higher/lower, all other variables being constant, the profit after tax for the financial year would have been SEK 0.4 million (0.1) lower/higher, as an effect of higher/lower interest expense in connection with renegotiation of new interest fixing periods.

Credit risk
Credit risk is managed at company and Group level. Credit risk arises through cash and cash equivalents, derivative instruments and balances at banks and financial institutions, as well as credit exposure to customers, including outstanding receivables and contractual transactions. The Group only uses banks with an AA-or higher rating for depositing cash and cash equivalents. In cases where no independent credit evaluation exists, a risk appraisal is made of the customer's creditworthiness in which financial position and prior experience and other factors are taken into consideration. Individual risk limits are set, based on internal or external credit evaluations in accordance with limits set by the Board of Directors.

The credit quality of financial assets is reported i note 19.

Liquidity risk
Liquidity risk is managed through the Group holding sufficient cash and cash equivalents and short-term deposits in a liquid market, available funding through contracted credit lines and the possibility of closing market positions. Due to the dynamic character of operations, the Group retains flexibility of funding by maintaining contracts for withdrawable lines of credit.

The management also carefully follows rolling forecasts of the Group's liquidity reserve, consisting of unutilized loan assurances (note 29) and cash and cash equivalents (note 24), on the basis of expected cash flows.

The table below analyses the Group's financial liabilities and derivative instruments settled net that constitute financial liabilities, broken down by the contractual time to maturity remaining on the balance sheet date. The amounts stated in the table are the contracted, undiscounted cash flows. The amounts falling due within 12 months agree with book amounts, since the discount effect is immaterial.

As at December 31, 2009 Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
More than
5 years
Bank borrowings 85,353 164,547 107,154 12,835
Derivative financial instruments 3,956 19 42 -
Trade and other payables 334,703 590 3,109 7,682
 
As at December 31, 2008 Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
More than
5 years
Bank borrowings 37,742 59,631 225,475 65,414
Derivative financial instruments 2,432 1,202 7 -
Trade and other payables 357,512 646 1,938 6,554
 


The table below analyses the Group's financial derivative instruments that will be settled gross, broken down by the contractual time to maturity remaining on the balance sheet date. The amounts stated in the table are the contracted, undiscounted cash flows. The amounts falling due within 12 months agree with book amounts, since the discount effect is immaterial.

 
As at December 31, 2009 Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
More than
5 years
Forward exchange contracts
- Cash flow hedges
- Outflow 22,317 - - -
- Inflow 229,783 10,033 5,721 118,104
 
As at December 31, 2008 Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
More than
5 years
Forward exchange contracts
- Cash flow hedges
- Inflow 36,903 12,415 4,388 -
 


2.2 CAPITAL RISK MANAGEMENT

The Group's goal for its capital structure is to safeguard the Group's ability to continue as a going concern, so that it can generate a return for its shareholders and benefit for other stakeholders and maintain an optimal capital structure as a means of controlling the cost of capital.

To retain or adjust the capital structure the Group can alter the dividend it pays to shareholders, repay capital to shareholders, issue new shares or sell assets to reduce its liabilities.

Just like other companies in the industry, the Group assesses its capital on the basis of the debt/equity ratio. This ratio is defined as net debt divided by total equity. Net debt is defined as total borrowing (including the items Current borrowing and Non-current borrowing in the consolidated balance sheet) less cash and cash equivalents. Equity is measured including minority interest.

 
  2009 2008
Total borrowing (note 29) 369,889 388,262
Less cash and cash equivalents (note 24) -74,661 -147,713
Net debt 295,228 240,549
Total equity 541,229 610,785
Debt/equity ratio 55% 39%
 


The change in debt/equity ratio in 2009 was mainly a consequence of increased net debt and lower equity. Borrowing increased only marginally during the year and the negative cash flow after investments was mainly charged to cash and cash equivalents. The negative comprehensive income for 2009 is the main reason for lower equity.

2.3 FAIR VALUE ESTIMATION
As of January 1, 2009 the Group applies the amendment to IFRS 7 for financial instruments measured at fair value in the balance sheet. Disclosure is made on measurement at fair value per level in accordance with the following fair value hierarchy:

  • Quoted prices (unadjusted) on active markets for identical assets or liabilities (level 1).
  • Other observable market data for the asset or liability other than quoted prices included in level 1, either direct (i.e. as quoted prices) or indirect (i.e. derived from quoted prices) (level 2).
  • Data on the asset or liability not based on observable market data (i.e. unobservable inputs) (level 3).

The following table shows the Group's assets and liabilities measured at fair value as at December 31, 2009.

 
  Level 1 Level 2 Level 3
Assets      
Financial assets at fair value through profit or loss      
- Unlisted shareholdings     2,976
- Capital insurance   10,807  
- Non-current bank deposits   4,501  
Derivatives used for hedging   3,041  
Total assets 0 18,349 2,976
Liabilities      
Derivatives used for hedging   4,017  
Total liabilities - 4,501 -
 


The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices from a stock exchange, broker, industrial group, pricing service or supervisory authority are easily and regularly available, and these prices represent actual and regularly occurring market transactions at arm's length. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are found at level 1. The investments found at level 1 mainly constitute shareholdings in the FTSE-100 classified as securities held for trading or financial assets available for sale. The Group does not currently hold such assets or liabilities.

Fair value of financial instruments not traded on an active market (for example OTC derivatives) is established using valuation techniques. These techniques use market information as far as possible when this is available, while company-specific information is used as little as possible. If all material inputs required for fair value measurement of an instrument are observable the instrument is found at level 2.

In the cases where one or more material inputs are not based on observable market information the instrument concerned is classified at level 3.

Specific valuation techniques used to measure financial instruments include:

  • Quoted market prices or brokers' quotations for similar instruments.
  • The fair value of interest swaps is calculated as the present value of estimated future cash flows based on observable yield curves.
  • The fair value of forward exchange contracts is determined using quoted forward exchange rates at the balance sheet date, where the resulting value is discounted to present value.
  • Other techniques, such as estimating discounted cash flows, are used to determine the fair value of remaining financial instruments.
Note 3Important accounting estimates

Estimates and assumptions are continually evaluated and rest on historical experience and other factors, including expectations of future events regarded as reasonable under the circumstances.

3.1 IMPORTANT ESTIMATES AND ASSUMPTIONS FOR ACCOUNTING PURPOSES
The Group makes estimates and assumptions about the future. The estimates for account­ing purposes derived from these assumptions will, by definition, seldom corres­pond to the actual outcome. The estimates and assumptions that have a signifi­cant risk of causing a material adjustment to the carrying amounts of assets and liabilities­ within the next financial year are outlined below.

Impairment tests for goodwill
Each year the Group examines whether goodwill is impaired, in accordance with the accounting policy described in note 1.7. Recoverable amounts for cash generating units have been determined by calculation of value in use. Certain estimates must be made for these calculations (note 16).

Based on the assumptions and estimates made, there is no impairment loss on goodwill.

Income taxes
The Group is liable to pay tax in many different countries. Extensive assessments are required to establish the global provision for income tax. There are many trans­actions and calculations in which the final tax is uncertain at the time the transactions and calculations are made. The Group reports a liability for expected tax field audits based on assessments of whether further tax liability will arise. In cases where the final tax for these cases differs from the amounts first reported, the differences will affect current tax and provisions for deferred tax in the period when these determinations are made.

If the actual final result (in the areas where assessments have been made) were to deviate by 10 per cent from the management's assessment, the Group would be forced to:

  • reduce the deferred tax asset by SEK 3.4 million (1.1) if the outcome is unfavorable, or
  • increase the deferred tax asset by SEK 3.4 million (1.1) if the outcome is favorable.

Fair value of derivative instruments or other financial instruments
Fair value of financial instruments not traded on an active market is established using valuation techniques. The Group chooses several methods and makes assumptions that are mainly based on the market conditions existing on the respective balance sheet date.

Revenue recognition
The Group uses the percentage of completion method for reporting fixed price contracts. The percentage of completion method means that the Group must estimate completion of services on the balance sheet date as a proportion of the total services to be provided. If the proportion of completed services to total services to be provided deviates by 10 per cent from the management's estimate, the year's reported income would increase by SEK 5.1 million (3.0) if the percentage of completion had increased, or decrease by SEK 5.1 million (3.0) if the percentage of completion had decreased.

Note 4Segment reporting
Financial year 2009 Sweden United Kingdom Germany USA Global
Services
Other Eliminations Group
Net sales 171,475 86,105 450,500 213,332 264,268 63,595 -32,925 1,216,350
External net sales 152,828 86,105 448,314 213,104 262,660 53,339 - 1,216,350
                 
EBITDA before non-recurring items 38,147 -29,105 36,126 -14,772 45,968 -25,486 - 50,878
Non-recurring items - -22,198 - -3,276 6,730 - - -18,744
Depreciation/amortization and impairment -10,418 -3,192 -8,258 -40,810 -7,024 -5,544 - -75,246
Earnings from associated companies and joint ventures - 4,285 - 8,838 - - - 13,123
Net financial items               -19,777
Taxes               14,568
Shares of equity in associated companies and joint ventures - 3,687 - 26,964 50 - - 30,701
Other operating
segment assets
154,778 195,783 273,573 577,183 200,325 422,227 -401,213 1,422,656
Operating segment liabilities 88,625 167,846 193,004 371,074 161,987 330,805 -401,213 912,128
Adjusted equity               541,229
Investments 7,729 56,380 4,035 2,563 8,326 2,547 - 81,580
Average number of employees 90 66 644 101 138 93 - 1,132
 
Financial year 2008 Sweden United Kingdom Germany USA Global Services Other Eliminations Group
Net sales 152,287 148,704 387,872 317,141 195,988 128,361 -44,402 1,285 951
External net sales 126,047 148,704 386,231 317,141 192,438 115,390 - 1,285 951
 
EBITDA before non-recurring items 38,934 -2,172 32,270 7,449 20,039 -24,804 - 71,716
Non-recurring items - - - - - - - -
Depreciation/amortization and impairment -8,240 -3,924 -9,004 -35,405 -6,985 -3,894 - -67,452
Earnings from associated companies and joint ventures - 2,880 - 5,585 - - - 8,465
Net financial items               -12,033
Taxes               446
Shares of equity in associated companies and joint ventures - 1,994 - 20,020 50 - - 22,064
Other operating
segment assets
133,869 131,074 301,424 638,561 147,507 434,312 -298,061 1,488,686
Operating segment liabilities 78,771 98,652 211,637 365,328 120,383 323,255 -298,061 899,965
Adjusted equity               610,785
Investments 7,756 38,327 7,808 26,349 14,427 13,731 - 108,398
Average number
of employees
78 86 594 156 129 87 - 1,130
 
External net sales
per product area
2009 2008            
Treatment of radioactive waste 326,458 404,586            
On-site waste services 15,011 5,295            
Consulting and engineering services 137,011 106,711            
Health physics services 99,233 87,760            
Transport and logistics 5,359 41,095            
Decommissioning services 226,715 241,640            
Operational and
outage support
139,994 129,744            
Fuel and materials performance 84,931 59,587            
Corrosion and
water chemistry
37,842 36,763            
Fuel optimization software 85,770 53,129            
Design and build 1,472 -            
Other 56,554 119,641            
           
 
Other operations mainly refer to the parent company and AB SVAFO. AB SVAFO was sold on April 1, 2009 and is responsible for management of older state-owned research waste and decommissioning of facilities related to previous research operations. The costs of the operations are met from the Nuclear Waste Fund.
 
External net sales based on the customer's country
of location
2009
SEK thousand
2009
Per cent
2008
SEK thousand
2008
Per cent
       
Sweden 219,906 18.0 226,400 17.6        
Europe excl Sweden 716,270 58.9 678,530 52.8        
North America 250,284 20.6 369,034 28.7        
Asia 29,875 2.5 11,975 0.9        
All other countries 15 0.0 12 0.0        
       
 
At present the Group has no individual customers that account for more than 10 per cent of total sales.
 
Non-current assets
per country
2009
SEK thousand
2009
Per cent
2008
SEK thousand
2008
Per cent
       
Sweden 176,466 16.6 179,016 17.5        
Europe excl Sweden 341,211 32.1 248,047 24.2        
North America 545,277 51.3 597,282 58.3        
Asia 179 0.0 203 0.0        
All other countries 0.0 0.0 0 0.0        
       
Note 5 Other gains and losses - net
  2009 2008
Other financial assets at fair value through profit or loss    
- Fair value losses -1,071 -541
- Fair value gains 750 1,408
Forward exchange contracts    
- Net exchange differences 7,064 -3,238
Note 6 Other income
  2009 2008
Sales of subsidiaries and other business units 6,730 -
Sale of property, plant and equipment 344 770
Rental income 637 585
Other 298 85
Note 7 Costs by nature of expense
  2009 2008
Purchases of material and services 380,987 510,077
Personnel costs 702,288 635,089
Energy 28,427 27,336
Depreciation/amortization and impairment 70,521 65,839
Other costs 66,480 39,649
Note 8 Remuneration to auditors
  2009 2008
PricewaterhouseCoopers    
- Audit assignments 4,114 3,475
- Other assignments 3,306 2,061
     
Other auditors    
- Audit assignments 114 175
- Other assignments 56 69
     
Audit assignments refers to examination of the annual accounts, the accounting records and the administration by the Board of Directors and the President, other duties incumbent on the company's auditors, as well as advisory services and other types of support as a result of observations made through such an examination or performance of such duties. All other tasks performed by the auditors are classified as Other assignments.
Note 9Employee benefits
Employee benefits 2009 2008        
Salaries
556,494 522,428
Social security costs 108,206 96,374
Pension costs - defined contribution based 27,022 22,871
Pension costs - defined benefit based 1,197 116
       
 
Salaries and other remuneration by country and between board members and
presidents as well as other employees
 
  2009
Board & President
Of which bonuses
Other employees 2008
Board & President
Of which bonuses Other employees
Parent company 4,971 - 9,669 4,787 -110 8,977
Subsidiaries in Sweden 3,249 597 116,950 2,067 94 101,204
Subsidiaries abroad            
- Norway - - 1,685 - - 1,798
- Germany 1,933 95 281,900 1,930 308 245,417
- United Kingdom 1,697 - 45,272 1,788 84 50,976
- USA 3,547 - 76,754 3,463 184 96,954
- Japan 893 37 424 664 16 307
- Switzerland - - 1,816 - - 1,208
- France - - 5,734 - - 888
Total, subsidiaries 11,319 729 530,535 9,912 686 498,752
Average number of employees
 
  2009
Men
Women Total 2008
Men
Women Total
Parent company 7 5 12 6 5 11
Subsidiaries in Sweden 202 71 273 180 67 247
Subsidiaries abroad
- Norway 2 - 2 2 - 2
- Germany 546 64 610 520 68 588
- United Kingdom 53 13 66 71 15 86
- USA 105 22 127 161 22 183
- Japan 1 1 2 1 1 2
- Switzerland 1 1 2 1 - 1
- France 38 - 38 10 - 10
Total, subsidiaries 948 172 1,120 946 173 1,119
 
Gender breakdown in the Group for members of the Board and other senior management
 
  2009
Number on balance sheet date
2009
Of which men
2008
Number on balance sheet date
2008
Of which men
   
Board members 11 8 11 8
President and other senior management 8 8 9 8    
   
For information on benefits to senior management executives, see note 38.
Note 10 Financial income and expenses
  2009 2008
Financial income    
Current bank balances 606 5,492
Fair value gains (unrealized and realized) 4,087 1,923
Other financial income 112 -
Financial expenses
Bank borrowings -17,207 -17,131
Fair value losses (unrealized and realized) -5,302 -990
Other financial expenses -2,073 -1,327
Total -24,582 -19,448
Note 11 Income tax
  2009 2008
Current tax
Current tax on profit for the year -15,691 -9,718
Adjustment for previous years -1,099 -
Deferred tax (note 30)
Origination and reversal of temporary differences 31,103 10,164
Effect of change in the Swedish tax rate 255 -
Total 31,358 10,164
The Swedish tax rate is 26.3 per cent (28). The income tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate for profits of the consolidated companies as follows.
     
  2009 2008
Profit before tax -49,766 696
Tax in accordance with the current tax rate 13,089 -196
Non-taxable revenue 1 86
Expenses not deductible for tax purposes -2,244 -1,327
Unrecognized tax asset in respect of loss carry forwards - 1,024
Recognized tax asset in respect of loss carry forwards -42 -
Adjustment for foreign tax rate 5,334 74
Revaluation of deferred tax - change in Swedish tax rate 255 -
Adjustment for previous years' tax assessment -1,099 1,556
Other effects -726 -771
As a result of the change in Swedish corporate tax from 28 per cent to 26.3 per cent, which applies from January 1, 2009, the relevant carrying amounts for deferred tax have been restated.
 

The weighted average tax rate was 29 per cent (-64). The main reasons for the difference in tax rate between Swedish income tax and the weighted average tax rate are the higher tax rate in the USA and UK in combination with operating losses, which have had a positive impact on the tax income.

Other comprehensive income only includes tax effects on cash flow hedges and on December 31 these were SEK 1.298 thousand (121). Other comprehensive income also includes foreign exchange differences, but they have no tax effect.

Note 12Foreign exchange differences - net
Foreign exchange differences are recognized in the income statement as follows.
  2009 2008
Other gains and losses - net (note 5) 6,743 -2,371
Financial items (note 10) -1,215 933
Note 13Earnings per share
Before dilution
Earnings per share before dilution is calculated by dividing the profit for the year by the weighted average number of shares in issue (see note 25).
 
  2009 2008
Net profit for the year -35,198 -395
Weighted average number of ordinary shares in issue 8,218,611 8,218,611
After dilution
Diluted earnings per share is calculated by adjusting the weighted average number of shares in issue to assume conversion of all dilutive potential shares. There were no unconverted share options or convertible debt instruments in issue on the balance sheet date.
 
  2009 2008
Net profit for the year -35,198 -395
Weighted average number of ordinary shares in issue 8,218,611 8,218,611
Note 14Dividend per share
Dividend paid in 2009 and 2008 amounted to SEK 8.219 thousand (SEK 1 per share) and SEK 16.437 thousand (SEK 2 per share). At the Annual General Meeting on April 29, 2010 it will be proposed that no dividend be distributed for the 2009 financial year.
Note 15Property, plant and equipment
  Buildings
and land
Plant and machinery Equipment and tools Construction in progress and advance payments for property, plant and equipment Total
As at January 1, 2008
Cost of acquisition 188,307 350,764 257,732 40,724 837,527
Accumulated amortization and impairment -76,438 -190,995 -163,500 - -430,933
January 1 - December 31, 2008
Opening book value 111,869 159,769 94,232 40,724 406,594
Foreign exchange differences 4,350 22,996 12,375 3,250 42,971
Acquisition of subsidiaries - - 3 - 3
Investments 2,721 4,597 13,052 75,158 95,528
Redistribution during the year 15,862 37,914 5,998 -40,023 19,751
Disposals and retirements -806 -827 -392 -2,710 -4,735
Depreciation/amortization -5,428 -26,561 -24,161   -56,150
Impairment losses for the year     -222   -222
As at December 31, 2008
Cost of acquisition 212,084 445,749 308,075 76,399 1,042,307
Accumulated amortization and impairment -83,516 -247,861 -207,190 - -538,567
January 1 - December 31, 2009
Opening book value 128,568 197,888 100,885 76,399 503,740
Foreign exchange differences -2,062 -8,798 -4,513 -2,033 -17,406
Acquisition of subsidiaries - - - - -
Investments 51,643 3,995 5,478 19,432 80,548
Redistribution during the year 77,343 23,030 3,759 -70,387 33,745
Disposals and retirements - -681 -5,634 - -6,315
Depreciation/amortization -9,549 -33,239 -23,713 - -66,501
Impairment losses for the year - - - - -
As at December 31, 2009
Cost of acquisition 336,424 446,374 279,939 23,411 1,086,148
Accumulated amortization and impairment -90,481 -264,179 -203,677 - -558,337
Book value 245,943 182,195 76,262 23,411 527,811
 
Depreciation costs of SEK 60.722 thousand are included in Cost of goods sold, of SEK 161 thousand in Selling and marketing costs, of SEK 5.028 thousand in Administrative expenses and SEK 590 thousand in Research and development costs. Interest of SEK 5.290 thousand (2.441) is included in the cost of acquisition of buildings, plant and machinery. The assessed value of buildings is SEK 29.271 thousand and of land SEK 24.647 thousand.  
Note 16Intangible assets
  Goodwill Software rights Rights of tenancy and similar rights Total
As at January 1, 2008
Cost of acquisition 317,092 21,732 67,067 405,891
Accumulated amortization and impairment -5,386 -21,254 -10,533 -37,173
January 1 - December 31, 2008
Opening book value 311,706 478 56,534 368,718
Foreign exchange differences 47,241 -1 7,807 55,047
Acquisition of subsidiaries 3,455 - 917 4,372
Adjustment of cost of acquisition 605 - - 605
Investments - 1,217 479 1,696
Redistributions - 87 -87 0
Depreciation/amortization - -538 -10,509 -11,047
Impairment losses for the year - -33 - -33
As at December 31, 2008
Cost of acquisition 368,393 22,970 78,639 470,002
Accumulated amortization and impairment -5,386 -21,760 -23,498 -50,644
January 1 - December 31, 2009
Opening book value 363,007 1,210 55,141 419,358
Foreign exchange differences -20,692 -79 -3,038 -23,809
Investments - 310 722 1,032
Redistributions - 407 -11 396
Disposals and retirements - - -722 -722
Depreciation/amortization - -118 -8,627 -8,745
Impairment losses for the year - - - -
As at December 31, 2009
Cost of acquisition 379,883 23,594 73,117 476,594
Accumulated amortization and impairment -37,568 -21,864 -29,652 -89,084
Rights of tenancy and similar rights consist mainly of customer relations/contracts. Depreciation of SEK 8.745 thousand (11.047) is included in Cost of goods sold in the income statement.    
 
Impairment tests for goodwill
 
Goodwill is allocated to the Group's cash generating units (CGUs) identified by segment. A segment level summary of the goodwill allocation is presented below.    
 
  2009 2008    
Sweden - -    
United Kingdom 24,767 24,226    
Germany 123,954 130,800    
USA 190,763 205,150    
Global Services 2,831 2,831    
   
 

Goodwill is tested annually to identify any impairment loss. Acquired operations are integrated with other operations after acquisition. Impairment testing is therefore carried out at segment level. The segments are identified as CGUs with the exception of the Global Services segment, where goodwill values are attributed to the respective area of operation.

   
 
The CGU's recoverable amount is based on value in use. These values are based on estimated future cash flows based on business plans for the next three years. The rate of growth is estimated for each CGU on the basis of market position and development. Cash flows beyond the three-year period are extrapolated using an estimated annual rate of growth, which in the calculations is set at about 3 per cent for all units. A weighted cost of capital for borrowed capital and equity is applied as the discount rate.    
 
The cost of borrowed capital has been determined individually for each segment, thereby taking into consideration differences in market rates between the markets in which the various units operate. The cost of equity is calculated as the return on risk-free investments for each segment, plus a risk premium that is estimated to reflect investors' requirements of listed companies in Studsvik's industry sector. The weighted cost of capital applied in calculating the recoverable amount is between 9 and 11 per cent (9) before tax. Based on the assumptions and estimates made, there is no impairment loss on goodwill. Studsvik has also assessed the sensitivity of value in use to unfavorable changes in the most important assumptions concerning cash flows and discount rate. These amounts also exceeded their carrying amounts.    
Note 17Investments in associated companies
  2009 2008
As at January 1 22,064 -
Share in earnings 13,123 8,465
Dividend received from associated companies -2,485 -744
Transferred from other financial assets - 13,475
Share received through acquisition of subsidiary - 50
Foreign exchange differences -2,001 818
The Group's share in earnings of the most important associated companies, which are all unlisted, and its share of assets
(including goodwill and liabilities) is as follows.
 
2009   Assets Liabilities Income
Profit/loss Participating interest %
THOR Treatment Technologies, LLC USA 31,324 4,358 52,126 8,837 50
UK Nuclear Waste Management Ltd United Kingdom 4,696 4,693 5,037 317 15
KraftAkademin AB Sweden 68 17 120 -4 20
2008   Assets Liabilities Income
Profit/loss Participating interest %
THOR Treatment Technologies, LLC USA 31,318 11,296 76,543 3,052 50
UK Nuclear Waste Management Ltd United Kingdom 5,724 5,584 7,965 0 15
KraftAkademin AB Sweden 68 12 145 3 20

THOR Treatment Technologies, LLC, is a joint venture where Studsvik is a co-owner under a cooperation agreement on joint control. TTT conducts waste treatment operations on the US federal waste market. The Group has no contingent liabilities referring to the holding in TTT.

UK Nuclear Waste Management Ltd is a joint venture where Studsvik is one of four partners. Studsvik has a significant influence through board representation and knowledge transfer. NWM has been appointed to be responsible, together with the Nuclear Decommissioning Authority (NDA), for management and operation of a final repository and to implement a well-functioning strategy for management of low level radioactive waste in the United Kingdom.
KraftAkademin AB produces and conducts training for the nuclear power industry. The business concept is based on giving customers the opportunity of supplementing their internal training activities with courses and seminars when implementing individual competence development plans. Studsvik contributes to KraftAkademin's operations through our competence in thermo hydraulics, reactor dynamics and health physics.
Note 18Financial instruments by category
Accounting policies for financial instruments have been
applied to the items below.
Loans and receivables Assets at fair value through profit or loss Derivatives for hedging Total
As at December 31, 2009
Assets on the balance sheet
Derivative financial instruments - 698 2,343 3,041
Trade and other receivables 299,830 - - 299,830
Other financial assets at fair value through profit or loss - 18,284 - 18,284
Cash and cash equivalents 74,661 - - 74,661
  Liabilities at fair value through profit or loss Other financial liabilities Derivatives for hedging Total
Liabilities on the balance sheet
Borrowings - 369,889 - 369,889
Derivative financial instruments 757 - 3,260 4,017
  Loans and receivables Assets at fair value through profit or loss Derivatives for hedging Total
As at December 31, 2008
Assets on the balance sheet
Derivative financial instruments - 146 425 571
Trade and other receivables 309,156 - - 309,156
Other financial instruments at fair value through profit or loss - 15,344 - 15,344
Cash and cash equivalents 147,713 - - 147,713
  Liabilities at fair value through profit or loss Other financial liabilities Derivatives for hedging Total
Liabilities on the balance sheet
Borrowings - 388,262 - 388,262
Derivative financial instruments 2,754 - 887 3,641
Note 19Credit quality of the financial assets
The credit quality of the financial assets can be assessed by referring to external credit ratings
(if available) or to the counterparty's payment history.
 
  2009 2008
Receivables
Counterparties without external credit rating
- New customers (less than 6 months) 3,823 11,389
- Existing customers with no defaults in the past 180,748 147,456
- Existing customers with some delayed
payments in the past
43,687 42,903
Lån till närstående
Befintlig motpart utan tidigare betalningsförsummelser 3,435 3,435
Total 3,435 3,435
 
Bank balances and current borrowing
AA 74,661 147,713
Derivative financial instruments
AA 3,041 571
None of the fully performing financial assets has been renegotiated in the last year. None of the loans to related parties have matured or become impaired during the year.
Note 20Derivative instruments
2009
Assets
Liabilities 2008
Assets
Liabilities
Forward exchange contracts - Cash flow hedges 3,041 4,017 571 3,641
The entire fair value of a derivative instrument designated as a hedging instrument is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity is less than 12 months. Revaluation of forward exchange contracts designated as hedges is through equity. Other forward contracts are revalued through profit or loss.
Outstanding forward exchange contracts December 31, 2009
INFLOW CURRENCIES
OUTFLOW CURRENCIES
CAD DKK EUR GBP JPY NOK USD EUR USD
Maturity year 000 000 000 000 000 000 000 000 000
2010 Amount 16,700 643 2,103 4,099 119,717 125 5,416 715 1,967
Rate *
6.725 1.393 10.383 11.354 0.075 1.218 7.214 10.776 7.431
2011 Amount 452 299 125 825
Rate * 1.358 10.553 1.195 7.408
2012 Amount 125 467
Rate * 1.177 7.48
2013 Amount 125 170
Rate * 1.168 7.119
2014 Amount 125 82
Rate * 1.159 7.101
2016 Amount 8,800
Rate * 6.948
2017 Amount 5,000
Rate * 6.955
2018 Amount 3,200
Rate * 6.934
*Average contractual rate
The nominal amount for outstanding forward exchange contracts is SEK 385.959 thousand (56.737).
Note 21Trade and other receivables
  2009 2008
Trade receivables 232,987 211,032
Less - provision for impairment of receivables -4,729 -9,284
Trade receivables - net 228 258 201 748
Loans to related parties 3,435 3,360
Work in progress 23,043 20,553
Tax assets 2,166 6,972
Other receivables 26,097 21,956
Prepaid expenses and accrued income
- Accrued income 3,034 31,853
- Accrued interest income - 9
- Prepaid rent 352 1,768
- Prepaid lease charges 487 61
- Prepaid insurance premiums 3,689 7,368
- Other prepaid expenses 9,269 13,508
Non-current portion 3,531 -
Current portion 296,299 309,156
Trade and other receivables are recognized at fair value.
 
The effective interest rate on non-current receivables is as follows.
 
  2009 2008
Loans to related parties (note 37) 2.2% 6.1%
 
No impairment loss is considered to exist for trade receivables less than 3 months overdue. As at December 31, 2009 trade receivables of SEK 62.627 thousand (84.573) were overdue without any impairment loss being identified. These refer to a number of independent customers who have not had payment difficulties in the past. An age analysis of these trade receivables is given below.
 
  2009 2008
Less than 3 months 57,182 71,207
3 to 6 months 1,521 3,662
More than 6 months 3,924 9,704
Carrying amounts of the Group's trade and other receivables by currency are as follows.
  2009 2008
SEK 82,947 89,629
EUR 104,174 76,791
GBP 17,805 91,223
CAD 159 -
USD 90,443 49,931
Other currencies 4,302 1,582
Changes in the reserve for doubtful receivables
are as follows.
  2009 2008
As at January 1 -9,284 -7,583
Translation difference 644 -1,441
Provision for doubtful receivables -4,166 -333
Receivables written off as unrecoverable 8,077 73
Transfers to and reversals from reserves for doubtful receivables are included in the item Other costs in the income statement. Amounts stated in the depreciation account are normally written off when the Group is not expected to recover further cash funds. No impairment loss has been identified for any assets in other categories of trade and other receivables. There is no concentration of credit risk with respect to trade receivables, as the Group has a large number of customers, internationally dispersed.
Note 22Financial assets at fair value through profit or loss
  2009 2008
Unlisted shareholdings 2,976 5,558
Capital insurance 10,807 9,786
Non-current bank deposits 4,501 -

The statement of cash flows includes financial assets measured at fair value through profit or loss in the category Cash flow from operating activities as part of the change in working capital. This does not, however, apply to non-current bank deposits recorded as cash flow from financing activities. Blocked bank funds in the USA amount to SEK 4.418 thousand and are recorded as non-current bank deposits.

 
The fair value of capital insurance is based on current market prices.
Note 23Inventories
  2009 2008
Raw material 4,560 4,891
Work in progress 11,856 22,159
Finished goods 1,542 1,767
The expensed expenditure for inventories is included under Cost of goods sold and
amounts to SEK 17.856 thousand (30.510).
Note 24Cash and cash equivalents
  2009 2008
Cash and bank balances 74,661 146,620
Current bank deposits - 1,093
Note 25Share capital and other contributed capital
  Number of shares
Share capital Other contributed capital
As at January 1, 2008 8,218 611 8,219 225 959
Transfers within equity   -687
As at December 31, 2008 8,218,611 8,219 225,272
       
As at January 1, 2009 8,218,611 8,219 225,272
As at December 31, 2009 8,218,611 8,219 225,272
 
All shares are ordinary shares with a quotient value of 1.0
Note 26Retained earnings
As at January 1, 2008 344,130
Net profit for the year -395
Dividend paid for 2007 -16,437
Transfers within equity 687
As at December 31, 2008 327,985
   
As at January 1, 2009 327,985
Net profit for the year -35,198
Dividend paid for 2008 -8,219
Note 27Reserves
  Currency translation reserve Hedge reserve Total
reserves
As at January 1, 2008 -9,932 - -9,932
Foreign exchange differences 59,262 - 59,262
Cash flow hedging      
- Fair value difference - -462 -462
- Tax on fair value differences - 121 121
As at December 31, 2008 49,330 -341 48,989
       
As at January 1, 2009 49,330 -341 48,989
Foreign exchange differences -22,479 - -22,479
Cash flow hedging      
- Fair value differences - -4,936 -4,936
- Tax on fair value differences - 1,298 1,298
As at December 31, 2009 26,851 -3,979 22,872
Note 28Trade and other payables
  2009 2008
Trade payables 70,675 97,387
Liabilities for work in progress 43,616 29,425
Advance payments from customers 19,717 32,605
Social security and other taxes 70,934 54,508
Other liabilities 15,337 16,432
Accrued expenses and deferred income
- Deferred income 13,796 19,947
- Accrued interest expense 436 1,836
- Accrued salaries 31,252 31,280
- Accrued pension costs 10,042 9,138
- Accrued consulting and service costs 953 29
- Accrued audit fees 258 -
- Other items 69,068 74,063
Non-current portion 11,381 9,138
Current portion 334,703 357,512
Note 29Borrowings
  2009 2008
Non-current portion 284,536 350,520
Current portion 85,353 37,742
Shares in Studsvik UK Ltd, Studsvik GmbH and Studsvik Verwaltungs GmbH have been put up as collateral for the Group's bank borrowings. The Group's borrowings are recognized at fair value.
 
The exposure of the Group's borrowings to interest rate changes and the contractual repricing dates at the balance sheet date are as follows
  2009 2008
0-6 months 200,471 -
6-12 months 166,078 388,262
1-5 years 3,340 -
The bank loans mature in 2017. Total borrowing includes bank loans and other borrowing against collateral of SEK 156.662 thousand (99.099). The collateral for bank loans is the Group's shares in subsidiaries.
 
Maturities of borrowings
  2009 2008
Less than 1 year 85,353 37,742
Between 1 and 2 years 164,547 59,631
Between 2 and 5 years 107,154 225,475
More than 5 years 12,835 65,414
The carrying amounts of the Group's borrowings
are denominated in the following currencies
  2009 2008
SEK 3,340 -
EUR 84,521 99,480
USD 211,943 219,342
GBP 70,085 69,440
The Group has the following unutilized credit facilities
  2009 2008
Variable interest rate
- Matures within one year 32,828 31,882
- Matures after more than one year 4,820 4,950
The lines of credit that mature within one year are one-year
credit facilities that will be reviewed on varying dates in 2010.
 
Average effective interest rate on balance sheet date, bank borrowings
  2009 2008
SEK 1.65% -
EUR 3.56% 4.45%
USD 4.20% 4.54%
GBP 5.12% 7.24%
Note 30Deferred tax
Deferred tax assets and tax liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax refers to the same tax authority. The amounts offset are as follows:
 
Offset amounts     2009 2008
Deferred tax assets        
Deferred tax assets to be utilized
after more than 12 months
    91,661 49,434
Deferred tax assets to be utilized within 12 months     1,900 14,553
Deferred tax liabilities        
Deferred tax liabilities to be paid
after more than 12 months
    32,737 31,780
Deferred tax liabilities to be paid within 12 months     1,218 2,549
Deferred tax assets Tax losses Fair value gains Other Total
As at January 1, 2008 41,460 - 148 41,608
Charged/credited to the income statement 15,063 - 1,693 16,756
Reposting from other financial receivables - - 1,550 1,550
Tax referring to components in other comprehensive income - 121 - 121
Reposting to current tax -2,792 - - -2,792
Translation differences 6,744 - - 6,744
As at December 31, 2008 60,475 121 3,391 63,987
Charged/credited to the income statement 35,202 826 -586 35,442
Tax referring to components in other comprehensive income - 109 - 109
Translation differences -5,977 - - -5,977
As at December 31, 2009 89,700 1,056 2,805 93,561
         
Deferred tax liabilities Accelerated tax depreciation Fair value gains Other Total
As at January 1, 2008 5,431 - 35,458 40,889
Charged/credited to the income statement 1,124 - 1,406 2,530
Reposting from other financial liabilities - - -14,488 -14,488
Change through acquisition
- - 458 458
Translation differences - - 4,940 4,940
As at December 31, 2008 6,555 - 27,774 34,329
Charged/credited to the income statement -538 1,989 2,633 4,084
Tax referring to components in other comprehensive income - -1,189 - -1,189
Reposting to current tax - - -1,091 -1,091
Translation differences - - -2,178 -2,178
As at December 31, 2009 6,017 800 27,138 33,955
         
Deferred tax assets are recognized for tax loss carry forwards to the extent that the realization of the related tax benefit through the future taxable profits is probable. Most of the Group's tax loss carry forwards are related to the US operations. These total USD 47.2 million (38.9), to be utilized within a 20 year period. The Group's recognized deferred tax assets include tax loss carry forwards in the USA of SEK 70.5 million (56.1).
Note 31Pension obligations
Defined benefit pension plans
There are a few defined benefit pension plans within the Group, which are primarily based on final salary. The plans that have been considered to be material are in Germany. A reclassification has been made for a defined benefit pension plan in Sweden. From 2005 the pension plan is a defined contribution plan. Other pension obligations have not been considered as having any material effect, and have therefore not been restated in accordance with IAS 19.
 
Pension insurance with Alecta
Commitments for old-age pension and family pension for employees in Sweden are safeguarded through insurance with Alecta. According to a statement by the Swedish Financial Accounting Standards Council's Emerging Issues Task Force, URA 42, this is a defined benefit plan covering several employers. For the 2009 financial year the Group has not had access to such information as will make it possible to report this plan as a defined benefit plan. Consequently, the pension plan, under ITP, which is safeguarded through insurance with Alecta, is reported as a defined contribution plan. The year's contributions for pension insurance taken out with Alecta amount to SEK 5.341 thousand (3.846). Alecta's surplus can be distributed to the policy holders and/or the insured. At the end of 2009 Alecta's surplus in the form of a collective solvency level was 136 per cent (126). The collective solvency level comprises the market value of Alecta's assets as a percentage of its insurance commitments calculated in accordance with Alecta's actuarial assumptions, which do not comply with IAS 19.
 
  2009 2008
Obligations in the balance sheet for    
Pension benefits 7,489 7,790
Income statement charge for (note 9)    
Pension costs
28,219 22,987
     
Amounts recognized in the balance sheet 2009 2008
Present value of unfunded obligations 7,489 7,790
Amounts recognized in the income statement 2009 2008
Defined benefit plans    
Current service cost 83 328
Interest expense 148 58
Of the total cost, SEK 51 thousand (76) was included in Cost of goods sold and SEK 180 thousand (310) in Administrative expenses. The actual return on the plan assets was SEK - thousand (-).    
     
The movement in the liability recognized
in the consolidated balance sheet
2009 2008
At the start of the year 7,790 5,961
Translation differences -490 1,476
Total expense recognized in the income statement 231 386
Contributions paid -42 -33
Total pension costs recognized
in the consolidated income statement
2009 2008
Total costs for defined benefit plans 231 386
Total costs for defined contribution plans 23,527 19,214
Costs of special employer's contribution and
tax on returns from pension funds
4,461 3,387
Actuarial assumptions 2009 2008
Discount rate 5.3% 5.6%
Expected return on plan assets 0.0% 0.0%
Future salary increases 3.0% 3.0%
Future pension increases 1.8% 2.2%
Note 32Other provisions
  Future waste management expenses Restructuring Other provisions Total
As at January 1, 2009 53,461 7,580 32,608 93,649
Recognized as an expense in the
consolidated income statement
       
- Additional provisions 6,502 - 36,793 43,295
Repostings -27,411 -7,580 34,991 0
Effects of changed conditions for discounting 886 - 3,338 4,224
Amount utilized during the period -1,712 - -1,050 -2,762
Translation difference - - -2,227 -2,227
As at December 31, 2009 31,726 0 104,453 136,179
         
Non-current portion 30,985 - 97,379 128,364
Current portion 741 - 7,074 7,815
Future waste management expenses        

The Group's operations generate nuclear waste and radioactive waste which must be sent for final disposal within the framework of the systems and rules in force in the countries in which Studsvik carries out operations in its own production facilities. Provisions are made for operational waste and also to some extent for decommissioning of facilities and the resulting decommissioning waste. The main part of the costs of decommissioning and decommissioning waste from the Group's Swedish nuclear facilities is financed, under the provisions of the Studsvik Act 1988:1597, through a charge on nuclear generated electricity. The Swedish nuclear power producers are liable to pay this charge. Fees paid in are administered by the Nuclear Waste Fund.

Funds for decommissioning and waste management may be withdrawn from the Fund by Studsvik, which holds the nuclear permit for the facilities in question. Studsvik is not liable to pay under the current Act. Studsvik's responsibility for decommissioning and waste management for its own nuclear facilities is limited to buildings, systems and components coming into existence after June 30, 1991. Studsvik estimates these commitments on a current basis and provision is made for them. Recognized provisions include management of waste, SEK 31.7 million. Of the total provisions, SEK 0.7 million is expected to be utilized in 2010 and the rest is expected to be utilized successively and at the earliest starting in 2011.

Restructuring

In December 2004 the Board of Directors of Studsvik AB decided that the Group's reactor operations would cease in 2005. Operations ceased in June 2005 after which restructuring of the business was started. This was fully completed in 2009. Remaining provisions include dismantling certain installations in the reactor for which Studsvik is responsible and have been reclassified as other provisions.

Other provisions

Other provisions refer to future costs for decommissioning the Swedish, British and American waste management facilities. In addition to this, future costs of decommissioning other nuclear facilities in Sweden are included, to the extent they are not covered by funds from the Nuclear Waste Fund. Of the total provisions, SEK 7.1 million are expected to be utilized in 2010 and refer to nuclear facilities in Sweden. The remaining part of the provisions is expected to be utilized only in connection with decommissioning operations.
Note 33Cash flow from operating activities
Non-cash items 2009 2008
Depreciation/amortization and impairment 75,246 67,452
Restructuring costs in the UK and USA 30,316 -
Proceeds from sale of property, plant and equipment -344 -2,124
Proceeds from sale of subsidiaries and other business units -6,730 -
Share in earnings from associated companies -13,123 -8,465
Change in provisions 7,880 4,079
Note 34Contingent liabilities
The Group has contingent liabilities in respect of bank guarantees and other guarantees as well as other items arising in the normal course of business. No material liabilities are expected to arise through these contingent liabilities. In the normal course of business the Group has issued guarantees amounting to SEK 66.836 thousand (63.290) to third parties. No further payments are expected as at the date of these financial reports.  
Note 35Commitments
CAPITAL COMMITMENTS
Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows.

2009 2008
Property, plant and equipment 17,095 17,424
OPERATING LEASE COMMITMENTS
Lease expenses for operating leases for the year amounted to SEK 11.943 thousand (23.591).
 
Future aggregate minimum lease payments
  2009 2008
Within 1 year 5,135 13,733
Between 1 and 5 years 15,119 19,211
More than 5 years - 3,819
FINANCE LEASE COMMITMENTS
Assets recognized as finance leases

Equipment and tools  
Opening book value January 1, 2008 8,243  
Depreciation/amortization for the year -2,904  
Translation differences 1,114  
 
Opening book value January 1, 2009 6,453  
Investments 3,365  
Depreciation/amortization for the year -130  
Disposals and retirements -5,807  
Translation differences -446  
 
Future aggregate minimum lease payments
  2009 2008
Within 1 year 725 303
Between 1 and 5 years 2,738 8,217
Lease expenses for finance leases for the year amounted to SEK 146 thousand (64). The Group's finance leases consisted mainly of transport vehicles in the logistics operations in the USA. These operations were sold during the year to R&R Trucking. During the year another finance lease was obtained for a band saw for large components in the Swedish operations.
Note 36Disposals
Disposals in 2009 are summarized below.
 
Date of disposal Operation Country Segment Proceeds * Number of employees *
April 1, 2009 AB SVAFO Sweden Other 63,432 4
October 5, 2009 Person-
dosimetri
Sweden Global Services 4,312 4
* Annual revenue and number of employees on the date of disposal.          
 
Disposals
The four nuclear power companies OKG AB, Ringhals AB, Forsmarks Kraftgrupp AB and Barsebäck Kraft AB took over ownership of Studsvik's subsidiary AB SVAFO. AB SVAFO is a non-commercial company with the task of managing historical waste under the Studsvik Act. The activities are entirely financed via the Nuclear Waste Fund. The disposal enables Studsvik to concentrate fully on its core activities. The transfer took place at book value without obligations for Studsvik regarding the remaining facilities.
As part of the Global Services strategy to focus on its core activities the Personal dosimetry operations were sold. The personal dosimetry laboratory is the largest independent laboratory in Sweden with about 500 customers, mainly in the medical field.
 
The table below presents the carrying amount of operations sold as at the date of disposal.          
           
The carrying amount of assets
and liabilities for the disposals
2009        
Property, plant and equipment 114        
Financial assets 2,582        
Trade and other receivables 5,138        
Trade and other payables -24,952        
Identifiable assets, net -17 118        
Capital gain 6,730        
Purchase price obtained and
liquid assets obtained
-10 388        
 
At the time of the transfer AB SVAFO had a net cash balance of SEK 18.4 million, mainly consisting of advances from the Nuclear Waste Fund. The transfer meant that the Group's cash and cash equivalents decreased by SEK 17.4 million.
Note 37Transactions with related parties
Studsvik, Inc. owns 50 per cent of THOR Treatment Technologies, LLC (TTT). In accord­ance with a Joint Venture Operating Agreement the owners are to provide management, technical and marketing services to TTT. Studsvik owns 15 per cent of UK Nuclear Waste Management Ltd (NWM), where Studsvik, in a consortium together with other partners, will manage and operate a repository for low level radioactive waste in the United Kingdom.
Transactions with associated companies 2009 2008
Sale of services
- THOR Treatment Technologies, LLC 9,473 7,315
- UK Nuclear Waste Management Ltd 3,584 4,155
Receivables from related parties
- THOR Treatment Technologies, LLC 272 2,664
- UK Nuclear Waste Management Ltd 226 1,176
Change in loans to related parties
- UK Nuclear Waste Management Ltd 0 3,360
Under an agreement with the owners the services
are supplied on a commercial basis.
Note 38Information on the Board of Directors and senior management
Salaries and other
benefits, 2009
Basic salary/
Board fee
Committee fee Variable remuneration Other benefits Pension cost Other remuneration Total
Chairman of the Board
Anders Ullberg 650 50 - - - - 700
Members of the board (6)
Jan Barchan 169 - - - - - 169
Ingemar Eliasson 225 100 - - - - 325
Lars Engström 225 - - - - - 225
Anna Karinen 350 - - - - - 350
Alf Lindfors 225 - - - - - 225
Per Ludvigsson 225 50 - - - - 275
Employee representatives (4) - - - - - - 0
President 2,692 - - 121 1,088 - 3,901
Other senior management (9) 11,806 - 1,082 767 3,016 1,602 18,273
of whom outgoing (2) 2,066 - 298 79 507 1,602 4,552
Salaries and other
benefits,
2008
Basic salary/
Board fee
Committee fee Variable remuneration Other benefits Pension cost Other remuneration Total
Chairman of the Board
Anders Ullberg 625 25 - - - - 650
Members of the board (6)
Jan Barchan 212 - - - - - 212
Ingemar Eliasson 212 50 - - - - 262
Lars Engström 112 - - - - - 112
Anna Karinen 350 - - - - - 350
Alf Lindfors 212 - - - - - 212
Per Ludvigsson 212 25 - - - - 237
Leif Nilsson* 100 - - - - - 100
Employee representatives (4) 22 - - - - - 22
President 2,692 - - 148 799 - 3,639
Other senior management (8) 11,025 - 661 550 2,575 - 14,811
*Board member until April 22, 2008
 
Remuneration to the Board
of Directors and other senior management executives
2009 2008          
Parent company
Salaries and other remuneration 9,171 8,802          
- Of which bonuses 518 93          
Pensions 3,020 2,504          
Number of persons 15 16          
               
Subsidiaries
Salaries and other remuneration 10,850 7,733          
- Of which bonuses 564 568          
Pensions 1,306 870          
Number of persons 6 5          
 
Group
Salaries and other remuneration 19,451 16,535          
- Of which bonuses 1,082 661          
Pensions 4,104 3,374          
Number of persons 21 21          
 
Principles
In 2009 the members of the Board of Directors did not receive any remuneration in addition to the Board and Committee fees.    
 
Bonuses
The President is entitled to a bonus. The forms of the variable part of the salary are established annually. For 2010 the variable part of the salary is based on the Group's net sales and operating margin and may not exceed 50 per cent of annual salary. Bonus for other senior management for 2010 is based on outcomes related to individually specified targets at both Group and unit level. For 100 per cent target fulfillment in all parameters a bonus is payable of 50 percent of the basic salary.    
 
Financial instruments
Under current employment contracts there are no share based payments.    
 
Pension

The pensionable age of the President is 65 years. The President receives a pension under the ITP plan. In addition to this, the company pays an annual pension premium equivalent to 17 per cent of the fixed salary to an endowment insurance owned by the company. The premium is paid up to the age of 65 on condition that the employment has not ceased before this. Retirement pension is paid from the month after the President reaches the age of 65 and for a period of 20 years. The size of the pension depends on the capital formation, including the return received at the time. For other members of the Executive Group Management a pension is payable as a rule from the age of 65. The pension obligations are vested.

Termination and severance pay

The President's period of notice is 6 months for his own termination of employment and 12 months for termination by the company. In the case of termination of employment by the company, salary is payable during the period of notice as well as an additional severance payment equivalent to 12 months' salary. If Studsvik AB should be acquired through a stock exchange buyout or through the company being acquired by a new principal owner (more than 50 per cent of the shares) the President is entitled to termination pay as though the termination was on the part of the company. For other members of the group executive management, the main rule is that the period of notice is 6 months when employment is terminated by the employee and 12 months when terminated by the company. In the case of termination of employment by the company, salary is payable during the period of notice as well as an additional severance payment equivalent to 12 months' salary.
   
Note 39Net sales
 
Net sales by geographical market
     
  2009 2008
Sweden 4,213 3,964
Europe, not including Sweden 3,941 3,775
North America 3,004 3,059
Note 40Employee benefits
2009 2008
Salaries
and other
remuneration
(of which  bonuses)
Social
security costs
(of which
pension cost)
Salaries
and other
remuneration
(of which  bonuses)
Social
security costs
(of which
pension cost)
Board of Directors and President 4,971
1,959
4,787
2,358
(-) (1,083) (-110) (758)
Other employee
9,669
8,409
8,977
6,016
(600) (4,577) (650) (3,043)
See also note 38.
Note 41Costs by nature of expense
  2009 2008
Purchases of material and services 19,205 18,535
Personnel costs 22,646 21,406
Depreciation/amortization 317 336
Services include fees and remuneration to
accounting firms as follows:
   
  2009 2008
PricewaterhouseCoopers    
Audit assignments 1,558 801
Consulting assignments 871 202
     
Audit assignments refers to the examination of the annual accounts, the accounting records and the administration by the Board of Directors and the President. It also includes other duties that are incumbent on the company's auditors as well as advisory services and other types of support as a result of observations made through such an examination. Everything else is classed as Other assignments.
Note 42Depreciation
  2009
According
to plan
2009
Book
2008
According
to plan
2008
Book
Equipment and tools 317 317 336 336
Note 43Operating leases
  2009 2008
Maturity within one year 1,324 1,118
Maturity after one year but within five years 428 928
The parent company's leases mainly refer to vehicles and premises with traditional terms and conditions.
Note 44Interest income and similar profit/loss items
  2009
2008
Interest 10,948 12,707
Dividends received 32,050 -
Exchange rate differences 2,645 1,211
Of which, in respect of Studsvik Group companies    
Interest 10,638 10,187
Dividends received 32,050 -
Note 45Interest expense and similar profit/loss items
  2009
2008
Interest 10,877 10,008
Exchange rate differences 3,154 990
Other financial expenses 189 67
Of which, in respect of Studsvik Group companies    
Interest 462 1,499
Note 46Appropriations
  2009
2008
Dissolution of tax allocation reserve 2,510 4,363
Note 47Income tax
  2009
2008
Current tax    
Current tax on profit for the year 7,402 5,819
Adjustment for previous years 183 112
Deferred tax    
Origination and reversal of temporary differences 400 1,024
Effect of change in the Swedish tax rate -156 -
Total 244 1,024
The Swedish tax rate is 26.3 per cent (28). The income tax on the parent company's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate for profits as follows.
     
  2009 2008
Profit before tax 2,903 -21,493
Tax in accordance with the current tax rate -764 6,018
Non-taxable revenue 8,429 76
Expenses not deductible for tax purposes -263 -275
Deferred tax asset referring to pensions 235 1,024
Adjustment for previous years' tax assessment 183 112
Other 9 -

As a result of the change in Swedish corporate tax from 28 per cent to 26.3 per cent, which applies from January 1, 2009, the relevant carrying amounts for deferred tax have been restated. The weighted average tax rate was -270 per cent (32), mainly as an effect of dividends received from subsidiaries (note 44).

Note 48Property, plant and equipment
  2009 2008
Equipment and tools    
Opening cost of acquisition 1,771 2,416
Investments for the year - 182
Sales and disposals - -827
Closing accumulated cost of acquisition 1 771 1 771
Opening depreciation -1,067 -752
Depreciation for the year -317 -336
Sales and disposals - 21
Closing accumulated depreciation -1 384 -1 067
Note 49Financial assets
  2009 2008
Shares in subsidiaries    
Opening cost of acquisition 822,068 822,346
Shareholder's contribution 34,393 -
Sales -1,000 -
Adjustment of cost of acquisition - -278
Closing cost of acquisition 855 461 822,068
Opening impairment losses -42,949 -42,949
Closing impairment losses -42,949 -42,949
Receivables from Group companies    
Loans to Studsvik Holding, Inc. Group    
- Opening cost of acquisition 169,314 154,094
- Items added/deducted during the year 7,825 -14,929
- Foreign exchange differences -10,801 30,149
Loan to Studsvik UK Ltd    
- Opening cost of acquisition 52,048 -
- Items added/deducted during the year 85,537 52,048
- Conversion to shareholders' contribution -34,393 -
- Foreign exchange differences -2,664 -
Other non-current receivables    
- Opening cost of acquisition 12,148 10,918
- Items added/deducted during the year 904 1,230
Note 50Prepaid expenses and accrued income
  2009 2008
Prepaid rent 211 215
Prepaid insurance premiums - 128
Other 802 1,172
Note 51Shares and participations in subsidiaries
  Share of equity, % Share
of voting
power, %
No of participations/
shares
  Nominal value Book value
Parent company's holdings
Studsvik Holding, Inc. 100 100 2,000 kUSD 25,372 568,747
Studsvik Nuclear AB 100 100 5,000 kSEK 50,000 133,400
Studsvik Scandpower, Inc. 79 79 1,503 kUSD 149 984
Studsvik Scandpower AB 91 91 910 kSEK 91 603
Studsvik Japan Ltd 100 100 10,000 kJPY 10,000 373
Studsvik Germany GmbH 100 100   kEUR 26 241
Studsvik Verwaltungs GmbH 100 100   kEUR 26 261
Studsvik UK Ltd 100 100 1,022 500 kGBP 1,023 89,797
Studsvik Instrument Systems AB 100 100 17,000 kSEK 17,000 18,106
Information on subsidiaries' corporate identity numbers and registered offices Corporate identity number Registered office    
Studsvik Nuclear AB 556051-6212 Nyköping    
ALARA Holding i Skultuna AB 556573-6591 Nyköping    
ALARA Engineering AB 556514-8177 Nyköping    
Studsvik Scandpower, Inc. 36-3088916 Boston, USA    
Studsvik Scandpower AB 556137-8190 Nyköping    
Studsvik Scandpower AS 008797.45012 Kjeller, Norway    
Studsvik Scandpower GmbH HRB 4839 Norderstedt, Germany    
Studsvik Scandpower Suisse GmbH CH400.4.021.112.4 Fischbach-Göslikon, Switzerland    
Studsvik Japan Ltd   Tokyo, Japan    
Studsvik Holding, Inc. 35-3481732 Erwin, USA    
Studsvik, Inc. 36-2999957 Erwin, USA    
Studsvik Processing Facility Erwin, LLC 36-4063922 Erwin, USA    
RACE Holding, LLC 20-2472653 Erwin, USA    
Studsvik Processing Facility
Memphis, LLC 62-1801098 Erwin, USA    
Studsvik Logistics, LLC 77-0631902 Erwin, USA    
Studsvik Germany GmbH HRB 504467 Mannheim, Germany    
Studsvik Verwaltungs GmbH HRB 504468 Mannheim, Germany    
Studsvik GmbH & Co. KG HRA 503411 Mannheim, Germany    
Studsvik SAS 504440330 Paris, France    
Studsvik UK Ltd 0477,2229 Newcastle, England    
Studsvik Alpha Engineering Ltd 0365,8198 Newcastle, England    
Studsvik Instrument Systems AB 556197-1481 Nyköping    
Note 52Untaxed reserves
  2009 2008
Tax allocation reserve - 2,510
Note 53Liabilities to credit institutions
  2009 2008
Bank borrowings    
Non-current portion 144,398 201,915
Current portion 57,484 19,250
Note 54Accrued expenses and deferred income
  2009 2008
Holiday pay liability 1,973 2,115
Accrued social security contributions 4,681 4,418
Accrued interest expense 436 1,836
Other 88 560
Note 55Pledged assets
  2009 2008
Shares in subsidiaries 90,299 502
Note 56Contingent liabilities
  2009 2008
Guarantees 830 1,311
Contingent liabilities referring to insurance 2,989 1,845
In addition the parent company has made a guarantee commitment for a subsidiary as for its own debt.
Note 57Derivative instruments
  2009
Assets
2009
Liabilities
2008
Assets
2008
Liabilities
Forward exchange contracts - 35 15 -
Revaluation of forward exchange contracts is through profit or loss.  
         
Outstanding forward exchange contracts, December 31, 2009  
         
      INFLOW CURRENCIES
      GBP USD
Maturity year     000 000
2010 Amount     3,770 3,190
- Average rate     11.372 7.188
Remeasured at fair value     42,644 22,890
Note 58Investment in property, plant and equipment
  2009
2008
Equipment and tools - 182
Note 59Cash flow from operating activities
Non-cash items
  2009 2008
Depreciation/amortization 317 336
Results from sale of property, plant and equipment - -770
Note 60Transactions with related parties
Intra-Group purchases and sales
The percentage of the year's purchases and sales referring to other companies within the Studsvik Group is presented below.
 
  2009 2008
Purchases 7% 4%
Sales 100% 100%
 
The same pricing principles are applied to purchases and sales between group companies as applied to transactions with external parties.
 
Agreements on severance payments and other commitments to Board members
and the President
 
The President's period of notice is 6 months for his own termination of employment and 12 months for termination by the company. In the case of termination of employment by the company, salary is payable during the period of notice as well as an additional severance payment equivalent to 12 months' salary. If Studsvik AB should be acquired through a stock exchange buyout or through the company being acquired by a new principal owner (more than 50 per cent of the shares) the President is entitled to termination pay as though the termination was on the part of the company. See also note 38.
Note 61Number of employees
      2009 2008
Women
    5 5
Men     7 6
Board members and senior management executives
  2009   2008  
  Number
on balance sheet date
Of which men Number
on balance
sheet date
Of which men
Board members 11 8 11 8
President and other senior management executives 3 3 5 4
Note 62Investment in subsidiaries
  2009 2008
Shareholder's contribution 34,393 -

Shareholder's contribution to Studsvik UK Ltd through conversion of loan.

   

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