annual report 2007 annual report - euromaint report 2007.pdf · 2015-01-16 · business concept...

ANNUAL REPORTANNUAL REPORTANNUAL REPORTANNUAL REPORTANNUAL REPORTANNUAL REPORTANNUAL REPORTANNUAL REPORTANNUAL REPORTANNUAL REPORTANNUAL REPORT

2007

Business concept EuroMaint strengthens its customers’ competitiveness through tailored maintenance and technical solutions, primarily in rail traffic and the engineering and processing industries.

3

THE GROUP AND ITS COMPANIES

EuroMaint is a strong, leading maintenance partner that unites creative thinking with solid long-term experience in order to raise customers’ efficiency. The companies in the EuroMaint Group offer leading maintenance and technical solutions in their fields. Creative technical system services, customised total solutions and partnerships contribute to our customers’ competitiveness and success.

EuroMaint’s subsidiary companies are specialist businesses that offer advanced maintenance services for the engineering industry, the rail transport sector and railway contractors. At present there are three companies: EuroMaint Industry, EuroMaint Rail and EuroMaint Tracksupport.

The common main products are comprehensive maintenance packages, Total Service Concepts encompassing preventive, corrective, restorative and improvement maintenance.

The Group-level functions focus on general industry-wide issues to identify and generate business, and on retaining and developing EuroMaint’s position as a leading maintenance partner. Strategic development issues and developing co-operation with important partners are vital aspects of this process. Internationalisation has begun in Northern Europe.

EuroMaint can be found all over Sweden from Luleå in the north to Malmö in the south, and also in Jelgava, Latvia and Detroit, USA. The head office is in Stockholm and the company has approximately 1,800 employees.

n EuroMaint has operations in Sweden (from Luleå in the north to Malmö in the south), and also in Latvia (Jelgava) and the USA (Detroit).

n The EuroMaint Group has three subsidiaries which offer advanced maintenance services in their respective industrial sectors.

EuroMaint AB EuroMaint Rail AB

EuroMaint Industry AB

EuroMaint Tracksupport AB

Operations and organisation


LATVIA

U S A

SWEDEN


4

GROUP 2007 2006

Turnover, SEK million 2,067 2,037

Operating profit/loss, SEK million 67 100

Cash flow, SEK mn -14 45

Operating margin, % 3 5

Equity/assets ratio, % 23 24

Average number of employees 1,771 1,747

Sick leave, % 4.7 4.7

FIVE-YEAR SUMMARY EUROMAINT GRUPPEN AB EUROMAINT AB GROUP GROUP

INCOME STATEMENT, 20071 20061 2006 20052 2004 2003SEK million PRO PRO PRO FORMA FORMA FORMA

Turnover 2,067 2,037 2,037 1,872 1,493 1,653

Operating profit/loss 67 100 100 114 47 -103

Net financial revenues/expenses -80 -68 -9 -11 -10 -11

Profit/loss after tax -8 27 70 93 52 -106

CASH FLOW, SEK million

Cash flow from:

Operating activities 56 77 77 62 48 -40

Investing activities -70 -32 -32 -100 -34 10

Financing activities -31 -66 -66 90 0 30

Change in cash and cash equivalents -45 -21 -21 52 14 0

BALANCE SHEET, SEK million

Fixed assets 889 207 207 221 160 113

Receivables and stock 873 776 776 693 563 690

Cash and cash equivalents 0 45 45 66 14 0

TOTAL ASSETS 1,762 1,028 1,028 980 737 803

Equity 188 249 249 178 81 18

Deferred tax 5 8 8 12 0 0

Other provisions 52 63 63 66 46 54

Long-term liabilities 965 274 274 340 250 264

Operating liabilities 552 434 434 384 360 4,671

TOTAL EQUITY AND LIABILITIES 1,762 1,028 1,028 980 737 803

1 Pro forma figures refer to projected figures for the whole of 2007 and to adjustment of financial expenses2 The relevant figures for 2003–2004 relate to EuroMaint Rail. EuroMaint Industry is included from 1 July 2005

EuroMaint Rail and EuroMaint Industry have developed from being internal resources within their former owner organisations – the Swedish State Railways and Volvo respectively – to becom-ing commercial companies on a competitive market. EuroMaint Tracksupport was formed from EuroMaint Rail in 2007 with the aim of meeting the unique needs of railway contractors.

EuroMaint has been owned by Ratos, a listed owner company, since 1 September 2007. The previous owner was AB Swedcarrier, a state-owned holding company.

The restructured Group, with EuroMaint Gruppen AB as the new parent company, is reported legally in the Report of the Directors from 1 September. The parent company EuroMaint Gruppen AB is reported legally from the date of formation, 25 April. However, in other parts of the Annual Report the new Group is reported and annotated based on pro forma figures to simplify monitoring over time and thereby simplify comparison. Financial values are based on the former EuroMaint AB Group, adjusted only for higher interest expenses due to an altered borrowing situation since the takeover. Comparison values for the 2006 balance sheet and the entire cash flow analysis show non pro forma figures for the former EuroMaint AB Group.

Financial summary

TURNOVER BY COMPANY, SEK million

2

345

14

-30

2,06

72,000

1,800

1,600

1,400

02003 2004 2005 2006 2007

1,65

3

1,49

3

1,87

2

TURNOVER, SEK million

67

100

50

0

-50

-1002003 2004 2005 2006 2007

-103

OPERATING PROFIT/LOSS, SEK million

2,03

7 40

20

0

-20

-402003 2004 2005 2006 2007

CASH FLOW AFTER INVESTING ACTIVITIES, SEK million

-38

GROUP

-14

1

1. EuroMaint Industry 13 %2. EuroMaint Rail 86 %3. EuroMaint Tracksupport 1 %

100

47

114

5

Vision EuroMaint is a leading innov ative maintenance partner for increased efficiency.

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EuroMaint Industry strengthens industrial competitive-ness through production streamlining. The company develops and maintains production equipment, components and processes in industry.

The headquarters are in Skövde and the company also has operations in Gävle, Hallsberg, Åmål and Detroit, USA. EuroMaint Industry has approximately 280 employees. The company has developed positively. In tandem with a stronger customer proposition, demand for EuroMaint Industry’s products has increased. A large number of major and minor contracts have been signed during the year. The company is expected to show positive financial results next year.

EUroMAInT InDUSTry 2007 2006

Turnover, SEK million 271 231

operating profit/loss, SEK million 0 -8

Cash flow, SEK million -15 -27

operating margin, % 0 negative


Average number of employees 261 281


EuroMaint rail offers cost-effective maintenance solutions for rolling stock in the rail transport industry. The company develops, produces and supplies technical system services and maintenance for all types of rolling stock and its components.

EuroMaint rail is headquartered in Solna and operations are carried out in 14 locations, including a site in Latvia. The com-pany has approximately 1,500 employees. EuroMaint Rail maintains many of the trains on Sweden’s railway lines. The company has not quite achieved its commercial goals during the year as the refurbishment operation has lost several major contracts. In 2008 EuroMaint Rail will be taking further steps to expand internationally.

EUroMAInT rAIL 2007 2006

Turnover, SEK million 1,816 1,818

operating profit/loss, SEK million 62 108

Cash flow, SEK million 6 73

operating margin, % 3 6


Average number of employees 1,481 1,456


EuroMaint Tracksupport offers first-class maintenance of rail-bound work machines and hydraulic equipment. The company aims to increase its customers’ competitiveness and success with specialist functional and product know-how, field service and professionalism.

The headquarters are in Åmål and the company operates in Sweden and norway. The company has approximately 30 employees. EuroMaint Tracksupport was formed on 1 July 2007.

EuroMaint Tracksupport has achieved the budgeted volumes but the financial results were slightly weaker during the autumn. General agreements have been signed during the autumn with both the Swedish and the Norwegian national rail administra-tions, Banverket and Jernbaneverket respectively.

EUroMAInT TrACkSUpporT 2007-07-01 2007-12-31*

Turnover, SEK million 15

operating profit/loss, SEK million 1

Cash flow, SEK million -4

operating margin, % 7

Equity/assets ratio, % 7

Average number of employees 29

Sick leave, % 2.7

THE GroUp AnD ITS CoMpAnIES

* No figures are available for 2006 as the company was formed on 1 July 2007.

The result has been burdened by items affecting comparability of SEK 25 million relating to a cost reduction programme and SEK 19 million relating to altered pension commitments.

7

15

16

12

8

4

02003 2004 2005 2006 2007

TUrnoVEr*, SEk million

THE GroUp AnD ITS CoMpAnIES

1,81

6

1,800

1,600

1,400

1,200

02003 2004 2005 2006 2007

1,65

3

TUrnoVEr, SEk million

62

100

50

0

-50

-1002003 2004 2005 2006 2007

-103

100

opErATInG proFIT/LoSS, SEk million

75

25

0

-25

-752003 2004 2005 2006 2007

CASH FLoW AFTEr InVESTInG ACTIVITIES, SEk million

1

1

0,5

0

-0,5

-12003 2004 2005 2006 2007

opErATInG proFIT/LoSS*, SEk million

4

2

0

-2

-42003 2004 2005 2006 2007

CASH FLoW AFTEr InVESTInG ACTIVITIES*, SEk million

* No figures are available for 2003–2006 as the company was formed on 1 July 2007.

-27

-30

29271

300

225

150

75

02003 2004 2005 2006 2007

288 30

3

307

TUrnoVEr*, SEk million

-8

20

10

0

-10

-202003 2004 2005 2006 2007

-4

11

25

opErATInG proFIT/LoSS*, SEk million

231

-15

40

20

0

-20

-402003 2004 2005 2006 2007

CASH FLoW AFTEr InVESTInG ACTIVITIES*, SEk million

42

* Figures for 2005 refer to whole year.

1,49

3

1,71

0 1,81

8

108

47

73

14

-30

6

-19

-4

0

88

EUroMAInT AnnUAL rEporT 2007

The Group and its Companies 2

Operations and organisation 3

Financial summary 4

EuroMaint’s three subsidiaries 6

The Chairman’s Comments 11

The CEo’s Comments 12

The operation 14

Business and Agreements 16

Increased demands as X 2000 attracts more passengers 17

Availability important for Stockholmståg 18

Simplified electronics maintenance for Stora Enso 20

Automation of a press line for DIAB 23

new Sectors and Markets 24

Jelgava – an important step on a future market 25

New customers bring growth in Gävle 26

Norway – now an even closer neighbour 28

Future Technology 30

Quality assurance during production 31

Portable systems increase availability 32

Competence and Development 34

Human resources 36

Structured approach to HR produces results 37

Quality, Environment and Traffic Safety 38

Environmental targets achieved with a good margin 39

The Market Environment and the Future 40

From cost-driver to value-creator 41

Financial Summary 42

Contents

pAGE 32 WHEEL

rEpro FILInG In THE FIELD

pAGE 31 nEW MEASUrEMEnT

AnD AnALySIS METHoD

pAGE 17 MAInTEnAnCE

oF Work MACHInES

pAGE 28 rEFUrBISHInG

norWEGIAn CArrIAGES

pAGE 17 QUALITy

For TrAVELLErS

9


The Business in Figures 43

Report of the Directors 44

Income Statements 46

Balance Sheets 47

Change in Equity 49

Cash Flow Analyses 50

Notes 51

Audit Report 68

Corporate Governance 69

Corporate Governance Report 71

Board and Management 74

Addresses 78

pAGE 20 AGrEEMEnTS

For ALL oF EUropE

pAGE 25 nEW

WorkSHop In LATVIA

pAGE 36 prIMAry

CoMpETITIVE ADVAnTAGE

The new EuroMaint Board of Directors has been in place for four months. We have come to know a Group that is developing positively, and we want to build on that development. We look to the future with confidence.

EuroMaint was acquired by Ratos from Swedcarrier on 1 July 2007, and the new owner took over the operation on 1 September. All external Board members are new. Along with the employee representatives, we are now a strong Board with broad expertise in railways, logistics, industrial operations and corporate devel-opment. Co-operation between the new external members, the union representatives and the management has got off to a good start. We have had many meetings since September and have been working hard to familiarise ourselves with the operation and not lose momentum.

What we see is a fundamentally stable company. Ratos wants to continue the ongoing development process in order to further raise quality and productivity of the company’s delivery to customers. The focus of expansion will essentially remain the same as before. Many skilled employees possess expertise that could be of great benefit to many more customers. For EuroMaint Rail expansion will primarily be outside of Sweden, for EuroMaint Tracksupport it will be the Nordic market. EuroMaint Industry will focus both on Sweden and further afield in Europe, while for automation the expansion will also be global. We are also considering expanding in maintenance to new industrial sectors.

The companies’ developmentThe Group aims to stand for cutting-edge expertise in common areas and for development on new markets. The companies will be responsible for developing business with existing and new customers in their market segments.

EuroMaint Industry has outstanding expertise in dramat-ically growing market segments, but has lacked capacity in 2007. I am convinced this situation can be resolved and I anticipate good growth in 2008.

EuroMaint Rail has not quite achieved its targets in the past year. The workforce has been reduced sharply and a total review of the refurbishment operation for passenger carriages is under way.

EuroMaint Tracksupport’s customers are unique and have very special machines. The guiding principle for the company is that successful development calls for focused sales work in an organisation with a lot of specialist expertise. The organisa-tional foundation is now in place for the company to turn its opportunities into firm results.

positive futureThe way we on the Board see it, the Group managers show great interest, energy and dedication to their tasks and are genuine experts in their respective fields. They have a good ability to deliver, which paves the way for solid development and ensures the companies can grow.

In 2008 I hope that EuroMaint will receive further confidence from customers so that any contracts coming to an end are renewed. Continuous development and improvement are the only ways to retain the customers’ trust and carry on developing the business. Our customers exist in a competitive market, and it is EuroMaint’s job to help them achieve success with their customers. Continuously placing higher demands on shared performance is the cornerstone of that development, and I believe EuroMaint can accomplish this.

In summary, I see EuroMaint as an excellent acquisition for Ratos! The Group is in a positive development cycle, with further potential for improvement in several areas. EuroMaint has a firm foundation in its employees’ know-how, its corporate responsibility and its good customer relations. This is a sound basis on which to build in realising the potential that lies before us. I look forward to EuroMaint’s continued development and am convinced that we can achieve the goals we have set for the future.

Ole Kjörrefjord, Chairman of the Board

oLE kJÖrrEFJorD, CHAIrMAn oF THE BoArD

The Chairman’s Comments

11


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Expanded market for EuroMaint railMany tenders for rolling stock maintenance are due in Sweden in the near future. The aim for EuroMaint Rail is to retain the high market share on its home territory while also cultivating the Northern European market, and the Nordic countries in particular. There have been several new contracts awarded in Norway in the past year.

Our establishment in Jelgava, Latvia, is an exciting addition that was officially launched at the beginning of 2008. This invest-ment is expected to lead to expansion both in component mainten-ance and eventually also train maintenance on the Baltic market.

Two innovations were launched by EuroMaint Rail at the major Nordic Rail fair in Jönköping, Sweden, in October 2007. The equipment for wheel reprofiling and brake testing in the field has attracted a lot of attention, both in Sweden and internationally.

EuroMaint Rail has not achieved its set targets for 2007. Consequently, a number of measures have been taken to raise productivity. In addition to increased cost moderation, significant personnel reductions have been made.

We are also striving to create the optimal goal-oriented work-shop in order to build the best conceivable basis for our deliveries.

Several of the major refurbishment contracts during the year have not been won, certain ongoing refurbishment contracts are making a loss and it is clear that the Nordic market for refurbish-ment is decreasing dramatically. A new model is therefore required to work on these large contracts on the international market.

newly formed EuroMaint TracksupportEuroMaint Tracksupport was formed in 2007 to be developed as a separate business. This has been done to meet the needs of Banverket, Swedish rail administration, and other customers in Sweden and neighbouring countries. Former President Christer Axelsson has now retired and Johan Jansson is the new President from 1 January 2008.

Active owners with a commercial focusSince 1 September 2007 EuroMaint has been owned by Ratos. The new board has shown active involvement and brings added strength ahead of future challenges. Our co-operation has started off well and the Board contributes positively to our joint ambition of developing the EuroMaint Group. I look forward to our continued teamwork and making our business strategy a reality.

Pether Wallin, President and CEO

THE CEo’S CoMMEnTS

During the year EuroMaint has consolidated its position as a strong maintenance partner in Sweden and now operates in three different industrial sectors: the engineering industry, rail transport and railway infrastructure. The ongoing develop-ment of methods, service propositions and agreement struc-tures has continued. our aim is to utilise our synergies and the similar needs that exist within the various industries when it comes to maintenance, service and availability. our ambition is continued growth in other industrial sectors.

All three of EuroMaint’s subsidiaries are facing major opportunities and exciting challenges. EuroMaint Rail is positioning itself ahead of railway deregulation in Europe in 2010 while also focusing on the major contracts that will be procured in 2008. EuroMaint Industry is an active player on the market, as industrial companies are gradually realising the benefits of outsourcing their mainten-ance oper ations. EuroMaint Tracksupport is establishing itself as a Nordic supplier of maintenance on work machines that maintain tracks and contact lines, as well as hydraulic equipment.

Enhanced proposition from EuroMaint IndustryWithin EuroMaint Industry we have developed the customer proposition during the past year and adapted our organisation to be able to deliver the revised offering. Now that these changes have been implemented, the key is to also produce results. There is great potential for maintenance services and component servicing, areas where we are well on the way to our goal of selling availability rather than hours. The market is also good for automa-tion systems, such as Automated Guided Vehicles and measure-ments stations for signature analysis, In Process Verification, IPV.

IPV is a concept that came to the company in 2007 through a deal in the USA. We have acquired engineering expertise so that we can continue the development of our products and customer propositions when it comes to test equipment. Meanwhile we are also increasing our presence and facilitating sales of business where the customers’ operations are global, primarily in the field of automation.

We are considering corporate acquisitions so as to further broaden our base in existing areas, while also offering our customers a wider range of propositions. With higher volumes the company can bear sufficiently high costs for development, marketing and sales. We will primarily grow in Sweden, although our intentions are also to grow internationally and follow our customers, who often have a global presence.

A maintenance Group in positive development

14

EUroMAInT ÅrSrEDoVISnInG

14

15

The operation

Business and Agreements 16

new Sectors and Markets 24

Future Technology 30

read more >>>

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Business and AgreementsFrom long-term turnkey agreements to rapid emergency response – EuroMaint covers the entire spectrum. Development is increasingly heading towards comprehensive packages, Total Service Concepts encompassing preventive, corrective, restorative and improvement maintenance.

16

1717

Travel by X 2000 is gradually increasing on all routes that offer the high-speed service. This places high demands both on the trains’ availability, and on ensuring that passengers perceive high quality in all facets of the train and the service. EuroMaint rail plays a pivotal role in both aspects.

EuroMaint Rail has long been responsible for maintaining the X 2000 (X2) trains. Over the years the requirements have changed, as has the way of organising maintenance.

Increased availabilityIn summer 2007 SJ AB introduced multiple trains – two train units coupled together – on certain departures to enable more travel. This places higher demands on the number of available vehicles. EuroMaint Rail therefore now offers more detailed management of the trains’ availability so that, for instance, SJ AB has access to most of its rolling stock during peak periods at the beginning and end of the week, and less during less busy periods. This is possible thanks to split-based maintenance, an approach that breaks down heavier maintenance measures so they can be carried out at different times and locations.

refurbishment boosts qualityDuring 2005–2007 EuroMaint Rail has refurbished all of SJ AB’s X 2000 trains, upgrading them to modern equipment and design standards. A corresponding refurbishment of the train units previously leased by Linx is currently under way, with the final delivery planned for summer 2008.

Thanks to the combined responsibility for refurbishment and maintenance, EuroMaint Rail takes a holistic approach and can therefore help increase efficiency. Damage repairs can be carried out in conjunction with refurbishment, maintenance actions have been fine-tuned alongside SJ AB, and the maintenance aspect is an integral part of the refurbishment process.

Increased demands as X 2000 attracts more passengers

n MorE CoUnTy SErVICES

Many county rail operators are significantly increasing their services. EuroMaint rail is helping to enable this increase for operators such as Upplands Lokaltrafik, pågatåg and Tåg i Bergslagen. Some of the services provided are split-based maintenance which takes advan-tage of breaks in operation, customised working times and a focus on how passengers perceive maintenance.

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BUSInESS AnD AGrEEMEnTS

n MAInTEnAnCE AGrEEMEnT WITH SJ AB

As an operator, SJ AB has procured maintenance for the 26 engine coaches it runs for Västtrafik in Gothenburg. The contract runs for three years from June 2007 and is a direct continuation of previous maintenance for EuroMaint rail. SJ AB has also chosen EuroMaint rail to maintain the new regina vehicles on the Coast-to-Coast Line between kalmar and Gothenburg until the end of June 2008.

n AGrEEMEnT WITH nEW CoMpAny

In autumn 2007 EuroMaint Tracksupport signed a general agreement with Banverket production for maintenance and trouble-shooting on rail-bound work machines. The contract runs for two years with the possibility of a two-year extension.

18

Availability important for Stockholmståg


Since June 2006 EuroMaint rail has been maintaining commuter trains in Stockholm for operator Stockholmståg. The availability contract entails putting more than 150 trains into service every day.

The most important demand from the contract principal, Stockholm Transport (SL), is that passengers should be able to rely on trains arriving and departing on time. EuroMaint Rail is responsible for all aspects of train maintenance, from preventive and corrective maintenance to more comprehensive repairs, for instance following vandalism.

High demands on availabilityDue to increased traffic, a larger proportion of the trains are needed at peak times. Major overhauls have traditionally entailed taking a vehicle out of service for several days. EuroMaint Rail has developed the process, dividing overhaul up into smaller parts which can be carried out during natural breaks in service. The company takes advantage of operational breaks during off-peak times for maintenance, making more vehicles available during peak times.

Maintenance when it’s neededOngoing preventive maintenance is carried out at the two work-shops in Älvsjö and Bro, and is charged either by the kilometre or by the hour. Automated status checks on the brake linings and wheels can also be carried out in Bro using the VIEW™ system, for which EuroMaint holds the Nordic licence. This check means that changes can be discovered early on and any faults remedied before they lead to service disruptions or costly repairs – yet another factor in increasing rolling stock availability.

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EUroMAInT rAIL

1. Maintenance, Work Machines 75%

2. Maintenance, Hydraulic Equipment 15%

3. Field Service 10%

EUroMAInT TrACkSUpporT

1. Component Servicing 39%

2. Engineering & operational reliability 35%

3. Automation 26%

TUrnoVEr By proDUCT ArEA

EUroMAInT InDUSTry

1. Train Maintenance 88%

2. refurbishment 7%

3. Spare parts Supply 3%

4. other 2%

1

3 42

3

2

1

1

3

2


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n norrLAnDSTrAFIkEn A MAJor CUSToMEr For noTVIkEn

norrlandstrafiken has changed operators several times, but EuroMaint rail has been entrusted by all of them to assume responsibility for rolling stock maintenance. This will remain true from 1 July 2008 when SJ AB takes over as operator.

EuroMaint rail’s Luleå workshop, notviken, is refurbishing 26 passenger carriages for the public enterprise Swedish State railways. The carriages have served the norrlandstrafiken lines between Gothenburg/Stockholm and narvik, just over the far northern Swedish border with norway. The fact that the same workshop will be maintaining the carriages not only ensures synergetic effects, but also guarantees that the refurbishment will be performed with the highest conceivable quality.

20

Simplified electronics maintenance for Stora Enso


EuroMaint Industry is simplifying Stora Enso’s handling of electronics components thanks to a comprehensive new agreement which includes electronics repairs for all Stora Enso units in Europe.

The main motivation for the agreement is that it enables Stora Enso to extend the useful life of its machines’ control systems by up to 10 years. Once new production of a particular printed circuit board has ended and the original manufacturer no longer supports it, the entire control system may need replacing so as not to risk costly losses in production. Instead of investing in a new control system, EuroMaint Industry has been contracted to repair the PCBs. This is to enable Stora Enso to plan its investments further ahead and only replace systems once it becomes necessary for some other reason, such as higher performance requirements.

EuroMaint Industry’s intention is to develop effective stock management solutions in close dialogue with Stora Enso. Through swift repairs and well-developed logistics, the customer should be able to reduce the amount of capital tied up in stock considerably.

20

EUroMAInT rAIL

1. Banverket 60%

2. Strukton rail 11%

1. SJ AB 45%

2. Green Cargo 16%

3. Stockholmståg 13%

4. Veolia 4%

5. other customers 22%


3. DIAB 6%


1. AB Volvo 38%

2. Volvo Cars 23%

TUrnoVEr By CUSToMEr

EUroMAInT InDUSTry

1

2

3

4

5

12

31

3

4

2



21

n SErVICE AGrEEMEnTS For InDUSTry

EuroMaint Industry has developed the structure of component servicing agreements for industry. Consequently customers now only need to contact a single site for component repair, or replacement if required. EuroMaint Industry offers a total service undertaking.

This type of contract has met with a good response from industry and several companies have been in touch to discuss the approach.


22

n proton Finishing, a major supplier of surface treatment solutions, decided to relocate one of its painting factories. EuroMaint Industry was brought in to manage the dismantling project, including labelling of all equipment and upgrading of all basic drawings.

n Scania CV, its maintenance company DynaMate and EuroMaint Industry have been working together on component servicing for many years. EuroMaint Industry and Scania CV have now signed an agree-ment pertaining primarily to electronics servicing. EuroMaint Industry also supplies production equip-ment to Scania CV.

n Husqvarna has signed an agreement with EuroMaint Industry for spindle renovation at Husqvarna Group workshops in Sweden. EuroMaint Industry will keep spare parts in stock on behalf of Husqvarna, so that worn or damaged spindles can quickly be renovated by EuroMaint Industry’s competent personnel.

23

Automation of a press line for DIAB

EuroMaint Industry has delivered automation equipment during the year for loading and emptying presses for DIAB. DIAB is a leading supplier of sandwich constructions for boats, wind turbine vanes and other applications. The challenge was to design, manufacture and install the equipment in a short space of time.

DIAB was already a customer of EuroMaint Industry for component servicing, and the contract has now been extended to include production engineering, project management and automation.

EuroMaint Industry was brought in to manage a technical production study alongside DIAB’s own personnel. The study resulted in a concept proposal for how production capacity could be increased to achieve target volumes. In stiff competition with other suppliers, EuroMaint Industry was entrusted with the task of deliv-ering much of the equipment. The deciding factor was EuroMaint Industry’s ability to deliver an excellent technical solution in a short space of time. DIAB also decided to contract sub-project managers from the company.

new production process raises capacityDIAB specialises in composite materials and sandwich technology which is suitable where light, durable materials are required, such as boat hulls, aircraft fuselages and wind turbine vanes. The previ-ous manual loading and emptying of the material presses was one of the processes that had to be streamlined.

EuroMaint Industry chose not to introduce any new technologies into the automation, but could do the job with perfect adapta-tions of the existing technology. The key was to find the simplest solutions possible, not only due to the project’s time constraints but mainly because the idea was to simplify care and maintenance. The customer was involved during the technical design phase and could influence the outcome.

The confidence in EuroMaint Industry’s ability to deliver on time proved to be well founded, as the systems could come online as per the customer’s needs.

EUroMAInT rAIL

•FLyToGET In norWAy: component maintenance

•SJ AB: three-year availability contract, Västtrafik

•SJ AB: one-year extension of maintenance for Coast-to-Coast Line

•pUBLIC EnTErprISE SWEDISH STATE rAILWAyS : refurbishment and refitting of passenger carriages

•SJ AB: upgrading previous Linx train units to X 2000 standard

IMporTAnT orDErS In 2007

EUroMAInT InDUSTry

•DIAB: automation equipment

•ArLA: project management

•SAnDVIk MATErIALS TECHnoLoGy: process development and more

•STorA EnSo: full-service agreement for electronics maintenance

•AB VoLVo: Automated Guided Vehicles (AGVs)

•VA TECH HyDro: renovation of generators


•BAnVErkET , SWEDISH rAIL ADMInISTrATIon: general agreement, maintenance and troubleshooting

•JErnBAnEVErkET, norWEGIAn rAIL ADMInISTrATIon: general agreement, maintenance

23


new Sectors and MarketsRail transport, railway infrastructure and engineering industry in Sweden are EuroMaint’s foundation. EuroMaint Industry’s growth is primarily in new sectors on the domestic market, but also internationally. EuroMaint Rail is looking beyond Sweden’s boundaries to grow. The newly formed EuroMaint Tracksupport has the Nordic region as its target market.

24

252525

Jelgava – an important step on a future market

The formation of a new workshop for processing mechan-ical and electrical products in Jelgava, Latvia, is proceeding to plan. personnel have been employed and trained, the first products have been delivered to customers and relocation of further operations is under way.

The establishment of EuroMaint Rail’s workshop in Jelgava is an important first step in a long-term strategy to become a natural maintenance partner as the gigantic railway market in the East progressively matures. Major infrastructure projects in the new EU nations, such as the railway corridor between Germany and Saint Petersburg and the deregulation of the railway market in Europe, are prompting the market to invest in modern rolling stock. This places demands on increased availability and more modern maintenance methods. Customers on Eastern European markets will gradually be offered increasingly advanced mainten-ance services.

At present there is a cost advantage in the Baltic, which makes production at the new unit profitable. This also means that setting up on a new market can be done with limited financial risk for EuroMaint Rail.

Workshop under developmentAt the end of 2007 there were 15 employees at EuroMaint Rail in Jelgava. Workstations have been brought over from Sweden, and new washing machines and a modern new painting plant have been installed. Training has been carried out and there are Swedish supervisors on site to support the initial stages.

The working method in Jelgava is an evolution of the processes and procedures applied in Sweden. The working process has also been streamlined thanks to the newly designed workshop layout.

Brake cylinders and shock absorbers are the first products being processed at the new workshop. In spring 2008 processing will expand to include window panes and driver’s seats, as well as electrical items such as relays, contactors and cables.

nEW SECTorS AnD MArkETS


EuroMaint Industry has established itself in Gävle with a clear market strategy, and the operation has grown considerably in the past year. A seminar on production streamlining, customer visits and co-operation with the University of Gävle are just some of the activities that have produced good results.

Contacts with Sandvik Materials Technology, SMT, in Sandviken led, for example, to about 10 personnel from there taking part in a two-day seminar on Total Productive Maintenance, TPM. The theme was how to take responsibility for total operational reliability, and the seminar looked at typical examples and ways of working to implement the model in production, based on EuroMaint Industry’s view of maintenance and production streamlining.

Maintenance development at Sandvik Materials TechnologyThe seminar was an excellent platform for further co-operation. Several maintenance engineers from EuroMaint Industry are now taking part in a maintenance development and technology project. They are responsible for process development and internal working methods to begin development of maintenance processes, as well as how to develop operationally reliable production.

Other assignments for the same customer include documen-tation updates in production processes, and instructions on safety procedures for electrical and mechanical engineers.

SMT has a clearly defined value foundation and EuroMaint Industry relishes the challenge of living up to those requirements. Closeness to the customer is a key concept and a prerequisite if developmental dialogue is to be possible.

New customers bring growth in Gävle

n nUCLEAr poWEr

At Forsmark nuclear power station, EuroMaint Industry is updating mainten-ance instructions and documentation, while also training the customer’s personnel in this. The maintenance systems are also being updated.

n FooD

The food industry is a new area for EuroMaint Industry. Arla Foods in Götene has started to automate packing of hard cheese in recyclable boxes. project man-agers from EuroMaint Industry have helped to quality assure deliveries of the equipment.

n HyDro poWEr

VA Tech Hydro commissioned EuroMaint Industry to renovate the first of two generators at Skotfoss power plant in norway. The other will be renovated in 2008. plate packs and stator winding are being replaced. new technology reduces energy loss in the generator.

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n MEETInG-pLACE For MAInTEnAnCE ISSUES

EuroMaint Industry organised a seminar on production streamlining and eff icient maintenance for specially invited companies in the Gävle area – both existing and prospective customers. The aim was to create a local meeting-place for maintenance issues and the panel represented far-reaching know-how, from academic expertise to well-known sports coach. The event was highly appreciated by participants.


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Norway – now an even closer neighbour

EuroMaint rail is sending a clear signal to the market that refurbishment can be supplied across national borders. Beginning the refurbishment of passenger carriages for nSB, norwegian national railway, has not been without its challenges, but thanks to flexibility, competent personnel and good co-operation with the customer, work is now under way in earnest.

The NSB contract entails giving 59 passenger carriages a brand new internal and external appearance, and encompasses a lot of engineering and technical design. The first train units will be delivered in the second quarter of 2008.

Close dialogue with the customerNSB is a new customer for EuroMaint Rail, so great emphasis has been placed on establishing sound procedures and forms for co-operation. The technical design process has been technically complex and the scope of the contract has been extended as work has progressed. Needless to say, all this has called for close, frequent contact between customer and supplier – which has gone very well.

The customer’s ambition has been to use the creative and technical design on these carriages also in future refurbishment projects for other carriage classes operating on the same types of route. Close dialogue has resulted in solutions that provide the functionality and quality that NSB is looking for in its carriages in the future.

Initial challenges Unlike previous refurbishment projects, EuroMaint Rail had no prior experience of maintaining this type of carriage, the class 7. For example the coachwork is made of aluminium, which is not the easiest of materials to work with. The contract for doors and door systems has developed as work has proceeded, from reno-vating existing to ordering new ones, which accounts for much of the order extension. This is just one example of a challenge that has been resolved successfully.

Alongside the customer, NSB, EuroMaint Rail has estab-lished a high standard for the renovated carriages. One newly refurbished train unit will be delivered every quarter.

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n Work MACHInE MAInTEnAnCE

Jernbaneverket, norway’s national rail Administration, has signed a general agreement with EuroMaint Tracksupport regarding maintenance of work machines that maintain tracks and contact lines. The one-year agreement with an option of extension up to five years, encompasses assignments both in norway and at the workshop in Åmål.


SoME oF THE ConTrACTS SIGnED DUrInG THE yEAr

•FLyToGET: renovation and refurbishment of main transformers for all rolling stock

• CArGonET: repairs on transformers and static current converters

•JErnBAnEVErkET: complete renovation and refurbishment of a generator

• nSB: an ongoing agreement covering renovation, including rewinding, of traction engines

• VA TECH HyDro: renovation of generators

• ALSToM norWAy: renovation of generators

A VArIETy oF ConTrACTS In norWAy

EuroMaint is focusing on becoming an attractive supplier on the norwegian market, primarily in rail transport but also in the energy sector.

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Future TechnologyFor a modern maintenance partner like EuroMaint, the customer’s needs are the guiding light in all development. How can the customer improve the availability and degree of utilisation of its equipment while also raising quality in production, thereby increasing profitability?

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FUTUrE TECHnoLoGy

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Quality assurance during production

EuroMaint Industry has broadened its automation offering with a new measurement and analysis method called In process Verification or IpV, which is used for cold testing engines, for instance. It means that the product can be tested several times during the production process, thereby dramatic-ally reducing costs for shortcomings in quality.

In August 2007 EuroMaint Industry acquired the rights to IPV from Veri-Tek in Detroit, simultaneously forming a subsidiary based in Detroit. This entails an addition to the automation offering and strengthens the advanced specialist expertise often required in modern automation products. It also means that EuroMaint Industry now operates on an international market with even closer proximity to customers.

IpV for smart quality assuranceThe method used at the IPV measurement stations is called signature analysis. This means that the station registers for instance a parameter, leakage or sound, which is presented in the form of a curve, a signature, which can be compared to a set ideal curve. Testing engines has been the main application to date. The space to be tested is filled with air or oil, and the sound analysis may show that the pressure is correct – or the presence of a leak.

EuroMaint Industry will initially focus on using the IPV system in the automotive industry. Apart from engines, production of driving shafts and gearboxes is one of the other areas that could benefit greatly from this test method.

new expertiseThe newly formed company, with cutting-edge expertise in IPV and knowledge of cold testing engines, has also added program-ming competence and experience of how engine technique is dealt with in the USA – enhancements that make EuroMaint Industry even better equipped to be a supplier on the inter-national market.

The US company will also sell other EuroMaint Industry products on the American market. The main products will be IPV and Automated Guided Vehicles, AGVs.

n AUToMATED GUIDED VEHICLES

Automated Guided Vehicles, AGVs, have been developed by EuroMaint Industry and are continuously being evolved. They have been sold successfully on the Swedish market for many years, primarily to the automotive industry. They are now also being marketed globally, with particular emphasis on the USA.

FUTUrE TECHnoLoGy

Portable systems increase availability

EuroMaint rail has introduced wheel reprofiling and brake testing in the field with the help of portable systems developed in-house. Bringing the resources to the need, rather than the other way round, reduces train downtime dramatically.

Wheel damage often entails waiting times for maintenance and considerable costs. With the portable wheel-lathe, damaged wheel profiles can be repaired on site and the train can be back in service within just a few hours. Reloading and the attendant shutoff of the high-tension line can be avoided. The goods reach their destin-ation on time and the wagon is then available as planned.

Brakes are tested after wheel profiling and wheel changes, for instance, as well as regularly in line with the general maintenance plan. The portable brake testing system measures actual brake force against the wheel, rather than only against air pressure as before. It therefore reveals brake faults that only arise when the wagon is cold, and if the brake has applied too much braking pressure for any reason, which can cause wheel damage. A digital measurement protocol can be transferred to the workshop by mobile communication for forwarding on to the customer.

personnel reacting to customer needsThe ideas for the portable systems came from personnel seeking to improve solutions to customers’ problems. The innovations were then refined and turned into products, and can now be offered to customers as unique services. Their use will gradually increase. In the long term, all unplanned reprofiling will take place in the field and the portable lathe will be used in the workshops that have no under-floor lathe. The new brake testing equipment will also replace existing systems in the workshop, as well as being used in the field.

The systems were launched in conjunction with the Heavy Haul conference in Kiruna in June, and at the Nordic Rail fair in Jönköping in October 2007. On the nearby market, brake testing and wheel reprofiling in the field are the services that will be on offer. The international market is currently being analysed.

n AUToMATIC STATUS CHECkS

rolling stock availability can be increased with status checks on wheel profiles and brake linings. Maintenance can be planned more efficiently and wear trends can also indicate other faults, such as poor brake discs and faults in the brake systems. EuroMaint rail currently uses the VIEW™ system for status checks in Hagalund and Bro.

n SIGnAL SySTEMS oF THE FUTUrE

The ErTMS signalling system is being introduced in the EU to increase the capacity and competitive-ness of the railway. Banverket, Swedish rail administration is responsible for finding suppliers of onboard equipment, ETCS, and EuroMaint rail is actively processing the potential suppliers. Installation, project planning ahead of installation, maintenance and user training from a mainten-ance perspective are what EuroMaint rail has to offer.

n rESEArCH AnD DEVELopMEnT

EuroMaint rail is a corporate member of the Luleå railway research Centre, JVTC, which partly develops maintenance. one interesting research project is measuring track forces and their connection to wheel condition. The aim is to use the status data for planning of wheel maintenance.

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Competence and Development

Human resources 36

Quality, Environment and Traffic Safety 38

The Market Environment and the Future 40

read more >>>

Human resourcesThe personnel are EuroMaint’s primary competitive asset. It is their knowledge, skills and experience that form the basis of our ability to offer customers value-added solutions. Success in the operation therefore depends on a workforce that enjoys the work, is motivated and wants to develop.

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HUMAn rESoUrCES

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EuroMaint views the business drive and proactive endeavours in Human resources, Hr, as a vital ingredient in the Group’s business operation and results. The aim is continually to challenge, encourage and support the corporate manage-ment and other managers in their efforts to develop staff and the organisation to their full potential. All with the aim of achieving the set business and operational goals.

A proactive Hr functionIt can be hard for an operational manager to view competence sourcing in a wider, more long-term perspective, whereas they have full control over which personnel are required at any given time. One of the main roles of Corporate HR is generally to ensure that the right person with the right knowledge is in the right place, at the right cost. To do this, HR work must be linked to strategy and business plans.

EuroMaint Industry sets a good example in creative thinking in conjunction with employing almost 60 people in 2007, while a further 30 will be needed in 2008. To supplement traditional advertising and recruitment services, the company is using other, more unconventional ways of spreading the word of its need for recruitment. These include a recruitment bonus for employees who refer new recruits, and being seen in new contexts such as sporting events and training companies. Thanks to this overall solution, EuroMaint Industry managed to recruit almost twice the number of people compared to a more traditional approach.

Education for the futureBoth EuroMaint Industry and EuroMaint Rail have been involved in a co-operation with the University of Gävle to discuss the structure and content of new education programmes.

This is a fine example of long-term thinking in recruitment issues, which has resulted in a two-year Advanced Vocational Education, AVE, programme in maintenance engineering and operational reliability, which will begin in the near future.

Manager portal launchedA thorough process mapping of HR work has taken place in 2007 as a foundation for the new way of organising operations. A web-based manager’s tool, with a gateway to everything relating to EuroMaint’s HR procedures, is just one of the results. The aim of the manager portal is to streamline managers’ efforts while also enabling HR to focus on strategic HR work. The portal has been tested in 2007 with an excellent response, and will be launched in 2008.

parental perksEuroMaint is known as a company that does not view parental leave as an obstacle. A mutually satisfactory solution can virtually always be reached thanks to good dialogue and receptiveness between employer and employee. After the leave period, employees can come back part time. Parenthood has often proven to be a positive exercise in the art of being a leader, showing the way and listening, character traits that are useful in working life. Parenthood can be seen as an ongoing leadership training programme.

EMpLoyEE FACTS 2007 2006 2005

personnel turnover, % 9.0 6.0 6.0

Turnover/employee, SEK ‘000 1,167 1,166 1,122

Sick leave, % 4.7 4.7 4.8

percentage of women, % 7.3 6.5 7.0

Average age 46 47 50

Structured approach to HR produces results

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Quality, Environment and Traffic SafetyWith safety in focus, EuroMaint works on continuous improvement, and the same applies to quality and environmental issues. Internal and external requirements are all considered in order to achieve the best results that are technically feasible, financially viable and environmentally motivated.

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QUALITy, EnVIronMEnT AnD TrAFFIC SAFETy

ISo certification is a further indicator of EuroMaint’s dedication to environmental and quality work. The crucial factor is the personnel’s awareness and knowledge of quality, environmental and safety aspects in their respective work area.

EuroMaint rail exceeds environmental goalsThe three targets set for 2007 were achieved with a clear margin:

• Waste sent to landfill has decreased by 60%. Contributing factors include a joint nationwide contract with a waste management supplier, and the fact that certain waste has been reclassified for recycling rather than landfill.

• Energy consumption has fallen by 18%. These efforts included key ratios from all operations. The landlord has also been influenced to enable measurement.

• Subcontractors have been influenced to increase the propor-tion of environmental certification. Whereas the number of environmentally certified subcontractors was previously meas-ured, a move was made during the year to instead measure the volume value of products supplied by environmentally certified subcontractors. The measurement values are therefore not comparable, although an improvement is still evident.

Environmental targets achieved with a good margin

Ahead of 2008, the vision is for the whole of EuroMaint Rail to use ‘green electricity’ only, i.e. power from renewable energy sources.

EuroMaint Industry has low environmental impactProduction streamlining among customers is EuroMaint Industry’s primary means of contributing to a better environment. The company’s own operation is permeated by an environmental approach, but does not entail any environmental problems. The company has gone from requiring permits to requiring notifications.

Safety in the backboneEuroMaint Rail and EuroMaint Tracksupport have well-developed systems for traffic safety work, which constantly achieve high ratings in customer surveys. The systems encompass training, authorisation systems, health checks and other aspects.

With its origins in Volvo, where safety is a key word, EuroMaint Industry too has a firmly established safety-based approach. It is always in focus in maintenance work, including the ‘Break and Lock’ concept for personnel safety in automated equipment. Safety is also an important aspect in the production equipment the company supplies to customers.

In-house quality controlEuroMaint Industry is working to place responsibility with the service provider in all situations. For instance a realistic test envir-onment has been developed for electronics repairs, to ensure the desired functionality in the printed circuit boards after a repair. This is an unusual approach and one that customers appreciate.

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n EuroMaint rail has decreased waste to landfill by 60% in total. The target was to decrease levels by 5% on the previous year.

n EuroMaint rail has decreased electricity consumption by 18% in total. The target was to decrease the f igure by 3% on the previous year.

n ISo CErTIFICATIon

The Älvsjö and Bro workshops have been modified in 2007 for certif ication to ISo 14001:2004 and 9001:2000 and incorporated into EuroMaint rail’s existing certif icates, which have also been revised for renewal. The new company EuroMaint Tracksupport was audited for quality during the autumn, with approved results. Consequently, all of EuroMaint’s workshops are certified to ISo 9001 standards for quality and ISo 14001 for the environment.

0 0Jan Feb Mar Apr May Jun Jul Aug Sep oct nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

WASTE To LAnDFILL ELECTrICITy ConSUMpTIon

50,000 1,000500

100,000 2,0001,500

150,000 3,0002,500

200,000 4,0003,500

Quantity (kg) kWh/m2

Target (acc.) Target (acc.)

result (acc.) result (acc.)

EUroMAInT rAIL’S EnVIronMEnTAL TArGETS

4040

The Market Environment and the FutureMaintenance that creates value for the customer is a sector currently undergoing consolidation. EuroMaint is working proactively to remain competitive on the growing market, partly by investing in new technology and changing its way of doing business.

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THE MArkET EnVIronMEnT AnD THE FUTUrE

Customers are looking to increase profitability through improved availability and a higher degree of utilisation in their production equipment, and higher quality in produc-tion – regardless of industrial sector. EuroMaint is developing its maintenance as the requirements change in order to be a world-class supplier.

The trend in the maintenance sector is a shift from being passive provider organisation to proactive maintenance partner, from cost-driving maintenance department to value-creating maintenance supplier, and from pre-defined to condition-based maintenance.

EuroMaint’s business logicEuroMaint’s strategy is to develop partnerships with customers and establish a business relationship where efficient mainten-ance pays, so that EuroMaint gets paid when customers earn money on their equipment, rather than for carrying out particular work tasks. Hourly rates for performed maintenance are being replaced by conceptualised packages of turnkey services.

Focus on new technologyStatus checks for performing maintenance where it is genuinely needed calls for new technology that can be applied in several industrial sectors. The VIEW™ system by Delta Rail is being used successfully by EuroMaint Rail to measure brake linings and wheels. In Process Verification, IPV, has been acquired by EuroMaint Industry during the year and is used to verify the entire process when producing engines, for instance.

Positioning systems, GPS, can be used to identify the location of rolling stock or high-cost components, for example. The chal-lenge is to adopt new technology and create added value, and then to transfer that knowledge into new sectors and markets.

Growth possible in many different waysWorld-class key operations on the domestic market are a necessary foundation for the internationalisation and expansion EuroMaint is planning, primarily in Northern Europe.

One strength in this process is the ability to demonstrate tangible benefits for new customers in choosing EuroMaint as a maintenance partner. The business model clarifies that the company’s aim as an independent partner is the same as the customer’s when it comes to optimising the operation to increase profitability, and that the high quality on the domestic market can also cross over to new markets.

Another form of internationalisation is taking place in the Baltic, where the establishment of a workshop is paving the way for new customers on a growing market. Yet another form lies in performing work for other countries, such as Norway, in Swedish workshops.

Growth will be achieved through acquisitions and oper-ational takeovers also in other sectors, where EuroMaint can see how the maintenance Group’s synergies can be deployed.

From cost-driver to value-creator

nEW MArkET In SIGHTS

Germany is both an exciting and a challenging market. A high cost level and demands for greater eff iciency mean the market is ready for total service concepts.

rEADy For HArMonISATIon

The European railway Agency’s ,ErA, work on safety and operational compatibility for the European railway network means that also the maintenance standards will be harmonised and require certif ication. EuroMaint’s operational management system is adapted for the new regulations and will help to make maintenance a Swedish export product.

METHoDICAL LIkE ForMULA 1

Maintenance shall be well planned and carried out swiftly, with the aim of making the customer’s core business more eff icient – quite simply, an investment in good production.

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Financial Summary


The restructured Group, with EuroMaint Gruppen AB as the new parent company, is reported legally in the Report of the Directors from 1 September. The parent company EuroMaint Gruppen AB is reported legally from the date of formation, 25 April. However, in other parts of the Annual Report the new Group is reported and annotated based on pro forma figures to simplify monitoring over time and thereby simplify comparison. Financial values are based on the former EuroMaint AB Group, adjusted only for higher interest expenses due to an altered borrowing situation since the takeover. Comparison values for the 2006 balance sheet and the entire cash flow analysis show non pro forma figures for the former EuroMaint AB Group.

InCoME STATEMEnT, SEK million

pro ForMA pro ForMA 2007-01-01 2006-01-01opErATInG InCoME 2007-12-31 2006-12-31Net turnover 2,064 2,034

Other operating revenues 3 3

ToTAL opErATInG rEVEnUE 2,067 2,037

opErATInG EXpEnSES Cost of goods and services sold -671 -610

Other external expenses -430 -463

Costs of personnel -872 -832

Depreciation of tangible assets -27 -25

Amortisation of intangible assets -2 -2

Other operating expenses 0 -5

ToTAL opErATInG EXpEnSES -2,000 -1,937

opErATInG proFIT/LoSS 67 100

FInAnCIAL ITEMS Financial revenues 7 3

Financial expenses -86 -71

nET FInAnCIAL rEVEnUES/EXpEnSE -80 -68

Pre-tax profit/loss -13 32

Tax 5 -5

nET proFIT/LoSS For THE yEAr -8 27

BALAnCE SHEET, SEK million

ASSETS 2007-12-31 2006-12-31*FIXED ASSETS Tangible assets 167 131

Intangible assets 710 42

Participations in Group companies 0 0

Deferred tax asset 12 12

Other long-term receivables 0 21

Long-term receivable, internal 0 0

ToTAL FIXED ASSETS 889 207

CUrrEnT ASSETS Inventories 280 269

Accounts receivable 345 332

Receivables from Group companies 2 4

Other receivables 86 48

Completed, not invoiced 88 69

Prepaid expenses/accrued revenues 72 54

Cash and bank balances 0 45

ToTAL CUrrEnT ASSETS 873 821

ToTAL ASSETS 1,762 1,028

EQUITy AnD LIABILITIES 2007-12-31 2006-12-31*EQUITy Share capital 0 0

Other contributed capital/statutory reserve 208 395

Accumulated deficit/non-restricted equity -20 -146

ToTAL EQUITy 188 249

LonG-TErM LIABILITIES Long-term interest-bearing liabilities 747 270

Shareholder loan, Group 218 0

Provision for pensions and similar commitments 35 42

Other provisions 16 21

Deferred tax liability 5 8

Other long-term liabilities 0 4

ToTAL LonG-TErM LIABILITIES 1,021 346

CUrrEnT LIABILITIES Advance payment from customers 50 36

Accounts payable 202 123

Income tax liability 13 21

Liabilities to Group companies 0 6

Liabilities to credit institutions, KF 23 0

Other current liabilities 14 12

Accrued expenses/deferred revenues 250 234

ToTAL CUrrEnT LIABILITIES 552 433

ToTAL LIABILITIES 1,573 779

ToTAL EQUITy AnD LIABILITIES 1,762 1,028

* Refers to the EuroMaint AB Group

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The Business in Figures

report of the Directors 44

Income Statements 46

Balance Sheets 47

Change in Equity 49

Cash Flow Analyses 50

notes 51

Audit report 68

read more >>>

THE BUSInESS In FIGUrES

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EUROMAINT ANNUAL REPORT 2007

Report of the directors

In Process Verification, IPV, has been acquired by EuroMaint Industry during the year and is used to verify the entire process when producing engines, for instance. Positioning systems, GPS, can be used to identify the location of rolling stock or high-cost components, for example. The challenge is to adopt new technol-ogy and create added value, and then to transfer that knowledge into new sectors and markets.

Growth possible in many different waysWorld-class key operations on the domestic market are a neces-sary foundation for the expansion EuroMaint is planning through establishment in other countries, primarily in Northern Europe. One strength in this process is the ability to demonstrate tangible benefits for new customers in choosing EuroMaint as a main-tenance partner. EuroMaint’s business model clarifies that the company’s aim as an independent partner is the same as the customer’s when it comes to optimising the operation to increase profitability, and that the high quality on the domestic market can also cross over to new markets. Another form of internationalisa-tion is taking place in the Baltic, where the establishment of a workshop is paving the way for new customers on a growing market. Yet another form lies in performing work for other countries, such as Norway, in Swedish workshops. Growth will be achieved through acquisitions and operational takeovers also in other sectors, where EuroMaint can see how the maintenance Group’s synergies can be deployed.

personnelAll EuroMaint companies have restructured during the year. EuroMaint Industry has employed almost 60 people and will need a further 30 or so in the year to come. EuroMaint Rail has identified synergies in connection with its reorganisation and has merged two divisions. Restructuring with accompanying workforce reductions have been carried out to plan, and in accordance with union talks. The cost of this for EuroMaint Rail is SEK 25 million. Previous pension obligations were affected by the change of ownership, in which EuroMaint went from state to private ownership. The estimated cost of this change amounts to SEK 19 million, which was set up as a reserve in 2007.

EuroMaint Tracksupport has taken over 30 people from EuroMaint Rail.

Long-term recruitment approachBoth EuroMaint Industry and EuroMaint Rail have been involved in a co-operation with the University of Gävle to discuss the struc-ture and content of new education programmes. This is a fine example of long-term thinking in recruitment issues, which has resulted in a two-year Advanced Vocational Education (AVE) programme in maintenance engineering and operational reliability, which will begin in the near future.

The Board of Directors and president of EuroMaint Gruppen AB hereby submit the Annual report for the 2007 financial year.

ownerEuroMaint Gruppen AB is a company wholly owned by EMaint AB, registered number 556731-5378, domiciled in Stockholm, which is owned by Ratos AB. EuroMaint Gruppen AB acquired 100% of EuroMaint AB on 1 September from the previous owner, AB Swedcarrier. The Group figures are reported from 1 September. The parent company EuroMaint Gruppen AB is reported from the date of formation, 25 April.

operations and organisationEuroMaint is a strong, leading maintenance partner that unites creative thinking with solid long-term experience in order to raise customers’ efficiency. Innovative technical system services,customised total solutions and partnership enable the EuroMaint Group companies to offer the leading maintenance and technical solutions in each sector, thus contributing to the customers’ competitiveness and success.

The common main products are comprehensive maintenance packages, Total Service Concepts encompassing preventive, corrective, restorative and improvement maintenance.

EuroMaint’s companies are specialist businesses that offer advanced maintenance services for the engineering industry, the rail transport sector and railway contractors. At present EuroMaint AB has three subsidiary companies: EuroMaint Industry AB, EuroMaint Rail AB and EuroMaint Tracksupport AB.

The Group-level functions focus on general industry-wide issues to identify and generate business, and on retaining and developing EuroMaint’s position as a leading maintenance partner, such as strategic development issues and the evolution of co-operation with strategic partners. Internationalisation has begun in Northern Europe.

EuroMaint can be found all over Sweden from Luleå in the north to Malmö in the south, and also in Jelgava, Latvia and Detroit, USA. The head office is in Stockholm.

Business enviromentCustomers are looking to increase profitability through improved availability and a higher degree of utilisation in their production equipment, and higher quality in production – regardless of industrial sector. EuroMaint is developing its maintenance as the requirements change in order to be a world-class supplier.

Focus on new technologyStatus checks for performing maintenance where it is genuinely needed calls for new technology that can be applied in several industrial sectors. The VIEW™ system by Delta Rail is being used successfully by EuroMaint Rail to measure brake linings and wheels.


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Impact on the environmentAt all EuroMaint Rail workshops, the main effect on the environ-ment is to the air and water, and to some extent also to the ground. The operation is classified as harmful to the environ-ment and an application must be made to the environmental authorities. The environmental authorities decide whether a permit or notification is required depending on the degree of risk to the environment. If EuroMaint Rail were not to receive the environmental permits required for production, this could harm its opportunities to fulfil customer commitments. If permits were not granted there is, however, the ability to restructure activities at the workshops for a limited period to restrict the adverse financial impact.

EuroMaint Rail’s units require official notification in accord-ance with the Ordinance (1998:899) concerning Environmentally Hazardous Activities and The Protection of Public Health, the exception being the workshop in Örebro which requires a permit. The activities carried out by EuroMaint Rail which require notifi-cation include vehicle washing, painting, deicing and handling diesel fuel. The permit obligation in Örebro is motivated by the large workshop area and also the large amount of chemicals used in connection with vehicle washing and painting, for example.

In spring 2007 the workshops in Älvsjö and Bro were approved for certification to ISO 14001:2004 standards.

EuroMaint Tracksupport carries out operations in Åmål that require notification.

EuroMaint Industry does not conduct any activities that require a permit. It has one operation which requires notification. It relates to the motor rewinding operation and the use of paints. The environmental impact of all EuroMaint Industry’s operations is consistently low and the financial risk is, therefore, low.

Significant risksThe Group’s companies have a customer structure whereby a small number of customers account for the predominant propor-tion of Group turnover. The loss of a major customer or a signifi-cant customer contract would place extensive demands on the companies to adapt their administrative support functions to the reduced turnover. For a transitional period the companies’ profit-ability would be reduced. As customer relations often encompass several different contract areas with differing lengths of term, this risk is, however, spread out over time.

Future developmentThe trend in the maintenance sector is a shift from being pas-sive provider organisation to proactive maintenance partner, from cost-driving maintenance department to value-creating maintenance supplier, and from pre-defined to condition-based maintenance.

EuroMaint’s business logic and strategy is to develop partner-ships with customers and establish a business relationship where efficient maintenance pays, so that EuroMaint gets paid when customers earn money on their equipment, rather thanfor carrying out particular work tasks. Hourly rates for performed maintenance are being replaced by conceptualised packages of turnkey services.

Events after the year-endThere have been no significant events to date.

Turnover and profit

Turnover

Total revenues for the year amounted to SEK 741 million.

Operating profit

Operating profit amounted to SEK -2 million, which gives a negative operating margin.

The result has been burdened by items affecting comparabil-ity of SEK 25 million relating to a cost reduction programme and SEK 19 million relating to altered pension commitments within EuroMaint Rail.

Financial items

Net financial revenues/expense amounted to SEK -26 million.

Cash flow

Cash flow for the period after investments amounted toSEK -981 million.

Proposed treatment of unappropriated earnings

Loss for the period in the parent company amounted toSEK -15,218,114.

At the disposal of the AGM, SEK:

Earnings brought forward 0

Other non-restricted equity 208,000,000

Net loss for the year -15,218,114

TOTAL 192,781,886

The Board of Directors proposes that the accumulatedprofit be allocated as follows:

To be carried forward to the 2008 financial year 192,781,886

TOTAL 192,781,886

The income statements and balance sheets will be presented to the AGM on 31 March 2008 for adoption.


46


Group parent Company

SEk thousands note 1 Sep 2007 25 April 2007 31 Dec 2007 31 Dec 2007

OPERATING REVENUES

Net turnover 24 739,852 1,512

Other operating revenues 4 1,634 0

TOTAL OPERATING REVENUE 741,486 1,512

OPERATING EXPENSES

Cost of goods and services sold -253,480 0

Other external expenses 5, 19 -172,603 -661

Costs of personnel 6 -306,176 -1,439

Depreciation of tangible assets 7 -9,484 0

Amortisation of intangible assets 8 -625 0

Other operating expenses 4 -1,425 0

TOTAL OPERATING EXPENSES -743,793 -2,100

OPERATING PROFIT/LOSS -2,307 -588

FINANCIAL ITEMS

Financial revenues 9 607 11

Financial expenses 9 -27,089 -20,559

NET FINANCIAL REVENUES/EXPENSE -26,482 -20,548

PRE-TAX PROFIT/LOSS -28,789 -21,136

Tax 10 8,793 5,918

NET PROFIT FOR THE PERIOD -19,996 -15,218

Parent company shareholders’ share of profit for the period -19,996 -15,218

EARNINGS PER SHARE, SEK THOUSANDS -20,0 -15,2

Income Statements


47


Balance Sheets


SEk thousands note 31 Dec 2007 31 Dec 2007

ASSETS

FIXED ASSETS

Tangible assets 7 166,784 0

Intangible assets 8 710,026 0

Participations in Group companies 11 0 935,200

Deferred tax asset 10 11,477 5,918

Other long-term receivables 0 0

Long-term receivable, internal 0 0

TOTAL FIXED ASSETS 888,287 941,118

CURRENT ASSETS

Inventories 13 280,246 0

Accounts receivable 14, 21 344,955 1,004

Receivables from Group companies 1,757 0

Other receivables 14 87,300 925

Completed, not invoiced 25 87,691 0

Prepaid expenses/accrued revenues 14 71,355 0

Cash and bank balances 0 5,963

TOTAL CURRENT ASSETS 873,304 7,892

TOTAL ASSETS 1,761,591 949,010


48


Balance Sheets continued


SEk thousands note 31 Dec 2007 31 Dec 2007

EQUITY AND LIABILITIES

EQUITY

Share capital 100 100

Other contributed capital/statutory reserve 208,000 0

Accumulated deficit/non-restricted equity -19,913 192,782

EQUITY PERTAINING TO PARENT COMPANY SHAREHOLDERS 188,187 192,882

TOTAL EQUITY 188,187 192,882

LONG-TERM LIABILITIES

Long-term interest-bearing liabilities 15 747,200 537,200

Shareholder loan, Group 217,569 217,569

Provision for pensions and similar commitments 12 35,164 0

Other provisions 16 16,276 0

Deferred tax liability 10 5,110 0

Other long-term liabilities 0 0

TOTAL LONG-TERM LIABILITIES 1,021,319 754,769

CURRENT LIABILITIES

Advance payment from customers 17 50,420 0

Accounts payable 17 201,591 814

Income tax liability 10 13,343 0

Liabilities to Group companies 17 34 0

Liabilities to credit institutions, KF 17 22,840 0

Other current liabilities 17 14,254 0

Accrued expenses/deferred revenues 17 249,603 545

TOTAL CURRENT LIABILITIES 552,085 1,359

TOTAL LIABILITIES 1,573,404 756,128

TOTAL EQUITY AND LIABILITIES 1,761,591 949,010

PLEDGED ASSETS AND CONTINGENT LIABILITIES

Pledged assets, floating charges 18 296,921 271,731

Contingent liabilities 18 30 0


49


SEk thousands

GROUP

EQUITY PERTAINING TO PARENT COMPANY SHAREHOLDERS other contributed Share captial capital profit earned Total equity

Company formed 1 September 2007 100 0 0 100

Shareholders’ contribution 0 208,000 0 208,000

Translation difference* 0 0 83 83

Net profit/loss for the year 0 0 -19,996 -19,996

CLOSING EQUITY 31 DECEMBER 2007 100 208,000 -19,913 188,187

* Exchange rate differences on translation of financial reports for foreign operations.

SEk thousands

PARENT COMPANY Earnings forward net profit/loss Share capital brought for the year Total equity

Company formed 25 April 2007 100 0 0 100

Shareholders’ contribution 0 208,000 0 208,000

Net profit/loss for the year 0 0 -15,218 -15,218

TOTAL CHANGE IN WEALTH EXC. TRANSACTIONS WITH THE COMPANY’S OWNERS 0 0 -15,218 -15,218

CLOSING EQUITY 31 DECEMBER 2007 100 208,000 -15,218 192,882

The number of shares in the parent company amounts to 1,000.The quota value in the parent company amounts to 100.

Changes in Equity

1 September – 31 December 2007

25 April – 31 December 2007


50


SEk thousands Group parent Company

note 1 Sep 2007 25 April 2007OPERATING ACTIVITIES 31 Dec 2007 31 Dec 2007

Profit/loss after financial items -28,789 -21,136

Depreciation 10,109 0

Other items not affecting cash flow 20 42,574 0

Income tax paid -3,033 6,843

CASH FLOW FROM ONGOING ACTIVITIES BEFORE CHANGES IN WORKING CAPITAL 20,861 -14,293

CHANGES IN WORKING CAPITAL

Increase (–)/decrease (+) in inventories 12,131 0

Increase (–)/decrease (+) in accounts receivable -108,604 0

Increase (–)/decrease (+) in other current receivables -15,370 -8,773

Increase (+)/decrease (–) in accounts payable 93,508 814

Increase (+)/decrease (–) in other current liabilities -27,589 545

CASH FLOW FROM OPERATING ACTIVITIES -25,063 -21,707

INVESTING ACTIVITIES

Acquisition of tangible and intangible fixed assets 7 -20,982 0

Divestment of tangible and intangible fixed assets 7 245 0

Acquisition of subsidiary/business segment, net liquidity effect -935,200 -935,200

Acquisition of other financial assets 0 0

CASH FLOW FROM INVESTING ACTIVITIES -955,937 -935 200

CASH FLOW FROM OPERATING ACTIVITIES -981,000 -956,907

FINANCING ACTIVITIES

New issue 0 100

Shareholders’ contributions received 208,000 208,000

Borrowings 750,040 754,769

CASH FLOW FROM FINANCING ACTIVITIES 958,040 962,869

Change in cash and cash equivalents for the period -22,960 5,962

Cash and cash equivalents at beginning of period 22,960 0

CASH AND CASH EQUIVALENTS AT END OF YEAR 0 5,962

Cash Flow Analyses 1 September – 31 December 2007


51


Notes

This Annual Report was approved by the Board of Directors and the President on 25 February 2008 and is proposed for final approval by the Annual General Meeting on 31 March 2008.

Ratos formed EuroMaint Gruppen AB on 25 April 2007. On 1 Septem-ber 2007, EuroMaint Gruppen AB acquired EuroMaint AB. Disclosures in the Annual Report for the parent company relate to the period 25 April – 31 December 2007. Disclosures in the Annual Report for the Group relate to the period 1 September 2007, the date on which the parent company acquired EuroMaint AB, to 31 December 2007.

The parent company is a registered limited company domiciled in Stockholm, Sweden. The address of the head office is Landsvägen 50 A, SE-172 63 Sundbyberg, Sweden. The parent company of the largest Group in which EuroMaint Gruppen AB, 556731-5402, is a subsidiary and in which consolidated financial statements are prepared, is Ratos AB, 556008-3585, in Stockholm.

The most important accounting policies applied in the preparation of these consolidated financial statements are set out below.

Statement on compliance with the applied rulesThe consolidated financial statements for EuroMaint Gruppen have been prepared in accordance with the Swedish Annual Accounts Act and International Financial Reporting Standards (IFRS) as endorsed by the EU. Moreover, the consolidated financial statements are prepared in accordance with Swedish Financial Accounting Standards Council recommendation RR 30:06 (Supplementary financial reporting rules for Groups). Accounting policies for the parent company correspond to those for the Group, apart from the exceptions outlined under the ‘Parent company’ heading below. The parent company financial state-ments are prepared in accordance with Swedish Financial Accounting Standards Council recommendation RR 32:06 (Financial reporting for legal entities) and the Annual Accounts Act.

Foundation for preparing reportsThe accounts are based on historical costs, with the exception of certain financial instruments and investment property which are carried at fair value.

Important estimates and assumptions for accounting purposesPreparing financial reports in accordance with IFRS requires the appli-cation of certain important estimates and assumptions regarding the future. The estimates for accounting purposes which result from these, by definition, will rarely equate to the actual result.

Uncertainty in estimatesCertain assumptions about the future and certain estimates and assess-ments on the balance sheet date are of particular importance to the measurement of assets and liabilities in the balance sheet. The areas where the risk of changes in value during the subsequent year is greatest because the assumptions or estimates may need to be altered are discussed below.

Impairment test for goodwillGoodwill arising in business combinations equates to the difference between the cost of the acquisition and the fair value of the identifiable net assets. An impairment test on the goodwill carried is performed once a year. Recoverable amounts (i.e. the higher of value in use and fair value after a deduction for selling expenses) are generally based on the value in use, calculated using discounted cash flow estimates.

In turn, this requires an estimation of the expected future cash flow from the cash generating unit and a relevant discount rate must be esta-blished to calculate the present value of the cash flow.

Obsolescence of inventoriesIn terms of value, inventories mainly comprise items which have been acquired in accordance with an assessed maintenance plan for various train models. As these cycles are long-term in nature (5 to 12 years), there is an element of uncertainty in this assessment. The company has a far-reaching obligation to stock items (spare parts) for a long time for various train models which have a very long financial and technical life.

Consolidated accounts EuroMaint Gruppen’s income statement and balance sheet encompasses all companies over which the parent company directly or indirectly exerts a controlling influence. A controlling influence entails the right to directly or indirectly formulate a company’s financial and operational strategies with the aim of securing financial benefits. A controlling influence arises when a shareholding amounts to more than half the voting rights.

Intra-Group transactions and balance sheet items, as well as profits on transactions between Group companies, are eliminated. Losses are also eliminated, unless the transaction is proof of a write-down require-ment for the transferred asset.

Business combinationsIFRS 3 entails establishing the fair value of identifiable assets and liabilities in the acquired operation at the time of acquisition. Identifi-able assets and liabilities also include assets, liabilities and provisions including obligations and demands from external parties not reported in the acquired operation’s balance sheet. No provisions are made for costs relating to planned restructuring measures resulting from the acquisition. The difference between the cost of the acquisition and the acquired proportion of net assets in the acquired operation is classified as goodwill and is recognised as an intangible asset in the balance sheet.

The useful life of each individual intangible asset is established and the asset’s fair value is amortised over its useful life. If the useful life is deemed indefinite, no amortisation takes place. If the useful life of an intangible asset is deemed indefinite, all relevant conditions are taken into account and based on there being no foreseeable upper time limit for the net cash flow generated by the asset. The useful life of goodwill is assumed to be indefinite and is not amortised, but it is subjected to an impairment test once a year.

On 1 September, EuroMaint Gruppen AB acquired EuroMaint AB. An acquisition analysis is under way and is expected to be finished by the second quarter of 2008. The acquisition analysis is preliminary at the close of the accounting period.

Segment reportingAs the subsidiaries conduct separate operations with separate products and services, their operations have been chosen as the primary segment. Sales between subsidiaries are based on market conditions. All assets and liabilities have been included for each subsidiary.

Segment information per line of business is given in Note 3. >>>

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Foreign currencies – translationReceivables and liabilities in foreign currencies are translated at the exchange rates in force on the balance sheet date.

In preparing the consolidated accounts, all items in the income state-ment pertaining to foreign subsidiaries are translated into Swedish kronor using average annual exchange rates. All items in the balance sheet are translated using the exchange rates on the relevant balance sheet date. Any changes in the Group’s equity arising from different exchange rates on the balance sheet date compared to the rate on the previous balance sheet date are carried in the translation difference directly in equity. All subsidiaries use their local currency as the functional currency. Transactions are carried at the exchange rate in force on the transaction date, which is then translated.

Tangible fixed assetsTangible fixed assets are carried at cost less accumulated depreciation and accumulated write-downs.

Additional costs are added to the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is likely that future economic benefits associated with the asset will accrue to the Group and the asset’s cost can be measured in a reliable way. All other forms of repair and maintenance are recognised as expenses in the income statement for the period in which they arise.

In order to distribute the cost of tangible fixed assets down to the estimated residual value, depreciation takes place linearly over the esti-mated useful life, in accordance with the following percentages per year:

Category Depreciation yearMachinery and equipment 5–10Computers and terminals 3Improvements to third-party property 5–10

The residual values and useful lives of assets are tested on each balance sheet date and adjusted as necessary. An asset’s carrying amount is depreciated immediately to its recoverable amount (the higher of the net selling price and value in use) if the asset’s carrying amount exceeds its estimated recoverable amount.

Profits and losses from sales are established by means of a compari-son between the sales proceeds and carrying amount and the result is recognised in the income statement.

Intangible assetsGoodwillGoodwill is the amount by which the cost exceeds the fair value of the Group’s proportion of the subsidiary’s identifiable net assets upon acquisition. Goodwill is recognised as an intangible asset. Profit or loss from the sale of a unit includes the remaining carrying amount of the goodwill pertaining to the sold unit.

Goodwill is distributed between cash generating units upon testing to determine any write-down requirement. The write-down requirement for goodwill is tested as follows: the goodwill value established at the time of acquisition is distributed among cash generating units or groups of cash generating units, which are expected to bring benefits to the company in the form of synergy effects. Assets and liabilities already within the Group at the time of acquisition may also be attributed to these cash generating units. Each cash flow of this kind to which goodwill is distributed, corresponds to the lowest level in the Group at which goodwill is monitored in the company’s Board and is not a larger

part of the Group than a segment. A write-down requirement exists when the recoverable amount for a cash generating unit, or group of cash generating units, is lower than the carrying amount. In such cases a write-down is entered in the income statement.

Investment propertyInvestment property is recognised at fair value, which equates to the market value and is established annually by external and internal valuers. Changes in fair value are recognised in the income statement as part of the Other operating revenues item.

Write-downs of assets that are not financialAssets with an indefinite useful life are not depreciated/amortised but tested annually to determine any write-down requirement. The assets which are depreciated/amortised are assessed in terms of write-down requirement whenever an event or a change in circumstances indicates that the carrying amount is not recoverable. A write-down is carried out 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 expenses, or its value in use. On determining the write-down requirement, the assets are grouped at the lowest levels at which there are separate, identifiable cash flows (cash generating units). An asset, apart from goodwill or financial assets, that has previously been written down is impairment tested on each balance sheet date as to whether a cancellation is warranted.

Financial instrumentsFinancial instruments recognised as assets in the balance sheet include cash equivalents, accounts receivable, derivatives and other receivables. Those recognised as liabilities include accounts payable, borrowings, derivatives and other liabilities.

A financial asset or financial liability is recognised in the balance sheet when the company becomes party to the instrument’s contractual terms. Accounts receivable are recognised in the balance sheet once an invoice has been sent. Liabilities are recognised once the counterparty has completed its task and there is a contractual obligation to pay, even though an invoice may not yet have been received. Accounts payable are recognised once the invoice has been received.

A financial asset is excluded from the balance sheet once the con-tractual rights have been realised, have expired or the company has lost control over it. The same applies for part of a financial asset. A financial liability is removed from the balance sheet once the obligation in the contract has been fulfilled or has in some other way been extinguished. The same applies for part of a financial liability. The write-down require-ment for accounts payable is assessed on an ongoing basis.

Financial assets excluding derivativesAcquisitions and sales of financial assets are reported on the business day, i.e. the day on which the company commits to acquiring or selling the asset. Financial assets are carried at amortised cost in the balance sheet.

BorrowingLoans are initially recognised at the loan amount and are subsequently entered at the loan amount less reductions. Borrowing is classified as a current liability if the payment of the liability will be made within 12 months of the balance sheet date.

Notes

noTE 1 ACCoUnTInG AnD MEASUrEMEnT poLICIES ConTD.


53


53

Derivative instrumentsThe Group uses derivative instruments to secure parts of its exposure to currency risks in ongoing payment flows. Hedge accounting is not applied, instead all derivatives are categorised as financial assets and liabilities measured at fair value through profit or loss. This means that the change in value of the derivatives is recognised in the income state-ment under financial items. Derivatives with positive values are entered as assets and derivatives with negative values are entered as liabilities. Fair value is established by obtaining the costs or revenue which would have arisen if the contract had expired on the balance sheet date.

The Group uses interest swaps to hedge parts of its borrowing with variable interest rates. These are entered in the income statement as financial expenses.

InventoriesMaterial stores and finished goods inventories are valued at the lower of cost or net selling price. The Group applies the first-in, first-out method (FIFO). The net selling price is the estimated selling price in operating activities less variable selling expenses.

Accounts receivableAccounts receivable are reported at the invoiced amount less any reserve for decrease in value. A reserve for decrease in value of accounts receivable is set up when there is objective proof that the Group will not be able to receive the amounts due in accordance with the original terms of the receivables. The size of the reserve is the difference between the asset’s carrying amount and the value of assessed future cash flows. The decrease in value is reported in the income statement.

Cash and cash equivalentsCash and cash equivalents include cash and bank balances.

Income taxesIncome taxes are included in the consolidated accounts, both in the form of current and deferred tax. Group companies are liable to pay tax in line with legislation in each country.

A current tax liability or asset is carried at the estimated amount to be paid or received with regard to the current or previous year.

Deferred tax is carried on all temporary differences comprising the difference between the tax base for assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is calculated through the application of tax rates and tax laws which have been decided or notified on the balance sheet date and which are expected to apply when the deferred tax asset in question is realised or the deferred tax liability is cleared.

Deferred tax assets are recognised for tax-deductible temporary differ ences and unused loss carry-forwards to the extent it is likely that future taxable profit will be available against which the temporary differences or unused loss carry-forwards may be used.

Employee benefitsPension obligationsThe Group companies have different pension plans. The pension plans are financed through payment of insurance premiums or through a provision in the balance sheet. The Group has both defined benefitand defined contribution pension plans.

A defined contribution pension plan is a plan for which the Group holds no further payment obligation once the contributions are paid. Defined contribution pension plans in the Group are PA-03, Alternativ ITP-S (supplementary pensions for higher earners), and ITP supplementary pensions for salaried employees in Alecta, which are recognised as defined contribution plans due to a deficiency in the information required to classify the plan as a defined benefit pension. The contributions are recognised as costs of personnel. Prepaid fees are recognised as an asset to the extent that cash repayment or a reduction in future payments may accrue to the company.

A defined benefit pension plan guarantees the employee a pension equivalent to a certain percentage of his or her final salary. The liability recognised in the balance sheet regarding defined benefit pension plans is the present value of the defined benefit obligation on the balance sheet date less the fair value of the plan assets.

The present value of the defined benefit obligation is established by discounting the estimated future cash flow at an interest rate for government bonds and with durations comparable to the pension provision in question. Actuarial gains and losses arising from experience-based adjustments and changes in actuarial assumptions exceeding the higher of 10% of the value of the plan assets and 10% of the defined benefit obligation, are taken up as expense or income over the estimated average remaining period of service of the employees. Past service cost is recognised directly in the income statement, unless the changes in the pension plan are conditional on the employee remaining in service for a set period (entitlement period). In such cases, the past service cost is recognised on a straight-line basis over the entitlement period.

On EuroMaint Gruppen AB’s acquisition of EuroMaint AB, assets and liabilities attributable to benefits after completed service have been recognised at the present value of the obligations and plan assets, in accordance with IAS 19 point 108. This means that actuarial gains and losses arising prior to the acquisition have been recognised in the con-solidated balance sheet, including the portion that may be considered to be in excess of the 10% corridor.

Remuneration on termination of employmentRemuneration on termination of employment is paid when an employee’s position is terminated prior to standard retirement or when an employee accepts voluntary redundancy from the position in exchange for such remuneration. The Group recognises an expense or liability when it is dem-onstrably obliged either to make the employee redundant in accordance with a detailed formal plan with no opportunity for recall, or to provide remuneration upon redundancy due to an offer made to encouragevoluntary redundancy among personnel. Benefits due after 12 monthsof the balance sheet date or longer are discounted at the present value.

provisionsProvisions are recognised when the Group has an existing legal or constructive obligation as a result of a past event, and it is more probable than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. No provisions are 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 is assessed generally for this entire group of obligations. >>>



54


Notes

revenue recognitionRevenue is carried with deductions for value added tax, any granted discounts and similar revenue reductions. Net turnover encompasses sales of services within maintenance, new construction and refurbish-ment of rolling stock, as well as maintenance and implementation of production facilities for the engineering industry. For maintenance contracts guaranteeing availability (known as ‘availability contracts’) and new construction and refurbishment contracts, revenue and costs pertaining to the assignment are recognised relative to the degree of completion of the assignment. This accounting principle is based on the view that the task is fulfilled in line with the work being carried out, and means that profit is recognised progressively based on the degree of completion of each assignment when the assignment’s final outcome can be measured in a reliable way. For availability contracts, the degree of completion is determined on the basis of work carried out in relation to the maintenance plan. For new construction and refurbishment contracts, the degree of completion is determined in relation to accrued assignment costs.

If an assignment’s final outcome cannot be measured in a reliable way but no loss is feared, revenue corresponding to accrued costs is recognised.

A feared loss for an assignment is immediately charged in itsentirety to the period’s results.

LeasesLeases where a considerable part of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made during the lease term are taken up as expenses in the income statement on a straight-line basis over the lease term.

Cash flow analysisThe indirect method is applied in recognising cash flow from operating activities.

Information on related partiesRelated parties refer to companies over which EuroMaint Gruppen or a related party of EuroMaint Gruppen can exercise a controlling or signifi-cant influence over operational and financial decisions. Related parties also encompass companies and natural persons that have the ability to exert a controlling or significant influence over EuroMaint Gruppen’s financial and operational decisions. Transactions with related parties are outlined in Note 2.

Natural persons closely related with the Group are defined as the Board Chairman and members, the President, other senior personnel and close family members of these people. Other senior personnel are the seven people who comprise the Group management alongside the President. Remuneration to the Board and Group managementis shown in Note 6.

new IFrS and interpretationNew standards and interpretations approved by the EU and not coming into force until the 2009 financial year or later have not been applied in preparing these financial statements.

IFRS 8 Operating SegmentsThe standard comes into effect on 1 January 2009 and applies to financial years starting on or after that date. The standard relates to the division of corporate operations into different segments. According to the standard, the company should take the structure of internal reporting as its starting point and determine reportable segments based on that. EuroMaint’s preliminary assessment is that this is not expected to have any significant impact on the Group’s segment reporting.

parent companyThe parent company financial statements are prepared in accordance with Swedish Financial Accounting Standards Council recommenda-tion RR 32:06 (Financial reporting for legal entities) and the Annual Accounts Act.


noTE 2 TrAnSACTIonS WITH rELATED pArTIES

Group parent company 1 Sep 2007 25 Apr 2007SEk thousands 31 Dec 2007 31 Dec 2007

Sale of goods and services

DIAB 2,846 0

receivables from related parties

DIAB 1,757 0

The table below presents information about the prime nature of the transactions with related parties.

operating revenues Expenses

DIAB Industrial Maintenance

The company in Note 2 is a company in the Ratos Group.


55


noTE 3 SEGMEnT rEporTInG

The EuroMaint Group operates in the maintenance industry. The Group has two segments: train maintenance and industrial maintenance.EuroMaint Rail AB, EuroMaint Rail SIA and EuroMaint Tracksupport operate in the train maintenance segment. EuroMaint Industry AB and EuroMaint Industry Inc. operate in the industrial maintenance segment.

SEk thousands Train Industrial Group Group1 September – 31 December 2007 Maintenance Maintenance adjustments

net turnover

External net turnover 637,330 104,141 -1,619 739,852

Internal net turnover 14,134 2,360 -16,494 0

Total net turnover 651,464 106,501 -18,113 739,852

profit/loss

Operating profit/loss -1,085 1,019 -2,241 -2,307

Financial revenues 455 101 51 607

Financial expenses -6,613 -168 -20,308 -27,089

Pre-tax profit/loss -7,243 -1,097 -20,449 -28,789

Income tax 3,179 316 5,298 8,793

Net profit for the period -4,064 -781 -15,151 -19,996

other disclosures

Assets 1,010,070 128,819 622,702 1,761,591

Liabilities 755,498 81,641 736,265 1,573,404

Investments 20,241 358 -2,137 18,462

Depreciation 8,240 1,239 630 10,109

The Group generally carries sales and transfers between the segments as though the sales and transfers had been to a third party at prevailing market prices.

noTE 4 oTHEr opErATInG rEVEnUES AnD opErATInG EXpEnSES

SEk thousands Group parent company 1 Sep 2007 25 Apr 2007other operating revenues 31 Dec 2007 31 Dec 2007

Profit from sale of fixed assets 12 0

Exchange gain from receivables/liabilities relating to operations 547 0

Rental revenues 355 0

Miscellaneous 720 0

Total 1,634 0

Group parent company 1 Sep 2007 25 Apr 2007 other operating expenses 31 Dec 2007 31 Dec 2007

Exchange loss, operational -1,425 0

Total -1,425 0


56


noTE 5 rEMUnErATIon To AUDITorS

Notes

SEk thousands Group parent company

1 Sep 2007 25 Apr 2007 31 Dec 2007 31 Dec 2007

Ernst & young

Audit engagement 1,587 70

Other engagements 252 0

Total 1,839 70

Audit engagement refers to the examination of the annual report and accounts as well as the Board’s administration, other tasks incumbent on the company’s auditors as well as advice or other assistance resulting from observations during the examination or implementation of other suchwork tasks. All other work is classified as other engagements.

noTE 6 AVErAGE nUMBEr oF EMpLoyEES AnD CoSTS oF pErSonnEL

Group parent company

1 Sep 2007 25 Apr 2007 31 Dec 2007 31 Dec 2007

Average number of employees by gender

Sweden

Woman 128 0

Men 1,632 1

Total 1,760 1

USA

Woman 1 0

Men 8 0

Total 9 0

Latvia

Woman 1 0

Men 1 0

Total 2 0

Board members and senior personnel

Board members

Woman 6 0

Men 32 8

Total 38 8

president and other senior personnel

Woman 4 0

Men 20 1

Total 24 1


57


noTE 6 AVErAGE nUMBEr oF EMpLoyEES AnD CoSTS oF pErSonnEL ConTD.

EuroMaint EuroMaint AB EuroMaint EuroMaint EuroMaint Gruppen AB rail AB Industry AB Tracksupport AB

Sick leave, % 2007 2007 2007 2007 2007

Total sick leave 0 0.32 5.7 3.1 2.7

Long-term sick leave 0 0 3.0 1.1 0

Sick leave for men 0 0 5.8 2.6 2.7

Sick leave for women 0 0.32 6.6 11.6 0

Employees – 29 years 0 0 5.9 3.2 1.1

Employees 30 – 49 years 0 0.32 5.2 3.4 2.5

Employees 50+ years 0 0 6.5 2.7 2.7 Sick leave is calculated based on the actual absence in relation to the normal working hours for each group.

Costs of personnel, SEk thousands Group

1 Sep 2007 Salaries and other remuneration in Sweden 31 Dec 2007

Board and Presidents 1,519

Of which bonus and thereby equalised remuneration 0

Other employees 207,242

Total salaries and other remuneration 208,761

Social security expenses 94,880

of which pension costs 18,024

Salaries and other remuneration in USA

Board and Presidents 0

Of which bonus and thereby equalised remuneration 0

Other employees 2,627

Total salaries and other remuneration 2,627

Salaries and other remuneration in Latvia

Board and Presidents 0

of which bonus and thereby equalised remuneration 0

Other employees 252

Total salaries and other remuneration 252

Social security expenses 59


58


Notes

remuneration and other benefits during the period The chairman of EuroMaint Gruppen AB receives a fee of SEK 300,000 and other Board members SEK 150,000 provided they are not employed by Ratos. If they are, a fee of SEK 0 (zero) is paid to members of the EuroMaint Gruppen AB Board. A preparation fee of SEK 63,000 has been paid to union representatives on the Board. The President of EuroMaint Gruppen AB received salary and benefits totalling SEK 773,000 (excluding social security costs) during the period and had the use of a company car with a total benefit value of SEK 81,000.

The President receives an old-age pension at 65 years. The President has a non-revocable premium-based pension promise amounting to 30% of fixed monthly revenues. The term of notice is 12 months from both the company’s and the President’s side, and during this time salary is payable with full adjustment. If notice is given by the company, 12 months’ non-pensionable severance pay is also awarded with full adjustment against other revenues.

remuneration and other benefits during the periodSenior management members receive an old-age pension at 65 years. Two members of senior personnel have a non-revocable premium-based pension promise amounting to 30% of fixed monthly salary. One member of senior personnel has a premium-based pension correspond-ing to 35% up to 30 basic amounts and 25% above 30. One member of senior personnel is encompassed by the alternative ITP with a sup-plementary premium-based pension plan with a premium equivalent to 40% up to 20 basic amounts and 24% over 20.

Agreements have been reached with one senior personnel regarding severance pay should the company give notice. The severance pay is equivalent to the fixed salary for 12 months in addition to the period of notice, which is 12 months. Severance pay is not pensionable, is fully adjustable and is not paid on retirement. Other senior personnel receive salary during the period of notice, which is 12 months, and noseverance pay.

remuneration and other benefits during the periodThe President of EuroMaint Industry AB received a salary of SEK 520,000 during the period, as well as a company car and other benefits of SEK 21,000. The agreed retirement age for the President and all senior personnel is 65 years. Upon termination of employment of the President there is a period of notice of 12 months from the employer’s side, or six months from the President’s side. The Vice Presidents and other senior personnel have a term of notice of three months which applies for notice given by either side. No severance pay is payable upon termination of employment. The Board of EuroMaint Industry did not receive aBoard fee.

remuneration and other benefits during the periodThe Board of EuroMaint Rail did not receive a Board fee. Senior man-agement members receive an old-age pension at 65 years. The President has a non-revocable premium-based pension promise amounting to 30% of fixed monthly revenues.

Agreements have been reached with one senior personnel regard-ing severance pay should the company give notice. The severance pay is equivalent to the fixed salary for 12 months in addition to salary during the period of notice, which is 12 months. Severance pay is not pensionable, is fully adjustable and is not paid on retirement. Other senior personnel receive salary during the period of notice, which is 12 months. Severance pay has been awarded to the President during the year amounting to SEK 283,000.

remuneration to senior personnel of EuroMaint Gruppen AB

SEk thousands Salary other pension benefits cost

President 773 81 210

remuneration to senior personnel of EuroMaint Tracksupport AB


President 286 2 129

remuneration to senior personnel of EuroMaint AB


President 0 0 0Other senior personnel (4 people) 1,800 64 465

remuneration to senior personnel of EuroMaint Industry AB


President 520 21 57Other senior personnel (7 people) 1,658 152 403

remuneration to senior personnel of EuroMaint rail AB


President 397 9 62

Other senior personnel (7 people) 2,043 171 511

noTE 6 AVErAGE nUMBEr oF EMpLoyEES AnD CoSTS oF pErSonnEL ConTD.


59


Group, SEk thousands Land and Improvments plant and Equipment, Construction Total buildings* to third-party machinery tools, fixtures in progress property and fittings

1 Sep 2007 1 Sep 2007 1 Sep 2007 1 Sep 2007 1 Sep 2007 1 Sep 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007

Opening cost 0 0 0 0 0 0

Acquisition of subsidiaries 13,540 24,604 127,118 170,617 41,997 377,876

Change in value of investment property 0 0 0 0 0 0

Purchases 0 4,406 1,498 10,270 4,808 20,982

Sales/scrappings 0 0 -1,178 -6,917 0 -8,095

Closing accumulated cost 13,540 29,010 127,438 173,970 46,805 390,763

Opening depreciation 0 0 0 0 0 0

Acquisition of subsidiaries -5,266 -9,788 -94,180 -113,111 0 -222,345

Sale of business 0 0 -477 319 0 -158

Depreciation for the period -99 -1,074 -2,117 -6,194 0 -9,484

Sales/scrappings 0 0 1,002 7,006 0 8,008

Closing accumulated depreciation -5,365 -10,862 -95,772 -111,980 0 -223,979

Closing residual value according to plan 8,175 18,148 31,666 61,990 46,805 166,784

* Land and buildings includes investment property with the following values:

Tax assessment value 255

Book value 7,080

noTE 7 TAnGIBLE FIXED ASSETS


60


noTE 8 InTAnGIBLE ASSETS

noTE 9 FInAnCIAL rEVEnUES AnD EXpEnSES

noTE 10 TAX

Notes

Accumulated costs 2007 Goodwill Customer Technology TotalSEk thousands relations

Opening balance 1 Sep 2007 0 0 0 0

Acquisition of subsidiaries 692,110 10,938 6,847 709,895

Accrued internally 0 0 0 0

Business combinations 0 0 0 0

Depreciation 0 -625 0 -625

Exchange rate difference 0 0 756 756

Closing balance 31 Dec 2007 692,110 10,313 7,603 710,026

The majority of goodwill is attributable to EuroMaint Rail AB and a minor proportion to EuroMaint Industry AB. Customer relations and technology are based on preliminary calculations.


1 Sep 2007 25 Apr 2007 31 Dec 2007 31 Dec 2007

Interest revenues 607 11

Financial revenues 607 11

Interest expenses -26,077 -20,559

Net exchange rate fluctuations -1,012 0

Financial expenses -27,089 -20,559

Net financial revenues/expense -26,482 -20,548


Total recorded tax 1 Sep 2007 25 Apr 2007 31 Dec 2007 31 Dec 2007

Current tax 6,413 0

Deferred tax 2,380 5,918

Total 8,793 5,918

Differences between the recorded tax and calculated tax based on the prevailing tax rate comprise the following components:

Group

Difference with calculated tax at prevailing tax rate 1 Sep 2007 31 Dec 2007

Recorded pre-tax profit/loss -28,789

Tax in accordance with prevailing tax rate, 28% 8,061

Effects of non-taxable revenues and non-deductible expenses

Non-deductible expenses 818

Non-taxable revenues 0

Difference between Swedish and foreign tax -86

Total 8,793


61


noTE 10 TAX ConTD.

Deferred tax assets and liabilities are attributable to the following: Group

Deferred tax assets 31 Dec 2007

Provisions for pension obligations 3,918

Accumulated tax deficit 5,918

Other 1,641

provision at year-end 11,477

Deferred tax liability

Untaxed reserves 5,110

Provision at year-end 5,110

noTE 11 pArTICIpATIonS In GroUp CoMpAnIES

Company name reg. no. Domicile no. of percentage Book participations of equity value and votes 31 Dec 2007

EuroMaint AB 556084-8458 Stockholm 1,000 100 935,200

EuroMaint Rail AB 556032-2918 Stockholm 190,000 100

EuroMaint Bemanning AB 556670-3095 Stockholm 1,000 100

EuroMaint GmbH HRB 103498 B Berlin 1 100

EuroMaint SIA 40003885784 Riga 15,000 100

EuroMaint Tracksupport AB 556673-4363 Stockholm 1,000 100

EuroMaint Industry AB 556232-0134 Stockholm 100,000 100

EuroMaint Industry Inc. 42-1733397 Delaware 1,000 100

noTE 12 pEnSIon oBLIGATIonS

In accordance with IAS 19, Employee Benefits, an actuary working on behalf of EuroMaint has calculated the Group’s pension provision and the amounts to be allocated for pensions for Group employees on an ongoing basis. Pension plans in EuroMaint comprise both defined benefit and premium-based plans.

premium-based pension obligationsPremium-based pension promises comprise what are known as Alterna-tive ITP plans, individual pension promises for senior personnel, as well as PA-03. On 25 April 2006, the Confederation of Swedish Enterprise and the Council for Negotiation and Co-operation (PTK) agreed on changes to the ITP plan. The new ITP agreement (ITP1) came into effect on 1 July 2007 and is a premium-based pension plan. The people encompassed by ITP1 are those born in 1979 or later.

Defined benefit pension obligationsITP pensionThe old ITP plan (ITP2) which applied up to 30 June 2007 inclusive, is a defined benefit pension plan encompassing retirement, family and disa-bility/sickness pension. Employees covered by ITP2 can either be insured in Alecta or in Scandia, ITP-S, and are born in or before 1978. Certain obligations for a retirement pension and family pension for white-collar employees in Sweden are secured via an insurance policy with Alecta. Ac-cording to a statement from the Swedish Financial Accounting Standards

Council’s Emerging Issues Task Force, URA 42, these are defined benefit plans encompassing several employers. The company has not had access to such information for the financial period 1 September – 31 December 2007 that would make it possible to enter this plan as a defined benefit plan. The ITP2 pension, which is secured through an insurance policy with Alecta, is therefore entered as a defined contribution plan.

Any surplus in Alecta can either be distributed to the policy holder or the insured individuals. At the end of the third quarter of 2007 Alecta’s surplus in the form of collective consolidation level 1 amounted to 164.0% (141.1%). The collective consolidation level comprises the market value of Alecta’s assets as a percentage of the insurance com-mitments calculated according to Alecta’s insurance calculation model, which does not comply with IAS 19.

Pension in accordance with transition rules and occupational injury annuities Employees previously covered by the state pension plan PA-91, former em-ployees of the SJ Group, have the opportunity to choose early retirement in accordance with transitional rules. Pension is paid from 60 years at the earliest and the pension level depends on the salary and length of service.

Occupational injury annuities are paid on a continuous basis until the death of the employee. EuroMaint has been responsible for costs for this life annuity since the beginning of 2001, before which the obligation was the responsibility of the Swedish State Railways public enterprise.


62


Notes

Estimated amounts for the period 1 September – 31 December.

provisions for pensions and similar Groupcommitments in balance sheet, SEk thousands 31 Dec 2007

Present value of funded obligations 267,616Fair value of plan assets -267,661Asset/Provision (-/+) -45Present value of unfunded obligations 35,209Provision in balance sheet for pensions and similar commitments 35,164

SEk thousands Grouppension costs recognised in income statement 1 Sep 2007 31 Dec 2007

Cost for earned benefits -1,707

Interest expense -3,564

Expected return on plan assets 3,475

Cost for defined benefit pensions -1,796

Cost for defined premium pensions -3,465

Cost carried in income statement -5,261

SEk thousands GroupCalculation assumptions 31 Dec 2007

Discount rate 3.80%

Return on plan assets 4.00%

Expected pay increase 2.50%

Calculation of maturing pensions 1.80%

Personnel turnover 3.40%

Calculation of income base amounts 2.80%

Expected average remaining

period of service for employees 14 years

The discount rate is based on government bonds with the same term as the Group’s pension commitments. The expected return on plan assets is based on the portfolio allocation reported by the insurance companies. Long-term inflation measurements are based on market expectations which can be discerned between real and nominal bonds.

SEk thousands GroupSpecification of posted net provision in balance sheet 1 Sep 2007 31 Dec 2007

Net provision in acquired units -20,968

Actuarial gains/losses brought forward on acquisition -16,910

Net cost for defined benefit pensions -1,797

Carried in balance sheet as increase in pension provision 78

Remuneration paid 4,359

Premiums 3,379

Reimbursement -3,305

Net provision at end of period -35,164

SEk thousands GroupActuarial gains and losses 1 Sep 2007 31 Dec 2007

Actuarial loss at beginning of period 0

Actuarial loss on present value of obligations which arose during the period -139

Actuarial gain on plan assets which arose during the period 61

Actuarial loss at end of period included in pension provision -78

Groupreconciliation of change in plan assets, SEk thousands 1 Sep 2007 31 Dec 2007

Fair value of plan assets at beginning of period 264,053

Expected return during the period 3,475

Premiums paid 3,379

Remuneration paid -3,305

Actuarial gains during the period 59

Fair value of plan assets at end of period 267,661

Plan assets are invested in pension insurance policies with Skandia and KPA. The insurances contain a mixture of shares and bonds. On 31 December 2007, 41% was invested in bonds, 45% in shares, 10% in real estate and 4% in other.

The return during the period amounted to 6.6% on average.

noTE 12 pEnSIon oBLIGATIonS ConTD.

The following defined benefit plans are recognised in the balance sheet:

pension provision/asset (+/-) in balance sheet, SEk thousands

Groupplan 31 Dec 2007

Funded pension obligation -45

Unfunded pension obligation 22,585

Occupational injury annuities, non-funded 12,624

35,164

KPA pensionDefined benefit pensions and life annuities in accordance with state pension rules for former employees which were earned prior to 1992 have been redeemed in life assurance company KPA. A premium of SEK 125 million was paid for this in 1999. The National Government Employee Pensions Board is responsible for calculating benefits and also administe-ring the paying-out of pensions whereby funds are continuously withdrawn from the insurance. The insurance terms specify how the cost is settled if pensions paid deviate from benefit amounts that formed the basis for the redeemed premium in 1999. This type of cost adjustment is usually handled by withdrawing funds from the surplus the Group has with KPA.


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noTE 14 ACCoUnTS rECEIVABLE AnD oTHEr rECEIVABLES

noTE 13 InVEnTorIES

SEk thousands Group 31 Dec 2007

Gross stock 376,834

Obsolescence reserve -96,588

Net stock 280,246

Distributed as follows

Replacement items 74,100

Spare parts 149,921

Other 56,225

280,246

All companies use an obsolescence scale in line with their particular circumstances. On 31 December 2007, the cost of inventories amoun-ted to SEK 261 million. The book value of written-down inventories at the close of the accounting period was SEK 21 million. Write-downs on inventories for the period amounted to SEK 2 million. The proportion of costs of goods sold entered as withdrawals from stock during the period was SEK 142 million.

The total loan facility with Swedbank encompasses SEK 960 million, and other institutions SEK 0. SEK 200 million of the facility is a ‘revol-ving facility’ to cover bank overdrafts and guarantee commitments. Of this SEK 122.5 million is dedicated to bank overdrafts (SEK and foreign currency) and SEK 36,196,000 is used for bank guarantees issued.

The Group’s exposure, regarding external borrowing, to changes in interest and contractual time for interest renegotiation are as follows:

All loans with Swedbank have a three-month tie-in period. To achieve the effect of a larger proportion of fixed interest, an interest swap contract has been taken out with Swedbank Finance. The swap contract of SEK 380 mil-lion, which was entered into on 27 December 2007 and runs until 31 De-cember 2010, produces an equivalent fixed base interest rate of 4.6125%.

The average tie-in period in months

for outstanding external borrowing is therefore: 20

The weighted average interest including interest margins on the balance sheet date was: 6.47%

Group 31 Dec 2007

1 year or less 367,200

1-5 years 380,000

747,200

SEk thousands Group parent company 31 Dec 2007 31 Dec 2007

Accounts receivable 344,955 0

Receivables from Group companies 1,757 1,004

Other receivables 87,300 925

Completed, not invoiced 87,691 0

Accrued revenues and prepaid expenses* 71,355 0

593,058 1,929

* Specification of accrued revenues and prepaid expenses

Prepaid rent 20,749 0

Accrued revenues for maintenance measures 32,512 0

Other 18,094 0

Total 71,355 0

noTE 15 LonG-TErM InTErEST-BEArInG LIABILITIES

The recorded amounts and fair value for long-term borrowing are as follows:

SEk thousands Group Book value Fair value

Long-term 31 Dec 2007 31 Dec 2007

Bank loans 760,000 760,000

Shareholder loans 217,569 217,569

Other -12,800 -12,800

Total 964,769 964,769

Current

Bank overdraft 22,840 22,840

Total 22,840 22,840

Dedicated bank overdraft facility 122,500


64


noTE 17 ACCoUnTS pAyABLE AnD oTHEr LIABILITIES

noTE 18 pLEDGED ASSETS AnD ConTInGEnT LIABILITIES

noTE 20 CASH FLoW AnALySIS, oTHEr ITEMS noT AFFECTInG CASH FLoW

Notes

noTE 16 oTHEr proVISIonS

noTE 19 LEASInG

SEk thousands Groupprovision guarantees 31 Dec 2007

Provision on 1 Sep 2007 19,798

Provisions for the year 0

Used during the year -3,522

Provision on 31 Dec 2007 16,276

The provisions relate to guarantee commitments for refurbished rolling stock and all are deemed long-term.

SEk thousands GroupFuture minimum leasing fees 31 Dec 2007

Within one year 10,347

Between one and five years 11,544

Beyond five years 1,476

Total 23,367

Leasing fees taken up as costs 1 Sep – 31 Dec 2007 3,718

Total 3,718

The Group’s operating leases include fees for vehicles, computers and certain office equipment.

SEk thousands Group parent Company 31 Dec 2007 31 Dec 2007

Advance payment from customers 50,420 0

Accounts payable 201,591 0

Tax liability 13,343 0

Liabilities to Group companies 34 814

Accrued expenses and deferred revenues* 249,603 545

Other liabilities 37,094 0

Total 552,085 1,359

* Specification of accrued expenses and deferred revenues

Costs of personnel 105,197 0

Trade accounts payable 21,576 0

Accrued expenses for maintenance measures 25,142 0

Other 97,688 545

Total 249,603 545

SEk thousands Group 31 Dec 2007

Pension obligations, FPG/PRI 30

Pledged floating charges 25,190

Pledged shares in subsidiaries (net assets)* 271,731

Floating charges and shares in subsidiaries (EuroMaint AB, EuroMaint Rail AB and EuroMaint Industry AB) are pledged with Swedbank as collateral for their total credit commitment. Pledged shares have been carried at the value of the net assets in the Group for the subsidiaries in question.

* The carrying amount for pledged shares does not include Groupgoodwill of SEK 692 million.

SEk thousands GroupCapital gain/loss 31 Dec 2007

Unpaid costs of personnel 44,000

Change in pension provision 366

Change in other provisions and reserves -3,522

Other items 1,730

Total 42,574

Operating activities include interest paid of SEK -14,886,000 andinterest received of SEK +1,249,000.


65


Through its business, EuroMaint is exposed to financial risks, including the effects of changes in prices on the credit and capital markets, and fluctuations in exchange rates and interest rates. The Group’s overall risk management focuses on the unpredictability of the financial markets, and strives to minimise potential unfavourable effects on the Group’s financial results. Financial operations in the Group are centrali-sed in the parent company’s finance function. The finance function acts as an internal bank and is responsible for the sourcing of capital, cash management and financial risk management. The operation is regulated through the Group’s financial rules.

The important areas of financial risk that are dealt with comprise:

Exchange rate risksEuroMaint is exposed to some extent to exchange rate risks due to its relatively large purchase volumes in foreign currencies and low customer invoicing in corresponding currencies. Purchases in foreign currencies for large projects are 100% hedged or agreed with variable fo-reign exchange clauses during the tendering/contract formulation stage. The financial rules and regulations also state that operating net flows shall be hedged at least to set levels during a rolling 12-month forecast period. This is usually achieved through forward agreements. Hedging takes place quarterly at levels of 40% to 70% for the coming quarters 1-4. EuroMaint’s greatest currency exposure is in its material purcha-ses in EUR. The net flow is approximately SEK 12 million a year, which means a 5% drop in the exchange rate would increase purchase costs by around EUR 600,000, which equates to approximately SEK 5.5 million.

Interest rate risksEuroMaint is affected by general changes in interest rates on its external loan portfolio. To counter these changes, 50% of the loan portfolio value has been hedged via a 3-year interest swap. The underlying loans are continuously renewed for 3-month periods. The interest swap gives a base interest rate of 4.6125% over the 3-year period. With the current size of the loan portfolio and 50% hedging level (interest swap), a 1% increase in the interest rate would raise EuroMaint’s annual interest expense by SEK 3.8 million.

Credit riskEuroMaint has procedures for minimising ongoing customer credit risks in the business. These procedures include credit checks, advance payment and guarantee management, and ongoing credit monitoring. Bad debt losses established in 2007 amounted to SEK 3,000. On the balance sheet date, EuroMaint owned indirect securities of approximately SEK 50 million in the form of advances from customers. The Group does not consider there to be any significant concentration of credit risks regarding financial assets.

On 31 December 2007, invoices to a value of SEK 2,934,000 were overdue for payment by more than 12 months. Terms of payment for most of the Group’s customers are 30 days. A small proportion of invoices, including those for kilometre-based contracts, are issued with terms of 15 days.

Liquidity and refinancing riskEuroMaint’s policy is always to have cash and cash equivalents and se-cured refinancing available to the extent required for the operation. On 31 December 2007 the company had credit facilities of SEK 960 million with Swedbank, partly including a bank overdraft facility of SEK 122.5 million.

noTE 22 DISCLoSUrE on FAIr VALUES rELATInG To FInAnCIAL InSTrUMEnTS

The fair values of financial instruments correspond to the book values, with the exception of financial loans which are subject to fixed interest rates. The nominal and book value of fixed-interest loans on the balance sheet date amounted to SEK 200 million. Upon measurement at fair value the liability increases by SEK 564,000, taking into account any interest penalty calculated by the bank that would be payable if the loans were to besettled in advance on the balance sheet date.

noTE 21 FInAnCIAL InSTrUMEnTS AnD FInAnCIAL rISk MAnAGEMEnT

Fair values of derivative instrumentson the balance sheet date, SEk thousands 31 Dec 2007

Contracts with positive fair values:

Hedging 715

Contracts with negative fair values:

Hedging 2,978

The nominal amount of outstanding derivatives on 31 December was NOK 160,900,000 (Sell) and EUR 4,500,000 (Buy). The fair value of the derivative contracts has been calculated based on the corresponding forward rate from the bank on the balance sheet date. The future contract values have then been discounted to present values with 6% interest.The bank’s official exchange rates have been used.


66


Notes

noTE 23 FInAnCIAL InSTrUMEnTS

GroUp, SEk THoUSAnDSASSETS By CATEGoryAssets Fair value Loan receivables and non-financial Total assets Value in Fixed assets profit or loss accounts receivable instruments balance sheet

Tangible assets 0 0 166,784 166,784 166,784

Intangible assets 0 0 710,026 710,026 710,026

Deferred tax asset 0 0 11,477 11,477 11,477

Total fixed assets 0 0 888,287 888,287 888,287

Current assets

Inventories 0 0 280,246 280,246 280,246

Accounts receivable 0 344,955 0 344,955 344,955

Receivables from Group companies 0 0 1,757 1,757 1,757

Other receivables 0 20,375 66,925 87,300 87,300

Completed, not invoiced 0 0 87,691 87,691 87,691

Prepaid expenses and accrued revenues 715 54 70,586 71,355 71,355

Cash and bank balances 0 0 0 0 0

Total current assets 715 365,384 507,205 873,304 873,304

Total assets 715 365,384 1,395,492 1,761,591 1,761,591

LIABILITIES By CATEGoryEquity and liabilities Fair value Liabilities non-financial Total liabilities Value in balance profit or loss measured at instruments sheet amortised cost

Share capital 0 0 100 100 100

Other contributed capital/statutory reserve 0 0 208,000 208,000 208,000

Accumulated deficit/non-restricted equity 0 0 -19,913 -19,913 -19,913

Total equity 0 0 188,187 188,187 188,187

Long-term liabilities

Long-term interest-bearing liabilities 0 747,200 0 747,200 747,200

Shareholder loan, Group 0 217,569 0 217,569 217,569

Provision for pensions and similar commitments 0 0 35,164 35,164 35,164

Other provisions 0 0 16,276 16,276 16,276

Deferred tax liability 0 0 5,110 5,110 5,110

Total long-term liabilities 0 964,769 56,550 1,021,319 1,021,319

Current liabilities

Advance payment from customers 0 0 50,420 50,420 50,420

Accounts payable 0 201,591 0 201,591 201,591

Income tax liability 0 0 13,343 13,343 13,343

Liabilities to Group companies 0 0 34 34 34

Liabilities to credit institutions, KF 0 22,840 0 22,840 22,840

Other current liabilities 0 0 14,254 14,254 14,254

Accrued expenses and deferred revenues 2,978 430 246,195 249,603 249,603

Total current liabilities 2,978 224,861 324,246 552,085 552,085

Total liabilities 2,978 1,189,630 380,796 1,573,404 1,573,404

Total equity and liabilities 2,978 1,189,630 568,983 1,761,591 1,761,591


67


noTE 26 BUSInESS CoMBInATIonS

On 1 September EuroMaint Gruppen AB acquired 100% of the share capital in EuroMaint AB, an operation mostly based in Sweden, which primarily carries out maintenance on railway vehicles. The acquired operation contributed earnings of SEK 724,238,000 and a net loss of SEK -4,778,000 toEuroMaint Gruppen AB for the period 1 September 2007 – 31 December 2007. Had the acquisition taken place on 1 January 2007, EuroMaintGruppen AB’s revenues would have been SEK 2,047,903,000 and profit for the year SEK 35,207,000. The acquisition analysis is preliminaryand may be subject to alteration.

Information on acquired net assets, MSEk: Book value Fair value

Intangible assets 18 18

Tangible fixed assets 156 156

Inventories 297 297

Receivables 441 441

Cash and cash equivalents 23 23

Borrowings -210 -210

Pension provision -20 -35

Other liabilities and provisions -451 -451

Total identifiable net assets 254 239

Group goodwill 692

Purchase price paid 931

noTE 24 nET TUrnoVEr noTE 25 CoMpLETED, noT InVoICED


Sale of services 674,607 1,512

Sale of goods 65,245 0

Total 739,852 1,512


Completed, not invoiced 97,535 0

Less accrued expenses -70,164 0

Plus accrued revenues 60,320 0

Total 87,691 0


68


To the Annual General Meeting of EuroMaint ABReg. no. 556731-5402

We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the Board of Directors and the President of EuroMaint Gruppen AB for the financial period 25 April – 31 December 2007. The company’s annual report and consolidated accounts can be found on pages 43-68 of the printed version of this document. The Board of Directors and President are responsible for these accounts and the administration of the company, and for ensuring the annual accounts are prepared in accordance with the Annual Accounts Act and that the consolidated accounts are prepared in accord-ance with the International Financial Reporting Standards (IFRS) as endorsed by the EU and the Annual Accounts Act. Our respon-sibility is to express an opinion on the annual accounts, the con-solidated accounts and the administration based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain high but not com-plete assurance that the annual accounts and the consolidated accounts are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the Board of Directors and President and significant estimates made by the Board of Directors and the President when preparing the annual accounts and consolidated accounts as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts.

As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circum-stances of the company in order to be able to determine the liabil-ity, if any, to the company of any Board member or the President.

We also examined whether any Board member or the President has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.

The annual accounts have been prepared in accordance with the Annual Accounts Act and, thereby, give a true and fair view of the company’s financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accord-ance with International Financial Reporting Standards (IFRS) as endorsed by the EU and the Annual Accounts Act and give a true and fair view of the Group’s financial position and results of operations. The Report of the Directors is consistent with the other parts of the annual accounts and consolidated accounts.

We recommend to the general meeting of shareholders that the income statement and balance sheet for the parent company and Group be adopted, that the profit be dealt with in accord-ance with the proposal in the Report of the Directors and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Stockholm, 29 February 2008Ernst & Young

Magnus FredmerAuthorised Public Accountant

Stockholm, 29 February 2008

Ole Kjörrefjord Knut Hansen Henrik Joelsson Chairman of the Board

Bo Jungner Wille Laurén

Anders Gustafsson Per Granström Bertil Hallén

Pether Wallin President & CEO

Audit Report


69

Corporate Governance

Corporate Governance report 71

Board report 73

Board of Directors, Group 74

Group Management 76

Subsidiary CompanyManagement 77

read more >>>

EuroMaint’s decision-making bodies comprise the Annual General Meeting, the Board of Directors, the president and the auditors. The AGM elects the Board of Directors and auditors. The Board of Directors appoints the president and Vice presidents. The owner EMaint AB proposes Board members. on behalf of the AGM, the auditors examine the accounts and the administration of the Board of Directors and president during the year.

EuroMaint AB complies with the Swedish Code of Corporate Governance with the exception of the parts relating to nomina-tions, information requirements on the website and recommen-dations for the Audit Committee and Remuneration Committee.

This Corporate Governance Report is not part of the formal annual report document and has not been examined by the company’s auditors.

Articles of associationThe company shall own, manage and administrate shares and securities in subsidiaries and associated companies in the transport sector and engineering and processing industry, and manage real and movable estate, and pursue business compatible therewith.

The Board of Directors shall comprise at least one and at most five members with a maximum of two deputies. The Board mem-bers and deputies are selected each year at the AGM.

Notice to attend the AGM shall be issued in writing by post no earlier than six weeks and no later than two weeks before the meeting. Other messages to shareholders shall also be issued in writing by post.

Annual General MeetingThe AGM is EuroMaint’s highest decision-making body. The AGM shall be held within six months of the end of the financial year and shall be the forum for approving the income statement and balance sheet, determining the dividend, electing the Board of Directors and, where appropriate, the auditors and deciding their fees, and for dealing with other statutory matters.

Notice to attend the AGM on 29 March 2007 was issued in writing by post in accordance with the requirements set out in the articles of association. The notice provides a detailed agenda including election of the Board of Directors and auditors, as well as fees for the auditors.

Stig Holm chaired the AGM on 29 March 2007. The Annual Report and audit report were presented at the AGM. In conjunc-tion with this, the Chairman of the Board submitted information about the work of the Board.

The auditors reported to the AGM on their inspection in a separate audit report.

At an extraordinary general meeting in connection with Ratos’s acquisition of EuroMaint, the sitting Board wasdismissed and a new one elected.

The extraordinary general meeting in 2007 decided:• To elect Ole Kjörrefjord, Wille Laurén, Knut Hansen, Bo Jungner and Henrik Joelsson as members of the Board and to elect Jonathan Wallis as a deputy.• Remuneration to the Board: Chairman SEK 300,000; Board members (not representatives of Ratos) SEK 150,000. >>>

Corporate Governance Report 2007

The AGM is EuroMaint’s highest decision-making body.

The AGM elects the Board of Directorsand auditors.

Annual General Meeting, AGM

The Board is ultimately responsible for the company’s organisation and administration, and shall also make decisions in strategic issues.

The Board appoints the presidentand Vice presidents.

Board of Directors

president pether Wallin is responsible for EuroMaint’s ongoing administration. There are also rules for the president’s decision-making authority regarding investments and financing issues. These rules have been established by the Board.

Executive Vice president Åke Finn isresponsible for economy, finance and IT.

Executive Vice president Björn Sundén is responsible for business development.

president

The principal auditor is Authorised public Accountant Magnus Fredmer of Ernst & young.

Auditors

EUroMAInT’S DECISIon-MAkInG BoDIES

71

CorporATE GoVErnAnCE

71


Board of DirectorsThe EuroMaint Board of Directors, which is appointed by the AGM, currently comprises five members, one deputy member and three employee representatives.

When necessary, employees of the company present reports to the Board meetings. The Board is ultimately responsible for the company’s organisation and administration, and shall also make decisions in strategic issues.

In general terms the Board of Directors deals with issues of considerable importance, such as:• Establishing rules of procedure.• Strategy planning, business- and profitability goals.

In addition to the inaugural Board meeting, which is held inconnection with the AGM, the Board usually convenes 4–5 times a year (ordinary meetings). Extra meetings are called if necessary. The inaugural meeting establishes the rules of procedure for the Board and decisions on authorised signatories for the company and verification of the minutes. In connection with the Board meeting that deals with the annual accounts, the report of the directors and proposed treatment of unallocated earnings, the principal auditor reports on the auditors’ observations and assessments from their audit.

At the ordinary meetings held during the year, interim reports are either finalised and published, or this task is assigned to the President. The Board of Directors finalises the interim reports.

The ordinary meetings encompass various standard reporting points, such as the latest financial results of theoperation.

Each year the Board evaluates the financial reporting itreceives from the company and sets out requirements for itscontent and presentation.

new Directors’ attendance at Board meetingsTwo ordinary and one inaugural Board meeting took place during the year with the following attendance:

Ole Kjörrefjord 3

Knut Hansen 2

Henrik Joelsson 3

Bo Jungner 2

Wille Laurén 3

Bertil Hallén 3

Per Granström 2

Anders Gustafsson 3

The role of the ChairmanIn addition to leading the work of the Board of Directors, the Chairman monitors the Group’s ongoing development through continuous contacts with the President in strategic issues.

president and Vice presidentsPresident Pether Wallin has been employed in the EuroMaint Group since 2002. The President is responsible for EuroMaint’s ongoing administration. There are also rules for the President’s decision-making authority regarding investments and financing issues. These rules have been established by the Board. Executive Vice President Åke Finn is responsible for economy, finance and IT. Executive Vice President Björn Sundén is responsible forbusiness development.

AuditorsThe principal auditor is Authorised Public Accountant Magnus Fredmer of Ernst & Young.

72

THE EUroMAInT BoArD oF DIrECTorS

ordinary memberknut Hansen

ordinary memberHenrik Joelsson

ordinary memberBo Jungner

ordinary memberWille Laurén

Chairman of the Boardole kjörrefjord

Deputy memberJonathan Wallis

Employee representativeBertil Hallén

Employee representativeper Granström

Employee representativeAnders Gustafsson

73


Under the Annual Accounts Act and Swedish Code of Corporate Governance, the Board of Directors is responsible for internal control. This report has been prepared inaccordance with sections 3.7.2 and 3.7.3 of the SwedishCode of Corporate Governance and is thereby restrictedto internal control with regard to financial reporting.

Control environmentThe Board mainly exercises its control by drawing up policy docu-ments and instructions for the President, along with the business plan and budget. The control is governed by the organisation, deci-sion paths and a decision-making process which is documented and communicated in steering documents such as policies, gui-delines and manuals, including the allocation of work between the Board and President, instructions for authorisation rights, as well as auditing and reporting instructions.

risk assessmentEuroMaint has a structured process for risk assessment and risk management in order to identify and ensure that the risks EuroMaint is exposed to are handled within set frameworks.

Control activityThe Board of Directors evaluates internal control, and the audi-tors report their observations regarding the audit at the Board meeting which deals with the annual accounts.

Each Board meeting monitors financial development against budget, and checks that the development of decided investments and sales is following set plans. The President reports any major deviations to the Board.

EuroMaint uses both Movex and Jeeves as business systems. Hyperion is used for Group consolidation and monitoring of key ratios. EuroMaint has chosen to outsource all management of IT operating issues to Siemens and to handle system development itself. EuroMaint Industry is to be phased into the established concept in 2008.

Two Executive Vice presidentsThe company has two Executive Vice Presidents. One is responsible for satisfactory internal control procedures, ensuring that the company’s control processes have been implemented and that any risk exposure is reported. The company has procedures for monitoring internal control.

The other Executive Vice President is responsible for developing business plans and business strategies. The company has intro-duced information and communication paths with the aim of promoting completeness and accuracy in financial reporting.

EuroMaint produces annual reports, interim reports and other ongoing information in accordance with legal requirements and accepted practice in Sweden. The reports are published on the company’s own website and are distributed to owners and other stakeholders who have registered an interest in receiving this information. Reports and press releases are available on the company’s website www.euromaint.se

Information on policies, instructions and manuals regarding financial reporting is provided to the relevant personnel.

Follow-upEach Board meeting monitors financial development against budget and forecasts, and checks that the development of chosen investments is following set plans.

If there are major deviations from the budget and the decided investments are deemed more costly, the President reports tothe Board.

The company prepares monthly accounts, including a budget comparison, where all significant differences are analysed, forecasts are drawn up three times a year and an annual budget is prepared.

EuroMaint has no internal audit, instead the internal control is scrutinised by the company’s external auditors on an ongoing basis.

StatementIn accordance with The Swedish Corporate Governance Board, the Board issues no statement on how well the internal control is working.

Board report into internal control regardingfinancial reporting for the 2007 financial year

Stockholm, 29 February 2008

Ole Kjörrefjord Knut Hansen Henrik Joelsson Chairman of the board

Bo Jungner Wille Laurén

Anders Gustafsson Per Granström Bertil Hallén Employee representative Employee representative Employee representative

74

JonATHAn WALLIS1974.

MSc Economics, Stockholm Schoolof Economics.BSc Stockholm University.

Deputy Board member since 2007.

previous positions: Bain & Company

Current employment: Ratos, Investment Manager

Board meetings attended: 3 (3)

knUT HAnSEn1957.

MSc Engineering, Chalmers University of Technology.

Board member since 2007.

previous positions: Project engineer Consafe Engineering, Business Controller Electrolux, VD Electrolux Logistics and Nordwaggon AB

Current employment: Aditro AB, Head of Logistics


WILLE LAUrén 1943.

BSc Economics, Turku Schoolof Economics.


previous positions: CFO ITT AEG Fläktgruppen andVice President ABB Sweden

Current employment: Own business

other assignments: Moventas AB, Ostnor AB,Nobia AB and others


Bo JUnGnEr1960.

MSc Economics, Stockholm Schoolof Economics.


previous positions: Brummer & Partners and SE-banken/Enskilda Securities

Current employment: Ratos, Investment Director

other assignments: Board member Anticimex Holding AB and other Anticimex Groupcompanies, Atle AB, BTJ Group AB, Bisnode AB and Jötul AS


oLE kJÖrrEFJorD 1955.

MBA.

Chairman of the Board since 2007.

previous positions:McKinsey & Company, Stockholm/Los Angeles Norwegian Trade Council, New York

Current employment: None

other assignments: Board Chairman Hector Rail AB, Fleetech AB and Fleet 101 AB and board member Korsnäs AB



Board of Directors, Group

JonATHAn WALLIS knUT HAnSEn WILLE LAUrén Bo JUnGnEr oLE kJÖrrEFJorD

75

AnDErS GUSTAFSSon1946.


previous positions: AGESSA, SJ and RPL

Current employment: EuroMaint Rail AB Sourcing & Supply division, QMS manager in distribution

other assignments: Chairman of the SACO federation Transport and Railway (TJ) in EuroMaint


pETHEr WALLIn1956.

MSc Engineering.

Co-opted member.

previous positions: MD of OmniNova Vehicle AB and OmniNova Composite AB, Vice President Hydro Automotive Structures and Volvo Cars

Current employment: President & CEO, EuroMaint AB

other assignments:Board Chairman EuroMaint Rail AB, EuroMaint Industry AB and Railcare Group and co-opted Board member Stockholmståg AB


BErTIL HALLén1954.

Compulsory schooling, educated in the union.


previous positions: Eriksberg Shipyard and SJ

Current employment: EuroMaint Rail AB

other assignments: Chairman of SEKO Gothenburg and SEKO EuroMaint AB, Board member Göteborgs Hamn AB


pEr GrAnSTrÖM1964.

Toolmaker.


previous positions: Euromation ABVolvo Cars AB

Current employment: EuroMaint Industry AB

other assignments:Union club chairman IF Metall, Board member EuroMaint Industry AB


HEnrIk JoELSSon1969.

MSc Economics, Stockholm School of Economics. MBA, INSEAD France.


previous positions: Management consultant,Bain & Company

Current employment: Ratos, Senior Investment Manager

other assignments: Board member Anticimex Holding AB and other Anticimex Group companies, Bisnode AB and deputy memberCamfil AB



AnDErS GUSTAFSSon pETHEr WALLIn BErTIL HALLén pEr GrAnSTrÖM HEnrIk JoELSSon

76

BJÖrn SUnDén InGELA CArLSSon ÅkE FInn nICkLAS FALk pETHEr WALLIn CECILIA BEEr


Group Management

InGELA CArLSSon1962.

MScAdministrative Social StudiesVice President Communication

Employed since 2006.

previous positions:The Federation of Swedish Farmers (LRF), Riksbyggen,Swedish Prime Minister’s Office,(soc. dem.) secretariat European Parliament, Swedish Social Democratic Party, The Swedish Association of Local Authorities and Regions

other assignments: Board member EuroMaint Rail AB, EuroMaint Industry AB, Foundation of Mediastudies, Political commissions of trust in Tyresö Municipality

ÅkE FInn1959.

Executive Vice President & CFO, EuroMaint AB.


previous positions:AlphaHelix AB andABB Switchgear Egypt

other assignments: Board member EuroMaint Rail AB, EuroMaint Industry AB,EuroMaint Industry Inc. andEuroMaint SIA

nICkLAS FALk1973.

BSc Engineering.President, EuroMaint Industry AB


previous positions: Traintech Engineering AB

other assignments: Board ChairmanEuroMaint Industry Inc.

pETHEr WALLIn1956.

MSc Engineering. President and CEO, EuroMaint AB.


previous positions:MD of OmniNova Vehicle AB andOmniNova Composite AB,Vice President Hydro AutomotiveStructures and Volvo Cars

other assignments: Board Chairman EuroMaint Rail AB,EuroMaint Industry AB andRailcare Group, co-optedBoard member Stockholmståg AB

CECILIA BEEr1966.

BSc.Vice President Human Resources,EuroMaint AB.


previous positions:Business development managerManpower AB, HR manager Crane AB,Vice President HR Fortum Power & Heat AB

other assignments: Board Chairman EuroMaint Tracksupport AB, Board member EuroMaint Rail AB and EuroMaint Industry AB

BJÖrn SUnDén1944.

BSc.Executive Vice President, Strategy & Business Development, EuroMaint AB.


previous positions:Saab NygeAero, Företagsfinans,Linjeflyg and NitroNobel

other assignments: Board Chairman EuroMaint Rail AB, Board member EuroMaint Industry AB, EuroMaint Industry Inc. andEuroMaint SIA

CORPORATE GOVERNANCE

Subsidiary Company Management

EuroMaint Industry • Nicklas Falk, President• Kim Berghäll, Business Unit Manager, Engineering & Operational Reliability• Urban Ekmark, HR Business Partner, Quality & Environment Manager • Magnus Larsson, Business unit Manager Component Servicing• Bo Lennartsson, head of Training and Technical Development• Arne Molander, Sales & Marketing Manager• Patrik Sahlberg, Business Unit Manager Automation and Executive Vice President• Ulf Sandén, CFO & Executive Vice President

EuroMaint Rail • Pether Wallin, Acting President • Thomas Andersson, Quality & Environment Manager• Håkan Björk, Division Manager Engineering & Planning• Steven Davidsson, Division Manager Sourcing & Supply• Lena Gellerhed, HR Business Partner• Lennart Johansson, Division Manager Refurbishment & Component Overhaul • Ann-Charlotte Ågren, CFO & Executive Vice President• Lars Åkerlind, Division Manager Sales & Marketing

EuroMaint Tracksupport • Johan Jansson, President• Annette Gottfridsson, Purchasing Manager• Hans Helgstedt, QMS/Engineering• Gustav Jansson, Marketing Manager• Mats Nyström, Production Manager

PETHER WALLIN, ACTING PRESIDENT

NICKLAS FALK, PRESIDENT

JOHAN JANSSON, PRESIDENT

77

EuroMaint is a strong, leading maintenance partner that increases customer efficiency.

Creative technical system services, customised total solutions and partnerships contribute

to our customers’ competitiveness and success. EuroMaint’s companies are specialist

businesses that offer advanced maintenance services for the rail transport sector and the

engineering industry.

www.euromaint.se

EUROMAINT

STOCKHOLM

EuroMaint AB Landsvägen 50 ASE-172 63 Sundbyberg, Sweden

www.euromaint.se

EUROMAINT INDUSTRY

SKöVDEHeadquarters

EuroMaint Industry ABSE-541 87 Skövde, SwedenVisiting address: Kavelbrovägen 2

GäVLE

EuroMaint Industry ABLötängsgatanSE-801 31 Gävle, SwedenVisiting address: Lötängsgatan

HALLSBERG

EuroMaint Industry ABKraftvärmegatan 1SE-694 32 Hallsberg, SwedenVisiting address: Kraftvärmegatan 1

ÅMÅL

EuroMaint Industry ABPO Box 302SE-662 27 Åmål, SwedenVisiting address: Västra Bangatan 2

USA

DETROIT

EuroMaint Industry, Inc.50477 Pontiac TrailWixom, MI 48393USAVisiting address: 50477 Pontiac Trail

EUROMAINT RAIL

SOLNAHeadquarters

EuroMaint Rail ABPO Box 1555SE-171 29 Solna, SwedenVisiting address: Svetsarvägen 10

BORLäNGE

EuroMaint Rail ABBangårdsgatan 8SE-781 71 Borlänge, SwedenVisiting address: Bangårdsgatan 8

GäVLE

EuroMaint Rail ABLötängsgatanSE-803 01 Gävle, SwedenVisiting address: Lötängsgatan

GOTHENBURG

EuroMaint Rail ABPO Box 36 136SE-400 13 Göteborg, SwedenVisiting address: Minuthandelsgatan 15

HALLSBERG

EuroMaint Rail ABLokvägen 2SE-694 35 Hallsberg, SwedenVisiting address: Lokvägen 2

LINKöPING

EuroMaint Rail ABSödra Oscarsgatan 2SE-582 73 Linköping, SwedenVisiting address:Södra Oscarsgatan 2

LULEÅ

EuroMaint Rail ABKontorsgatan 37SE-973 42 Luleå, SwedenVisiting address: Kontorsgatan 37

EuroMaint Rail ABLokstallsvägen 2SE-972 45 Luleå, SwedenVisiting address: Lokstallsvägen 2

MALMö

EuroMaint Rail ABPO Box 124SE-201 21 Malmö, SwedenVisiting address: Carlsgatan, entrance 6

EuroMaint Rail ABPO Box 3503SE-200 22 Malmö, SwedenVisiting address:Södra Bulltoftavägen 51

NäSSJö

EuroMaint Rail ABPO Box 37SE-571 21 Nässjö, SwedenVisiting address: Gölgatan

STOCKHOLM

EuroMaint Rail ABVäxlarevägen 29SE-170 63 Solna, SwedenVisiting address: Växlarevägen 29

EuroMaint Rail ABBlackvretenSE-195 95 Rosersberg, SwedenVisiting address: Blackvreten workshop

EuroMaint Rail ABRysstorpsvägen 12SE-197 91 Bro, SwedenVisiting address: Rysstorpsvägen 12

EuroMaint Rail ABVaruvägen 34SE-125 30 Älvsjö, SwedenVisiting address: Varuvägen 34

SUNDSVALL

EuroMaint Rail ABParkgatan 5SE-852 29 Sundsvall, SwedenVisiting address: Parkgatan 5

VäNNäS

EuroMaint Rail ABVästra Järnvägsgatan 8SE-911 34 Vännäs, SwedenVisiting address:Västra Järnvägsgatan 8

ÅMÅL

EuroMaint Rail ABPO Box 302SE-662 27 Åmål, SwedenVisiting address: Västra Bangatan 2

öREBRO

EuroMaint Rail ABPO Box 1502SE-701 15 Örebro, SwedenVisiting address:Södra Grev Rosengatan 1

EuroMaint Rail ABPO Box 1403SE-701 14 Örebro, SwedenVisiting address:Södra Grev Rosengatan 1

LATVIA

JELGAVA

EuroMaint Rail SIARupniecibas iela 39Jelgava, LV-3008LatviaVisiting address:Rupniecibas iela 39

EUROMAINT TRACKSUPPORT

ÅMÅL

EuroMaint Tracksupport ABPO Box 83SE-662 22 Åmål, SwedenVisiting address: Västra Bangatan 2

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