EuroMaint Annual Report 2012

EuroMaint Annual Report 2012

EuroMaint Annual Report 2012

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De-icing facility at Euromaint's Svartön workshop, Luleå, Sweden.

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EuroMaint Annual Report 2012

Contents

Operational activities Group overview

4

The year in brief

6

The CEO's comments

7

Strategic focus

9

EuroMaint's offering

14

EuroMaint's Business Areas

19

The rail market

20

Five-year overview

25

Financial reporting 2012 Directors' report

26

The Group

28

The Parent Company

32

Notes

36

Auditors' report

60

The Board of Directors

61

Company management

62

This annual report has been prepared in Swedish­ and translated into English. In the event of any discrepancies­between the Swedish and the translation,­the former shall have precedence.

EuroMaint Annual Report 2012

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EuroMaint in two minutes

Refurbishment of a T46 locomotive underway at Euromaint's Notviken workshop, Luleå, Sweden. From the left: Kent Fredriksson and Tommy Sundberg.

Average no. of employees

Net turnover, MSEK

2,324

1,909

169

2,814 2,860

2,373 2,442 2,437 1,793

Operating earnings EBITA*, MSEK

2,510

2,489 122

137

133

81

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

2008

The figures for 2010 and 2011 are pro forma. For the basic data for the graphs and additional key ratios, please refer to the five-year overview on page 25. * Items affecting comparability.

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EuroMaint Annual Report 2012

2009

2010

2011

2012

Group Overview

Infrastructure providers Responsible for track and overhead lines

Infrastructure contractors Maintains track and lines for infrastructure providers

Passengers

Freight

Train operators for passenger traffic

Train operators for freight traffic as well as freight wagon owners

Euromaint supplies maintenance, reprocessing of components and the supply of spare parts for passenger­trains as well as freight wagons and locomotives.

Euromaint supplies maintenance­for the work machines used by the infrastructure­contractors.

Euromaint is Europe's largest­ independent supplier of maintenance­services for rolling­ stock. With long experience­ and unique expertise in train maintenance,­Euromaint is an attractive­partner to its customers­in creating available, reliable and safe trains.

EuroMaint's offering Euromaint has two main offerings: Maintenance of rolling stock that is used for passenger traffic and maintenance­ of rolling stock that is used for freight traffic. In addition, Euromaint has a niched offering directed at work machines used for maintaining rail infrastructure. Euromaint also provides the reprocessing of components as well as logistics services to train operators, owners of rolling stock and maintenance companies.

EuroMaint's customers Euromaint's customers include many of the players in the rail transport sector, such as train operators, freight wagon owners, infrastructure contractors and manufacturers of rolling stock. Major customers includes companies such as SJ, A-Train (Arlanda Express),

Green Cargo, AAE, VTG, Deutsche Bahn and Infranord.

EuroMaint's organisation Euromaint runs its operational activities­ through its subsidiary Euromaint­Rail. The operational activities­are split into four Business­Areas – Passenger, Freight, Work Machines and Components. Each business­area has its own expertise and experience, and has the task of creating­maximum profitability for its part of Euromaint's offering. Euromaint is based in Sweden and Germany and also has operational activities in Belgium, Latvia and the Netherlands.

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the year in brief

Euromaint Rail receives the assignment­to modernise eight 10 MVA train converters for Jernbaneverket Bane Energi, Norway. The modernisation means that Jernbaneverket's costs for maintaining the converters is reduced and that availability increases.

Euromaint Rail, in collaboration with DSB Vedligehold, receives the assignment­to maintain Öresundstågen via DSB Øresund A/S.

Euromaint Rail signs a contract with ÖstgötaTrafiken for the overhaul of two model X14 trains. Thanks to the maintenance­assignment, the trains will remain in service for many more years.

Robert Lehmann, COO for Euromaint­Rail's German company, is appointed as acting Business Area Manager­and MD for the German company.

SJ has Euromaint Rail refurbish 55 passenger­coaches at the Notviken workshop, Luleå, Sweden. The refurbishment­ runs from November 2012 until the first quarter of 2014, and will employ around 40 people.

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EuroMaint Annual Report 2012

2 0 1 2

Euromaint Rail signs a contract with Norwegian Flytoget AS on sourcing services­for suppliers who deliver and repair spare parts to Flytoget. The assignment means Euromaint is taking responsibility for everything from finding suppliers to carrying out procurements as well as signing and following up contracts.

Euromaint Rail signs a contract with Inlandsbanan to continue its cooperation­regarding consignment stock. Inlandsbanan also decides to expand the contract with reprocessing of components.

Euromaint Rail signs a contract with Alstom to take the main responsibility for the supply of materials for all 51 of the X10 train units operating commuter services in Stockholm.

The CEO's comments

The CEO's comments

Ove Bergkvist President and CEO.

Euromaint wants to be the best at what we do. This is a clearly stated ambition. During 2012, we have taken a number of steps in the right direction. The focus has been on change for improvement.­

In the last year, we have put a lot of effort into helping our existing customers­ increase their competitiveness by actively proposing improvements for their rolling stock. At the same time, we have pursued an extensive change and improvement process. During the first six months, the company management­ presented Euromaint's new focus. This describes where we are heading and how we will get there. The goal is not particularly modest; we always aim to be the best at everything we do. This is a process that we are counting on to give clear results in the coming years. Our results for 2012 were clearly affected by the weak economy. Turnover declined and amounted to SEK 2,489 million (SEK 2,860 ). Operating­profit (EBITA) amounted to SEK 51 million­ (SEK 102 ). This is not in line with our targets. There is still a lot left to do if we are to reach our profitability­target and our ambition to be the best, and

this demands that we all pull in the same direction. To increase insight into and understanding of our business and our ambition, I have spent a lot of my time visiting our workplaces in Sweden and Germany. There I have had many interesting­discussions about our ambitions­and what is lacking in order for us to be the best at what we do. These efforts are now being pursued­further­locally, and with great commitment.­During my visits to the operational­units, we extensively discussed­the importance of good cooperation for achieving change and improvement. Many of us have worked hard to tear down barriers and create the conditions for an open, honest and mutual dialogue. In this way, we have strengthened internal cooperation, and the backing for our four core values "cooperation", "responsibility", "contributive" and "reliable"­has been of great importance

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The CEO's comments

for the fact that we have raised the quality, improved key ratios and now get more trains back in traffic on time. 2012 has been a transitional year with no major procurements being carried­ out. Nevertheless, in my opinion, the work that has been done during the year have made us better prepared for future procurements than we have ever been before. Among other things, we have developed the maintenance concept,­which is creating the conditions­ for more planned maintenance, and we have come a long way in the process of moving from delivering trains in traffic to delivering punctuality. We are competitive­and ready for new markets. The year has offered challenges due to weak economic conditions. Among other things, financial worries are causing operators and rolling stock owners to review their maintenance strategies, which has direct consequences for us. In Germany, our largest customer

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EuroMaint Annual Report 2012

has decided to carry out all of its own maintenance.­As a result, we have been forced to reduce operational activities and we have also been affected by the weak market conditions in Sweden. In February 2013, we lost the maintenance assignment for SJ Norrlandståg. This is obviously a disappointment with consequences for both employees and the company. It is also clear evidence that our market is in a state of flux, in which we are meeting increasingly stiff competition. Nevertheless, as with the loss of Stockholmspendeln in 2010, we are now making a thorough assessment in order to strengthen ourselves further. We already know that we need to be more flexible and reorganise our resources more quickly when we have more, or less, to do. In this way, we can be an even more competitive company.­The longterm goal, of course, is to win back the maintenance provider assignments for Norrlandståg and Stockholmspendeln.

As we enter 2013, we are doing so with the ambitions of developing our existing contracts in order to create added value for our customers, winning­new contracts and continuing to develop positively. We can see that customers that have left us choose to return. This is not because we are the cheapest, because we aren't. Instead, it's because we are highly competent. We have an ambition that is shared by our customers­– the trains will go out on time. I would like to finish by thanking all employees for their fantastic efforts during the year. Together, we have come a good way along the road towards our goal – to always be the best at what we do.

Solna, Sweden, February 2013 Ove Bergkvist President and CEO

Strategic focus

Strategic focus During 2012, Euromaint has continued on the journey with a focused improvement process to come closer to the company's­ vision – to be Europe's leading­ independent supplier of maintenance­services to all parts of the rail transport sector.

During 2012, the new strategic direction for Euromaint was introduced. It involves several aspects. Firstly, it concentrates­ the operational activities on train maintenance, instead of also offering maintenance­services to industry as was previously­the case. Secondly, an extensive change process was initiated to develop and strengthen the operational activities within train maintenance. This change process has been the common factor during 2012. The goals are best summed up by: Euromaint always aims to be the best at everything it does.

Keeping our customer promises

Angela Hedlund and Thomas Åberg, welders at the Notviken workshop, Luleå, Sweden.

Through the change process, Euromaint wants to build for the future and create a stable platform to win important business opportunities that will be offered for tender in the next few years. A precondition for this is that Euromaint keeps the company's customer promises. Euromaint will always offer high quality at an attractive cost, creating efficiency, availability and reliability for customers; in addition Euromaint will always keep its promises and be proactive. This can be summed up as quality, delivery and innovation – three customer promises

that permeate the efforts to develop Euromaint’s operational activities during 2012. A few concrete examples of these efforts are given below. Deviation management Euromaint has strengthened systems­ and working methods for the way delivery quality deviations are managed.­ This concerns both being better at identifying deviations as well as understanding the underlying causes and taking actions so the deviations will not recur. This is done by means of so-called root cause analyses, in which the company's­experienced personnel actively search for the underlying cause as to why the fault occurred, so that it will not happen again. These analyses can prevent­rolling stock from repeatedly having to enter the workshop for repair of a recurrent fault. The greatest part of the responsibility for deviation management rests on the respective workshop and it is followed up by Euromaint's Quality Manager. Purpose: increased quality. New maintenance planning Euromaint has introduced a new way of planning the maintenance of the

Customer promises

Vision

Quality For Euromaint, quality and safety are closely linked. Maintenance actions must be performed correctly and according to the maintenance instructions.

Euromaint will be Europe's leading independent­supplier of maintenance services for all parts of the rail transport sector.

Delivery Delivering the trains from the workshops on time is central for Euromaint. Euromaint will help its customers keep their promises about the punctuality of train transport.

Mission Euromaint will contribute to making the train the natural means of transport for meeting the environmental challenges of tomorrow.

Innovation Euromaint will be proactive and make proposals, for instance, on how the availability of customers' rolling stock could be even better.

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Strategic focus

motor coach fleets maintained by the company.­The first part of the new planning controls­how frequently each piece of rolling stock will be taken into the workshop. With the new planning,­ rolling stock comes in for corrective­ maintenance­twice between each occasion­for preventive maintenance. This has made it significantly easier to plan the maintenance. The second part is the day-to-day planning of maintenance, when the rolling stock is on the way to, or at, the workshop. Currently, weekly plans are drawn up defining the rolling stock that will be taken into the workshop and when it will arrive. Every morning, a detailed plan is prepared for the next day. This states the maintenance actions that are to be carried­out, and where the rolling stock will be located in the workshop at any given time. Material is ordered in advance so it is in place on time. Purpose: increased quality and more reliable delivery. Joint daily management Joint daily control is an internal form of cooperation aimed at strengthening­ the dialogue and cooperation between different­operational activities in Euromaint­linked to a specific type of rolling stock and assignment. Joint daily control is carried out several times a week with participants from the workshops, the central planning function,

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EuroMaint Annual Report 2012

purchasing, rolling stock engineering and material supply. Here, all questions­ affecting the delivery capability are addressed. Any deviations and problems are indentified with a clear division of responsibilities for remedying these. Purpose: more reliable delivery. REMOTE VEHICLE MONITORING/RVM The use of RVM is one example of Euromaint's­efforts to develop new solutions­that strengthen the company's offering to its customers. RVM consists of a piece of hardware that is connected to the train's computer which makes it possible to obtain real time information­ remotely, including fault indications and the train's position. This makes it easier to plan maintenance, which in turn improves efficiency for customers as their rolling stock spends less time in the workshop. It is also an important­ first step towards a more conditionbased maintenance. That is to say, preventive­maintenance is carried out when it is needed, based on the rolling stock's condition. Purpose: to create added value for our customers through innovation.

Improved key ratios During 2012, Euromaint's work with quality and delivery improvements has had positive effects on the key ratios used for following up the company's maintenance commitments. One

Daily control at the Notviken workshop, Luleå, Sweden. From the left: Stig-Anders Lindgren, Daniel Eriksson and Rolf Forssell.

Strategic focus

example is that the rolling stock availability for one type of rolling stock has improved from an average of approx. 5.5 vehicles out of operation per day during 2011 to approx. 3.5 in 2012. For the same type of rolling stock, the damage points – a measure of the extent and age of the damage in the rolling stock fleet – has been reduced by approx. 30 percent compared with 2011. For another type of rolling stock, the backlog, that is to say,

the number of hours by which the preventive maintenance is behind schedule, has been reduced by approx. 25 percent.

pany on the road to the vision of being Europe's leading independent supplier of maintenance­services for rolling stock.

EuroMaint's focus areas

– Stability To be a stable partner and run a stable business with high quality and delivery reliability.

Euromaint has defined four focus areas that characterise a company that can lead the market's development in the manner Euromaint is trying to attain. These focus areas guides the com-

Development 2012: Euromaint has implemented most of the improvement actions that increased both quality and delivery capability. – Profitability To create profitable growth, good control­of costs and strong cash flow. Gives returns to the owner and room to develop the operational activities through investments. Development 2012: Profitability has deteriorated­as a result of reduced turnover on the German market. Nevertheless,­the company maintains a satisfactory gross margin. Further savings­were initiated at the end of the year. – Image To strengthen the market's confidence in Euromaint by standing for quality, delivery and innovation. Development 2012: Euromaint's improvement efforts during 2012 have been based on customer promises

Euromaint Sweden is maintaining Danish bogies Every day, hundreds of thousands of Copenhagen's residents take the underground to work and school. They all take it for granted that the trains will work as they should and depart on time. For Danish Metro Service, which operates the underground, it is the be-all and end-all that all components on the underground trains are maintained according to plan. Euromaint has responsibility for maintaining the bogies. This is carried out at the workshop in Örebro, Sweden. Long experience means the quality of the work is high and the bogies are delivered at the appointed time. Euromaint is one part in the chain of several suppliers who are performing actions on behalf of Metro Service, which for the fourth year in a row in 2012 has been picked out as the world's best driverless underground. For this reason it is important to keep to the time frames if the entire overhaul is to function. "Great professionalism, specialisation in bogies and a competitive price is why we chose Euromaint," says Lars Ahm, Supervisor Rolling Stock for Metro Service. Challenge: Every day, Copenhagen's underground has hundreds of thousands of passengers.­To achieve satisfied passengers, the trains must function as expected. Customer value: High availability, reliability and punctual rolling stock. Euromaint's solution: As one part of the maintenance chain, Euromaint provides efficient reprocessing of components on the rolling stock's bogie frames.

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Strategic focus

Lars Ejnestrand inspects a contact strip in connection with the inspection of locomotives at the Svartön workshop, Luleå, Sweden.

in the areas of quality, delivery and innovation.­The year's efforts have been an important­step in the process of strengthening the company's market image in the long term. – Growth To grow in the Nordics as well as in the rest of Europe, organically as well as through acquisitions. Development 2012: Turnover has declined during 2012. The reason is primarily a reduced demand for freight wagon maintenance in Germany, as a result of weak European market conditions.

Profitability goal Euromaint aims for growth with profitability,­where profitability is given priority. Meeting the company's profitability target will both strengthen the

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EuroMaint Annual Report 2012

company's position in the sector and contribute to a good return for the company's­owner. Euromaint's overall profitability target is to reach an annual EBITA margin of ten percent in the long term. Euromaint's opportunities for growth in the next three-year period are in Sweden and the other Nordics for the Business Areas Passenger, Components and Work Machines. Euromaint also has great potential for winning new business­ for maintaining passenger rolling stock in Germany. A large number of EMU/ DMU trains (Electric Multiple Unit and Diesel Multiple Unit) will be overhauled in the coming years, and this is an area where Euromaint has a strong offering. For the Business Area Freight, Euromaint's ambition is to increase its market share in Europe, for the maintenance­of both freight wagons and locomotives.  

Strategic focus

Euromaint's core values In order to develop a stable and profitable company, it is important for all employees to know what is expected of them. One important building block is the company's core values. These place the focus on increased quality, reliability and delivery reliability with the end goal being increased profitability and growth. Shared core values, an active leadership, well-functioning processes and routines through open, honest and mutual dialogue will unite those things Euromaint wants to be and stand for. Cooperation Understanding the whole and how all parts contribute to the development of the whole. The whole is more important than the parts. Responsibility Taking responsibility for your own and your colleagues' work, ensuring that there are the right conditions to make it possible to do a good job as well as correct faults when they arise. Contributing Seeing that one’s own tasks contribute to the whole and contributing to continuous improvement. Reliable Always keeping promises and delivering as expected, both internally and externally.

Challenging demands every day Traffic safety and customer benefit, generally speaking, characterise every work procedure for the majority of Euromaint's personnel. In addition to this, there are technical requirements specific to the assignment for different types of trains. This places great demands on personnel to challenge themselves actively to ensure that they have the right competence and authorisation to be a resource in ­Euromaint's customer assignments. At Euromaint, there are currently approx. 400 different rolling stock authorisations. Ultimately this concerns carrying out different types of maintenance work on trains, in a safe way and with the right quality, regardless of whether the work is on coaches and locomotives for passengers or for freight traffic. Holding due authorisation to carry out authorisation-classed work is a precondition­for value creation, both for the individual and for Euromaint as a whole. There is a wide range between the basic authorisation "railyard safety" to "s-authorisation" (static converters). The first gives authorisation to work in the workshops. The latter is a cutting-edge authorisation held by some 50 employees. This also places high requirements on the company to have an effective and attractive training programme in accordance with the requirements that are placed on the operational activities. Euromaint has a well-established system for dealing with training needs. Training is carried out mainly in-house, but external resources are also engaged when required.

Hans Johansson and Anders Carlqvist turn a wheel set in the underfloor lathe at Euromaint's Notviken workshop, Luleå, Sweden.

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Euromaint's Offering

An expert maintenance partner Euromaint has a comprehensive­ offering of maintenance services­for rolling stock. With high quality­and high safety as the watchwords for the work, Euromaint­wants to be the natural­partner for creating available, reliable and safe fleets of rolling stock – regardless of whether the customer operates passenger or freight traffic.

Euromaint is Europe's largest independent supplier of maintenance services­for rolling stock. The company has a complete maintenance offering for its customers – from light maintenance to heavy maintenance such as overhauls, as well as the reprocessing of components and supply of spare parts. Strengthening the customers' competitiveness Euromaint wants to create the conditions­for increased travel by guaranteeing­the availability, reliability and safety of the customers' rolling stock fleets. This strengthens the customers' competiveness. With Euromaint as their maintenance partner, customers can benefit from the company's unique experience, industrial approach and use of modern technology. They receive a customised maintenance process that is followed up according to clearly defined key ratios. As an independent supplier, Euromaint­is independent from the train operators and train manufacturers. In other words, there are no loyalties other than those to the customer. Everything Euromaint does is focused on giving the customer the best possible maintenance solution.

Two main offerings Euromaint's offering can be divided into two main parts: maintenance of rolling stock that is used for passenger traffic and maintenance of rolling stock that is used for freight traffic. In addition to this, the company has an attractive maintenance offering that is directed at maintenance vehicles for rail infrastructure, such as track and overhead lines. Euromaint also provides the reprocessing of components as well as logistics services to train operators, owners of rolling stock and maintenance companies.

Passenger traffic Euromaint offers a complete maintenance concept for train operators running passenger traffic. In this area, Euromaint­usually works based on a turnkey commitment, in which the payment model is based on the customers' rolling stock being available for traffic. This involves Euromaint taking the responsibility for the maintenance and receiving payment based on the number of kilometres the trains run. Euromaint and the customer work together to increase efficiency. When the customers are successful, Euromaint is successful.

Long-term planning

Spare parts

Rolling stock in traffic

• Locations/depots • Maintenance windows • Availability requirements • Quality requirements

Workshop

Euromaint takes full responsibility for the maintenance of rolling stock for passenger traffic. Customised maintenance solutions, adapted to the customer's traffic, are combined with an efficient spare parts and component supply system to increase the availability of the customer's rolling stock fleet.

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EuroMaint Annual Report 2012

• Maintenance Documentation • Dimensioned actions • Expertise • Physical conditions

Components

Euromaint's Offering

Safety first

optimised maintenance solutions Euromaint creates optimised maintenance solutions for its customers. The company's long experience of train maintenance means our customers can be assured that they have a supplier that understands their needs and customises its offering to support their operational activities. This is based on the customer's­traffic planning. Maintenance is carried out during the times of day when passengers travel less, and is adapted to the quality requirements set for the condition of the rolling stock. Every train has a maintenance plan that must be followed. The plan states when and how inspections and preventative maintenance will be carried out. Based on this, Euromaint develops a customised maintenance solution for the customer. Factors that play a role include where the rolling stock's operating pauses are planned in and where

Every day, hundreds of thousands of people travel by train in Sweden – people who rely on the trains they travel in being safe. For Euromaint, safety goes without saying. Supplying high quality maintenance is about supplying maintenance that results in the customers' rolling stock complying with all statutory requirements for traffic safety. However, this does not satisfy Euromaint; instead, it aims for continuous improvements in order to further­ increase safety. A few clear examples can be found in Euromaint’s work with the SJ 2000 trains. Critical elements of the maintenance work are carried out in demarcated areas, where entry is restricted to just the maintenance engineers. In the area, mobile phones are banned and talking with the engineers during the time they are inside is not permitted. Traceable, registered torque wrenches are used to tighten the bolts connected to the axletrees.­This gives certified proof that every bolt has been tightened­to exactly the correct torque.

the workshops are located, when and how long the trains can be available­ for maintenance, and other specific requirements set by the customer. Requirements­may concern aspects such as the level of comfort for passengers.­ The customer­may request maintenance patrols at strategic end stations which carry out comfort related actions, for example ensuring all the toilets on a train are working properly. Based on the analyses of the main-

tenance carried out, and the pattern of faults occurring in the rolling stock, Euromaint develops the maintenance plan and adjusts it, based on the rolling stock's real operating environment, in order to improve efficiency and reliability. Industrialised process To optimise the flow of rolling stock through the workshop, Euromaint works according to an industrialised process, which is under continuous development,

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Euromaint's Offering

Remote Vehicle Monitoring Remote Vehicle Monitoring − RVM, means the maintenance can be more efficient thanks to real time monitoring of the rolling stock's condition. When a fault arises in the electrical systems, Euromaint receives immediate information and can act immediately. RVM also means that planned maintenance can be prepared and systematic faults can be detected earlier. As a result, more trips can be run with the existing train fleet.

Kundportal

4 EuroMaint Euromaint makes a diagnosis, plans in the train in dialogue with the customer and prepares actions.

5 Customer portal (From 2013) The information on the train's condition is displayed in a customer portal, where you can: • see utilisation ratio • see improvement proposals • hold dialogue on rolling stock • obtain positional information to facilitate traffic planning • see key ratios

3 The data is transformed into information and sent to Euromaint for analysis and processing.

6 EuroMaint's workshops When the train comes in, the work is prepared and the action time can be shortened.

1 The train computer receives signals from the electronic systems on the train and generates fault codes GSM

2

in order to provide the customer with increased efficiency. The trains are taken in to the workshop according to carefully formulated plans. This is normally done during the trains' planned operational pauses. At this time, all the material and tools are in place for the planned action and the personnel are ready to go. The principal aim is to ensure the customers' rolling stock is idle in the workshop for as short a time as possible. To increase availability, Euromaint can divide up more extensive actions over more than one occasion. A large preventive­action which would normally take two days is split up into smaller steps and carried out during several planned visits to the workshop. In this way, the actions can be carried out

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EuroMaint Annual Report 2012

Via RVM the data is forwarded.

during the ordinary operational pauses, which increases the time the train can be used in traffic. Of course, any splitting up of the maintenance actions is done without sacrificing traffic safety. Corrective maintenance, to remedy faults and deficiencies, is usually carried out during planned visits to the workshop or in connection with preventive maintenance. When prompt action is needed in the field, Euromaint's mobile service teams can be called out on short notice. Remote monitoring of trains Euromaint works continuously to create more value for its customers. The use of Remote Vehicle Monitoring (RVM) is one example of these efforts. A piece of hardware is connected to the train's

computer and this makes it possible­ for Euromaint to obtain real time information­about fault indications and the train's position. Euromaint's experienced maintenance personnel interpret the fault codes and draw conclusions about the actions that will be required to correct the fault the next time the train arrives at the workshop. This creates­ major benefits for the customers. Since the actions can be planned and the material ordered in advance, maintenance­is more efficient and the time the train spends in the workshop is reduced. The system also increases the customers' opportunities for planning their traffic, since they obtain advance information on when a train will need to be taken into the workshop. With RVM,

Euromaint's Offering

Remote vehicle monitoring for efficient maintenance In Bergslagen, there are many commuters. Tåg i Bergslagen has been set up to increase the opportunities for commuting. When Tåg i Bergslagen, together with Tågkompaniet, which operates the trains, were planning to increase traffic using the existing rolling stock, they turned for help to Euromaint, which increased the efficiency of the rolling stock maintenance­thanks to remote vehicle monitoring. Remote vehicle monitoring makes it possible to identify where, when and how frequently a fault occurs while the train is in operation and acts as a complement to traditional preventative and corrective maintenance. By collecting status information­and fault indication data even before the train arrives at the workshop, valuable information is obtained about the rolling stock. Planning and preparation are optimised, giving more efficient maintenance. On the second day after the system had been brought into use on the rolling stock, a deviation was detected that could have caused a stoppage in traffic. The rolling stock was immediately directed to the workshop for action. "I am reasonably convinced that we avoided a stop on the line with everything that would mean, thanks to this system. A stoppage involves problems for passengers, evacuations, recovery and so on, so I am very happy the fault was detected in time", says Håkan Jarl, Traffic Manager at Tågkompaniet. Challenge: Tåg i Bergslagen is increasing the opportunities for commuting to work, study, duty or leisure, in the entire region. To achieve satisfied passengers, the trains must function as they should and run on time. Customer value: Efficient and optimised train maintenance and punctual rolling stock. Euromaint's solution: Installation of a system for remote vehicle monitoring, RVM, making it possible to identify where, when and how frequently faults occur.

the onboard personnel do not need to spend as much time checking systems on the train, because it is now done automatically. This frees up time that can be devoted to providing increased service to the passengers. Efficient component and material­supply Euromaint offers a complete material­ supply service to its customers, including sourcing, stock-keeping, intelligent­logistics solutions and spare parts. Thanks to an efficient purchasing organisation which has established relationships with all of the important manufacturers and subcontractors, the company can create cost benefits when purchasing spare parts; savings that benefit the customers. The company also offers reprocessing of high-value components such as wheels, bogies and traction motors. An advanced logistics system ensures the right components are in the right place at the right time before every maintenance action. The offering in Germany The offering to customers operating passenger traffic in the German market is rather different to that in Sweden. In Germany, Euromaint has traditionally­ concentrated on overhauls­and refurbish­ment­of passenger coaches. With Germany as a base, these services­ have also been offered to customers in neighbouring countries. During the

coming years, the number of overhauls­ of so-called EMU and DMU trains (Electric­Multiple Unit and Diesel Multiple­Unit) will increase. For the German market, Euromaint also offers roll-out services, where the company, on assignment from the train manufacturers, completes and fine tunes passenger trains prior to their delivery to customers. This is an operational activity that is growing in importance. Work is also currently underway to develop the maintenance offering for passenger traffic, in a similar way to how Euromaint works in Sweden.

Freight traffic

A unique position Euromaint holds a unique position­ in the European market for the maintenance­of rolling stock for freight traffic. The company has a network of workshops covering large areas of Germany­as well as a presence in important ports in the Benelux region. Combined with the Swedish workshops, this means that Euromaint can follow its customers – the large international wagon owners – from Luleå in the north to Oberhausen in the south. The benefit for customers is that they can reduce the number of maintenance suppliers, resulting in more efficient administrative processes and follow up.

Euromaint has a comprehensive range of maintenance services for operators running freight traffic. In contrast to the way things are for passenger traffic, where preventive maintenance is a central component, the maintenance of freight wagons has a low proportion of preventive actions. The majority of maintenance consists of unplanned, corrective­actions such as replacing brake blocks or wheels. In addition, a maintenance plan is followed that, in general terms, involves the freight wagons going through major overhauls every four years. Some wagon owners and operators like their wagons to be inspected regularly, for example on an annual basis, to reduce corrective maintenance.

Expert at overhauls and reprocessing of components Euromaint has a strong position in the market for the overhaul and refurbishment of freight wagons. The operational­ activities are based at the company's workshops in Germany, which are focused on this type of work. At the Kaiserslautern­workshop, Euromaint also offers reprocessing of high-value components such as couplers and draught gear. In Sweden, Euromaint carries­out overhauls at its workshops in Landskrona and Luleå. The company has expertise and experience,­regardless of whether the overhaul affects wagons for transporting coal and iron ore, tanker carriers or container­carriers. This is combined with

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Euromaint's Offering

Comprehensive maintenance for steel transports Euromaint is responsible for maintaining some 300 wagons hired out by the Swiss company­ AAE to its industrial customer, SSAB. The wagons in SSAB's "steel train" annually freight about two million tons of steel from Luleå to the steelworks in Borlänge, in the face of considerable­climatic challenges presented by a great deal of snow and severe cold. Euromaint provides a customised maintenance solution focusing on the availability of the wagons. Efficiency, flexibility and reliability are important bywords for the customer. With almost 30 years' experience of the transport challenges posed by cold climates, Euromaint is contributing to AAE's development of technology and maintenance solutions for transport. Among other things, Euromaint has put forward a concept involving preventive wheel replacements in order to increase wagon availability during the otherwise critical winter period. "Euromaint frequently provides more technical support than we requested. Something we are very pleased with", says Roland Rubischung, Operations Manager Scandinavia for AAE. Challenge: Freighting steel from Luleå to Borlänge in the face of climatic challenges including a great deal of snow and severe cold. Customer value: Undisrupted production and available rolling stock. Euromaint's solution: Provision of a customised solution including preventive wheel replacements­in order to increase availability of the wagons.

an attractive offering to customers who need to refurbish their freight wagons. For example, this could concern a freight wagon for transporting steel that needs to be adapted for transporting timber instead. Focus on mobile maintenance Mobile maintenance has become an increasingly important part of the total maintenance solution for freight rolling stock. This involves remedying faults and damage directly on site as far as possible. The reason is simple; it increases availability. In the case of damage, the operator who is renting the wagon to transport his freight wants the wagon to be unavailable for as short a time as possible. If the maintenance supplier can offer service on site, the stoppage will be significantly shorter than if the wagon has to be transported to a workshop. Mobile maintenance is of particular importance in northern

18

EuroMaint Annual Report 2012

Sweden, where it can be a long way to the nearest workshop. Euromaint has developed several different­mobile maintenance solutions for supplying help alongside the track, or on site with the customer in ports and at terminals. This includes light, equipped vans for simpler actions as well as heavy trucks with equipment for handling more complex damage. Buffers, springs and wheels can be replaced today directly at the scene of the damage. With a portable lathe, even wheels can be turned in the field. Moreover, Euromaint has a mobile concept for testing brakes, which means the rolling stock no longer needs to be transported to the workshop for these tests. Maintenance of freight locomotives­ Euromaint offers maintenance of freight locomotives for the Swedish market, giving the company a unique offering

for freight compared to the competition,­ which maintains either locomotives or freight wagons. Euromaint has a complete­range of maintenance services­for corrective maintenance and overhauls­as well as the reprocessing of components. The company also carries­out the refurbishment of freight locomotives.­One example is the four model T46 terminal locomotives that are being refurbished on behalf of LKAB. Refurbishments are extensive assignments that set stringent requirements for expertise and experience, since they concern, in principle, rebuilding a locomotive from the ground up.

Euromaint's Business Areas

Luleå

Four business areas

Vännäs

Sundsvall

Euromaint conducts operations­ in four business areas. Each business area has its own unique expertise and experience, and has the task of creating maximum­profitability for its part of Euromaint's offering.

Gävle

Borlänge

Västerås Örebro Stockholm Hallsberg Falköping Linköping

Åmål

Göteborg Jelgava Landskrona Malmö

Angermünde Wustermark

Rotterdam Wolfsburg Antwerpen

Euromaint's presence Workshop Service station Only mobile maintenance

Delitsch Leipzig

Duisburg

Kaiserslautern Oberhausen

Ingolstadt

Passengers Number of employees at 31 December: 1,036 This business area offers a complete maintenance concept to train operators running passenger traffic – everything from light maintenance to more extensive maintenance actions. In Business Area Passenger, Euromaint normally operates based on a turnkey commitment, in which the payment model is based on the customers' rolling stock being available for traffic. This involves Euromaint taking the responsibility for the maintenance and receiving payment based on the number of kilometres the trains run.

Freight/Germany Number of employees at 31 December: 968 This business area provides a range of maintenance services for freight rolling stock. The offering covers planned and corrective maintenance (both in the workshop and mobile) as well as overhauls, refurbishments and reprocessing of components. The planned maintenance is based on framework agreements that define the actions to be carried out in accordance with a maintenance plan. Corrective maintenance is carried out either against tender or on a running account basis. Major and extensive actions, such as overhauls and refurbishments, also follow established maintenance plans.

Work Machines Number of employees at 31 December: 37 Offers a complete maintenance programme directed at machines and tools that are used for maintenance­and construction of the infrastructure, such as track and overhead lines. The business model usually consists of framework agreements that contain fixed actions, which are usually called off by the customer, as well as service packages based on the machines' running hours. Corrective maintenance­and field service are carried out either against tender or on a running account basis.

Components Number of employees at 31 December: 300 Offers complete material supply to all types of customers in the rail transport industry; everything from the reprocessing of components to sourcing, stock-keeping, intelligent logistics solutions and the supply of spare parts. Business Area Components has a large quantity of its own business concerning the reprocessing of components for train operators and other maintenance companies. It is also an internal resource serving the other business areas with reprocessing of components and spare parts. As a supplier of logistics, the Business Area has revenues from agreements with all types of customers in the rail traffic industry, both in Sweden as well as in Norway and Denmark. The agreements can cover everything from parts of the supply chain to the complete responsibility for supply. EuroMaint Annual Report 2012

19

The rail market

The rail market Rail is a central part of the European­infrastructure for the transport of passengers and freight. In a time when the environmental­burden, globalisation,­efficient use of energy and growth are questions high on the agenda, rail is an issue of great national interest. This is also a shared interest for the EU as a solution to many of the challenges facing Europe as it tries to provide for sustainable development in the future.

The rail markets in the EU's member states are undergoing change. The previously­state-controlled national rail systems are being opened up, or will be opened up, to competition in accordance­with the EU's principles­on free movement and free competition.­ This is a process that has reached different­stages in different countries. There are also differences between passenger­traffic, which in several aspects is still in its infancy, and freight traffic, which is generally fully deregulated.

Driving forces and conditions in Europe As a means of transport, many aspects of rail reflect Europe's general development­– a development involving a number of challenges. Globalisation The world has shrunk as globalisation has brought countries and companies­ closer to each other. Globalisation requires efficient transport systems for it to function and this is influencing rail transport.

Environmental challenges Climate changes are a consequence of an increasing number of people wanting their share of a limited quantity of resources. Limiting these changes requires transports with the lowest possible environmental burden. To achieve efficient transport, coordination also has a central part to play in reducing the consumption of natural resources. Rail has an important part to play in solving the environmental challenges of the future. Liberalisation and deregulation Increased globalisation and increased coordination have brought about liberalisation­within many areas of society. From a European transport perspective, freight traffic has been a forerunner, with deregulation starting some 20 years ago. The deregulation of

Euromaint's customers

Euromaint's competitors

Euromaint's customers consist of the rail market players that need to maintain­train units, coaches, wagons and locomotives.­The customer groups primarily include operators and rolling stock owners within passenger and freight traffic. Here is a selection:

Depending on geographical market and segment, Euromaint faces different types of competition. Many competitors are small companies that have chosen to supply a specific area or a specific service. Some are larger, with a more complete offering such as the major rolling stock suppliers. One type of competition are the operators with their own workshops. This is particularly common in Germany,­where many operators choose to handle parts of the maintenance themselves and engage Euromaint­ for other parts. In this way, Euromaint has customers­ that are also included in its list of competitors.­ Examples­of customers:

• AAE • Arriva • A-train • DB • Green Cargo • Infranord • SJ • TWA • Veolia • VTG • Wascosa

20

Population growth and demography The world is also becoming a little larger in terms of the world's population­ growth. Above all, in Europe we are seeing concentrations of population around larger cities and regions, where efficient local and regional transport is a precondition for continued growth.

EuroMaint Annual Report 2012

• Alstom • Alstom LHB • Bombardier • DB • Mantena • Villmann • Operators with their own maintenance

The rail market

passenger traffic has begun in several European countries but is far from fully completed. Euromaint in Europe Euromaint is a Swedish company with an international offering and operational activities in five European countries. Operational activities are represented by more than 25 workshops and mobile service units in Belgium, Latvia, the Netherlands, Sweden and Germany. The offering is pan-European, while the majority of the services are delivered in Sweden and Germany.

The market for passenger traffic Passenger traffic is largely a national question. In the EU, each member state has its own history, and questions­concerning passenger traffic aim above all to satisfy the national interests. Obviously, it is also important that the national rail

systems are attractive to passengers coming from other countries, but the real cross-border passenger traffic is still small. One particular reason for this is the technical differences between countries. The forces driving the development of passenger traffic are the same at the national level as for the whole of Europe. Sweden Swedish passenger traffic by rail has been deregulated in several steps, starting in the early 1990s. When the Swedish state split up what was then Statens Järnvägar into Banverket, with responsibility for the railway track, and SJ, which would operate the trains, it opened up an opportunity for new players to enter the Swedish rail system. The background to this was the fact that the state wanted to get away from the subsidies SJ was receiving to cover operating deficits and to counteract the closure of unprofitable lines. At the

EuroMaint Annual Report 2012

21

The rail market

same time, public transport authorities were given responsibility for the traffic on regional lines. The idea behind the changes was that a railway sector with free competition would have better preconditions for achieving efficiency and profitability. Today, passenger traffic is completely deregulated thanks to a relatively fast process during the last three to four years. The final step started in 2009, when the Swedish rail network was opened up for traffic at the weekends. In the following year, all passenger traffic in Sweden was opened up for competition. Due to the long application process, and the time when the rail paths were allocated, it was only at the turn of the year 2011/2012 that Sweden finally had a fully deregulated market for passenger traffic by rail. Market structure Trafikverket (the Swedish Transport Administration) is the government agency responsible for operating and maintaining the rail track and associated infrastructure. It is also Trafikverket that allocates the train paths, that is to say, the right to traffic the track over a given route, at a given time; something for which they charge. The fundamental purchaser of rail traffic is a so-called public transport authority, which has the task of satisfying­ the needs for travel in a given region. In Sweden, there are some twenty public transport authorities with responsibility­ for planning and ordering local and regional traffic in their respective­ counties.­Some counties have combined to coordinate traffic, for example Norrtåg, which covers the traffic in four counties in total. Local and regional traffic is rarely profitable­and requires financial support.­ The Public Transport Administrations procure the traffic from operators that run the train routes for a fixed period of time and with a contractual payment. In addition­to the traffic ordered, the public transport authority can also allow the operator to run trains on completely commercial terms. Germany Germany has a well-developed and efficient­railway network and the country is dependent on well-functioning passenger­traffic. Today, the German passenger­traffic is deregulated and new operators are winning an increasing number of procurements. The first step in deregulation was the so-called railway reform that in 1994 brought

22

EuroMaint Annual Report 2012

together the state railways in the former East and West Germany into one state railway company, Deutsche Bahn (DB). In a second step, the operational activities­were split up into a number of subsidiaries;­this included separating transportation units from infrastructure­ units. In connection with this, the responsibility for shorter rail routes was also transferred to the regional level. Market structure Local and regional traffic today is fully competitive. Local traffic is administered­ at the municipal level. Several­munici­ palities­have joined together in various types of local transport associations­ (Verkehrsverbund). In total in Germany, there are hundreds of local transport associations that, to varying extents, procure traffic on a competitive basis. Germany's 16 states are responsible,­ independently of each other, for passenger­traffic in their region. The states are of different sizes and they more or less have their own solution for supplying passenger traffic. Longer rail routes are still dominated by DB, without any real competition. In Germany, there are also a number of government agencies that exercise market supervision – a consequence of the fact that the rail infrastructure is administered by a company in the DB Group. Some of the most important areas they monitor are the allocation of train paths and pricing.

THE MAINTENANCE MARKET The majority of passenger traffic is procured;­that is to say, there is a purchaser – the public transport authority or equivalent – of the rail traffic. When operators participate in a procurement, they must guarantee that they have a competent partner to assist them in supplying well-maintained trains, in a safe and reliable manner, as well as in strengthening the customer's competitiveness and increasing the train's popularity­as a means of transport. As a result of Euromaint's independence from manufacturers and others, the company can offer its services to several players during a procurement process.­An important part of Euromaint's­work is creating close relationships with the international players that are increasingly participating in Swedish procurements. Despite its strong position, Euromaint still has great opportunities for growth. The lengths of agreements for procured­traffic are usually long and, in Sweden, normally between five and ten years. In Germany, the length of the agreements is longer and may extend up to 15 years. Shorter agreement periods are encountered on both markets. Because the periods of the agreements are long, several years can go by without any major business on the market. This means that winning or losing a procurement process has a far-reaching effect on Euromaint's operational activities.

The rail market

On the German market, it is usual for the smaller train operators to manage both regular maintenance and overhauls in-house. On the other hand, the larger operators rarely have the capacity to manage all of their rolling stock maintenance.­For these players, Euromaint is a very interesting maintenance supplier. At the same time, Euromaint is also an interesting supplier­for the maintenance smaller players cannot handle in-house. In Germany, there is a change underway in the market for the maintenance­of passenger traffic. In connection­with deregulation 10-15 years ago, many older trains were replaced by new modern motor units (EMU/DMU). These new trains will now need overhauling. Together with the opportunities­ that are created when new operators enter the market with their particular maintenance needs, this is creating great opportunities for Euromaint­

to grow in the market. Therefore, Euromaint­is working actively to develop its offering to the market for maintaining rolling stock for passenger traffic.

The market for freight traffic The EU has long worked to create the conditions for a well-functioning panEuropean rail freight market. Apart from the driving forces that generally apply for rail, freight traffic is greatly affected by the prevailing market conditions. Sweden Sweden is a country with long distances­and it is dependent on wellfunctioning rail-borne freight traffic. Moreover, Sweden is an export nation, including steel and forestry products that are mainly transported by rail. During the 1990s, rail freight traffic was deregulated.­Cross-border freight traffics­were opened up first of all, with

domestic freight traffic following a few years later. In connection with the conversion of SJ into a state owned public company in 2001, the state separated the freight traffic business and organised it as the state-owned joint stock company, Green Cargo. The market's players Green Cargo is still the dominating player in Sweden, but there are also a number of competing operators. Their main offering is based on operating freight locomotives, which they either own themselves or rent from a rolling stock owner. There are a large number of companies in the market specialising in renting out freight wagons. The wagons are available in many different versions adapted to the specific freight to be shipped. During recent years, the market has seen a clear trend in which several large international wagon owners have entered the market.

Overhaul of locomotives at the Svartön workshop, Luleå, Sweden.

EuroMaint Annual Report 2012

23

The rail market

Dick Fredriksson inspects a locomotive at the Svartön workshop, Luleå, Sweden.

Germany With its central location in the middle of Europe, bordering on nine other countries, Germany is a transit market for the pan-European distribution of freight. Germany is also one of the world's largest exporting countries. The rail transport network is well developed. When the German state split up its rail operations, DB Cargo was founded to manage freight traffic. After a number of reorganisations and changes of name, operational activities are organised today in DB Schenker Rail. The market's players DB Schenker Rail is Europe's leading transport company and naturally dominates­the German market. With German's position as a rail nation, and the fact that large parts of Europe's freight traffic pass through the country, it is natural to talk about the German and the European markets as synonyms. Today, there are 15 dominating private wagon owners in Europe. All of them have their main operations in Germany.­ Together, they control more than twothirds of the European rail freight market. THE MAINTENANCE MARKET Freight traffic in Europe has been deregulated for some 20 years and in all respects it is a more mature market than that for passenger traffic. On both the Swedish and the German market, leasing companies rent out locomotives to operators. The leasing company either rents out its locomotives including complete maintenance, for which they seek partnership with a maintainer such as Euromaint, or the leasing company only takes responsibility for the heavy maintenance and leaves the

operator to provide for the other maintenance. In this case, Euromaint can obtain two contractual partners for the maintenance of the same locomotive; one for the light maintenance and one for the heavy maintenance. There are also operators that own their own locomotives. On the freight wagon side, it has become increasingly common during recent years for major international wagon owners to rent out freight wagons in Sweden. The wagons are either rented out including maintenance, with the wagon owner being responsible for procuring­the maintenance, or the wagons are rented out to an operator who has the responsibility for establishing­relationships with a maintenance company. Thanks to Euromaint's­ unique pan-European offering, the company­is an attractive partner for these international players.

On the German market, Euromaint is the largest independent maintenance supplier for freight wagons. As Europe's largest transit market, Germany is the main market for major international wagon owners, and the leading wagon owners are customers of Euromaint. One of Euromaint's customers in Germany­is DB Schenker Rail. Euromaint­carries out part of the maintenance that, for various reasons, DB does not carry out in-house. During recent years, DB has greatly reduced its number of freight wagons and changed its maintenance strategies. This has happened partly as a reaction to the European recession and partly because a large number of the wagons they previously­provided are no longer in demand by the market. For Euromaint,­ this has resulted in a substantial reduction­in turnover.

Euromaint's competitive advantages Euromaint has a unique market position. The company is Europe's largest independent­supplier of maintenance services for the European train market. The company has long experience of train maintenance and Euromaint's employees possess­specialist expertise that is difficult to find anywhere else on the market. Euromaint's ambition is to be a complete maintenance partner, something for which the company is increasingly recognised. Thanks to its unique expertise,­ Euromaint­can offer customised solutions that many of its competitors cannot manage, giving the operator the possibility to focus on train operation and passengers.

24

EuroMaint Annual Report 2012

Five-year overview

Five-year overview SEK million Income Statement Net turnover Operating expenses Other income/expenses Income from divestments/associated companies EBITDA Depreciation, amortisation, and impairment EBITA Depreciation, amortisation, and impairment of intangible assets EBIT Financial income Financial expenses EBT Tax Profit/loss from discontinued operations Profit/loss for the year/period Income attributable to parent company's owners

Note

2)

Items affecting comparability Operating EBITA STATEMENT OF FINANCIAL POSITION Goodwill Other non-current assets Tangible non-current assets Financial assets, non-interest-bearing Total non-current assets Inventories Receivables, non-interest-bearing Cash, bank and other current investments Total current assets TOTAL ASSETS Equity attributable to parent company's owners Provisions, interest-bearing Provisions, non-interest-bearing Liabilities, interest-bearing Liabilities, non-interest-bearing Financial liabilities, other TOTAL EQUITY AND LIABILITIES KEY FIGURES EBITA margin (%) EBT margin (%) Return on equity (%) Return on capital employed (%) Equity ratio (%) Interest-bearing net debt (SEK million) Debt/equity ratio (multiple) Average no. of employees

3)

2012

2011 1)

2010 1)

2010

2009

2008

2,489 -2,420 33 – 102 -51 51 – 51 2 -48 5 -18 – -12 -12

2,860 -2,727 28 -2 159 -57 102 -2 100 3 -51 52 43 -118 -23 -23

2,814 -2,835 63 – 41 -56 -15 -4 -19 2 -63 -79 33 -30 -77 -77

3,532 -3,602 63 – -7 -59 -67 -4 -71 2 -63 -132 37 – -95 -95

2,510 -2,352 17 – 175 -42 133 -4 128 1 -59 70 -13 – 57 57

2,324 -2,165 – – 159 -38 122 -4 118 3 -61 60 -11 – 49 49

-30 81

-35 137

-184 169

– -67

– 133

– 122

710 8 164 0 882 432 459 – 892 1,774 594 11 32 577 548 11 1,774

712 9 185 24 930 454 690 – 1,144 2,075 737 19 47 628 632 11 2,075

– – – – – – – – – – – – – – – – –

770 18 212 37 1,037 535 798 – 1,333 2,370 668 17 83 724 865 13 2,370

719 23 202 10 954 375 776 – 1,151 2,105 516 15 22 756 786 10 2,105

692 14 208 11 925 264 675 33 973 1,897 447 19 32 746 644 8 1,897

2.1 0.2 -1.8 4.1 33 588 1.0 2,437

3.6 1.8 – – 36 647 0.9 2,442

-0.5 -2.8 – – – – – 2,373

-1.9 -3.7 -16.0 -5.1 28 741 1.1 2,713

5.3 2.8 11.9 10.4 24 772 1.5 1,909

5.2 2.6 11.5 9.8 24 732 1.7 1,793

Note The profits for 2010 and 2011 are pro forma taking into account the discontinued operation (Business Area Refurbishment) and sale of business (Euromaint Industry). 2) Excluding interest on shareholder borrowings. 3) As of 31 December 2012, equity includes shareholder borrowings of SEK 503 million (449). 1)

EuroMaint Annual Report 2012

25

Directors' report

Directors' report The Board of Directors and the CEO of Euromaint Gruppen AB, company registration number 556731-5402, with registered­ office in Stockholm, hereby submit the Annual Report for operational­activities during the financial year 2012. Owners Euromaint Gruppen AB is a wholly-owned subsidiary of EMaint AB,­company registration number 556731-5378, with registered office in Stockholm, which is owned by Ratos AB. Euromaint Gruppen AB acquired 100% of Euromaint AB on 1 September 2007 from the previous owner AB Swedcarrier. Operations and organisation Euromaint strengthens its customers' competitiveness by services and products that increase the availability, reliability and service life of production equipment in the rail transport sector. Through operational activities in Euromaint Rail, Euromaint can be found throughout Sweden, from Luleå in the north to Malmö in the south, in Jelgava in Latvia, and since 2010 in ­Germany and the Netherlands.­The head office is in Solna. The business environment Rail is a central part of the European infrastructure for the transport of passengers and freight. It is a common interest for the EU as a solution to many of the challenges facing Europe as it tries to provide for sustainable development. National rail systems are being opened up in accordance with the EU's principles on free movement and free competition. This is a process that has reached different stages in different countries.­Passenger traffic is still largely a national question, while the EU has long worked to create the conditions for a well-functioning pan-European rail freight market. A deregulated market benefits Euromaint in its role as an independent player for maintenance, without links to train operators or manufacturers. During 2012, market conditions have affected Euromaint Rail's business, not least in Germany, where among other things the company's largest customer, DB, has reviewed its maintenance strategy and chosen to carry out its maintenance internally. However, Euromaint Rail has not lost shares of the total markets. Various means of potential growth World class operational activities in the domestic markets are a necessary foundation for expansion. For the company to be the leading independent player in train maintenance, stability, profitability,­a good image and growth are required. Euromaint's independent position is an important factor for creating an attractive image as a partner. The business model makes it clear that, as an independent partner, the company shares the same goals as the customer when it comes to optimising­the activities for increased profitability, and that the high level of quality in the domestic market can be transferred­ to new markets. The work to internationalise operational activities­is continuing. Employees The average number of employees in the Group was 2,437 (2,761).

26

EuroMaint Annual Report 2012

Environmental impact Common to all of EuroMaint Rail's production areas is that their main environmental impact is on air and water and, to a certain extent, soil. Its activities are classified as environmentally­hazardous, and require reporting to the environ­mental authorities. The environmental authorities decide whether the degree of environmental hazard requires licensing or reporting. If EuroMaint Rail does not receive the environmental licences required for production, this can limit the company's ability to fulfil its commitments to its customers. If there is a short delay in licences being issued, it is possible to switch workshop activities in order to limit economic damage. EuroMaint Rail's units are obliged to submit reports in accordance with the Ordinance concerning Environmentally-Hazardous Activities and the Protection of Public Health (1998:899), with the exception of its activities­ in Örebro, which are subject to licence. Notifiable activities­ carried­out by EuroMaint Rail include vehicle cleaning, painting, de-icing, the handling of diesel fuel etc. The licence requirement in Örebro is necessitated by the large workshop area, as well as extensive use of chemicals in connection with activities such as vehicle cleaning and painting. Risks and uncertainty factors The Group's companies have a customer structure in which a few customers account for a large proportion of the Group's turnover. The loss of one major customer, or a significant customer­contract, would result in significant readjustments for an adjustment of the companies' operational activities to match the reduced turnover. During a transitional period, the profitability of companies would be reduced in any such scenario. However, as customer relationships often include several­different­contract territories with varying contract lengths, this risk is distributed over time. The Group and the industry in general are affected by the weather conditions, where severe winters with restricted passability­for rail traffic could affect costs. Otherwise, the company is affected by the general trends in demand and market conditions­in each sector. Multi-year review and key ratios For key ratios see "Five-year overview" on page 25. Financial instruments and risk management Through its operations, Euromaint is exposed to financial risks, including the effect of changes in prices on the loan and capital markets, exchange rates and interest rates. The Group's overall risk management focuses on the unpredictability­of the financial­markets and aims at minimising potentially unfavourable­effects on the Group's financial results. Financial­ operations­in the Group are centralised in Euromaint Rail AB's finance function.­The finance function acts as an internal bank and is responsible­for the sourcing of capital, cash management­and financial risk management. The operations are regulated through the Group's Financial Regulations.

Directors' report

Important financial risks that are managed are: Market risk The risk that the value of, or future cash flows from, a financial instrument will vary due to changes in market prices. Currency risk and interest rate risk constitute market risks. – Currency risk Currency risk refers to the risk of exchange rate fluctuations negatively affecting the Group's income statement, balance sheet and/or cash flows. Currency risks exist, both in the form of transaction risks and translation risks. – Interest rate risk Interest rate risk refers to the risk of a negative effect on the Group's financial results resulting from changes in market interest rates. Other risk – Credit risk Credit risk is the risk generated by the fact that the credit rating of the investor's counterparty can change in an unpredictable manner, thereby resulting in a loss for the Group. – Liquidity and refinancing risk Refinancing risks refer to the risk that the refinancing of mature loans will become difficult or costly and that Euromaint­ will thereby have difficulty fulfilling its payment obligations. Liquidity risk refers to the risk of difficulty in fulfilling the obligations­associated with financial liabilities. For more information about financial risks, see note 22. Events of material significance in the financial year During 2012, market conditions have affected Euromaint's business, not least in Germany, where among other things the company's largest customer, DB, has reviewed its maintenance strategy and chosen to carry out its maintenance internally. The declining volumes have led to the initiation of cost savings­and an overhaul of the organisation and, among other things, the German business has transferred its head office from Mannheim­to existing premises in Delitzsch. During the autumn, a new CEO was appointed for the German company. The Swedish operational activities are not as dependent on the freight business and they have been able to continue­ the work on developing the maintenance concept and strengthening quality, as well as helping to make our existing customers­more competitive by actively proposing improvements for their rolling stock. 2012 has been a transitional year in which no major procurements have been made. Nevertheless,­the Swedish business concluded a contract for the maintenance of Öresundstågen, in collaboration with DSB Vedligehold, as well as a contract with Västtrafik for maintenance­of their twenty-two model X 61 train units. Future development Euromaint Rail has a strong position in the Swedish train maintenance market. Through the acquisition of RSM in 2010, Euromaint Rail considerably strengthened its operational activities directed at freight traffic and established itself in the increasingly deregulated European train market. Changes in maintenance strategies among the German freight wagons mean that Euromaint needs to adjust its German operational activities and take a closer look at the possibility of increasing its share of the maintenance of passenger coaches. Euromaint Rail is already the leading independent player for train main-

tenance in Europe and, thanks to its position, Euromaint has good opportunities to take advantage of the ongoing deregulation of the train operator market in Europe. Euromaint has identified a number of areas that must be fulfilled­in order to attract current and potential customers; these areas constitute the Group's customer promises. The focus areas are: – Stability – be a stable partner and operate a stable business – Profitability – create profitable growth, good control of costs and strong cash flow – Image – strengthen the market's confidence by standing for quality, delivery and innovation – Growth – grow in the Nordics as well as in the rest of Europe, organically and through acquisitions Based on these areas, Euromaint wants to further strengthen its position on the market. The Parent Company Euromaint Gruppen AB carries out internal management­ services­for other companies in the Group, as well as managing­Group-wide finance agreements with banks. Apart from that, there are no external activities. Turnover was SEK 248 thousand (1,787) and operating result SEK -23 thousand (-83,815). The profit/loss for the year amounted to SEK -62,145 thousand (-139,783). Consolidated turnover and results Turnover Total earnings amounted to SEK 2,524 million (3,229). Operating result Operating profit amounted to SEK 51 million (64), giving an operating margin of 2% (2%). Financial items Net financial income amounted to SEK -100 million (-90). Cash flow Cash flow for the period after investments amounted to SEK 5 million (-40). Equity/assets ratio The equity/assets ratio amounted to 33% (36%). The equity/ assets ratio is measured as equity and shareholder borrowings in relation to the balance sheet total. Appropriation of profits in the parent company Proposed appropriation of profits The parent company's profit/loss for the year was SEK:

-62,144,677

Available to the Annual General Meeting, SEK: Profit brought forward Profit/loss for the year Total

245,569,352 -62,144,677 183,424,675

The Board proposes that the accumulated profit be appropriated­as follows: Distribution to shareholders Carry forward Total

11,792,000 171,632,675 183,424,675

The income statement and balance sheet will be presented for adoption at the Annual General Meeting on 20 March 2013.

EuroMaint Annual Report 2012

27

The Group

Consolidated income statement SEK thousands Operating income Net turnover Other operating income Total operating income

Note

2012

2011

2, 25, 29 3

2,489,372 34,245 2,523,617

3,188,073 40,726 3,228,799

2 4, 19 5 6 7

-819,683 -543,955 -1,056,840 -6,967 -44,258 – – -879 -2,472,582

-1,129,943 -636,197 -1,281,977 -41,182 -54,191 -2,770 -6,415 -12,331 -3,165,007

51,035

63,793

2,058 -102,243 -100,185

3,342 -93,072 -89,730

-49,150

-25,937

9

-17,578 -66,728

41,246 15,309

28

–

-118,492

Profit/loss for the year

-66,728

-103,183

Parent company shareholders' share of the profit/loss for the year Earnings per share, undiluted

-66,728 -667

-103,183 -1,032

2012 -66,728

2011 -103,183

-6,053 -1,038 45 – -7,046

-2,099 2,078 – – -21

-73,774

-103,204

Operating expenses Cost of goods and services sold Other external expenses Personnel costs Amortisation Depreciation Result from participations in associates Results from sales of subsidiaries Other operating expenses Total operating expenses

3

Operating result Financial income Financial expenses Net financial items

8 2, 8

Profit before tax Tax Profit or loss for the year from continuing operations Income from discontinued operations

Consolidated statement of comprehensive income SEK thousands Profit/loss for the year Other comprehensive income Change to translation reserve for the year Change in hedging reserve for the year Currency adjustment Tax attributable to other comprehensive income Other comprehensive income for the year Total comprehensive income for the year attributable to parent company shareholders

28

EuroMaint Annual Report 2012

The Group

Consolidated statement of financial position SEK thousands Assets Non-current assets Intangible non-current assets Property, plant and equipment Participations in associated companies Deferred tax assets Total non-current assets Current assets Inventories Accounts receivable Receivables from Group companies Tax assets Other receivables Completed, not invoiced Prepaid expenses/accrued income Cash and cash equivalents Total current assets

Note

2012

2011

6 7, 20 11 9

717,493 164,458 215 – 882,166

720,850 185,371 482 23,585 930,288

13 14, 22, 24 14 14 14, 24 14, 26 14 21

432,319 350,793 16,000 6,270 28,734 3,200 54,488 – 891,804

454,336 369,000 183,434 15,966 46,040 19,577 56,075 – 1,144,428

1,773,970

2,074,716

Total assets Liabilities and equity Equity Share capital Other capital contribution Reserves Profit brought forward including profit/loss for the year Equity attributable to parent company's shareholders

100 432,316 -31,607

100 432,286 -24,516

-309,763 91,046

-119,651 288,219

Non-current liabilities Non-current liabilities Shareholder borrowings Provisions for pensions and similar obligations Other provisions Deferred tax liabilities Other non-current liabilities, interest-bearing Other non-current liabilities, not interest-bearing Total non-current liabilities

15, 20, 22, 24 2, 15, 22, 24 12 16 9 15 24

401,800 503,198 11,112 27,239 5,113 11,611 15,438 975,511

444,880 448,669 18,734 33,339 13,850 13,276 11,246 983,994

17 2, 17, 24 17, 24 15, 17, 24 17, 24 17, 27 17

8,252 239,347 – 163,215 31,101 62,039 203,459 707,413 1,682,924

33,590 254,514 – 170,127 42,876 70,509 230,887 802,503 1,786,497

1,773,970

2,074,716

251,466 117,397

289,986 84,751

Current liabilities Advance payment from customers Accounts payable Liabilities to Group companies Liabilities to credit institutions, interest-bearing Other current liabilities Invoiced, not completed Accrued expenses/deferred income Total current liabilities Total liabilities Total equity and liabilities Pledged assets and contingent liabilities Pledged assets, floating charges Contingent liabilities

18 18

EuroMaint Annual Report 2012

29

The Group

Consolidated statement of changes in equity

Share capital

Other capital contribution

100

432,257

-24,495

-46,746

361,116

– – – –

29 – – –

– – – –

-29 183,434 -48,245 -104,882

0 183,434 -48,245 -104,882

– – –

– – –

– -21 -21

-103,183 – -103,183

-103,183 -21 -103,204

Closing equity 31 December 2011

100

432,286

-24,516

-119,651

288,219

Opening equity 1 January 2011

100

432,286

-24,516

-119,651

288,219

Transfer from unrestricted funds to restricted Group contributions received/given Current tax attributable to Group contributions Dividend

– – – –

30 – – –

– – – –

-30 16,000 -4,208 -135,191

0 16,000 -4,208 -135,191

Profit/loss for the year Other comprehensive income for the year Comprehensive income for the year

– – –

– – –

– -7,091 -7,091

-66,728 45 -66,683

-66,728 -7,046 -73,774

100

432,316

-31,607

-309,763

91,046

SEK thousands Note Equity attributable to parent company's shareholders Opening equity 1 January 2011 Transfer from unrestricted funds to restricted Group contributions received/given Current tax attributable to Group contributions Change to accounting principles

1

Profit/loss for the year Other comprehensive income for the year Comprehensive income for the year

Closing equity 31 December 2011 Change in translation reserve * Opening translation reserve 1 January 2011 Change for the year from the translation of companies Closing translation reserve 31 December 2011

-22,417 -2,099 -24,516

Opening translation reserve 1 January 2012 Change for the year from the translation of companies Closing translation reserve 31 December 2012

-24,516 -6,053 -30,569

Change in hedging reserve Opening hedging reserve 1 January 2011 Change for the year Closing hedging reserve 31 December 2011

-2,078 2,078 0

Opening hedging reserve 1 January 2012 Change for the year Closing hedging reserve 31 December 2012

0 -1,038 -1,038

Exchange rate differences when translating financial statements for foreign operations.

*

The company applies hedge accounting for currency and interest derivatives. See Note 1 for more information.

30

Retained earnings including profit or loss for Reserves the year

EuroMaint Annual Report 2012

Total equity

The Group

Consolidated statement of cash flows SEK thousands Operating activities Profit/loss after financial items in continuing operations Profit/loss after financial items in discontinued operations Depreciation/amortisation Impairment of assets Other items not affecting liquidity Income tax paid Cash flow from operating activities before changes in working capital

Note

21

Changes in working capital Increase (-)/Decrease (+) in stock Increase (-)/Decrease (+) in accounts receivable Increase (-)/Decrease (+) in other current receivables Increase (+)/Decrease (-) in accounts payable Increase (+)/Decrease (-) in other current liabilities Cash flow from operating activities Investing activities Acquisition of intangible and tangible non-current assets Disposal of intangible and tangible non-current assets Acquisition of subsidiary/segment, net liquidity impact Disposal of subsidiaries Investment, financial assets Cash flow from investing activities Cash flow from operating activities

6, 7

21 21

Financing activities Shareholder contributions received Borrowings Amortisation loans Dividend paid Group contribution received Cash flow from financing activities Change in cash and cash equivalents for the period Cash and cash equivalents at beginning of the period Cash and cash equivalents at year end

21

2012

2011

-49,150 – 51,225 – 41,572 3,051

-25,937 -118,492 61,703 33,670 42,117 2,985

46,698

-3,954

22,017 18,207 35,270 -15,167 -73,011 34,014

21,017 -64,143 122,682 -57,469 -119,597 -101,464

-28,711

-43,904

–

–

– – – -28,711 5,303

– 105,014 – 61,110 -40,354

– – -53,546 -135,191 183,434 -5,303

– 147,927 61,110 -40,354 142,310 40,354

– – –

– – –

EuroMaint Annual Report 2012

31

The Parent Company

Parent company income statement Note

2012

2011

25

248 248

1,787 1,787

2 4 5 6 7 10

– -1 -270 – – – -271

– -158 -1,771 – – -83,673 -85,602

-23

-83,815

122 -84,398 -84,276

5 -74,251 -74,246

-84,299

-158,061

22,154 -62,145

18,278 -139,783

SEK thousands Profit/loss for the year

2012 -62,145

2011 -139,783

Other comprehensive income Change in hedging reserve for the year Other comprehensive income for the year Comprehensive income for the year

-1,038 – -63,183

– 0 -139,783

SEK thousands Operating income Net turnover Total operating income Operating expenses Cost of goods and services sold Other external expenses Personnel costs Amortisation Depreciation Impairment of shares in subsidiaries Total operating expenses Operating result Financial income Financial expenses Net financial items

8 8

Profit before tax Tax Profit/loss for the year

9

Parent company statement of comprehensive income

32

EuroMaint Annual Report 2012

The Parent Company

Parent company balance sheet SEK thousands Assets Non-current assets Intangible assets Property plant and equipment Participations in Group companies Deferred tax assets Non-current receivable Group companies Total non-current assets Current assets Inventories Accounts receivable Receivables from Group companies Tax assets Prepaid expenses/accrued income Cash and cash equivalents Total current assets

Note

2012

2011

6 7, 20 10 9

– – 935,200 293 146,530 1,082,023

– – 935,200 – 166,077 1,101,277

13 14, 24 14, 24 14 14 21

– – 302,288 – – 5 302,293

– – 400,073 – 26 65 400,164

1,384,316

1,501,441

100 -1,038

100 –

– 245,570 -62,145 182,487

– 458,364 -139,783 318,681

15, 20, 22, 24 2, 15, 22, 24 15

401,800 503,198 –

444,880 448,669 –

24 24

– 12,577 917,575

58,550 11,246 963,345

17 2, 17, 24 17, 24 15 17 17

– 19 239,130 45,000 21 84 284,254 1,201,829

– 26 219,267 – 14 108 219,415 1,182,760

1,384,316

1,501,441

251,466 –

289,986 –

Total assets Liabilities and equity Equity Restricted equity Share capital Reserves Non-restricted equity Fair value reserve Retained earnings Profit/loss for the year Total equity Non-current liabilities Non-current interest-bearing liabilities Shareholder borrowings Other non-current liabilities, interest-bearing Other non-current liabilities, not interest-bearing Group Other Total non-current liabilities Current liabilities Advance payment from customers Accounts payable Liabilities to Group companies Liabilities to credit institutions, interest-bearing Other current liabilities Accrued expenses/deferred income Total current liabilities Total liabilities Total equity and liabilities Pledged assets and contingent liabilities Pledged assets Contingent liabilities

18 18

EuroMaint Annual Report 2012

33

The Parent Company

Parent company's changes in equity Restricted equity Share capital

Hedging reserve

100

–

0

532,960

-104,904

428,156

Appropriation of profits Shareholder contributions Group contributions received Current tax attributable to Group contributions

– – – –

– – – –

– – – –

-104,904 -104,882 183,434 -48,244

104,904 – – –

– -104,882 183,434 -48,244

Profit/loss for the year Other comprehensive income for the year Comprehensive income for the year

– – –

– – –

– – 0

– – –

-139,783 – -139,783

-139,783 – -139,783

Closing equity 31 December 2011

100

–

0

458,364

-139,783

318,681

Opening equity 1 January 2012

100

–

0

458,364

-139,783

318,681

Appropriation of profits Dividend Group contributions received Current tax attributable to Group contributions

– – – –

– – – –

– – – –

-139,783 -135,191 84,368 -22,188

139,783 – – –

0 -135,191 84,368 -22,188

Profit/loss for the year Other comprehensive income for the year Comprehensive income for the year

– – –

– – –

– -1,038 –

– – –

-62,145 – -62,145

-62,145 -1,038 -63,183

100

–

-1,038

245,570

-62,145

182,487

SEK thousands Equity Opening equity 1 January 2011

Closing equity 31 December 2012

The number of shares in the parent company amounts to 100,000 (100,000). The par value in the parent company is 1.

34

Non-restricted equity Retained Profit/loss for earnings the year

Fair value reserve

Change in fair value reserve Opening fair value reserve 1 January 2011 Change for the year Closing fair value reserve 31 December 2011

– – –

Opening fair value reserve 1 January 2012 Change for the year Closing fair value reserve 31 December 2012

– – –

Change in hedging reserve Opening hedging reserve 1 January 2011 Change for the year Closing hedging reserve 31 December 2011

– – –

Opening hedging reserve 1 January 2012 Change for the year Closing hedging reserve 31 December 2012

– -1,038 -1,038

EuroMaint Annual Report 2012

Total equity

The Parent Company

Parent company cash flow statement SEK thousands Operating activities Profit/loss after financial items Amortisation/impairment Other items not affecting liquidity Income tax paid Cash flow from operating activities before changes in working capital

Note

2012

2011

10 21

-84,299 – 54,517 –

-158,061 83,673 43,462 -105

-29,782

-31,031

– -1,260 -7 19,825 -11,224

– 63,975 -25 -418 32,501

6, 7

–

–

21

– – -11,224

– – 32,501

– – -37,084 -135,191 – 183,434 11,159

– 100,000 -100,000 -104,882 – 71,965 -32,917

-65 65 0

-416 481 65

Changes in working capital Increase (-)/Decrease (+) in accounts receivable Increase (-)/Decrease (+) in other current receivables Increase (+)/Decrease (-) in accounts payable Increase (+)/Decrease (-) in other current liabilities Cash flow from operating activities Investing activities Acquisition of intangible and tangible non-current assets Acquisition of subsidiary/area, net liquidity impact Cash flow from investing activities Cash flow from operating activities Financing activities Shareholder contributions received Borrowings Amortisation loans Dividend paid Group contribution paid Group contribution received Cash flow from financing activities Change in cash and cash equivalents for the period Cash and cash equivalents at beginning of the period Cash and cash equivalents at year end

21

EuroMaint Annual Report 2012

35

Notes

Note 1. Accounting and valuation principles This Annual Report and the Consolidated Financial Statements were adopted by the Board of Directors and the Chief Executive Officer on 2 March 2013, and are proposed for final adoption by the Annual General Meeting on 20 March 2013. Ratos formed the Euromaint Gruppen AB on 25 April 2007. Euromaint Gruppen AB acquired Euromaint AB on 1 September 2007. The parent company is a registered limited liability company domiciled in Stockholm. The address for the head office is Svetsarvägen 10, SE-171 41 Solna, Sweden. The parent­company in the largest group to which Euromaint Gruppen AB, 556731-5402 is a subsidiary,­and in which the Consolidated Financial Statements are drawn up, is Ratos AB, 556008-3585, Stockholm. The most important accounting principles applied in the preparation of these consolidated­financial statements are listed below and have been applied consistently to all periods unless otherwise stated. The Group's accounting principles have also been consistently applied by Group companies. Statement of compliance with applicable regulations Euromaint Gruppen's Consolidated Financial Statements have been prepared in accordance with the Swedish Annual Accounts Act and International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and interpretation statements from the International Financial Reporting Interpretations Committee (IFRIC), as they both have been adopted by the EU. The Consolidated Financial Statements are also prepared according to the Swedish Financial Reporting Board's Recommendation RFR 1. (Supplementary Accounting Rules for Groups). The accounting principles relating to the parent company corres­ pond to the principles for the Group except as shown below under the heading The Parent Company. The parent company's Financial Statement is prepared in accordance with the Swedish Financial Reporting Board Recommendation RFR 2 (Accounting for legal entities) and the Swedish Annual Accounts Act. Basis of preparation of the statements The accounts are based on historical acquisition costs, apart from certain financial instruments. For further information on this point, please consult the section Financial Instruments, below. Important estimates and assumptions for accounting purposes The preparation of statements in accordance with IFRS requires the use of a number­ of estimates and assumptions about the future; these are made by the company management.­The estimates for accounting purposes that result will, by definition, rarely correspond to the actual results. Estimates and assumptions are reviewed regularly. Changes to estimates are reported in the period in which the change is made if the change only affects this period, or in the period in which the change is made and future periods if the change affects both the current period and future periods. Uncertainty in estimates Some assumptions about the future and certain estimates and assumptions at the balance­sheet date have special significance for the valuation of assets and liabilities­ in the balance sheet. Discussed below are the areas where the risk of changes in value during the following year is greatest due to the need to change assumptions or estimates.­ Testing the impairment requirement for goodwill Goodwill arising from business combinations represents the difference between the acquisition cost and the fair value of the acquired identifiable net assets. The impairment requirement for goodwill is tested once a year. The recoverable amount (i.e. the higher of value in use and fair value less selling expenses) is normally established based on the value in use, derived using discounted cash flow calculations. This in turn requires the expected future cash flow from the cash-generating unit to be estimated­and an appropriate discount rate is established for calculating the cash flow's present value. Pension obligations The value of pension obligations for defined benefit pension plans is based on actuarial calculations using assumptions regarding discount rates, expected returns on plan assets, future salary increases, inflation and demographic conditions. Obsolescence of stock In value terms, stock consists mainly of items acquired according to an estimated maintenance plan for different train models. Since these cycles are long-term (5-12 years), there is an uncertainty in the assessment. The company has an obligation to stock items (spare parts) over a long period for individual train models, which have a very long economic and technical life. Percentage of completion accounting method With the percentage of completion accounting method there is uncertainty, as the work runs for several years, in predicting the final financial outcome of a major refurbishment­project. Reconciliation is therefore made during the period from the beginning of the project until completion, but because this consumes both time and money, this is only performed a certain number of times during the year. Provision for warranties for work carried out For so-called 'availability work', faults in a provided service or a non-functioning

36

EuroMaint Annual Report 2012

product­are corrected during a short period after the service has been provided. The cost of the work or replacement of a non-functioning product is included in the agreed business deal. For refurbishment work, there is a need for warranties to the customer. These warranties­run for two to five years. Since each refurbishment job is a unique part of the company's operations and cannot be compared with any other refurbishment job, the cost for warranties is difficult to assess. The company tries to estimate the warranty costs that may arise, and make provisions for these, but some uncertainty remains over the final outcome. Changed accounting principles Changes in IFRS, with application from 2012, have not had a significant effect on the Consolidated Financial Statements. New IFRS that have not yet been applied A number of new and changed IFRS only come into force in the next financial year and have not been applied in advance when preparing these financial statements. – IFRS 10. New standard for Consolidated Financial Statements. The new standard does not contain any changes compared to the currently valid IAS 27 regarding the consolidation of acquisitions and disposals. IFRS 10 contains a model that is to be used when determining whether or not there is control for all investments that a company holds. – IFRS 12 Disclosure of interests in other entities. The disclosure requirements concerning­subsidiaries etc. have been changed. – IFRS 13 Fair value measurement. A new uniform standard for measuring fair value as well as improved disclosure requirements. – Changes in IAS 19 Employee benefits: "The corridor method" for recognition of actuarial­gains and losses on pension provisions will no longer apply from 2013. This means the Group will reverse the difference (SEK 11,695) directly in equity in January 2013. – Changes in IAS 1 Presentation of Financial Statements, Classification of line items that will be presented as part of other comprehensive income. – IAS 28 Investments in associates and joint ventures. The change concerns how recognition­is to be done when changes in investments change and significant or joint control ceases or not. – UFR 9 Recognition of Yield Tax. Yield tax levied on provisions on the balance sheet are recognised as an expense in the income statement. The company has decided that the new standards will come into effect from 2013. The change in IFRS with application from 2013 which is deemed to have the greatest effect on the Group's accounting is the change to IAS 19. Consolidated financial statements Euromaint Gruppen's income statement and balance sheet comprise all the companies­ over which the parent company directly or indirectly exercises a controlling influence. A controlling influence means the right to directly or indirectly shape a company's financial and operating­strategies in order to obtain economic benefits. A controlling influence arises when a shareholding totals more than half of the voting rights. When assessing if there is significant influence, potential voting shares that can be used or converted without delay are taken into consideration. Intra-group transactions and balance sheet items, as well as profit on transactions between Group companies are eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence that there is an impairment requirement for the transferred asset. Consolidation principles and business combinations Subsidiaries are companies under the control of Euromaint Gruppen AB. Controlling influence means the right to directly or indirectly shape a company's financial and operating­strategies in order to obtain economic benefits. When assessing if there is a controlling influence, potential voting shares that can be used or converted without delay are taken into consideration. Acquisitions 1 January 2010 or later Subsidiaries are reported according to the acquisition method. This method means that the acquisition of a subsidiary is considered a transaction by means of which the Group indirectly acquires the subsidiary's assets and takes over its liabilities. The acquisition analysis establishes the fair value on the acquisition date of the acquired identifiable assets and assumed liabilities, as well as any holding without a controlling influence. Transaction fees, with the exception of transaction fees related to the issue of equity instruments or debt instruments, arising are recognised directly in the profit/ loss for the year. When combining businesses where the transferred compensation, possibly a holding­ without a controlling influence and the fair value of a previously owned share (in the event of phased acquisition) exceeds the fair value of acquired assets and assumed liabilities which are recognised separately, the difference is recognised as goodwill. When the difference is negative, a low price acquisitions, this is recognised directly in the profit/loss for the year. Transferred compensation in conjunction with the acquisition does not include payments­related to the regulation of previous business relationships. This type of regulation­is recognised in earnings. The company's acquisitions have not included any conditional purchase sums.

Notes

Note 1. Accounting and valuation principles (cont.) Acquisitions made between 1 January 2004 and 31 December 2009 Acquisitions made between 1 January 2004 and 31 December 2009, where the acquisition cost exceeds the fair value of acquired assets and assumed liabilities, as well as contingent liabilities reported separately, the difference is recognised as goodwill. When the difference is negative, this is recognised directly in the profit/loss for the year. Transaction fees, with the exception of transaction fees related to the issue of equity instruments or debt instruments, arising have been included in the acquisition cost. Foreign currency – translation Foreign operations' financial statements Receivables and liabilities in foreign operations, including goodwill and other consolidated­surplus and deficit values, are translated from the foreign operations' functional currency­to the Group's reporting currency, the Swedish krona, at the rate on the balance­sheet date. When preparing the consolidated accounts, all items in the income statement for foreign­subsidiaries are recalculated to Swedish krona using the average exchange rates, which constitute an approximation of the exchange rates in force at the time of each transaction during the year. The changes in the Group's equity arising from different­exchange rates on the balance sheet date, compared with the rate on the previous­balance sheet date, are recognised in other comprehensive income and accumulate as a separate component under equity, designated translation reserve. When disposing of foreign activities, the accumulated translation differences attributable to the sold foreign activities are reclassified from equity to profit/loss for the year as a reclassification adjustment at the time when the profit or loss from the sale is reported. Transactions in foreign currency All subsidiaries use the local currency as their functional currency. Transactions are reported at the rate on the transaction date, which is then translated. Monetary assets and liabilities in foreign currency are recalculated to the functional currency at the exchange rate in force on the balance sheet date. Exchange rate differences that arise from these translations are reported in the profit/loss for the year. Non-monetary assets and liabilities reported at historical acquisition cost are translated at the exchange rate at the time of the transaction. Non-monetary assets and liabilities reported at fair value are translated into the functional currency at the rate in force at the time of the valuation­of fair value. The functional currency of the parent company is Swedish krona which also constitutes the statement currency for the parent company and Group. Net investment in a foreign operation Monetary non-current receivables to a foreign operation for which no regulation is planned, or which will in all probability not take place within the foreseeable future, are in practice part of Euromaint's net investment in the foreign operation. An exchange rate difference arising in the monetary non-current receivable is recognised in other comprehensive­incomes and accumulated in a separate component in equity, called translation reserve. When disposing of a foreign operation the accumulated exchange rate differences related to monetary non-current receivables are included in the accumulated­translation differences reclassified from the translation reserve in equity to the net profit/loss for the year. Property, plant and equipment Owned assets Tangible non-current assets are included at cost of acquisition, less accumulated depreciation­and accumulated impairments. The cost of acquisition includes the purchase price and costs directly attributable to the asset, such as the cost for getting it in place and in such a condition that it can be used in accordance with the aim of the acquisition. Subsequent costs are included in the asset's carrying amount or recognised as a separate­asset, as appropriate, only when it is likely that future economic benefits­ associated­with the asset will flow to the Group and the cost of the item can be measured­reliably. All other types of repairs and maintenance are reported as expenses in the income statement during the period in which they arise. Leased assets Assets leased under finance lease contracts are recognised as non-current assets in the statement­of financial position and are initially measured at the lower of the leased item's fair value and the present value of the minimum lease payments at the start of the contract. The obligation to pay future lease payments is recognised as non-current and current liabilities. The leased assets are depreciated over the useful life of the asset, or if shorter over the agreed leasing period, while lease payments are reported as interest­and the amortisation of debt. The assets that are leased according to operational leasing are not recognised as assets in the report of financial position. Operating lease contracts do not give rise to a liability either. Depreciation principles To allocate their acquisition cost down to the estimated residual value, there is straightline­depreciation according to plan of tangible non-current assets over the estimated useful life, according to the following percentages per year: Category Machinery and equipment Computers and terminals Improvements of leased property

Depreciation year 5-10 3 5-10

The assets' residual values and useful lives are reviewed on each balance sheet date and are adjusted if necessary. An asset's carrying amount is impaired immediately to its recovery value (the higher of net realisable value and value in use) if the asset's carrying amount exceeds its estimated recovery value. Profits and losses following disposals are determined by comparing the revenue from sales and the carrying amount, and the result is reported in the income statement. Intangible assets Goodwill Goodwill represents the amount by which the acquisition cost exceeds the fair value of the Group's share of the acquired subsidiary's identifiable net assets on the date of acquisition minus any impairments. Goodwill is recognised as an intangible asset. Profit or loss on the divestment of a unit includes the remaining carrying amount of the goodwill­relating to the divested unit. Goodwill is allocated to cash generating units for the examination of any impairment requirement. The impairment requirement for goodwill is tested using the following procedure. The goodwill value as determined on the date of acquisition is allocated to cash-generating units, or groups of cash-generating units, which are expected to bring benefits to the company through synergies. Assets and liabilities that already exist in the Group at the time of acquisition can also be attributed to these cash-generating units. Any cash flow of this type that to which goodwill is allocated corresponds to the lowest level within the Group at which goodwill is monitored in the company's management­and is not a part of the Group greater than one segment. An impairment requirement exists when the recoverable amount for a cash-generating unit (or groups of cash-generating units) is less than the carrying amount. An impairment is then recorded in the income statement. Customer and market-related Acquired intangible assets, such as brands, customer-related assets and other similar­items, have previously been capitalised and recognised at acquisition cost less accumulated­amortisation and impairments. In 2011, the Group disposed of subsidiaries­whereupon customer-related assets no longer exist in the Group's "Statement of financial position". Technology Research projects or patent rights acquired in a business combination are capitalised and reported at the acquisition cost less amortisation and impairments. Subsequent expenses for capitalised intangible assets are reported as an asset in the statement of financial position. Only then do they increase the future economic benefits­ for the specific asset to which they relate. All other expenses are recorded as a cost when they occur. Depreciation principles Amortisation is reported in the profit/loss for the year over the estimated useful life of the intangible asset, unless such useful lives cannot be determined. The useful lives are re-examined at least once a year. Goodwill and other intangible assets with an uncertain useful life or which are not yet ready for use are tested for impairment requirements annually, and also as soon as indications arise that suggest that the asset in question has reduced in value. Intangible assets with definable useful lives are amortised­from the date they are available for use. The calculated useful lives are: Category Technology

Depreciation year 3

Impairment of assets that are not financial Tangible and intangible assets Assets that have an indefinite useful life are not depreciated, but are tested annually­ for any impairment requirement. The assets which are depreciated are assessed in terms of any impairment requirement whenever events or changes in circumstances­ indicate that the carrying amount is not recoverable. If it is not possible to significantly­ determine­independent cash flows for an individual asset, and its fair value minus selling­expenses cannot be used, the assets are grouped to the lowest level when testing­impairment requirements when it is possible to identify significantly independent­cash flows – a so-called "cash-generating unit". An impairment is made according to the amount by which the asset's carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less selling expenses or value in use. When calculating the value in use, future cash flows are discounted by a discount factor that takes into account the risk-free interest rate associated with the specific asset. An impairment is recognised as a cost in the profit/loss for the year. Once impairment requirements have been identified for a cash-generating unit, the impairment sum is primarily assigned to goodwill. The other assets included in the unit are then proportionally impaired. An asset, except goodwill, that has previously been impaired is examined on each balance sheet date to determine whether a reversal is required. Financial instruments Financial instruments recognised in the statement of financial position include, on the asset side, cash and cash equivalents, trade receivables, derivatives and other receivables.­ On the liability side are accounts payable, loans, derivatives and other liabilities. A financial asset or financial liability is recognised in the statement of financial position­once the company has become a party to the instrument's contractual terms. Trade receivables are recognised in the statement of financial position when

EuroMaint Annual Report 2012

37

Notes

Note 1. Accounting and valuation principles (cont.) the invoice has been sent. Liabilities are entered when the counterparty has delivered and a contractual­obligation to pay exists, even if an invoice has not yet been received. Accounts payable are entered when an invoice has been received. A financial asset is derecognised from the statement of financial position when the rights in the contract have been realised, cancelled or the company loses control over it. The same applies to part of a financial asset. A financial liability is derecognised from the statement of financial position when the obligation in the contract has been fulfilled or is otherwise satisfied. The same applies to part of a financial liability. Acquisitions and divestments of financial assets are reported on the trade date, which is the date on which the company commits to acquire or sell the asset. Financial instruments and hedge accounting Forward agreements used to hedge currency changes for receivables and liabilities in a foreign currency are valued at the spot price on the day when the currency future is taken up for assessment of the underlying receivable or liability. The difference between the forward rate and the day rate when the agreement is entered into (the arbitrage premium)­is amortised over the term of the forward agreement. Amortised arbitrage premiums are reported as interest rate income or an interest rate expense when the future is longer than three months. Classification of financial instruments The Group classifies its financial instruments into the following categories: financial assets or financial liabilities held for trading and measured at fair value via the income statement, trade receivables, liabilities measured at amortised cost and derivatives used for hedging purposes. The classification depends on the purpose for which the instrument was acquired. The classification is determined at initial recognition and is reassessed at each reporting date. Calculation of fair value When the market is not active for a particular financial asset, fair values are calculated­ through valuation techniques, whereby the Group makes assumptions based on the market conditions prevailing at the balance sheet date. Market rates of interest­ form the basis for calculating the fair value of long-term loans. For other financial­ instruments­where the market value is not specified, fair value is considered to correspond­with the carrying amount. Financial assets measured at fair value via the income statement This category includes financial assets held for trading and those which, from the time of investment, are attributable to the category measured at fair value via the income statement. The Group's assets in this category consist of derivative instruments that are not identified as hedges. Assets in this category are classified as current assets if they are held for trading or are expected to be realised within 12 months from the balance­sheet date. Financial assets measured at fair value via the income statement are valued at their fair value initially, which means that transaction costs burden the income for the period, and following the acquisition date. Realised and unrealised gains and losses arising from changes in fair value are included in the income statement as financial items in the period in which they occur. Accounts receivable Trade receivables are non-derivative financial assets with fixed or determinable payments­that are not quoted in an active market. Trade receivables are recognised at the acquisition cost less any provision for impairment. A provision for depreciation of accounts receivable is established when there is objective evidence that the Group will not be able to receive the amounts due under the receivables' original terms. The size of the provision is the difference between the asset's carrying amount and the value of estimated future cash flows. Depreciation is reported in the income statement. Trade receivables are deemed uncertain when payment is not seen as likely. The impairment requirements for accounts receivable are determined based on historic experience­of customer losses for similar accounts. Accounts receivable with impairment requirements are reported at the present value of expected future cash flows. However, accounts with a short term are not discounted. Impairments of trade receivables recognised at amortised cost are reversed if the previous reasons for impairment are no longer valid and full payment from the customer­is expected to be received. Financial liabilities valued at fair value via the income statement This category includes derivatives with negative fair value that are not used for hedge accounting, and financial liabilities that are held for trading. The liabilities are valued continuously at fair value, which means that transaction costs burden the income for the period, and changes in value are reported in the income statement as a financial item. Synthetic options Synthetic option programmes with market premiums are recognised and measured­ in accordance with IAS 39. Received premiums are recognised as financial liabilities.­ When a valuation of the options at fair value through an option pricing model corresponds­to the premium the company has received, this means that there is no initial­cost to the company. The liability is revalued continuously at fair value by applying­an option pricing model, taking the existing conditions into account. Changes in value over the option's term are reported as a financial item, as well as other income and expenses in respect of financial assets and liabilities. If a synthetic option is exercised­by the holder, the financial liability, as previously revalued at fair value, is settled.

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EuroMaint Annual Report 2012

Any realised profit is recognised in the income statement as a financial item. If the synthetic options mature without value, the reported liability is recognised as income. Borrowing Loans are reported initially at the loan sum including transaction costs, and are then reported at amortised cost applying the effective interest rate method. Borrowings are classified as current liabilities if payment of the liability is to be made within 12 months following the balance sheet date. Accounts payable Accounts payable are initially reported at the acquisition cost equivalent to fair value with additions for transaction costs and are subsequently measured at amortised cost using the effective interest rate method. Derivative instruments The Group has used derivative instruments in the form of futures to hedge parts of its exposure to currency risks in the payment flows, as well as interest rate swaps to hedge parts of borrowings with variable interest rates. Hedge accounting was applied with effect from 1 January 2008. For 2012, there are only interest rate swaps. With effect from 2011, the Group successively discontinued the use of derivatives and there are now no unrealised derivatives remaining. Derivative contracts and interest rate swaps are recognised­as follows. The effective portion of the hedging instrument's change in value is recognised in other comprehensive income and the accumulated changes in value in a specific component of equity, while the ineffective part is recognised in profit/ loss for the year. (The last derivative contract was realised in December 2011). In order to meet the requirements for hedge accounting under IAS 39, there needs to be a clear link to the hedged item. It also demands that the hedge effectively protects the hedged item, that the hedge documentation be prepared, and that efficiency can be shown to be sufficiently high through efficiency measurement. Accumulated changes in value in equity are reversed in the profit/loss for the year in the periods when the hedged item affects the result, for example, when the forecast external sale has taken place. When a hedging instrument expires, is sold or when the hedge no longer meets the conditions­ for hedge accounting, the accumulated changes in value in equity remain and are reversed to the profit/loss for the year. If a forecast transaction is no longer expected to take place, the accumulated change in value that has been recognised in equity is immediately transferred to profit/loss for the year. Derivatives with positive values are reported as assets and derivatives with negative values as liabilities. Cash and cash equivalents Cash and cash equivalents include cash and bank deposits. Associated companies Associated companies are companies over which the Group has a significant, but not controlling, influence on operational and financial management, ordinarily through a shareholding of between 20 and 50 % of the voting rights. From the date that the significant­influence is obtained the shares in the associated company are reported according to the equity method in the consolidated accounts. The equity method means that the value reported in the Group of shares in the associated companies­ correspond­to the Group's share in the associated companies equity as well as Group goodwill and other residual values of Group surplus and deficit values.­In the consolidated­profit/loss for the year, the Group's share in the associated company's­ profit/loss attributable to the owners of the parent company adjusted for any depreciation,­impairments and reversals of acquired surpluses and deficit values, are recognised in "Income from participations in associated companies". These equity participations,­reduced by dividends received from associated companies, constitute the main change of the reported value of equity in associated companies. Any difference on the acquisition date between the acquisition cost for the holding­ and the owner company's share of the net fair value of the associated company's identifiable­assets and liabilities, is reported according to the same principles as for the acquisition of subsidiaries. Transaction fees, with the exception of transaction fees related to the issue of equity instruments or debt instruments, arising have been included in the acquisition cost. When the Group's share of reported losses in the associated company exceeds the reported value of the shares in the Group, the value of the shares is reduced to zero. Deduction for losses also takes place against long-term financial intermediaries without­ collateral, which financially constitute part of the owner company's net investment in the associated company. Continuing losses are not recognised unless the Group provided guarantees to cover losses arising in the associate. Inventories Stock is valued at the acquisition cost or the net realisable value, whichever is lowest.­The acquisition cost for stock is calculated using the first-in, first-out method and includes expenses that have been incurred from acquiring stock assets and transporting­them to their current location and getting them into the appropriate condition.­For manufactured goods and work in progress, the acquisition cost includes a reasonable proportion of indirect costs based on normal capacity. The net realisable value is the estimated sale price in operating activities, once the costs of completion and sale have been deducted. Contingent liabilities A contingent liability is recognised when there is a possible commitment deriving from

Notes

Note 1. Accounting and valuation principles (cont.) events that have occurred and whose occurrence is only confirmed by one or more uncertain future events or when there is a commitment that has not been recognised as a liability or provision due to it not being credible that an outflow of resources will be required. Classification The non-current assets, non-current liabilities and provisions consist essentially of amounts that are expected to be recovered or paid after more than 12 months following the balance sheet date. Current assets and current liabilities consist essentially of amounts that are expected to be recovered or paid within 12 months following the balance sheet date. Income taxes Income taxes are included in the consolidated financial statements with both current­ and deferred tax. Group companies are subject to taxation in accordance with the existing­legislation in each country. A current tax liability or asset is reported as the tax estimated to be paid or received for the current or previous years. Deferred tax is reported on all temporary differences arising from the difference between the tax value of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is calculated by applying the tax rates and tax laws that have been enacted or announced at the balance sheet date and are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets are reported for deductible temporary differences and unused tax loss carry-forwards to the extent it is likely that future taxable profits will be available against which the temporary differences or unused loss carry-forwards may be utilised. Remuneration to employees Pension obligations Group companies have various pension plans. The pension plans are financed through the payment of insurance premiums or through provisions in the balance sheet. The Group has both defined benefit and defined contribution pension plans. A defined contribution pension plan is a pension plan for which the Group does not have any further payment obligations once the contributions are fully paid. Defined contribution pension plans in the Group are PA-03, Option ITP-S, and ITP in Alecta which is reported as a defined contribution plan due to lack of the information required to report the plan as a defined benefit plan. The contributions are reported as personnel costs. Prepaid contributions are reported as an asset to the extent that a cash refund or reduction of future payments can be credited by the Group. A defined benefit pension plan means that the employee is guaranteed a pension equivalent to a certain percentage of the final salary. The liability reported in the balance­ sheet for defined benefit pension plans is the present value of the defined benefit obligation­at the balance sheet date less the fair value of plan assets. The present value of the defined benefit obligation is determined by discounting the estimated future cash flows using the interest rate on government bonds with maturities­comparable to the current pension liability. Actuarial gains and losses that arise from experience-based adjustments and changes in actuarial assumptions in excess of the greater of ten per cent of the value of plan assets and ten per cent of the defined benefit obligation, are taken up as costs or income over the employees' estimated­average remaining service (the ten per cent corridor). Costs relating to past service are reported directly in the income statement, unless the changes in the pension­plan are conditional on the employees remaining in service for a specified period (the vesting period). In such cases costs relating to past service can be allocated on a straight-line basis over the vesting period. On Euromaint Gruppen AB's acquisition of Euromaint AB, assets and liabilities that are attributable to post-employment benefits were recognised at the current value of obligations and plan assets, as per IAS 19 paragraph 108. This means that actuarial gains and losses that were incurred before the acquisition have been recognised in the statement of financial position, including those that may be attributed to exceeding the "ten per cent corridor". Short-term benefits Short-term employee benefits are calculated without discounting, and are reported as a cost once the related services have been received. A provision is reported for the expected cost of profit-sharing and bonus payments when the Group has a valid legal or informal obligation to make such payments as a result of services received from employees and if the obligation can be estimated reliably. Termination benefits Termination benefits are payable for an employee's employment terminated before the normal retirement date or when an employee accepts voluntary redundancy in exchange for such compensation. The Group reports the liability or cost when it is demonstrably committed either to terminating the employee according to a detailed formal plan without the possibility of revocation, or to providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits that are due after 12 months from the balance sheet date or longer are discounted to the present value. Provisions Provisions are reported when the Group has an existing legal or informal obligation as a result of past events; it is more likely that an outflow of resources is required to settle the obligation than to not do so and the amount can be estimated reliably. No provisions­are made for future operating losses. If there are a number of similar obligations,­the likelihood of there needing to be an outflow of resources to settle this

entire group of obligations is assessed. Where the effect of when payment is made is important, the provisions are calculated by discounting the expected future cash flow at an interest rate before tax that reflects the current market estimates of the time value of money and, where applicable, the risks associated with the liability. The provisions for warranties, restructuring and pensions are reported under provisions. Provision for warranties starts to be calculated when a service is completed or the goods have been released to the customer. In order to estimate the amounts, historical data related to repairs and exchanges are generally used. Revenue recognition Revenue is reported less VAT, any discounts and similar revenue reductions. Net turnover­includes mainly sales of services within maintenance and the refurbishment of rolling stock. For larger projects, contract revenue is recognised in proportion to the assignment's completion rate, which comprises accrued contract costs compared to forecast contract costs. This accounting is based on the view that the performance is fulfilled as the work is carried out and means that profits are gradually reported based on each assignment's completion rate when the assignment's final outcome can be reliably estimated. For availability deals, known as kilometre contracts, revenue recognition is based on the number of kilometres that the rolling stock has travelled. An anticipated loss for an assignment is charged in full immediately to the profit/ loss for the period. Financial income and expenses Financial income relates to the positive exchange rate differences, interest income on financial assets, pension assets and bank deposits, profit from the change in value of financial assets valued at fair value via the income statement and any such profit from hedging instruments reported in income. Financial expenses are costs related to loans, pension liabilities, current bank charges, negative exchange rate differences, loss from the change in value of financial assets valued at fair value via the income statement, impairment of financial assets, and any such losses from hedging instruments reported in the profit/loss for the year. Leases Operating leases Leases in which a substantial part of the risks and benefits of ownership are retained by the lessor are classified as operating leases. Payments that are made during the lease period are written-off in the income statement on a straight-line basis over the lease period. Finance leases Finance leases involve the financial risks and benefits associated with ownership largely being transferred to the lessee. Where this is not the case, it is a question of operating­leases. Minimum lease payments are allocated between interest expense and amortisation­of outstanding liabilities. The interest charges may be allocated over the lease period so that each accounting period is charged with an amount equal to a fixed interest rate for the liability reported in each accounting period. Variable charges are written-off in the periods they are incurred. Cash flow statement The indirect method is applied when reporting cash flow from operating activities. Related party disclosures Related parties refers to the companies where Euromaint or parties related to Euromaint can exercise control or a significant influence in terms of operational and financial decisions. The circle of related parties also includes the companies and individuals­who have an opportunity to exercise control or a significant influence over Euromaint Gruppen's financial and operational decisions. Related party transactions are reported in Note 2. Related individuals are defined as the Chairman and Members of the Board, the Chief Executive Officer and other senior executives as well as close relatives of these people. Remuneration to the Board of Directors and the Chief Executive Officer is presented­in Note 5. Discontinued operations When the Group intends to discontinue an operation that represents either a separate­ major line of business or a geographical area of operations, this is recognised as a discontinued­operation in accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations. Profit or loss after tax in the discontinued operation is recognised as a single amount in the income statement, separate from the statement of other comprehensive income and the statement for the comparative period, in order to present the discontinued operation separately from the remaining operations. The layout of the statement of financial position for the current and previous year has not been amended, in accordance with applicable regulations, in the same way. Earnings per share Earnings per share is calculated using the profit/loss for the year for the Group attributable­to the parent company's owners and on the weighted average number of shares outstanding during the year. When calculating the diluted earnings per share, the profit/loss and the average number of shares are adjusted to take account of the effects of diluting potential ordinary shares. During the year there has been no dilution of potential ordinary shares.

EuroMaint Annual Report 2012

39

Notes

Note 1. Accounting and valuation principles (cont.) The Parent Company The parent company's Annual Report is prepared in accordance with the Swedish Financial Reporting Board Recommendation RFR 2 (Accounting for legal entities) and the Swedish Annual Accounts Act. Differences between the parent company and the Group's accounting principles Due to the link between accounting and taxation, the rules on financial instruments and hedge accounting in IAS 39 are not applied to the parent company as a legal entity. In the parent company, financial non-current assets are valued at acquisition cost minus any impairment and financial current assets according to the principle of lowest value. Interest rate swaps that effectively hedge cash flow risk in interest rate payments for liabilities are valued at the net of accrued claim for variable interest and accrued liability

for fixed interest and the difference is reported as an interest rate expense or interest rate income. The hedging is effective if the financial significance of the hedge and the liability is the same as if the liability had instead been taken up at a fixed market rate when the hedging relationship commenced. Any premiums paid for the swap agreement are amortised as interest over the term of the agreement. Group contributions With effect from 2011, Group contributions received are recognised as dividends and Group contributions issued as investments in shares in subsidiaries. Group contributions­were previously recognised directly in equity in accordance with UFR 2 Group Contributions and Shareholders' Contributions.

Note 2. Transactions with related parties The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

–

10

–

–

– –

23 11

– –

– –

Financial expenses EMaint (Ratos)

54,529

41,542

54,529

41,542

Receivables from related parties Ratos Inwido Spin International

– – 16,000

– 116,834 66,600

– – 16,000

– 116,834 66,600

Liabilities to related parties GS-Hydro Lindab EMaint (Ratos)

– – 503,198

– 14 448,669

– – 503,198

– – 448,669

Revenue Services

Expenses

SEK thousands Sales of goods and services DIAB Purchase of goods and services Camfil Lindab

The following table provides details of the transactions with related parties. DIAB Camfil Lindab EMaint (Ratos)

Material purchase Material purchase Interest expenses

Companies in Note 2 are companies within the Ratos Group. Information on remuneration paid to senior executives­can be found in Note 5.

Note 3 Other operating income and expenses

SEK thousands Other operating income Profit on the sale of non-current assets Exchange gains on receivables/liabilities of an operating nature Rental income Miscellaneous Total Other operating expenses Loss on the sale of non-current assets Exchange losses of an operating nature Miscellaneous Total The parent company has no figures to report for 2012 and 2011.

40

EuroMaint Annual Report 2012

The Group 2012

The Group 2011

302 3,382 0 30,561 34,245

3,841 4,564 415 31,906 40,726

-879 0 – -879

-2,728 -9,603 – -12,331

Notes

Note 4. Auditors' fees

SEK thousands KPMG Auditing assignments Auditing assignments other Tax assignments Other assignments Total

The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

1,626 – 256 264 2,146

3,242 278 148 84 3,752

– – – – –

– – – – –

Auditing assignments refer to the review of the annual report and accounting as well as the administration by the Board and the CEO, other duties which are incumbent on the company's auditors to perform as well as advice and other assistance as a result of observations made during the review or the implementation­of such other duties. Everything else falls under other assignments. The parent company's audit fees for 2012 and 2011 were paid by the subsidiary Euromaint AB.

Note 5. Average number of employees and employee costs The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

Sweden Female Male Total

134 1,301 1,435

156 1,685 1,841

– – –

– 1 1

Germany Female Male Total

94 882 976

90 798 888

– – –

– – –

2 24 26

2 30 32

– – –

– – –

230 2,207 2,437

248 2,513 2,761

– – –

– – –

3 12 15

2 23 25

– 3 3

– 3 3

SEK thousands The average number of employees broken down by gender is

Rest of Europe Female Male Total Group total Female Male Total Board members Female Male Total The Chief Executive Officer and other senior executives Female Male Total

4

3

–

–

6 10

10 13

– –

1 1

EuroMaint Annual Report 2012

41

Notes

Note 5. Average number of employees and employee costs (cont.) The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

4,253 (750)

5,718 (800)

– (–)

682 (–)

Other employees Total salaries and other remuneration Payroll overheads   Of which pension expenses

511,192 515,445 214,755 (47,767)

658,476 664,194 282,347 (63,925)

154 154 111 (59)

365 1,047 704 (299)

Other countries Salaries and other remuneration The Board and CEOs   Including bonuses and comparable remuneration Other employees Total salaries and other remuneration Payroll overheads   Of which pension expenses

– (–) 266,262 266,262 54,274 (–)

– (–) 256,324 256,324 52,852 (–)

– (–) – – – (–)

– (–) – – – (–)

SEK thousands Personnel costs Sweden Salaries and other remuneration The Board and CEOs   Including bonuses and comparable remuneration

Remuneration and other benefits during the period The Chairman of Euromaint Gruppen AB received a fee of SEK 433 thousand (517) in 2012, with other Board Members receiving SEK 42 thousand (316). If employed by Ratos, no fee applies. During 2011, a new Chief Executive Office of Euromaint Gruppen AB was appointed. With effect from September 2011, he is paid a salary by Euromaint Rail AB. During the period, the CEO of Euromaint Gruppen AB received a total salary of SEK – (682). The CEO's retirement age is 65. The CEO has a defined contribution pension promise of 30 % of monthly pensionable remuneration. The notice period is twelve months for notice from the company's side and six months for notice from the CEO's side and during this time, salary is paid with full adjustment against other income. The previous CEO of Euromaint AB was hired as a consultant up to the end of April 2011 and invoiced Euromaint – SEK (1,340) in fees and – SEK (26) in travel expenses. These costs are reported in the item ”Other external expenses”. Some employees in the Euromaint Group have signed synthetic shares and options. However, these are not linked to each employee's employment. Benefits to management groups and employees in similar positions, in accordance with ÅRL, are recognised as benefits to other employees.

42

EuroMaint Annual Report 2012

Notes

Note 6. Non-current assets Recovery value The calculated recovery value is made up of the value in use

order to make the valuation comparable with the carrying amount, the Group therefore includes receipts and payments in the estimated future cash flows instead of reducing the group value by tax liabilities and receivables. The company has chosen a discount rate after tax, as estimated future cash flows also include tax. The discount factor reflects market assessments of the time value of money and the specific risks associated with the asset. The discount factor does not reflect any such risks taken into account when future cash flows are estimated. As a starting point when calculating the discount rate, the company's weighted average capital cost, its marginal borrowing rate and other market borrowing rates independent of the company's capital structure are used. For the 2012 calculations, the discount rate after tax has been calculated at 7.08% The impairment testing of cash-generating units containing goodwill The following cash-generating units have substantial reported goodwill values in relation­to the total reported amount of goodwill in the Group:

The value in use is calculated as the present value of future calculated cash flows generated­by the asset during the estimated useful life. The assessment of future cash flows is based on realistic and verifiable assumptions that constitute the best estimates­ of the financial circumstances that are expected for the useful life. For example, personnel­cost increases and other operating costs are based on anticipated inflation, which can be compensated through price increases in current contracts or indexing in fixed price contract. Exchange rate forecasts are based on the current noted exchange rate taking account of existing currency hedges. The assessment of future cash flows is based on the latest budgets/forecasts and normally covers a three year period. For calculations after this period the estimates of future cash flows are based on the assumption of a steady rate of growth deemed realistic for the cash-generating unit. For the 2012 calculation, a growth rate of 3% has been used based on market positions, plans for the future and growth in the market for each unit. Estimates of future cash flows do not include future payments attributable to a future restructuring that the ownership is not obliged to implement. As soon as the ownership is obliged to implement the restructuring, future cash flows then include savings and other benefits, as well as payments out that the restructuring­is expected to give rise to. Nor do assessed future cash flows include receipts and payments from financing activities. On the other hand, tax receipts and payments are included. When valuing a company, it is normal to include taxes. The calculated value in use should be compared with the carrying amount of ownership, which includes both tax assets and liabilities. In

SEK million Rail Sweden Rail Germany Total

2012 662 48 710

2011 662 50 712

The impairment tests carried out by the company management, which are also presented­to the Board of Directors, have not resulted in impairment of the carrying amounts in the remaining segments in 2012.

2012 SEK thousands The Group Opening accumulated acquisition costs Investments during the year Correction Acquisitions of subsidiaries Sales of subsidiaries Currency adjustment Closing accumulated acquisition costs Opening accumulated amortisation Correction Acquisitions of subsidiaries Sales of subsidiaries Amortisation for the year Exchange rate difference Closing accumulated depreciation Net book value

Goodwill

Customer relations

Technology

Total

711,794 – – – – -1,833 709,961

– – – – – – –

21,593 5,541 -991 – – -217 25,926

733,387 5,541 -991 – – -2,050 735,887

– – – – – – –

– – – – – – –

-12,537 991 – – -6,967 119 -18,394

709,961

–

7,532

*

*

-12,537 991 – – -6,967 119 -18,394 717,493

2011

*

*

Goodwill

Customer relations

Technology

Total

769,503 – – – -57,455 -254 711,794

15,000 – – – -15,000 – –

32,787 3,308 -6,657 – -7,603 -242 21,593

817,290 3,308 -6,657 – -80,058 -496 733,387

– – – 33,670 -33,670 – –

-10,312 – – 11,875 -1,563 – –

-19,024 6,657 – 5,649 -5,949 130 -12,537

711,794

–

9,056

*

*

-29,336 6,657 – 51,194 -41,182 130 -12,537

*

*

720,850

The goodwill that is recognised is attributable to Euromaint AB and subsidiary. All intangible assets are acquired. For information with respect to amortisation, see Note 1. Goodwill with an indefinite useful life is attributed to separate subsidiaries during the impairment test, as these constitute cash-generating units. The parent company has no immaterial non-current assets, for this reason this division is not reported. *

Correction refers to incorrect opening balances from previous years.



EuroMaint Annual Report 2012

43

Notes

Note 7. Property, plant and equipment 2012 Buildings and land

Improvements to leasehold

Plant and machinery

5,900 – 1,301 -431 -213 6,557

50,210 – 753 -1,356 -115 49,492

169,726 -5,906 5,320 -2,530 -1,391 165,219

Opening depreciation Correction Depreciation for the period Sales/disposals Currency adjustment Closing accumulated depreciation

-1,027 – -618 42 – -1,603

-27,742 – -4,582 789 60 -31,475

-113,816 4,304 -10,329 2,375 479 -116,987

Closing planned residual value 2012

4,954

18,017

SEK thousands The Group Opening acquisition costs Correction Purchasing Sales/disposals Currency adjustment Closing accumulated acquisition costs

Equipment, tools, fixtures and fittings­

Construction in progress

Total

26,609 – -2,122 -1,085 -166 23,236

536,912 – 27,921 -11,560 -3,133 550,140

-208,957 -4,304 -28,729 5,901 472 -235,617

– – – – – –

-351,542 – -44,258 9,107 1,011 -385,682

48,232

70,019

23,236

164,458

Construction in progress

Total

*

284,467 5,906 22,669 -6,158 -1,248 305,636

*

2011 Buildings and land

Improvements to leasehold

Plant and machinery

Equipment, tools, fixtures and fittings

– 4,760 1,172 – – -32 5,900

53,987 -4,760 1,279 – -325 29 50,210

178,692 42 8,935 -10,454 -6,813 -676 169,726

285,534 -42 25,325 -19,805 -6,532 -13 284,467

16,183 – 13,053 – -2,620 -7 26,609

534,396 – 49,764 -30,259 -16,290 -699 536,912

– -495 -536 – –

-23,436 495 -4,810 – –

-112,507 53 -12,258 6,083 4,809

-186,251 -53 -36,587 9,584 4,680

– – – – –

-322,194 – -54,191 15,667 9,489

Currency adjustment Closing accumulated depreciation

4 -1,027

9 -27,742

4 -113,816

-330 -208,957

– –

-313 -351,542

Closing planned residual value 2011

4,873

22,468

55,910

75,510

26,609

185,370

SEK thousands The Group Opening acquisition costs Correction Purchasing Sales of subsidiaries Sales/disposals Currency adjustment Closing accumulated acquisition costs Opening depreciation Correction Depreciation for the period Sales of subsidiaries Sales/disposals

Correction refers to reclassification of non-current assets. The parent company has no tangible non-current assets, for this reason this division is not reported.

*

44

EuroMaint Annual Report 2012

Notes

Note 8. Financial income and expenses

SEK thousands Interest income Loans and receivables Pensions

The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

714 1,344

767 1,961

122 –

5 –

– 2,058

614 3,342

– 122

– 5

– -93,902 -1,757

-4,466 -85,278 -2,373

– -81,298 –

-4,466 -69,785 –

– -6,584 -102,243

– -955 -93,072

– -3,100 -84,398

– – -74,251

Other financial income Net exchange rate change Financial income Interest expenses Change in value synthetic options Financial liabilities valued at amortised cost Pensions Loans and accounts payable Net exchange rate change Other financial expenses Financial expenses

Income and expenses by financial category Financial assets/liabilities are measured at fair value in the income statement – Held for trading

Financial assets measured according to the Fair Value Option

Loans and receivables

Liabilities valued at amortised cost

Derivatives used for hedging purposes

Total

– – – –

– – 1,344 1,344

714 – – 714

– – – –

– – – –

714 – 1,344 2,058

Expenses by category Interest expenses Pension plan interest expenses Synthetic options Other financial expenses Total

– – – – –

– 1,757 – – 1,757

– – – – –

93,902 – – 6,584 100,486

– – – – –

93,902 1,757 – 6,584 102,243

The Group 2011 Income by category Interest income Other financial income Pension plan Total

– – – –

– – 1,961 1,961

767 614 – 1,381

– – – –

– – – –

767 614 1,961 3,342

Expenses by category Interest expenses Net exchange rate changes Pension plan interest expenses Synthetic options Other financial expenses Total

– – – – – –

– – -2,373 -4,466 – -6,839

– – – – -955 -955

-85,278 – – – – -85,278

– – – – – –

-85,278 – -2,373 -4,466 -955 -93,072

SEK thousands The Group 2012 Income by category Interest income Other financial income Pension plan Total

EuroMaint Annual Report 2012

45

Notes

Note 8. Financial income and expenses (cont.) Income and expenses by financial category Financial assets/liabilities are measured at fair value in the income statement – Held for trading

Financial assets measured according to the Fair Value Option

Loans and receivables

Liabilities valued at amortised cost

Derivatives used for hedging purposes

Total

– –

– –

122 122

– –

– –

122 122

Expenses by category Interest expenses Valuation of synthetic options Other financial expenses Total

– – – –

– – – –

– – 3,100 3,100

81,298 – – 81,298

– – – –

81,298 – – 84,398

Parent Company 2011 Income by category Interest income Total

– –

– –

5 5

– –

– –

5 5

– -4,466 -4,466

– – –

– – –

-69,785 – -69,785

– – –

-69,785 -4,466 -74,251

SEK thousands Parent Company 2012 Income by category Interest income Total

Expenses by category Interest expenses Valuation of synthetic options Total

46

EuroMaint Annual Report 2012

Notes

Note 9. Tax The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

3,330 -1,083 -19,825 -17,578

46,048 -699 -4,103 41,246

22,188 -34 – 22,154

18,384 -106 – 18,278

Differences between reported tax and estimated tax are based on the current tax rate consisting of the following components: Difference in estimated tax at current tax rate Reported profit before tax from continuing operations Reported profit before tax from discontinued operations

– -49,150 –

– -25,937 -118,492

– -84,299 –

– -74,387 –

Tax according to current tax rate, 26.3 (26.3)%

12,926

37,985

22,171

19,564

Effects of non-taxable income and non-deductible expenses Effect of other tax rates in other countries/foreign subsidiaries Non-deductible expenses Non-taxable income Effect of deficit utilised from previous years Activation of previously unrecognised tax loss carryforwards Tax attributable to previous years Effect of changed tax rate Difference between Swedish and foreign tax Miscellaneous Total

1,032 6,692 12 – -8,566 -1,083 – – -28,591 -17,578

– -1,264 10,392 -633 – -699 – – -4,535 41,246

– 1 – – – – – – -17 22,155

– -1,180 – – – – – – – 18,384

SEK thousands Total reported tax Current tax Tax attributable to previous years Deferred tax Total

The Group's effective tax for 2012 amounts to -35.8 (-28.6)% of taxable profit. The parent company's effective tax for 2012 amounts to -26.3 (-24.7)% of taxable profit. Deferred tax assets and liabilities are attributable to the following: Changes in deferred tax assets and deferred tax liabilities related to the hedging instruments have been reported in other comprehensive income, other changes have been reported in the income statement.

SEK thousands Deferred tax assets Deferred tax attributable to deficits Hedging instruments (under Other comprehensive income) Non-current assets Other provisions Other receivables Transferred to "Deferred tax liabilities" Provisions at year end

The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

517 – -2,824 1,439 782 86 –

1,100 – 22,485 – – – 23,585

– – – – – – –

– – – – – – –

3,822 – – 1,205 86 5,113

3,478 3,762 – 6,610 – 13,850

– – – – – –

– – – – – –

23,585 -583 -25,309 – 1,439 782

33,370 -4,666 22,485 -27,604 – –

– – – – – –

– – – – – –

– -86

– 23,585

– –

– –

Deferred tax liabilities Provisions for pension obligations Non-current assets Deferred tax in untaxed reserves Provisions Transferred from "Deferred tax liabilities" Provisions at year end Changes to deferred tax assets and liabilities are attributable to the following: Change in deferred tax assets Opening value Deferred tax attributable to deficits Non-current assets Valuation of hedging instruments Other provisions Other receivables Provisions for pension obligations Closing value

EuroMaint Annual Report 2012

47

Notes

Note 9. Tax (cont.)

SEK thousands Change in deferred tax liability Opening value Provisions for pension obligations Non-current assets Change in deferred tax in untaxed reserves Deficit deductions utilised Provisions Closing value

The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

13,850 344 -3,762 – – -5,405 5,027

9,421 -98 3,762 -5,845 – 6,610 13,850

– – – – – – –

– – – – – – –

2012

2011

2012

2011

–

–

–

–

-4,208 -4,208

-48,245 -48,245

-22,188 -22,188

-18,384 -18,384

Tax items reported directly in other comprehensive income Deferred tax attributable in hedging reserves Tax items reported directly against equity Current tax attributable to Group contributions Total

Note 10. Participations in Group companies (refers to the parent company)

Company's name

Corp. ID no.

Registered office

No. of participations

Euromaint AB + Shareholders' contribution - Impairment Closing value

556084-8458

Stockholm

1,000

Euromaint Rail AB Euromaint Rail Bemanning AB Euromaint GmbH Euromaint SIA

556032-2918 556670-3095 Amtsgericht Leipzig Stadt HRB 25939 40003885784

Stockholm Stockholm Leipzig / Germany Riga / Latvia

190,000 1,000 1 15,000

Note 11. Participations in associated companies

48

The Group 2012 482 218 -470 –

The Group 2011 3,244 – – –

– – -15 215

– -2,770 8 482

Holdings The following specifications show the Group's associated companies. Company's name Equity and SEK thousands voting rights % LRS Polska, Poland 50 Euromaint Mobile Service BV 50 Associated companies owned by group companies

Book value 2012 – 215 215

EuroMaint Annual Report 2012

Book value 2012

Book value 2011

100

935,200

935,200 83,673 -83,673 935,200

935,200

The subsidiary Euromaint Tracksupport AB (556673-4363) was merged during 2012 with Euromaint AB (556084-8458).

SEK thousands Carrying amount at year start Investments Sales Share in profit of associates Comprehensive income from participations in associated companies Impairment losses Exchange rate differences Carrying amount at year end

Equity and voting rights %

Book value 2011 482 – 482

100 100 100 100

Notes

Note 12. Pensions and similar obligations In accordance with IAS 19, Employee Benefits, actuaries on behalf of Euromaint have calculated the Group's pension liability and the amounts that should currently be set aside for pensions for the Group's employees. Pension plans in Euromaint include both defined benefit and defined contribution plans. Defined contribution pension obligations Euromaint's employees are mainly covered by defined contribution pension plans. Salaried employees are covered by the ITP1 plan and workers are covered by the SAF-LO plan. In accordance with a separate exception from the Swedish Agency for Government Employers, a small group of employees are also covered by the national pension plan, PA-03. All pension plans provide retirement and disability­pensions­ and, in some cases, also survivor protection. Premiums are paid to independent­legal entities­and the size of the premium comprises a percentage of the employee's salary. Defined benefit pension obligations Defined benefit pensions earned by salaried employees born in 1978 or earlier according­to the ITP2 plan, which provides retirement, family and disability. Premiums for the ITP2 plan are paid on a regular basis to the insurance company Alecta. The size SEK thousands The Group The following defined benefit plans are recognised in the statement of financial position: Pension liability/asset (+/-) on the balance sheet Plan 2012 2011 Funded pension obligation -3,679 -424 Unfunded pension obligation 9,667 13,382 Professional and occupational disability annuities, unfunded 5,063 5,776 Total 11,051 18,734 Specification of the booked net debt in the statement of financial position Net debt at year start Retained actuarial gains/losses on acquisition Net cost of defined benefit pension Recognised in the balance sheet as an increase in pension liability Remuneration paid Premiums Reimbursements Net debt at year end Actuarial gains and losses Actuarial loss at year start Amortisation of actuarial loss Actuarial loss on the present value of obligations that arose during the year Actuarial loss from change in assumptions Actuarial gains/losses on plan assets that arose during the year (+/-) Actuarial loss at year end that is included in pension liability Provisions for pensions and similar obligations in the balance sheet Present value of funded obligations Fair value of plan assets Receivable/liability (-/+) Present value of unfunded obligations Retained actuarial gains/losses (+/-) Impairment of assets under IAS 19 point 58b Provisions in the statement of financial position for pensions and similar obligations Total provisions in the balance sheet for pensions and similar obligations

2012 -18,692 – -581

2011 -16,511 – -2,968

– 13,384 1,002 -6,225 -11,112

– 12,124 – -11,379 -18,734

2012 -12,767 5,740

2011 -14,300 1,961

4,559 -3,075

1,994 -9,329

-3,132

6,907

-8,675

-12,767

2012 55,071 -57,130 -2,059

2011 59,739 -64,141 -4,402

19,507 -8,395 2,059

28,153 -12,767 7,750

13,171

23,136

11,112

18,734

of the pension premium is based on the salary level for the employee and the cost of the premium is recognised in the income statement. According to a statement from the Task Force of the Swedish Financial Accounting Standards Councill, an obligation secured by an insurance policy with Alecta regarding retirement and family pensions for salaried employees in Sweden is a multi-employer defined benefit plan. For 2012, Euromaint has not had access to information to make it possible to recognise this plan as a defined benefit plan, for which reason the plan is recognised as a defined benefit­ plan. The fees for the year for pension insurance policies taken out with Alecta amount to approximately SEK 39 million. There are also defined benefit retirement and family pensions that are earned in the PA-91 plan. PA-91 was a pension plan that covered personnel employed in state owned operations. The PA-91 plan is closed for new earnings and all pension earned is insured with KPA Pensionsförsäkring. Euromaint is also paying a occupational injury life annuity to a group of former employees of Affärsverket Statens Järnvägar, as well as early retirement pensions according to so-called transitional provisions in previous state pension rules.

SEK thousands The Group Reported pension cost in the income statement Cost of earned benefits Interest expense Expected return on plan assets Change in impairment of pension assets (IAS 19 paragraph 58b) Amortisation of actuarial profit/loss (+/-) Change in payroll tax on change of pension liability Cost of defined benefit pensions Cost of defined contribution pensions Cost reported in the income statement Reconciliation of changes in plan assets Fair value of plan assets at the start of the year Expected return during the year Premiums paid Remuneration paid Actuarial gain during the year The fair value of plan assets at year end Calculation assumptions Discount rate Expected return on plan assets Expected salary increase Increase in outgoing pensions Employee turnover Increase in income base amounts Expected average remaining service for employees

2012 26 1,757 -1,344

2011 467 2,373 -1,961

142 –

118 1,971

– 581

– 2,968

– –

-49,603 -46,635

2012

2011

64,141 1,344 1,002 -6,225 -3,132

66,652 1,961 – -11,379 6,907

57,130

64,141

2012 1.30% 2.20% 2.10% 1.10% – 2.10%

2011 2.20% 2.90% 1.40% 1.40% – 1.40%

3 years

4 years

The discount rate is based on government bonds with the same term as the Group's pension obligations. The expected return on plan assets is based on the portfolio allocation­which the insurance companies report. Long-term inflation measures are based on market expectations, which can be seen between real and nominal bonds. Changes in IAS 19 Employee benefits: "The corridor method" for recognition of actuarial­gains and losses on pension provisions will no longer apply from 2013. This means the Group will reverse the difference (SEK 10,314) directly in equity in January 2013.

EuroMaint Annual Report 2012

49

Notes

Note 13. Inventories SEK thousands The Group Gross stock Obsolescence reserve Work in progress Net stock

2012 422,048 -63,158 73,429 432,319

2011 437,553 -58,909 75,692 454,336

Distributed as below Replacement parts Spare parts Work in progress Miscellaneous Total

89,019 268,920 73,429 951 432,319

92,670 276,450 75,692 9,524 454,336

Note 14. Trade receivables and other receivables

SEK thousands Accounts receivable Receivables from Group companies Tax assets Other receivables Completed, not invoiced Prepaid expenses and accrued income Total Specification of prepaid expenses and accrued income: Prepaid rent Accrued income, maintenance measures Miscellaneous Total

The Group 2012 350,793 16,000 6,270 28,734 3,200 54,488 459,485

The Group 2011 369,000 183,434 15,965 46,040 19,577 56,076 690,092

The Parent Company 2012 – 448,818 – 5 – – 448,823

The Parent Company 2011 – 400,073 – – – 26 400,099

25,784 20,234 8,470 54,488

22,274 18,580 15,222 56,076

– – – –

– – 26 26

Note 15. Interest-bearing liabilities Fair value for interest-bearing liabilities approximates the book value, which is why the calculation of fair value has not been calculated. Book amounts for Group borrowing are as follows:

SEK thousands Non-current component Bank loans Shareholder borrowings Finance lease liability Other* Total *

Book value/fair value The Group 2011

The Parent Company 2012

Book value/fair value The Parent Company 2011

405,000 503,198 11,611 -3,200 916,609

450,000 448,669 13,276 -5,120 906,825

401,800 503,198 – – 904,998

450,000 448,669 – -5,120 893,549

Other refers to bank charges for taking out the loan. These are amortised over the term and are reversed during the term of the loan.

Short-term component Bank loans Finance lease liability Bank overdraft facility Total Overdraft limit

50

The Group 2012

EuroMaint Annual Report 2012

45,000 6,376 111,839 163,215

45,000 6,376 118,751 170,127

– – – –

– – – –

196,934

187,779

–

–

Notes

Note 15. Interest-bearing liabilities (cont.) The total loan facility with Swedbank includes SEK 1,090,000 thousand (1,040,000), and other institutions SEK 0 (0). SEK 330,000 thousand of the framework refers to a so-called Revolving Facility to cover the bank overdraft and warranty commitments. Of this, SEK 196,934 thousand is dedicated to the overdraft facility (SEK and foreign currency) and SEK 117,381 thousand (84,72) is utilised for issued bank guarantees. Available and utilised margin for senior debt is SEK 450,000 thousand. The margin of SEK 310,000 thousand to the loan facility's ceiling of SEK 1,090,000 thousand is equivalent to all amortisations made during the loan agreement and cannot be used for new loans. Interest on the shareholder borrowings amounts to 12 % and is fixed until the loan is repaid. The Group's exposure, with respect to external borrowing, to changes in interest rates and the contractual timing of interest rate renegotiation is as follows: All loans with Swedbank run for 3 months. SEK 150 million of the loan sum has been hedged at a fixed interest rate of 1.95% with term until 14/02/2014, by signing­an interest rate swap contract.

SEK thousands The average term in months for outstanding external bank loans is therefore: Weighted average interest rates including interest margins were on the balance sheet date:

SEK thousands Interest rate duration 1 year or less 1-5 years Total

The Group 2012

The Group 2011

6.5

3

4.79%

4.97%

The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

300,000 150,000 450,000

495,000 – 495,000

300,000 150,000 450,000

450,000 – 450,000

Relating to maturity bank loans and shareholder loans, see note 22. Relating to financial leasing agreements, see note 20.

Note 16. Other provisions 2012 SEK thousands The Group Provisions at year start Provision for the year Utilisation during the year Reclassification Provisions in companies acquired over the course of the year Provisions in companies sold over the course of the year Exchange rate difference Provisions at year end

Other provisions

Warranties

Total

2011 Other provisions

Warranties

Total

26,221 4,865 -6,663 –

7,118 577 -3,662 –

33,339 5,442 -10,325 –

20,995 6,291 -4,393 3,634

52,623 21,159 -56,073 -3,634

73,618 27,450 -60,466 –

–

–

–

–

–

–

– -958 23,465

– -259 3,774

– -1,217 27,239

– -306 26,221

-1,200 -5,757 7,118

-1,200 -6,063 33,339

The parent company does not report any provisions. Provision for warranties starts to be calculated when a service is completed or the goods have been released to the customer. In order to estimate the amounts, historical data related to repairs and exchanges are generally used. Provisions for restructuring are reported when a detailed and formal restructuring plan has been established by the Group and when this has either started or has been made publicly known.

Note 17. Trade payables and other liabilities

SEK thousands Advance payment from customers Accounts payable Liabilities to Group companies Liabilities to credit institutions, interest-bearing Other current liabilities Invoiced, not completed Accrued expenses/deferred income * Total *

The Group 2012 8,252 239,347 – 163,215 31,101 62,039 203,459 707,413

The Group 2011 33,590 254,514 – 170,127 42,876 70,509 230,887 802,503

The Parent Company 2012 – 19 239,130 45,000 21 – 84 284,254

The Parent Company 2011 – 26 219,267 – 14 – 108 219,415

95,329 36,763 53,821 17,546 203,459

101,177 34,792 59,019 35,899 230,887

– – – 84 84

– – – 108 108

Specification of prepaid charges and accrued income.

Personnel costs Product liabilities Accrued costs, maintenance measures Miscellaneous Total

EuroMaint Annual Report 2012

51

Notes

Note 18. Pledged assets and contingent liabilities The Group 2012

The Group 2011

The Parent Company 2012

The Parent Company 2011

246,276 5,190 251,466

284,796 5,190 289,986

246,276 – 246,276

284,796 – 284,796

Contingent liabilities Pension obligations, FPG/PRI Other guarantees Total

16 117,381 117,397

30 84,721 84,751

– – –

– – –

Total

368,863

374,737

246,276

284,796

SEK thousands Pledged assets Pledged shares in subsidiaries (net assets)* Pledged floating charges Total

Floating charges on assets and shares in subsidiaries (Euromaint AB and Euromaint Rail AB) are pledged in Swedbank as security for their total credit­ commitment.­Pledged shares have been recorded at the value of net assets in the Group for the current subsidiaries. The Group gives warranties on refurbishment­and maintenance work of up to 5 years after the completion date. * In the carrying amount for pledged shares the consolidated goodwill of SEK 662 million has not been included.

Note 19. Operating leases

Note 20. Finance leases

SEK thousands Future minimum lease payments Within 1 year Between 1 and 5 years More than 5 years Total

2012

The Group 2011

86,303 92,257 3,412 181,972

96,451 36,184 23,015 155,650

Exposed lease rentals booked as costs Total

110,522 110,522

109,007 109,007

The rental of track and premises is recognised under the Group's operational leases.

SEK thousands Future minimum lease payments Within 1 year Between 1 and 5 years More than 5 years Total

2012

The Group 2011

6,242 11,282 1,387 18,911

6,393 7,797 704 14,894

Future minimum lease payments exclude guaranteed residual values, as these do not constitute a future payment. Guaranteed residual values are included in the closing lease liabilities however. The guaranteed residual values amount to SEK 4,335 thousand (1,107). Written-off lease rentals Total

7,361 7,361

11,129 11,129

No variable fees are included in net income. The hire of vehicles, computers and some office equipment is reported under the Group's finance leases. For the majority of the finance lease contracts, at the end of the contract Euromaint can either allocate a purchaser for the equipment for SEK 1,000, excluding VAT, return the equipment to the lessor or extend the contract (the new rental then becomes a quarterly rent per year as previously). The Parent Company There are no amounts to report for the parent company.

52

EuroMaint Annual Report 2012

Notes

Note 21. Cash flow analysis, other items not affecting liquidity

SEK thousands Change in personnel-related reserves Changes in provisions Unpaid interest on shareholder borrowings Impairment associates Currency translation effects Other items Total

The Group 2012 – -13,722 54,529 – 453 312 41,572

The Group 2011 – -9,289 41,542 2,770 5,018 2,076 42,117

The Parent Company 2012 – – 54,529 – – -12 54,517

The Parent Company 2011 0 – 41,542 – – 1920 43,462

Cash and cash equivalents comprise cash and deposits held with banks and similar institutions with maturities within three months from the date of acquisition­ and short-term cash investments with a maturity from the date of acquisition of less than three months, which are only exposed to an insignificant risk of changes­in value.

Disposal of subsidiaries during 2012 No disposals have been made during 2012 Disposal of subsidiaries during 2011 Disposed assets and liabilities Non-current assets Inventories Operating receivables Cash and cash equivalents Total assets Provisions Operating liabilities Total provisions and liabilities

50,668 59,574 82,890 7,554 200,686 2,069 89,238 91,307

Net assets and liabilities

109,379

Sales Deducted. Cash and cash equivalents in the acquired subsidiary Effect on cash and cash equivalents

112,568 -7,554 105,014

During 2011, the Euromaint Group disposed of two subsidiaries. One was the Swedish company Euromaint Industry AB, and the other was the German company Waggonund­Lokreparatur- Service GmbH. The income statements of the disposed companies­ are included­in the consolidated income statement up to the day of disposal. The capital­loss on disposal of Euromaint Industry AM amounted to SEK -7.2 million and the capital­gain on disposal of Waggon- und Lokreparatur- Service GmbH amounted to SEK 0.8 million. The effect on cash or cash equivalents amounted to SEK 105 million. Acquisition of subsidiaries during 2012 No acquisitions have been made during 2012 and 2011

EuroMaint Annual Report 2012

53

Notes

Note 22. Financial risks and financial policy Through its operations, Euromaint is exposed to financial risks, including the effect of changes to prices in the loan and capital markets, exchange rates and interest rates. The Group's overall risk management focuses on the unpredictability of the financial­ markets and aims at minimising potentially unfavourable effects on the Group's financial­results. Financial operations in the Group are centralised in Euromaint Rail AB's financial function. The finance function acts as an internal bank and is responsible­ for the sourcing of capital, cash management and financial risk management. The operations­are regulated through the Group's Financial Regulations. The following important financial risks are dealt with: Market risk The risk that the value of, or future cash flows from, a financial instrument varies due to changes in market prices. Currency risk and interest rate risk constitute market risks. Currency risks Currency risk refers to the risk of exchange rate fluctuations negatively affecting the Group's income statement, balance sheet and/or cash flows. Currency risk exists both in the form of transaction risk and translation risk. Euromaint is to some extent exposed to currency and transaction risks because of relatively large volumes purchased­in foreign currency and small customer invoicing in the corresponding currencies.­Purchases made in foreign currencies for major projects are hedged at 100% or are agreed with variable currency clauses during the tender/contract process. The financial regulations do not require currency hedges for the current net flows. Euromaint is exposed to the following currencies; EUR, NOK, USD, GBP, DKK, LVL and CHF. Euromaint's largest currency exposure is to goods purchased in EUR. The net flow in EUR is approximately EUR 17,000 thousand (22,500) per year, which means that a 5% change in the exchange rate will affect purchase costs before hedging by approximately SEK 7.4 (10.0) million before tax. Currency hedging­is no longer practised against this net flow. Exposure relating to the transaction risk attributable­ to the other currencies is not significant. Currency risk in the form of translation­risk is attributable to the currencies EUR and LVL. Translation differences for internal investment­loans in EUR are reported due to its character to equity. Interest rate risk Interest rate risk refers to the risk of a negative effect on the Group's financial results resulting from changes in market interest rates. Euromaint is affected by the general­ rate adjustments through its external loan portfolio. To counter these, SEK 150 million­ of the loans has been hedged with a 2-year interest rate swap. The underlying loans run for 3 months. The interest rate swap gives a base rate of 1.95% up to the due date, 14/02/2014. Therefore, with the current size of the loan portfolio, an increase in

54

EuroMaint Annual Report 2012

interest­rates of 1% unit increases the annual interest expense for Euromaint by SEK 3.0 million­before taxes. The shareholder loans carry a fixed rate of 12% until the loans are repaid. Other risk Credit risk Credit risk is the risk generated by the fact that the credit rating of the investor's counterparty­can change in an unpredictable manner, thereby resulting in a loss for the Group. Euromaint has routines in place to minimise the ongoing customer credit risk in its operations. These procedures relate, for example, to credit testing, advances and warranty management, and ongoing credit monitoring. Identified customer losses during­2012 amounted to SEK 2,356 thousand (495). On balance sheet date, Euromaint had indirect collateral of approximately SEK 91 (140) million in the form of advances from customers. The Group considers that there are no significant concentrations­of credit risk in respect of the financial assets. Age analysis, trade receivables Not due Due 0-60 days Due 61-180 days Due 181-365 days More than 1 year Total accounts receivable

216,847 95,383 15,398 6,179 16,986 350,793

Financial assets that are neither due for payment nor can be impaired are deemed to have a good credit quality. Liquidity and refinancing risk Refinancing risks refer to the risk that the refinancing of mature loans will become difficult­or costly and that Euromaint will thereby have difficulty fulfilling its payment obligations. Liquidity risk refers to the risk of difficulty in fulfilling the obligations associated­with financial liabilities. EuroMaint's policy is to always have available cash and cash equivalents and secured refinancing to the extent required for the activity. As of 31 December 2012, there was a loan facility with Swedbank totalling SEK 1,090 (1,040) million including a bank overdraft facility with a framework of SEK 197 (187) million­as well as a extended separate framework of SEK 50 (0) million solely dedicated to bank guarantees. As of the measurement day, 31 December 2012, Euromaint fulfilled all the requirements related to financial ratios associated with the financing agreement.

Notes

Note 22. Financial risks and financial policy (cont.) SEK thousands The Group Due dates on bank loans and shareholder borrowings: Within 1 year 1-5 years 5 years or later Total

Book value 45,000 405,000 503,198 953,198

For lease liability due dates, see Note 19. Fair value of derivative instruments as of the balance sheet date Contracts with positive fair values: Currency hedging (due date within 1 year) Contracts with negative fair values: Interest rate swap (due date 1-5 years) Currency hedging (due date within 1 year)

2012

2011

–

–

-1,331 –

– –

Loan terms and due date structure/interest rate renegotiation SEK Loans from credit institutions and shareholder borrowings Bank loans

1 year or less 45 000 – – – 45,000

Within 1-5 years 45,000 250,000 110,000 – 405,000

EUR

NOK

Other

Total

1,841,570 – 1,841,570

677,370 – 677,370

9,454 – 9,454

287 – 287

2,528,681 – 2,528,681

Within 1 year Net turnover Currency hedged volume Net currency exposure

2,000,000 – 2,000,000

600,000 – 600,000

– – –

– – –

2,600,000 – 2,600,000

1-3 years Net turnover Currency hedged volume Net currency exposure

6,000,000 – 6,000,000

1,800,000 – 1,800,000

– – –

– – –

7,800,000 – 7,800,000

Shareholder borrowings Total *

Nominal sum 90,000 250,000 110,000 503,198 953,198

Due date 30/08/2014 30/08/2015 30/08/2016

SEK

*

The loan becomes due on request.

Transaction exposure along with currency hedged volumes Currency hedged sales converted to SEK thousand 2012 Currency Net turnover Currency hedged volume Net currency exposure Currency hedged forecast volume

EuroMaint Annual Report 2012

55

Notes

Note 23. Information on fair value of financial instruments Fair values of all financial instruments are significantly consistent with book values, as all interest including interest on shareholder borrowings is deemed marketable. Fair value of comprehensive income

Assets Non-current investment, pension obligations, not interest-bearing * Total

Level 1

Level 2

The Group 2012 Level 3

– –

– –

– –

– –

– –

– –

Liabilities Synthetic shares and options ** Derivative financial instruments Total

Level 1 – – –

Level 2 – – –

Level 3 11,246 – 11,246

Level 1 – – –

Level 2 – – –

Level 3 11,246 – 11,246

Level 1

The Parent Company 2011 Level 2 Level 3

Level 1. Level 2. Level 3.

Fair value determined by quoted prices in an active market for the same instrument. Fair value determined using either directl (as prices) or indirect (derived from price) observable market data not included in Level 1. Fair value based on using input data that is not observable on the market. The value of the liability for the synthetic shares is based on an external measurement, where a Fair Market Value has been assessed using a DCF model (discounted cash flow). The cash flows have been calculated based on the company's business plans, market­ prospects, investment plans and growth forecasts and then discounted by a weighted average capital cost (WACC). For the 2011 measurement, a WACC of 13% was used. When determining the discount rate, consideration has been given to specific risks in the market and to the company, risk-free rate, market loan margins and the company's­capital structure. The model calculates an Equity Value (EQV) based on the value of the entire company less the loan. The value of the liability for the synthetic options has been calculated using the Black-Scholes valuation method and is based on the company's extent and terms for the incentive programme, share valuation and statistics on volatility and yield rates for government bonds. * Reported as net under provisions, pensions. ** Synthetic options were valued by an external independent valuer in 2011.

Financial assets and liabilities valued at fair value in the income statement

Synthetic shares and options Opening balance Profit/loss, income statement Acquisitions Concluded Closing balance

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The Group 2012 11,246 – – – 11,246

The Group 2011 13,105 4,467 648 -6,974 11,246

The Parent Company 2012 11,246 – – – 11,246

The Parent Company 2011 13,105 4,467 648 -6,974 11,246

Notes

Note 24. Financial instruments SEK thousands The Group As of 31 December 2012 Assets by category Accounts receivable Other receivables Total

Financial assets measured at fair value via the income statement Held for trading – – –

Loans and receivables Book value 350,793 28,734 379,527

Derivatives used for hedging purposes Book value – – –

Liabilities by category Non-current interest-bearing liabilities Shareholder borrowings Synthetic options and shares Current interest-bearing liabilities Accounts payable Other liabilities Total

Financial liabilities valued at fair value via the income statement Held for trading – – 11,246 – – – 11,246

Liabilities valued at amortised cost Book value 401,800 503,198 – 163,215 239,347 31,101 1,338,661

Derivatives used for hedging purposes Book value – – – – – – –

SEK thousands The Group As of 31 December 2011 Assets by category Accounts receivable Other receivables Total

Financial assets measured at fair value via the income statement Held for trading – – –

Loans and receivables Book value 369,000 46,040 415,040

Derivatives used for hedging purposes Book value – – –

Liabilities by category Non-current interest-bearing liabilities Shareholder borrowings Synthetic options and shares Current interest-bearing liabilities Accounts payable Derivative instruments, current Other liabilities Total

Financial liabilities valued at fair value via the income statement Held for trading – – 11,246 – – – – 11,246

Liabilities valued at amortised cost Book value 444,880 448,669 – 170,127 254,514 – 31,630 1,349,820

Derivatives used for hedging purposes Book value – – – – – – – –

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Notes

Note 24. Financial instruments (cont.) SEK thousands The Parent Company As of 31 December 2012 Assets by category Receivables from Group companies Total

Financial assets measured at fair value via the income statement Held for trading – –

Loans and receivables Book value 448,818 448,818

Derivatives used for hedging purposes Book value – –

Liabilities by category Non-current interest-bearing liabilities Shareholder borrowings Synthetic options and shares Accounts payable Liabilities to Group companies, non-interest bearing Total

Financial liabilities valued at fair value via the income statement Held for trading – – 11,246 – – 11,246

Liabilities valued at amortised cost Book value 401,800 503,198 – 19 239,130 1,144,147

Derivatives used for hedging purposes Book value – – – – – –

SEK thousands The Parent Company As of 31 December 2011 Assets by category Receivables from Group companies Total

Financial assets measured at fair value via the income statement Held for trading – –

Loans and receivables Book value 400,073 400,073

Derivatives used for hedging purposes Book value – –

Liabilities by category Non-current interest-bearing liabilities Shareholder borrowings Synthetic options and shares Accounts payable Liabilities to Group companies, non-interest bearing Total

Financial liabilities valued at fair value via the income statement Held for trading – – 11,246 – – 11,246

Liabilities valued at amortised cost Book value 444,880 448,669 – 26 277,817 1,171,392

Derivatives used for hedging purposes Book value – – – – – –

Note 25. Distribution of net turnover

SEK thousands Sale of services Sale of goods Total

The Group 2012 2,357,781 131,591 2,489,372

The Group 2011 2,873,323 314,750 3,188,073

The Parent Company 2012 248 – 248

The Parent Company 2011 1,787 – 1,787

The Group 2012 3,200 – 3,200

The Group 2011 739,736 -720,159 19,577

The Parent Company 2012 – – –

The Parent Company 2011 – – –

Note 26. Completed, not invoiced

SEK thousand Assets in the balance sheet Accrued income Invoiced amounts Total

For contracts reported according to the percentage of completion accounting method the degree of completion is determined in relation to the abandoned ­contract costs compared to forecast contract costs incurred. Information about the total assignment revenue and costs incurred reported in the income statement during the period is not provided as these charges are deemed to be sensitive.

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Notes

Note 27. Invoiced, not completed SEK thousands The Group Invoiced amounts Accrued income Total

Note 29. Distribution of net turnover by segment

2012 139,909 -77,870 62,039

2011 111,925 -41,416 70,509

Note 28. Discontinued operations In August 2011, the Group decided to discontinue the Business Area Refurbishment. The Business Area was operated during the years 2009-2011 as a separate business, both in terms of operations and reporting. Since the decision was taken, the Business Area has been recognised as a discontinued operation in the income statement for 2011. SEK thousands Profit or loss for the year in discontinued operations Revenue Expenses Tax for the year * Profit/loss for the year

2012 – – – –

The Group operates in two segments taking into account how the Group organises the sales of goods and services. The two segments are Sweden and Central Europe. All sales in the parent company are internal whereupon they are omitted. Distribution of net turnover in the Group are as given below: SEK thousands The Group Sweden Central Europe Total

2012 1,843,276 646,096 2,489,372

2011 2,373,929 814,144 3,188,073

2011 140,619 -259,111 – -118,492

The tax revenues in the Group are essentially attributable to Group contributions and are not deemed to be business area specific.

*

SEK thousands Net cash flow from discontinued operations Cash flow from operating activities Cash flow from investing activities ** Cash flow from financing activities ** Net cash flow

2012 – – – –

2011 -76,350 – – -76,350

The business area is essentially considered not to have been the owner of the Group's loans or assets, whereupon only the cash flow from the business area's operating activities­is recognised. **



Stockholm, 2 March 2013



Leif Johansson Chairman of the Board



Ove Bergkvist CEO

Jonathan Wallis

Hans Pettersson

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Auditors' report

Auditors' report To the Annual General Meeting of Euromaint Gruppen AB, reg. no.556731-5402 Report on the Annual Report and the Consolidated Financial Statements We have audited the Annual Report and Consolidated Financial Statements for Euromaint­Gruppen AB for 2012. The company's­Annual Report and Consolidated Financial­Statements­are included in the printed version of this document­on pages 26-59. The Annual Report and the Consolidated Financial Statements are the responsibility of the Board of Directors and the Chief Executive Officer. The Board of Directors and Chief Executive Officer have the responsibility for preparing an Annual Report giving a true and fair view according to the Swedish Annual Accounts Act, and a Consolidated Financial Statement giving a true and fair view according to International Financial Reporting Standards­as they have been adopted by the EU, and the Swedish Annual Accounts Act, and for the internal controls the Board of Directors­ and the Chief Executive Officer deem necessary in order to prepare an Annual Report and Consolidated Financial­Statements that do not contain material misstatements, whether these are due to fraud or error. The auditor's responsibility Our responsibility is to express an opinion about the Annual Report and the Consolidated­Financial Statements based on our audit. We have performed the audit according to International­Standards on Auditing and generally accepted auditing practice in Sweden. These standards require us to comply with professional ethical requirements and to plan and perform the audit to obtain reasonable assurance that the Annual Report and the Consolidated Financial Statements are free of material misstatement. An audit involves taking various actions to obtain audit evidence about amounts and other information in the Annual Report and the Consolidated Financial Statements.­ The auditors­decide the actions that are to be taken, including by assessing the risks for material misstatement in the Annual Report and the Consolidated Financial Statements,­whether these are due to fraud or error. During this risk assessment, the auditors take into account the parts of the internal controls that are relevant for the way the company prepares the Annual Report and the Consolidated Financial Statements to give a true and fair view, in order to design audit procedures that are appropriate taking into account the circumstances, but not for the purpose of making a statement­ about the effectiveness of the company's internal control. An audit also includes assessing the appropriateness of the accounting principles that have been used and the reasonableness­of the Board of Directors and Chief Executive Officer's estimates in the statements, as well as assessing the overall presentation in the Annual Report and the Consolidated Financial Statements. We consider that the audit evidence we have collected is sufficient­and appropriate to provide a basis for our opinion. Opinion In our opinion, the Annual Report has been prepared in accordance­with the Swedish Annual Accounts Act and gives in all material respects a true and fair view of the parent company's­financial position as of 31 December 2012 and of its financial performance­ and cash flow for the year according to the Swedish Annual Accounts Act. The Consolidated­Financial­Statements have been prepared in accordance with the Swedish Annual Accounts Act and gives in all material respects a true and fair view of the Group's financial position as of 31 December 2012 and of its financial performance and

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cash flow for the year according to the Swedish Annual Accounts Act. The Directors' report is consistent with other parts of the financial­statements and the consolidated financial statements. We therefore recommend that the Annual General Meeting adopt the income statement­and balance sheet for the parent company as well as the statement of comprehensive­income and consolidated statement of financial position. Report on other requirements according to laws and other statutes­ In addition to our audit of the Annual Report and Consolidated Financial Statements, we have also performed an audit of the proposed appropriation of the Company's profit or loss as well as the Board of Directors' and Chief Financial Officer's administration of Euromaint Gruppen AB for the year 2012. The Board of Directors' and the Chief Executive Officer's responsibility The Board of Directors is responsible for the proposal for the appropriation of the company's profit or loss, and the Board of Directors and the Chief Executive Officer are responsible for the administration according to the Companies Act. The auditor's responsibility Our responsibility is to express an opinion with reasonable­assurance on the proposal for the appropriation of the company's­profit or loss and on the administration based on our audit. We have performed the audit according to generally accepted auditing practice in Sweden. As a basis for our opinion on the Board of Directors' proposal­for the appropriation of the company's profit or loss, we have reviewed the Board's reasoned opinion, as well as a selection of evidence for this, in order to assess whether the proposal complies with the Companies Act. As the basis for our pronouncement on discharge from liability, we have, in addition to our audit of the Annual Report and the Consolidated Financial Statements, examined significant­decisions, actions taken and circumstances in the Company in order to be able to determine the liability to the Company, if any, of any Board Member or the Chief Executive­Officer. We have also examined whether any member of the Board or the CEO has otherwise acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We consider that the audit evidence we have collected is sufficient and appropriate to provide a basis for our opinion. Opinion We recommend that the Annual General Meeting appropriate the profit of the parent company according to the proposals contained in the Director's Report and discharge the Board Members and the Chief Executive Officer from liability for the financial year. Stockholm, 2 March 2013 KPMG AB

Fredrik Sjölander Authorised Public Accountant

The Board of Directors

The Board of Directors

Leif Johansson Position: Chairman of the Board Date of Birth: 1949 Board Member since: 2012 Other board appointments: Board Member, Arcus-Gruppen AS, Inwido AB and Profura AB Education: Combined engineering and business degree Current employment: Deputy CEO and Senior Advisor, Ratos

Jonathan Wallis Position: Board Member Date of Birth: 1974 Board Member since: 2007 Other board appointments: Board member of KVD Kvarndammen AB Education: MSc Econ.,­Stockholm School of Economics, BA Stockholm University Current employment: Senior Investment Manager, Ratos

Hans Pettersson Position: Board Member Date of Birth: 1951 Board Member since: 2011 Other board appointments: Board Member, Skånska Energi AB, Chairman of the Board Flextrus AB Education: MSc in Forestry Current employment: CEO, Dynea

Oscar Hermansson Position: Deputy Member Date of Birth: 1979 Board Member since: 2012 Other board appointments: Scandinavian Business Seating AS Education: MSc Econ.,­Stockholm School of Economics Current employment: Investment Manager, Ratos

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Company management

Company management

Ove Bergkvist Position: CEO and President, acting Business Area Manager – Passenger Date of Birth: 1968 Employed by Euromaint: 2011

Lena Gellerhed Position: HR Manager Date of Birth: 1968 Employed by Euromaint: 2007

Mattias Wessman Position: CIO Date of Birth: 1974 Employed by Euromaint: 2009

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Henrik Dagberg Position: Strategy Manager Date of Birth: 1972 Employed by Euromaint: 2009

Gustav Jansson Position: Business area Manager Work Machines Date of Birth: 1952 Employed by Euromaint: 1978

Ingela Erlinghult Position: Business area Manager Components Date of Birth: 1965 Employed by Euromaint: 2009

Cecilia Wallberg Position: CFO Date of Birth: 1966 Employed by Euromaint: 2006

Anne-Catherine Worth Position: Communications Manager Date of Birth: 1969 Employed by Euromaint: 2012

Produced by IR Stockholm and Euromaint. Photography: Maria Åsén and Euromaint. Picture of page 11 loaned by Metro Service. Illustration on page 16 Martin Thelander. Printed by: Vitt Grafiska.

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Head office EuroMaint AB Box 1555 SE-171 29 Solna Visiting address: Svetsarvägen 10, Solna, Sweden Head office, Germany EuroMaint Rail GMBH Karl-Marx-Straße 39 D-04509 Delitzsch Germany

www.euromaint.com

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