Lagercrantz Group — Annual Report 2012

Jun 28, 2012

Content

The Year in Brief

Lagercrantz Group in Brief

President's Statement

Business Concept, Vision and Goals

Strategy and Corporate Culture

Business Areas

The Share

Several-year Overview

Board of Directors' Report

Consolidated Financial Statements

Notes

Auditor's Report

Board of Directors and Auditors

Management

Financial Information

This report is a translation of the Swedish language Annual Report. In the event of any

discrepancies between this document and the Swedish original, the latter shall govern.

Content: Henrik Ekelund and Lagercrantz Group Art and design: Tintin Timén and Staffan Jansson Production: Isle of Design Photo: Magnus Fond and Matton Images Translation: Ole BöökPrint: Digaloo

Production

Profit after finance items increased by 25 percent to MSEK 171 (137), which represents

• Net revenue for 2011/12 grew by 12 percent to MSEK 2,265 (2,029), equivalent to organic growth of 7 percent, adjusted for exchange rate effects.
• Operating profit increased by 25 percent to MSEK 184 (147). The operating margin was 8.1 percent (7.2).
• an all-time high result.
• Profit after taxes increased to MSEK 126 (102).
• Earnings per share after dilution increased to SEK 5.63 (4.61).
• Cash flow from operating activities increased by 48 percent to MSEK 175 (118), equivalent to SEK 7.82 (5.33) per share.
• The return on equity was 22 percent (20) and the equity ratio stood at 46 percent (42) at the end of the period.
• 2 acquisitions were made during the later part of the year, which have contributed to broaden the operation with proprietary products.
• Based on the successes with a broader orientation, a fourth division is created – Niche Products.

The Board of Directors proposes an increase of the dividend to SEK 2.75 (2.25) per share.

The Year in Brief

1 APRIL 2011 – 31 MARCH 2012

Return on equity, rolling 12 months

Lagercrantz is a technology group in the areas of electronics, electricity, communication and related fields. The Group's companies deliver all its specialised products and solutions to other companies (B2B) and several of the companies are world-leaders in their respective niches.

Lagercrantz is active in eight countries in Northern Europe and in China. The Group has about 800 employees and revenue of approximately SEK 2.3 billion. The Company's shares are listed on Nasdaq OMX Stockholm since 2001.

THE BUSINESS IS ORGANISED IN FOUR DIVISIONS:

• Electronics offers special products in embedded electronics, industrial wireless communication, RFID and lighting control.
• Mechatronics offers electric connections systems, electric installation materials, electric and electro-mechanical components and cablings.
• Communications offers products, systems, services and support in network access, digital image transmission/ technical security, and software.

Lagercrantz in Brief

Niche Products is the Group's new division from April 2012. Here a number of interesting market positions will be built up primarily by acquiring profitable companies with proprietary products. Initially, SwedWire, Svensk Stålinredning and Vendig are included, previously part of division Mechatronics.

Lagercrantz operates according to a decentralised model, which means that business decisions are made by the subsidiaries, close to the customers and suppliers. This results in great commitment on the part of all personnel and their business acumen is an important competitive advantage.

Lagercrantz creates value by offering proprietary products as well as products from world-leading manufacturers, in combination with customisation and advanced knowledge in technology and business. The largest group of customers is manufacturing industrial companies, but wholesalers and the public sector are also important customers. As the sale of proprietary products grows, a larger proportion of sales is exported to customers outside the Nordic Countries.

Revenue by business type

Trading 50% (54) Proprietary products 26% (24) Niche production 15% (12) System integration 5% (6) Service 3% (3)

Other 1% (1)

Revenue by market channel 12 months 2011/12

Direct to end customer 43% (38) Distributors / resellers 37% (42) Systems integrators 9% (10) Contract manufacturers 8% (8) Other 3% (2)

Revenue by market segment 12 months 2011/12

Power gen. & Electricity distr. 25% (22) Electronics 15% (19) IT 12% (13) Construction 11% (9) Transportation 7% (8) Telecommunication 6% (8) Security 3% (4)

• Medical 3% (3)
• Other 18% (14)

Revenue by geographic market 12 months 2011/12

Norway 18% (16) Euro-area 17% (16) Other Europé 6% (7) Asia 5% (6) Other 2% (2)

Lagercrantz is active in eight countries in Northern Europe and in China.

The 2011/12 operating year signified a new record year for Lagercrantz Group. Profit after finance items amounted to MSEK 171, which compared to last year's record of MSEK 137 is an increase of 25 percent. The Group also reached new heights in terms of profitability. The operating margin (EBIT in percent) was 8.1 percent (7.2) and the return on equity rose to 22 percent, the highest figure since going public. These successes were achieved despite a turbulent macro-economic environment.

The spring of 2011 was marked by optimism. At Lagercrantz, we experienced good and growing demand in most of the Group's areas. During summer 2011 came the crisis in Europe, which led to mounting uncertainty during autumn. At Lagercrantz, we sensed greater hesitation on the part of customers. Orders were delayed as long as possible and ordered quantities were smaller than before. The rate of growth also suffered to a degree. Yet, in the face of all this, the effects of the crisis on our business were not as great as almost everybody feared. Stabilizing action was taken by politicians in Europe after the turn of the calendar year. It is, however, too early to draw any far-reaching conclusions as to the outcome of these actions. Several macro-economic analysts are still warning that it is too early to sound the all clear. We therefore continue to be extra observant.

Behind Lagercrantz Group's successes and ability to fend off turbulence in the world around us lies the strategy that we have been pursuing steadfastly for several years. The organisational model, with decentralisation and management by objective, is well established. All subsidiaries work towards clear earnings goals and when the market changes we see more and more initiatives on the part of our subsidiary heads to adjust costs and to act in response to the market situation.

The acquisition strategy is also important in the transformation of Lagercrantz Group. We are constantly on the lookout for profitable B2B technology companies with strong market positions. In our quest also to raise the value added in our business, we have in recent years increasingly searched for product companies. The proportion of proprietary products has increased and is today almost 30 percent of our sales. All in all, it is gratifying to note that our earnings growth is derived from improvements in our existing business, as well as from successful acquisitions.

Let me conclude the year by taking this opportunity to extend my heart-felt thanks to all our dedicated associates for their fantastic work and many valuable initiatives during the year.

FUTURE – NEW DIVISION

Lagercrantz Group's development in recent years certainly whets the appetite. The business concept is strong and to develop it further we are establishing a new division, Niche Products, starting with the 2012/13 operating year.

Niche Products becomes the Group's fourth division and will initially consist of three of our subsidiaries: SwedWire, Svensk Stålinredning and Vendig. Our subsequent ambitions are to apply our dedicated resources and to acquire additional niched product companies. The orientation will be based on how we in recent years have operated when weighing opportunities in different technology areas, primarily in the Nordic countries. Along the way, we then form groups of companies and clusters in different product areas. Starting with this year-end report and the Annual Report for 2011/12, we will be reporting the Group incorporating this change. It is interesting to note that Niche Products already at the outset records good key financial indicators.

Division Mechatronics, where the three subsidiaries have been included, will as a consequence of the new division get a more distinct orientation towards electrically related products. Included here are the Group's largest subsidiary Elpress, Norwesco, the Group's three cable harness units, and our trading operations in electro-mechanics. With this, Mechatronics will be getting a more distinct profile, and its key financial indicators will continue to look good.

With these changes, we are creating new growth opportunities for Lagercrantz Group. We will continue to build, stone by stone, applying our decentralised business philosophy. We will continue to focus on margins and value added and we will continue to build our business with additional acquisitions. Going forward, Lagercrantz Group will continue to be composed of a number of well-managed, sharply niched technology companies, each a leader in its area.

May 2012

Jörgen Wigh

President & CEO

2011/12 – a record year

" The business concept is strong and to develop it further we areestablishing a new division, Niche Products, starting with the 2012/13 operating year."

GOALS

Lagercrantz Group's financial goals are: Earnings growth of 15 percent per year. Return on equity of not less than 25 percent.

Growth is measured over a business cycle as profit after wwfinance items. The return-on-equity goal is converted internally to return on working capital being not less than 45 percent. Follow-up against goals is performed on an ongoing basis during the year to allow rapid response by action. The Group operates with a clear internal comparison among the companies to enable each subsidiary to measure its own performance relative to other companies in the Group.

Business concept, vision and goals

VISION

Lagercrantz vision – is to be a leader in value-creating technology with market-leading positions in several expansive niches.

Leading means good growth and profitability, and creation of a positive development for customers, based on new technology or new concepts, driving the industry's development and refining our own business.

Value-creation means to add value in goods and services offered by taking advantage of all our accumulated experience, and technical and industrial knowledge. Customers are offered unique solutions and new combinations, technology, design and adaptation, as well as service, support and training.

^Amarket-leading position means being number one or two in a defined sub-market – a niche.

Lagercrantz Group's business concept is – within well-defined niches and in partnership with customers and suppliers – to offer value-creating technical solutions in electronics, electrics, communication and related fields.

Strategy and corporate culture

Acquisitions

The growth targets shall be reached through organic growth and acquisitions. Acquired companies strengthen the market position in existing areas, or pave the way for entry to new areas. It is crucial that acquired companies have a welltried business model, good earnings capacity, strong competencies and good growth potential.

CORPORATE CULTURE

Common basic values

The common basic values are an important part of the corporate culture, which is made up of accountability and freedom, simplicity and efficiency, together with willingness to change. When making acquisitions, Lagercrantz continues to build on the strong corporate culture that exists in the acquired companies and thus strengthens its own basic values as well as those of the acquired companies.

Decentralisation and management by objective

Each subsidiary runs its operations with a great deal of freedom under their own responsibility. The most important business decisions are made where expertise is at its maximum – close to the customers and the market. Each subsidiary prepares an annual business plan with quarterly targets for earnings and working capital. Plans are followed up on an ongoing basis and action is taken by each subsidiary as needed.

Businessmanship

Businessmanship is to create added value for customers by understanding the market, the technology and the customers' needs. This means a requirement for a holistic and commercially viable perspective and the ability to recognise new business opportunities and future needs. It also involves cultivating good relationships based on great knowledge of one's own organisation's delivery capacity and ability to build creative and attractive solutions for the customers.

Lagercrantz Group shall confirm its position as a profitable and growing company by developing its existing operations and by acquiring more companies with strong positions in well-defined niches.

Lagercrantz Group works with group-wide strategies and a strong corporate culture to achieve the set goals relating to earnings growth and profitability:

Strategies:

• Strong market positions in niches
• Increased value added
• Acquisitions

Corporate culture:

• Common basic values
• Decentralisation and management by objective
• Businessmanship

STRATEGIES

Strong market positions in niches

All of Lagercrantz Group's subsidiaries strive to achieve a strong market position in their niche. A niche consists of a well-defined technology area, customer segment or geographical area with a total market value normally in the order of MSEK 200-1,000.

Increased value added

With local market knowledge and specialised technical expertise, Lagercrantz Group contributes added value by customising, developing and combining different products in the solutions offered to customers. The degree of refinement is continually enhanced by increasingly offering proprietary products and phasing out standard components with low margins.

Lagercrantz Group is a technology group that offers world-leading technology and expertise in electronics, electrics, communication and adjacent areas. Business is conducted in accordance with a decentralised model through some 30 independent subsidiaries, all with pronounced niche focus. A highly qualified technical sales process is common to all the subsidiaries, as is the fact that all sales are to other companies, so-called businessto-business (B2B). Several of the companies offer their own proprietary products and customisation based on extensive experience and multi-year development. Via its subsidiaries, Lagercrantz has market-leading positions in several expansive niches. That means that each subsidiary focuses on developing a leading position in a limited market, a product or customer niche, with MSEK 200 to MSEK 1,000 in total revenue.

Business areas

ELECTRONICS

Division Electronics offers special components within embedded electronics, lighting control as well as wireless communication and identification solutions (RFID) from world-leading manufacturers as well as proprietary products. The customers are typically manufacturing companies in the fields of marine industry, medical technology, automation, telecommunications and other industry with stringent demands.

Companies within Electronics are mostly value adding distributors. The customer is offered special products and solutions from world-leading manufacturers with a high degree of customisation, maintenance, support and services. For the manufacturers, the distributor is a sales organisation that creates demand through good businessmanship and a high level of technical expertise.

Electronics' offer also includes proprietary products, among which are RFID products for high-security, industrial and commercial properties, as well as embedded computers aimed at marine customers, military applications and industry with stringent demands.

The division has operations in Denmark, Norway, Sweden, Germany, Poland and China.

Market and customers

Electronics targets OEM customers within electronics in Northern Europe. The customers impose stringent demands, particularly when they are subject to certification and regulatory control. Examples are marine navigation equipment, sensors for gas measurement and medical devices in the health care area. Within communications, Electronics is a leader in distribution of GSM modules. Within embedded electronics, the division has prominent positions in industrial computers, panel PC and monitors. The division is a world-leading player within marine monitors and has three of the four largest system manufacturers as customers. The division also has a leading position in Denmark

on the distribution side within automatic lighting, through advanced knowledge about intelligent light control in offices and public environments.

The division is a market leader in Finland in access control with its RFID products and solutions for the real estate industry and also commands a strong position within identification solutions in industry in general.

Division Electronics' strives to increase value added for customers means that project sales of semi-manufactures and modules for small and medium-sized production runs are increasing at the expense of standard components for large production runs. The share of services and proprietary products is also increasing.

MECHATRONICS

Mechatronics offers mainly electrically related products and systems to customers in manufacturing industry, energy generation and electricity distribution. The offer includes proprietary products in the form of electrical connection systems, electric installation material, customised wiring harness and distribution of mechanical and electro-mechanical products. Geographically, the bulk of sales are in the Nordic Region, but a growing proportion is being exported to countries outside the Nordic Region.

The division has operations in Denmark, Finland, Sweden, Germany and China.

The products developed in-house are characterised by high quality, reliability and a long useful life. They are also designed for safe and efficient handling during installation, which makes for a key customer benefit.

Customised wiring harness is developed in consultation with the customer in order to produce a product that is optimised for the customer's application, demands for high quality and prompt delivery. The product is manufactured locally based on the customer's forecasts, often from the prototype phase, on to ongoing production and subsequently for a possible after-market. A high degree of flexibility, lo^gistics and proximity to the customer are some of the added values offered by the units.

The value-adding distribution in Mechatronics includes products from leading manufacturers. The companies in the division work closely to their customers to offer customerspecific products, offer technical advice, good logistics and high accessibility.

Market and customers

Mechatronics has most of its customers in the Nordic manufacturing industry, especially in power generation, automation, and track-bound and heavy vehicles. Other customers include electricity grid owners as well as wholesalers and distributors in construction and electrical installation. A major portion of the division's sales is exports. The division has a market-leading position in electric connection systems in the Nordic power grid market and is an important supplier of wiring harness for large industrial companies.

COMMUNICATIONS

Communications offers products, systems, service and support in three areas: network access products, digital image transmission/technical security and software. Division Communication's companies offer solutions to the market in their role of value-creating distributor, with their own products or as systems integrator.

The division is active in Sweden, Norway, Denmark and Finland.

Access products

The access field includes trade in IT, telecommunications and AV equipment directly to end customers and via resellers. The customers use the products to develop networks for IT, telecommunications, data transmission and AV systems. A high level of customer value is created by presenting simple and cost-efficient solutions that suit the predefined connections in the customer's equipment.

Companies within the Access field represent worldleading manufacturers that have developed their products around the latest technology and through refined methods. In some cases, supplementary equipment and software have been developed in-house. The driving forces are demand for faster data transmission, greater bandwidth, simpler and more effective networks, higher security, reliable data storage, smaller units and lower energy consumption.

Digital image/technical security

The business area is affected by the need for greater security in society. This applies both in the case of public places, such as shops, streets and squares, as well as for pure high security objects. In the video conferencing area, demand is driven by cost and environmental benefits and by customers' ambition to streamline their communication, thereby, among other things, utilising their expertise better.

All companies have a prominent position in their respective fields. The primary competitive advantage is a high level of competence, based on extensive experience and demanding customers. Combined with an improved after-market offer and customer support, this has contributed to a positive development.

A number of deals and agreements were entered into in the retail sector in recent years. In video conferencing, successes have been achieved in telemedicine and remote education. One of the division's product companies has developed and launched a new generation of DECT telephones for health care, correctional facilities and other vulnerable environments, where the need for personal protection is vital.

Software

The area offers products, expertise and services in technical construction and design. This is based mainly on valueadding distribution of selected software conducted in close co-operation with group of resellers. A major portion of the added value lies in enhancing the business and competitiveness of resellers in the form of concrete and individual business development initiatives. Cost-efficient distribution and highly competent technical support is also offered.

NICHE PRODUCTS

Division Niche Products was started as of 1 April 2012 and is in its formative stages. Aside from developing its three current subsidiaries, a priority is to grow by acquiring new businesses. We are primarily looking for businesses with proven profitability and revenue in the order of MSEK 50 to MSEK 200. Acquisition targets should preferably have a strong position on their market niche and have a large element of proprietary products. As owners, we believe in decentralised decision-making under accountability. We offer acquired companies an opportunity to continue to develop their business under their own name, much in the same way as before, at the same time taking advantage of Lagercrantz Group's resources to grow the business at an accelerated pace. Today Niche Products consists of the businesses in three subsidiaries, SwedWire, Svensk Stålinredning and Vendig, which with the start of the 2012/13 operating year have been moved from division Mechatronics.

Over a five-year period, between 1 April 2007 and 31 March 2012, the market price of the Lagercrantz share has risen by 72 percent. The broad OMX Stockholm Price Index fell during the same period by 15 percent, and the Carnegie Small Cap Index benchmark index, which depicts the overall development for smaller companies, fell by 11 percent.

On 31 March 2012 the share price was SEK 57.25 (67.75). The movement in market price during the 2011/12 financial year (April-March) signified a decline by 12 percent (+96). During the same period, the OMX Stockholm Price Index declined by 9 percent (12) and the Carnegie Small Cap Index fell by 8 percent (16).

Lagercrantz had a market capitalisation of MSEK 1,327 (1,370) as of 31 March 2012, calculated based on the number of shares outstanding after the repurchases and is part of the Small Cap segment for companies with a market capitalisation below MEUR 150 on Nasdaq OMX Stockholm's main list.

PROPOSED DIVIDEND 2012

The Board of Directors proposes a dividend increase to SEK 2.75 (2.25) for the 2011/12 financial year. The total dividend payment will thus be SEK 61 (50).

TURNOVER OF THE SHARE ON THE STOCK EXCHANGE

The trading volume during the financial year was about 7.7 million shares (6.6) with a value of MSEK 420 (306). The turnover rate for the outstanding number of shares was 38 percent (30). An average of 47 (52) deals were recorded in the Lagercrantz share during the year each trading day.

INCENTIVE PROGRAMME

The Annual General Meeting makes decisions regarding incentive programmes for members of senior management in the Group. The purpose of the programmes is to raise the

The share

motivation and create participation for managers and members of senior management with respect to the opportunities for the Company's performance. The 2009 Annual General Meeting resolved to award 255 000 call options on repurchased class B shares. The 2010 Annual General Meeting resolved to issue 260,000 call options on repurchased class B shares in a similar manner and the 2011 Annual General Meeting resolved to issue 180,000 call options. All programmes were fully subscribed.

The total number of options outstanding as of 31 March 2012 was 684,500 after repurchase of 10,500 options from associates who have left the Group.

Each option gives its holder the right to purchase one share at the redemption price of SEK 29.70 (2009 programme), SEK 41.00 (2010 programme) and SEK 57.20 (2011 programme). The options can be exercised not later than 30 September 2012 (2009 programme) and on 4 October 2013 (2010 programme) and on three occasions before 4 October 2014 (2012 programme). In all, and fully subscribed, the programmes correspond to just short of 3 percent of the number of shares outstanding and about 2 percent of the votes in the Company. Programmes were also issued for 2006, 2007 and 2008, all of which are closed.

REPURCHASE OF OWN SHARES

The 2011 Annual General Meeting authorized the Board of Directors. In accordance therewith, 200,000 shares were repurchased during February 2012. Lagercrantz Group's total holding of shares in treasury was 956,300 class B shares as of 31 March 2012, equivalent to 4.1 percent of the shares outstanding and 2.9 percent of the votes in Lagercrantz Group.

INFORMATION

Lagercrantz Group informs about significant events in the Company by publishing press releases. The Company provides periodic financial information in the form of quarterly reports. Press releases and quarterly reports are available at the Company's website, where also financial overviews and current corporate governance information is published.

SHARE FACTS Short name LAGR B ID SSE14335 ISIN code SE0000808396 Segment Small Cap Sector Industrial goods and services ICB code 2700 Listed since 3 September 2001

OWNERSHIP STRUCTURE IN LAGERCRANTZ GROUP 31 MARCH 2012

Votes	Stake	ers
1.3%	1.9%	257
1.6%	2.2%	504
7.4%	9.0%	579
5.7%	6.6%	-75
3.0%	3.6%	-11
81.0%	76.7%	29
100.0%	100.0%	555
Votes	Stake	ers
47.1%	65.07%	382
52.9%	34.9%	290
100.0%	100.0%	572

Number of shares Number of owners Stake Votes1–500 2 257 1.9% 1.3%501–1 000 604 2.2% 1.6%1 001–10 000 679 9.0% 7.4%10 001–50 000 75 6.6% 5.7%50 001–100 000 11 3.6% 3.0%100 001– 29 76.7% 81.0%Total 3 655 100.0% 100.0%Category Number of owners Stake Votes Institutional ownership 382 65.07% 47.1% Private individuals 3 290 34.9% 52.9%Total 3 672 100.0% 100.0%of which Sweden based 3 520 83.91% 88.7%

STRONG DEVELOPMENT OF THE SHARE

LARGEST SHAREHOLDERS IN LAGERCRANTZ GROUP 31 MARCH 2012

Sha reho lder	A-sh ares	B-sh ares	% sh ares	% v otes
And w fa mily ers B örjes son	492, 558	402 ,500	4.0%	16.6 %
Hed elius w fa mily Tom	558 477,	5,40 0	2.2%	14.9 %
Nord ds ea In t Fun vest men		2,12 2,86 0	9.6%	6.6%
Odin Fun ds		1,79 6,06 0	8.1%	5.6%
Swe dban k Ro bur F unds		1,63 5,41 8	7.4%	5.1%
Livfö rsäk kand ia (P ubl) rings AB S		1,43 6,18 2	6.5%	4.5%
Lann ebo Fund s		1,30 5,95 4	5.9%	4.1%
Didn er & Gerg nds e Fu		1,22 1,63 9	5.5%	3.8%
Rapp , Ma riann e		716, 000	3.2%	2.2%
FON DITA NO RDIC MIC RO C AP S R		650, 000	2.9%	2.0%
dels bank unds Han en F		605 ,294	2.7%	1.9%
SEB Inve nt M stme nt anag eme		591, 000	2.7%	1.8%
fam Säve ily	10,0 00	428 ,289	2.0%	1.6%
Chri stina Mör ner,	10,0 00	346 ,411	1.6%	1.4%
Mat érn, Mar ta von gare	10,0 00	341, 661	1.6%	1.4%
The Know ledg e Fo unda tion		296 ,800	1.3%	0.9%
Wig h, Jö rgen	16,5 62	67,6 00	0.4%	0.7%
CBM U-D FA-I NT S ML C AP V		214, 211	1.0%	0.7%
Bolin der, Jan		210, 985	0.9%	0.7%
érn f amil Mat y		200 ,806	0.9%	0.6%
20 la t sh areh olde rges rs	1,01 6,67 8	14,5 95,0 70	70.3 %	77.2 %
Oth er o wne rs	77,9 76	6,52 7,28 5	29.7 %	22.8 %
TOT xcl s hare s he ld in AL e trea sury	1,09 4,65 4	21,1 22,3 55	100 .0%	100 .0%
(tre y) Lage tz G rcran roup asur		956 ,300
TOT AL	1,09 4,65 4	22,0 78,6 55

INCOME STATEMENT

in MS Amo unts EK	2011 /12	2010 /11	200 9/10	200 8/09	200 7/08
Net reve nue	2 26 5	2 02 9	1 72 0	2 13 8	2 17 2
ratin ofit befo re d ciat ion and orti sati Ope g pr epre am on	219	176	92	130	154
recia tion and rtisa tion Dep amo	-35	-29	-25	-25	-23
ratin ofit Ope g pr	184	147	67	105	131
Fina inco nd e nce me a xpen se	-13	-10	-9	-11	-10
Profi t aft er fi ce it nan ems	171	137	58	94	121
s & m inor ity in Taxe tere st	-45	-35	-16	-26	-30
profi t for the Net yea r	126	102	42	68	91

BALANCE SHEET

in MS Amo unts EK	2012 -03- 31	2011 -03- 31	2010 -03- 31	200 9-03 -31	200 8-03 -31
Ass ets
gible Intan rent ts non -cur asse	553	505	283	306	238
ible Tang ent a ssets non- curr	87	91	51	56	51
l non Fina ncia rent ts -cur asse	10	11	17	23	30
Othe rent ts r cur asse	659	621	503	604	657
Cash and cash ivale sho rm in nts & rt-te vest ts equ men	37	56	29	60	79
l ass Tota ets	1 34 6	1 28 4	883	1 04 9	1 05 5
ity a nd l iabi litie Equ s
Equi ty & mino rity i nter est	620	545	494	518	459
est-b d lia biliti Inter earin visio g pro ns an es	222	299	67	138	172
Non -inte bear ing p rovis ions and liabi lities rest-	504	440	322	393	424
l eq uity and liab ilitie Tota s	1 34 6	1 28 4	883	1 04 9	1 05 5
Cap ital e mplo yed	842	844	561	656	631
Pled ged d co ent l iabil nting ities ts an asse	6	32	31	63	61

CASH FLOW STATEMENT

in MS Amo unts EK	2011 /12	2010 /11	200 9/10	200 8/09	200 7/08
Profi t aft er fin item ance s	171	137	58	94	121
Adju nts f id ta item t inc lude d in cash flow xes & stme or pa s no	13	11	-2	1	-19
Cas h flo w b efor e ch es in rkin pita l ang wo g ca	184	148	56	95	102
Cash flow from cha orkin pital in w nges g ca	-9	-30	31	42	18
Cas h flo w fr ratin tivit ies om ope g ac	175	118	87	137	120
Cash flow from inve tiviti stme nt ac es	-68	-297	-18	-77	17
Cas h flo w fr ratin tivit ies om ope g ac
and inv acti vitie estm ent s	107	-179	69	60	137
Cash flow from fina ncin tiviti g ac es	-127	206	-99	-77	-151
h flo w fo r the Cas yea r	-20	27	-30	-17	-14

Summary of Financial Development

KEY FINANCIAL INDICATORS

in MS less o therw ise st ated Amo unts EK un	2011 /12	2010 /11	200 9/10	200 8/09	200 7/08
Cha in re e, % nge venu	11,6	18,0	-19,6	-1,6	10,0
ratin rgin, Ope % g ma	8,1	7,2	3,9	4,9	6,0
Profi rgin, % t ma	7,5	6,8	3,4	4,4	5,6
ital e mplo yed, Retu % rn on cap	22	21	11	17	21
Retu ity, % rn on equ	22	20	8	14	21
Equi ratio , % ty/as sets	46	42	56	49	44
Deb ity ra tio t equ	0,4	0,5	0,1	0,3	0,4
debt ity ra tio Net equ	0,3	0,4	0,1	0,2	0,2
ned Time s int t ear eres	11	12	6	7	9
inter est-b earin g lia biliti es (+ )/rec eiva bles (-) Net	185	243	38	78	93
ber o f em ploy d Num t yea ees a r-en	780	731	608	742	763
ber o f em ploy Aver age num ees	753	692	661	782	769
loye e sal and ben efits Emp aries exp ense	441	405	366	442	409
ide S wed Reve outs nue en	1 53 3	1 35 5	1 15 5	1 48 6	1 49 6

PER-SHARE DATA

	2011 /12	2010 /11	200 9/10	200 8/09	200 7/08
f sha afte Num ber o ding end urch ('00 0) tstan at y re ou ear- r rep ases	22 2 17	22 1 96	21 9 78	21 9 78	22 4 78
Wei ghte d nu mbe r of s hare ding afte urch ('00 0) tstan s ou r rep ases	22 2 42	22 0 46	21 9 78	22 2 87	23 2 12
r of s afte Wei ghte d nu mbe hare ding urch tstan s ou r rep ases
and dilut ion ( ) '000	22 3 92	22 1 33	21 9 78	22 2 87	23 2 12
fit p er sh Ope ratin SEK g pro are,	8,22	6,64	3,05	4,71	5,64
ings hare Earn , SEK per s	5,66	4,63	1,91	3,05	3,92
hare afte r dilu Earn ings tion , SEK per s	5,63	4,61	1,91	3,05	3,92
Cash flow from ratio er sh fter dilut ion, SEK ope ns p are a	7,82	5,33	3,96	6,15	5,17
Cash flow shar e aft er di lutio n, SE K per	-0,8 9	1,22	-1,37	-0,7 6	-0,6 0
Divid end hare , SEK (20 11/1 2 div iden d: as d) per s pro pose	2,75	2,25	1,50	1,50	1,50
r sha Equi re, S EK ty pe	27,9 0	24,6 0	22,5 0	23,6 0	20,4 0
arke t pri er sh SEK Mos t rec ent m ce p are,	57,2 5	61,7 5	31,5 0	23,5 0	28,8 0

DEFINITIONS

Return on equity Profit for the year in percent of average equity

Return on capital employed

Profit after finance items plus finance expense in percent of average capital employed.

Equity per share Equity relative to number of shares outstanding at year-end after repurchases.

Average number of employees Average number of annual employees during the year.

Cash flow per share after dilution

Cash flow for the year relative to weighted number of shares outstanding after repurchases and dilution.

Cash flow from operations per share after dilution

Cash flow from operating activities relative to weighted number of shares after repurchases and dilution.

Net interest-bearing liabilities/receivables

Interest-bearing provisions and liabilities, less cash and cash equivalents and short-term in-

vestments.

Net debt equity ratio Interest-bearing provisions and liabilities, less cash and cash equivalents and shortterm investments relative to equity, plus minority interest.

Change in revenue Change in net revenue in percent of preceding year's net revenue.

Times interest earnedProfit after finance items, plus finance costs divided by finance costs.

Operating margin Operating profit in percent of net revenue.

Debt equity ratio Interest-bearing liabilities relative to equity plus minority interest plus minority interest.

Equity/assets ratio

Equity plus minority interest in percent of balance sheet total.

Capital employed

Balance sheet total, less non-interest-bearing provisions and liabilities.

Earnings per share

Profit for the year attributable to the Parent Company's equity holders relative to weighted

Earnings per share after dilution

Profit for the year attributable to the Parent Company's equity holders relative to weighted number of shares outstanding after repurchases.

Profit margin

Profit after finance items, less share in associated companies' net revenue.

The legal Annual Accounts consist of the Board of Directors Report, including the Corporate Governance Report, with proposed allocation of earnings, and the Financial Statements.

BUSINESS

Lagercrantz Group AB (publ) and its subsidiaries are a technology group in electronics, electrics, communication and adjacent areas. The Group's products and services are distinguished by high technology content, customer adaptation and value creation. The Group is active in a number of product segments on several geographic markets.

The Group operates with a distinct niche focus and is characterised by decentralised business responsibility, where each subsidiary is a separate profit centre with responsibility for its chosen strategy. The Lagercrantz Group consists of the Parent Company, Lagercrantz Group AB, and just short of 30 operating subsidiaries. During 2011/12, the subsidiaries are organised in three divisions: Electronics, Mechatronics and Communications. For the next financial year division Niche Products will be added, initially consisting of three units moved from division Mechatronics.

NET REVENUE AND PROFIT

Lagercrantz Group's net revenue for the 2011/12 (1 April 2011– 31 March 2012) increased by 12 percent to MSEK 2,265 (2,029). Acquired businesses contributed with MSEK 130 to the period's revenue compared to the preceding year, which translates to organic growth of just over 5 percent for comparable unit, equivalent to organic growth of 7 percent adjusted for currency effects.

The overall business climate was favourable during the year. Financial unrest in the euro area had a negative effect on the market, especially during the autumn of 2011. The Group's customers adopted a wait-and-see attitude and caution prevailed. Demand improved towards the end of the financial year for Electronics, Communications and Niche Products, reaching a stable and favourable level. Division Mechatronics saw stronger demand compared to prior periods.

Operating profit for the financial year increased by 25 percent to MSEK 184 (147), which is an all-time high profit for a twelvemonth period. The operating margin was 8.1 percent (7.2). The operating margin was 8.1 percent (7.2). Strong demand and good control over costs in the newly acquired units was the basis for the year's profit improvement. Currency effects on operating profit were MSEK –1 (–3) during the financial year.

Acquired units contributed MSEK 24 to the financial year's operating profit compared to the preceding year, for organic profit growth of 9 percent for comparable units, equivalent to underlying organic profit growth of MSEK 13 for comparable units.

Profit after net finance items amounted to MSEK 171 (137). Net finance items was impacted by currency effects to the tune of MSEK –1 (0) during the financial year.

Profit after taxes for the 2011/12 financial year amounted to MSEK 126 (102). Earnings per share, after dilution, amounted to SEK 5.63 vs. SEK 4.61 for the year before.

PROFITABILITY AND FINANCIAL POSITION

The return on equity for the financial year reached 22 percent, compared to 20 percent for the preceding year. The corresponding numbers for return on capital employed were 22 percent and 21 percent, respectively.

Equity per share SEK 27.90, as against SEK 24.60 at the begin ning of the financial year and was affected by – aside from ear-

nings – currency-related translation effects and dividends paid. The equity/assets ratio was 46 percent compared to 42 per cent at the beginning of the financial year. At the end of the pe riod the net financial liability was MSEK 185, including a pension liability of MSEK 50, compared to MSEK 243, including a pension liability of MSEK 50 at the beginning of the period. The consoli dated net debt equity ratio was 0.3 (0.4).

CASH FLOW AND CAPITAL EXPENDITURES

Cash flow from operating activities during the financial year amounted to MSEK 175 (118) and 73 MSEK (41) during the fourth quarter. Spending on non-current assets amounted to MSEK 20 (19) and business acquired affected cash flow by MSEK –48 (–278) during the financial year.

NET REVENUE AND RESULT BY DIVISION Electronics

Net revenue for the financial year amounted to MSEK 606 (586). Sales were good during the period, even if a few units recorded a decline towards the end of the financial year compared to the year before. Operating profit for the financial year amounted to MSEK 42 (30), which is equivalent to an operating margin of 6.9 per-

cent (5.1). All businesses recorded improved margins during the year, based on cost focus and other measures to strengthen margins. The businesses in Denmark, Sweden and Norway de veloped especially well. Recent years' transformation towards in creased value added has paid off.

From March 2012 the newly acquired Finnish company Ides co, is included. Idesco develops and sells product based on RFID technology (Radio Frequency IDentification) for high-security, industrial and commercial properties. Idesco is also active in the area of identification solutions for industrial needs.

Mechatronics

Net revenue for division Mechatronics for the financial year in creased to MSEK 920 (740), which translates to growth of 24 percent and organic growth of 11 percent for comparable units. The rate of growth abated as the financial policy uncertain ty grew during the third quarter. Weakness was seen primarily in export-oriented industrial sectors. Demand picked up again during the fourth quarter, however, especially in businesses rela ted to electrical connection systems, circuit breakers and wiring harness saw a positive development. Operating profit for the fi nancial year amounted to MSEK 123 (77), equivalent to an opera-

ting margin of 13.4 percent (10.4). Acquired businesses as well as comparable units supported the earnings improvement. From November 2011, Swedish company Vendig is included. Vendig develops, manufactures and markets components for conveyors in the bulk handling industry in Sweden and the rest of Europe.

In the divisional structure in force since 1 April 2012, compa nies SwedWire, Svensk Stålinredning and Vendig have been mo ved to division Niche Products.

The Board of Directors and the President of Lagercrantz Group AB (publ), organisation number 5562824556, hereby submit their Annual Accounts and consolidated financial statements for the 2011/12 operating year. The Corporate Governance Report is also included in the Board of Directors Report.

Board of Directors Report

Communications

Net revenue for the financial year amounted to MSEK 739 (703). Demand was stable during the year as a whole, even though there were variations among the different businesses.

Operating profit for the financial year declined to MSEK 43 (53). The drop is attributable to a few specific units with inferior development compared to the year before. Restructuring action has been taken in these, the effect of which was beginning to be seen towards the end of the year.

PARENT COMPANY AND OTHER CONSOLIDATION ITEMS

The Parent Company's internal net revenue for the financial year amounted to MSEK 28 (25) and profit after finance items was MSEK 172 (33). This result includes exchange rate adjustments on intra-Group lending in the amount of MSEK –1 (–3). Dividend income from subsidiaries amounted to MSEK 168 (32). Investments in non-current assets amounted to MSEK 0 net (0). Of the Parent Company's approved committed credit facility in the amount in the amount of MSEK 500, MSEK 164 was utilised at year-end, compared to MSEK 175 MSEK at the beginning of the financial year. A previous acquisition loan in the amount of MSEK 75 was also repaid in full during the year. In addition, the Company held liquid funds of MSEK 0 as against MSEK 0 at the beginning of the financial year.

EMPLOYEES

At the end of the period, the number of employees in the Group was 780, which can be compared with 731 at the beginning of the financial year. The increase is primarily the result of acquired businesses, adding 39 new employees.

SHARES, REPURCHASES AND MAJOR SHAREHOLDERS

The share capital amounted to MSEK 48.9 at the end of the period. The distribution on classes of shares is 1,094,654 class A shares and 22,078,655 class B shares, a total of 23,173,309 shares. The class A share is not listed. The quotient value per share is SEK 2.11. The Articles of Association allow for conversion of class A shares to class B shares. No class A shares were converted during the year.

The 2011 Annual Meeting resolved to authorise the Board of Directors to repurchase shares up to 10 percent of the total number of shares outstanding until the next Annual Meeting. Repurchases shall be made via the stock exchange. Among other things, the mandate included the option of covering the Company's obligations under incentive programmes, under which purchase options on repurchased shares have been acquired by members of senior management and key persons in the Group. During the fourth quarter, 200,000 own class B shares were repurchased at an average price of SEK 55.00, equivalent to MSEK 11.

At the end of the period, Lagercrantz Group owned 956,300 class B shares, equivalent to 4.1 percent of the number of shares outstanding and 2.9 percent of the voting power in Lagercrantz Group. The average acquisition cost of the shares held in treasury amounts to SEK 31.75 per share. Repurchased share cover, inter alia, the Company's obligation under outstanding call option programmes for repurchased shares, where a total of 644,300 options have been acquired by members of senior management (awards 2009, 2010 and 2011) and which are still outstanding, with a redemption price of SEK 29.70, SEK 41.00 and SEK 57.20 SEK, respectively, per call option. During the financial year, 180,000 options were acquired by members of senior management in the Group with a redemption price of SEK 57.20 per call option.

During the third quarter, the entire incentive programme based on options on repurchased class B shares acquired by members of senior management in the Group during 2008, and parts of the 2009 programme were redeemed. In connection with redemption of the options a total of 220,700 repurchased class

B shares for a total of MSEK 8 were sold (refer to Note 6 for additional information).

Two shareholders held more than ten percent of the votes as of 31 March 2012: Anders Börjesson with family, 16.6 percent, and Tom Hedelius with family, 14.9 percent. Nordea Investment Funds, with 9.6 percent of the capital, was the largest owner in terms of number of shares owned.

The above holdings are calculated based on the number of shares and votes outstanding, not including the shares held in treasury by the Lagercrantz Group.

After the end of the financial year Lannebo Fonder increased its holding to more than 10 percent. As of 15 June 2012 Lannebo Fonder is the Group's largest shareholder in terms of ownership.

CERTAIN AGREEMENTS

There are no significant agreements to which the Company is a party that are activated or changed as a result of a change of control due to a public take-over offer.

ACQUISITIONS

During November 2011 Vendig AB was acquired to be included in division Mechatronics (now division Niche Products) from November.

During March 2012 Idesco Oy was acquired to be included in division Electronics from March 2012.

The estimated purchase money for businesses acquired during the financial year amounted to MSEK 61. This amount includes estimated conditional purchase money totalling MSEK 10 for both companies. Transaction expenses for acquisitions during the year amounted to MSEK 0.5 and are included in Administrative expenses in the income statement. With these acquisitions, goodwill in the Group increased by MSEK 42 and other intangible non-current assets grew by MSEK 17, primarily referring to proprietary products. The deferred tax liability amounts to MSEK 5.

The effect of the acquisitions on consolidated revenue during the financial year is MSEK 17 and on profit before taxes MSEK 2, after acquisition expenses. Had the acquired units been consolidated as of 1 April 2011, the effect on revenue and profit before taxes would have been MSEK 78 and MSEK 9, respectively, after acquisition expenses.

The acquisition analysis for the acquired businesses is presented in Note 38.

TRANSACTIONS WITH CLOSELY RELATED PARTIES

Transactions between Lagercrantz and closely related parties with a significant impact on the Company's financial position and results have not occurred.

SOCIAL RESPONSIBILITY

Lagercrantz builds its long-term development on responsible enterprise with respect to moral values and businessmanship. The Group's business is based on long-term and strong relationships with customers and suppliers, as well as good ethics and great respect for all individuals in the company as well as with external contacts.

Much like in other parts of the Group's business, the concrete work with social responsibility is highly decentralised within the framework of the guidelines Lagercrantz has adopted and which is based on the ethics policy adopted by IT & Telecom companies in Almega 15 October 2008. This policy can be seen at Lagercrantz Group's website and includes important basic principles with respect to: Discrimination, Work Environment, Environment, Intangible Rights, Child Labour, Bribery and Corruption. During the year the Group has developed a template for evaluating suppliers with respect to these issues.

ENVIRONMENTAL IMPACT

Responsibility for improving the environment and participating in a sustainable development is an important prerequisite for the Group's business. The principal activity consists of trading and distribution and only a small number of companies in the Group have their own manufacturing operations. The Group's impact on the environment is therefore limited and is mainly associated with transportation of finished goods, business travel and waste management. The Group's companies are continually working on reducing the environmental impact of their operations. Environmental work is conducted locally, based on the specific conditions for each individual company.

The Group's companies strive for high efficiency in their use of energy and natural resources, promote systems for renewed use and recycling of material and energy and also prevent and limit environmental pollution. The ambition is to be sensitive to customers' and suppliers' wishes, thereby meeting the market's demands for proactive environmental work. Several of the companies in the Group work with quantitative goals in their environmental efforts. In two subsidiaries the Group conducts business that requires a permit under the Swedish Environmental Act. There are no known threats from an environmental viewpoint that could jeopardise the operations.

RESEARCH AND DEVELOPMENT

In the interest of strengthening and developing Lagercrantz Group's position in its areas of operation, the Group assigns resources primarily to development of different solutions for customers and co-operation partners, products, and certain establishment of proprietary trademarks. Activities during 2011/12 included product development in particular. Development is performed in close co-operation with the customer and always based on an identified customer need. Lagercrantz Group conducts no research of its own.

Expenditure for research and development increased slightly during the year, but still accounts for less than one percent of revenue. Expenses for development of PC solutions for embedding in complex environments were capitalised during the year.

RISKS AND UNCERTAINTY FACTORS

Lagercrantz Group's profit, financial position and the future development are affected by internal factors over which the Company exerts control, as well as by external factors where opportunities to affect the course of events are limited. The focus is instead on managing the consequences thereof. The most important risk factors are the state of the economy, structural changes on the Group's markets, supplier and customer dependence, the competitive situation and financial risks, as described below.

Financial and political uncertainties are the most palpable uncertainty factors for Lagercrantz Group. The unrest in financial markets, and the broad economic slowdown during 2008–2009, had a negative effect on demand for several of the Group's companies. A number of measures were therefore taken during the 2008/09 and 2009/10 financial years, in areas including costs, working capital, and capital expenditures. When thus demand grew stronger in the beginning of 2010/11, the Group had a good position, with reduced costs and a strong financial position, which has had a positive effect on the Group during 2011/12.

Overall, the business climate during 2011/12 was benign. Financial unrest in the euro area had a negative effect on the market, however, especially during the autumn of 2011. The Group's customers adopted a cautious attitude and apprehension could be sensed, but during the fourth quarter demand picked up again.

The economic situationLagercrantz is affected by the overall economic development, typically measured in terms of GDP growth. Since Lagercrantz almost exclusively sells its products and services to companies and government agencies, it is primarily these entities' purchasing plans that affect Lagercrantz Group. Lagercrantz tries to meet the risks that result from cyclical changes in the economy by sector diversification, niche focus and its decentralised structure. Sector diversification means that, seen across the entire Group, its customers will find themselves in different phases on an economic cycle. As a consequence of the Group's niche focus, the Group is less dependent on one or a few end markets for its growth and profitability. This means that cyclical changes in one sector or one country may have an impact on an individual company niched towards parts of this sector or geographic area, but will have less effect on the Group's overall development. Lagercrantz Group endeavours to have a growing part of its sales in the form of aftermarket sales and service revenue, which is deemed to be less sensitive to economic cycles than investmenttype goods. The decentralised structure means that it is the responsibility of the individual profit centres to keep on top of their respective markets and take action quickly when fluctuations in the market situation are seen. This makes rapid and effective changes possible and local measures can be taken with a clear link to each profit centre's environment.

Structural changes

Lagercrantz works actively on increasing the value element in its offer, irrespective of customer group. This has clearly been a contributing reason for the Group's improved profitability, and the fact that the Group continues to be a prioritised supplier to many customers. An important part of this work has been to be more selective in choosing customers and market segments where the Group has an opportunity of creating a strong market position, which makes it more difficult to replace us with another supplier.

Another structural change that affects our business is the ever more rapid technological development, and overall shorter product life cycles. This places ever more rigorous demands on the companies to stay close to the customers in order to catch new trends and to know when it is commercially warranted to adopt a new technology area, or to phase out an existing one.

Supplier and customer dependence

Dependency on individual suppliers is one of the most important operational risks for an individual subsidiary to handle. Some of the companies in the Group have developed their business based on one or a few strong supplier relationships. If one of these were to disappear, it would hurt the company, especially in the short term, before alternatives have been located. In order to minimise this risk the subsidiaries work closely with their suppliers so as to create strong relationships at multiple levels. The Group also increasingly works on analysing supplier and customer relationships based on contract structure, product liability issues and insurable risks to minimise the consequences of the loss of a supplier or customer. In recent years the Group has also worked successfully to reduce the risks associated with late payments from or non-payment by customers. Measures have included credit assessment and follow-up of new and existing customers, as well as active management of late payments. Overall in the Group, there is a large number of suppliers and distribution agreements and of these some 20 are of such major economic importance that special action would be required if one or more of these were lost. No individual supplier represents more than about 5 percent of the Group's aggregate sales. A number of supplier agreements expire and are added each year in the normal course of business, however.

Lagercrantz has a broad customer structure, split over a number of industry segments and geographic markets. No customer represents more than 5 percent of the Group's aggregate sales.

Competitive situation

In general, it can be said that the market segments where Lagercrantz is active are marked by change and increased consolidation, even if there are major variations.

In the electronic industry in particular, the consolidation that swept the market in the beginning of the 2000s, created pricing pressures in the area of standard components to major customers. There are nevertheless still many niches that offer good profitability, especially because the customer structure there is different, with more small and local customers. This is the type of niche where Lagercrantz wants to be. In other areas where Lagercrantz is active, moves among customers led to a situation where the remaining players compete for the same customers and organic growth is weak. This is the case in the wiring harness business. Here Lagercrantz attempts to assume a unique position through flexible production, high quality and strong customer relationships. In several other markets where Lagercrantz Group's businesses are active, market growth is so good and the degree of consolidation so low that the competitive situation allows for growth as well as improved profitability.

Seasonal variations

Lagercrantz Group's business is only to a limited degree marked by seasonal variations. Operations normally follow the seasonal pattern for the manufacturing industry, which means lower sales during holiday periods. Based on a historical pattern, just short of half of the result is generated during the first two quarters, and just over half during the last two quarters of the financial year, October to March in other words. In lockstep with the change in the Group's structure prompted by a growing share of export-related business, the seasonal pattern has been evened out to a large extent. Deviations from this may also appear when rapid economic changes occur.

Financial risks and sensitivity analysis

For an account of the Group's and the Parent Company's financial risks and a sensitivity analysis, reference is made to Note 41.

CORPORATE GOVERNANCE REPORT

Starting with the 2009/10 financial year, Lagercrantz Group prepares a statutory corporate governance report in accordance with the Swedish Annual Accounts Act (1995:1554), chapter 6, sections 6–9, which is subject to review by the Company's auditor. In addition hereto Lagercrantz Group applies the Swedish Code for Corporate Governance in accordance with the revised code that came into force 1 February 2010. Since the legislation and the code partially overlap, Lagercrantz Group in the following provides a report that takes the Swedish Annual Accounts Act as well as the Swedish Code for Corporate Governance into account. The Company adheres to the code in all essential aspects. In four respects (two of which are found in the section on Election Committee, one in the section on Audit Committee, and one in the section on incentive programmes) an explanation is offered for the deviations. The report also contains an account of the work of the Election Committee leading up to the 2012 Annual General Meeting.

Corporate governance structure

Lagercrantz Group is a Swedish public limited liability company with its registered office in Stockholm. The Company, through its subsidiaries, deals in technology and is publicly traded on Nasdaq OMX Nordic since 2001. Governance and control of the Company is exercised through a combination of written rules and practice. In the first instance the regulatory framework consists of the Swedish Companies Act and the Swedish Annual Accounts Act, but also the Swedish Code for Corporate Governance and the rules that apply to the regulated market where the Company's shares are listed for trading.

The Swedish Companies Act contains basic rules for the Company's organisation. The Swedish Companies Act stipulates that there should be three decision-making organs: the General Meeting of Shareholders, the Board of Directors and the President & Chief Executive Officer, in a hierarchal relationship with each other. There should also be one control organ, the auditor, who is appointed by the Annual General Meeting.

Shareholders

As of 31 March 2012 the number of shareholders was 3,655, compared to 3,777 at the beginning of the financial year. Private individuals owned 35 percent (40) of the number of shares outstanding and 53 percent (57) of the votes in the Company. The remaining shares were owned by legal entities, primarily mutual funds, insurance companies and pension funds. Foreign shareholders owned 24 percent (17) of the shares outstanding and 17 percent (12) of the votes. The holding of the ten largest shareholders was 55 percent (57) of the shares outstanding and 65 percent (66) of the votes.

The above calculations are based on the number of shares outstanding, not including repurchased shares held in treasury by Lagercrantz Group.

Annual meeting and articles of association

The general meeting of shareholders is the highest decisionmaking body in Lagercrantz Group. Here, shareholders exercise their influence through discussions and decisions. The General Meeting decides on all issues that do not expressly fall under the jurisdiction of another corporate organ. Every shareholder has the right to participate in the proceedings of and to vote their shares at the General Meeting in accordance with the provisions of the Articles of Association.

Lagercrantz Group's regularly scheduled Annual General Meeting shall be held in Stockholm within six months of the end of the financial year. The Annual General Meeting appoints the Board of Directors and the auditors and sets their fees. The Annual General Meeting also adopts the financial statements and decides on the allocation of earnings and on discharge from liability for the Board of Directors and the President and decides on other matters that according to the Articles of Association or legislation should be brought before the General Meeting.

The Articles of Association have been adopted by the General Meeting. This document stipulates that the Company's shares have been issued in two classes, where class A shares give their holder 10 votes and class B shares one vote per share. The Company's share capital shall be a minimum of SEK twentyfive million (25,000,000) and a maximum of SEK one hundred million (100,000,000). The minimum number of shares outstanding shall be 12,500,000 and the maximum number of shares outstanding shall be 50,000,000. Both classes of shares confer the same rights on its holders with respect to the Company's assets and profit. The Articles of Association allows for conversion of class A shares into class B shares. The Articles of Association also stipulate that the Company's Board of Directors shall consist of not less than three and not more than nine directors, and regulates the forms of notice for General Meeting.

Notice for Annual General Meeting, and notice for Extraordinary General Meeting, where an amendment of the Articles of Association will be on the agenda, shall be issued not more than six weeks and not less than four weeks before such Meeting. Notice for other Extraordinary General Meeting shall be issued not more than six weeks and not less than two weeks before such Meeting. The notice to attend shall be published in Dagens Industri and Post och Inrikes Tidningar, and shall be available at the Company's website.

Shareholders who wish to participate in the proceedings of the General Meeting shall (I) be entered in a transcript or other version of the entire share register showing the state of affairs five weekdays before the General Meeting and (II) give notice to the Company for him- or herself and up to two assistants not later than at 3:00 p.m. on the date set forth in the notice for the General Meeting.

Since 2005 the Annual General Meeting has also determined the form for how an election committee is to be appointed.

Annual Meeting 2011

The 2011 Annual General Meeting was held 30 August in Stockholm. Notice for the Annual General Meeting was published 26 July 2010 in Dagens Industri and Post och Inrikes Tidningar, and was announced the same day in a press release. At the Meeting shareholders representing 9.0 million shares and 17.9 million votes, respectively, were present. This is equivalent to 40 percent of the number of shares outstanding and 56 percent of the votes in the Company.

Resolutions passed at the Annual Meeting included the following:

• A dividend of SEK 2.25 per share was declared in accordance with the proposal of the Board of Directors.
• Discharge from liability was granted to the Board of Directors and the President for their administration during 2010/11.
• All directors and the Chairman of the Board of Directors were re-elected in accordance with the proposal of the Election Committee.
• Fees for the Board of Directors and the auditors were determined.
• Routines were established for appointment of an election committee in preparation for the next Annual Meeting.
• Principles for remuneration and other terms of employment for senior management were resolved.
• In accordance with the proposal of the Board of Directors, the Annual General Meeting resolved that the Company – in a departure from the pre-emptive rights if shareholders – to offer managers and members of senior management to acquire up to 180,000 call options on repurchased class B shares.
• The Board of Directors was authorised to acquire and sell shares in the Company, representing up to 10 percent of the shares outstanding – on one or more occasions – during a period ending immediately before the next following Annual General Meeting.

Board of Directors

It is the duty of the Board of Directors to manage the affairs of the Company in the best possible way and in so doing look after the interests of the shareholders. Lagercrantz Group AB's Board of Directors consisted during 2011/12 of six regular members who together represent broad commercial, technical and public experience:

• Pirkko Alitalo
• Anders Börjesson, Chairman of the Board of Directors
• Tom Hedelius, Vice Chairman of the Board of Directors
• Lennart Sjölund
• Roger Bergqvist, as of 30 August 2012
• Jörgen Wigh, President & CEO

A detailed presentation of the members of the Board of Directors, including information about other assignments, will be found on page 52. Other members of management of the Group participate in Board of Directors meetings as reporters or Secretary.

Chairman of the Board of Directors

The Chairman of the Board of Directors leads the work of the Board of Directors and has a special responsibility to follow the Company's development between the Board of Directors meetings, and to ensure that the members of the Board of Directors are provided with the information necessary to perform satisfactorily. The Chairman maintains ongoing contact with corporate management and holds meetings with them as needed. The Chairman is also responsible for evaluation of the work of the

Board of Directors and for the Election Committee being informed of the result of such evaluation.

Work of the Board of Directors

The Board of Directors held ten meetings during the 2011/12 operating year during which minutes were taken, one of which was a statutory Board of Directors meeting in conjunction with Annual General Meeting. The work of the Board of Directors follows rules of procedure that are confirmed on an annual basis at the statutory Board of Directors meeting. These rules of procedure lay down the division of labour between the Board of Directors and the President, the Chairman's and the President's responsibility and the forms for the financial reporting.

The President is a member of the Board of Directors and presents reports at Board of Directors meetings. The Board has appointed the Group's Chief Financial Officer to serve as secretary. The Board of Directors has a quorum when at least four directors are present and, where possible, decisions are made after discussion that leads to consensus. The Board of Directors was complete at all meetings during the year.

During regularly scheduled Board of Directors Meetings the Company's economic and financial position are dealt with; one item on the agenda deals with acquisitions. The Board of Directors is kept informed by way of information in writing about the Company's business and other relevant information.

During 2011/12 the Board of Directors devoted special attention to acquisition issues, market development and business model. One extra Board of Directors meeting was held during one meeting solely aimed at discussing the Group's position and strategy.

The work of the Board of Directors is evaluated annually following an established procedure, which includes discussions around:

• Agenda and material for the Board of Directors
• Number of meetings
• Strategic plan and orientation
• Audit analysis
• Overarching responsibility
• Competence
• Work of the Chairman

The Board of Directors dealt with the most recent evaluation during a meeting in the month of February 2012. In accordance with the Code, the Board of Directors evaluated the work of the President & CEO at a meeting without the presence of corporate management.

The total fee to the Board of Directors of Lagercrantz Group for 2011/12 amounted to SEK 1,217 thousand (1,100). In accordance with an Annual Meeting resolution, the Chairman of the Board of Directors received SEK 400 thousand (400), the Vice Chairman SEK 300 thousand (300) and the other directors who are not employees of the Company received SEK 200 thousand (200) each. See Note 6.

Remuneration committee

The Board of Directors has appointed a remuneration committee within itself with the task of preparing the proposal of the Board of Directors for the Annual Meeting's guidelines for remuneration to the President and CEO, and other members of senior management. The Committee also has the task of following up on and implementing the resolutions of the Annual Meeting with respect to principles for remuneration to members of senior management. During 2011/12 the Remuneration Committee consisted of Anders Börjesson, Chairman of the Board of Directors, and Tom Hedelius, Vice Chairman of the Board of Directors. The President & CEO presents reports but does not participate in matters concerning him. The Remuneration Committee held one meeting during the year. All members were present at this meeting.

Audit Committee

The Board of Directors has appointed an audit committee the duty of which is to analyse and discuss the Company's risk management, governance and internal control. During 2011/12 the Committee consisted of all directors with the exception of the President & CEO. In the opinion of the Board of Directors, this is most appropriate in view of Lagercrantz Group's size and business. The Audit Committee maintains contact with the Company's auditors to discuss the orientation and scope of the audit work. In connection with the adoption of the annual financial statements, the Company's auditors report on their observations during the course of their audit and their assessment of the internal control. At its disposal the Audit Committee also has an internal control group.

The Committee held one meeting during the year. All members were present at this meeting.

Because of the structure with an internal control group that supervises and reports discrepancies to the Committee, and the extensive work that a traditional examination by the Company's auditors would entail, the Board of Directors has chosen to deviate from the recommendation of the Swedish Code of Corporate Governance calling for a review of the semi-annual report or the 9month interim report.

Auditors

At the 2009 Annual General Meeting, registered audit company KPMG AB was elected to serve as auditor. The audit firm has appointed Joakim Thilstedt, Authorised Public Accountant, to serve as auditor in charge.

In order to ensure oversight and control by the Board of Directors, it is annually given an opportunity to voice its opinion on the auditors' planning of the audit's scope and focus. After completing its review of internal control and accounting records, the auditors report on their findings at the Board of Directors meeting in May. In addition hereto the auditors are offered to attend Board of Directors meetings when the Board of Directors or the auditors feel that there is a need.

The independence of the auditors is ensured by the audit firm's internal guidelines. Their independence has been confirmed to the Audit Committee.

Management

The Chief Executive Officer and Group management draw up and implement Lagercrantz Group's over-arching strategies and deal with issues such as acquisitions, disposals and major capital outlays. Such issues are prepared by Group management for decision by the Parent Company's Board of Directors. The President & CEO is responsible for day-to-day management of the Company in accordance with decisions and guidelines of the Board of Directors.

Lagercrantz Group's Group management consists of the President, Executive Vice President and the Group's Chief Financial Officer. The management team consists of Group management and division heads/business area managers, in total eight persons who constitute senior management. The management team meets on a monthly basis to discuss the Group's and the subsidiaries' results and financial position, as well as issues pertaining to strategy, result follow-up, forecasts and the general development of the business. At these meetings also the Group Controller and one person in business development are present. Among the tasks are also issues concerning acquisitions, joint projects, consolidated financial reporting, communication with the stock market, internal and external communication, and coordination and follow-up of security, environment and quality.

Remuneration to members of senior management

Lagercrantz Group's principles for remuneration to members of senior management entail that remuneration to the President & CEO and other persons in the management team may consist of basic salary, variable remuneration, pension, other benefits and financial instruments.

Guidelines adopted for remuneration of members of senior management as resolved by the 2011 Annual General Meeting and information about existing incentive programmes are set forth in Note 6 of this Annual Report and are summarized below.

The aggregate remuneration must be in line with market conditions as well as competitive, and should be commensurate with responsibility and authority. The annual variable portion of the remuneration should be maximised to about 40 percent of the fixed salary. The variable portion should also be based on actual performance relative to set goals, and on individual performance.

The retirement age shall be 60–65 years and in addition to the ITP plan, there should in the normal instance only be defined contribution pension plans. In case of termination, there may be severance pay equivalent to a maximum of one year's salary. There shall be no other share-price-based incentive programmes than the present and to the Annual Meeting proposed incentive programme.

In individual cases and if special reasons exist, the Board of Directors may diverge from the above guidelines.

The proposal of the Board of Directors to the 2012 Annual General Meeting for guidelines for remuneration to members of senior management is that the principles for remuneration to the President & CEO and other senior managers should be unchanged.

Operative governance

The Group's operative activities are handled in subsidiaries of the Lagercrantz Group. There is active board-of-directors work in all subsidiaries under the management of division heads. Subsidiary boards of directors follow day-to-day operations and set business plans. Operations are conducted in accordance with the rules, guidelines and policies adopted by Group management, and by guidelines instituted by each respective subsidiary Board of Directors. Subsidiary chief executives are charged with profit centre and profitability responsibility for their respective companies, as well as responsibility to secure growth and development in their respective companies. Allocation of investment capital in the Group is determined following a decision by parent company Lagercrantz Group's Board of Directors in accordance with an annually updated capital expenditure policy.

Operative governance in the Lagercrantz Group is distinguished by clearly defined demands by Group management and considerable liberty for each respective subsidiary to make decisions and act to fulfil set goals.

Internal control

The purpose of internal control is to ensure that the Company's strategies and goals are followed up and that the investment of the shareholders is protected. A secondary purpose is to ensure Group-wide accurate and relevant information to the stock market in compliance with generally accepted accounting principles in Sweden, laws, regulations and other requirements on listed companies. The Board of Directors of Lagercrantz Group has delegated the practical responsibility to the President & CEO, who in turn has allocated the responsibility to the other members of senior management and to subsidiary chief executives.

Control activities take place in the entire organisation at all levels. Follow-up is included as an integrated element of management's day-to-day work.

For the financial reporting there are policies and guidelines, and also automatic control in systems as well as reasonability assessment of flows and amounts.

Management makes regular assessments of any new financial risks that may arise and the risk for errors in the existing financial reporting. To its aid in this regard, management has an internal control group consisting of persons from the finance de-

partment. The group is charged with responsibility to review the Group's internal control routines and compliance therewith, and report its observations and recommendations to the Audit Committee.

Controls are made taking transaction flows, staffing and control mechanisms into account. There is focus on possible errors in the financial reporting with respect to significant earnings and balance sheet items and areas where there is a risk that the consequences of any errors would be considerable.

The Board of Directors is of the opinion that a trading operation of Lagercrantz Group's scope, in a decentralised organisation, in a well-defined market, does not require a more extensive review function. The Board of Directors makes a renewed assessment of this issue on an annual basis.

So as to ensure good capital market communication, the Board of Directors has adopted a communications policy. This policy dictates what should be communicated, by whom and how. The basic premise is that regular financial information is provided in the form of:

• Press releases about significant events or stock price-sensitive information.
• Interim reports, year-end report and press release in conjunction with the Annual General Meeting
• Annual Report

Through openness and transparency, the Board of Directors and management of Lagercrantz Group work to provide the Company's owners and the stock market with relevant and accurate information.

Election Committee

The principal task of the Election Committee is to suggest directors, Chairman of the Board of Directors and auditors and to suggest the fees for directors, the Chairman and the auditors in such a way that the Annual General Meeting can make wellfounded decisions. The 2011 Annual General Meeting decided to give the Chairman of the Board of Directors the assignment of contacting the largest shareholders by vote before 31 December 2011, requesting them to appoint candidates, thereby forming an election committee together with the Chairman of the Board of Directors. In accordance herewith, an election committee was formed consisting of:

• Anders Börjesson, Chairman
• Tom Hedelius, Vice Chairman
• Bengt Belfrage, Nordea fonder
• Erik Sjöström, Skandia Liv
• Tomas Ramsälv, Odin Fonder

The Election Committee has access to the evaluation made by the Board of Directors of its work, and information about the Company's business and strategic orientation. The suggestions of the Election Committee, as well as its motives, will be published in connection with the notice for the Annual General Meeting and will also be made available at the Company's website. The mandate period of the Election Committee lasts until a new Election Committee has been appointed. No fees are payable for Election Committee work.

In a deviation from the Swedish Code of Corporate Governance, the Chairman of the Board of Directors, Anders Börjesson, has also held the post of Chairman of the Election Committee. Tom Hedelius, Vice Chairman of the Board, has also been a member of the Election Committee. The explanation for this deviation is that Anders Börjesson and Tom Hedelius also are the Company's largest owners in terms of votes. Lagercrantz Group's strategic orientation, as well as its business and governance model, is based on aspects such as strong engagement and know-how on the part of the Company's principal owners. This approach permeates Lagercrantz Group's corporate culture and has proved to be vital for the Group's successful development.

The Board of Directors and the Election Committee are of the opinion that a majority of the members of the Board of Directors is independent relative to the Company and corporate management, and that at least three of these directors also are independent relative to the Company's major shareholders.

Incentive programme

A long-term incentive programme has been in place since 2006 for managers and members of senior management in the Group in accordance with an annual general meeting resolution. The purpose of the programme is to raise motivation and create participation for managers and members of senior management regarding the opportunities for the company's development. The object of the programme is also to motivate managers and members of senior management to continued employment in the Group. The programme is a revolving programme based on call options on repurchased Class B shares held in treasury. Options have been issued in 2006, 2007, 2008, 2009, 2010 and 2011 based on the decision by the annual general meeting each year. The 2009, 2010 and 2011 programmes are currently outstanding. Outstanding programmes mean that shares can be acquired on three different occasions, two of which fall within three years from issuance and thus constitute a deviation form the Swedish Code of Corporate Governance. The purpose of this is to allow redemption on several occasions. A complete description of outstanding option programmes will be found in Note 6.

EVENTS AFTER THE DATE OF THE REPORT OF FINANCIAL POSITION

In April 2012 Lagercrantz increased the number of divisions to four, introducing division Niche Products. Three of the Group's existing companies are being moved from division Mechatronics to division Niche Products. These companies are: Svensk Stålinredning AB, SwedWire AB and Vendig AB.

Niche Products will be built up by acquiring – in the first instance – profitable companies with a strong market position in interesting niches and with a large element of proprietary products.

FUTURE DEVELOPMENT

The Group's two most important tasks for the future are to continue developing existing businesses, also focusing on growth, organically as well as through acquisitions.

The financial and political uncertainty continues in many parts of the world. It remains unclear what the real economic effects of this uncertainty will be, so the Group has adopted a cautious attitude and follows the changes in the surrounding world diligently.

Since the Group has been working on lowering its costs and increasing its added value, improved profitability has been created and the Group now stands well prepared for the future. To this is added the revenue and profit that follows from successful acquisitions. The Group's ambition is to continue increasing the element of proprietary products, primarily through acquisitions.

DIVIDEND

The Board of Directors proposes a dividend of SEK 2.75 (2.25) per share. The dividend is equivalent to a total of MSEK 61 (50) and constitutes 49 percent (49) of the year's profit. The size of the dividend is based on consideration to the Group's capital structure and future possibilities for expansion. The Board of Directors is of the opinion that the proposed dividend leaves room for the Group to fulfil its obligations and to make the necessary capital expenditures.

PROPOSED ALLOCATION OF EARNINGS

The Board of Directors proposes that that the funds available for distribution, SEK 548,374 thousand, are allocated as follows:

548 ,374
487 ,277
61,0 97

* Based on the total number of shares outstanding on 31 March 2012. The total amount paid as dividends may change until the record day due to repurchases of shares and transfer of shares to participants in long-term incentive programmes.

In making the proposal for dividend, the Company's dividend policy, equity/assets ratio and financial position in other respects was taken into account and due consideration was given to the Company's ability to fulfil present and anticipated payment obligations in a timely manner and to carry out necessary capital expenditures.

BOARD ASSURANCE

The consolidated and the Parent Company income statements and the consolidated statement of financial position and the Parent Company's balance sheet will be subject to approval at the Annual General Meeting to be held 28 August 2012. We regard the consolidated financial statements as prepared in accordance with the international financial reporting standards referred to in regulation (EG) No. 1606/2002 of 19 July 2002 of the European Parliament and the Council on the application of international financial reporting standards and as providing a true and fair view of the financial position and performance of the Group. The annual accounts have been prepared in accordance with generally accepted accounting principles in Sweden and give a true and fair view of the financial position and results of the Parent Company. The Board of Directors Report for the Group and the Parent Company provides a true and fair overview of the business activities, financial position and results of the Group and the Parent Company and describes the significant risks and uncertainty factors facing the Group and the Parent Company.

Stockholm, 26 June 2012

Anders Börjesson Tom Hedelius Chairman

Vice Chairman

Roger Bergqvist Pirkko Alitalo Lennart Sjölund Director Director

Director

Jörgen Wigh President & Chief Executive Officer

Our audit report was submitted 26 June 2012

KPMG AB

Joakim ThilstedtAuthorised Public Accountant

Consolidated income statement

in MS Amo unts EK	Not e	2011 /12	2010 /11
Net reve nue	3,4	2 26 5	2 02 9
of g Cost ood s sol d		-1 60 9	-1 46 1
rofit Gro ss p		656	568
Othe ratin r ope g rev enue	7	13	15
Selli osts ng c		-323	-280
Adm inist rativ e ex pens es		-134	-129
arch and dev elop Rese t exp men ense s		-21	-17
Othe ratin r ope g ex pens e	8	-7	-10
ratin ofit Ope g pr	3, 5, 6, 9 , 10, 13	184	147
lt fro m fin Resu anci al ite ms
Fina inco nce me	11	3	2
Fina nce expe nse	12	-16	-12
Profi t be fore tax es	13	171	137
Taxe s	14	-45	-35
Profi t for the yea r		126	102
afte Earn ings hare r dilu tion , SEK per s	40	5,63	4,61
ings hare Earn , SEK per s	40	5,66	4,63
f sha g aft Num ber o ndin er th r's re hase s ('0 00) utsta res o e yea purc		22 2 17	22 1 96
Wei ghte d nu mbe r of s hare ding afte r the hase s aft er di lutio n ('0 00) tstan r's re s ou yea purc		22 3 92	22 1 33
r of s afte s ('0 00) Wei ghte d nu mbe hare ding r the r's re hase tstan s ou yea purc		22 2 42	22 0 46
osed divi dend shar Prop e, SE K per		2,75	2,25

Consolidated report of comprehensive income

in MS Amo unts EK	Not e	2011 /12	2010 /11
Profi t for the perio d		126	102
Othe preh ensi ve in r com com e
Cha in fa ir va lue o f hed ging nge rese rve		1	1
Cha nslat in tra ion r nge eser ve		1	-29
Com preh ive i me f or th ens nco e ye ar		128	74

Consolidated report of financial position

Amo in MS EK unts	Not e	2012 -03- 31	2011 -03- 31
ASS ETS	3
Non rent ets -cur ass
Intan gible rent ts non -cur asse
dwil l Goo	15	361	320
Trad rks ema	16	108	108
Othe r inta ngib le as sets	17	84	77
		553	505
ible Tang rent ts non -cur asse
Build , lan d & l and ings impr ents ovem	18	30	31
ehol d im Leas nts prov eme	19	2	2
Plan t and hine mac ry	20	38	40
Equi ools , fixt and fitti nt, t pme ures ngs	21	17	18
		87	91
Fina ncia l non rent ts -cur asse
Othe r lon able eceiv g-te rm r s	24, 3 3	2	2
		2	2
Defe rred tax t asse
Defe rred tax a sset	31	8	9
		8	9
l no Tota t ass ets n-cu rren		650	607
Curr ent ts asse
Inve ies, e ntor tc.	25
erial s and plies Raw mat sup		64	62
k in Wor prog ress		21	17
Finis hed prod and ds fo ale ucts goo r res		144	144
		229	223
Shor ceiva bles t-ter m re	33
Trad bles eiva e rec	26	362	323
ed b invo iced Earn ut no t yet reve nue	27	14	14
Tax a ssets		12	8
Othe eiva bles r rec		20	31
aid e nd a ed in Prep xpen ses a ccru com e		22	22
		430	398
Shor m in t-ter vest ts men		0	0

Not in MS Amo unts EK e	2012 -03- 31	2011 -03- 31
ASS ETS 3
Non rent ets -cur ass
gible Intan rent ts non -cur asse
Goo dwil l 15	361	320
Trad rks 16 ema	108	108
Othe r inta ngib le as 17 sets	84	77
	553	505
Tang ible rent ts non -cur asse
Build ings , lan d & l and impr 18 ents ovem	30	31
Leas ehol d im 19 nts prov eme	2	2
Plan t and hine 20 mac ry	38	40
ools , fixt and fitti Equi 21 nt, t pme ures ngs	17	18
	87	91
Fina ncia l non rent ts -cur asse
Othe r lon eceiv able g-te 24, 3 3 rm r s	2	2
Defe rred tax t asse	2	2
Defe rred 31 tax a sset	8	9
	8	9
Tota l no	650	607
t ass ets n-cu rren
Curr ent ts asse
ies, e Inve 25 ntor tc.
Raw erial s and plies mat sup	64	62
k in Wor prog ress	21	17
ds fo Finis hed prod and ale ucts goo r res	144	144
	229	223
Shor ceiva bles 33 t-ter m re
Trad eiva bles 26 e rec	362	323
Earn ed b invo iced 27 ut no t yet reve nue	14	14
Tax a ssets	12	8
Othe bles eiva r rec	20	31
aid e nd a ed in Prep xpen ses a ccru com e	22	22
	430	398
Shor m in t-ter vest ts men	0	0
Cash and cash ivale 33 nts equ	37	56
l cur Tota rent ets ass	696	677
TOT AL A SSET S	1 34 6	1 28 4

Consolidated report of financial position

in MS Amo unts EK	Not e	2012 -03- 31	2011 -03- 31
EQU ITY AND LIA BILI TIES
nd l iabi litie Equ ity a s	29
Shar pital e ca		49	49
Othe tribu ted c apita l r con		345	345
Rese rves		-18	-20
ined Reta ings earn		244	171
l eq uity ibut able he P ity h olde Tota attr to t t Co ny's aren mpa equ rs		620	545
rm l iabi litie Lon g-te s	3, 33 , 34
Long inte bear ing l iabil ities -term rest-
ision for ions Prov pens	30	50	50
Liab ilitie cred it ins titut ions s to	34	0	75
Othe r lon rm in st-be aring liab ilitie g-te tere s		1	–
		51	125
inte bear ing l iabil ities Long -term rest-
bear ing l iabil Long -inte ities -term rest- non		–	0
Defe rred tax l iabil ity	31	68	60
Othe visio r pro ns	32	4	1
		72	61
Tota l lon rm l iabi litie g-te s		123	186
liab ilitie Curr ent s	3, 33 , 34
Shor m in t-be aring liab ilitie t-ter teres s
ed c redit faci lity Com mitt	34	170	174
Liab ilitie cred it ins titut ions s to	34	0	0
		170	174
Curr on-i est-b earin g lia biliti ent n nter es
Adv ts fro stom ance pay men m cu ers		0	3
Trad yabl e pa es		205	188
liabi lities Tax		37	17
Othe r liab ilitie s		86	86
ued and paid inco Accr expe nses pre me		97	84
Prov ision s	32	8	1
		433	379
l cur liab ilitie Tota rent s		603	553
TOT QUI ES AL E TY A ND L IABI LITI		1 34 6	1 28 4

PLEDGED ASSETS AND CONTINGENT LIABILITIES IN THE GROUP

in MS Amo unts EK	Not e	2012 -03- 31	2011 -03- 31
Pled ged ets ass
wn l iabil and For o ities ision prov s	34
Corp orat rtga e mo ges		3	29
		3	29
tinge nt lia biliti Con es	39
nder takin Gua gs, F PG/P RI rant ee u		1	0
Othe rant r gua ees		2	3
		3	3

Consolidated statement of changes in equity

2012 -03- 31	Sha re ital cap	Oth er ribu ted cont ital cap	Rese rves Hed ging rese rve	slat ion Tran rese rve	Reta ined ings earn	lt Tota ity equ
bala Ope ning nce	49	345	-1	-19	171	545
COM PRE HEN SIVE INC OM E
Profi t for the year					126	126
Othe preh ensiv e inc r com ome			1	1	–	2
Com preh ive i me f or th ens nco e ye ar			1	1	126	128
Divid end					-50	-50
hase of o hare Purc wn s s					-11	-11
urch ased sha Exer cisin tion g op s on rep res					8	8
Opti nt on p rogr amm e pa yme		0				0
Clos bala ing nce	49	345	–	-18	244	620
Amo in MS EK unts	Sha re	Oth er ribu ted cont	Rese rves Hed ging	slat Tran ion	ined Reta	l Tota
2011 -03- 31	ital cap	ital cap	rese rve	rese rve	ings earn	ity equ
ning bala Ope nce	49	345	-2	10	92	494
COM SIVE INC OM PRE HEN E
Profi t for the					102	102
year Othe preh ensiv e inc r com ome			1	-29	–	-28
preh me f or th Com ive i ens nco e ye ar			1	-29	102	74
Divid end					-33	-33
Exer cisin tion urch sha g op s on rep ases res					10	10
Opti nt on p rogr amm e pa yme		0				0

Note 29 contains additional information about equity.

Consolidated statement of cash flows

Amo in MS EK unts	Not e	2011 /12	2010 /11
ratin tivit ies Ope g ac
Profi t aft er fin item ance s	36	171	137
Adju nt fo lude d in cash flow r item t inc stme s, et s no c.	37	36	23
		207	160
Paid taxe s		-23	-12
h flo ws f ratin tivit ies b efor e ch es in rkin pita l Cas rom ope g ac ang wo g ca		184	148
Cash flow s fro m ch orkin l s in w pita ange g ca
ase( -)/De se(+ ) in i torie Incre crea nven s		2	-8
ase( -)/De se(+ ) in o ivab les Incre ting crea pera rece		-30	-48
ase( +)/D ase( -) in ating liab ilitie Incre ecre oper s		19	26
h flo ws f Cas ratin tivit ies rom ope g ac		175	118
Inve acti vitie stm ent s
nt in bus iness Inve stme es	38	-48	-278
f int ble n Acq uisit ion o angi nt as sets on-c urre		-6	-10
uisit ion o f tan gible Acq rent ts non -cur asse		-15	-9
Sale of t ble n angi nt as sets on-c urre		1	0
h flo ws f inv acti vitie Cas estm ent rom s		-68	-297
Fina ncin tivit ies g ac
Åter köp ktier av eg na a		-11	–
cisin tion urch ased sha Exer g op s on rep res		8	10
Divid end paid		-50	-33
Cha in lo finan cial l iabil ities ng-t nge erm		-75	75
Cha in sh finan cial l iabil ities ort-t nge erm		1	154
Cas h flo ws f mitt ed c redi t fac ility rom com		-127	206
h flo ws f or th Cas e ye ar		-20	27
g of Cash and cash ivale t beg innin nts a equ year		56	29
slati on d iffer in c ash a nd c ash e quiv alen Tran ts ence		1	0
Cas h an d ca sh e quiv alen d ts at yea r-en		37	56

CHANGE IN NET FINANCIAL LIABILITY/CLAIM

Amo unts in MS EK	Not 2011 /12 e	2010 /11
finan cial l iabil ity(+ )/cla im(-) at b egin ning of y Net ear	243	38
Cha in in st-be aring liab ilitie tere nge s	-85	228
est-b earin g lia biliti es in uired bus iness Inter acq es	8	3
Cha in in st-be aring sion ision tere nge pen prov s	0	1
Cash and cash ivale nts i quire d bu sine equ n ac sses	-7	-3
Cha sh a nd c ash e alen in ca quiv ts nge	26	-24
fina ncia l liab ility (+)/c laim (-) a nd Net t ye ar-e	185	243

Parent company income statement

Not e	2011 /12	2010 /11
	28	25
	–	–
	28	25
	-44	-35
3, 6, 9, 1 0, 13	-16	-10
11	216	60
12	-28	-17
13	172	33
	-1	1
	171	34
14	-1	-2
	170	32
	3,4

Parent company report of comprehensive income

Amounts in MSEK
-----------------	--

in MS Amo unts EK	Not e	2011 /12	2010 /11
Profi t for the perio d Othe preh ensiv e inc r com ome		170 –	32 –
preh ive i me f or th Com ens nco e ye ar		170	32

Company balance parent sheet

Amo unts in MS EK	Not e	2012 -03- 31	2011 -03- 31
ASS ETS
Non rent ets -cur ass
ools , fixt and fitti Equi nt, t pme ures ngs	21	0	0
		0	0
l non Fina ncia rent ts -cur asse
Shar es in Gro anie up c omp s	22	835	774
from Due Gro anie up c omp s	23	116	96
Defe rred tax a sset	31	1	0
		952	870
l no Tota t ass ets n-cu rren		952	870
Curr ent ts asse
Shor ceiva bles t-ter m re	33
from Due Gro anie up c omp s	33	60	29
Tax a ssets		3	1
Othe bles eiva r rec		3	3
aid e nd a ed in Prep xpen ses a ccru com e	28	3	2
		69	35
Cash and cash ivale nts equ	33	0	0
Tota l cur rent ets ass		69	35
TOT AL A SSET S		1 02 1	905

Parent company balance sheet

Amo in MS EK unts	Not e	2012 -03- 31	2011 -03- 31
EQU ITY AND LIA BILI TIES
ity Equ	29
Shar pital e ca		49	49
l rese Lega rve		13	13
d fu Rest ricte nds		62	62
ined Reta ings earn		379	399
Profi t for the year		170	32
icte d fu nds Unr estr		549	431
l eq uity Tota		611	493
xed Unta rese rves		3	2
rm l iabi litie Lon g-te s	33, 3 4
inte bear ing l iabil ities Long -term rest-
for Prov ision ions pens	30	22	21
pani Due to G roup com es		1	1
Liab ilitie cred it ins titut ions s to	34	–	75
l lon rm l iabi litie Tota g-te s		23	97
liab ilitie Curr ent s	33, 3 4
est-b g lia biliti Curr ent i earin nter es
mitt ed c redit faci lity Com	34	164	175
		164	175
Shor n-in t-be aring liab ilitie t-ter teres m no s
Trad yabl e pa es		2	1
pani Due to G roup com es		175	107
liabi lities Tax		3	3
Othe r liab ilitie s		30	19
ued and paid Accr inco expe nses pre me	35	10	8
		220	138
l cur liab ilitie Tota rent s		384	313
TOT AL E QUI TY A ND L IABI LITI ES		1 02 1	905
PAR ENT CO MPA NY P LED GED ASS ETS AND CO NTIN GEN T LIA BILI TIES
Amo in MS EK unts		2012 -03- 31	2011 -03- 31

Amo in MS EK unts	2012 -03- 31	2011 -03- 31
Pled ged ets ass	Inga	Inga
Con ting liab ilitie ent s
nder takin Gua gs, F PG/P RI rant ee u	26	24
Othe rant r gua ees	2	4
	28	28

The Parent Company guarantees the pension commitments of its subsidiaries via FPG/PRI.

Summary of changes in parent company equity

in MS Amo unts EK
2012 -03- 31	Sha re ital cap	l Lega rese rve	icte d Unr estr ity equ	l Tota ity equ
Clos ing b alan cord ing t cedi ear's bala heet ce ac o pre ng y nce s	49	13	431	493
COM PRE HEN SIVE INC OM E
Profi t for the year			170	170
Othe preh ensiv e inc r com ome			–	–
preh ive i me f or th Com ens nco e ye ar			170	170
Divid end			-50	-50
urch ased sha Exer cisin tion g op s on rep res			8	8
Opti nt on p rogr amm e pa yme			1	1
hase of o hare Purc wn s s			-11	-11
Clos ing bala rdin g to nce acco	49	13	549	611
Amo in MS EK unts
	Sha re	l Lega	d Unr icte estr	l Tota
2011 -03- 31	ital cap	rese rve	ity equ	ity equ
Clos ing b alan cord ing t cedi bala heet ear's ce ac o pre ng y nce s	49	13	423	485
COM SIVE INC OM PRE HEN E
Profi t for the year			32	32
Othe preh ensiv e inc r com ome			–	–
preh me f or th Com ive i ens nco e ye ar			32	32
Divid end			-33	-33
urch ased sha Exer cisin tion g op s on rep res			9	9
Opti nt on p rogr amm e pa yme			0	0
Clos ing bala rdin g to nce acco	49	13	431	493

Note 29 contains additional information about equity.

Parent company cash flow statements

Amo in MS EK unts	Not e	2011 /12	2010 /11
Ope ratin tivit ies g ac
Profi t aft er fin item ance s	36	172	33
Adju nt fo lude d in cash flow r item t inc stme s, et s no c.	37	-29	-19
		143	14
Paid taxe s		-4	-1
h flo ws f ratin tivit ies b efor e ch es in rkin pita l Cas rom ope g ac ang wo g ca		139	13
Cash flow s fro m ch s in w orkin pita l ange g ca
Incre ase( -)/De se(+ ) in o ting ivab les crea pera rece		12	33
ase( +)/D ase( -) op ing l iabil ities Incre erat ecre		61	44
h flo w fr Cas ratin tivit ies om ope g ac		212	90
Inve acti vitie stm ent s
nts i n bu sine Inve stme sses		-52	-225
f tan Acq uisit ion o gible rent ts non -cur asse		0	0
Sale of/d ase i n fin ts ecre ance asse		-20	-51
h flo ws f Cas inv acti vitie estm ent rom s		-72	-276
Fina ncin tivit ies g ac
hase of o hare Purc wn s s		-11	–
Exer cisin tion urch ased sha g op s on rep res		8	10
Divid end		-50	-33
finan Cha in lo cial l iabil ities ng-t nge erm		-75	75
Cha in sh mitt ed c redit faci lity ort-t nge erm com		-12	134
h flo ws f fina Cas ncin tivit ies rom g ac		-140	186
h flo ws f Cas or th e ye ar		0	0
Cash and cash ivale t beg g of innin nts a equ year		0	0
Cas h an d ca sh e quiv alen d ts at yea r-en		0	0

Note 1 Accounting policies

(a) Compliance with standards and law

The consolidated financial statements have been compiled in accordance with International Financial Reporting Standards (IFRS) issued by the Accounting Standards Board (IASB) and interpretations from IFRS Interpretations Committee as approved by the EU Commission for application within EU. Recommendation RFR 1 Supplementary rules for consolidated accounting of the Swedish Financial Reporting Board has also been applied.

The Parent Company applies the same accounting policies as the Group, except in the cases stated below under the section "Parent Company accounting policies". Discrepancies that do exist between the Parent Company's and the Group's policies are prompted by limitations in applying IFRS to the Parent Company as a result of the Swedish Annual Accounts Act (ÅRL) and the Swedish Act on securing pension obligations, and in certain cases for tax reasons.

(b) Assumptions for compiling the parent Company's and the Group's financial reports

The Parent Company's functional currency is SEK, which also constitutes the reporting currency for the Parent Company and the Group. This means that the financial reports are presented in Swedish kronor. All amounts, unless otherwise specifically stated, are rounded to the nearest million. Assets and liabilities are reported at historical acquisition values, except for certain financial assets and liabilities which are valued at fair value. Financial assets and liabilities reported at fair value consist of derivative instruments, financial assets classified as financial assets valued at fair value through the income statement.

Non-current assets and available-for-sale groups of disposals are reported at the lower of previously reported value and fair value, after deduction of selling expenses. Set-off of receivables and liabilities and of revenue and costs occurs only where

required or expressly permitted in an accounting recommendation.

The financial reports encompass the Administration Report with proposed allocation of earnings and the financial statements with notes. The consolidated financial statements and the Parent Company's annual accounts have been approved for publication by the Board of Directors 26 June 2012. The consolidated income statement and statement of financial position and the Parent Company's income statements and balance sheets are subject to approval by the Annual General Meeting to be held 28 August 2012.

Preparing the financial reports in accordance with IFRS requires management to make judgments and estimates and make assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and costs. Estimates and assumptions are based on historical experience and a number of other factors that under prevailing circumstances are deemed reasonable. The result of these judgments and assumptions is then used to judge the reported value of assets and liabilities that would not be clearly evident from other sources. The actual outcome may differ from these estimates and judgments.

Estimates and assumptions are reviewed on a regular basis. Changes in estimates are reported in the period when the change is made, where the change affects that period only, or in the period when the change is made, and in future periods where the change affects the current period as well as future periods.

Judgments made by management with application of IFRS with significant impact on the financial reports and estimates made that may lead to significant adjustments in the financial reports of subsequent years are described in greater detail in Note 2 and elsewhere. By events after the end of the period under review are meant favourable as well as unfavourable events that occur between the end of the period under review and the date in the next following financial year when the financial reports are signed by the members of the Board of Directors. Information is provided in the annual report about significant events after the end of the period under review that are not accounted for when the income statement and the statement of financial position are adopted. Only events that confirm circumstances prevailing before the end of the reporting period are taken into account at the time of adoption of the financial statements.

The stated accounting policies for the Group have been consistently applied for all periods presented in the Group's financial reports, unless otherwise specifically stated. The Group's accounting policies have been consistently applied in reporting and consolidating the Parent Company and subsidiaries.

Changed accounting policies

There are no changed accounting policies applied by the Group after 1 April 2012 which have had any material effect on the Group's accounting.

Early application of new or revised IFRS interpretations during the 2011/12 financial year

A number of new IFRS or interpretations enter into force only in coming financial years and have not been applied early in the preparation of these financial statements.

New and revised IFRS not yet applied

New standards, aside from IAS 19, additions to standards and new interpretation statements published before the presentation of the Annual Report are not believed to have significant impact on the consolidated financial statements, beyond expanded information about, among other things, financial instruments and shares in other companies.

The changed version of IAS 19 will be applied from 1 April 2013 or later. The amendment involves significant changes, primarily in reporting defined benefit pensions, i.a. as follows:

Elimination of the possibility of deferring the reporting of actuarial gains and losses using the so-called "corridor method";

• The return calculated on managed assets must be based on the discount rate used for calculating the pension benefit;
• Immediate reporting of all changes in obligations and managed assets. The socalled "revaluations", i.e. actuarial items and the difference between actual return and the return based on the discount interest rate for the managed assets, are reported in other comprehensive profit, while the year's vested pension rights and net interest income will be reported in the income statement.

This changed standard will have an effect on the Group's financial reports. For the 2011/12 financial year the changes would have increased the pension liability by MSEK 9, and would have reduced equity by approx. MSEK 8.

In additions to these changes in connection with the new version of IAS 19 the liability can also be affected by the fact that taxes linked to pension benefits must be taken into account in the actuarial assumptions. How this will be handled is still under investigation.

(c) Operating segment reporting

An operating segment is a part of the Group that conducts business from which it can generate income and incur costs and for which independent financial information is available. An operating segment's earnings are also followed up by the Group's highest executive decision-maker to evaluate the result and to be able to allocate resources to the operating segment in question. Refer to Note 3 for additional description of the breakdown and presentation of operating segments.

(d) Classification, etc.

Non-current assets and long-term liabilities in the Parent Company and the Group essentially consist only of amounts that are expected to be recovered or paid more than twelve months from the end of the reporting period. Current assets and short-term liabilities in the Parent Company and the Group essentially consist only of amounts that are expected to be recovered or paid within twelve months of the reporting period.

(e) Principles of consolidation

(I) Subsidiaries

Subsidiaries are all entities over which Lagercrantz Group AB has a controlling influence. Controlling influence means a direct or indirect right to govern an entity's financial and operative strategies for the purpose of obtaining economic advantages. When judging whether controlling influence exists, the existence and effect of potential voting rights that are exercisable, or can be converted without delay, are taken into consideration.

Subsidiaries are reported in accordance with the purchase method of accounting. This method means that the acquisition of a subsidiary is viewed as a transaction where the Group indirectly acquires the assets of the subsidiary and assumes its debt and contingent liabilities. The acquisition cost to the Group is determined by an acquisition analysis in conjunction with the acquisition. In this acquisition analysis the fair values of acquired identifiable assets, and assumed liabilities and contingent liabilities, as well as any holdings without controlling influence are determined. Transaction expenses incurred are carried directly to the year's income statement. The difference between the acquisition cost of the shares in the subsidiary and the fair value of acquired assets, assumed liabilities and contingent liabilities is recorded as goodwill in the Group. When the difference is negative it is recorded directly in the income statement.

Conditional purchase money is reported at fair value at the time of acquisition and is re-assessed at each reporting date and any change in valuation is carried to the year's income statement.

An acquisition that does not refer to 100 percent of the subsidiary gives rise to a holding without controlling influence. There are two alternative ways of reporting holdings without controlling influence. These two alternatives are to report holdings without controlling interest as a proportion of net assets, or to report holdings without controlling interest at fair value, which means that holdings without controlling interest includes a proportion of goodwill. The choice of which of the two alternative methods to apply is made individually for each acquisition.

The financial statements of subsidiaries are consolidated from the time of acquisition until the date when such controlling influence ceases to exist.

(II) Transactions eliminated in consolidation

Intra-Group receivables and liabilities, revenue or costs and unrealised gains or losses arising in intra-Group transactions between Group companies are eliminated in their entirety when preparing the consolidated financial statements.

(f) Foreign currency

(I) Transactions in foreign currency

Transactions in foreign currency are restated to the functional currency using the rate of exchange prevailing on the day of the transaction. Monetary assets and liabilities in foreign currency are converted to the functional currency at the rate of exchange

Notes to the financial statements

prevailing at the end of the reporting period. Foreign exchange rate differences that arise in conversion are accounted for in the income statement. Non-monetary assets and liabilities reported at historical acquisition values are converted at the rate of exchange prevailing at the time of the transaction. Non-monetary assets and liabilities reported at fair value are converted to the functional currency at the rate of exchange prevailing at the time of fair value valuation. The exchange rate change is then reported in the same way as other changes in value.

(II) Financial statements of foreign entities

Assets and liabilities in foreign entities, including goodwill and other surplus values, and other surpluses and deficits in the Group are converted to Swedish kronor at the rate of exchange prevailing at the end of the reporting period. Revenue and costs in a foreign entity are converted to Swedish kronor at an average rate. Translation differences that arise in connection with conversion of a foreign net investment, and the resultant effects of hedging of net investments, are reported directly in other comprehensive income and are accumulated as a separate component of equity, the translation reserve. When foreign entities are sold, the accumulated translation differences attributable to the entity are realised after deduction of any foreign exchange hedging and reclassified from the translation reserve in equity to profit/loss for the year.

Lagercrantz Group has elected to zero out the accumulated translation differences in foreign entities attributable to the time before 1 April 2004, i.e. the time for adopting IFRS.

(g) Revenue

(I) Sale of goods

Revenue from the sale of goods is reported in the income statement when significant risks and rewards associated with ownership of the goods have been transferred to the buyer, i.e. typically in connection with delivery. If the product requires installation at the buyer, and the installation constitutes a significant part of the delivery, revenue is recognised when the installation is completed. Revenue is not recognised if it is probable that the economic rewards will not inure to the benefit of the Group.

(II) Revenue from the sale of real property

Revenue from the sale of real property is normally recorded on the closing date, unless risks and rewards have been transferred to the buyer at an earlier occasion.

(III) Service assignments

Revenue from service assignments is normally reported when the service is performed. Revenue from service assignments of the service and maintenance agreement type is reported in accordance with the principles for so-called gradual revenue recognition. The degree of completion is normally determined based on the relationship between sunken expenditure at the end of the reporting period and the estimated total expenditure. In certain companies recorded time is used as a basis for degree of completion. A probable loss is accounted for immediately in the consolidated income statement.

(IV) Rental income

Rental income from real properties is reported on a straight-line basis in the income statement based on the terms of the lease. The aggregate cost of benefits provided is reported as a reduction of rental income on a straight-line basis over the term of the lease.

(V) Government grants

Government grants are reported in the statement of financial position as prepaid income when there is reasonable assurance that the grant will be received and that the Group will be able to fulfil the conditions associated with the grant. Grants are systematically assigned to the right periods in the same way and over the same periods as the costs the grants are intended to compensate for. Government grants related to assets are reported as a reduction of the reported value of the asset.

(h) Operating expenses and finance income and expense

(I) Payments relating to operating leases

Payments related to operating leases are reported on a straight-line basis in the income statement. Benefits received in connection with signing a contract are reported as a part of the total leasing cost in the income statement.

(II) Payments relating to finance leases

The minimum leasing fees are allocated to interest expense and repayment of the outstanding liability. The interest expense is distributed over the leasing period in such a way that each accounting period is charged with an amount equivalent to a fixed rate of interest for the liability reported during the respective period. Variable fees are expensed in the periods when they arise.

(III) Finance income and expense

Finance income and expense consists of interest income on bank funds, receivables and interest-bearing securities, interest expense on loans, dividend income, exchange rate differences, changes in value of financial assets valued at fair value through the income statement, impairment of financial assets and gains and losses on hedging instruments reported in the income statement.

Interest income on receivables and interest expense on liabilities are calculated using the effective rate method. The effective rate is the rate that is the present value of all estimated future payments during the expected period of fixed interest that equals the reported value of the receivable or the liability. The interest component of financial lease payments is reported in the income statement using the effective rate method. Interest income includes accruals and deferrals of transaction costs and any rebates, discounts, premiums and other differences between the original value of the receivable and the amount received at maturity.

Interest expense includes accrued and deferred amounts of issuing costs and similar direct transaction costs in connection with raising loans.

Borrowing costs are reported in the income statement using the effective rate method, except to the extent they are directly attributable to the purchase, design or production of assets that take significant time to complete for their intended use or for sale, in which case they are part of the acquisition cost of the assets in question.

Dividend income is reported when the right to receive payment has been determined.

(i) Financial instruments

Financial instruments are valued and reported in the Group in accordance with the rules in IAS 39. Financial instruments reported among assets in the statement of financial position include on the asset side liquid funds, trade receivables, advance payments to suppliers and derivatives. Liabilities include trade payables, loan liabilities, advance payments from customers and derivatives.

Reporting in and removal from the Statement of Financial Position

A financial asset or a financial liability is recorded in the statement of financial position when the company becomes party to the contractual terms of the instrument in question. Trade receivables are recorded in the statement of financial position when an invoice has been sent out. A liability is recorded when the counterparty has performed and a contractual obligation exists to pay, even if an invoice has not been received. Trade payables are recorded when an invoice has been received. A financial asset is removed from the statement of financial position when the rights in the contract are realised, fall due or the company loses control over it. The same holds true for a part of a financial asset. A financial liability is removed from the statement of financial position when the obligation in the contract is fulfilled, or when the liability is extinguished in some other way. Acquisition and disposal of financial assets are reported on the transaction date.

Valuation

Financial instruments which are not derivatives are initially valued at acquisition cost, equivalent to the fair value of the instrument. A financial instrument's classification determines how it is valued after the first recording occasion. IAS 39 classifies financial instruments in categories. The classification depends on the purpose behind acquiring the financial instrument. The relevant categories for the Group are as follows:

Financial assets at fair value through the income statement, Loans receivable and trade receivables, Financial liabilities valued at fair value through the income statement, Other financial liabilities and Derivatives used for hedge accounting.

Financial assets valued at fair value through the income statement

This category consists of two sub-groups: financial assets held for trading and other financial assets that the company initially has chosen to place in this category (in accordance with the so-called Fair Value Option). Financial instruments in this category are valued on a current basis at fair value with changes in value reported through the income statement. The first sub-group includes derivatives with positive fair value, except for derivatives which are identified and effective hedging instruments (see below).

Loan receivables and trade receivables

Loan receivables and trade receivables are non-derivative assets with fixed payments or with payments that can be determined, and which not are listed on an active market. Receivables arise when companies provide funds, goods or services directly to a customer without intention of trading in the receivable that arises. They are included in current assets, with the exception of items that mature later than 12 months after the end of the reporting period, which are classified as non-current assets. Loan receivables and trade receivables include items Trade receivables and Other receivables in the statement of financial position. Assets in this category are valued at accrued acquisition value.

Trade receivables are reported in the amount expected to be collected, i.e. after deduction for doubtful credits. Impairment charges are reported as operating expenses.

Financial liabilities valued at fair value through the income statement

This category consists of financial liabilities held for trading and derivatives not used for hedge accounting. Liabilities in this category are valued on an ongoing basis at fair value with the change in value in the income statement.

The Group held no material instruments belonging to this category during the financial year.

Other financial liabilities

Financial liabilities not held for trading are valued at accrued acquisition value. The Group's loan liabilities, financial lease liabilities, trade payables and advance payments from customers belong to this category.

Derivatives used for hedge accounting

All derivatives are accounted for at fair value in the statement of financial position. Changes in value are accounted for in the income statement in the case of actual hedge accounting. Hedge accounting is described in greater detail below, under Derivatives and hedge accounting.

Liquid funds

Liquid funds consist of cash and immediately available balances with banks and equivalent institutions, and short-term liquid investments with a term to maturity of less than three months, exposed to minimal risk for fluctuation in value.

Financial investments

Financial investments are classified either as non-current assets or short-term investments depending on the purpose of the holding. If the term or the expected holding period is more than one year, they are classified as non-current assets and if they are shorter than one year as short-term investments.

(j) Derivatives and hedge accounting

The Group's derivative instruments are acquired to hedge interest and foreign exchange rate risks to which the Group is exposed. An embedded derivative is reported separately unless it is closely related to the host contract. Derivatives are valued initially at fair value, with the effect that transaction costs are charged to the period's earnings. After the initial reporting derivative instruments are valued at fair value and changes in value are reported as described below.

In order to meet the requirements for hedge accounting in accordance with IAS 39, there must be an unambiguous link to the secured item. It is also required that the hedge protects the secured item in an effective manner, that hedging documentation has been drafted and that such efficiency can be measured. Gains and losses are reported in the income statement for items that have been hedged.

Hedging of prognosticated sales in foreign currency –cash flow hedging Forward contracts used for hedging of highly likely prognosticated sales in foreign currency are reported in the report of financial position at fair value. Changes in value for the period are reported in other comprehensive income and the accumulated changes in value are reported as a separate component of equity (hedging reserve) until the hedged flow affects he year's result, at which time the accumulated changes in value of the hedging instrument are reclassified to the year's result in connection with the hedged item (sales revenue) affects the year's result.

Hedging of period with fixed interest – cash flow hedging

Interest rate swaps are used to hedge against the uncertainty of future interest flows relating to loans with variable interest. Interest rate swaps are valued at fair value in the statement of financial position. In the income statement the interest coupon portion is reported on a current basis as correction of interest expense. Other changes in the value of interest rate swaps are reported in other comprehensive income and are included as a part of the hedging reserve in equity until the hedged item affects the income statement and as long as the criteria for hedge accounting and effectiveness are fulfilled.

Receivable and liabilities in foreign currency

Forward contracts can be used for hedging an asset or a liability against foreign exchange rate risk. For such hedging no hedge accounting is required since the hedged item as well as the hedging instrument is reported at fair value through the income statement with respect to foreign exchange rate differences. Changes in value of operations-related receivables and liabilities are recognised in the operating result, while changes in value of financial receivables and liabilities are reported in net financial items.

Net investments

Investments in foreign subsidiaries (net assets including goodwill) have been partially hedged by raising loans in the corresponding currency. Such loans are translated at the end-of-period exchange rate. The period's translation differences relating to financial instruments used as hedging instruments in hedging a net investment in a Group company is reported, to the extent the hedge is effective, in other comprehensive income and the accumulated changes are reported as a special component of equity (the translation reserve). This procedure is used to neutralise the translation differences that affect other comprehensive income when the Group's companies are consolidated.

(k) Tangible non-current assets

(I) Owned assets

Tangible non-current assets are reported as assets in the statement of financial position if it is probable that future economic advantages will inure to the company's benefit and the acquisition value of the asset can be calculated in a reliable manner.

Tangible non-current assets are reported in the Group at acquisition value, less accumulated depreciation and any charges for impairment. The acquisition value includes the purchase price and costs directly attributable to the asset to bring it to location and make it usable for the purpose intended with its procurement. Examples of directly attributable costs included in the acquisition value are costs for shipping and handling, installation, legal ratification, consulting services and legal services. Borrowing costs directly attributable to the purchase, design or production of assets that take significant time to complete for their intended use or for sale are included in the acquisition value.

Tangible non-current assets that consist of parts with different periods of utilisation are treated as separate components of tangible non-current assets.

The reported value of a tangible non-current asset is removed from the statement of financial position upon disposal or sale, or when no future economic benefits are expected to be derived from use or disposal/sale of the asset. Gains or losses that arise upon sale or disposal of an asset are defined as the difference between the selling price and the reported value of the asset, less direct selling expenses. Gains and losses are recognised as other operating income/expense.

(II) Leased assets

IAS 17 is applied to leased assets. Leases are classified in the consolidated financial statements either as financial or operating leases. Leases where substantially all of the economic risks and rewards associated with ownership have been transferred to the lessee are classified as financial leases. Where that is not the case, the lease is an operating lease.

Assets rented under financial leases are reported as assets in the statement of financial position. The obligation to pay future leasing fees is reported as long- and short-term liabilities. The leased assets are depreciated according to plan, whereas lease payments are reported as interest and repayment of debt.

In the case of operating leases the lease payment is expensed over the term of the lease based on usage, which may vary from what has actually been paid as leasing fees during the year.

(III) Additional expenditure

Additional expenditure is added to the acquisition value only to the extent it is probable that the future economic benefits associated with the asset will inure to the benefit of the company and the acquisition value can be calculated in a reliable manner. All other additional expenditure is recognised as an expense in the period when it arises.

(IV) Depreciation principles

Assets are depreciated on a straight-line basis over their estimated period of use. Land is not depreciated. The Group applies component depreciation, which means that depreciation is based on the estimated period of use of individual components. Estimated periods of use: Estimated period of use: Buildings, property used in operations 15−50 years

Plan t and hiner mac y	3−10 year s
ipme ols, fi s and fittin Equ nt, to xture gs	3−5 y ears

Property used in operations consists of a number of components with varying periods of use. The main classification is buildings and land. The land component is not depreciated since its period of use is considered to be unlimited. Buildings, however, consist of a number of components the period of use of which varies. The periods of use have been deemed to vary between 15 and 50 years for these components. Assessment of the residual value and period of use of assets is made on an annual

basis.

(l) Intangible assets

(I) Goodwill

Goodwill represents the difference between the acquisition value for an acquisition and the fair value of the acquired assets, assumed debt and contingent liabilities. In adopting IFRS, the Group has applied IFRS retroactively to goodwill in acquisitions after 1 August 2002 and before 1 April 2004. The classification and accounting procedures of acquisitions before 1 August 2002 have not been re-assessed in accordance with IFRS 3 when preparing the consolidated opening balance in accordance with IFRS as 1 April 2004.

Goodwill is valued at acquisition cost, less any accumulated impairment charges. Goodwill is distributed to cash-generating units and tests are performed on an annual basis to determine if assets have suffered any impairment. (Refer to Accounting policies (n).

For acquisitions where the acquisition cost is less than the net value of acquired assets, assumed debt and contingent liabilities, the difference is carried directly to the income statement.

(II) Research and development

Expenditure for research and development aimed at obtaining new scientific or technological knowledge is reported as costs as incurred.

Expenditure for development, where the research result or other knowledge is applied to achieve new or improved products or processes, is reported as an asset in the statement of financial position, if the product or the process is technically or commercially usable and the company has sufficient resources to complete the development and then utilise or sell the intangible asset. The reported value includes expenditure for material, direct expenditure for salaries and indirect expenditure attributable to the asset in a reasonable and consistent manner. Other expenditure for development is reported as costs directly in the income statement as incurred. Development costs reported in the balance sheet are carried at acquisition value, less accumulated amortisation and any impairment losses.

(III) Other intangible assets

Other intangible assets acquired by the Group are reported at acquisition value, less accumulated amortisation and impairment. Also included here are capitalised IT expenditure for development and purchase of software. Sunk costs for internally generated goodwill and internally generated trademarks are reported in the income statement when the cost is incurred.

(IV) Additional expenditure

Additional expenditure for capitalised intangible assets is recorded as an asset in the statement of financial position only to the extent it increases the future economic benefits for the specific asset to which it is attributable. All other expenditure is expensed as incurred. Aquired trademarks are reported at acquisition value.

(V) Amortisation

Amortisation is recorded in the income statement on a straight-line basis over the

2

estimated period of use of intangible assets, unless such periods of use are indefinable. Goodwill, trademarks and intangible assets with an indefinable period of use are tested on an annual basis for any impairment suffered, or as soon as there are indications that the asset in question has suffered a loss of value. Intangible assets subject to amortisation are amortised from the date when they are available for use. The estimated periods of use are:

Patents, innovations and customer relationships 5–20 years Capitalised development expenses and software 3–7 years

(m) Inventories

Inventories are valued at the lower of acquisition value and net realisable value. Net realisable value is the estimated selling price in current operations, after deduction of estimated costs for completion and for accomplishing a sale.

The acquisition value of inventories is calculated by applying the first-in first out method (FIFO), or weighted average acquisition cost and includes expenditure arising at the acquisition of the inventory assets and transportation thereof to their current location and state. For manufactured goods and work in progress, the acquisition value includes a reasonable portion of indirect costs based on normal capacity utilisation.

(n) Impairment of assets

The reported value of the Group's assets is tested on each balance sheet date with a view to determining if any impairment has been suffered. IAS 36 is applied for testing for any need for impairment charges for assets other than financial assets, which are tested in accordance with IAS 39, assets held for sale and groups of assets reported in accordance with IFRS 5, inventories, assets under management used for financing compensation to employees and deferred tax assets.

The value of exempted assets as above the valuation is tested in accordance with each respective standard.

If there is any indication that impairment has been suffered, the recoverable value of the asset is calculated. The recoverable value of goodwill, other intangible assets with indefinable period of use and intangible assets not yet ready for use is calculated annually.

Where it is not possible to allocate essentially independent cash flows to an individual asset, assets are grouped to the lowest level where essentially independent cash flows can be determined (a so-called cash-generating unit) for purposes of testing whether impairment has been suffered. An impairment loss is recorded when an asset's or a cash-generating unit's value exceeds the recovery value. An impairment loss is charged to the income statement.

Impairment losses of assets attributable to a cash-generating unit are in the first instance allocated to goodwill. Proportional impairment charges are then made against other assets in the unit.

The recovery value of other assets is the higher of fair value less selling expenses and the value in use. Future cash flows are discounted using a discount factor that reflects risk-free interest and the risk associated with the specific asset for the purpose of calculating the value in use.

(I) Impairment of financial assets

The recoverable value of assets belonging to the categories held-to maturity investments, loans and trade receivables are reported at accrued acquisition value is calculated as the present value of future cash flows discounted using the effective rate of interest prevailing when the asset was first accounted for. Assets with short remaining term are not discounted. An impairment loss is reported as a cost in the income statement.

(II) Reversal of impairment losses

Impairment losses on held-to-maturity investments, or loans and accounts receivable reported at accrued acquisition value, are reversed if a later increase of the recovery value can objectively be attributed to an event that occurred after the impairment loss was incurred.

Impairment losses on other assets are reversed where there has been a change in the assumptions on which the calculation of the recoverable value was made.

An impairment loss is reversed only to the extent the reported value of the asset after the reversal does not exceed the value the asset would have had if no impairment loss had been incurred, taking into account the amortisation that would then have been made. Impairment losses on goodwill are not reversed.

(o) Shareholders' Equity

The Group's equity can be divided into share capital, other contributed capital, reserves, retained earnings and minority holdings without controlling influence.

(I) Repurchase of own shares

Holdings of own shares in treasury and other equity instruments are reported as a reduction of equity. The acquisition of such instruments is reported as a deduction item against equity. Proceeds from the sale of equity instruments are reported as an increase in equity. Any transaction costs are carried directly to equity.

(II) Dividends

Dividends are reported as a liability after the General Meeting has approved the dividend.

(III) Earnings per share

Calculating earnings per share is based on consolidated net income attributable to the parent company's shareholders and the weighted average number of shares outstanding during the year. When calculating earnings per share after dilution the average number of shares outstanding is adjusted to account for the effects of diluting potential shares of common stock, which during reported periods are attributable to options issued to employees. Dilution from options affects the number of shares out standing and occurs only when the strike price is lower than the market price.

(p) Employee benefits

(I) Defined contribution plans

Obligations relating to fees for defined contribution plans are reported as an expense in the income statement when it occurs.

(II) Defined benefit plans

The Group's net obligations relating to defined benefit plans are calculated separately for each plan through an estimate of the future compensation that the employee has earned as a result of his/her employment in both the current and prior periods.

Calculations are performed by a qualified actuary using the so-called projected unit credit method. Commitments are then valued at the present value of expected future payments with due consideration to future pay increases. The discount rate used is the interest at the end of the reporting period on an investment grade corpo rate bond, including housing bonds, with a term equivalent to the Group's pension commitments. When there is no active market for such corporate or housing bonds, the market rate for government bonds with an equivalent term is used. In the cases of funded plans, the fair value of managed assets reduces the calculated value.

When the calculation leads to an asset for the Group, the reported value of the asset is limited to the net of unreported actuarial losses and unreported costs for service during prior periods and the present value of repayments from the plan, or re duced future payments into the plan.

When the benefits under a plan are improved, the proportion of the increase in be nefits pertaining to the employee's service during prior periods is reported as a cost in the income statement, distributed on a straight-line basis over the average period until the benefits are fully vested. Where the benefits are fully vested, the cost is re-

ported in the income statement directly. All actuarial gains and losses as of 1 April 2004, the date for adoption of IFRS, have been reported. The so-called corridor rule is applied for actuarial gains and losses arising when the Group's obligations for different plans are calculated after 1 April 2004. Under the corridor rule, the portion of the accumulated actuarial gains and los ses that exceed 10 percent of the greater of the obligations' present value and the fair value of managed assets is reported in the result over the expected average remain-

ing employee service period of the employees covered by the plan. No other actuarial gains and losses are taken into account. Obligations for retirement pension to salaried employees in Sweden in accordance with the ITP plan are handled mainly within the so-called FPG/PRI system. Obligations for family pensions are secured by insurance in Alecta, however. These obligations are also of the defined benefit type, although the Company has not had access to the information necessary to report these obligations as a defined benefit plan. These pensions secured by insurance in Alecta are therefore reported as defined contribu tion plans. At the end of 2011, Alecta's surplus in the form of collective solvency mar gin was 113 percent (2010: 146 percent). The collective solvency margin is defined as the market value of Alecta's assets in percent of the insurance commitments cal culated in accordance with Alecta's actuarial calculation assumptions, which do not correspond to IAS 19. Alecta's surplus can be distributed to the policy holders and/ or the insured.

When there is a difference between how the pension cost is determined in a legal entity and a group, a provision or a receivable is reported relating to special payroll tax based on this difference. Such provision or receivable is not subject to present value calculation. The net of interest on pension liabilities and the anticipated return on the relevant managed assets is reported in the net of finance items. Other compo nents are reported in operating income.

(III) Benefits in the event of termination

In connection with termination of personnel, a provision is set aside only where the company is demonstrably obligated, without a realistic opportunity to reverse the de cision, by a formal detailed plan to terminate an employment before the normal point in time. When benefits are given as an offer to encourage voluntary termination, a cost is reported where it is probable that the offer will be accepted and that the num ber of employees who will accept the offer can be estimated with reliability.

(IV) Option programmes

The call option programme for the group enables members of senior management to acquire shares in the company. The employees have paid a market valuated pre mium for this opportunity. Premiums received are carried in equity as a transaction with the owners.

(q) Provisions

A provision is reported in the statement of financial position where the Company has a formal or informal undertaking or obligation as a consequence of a transpired event and where it is probable that an outflow of economic resources will be required to settle the undertaking or obligation, and an accurate assessment of the amount can be made. Where the effect of the timing of the payment is significant, provisions are calculated based on discounting the expected future cash flow at an interest rate that reflects current market assessments of the time value of money and, where applica ble, the risks associated with the obligation.

(I) Warranties

A provision for warranties is reported when the underlying products or services are

sold. The provision is based on historical data on warranties and compilation of possible outcomes in relation to the probabilities associated therewith.

(II) Restructuring

A provision for restructuring is reported when the Group has adopted a comprehensive and formal restructuring plan, and the restructuring has either begun, or been publicly announced. No provisions are set aside for future operating costs.

(III) Loss contracts

A provision for loss contracts is reported when the anticipated benefits that the Group expects to receive from a contract are lower than the inevitable costs to fulfil the obligation or contract.

(r) Taxes

Income taxes consist of current taxes and deferred taxes. Income taxes are reported in the income statement, except when the underlying transaction is reported in other comprehensive income, or directly against equity, in which case the associated tax effect is also reported in other comprehensive income or in equity.

Current taxes are taxes to be paid or refunded relating to the current year, with application of the tax rates resolved, or in practice resolved, as of the end of the reporting period. Also included are adjustments of current taxes attributable to prior periods.

Deferred taxes are calculated in accordance with the balance sheet method based on temporary differences between reported values and values for tax purposes of assets and liabilities. The following temporary differences are not taken into account: Temporary difference arising upon first recording of goodwill, first recording of assets and liabilities that are not acquisition of a business, and at the time of the transaction do not affect either the reported result or the result for tax purposes. Also not accounted for are temporary differences attributable to shares in subsidiaries and associated companies not expected to be reversed within the foreseeable future. The valuation of deferred taxes is based on how the reported values of assets or liabilities are expected to be realised or settled. Deferred taxes are calculated using the tax rates and tax rules resolved, or in practice resolved, as of end of the reporting period.

Deferred tax claims relating to deductible temporary differences are reported only to the extent that it is probable that it will be possible to utilise them. The value of deferred tax claims is reduced when it no longer is deemed probable that it will be possible to utilise them.

(s) Contingent liabilities

A contingent liability is reported when there is a possible undertaking emanating from events that have occurred and the existence of which are confirmed only by the occurrence of one or more future uncertain events, or when there is an undertaking not reported as a liability or provision because it is unlikely that an outflow of resources will be required.

(t) Cash flow statement

Payments have been divided into categories: Operating activities, investing activities and financing activities. The indirect method is used for flows from operating activates.

The year's changes of operating assets and operating liabilities have been adjusted for effects of exchange rate differences. Acquisitions and disposals are reported in investment operations. The assets and liabilities held by the entities acquired and sold at the time of change are not included in the statement of changes in working capital, nor are changes of balance sheet items reported in investment and financing operations.

Liquid funds include cash and bank flows and also short-term investments, the conversion to bank funds of which can occur at a beforehand essentially known amount. Liquid funds include short-term investments with a term of less than three months.

(u) Parent Company accounting policies

The Parent Company has prepared its annual accounts in accordance with the Swedish Annual Accounts Act (1995:1554) and recommendation RFR 2 Accounting for legal entities of the Swedish Financial Reporting Board. Statements issued by the Swedish Financial Reporting Board for listed companies are also applied. RFR 2 means that the Parent Company in the annual accounts for the legal entity should apply all IFRS and statements approved by EU to the greatest extent possible within the framework of the Swedish Annual Accounts Act and with due regard to the relationship between accounting and taxation. The recommendation sets out which exceptions and additions are to be made from IFRS.

In all, this results in differences between the Group's and the Parent Company's accounting in the areas indicated below.

Classification and presentation

The Parent Company's income statement and balance sheet are presented in accordance with the format used in the Swedish Annual Accounts Act. Differences compared to IAS 1 Presentation of Financial Statements applied in preparing the consolidated financial statements are primarily in the area of reporting of finance income and expense, non-current assets and equity.

Subsidiaries

Shares in subsidiaries are reported in the Parent Company in accordance with the purchase method of accounting. Dividends received are reported as revenue only to the extent they originate from profit earned after the acquisition. Dividends that exceed such earned profit are regarded as a repayment of the investment and reduce the reported value of the share.

Note 2 Critical estimates and judgements

The Board of Directors and management have discussed the development, the choice of and disclosures relating to the Group's important accounting policies and estimates, and the application of these policies and estimates. Certain critical accounting estimates performed in conjunction with application of the Group's accounting policies are described below.

Test for impairment of goodwill

Each year the Group investigates if any impairment of goodwill has occurred. The recoverable value of the cash-generating units is determined through a calculation of the value in use. This calculation is based on the strategic plan of the business in question andexpected future cash flows for the operation. The discount factor used for present value calculations of expected future cash flows isthe weighted average cost of capital (WACC). The year's review has demonstrated that there is no need for an impairment charge. Refer to Note 15 for further information.

Deferred taxes

The value of tax loss carryforwards and other deferred tax claims/liabilities is taken into consideration to the extent that it is deemed probable that it will be possible to utilise them in the future.

Exposure to foreign currencies

An analysis of the exposure to foreign currencies and the risks associated with changes in foreign exchange rates is provided in Note 40.

Pension assumptions

Pension assumptions are an important element of the actuarial methods used to measure pension obligations and they can have an effect on the reported pension liability and the annual cost of pensions. Two critical assumptions − the discount rate and expected return on managed assets − are important for measuring the year's pension cost as well as the present value of the defined benefit pension obligations.

These assumptions are reviewed at least once per year for each plan in each country. Other assumptions may relate to demographic factors, such as retirement age, mortality and personnel turnover and are not reviewed as often. The current outco-

Revenue

Financial instruments and hedge accounting

Due to the relationship between accounting and taxation, the rules regarding finan cial instruments and hedge accounting in IAS 39 are not applied to the Parent Com pany as a legal entity.

Anticipated dividends

Anticipated dividends from subsidiaries are reported in those cases when the Parent Company alone has the right to decide on the size of the dividend and the Parent Company has decided on the size of the dividend before publication of its financial reports.

Tangible non-current assets

Owned assets

Tangible non-current assets in the Parent Company are reported at acquisition value after deduction of accumulated depreciation and any impairment losses in the same way as the Group, but with the addition of any write-ups.

Borrowing costs

In the Parent Company borrowing costs are charged to income during the period to which they apply. No borrowing costs are capitalised among assets.

Leased assets

In the Parent Company all lease contracts are reported in accordance with the rules for operating leases.

Taxes

In the Parent Company untaxed reserves are reported including deferred tax liability. In the consolidated financial statements, on the other hand, untaxed reserves are di vided into deferred tax liability and equity.

(v) Group contributions and shareholder contributions for legal entities

The Company reports group contributions and shareholder contributions in accor dance with the statement of the Swedish Financial Reporting Board. Starting in 2011, group contributions received as dividends and group contributions rendered as in vestment in shares in subsidiaries, or if nothing of value is added, as an impairment loss against the shares through the income statement. Comparative data for 2010/11 have been changed according to the new principles. Group contributions were pre viously carried directly to equity.

(x) Mergers

Mergers are accounted for in accordance with BFNAR 1999:1.

(y) Financial guarantees

Lagercrantz group has chosen not to use the recommendations in IAS 39 regarding financial guarantees for subsidiaries in accordance with RFR2.

Sales and profit by operating segment

	Elect	ronic s	Mech	ics atron		Com icatio mun ns
	2011 /12	2010 /11	2011 /12	2010 /11	2011 /12	2010 /11
Reve nue
Exter nal sa les	606	586	920	740	739	703
Inter nal sa les	18	25	11	8	0	1
l rev Tota enue	624	611	931	748	739	704
Profi t
fit Ope ratin g pro	42	30	123	77	43	53
			Paren t Com pany	and elimi natio ns		Tota l
			2011 /12	2010 /11	2011 /12	2010 /11
Reve nue
nal sa les Exter			–	–	2 265	2 029
nal sa les Inter			-29	-34	–	–
l rev Tota enue			-29	-34	2 265	2 029
Profi t
fit Ope ratin g pro			-24	-13	184	147
Finan ce inc ome					3	2
Finan ce ex pens e					-16	-12
Profi t bef ore t axes					171	137
Taxes					-45	-35
rofit Net p					126	102

Elect	ronic s		Mech ics atron		Com icatio mun ns
2011 /12	2010 /11	2011 /12	2010 /11	2011 /12	2010 /11
606	586	920	740	739	703
18	25	11	8	0	1
624	611	931	748	739	704
42	30	123	77	43	53
		Paren t Com pany	elimi natio ns		Tota l
		2011 /12	2010 /11	2011 /12	2010 /11
		–	–	2 265	2 029
		-29	-34	–	–
		-29	-34	2 265	2 029
		-24	-13	184	147
				3	2
				-16	-12
				171	137
				-45	-35
				126	102
				and

Transfer pricing between operating segments is on market terms.

Other disclosures by operating segment

					icatio ns 2010 /11
300	278	685	595	334	375
–	–	–	–	–	–
300	278	685	595	334	375
76	79	159	133	108	137
–	–	–	–	–	–
76	79	159	133	108	137
6	6	10	5	5	8
7	6	17	14	11	9
	Elect 2011 /12	ronic s 2010 /11	Mech 2011 /12	ics atron 2010 /11	Com mun 2011 /12

	Paren	t Com pany		Tota l
	2011 /12	2010 /11	2011 /12	2010 /11
Asse ts	6	5	1 325	1 253
Undi stribu ted a ssets	–	–	21	31
l ass Tota ets	6	5	1 346	1 284
Liabi lities	64	48	407	397
Undi stribu ted li abilit ies	–	–	319	342
Tota l liab ilitie s	64	48	726	739
Capit al exp endit ures	0	0	21	19
n and Depr eciat ion, a mort isatio impa irmen t	0	0	35	29

External sales by geographic market

The basis for sale by geographic market is the country where invoicing takes place.

		2011 /12	2010 /11
Swed en	732		674
ark Denm	453		399
Norw ay	416		323
Finla nd	143		145
Unite d Kin gdom	49		57
Germ any	120		116
Polan d	34		41
Othe r Euro pe	168		119
of wo rld Rest	150		155
	2 265		2 029

Investments and non-current assets by geographic market

	Capit al ex 2011 /12	pend iture s 2010 /11	Non- nt as sets curre 2012 -03-3 1 2 011-0 3-31
Swed en	12	12	425	407
ark Denm	6	7	84	86
Norw ay	1	0	43	42
Finla nd	2	0	72	44
Germ any	0	0	18	18
Polan d	0	0	0	0
Othe r Euro pe	–	0	0	0
of wo Rest rld	–	–	0	0
Undi stribu ted a ssets	–	–	8	10
	21	19	650	607

me often differs from the actuarial assumptions for economic and other reasons. The discount rate makes it possible to measure future cash flows at present value at the time of measurement. This interest rate should correspond to the return on investment grade corporate bonds, or government bonds (including housing bonds) if a functioning market for corporate bonds does not exist. A lowered discount rate increases the present value of the pension liability and the annual cost.

Note 3 Segment reporting

Segment reporting is drawn up for the Group's operating segments and is based on top management's follow-up of business operations.

The Group's internal reporting system is thus built based on follow-up of the earnings, cash flows and return generated by the Group's goods and services. This follow-up generates top management's, i.e. Management Team's, decisions about the best possible allocation of resources to what the Group produces and sells in the segments. Directly attributable items have been included in segment earnings and non-current assets, as well as items that can be allocated in a reasonable and reliable manner. Segment investments in non-current assets include all capital expenditures, both in intangible and tangible assets. Assets added as a result of acquisitions are not included, but amortisation of group surplus values is.

Operating segments

The Group consists of the following operating segments:

Division Electronics: Sells special components and solutions for electronics. Division Mechatronics: Active in niche production of cabling, electrical connection systems and similar products.

Division Communications: Active in IT-related areas such as Digital image/technical security, Access and Software.

Parent Company

	2011 /12	2010 /11
nal n e by Inter ating et re ent venu oper segm
Elect ronic s	7	7
Mech ics atron	10	9
icatio Com mun ns	10	9
	27	25
Inter nal n e by raph ic ma rket et re venu geog
Swed en	14	13
ark Denm	8	7
Norw ay	2	2
Finla nd	2	2
Germ any	1	1
Othe ntrie r cou s	0	0
	27	25

Note 4 Distribution of net revenue

Net r ue by prod uct c ateg even ory
	2011 /12	2010 /11
Grou p
Tradi ng	1 128	1 066
Niche prod uctio n	350	247
ducts Prop rietar y pro	588	513
Syste m int ion egrat	117	128
Servi d oth ce an er	82	75
	2 265	2 029

In the case of other types of revenue, dividend and interest income are reported in net finance items. Refer to note 11.

Note 5 Operating expenses by type of cost

	2011 /12	2010 /11
Grou p
of go ods s old Cost	1 472	1 347
Com ation -relat ed pe el cos ts pens rsonn	441	405
eciat ion a nd am ortisa tion Depr	35	29
Othe rating r ope expe nses	146	116
Tota l ope ratin g ex pens es	2 094	1 897

Note 6 Employees, personnel costs, and fees to Board of Directors and auditors

Average number of employees

		Of w hom		Of w hom
	2011 /12	men	2010 /11	men
Paren t Com pany
Swed en	9	78%	9	78%
Othe nies r Gro up co mpa
Swed en	424	73%	387	74%
ark Denm	178	53%	150	51%
Norw ay	38	76%	38	76%
Finla nd	71	46%	69	48%
Germ any	23	70%	23	65%
Polan d	10	70%	15	80%
Othe panie r com s	–	-	1	100%
l in G pani Tota roup com es	744	69%	683	66%
al Grou p tot	753	69%	692	66%

Salaries, other compensation and social benefits

	2011	/12	2010	/11
	Salar ies an d tion comp ensa	Socia l bene fits	Salar ies an d tion comp ensa	Socia l bene fits
Paren t Com pany	16	11	15	9
(of w hich ion c ost) pens		(5)1)		(3)1)
Othe r Gro ies up co mpan	321	93	294	87
(of w hich ion c ost) pens		(24)		(23)
Grou al p tot	337	104	309	96
(of w hich ion c ost) pens		(29)2 )		(26)2 )

1) MSEK 1 (1) of the Parent Company's pension costs refers to the group Board of Directors and President. This group also includes executive vice presidents and presidents of subsidiaries.

There are no outstanding pension obligations.

2) MSEK 5 (5) of the Group's pension costs refers to the group Board of Directors, President, executive vice presidents and subsidiary presidents. The Group's pension obligations to this group amount to MSEK 0 (0).

Salaries and other compensation by country and among

direc and othe ploy tors, etc. r em	ees
		2011 /12	2010	/11
d of D irecto Boar and p resid	rs ent	Othe empl oyee s	ard o f Dire r Bo ctors and p resid ent e	Othe r mplo yees
Pare nt Co mpa ny
Swed en	7	9	8	7
(of w hich bonu .) s, etc	(1)	(1)	(2)	(1)
Othe den r Gro ies in Swe up co mpan	14	145	11	131
(of w .) hich bonu s, etc	(1)	(6)	(0)	(3)
den l Swe tota	21	154	19	138
	(2)	(7)	(2)	(4)
ide S wed Outs en
Denm ark	9	87	9	76
(of w hich bonu .) s, etc	(0)	(4)	(1)	(2)
Norw ay	3	24	4	23
(of w hich bonu .) s, etc	(0)	(1)	(0)	(1)
Finla nd	3	22	3	20
(of w hich bonu .) s, etc	(0)	(1)	(0)	(1)
Germ any	1	10	1	11
(of w hich bonu .) s, etc	(–)	(–)	(–)	(0)
Polan d	1	2	1	3
(of w hich bonu .) s, etc	(–)	(–)	(–)	(–)
Othe ntrie r cou s	–		–	1
(of w hich bonu .) s, etc	(–)	(–)	(–)	(–)
tside Grou pani p com es ou
Swe den, l tota	17	145	18	134
(of w hich bonu .) s, etc	(1)	(6)	(1)	(4)
al Grou p tot	38	299	37	272
(of w hich bonu .) s, etc	(3)	(13)	(3)	(8)

The group Board of Directors and Presidents includes directors, presidents and executive vice presidents.

Gender distribution in management

	2012 -03-3 Prop ortio of wo men	1 2 011-0 3-31 n P rtion ropo of wo men
nt Co Pare mpa ny
Board of D irecto rs	17%	20%
Othe bers of se nior m t r mem anag emen	0%	0%
Grou al p tot
Board of D irecto rs	7%	7%
Othe cutiv r exe es	3%	3%

Principles for compensation to the Board of Directors and other members of senior management

Fees paid to the Chairman of the Board of Directors and to members of the Board of Directors were set by the Annual Meeting.

No separate fees are paid for committee work. In accordance with Annual Meeting resolution, compensation to the President & CEO and other members of senior management consists of basic salary, variable compensation, pension and financial instruments.

The total compensation shall be adjusted to conditions on the market and competitive and should be commensurate with responsibility and authority. The variable annual portion of the compensation shall be maximised at and never exceed the fixed salary. The variable portion of the compensation should also be based on outcome relative to set goals and on individual performance. The retirement age shall be 60−65 years and in addition to an ITP plan, only defined contribution pension plans may be offered. In the case of termination, a severance payment in a maximum amount of one year's salary may be offered in addition to salary during the period of notice. In addition to the incentive programme proposed to the Annual General Meeting, no other share-based or share-price-related programmes will be offered.

As far as compensation to the President and other members of senior management is concerned, the Board of Directors has appointed a compensation committee consisting of the Chairman of the Board of Directors and the Vice Chairman of the Board of Directors, with the Chairman as reporter. The task of the committee is to evaluate and suggest principles of compensation for members of senior management to the Board of Directors. The Board of Directors submits proposals to the Annual Meeting for resolution. The proposal to the 2012 Annual General Meeting is set forth in the Board of Directors Report.

hous and SEK t	sala Basic ry, direc tors f ee	ble Varia tion comp ensa	Othe r tion comp ensa	Othe bene fits	r P ensio n cost	l Tota
Chai of th ard o f Dir e Bo ecto rman rs
Ande rjesso rs Bö n	400					400
Dire ctor
Tom Hede lius	300					300
Pirkk o Alit alo	200					200
art Sj ölund Lenn	200					200
Robe rgqvi rt Be st	117					117
iden Pres t & C EO
Jörge n Wig h	2 698	569	70	96	820	4 253
Exec utive Vice Pres iden t
Nikla ark s Enm	749			39	116	838
öder lind Mag nus S	1 714	362	44	97	433	2 650
Othe mbe rs of seni nt r me or m anag eme
4.5 p erson s	5 474	805	128	292	1 531	8 230
l Tota	11 85 2	1 736	242	524	2 900	17 25 4

Compensation and other benefits to the Board of Directors and members of senior management 2010/2011

SEK t hous and	Basic sala ry, direc tors f ee	Varia ble tion comp ensa	Othe r tion comp ensa	Othe bene fits	r P ensio n cost	Tota l
Chai of th ard o f Dir e Bo ecto rman rs
Ande rs Bö rjesso n	400					400
Dire ctor
Hede lius Tom	300					300
Pirkk o Alit alo	200					200
ölund Lenn art Sj	200					200
Pres iden t & C EO
Jörge n Wig h	2 269	666	51	99	690	3 775
utive Vice iden Exec Pres t
Nikla ark s Enm	1325	389	38	89	269	2 110
öder lind Mag nus S	1 444	425	38	123	361	2 391
Othe mbe rs of seni nt r me or m anag eme
4 per sons	4 261	927	82	270	1 114	6 654
l Tota	10 39 9	2 407	209	581	2 434	16 03 0

In addition to the President & CEO, other members of senior management refers to the management group consisting of: executive vice presidents (1.3 persons), and division and business area executives (4.5 persons). Niklas Enmark resigned as Executive Vice President in conjunction with the 2011 Annual General Meeting. Compensation to this group, a total of 7.8 (7) persons in 2011/12, was covered by the resolution at the 2011 Annual General Meeting for members of senior management. Compensation Committee has verified compliance with the resolution of the Annual General Meeting and conformity of the compensation with market conditions has been confirmed by comparing with compensation in other similar, listed companies.

Pensions

The retirement age for the President & CEO is 60 years. The retirement age of other members of senior management is 65 years. Pension is paid equivalent to the ITP plan, which is a defined contribution plan.

Severance payment

The period of notice for the President is 12 months when termination is at the initiative of the Company and 6 months when termination is at the initiative of the President. In the case of termination at the initiative of the President, the President is entitled a severance payment of the equivalent of one year's salary in addition to salary during period of notice. No severance payment is payable in the case of termination at the initiative of the President. The severance payment is not prorated against other income.

The period of notice for the other members of Group management is 6-12 months when termination is at the initiative of the Company and up to 6 months when termination is at the initiative of the employee. In the case of termination at the initiative of the Company, members of Group management are entitled to a severance payment of the equivalent of up to one year's salary, in addition to salary during the period of notice. No severance payment is payable in the case of termination at the initiative of the employee. The severance payment is not prorated against other income.

Option programme

The 2011 Annual General Meeting resolved an incentive programme for members of senior management in the Lagercrantz Group. This call option programme consists of call options for Lagercrantz Group repurchased shares, where each call option gives the holder a right to acquire one class B repurchased share. Redemption can take place during three time periods: (I) during two week perioden1 April 2013 – 30 September 2013, (II) during two weeks from the when the Company publishes its Interim Report for the period 1 April 2013 – 31 March 2014, and (III) during the period 22 September – 3 October 2014.

Similar call option programmes for members of senior management were resolved by the 2010 and 2009 Annual General Meetings. In all cases the share is acquired at a redemption price determined as a percentage mark-up of an average share price after theAnnual General Meeting in accordance with listed paid prices. The programmes

cover members of senior management and managers with a direct possibility of affecting the Group's profit. The members the Board of Directors do not have the right to acquire call options, with the exception of the Company's President & CEO. One prerequisite for being awarded call options is that the employee has concluded a special pre-emption agreement with the Company. Pre-emption shall occur at the market value at the time of termination of employment, a tender offer for all outstanding and in cases when the call options are to be transferred to a third party. In all other respects the call options are freely transferable. The Company did not invoke the preemption agreement during 2011/12. The premium for the call options shall be equivalent to the market value of the call options in accordance with external valuation applying the generally accepted valuation method (the Black & Scholes model).

Participants may receive extra compensation in the form of cash gross salary equivalent to only a part of the option premium paid. Payment of this compensation is made two years after the decision on issuance on the condition that the option holder is still in the employment of the Group and owns call options.

The award resolved by the 2009 Annual General Meeting comprised 23 persons and a total of 255,000 call options. Awards varied between 3,000 and 44,000 options per person. The President & CEO acquired 44,000 and other members of senior management 108,000. The measuring period to determine the average share price, which was SEK 25.92, was 7 September – 18 September 2009. The redemption price for the shares resolved was 120 percent of the average price, was set as SEK 31.10, but was subsequently adjusted to SEK 29.70 due the dividend paid. The market value of the call options was set at SEK 2.00 per option by an independent valuation institution. The cost for programme 2009 amounted to about MSEK 1.0, for the most part attributable to the extra compensation, with only a marginal effecton earnings per share. About MSEK 0.4 of the cost for the current option programme was charged to 2009/10 earnings. The effect on equity amounted to MSEK 0.1.

The award resolved by the 2010 Annual General Meeting comprised 26 persons and a total of 260,000 call options. Awards varied between 5,000 and 40,500 options per person. The President & CEO acquired 40,500 and other members of senior management 105,000. The measuring period to determine the average share price, which was SEK 35.00, was 6 September – 17 September 2010. The redemption price for the shares resolved was 120 percent of the average price, was set as SEK 42.00, but was subsequently adjusted to SEK 41.00 due due to the dividend paid. The market value of the call options was set at SEK 2.00 per option by an independent valuation institution. The cost of the 2010 programme amounted to approximately MSEK 0.8, for the most part attributable to the extra compensation, with only a marginal effect on earnings per share. About MSEK 0.4 of the cost for the current option programme was charged to 2010/11 earnings. The effect on equity amounted to MSEK 0.4.

The award resolved by the 2011 Annual General Meeting comprised 26 persons and a total of 180,000 call options. Awards varied between 2,500 – 23,500 options per person. The President & CEO acquired 23,500 and other members of senior management 50,500. The measuring period to determine the average share price, which was SEK 47.67, was 5 September – 16 September 2011. The redemption price for the shares resolved was 120 percent of the average price, was set as SEK 57.20. The market value of the call options was set at SEK 3.30 per option by an independent valuation institution. The of the 2011 programme was approximately MSEK 0.7, for the most part attributable to the extra compensationen, with only a marginal effect on earnings per share. About MSEK 0.6 of the cost for the current option programme was charged to 2011/12 earnings. The effect on equity amounted to MSEK 0.2.

In addition hereto, redemption of options relating to the 2008 and 2009 programmes meant an increase in equity of MSEK 8.0, in connectionclass B shares held in treasury and sold to the option holders.

Fees and reimbursement to auditors

	Grou	p	t Com Paren	pany
	2011 /12	2010 /11	2011 /12	2010 /11
KPM G
Audi t assi ents gnm	2	2	0,5	0,6
dviso ignm Tax a ents ry ass	0	0	0,1	0,0
ther assig ts nmen	1	0	0,0	0,1
Othe r aud itors
Audi t assi ents gnm	1	0	–	–
Tax a dviso ignm ents ry ass	0	0	–	–
Othe r assi ents gnm	0	0	–	–

By audit assignment is meant examination of the annual accounts and the administration by the Board of Directors and the President, other tasks the Company's auditors are obligated to perform, and advice or other assistance prompted by Observations in the course of such examination.

Note 7 Other operating income

	2011 /12	2010 /11
Grou p
Capit al ga ins	1	1
l inco Renta me	0	0
Othe ation r com pens	2	2
ivabl es/lia bilitie s of a char FX ga ins on rating acter rece n ope	6	9
llane Misce ous	4	3
	13	15

Note 8 Other operating expenses

	2011 /12	2010 /11
Grou p
FX lo eivab les/lia bilitie s of a char rating acter sses o n rec n ope	-6	-9
Othe r exp ense s	-1	-1
	-7	-10

Note 9 Depreciation and amortisation of tangible and intangible non-current asset

	2011 /12	2010 /11
Grou p
Depr eciat ion a nd am ortisa tion a ccord ing to plan by ty pe of	t asse
gible Intan ts asse	-16	-12
Build ings a nd la nd	-1	-1
hold Lease impro nts veme	-1	-1
Plant and mach inery	-9	-10
Equip ls, fix and fittin ment , too tures gs	-8	-5
	-64	-29
nd am ccord plan by fu Depr eciat ion a ortisa tion a ing to nctio n
of go Cost ods s old	-10	-9
rch a nd de velop Resea ment	-9	-6
Sellin ts g cos	-12	-10
Adm inistr ative expe nses	-4	-4
	-35	-29
nt Co Pare mpa ny
eciat ion a nd am ortisa tion a ccord ing to plan by ty pe of Depr	t asse
ls, fix and fittin Equip ment , too tures gs	0	0
	0	0
eciat ion a nd am ortisa tion a ccord ing to plan by fu nctio Depr n
Adm inistr ative expe nses	0	0

0 0

Note 10 Leasing fees relating to operating leases and rental contracts

	2011 /12	2010 /11
Grou p
ng fe d ren ed du he fin l year Leasi ring t ancia ts ex es an pens	38	34
Amo of fu l pay unts ture a ment nnua s:
r afte ent fi ial ye 1 yea r curr nanc ar	31	29
rs aft finan cial y 2 yea rrent er cu ear	20	21
rs aft finan cial y 3 yea rrent er cu ear	10	14
rs aft finan 4 yea cial y rrent er cu ear	3	7
5 yea rs aft finan cial y rrent er cu ear	3	5
	67	76
Pare nt Co mpa ny
ng fe he fin Leasi d ren ed du ring t ancia l year ts ex es an pens	2	2
Amo of fu l pay unts ture a ment nnua s:
r afte ent fi ial ye 1 yea r curr nanc ar	2	2
rs aft finan cial y 2 yea rrent er cu ear	1	2
than ars af finan cial y More 3 ye ter cu rrent ear	0	1
	3	5
Leasi ng fe d ren t for ises a nt fo r the large st pa es an prem ccou	rt of leasin	ts. g cos

Note 11 Finance income

	2011 /12	2010 /11
Grou p
st inc Intere ome	1	1
ins FX ga	2	1
	3	2
Pare nt Co mpa ny
Profi t from shar es in Grou panie p com s
st inc from panie Intere Grou ome p com s	4	2
tribu ived Grou tions p con rece	44	25
Divid end i ncom e	168	32
	216	59
Othe r inte rest i e and simil ar ite ncom ms
FX ga ins	0	1
Othe r inte rest i ncom e	0	–
	0	1
l fina Tota nce i ncom e	216	60

Note 12 Finance expense

	2011 /12	2010 /11
Grou p
nsion Intere st ex pens e, pe s	-2	-2
Othe r inte rest e xpen se	-11	-7
Effec t of in t hed ging teres	-1	-2
FX lo sses	-2	-1
Othe r	0	0
	-16	-12
Pare nt Co mpa ny
lt fro Resu m sh in Gr nies ares oup c ompa
Intere e to G anies st ex pens roup comp	-2	-1
Grou tribu tions rend ered p con	-12	–
FX lo sses	-2	-3
Impa irmen t	–	-4
	-16	-8
Othe r inte d sim ilar it rest e xpen se an ems
Othe r inte rest e xpen se	-11	-7
Effec t of in t hed ging teres	-1	-2
Othe r	0	0
	-12	-9
l fina Tota se in the Pare nt Co nce e xpen mpa ny	-28	-17

Note 13 Exchange rate differences affecting profit

	2011 /12	2010 /11
Grou p
iffere affec rofit Excha ate d ting o ing p perat nge r nces	-1	-3
Finan cial e xcha ate d iffere nge r nces	0	0
	-1	-3
Pare nt Co mpa ny
iffere Finan cial e xcha ate d nge r nces	-2	-2

-2 -2

Note 6 continues

Note 14 Taxes on the year's profit

2011/12 2010/11

nse (- )/tax incom e (+) Curre nt tax expe se fo r the d Tax e perio xpen	-40	-28
nt of Adju attri buta ble to prio stme taxes r yea rs	0	1
	-40	-27
Defe rred t e (-)/t ax in (+) ax ex pens come
Defe rred t rary d iffere on te axes mpo nces	-3	-4
Defe of ca rred t on ch pitali sed axes ange
alue of tax loss forw ard tax v carry	-2	-4
	-5	-8

Total reported tax expense/tax income in the Group -45 -35

The value of tax loss carryforwards is taken into account when it is believed that they will result in lower tax payments in the future.

ncilia tion of ef fecti Reco ve ta x	2011 /12	2010 /11
Grou p
Profit befo re tax es	171	137
ccord ing to nt Co % Tax a Pare y's ta x rate , 26.3 mpan	-45	-36
Effec t of o ther t es fo r othe ies ou tside ax rat r Gro up co mpan	den Swe 0	1
dedu ctible Non- expe nses	-1	-1
Othe pt inc r tax- exem ome	1	0
Taxes attri buta ble to prio r yea rs	0	1
rted effe ctive Repo taxe s	-45	-35
	2011 /12	2010 /11
Pare nt Co mpa ny
Curre nse (- )/tax incom e (+) nt tax expe
se fo r the perio d Tax e xpen	-1	-2
	-1	-2
Defe rred e (-)/t ax in (+) tax ex pens come
Defe rred t rary d iffere on te axes mpo nces	0	0
	0	0
l rep orted se/ta x inc in th ent C Tota tax e e Par xpen ome	-1 omp any	-2
Reco ncilia tion of ef fecti ve ta x	2011 /12	2010 /11
Pare nt Co mpa ny
Profit befo re tax es	171	34
Tax a ccord ing to te, 26 .3% ent t curr ax ra	-45	-9
Effec t of im pairm harge ent c s	–	-1
Divid ends from panie Grou p com s	44	8
dedu ctible Non- expe nses	0	0
effe Repo rted ctive taxe s	-1	-2

Note 15 Goodwill

	2012 -03-3	1 2 011-0 3-31
Grou p
mula ted a cquis ition value Accu s
ing b alanc Open e	320	179
Addi tions	42	150
nt fo Adju r add itiona l purc hase stme mone y	–	-2
Excha ate d iffere nge r nces	-1	-7
Clos ing b alan ce	361	320
Good will a lloca ted to Grou panie p com s
Acte Solu tions AB	2	2
CAD iet A/ S -Kom pagn	24	25
COBS AB	8	8
Direk k AB troni	9	9
Elpre ss AB	40	40
ISG S s AB ystem	12	12
Idesc o OY	20	–
ISIC A /S	5	5
K&K Activ e OY	30	30
Leten g AS	23	22
Nord ic Ala rm A B	20	20
Norw AB esco	31	31
v Tele & Vi deo K lt AB STV S onsu	5	5
Swed wire AB	61	61
Sven sk Stå linred ning AB	21	21
Unitr onic AG	16	16
erbe Vanp ée & West rg A/ S	13	13
Vend ig AB	21	–
Tota l goo dwil l	361	320

Test for impairment of goodwill

The Group's reported goodwill amounts to MSEK 361 (320). Goodwill is not amortised after the transition to IFRS. Instead the value of goodwill is tested to IFRS. Instead the value of goodwill is tested annually in accordance with the rules set forth in IAS 36. A test was performed during March 2011. Goodwill is allocated to cash-generating units, which typically coincide with the entity acquired. In cases where the acquired business is integrated into other Lagercrantz businesses to such an extent that it is not possible to keep separate the assets and cash flows attributable to the entity acquired, a test of goodwill values is performed at a higher level. The recovery value is calculated based on the value in use and a current assessment of the cash flows for the next fiveyear period. Assumptions are made for sales growth, gross margin, level of overhead, working capital requirement and the need for capital expenditures based on earlier experiences. In the normal case these parameters are set to correspond to the prognosticated levels for the next financial year, mainly based on the relevant entity's business plan calling for a growth rate of 0–10 percent per year. For the year's thereafter a rate of growth based on estimated sustained growth rate of about 3 percent is applied. Cash flows have been discounted using a weighted capital cost equivalent to about 11 percent before taxes (about 12–13.5 percent last year). calculations demonstrate that value in use exceeds the reported value. The test for impairment of demonstrate thatthe value in use exceeds the reported value. The test for impairment of goodwill thus did not result in a need for an impairment charge. The sensitivity of these calculations mean that the value of goodwill can still be defended even if certain of the parameters included were to change. If, for instance, the sustainable rate of growth was 1 percent instead of 3 percent, the value in use still exceeds the reported value. The values can also be defended if the recovery value of each respective company were to decline by 15 percent. Other tests for impairment: No events or changed circumstances have been identified that would warrant a test of other intangible non-current assets.

Note 16 Trade marks

	2012 -03-3	1 2 011-0 3-31
Grou p
mula ted a cquis ition value Accu s
ing b alanc Open e	108	39
Addi tions	0	70
Excha ate d iffere nge r nces	0	-1
Clos ing b alan ce	108	108
s foll Trade mark alloc ated to Gr nies a s are oup c ompa ows:
Acte Solu tions AB	3	3
COBS AB	3	3
Direk troni k AB	2	2
Elpre ss AB	15	15
ISIC A /S	8	8
g AS Leten	17	17
Nord ic Ala rm A B	7	7
Norw AB esco	15	15
v Tele deo K lt AB STV S & Vi onsu	3	3
Swed wire AB	25	25
ée & erbe rg A/ S Vanp West	10	10
l trad rks Tota e ma	108	108

Each year an assessment is made to determine if any impairment of trademarks has occurred in accordance with the same principles as for goodwill.

Note 17 Other intangible assets

	2012 -03-3	1 2 011-0 3-31
Grou p
mula ted a cquis ition value Accu s
ing b alanc Open e	131	109
Addi tions	23	27
Recla ssific ation	-2	–
Excha ate d iffere nge r nces	0	-5
	152	131
Accu mula ted a isatio ordin lan mort g to p n acc
Open ing b alanc e	-54	-44
ortisa tion a ccord ing to plan Year 's am	-16	-12
Recla ssific ation	2	–
iffere Excha ate d nge r nces	0	2
	-68	-54
Clos ing b alan ce	84	77

Other intangible assets primarily consist of patents, customer relationships, capitalised development costs and software. Of the total reported value MSEK 23 (27) refers to internally generated intangible assets. A total of MSEK 12 (11) expensed as research and development during the year.

Note 18 Buildings, land and land improvements

	2012 -03-3	1 2 011-0 3-31
Grou p
mula ted a cquis ition value Accu s
ing b alanc Open e	33	3
Addi tions	–	0
Addi tions via n ies ew co mpan	–	30
	33	331)
mula ted d rding to pl Accu iation eprec acco an
Open ing b alanc e	-2	-1
Addi tions via n ies ew co mpan	–	0
's dep recia tion a ccord ing to plan Year	-1	-1
	-3	-2
Clos ing b alan ce	30	31

1) Acquisition values include no capitalised interest.

Note 19 Leasehold improvements

	2012 -03-3	1 2 011-0 3-31
Grou p
mula ted a cquis ition value Accu s
ing b alanc Open e	6	7
Addi tions	1	0
Excha ate d iffere nge r nces	0	-1
	7	6
Accu mula ted d iation rding to pl eprec acco an
Open ing b alanc e	-4	-3
's dep recia tion a ccord ing to plan Year	-1	-1
Excha ate d iffere nge r nces	0	0
	-5	-4
Clos ing b alan ce	2	2

Pla Not e 20	nt a	nd m ach iner y
--------------------	------	--------------------------

	2012 -03-3	1 2 011-0 3-31
Grou p
Accu mula ted a cquis ition value s
Open ing b alanc e	123	77
Addi tions	8	4
Addi tions via n ies ew co mpan	0	46
Recla ssific ation	0	0
Sales and dispo sals	-2	-2
Excha ate d iffere nge r nces	0	-2
	129	123
Accu mula ted d iation rding to pl eprec acco an
Open ing b alanc e	-83	-48
Addi tions via n ies ew co mpan	0	-30
Sales and dispo sals	1	2
's dep ccord plan Year recia tion a ing to	-9	-10
iffere Excha ate d nge r nces	0	3
	-91	-83

Closing balance 38 40

Note 21 Equipment, tools, fixtures and fittings

	2012 -03-3	1 2 011-0 3-31
Grou p
mula ted a cquis ition value Accu s
ing b alanc Open e	116	110
Addi tions	7	8
Addi tions via n ies ew co mpan	1	7
Sales and dispo sals	-22	-5
Recla ssific ation	0	0
Excha ate d iffere nge r nces	0	-4
	102	116
mula ted d iation rding to pl Accu eprec acco an
ing b alanc Open e	-98	-94
Addi tions via n ies ew co mpan	-1	-8
Sales and dispo sals	22	5
Recla ssific ation	0	0
's dep recia tion a ccord ing to plan Year	-8	-5
Excha ate d iffere nge r nces	0	4
	-85	-98
Clos ing b alan ce	17	18
Pare nt Co mpa ny
mula ted a cquis ition value Accu s
ing b alanc Open e	1	1
Addi tions	0	0
	1	1
mula ted d iation rding to pl Accu eprec acco an
ing b alanc Open e	-1	-1
's dep ccord plan Year recia tion a ing to	0	0
	-1	-1
Clos ing b alan ce	0	0

Note 22 Shares in Group companies

	2012 -03-3	1 2 011-0 3-31
Pare nt Co mpa ny
Accu mula ted a cquis ition value s
ing b alanc Open e	882	645
nal a dditio Exter ns	61	239
Adju nt of leme hase stme ntary supp purc mone y	–	-2
	943	882
mula ted im pairm harg Accu ent c es
ing b alanc Open e	-108	-106
Year 's imp airme nt ch arges	–	-2
	-108	-108
Clos ing b alan ce	835	774

Specification of the Parent Company's and the Group's holding of shares

)/ Org eg of fice Grou p co 2 nr / R	Num ber of sh ares	1) Stake in %	Rep c arryi 2012 -03-3	lue ng va 1 2 011-0 3-31
Solu tions Acte AB,
rrköp ing 55 6600 -803 2, No Acte Syst ems A S,	500	100,0	13	13
92 7 714 574, Berg en, N orwa Com d, Acte nts Lt pone	600 y	100,0	1
mpsh ire, U 42 0944 7, Ha K AS, Acte	49 99 9	100,0	0	0
, Oslo 92 3 148 442 , Nor way Supp ly AB Acte	5 000	100,0	44	44
, 6213 -240 6, No rrköp ing 55	50 00 0	100,0	20	20
Oy, Acte 23 9 992 , Hels inki, Finla nd	300	100,0	3	3
COBS AB, 6524 -378 8, Gö tebo 55 rg	3 000	100,0	21	21
Direk troni k AB, 55 6281 -966 3, Ny näsh amn	3 000	100,0	24	24
Elpre ss AB , 55 6031 -560 7, Kra mfor s	80 00 0	100,0	99	99
Elpre ss A/ S, CV R 261 6262 9, Sil kebo rg, D	rk 100 enma	100,0	–
Elpre ss Gm bH, HB R 325 2, Vie Germ rsen, any	100	100,0	–
Elpre ss (Be ijing) Elec trical Co Co. Ltd, B eijing nents mpo	, Chin a 100	100,0	–
Kable ma A B, 55 6746 -2196 , Kra mfor s	100	100,0	–
EFC F inlan d Oy, 17 5056 7-0, Korsh olm, Finla	nd 1 550	100,0	13	13
Idesc o OY , 20 2449 7-7, U leåbo rg, Fi nland	403 391	90,2	30
Idesc o AB , 55 6742 -300 8, Sto ckho lm	1 000	100,0	–
ISG S s AB, ystem 55 6468 -2192 , Hög anäs	200	100,0	18	18
K& K Acti ve OY , 09 8067 0-5, Helsi nki, F inlan d	100	100,0	51	51
Kabla oduk tion i Väst erås A gepr 55 6509 -109 6, Vä sterå s	B, 5 000	100,0	20	20
Lage tz Co nicat ion A rcran mmu 55 6260 -2127 , Soln a	B, 1 000	100,0	3
Leten g AS , 95 2 002 872, Tyns et, N orwa	y 1 2 968	95,0	51	51
Nord ic Ala rm A B, lna 55 6318 -003 2, So	38 30 0	100,0	30	30
Norw AB, esco by 55 6038 -409 0, Tä	15 00 0	100,0	61	61
v Tele deo K lt AB STV S & Vi onsu ckho lm 55 6307 -456 5, Sto	, 65 00 0	100,0	16	16
sk Stå linred Sven ning AB, 55 6842 -600 0, Vä rnam o	100 0 00	100,0	32	32
Swed wire AB, rberg 55 6297 -006 0, Va	100 0 00	100,0	95	95
Unitr onic AG, üssel dorf, HR B 400 42 , D Germ	any 1 53 60 0	100,0	28	28
bH , Seco s Gm itzerl and Ba ar, Sw	20 00 0	100,0	–
Vend ig AB , , Ska 55 6626 -7976 ra	5 000	100,0	31
Lage tz A/ S, rcran enha 81 74 6 7 10, Cop gen,	ark Denm 6	100,0	131	131
Acte A/S, 7 hage 1 2 8 89 19, C n, De open	k 2 nmar	100,0	–
ia Ltd Lage tz As rcran , Ho ng Ko ng	20 00 0	100,0	–
Pola nd Sp Acte Z o.o ., , Pola nd 5 7 53, W arsaw	2	100,0	–
IWSF E Sp Z o o., Polan d 96 322, War saw,	4 00 0	100,0	–
Elfac A/S, Silke borg 17 46 5 0 31, , Den	mark 1	100,0
ISIC A /S, Århu	k 3		–
16 70 4 5 39, s, De nmar erbe Vanp ée & West rg A/ S,	3 400	100,0	–
enha 25 69 5 8 01, Cop gen, h Dat Betec a A/S ,	ark 50 Denm 0	100,0	–
enha 10 51 0 7 32, Cop gen, iet A/ CAD -Kom S, pagn	ark Denm 1	100,0	–
enha 21 69 7 7 88, Cop gen,	ark 8 Denm	100,0	–

835 7741) Refers to ownership stake of capital, which also coincides with the proportion of votes

for the total number of shares outstanding.

2) Group companies are reported at book value; other companies are owned indirectly via

Group companies.

Note 23 Due from Group companies

	2012 -03-3	1 2 011-0 3-31
Pare nt Co mpa ny
mula ted a cquis ition value Accu s
ing b alanc Open e	96	47
Incre al rec eivab les ment	93	78
ivabl id Rece es pa	-72	-26
Excha ate d iffere nge r nces	-1	-3
Clos ing b alan ce	116	96

Note 24 Other long-term receivables

	2012 -03-3	1 2 011-0 3-31
Grou p
mula ted a cquis ition value Accu s
ing b alanc Open e	2	2
al rec eivab les Incre ment	0	0
Rece ivabl id es pa	0	0
Clos ing b alan ce	2	2

Note 25

Major one-time impairment charges were made against inventories in a number of companies in the amount of MSEK 10 (6).

Note 26

Agin g of u nimp aired trad eivab les d e rec ue	2012 -03-3	1 2 011-0 3-31
Grou p
Trade ivabl t due rece es no	315	300
Trade ivabl es du e in 0 days – 30 rece	44	20
Trade ivabl es du 90 d e in > 30 – rece ays	3	2
Trade ivabl es du e in > 90 – 180 days rece	0	1
Trade ivabl es du e in > 180 days rece	0	0
l Tota	362	323
ision unt f or ba d deb t loss Prov acco es	2012 -03-3	1 2 011-0 3-31
Grou p
Open ing b alanc e	3	4
rsal o f prev iously mad e imp airme nt ch Reve arges	-1	-1
nt los Year 's imp airme ses	0	0
iffere Excha ate d nge r nces	0	0
Clos ing b alan ce	2	3

Bad debt losses realised during the year have been charged to the income statement in the amount of MSEK 0 (1).

Note 27 Earned but not yet invoiced revenue

	2012 -03-3	1 2 011-0 3-31
Grou p
Work in pr ogre ss
mula ted r nised Accu ract i cont ecog ncom e	68	102
Invoi cing	-54	-88
l clai clien Tota ts m on	14	14
mula ted c d rec ed in Accu ognis ontra ct co sts an come
(afte r ded uctio n of r nised loss) d of p eriod at en ecog	68	102
Adva ceive d nts re nce p ayme	–	–
unt h eld b ack b y clie Amo nts	–	–

Contract income from fixed price contracts are reported using gradual profit recognition. Calculations are made based on completed time relative to estimated time to complete the entire contract.

Note 28 Prepaid expenses and accrued income

	2012 -03-3	1 2 011-0 3-31
Pare nt Co mpa ny
Prepa id ren t	0	0
Prepa id ins mium uranc e pre s	0	0
Othe r item s	3	2
	3	2

Note 29 Equity

Parent Company

According to Swedish law, shareholder's equity shall be divided between funds that may not be paid as dividends (restricted funds) and funds that may be paid as dividends (unrestricted funds).

Restricted reserves

Restricted funds consist of share capital and the following reserves:

Revaluation reserve

When a tangible or financial non-current asset is revalued, the amount by which it is revalued is allocated to a revaluation reserve.

Legal reserve

The purpose of the legal reserve is to set aside the portion of net earnings not required to cover a loss brought forward.

Unrestricted equity

Unrestricted funds consist of retained earnings and premium reserve:

Retained earnings

Consist of the preceding year's unrestricted equity after any allocation to legal reserve and after any dividends paid. Constitute the total unrestricted equity together with this year's income, i.e. the amount available for payment as dividends to the shareholders.

Premium reserve

When shares are issued at a premium, i.e. when payment for shares is made in excess of their nominal value, an amount equivalent to the amount received in excess of the quotient value of the shares must be credited to the premium reserve.

Share capital

Distribution and change of class of share

Class es of shar es	ber o f Num share s	ber o f Num vote s
Class A sh 10 v hare otes ares, per s	1 094 654	10 94 6 540
Class B sh 1 vo r sha te pe ares, re	22 07 8 655	22 07 8 655
Class B sh held in tre ares asury	-956 300	-956 300
l Tota	22 21 7 009	32 06 8 895
	Class A sh ares	Class B sh ares
ber o f sha ndin Num utsta res o g at be ginn ing a nd e nd o f per iod	1 094 654	22 07 8 655
rchas ed sh Repu ares	Class A sh ares	Class B sh ares
f rep f per Num ber o urcha sed s hares At b eginn ing o iod	–	977 0 00
Class B sh rchas ed du ring t he ye ares repu ar		200 0 00
Share d in c ction with rede mptio n of o ption s use onne	s	-220 700
Clos ing b alan ce	–	956 3 00

The share capital amounted to MSEK 48.9 at the end of the period. The class B share is listed on Nasdaq OMX Nordic Exchange Stockholm. According to the Articles of Association the share capital shall be not less than MSEK 25 and not more than MSEK 100. The quotient value of the share is SEK 2.11.

The proposed dividend for the year is SEK 2.75 (2.25) per share.

The options programmes described in Note 6 are secured by shares repurchased at an average cost of SEK 31.75.

When the call options are exercised at a redemption price of SEK 29.70, SEK, 41.00 and SEK 57.20, respectively, per share, the number of shares outstanding may increase by the number of option redeemed, or a total 644,300 shares. The number of shares held in treasury will then decline accordingly.

Group

The Group's equity consists of share capital and the following items:

Other contributed capital

Refers to equity capital contributed by the owners.

Reserves

Reserves refer to restatement reserve and hedging reserve. The restatement reserve includes all FX rate translation differences that arise when

translating the financial statements of foreign operations. These entities prepare their financial statements in other currencies than the Group and the Parent Company, which report in Swedish kronor (SEK). The restatement reserve additionally consists of exchange rate differences that arise upon revaluation of net investments in foreign operations. The hedging reserve includes the effective portion of the accumulated net change in fair value of a cash flow hedging instrument attributable to hedging transactions that have not yet transpired.

Retained earnings

Retained earnings include earned profit in the Parent Company and its subsidiaries. Profit for the year is reported separately in the report of financial position. Prior provisions to the legal reserve, not including transferred premium reserves, are included in this equity item.

Capital management

The Group's goal, as expressed in its finance policy, is to have a good capital structure and financial stability in the interest of retaining the confidence of investors, credit institutions and the market in general. In addition, this constitutes a foundation for continued development of the business operations. Capital is defined as total shareholders' equity, not including minority interests.

The ambition of the Board of Directors is to retain a balance between a high return and the security of a large capital base. The Group's goal is to achieve a return on equity of at least 25 percent per year. For the 2011/12 financial year the return was 22 percent (20). This improvement was achieved through a profit increase to MSEK 126 (102)_and the fact that average equity during the year amounted to MSEK 583 (520), i.e. that profit increased more than equity. This is, in part, due to a dividend paid during the year in the amount of approximately MSEK 50, and repurchase of own shares.

The Group's dividend policy is to pay a dividend amounting to 30–50 percent of the year's profit, taking the Group's cash flow and capital expenditure requirements into account. The Board of Directors is proposing to the 2012 Annual General Meeting a dividend of SEK 2.75 (2.25) per share. The proposed dividend translates to a dividend share of 49 percent (49). The dividend is also equivalent to 10 percent (9) of consolidated equity as of 31 March 2012.

The Group's Board of Directors has a mandate from the 2011 Annual Meeting to repurchase shares. The Group repurchased 200,000 shares during the year, in addition to prior years' purchases. The timing of these repurchases were, in part, determined by the market price of the share. A portion of the repurchased shares are intended to cover the Group's commitment under outstanding option programmes, where members of senior management and certain key persons have the opportunity to acquire class B shares by exercising acquired options. There is no formal repurchase plan. Decisions to buy and sell shares in the Group are instead made by the Board of Directors within the framework of the mandate given by Annual General Meeting. The Board of Directors is again proposing to the 2012 Annual General Meeting to pass a resolution to repurchase own shares.

There was no change in the Group's capital management during the year.

Note 30 Provisions for pensions and similar obligations

Defined benefit obligations and the value of managed assets

Lagercrantz Group has defined benefit pension plans in just a few countries. The plans in Sweden cover certain Group companies. The plans provide benefits based on the compensation and the years of service the employees have at or close to retirement. The pension plan according to ITP, secured by insurance with Alecta, is reported as a defined contribution plan since the Company has not had access to information detail making it possible to report this plan as a defined benefit plan.

	2012 -03-3	1 2 011-0 3-31
Grou p
lue o f unf unde d defi ned b enefi t obl igatio Prese nt va ns	58	49
s bef Net o bliga tion djus tmen ts ore a	58	49
Adju stme nts:
arial and losse bliga Actu gains ion o tions s on pens	-8	1
Subto tal of mula ted u rted a ial ctuar accu nrepo
gains (+) a nd lo sses ( -)	-8	1
rt of fina ncial , obl Net a nt in ition igati mou repo pos	on
(+), a (-) sset	50	50
The n is rec orde d in t he fo llowi ng ite ms in the r et am ount	t of fi epor nanc	ial po sition :
Provi sion f nsion s and simi lar ob ligati or pe ons	50	50
rt of fina Net a nt in the ncial ition mou repo pos	50	50

Distribution of amount on plans in the following countries: 2012-03-31 2011-03-31

1
49
49

Actuarial gains and losses may arise when the present value of the obligation and the fair value of managed assets are determined. They arise either when the actual outcome differs from the previously made assumption, or when assumptions are changed. The portion of the accumulated actuarial gains and losses at the end of the preceding year that exceeds 10 percent of the higher of present value of the obligations and the fair value of managed assets is expensed and distributed evenly over the average remaining time of employment of the employees.

Pens ion c ost	2011 /12	2010 /11
Grou p
Defin nefit ed be plans
Cost of pe nsion ned d uring the y s ear ear	0	0
Intere st ex pens e	-2	-2
arial gains (-) an d loss es (+) rted durin g the Actu repo year	0	0
of d efine nefit Cost d be plan s	-2	-2
Cost of de fined ribut ion p lans cont	-27	-24
l cos ation afte mina tion of em ploy Tota t com r ter pens	t -2 9 men	-26

The pension cost relating to the most important defined benefit pension plans in the amount of MSEK 2 (2) is reported in the income statement on the lines Selling costs, Administrative expenses and Interest expense. The interest component of the pension cost reported as a financial expense amounted to MSEK 2 (2). The pension cost of defined contribution pension plans was MSEK 27 (24). The total cost of defined benefit and defined contribution pension plans amounted to MSEK 29 (26).

Reconciliation of net amount of pensions in the report of financial position

The following table explains how the net amount in the report of financial position changed during the period.

	2011 /12	2010 /11
ning bala alue of o bliga tion Ope Pres ent v nce:	50	49
of de fined bene fit pla Cost ns	2	2
f com Paym ation ent o pens	-2	-1
f fees Paym by th ent o e com pany	0	0
Chan ge in arial gains /loss actu es	0	0
lation diffe Trans rence s	0	0
Clos ing b alan lue o f obl igati ce: P nt va rese on	50	50
Net a nt in fina ncial ion, closi ng b alan rt on post mou repo	50 ce	50

Actuarial assumptions

The following significant actuarial assumptions have been applied when calculating the obligations:

(weig hted lues) avera ge va	2012 -03-3	1 2 011-0 3-31
Disco unt in teres t rate	3,7%	4,9%
cted inflat Expe ion	2,0%	2,2%
Futur e sala ry inc rease s	3,0%	3,2%
nnel Perso turno ver	5,0%	5,0%
Chan ge in inco nt me a mou	3,0%	3,2%

As in prior years, the basis for discount interest rate in Sweden is the housing bond rate. The Group estimates that MSEK 3 will be paid during 2012/13 to funded and unfunded defined benefit plans.

2012-03-31 2011-03-31

	22	21
sion f Provi nsion or pe s	22	21
Pare nt Co mpa ny

Pledged assets for pension obligations

The Parent Company has guaranteed the PRI liabilities of Group companies.

Note 31 Deferred taxes

2012 -03-3 1	Defe rred tax a sset	Defe rred tax li abilit y	Net
Grou p
Othe ent a ssets r non -curr	4	-50	-46
Othe isions r prov	2	–	2
xed r Unta eserv es	–	-18	-18
Othe r	1	0	1
Tax lo rryfo ds ss ca rwar	1	–	1
	8	-68	-60
2011 -03-3 1	Defe rred tax a sset	Defe rred tax li abilit y	Net
Grou p
Othe ent a ssets r non -curr	5	-48	-43
Othe isions r prov	0	–	0
xed r Unta eserv es	–	-12	-12
Othe r	1	0	1
Tax lo rryfo ds ss ca rwar	3	–	3
	9	-60	-51

Unreported deferred tax assets

Deferred tax claims relating to tax loss carryforwards of MSEK 1 (1) have not been recognised. The value of tax loss carryforwards is taken into account to the extent it is deemed possible that they will result in lower tax payments in the future. Change in deferred taxes in temporary differences and tax loss carryforwards

	Open ing balan ce	Repo rted via the i e sta teme nt ncom	Closi ng balan ce
Grou p
Othe ent a ssets r non -curr	-43	0	-46
Othe isions r prov	0	2	2
xed r Unta eserv es	-12	-5	-18
Othe r	1	0	1
Tax lo rryfo ds ss ca rwar	3	-2	1
	-51	-5	-60

The difference on the change by type of tax not carried via the income statement is explained by deferred taxes in connection with acquisitions and by translation differences.

The Company reports no deferred taxes on temporary differences attributable to investments in Group companies. Any effects in the future will be recognised when the Company can no longer control the reversal of such differences, or when it for other reasons is no longer probable that reversal will take place within the foreseeable future.

The Parent Company has a deferred tax asset of MSEK 1 (0).

Note 32 Other provisions

	2012 -03-3	1 2 011-0 3-31
Grou p
Othe vision s as l liabi lities term r pro ong-
s for Cost ing m restr uctur easu res	0	0
Warr provi sions anty	2	0
Othe r	2	1
	4	1
Othe vision hort- liabi lities term r pro s as s
Cost s for ing m restr uctur easu res	8	1
Othe r	0	0
	8	1
Ope ning bala nce	2	8
Provi sions side d uring the p eriod set a	13	1
utilis ed du ring t he pe riod Amo unts	-3	-7
Clos ing b alan ce	12	2

Restructuring

Restructuring costs for which provisions have been set aside primarily refer to structural measures, and measures attributable to personnel changes.

Note 33 Financial assets and liabilities

Financial instruments by category

Fair values of financial assets and liabilities essentially correspond to reported values. Valuation of fair value is based on fair value option for conditional consideration, hich are part of IAS 39s cat. 3. Derivatives are valued at fair value based on observable market data and are part of IAS 39s cat. 2.

Group

2012 -03-3 1	and Loan trade recei vable	Deriv ative s f or he dge nting s a ccou	Tota l
the re of fin l pos Asse ts in ancia ition port
Long ivabl -term rece es	2		2
Trade ivabl rece es	362		362
Cash and cash equiv alent s	37		37
Sum ma	401	–	401

The consolidated report of financial position shows other receivables in the amount of MSEK 20. All items are non-financial.

2012 -03-3 1	Finan cial liabil ities	Deriv ative s for h edge untin acco g	Tota l
Liabi lities in the rt of finan cial p ositio repo n
Shor liabi lities dit in stitut ions t-term to cre	170		170
Trade bles paya	205		205
Othe ent li abilit ies r curr	28	–	28
l Tota	403	–	403

The consolidated report of financial position shows other liabilities in the amount of MSEK 86. There are no derivatives as of the balance sheet date. Conditional purchase money payments are carried in the amount of MSEK 28 valued at fair value via the financial statement. Financial liabilities are generally due within 12 months. Other items are non-financial.

2011 -03-3 1	and Loan trade recei vable	Deriv ative s f or he dge nting s a ccou	Tota l
the re of fin l pos Asse ts in ancia ition port
Long ivabl -term rece es	2		2
Trade ivabl rece es	323		323
Cash and cash equiv alent s	56		56

Total 381 – 381

The consolidated report of financial position shows other liabilities in the amount of MSEK 31. All items are non-financial.

2011 -03-3 1	Finan cial liabil ities	Deriv ative s for h edge untin acco g	l Tota
Liabi lities in the rt of finan cial p ositio repo n
Long liabi lities dit in stitut ions -term to cre	75		75
Shor liabi lities dit in stitut ions t-term to cre	174		174
Trade bles paya	188		188
Othe ent li abilit ies r curr	21	1	22
Tota l	458	1	459

The consolidated report of financial position shows other liabilities in the amount of MSEK 86. Derivates are are carried as financial instruments in the amount of MSEK 1. and conditional purchase money in the amount of MSEK 21, valued at fair value. Other items are non-financial.

Parent Company

2012 -03-3 1	and Loan trade recei vable	Deriv ative s f or he dge nting s a ccou	Tota l
the b alanc e she Asse ts in et
Due f ubsid iaries , long -term rom s	116		116
Othe ent li abilit ies r curr	60		60
Cash and cash equiv alent s	–		–
l Tota	176	–	176

2012 -03-3 1	Finan cial liabil ities	Deriv ative s for h edge untin acco g	Tota l
Liabi lities in the bala heet nce s
ies, lo Due t o Gro ng-te up co mpan rm	1		1
Long liabi lities dit in stitut ions -term to cre	0		0
Shor liabi lities dit in stitut ions t-term to cre	164		164
Trade bles paya	2		2
Othe ent li abilit ies r curr	198		198
Tota l	364	–	364

MSEK 23 refers to conditional purchase money valued at fair value.

2011 -03-3 1	and Loan trade recei vable	Deriv ative s f or he dge nting s a ccou	l Tota
the b alanc e she Asse ts in et
Due f ubsid iaries , long -term rom s	96		96
Othe r sho eivab les rt-ter m rec	29		29
Cash and cash equiv alent s	0		0
l Tota	125	–	125
2011 -03-3 1	cial Finan liabil ities	Deriv ative s for h edge untin acco g	l Tota
Liabi lities in the bala heet nce s
ies, lo Due t o Gro ng-te up co mpan rm	1		1
liabi lities dit in stitut ions Long -term to cre	75		75
Shor liabi lities dit in stitut ions t-term to cre	175		175
Trade bles paya	1		1
Othe ent li abilit ies r curr	107		107

Total 358 – 358

MSEK 13 of other liabilities refers to conditional purchase money valued at fair value.

Note 34 Interest-bearing liabilities and provisions

The Group's interest-bearing liabilities are allocated in the report on financial position as follows: Provision for pensions MSEK 50 (50), Long-term liabilities MSEK 1 (75), Current liabilities to credit institutions MSEK 171 (174) and Other current liabilities MSEK 0 (0). Total MSEK 222 (299). Provision for pensions are defined as an interestbearing provision since the defined benefit pension obligations in accordance with IAS 19 are converted to present value using a discount interest rate. Refer to Note 30 for details.

Credit terms on trade payables in the Group follow normal industry practice. The interest rate swap acquired by the Parent Company in the amount of MSEK 100 matured on 30 March 2012. The nominal value of interest-bearing liabilities and provisions essentially agree with reported values.

Liabi lities edit i nstit ution to cr s	2012 -03-3	1 2 011-0 3-31
Grou p
rtion Curre nt po	0	0
rity, 2 ars fr he da te of finan Matu –5 ye om t rt on repo	cial p ositio 0 n	75
ore th an fiv rs the date of re n fina Matu rity, m port o e yea	ncial posit ion –	0
	0	75
Pare nt Co mpa ny
Curre rtion nt po –	–
ars fr he da te of finan Matu rity, 2 –5 ye om t rt on repo	cial p ositio n –	75
Matu rity, m ore th an fiv rs the date of re n fina port o e yea	ncial posit ion –	–
	–	75
Com mitte d cre dit fa cility	2012 -03-3	1 2 011-0 3-31
Grou p
Appr oved cred it lim it	518	455
ilised ion Unut port	-348	-281
Utili sed p ortio n	170	174
dit fa Cred it lim its on mitte d cre cilitie com s are renew	ed on l basi an a nnua	s.
nt Co Pare mpa ny
oved cred it lim it Appr	500	400
ilised Unut port ion	-336	-225
Utili sed p ortio n	164	175
The c redit limit mmit ted c redit facili ty is r on co enew	ed on l basi an a nnua	s.
Pledg ed as sets f mmit ted c redit facil ity or co	2012 -03-3	1 2 011-0 3-31
Grou p
		29
Corp orate tgag mor es	3

Note 35 Accrued expenses and prepaid income

	2012 -03-3	1 2 011-0 3-31
Pare nt Co mpa ny
Perso nnel costs	6	5
Othe r item s	4	3
	10	8

Note 36 Paid interest

2011 /12	2010 /11
1	1
-12	-9
4	2
-13	-9

Note 37 Adjustment for items not included in cash flow

	2011 /12	2010 /11
Grou p
nd am Depr eciat ion a ortisa tion	35	29
Othe isions r prov	1	-4
Impa irmen t loss d dis ls es an posa	-1	0
Capit al los ale o f non ent a ssets s on s -curr	2	-1
Chan ge in inter l est a ccrua	1	1
Othe r item s	-2	-2
	36	23
nt Co Pare mpa ny
eciat ion a nd am ortisa tion Depr	0	0
t loss Impa irmen es	–	4
tribu et dis burse d Grou tion not y p con	12	–
Grou tribu tion eived not y et rec p con	-44	-25
Othe r item s	3	2
	-29	-19

Note 33 continues

Note 38 Investment in businesses

The following companies were acquired during the year (100 percent unless

otherwise stated): Vendig AB Is part of division Mechatronics from November. Idesco OY is part of Electronics from March. All acquisitions were paid for in cash.

Specification of acquisitions

The Swedish Company Vendig AB was acquired Under in November 2011. Vendig is a niched player that develops, manufactures and markets belt scarpers and other components for conveyor systems in the bulk-handling industry in in Sweden and the rest of Europe. In 2010/11 Vendig has sales of approximately MSEK 30 with good profitability. The company is located in Skara.

Idesco OY was acquired in March of 2012. Idesco develops and sells products based on RFID technology (Radio Frequency IDentification). During the 2011 financial year Idesco had sales of MEUR 5.6 with good profitability. The company is located in Uleåborg.

Since information on the acquisitions on an individual basis is immaterial, data is provided only in aggregated form. Lagercrantz Group typically utilizes supplementary purchase money as a complement to the basic purchase money. The amount for estimated purchase money includes supplementary purchase money set aside in the amount of MSEK 10 for Vendig AB and Idesco OY. The calculation is based on a probability-weighted waiting value. Non-payment of supplementary purchase money is the lowest outcome possible, Övervärden på materiella anläggningstillgångar avser fastigheter som värderats till marknadsvärde. Värdet på varumärken baseras på den starka marknads- och kundposition bolagen har och är värderat baserat på den marknadsföring som måste ske för att bygga upp en motsvarande position. which, however, is highly unlikely. Of not yet paid purchase sum calculated contingent purchase sum is MSEK 28. Intangible surplus values refer primarily to strong product ranges and innovations that justify good prices and a good position in the market. Goodwill is justified by the value of the companies' technical expertise and their good profitability.

Net assets of the acquired companies at the time of acquisition

MSEK	Carry ing v alue in the panie com s a	Fair v alue djust ment	Fair v alue in the G roup
gible Intan ent a ssets non -curr	0	17	17
Othe ent a ssets r non -curr	0	–	0
torie Inven s	8	–	8
Othe ent a ssets r curr	12	–	12
Cash and cash alent equiv s	7	–	7
st-be liabi lities Intere aring	-8	–	-8
Othe r liab ilities	-12	-5	-17
Net i dent ifiab le as liabi lities sets/	7	12	19
Good will			42
Estim ated hase purc mon ey			61
Effec cash flow t on
		2011 /12	2010 /11
Grou p
gible Intan ent a ssets non -curr		-59	-239
ible n Tang t asse ts on-c urren		-1	-48
Inven torie s		-8	-46
Othe ent a ssets r curr		-19	-54
Defe rred t ax lia bility		5	28
liabi lities Long -term		8	–
Curre nt lia bilitie s		12	58
l pur chas Tota e mo ney		-62	-301
Cash and cash equiv alent s in t he ac	quire d bus iness es	7	3
Effec t of t he ye ar's a cqui sitio ns on	the ash Grou p's c
and cash ivale nts equ		-55	-298
Adju nt of estim ated leme stme supp	hase ntary purc mone y,
prior isitio acqu ns		–	2
t of/i se in liabil ities r Repa ymen ncrea	elatin cquir ed bu g to a	sines 7 ses	18

Cash flow attributable to capital investments in businesses -48 -278

No temporary tax differences arose in connection with the year's acquisitions.

Distribution of intangible assets in connection with acquisitions

	2011 /12	2010 /11
Grou dwill p goo	42	150
Trade ks mar	–	70
Othe r inta ngibl ets e ass	17	19
l inta ngib le as Tota via a cqui sitio sets ns	59	239

Contribution of the acquired entities to the Group's revenue and profit

	2011 /12	2010 /11
Reve nue	17	205
ribut ion to profi t bef cquis ition Cont costs ore a	4	34
rhead Trans actio n ove	-1	-3
f surp Amo rtisat ion o lus va lues	-1	-1
Cont ribut ion t fit af cqui sitio ter a ts o pro n cos	2	30
Finan cing costs	0	-7
ribut fit af ter fi Cont ion t ts o pro nanc e cos	2	23

Contribution of the acquired entities to the Group's revenue and profit had they been included for the entire year

	2011 /12	2010 /11
Reve nue	78	302
ribut ion to profi t bef cquis ition Cont costs ore a	14	48
rhead Trans actio n ove	-1	-3
f surp Amo rtisat ion o lus va lues	-2	-2
Cont ribut ion t fit af cqui sitio ter a ts o pro n cos	11	43
Finan sts ce co	-2	-10
fit af ter fi Cont ribut ion t ts o pro nanc e cos	9	33

Transaction overhead for the year's acquisitions in the amount of MSEK 1 (3) is reported as administrative expenses.

Note 39 Contingent liabilities

	2012 -03-3	1 2 011-0 3-31
Grou p
Guar unde rtaki PG/P antee ngs F RI	1	0
Bank antee guar s	2	3
	3	3

Note 40 Earnings per share

	2011 /12	2010 /11
Earni er sh are, S EK ngs p	5,66	4,63
Earni er sh fter d ilutio n, SE K ngs p are a	5,63	4,61

The calculation of earnings per share for 2011/12 was based on profit for the year attributable to the Parent Company's equity holders amounting to MSEK 126 (102) and n a weighted average number of shares outstanding during 2011/12 amounting to 22,242,208 (22,046,145). The weighted number of shares outstanding including dilution amounts to 22,391,925 (22,133,388).

Instruments that may give rise to future dilutive effect

During 2011/12 the Company had three call option programmes outstanding, the redemption prices of which ( SEK 29.70, 41.00, and 57.20, respectively, per share) in two cases exceeded the average market price (SEK 53.17 per share). These options give rise to a dilutive effect and have been included in the calculation of earnings per share after dilution. Refer to Note 6 for a description of the option programme. Shares held in treasury are used as a hedge for this programme.

Note 41 Risk management

Financial risks

Efficient and systematic risk evaluation of financial risks as well as business risks is essential to Lagercrantz. Lagercrantz Group's model for risk management does not involve avoidance of risk, but is rather aimed at identifying, managing and pricing these risks.

The Board of Directors of Lagercrantz is responsible for adopting the finance policy that sets guidelines, goals and limits for financial management and management of financial risks within the Group. The finance policy governs the distribution of responsibility between the Board of Directors of Lagercrantz, Group management and the Group's companies. Group management has the operative responsibility to secure the Group's financing and to manage cash liquidity, financial assets and liabilities in an efficient manner.

Foreign exchange risk

Despite the fact that Lagercrantz has an international presence, its operations are local in nature as far as foreign exchange risk is concerned. Foreign exchange risk is the greatest financial risk to which Lagercrantz Group is exposed. It is defined as the risk for negative effect on profit caused by foreign exchange rate fluctuations. Foreign exchange rate fluctuations affect the Company's profit, equity and competitive situation in different ways:

• The result is affected when sales and purchases are in different currencies (transaction exposure).
• The result is affected when assets and liabilities are in different currencies (translation exposure).
• The result is affected when profit of subsidiaries in different currencies is translated into Swedish kronor (translation exposure).
• Equity is affected when the subsidiaries' net assets in different currencies are translated into Swedish kronor (translation exposure).

Transaction exposure

In an internationally active trading company such as Lagercrantz Group it is important to offer customers and suppliers opportunities to pay in their own currency. This means that the Group continually assumes currency risks, both in terms of trade receivable and trade payables in foreign currency. Since the largest part of sales is in the Nordic Region, Lagercrantz Group has a surplus of foreign currency flows in that region. These flows are exposed to transaction risks. The Group's purchases and sales in important foreign currencies amounted to MSEK 1,188 and MSEK 1,573, respectively.

Purchase/sale of important currencies

Amo in MS EK unts	Purch ases	Sales
USD	211	134
EUR	727	833
GBP	11	19
DKK	167	398
NOK	31	143
JPY	39	32
PLN	2	14
Grou al p tot	1188	1573

Cash and cash equivalents by currency

Amo unts in MS EK	2012 -03-3	1 2 011-0 3-31
SEK	6	3
USD	1	7
EUR	15	10
DKK	4	12
NOK	2	16
Othe encie r curr s	9	8
al Grou p tot	37	56

According to the guidelines of Lagercrantz Group, its foreign exchange exposure should be reduced to a certain extent. Currency exposure that arises is eliminated to the greatest extent possible by currency clauses and invoicing in the same currency as that in which purchases are made. Forward foreign exchange cover is deemed to be small in combination with the growing complexity of reporting financial derivative instruments.

Translation exposure in the report of financial position

An individual subsidiary should normally have no translation risk in its own balance sheet. This means that a subsidiary's receivables and liabilities in foreign currency should be balanced. Subsidiaries also normally do their borrowing in their own currency. In practice, this only comes into play when loans are raised in conjunction with the acquisition and in the case of loans between subsidiary and parent company. Equity in foreign Group companies is normally not hedged since investments in subsidiaries are considered to be of a long-term character. There may be exceptions, however. The translation exposure in consolidated equity can, during certain periods with sharp foreign currency rate fluctuations, be substantial. The largest exposures are in DKK, USD, EUR and NOK. The effect of translation differences on equity is set forth in the summary of changes in shareholders' equity.

Exchange rate sensitivity

As a rule of thumb it can be said that a change of the euro exchange rate (including the Danish krona, with an exchange rate linked to the EUR) by plus or minus 5 percent is estimated to change Lagercrantz Group's gross profit by plus or minus MSEK 10, respectively, on an annual basis given the conditions prevailing during the financial year. A change of the US dollar exchange rate by plus or minus 5 percent would give rise to a corresponding effect of minus or plus, respectively, MSEK 4. A corresponding change in the Norwegian exchange rate gives rise to an effect of minus or plus, respectively, of MSEK 3. Exchange rate changes also have other effects on earnings since parts of the overhead are denominated in foreign currency, especially DKK and EUR, and because of measures continually taken to minimise the effects of foreign exchange rate changes. This makes the ultimate effects on profit difficult to predict and analyse. The rule of thumb should therefore be used carefully.

Interest risk

The Group's financial policy states the borrowing and the period of fixed interest thereon should not be longer than the period during which a borrowing need is deemed to exist. The overarching policy is that up to 50 percent of the borrowing should be for a term of one to five years. Interest risk arises in two ways:

• The company may have invested in interest-bearing assets the value of which changes when there is an interest rate change.
• The cost of the company's borrowing may change when the interest rate level changes.

Lagercrantz Group has no long-term surplus liquidity and does not normally invest funds in anything but short-term bank deposits/short-term money market instruments with a term of less than 90 days. As a consequence, there is no appreciable interest rate risk in the Group's short-term investments. Changes in the interest rate level therefore primarily affect the Company's borrowing cost. A change in the weighted average interest rate by 1 percent for the Group is expected to affect the interest expense before taxes by approximately MSEK 2 on an annual basis, given the conditions that prevailed during the financial year. The Group's goal is to have a well balanced liquidity reserve available in the form of cash and cash equivalents, and committed credit facilities.

Weighted average effective interest rates on loans, %

	Grou p		Paren t Com pany
	2011 /12	2010 /11	2011 /12	2010 /11
liabi lities Long -term
dit in stitut ions to cre	4,83 %	3,49 %	4,83 %	3,49 %
Shor liabi lities t-term
dit in stitut ions to cre	2,94 %	1,89%	2,77 %	1,69%

Credit risk

Lagercrantz Group's credit risk with respect to trade receivables is highly diversified through a large number of projects and other business agreements of varying size and type, with a large number of customer categories in a multitude of geographic markets. The Company therefore has no significant concentration of credit risks. Financial credit and counterparty risk is identified, managed and reported in accordance with the framework defined in the Group's finance policy, risk policy and rules of attestation. In connection with financing of projects and other business agreements Lagercrantz may in certain cases assume responsibility for bank guarantees, in the form of Parent Company guarantees towards a third party, for the purpose of securing financing during a limited period of time. According to the finance policy, as few credit counterparties as possible shall be strived for and they should always be highly creditworthy. No material losses of a financial character were sustained during the year.

Liquidity risk

Established relationships with the capital markets is a prerequisite for Lagercrantz Group's prospects for securing a supply of capital on a long-term basis on terms on market conditions. Given the credit facilities in place, there is good preparedness for temporary fluctuations in the liquidity needs of the Group. For maturity dates, refer to Note 34. Lagercrantz Group's confirmed bank credit facilities consist of: Committed credit facility in the amount of MSEK 500 in the Parent Company Committed credit facilities in the amount of MSEK 18 in subsidiaries

Capital risk

The Group's goal with respect to its capital structure is in line with the purpose of securing the ability to continue operations, allowing it to continue generating a return to its shareholders and benefits for other stakeholders, and to maintain a capital structure that gives a low overall capital cost. The risk inherent in the Group's level of capital is judged in terms such as equity ratio and interest coverage ratio. The present levels of these metrics adequately fulfil the requirements imposed by providers of capital. The current level of these metrics are well in line with the requirements of capital providers, the so called covenants.

Note 42 Related party disclosures

Related party relationships

The Parent Company has a related-party relationship with its Group companies and to the members of the Management Team. The Company's directors and their close family members control approximately 32 percent of the votes in the Company.

Related party transactions

The Parent Company invoices subsidiaries for intra-Group services. Sales among Group companies have occurred in small amounts. Transactions are on terms and conditions in line with market conditions. No other related party transactions have occurred within the Group. No other purchasesor sales have occurred between the Parent Company and the Group companies.

Note 43 Events after the balance sheet date

The number of divisions will increase to four when Division Niche Products is added.

Note 44 Information about Lagercrantz Group AB

Lagercrantz Group AB (publ), with its registered office in Stockholm. Box 3508, Torsgatan 2, SE-103 69 Stockholm, Sweden Organisation number 556282-4556

The Company's primary object is to deal in and manufacture products in the fields of data and electronics – either itself or through wholly or partially owned Group companies – and to engage in other business compatible therewith. The average number of employees during the year was 9. The Parent Company's shares are registered on the NASDAQ OMX. The Annual Accounts and the consolidated financial statements were approved for publication by the Board of Directors and the President on 26 June 2012.

Note 41 continues

Auditor's report

Report on the annual accounts and consolidated accounts

We have audited the annual accounts and consolidated accounts of Lagercrantz Group AB (publ) for the financial year 2011-04-01–2012-03-31.

Responsibilities of the Board of Directors and the Managing Director for the annual accounts and consolidated accounts The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these annual accounts and consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinions

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 March 2012 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act, and the consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 March 2012 and of their financial performance and cash flows in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. A corporate governance statement has been prepared. The statutory administration report and the corporate governance statement are consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the income statement and statement of financial position for the group.

Report on other legal and regulatory requirements

In addition to our audit of the annual accounts and consolidated accounts, we have examined the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the Managing Director of Lagercrantz Group AB (publ) for the financial year 2011-04-01–2012-03-31.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss, and the Board of Directors and the Managing Director are responsible for administration under the Companies Act.

Auditor's responsibility

Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company's profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.

As basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss, we examined the Board of Directors' reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

As basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the Managing Director is liable to the company. We also examined whether any member of the Board of Directors or the Managing Director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinions

We recommend to the annual meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director are discharged from liability for the financial year.

Stockholm 26 June 2012

KPMG AB

Joakim ThilstedtAuthorized Public Accountant

To the annual meeting of the shareholders of Lagercrantz Group AB (publ), corp. id. 556282-4556

Board of Directors and Auditors

Anders Börjesson Chairman Born: 1948.Edu: Bachelor of Science (Econ.). Chairman of Addtech AB and Cibenon AB. Vice Chairman ofB&B Tools AB. Director ofBoomerang AB, Bostad Direkt AB, Futuraskolan AB, Inomec AB and Ventilationsgrossisten – Stockholms Byggplåt AB. Holding (family): 492,588 class A shares and 402,500 class B shares. Director since 2001.

Pirkko AlitaloDirectorBorn: 1949.Edu: Bachelor of Science (Econ.). Holding: 5,000 class B shares. Director since 2001.

Roger Bergqvist DirectorBorn: 1948.Edu: Economics and marketing at univeristy level. Director of Proact IT Group AB, BE Group AB, Cybercom Group AB, Ventilationsgrossisten – Stockholms Byggplåt AB and Stillfront Group AB. Holding: 6,000 class B shares. Director since 2011.

Tom HedeliusVice ChairmanBorn: 1939.Edu: Doctor h. c. Economics.Honorary Chairman of Svenska Handelsbanken AB.Chairman of Anders Sandrewsstiftelse, B&B Tools AB and Jan Wallanders andTom Hedelius stiftelse.Vice Chairman of Addtech AB.Holding (family): 477,558 class A shares and 5,400 class B shares. Director since 2001.

Lennart Sjölund DirectorBorn: 1949.Edu: Bachelor of Science (Econ.). Chairman of ErySave AB, Quickcool AB, Parkallen Invest AB, Östanbäcks Timmerhus AB andZarismo AB.Director of Godiva AB andNew Nordic Healthbrands AB.Holding (family): 110,000 class B shares.Director since 2001.

Jörgen Wigh President and Chief Executive Officer

Born: 1965.Edu: Bachelor of Science (Econ.). Holding: 16,562 class A shares, 111,600 class B shares and 64,000 call options on class B shares. Director since 2006.

Auditors

Auditors appointed by the 2011 Annual Meeting are the registered auditing company KPMG AB. Auditor in charge is Joakim Thilstedt, Authorised Public Accountant.

Holding refers to status per 15 June 2012.

Management

Jörgen Wigh President and Chief Executive OfficerBorn: 1965.Edu: Bachelor of Science (Econ.). Holding: 16,562 class A shares, 111,600 class B shares and 64,000 call options on class B shares. Director since 2006.

Bengt Lejdström Chief Financial Officer

Born: 1962.

Holding: 6,500 call options on class

B shares

Magnus Söderlind Executive Vice President Responsible for business developmentBorn: 1966.Holding: 51,125 class B shares and 42,500 call options on class B shares.

Gunnar Almeling Vice President MechatronicsBorn: 1956.Holding: 1,800 class B shares and 26,000 call options on class B shares.

Kjell Eriksson Vice President CommunicationsBorn: 1954.Holding: 3,200 class B shares and 26,000 call options on class B shares.

Ulf GladhVice President ElectronicsBorn: 1961.Holding: 11,000 class B shares and 26,000 call options on class B shares.

Anders LarssonGroup Controller Born: 1961.Holding: 12,300 class B shares and 13,500 call options on class B shares.

Vice President CommunicationsBorn: 1961.Holding: 9,600 class B shares and 26,000 call options on class B shares.

Jonas Ahlberg Vice President Niche ProductsBorn: 1966.

Holding refers to status per 15 June 2012.

Annual Meeting

The Annual Meeting of Lagercrantz Group AB will be held on augusti at . on Hotell Anglais, Humle^gårdsgatan in Stockholm.

NOTICE OF PARTICIPATION

Shareholders who wish to participate in the proceedings of the Annual Meeting must:

• Be entered in the share register under their own name (not in the name of a nominee) in the share register maintained by Euroclear Sweden (former VPC) no later than Wednesday August ,
• File notice of their desire to attend to the Company on www.lagercrantz.com, by telephone + , to the Company's head office under address Lagercrantz Group AB (publ), Box , SE- Stockholm or via e-mail info@lagercrantz.com not later than Friday August , at ..

Such notice must contain the following information: shareholder's name, personal registration number (organization number), phone number and the number of any assisting counsel. Shareholders whose shares are registered in the name of a nominee must, in order to exercise their rights at the Annual Meeting, temporarily register their shares in their own name. Such re-registration must be completed no later than August . Request for such re-registration be made to the custodian in ample time before August for the registration to take place in time.

Call for Annual Meeting will be published July through announcement in Post & Inrikes Tidningar and in Dagens Industri. Call for meeting will also be available on the Company's website www.lagercrantz.com.

Calendar

uly 19 J 201 2	for the iod Inte rim ort rep per
	 Ap ril – Jun  e  .
28 A st 2 012 ugu	l M An eeti nua ng  
ber 25 O 201 2 cto	for the iod Inte rim ort rep per
	ril – ber  Ap Sep tem   .
31 J 201 3 anu ary	for the iod Inte rim ort rep per
	ril – emb  Ap Dec  er  
7 M ay 2 013	d re t fo r th e fin ial Yea r-en por anc

year /.

Published information is available at www.lagercrantz.com.

ELECTRONICS

ACTE A/SVallensbækvej 41

DK-2605 Brøndby DENMARK Tel: + 45 46 900 400 Fax: + 45 46 900 500www.acte.dk

ACTE AS

Vestvollveien 34 BP.O. Box 190 NO-2021 SkedsmokorsetNORWAYTel: + 47 63 898 900Fax: + 47 63 879 000www.acte.no

ACTE SP. Z O.O.

ul Krancowa 49 PL-02-493 WarsawaPOLANDTel: + 48 22 336 02 00Fax: + 48 22 336 02 01www.acte.pl

ACTE SOLUTIONS AB

Karlsbodavägen 20 A, Bromma P.O. Box 4115SE-171 04 SolnaSWEDENTel: + 46 8 445 28 00Fax: + 46 8 98 26 19www.actesolutions.se

ISIC A/S

Edwin Rahrs Vej 54 DK-8220 BrabrandDENMARKTel: + 45 70 20 70 77Fax: + 45 70 20 79 76www.isic.dk

IDESCO OY

Teknologiantie 9 FI-90590 Oulu FINLANDTel: + 358 6 20 743 4175Fax: + 358 6 20 743 4176www.idesco.fi

UNITRONIC AG

Mündelheimer Weg 9 DE-40472 DüsseldorfGERMANYTel: + 49 211 951 10Fax: + 49 211 951 11 11www.unitronic.de

VANPÉE & WESTERBERG A/STransformervej 29

DK-2730 HerlevDENMARKTel: + 45 44 85 90 00Fax: + 45 44 85 90 87www.vanpee.dk

MECHATRONICS

ACTE OYLarin Kyöstin tie 4 P.O. Box 36FI-00641 Helsingfors

FINLAND

Tel: + 358 9 752 761 Fax: + 358 9 752 766 59

www.acte.fi

ACTE SUPPLY AB

Karlsbodavägen 20 A, Bromma

P.O. Box 4115SE-171 04 SolnaSWEDEN

Tel: + 46 8 445 28 00Fax: + 46 8 98 26 19www.actesupply.se EFC FINLAND LTDJärvvägen 6 FI-65520 Korsholm FINLAND

Tel: + 358 6 322 6222 Fax: + 358 6 322 6200

www.efc.fiELFAC A/SPriorsvej 23 DK-8600 Silkeborg DENMARKTel: + 45 86 801 555Fax: + 45 86 824 050www.elfac.dkELPRESS ABIndustrivägen 15 P.O. Box 186SE-872 24 KramforsSWEDEN

Tel: + 46 612 71 71 00Fax: + 46 612 130 20 www.elpress.se

KABLAGEPRODUKTION I VÄSTERÅS ABOmformargatan 12 SE-721 37 VästeråsSWEDEN Tel: + 46 21 81 51 51Fax: + 46 21 81 51 61www.kablageproduktion.com

NORWESCO AB

Enhagsslingan 19 P.O. Box 603SE-187 26 Täby SWEDEN Tel: + 46 8 792 27 00Fax: + 46 8 792 27 09www.norwesco.se

NICHE PRODUCTS

SWEDWIRE AB

Birger Svenssons väg 16 P.O. Box 170SE-432 24 Varberg SWEDENTel: + 46 340 64 54 30Fax: + 46 340 64 54 34www.swedwire.se

SVENSK STÅLINREDNING AB

Industrivägen 31 SE-330 10 Bredaryd SWEDENTel: + 46 370 37 41 00Fax: + 46 370 37 41 25www.stalinredning.se

VENDIG AB

Göteborgsvägen 1 P.O. Box 62SE-532 21 SkaraSWEDENTel: + 46 511 173 60Fax: + 46 511 176 30www.vendig.se

COMMUNICATIONS

DIREKTRONIK AB

Konsul Johnsons väg 15 P.O. Box 234SE-149 23 Nynäshamn SWEDENTel: + 46 8 52 400 700Fax: + 46 8 520 181 21www.direktronik.se

K & K ACTIVE OY

Itälahdenkatu 22 B FI-00210 Helsingfors FINLANDTel: + 358 9 6855 0550Fax: + 358 9 6855 0551www.kandk.fi

LETENG AS

Enebakkveien 117NO-0680 OsloNORWAYTel: + 47 624 82 450 Fax: + 47 624 81 517www.leteng.no

COBS AB

Norra Långebergsgatan 4 P.O. Box 9242SE-421 32 Västra FrölundaSWEDENTel: + 46 31 333 38 40Fax: + 46 31 14 80 90www.cobs.se

ISG SYSTEMS AB

Sporthallsvägen 10 SE-263 34 Höganäs SWEDENTel: + 46 42 36 21 40Fax: + 46 42 36 21 49www.isg.se

NORDIC ALARM AB

Englundavägen 11 SE-171 41 SolnaSWEDENTel: + 46 8 27 27 27Fax: + 46 8 735 52 58www.nordicalarm.se

STV VIDEO DATA AB

Anderstorpsvägen 12, 2 tr SE-171 54 SolnaSWEDENTel: + 46 8 568 441 00Fax: + 46 8 568 441 01 www.stv.se

BETECH DATA A/S

Herstedvang 7 C, 2 DK-2620 Albertslund DENMARK Tel: + 45 43 487 470Fax: + 45 43 487 488www.betechdata.dk

CAD-KOMPAGNIET A/S

Herstedvang 7 C, 2 DK-2620 Albertslund DENMARK Tel: + 45 70 22 22 17Fax: + 45 70 22 22 84www.cad-komp.dk

Addresses

LAGERCRANTZ GROUP AB

Torsgatan 2 P.O. Box 3508SE-103 69 StockholmSWEDENTel: + 46 8 700 66 70Fax: + 46 8 28 18 05www.lagercrantz.com

Lagercrantz Group AB (publ) Torsgatan 2 P.O. Box 3508 SE-103 69 Stockholm, SWEDEN

Tel: + 46 8 700 66 70 Fax: + 46 8 28 18 05

www.lagercrantz.com

Corporate identity number: 556282-4556 Registered office: Stockholm