Studsvik — Annual Report 2010

Mar 29, 2011

Annual Report 2010

Information to shareholders

ANNUAL GENERAL MEETING OF SHAREHOLDERS, APRIL 26, 2011

The Annual General Meeting will be held in Stockholm, World Trade Center, Klarabergsviadukten 70 / Kungsbron 1, on Tuesday, April 26, 2011, at 4 p.m.

Notification of attendance

Shareholders wishing to participate must be registered in the share register kept by Euroclear Sweden AB by April 18, 2011, and must give notification of their intention to attend by April 18 at the latest.

• • by telephone +46 155 22 10 33,
• • by mail to Studsvik AB, P. O. Box 556, SE-611 10 Nyköping, Sweden,
• • by email to studsvik@studsvik.se,
• • by fax on +46 155 26 30 00, or
• • via Studsvik's website, www.studsvik.com.

The shareholder's notification should state

• • name
• • personal identity number / corporate identity number
• • address and telephone number
• • number of shares held

For entitlement to vote at the Annual General Meeting, shareholders with nominee-registered holdings must apply to the bank or broker managing their shares for temporary re-registration a couple of banking days before April 18, 2011.

Nomination committee

Studsvik's Nomination Committee consists of:

• • Bill Tunbrant, representative of the Karinen family
• • Jan Barchan, Briban Invest, Member of the Board
• • Peter Rudman, Nordea fonder
• • Anders Ullberg, Chairman of the Board

The task of the Nomination Committee is to submit proposals to the Annual General Meeting of Shareholders regarding election of the Board of Directors, auditors and alternate auditors and their fees.

FORTHCOMING FINANCIAL INFORMATION 2011

• Report on the first quarter as at March 31	April 26, 2011
• Report on first half year as at June 30	July 20, 2011
• Report on the three first quarters as at September 30	October 27, 2011
• Year-end report 2011	February 2012
• Annual report 2011	April 2012

The reports will be available at www.studsvik.com on the publication dates.

Contents

Facts about Studsvik	2
President's comments	4
Administration report Business activities of the Group Market	5 5 5
Studsvik's areas of operations	6
Sales and earnings	7
Profitability	7
Financial targets	7
Comments on the Group's operating segments	7
Capital expenditure Research and development	13 13
Parent company	13
Benefits to senior management	13
Employees	13
Environment	13
Decommissioning of nuclear facilities	13
Risk management	14
The Studsvik share	16
Corporate governance	18
Outlook	18
Proposed distribution of profits	18
Financial statements	19
Group statement of comprehensive income	19
Group statement of financial position	20
Group statement of cash flow Parent company income statement	22 23
Parent company balance sheet	24
Parent company cash flow statement	26
Notes to the consolidated accounts	27
Notes to the parent company accounts	50
Audit report	54
Corporate governance	55
Board of Directors and auditors	58
Executive Group Management	60
Five-year review	62
Definitions of key figures and ratios	64

Facts about Studsvik

This is Studsvik

Studsvik offers specialist services to the growing international nuclear power industry. Customers' intermediate level waste is treated, stabilized and reduced in volume at our own modern facilities in Sweden, the UK and the USA, which is cost effective for the customers while minimizing environmental impact. Studsvik also tests customers' materials and reactor fuel in qualified laboratories in Sweden and offers software and consultancy services to streamline the operation of nuclear power plants. A large part of Studsvik's work is also carried out directly on site at the customer's nuclear power plants in connection with maintenance, modernization and decommissioning.

Demand for services in nuclear engineering is increasing on many of Studsvik's markets, since many countries are building and modernizing nuclear power plants to meet the sharply increasing demand for electricity in the next 20 years.*

2010 in brief

• • Clear improvement in performance, loss turned to profit
• • Strong cash flow and substantially reduced net debt
• • Positive trend in Sweden, Germany and Global Services
• • The USA reported a positive operating profit and the United Kingdom cut its loss by half
• • The shutdown materials testing reactors R2 and R2-0 were transferred to SVAFO
• • Order for SEK 25 million for treatment of heat exchangers from the Finnish TVO plant
• • Protracted licensing process delaying delivery of steam generators from Canada

Mission

Studsvik offers specialist services, characterized by innovation, efficiency and safety, to the international nuclear power industry in the areas of waste management, decommissioning, engineering and services and operating efficiency.

Strategies

Growth with profitability

Studsvik is strengthening its position and profitability through organic growth in combination with alliances and acquisitions.

Products and services

The Group focuses on products and services that strengthen the customers' profitability, help to improve safety and make it easier for customers to be environmentally accountable. Studsvik has a long tradition of maintaining a high innovation rate and develops its own technology and methods on the basis of the customers' requirements.

Market

Studsvik conducts operations in a market and in countries with high barriers to entry. Studsvik's strong market position forms the basis for continued successful development. Establishments in new geographical markets take place successively when demand for Studsvik's services is deemed sufficient.

Key ratios	2010	2009
Sales, SEK million	1,344.1	1,216.3
Operating profit/loss, SEK million	33.4	–30.0
Profit/loss after net financial items, SEK million	14.3	–49.7
Earnings per share, SEK	0.49	–4.28
Operating margin, %	2.5	neg
Equity-assets ratio, %	36.5	37.2
Equity per share, SEK	63.37	65.82
Average number of employees	1,169	1,132

Partners

Studsvik operates independently on the market and develops proprietary services in close cooperation with customers and public authorities. When developing new services or when bidding for major projects Studsvik's competitiveness can be strengthened by strategic partnerships, either with highly specialized niche players or global enterprises.

Organization

Studsvik's organization typically has short decision lines and a clear geographical management structure with sharp focus on profitability and customer satisfaction. The business is run in five operating segments with their own geographical areas of responsibility. The company has four areas of operation, whose services are marketed within the framework of Groupwide Key Offerings, which are described at www.studsvik.se.

* Source: International Atomic Energy Agency IAEA.

Clear improvement in performance

2010 was a turning point for Studsvik. Operating profit adjusted for non-recurrent items increased by over SEK 40 million, while cash flow from operating activities improved and net debt decreased. Germany, Global Services and Sweden showed strong development. In the United Kingdom and the USA our challenges continued, but we saw a gradual improvement at the end of the year.

Germany, Global Services and Sweden account for 70 per cent of Group sales. The optimism now prevailing in the nuclear industry has had a positive impact on these segments, while internal improvements have increased profitability.

In Germany there is renewed belief in nuclear power, leading to greater investments in renovation and modernization of nuclear power facilities and thus increased demand for Studsvik's services. The revenue from qualified nuclear engineering services, such as characterization of waste, health physics investigations and safety analyses increased. Our high capacity utilization, combined with focus on operations involving high-margin services, resulted in improved profitability in Germany. It is particularly gratifying for the future that the German government has proposed an amendment to legislation, extending the operating period of German reactors by an average of 12 years. If the proposal is implemented it will open a new market in the form of modernization work and measures to extend reactor lifetimes.

Global Services is also experiencing positive development. Nuclear power is being extended in the world, while major investments are being made to improve efficiency of older nuclear power facilities. This is increasing demand for advanced software and materials testing of components and fuel types.

Segment Sweden's capacity utilization continued to be high. The operations have previously struggled with profitability problems due to bottlenecks and a non-optimal waste mix. The problems are well on the way to being solved through a combination of increased resources for treatment of large components, better logistical solutions and correct pricing. Together with a low number of production stoppages, this resulted in satisfactory earnings.

In recent years the challenges in the United Kingdom and the USA have been great. In 2010 the poor state of public finances in the United Kingdom hit operations hard. Towards the end of the year, however, it became clear that the Nuclear Decommissioning Authority (NDA) would retain the same funding, which improved the market situation.

The exceptional shortage of transportation capacity for waste that arose in the USA in the second and third quarters of the year restricted incoming deliveries of material to the Erwin facility. In the fourth quarter the transport situation was normalized and the operations had a strong close to the year.

To sum up, Studsvik's situation showed a clear improvement in 2010 compared with the previous year. The Group's three most profitable segments are continuing to perform well. Future emphasis is on continued product development and streamlining. At the same time work is continuing to reduce risk in the UK and the US operations to ensure a stable earnings trend for Studsvik as a whole.

Nyköping in February 2011

Magnus Groth

Administration report

The Board of Directors and the President of Studsvik AB (publ), corporate identity number 556501-0997, hereby submit the annual accounts for 2010.

BUSINESS ACTIVITIES OF THE GROUP

Studsvik is a leading supplier of services to the international nuclear power industry. Its customers are mainly nuclear power plants and suppliers to the nuclear industry. The operations are conducted at Studsvik's own facilities in Europe and the USA as well as at customer sites.

The company's mission is to supply specialist services characterized by innovation, efficiency and safety to the international nuclear power industry. The services cover the entire life cycle of nuclear power plants with the emphasis on waste management, engineering and services, operating efficiency and decommissioning.

The Group's operations are conducted in five segments. The segmental structure is mainly geographical, with the operating segments Sweden, United Kingdom, Germany, USA and Global Services.

The company's share is listed on the NASDAQ OMX Stockholm exchange.

MARKET

A growing market

The International Atomic Energy Agency (IAEA) forecasts that world electricity demand will double by 2030 and that electricity production from nuclear power plants will increase by 40 per cent in the same period. At present a total of 56 new reactors are being built around the world, while major investments are being made to increase capacity and extend the life of existing nuclear power plants. Growth is greatest in Asia, mainly in China, India and South Korea, but also in eastern and western Europe, in countries such as Finland and France, and in the USA.

On January 1, 2010 there were 437 reactors in operation in the world. About 60 countries are considering the introduction of nuclear power as an energy source, but already today over 100 new reactors are at the planning stage and another 250 have been proposed. Growth will be predominant in Asia, though the number of new reactors is also expected to be great in the Western world.

Studsvik is favored both by new construction and enhanced efficiency, partly through its Global Services operations, and partly through the nuclear engineering services offered by all segments. Global Services carries out tests of material and fuels when new reactors are being designed and the demand for software is growing at the same time. Engineers carry out safety and radiological studies for the planned nuclear power plants and in connection with streamlining draw up the waste and decommissioning plans that must be in place before building starts.

Waste is generated in the operation of nuclear power plants and other nuclear facilities. A large amount of low and intermediate level waste will also be generated in connection with the planned closedown of some 10 reactors in the next few years. Many countries have also started to deal with facilities and waste from the 1950s and 1960s, when the first powergenerating reactor types were developed and military use of nuclear energy increased. Studsvik's treatment reduces the volume of the waste while at the same time chemically stabilizing the material, which gives cheaper and safer storage.

Studsvik's market for treatment of waste is also increasing due to new legislation in many countries. Final disposal of nuclear waste is always in the country in which it was produced, but some countries allow the waste to be sent abroad for treatment and volume reduction before final disposal in its country of origin. This means that Studsvik receives low and intermediate level waste from European countries, such as Germany and Italy, and signed an agreement in 2009 with the Canadian company Bruce Power to treat 32 Canadian steam generators at the facility in Sweden.

In 2010 the positive trend continued in Germany and Sweden, while developments in the UK and the USA were weak. Uncertainty about public finances in the United Kingdom led to postponement of planned projects in the nuclear industry, which is to a great extent government-funded. Towards the end of the year the funding situation for the nuclear power industry became clearer, which improved the market situation.

In the USA demand continued to be weak as a consequence of customers deciding to reduce their expenditure in the short term by temporarily storing waste on their own sites.

Strong market position

Studsvik offers services in all the phases of a nuclear power plant, which means that the company benefits both from new construction, upgrades and decommissioning of old reactors. When upgrading reactors, Studsvik can offer the same type of engineering services as for new construction. When a nuclear power plant is to be decommissioned the work needs to be planned carefully, and different types of calculations and analyses carried out at the same time as the waste is treated. Studsvik competes in this area mainly with consultants that do not specialize in nuclear technology, such as the Swedish companies Sweco, ÅF and Vattenfall Power Consultant, as well as the British companies Aker Solutions and AMEC.

In the operating efficiency area, customers often have their own competence and operations, while some research institutions offer this type of service. There are, however, no competitors operating commercially, which, combined with an international circle of customers and specialized contracts, puts Studsvik in a unique position in the market throughout the lifecycle of nuclear power plants.

Studsvik's areas of operations Top left: Waste management – arrival of steam generator at the facility in Sweden, right: Decommissioning – work on dismantling the turbine hall in Obrigheim, Germany. Bottom left: Engineering and services - vacuum chamber designed for Helmholz Zentrum Berlin in 2006, right: Operating efficiency – work in the autoclave hall at the facility in Sweden.

In the waste management area, Studsvik is the only company in the world able to reduce the volume of and give radiological clearance to metal from very large components. Studsvik also has a world-leading technique for stabilizing and reducing the volume of complex types of waste, such as ion exchange resins, through its patented THOR technology.

STUDSVIK'S AREAS OF OPERATIONS

Waste treatment

The generation of electricity at nuclear power plants gives rise to low and intermediate level radioactive waste that has to be dealt with. Decommissioning of nuclear facilities results in large amounts of waste of different kinds, which can be processed before being stored or sent for final disposal. Studsvik has developed world-leading methods for treating different types of nuclear waste. The methods considerably reduce customers' costs for subsequent management and storage.

Studsvik carries out waste services at customer sites and at its own facilities. Services that are carried out at customers' own sites include for example, characterization, sorting and packaging of waste, stabilization and solidification of wet waste, compacting of dry waste and measurement of radioactivity in waste before treatment and recycling. The services carried out at Studsvik's own facilities are aimed at sorting, stabilizing and reducing the volume of waste, so as to reduce the cost of storage. A large proportion of metallic material can thereby also be recycled.

Organic waste is usually treated using various thermal processes to achieve a chemically stable product suitable for storage or final disposal, but is also melted and sorted to reduce the volume of waste. Apart from traditional incineration, Studsvik also uses pyrolysis, in which material is treated by dry distillation without any oxygen. The Group has developed its own pyrolysis process called THORSM, which can be used to treat both dry and wet low-level and intermediate level waste. The technique has particular advantages when treating wet waste, such as ion-exchange resins.

Metallic materials are cleaned using different mechanical and chemical methods, usually in combination with melting, enabling most of the material to be radiologically cleared and reused. Increasing the output of and modernizing a power plant is usually done by replacing large components such as turbines, heat exchangers and steam generators with new equipment. These components vary in size and often weigh over 100 tonnes. Studsvik has developed effective methods of dealing with spent components in an environmentally responsible and cost-effective way.

Decommissioning

Decommissioning of nuclear facilities is ongoing in several countries. Studsvik has worked with decommissioning in Sweden and Germany for more than 20 years and in the United Kingdom since 2005, making it an established player in these markets. The decommissioning process is long and complicated. Studsvik's services cover the entire decommissioning and dismantling process, from feasibility studies, planning and project management to practical dismantling and subsequent waste treatment. Studsvik has developed its own technology and equipment for certain dismantling and demolition work.

Engineering and services

The nuclear power industry endeavors to produce as much electric power as possible while maintaining safety. One way of increasing output is to shorten the outage periods for regular maintenance and service. Studsvik has developed methods for making maintenance work more effective and by this means has established a strong position in central Europe with multi-year partner contracts. The services cover qualified consultancy services and mechanical service. as well as decontamination and health physics at nuclear power plants.

Operating efficiency

The nuclear power industry needs specialized engineering services to establish the strength and expected life of construction materials and fuel, in both operational and reinvestment phases. Studsvik has been carrying out such services for over 60 years and has laboratories where both irradiated and non-irradiated material can be tested and evaluated.

Good fuel economy is central for achieving sound profitability when operating a nuclear power plant. By increasing burn-up of reactor fuel the power extraction can be increased, but operating safety may not be jeopardized when more energy is to be extracted from each fuel element. Studsvik's software for fuel optimizing and core monitoring is world-leading.

SALES AND EARNINGS

Sales amounted to SEK 1,344.1 million (1,216.3), which corresponds to an increase of 11 per cent in local currencies. Sales increased in local currencies in all segments except the United Kingdom, which reported sales at the same level as the previous year.

The operating profit improved to SEK 33.4 million (–30.0). In the second, third and fourth quarters there was a shortage of transport capacity for the type of radioactive material that Studsvik treats at the Erwin facility. This restricted incoming deliveries of material to the facility, which had a strongly negative impact on consolidated earnings. The situation normalized in the fourth quarter and production volumes increased. Capacity utilization at the Memphis facility was low to start with, but improved towards the end of the year. Altogether the US operations reported substantially improved earnings in 2010. In Germany the positive trend continued in all areas of operation and Sweden had a strong close to the year after a weak start, with an operative result at the same level as the previous year. In the United Kingdom the market was characterized by the weak state of public finances. Demand was low, which led to low capacity utilization in Studsvik's operations. The situation improved somewhat, however, towards the end of the year. The United Kingdom reported a loss, though it was halved in comparison with the previous year. The positive trend for Global Services continued, with high capacity utilization in materials technology and consulting, and high new sales of software.

Operating profit analysis

	2010	2009
Reported operating profit/loss	33.4	–30.0
Items affecting comparability
– Global Services	-	–6.7
– USA	-	10.2
– United Kingdom	-	22.8
– Germany	5.9	-
Adjusted operating profit/loss	39.3	–3.7

Foreign exchange effects impacted the operating profit by SEK –6.0 million (3.8), of which translation effects were SEK –2.1 million (–3.2).

PROFITABILITY

The Group's operating margin was 2.5 per cent (negative) and the profit margin was 1.1 per cent (negative). Capital employed decreased by SEK 113.5 million to SEK 797.7 million. The turnover rate of capital employed was 1.6 (1.3) and the return on capital employed was 4.4 per cent (negative).

FINANCIAL TARGETS

The financial targets are an average annual growth of 10 per cent, achieving an operating margin of 8 per cent and an equity-assets ratio of 40 per cent.

COMMENTS ON THE GROUP'S OPERATING SEGMENTS

In 2010 the Group conducted its business through five operating segments. On pages 8–12 you will find comments on their development.

Key ratios					Percentage of sales
Amounts in SEK million	2007	2008	2009	2010		13%
Sales	135.4	152.4	171.3	179.9
Operating profit	28.2	30.7	27.7	19.9
Operating margin, %	20.8	20.1	16.2	11.1
Investments	33.9	7.8	7.7	8.4
Number of employees	78	78	90	92

Steam generators being transported to the Studsvik facility.

Studsvik treats and reduces the volume of low and intermediate level waste on behalf of customers mainly in the nuclear power industry. The segment has a unique position in the European market in the fields of incineration of dry waste and treatment of scrap metal and large components. The waste is handled and treated at the customer's site or in a facility outside Nyköping.

Studsvik separates non-radioactive parts from contaminated components, which in turn are melted or incinerated. The process leads to a reduction in the amount of waste that must be sent for final disposal, which reduced the customer's costs.

Capacity utilization in the incineration facility was high throughout 2010 and the annual production was the highest in the history of the facility.

There was a high demand for the melting operations, which mainly treated large components. The bottlenecks that previously restricted capacity in the facility have been successively removed during the year.

Studsvik is alone in the world in offering a treatment concept for large components, with successful results. The market is interesting since many nuclear power plants have used components that are large in volume with considerable metal content. One of them is Bruce Power in Canada, which will transport 16 steam generators each weighing 100 tonnes to Studsvik. In 2010 Studsvik also signed an agreement with the Finnish nuclear power plant TVO for treatment and recycling of end-of-life heat exchangers. The order value is about SEK 25 million.

The operations continued to grow in 2010. Sales increased by 5 per cent to SEK 179.9 million (171.3), while operating profit decreased by 28 per cent to SEK 19.9 million (27.7). The figure includes value changes in foreign exchange contracts of SEK –4.4 million (4.5). The operating margin excluding these effects was 13.5 (13.5) per cent. The segment had a healthy order book at year-end.

The modernization of nuclear power plants in progress in several countries is expected to continue, which will generate waste that can be treated at Studsvik's facilities. This, added to the fact that an increasing number of countries allow low and intermediate level waste to be transported and treated outside their borders, means that the segment's available market is growing. Growth is also expected to continue as a consequence of Studsvik breaking into new geographical markets.

UNITED KINGDOM

Key ratios
Amounts in SEK million	2007	2008	2009	2010
Sales	129.1	148.6	86.1	80.5
Operating profit/loss	3.0	–3.2	–50.2	–24.2
Operating margin, %	2.3	neg	neg	neg
Investments	42.4	38.3	56.4	1.1
Number of employees	65	86	66	64

Percentage of sales

6%

First delivery to Studsvik's Metal Recycling Facility in Workington, UK.

Studsvik treats low-level waste and carries out engineering consulting services for customers in the British nuclear power industry. The waste is treated at Studsvik's metal recycling facility (MRF). Studsvik was established in the United Kingdom in 2005 with the objective of taking market share within the framework of the national strategy for management of historical waste that the Nuclear Decommissioning Authority (NDA) is responsible for. Studsvik is part of the consortium, UK Nuclear Waste Management (NWM), responsible for operating the United Kingdom's low-level radioactive waste repository. Studsvik owns 15 per cent of NWM.

Large parts of the UK nuclear power market are dependent on government funding. The existing state of public finances in 2010 had a negative impact on the market. Lead times in sales processes, which normally are long, increased even more, causing many projects to be deferred. As a result, capacity utilization was low in 2010 both in the consulting business and the MRF.

The organization was adapted during the year to existing market conditions.

Several factors of uncertainty in the market were removed towards the end of 2010, mainly the budget situation for the central government funded Nuclear Decommissioning Authority (NDA). Market activity increased, as did the order book and capacity utilization, but the order book was still low at the close of the year. The NDA has allocated separate funds to finance treatment of metallic material. The NDA's decision creates the conditions for establishing a material flow that provides a basic level of capacity utilization for the MRF.

Sales decreased by 6 per cent to SEK 80.5 million (86.1). In local currency sales were unchanged between the years. The operating loss was SEK –24.2 million (–50.2). Structural costs of SEK 22.8 million were recognized in income in the previous year. NWM contributed a share in earnings of SEK 3.4 million (4.3).

GERMANY

Key ratios
Amounts in SEK million	2007	2008	2009	2010
Sales	341.3	387.9	450.5	461.5
Operating profit	25.3	23.3	27.8	28.7
Operating margin, %	7.4	6.0	6.2	6.2
Investments	17.6	7.8	4.1	1.8
Number of employees	564	594	644	661

The turbine hall in Obrigheim before being dismantled.

Studsvik's German operations address customers in Continental Europe. The segment has a broad range of services that cover the entire lifecycle of nuclear reactors and other nuclear facilities. A large proportion of the services are provided in connection with refueling and maintenance outages of nuclear power plants and the work is mainly carried out on the customers' premises. The segment also has growing operations in nuclear engineering services. Studsvik holds a strong market position with all the German and most of the Swiss and Belgian nuclear power plants as customers. Since 2008 Studsvik Germany has also conducted consulting operations in France.

Capacity utilization was high during the year, mainly due to extensive annual maintenance work at the German nuclear power reactors. Activity continued to be high in decommissioning projects in Germany and Belgium and qualified technical consulting services continued to grow.

In September 2010 the German government announced its nuclear power policy, under which amended legislation will extend the operational period of German reactors by an average of 12 years. The industry has responded positively to this, which opens a new market in the form of modernization and measures to extend lifetimes.

Operations in France grew during the year and Studsvik is now a certified supplier of nuclear engineering and decommissioning services. The decommissioning contract for Belgonucleaire's fuel factory in Dessel, Belgium was conducted at a high and stable level. At the nuclear power plant in Obrigheim, Germany Studsvik completed the two-year contract to decommission a turbine hall. The order situation in the segment is good and growth is mainly expected through Studsvik broadening its offering of nuclear engineering services in Germany and France.

During the year the former head of the segment left the operations. The costs of the change in management, SEK 5.9 million, were charged to income for 2010. Sales rose to SEK 461.5 million (450.5), an upturn of 13 per cent in local currency. The operating profit was SEK 28.7 million (27.8). Adjusted for the management change costs, the operating margin increased to 7.5 (6.2) per cent.

USA Key ratios

Amounts in SEK million	2007	2008	2009	2010
Sales	427.7	317.1	213.3	272.0
Operating profit/loss	6.3	–22.4	–50.0	1.4
Operating margin, %	1.5	neg	neg	0.5
Investments	21.4	26.4	2.6	3.5
Number of employees	234	156	101	107

Studsvik offers a large number of services to nuclear facilities in the USA. The services include treatment of low and intermediate level waste at Studsvik's facilities in Tennessee and a niche offering of engineering and technical services based in Atlanta, Georgia.

At Erwin, Tennessee, low-level wet waste is treated in a facility that uses Studsvik's patented pyrolysis technology THORSM. For a large part of the year a shortage of transport containers restricted operations. The transport containers are used mainly for material with a higher level of radioactivity, called class B/C waste. The shortfall could partly be compensated for by material of a lower radioactive content. At the end of the year all transport containers were again in operation, which improved profitability.

Operations at the Memphis facility stabilized during 2010, but capacity utilization continued to be low given the general economic trend. Customers waited to send waste for treatment and thus cut costs in the short term. Output increased, however, at the end of the year and profitability improved.

The segment's consulting operations, which are primarily based on Studsvik's patented THORSM technology, have their primary customer base in the USA, but also carry out assignments in some other countries. At the end of 2010 contracts had been signed with customers in the USA, the UK, France and Japan.

For 2010 the USA segment reported sales of SEK 272.0 million (213.3) and an operating profit of SEK 1.4 million (–50.0). Structural costs of SEK 10.2 million were charged to income in the previous year.

Top picture: Inside Studsvik's facility in Erwin, Tennessee. Bottom picture: Steam generator for treatment at Studsvik's facility in Memphis, Tennessee.

GLOBAL SERVICES

Key ratios
Amounts in SEK million	2007	2008	2009	2010
Sales	178.8	196.0	264.3	296.6
Operating profit	14.4	13.0	45.7	33.1
Operating margin, %	8.1	6.6	17.3	11.2
Investments	5.3	14.4	8.3	9.2
Number of employees	118	129	138	153

Percentage of sales

Work with a lead cell in the active metal laboratory at the Studsvik facility in Sweden.

Studsvik carries out tests, investigations and analyses of nuclear fuel and materials for nuclear power plants, reactor and fuel manufacturers as well as government agencies and organizations around the world. Studsvik is also active in the field of nuclear engineering services and is the only independent supplier of software for fuel optimization and core monitoring. The testing and analysis is carried out at Studsvik's laboratories in Sweden, while the software operations are conducted at several offices in Europe and the USA. Development of software takes place mainly in the USA.

The market showed strong growth in 2010 and the segment had a good inflow of orders. A program to streamline laboratory operations was carried out during the year, which contributed to the good earnings trend. During the year Studsvik was awarded a large number of contracts in the field of materials technology, including several analyses of reactor fuel for a British customer.

Studsvik has invested in a transport flask for reactor fuel to be delivered in early 2011. The flask, which is to be used to transport fuel rods, provides good conditions for minimizing delays in transportation, thereby achieving better capacity utilization in the laboratories.

The consulting operations increased both sales and profitability during the year. Strong demand has led to an increase in the number of Studsvik employees in the area.

Studsvik holds a strong position in the field of core monitoring software. The software is used by about half the world's nuclear power plants. There was strong development in the field during the year, with high new sales levels of software and program versions to both new and existing customers.

Global Services sales rose to SEK 296.6 million (264.3), which corresponds to a 14 per cent increase in local currencies. The operating profit fell to SEK 33.1 million (45.7). The figure includes value changes in foreign exchange contracts of SEK 0.5 million (2.5) and capital gains from the sale of a business segment of SEK 0 million (6.7). The operating margin, excluding these effects, was 11.0 (14.0) per cent.

CAPITAL EXPENDITURE

The Group's capital expenditure amounted to SEK 25.6 million (81.6). Investments for the year include a scanning electron microscope for SEK 6.3 million and automatic tube threading equipment for SEK 5.0 million.

RESEARCH AND DEVELOPMENT

Development projects are initiated and implemented both in co-operation with customers in the form of consulting contracts and within the framework of Studsvik's internal product development. Research expenditure is expensed as it is incurred. Identifiable expenditure for the development of new processes and products is capitalized to the extent it is expected to bring economic benefits.

In 2010 total costs of company-funded research and development amounted to SEK 40.3 million (46.1). Most resources were allocated to Studsvik's in-core fuel management codes. In software development, the expenditure is a combination of maintenance of existing software and new development. As of the second half of 2010 a new principle for classification of costs of research and development has been applied in the Software area of operation. It is primarily the costs that lie in the borderland between software maintenance and new development that are reported as costs of services sold. The new principle means that a greater proportion of the total cost is reported as costs of services sold and a smaller proportion as research and development. The application of the new model means a reduction in the reported costs of research and development of SEK 6.2 million in 2010. As the economic benefits of the new development work are allocated over a very long period this expenditure is expensed as it arises.

PARENT COMPANY

Parent company operations comprise the co-ordination of tasks for the Group and assets mainly consist of shares in subsidiaries. Parent company sales were SEK 10.5 million (11.2). The operating loss was SEK –25.6 million (–31.0).

Profit/loss after financial items was SEK –2.5 million (0.4). This includes dividend from subsidiaries of SEK 21.4 million (32.0). The parent company's investments amounted to SEK 0 million (0). Cash and cash equivalents amounted to SEK 43.2 million (49.3) and interest-bearing liabilities to SEK 135.7 million (201.9).

BENEFITS TO SENIOR MANAGEMENT

The Annual General Meeting held on April 29, 2010 adopted the principles for benefits to senior management.

Senior management executives will be offered a commercially competitive fixed salary based on the individual executive's responsibilities and powers. Salary will be fixed per calendar year. Senior management may be offered performance-related remuneration of a maximum of 50 per cent of fixed salary. Performance-related remuneration will be primarily based on the Group's financial targets. A plan for the performance-related remuneration will be determined for the financial year.

Senior management may arrange pension solutions on an individual basis in addition to the provisions of collective agreements or other agreements. They may thus convert salary and performance-related remuneration to extra pension contributions, given that the cost to Studsvik is unchanged over time.

A maximum period of notice of 12 months from either senior management or Studsvik is applicable. A severance payment equivalent to a maximum of 12 months' salary, in addition to salary during the period of notice, may be payable. There is more information concerning benefits to senior management in note 38.

The Board of Directors does not intend to propose any change in these principles at the 2011 Annual General Meeting.

EMPLOYEES

The average number of employees in 2010 was 1,169 (1,132). The Group has adopted a common Code of Conduct that focuses on four areas of responsibility:

• • Employees and organization
• • Society
• • Customers and suppliers
• • Environment

Studsvik has a program to reduce the number of workrelated injuries. In 2010 the number of work-related injuries resulting in sickness absence was reduced from 28 in 2009 to 24 in 2010.

ENVIRONMENT

The Group conducts activities requiring licenses in Sweden, the United Kingdom and the USA. Activities at the Group's Swedish facilities are licensed under the Swedish Environmental Code, the Act on Nuclear Activities and the Radiation Protection Act. Activities in the USA and the UK are conducted in a corresponding way in accordance with national legislation.

The Swedish nuclear facilities that require a license under the Act on Nuclear Activities include laboratories where radioactive materials are used, facilities for treatment of low and intermediate level waste and a facility for storage of nuclear material. The main environmental impact from the Group's facilities is from emissions and discharges to air and water. The licenses under which the nuclear facilities are operated state limit and recommended values for emissions and discharges to the exterior environment.

DECOMMISSIONING OF NUCLEAR FACILITIES

The operations at Studsvik's nuclear facilities in Sweden are conducted under license pursuant to the Swedish Act on Nuclear Activities and it is therefore Studsvik's responsibility to decommission the facilities. Under the Act the holder of the license has both the technical and the financial responsibility for decommissioning.

In accordance with the Act on Financing the Handling of Certain Radioactive Waste etc (1988:1597) (the Studsvik Act) the Swedish nuclear power producers pay a fee per generated kWh of electricity to the Nuclear Waste Fund to cover the costs of decommissioning the main part of Studsvik's nuclear facilities. Regular cost estimates are made in order to establish the extent of the obligation. These form the basis for determining the fee payable to the Nuclear Waste Fund by the nuclear industry. Decommissioning in practice means that when Studsvik decides to permanently close down a facility covered by the Studsvik Act, ownership is transferred to a company owned by the nuclear power industry, which carries out the decommissioning at a time that is decided by that company. In accordance with this, in December 2010 the R2 and R2-0 reactors, which Studsvik closed down in 2005, were transferred to AB SVAFO, which is owned by the nuclear power industry.

The Group's Swedish facilities that are not covered by the Studsvik Act are governed by an Act that came into force in 2007 (2006:647). Under that Act Studsvik is financially liable to ensure future decommissioning of these facilities. This is done partly by paying a fee to the Nuclear Waste Fund, partly by pledging collateral to assure compliance. Cost estimates are made to determine the extent of Studsvik's obligation. These then form the basis for determining the fee to be paid by Studsvik to the Nuclear Waste Fund. The fee paid by Studsvik in 2010 was SEK 1.1 million. Studsvik assesses that the annual fee will on the whole remain at that level. Provision is made in the accounts for the obligation Studsvik has under IAS 37, which also means that an annual cost of the obligation for the estimated economic life of the facility is charged to income. The annual cost will be more or less equivalent to the fee paid to the Nuclear Waste Fund. The balance in the Nuclear Waste Fund is recorded as an asset in the accounts.

For its nuclear facilities in the USA and the United Kingdom the Group makes provisions in its own balance sheet for future decommissioning. In the USA Studsvik also provides supplementary collateral for the obligation in the form of bank guarantees.

RISK MANAGEMENT

Studsvik operates on an international market that is exposed to competition. The responsibility for assessing operational and financial risk lies with the respective subsidiary. The subsidiaries' risk assessments are examined, compared and followed up by the parent company and dealt with on a current basis by the board of directors of the respective subsidiary.

An overall analysis of the Group's risks and how they are dealt with is presented annually to the Board of Directors of Studsvik AB and is followed up on a regular basis. The Group has a high safety culture, which rests on a long tradition of clear routines for quality assurance and follow-up in the context of various quality certification processes.

The fact that Studsvik operates in the nuclear sector entails special risks that are regulated and supervised by national agencies and international bodies. An overall risk assessment must include all parts of the annual report and a general business environment analysis. Selected risk factors are described below in no order of rank. Financial risks are dealt with in the section "Financial risk management", note 2.

External risks

Licensing obligation and regulatory framework

Studsvik handles radioactive material and waste, which means that some of the operations must be licensed under the Swedish Environmental Code and are subject to official supervision and approval. Consequently there is a risk that the conditions governing operations may be changed through amendment or cancellation of official permits, changes in the regulatory framework or through political decisions. This may for example involve further protective measures that Studsvik may need to invest in to fulfill requirements. Studsvik may be notified by regulators of alleged infringements of licensing or regulations.

As far as the management and Board of Directors can judge, Studsvik fulfils the requirements imposed by such regulations. The Group's high safety culture means that it has a high capacity for adjustment to new rules and terms of reference. Working methods that reduce emissions and risks are continuously being enhanced.

In all countries storage and final disposal of nuclear waste are subject to a strict regulatory framework, which does not allow waste to be mixed, for example. In the USA there is discussion on allowing the mixture of high-level waste with lowlevel waste as an alternative method of managing waste with high levels of radioactivity. Such a change would mean that the business competitiveness of some of Studsvik's services would be reduced on the American market.

Market

Demand for Studsvik's services depends on a number of factors, and in the long term is dependent on developments in the nuclear power industry and the factors influencing them. By addressing its services to the nuclear power industry's needs throughout plant lifecycles, Studsvik's business is only dependent in the very long term on the survival of the nuclear power industry.

Public opinion

Issues relating to nuclear technology are of public interest. Various issues may be subject to expressions of opinion and debate. In such a context it cannot be ruled out that opinion may emerge on matters that directly or indirectly restrict Studsvik's scope of business action. Studsvik acts consistently to maintain high public confidence by doing what it can not to conduct its business in conflict with public opinion.

Business activities focus on improving the safety profile of nuclear power. Its approach to the world around is characterized by dialogue and the principle of the greatest possible transparency.

Operational risks

Technology

Software, laboratory activities, waste treatment and certain specialist services provided through Studsvik's operations are based on proprietary technology that is constantly exposed to competitive challenges. The possibility of other methods being developed that reduce the competitiveness of Studsvik's technologies cannot be ruled out.

Studsvik manages this risk by patenting its proprietary technology whenever it is considered possible and financially justifiable. The risk is also managed through continuous product development in close cooperation with customers, as well as through largely offering customers package solutions, based on Studsvik's extensive experience, which makes Studsvik less sensitive to the replication of individual services or products.

Transportation

A large part of Studsvik's operations, particularly in the field of materials testing and waste management, depend on transportation of material to and from Studsvik's facilities, which could be hindered by new legislation or amendments to international conventions. Transportation also requires official approval, special equipment and/or vehicles, resulting in the possibility of prolonged delays, which lead to losses in earnings. Transportation already complies with high safety standards, is subject to frequent inspections by supervisory authorities and has a low risk of harmful consequences in the event of an accident. By maintaining a high level of competence within Studsvik's own transport organization and by investing in its own transport flask, the risk is limited.

Operation of company facilities

Studsvik conducts its business at its own facilities. Technical failures that cause unplanned operational disruptions cannot be ruled out, and may have an adverse effect on income and give rise to costs. Studsvik's quality and monitoring systems, as well as its competence development processes, are intended to minimize the risk of unplanned operational disruptions, and improve contingency planning to minimize the effects of any disruptions that do nevertheless occur.

Dependence on employees

The running of Studsvik's facilities depends on the workforce being complete and competent. Studsvik has a long history of industrial peace. However, labor conflicts that may affect business and cause loss of income cannot be ruled out. Studsvik works actively to create stable and sound relations with employees and trade union organizations. An active human resources policy with the means and systems required for employee development creates a high level of job satisfaction.

In accordance with Swedish legislation Studsvik has trade union representatives on the board of the parent company.

Dependence on key personnel

Studsvik offers proprietary technical solutions and services using different types of specialist expertise. This makes the company to some extent dependent on key personnel. This risk is continually limited by systematizing processes, recruitment and competence development.

Fixed price contracts

In connection with large service contracts, Studsvik sometimes accepts fixed price contracts. These contracts require effective risk management and project management. Studsvik trains its project managers and applies special procedures that are integrated into the Group's quality systems to ensure that these risks are managed professionally.

Supplier liability

Studsvik supplies services with a high technical content to qualified customers. As a supplier, Studsvik is responsible for timely delivery, functionality and other qualities of services ordered. If a service is delivered late or does not fulfill requirements that a customer can rightfully impose, Studsvik risks loss of income, for example as a consequence of costs incurred for replacement or damages. Studsvik makes regular assessments of potential exposures and makes provision in the balance sheet.

Owner liability for waste

In the USA Studsvik takes over owner liability for certain waste from its customers. The Group has agreed with the subcontractor on storage of this waste pending the opening of a final repository. Changes in regulatory or commercial conditions that necessitate amendments or supplements to this arrangement cannot be ruled out. The risk is managed by Studsvik making provisions in the balance sheet for future costs of storage and disposal and receiving compensation for the risks associated with long-term commitments. Liquid assets referring to the future commitments are deposited in a blocked account in an American bank.

Dependence on suppliers

Part of Studsvik's strategy is to build up unique customer offers together with selected partners. This can result in a measure of natural dependence on these partners. The design of Studsvik's contracts enables close relationships based on trust, while keeping alternative partners available.

Financing and political decisions

In most countries, nuclear decommissioning and the treatment of radioactive waste require the active involvement of the authorities, for example through decisions on financing, decommissioning permits, and rules regulating final disposal.

In many markets these activities are funded through complex systems involving a combination of accumulated funds, income from the operations of nuclear power plants, and taxes. Consequently, political decisions affect demand for Studsvik's services, particularly in the areas of waste management and decommissioning. Delays in processing by the authorities and resulting delay in completion of contracts cannot be ruled out.

Insurable risks

Accidents and stoppages

Studsvik conducts its business at its own laboratories and facilities. The possibility of an accident at one of these sites, or in connection with transportation to or from a site, cannot be ruled out. Potential accident risks are regularly surveyed at the subsidiaries. Preventive measures are integrated into the Group's quality and safety systems. In order to reduce the negative impact on profits that an accident and subsequent stoppage could have, all facilities are covered by property insurance and consequential loss insurance has been taken out for all strategic facilities.

Damage caused to a contracting party or third party

Error or negligence in performance of a service or delivery of a product can lead to a contracting party or third party suffering physical and/or financial damage. The concept of damage includes personal injury, material damage and financial damage. Third party liability insurance has been taken out to cover Studsvik against the financial risks and consequences of its business. The business is insured from two risk perspectives; nuclear liability and non-nuclear liability.

In cases where the Group conducts nuclear activities subject to license, it is a licensing requirement that insurance has been taken out and maintained. This is regulated in the Nuclear Liability Act in Sweden and corresponding legislation in other countries. This legislation also regulates the insurance amounts, which are currently SDR 360 million (millions of special drawing rights), equivalent to SEK 3.9 billion. Nuclear liability insurance for the Swedish operations is provided by Nordic Nuclear Insurers (NNI) and European Liability Insurers Limited (ELINI). Insurance for the UK operations is provided by Nuclear Risk Insurers Limited (NRI). Liability insurance for the American operations is provided by the American Nuclear Insurers Liability Insurance Pool (ANI).

The non-nuclear operations are insured through a global liability insurance policy with the insurance company IFP&C Insurance Ltd.

Other risks

Theft, sabotage or attack

A company handling radioactive material can never completely exclude the possibility of theft. The transportation of radioactive material, as well as facilities for storage and processing, can be the target of sabotage or other forms of attack.

Studsvik takes active measures to maintain physical protection in close cooperation with the police and public authorities. The level of physical protection is regularly adjusted in line with the assessment of the threat picture made by the police and public authorities. Studsvik follows the plans drawn up by the licensing and supervisory authorities.

Cost liability for decommissioning

The operations in Studsvik's Swedish nuclear facilities are run under license pursuant to the Act on Nuclear Activities and it is therefore Studsvik's responsibility to decommission the facilities. Under local regulations Studsvik is technically and financially responsible for decommissioning the Group's US and UK facilities. The scope and implications of these obligations and a risk assessment of them are described in more detail in the administration report, page 13.

Environmental debt

Studsvik generates only an extremely limited volume of waste that impacts the environment. When Studsvik manages radioactive waste on behalf of a customer, the liability for the residual radioactive products lies with the customer, with the exception of the Erwin facility, where Studsvik takes over ownership of the waste. Studsvik has a contract with Waste Control Specialists for disposal of this waste.

Sensitivity analysis

Variations in prices to customers and the Group's costs affect the Group's earnings. The Group's largest single cost item is personnel, which accounts for 52 per cent of total costs. The Group's currency exposure is greatest against USD, EUR and GBP.

Sensitivity analysis		Change	Effect on operating profit
Price to customer	1%	+/-	SEK 13.4 million
Personnel costs	1%	+/-	SEK 7.0 million
Exchange rate USD/EUR/GBP	10%	+/-	SEK 9.8 million

THE STUDSVIK SHARE

Share price and trading

The Studsvik share is listed on the NASDAQ OMX Stockholm exchange. The share price rose in 2010 by 12 per cent, from SEK 65.25 to SEK 73, corresponding to a market value of SEK 600 million. During the year the price varied between a low of SEK 59.75 on September 28 and a high of SEK 94.25 on April 21.

In 2010, 2.78 million Studsvik shares were traded for a value of SEK 191.8 million. This corresponds to 54 per cent of the free float (the value of shares that are available for trading), to be compared with 87 per cent in the previous year. The market value of the free float was SEK 377.4 million at year-end. The free float refers to shares held by shareholders with less than 10 per cent of the capital.

Number of shares and share capital

On December 31, 2010 Studsvik AB (publ) had 8,218,611 shares in issue. Each share carries one vote and entitles the owner to share equally in the company's assets and earnings. The quotient value is SEK 1.0 and the share capital amounted to SEK 8.2 million.

Shareholders, December 31, 2010	Number of shares	Holding. %
Karinen Family	1,769,552	21.5
Briban Invest AB	1,283,492	15.6
Allianz Global Investors	714,561	8.7
Erste Bank Österreichische Sparkassen	385,429	4.7
Credit Agricole Suisse SA	348,098	4.2
State Street Bank, Boston	269,089	3.3
Invus Investment AB	199,800	2.4
Citibank NA, London	154,868	1.9
HSBC Trinkahaus and Burkhardt AG	136,730	1.7
Blue Whale Ltd	131,246	1.6
Total, 10 largest shareholders – holdings	5,392,865	65.6
Other shareholders	2,825,746	34.4
Total	8,218,611	100.0

Change in share capital

Year	Transaction	Increase in number of shares	Share capital SEK	Total number of shares
1994	Founding	500,000	500,000	500,000
2001	Bonus issue	5,300,000	5,800,000	5,800,000
2001	Private placement	2,314,211	8,114,211	8,114,211
2004	New issue1)	2,400	8,116,611	8,116,611
2005	New issue1)	102,000	8,218,611	8,218,611

1) Conversion of warrants.

Shareholder structure, December 31, 2010

Shareholding	Number of shareholders	Number of shares	% of total shares
1 – 500	3,586	383,430	4.7
501 – 2,000	438	483,229	5.9
2,001 – 10,000	136	623,356	7.6
10,001 – 50,000	33	806,147	9.8
50,001 – 100,000	7	447,074	5.4
100,001 –	16	5,475,375	66.6
Total	4,216	8,218,611	100.0

Data per share

Amount, SEK	2006	2007	2008	2009	2010
Number of shares at close of period	8,218,611	8,218,611	8,218,611	8,218,611	8,218,611
Average number of shares	8,218,611	8,218,611	8,218,611	8,218,611	8,218,611
Price, December 31	253.00	155.00	55.00	65.25	73.00
Earnings per share before dilution	4.24	5.65	–0.05	–4.28	0.49
Earnings per share after dilution	4.24	5.65	–0.05	–4.28	0.49
Equity per share	67.97	69.58	74.32	65.82	63.37
P/E ratio	60	27	neg	neg	149

Shareholders

On December 31 Studsvik had 4,216 shareholders. The percentage of shares registered abroad was 37.1 per cent. The two largest owners, the Karinen family and Briban Invest AB, held 37.1 per cent of the shares and the ten largest owners 65.6 per cent. At year-end Studsvik's Board of Directors owned 2,647,784 shares, corresponding to 32.2 per cent of capital and votes. The Executive Group Management together owned 25,600 shares, corresponding to 0.3 per cent of the shares.

Dividend policy and dividend

The Board's goal is that on average the dividend should correspond to at least 30 per cent of the consolidated profit after tax. Decisions on dividend proposals will, however, depend on Studsvik's growth potential, the strength of its balance sheet, liquid funds and financial position in general. The Board of Directors proposes to the Annual General Meeting that no dividend be distributed for the 2010 financial year.

Liquidity provider

Remium AB has been appointed to act as liquidity provider for the company's share.

Analysts

The Studsvik share is followed on a continuous basis by Alex Barnett, Jefferies, and Erik Rolander, Remium.

Information on the Articles of Association

There is no provision in Studsvik's Articles of Association that restricts the right to transfer shares. The company has not transferred any of its own shares or issued new shares during the financial year. The company is not aware of any agreements between shareholders that may result in restrictions on the right to transfer shares in the company. The company is not a party to any material agreement that is affected by any public take-over bid. The company's employees do not hold any shares for which the voting right cannot be exercised directly. The elected members of the Board of Directors are appointed by the Annual General Meeting. There is no provision in the Articles of Association concerning appointment and dismissal of Board members.

CORPORATE GOVERNANCE

The company has prepared a corporate governance report that is separate from the administration report. This can be found on pages 55–57.

OUTLOOK

The need for electricity is increasing globally and electricity production from nuclear power will increase. New nuclear power capacity is being planned and built in many countries, in parallel with the modernization and output increase of nuclear power plants in several of the countries where Studsvik operates. Decommissioning of nuclear facilities is continuing and is expected to continue by and large at an unchanged rate. Demand is strong for the services of the type Studsvik offers, including waste treatment, materials testing, software and consulting services. The British and American markets that have been characterized by weak national economic development are successively recovering.

PROPOSED DISTRIBUTION OF PROFITS

In view of the fact that the Group's financial position is not in parity with the Group's targets, the Board of Directors proposes that no dividend be distributed for 2010. The total profits at the disposal of the Annual General Meeting comprise the parent company's non-restricted equity, SEK 649,751,668, consisting of retained earnings, SEK 645,403,987 and profit for the year, SEK 4,347,681. The Board of Directors proposes that the profits be distributed as follows:

To be carried forward	SEK 649,751,668
Total non-restricted equity
in the parent company	SEK 649,751,668

Group statement of comprehensive income

	Note	2010	2009
Net sales	4	1,344,106	1,216,350
Costs of services sold	7	–1,027,193	–949,415
Gross profit		316,913	266,935
Selling and marketing costs	7	–52,768	–52,066
Administrative expenses	7, 8	–186,613	–201,100
Research and development costs	7	–40,271	–46,122
Share in earnings from associated companies	17	7,260	13,123
Other operating income	5	3,294	15,823
Other operating expenses	6	–14,407	–26,582
Operating profit/loss	4–9	33,408	–29,989
Financial income	10, 12	3,830	4,805
Financial expenses	10, 12	–22,874	–24,582
Profit/loss before tax		14,364	–49,766
Income tax	11	–10,352	14,568
NET PROFIT/LOSS FOR THE YEAR		4,012	–35,198
Other comprehensive income
Translation differences on foreign subsidiaries		–28,320	–22,501
Cash flow hedging		5,274	–4,936
Income tax on items recognized in other comprehensive income		–1,387	1,298
Other comprehensive income for the year, net after tax		–24,433	–26,139
Total comprehensive income for the year		–20,421	–61,337
Income for the year attributable to
Parent company's shareholders		4,012	–35,198
Non-controlling interests		-	-
Total comprehensive income attributable to
Parent company's shareholders		–20,405	–61,315
Non-controlling interests		–16	–22
Earnings per share calculated on income attributable to
the parent company's shareholders during the year (SEK)	13
– Before dilution	13	0.49	–4.28
– After dilution		0.49	–4.28

Group statement of financial position

	Note	2010	2009
ASSETS
Non-current assets
Property, plant and equipment	15	490,144	527,811
Intangible assets	16	350,659	387,510
Investments in associated companies	17	25,348	30,701
Deferred tax assets	30	98,291	93,561
Financial assets at fair value through profit or loss	18, 22	46,243	17,694
Derivative financial instruments	18, 20, 22	573	2,325
Trade and other receivables	18, 21	3,396	3,531
Total non-current assets		1,014,654	1,063,133
Current assets
Inventories	23	19,507	17,958
Trade and other receivables	18, 21	318,834	296,299
Financial assets at fair value through profit or loss	18, 22	557	590
Derivative financial instruments	18, 20, 22	5,095	716
Cash and cash equivalents	18, 24	68,376	74,661
Total current assets		412,369	390,224
TOTAL ASSETS		1,427,023	1,453,357
EQUITY
Capital and reserves attributable to parent company's shareholders
Share capital	25	8,219	8 219
Other contributed capital	25	225,272	225,272
Other reserves	27	–1,545	22,872
Retained earnings	26	288,580	284,568
Equity attributable to the parent company's shareholders		520,526	540,931
Non-controlling interests		282	298
Total equity		520,808	541,229
LIABILITIES
Non-current liabilities
Borrowings	18, 29	146,002	284,536
Derivative financial instruments	18, 20, 22	948	78
Deferred tax liabilities	30	38,063	33,955
Pension obligations	31	5,749	7,489
Other provisions	32	215,600	128,364
Trade and other payables	28	12,605	11,381
Total non-current liabilities		418,967	465,803
Current liabilities
Trade and other payables	28	337,479	334,703
Current tax liabilities		15,935	14,515
Borrowings	18, 29	129,933	85,353
Derivative financial instruments	18, 20, 22	1,987	3,939
Other provisions	32	1,914	7,815
Total current liabilities		487,248	446,325
Total liabilities		906,215	912,128
TOTAL EQUITY AND LIABLITIES		1,427,023	1,453,357

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share capital	Other paid in capital	Other reserves	Retained earnings	Equity attributable to parent company shareholders	Non controlling interests	Total equity
Opening balance at January 1, 2009	8,219	225,272	48,989	327,985	610,465	320	610,785
Total comprehensive income for the period			–26,117	–35,198	–61,315	–22	–61,337
Dividend				–8,219	–8,219		–8,219
Closing balance at December 31, 2009	8,219	225,272	22,872	284,568	540,931	298	541,229
Opening balance at January 1, 2010	8,219	225,272	22,872	284,568	540,931	298	541,229
Total comprehensive income for the period			–24,417	4,012	–20,405	–16	–20,421
Dividend							-
Closing balance at December 31, 2010	8,219	225,272	–1,545	288,580	520,526	282	520,808

Group statement of cash flow

	Note	2010	2009
Cash flow from operating activities
Operating profit/loss		33,408	–29,989
Adjustment for non-cash items	33	73,458	93,245
		106,866	63,256
Interest received		884	718
Interest paid		–16,603	–22,085
Income tax paid		–12,327	–3,143
Cash flow from operating activities before change in working capital		78,820	38,746
Change in working capital
– Current assets		–46,111	–29,644
– Other current liabilities		74,805	12,341
Cash flow from operating activities		107,514	21,443
Cash flow from investing activities
Sales of subsidiaries and other business units	36	-	–10,388
Acquisition of financial assets		–27,183	–4,335
Disposals of financial assets		1,006	-
Purchases of property, plant and equipment	15	–25,275	–77,742
Sale of property, plant and equipment	15	–143	654
Purchases of intangible assets	16	–332	–1,032
Dividend from associated companies	17	10,369	2,485
Cash flow from investing activities		–41,558	–90,358
Cash flow from financing activities
Loans raised	29	171	30,419
Repayments of loans	29	–68,828	–24,043
Dividend	14	-	–8,219
Cash flow from financing activities		–68,657	–1,843
Decrease in cash and cash equivalents		–2,701	–70,758
Cash and cash equivalents at beginning of the year		74,661	147,713
Translation difference		–3,584	–2,294
Cash and cash equivalents at end of the year	24	68,376	74,661

Parent company income statement

	Note	2010	2009
Net sales	40	10,519	11,158
Costs of services sold		–3,105	–6,316
Gross profit		7,414	4,842
Administrative expenses		–34,122	–35,852
Other operating income		1,258	-
Other operating expenses		–115	–20
Operating loss	40–43	–25,565	–31,030
Dividends from subsidiaries		21,422	32,050
Interest income and similar items	45	12,950	13,593
Interest expense and similar items	46	–11,356	–14,220
Profit/loss before tax		–2,549	393
Appropriations	47	-	2,510
Income tax	48	6,896	7,829
NET PROFIT FOR THE YEAR		4,347	10,732
Parent company statement of comprehensive income
Net profit for the year		4,347	10,732
Other comprehensive income
Group contributions from subsidiaries		30,000	40,000
Income tax on items recognized in other comprehensive income		–7,890	–10,520
Other comprehensive income for the year, net after tax		22,110	29,480
Total comprehensive income for the year		26,457	40,212

Parent company balance sheet

	Note	2010	2009
ASSETS
Non-current assets
Property, plant and equipment	49
– Equipment and tools		110	387
Financial assets	50
– Deferred tax assets		3,126	2,814
– Shares in subsidiaries	52	833,995	812,512
– Receivables from Group companies		251,560	266,866
Financial assets at fair value through profit or loss	50	15,493	13,052
Total non-current assets		1,104,284	1,095,631
Current assets
Inventories and goods for resale		661	417
Trade and other receivables		700	89
Financial assets at fair value through profit or loss		557	590
Derivative financial instruments	57	2,933	-
Receivables from Group companies		32,144	46,767
Prepaid expenses and accrued income	51	1,165	1,013
Cash and cash equivalents		43,208	49,339
Total current assets		81,368	98,215
TOTAL ASSETS		1,185,652	1,193,846
EQUITY
Equity
Share capital		8,219	8,219
Restricted reserves Total restricted equity		225,272 233,491	225,272 233,491
Non-restricted equity
Non-restricted reserves		645,404	612,562
Net profit for the year		4,347	10,732
Total non-restricted equity		649,751	623,294
Total equity		883,242	856,785
Untaxed reserves		-	-
LIABILITIES
Non-current liabilities
Liabilities to credit institutions	53	37,518	144,398
Deferred tax liabilities		606	-
Liabilities to Group companies		40,466	28,106
Other liabilities		11,261	10,042
Total non-current liabilities		89,851	182,546
Current liabilities
Liabilities to Group companies		99,104	84,494
Trade payables		2,530	1,812
Liabilities to credit institutions	53	98,215	57,484
Income tax liability		3,142	2,554
Derivative financial instruments	57	628	35
Other liabilities		1,346	958
Accrued expenses and deferred income	54	7,594	7,178
Total current liabilities		212,559	154,515
Total liabilities		302,410	337,061
TOTAL EQUITY AND LIABLITIES		1,185,652	1,193,846

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

	Share capital	Statutory reserve	Non-restricted equity	Total equity
Opening balance at January 1, 2009	8,219	225,272	591,301	824,792
Group contribution received			40,000	40,000
Tax effect of Group contributions			–10,520	–10,520
Dividend			–8,219	–8,219
Profit for the year stated in the income statement			10,732	10,732
Closing balance at December 31, 2009	8,219	225,272	623,294	856,785
Opening balance at January 1, 2010	8,219	225,272	623,294	856,785
Group contribution received			30,000	30,000
Tax effect of Group contributions			–7,890	–7,890
Dividend			-	-
Profit for the year stated in the income statement			4,347	4,347
Closing balance at December 31, 2010	8,219	225,272	649,751	883,242

Parent company cash flow statement

	Note	2010	2009
Cash flow from operating activities
Operating loss		–25,565	–31,030
Adjustment for non-cash items	59	–950	317
		–26,515	–30,713
Interest received		6,718	10,572
Dividend received		21,422	32,050
Interest paid		–7,366	–12,465
Income tax paid		–111	12
Cash flow from operating activities before change in working capital		–5,852	–544
Change in working capital
– Current assets		1,554	–635
– Other current liabilities		18,379	51,431
Cash flow from operating activities		14,081	50,252
Cash flow from investing activities
Sale of subsidiaries		-	1,000
Sale of property, plant and equipment		5	-
Loans to subsidiaries	50	–15,687	–92,986
Disposal of other financial assets		-	2,645
Cash flow from investing activities		–15,682	–89,341
Cash flow from financing activities
Repayments of loans		–57,474	–18,972
Loans raised		12,944	-
Dividend paid		-	–8,219
Group contribution received		40,000	31,500
Cash flow from financing activities		–4,530	4,309
Decrease in cash and cash equivalents		–6,131	–34,780
Cash and cash equivalents at beginning of the year		49,339	84,119
Cash and cash equivalents at end of the year		43,208	49,339

NOTES TO THE CONSOLIDATED ACCOUNTS

Amounts in SEK '000 unless otherwise stated

Note 1 Accounting policies and valuation principles

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

1.1. BASIS OF PREPARATION

The consolidated accounts for the Studsvik Group have been prepared in accordance with the Annual Accounts Act, RFR 1 Supplementary accounting rules for groups and International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the EU. The consolidated accounts have been prepared in accordance with the historical cost method except as regards available for sale financial assets and financial assets and liabilities carried at fair value through the income statement.

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

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

• • IFRS 3 (revised), "Business combinations", and the consequent amendments to IAS 27, "Consolidated and separate financial statements", IAS 28, "Investments in associates", and IAS 31, "Interests in joint ventures", are to be applied prospectively for business combinations where the date of acquisition falls in the first financial year starting on or after July 1, 2009. The revised standard continues to prescribe the acquisition method of accounting for business combinations but with some material amendments. For example, all payments made to purchase a business are recognized at fair value on the acquisition date, including contingent purchase amounts classified as liabilities and thereafter revalued via the statement of comprehensive income. An accounting policy choice can be made, on a transaction by transaction basis, to measure a non-controlling interest in the acquired business at fair value or the non-controlling interest's proportionate share of net assets of the acquired business. All acquisition related costs are recognized as expenses. However, no acquisitions were made in 2010.
• • IAS 27 (revised) requires that the effects of all transactions with shareholders with non-controlling interests are accounted for as equity transactions as long as the controlling interest remains, and these transactions no longer give rise to goodwill or profit or loss. The standard also states that when a parent company loses the controlling interest, any remaining participation must be remeasured to fair value and a gain or loss recognized in the income statement. IAS 27 (revised) has not had any impact on the current period, as none of the holding without non-controlling interest has a negative value. No transactions have taken place in which the company has lost the controlling interest but retains a non-controlling interest, nor have any transactions taken place with non-controlling interests.
• • IAS 36 (amendment), "Impairment of assets" (applies to financial years starting on or after January 1, 2010). The amendment clarifies that the largest cash-generating unit (or group of units) to which goodwill can be allocated for the purposes of impairment review, is an operating segment as defined by paragraph 5 of IFRS 8, "Operating segments" (i.e. before the aggregation of segments with similar economic characteristics).

Standards, amendments and interpretations in force, but which are not currently relevant to the Group

The following standards, amendments and interpretations of published standards are compulsory for financial years starting on or after January 1, 2010, but are not currently relevant to the Group.

• IFRIC 17, "Distributions of non-cash assets through dividend to owners" (applies to financial years starting on or after July 1, 2009). This interpretation provides guidance on accounting for agreements under which a company distributes noncash assets to the shareholders. The standard is not expected to have any impact on the Group's accounts.

• • IFRIC 18, "Transfer of assets from customers" (applies to transfers of assets on or after July 1, 2009). This interpretation clarifies the requirements of IFRS for agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water) or both. As no assets of the kind mentioned in IFRIC 18 exist in the Group, the new standard is currently not relevant to the Group.
• • IFRIC 9 and IAS 39 (amendment), "Embedded derivatives" (applies to financial years ending on or after June 30, 2009). This amendment requires that an entity must assess if an embedded derivative is to be separated from a host contract when the entity reclassifies a hybrid financial asset out of the fair value through profit or loss category. There are no embedded derivatives in the Group, and therefore the new standard is currently not relevant to the Group.
• • IFRIC 16 (amendment), "Hedges of a net investment in a foreign operation" (applies to financial years starting on or after July 1, 2009). The amendment states that, in a hedge of a net investment in a foreign operation, instruments that qualify for hedge accounting can be held by any of the Group companies, including the foreign operation. The standard currently has no impact on the Group.
• • IAS 38 (amendment), "Intangible assets" (applies to financial years starting on or after January 1, 2010). The amendment provides clarification on fair value measurement of an intangible asset acquired in a business combination and it permits the grouping of assets as a single asset if the individual assets have similar useful lives. The standard may have an impact on the Group's accounts in future acquisitions.
• • IAS 1 (amendment), "Presentation of financial statements". The amendment clarifies that the potential settlement of a liability by the issue of equity can either be classified as current or non-current due to an amendment of the definition of current liability. The standard is currently not relevant to the Group, since no settlement of debt by issuing equity is planned.
• • IFRS 2 (amendment), "Group cash-settled and share based payment transactions" (applies to financial years starting on or after January 1, 2010). The amendment means that IFRIC 8, "Scope of IFRS 2", and IFRIC 11, "IFRS 2 – Group and treasury share transactions", are embedded into the standard. In addition, the previous guideline in IFRIC 11 is supplemented regarding the classification of inter-company transactions, which is not addressed in the interpretation. The standard currently has no impact on the Group.
• • IFRS 5 (amendment), "Non-current assets held for sale and discontinued operations". The amendment clarifies that IFRS 5 specifies the disclosure requirments for non-current assets (or disposal groups) classified as non-current assets held for sale or discontinued operations. It also clarifies that the general requirements of IAS 1 still apply, in particular points 15 (to give a true and fair view) and 125 (sources of estimation uncertainty). The standard is currently not relevant to the Group.

Standards, amendments and interpretation of existing standards that as yet have not come into force and that are not applied prospectively by the Group

The following new standards and amendments and interpretations of existing standards have been published and are compulsory for the Group's accounting for the financial year starting on or after January 1, 2011, but have not been applied prospectively by the Group:

• • IFRS 9, "Financial instruments" (published in November 2009). This standard is the first phase in the process of replacing IAS 39, "Financial instruments: recognition and measurement". IFRS 9 introduces two new requirements for valuation and classification of financial assets and will probably impact the Group's accounting for financial assets. The standard is not applicable until financial years starting on or after January 1, 2013, but is available for prospective application. However, the standard has not yet been adopted by the EU. The Group has yet to evaluate the full impact of IFRS 9 on the financial statements.
• • IAS 24 (revised), "Related party disclosures", issued in November 2009. It replaces IAS 24, "Related party disclosures", issued in 2003. IAS 24 (revised) is to be applied for financial years starting on or after January 1, 2011. Prospective application is permitted of all or part of the standard.

The revised standard clarifies and simplifies the definition of a related party. The Group will apply the revised standard from January 1, 2011. The revised standard for related party disclosures is not expected to have any major impact on the Group's accounting for related party transactions.

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

The following interpretations of existing standards have been published and are compulsory for the Group for financial years starting on or after January 1, 2011, but are not relevant to the Group.

• • IAS 32 (amendment), "Classification of rights issues", published in October 2009 (applies to financial years starting on or after February 1, 2010). The amendment deals with accounting for rights issues in currencies other than the company's functional currency. As the Group does not hold subscription rights in any other currency than the functional currency the new standard is not relevant to the Group.
• • IFRIC 19, "Extinguishing financial liabilities with equity instruments" (applies to financial years starting on or after July 1, 2010). The interpretation clarifies the accounting for debt for equity swaps. The standard is not applicable to the Group.
• • IFRIC 14 (amendment), "Prepayments of a minimum funding requirement". Without the amendment, companies subject to a minimum funding requirement are not allowed to report certain prepayments of future expenditure as an asset. The amendment applies to financial years starting on January 1, 2011, but is not relevant to the Group.

1.2 CONSOLIDATED ACCOUNTS

Subsidiaries

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

The acquisition method of accounting is used to account for the Group's business combinations. The purchase price for the acquisition of a subsidiary consists of the fair value of transferred assets, liabilities and shares issued by the Group. The purchase price also includes the fair value of all assets and liabilities that are a consequence of an agreement on contingent purchase price. Acquisition related costs are recognized as expenses when they arise. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. For each acquisition the Group determines if all non-controlling interests in the acquired company are to be measured at fair value or at their proportionate share of the acquiree's identifiable net assets. The excess of the purchase price, any non-controlling interest and fair value on the acquisition date of prior shareholdings over the fair value of the Group's share of identifiable net assets acquired, is recognized as goodwill. If the amount is less than the fair value for the acquired subsidiary's assets in the case of a "bargain purchase", the difference is recognized directly in the statement of comprehensive income.

Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Transactions with non-controlling interests

The Group treats transactions with non-controlling interests as transactions with the Group's shareholders. For acquisitions from non-controlling interests the difference between the purchase price paid and the actual acquired share of the carrying amount of the subsidiary's net assets is recognized directly in equity. Gains and losses on sales to non-controlling interests are also recognized in equity.

When the Group no longer has a controlling interest or significant influence, each remaining holding is revalued to fair value and the change in the carrying amount is recognized in the income statement. The fair value is used as the first carrying amount and forms the basis of continued accounting treatment of the remaining holding as an associated company, joint venture or financial asset. All amounts referring to the entity sold, which were previously recorded in other comprehensive income, are recorded as though the Group had sold the related assets or liabilities directly. This may mean that amounts previously recorded in other comprehensive income are reclassified to profit or loss.

If the participating interest in an associated company decreases, but a significant influence nevertheless remains, where relevant only a proportional share of the amounts previously recorded in other comprehensive income is reclassified to profit or loss.

Associated companies

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

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

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

Joint ventures

For joint ventures, where there is a common controlling interest, the equity method is applied. Interests in a joint venture are initially recognized at cost at the time of acquisition and adjusted on a current basis by its share of changes in the equity of the entity under common control.

The Group's share of the profit from the entity under common control is recognized in the consolidated statement of comprehensive income. If the Group's share of accumulated losses is equal to or more than the Group's share of the equity of the entity under common control, the Group does not recognize further losses.

Amended accounting policies

The Group has changed its accounting policies for transactions with non-controlling interests and accounting for the Group's loss of controlling interest or significant influence, from January 1, 2010 when the revised IAS 27, "Consolidated and separate financial statements" came into force. The revision of IAS 27 also included consequential changes to IAS 28, "Investments in associates" and IAS 31, "Interests in joint ventures".

Transactions with non-controlling interests were previously treated as transactions with external parties from the Group's perspective. Sales then gave rise to gains or losses in the income statement and acquisitions meant recognition of goodwill. For sale of all or part of a holding a proportional share of the reserves attributable to the subsidiary was reclassified to the income statement or recognized directly in retained earnings.

Under previous policies, when the Group lost its controlling interest or significant influence, the Group used the carrying amount at the time when the interest or influence ceased as the acquisition cost and base for continued accounting treatment of the remaining holding as an associated company, joint venture or financial asset.

The Group applies the new accounting policies prospectively for transactions occurring after January 1, 2010. Consequently no adjustment has been necessary of amounts previously reported in the consolidated accounts.

1.3 SEGMENT REPORTING

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

1.4 FOREIGN CURRENCY TRANSLATION Functional and presentation currency

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

Transactions and balances

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

Foreign exchange gains and losses attributable to loans and cash and cash equivalents are recognized in the income statement as financial income or expense. All other foreign exchange gains or losses, mainly on trade receivables and trade payables, are recorded in the items 'Other operating income' and 'Other operating expenses' in the income statement.

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

Group companies

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

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

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

1.5 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is recorded at acquisition cost less depreciation. Acquisition cost includes expenses directly attributable to the acquisition of the asset. Expenditure for dismantling and restoration is added to the acquisition cost and reported as a separate component. Dismantling and restoration costs during the useful life of the asset are calculated annually on the basis of the evaluation made on each date of estimate. Any adjustments of the future costs adjust the acquisition cost of the asset.

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

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

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

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

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

Gains and losses on disposals are determined by comparing sales proceeds with the carrying amount and are recorded under 'Other operating income' and 'Other operating expenses' in the income statement.

1.6 INTANGIBLE ASSETS Goodwill

The excess amount of the remuneration transferred, any non-controlling interest and fair value on the acquisition date of prior shareholdings over the fair value of the Group's share of identifiable net assets acquired, is recognized as goodwill. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associated companies is included in the value of investments in associated companies and tested for impairment as part of the value of the total investment. Goodwill that is disclosed separately is tested annually for impairment and recognized at acquisition cost less accumulated impairment losses. Goodwill impairment loss is not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units when tested for impairment. Allocation is to the cash-generating units or groups of cash-generating units that are expected to benefit from the business combination giving rise to the goodwill item.

Computer software

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

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

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

Contractual customer relations and similar rights

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

1.7 IMPAIRMENT LOSSES ON NON-FINANCIAL ASSETS

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

1.8 FINANCIAL ASSETS

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

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if it is acquired mainly for the purpose of selling in the short term. Derivatives are classified as held for trading if they are not designated as hedging instruments. Assets in this category are classified as current assets if they are expected to be settled within 12 months. Otherwise they are classified as non-current assets.

Loans and receivables

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

Derivatives for hedging

Derivatives that are classified as hedging instruments are designated as hedges and qualify for hedge accounting treatment. The Group normally only enters into derivatives contracts when they qualify for hedge accounting treatment. The Group's derivatives are recorded as current and non-current assets and liabilities.

Recognition and measurement

Purchases and sales of financial assets are recognized on the trade date – the date on which the Group commits to purchase or sell the asset. Financial instruments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets recognized at fair value through profit or loss are initially recognized at fair value, while related transaction costs are recognized in the income statement. Financial assets are derecognized when the rights to receive cash flows from the instruments have expired or have been transferred and the Group has transferred substantially all risks and benefits of ownership. Financial assets at fair value through profit or loss are subsequently carried at fair value after the date of acquisition. Loans and trade receivables are carried at amortized cost after the acquisition date, applying the effective interest method. Gains and losses arising from changes in the fair value of the "financial assets at fair value through profit or loss" category, are presented in the income statement in the period in which they arise under the items 'Other operating income' and 'Other operating expenses'.

1.9 OFFSET OF FINANCIAL INSTRUMENTS

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

1.10 IMPAIRMENT LOSSES ON FINANCIAL ASSETS a) Assets carried at amortized cost

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

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

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

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

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

1.11 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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

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

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

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

Fair value hedging

The Group only applies fair value hedging for certain financial non-current assets and borrowing.

Cash flow hedging

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

1.12 INVENTORIES

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

1.13 TRADE RECEIVABLES

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

1.14 CASH AND CASH EQUIVALENTS

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

1.15 SHARE CAPITAL

Ordinary shares are classified as equity.

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

1.16 TRADE PAYABLES

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

1.17 BORROWINGS

Borrowings are recognized at fair value, net after transaction costs.

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

1.18 CURRENT AND DEFERRED INCOME TAX

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

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

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

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

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

1.19 EMPLOYEE BENEFITS

Pension obligations

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

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

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

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

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

Termination benefits

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

Profit-sharing and variable salary components

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

1.20 PROVISIONS

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

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

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

1.21 REVENUE RECOGNITION

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

The Group recognizes revenue when its amount can be reliably measured, it is probable that the future economic benefits will flow to the company and special criteria are fulfilled for each of the Group's operations as described below.

The Group uses the percentage of completion method to determine the appropriate amount to recognize in a given period. Only contract costs incurred for work performed on the balance sheet date are recognized as expenses.

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

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

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

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

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

Amended accounting policy

As of July 1, 2009, when the revised IAS 27, "Consolidated and separate financial statements" came into force, the Group has amended its accounting policy for distribution of profits earned prior to acquisition. Such dividends previously reduced the cost of acquisition of the holding, but now dividends are always recognized as income. The new policy is applied prospectively in accordance with the transition provisions. Consequently, no adjustment has been necessary of the amounts previously reported in the consolidated accounts.

1.22 LEASES

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

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

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

1.23 DIVIDENDS

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

1.24 PARENT COMPANY

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

Shares and participations in subsidiaries

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

Income

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

Leases

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

Pensions

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

Taxes

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

Group contributions and shareholders' contributions for legal entities

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

Note 2 Financial risk management

2.1 FINANCIAL RISK FACTORS

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

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

Market risk

Price risk

The Group's largest single cost item is personnel, which accounts for 52 per cent (55) of total costs. Other expenses vary. The Group's risk exposure as regards purchases is therefore of less significance.

Currency risk

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

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

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

If the Swedish krona had weakened by 10 per cent against the US dollar, all other variables being constant, the year's profit as at December 31, 2010 would have been SEK 0.3 million (3.9) lower, mainly as a result of the Group's total costs in USD being somewhat higher than the corresponding income in USD. Equity would have been SEK 23.3 million (25.5) higher, mainly due to translation of the Group's net investments in the USA.

If the Swedish krona had weakened by 10 per cent against the euro, all other variables being constant, the year's profit as at December 31, 2010 would have been SEK 10.0 million (6.4) higher, mainly as a result of positive net earnings in the German operations. Equity would have been SEK 9.5 million (10.8) higher, mainly due to translation of the Group's net investments in Germany.

If the Swedish krona had weakened by 10 per cent against the pound sterling, all other variables being constant, the year's profit as at December 31, 2010 would have been SEK 0.0 million (–2.6) higher, as the Group's total costs in GBP are the same as the corresponding income in GBP. Equity would have been SEK 0.3 million (–0.6) higher, mainly due to translation of the Group's net investments in the United Kingdom.

If the Swedish krona had weakened by 10 per cent against the Canadian dollar, all other variables being constant, the year's profit as at December 31, 2010 would have been SEK 0.3 million (0.3) lower, mainly as a consequence of revaluation of the Group's forward contract hedges in CAD.

Interest rate risk referring to cash flows and fair values

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

The Group's interest rate risk arises through non-current borrowings. Borrowing at variable interest rates exposes the Group to cash flow interest rate risk. Borrowing at fixed interest rates exposes the Group to fair value interest rate risk. In 2010 and 2009 there were no loans at variable interest rates. The Group's contractual repricing dates for interest rates are shown in note 29.

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

Simulations carried out show that the impact on earnings of a change of 0.1 percentage point would be a maximum increase or decrease respectively of SEK 0.2 million (0.3).

If the interest rate on borrowings in US dollars on December 31, 2010 had been 0.5 percentage points higher/lower, all other variables being constant, the profit after tax for the financial year would have been SEK 0.6 million (0.7) lower/higher, as an effect of higher/lower interest expense in connection with renegotiation of new interest fixing periods.

If the interest rate on borrowings in pounds sterling on December 31, 2010 had been 0.5 percentage points higher/lower, all other variables being constant, the profit after tax for the financial year would have been SEK 0.2 million (0.3) lower/higher, as an effect of higher/lower interest expense in connection with renegotiation of new interest fixing periods.

If the interest rate on borrowings in euros on December 31, 2010 had been 0.5 percentage points higher/lower, all other variables being constant, the profit after tax for the financial year would have been SEK 0.0 million (0.4) lower/higher, as an effect of higher/ lower interest expense in connection with renegotiation of new interest fixing periods.

Borrowing in other currencies in 2010 was at fixed interest rates and was not affected by interest rate changes.

Credit risk

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

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

Liquidity risk

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

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

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

As at December 31, 2010	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Bank borrowings	129,933	45,177	98,304	2,521
Derivative financial instruments	1,987	202	5	741
Trade and other payables	337,479	557	3,015	9,033
As at December 31, 2009	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Bank borrowings	85,353	164,547	107,154	12,835
Derivative financial instruments	3,956	19	42

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

Trade and other payables 334,703 590 3,109 7,682

As at December 31, 2010	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Forward exchange contracts – Cash flow hedges
– Outflow	33,794	604
– Inflow	278,658	13,339	3,044	118,104
As at December 31, 2009	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Forward exchange contracts – Cash flow hedges
– Outflow	22,317

2.2 CAPITAL RISK MANAGEMENT

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

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

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

	2010	2009
Total borrowing (note 29)	275,935	369,889
Less cash and cash equivalents (note 24)	–68,376	–74,661
Net debt	207,559	295,228
Total equity	520,808	541,229
Debt/equity ratio	40%	55%

The change in debt/equity ratio in 2010 was mainly a consequence of lower equity. Borrowing decreased during the year and the positive cash flow after investments was not sufficient to balance the reduction in borrowing, consequently cash and cash equivalents fell somewhat. The negative comprehensive income for 2010 as a result of translation differences on foreign subsidiaries is the main reason for lower equity.

2.3 FAIR VALUE ESTIMATION

The table below shows financial instruments at fair value on the basis of their classification in the fair value hierarchy. The different levels are defined as follows:

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

The following table shows the Group's assets and liabilities measured at fair value as at December 31, 2010.

	Level 1	Level 2	Level 3
Assets
Financial assets at fair value through profit or loss
– Unlisted shareholdings	-		4,232
– Capital insurance	-	11,818
– Non-current bank deposits	-	30,750
Derivatives used for hedging	-	5,668
Total assets	-	48,236	4,232
Liabilities
Derivatives used for hedging	-	2,935
Total liabilities	-	2,935	-

Note 2 (cont)

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

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

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices from a stock exchange, broker, industrial group, pricing service or supervisory authority are easily and regularly available, and these prices represent actual and regularly occurring market transactions at arm's length. The Group does not currently hold such assets or liabilities.

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

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

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

The following table shows changes for instruments at level 3 in 2010.

	Level 3
Opening balance	2,976
Gains recognized in the income statement	1,256
Closing balance	4,232
Total gains or losses for the period included in profit or loss for assets held at the end of the reporting period

In 2009 there was no change in the book value of holdings of unlisted shares.

Note 3 Important accounting estimates

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

3.1 IMPORTANT ESTIMATES AND ASSUMPTIONS FOR ACCOUNTING PURPOSES

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

Impairment tests for goodwill

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

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

Income taxes

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

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

• • reduce the deferred tax asset by SEK 0.5 million (3.4) if the outcome is unfavorable, or
• • increase the deferred tax asset by SEK 0.5 million (3.4) if the outcome is favorable.

Fair value of derivative instruments or other financial instruments

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

Revenue recognition

The Group uses the percentage of completion method for reporting fixed price contracts. The percentage of completion method means that the Group must estimate completion of services on the balance sheet date as a proportion of the total services to be provided. If the proportion of completed services to total services to be provided deviates by 10 per cent from the management's estimate, the year's reported income would increase by SEK 2.8 million (5.1) if the percentage of completion had increased, or decrease by SEK 2.8 million (5.1) if the percentage of completion had decreased.

Provisions

The operations at Studsvik's facilities in Sweden, the USA and the UK are subject to local licensing requirements and Studsvik is liable to decommission facilities, manage waste and restore land. The Group makes provision in its own balance sheet for these future decommissioning costs. The Group also provides collateral in the form of bank guarantees and deposits blocked funds. The Group makes regular assessments of its technical and financial obligations and revises the value of these provisions annually. The commitment consists of discounted values of future cash flows.

If the actual estimate of the discount rate were to deviate by 10 per cent from the management's assessment, the net result would have been SEK 0.2 million (0.4) lower for a higher rate.

If the actual estimate of the future decommissioning cost were to deviate by 10 per cent from the management's assessment, the result would have been SEK 1.0 million (0.8) lower for a higher estimate of future costs. The majority of changes in estimated future costs are capitalized as property, plant and equipment and thus only affect future depreciation.

Changes in the Group's provisions are presented in note 32.

Note 4 Segment reporting

Operating segments have been established on the basis of information dealt with by the Board of Directors and Executive Group Management and used to make strategic decisions. The Board of Directors and Executive Group Management assess operations from both a geographical and product perspective.

The Board of Directors and Executive Group Management assess the operating segments' performance on the basis of operating profit and a measurement called EBITDA before non-recurring items. This measurement excludes the effects of non-recurrent costs from the operating segments. Examples of these costs are restructuring costs, legal costs and impairment of goodwill when impairment is due to an isolated one-off event. Profit from discontinued operations is not included in EBITDA before non-recurring items. Operating segment assets refer to all non-current assets and current assets by segment. Operating segment liabilities refer to all non-current and current liabilities by segment. Adjusted equity is the total consolidated equity.

Interest income and expenses are not allocated to the segments, since they are affected by measures taken by the central treasury, which handles the Group's cash liquidity.

		United			Global
Financial year 2010	Sweden	Kingdom	Germany	USA	Services	Other	Eliminations	Group
Net sales	179,956	80,570	461,488	271,980	296,567	67,696	–14,151	1,344,106
External net sales	175,747	80,570	459,981	271,980	296,262	59,566	-	1,344,106
EBITDA before non-recurring items	31,026	–21,587	39,524	33,090	38,978	–20,288	-	100,743
Non-recurring items	-		–5,915	-				–5,915
Depreciation/amortization and impairment	–11,099	–5,988	–4,875	–35,520	–5,922	–5,276	-	–68,680
Earnings from associated companies and
joint ventures	-	3,388	-	3,872	-			7,260
Operating profit/loss	19,927	–24,187	28,734	1,442	33,056	–25,564	0	33,408
Net financial items								–19,044
Taxes								–10,352
Net profit for the year								4,012
Shares of equity in associated companies and
joint ventures	-	2,950	-	22,348	50	-		25,348
Other operating segment assets	129,315	179,378	254,350	586,525	187,067	390,267	–325,227	1,401,675
Total assets								1,427,023
Operating segment liabilities	125,661	154,641	184,817	398,474	139,565	228,284	–325,227	906,215
Adjusted equity								520,808
Total equity and liabilities								1,427,023
Investments	8,424	1,077	1,823	3,495	9,206	1,582	-	25,607
Average number of employees	92	64	661	107	153	92	-	1,169
Financial year 2009	Sweden	United Kingdom	Germany	USA	Global Services	Other	Eliminations	Group
Net sales	171,475	86,105	450,500	213,332	264,268	63,595	–32,925	1,216,350
External net sales	152,828	86,105	448,314	213,104	262,660	53,339	-	1,216,350
EBITDA before non-recurring items	38,147	–29,105	36,126	–14,772	45,968	–25,486	-	50,878
Non-recurring items	-	–22,198	-	–3,276	6,730	-		–18,744
Depreciation/amortization and impairment	–10,418	–3,192	–8,258	–40,810	–7,024	–5,544	-	–75,246
Earnings from associated companies and
joint ventures Operating profit/loss	- 27,729	4,285 –50,210	- 27,868	8,838 –50,020	- 45,674	–31,030	0	13,123 –29,989
Net financial items								–19,777
Taxes								14,568
Net loss for the year								–35,198
Shares of equity in associated companies and joint ventures	-	3,687	-	26,964	50	-		30,701
Other operating segments	154,778	195,783	273,573	577,183	200,325	422,227	–401,213	1,422,656
Total assets								1,453,357
Operating segment liabilities	88,625	167,846	193,004	371,074	161,987	330,805	–401,213	912,128
Adjusted equity								541,229
Total equity and liabilities								1,453,357
Investments	7,729	56,380	4,035	2,563	8,326	2,547	-	81,580
Average number of employees	90	66	644	101	138	93	-	1,132

Note 4 (cont)

EBITDA before non-recurring items is reconciled against profit before tax and discontinued operations.

	2010	2009
EBITDA before non-recurring items	100,743	50,878
Depreciation of property, plant and equipment	–63,090	–66,501
Amortization of intangible assets	–5,590	–8,745
Capital gains on operations sold	-	6,730
Impairment of assets	-	–25,474
Severance pay	–5,915
Profit share from associated companies and joint ventures	7,260	13,123
Net financial items	–19,044	–19,777
Profit/loss before tax	14,364	–49,766
External net sales per product area	2010	2009
Treatment of radioactive waste	431,503	326,458
On-site waste services	12,149	15,011
Consulting and engineering services	123,687	137,011
Health physics services	104,964	99,233
Transport and logistics	7,256	5,359
Decommissioning services	203,314	226,715
Operational and outage support	159,747	139,994
Fuel and materials performance	119,835	84,931
Corrosion and water chemistry	30,316	37,842
Fuel optimization software	86,766	85,770
Design and build	5,003	1,472
Other operations	59,566	56,554
Total	1,344,106	1,216,350

Other operations mainly refer to the parent company.

External net sales based on			2009
the customer's country of location	SEK thousand	Per cent	SEK thousand	Per cent
Sweden	240,834	17.9	219,906	18.0
Europe excl Sweden	724,381	53.9	716,270	58.9
North America	353,651	26.3	250,284	20.6
Asia	25,221	1.9	29,875	2.5
All other countries	19	0.0	15	0.0
Total	1,344,106	100.0	1,216,350	100.0

At present the Group has no individual customers that account for more than 10 per cent of total sales.

		2010	2009
Non-current assets per country	SEK thousand	Per cent	SEK thousand	Per cent
Sweden	179,756	17.7	176,466	16.6
Europe excl Sweden	301,137	29.7	341,211	32.1
North America	533,567	52.6	545,277	51.3
Asia	194	0.0	179	0.0
Total	1,014,654	100.0	1,063,133	100.0

Note 5 Other operating income

Other income	2010	2009
Sales of subsidiaries and other business units	-	6,730
Sale of property, plant and equipment	363	344
Insurance compensation	251
Rental income	502	637
Other	434	298
Total	1,550	8,009

Note 5 (cont)

Other gains	2010	2009
Other financial assets at fair value through profit or loss
– Fair value gains	1,744	750
Forward exchange contracts
– Foreign exchange differences	-	7,064
Total	1,744	7,814

Note 6 Other operating expenses

Other costs	2010	2009
Bad debt losses	14
Sale of property, plant and equipment	1,603
Other impairment losses	462
Non-recurrent structural costs	5,915	25,474
Other	89	37
Total	8,083	25,511
Other losses	2010	2009
Other financial assets at fair value through profit or loss
– Fair value losses	2,420	1,071
Forward exchange contracts
– Foreign exchange differences	3,904
Total	6,324	1,071

Note 7 Costs by nature of expense

	2010	2009
Purchases of material and services	475,985	380,987
Personnel costs	705,076	702,288
Energy	27,240	28,427
Depreciation/amortization and impairment	68,890	70,521
Other costs	29,654	66,480
Total	1,306,845	1,248,703

Note 8 Remuneration to auditors

	2010	2009
PricewaterhouseCoopers
– Audit assignments	3,438	4,114
– Audit business in addition to audit	394	822
– Tax consultancy	376	2,432
– Other services	363	52
Total	4,571	7,420
Other auditors
– Audit assignments	108	114
– Audit business in addition to audit	93
– Tax consultancy
– Other services	54	56
Total	255	170
Group, total	4,826	7,590

Audit assignments refers to examination of the annual accounts, the accounting records and the administration by the Board of Directors and the President, other duties incumbent on the company's auditors, as well as advisory services and other types of support as a result of observations made through such an examination or performance of such duties.

Note 9 Employee benefits

Employee benefits	2010	2009
Salaries	549,941	556,494
Social security costs	98,698	108,206
Pension costs – defined contribution based	28,942	27,022
Pension costs – defined benefit based	1,150	1,197
Total	678,731	692,919

			2010			2009
Salaries and other remuneration by country and between board members and presidents as well as other employees	Board and President	Of which variable remuneration	Other employees	Board and President	Of which variable remuneration	Other employees
Parent company	5,293	-	6,088	4,971	-	9,669
Subsidiaries in Sweden	4,446	735	126,142	3,249	597	116,950
Subsidiaries abroad
– Norway	-		1,672	-		1,685
– Germany	1,812	190	292,601	1,933	95	281,900
– United Kingdom	1,311	-	20,765	1,697	-	45,272
– USA	2,165	-	77,895	3,547	-	76,754
– Japan	901	37	428	893	37	424
– Switzerland	-		2,498	-		1,816
– France	-		5,924	-		5,734
Total, subsidiaries	10,635	962	527,925	11,319	729	530,535
Total, Group	15,928	962	534,013	16,290	729	540,204

		2010				2009
Average number of employees	Men	Women	Total	Men	Women	Total
Parent company	6	5	11	7	5	12
Subsidiaries in Sweden	211	77	288	202	71	273
Subsidiaries abroad
– Norway	1	-	1	2	-	2
– Germany	567	75	642	546	64	610
– United Kingdom	56	8	64	53	13	66
– USA	115	20	135	105	22	127
– Japan	1	1	2	1	1	2
– Switzerland	1	1	2	1	1	2
– France	20	4	24	38	-	38
Total, subsidiaries	972	186	1,158	948	172	1,120
Total, Group	978	191	1,169	955	177	1,132

		2010		2009
Gender breakdown in the Group (including subsidiaries) for members of the Board and other senior management	Number on balance sheet date	Of which men	Number on balance sheet date	Of which men
Board members	11	7	11	8
President and other senior management	11	11	11	11
Total, Group	22	18	22	19

For information on benefits to senior management executives, see note 38.

Note 10 Financial income and expense

	2010	2009
Financial income
Current bank balances	850	606
Fair value gains (unrealized and realized)	2,947	4,087
Other financial income	33	112
Total	3,830	4,805
Financial expenses
Bank borrowings	–15,168	–17,207
Fair value losses (unrealized and realized)	–6,271	–5,302
Other financial expenses	–1,435	–2,073
Total	–22,874	–24,582
Net financial items	–19,044	–19,777

Note 11 Income tax

	2010	2009
Current tax
Current tax on profit for the year	–12,308	–15,691
Adjustment for previous years	164	–1,099
Total	–12,144	–16,790
Deferred tax (note 30)
Origination and reversal of temporary differences	2,403	31,103
Effect of change in tax rate	–611	255
Total	1,792	31,358
Total income tax	–10,352	14,568

The Swedish tax rate is 26.3 (26.3) per cent. The income tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate for profits of the consolidated companies as follows.

	2010	2009
Profit/loss before tax	14,364	–49,766
Tax in accordance with the current tax rate	–3,777	13,089
Non-taxable revenue	330	1
Expenses not deductible for tax purposes	–599	–2,244
Unrecognized tax asset in respect of loss carry forwards	–4,598
Recognized tax asset in respect of loss carry forwards	-	–42
Adjustment for foreign tax rate	916	5,334
Revaluation of deferred tax – change in tax rate	–611	255
Adjustment for previous years' tax assessment	164	–1,099
Other effects	–2,177	–726
Tax expense	–10,352	14,568

The deferred taxes in England have been revalued due to the changed tax rate from 28 per cent to 27 per cent, which is applicable on April 1, 2011. The revaluation is SEK –611 thousand. Further tax cuts have been proposed in England of 1 per cent per year to 24 per cent by April 1, 2014. This has not, however, been taken into account in the figures reported.

The weighted average tax rate was 72 (29) per cent. The main reasons for the difference in tax rate between Swedish income tax and the weighted average tax rate are above all a previously unrecognized tax asset related to the operating loss for the year in the USA and the operating loss in the UK in the fourth quarter of 2010. The higher tax rate in Germany combined with operating profit has had a negative impact on the tax expense.

Other comprehensive income only includes tax effects on cash flow hedges and on December 31 these were SEK –1,387 thousand (1,298). Other comprehensive income also includes foreign exchange differences, but they have no tax effect.

Note 12 Foreign exchange differences – net

Foreign exchange differences are recognized in the income statement as follows.

	2010	2009
Other gains and losses – net (notes 5 and 6)	–5,838	6,743
Financial items (note 10)	–3,324	–1,215
Total	–9,162	5,528

Note 13 Earnings per share

Before dilution

Earnings per share before dilution is calculated by dividing the profit for the year by the weighted average number of shares in issue (note 25).

	2010	2009
Net profit/loss for the year	4,012	–35,198
Weighted average number of ordinary shares in issue Earnings per share before dilution (SEK per share)	8,218,611 0.49	8,218,611 –4.28

After dilution

Diluted earnings per share is calculated by adjusting the weighted average number of shares in issue to assume conversion of all dilutive potential shares. There were no unconverted share options or convertible debt instruments in issue on the balance sheet date.

Earnings per share after dilution (SEK per share)	0.49	–4.28
Weighted average number of ordinary shares in issue	8,218,611	8 218 611
Net profit/loss for the year	4,012	–35,198
	2010	2009

Note 14 Dividend per share

Dividend paid in 2010 and 2009 amounted to SEK 0 thousand (SEK 0 per share) and SEK 8,219 thousand (SEK 1 per share). At the Annual General Meeting on April 26, 2011 it will be proposed that no dividend be distributed for the 2010 financial year.

Note 15 Property, plant and equipment

	Buildings and land	Plant and machinery	Equipment and tools	Construction in progress and advance payments for property, plant and equipment	Total
As at January 1, 2009
Cost of acquisition	212,084	445,749	308,075	76,399	1,042,307
Accumulated amortization and impairment	–83,516	–247,861	–207,190	-	–538,567
Book value	128,568	197,888	100,885	76,399	503,740
January 1 – December 31, 2009
Opening book value	128,568	197,888	100,885	76,399	503,740
Foreign exchange differences	–2,062	–8,798	–4,513	–2,033	–17,406
Investments	51,643	3,995	5,478	19,432	80,548
Capitalization of future restoration cost	33,944	-	-	-	33,944
Redistributions	43,598	23,030	3,759	–70,387	0
Disposals and retirements	–199	,–681	–5,634	-	–6,514
Depreciation/amortization	–9,549	–33,239	–23,713	-	–66,501
Closing book value	245,943	182,195	76,262	23,411	527,811
As at December 31, 2009
Cost of acquisition	336,424	446,374	279,939	23,411	1,086,148
Accumulated amortization and impairment	–90,481	–264,179	–203,677	-	–558,337
Book value	245,943	182,195	76,262	23,411	527,811
January 1 – December 31, 2010
Opening book value	245,943	182,195	76,262	23,411	527,811
Foreign exchange differences	–13,275	–7,582	–3,405	–619	–24,881
Investments	939	1,039	4,331	18,966	25,275
Capitalization of future restoration cost	5,128	10,147	12,438	-	27,713
Redistributions	73	12,571	7,143	–19,787	0
Disposals and retirements	–190	–1,059	–1,354	–81	–2,684
Depreciation/amortization	–8,366	–32,249	–22,475	-	–63,090
Closing book value	230,252	165,062	72,940	21,890	490,144
As at December 31, 2010
Cost of acquisition	328,194	442,439	277,573	21,890	1,070,096
Accumulated amortization and impairment	–97,942	–277,377	–204,633	-	–579,952
Book value	230,252	165,062	72,940	21,890	490,144

Depreciation costs include SEK 54,752 thousand (60,722) in cost of services sold, SEK 119 thousand (161) in selling and marketing costs, SEK 7,654 thousand (5,028) in administrative expenses and SEK 565 thousand (590) in research and development costs. Interest of SEK 4,833 thousand (5,290) is included in the cost of acquisition of buildings, plant and machinery. The assessed value of buildings is SEK 42,175 thousand and of land SEK 25,397 thousand. The value of finance leases capitalized as property, plant and equipment is presented in note 35.

Note 16 Intangible assets

			Contractual customer relations
	Goodwill	Software rights	and similar rights	Total
As at January 1, 2009
Cost of acquisition	368,393	22,970	78,639	470,002
Accumulated amortization and
impairment	–5,386	–21,760	–23,498	–50,644
Book value	363,007	1,210	55,141	419,358
January 1 – December 31, 2009
Opening book value	363,007	1,210	55,141	419,358
Foreign exchange differences	–20,692	–79	–3,038	–23,809
Investments	-	310	722	1,032
Redistributions	-	407	–11	396
Disposals and retirements	-	-	–722	–722
Depreciation/amortization	-	–118	–8,627	–8,745
Closing book value	342,315	1,730	43,465	387,510
As at December 31, 2009
Cost of acquisition	379,883	23,594	73,117	476,594
Accumulated amortization and
impairment Book value	–37,568 342,315	–21,864 1,730	–29,652 43,465	–89,084 387,510
January 1 – December 31, 2010
Opening book value	342,315	1,730	43,465	387,510
Foreign exchange differences	–28,894	–108	–2,247	–31,249
Investments	-	-	332	332
Redistributions	-	-	-	-
Disposals and retirements	-	–147	–197	–344
Depreciation/amortization	-	–196	–5,394	–5,590
Closing book value	313,421	1,279	35,959	350,659
As at December 31, 2010
Cost of acquisition	346,634	23,298	68,089	438,021
Accumulated amortization and
impairment	–33,213	–22,019	–32,130	–87,362
Book value	313,421	1,279	35,959	350,659

Contractual customer relations and similar rights consist mainly of customer relations/contracts as well as some tenancy rights. Deprectiation of SEK 5,590 thousand (8,745) is included in 'Cost of services sold' in the income statement.

Note 16 (cont)

Impairment tests for goodwill

Goodwill is allocated to the Group's cash generating units (CGUs) identified by segment. A segment level summary of the goodwill allocation is presented below.

	2010	2009
Sweden	-	-
United Kingdom	22,625	24,767
Germany	107,859	123,954
USA	180,106	190,763
Global Services	2,831	2,831
Total	313,421	342,315

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

The cash generating units' recoverable amount is based on value in use. These values are based on estimated future cash flows based on business plans approved by the company management for the next three years. The management has established the budgeted gross margin on the basis of previous earnings and its expectations concerning market developments. The rate of growth is estimated for each cash generating unit on the basis of market position and development. Cash flows beyond the three-year period are extrapolated with an estimated annual rate of growth. A weighted cost of capital for borrowed capital and equity is applied as the discount rate, as presented below.

Material estimates used for calculating value in use in 2010:

		Growth rate
	Gross margin %	after year 3%	Discount rate %
United Kingdom	14	3	11
Germany	16	2	8
USA	32	3	11
Global Services	45	3	9

Material estimates used for calculating value in use in 2009:

	Gross margin %	after year 3 %	Discount rate %
United Kingdom	22	3	10
Germany	13	3	10
USA	23	3	11
Global Services	45	3	9

The cost of borrowed capital has been determined individually for each segment, thereby taking into consideration differences in market rates between the markets in which the various units operate. The cost of equity is calculated as the return on risk-free investments for each segment, plus a risk premium that is estimated to reflect investors' requirements of listed companies in Studsvik's industry sector. The weighted cost of capital applied in calculating the recoverable amount is between 8 and 11 (9 and 11) per cent before tax. Based on the assumptions and estimates made, there is no impairment loss on goodwill. Studsvik has also assessed the sensitivity of value in use to unfavorable changes in the most important assumptions concerning cash flows and discount rate. These amounts also exceeded the carrying amounts for net assets. There are no other specific circumstances that have affected impairment testing.

Sensitivity analysis	Margin at carrying amount %	Margin at 10% higher discount rate %	Margin at 10% lower operating profit %
United Kingdom	62	39	45
Germany	649	522	561
USA	240	181	173
Global Services	3,493	2,947	3,076

Note 17 Investments in associated companies

	2010	2009
As at January 1	30,701	22 064
Share in earnings	7,260	13,123
Dividend received from associated companies	–10,369	–2,485
Foreign exchange differences	–2,244	–2,001
As at December 31	25,348	30,701

The Group's share in earnings of the most important associated companies, which are all unlisted, and its share of assets (including goodwill and liabilities) is as follows.

2010		Assets	Liabilities	Income	Profit/loss	Participating interest %
THOR Treatment Technologies, LLC	USA	36,372	14,032	71,166	3,862	50
UK Nuclear Waste Management Ltd	United Kingdom	4,070	3,895	5,066	3,620	15
KraftAkademin AB	Sweden	103	25	114	20	20
Total		40,545	17,952	76,346	7,502
2009		Assets	Liabilities	Income	Profit/loss	Participating interest %
THOR Treatment Technologies, LLC	USA	31,324	4,358	52,126	8,837	50
UK Nuclear Waste Management Ltd	United Kingdom	4,696	4,693	5,037	2,883	15
KraftAkademin AB	Sweden	68	17	120	–4	20
Total		36,088	9,068	57,283	11,716

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

UK Nuclear Waste Management Ltd is a joint venture where Studsvik is one of four partners. Studsvik has a significant influence through board representation and knowledge transfer. NWM has been appointed to be responsible, together with the Nuclear Decommissioning Authority (NDA), for management and operation of a final repository and to implement a well-functioning strategy for management of low level radioactive waste in the United Kingdom.

KraftAkademin AB produces and conducts training for the nuclear power industry. The business concept is based on giving customers the opportunity of supplementing their internal training activities with courses and seminars when implementing individual competence development plans. Studsvik contributes to KraftAkademin's operations through our competence in thermo hydraulics, reactor dynamics and health physics.

Note 18 Financial instruments by category

Accounting policies for financial instruments have been applied to the items below.

	Loans and trade receivables	Assets at fair value through profit or loss	Derivatives for hedging	Total
As at December 31, 2010
Assets on the balance sheet
Derivative financial instruments	-	4,307	1,361	5,668
Trade and other receivables	322,230	-	-	322,230
Other financial assets measured at fair value through profit or loss	-	46,800	-	46,800
Cash and cash equivalents	68,376	-	-	68,376
Total	390,606	51,107	1,361	443,074
	Liabilities at fair value through profit or loss	Other financial liabilities	Derivatives for hedging	Total
Liabilities on the balance sheet
Borrowings	-	275,935	-	275,935
Derivative financial instruments	645	-	2,290	2,935
Total	645	275,935	2,290	278,870

	Loans and trade receivables	Assets at fair value through profit or loss	Derivatives for hedging	Total
As at December 31, 2009
Assets on the balance sheet
Derivative financial instruments	-	698	2,343	3,041
Trade and other receivables	299,830	-	-	299,830
Other financial assets measured at fair value through profit or loss	-	18,284	-	18,284
Cash and cash equivalents	74,661	-	-	74,661
Total	374,491	18,982	2,343	395,816
	Liabilities at fair value through profit or loss	Other financial liabilities	Derivatives for hedging	Total
Liabilities on the balance sheet
Borrowings	-	369,889	-	369,889

Derivative financial instruments 757 - 3,260 4,017 Total 757 369,889 3,260 373,906

Note 19 Credit quality of the financial assets

The credit quality of the financial assets can be assessed by referring to external credit ratings (if available) or to the counterparty's payment history.

	2010	2009
Trade receivables
Counterparties without external credit rating
– New customers (less than 6 months)	11,081	3,823
– Existing customers with no defaults in the past	169,904	180,748
– Existing customers with some delayed payments in the past	58,756	43,687
Total	239,741	228,258
Loans to related parties
Existing related party with no previous defaults	2,354	3,435
Total	2,354	3,435
Bank balances and current borrowing
AA	68,376	74,661
Total	68,376	74,661
Derivative financial instruments
AA	5,668	3,041
Total	5,668	3,041

None of the fully performing financial assets has been renegotiated in the last year. Loans to related parties have decreased during the year through repayment.

Note 20 Derivative instruments

		2010	2009
	Assets	Liabilities	Assets	Liabilities
Forward exchange contracts – Cash flow hedges	5,668	2,935	3,041	4,017

The entire fair value of a derivative instrument designated as a hedging instrument is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity is less than 12 months. Revaluation of forward exchange contracts designated as hedges is through equity. Other forward contracts are revalued through profit or loss.

Outstanding forward exchange contracts on December 31, 2010

							INFLOW CURRENCIES					OUTFLOW CURRENCIES
		CAD	DKK	EUR	GBP	JPY	NOK	USD	CHF	EUR	JPY	NOK	USD
Maturity year		000	000	000	000	000	000	000	000	000	000	000	000
2011	Amount	16,700	452	2,707	7,260	42,200	125	8,186	57	2,788	6,100	4,000	392
	Rate 1	6.728	1.358	9.798	10.868	0.081	1.195	6.926	7.029	9.189	0.086	1.150	6.772
2012	Amount			438		43,740	125	727			6,870
	Rate 1			9.729		0.082	1.177	7.343			0.088
2013	Amount						125	238
	Rate 1						1.168	7.106
2014	Amount						125	150
	Rate 1						1.159	7.083
2015	Amount
	Rate 1
2016	Amount	8,800
	Rate 1	6.948
2017	Amount	5,000
	Rate 1	6.955
2018	Amount	3,200
	Rate 1	6.934
	Translated to fair value,
SEK thousand		208,413	545	27,952	76,013	7,136	547	63,029	411	25,098	1,078	4,607	2,663

¹ Average contractual rate

The nominal amount for outstanding forward exchange contracts is SEK 446,538 thousand (385,959).

Note 21 Trade and other receivables

	2010	2009
Trade receivables	241,124	232,987
Less – Provision for impairment of receivables	–1,383	–4,729
Trade receivables – net	239,741	228,258
Loans to related parties	2,354	3,435
Work in progress	32,541	23,043
Tax assets	2,242	2,166
Other receivables	18,376	26,097
Prepaid expenses and accrued income
– Accrued income	8,386	3,034
– Accrued interest income	27	-
– Prepaid rent	598	352
– Prepaid lease charges	443	487
– Prepaid insurance premiums	3,987	3,689
– Other prepaid expenses	13,535	9,269
Total	322,230	299,830
Non-current portion	3,396	3,531
Current portion	318,834	296,299
Total	322,230	299,830

The book value for trade and other receivables is the fair value.

The effective interest rate on non-current receivables is as follows.

	2010	2009
Loans to related parties (note 37)	2.0%	2.2%

No impairment loss is considered to exist for trade receivables less than 3 months overdue. As at December 31, 2010 trade receivables of SEK 82,243 thousand (62,627) were overdue without any impairment loss being identified. These refer to a number of independent customers who have not had payment difficulties in the past. An age analysis of these trade receivables is given below.

	2010	2009
Less than 3 months	79,807	57,182
3 to 6 months	2,587	1,521
More than 6 months	–151	3,924
Total	82,243	62,627

Carrying amounts of the Group's trade and other receivables by currency are as follows.

	2010	2009
SEK	101,649	82,947
EUR	90,367	104,174
GBP	25,955	17,805
CAD	-	159
USD	103,645	90,443
Other currencies	614	4,302
Total	322,230	299,830

Changes in the reserve for doubtful receivables:

	2010	2009
As at January 1	–4,729	–9,284
Translation difference	309	644
Provision for doubtful receivables	–885	–4,166
Receivables written off as unrecoverable	3,922	8,077
As at December 31	–1,383	–4,729

Transfers to and reversals from reserves for doubtful receivables are included in the item 'Other operating expenses' in the income statement. Amounts stated in the depreciation account are normally written off when the Group is not expected to recover further cash funds. No impairment loss has been identified for any assets in other categories of trade and other receivables. There is no concentration of credit risk with respect to trade receivables, as the Group has a large number of customers, internationally dispersed.

Note 22 Financial assets at fair value through profit or loss

	2010	2009
Unlisted shareholdings	4,232	2,976
Capital insurance	11,818	10,807
Non-current bank deposits	30,750	4,501
Total	46,800	18,284

The statement of cash flows includes financial assets measured at fair value through profit or loss in the category 'Cash flow from operating activities' as part of the change in working capital. This does not, however, apply to bank deposits recorded as 'Cash flow from financing activities'. Blocked bank funds in the USA amount to SEK 29,839 thousand (4,418) and blocked funds in the Nuclear Waste Fund to SEK 911 thousand (0) and are recorded as non-current bank deposits.

The fair value of capital insurance is based on current market prices.

Note 23 Inventories

	2009
4,540	4,560
13,075	11,856
1,892	1,542
19,507	17,958
	2010

The expensed expenditure for inventories is included under 'Cost of services sold' and amounts to SEK 15,700 thousand (17,856).

Note 24 Cash and cash equivalents

	2010	2009
Cash and bank balances	68,376	74,661
Total	68,376	74,661

Note 25 Share capital and other contributed capital

	Number of shares	Share capital	Other paid-in capital
As at January 1, 2009	8,218,611	8,219	225,272
As at December 31, 2009	8,218,611	8,219	225,272
As at January 1, 2010	8,218,611	8,219	225,272
As at December 31, 2010	8,218,611	8,219	225,272

All shares are ordinary shares with a quotient value of 1.0.

Note 26 Retained earnings

As at January 1, 2009	327,985
Net loss for the year	–35,198
Dividend paid for 2008	–8,219
As at December 31, 2009	284,568
As at January 1, 2010	284,568
Net profit for the year	4,012
Dividend paid for 2009	-
As at December 31, 2010	288,580

Note 27 Reserves

	Currency translation reserve	Hedge reserve	Total reserves
As at January 1, 2009	49,330	–341	48,989
Foreign exchange differences	–22,479	-	–22,479
Cash flow hedging
– Fair value differences	-	–4,936	–4,936
– Tax on fair value differences	-	1,298	1,298
As at December 31, 2009	26,851	–3,979	22,872
As at January 1, 2010	26,851	–3,979	22,872
Foreign exchange differences	–28,304	-	–28,304
Cash flow hedging
– Fair value differences	-	5,274	5,274
– Tax on fair value differences	-	–1,387	–1,387
As at December 31, 2010	–1,453	–92	–1,545

Note 28 Trade and other payables

	2010	2009
Trade payables	85,797	70,675
Liabilities for work in progress	54,660	63,333
Social security and other taxes	75,442	70,934
Other liabilities	12,018	15,337
Accrued expenses and deferred income
– Deferred income	14,224	13,796
– Accrued interest expense	572	436
– Accrued salaries	30,649	31,252
– Accrued pension costs	11,818	10,042
- Accrued consulting and service costs	1,178	953
– Accrued audit fees	949	258
– Other items	62,777	69,068
Total	350,084	346,084
Non-current portion	12,605	11,381
Current portion	337,479	334,703
Total	350,084	346,084

Note 29 Borrowings

	2009
146,002	284,536
129,933	85,353
275,935	369,889
	2010

Shares in Studsvik UK Ltd, Studsvik GmbH and Studsvik Verwaltungs GmbH have been put up as collateral for the Group's bank borrowings. The Group's borrowings are recognized at fair value.

The exposure of the Group's borrowings to interest rate changes and the contractual repricing dates at

the balance sheet date are as follows	2010	2009
0–6 months	199,707	200,471
6–12 months	73,456	166,078
1–5 years	2,772	3,340
Total	275,935	369,889

The bank loans mature up to 2017. Total borrowing includes bank loans and other borrowing against collateral of SEK 105,255 thousand (156,662). Other borrowings refer to an immaterial amount for finance leases. The collateral for bank loans is the Group's shares in subsidiaries.

Maturities of borrowings	2010	2009
Less than 1 year	129,933	85,353
Between 1 and 2 years	53,201	164,547
Between 2 and 5 years	90,353	107,154
More than 5 years	2,448	12,835
Total	275,935	369,889

The carrying amounts of the Group's borrowings

are denominated in the following currencies	2010	2009
SEK	2,772	3,340
EUR	73,456	84,521
USD	171,981	211,943
GBP	27,726	70,085
Total	275,935	369,889

The Group has the following unutilized

credit facilities	2010	2009
Variable interest rate
– Matures within one year	39,167	32,828
– Matures after more than one year	-	4,820
Total	39,167	37,648

The lines of credit that mature within one year are one-year credit facilities that will be reviewed on varying dates in 2011.

Average effective interest rate on balance

sheet date, bank borrowings	2010	2009
SEK	2.09%	1.65%
EUR	2.64%	3.56%
USD	4.35%	4.20%
GBP	3.34%	5.12%

Note 30 Deferred tax

Deferred tax assets and tax liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax refers to the same tax authority.

Offset amounts			2010	2009
Deferred tax assets
Deferred tax assets to be utilized after more than 12 months			95,615	91,661
Deferred tax assets to be utilized within 12 months			2,676	1,900
Total			98,291	93,561
Deferred tax liabilities
Deferred tax liabilities to be paid after more than 12 months			35,658	32,737
Deferred tax liabilities to be paid within 12 months			2,405	1,218
Total			38,063	33,955
Deferred tax assets	Tax losses	Fair value gains	Other	Total
As at January 1, 2009	60,475	121	3,391	63,987
Charged/credited to the income statement	35,202	826	–586	35,442
Tax referring to components in other comprehensive income	-	109	-	109
Translation differences	–5,977	-	-	–5,977
As at December 31, 2009	89,700	1,056	2,805	93,561
Charged/credited to the income statement	10,579	312	–1,467	9,424
Tax referring to components in other comprehensive income	-	1,027	-	1,027
Translation differences	–5,721	-	-	–5,721
As at December 31, 2010	94,558	2,395	1,338	98,291
Deferred tax liabilities	Accelerated tax depreciation	Fair value gains	Other	Total
As at January 1, 2009	6,555	-	27,774	34,329
Charged/credited to the income statement	–538	1,989	2,633	4,084
Tax referring to components in other comprehensive income	-	–1,189	-	–1,189
Reposting to current tax	-	-	–1,091	–1,091

As at December 31, 2010	7,674	1,410	28,979	38,063
Translation differences	-	-	–4,556	–4,556
Reposting to current tax	-	-	1,032	1,032
Tax referring to components in other comprehensive income	-	-	-	-
Charged/credited to the income statement	1,657	610	5,365	7,632
As at December 31, 2009	6,017	800	27,138	33,955
Translation differences	-	-	–2,178	–2,178

Deferred tax assets are recognized for tax loss carry forwards to the extent that the realization of the related tax benefit through the future taxable profits is probable. Most of the Group's tax loss carry forwards are related to the US operations. These total USD 47.0 million (47.2), to be utilized within a 20 year period. The Group's recognized deferred tax assets include tax loss carry forwards in the USA of SEK 70.9 million (70.5).

Note 31 Pension obligations

Defined benefit pension plans

There are a few defined benefit pension plans within the Group, which are primarily based on final salary. The plans that have been considered to be material are in Germany. Other pension obligations, which also exist in Germany, have not been regarded as having any material effect and have not been subject to actuarial calculation.

Pension insurance with Alecta

Commitments for old-age pension and family pension for employees in Sweden are safeguarded through insurance with Alecta. According to a statement by the Swedish Financial Accounting Standards Council's Urgent Issues Task Force, URA 42, this is a defined benefit plan covering several employers. For the 2010 financial year the Group has not had access to such information as will make it possible to report this plan as a defined benefit plan. The pension plan under ITP, which is vested through insurance with Alecta, is therefore reported as a defined contribution plan. The year's contributions for pension insurance taken out with Alecta amount to SEK 5,854 thousand (5,341). Alecta's surplus can be distributed to the policy holders and/or the insured. At the end of 2010 Alecta's surplus in the form of a collective solvency level was 134 (136) per cent. The collective solvency level comprises the market value of Alecta's assets as a percentage of its insurance commitments calculated in accordance with Alecta's actuarial assumptions, which do not comply with IAS 19.

	2010	2009
Obligations in the balance sheet for
Pension benefits	5,749	7,489
Income statement charge for (note 9)
Pension costs	30,092	28,219
Amounts recognized in the balance sheet	2010	2009
Present value of unfunded obligations	5,749	7,489
Total	5,749	7,489
Amounts recognized in the income statement	2010	2009
Defined benefit plans
Current service cost	563	83
Interest expense	134	148
Total	697	231

Of the total cost, SEK 407 thousand (51) was included in 'Cost of services sold' and SEK 290 thousand (180) in 'Administrative expenses'. The actual return on the plan assets was SEK - thousand (-).

The movement in the liability recognized in the

consolidated balance sheet is as follows	2010	2009
At the start of the year	7,489	7,790
Translation differences	–506	–490
Total expense recognized in the income statement	697	231
Contributions paid	–1,931	–42
At the end of the year	5,749	7,489

Total pension costs recognized in the consolidated

income statement	2010	2009
Total costs for defined benefit plans	697	231
Total costs for defined contribution plans	24,810	23,527
Costs of special employer's contribution and tax on
returns from pension funds	4,585	4,461
Total	30,092	28,219
Actuarial assumptions	2010	2009
Discount rate	5.2%	5.3%
Expected return on plan assets	0.0%	0.0%
Future salary increases	0.0%	3.0%
Future pension increases	1.8%	1.8%

Note 32 Other provisions

	Future waste management	Other
	expenses	provisions	Total
As at January 1, 2010	31,726	104,453	136,179
Recognized as an expense in the consolidated income statement
– Additional provisions	17,353	1,319	18,672
Capitalized as property, plant and
equipment	-	27,713	27,713
Repostings	882	–882	0
Reclassification from other liabilities	40,432	-	40,432
Foreign exchange differences	-	–4,821	–4,821
Discount effect	1,184	1,033	2,217
Amount utilized during the period	–1,438	–1,440	–2,878
Translation difference	-	-	-
As at December 31, 2010	90,139	127,375	217,514
Non-current portion	88,225	127,375	215,600
Current portion	1,914	-	1,914
Total	90,139	127,375	217,514

Future waste management expenses

The Group's operations generate nuclear waste and radioactive waste which must be sent for final disposal within the framework of the systems and rules in force in the countries in which Studsvik carries on operations in its own production facilities. Provisions are made for operational waste and also to some extent for decommissioning of facilities and the resulting decommissioning waste. The main part of the costs of decommissioning and decommissioning waste from the Group's Swedish nuclear facilities is financed, under the provisions of the Studsvik Act 1988:1597, through a charge on nuclear generated electricity. Fees paid in are administered by the Nuclear Waste Fund. The Group's total payments to the Nuclear Waste Fund amount to SEK 911 thousand (0) and are recorded as non-current bank deposits.

Funds for decommissioning and waste management may be withdrawn from the Fund by Studsvik, which holds the nuclear permit for the facilities in question. Studsvik is not liable to pay under the current Act. Studsvik's responsibility for decommissioning and waste management for its own nuclear facilities is limited to buildings, systems and components coming into existence after June 30, 1991. Studsvik estimates these commitments on a current basis and provision is made for them. Recognized provisions include management of waste in connection with decommissioning, SEK 37.6 million. Of the total provisions, SEK 1.9 million is expected to be utilized in 2011 and the rest is expected to be utilized successively and at the earliest starting in 2012.

The provision for future waste management costs also includes costs for storage of waste treated at the Group's facility in Erwin, USA. These provisions were reclassified during the year from 'Other liabilities' and at the close of the year amount to SEK 52.6 million and are expected to be utilized at the earliest starting in 2012. The Group makes regular payments to blocked bank accounts, which are recorded as non-current bank deposits.

Other provisions

Other provisions refer to future costs for decommissioning of the Swedish, British and American waste management facilities. In addition to this, future costs of decommissioning other nuclear facilities in Sweden are included. Of the total provisions, SEK 0.0 million is expected to be utilized in 2011. The remaining part of the provisions is expected to be utilized only in connection with decommissioning operations.

Note 33 Cash flow from operating activities

Non-cash items	2010	2009
Depreciation/amortization and impairment	70,394	75,246
Restructuring costs in the UK and USA	-	30,316
Proceeds from sale of property, plant and equipment	1,240	–344
Proceeds from sale of subsidiaries and other business units	-	–6,730
Share in earnings from associated companies	–7,260	–13,123
Revaluation of financial holdings	–1,222	-
Change in provisions	10,306	7,880
Total	73,458	93,245

Note 34 Contingent liabilities

The Group has contingent liabilities in respect of bank guarantees and other guarantees as well as other items arising in the normal course of business. No material liabilities are expected to arise through these contingent liabilities. In the normal course of business the Group has issued guarantees amounting to SEK 139,329 thousand (66,836) to third parties. No further payments are expected as at the date of these financial statements.

Note 35 Commitments

CAPITAL COMMITMENTS

Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows.

	2010	2009
Property, plant and equipment	14,727	17,095
Total	14,727	17,095

OPERATING LEASE COMMITMENTS

Lease expenses for operating leases for the year amounted to SEK 7,681 thousand (11,943).

Future aggregate minimum lease payments	2010	2009
Within 1 year	4,033	5,135
Between 1 and 5 years	14,020	15,119
Total	18,053	20,254

FINANCE LEASE COMMITMENTS

Assets recognized as finance leases		Equipment and tools
Opening book value January 1, 2009		6,453
Investments		3,365
Depreciation/amortization for the year		–130
Disposals and retirements		–5,807
Translation differences		–446
Closing book value December 31, 2009		3,435
Opening book value January 1, 2010		3,435
Investments		104
Depreciation/amortization for the year		–673
Disposals and retirements		–94
Translation differences		-
Closing book value December 31, 2010		2,772
Future aggregate minimum lease payments	2010	2009
Within 1 year	603	725
Between 1 and 5 years	2,169	2,738
Total	2,772	3,463

Lease expenses for finance leases for the year amounted to SEK 673 thousand (146). The Group's finance leases previously included transport vehicles for the logistics operations in the USA. These operations were sold in 2009 to R&R Trucking. Remaining finance leases consist of equipment for treating large components in the Swedish operations.

Note 36 Disposals

There were no disposals during 2010. Disposals in 2009 are listed below.

	Business				Number of employ
Date of disposal	operations		Country Segment	Income1	ees 1
April 1, 2009	AB SVAFO	Sweden Other		63,432	4
October 5, 2009	Personal dosimetry		Sweden Global Services	4,388	4

1 Annual revenue and number of employees on the date of disposal.

Disposals

The four nuclear power companies OKG AB, Ringhals AB, Forsmarks Kraftgrupp AB and Barsebäck Kraft AB took over ownership of Studsvik's subsidiary AB SVAFO. AB SVAFO is a non-commercial company with the task of managing historical waste under the Studsvik Act. The activities are entirely financed via the Nuclear Waste Fund . The disposal enables Studsvik to concentrate fully on its core activities. The transfer took place at book value without obligations for Studsvik regarding the remaining facilities.

As part of the Global Services strategy to focus on its core activities the Personal dosimetry operations were sold. The personal dosimetry laboratory is the largest independent laboratory in Sweden with about 500 customers, mainly in the medical field.

The table below presents the carrying amount of operations sold as at the date of disposal.

The carrying amount of assets and liabilities for the disposals	2009
Property, plant and equipment	114
Financial assets	2,582
Trade and other receivables	5,138
Trade and other payables	–24,952
Identifiable assets – net	–17,118
Capital gain	6,730
Purchase price obtained and liquid assets obtained	–10,388

AB SVAFO had a net cash balance of SEK 18.4 million at the time of the transfer, mainly consisting of advances from the Nuclear Waste Fund. The transfer meant that the Group's cash and cash equivalents decreased by SEK 17.4 million.

Note 37 Transactions with related parties

Studsvik, Inc. owns 50 per cent of THOR Treatment Technologies, LLC (TTT). In accordance with a Joint Venture Operating Agreement the owners are to provide management, technical and marketing services to TTT. Studsvik owns 15 per cent of UK Nuclear Waste Management Ltd (NWM), where Studsvik, in a consortium together with other partners, will manage and operate a repository for low level radioactive waste in the United Kingdom.

Transactions with associated companies	2010	2009
Sale of services
– THOR Treatment Technologies, LLC	6,010	9,473
– UK Nuclear Waste Management Ltd	9,822	3,584
Receivables from related parties
– THOR Treatment Technologies, LLC	1,501	272
– UK Nuclear Waste Management Ltd	2,354	3,661
Change in loans to related parties
– UK Nuclear Waste Management Ltd	–785	0

Under an agreement with the owners the services are supplied on a commercial basis. There have been no transactions with other related parties.

Note 38 Information on the Board of Directors and senior management

Salaries and other benefits, 2010	Basic salary/ Board fee	Committee fee	Variable remuneration	Other benefits	Pension cost	Other provisions	Total
Chairman of the Board
Anders Ullberg	650	50	-	-	-	-	700
Members of the Board (6)
Jan Barchan	112	-	-	-	-	-	112
Ingemar Eliasson*	112	50	-	-	-	-	162
Lars Engström	225	25	-	-	-	-	250
Anna Karinen	288	-	-	-	-	-	288
Alf Lindfors	225	-	-	-	-	-	225
Per Ludvigsson	225	75	-	-	-	-	300
Agneta Nestenborg**	112	-	-	-	-	-	112
Employee representatives (4)	-	-	-	-	-	-	-
President	2,813	-	-	90	1,093	-	3,996
Other senior management (9)	10,333	-	834	597	2,645	5,724	20,133
– of whom outgoing (2)	2,652	-	300	146	393	5,724	9,215
Total	15,095	200	834	687	3,738	5,724	26,278

* Member of the Board until April 29, 2010.

** Member of the Board from April 29, 2010.

Salaries and other benefits, 2009	Basic salary/ Board fee	Committee fee	Variable remuneration	Other benefits	Pension cost	Other provisions	Total
Chairman of the Board
Anders Ullberg	650	50	-	-	-	-	700
Members of the Board (6)
Jan Barchan	169	-	-	-	-	-	169
Ingemar Eliasson	225	100	-	-	-	-	325
Lars Engström	225	-	-	-	-	-	225
Anna Karinen	350	-	-	-	-	-	350
Alf Lindfors	225	-	-	-	-	-	225
Per Ludvigsson	225	50	-	-	-	-	275
Employee representatives (4)	-	-	-	-	-	-	-
President	2,692	-	-	121	1,088	-	3,901
Other senior management (9)	11,806	-	1,082	767	3,016	1,602	18,273
– of whom outgoing (2)	2,066	-	298	79	507	1,602	4,552
Total	16,567	200	1,082	888	4,104	1,602	24,443

Note 38 (cont)

Remuneration to the Board of Directors and other

senior management executives	2010	2009
Parent company
Salaries and other remuneration	7,863	9,171
– Of which variable remuneration	260	518
Pensions	2,564	3,020
Number of persons	15	15
Subsidiaries
Salaries and other remuneration	13,990	10,280
– Of which variable remuneration	574	564
Pensions	1,174	1,084
Number of persons	6	6
Group
Salaries and other remuneration	21,853	19,451
– Of which variable remuneration	834	1,082
Pensions	3,738	4,104
Number of persons	21	21

Principles

In 2010 the members of the Board of Directors did not receive any remuneration in addition to the Board and Committee fees.

Variable remuneration

The President has the right to variable remuneration. The forms of the variable salary component are established annually. For 2011 the variable salary component is based on the Group's sales and operating margin and may not exceed 50 per cent of annual salary. The variable salary component for other senior management for 2011 is based on outcomes related to individually specified targets at both Group and unit level. For 100 per cent target fulfillment in all parameters a variable salary component is payable of 20–50 percent of the basic salary.

Other benefits and remuneration

Other benefits reported are company car, meal subsidies and other benefits such as health care, home computer etc. Other remuneration mainly includes severance pay.

Financial instruments

Under current employment contracts there are no share based payments.

Pension

The pensionable age of the President is 65 years. The President receives a pension under the ITP plan. In addition to this, the company pays an annual pension premium equivalent to 17 per cent of the fixed salary to an endowment insurance owned by the company. The premium is paid up to the age of 65 on condition that the employment has not ceased before this. Retirement pension is paid from the month after the President reaches the age of 65 and for a period of 20 years. The size of the pension depends on the capital formation, including the return received at the time. As a rule, other group management executives receive a pension from the age of 65 in accordance with collective agreements on the Swedish labor market. The pension obligations are vested.

Termination and severance pay

The President's period of notice is 6 months for his own termination of employment and 12 months for termination by the company. In the case of termination of employment by the company, salary is payable during the period of notice as well as an additional severance payment equivalent to 12 months' salary. If Studsvik AB should be acquired through a stock exchange buyout or through the company being acquired by a new principal owner (more than 50 per cent of the shares) the President is entitled to termination pay as though the termination was on the part of the company. For other members of the group executive management, the main rule is that the period of notice is 6 months when employment is terminated by the employee and 12 months when terminated by the company. In the case of termination of employment by the company, salary is payable during the period of notice as well as an additional severance payment equivalent to 12 months' salary.

Note 39 Events after the close of the reporting period

No events have occurred after the close of the reporting period on December 31, 2010, that are estimated to be material as defined in IAS 10.

NOTES TO THE PARENT COMPANY ACCOUNTS

For the parent company's accounting policies, see note 1.24.

Note 40 Net sales

Net sales by geographical market	2010	2009
Sweden	4,239	4,213
Europe, excluding Sweden	4,174	3,941
North America	2,106	3,004
Total	10,519	11,158

Note 41 Employee benefits

		2010		2009
	Salaries and other		Salaries and other
	remuneration (of which	Social security costs	remuneration (of which	Social security costs
	variable	(of which	variable	(of which
	remunera tion	pension costs)	remunera tion)	pension costs)
Board of Directors and	5,293	2,718	4,971	1,959
President	(-)	(1,201)	(-)	(1,083)
Other employees	6,088	5,121	9,669	8,409
	(356)	(2,620)	(600)	(4,577)
Total	11,381	7,839	14,640	10,368
	(356)	(3,821)	(600)	(5,660)

See also note 38.

Note 42 Costs by nature of expense

Total	37,227	42,168
Depreciation/amortization	272	317
Personnel costs	19,383	22,646
Purchases of material and services	17,572	19,205
	2010	2009

Services include fees and remuneration to accounting firms as follows:

	2010	2009
PricewaterhouseCoopers
Audit assignments	1,151	1,558
Consulting assignments	29	871

Audit assignments refer to the examination of the annual accounts, the accounting records and the administration by the Board of Directors and the President. It also includes other duties that are incumbent on the company's auditors as well as advisory services and other types of support as a result of observations made through such an examination. Everything else is classed as 'Other assignments'.

Note 43 Depreciation

	2010			2009
	According to		According to
	plan	Book	plan	Book
Equipment and tools	272	272	317	317
Total	272	272	317	317

Note 44 Operating leases

	2010	2009
Maturity within one year	932	1,324
Maturity after one year but within five years	1,674	428
Total	2,606	1,752

The parent company's leases mainly refer to vehicles and premises with traditional terms and conditions.

Note 45 Interest income and similar profit/loss items

	2010	2009
Interest	10,528	10,948
Dividends received	21,422	32,050
Exchange rate differences	2,422	2,645
Total	34,372	45,643
Of which, in respect of Studsvik Group companies
Interest	10,495	10,638
Dividends received	21,422	32,050
Total	31,917	42,688

Note 46 Interest expense and similar profit/loss items

	2010	2009
Interest	7,482	10,877
Exchange rate differences	3,874	3,154
Other financial expenses	-	189
Total	11,356	14,220
Of which, in respect of Studsvik Group companies
Interest	473	462
Total	473	462

Note 47 Appropriations

	2010	2009
Dissolution of tax allocation reserve	-	2,510
Total	-	2,510

Note 48 Income tax

	2010	2009
Current tax
Current tax on profit for the year	7,027	7,402
Adjustment for previous years	164	183
Total	7,191	7,585
Deferred tax
Origination and reversal of temporary differences	–295	400
Effect of change in the Swedish tax rate	-	–156
Total	–295	244
Total income tax	6,896	7,829

The Swedish tax rate is 26.3 (26.3) per cent. The income tax on the parent company's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate for profits as follows.

Note 48 (cont)

	2010	2009
Profit/loss before tax	–2,549	2,903
Tax in accordance with the current tax rate	670	–764
Non-taxable revenue	5,964	8,429
Expenses not deductible for tax purposes	–242	–263
Deferred tax asset referring to pensions	322	235
Adjustment for previous years' tax assessment	164	183
Other	18	9
Total	6,896	7,829

As a result of the change in Swedish corporate tax from 28 per cent to 26.3 per cent, which applies from January 1, 2009, the relevant carrying amounts for deferred tax have been restated in the accounts for 2009.

The weighted average tax rate was 270 (–270) per cent, mainly as an effect of dividends received from subsidiaries (note 45).

Note 49 Property, plant and equipment

	2010	2009
Equipment and tools
Opening cost of acquisition	1,771	1,771
Sales and disposals	–19	-
Closing accumulated cost of acquisition	1,752	1,771
Opening depreciation	–1,384	–1,067
Depreciation for the year	–272	–317
Sales and disposals	14	-
Closing accumulated depreciation	–1,642	–1,384
Closing residual value according to plan	110	387

Note 50 Financial assets

	2010	2009
Shares in subsidiaries
Opening cost of acquisition	855,461	822,068
Shareholder's contribution	21,483	34,393
Sales	-	–1,000
Closing cost of acquisition	876,944	855,461
Opening impairment losses	–42,949	–42,949
Closing impairment losses	–42,949	–42,949
Closing value	833,995	812,512
Receivables from Group companies
Loans to Studsvik Holding, Inc. Group
– Opening cost of acquisition	166,338	169,314
– Items deducted/added	–4,602	7,825
– Foreign exchange differences	–5,743	–10,801
Closing value	155,993	166,338
Loan to Studsvik UK Ltd
– Opening cost of acquisition	100,528	52,048
– Items added	24,099	85,537
– Conversion to shareholders' contribution	–19,388	–34,393
– Foreign exchange differences	–9,672	–2,664
Closing value	95,567	100,528
Other non-current receivables
– Opening cost of acquisition	13,052	12,148
– Items added	1,185	904
– Revaluation to fair value	1,487	-
– Foreign exchange differences	–231	-
Closing value	15,493	13,052

Note 51 Prepaid expenses and accrued income

	2010	2009
Prepaid rent	278	211
Prepaid insurance premiums	176	-
Other	711	802
Total	1,165	1,013

Note 52 Shares and participations in subsidiaries

			Number of
	Share of	Share of	participa
	equity, %	voting rights, %	tions/ shares		Nominal value	Book value
Parent company's holdings
Studsvik Holding, Inc.	100	100	2,000			kUSD 25,372 568,747
Studsvik Nuclear AB	100	100	5,000			kSEK 50,000 133,400
Studsvik Scandpower, Inc.	79	79	1,503	kUSD	149	984
Studsvik Scandpower AB	91	91	910	kSEK	91	603
Studsvik Japan Ltd	100	100	10,000		kJPY 10,000	373
Studsvik Germany GmbH	100	100		kEUR	26	241
Studsvik Verwaltungs
GmbH	100	100		kEUR	26	261
Studsvik UK Ltd	100		100 1,022,500	kGBP		1,023 111,280
Studsvik Instrument
Systems AB	100	100	17,000			kSEK 17,000 18,106
Total						833,995

Information on subsidiaries' corporate identity numbers and registered offices

	Corporate identity number	Registered office
Studsvik Nuclear AB	556051-6212	Nyköping, Sweden
ALARA Holding i Skultuna AB	556573-6591	Nyköping, Sweden
ALARA Engineering AB	556514-8177	Nyköping, Sweden
Studsvik Scandpower, Inc.	36-3088916	Boston, USA
Studsvik Scandpower AB	556137-8190	Nyköping, Sweden
Studsvik Scandpower AS	008797.45012	Kjeller, Norway
Studsvik Scandpower GmbH	HRB 4839	Norderstedt, Germany
Studsvik Scandpower Suisse GmbH	CH400.4.021.112.4	Fischbach-Göslikon, Switzerland
Studsvik Japan Ltd		Tokyo, Japan
Studsvik Holding, Inc.	35-3481732	Erwin, USA
Studsvik, Inc.	36-2999957	Erwin, USA
Studsvik Processing Facility Erwin, LLC	36-4063922	Erwin, USA
RACE Holding, LLC	20-2472653	Erwin, USA
Studsvik Processing Facility Memphis, LLC	62-1801098	Erwin, USA
Studsvik Logistics, LLC	77-0631902	Erwin, USA
Studsvik Germany GmbH	HRB 504467	Mannheim, Germany
Studsvik Verwaltungs GmbH	HRB 504468	Mannheim, Germany
Studsvik GmbH & Co. KG	HRA 503411	Mannheim, Germany
Studsvik SAS	504440330	Paris, France
Studsvik UK Ltd	0477 2229	Newcastle, England
Studsvik Alpha Engineering Ltd	0365 8198	Newcastle, England
Studsvik Instrument Systems AB	556197-1481	Nyköping, Sweden

Note 53 Liabilities to credit institutions

	2010	2009
Bank borrowings
Non-current portion	37,518	144,398
Current portion	98,215	57,484
Total	135,733	201,882

Note 54 Accrued expenses and deferred income

	2010	2009
Holiday pay liability	1,673	1,359
Accrued salaries	802	614
Accrued social security contributions	4,568	4,681
Accrued interest expense	551	436
Other	-	88
Total	7,594	7,178

Note 59 Cash flow from operating activities

Non-cash items	2010	2009
Depreciation/amortization	272	317
Fair value gains	–1,256	-
Other items	34	-
Total	–950	317

Note 60 Transactions with related parties

Intra-Group purchases and sales

The percentage of the year's purchases and sales referring to other companies within the Studsvik Group is presented below.

	2010	2009
Purchases	10%	7%
Sales	100%	100%

The same pricing principles are applied to purchases and sales between group companies as apply to transactions with external parties.

Agreements on severance payments and other commitments to Board members and the President

The President's period of notice is 6 months for his own termination of employment and 12 months for termination by the company. In the case of termination of employment by the company, salary is payable during the period of notice as well as an additional severance payment equivalent to 12 months' salary. If Studsvik AB should be acquired through a stock exchange buyout or through the company being acquired by a new principal owner (more than 50 per cent of the shares) the President is entitled to termination pay as though the termination was on the part of the company. See also note 38.

Note 61 Number of employees

			2010	2009
Women			5	5
Men			6	7
Total			11	12
		2010		2009
Board members and senior management executives	Number on balance sheet date	Of which men	Number on balance sheet date	Of which men
Board members	11	7	11	8
President and other senior

Note 62 Investment in subsidiaries

	2010	2009
Shareholder's contribution	21,483	34,393
Total	21,483	34,393

management executives 3 3 3 3

Shareholder's contribution to Studsvik UK Ltd in 2010 through conversion of loan, accrued interest and other receivables.

Note 55 Pledged assets

	2010	2009
Shares in subsidiaries	111,782	90,299
Total	111,782	90,299

Note 56 Contingent liabilities

	2010	2009
Guarantees	393	830
Contingent liabilities referring to insurance	3,030	2,989
Total	3,423	3,819

In addition the parent company has made a guarantee commitment for subsidiaries as for its own debt.

Note 57 Derivative instruments

		2010		2009
	Assets	Liabilities	Assets	Liabilities
Forward exchange contracts	2,933	628	-	35

Revaluation of forward exchange contracts is through profit or loss.

Outstanding forward exchange contracts, December 31, 2010

		OUTFLOW CURRENCIES	INFLOW CURRENCIES
Maturity year	EUR 000	USD 000	GBP 000	USD 000
2011 Amount	1,000	90	7,260	5,430
Average rate	9.034	6.661	10.868	6.824
Remeasured at fair value	9,016	596	78,387	36,822

Note 58 Investment in property, plant and equipment

	2010	2009
Equipment and tools	-	-
Total	-	-

No investments were made during the year.

The consolidated income statement and balance sheet and the parent company income statement and balance sheet will be adopted at the Annual General Meeting to be held on April 26, 2011. In our view, the consolidated accounts have been prepared in accordance with international financial reporting standards (IFRS) as adopted by the EU and give a true and fair view of the Group's financial position and results of operations. The annual accounts have been prepared in accordance with generally accepted accounting principles and give a true and fair view of the parent company's financial position and results of operations. The administration report for the Group and parent company provides a fair review of the development of the Group's and the parent company's business, financial position and performance and describes significant risks and uncertainties faced by the parent company and the companies that are part of the Group.

Nyköping, March 8, 2011

Anders Ullberg Anna Karinen Jan Barchan

Chairman Vice Chairman Board Member

Board Member Employee representative Board Member

Lars Engström Maria Lindberg Alf Lindfors

Per Ludvigsson Roger Lundström Agneta Nestenborg Board Member Employee representative Board Member

Magnus Groth President

Our audit report was submitted on March 14, 2011 PricewaterhouseCoopers AB

Magnus Brändström Authorized public accountant

Audit report

To the Annual General Meeting of the Shareholders of Studsvik AB (publ)

Corporate registration number 556501-0997

We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the Board of Directors and the President of Studsvik AB (publ), for 2010. The company's annual accounts and consolidated accounts are included in the printed version of this document on pages 5–53. The Board of Directors and the President are responsible for these accounts and the administration of the company, as well as for the application of the Annual Accounts Act when preparing the annual accounts and the application of international financial reporting standards IFRS as adopted by the EU and the Annual Accounts Act when preparing the consolidated accounts. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the Board of Directors and the President and significant estimates made by the Board of Directors and the President when preparing the annual accounts and consolidated accounts as well

as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any Board member or the President. We also examined whether any Board member or the President has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.

The annual accounts have been prepared in accordance with the Annual Accounts Act and give a true and fair view of the company's financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with international financial reporting standards IFRS as adopted by the EU and the Annual Accounts Act and give a true and fair view of the Group's financial position and results of operations. The statutory administration report is consistent with the other parts of the annual accounts and the consolidated accounts.

We recommend to the General Meeting of Shareholders that the income statements and balance sheets of the Parent Company and the Group be adopted, that the profit of the Parent Company be dealt with in accordance with the proposals in the administration report and that the members of the Board of Directors and the President be discharged from liability for the financial year.

Stockholm, March 14, 2011 PricewaterhouseCoopers AB

Magnus Brändström Authorized public accountant

Corporate governance

Studsvik AB is a Swedish public company with its registered office in Nyköping and is listed on the NASDAQ OMX Stockholm exchange. The company is the parent of a Group that carries on business in nuclear technology in an international arena. Corporate governance is based on the Articles of Association and the Swedish Companies Act, a number of Swedish and foreign laws and ordinances and the Swedish Code of Corporate Governance (the Code). Studsvik has no departures from the Code to report.

General Meeting of Shareholders

The General Meeting is the company's highest decision-making body, where the shareholders exercise their influence through discussions and decisions. An Annual General Meeting shall be held once a year in order to adopt the income statement and balance sheet, determine how the financial results are to be allocated and elect a board of directors and auditors.

The number of shareholders on December 31, 2010 was 4,216. The total number of shares was 8,218,611. All shares have an equal right to participate in the company's assets and profits. Information on shareholders, voting rights, Articles of Association and any authorizations for the Board of Directors to issue or acquire shares is given in the administration report, page 18.

At the Annual General Meeting in April 2010, 38 shareholders participated representing a total of 23.4 (52.8) per cent of all votes in the company. The Annual General Meeting adopted the consolidated income statement and balance sheet, adopted the Board of Directors proposal concerning dividend and discharged the Board of Directors and President from liability. Agneta Nestenborg was elected to the Board of Directors as a new member. She succeeded Ingemar Eliasson, who had declined re-election. Other members of the Board of Directors were re-elected and Anders Ullberg was appointed as Chairman. The Meeting also established principles for benefits to senior management and appointed the Nomination Committee. The minutes of the Annual General Meeting can be found on the company's website.

Nomination committee

The main task of the Nomination Committee is to propose candidates for the Board of Directors, Chairman of the Board and auditors and their fees to the Annual General Meeting. The Nomination Committee is also to propose a new Nomination Committee.

As resolved by the Annual General Meeting, the Nomination Committee is to consist of the Chairman of the Board and representatives of each of the three largest shareholders. The Annual General Meeting elected Jan Barchan (Briban Invest AB), Peter Rudman (Nordeas fonder), Bill Tunbrant (representative of the Karinen family) and Anders Ullberg (chairman of the Board) to the Nomination Committee. The Nomination Committee appointed Bill Tunbrant as chairman and held two meetings. The Nomination Committee's term of office is until a new Nomination Committee is appointed.

Composition of the Board of Directors

Studsvik AB's Board of Directors consists of seven board members elected by the general meeting of shareholders, as well as two members and two alternates appointed by the local trade union organizations Unionen and the Swedish Association of Graduate Engineers. The members of the Board of Directors are presented on pages 58–59.

The members elected by the Annual General Meeting are to be regarded as independent in relation to the company and the company management. All, apart from Jan Barchan, Anna Karinen and Per Ludvigsson, are independent of major shareholders.

Chairman

Anders Ullberg is the Chairman of the Board and leads the work of the Board. He has a particular responsibility to follow the company's development between Board meetings and ensure that the Board Members regularly receive the information necessary for performing a satisfactory job. The Chairman is to maintain regular contact with the President on various matters as needed.

Work of the Board of Directors

The task of the Board of Directors is to administer the company's business in the best way possible and safeguard the interests of the shareholders in its work. The Board's work follows rules of procedure adopted annually at the inaugural board meeting. The rules of procedure specify the division of duties between the Board and the President, the responsibilities of the Chairman and President respectively, and the forms of financial reporting. The President takes part in the work of the Board of Directors and

Auditors Elected by the Annual General Meeting. Audit the	Shareholders Exercise control via the Annual General Meeting and where applicable extraordinary general meetings.	Nomination Committee 4 members. Submits proposals to the Annual General Meeting concerning members of the Board of Directors and fees.
accounts, bookkeeping and administration of the Board of Directors and President.	Board of Directors 7 members elected by the Annual General Meeting and 2 members appointed by the local trade union organizations.	Audit Committee (3 members) Remuneration Committee (3 members)
	President/Chief Executive Officer and Executive Group Management The President leads the business operations in consultation with other members of the Executive Group Management.	Internal control function Integrated part of the Group Accounting and Finance function. Observations reported to the Audit Committee.

other members of the Group Executive Management take part when this is called for. The Group's Chief Financial Officer, who is also Executive Vice President, acts as secretary to the Board.

In 2010 the Board of Directors held 7 meetings, including the inaugural meeting immediately following the Annual General Meeting. The attendance of the members is shown in the table below.

The Board of Directors receives information on the company's economic and financial situation through monthly reports and at board meetings. Ahead of each board meeting the Chairman and President go through the business to be dealt with at the meeting and supporting documentation for the Board's processing of the business is sent to the members about a week before each board meeting.

In 2010 the Board gave particular attention to the US-based operations, which after a strong first quarter were affected by a production shortfall due to a lack of transportation capacity. The business risks were analyzed and decisions taken on measures to minimize them. The global financial crisis hit the United Kingdom with full force in 2010. The Board analyzed in detail the Group's UK operations and decisions were taken to adapt operations to the current market conditions. The Group's strategic position was discussed and decisions on the strategic alignment for the period 2011–2013 were taken.

The company's auditors reported their observations from their audit of the annual accounts, review of interim accounts and internal control at two meetings during the year. At one of these meetings the Board was given the opportunity to have discussions with the auditors without the company management being present.

The Chairman ensures that the work of the Board of Directors is evaluated annually and that the Nomination Committee receives the information necessary concerning the results of the evaluation.

Policies, guidelines and instructions

The Board annually reviews and adopts Group policies and guidelines and the Group's Code of Conduct. The Code of Conduct, which is available on Studsvik's website, aims to provide guidance to employees and business partners, minimize risks, strengthen the corporate culture and convey Studsvik's core values.

The President adopts guidelines and operative instructions based on policies and guidelines established by the Board. Guidelines and operative instructions issued by the President primarily cover financial reporting and information technology (IT). All policies and guidelines are available on the company's intranet.

Remuneration Committee

The Board has appointed a Remuneration Committee from among its number. The Remuneration Committee submits proposals to the Board for the President's salary and other conditions of employment and, following proposals by the President, approves salaries and other conditions of employment for the Executive Group Management. The Committee also draws up the Board of Directors' proposals to the General Meeting concerning principles of remuneration and other conditions of employment for the Executive Group Management. The Remuneration Committee works in accordance with the instructions adopted annually by the Board of Directors and reports on its work to the Board of Directors. The Remuneration Committee consists of Anders Ullberg (chairman), Jan Barchan and Anna Karinen.

Audit Committee

The Board has set up an Audit Committee to assure the quality of the company's financial reporting. The Audit Committee consists of Per Ludvigsson (chairman), Lars Engström and Anders Ullberg. The presenter in the Committee is the Chief Financial Officer. Apart from the Group's quarterly reports, during the year the Committee has taken note of and dealt with reports from internal audits performed. The Committee received regular updates on developments in ongoing fixed price contracts, discussed costing and risk analysis methods, the Group's financing and made decisions on procedures for procurement of non-audit services from the elected firm of auditors.

The company's auditors reported their observations from the hard-close and internal control, conducted at the time of the second and third quarter closings. The Committee meets before each reporting date and on more occasions if necessary. The Committee held four meetings during the year. The Audit Committee works in accordance with the instructions adopted annually by the Board of Directors and reports on its work to the Board of Directors.

Board fees

The total board fee paid by Studsvik AB for 2010 amounted to SEK 2,149,000 (2,268,750). In accordance with a resolution passed by the Annual General Meeting, the Chairman of the Board receives SEK 650,000 per year and ordinary members SEK 225,000 per year. No fee is paid to members appointed by the employee organizations. The chairman of the Audit Committee receives a fee of SEK 100,000 per year and the members SEK 50,000 per year. No fee is paid to the Remuneration Committee.

Auditors

At the 2007 Annual General Meeting the registered public accounting firm PricewaterhouseCoopers AB was elected as auditor for the period up to and including the 2011 Annual General Meeting. The auditor in charge is authorized public accountant Magnus Brändström. Remuneration to the company's auditors is paid in accordance with an approved invoice on agreed terms. For information concerning remuneration in 2010 please refer to note 8, page 36.

Board members	Elected		Attendance Remuneration Committee	Audit Committee	Independent of company	Independent of share holders	Fee SEK thousand
Anders Ullberg, Chairman of the Board	2007	7/7	1/1	4/4	yes	yes	700
Anna Karinen, Vice Chairman	2003	7/7	1/1		yes	no	288
Jan Barchan	2004	4/7	1/1		yes	no	112
Ingemar Eliasson	2002	3/7		2/4	yes	yes	162
Lars Engström	2008	6/7		2/4	yes	yes	250
Alf Lindfors	2006	7/7			yes	yes	225
Per Ludvigsson	2007	7/7		4/4	yes	no	300
Agneta Nestenborg	2010	4/7			yes	yes	112
Maria Lindberg	2006	6/7
Roger Lundström	2005	5/7

President and Executive Group Management

The President is responsible for the day-to-day management of the company. He leads the operative business and prepares information and data for decision-making for the Board of Directors and is the presenter at Board meetings. The President has appointed a Group Management team consisting of the Executive Vice President/CFO, the head of the Group function company acquisitions and projects and the heads of the five segments. The President and Executive Group Management are presented on pages 60–61.

The Executive Group Management meets weekly to follow up the operative and financial developments in the segments. On two to three occasions during the financial year the Executive Group Management meets to deal with matters of a more strategic or long-term nature. The President and central staff functions are based in Nyköping. In accordance with the policies and guidelines established by the Board, the Group functions are responsible for business development, allocation of financial resources among the Group's operations, capital structure and risk management. The tasks also include questions of Groupwide acquisitions and disposals, certain major projects, the Group's financial reporting, communication with the stock market, internal and external information, IT and co-ordination and follow-up of safety, environment, work environment and quality

Operative management

The Group's operative business is carried out in subsidiaries of Studsvik AB, which by and large correspond to the Group's operating segments. In each subsidiary the board plays an active role under the leadership of the CEO. The boards of the subsidiaries follow the companies' day-to-day operations and establish business plans and budgets.

The business is carried on in accordance with the rules, guidelines and policies established by the parent company, and local rules established by each subsidiary company board. The heads of the segments have budget responsibility and shall ensure growth in their companies. They are also responsible for utilizing the synergies between the Group's various units.

Internal control

Internal control aims to ensure that:

• • Company strategies and goals are followed up
• • Shareholders' interests are protected
• • External financial reporting reflects the actual situation with reasonable certainty
• • The financial reports are prepared in accordance with generally accepted accounting principles, laws and ordinances and other requirements of listed companies

Statement by the auditor on the corporate governance report

To the Annual General Meeting of the Shareholders of Studsvik AB (publ), corporate identity number 556501-0997

The Board of Directors is responsible for the corporate governance report for 2010 on pages 55–57 and for its preparation in accordance with the Annual Accounts Act. As a basis for The Board of Directors has the overall responsibility for ensuring the Group has effective internal controls. The President is responsible for ensuring that processes and organization are in place that guarantee internal control and the quality of financial reporting. Studsvik has no special internal audit function. Review of internal controls is carried out by the Group Accounting and Finance function as an integrated aspect of the work of the business and finance controllers, which the Board has found to be appropriate in light of the Group's size and complexity. The review is based on an overall risk analysis and on checklists and question lists in material for self-assessment that are subsequently verified from the point of view of materiality through direct examination. The outcome of the examination is reported to the Audit Committee and the Board. The Group has relatively few operating units, for the most part with well-established processes. Structural and policy documents in the form of policies, guidelines and instructions have been drawn up to ensure a common view and method of working within the Group. These include among other things:

• • Authorization manual
• • Budget and business plans
• • Cash management
• • Financial reporting
• • Financing
• • Investments and acquisitions
• • Project management and risk analysis
• • Risk management and insurance
• • Foreign currency hedging

Control activities are carried out regularly by the Group's controller organization, and at company level within various parts of the accounting and reporting process. The control activities focus on known risks, but they are also intended to identify and correct any errors and non-conformities. Processes and systems are examined regularly with a view to identifying areas for improvement.

Corporate responsibility activities

Studsvik conducts systematic corporate responsibility activities to ensure good working conditions inside and outside the Group. For Studsvik, corporate responsibility entails a commitment to follow the principles of sustainable development. This also includes economy, environment, health and safety as well as ethical and social aspects. The Group's Code of Conduct is the cornerstone of corporate responsibility activities.

Studsvik has prepared a separate Corporate Responsibility Report for 2010 in accordance with level B of the Global Reporting Initiative (GRI), published on www.studsvik.se.

our opinion that the corporate governance report has been prepared and is consistent with the other parts of the annual accounts and consolidated accounts, we have read the corporate governance report and assessed its statutory content based on our knowledge of the company.

A corporate governance report has been prepared and its statutory content is consistent with the other parts of the annual accounts and the consolidated accounts.

Stockholm, March 14, 2011 PricewaterhouseCoopers AB

Magnus Brändström Authorized public accountant

Board of Directors and auditors

Anders Ullberg

Danderyd, born in 1946 Chairman since 2007 Former President and CEO of SSAB, Svenskt Stål. Chairman of the board of Boliden and Eneqvistbolagen and member of the board of Atlas Copco, Beijer Alma, Norex International, Sapa, Valedo Partners and Åkers Chairman of the Swedish Financial Reporting Board and member of the Swedish Corporate Governance Board Education: M.Sc. (Business and Economics)

Holding: 30,000 shares

Anna Karinen

Sparreholm, born in 1963 Member since 2003, Vice Chairman since 2007 Self-employed, in commercial real estate management, member of the board of the Flen branch of Handelsbanken. Education: Bachelor of laws Holding: 1,327,492 shares

Jan Barchan

Malmö, born in 1946 Member since 2004 CEO of Briban Invest AB, Chairman of the Board of ConnectBlue AB and board member of TAT AB, Assistera AB and Skånemejerier Education: M.Sc. (Business and Economics) Holding: 1,283,492 shares

Lars Engström

Örebro, born in 1963 Member since 2008 President and CEO of Munters AB Education: M.Sc. (Engineering) Holding: 3,500 shares

Alf Lindfors

Östhammar, born in 1946 Member since 2006 Senior adviser, former head of the Electricity Generation business area and Vice President of Vattenfall AB Education: M.Sc. (Engineering) and postgraduate qualification in reactor technology Holding: 0 shares

Per Ludvigsson

Råå, born in 1943 Member since 2008 Chairman of the board of the Inter IKEA Group, member of the board of IKANO and Briban Invest AB Education: M.Sc. (Business and Economics) Holding: 3,000 shares

Agneta Nestenborg

Södra Sandby, born 1961 Member since 2010 Head of Division Hydro Power, Vattenfall Power Consultant AB Education: PhD and MBA Holding: 1,000 shares

EMPLOYEE REPRESENTATIVES

Maria Lindberg

Nyköping, born in 1964 Member since 2006, alternate 1999–2006 Representative of the Swedish Association of Graduate Engineers. Works as Senior Specialist at Studsvik Nuclear AB Education: Ph.D. in physical chemistry Holding: 200 shares

Roger Lundström

Nyköping, born in 1966 Member since 2005, alternate 2003–2005 Representative of Unionen. Works in microscopy and damage analysis at Studsvik Nuclear AB Education: Mechanical engineer Holding: 0 shares

Lena Bergström

Nyköping, born in 1970 Alternate since 2008 Representative of the Swedish Association of Graduate Engineers. Business manager in waste management at Studsvik Nuclear AB Education: M.Sc. (Business and Economics) Holding: 0 shares

Per Ekberg

Nyköping, born in 1959 Alternate since 2006 Representative of Unionen. Works in the materials research department at Studsvik Nuclear AB Education: Power generation technology Holding: 100 shares

AUDITOR

Magnus Brändström

Born in 1962 Authorized public accountant, PricewaterhouseCoopers AB, Stockholm Auditor of Studsvik since 2003

Anders Ullberg Alf Lindfors

Jan Barchan

Lars Engström

Per Ludvigsson Anna Karinen Roger Lundström

Agneta Nestenborg

Lena Bergström

Per Ekberg

Executive Group Management

Magnus Groth

President and Chief Executive Officer Education: M.Sc. (Engineering) and M.Sc. (Business and Economics) Year of birth: 1963 Year of employment: 2005 Background: Vattenfall AB, Enron Nordic Energy AS, Boston Consulting Group Directorships: Board member of Acando AB and Pilum AB Holding: 3,200 shares

Jerry Ericsson

Executive Vice President and Chief Financial Officer Education: M.Sc. (Business and Economics) Year of birth: 1951 Year of employment: 1984 Background: Controller and CFO in various industries, at top management level since 1978 Holding: 16,600 shares

Sten-Olof Andersson

Head of Studsvik Germany and director, Groupwide projects and company acquisitions Education: Engineer Year of birth: 1955 Year of employment: 1996 Background: Project management and international sales in ABB's Power Generation segment, President of subsidiaries in the Studsvik Group Holding: 5,800 shares

Magnus Arbell

President, Studsvik Nuclear AB Education: M.Sc. (Materials Technology) Year of birth: 1963 Year of employment: 2008 Background: President of Stiebel-Eltron AB, President of Sveaverken AB, President of Kverneland Group Sweden, development engineer ABB Atom, chairman of Sörmland Provincial Bank Holding: 0 shares

Mats Fridolfsson

Head of Studsvik Sweden Education: System scientist, post-secondary education in Norrköping and Linköping University Year of birth: 1962 Year of employment: 2010 Background: Alstom Power Sweden AB, including as site manager at Oskarshamn nuclear power plant, Flextronics Holding: 0 shares

Lewis Johnson

Head of Studsvik USA Education: Master of International Business Administration Year of birth: 1962 Year of employment: 2007 Background: President and CEO of Radatec, Inc Holding: 0 shares

Sam Usher

Head of Studsvik UK Education: MEng Chemical Engineering, MSc Engineering Management, CEng Chartered Engineer Year of birth: 1969 Year of employment: 2008 Background: Plant Manager BNFL Sellafield, Business, Project and Strategic Development Manager, AMEC Holding: 0 shares

Magnus Groth

Sten-Olof Andersson

Magnus Arbell

Lewis Johnson Sam Usher

Mats Fridolfsson

Five year review

CONDENSED INCOME STATEMENTS

SEK million	2006	2007	2008	2009	2010
Net sales	1,219.6	1,314.7	1,285.9	1,216.3	1,344.1
Cost of services sold	–906.5	–1,000.1	–986.3	–949.4	–1,027.2
Gross profit	313.1	314.6	299.6	266.9	316.9
Selling and marketing costs	–44.6	–53.8	–52.1	–52.0	–52.8
Administrative expenses	–164.2	–180.4	–194.8	–201.1	–186.6
Research and development costs	–39.8	–41.8	–44.8	–46.1	–40.3
Participation in associated company's profit before tax	-	-	8.5	13.1	7.3
Other, net	6.8	23.5	–3.7	–10.8	–11.1
Operating profit/loss	71.3	62.1	12.7	–30.0	33.4
Net financial items	–14.2	–16.1	–12.0	–19.7	–19.1
Profit after financial items	57.1	46.0	0.7	–49.7	14.3
Tax on profit for the year	–22.3	1.2	0.4	14.5	–10.3
NET PROFIT/LOSS FOR THE YEAR	34.8	47.2	1.1	–35.2	4.0

CONDENSED BALANCE SHEETS

SEK million	2006	2007	2008	2009	2010
Assets
Goodwill	304.7	311.7	363.0	342.3	313.4
Other non-current assets	523.6	530.9	661.5	720.8	701.2
Trade receivables	189.2	206.0	201.7	228.3	239.7
Other non-interest bearing current assets	92.3	120.5	136.9	87.2	104.3
Cash and cash equivalents and current investments	247.6	176.9	147.7	74.7	68.4
Total assets	1,357.4	1,346.0	1,510.8	1,453.3	1,427.0
Equity and liabilities
Equity	558.7	568.4	610.5	540.9	520.5
Non-controlling interests	-	3.4	0.3	0.3	0.3
Non-current interest-bearing liabilities	307.4	196.4	350.5	284.5	146.0
Non-current non interest-bearing liabilities	109.7	110.2	137.0	181.3	273.0
Current interest-bearing liabilities	39.8	122.3	37.7	85.4	129.9
Current non interest-bearing liabilities	341.8	345.3	374.8	360.9	357.3
Total equity and liabilities	1,357.4	1,346.0	1,510.8	1,453.3	1,427.0

CONDENSED CASH FLOW STATEMENTS

SEK million	2006	2007	2008	2009	2010
Operating profit/loss	71.3	62.1	12.7	–30.0	33.4
Reversal of depreciation/amortization	53.8	60.1	67.2	75.2	68.6
Other non-cash items	–3.1	–22.6	–6.2	18.0	4.8
Cash flow from operating activities	122.0	99.6	73.7	63.2	106.8
Net financial items	–14.1	–16.1	–13.0	–21.4	–15.7
Taxes	–2.4	–6.8	1.2	–3.1	–12.3
Cash flow before changes in working capital	105.5	76.7	61.9	38.7	78.8
Changes in working capital	–1.4	–37.7	–32.4	–17.3	28.7
Cash flow before investments	104.1	39.0	29.5	21.4	107.5
Investments	–344.7	–122.4	–103.3	–83.1	–52.8
Cash flow after investments	–240.6	–83.4	–73.8	–61.7	54.7

DATA PER SHARE	2006	2007	2008	2009	2010
Number of shares at close of period	8,218,611	8,218,611	8,218,611	8,218,611	8,218,611
Average number of shares	8,218,611	8,218,611	8,218,611	8,218,611	8,218,611
Earnings per share before dilution, SEK	4.24	5.65	–0.05	–4.28	0.49
Earnings per share after dilution, SEK	4.24	5.65	–0.05	–4.28	0.49
Equity per share, SEK	67.97	69.58	74.32	65.82	63.37

KEY FINANCIAL FIGURES AND RATIOS	2006	2007	2008	2009	2010
Margins
Operating margin, %	5.8	4.7	1.0	neg	2.5
Profit margin, %	4.7	3.5	0.1	neg	1.1
Return on investment
Return on operating capital, %	13.0	9.0	1.6	neg	4.3
Return on capital employed, %	11.3	7.9	2.1	neg	4.4
Return on equity, %	6.2	8.2	0.2	neg	0.8
Capital structure
Operating capital, SEK million	658.3	713.6	851.3	836.5	729.3
Capital employed, SEK million	905.8	890.5	999.0	911.2	797.7
Equity, SEK million	558.7	571.8	610.8	541.2	520.8
Net interest-bearing debt, SEK million	99.6	141.8	240.5	295.3	208.5
Net debt/equity ratio	0.2	0.2	0.4	0.5	0.4
Interest coverage ratio, multiple	2.5	2.9	1.0	neg	1.6
Equity-assets ratio, %	41.2	42.5	40.4	37.2	36.5
Cash flow
Self-financing ratio, multiple	0.3	0.3	0.2	0.3	2.1
Investments, SEK million	344.7	127.3	108.4	81.6	25.6
Employees
Average number of employees	1,279	1,141	1,130	1,132	1,169
Net sales per employee, SEK million	1.0	1.2	1.1	1.1	1.1

Definitions of key figures and ratios

Equity

The total of non-restricted and restricted equity at the end of the year. Average equity capital has been calculated as opening balance plus closing balance of equity capital, divided by two.

Equity per share

Equity divided by the number of shares at the end of the period.

Investments

Total of the acquisition of businesses/subsidiaries and acquisition of intangible assets and property, plant and equipment.

Average number of employees

Average number of employees at the end of each month.

Net sales per employee

The year's net sales divided by the average number of employees.

Net debt-equity ratio

Interest-bearing net debt divided by equity including non-controlling interests.

Operating capital

The balance sheet total less non interest-bearing liabilities, current investments, cash and bank balances. Average operating capital has been calculated as opening balance plus closing balance of operating capital, divided by two.

P/E ratio

The share price divided by earnings per share.

Self-financing ratio

Cash flow before investments divided by investments.

Equity-assets ratio

Equity including non-controlling interests as a percentage of the balance sheet total.

Capital employed

Balance sheet total less non interest-bearing liabilities. Average capital employed has been calculated as opening balance plus closing balance of capital employed, divided by two.

Earnings per share

Profit for the year divided by the average number of shares. The average number of shares has been calculated as a weighted average of all shares in issue for the year.

Return on equity

Profit for the year as a percentage of average equity.

Return on operating capital

Operating profit as a percentage of average operating capital.

Return on capital employed

Profit/loss after financial items with financial expenses added back, as a percentage of average capital employed.

Net interest-bearing debt

Total of current and non-current interest-bearing liabilities less current investments and cash and bank balances.

Interest coverage ratio

Profit after financial income divided by financial expense.

Operating margin

Operating profit/loss after depreciation as a percentage of net sales.

Profit margin

Profit/loss after financial items as a percentage of net sales.

Worldwide

SWEDEN

Studsvik AB P. O. Box 556 SE-611 10 Nyköping Sweden Visiting address: V Trädgårdsgatan 38, Nyköping Tel: +46 155 22 10 00 Fax: +46 155 26 30 00

Studsvik Nuclear AB SE-611 82 Nyköping Sweden Besöksadress: Studsvik Tel: +46 155 22 10 00 Fax: +46 155 26 30 70

Studsvik Scandpower AB Stensborgsgatan 4 SE-721 32 Västerås Sweden Tel: +46 21 41 57 70

ALARA Engineering AB Stensborgsgatan 4 SE-721 32 Västerås Sweden Tel: +46 21 448 07 61

FRANCE Studsvik SAS Centre d'Affaires EURIPOLE 17 rue de Sancey ZA des Vauguillettes III F-89100 Sens France Tel: +33 3 86 66 60 75

Fax: +33 3 86 66 60 76

JAPAN Studsvik Japan Ltd Nakamura Bldg. 3F 2-7-14 Shibuya, Shibuya-ku Tokyo 150-0002 Japan Tel: +81 3 5464 3771 Fax: +81 3 5464 3708

NORWAY Studsvik Scandpower AS P.O. Box 15 NO-20027 Kjeller

Norway Visiting address: Instituttveien 10, Kjeller Tel: +47 648 445 30 Fax: +47 648 445 31

SWITZERLAND Studsvik Scandpower Suisse GmbH Klausenstrasse 21

CH-5525 Fischbach-Göslikon Switzerland Tel: +41 79 319 1501

UNITED KINGDOM

Studsvik UK Ltd Unit 14, Princes Park Fourth Avenue Team Valley Trading Estate Gateshead Tyne & Wear NE11 0NF United Kingdom Tel: +44 191 482 1744 Fax: +44 191 482 1747

GERMANY

Studsvik Scandpower GmbH Rathausallee 28 DE-22846 Norderstedt Germany Tel: +49 40 3098 088 10 Fax: +49 40 3098 088 88

Studsvik GmbH & Co. KG Karlsruher Str. 20 DE-75179 Pforzheim Germany Tel: +49 7231 58695 01 Fax: +49 7231 58695 02

USA

Studsvik Scandpower, Inc. 1087 Beacon Street, Suite 301 Newton, MA 02459-1700 USA Tel: +1 617 965 7450 Fax: +1 617 965 7549

Studsvik, Inc. 5605 Glenridge Dr, NE Suite 705 Atlanta, GA 30342 USA Tel: +1 404 497 4900 Fax: +1 404 497 4901

Studsvik Processing Facility Memphis, LLC 2550 Channel Ave P.O. Box 13143 Memphis, TN 38113 USA Tel: +1 901 775 0690 Fax: +1 901 775 0629

Studsvik Processing Facility Erwin, LLC 151 T.C. Runnion Rd Erwin, TN 37650 USA Tel: +1 423 735 6300 Fax: +1 423 743 0794

Studsvik AB (publ) Annual Report 2010 Org nr 556501-0997

© Studsvik AB (publ)

This report is a translation of the Swedish statutory report. In the event of any discrepancies between this document and the Swedish original, the latter shall govern. The content of this annual report may not, in whole or part, be reproduced or stored in a machine-readable medium without the previous permission of Studsvik AB (publ).

Production: Meze Design Group AB, Comir AB Photo: Jan Lindblad Jr, Janne Höglund, Mattias Bardå and others Printing: Österbergs Tryckeri

Studsvik AB (publ)

Västra Trädgårdsgatan 38 P.O. Box 556 SE-61110 Nyköping Sweden Telephone +46 155 2210 00 www.studsvik.com