Studsvik — Annual Report 2011

May 28, 2012

Annual Report 2011

Information to shareholders

ANNUAL GENERAL MEETING OF SHAREHOLDERS, APRIL 26, 2012

The Annual General Meeting will be held in Stockholm, World Trade Center, Klarabergs viadukten 70 / Kungsbron 1, on Thursday, April 26, 2012, at 4 p.m.

Notifi cation of attendance

Shareholders wishing to participate must be registered in the share register kept by Euroclear Sweden AB by April 20, 2012, and must give notifi cation of their intention to attend by April 20 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 +46 155 26 30 00, or
• via Studsvik's website, www.studsvik.com.

The shareholder's notifi cation should state

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

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 20, 2012.

Nomination committee

Studsvik's Nomination Committee consists of:

• Bill Tunbrant, representative of the Karinen family (chairman)
• Stina Barchan, Briban Invest AB
• Erik Feldt, 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 2012

• Report on the fi rst quarter as at March 31	April 26, 2012
• Report on the fi rst half year as at June 30	July 20, 2012
• Report on the three fi rst quarters as at September 30	October 26, 2012
• Year-end report 2012	February 2013
• Annual report 2012	April 2013

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

Contents

Facts about Studsvik	2
President's comments	3
Administration report Business activities of the Group Market Studsvik's areas of operation	4 4 4 5
Sales and earnings Profi tability Financial targets Investments	6 6 6 6
Research and development Comments on the Group's operating segments Parent company Benefi ts to senior management Employees	6 7 12 12 12
Safety, sustainable development and the environment Social commitment Decommissioning of nuclear facilities Risk management The Studsvik share Corporate governance Outlook Proposed distribution of profi ts	12 12 13 13 15 17 17 17
Financial statements Group statement of comprehensive income Group statement of fi nancial position Group statement of cash fl ow Parent company income statement Parent company balance sheet Parent company cash fl ow statement Notes to the consolidated accounts Notes to the parent company accounts Audit report	18 18 19 21 22 23 25 26 48 53
Corporate governance	54
Board of Directors and Auditors	58
Executive Group Management	60
Five-year review	62
Defi nitions of key fi gures and ratios	64

Facts about Studsvik

This is Studsvik

Studsvik delivers services to the international nuclear power industry. We treat, stabilize and reduce the volume of low and intermediate level waste in our own facilities in Sweden, England and the USA. We test materials and reactor fuel in qualifi ed laboratories in Sweden and offer software and consultancy services to streamline the operation of nuclear power plants. We also carry out work directly on site at the customers' nuclear power plants in connection with maintenance, modernization and decommissioning.

Demand for services 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.

2011 in brief

• Improved earnings, strong cash fl ow and substantially reduced net debt.
• Germany's decision to phase out nuclear power had a negative impact on profi tability in Germany.
• A seven-year agreement worth SEK 94.5 million was signed with EDF Energy. Studsvik will carry out tests of fuel and fuel material. The contract can be extended by another 10 years.
• An agreement worth SEK 84 million was signed with LLW Repository Ltd for treating 5 heat exchangers from the closed Magnox nuclear power station in Berkeley in 2012.
• Studsvik's fi rst major order on the rapidly growing Chinese market was signed with CIAE (China Institute of Atomic Energy) for delivery of software for a total value equivalent to SEK 5.8 million.
• Anders Jackson was appointed President and CEO of Studsvik AB.

Mission

To offer specialist services, characterized by innovation, effi ciency and safety, to the international nuclear power industry in the areas of waste management, decommissioning, engineering and services and operating effi ciency.

Strategies

Growth with profi tability

We are strengthening our position and profi tability through organic growth in combination with alliances and acquisitions.

Products and services

We focus on products and services that increase customers' profi tability, help to improve safety and make it easier for customers to be environmentally accountable. We have a long tradition of maintaining a high innovation rate and develop our own technology and methods on the basis of the customer's requirements.

Market

We conduct operations in a market with high barriers to entry. Our 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 suffi cient.

Partners and collaboration

We operate independently on the market, but develop proprietary services in close collaboration 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

Our organization typically has short decision lines and a clear geographical management structure with sharp focus on profi tability and customer satisfaction.

2011	2010
1,200.7	1,344.1
53.6	33.4
40.7	14.3
2.77	0.49
4.5	2.5
37.7	36.5
66.77	63.37
1,153	1,169

President's comments

2011 meant increased effectiveness and profi tability, as we positioned ourselves in a number of growing markets. Asian economies, particularly China and India, represent interesting future growth opportunities, due to their plans for substantial expansion of nuclear power. I also see interesting opportunities for Studsvik in Europe and the USA. Most of the 400 or more nuclear power reactors operating in the world today were built in the period 1970–1990. The majority of them need to be modernized or replaced and decommissioned in the next decade due to their age. This creates a growing market, in which Studsvik's services in operating effi ciency, decommissioning and waste treatment are in demand.

The Board of Directors of Studsvik AB appointed Anders Jackson as President and Chief Executive Officer of Studsvik AB on August 24, 2011. Anders Jackson took up his position on January 1, 2012.

There is also great development potential internally at Studsvik. By evaluating and focusing on what we supply I believe in future we can not only improve profi tability, but also make our customer offering distinct.

All in all, these factors create opportunities. At the same time, fi nancial resources are needed to meet expected future growth in demand and to become even more skillful. In view of this, it is positive that our operating profi t increased by SEK 20.2 million in 2011, while at the same time cash fl ow from operating activities improved to SEK 151.1 million and net debt decreased. It is also positive that we increased effi ciency in Global Services and improved earnings in the USA.

Germany, which accounted for 30 per cent of Studsvik's sales and 34 per cent of the operating profi t in 2011, is excepted from my positive picture of the nuclear power market. The German parliament decided during the year to phase out nuclear power. Eight reactors were shut down as early as in March, while the remaining nine reactors are to be phased out during the period 2015– 2022. The decision meant an instantaneous decrease in the market for service and maintenance. However, our business in the neighboring countries Belgium and Switzerland, like our consulting operations, developed positively and compensated somewhat for the decline in Germany. We are adapting to the new conditions and in the long term I see a substantially increased decommissioning market in Germany.

Global Services continued to experience positive develop ment. For one thing, a great many new nuclear power plants are being built in the world and for another, major investments are being made to improve the effi ciency of older nuclear power facilities. Sales declined somewhat compared with the previous year within the framework of normal variations, while earnings and profi tability improved as a consequence of internal effi ciency improvement efforts. At the same time, tendering activity is good, despite the initial negative effects on demand after the natural disaster in Japan. In 2011 Studsvik signed a large number of orders in the materials technology area and consulting operations continued to grow vigorously. Demand for Studsvik's core monitoring software, which is used by about half of the world's nuclear power plants, was strong.

Capacity utilization in the segment Sweden was high throughout the year in the metal recycling facility and our operations for treatment of non-nuclear waste showed positive development.

Sales in the United Kingdom rose by more than 40 per cent. The infl ow of orders increased successively and productivity for the metal recycling facility, MRF, improved. Earnings improved, but we did not achieve a positive operating profi t.

In the USA we increased output volumes in both production facilities, while effi ciency in treatment processes improved, contributing to improved earnings compared with 2010. We did not succeed so well in the USA-based consulting operations, however, but the order situation improved towards the end of the year.

The foundations were laid in 2011 for continued growth. We improved earnings signifi cantly despite Fukushima and succeeded in winning our fi rst contracts in new markets in China and Russia. It is very gratifying to note that Global Services and the Swedish operations continue to show stable profi tability, the operations in the United Kingdom are growing and profi tability in the USA is back at satisfactory levels. The work of our future positioning in Germany will be a priority area in 2012, while we focus on growth-promoting measures for Studsvik's stable operations to ensure that we retain and develop a strong position in the nuclear power market.

Nyköping in February 2012

Anders Jackson

Administration report

The Board of Directors and the President of Studsvik AB (publ), corporate identity number 556501-0997, hereby submit the annual accounts for 2011.

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, effi ciency 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 effi ciency and decommissioning.

The Group's operations are conducted in fi ve 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

New construction, effi ciency improvement and dismantling

In 2011 the International Atomic Energy Agency (IAEA) increased its forecast for future world electricity demand. The organization predicts that demand will have more than doubled by 2030. At the same time environmental requirements will increase for reduced carbon dioxide emissions. Consequently, it is projected that electricity generation from nuclear power plants will rise by more than 40 per cent in the same period. More than 60 new countries have expressed an interest in building nuclear power plants. The major part of the world's energy from nuclear power plants is, however, expected even in the future to be produced in the 29 countries that already use nuclear power as an energy source. Of these, 24 countries plan to increase their production of nuclear power generated electricity.

There are currently 441 active reactors in the world, while 66 new reactors are being built or are being planned. Growth is greatest in Asia, mainly in China, India and South Korea, but also in east and west Europe, in countries such as Finland and France, and in the USA. Two thirds of new construction is expected to take place in Asia.

Of the 441 nuclear power plants in operation, 358 are 20 or more years old. Many countries have decided to implement effi ciency enhancement programs to extend the life in relation to the expected 30–40 years initially planned for.

Studsvik is favored both by new construction and effi ciency enhancement, 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 fuel for existing and new reactor designs and demand for software is increasing. Engineers carry out safety and radiological studies for the planned nuclear power plants and in connection with effi ciency improvements 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 20 reactors in the next few years. Many countries have also started to deal with facilities and waste from the 1950s and 1960s, when the fi rst power-generating reactor types were developed and military use of nuclear energy increased. By treating and compressing waste, Studsvik can reduce waste volume and at the same time chemically stabilize the material, which reduces storage costs and assists 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 fi nal disposal in its country of origin. This means that Studsvik receives and treats low and intermediate level waste from European countries such as England, Germany, Italy and Finland.

In 2011 Germany decided to phase out nuclear power, which means that the eight reactors temporarily shut down in March 2011 will continue to be shut down and that the remaining nine reactors will be phased out in the period 2015–2022. The German market for service and maintenance will decline permanently, as 40 per cent of the reactors have been taken out of operation. The market for dismantling and management of waste from the German nuclear power industry will, however, in the long run increase as an effect of the decision.

In other segments the market and operations reported positive development. The major natural disaster in Japan in March 2011 reduced demand in some areas instantaneously, but this decline gradually slowed during the year. During the year Studsvik signed a number of important orders, including in the United Kingdom, China and Russia.

Well positioned

Studsvik offers services in all the phases of a nuclear power plant, which means that the company benefi ts 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, while methods for treating the waste must be identifi ed. Studsvik competes in this area mainly with consultants that do not specialize

Studsvik's areas of operation

Top left: Waste Treatment: arrival of steam generator at the facility in Sweden, top right: Decommissioning – decontamination work in Germany. Bottom left: Engineering and Services in Germany, bottom right: Operating efficiency – analysis at the laboratory in Sweden.

in nuclear technology, such as the Swedish companies Sweco and ÅF, as well as the British companies Aker Solutions and AMEC.

In the operating effi ciency area, customers often have their own competence and operations, while some research institutions offer this type of service. There are, however, hardly any 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.

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 OPERATION

Waste Treatment

All waste generated by the nuclear power industry, both during the operating and decommissioning phases, must be sent for fi nal disposal to special facilities. There is a major environmental and economic value in reducing and chemically stabilizing these volumes.

Studsvik has developed world-leading methods for treating different types of nuclear waste. The methods considerably reduce the customers' costs for subsequent management and storage. Studsvik processes and treats waste in its own facilities, but also carries out services directly at customers' facilities.

Services that are carried out at customers' own sites include for example, characterization, sorting and packaging of waste, stabilization and solidifi cation 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 and fi nal disposal. Large volumes of metallic material can be recycled after Studsvik's processing.

Organic waste is usually treated using various thermal processes to achieve a chemically stable product suitable for storage or fi nal disposal, but is also measured 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 THOR SM, which can be used to treat both dry and wet low-level and intermediatelevel waste. The technique has particular advantages when treating wet waste, such as ion-exchange resins.

Metallic materials are cleaned using different mechanical 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

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.

Decommissioning of nuclear facilities, which is in progress in several countries, is a long and complicated process. Studsvik's services cover the entire decommissioning and dismantling process, from feasibility studies, planning and project management to practical dismantling and sub sequent waste treatment. Studsvik has developed its own technology and equipment for certain dismantling and demo lition 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 continental Europe with multi-year partner contracts. The services cover qualifi ed consultancy services and mechanical service, as well as decontamination and health physics at nuclear power plants.

Operating Effi ciency

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 profi tability when operating a nuclear power plant. By increasing burn-up of reactor fuel, 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 worldleading.

SALES AND EARNINGS

Sales amounted to SEK 1,200.7 million (1,344.1), a decrease in local currencies of 6.3 per cent. The operating profi t increased by SEK 20.2 million to SEK 53.6 million (33.4). Foreign exchange effects impacted the operating profi t by SEK –5.1 million (–6.0).

The major natural disaster in Japan had a negative effect on the Group at the beginning of the year. The events in Japan in March initially meant that orders were postponed and in some cases cancelled. However, the negative effects gradually subsided during the year. The natural disaster in Japan caused Germany to shut down eight nuclear reactors and later in the year to legislate on a phase out of nuclear power by 2022. The decision drastically altered the conditions for Studsvik's operations in service and maintenance in Germany, as 40 per cent of the service and maintenance market immediately disappeared. Developments in Germany are the main reason for the decrease in the Group's sales in 2011 and operations in Germany had to be adapted to the new conditions. Operations in the United Kingdom developed positively in the fi rst three quarters of the year. In the fourth quarter some incoming deliveries of metallic material to the metals recycling facility were delayed, with consequent low capacity utilization. All in all, however, the United Kingdom developed positively and operations reported an improvement in earnings compared with 2010. In Sweden capacity utilization was high in the metals recycling facility, while volumes in the incineration operations fell somewhat. The USA developed positively as a combination of increased volumes and improved effi ciency in the processes. The positive development in Global Services continued, with high capacity utilization in materials technology and consulting operations. The software operations reported the second best year in their history.

PROFITABILITY

The Group's operating margin was 4.5 (2.5) per cent and the profi t margin was 3.4 (1.1) per cent. Capital employed decreased by SEK 30.2 million to SEK 767.5 million. The turnover rate of capital employed was 1.6 (1.6) and the return on capital employed was 9.1 (4.4) per cent.

FINANCIAL TARGETS

Studsvik's overall fi nancial 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.

INVESTMENTS

The Group's investments were SEK 55.4 million (25.6). The increased investments mainly refer to erection of a pyrolysis facility in Sweden, SEK 21.5 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. Identifi able expenditure for the development of new processes and products is capitalized to the extent it is expected to bring economic benefi ts.

In 2011 total expenditure for internally funded research and development amounted to SEK 28.4 million (40.3). The greatest resources were allocated to Studsvik's in-core fuel management codes and to reactor operation. In software development the expenditure is a combination of maintenance of existing software and new development.

SWEDEN	Key ratios					Percentage of sales
	Amounts in SEK million	2008	2009	2010	2011		14%
	Sales	152.4	171.3	179.9	167.3
	Operating profi t	30.7	27.7	19.9	19.8
	Operating margin, %	20.1	16.2	11.1	11.9
	Investments	7.8	7.7	8.4	26.1
	Number of employees	78	90	92	92

The melting plant in Studsvik.

Studsvik treats and reduces the volume of low level waste on behalf of customers mainly in the nuclear power industry. The segment holds a unique position in the European market in the areas of incineration and thermal treatment of dry waste and treatment of metal scrap and large components. Studsvik also has a special position in Sweden as regards treating radioactive waste from nonnuclear activities, such as hospitals, universities and the process industry. The waste is handled and treated at the customer's site or in Studsvik's facility outside Nyköping.

Capacity utilization was high throughout 2011 in the metals recycling facility, while the area of treatment of nonnuclear waste developed positively. In 2011 more than 3,000 tonnes of metallic material was treated, an increase of 40 per cent compared with 2010. Capacity utilization at the incineration facility was high for most of 2011, but the production volume decreased somewhat on an annual basis as a result of lower volumes from the German market. All in all, product mix and processes improved, which had a positive impact on profi tability.

At the beginning of the year Studsvik signed a 20-year agreement with Westinghouse Sweden for treatment of uranium-contaminated waste, with a method using pyrolysis instead of incineration. The total order value is SEK 130 million over a 20-year period. The waste will be treated in a pyrolysis facility which Studsvik built in 2011 adjacent to the existing incineration facility in the Studsvik area. The new facility, which comes into operation in early 2012, has the capacity to treat waste from other customers as well.

An agreement was also signed with the Ringhals nuclear power plant in Sweden for treatment of three steam generators, which is worth about SEK 50 million. The treatment, which was started in 2011 at Studsvik's facilities, aims to recycle most of the metal in these large components.

In May 2009 Studsvik signed an order for treatment of steam generators from Bruce Power in Canada. The fi rst steam generators were to have been delivered to Studsvik in 2010 under the original plan. Bruce Power has requested deferment of the shipment. Delivery is expected to take place at the earliest in 2013.

Studsvik's British operations signed an agreement on treatment of fi ve heat exchangers from the closed down nuclear power station in Berkeley. The heat exchangers are to be transported by road and sea to the Studsvik facility in spring 2012, where the components will be treated.

Sales decreased during the year to SEK 167.3 million (179.9) and the operating profi t was SEK 19.8 million (19.9). The fi gure includes value changes in foreign exchange contracts of SEK –0.4 million (–4.4). The operating margin, excluding these effects, was 12.1 (13.5) per cent.

UNITED KINGDOM

Key ratios
Amounts in SEK million	2008	2009	2010	2011
Sales	148.6	86.1	80.5	107.8
Operating loss	–3.2	–50.2	–24.2	–9.7
Operating margin, %	neg	neg	neg	neg
Investments	38.3	56.4	1.1	1.6
Number of employees	86	66	64	71

Metals Recycling Facility in Workington.

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 metals recycling facility (MRF) in Workington. Studsvik was established in the United Kingdom in 2005 with the objective of building up consulting and waste treatment operations within the framework of the national strategy for management of waste that the Nuclear Decommissioning Authority (NDA) is responsible for. In 2009 the metals recycling facility was brought into operation. Studsvik also owns 15 per cent, and URS and AREVA the remaining shares, of the umbrella organization UK Nuclear Waste Management (NWM), which is responsible for operating the United Kingdom's low-level radioactive waste repository (LLWR Ltd).

In 2011 the infl ow of orders increased, resulting in a gradual increase in capacity utilization in both consulting operations and the treatment facility. Productivity at the MRF improved compared with the previous year and NWM developed well.

At the end of the year Studsvik signed a contract with LLWR, worth SEK 84 million, for shipping and treating fi ve heat exchangers from the disused nuclear power station in Berkeley, England. A total of fi fteen heat exchangers currently remain from the original facility and the project constitutes an important step in decommissioning Berkeley. Studsvik will transport the heat exchangers by road and by sea to the facility in Studsvik outside Nyköping.

Sales increased to SEK 107.8 million (80.5). The operating loss improved to SEK –9.7 million (–24.2). NWM contributed a share in earnings of SEK 4.1 million (3.4). The operating margin was –9.0 (–30.0) per cent.

GERMANY

Key ratios
Amounts in SEK million	2008	2009	2010	2011
Sales	387.9	450.5	461.5	365.3
Operating profi t	23.3	27.8	28.8	18.4
Operating margin, %	6.0	6.2	6.2	5.0
Investments	7.8	4.1	1.8	1.3
Number of employees	594	644	661	646

Dismantling work in Obrigheim.

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. Studsvik holds a strong market position with all the German and most of the Swiss and Belgian nuclear power plants as customers. Segment Germany has also been conducting consulting operations in France since 2008.

The German parliament decided during the year that nuclear power will be phased out in Germany. Eight reactors were shut down in March 2011 and the remaining nine reactors will be gradually shut down during the period 2015–2022. The German market for service and maintenance thus decreased to a permanently lower level, as a result of 40 per cent of the reactors no longer being operational. Service and maintenance of German reactors accounts for about 40 per cent of the segment's business in Germany.

Measures were taken to meet the new market situation. During the year service and maintenance of German nuclear facilities was carried out at the planned level, while the segment's engineering services reported good growth.

Operations in neighboring countries, i.e. Belgium and Switzerland, increased during the year and compensated somewhat for the decline in Germany. The consulting operations grew by about 10 per cent.

In 2011 fewer major decommissioning projects were carried out than in the previous year, though without any negative impact on profi tability.

In October Stefan Berbner took over as head of segment Germany.

Sales decreased to SEK 365.3 million (461.5). The operating profi t was SEK 18.4 million (28.8). The operating margin was 5.0 (6.2) per cent.

USA	Key ratios
	Amounts in SEK million	2008	2009	2010	2011
	Sales	317.1	213.3	272.0	242.6
	Operating profi t/loss	–22.4	–50.0	1.4	22.6
	Operating margin, %	neg	neg	0.5	9.3
	Investments	26.4	2.6	3.5	7.4
	Number of employees	156	101	107	109

The Erwin facility in Tennessee.

Studsvik delivers waste treatment services to nuclear power producers and suppliers to the nuclear power industry in the USA. The services include treatment of low and intermediate level waste in a facility in Erwin, Tennessee, and treatment of low level waste, metallic material and large components from nuclear power plants in a facility in Memphis, Tennessee. In addition the consulting operations offer a strictly niched range of services, primarily based on Studsvik's patented pyrolysis technology THOR SM.

Production volumes increased in both of the segment's production facilities. During the year the production processes were tuned up, improving volume reduction and hence profi tability.

The customer base of the consulting operations is in the USA, France and Japan. The assignments normally run for several years. Capacity utilization was low for much of 2011, but the order situation improved towards the end of the year.

Studsvik has formed a joint venture with Energy-Solutions, SEMPRASAFE, aimed at treating waste from the nuclear power industry at the Erwin facility. This joint venture was launched in 2011 and discussions on customer contracts are in progress. The venture creates conditions for increased production volumes and a steadier infl ow of material to the Erwin facility.

Sales amounted to SEK 242.6 million (272.0) and the operating profi t improved to SEK 22.6 million (1.4). The operating margin was 9.3 (0.5) per cent.

GLOBAL SERVICES

Key ratios
Amounts in SEK million	2008	2009	2010	2011
Sales	196.0	264.3	296.6	287.9
Operating profi t	13.0	45.7	33.1	33.7
Operating margin, %	6.6	17.3	11.2	11.7
Investments	14.4	8.3	9.2	17.5
Number of employees	129	138	153	161

Q4Q3Q2Q1 Q4Q3Q2Q1 Q4Q3Q2Q1 Q4Q3Q2Q1 2008 2009 2010 2011

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 also has a considerable consulting business 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 offi ces in Europe and the USA. The software is mainly developed in the USA.

An improved product mix in combination with effi ciency improvements in the production processes increased profi tability despite a slight decrease in sales compared with the previous year. The decrease in sales is attributable to materials testing and is within the framework of normal variations. Tendering activity was good and the negative effects on demand after the natural disaster in Japan that were noted in the second quarter, declined during the rest of the year.

Sales increased in the consulting operations. Demand is strong and the operations are expanding.

In 2011 Studsvik signed a large number of orders in the materials technology area. For example, a seven-year agreement was signed with EDF Energy worth SEK 94.5 million to carry out materials testing on fuel and fuel material from AGR reactors (Advanced Gas cooled Reactors). The fuel and materials tests will be carried out at Studsvik's facilities for the purpose of supporting operation of EDF's AGR reactors in the United Kingdom. The agreement can be extended by a further ten years.

Studsvik's core monitoring software is currently used by about half of world's nuclear power plants. In 2011 the operations reported their second best earnings ever and during the year Studsvik strengthened its position in the emerging markets of Russia and China. An order worth SEK 6.5 million was signed with the Russian nuclear fuel manufacturer JSC TVEL for software and related services in 2012. JSC TVEL is a world-leading manufacturer of nuclear fuel, which is used in 74 commercial nuclear power plants and 30 research reactors in 17 countries. In addition an order was signed with the CIAE (China Institute of Atomic Energy) for delivery of software of a total value equivalent to SEK 5.8 million. The order is strategically important, as it is Studsvik's fi rst major order in the rapidly growing Chinese market, where a hundred reactors are expected to be built in the next 20 years. This agreement establishes a platform for Studsvik's growth in China, both for software and the Group's other products and services.

During the year Studsvik and the National Nuclear Laboratory (NNL) in the United Kingdom signed an agency and license agreement that gives Studsvik the right to market and sell the NNL's ENIGMA software together with its own CMS software package.

Global Services sales amounted to SEK 287.9 million (296.6). The operating profi t increased to SEK 33.7 million (33.1). The fi gure includes value changes in foreign exchange contracts of SEK –0.7 million (0.5). The operating margin, excluding these effects, was 12.0 (11.0) per cent.

PARENT COMPANY

Parent company operations comprise the co-ordination of tasks for the Group and assets mainly consist of shares in subsidiaries. Net sales for the parent company were SEK 10.9 million (10.5). The operating profi t was SEK –25.2 million (–25.6).

Profi t/loss after fi nancial items was SEK –34.2 million (27.5), including dividend from subsidiaries of SEK 17.9 million (21.4). An impairment loss of SEK 55 million was recognized in the parent company's book value of shares in subsidiaries. Parent company investments amounted to SEK 0 million (0). Cash and cash equivalents amounted to SEK 45.7 million (43.2) and interest-bearing liabilities to SEK 94.8 (135.7).

BENEFITS TO SENIOR MANAGEMENT

The Annual General Meeting held on April 26, 2011 adopted the principles for benefi ts to senior management.

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

Apart from the provisions of collective agreements or other agreements, senior management executives can arrange pension solutions on an individual basis. 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. Severance payments, apart from salary during the period of notice, may be made amounting to the equivalent of a maximum of 12 months' salary. There is more information concerning benefi ts to senior management in note 38.

The Board of Directors does not intend to propose any change in these principles at the 2012 Annual General Meeting.

EMPLOYEES

The average number of employees in the Group in 2011 was 1,153 (1,169).

Demand for the Group's services is increasing. The increase is most pronounced in the consulting area. The entire nuclear power industry is facing a generation change and therefore major efforts are being made to create attractive conditions for the Group's existing and potential employees. This, along with focused recruitment efforts, is a fundamental condition for utilizing the business opportunities that exist in a growing market.

Safe work environment

For Studsvik a safe work environment and the work of creating a strong safety culture have the highest priority. The ultimate target is the vision of zero injuries, i.e. that each unit completely avoids work-related injuries. Studsvik has a program to reduce the number of work-related injuries and the number of injuries resulting in sickness absence is gradually decreasing.

In 2011 these injuries decreased from 24 to 19. Measures are being taken to eliminate physical work environment risks both at the Group's and customers' facilities. Improved knowledge of risks and infl uencing and changing attitudes and behavior are equally important. As part of this work, all employees are encouraged to identify improvements and to report potential risks and risk behaviors. All meetings and gatherings in the Group also start off with a current safety message.

Health and health promotion

Studsvik's ambition is to offer its employees a healthy work environment and a good work-leisure balance. The goal is to maintain a high standard of health and safety work, where local statutes and ordinances constitute the lowest acceptable level. Studsvik conducts systematic health and health promotion work, mainly focused on preventive measures and rehabilitation. Sickness absence and ill health are to a great extent related to lifestyle factors. In collaboration with occupational health services, and in other ways, Studsvik takes initiatives to identify lifestyle and environmental factors that put individuals at greater risk of ill health. Employees are encouraged to take physical exercise and other measures to improve their lifestyle by means of fi nancial subsidies and through joint activities.

Equal opportunities and diversity

Studsvik values and encourages diversity in the organization in a way that refl ects the diversity in our markets. An organization made up of employees with different experience and background makes the business more innovative. The percentage of women employed was 17 (16) per cent. Studsvik does not tolerate any form of discrimination and all forms of harassment are actively opposed by the company and its managers.

SAFETY, SUSTAINABLE DEVELOPMENT AND THE ENVIRONMENT

Safety, sustainable development and environmental responsibility are integrated parts of Studsvik's business strategy. The goal is to minimize the environmental impact of operations and Studsvik's own facilities, both as regards emissions and use of resources. The operations are to supply the market and customers with sustainable solutions for safe and environmental friendly operation and decommissioning of nuclear facilities.

Studsvik has prepared a separate Corporate Respon sibility Report for 2011 in accordance with level B of the Global Reporting Initiative (GRI), published on www.studsvik.com.

SOCIAL COMMITMENT

Studsvik is dependent on the rest of the world. We are aware of that dependence and the consequences of our operations on society. Studsvik endeavors to maintain good and open communications with regions, municipalities, authorities and other stakeholders. We also aim to support the local community through cooperation with organizations and municipal administrations on matters that are strategically important for Studsvik, or where we can contribute to positive social development.

DECOMMISSIONING OF NUCLEAR FACILITIES

The operations in Studsvik's nuclear facilities in Sweden are run under license pursuant to the 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 fi nancial 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. To establish the extent of the obligation, regular cost estimates are made. 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.

The Group's Swedish facilities whose decommissioning is not covered by the Studsvik Act are governed by an Act that came into force in 2007 (2006:647). Under that Act Studsvik is fi nancially liable to ensure the 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. In 2011 the fee to the Nuclear Waste Fund was SEK 0.9 million. Studsvik assesses that the annual fee will continue 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 reported as an asset in the accounts.

For its nuclear facilities in the USA and the United Kingdom the Group makes provision 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 fi nancial 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 certifi cation 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 offi cial supervision and approval. Consequently there is a risk that the conditions governing operations may be changed through amendment or cancellation of offi cial 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 fulfi ll requirements. Studsvik may be notifi ed by regulators of alleged infringements of licensing or regulations.

As far as the management and Board of Directors can judge, Studsvik fulfi lls the requirements imposed by such regulations. The Group's high security culture means 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.

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 infl uencing 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 confi dence by doing what it can not to conduct its business in confl ict with public opinion.

Business activities focus on improving the safety profi le of nuclear power. Its approach to the world around is characterized by dialogue and the principle of maximum 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 techno logy whenever it is considered possible and fi nancially justifi able. 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, especially in the fi eld of materials testing and waste management, involves the transportation of material to and from Studsvik's facilities, which could be hindered by new legislation or amendments to international conventions. Transportation also requires offi cial approval, special equipment and/or vehicles, resulting in the possibility of prolonged delays, which can lead to deferment or 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 in our own transport organization and through the availability of our own transport packaging 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 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 confl icts that may affect operations 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 fi xed 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 qualifi ed 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 fulfi ll 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 for identifi ed risks.

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 fi nal 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 provision 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 subcontractors

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 fi nancing, decommissioning permits, and rules regulating fi nal 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 profi ts 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 fi nancial damage. The concept of damage includes personal injury, material damage and fi nancial damage. Third party liability insurance has been taken out to cover Studsvik against the fi nancial 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 (SDR = special drawing rights), equivalent to SEK 3.8 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 If P&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 at Studsvik's Swedish nuclear facilities are conducted under license pursuant to the Swedish Act on Nuclear Activities and it is therefore Studsvik's responsi bility to decommission the facilities. Under local regulations Studsvik is technically and fi nancially responsible for decommissioning the Group's US and UK facilities.

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 (WCS) for storage of this waste. WCS has offered terminal storage of the waste and the conditions for this are being negotiated.

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 54 per cent of total costs. The Group's currency exposure is greatest against USD, EUR and GBP.

Sensitivity analysis		Change	Impact on operating profi t
Price to customer	1%	+/–	SEK 12.0 million
Personnel costs	1%	+/–	SEK 6.3 million
Exchange rate USD/EUR/GBP	10%	+/–	SEK 11.9 million

THE STUDSVIK SHARE

Share price and trading

The Studsvik share is listed on the NASDAQ OMX Stockholm exchange. The share fell in 2011 by 56.4 per cent, from SEK 73 to SEK 31.80 corresponding to a market value of SEK 261 million. During the year the share price varied between a high of SEK 74 on January 3 and a low of SEK 28.60 on December 9.

In 2011, 2.876 million Studsvik shares were traded for a value of SEK 160.5 million. This corresponds to 56 per cent of the free fl oat (the value of shares that are available for trading), to be compared with 54 per cent in the previous year. The free fl oat refers to shares held by shareholders with less than 10 per cent of the capital.

Number of shares and share capital

The number of shares in Studsvik AB (publ) on December 31 2011 was 8,218,611. Each share carries one vote and entitles the owner to share equally in the company's assets and earnings. The quotient value is 1.0 and the share capital amounted to SEK 8.2 million.

Shareholders

On December 31 Studsvik had 4,183 shareholders. The percentage of shares registered abroad was 30.3 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 61.7 per cent. See pages 58 and 60 for the shareholdings of the Board of Directors and the Executive Group Management.

Shareholders, December 31, 2011	Number of shares	Holding, %
Karinen Family	1,769,552	21.5
Briban Invest AB	1,283,492	15.6
Allianz Global Investors	716,016	8.7
Credit Agricole Suisse SA	348,098	4.2
Invus Investment AB	224,800	2.7
State Street Bank, Boston	164,532	2.0
Citibank NA, London	154,273	1.9
Avanza Pensionsförsäkring AB	146,841	1.8
HSBC Trinkahaus and Burkhardt AG	136,530	1.7
Blue Whale Ltd	131,246	1.6
Total, 10 largest shareholders – holdings	5,075,380	61.7
Other shareholders	3,143,231	38.3
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, 2011

Shareholding	Number of shareholders	Number of shares	% of total shares
1 – 500	3,513	371,397	4.5
501 – 2,000	460	494,286	6.0
2,001 – 10,000	145	644,944	7.9
10,001 – 50,000	41	911,738	11.1
50,001 – 100,000	10	730,354	8.9
100,001 –	14	5,065,892	61.6
Total	4,183	8,218,611	100.0

Data per share

Amount, SEK	2007	2008	2009	2010	2011
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	155.00	55.00	65.25	73.00	31.80
Earnings per share before dilution	5.65	–0.05	–4.28	0.49	2.77
Earnings per share after dilution	5.65	–0.05	–4.28	0.49	2.77
Equity per share	69.58	74.32	65.82	63.37	66.77
P/E ratio	27	neg	neg	149	11

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 profi t after tax. Decisions on dividend proposals will, however, take into consideration Studsvik's growth potential, the strength of its balance sheet, liquid funds and fi nancial position in general. For 2011 the Board of Directors proposes a dividend of SEK 1.00 per share (0) or a total of SEK 8,219 thousand, which is equivalent to 36 per cent of the net profi t for the year.

Market maker

Remium AB has been appointed to act as market maker for the company's share.

Analysts

The Studsvik share is followed on a continuous basis by 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 fi nancial 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 54–57.

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. In Germany a decision has been made to phase out nuclear power by 2022, which will reduce demand for service and maintenance in proportion to the volume for the eight reactors that have already been taken out of operation. The German facilities taken out of operation in 2011 will be subject to decommissioning. When this process will start is as yet not clear. Decommissioning of nuclear facilities in other markets is expected to expand substantially in the long term.

PROPOSED DISTRIBUTION OF PROFITS

The Board proposes that a dividend of SEK 1.00 (0) per share be distributed for the 2011 fi nancial year. The total profi ts at the disposal of the Annual General Meeting comprise the Parent Company's non-restricted equity, SEK 614,959,350, consisting of retained earnings, SEK 649,751,668 and profi t for the year, SEK –34,792,318. The Board of Directors proposes that the profi ts be distributed as follows:

To the shareholders

SEK 1.00 per share, a total of	SEK 8,218,611
To be carried forward	SEK 606,740,739
Total non-restricted equity
in the Parent Company	SEK 614,959,350

The proposed dividend to the shareholders reduces the company's equity-assets ratio to 37.1 per cent. In light of the Group's business activities, the equity-assets ratio is adequate. It is expected that liquidity in the Company and the Group can be maintained at a satisfactory level.

Consequently, in the view of the Board, dividend can be resumed and distributed in accordance with the adopted dividend policy.

Group statement of comprehensive income

	Note	2011	2010
Net sales	4	1,200,753	1,344,106
Costs of services sold	7	–924,804	–1,027,193
Gross profi t		275,949	316,913
Selling and marketing costs	7	–46,568	–52,768
Administrative expenses	7, 8	–171,950	–186,613
Research and development costs	7	–28,401	–40,271
Share in earnings from associated companies	17, 18	7,572	7,260
Other operating income	5	21,806	3,294
Other operating expenses	6	–4,814	–14,407
Operating profi t	4, 5, 6, 7, 8, 9	53,594	33,408
Financial income	10, 12	15,090	3,830
Financial expenses	10, 12	–27,988	–22,874
Profi t before tax		40,696	14,364
Income tax	11	–17,967	–10,352
NET PROFIT FOR THE YEAR		22,729	4,012
Other comprehensive income
Translation differences on foreign subsidiaries		6,596	–28,320
Cash fl ow hedges		–1,839	5,274
Income tax on items recognized in other comprehensive income		484	–1,387
Other comprehensive income for the year, net after tax		5,241	–24,433
Total comprehensive income for the year		27,970	–20,421
Income for the year attributable to
Parent company's shareholders		22,729	4,012
Non-controlling interests		–	–
Total comprehensive income attributable to
Parent company's shareholders		27,965	–20,405
Non-controlling interests		5	–16
Earnings per share calculated on income attributable to the parent company's shareholders during the year (SEK)
– Before dilution	13	2.77	0.49
– After dilution	13	2.77	0.49

Group statement of fi nancial position

	Note	2011	2010
ASSETS
Non-current assets
Property, plant and equipment	15	481,065	490,144
Intangible assets	16	350,715	350,659
Investments in associated companies	17, 18	14,003	25,348
Deferred tax assets	31	96,676	98,291
Financial assets at fair value through profi t or loss	19, 23	55,830	46,243
Derivative fi nancial instruments	19, 21, 23	42	573
Trade and other receivables	19, 22	2,625	3,396
Total non-current assets		1,000,956	1,014,654
Current assets
Inventories	24	14,819	19,507
Trade and other receivables	19, 22	316,864	318,834
Financial assets at fair value through profi t or loss	19, 23	44	557
Derivative fi nancial instruments	19, 21, 23	1,190	5,095
Cash and cash equivalents	19, 25	122,092	68,376
Total current assets		455,009	412,369
TOTAL ASSETS		1,455,965	1,427,023
EQUITY
Capital and reserves attributable to parent company's shareholders
Share capital	26	8,219	8,219
Other contributed capital	26	225,272	225,272
Other reserves	28	3,691	–1,545
Retained earnings	27	311,309	288,580
Equity attributable to the parent company's shareholders		548,491	520,526
Non-controlling interests		287	282
Total equity		548,778	520,808
LIABILITIES
Non-current liabilities
Loans	19, 30	92,138	146,002
Derivative fi nancial instruments	19, 21, 23	1,033	948
Deferred tax liabilities	31	38,572	38,063
Pension obligations	32	6,165	5,749
Other provisions	33	238,340	215,600
Trade and other payables	29	38,012	12,605
Total non-current liabilities		414,260	418,967
Current liabilities
Trade and other payables	29	333,380	337,479
Current tax liabilities		20,310	15,935
Loans	19, 30	125,537	129,933
Derivative fi nancial instruments	19, 21, 23	5,266	1,987
Other provisions	33	8,434	1,914
Total current liabilities		492,927	487,248
Total liabilities		907,187	906,215
TOTAL EQUITY AND LIABILITIES		1,455,965	1,427,023

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share capital	Other paid-in capital	Other reserves	Retained earnings	Equity attributable to the parent company's shareholders	Non controlling interests	Total equity
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
Closing balance at December 31, 2010	8,219	225,272	–1,545	288,580	520,526	282	520,808
Opening balance at January 1, 2011	8,219	225,272	–1,545	288,580	520,526	282	520,808
Total comprehensive income for the period			5,236	22,729	27,965	5	27,970
Closing balance at December 31, 2011	8,219	225,272	3,691	311,309	548,491	287	548,778

Group statement of cash fl ow

	Note	2011	2010
Cash fl ow from operating activities
Operating profi t		53,594	33,408
Adjustment for non-cash items	34	84,246	73,458
		137,840	106,866
Interest received		777	884
Interest paid		–13,761	–16,603
Income tax paid		–12,068	–12,327
Cash fl ow from operating activities before change in working capital		112,788	78,820
Change in working capital
– Current assets		14,494	–46,111
– Other current liabilities		23,778	74,805
Cash fl ow from operating activities		151,060	107,514
Cash fl ow from investing activities
Acquisition of fi nancial assets		–7,911	–27,183
Disposals of fi nancial assets		–	1,006
Purchases of property, plant and equipment	15	–53,422	–25,275
Sale of property, plant and equipment	15	5,672	–143
Purchases of intangible assets	16	–1,978	–332
Dividend from associated companies	17, 18	20,022	10,369
Cash fl ow from investing activities		–37,617	–41,558
Cash fl ow from fi nancing activities
Loans raised	30	6,161	171
Repayments of loans	30	–65,454	–68,828
Cash fl ow from fi nancing activities		–59,293	–68,657
Change in cash and cash equivalents		54,150	–2,701
Cash and cash equivalents at beginning of the year		68,376	74,661
Translation difference		–434	–3,584
Cash and cash equivalents at end of the year	25	122,092	68,376

Parent company income statement

	Note	2011	2010
Net sales	40	10,875	10,519
Costs of services sold		–5,033	–3,105
Gross profi t		5,842	7,414
Administrative expenses	42	–32,205	–34,122
Other operating income	44	1,193	1,258
Other operating expenses	44	–45	–115
Operating loss	40, 41, 42, 43, 44	–25,215	–25,565
Result from participation in Group companies	46	–12,131	51,422
Interest income and similar items	47	21,135	12,950
Interest expense and similar items	48	–17,982	–11,356
Profi t/loss before tax		–34,193	27,451
Appropriations	49	–	–
Income tax	50	–599	–994
NET PROFIT/LOSS FOR THE YEAR		–34,792	26,457
Parent company statement of comprehensive income
Net profi t/loss for the year		–34,792	26,457
Other comprehensive income		–	–
Total comprehensive income for the year		–34,792	26,457

Parent company balance sheet

ASSETS Non-current assets Property, plant and equipment 51 – Equipment and tools 38 110 Financial assets 52 – Deferred tax assets 3,662 3,126 – Shares in subsidiaries 54 861,475 833,995 – Receivables from Group companies 166,529 251,560 Financial assets at fair value through profi t or loss 52 16,770 15,493 Total non-current assets 1,048 474 1,104,284 Current assets Inventories and goods for resale 633 661 Trade and other receivables 529 700 Financial assets at fair value through profi t or loss 44 557 Derivative fi nancial instruments 59 36 2,933 Receivables from Group companies 26,080 32,144 Prepaid expenses and accrued income 53 1,135 1,165 Cash and cash equivalents 45,712 43,208 Total current assets 74,169 81,368 TOTAL ASSETS 1,122,643 1,185,652 EQUITY Equity Share capital 8,219 8,219 Restricted reserves 225,272 225,272 Total restricted equity 233,491 233,491 Non-restricted equity Non-restricted reserves 649,751 623,294 Net profi t/loss for the year –34,792 26,457 Total non-restricted equity 614,959 649,751 Total equity 848,450 883,242 Untaxed reserves – – LIABILITIES Non-current liabilities Liabilities to credit institutions 55 12,710 37,518 Deferred tax liabilities – 606 Liabilities to Group companies 49,443 40,466 Other liabilities 11,342 11,261 Total non-current liabilities 73,495 89,851 Current liabilities Liabilities to Group companies 105,504 99,104 Trade payables 1,847 2,530 Liabilities to credit institutions 55 82,097 98,215 Income tax liability 1,029 3,142 Derivative fi nancial instruments 59 2,530 628 Other liabilities 726 1,346 Accrued expenses and deferred income 56 6,965 7,594 Total current liabilities 200,698 212,559 Total liabilities 274,193 302,410 TOTAL EQUITY AND LIABILITIES 1,122,643 1,185,652	Note	2011	2010

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

	Share capital	Statutory reserve	Non-restricted equity	Total equity
Opening balance at January 1, 2010	8,219	225,272	623,294	856,785
Comprehensive income
– Net profi t for the year			26,457	26,457
Closing balance at December 31, 2010	8,219	225,272	649,751	883,242
Opening balance at January 1, 2011	8,219	225,272	649,751	883,242
Comprehensive income
– Net loss for the year			–34,792	–34,792
Closing balance at December 31, 2011	8,219	225,272	614,959	848,450

Parent company cash fl ow statement

	Note	2011	2010
Cash fl ow from operating activities
Operating loss		–25,215	–25,565
Adjustment for non-cash items		–1,124	–950
		–26,339	–26,515
Interest received		5,637	6,718
Profi t from shares in Group companies		47,869	61,422
Interest paid		–5,705	–7,366
Income tax paid		–3,873	–111
Cash fl ow from operating activities before change in working capital		17,589	34,148
Change in working capital
– Current assets		4,703	1,554
– Other current liabilities		6,823	18,379
Cash fl ow from operating activities		29,115	54,081
Cash fl ow from investing activities
Sale of property, plant and equipment		–	5
Loans to Group companies	52	5,031	–15,687
Cash fl ow from investing activities		5,031	–15,682
Cash fl ow from fi nancing activities
Repayment of loans		–56,214	–57,474
Loans raised		24,572	12,944
Cash fl ow from fi nancing activities		–31,642	–44,530
Change in cash and cash equivalents		2,504	–6,131
Cash and cash equivalents at beginning of the year		43,208	49,339
Cash and cash equivalents at end of the year		45,712	43,208

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, the Swedish Financial Reporting Board recommendation RFR 1, Supplementary accounting rules for groups, and International Financial Reporting Standards. The consolidated accounts have been prepared in accordance with the historical cost method except as regards available for sale fi nancial assets and fi nancial assets and liabilities carried at fair value through profi t or loss.

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

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

None of the IFRS or IFRIC interpretations that are compulsory for the fi nancial year starting on January 1 2011 have had any material impact on 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

• IAS 1, "Presentation of fi nancial statements", amendment concerning other comprehensive income. The items reported under other comprehensive income shall be presented in two separate groups. The grouping is to be based on whether or not they are potentially reclassifi able to profi t or loss. The amendment comes into force on July 1, 2012, but has not yet been adopted by the EU.
• IFRS 9, "Financial instruments" replaces the parts of IAS 39 that are related to classi fi cation and valuation of fi nancial instruments. Under IFRS 9 fi nancial assets are classifi ed into two categories; fair value measurement or measurement at amortized cost. There are no major changes for fi nancial liabilities compared with IAS 39. The greatest change refers to liabilities identifi ed at fair value. For these, the portion of changes in fair value that refers to own credit risk should be reported in other comprehensive income instead of through profi t or loss, unless this causes inconsistency in accounting. The Group intends to apply the new standard at the latest in the fi nancial year starting January 1, 2015 and has not yet evaluated the effects. The standard has not yet been adopted by the EU.
• IFRS 10, "Consolidated fi nancial statements" identifi es control as the determining factor to establish if a company is to be included in the consolidated fi nancial statements. The standard provides further guidance on how to determine control when this is diffi cult to assess. The Group intends to apply IFRS 10 in the fi nancial year starting January 1, 2013, but under present circumstances is not regarded as having any impact on the fi nancial reports.
• IFRS 11, "Joint arrangements" focuses on rights and obligations in "joint arrangements". There are two types of joint arrangements; "joint operations" and "joint ventures". In a "joint operation" assets, liabilities, revenues and expenses are to be reported on the basis of the holder's share of them. A "joint venture" arises when a "joint operator" has the right to the net assets of a "joint arrangement". In such an arrangement the joint venturer must account for its interest using the equity method. The proportional method is no longer allowed. The Group intends to apply the new standard for the fi nancial year starting January 1, 2013, but under present circumstances it is not regarded as having any impact on the fi nancial reports. The standard has not yet been adopted by the EU.
• IFRS 12, "Disclosures of interest in other entities" covers disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated "structure entities". The Group intends to apply IFRS 12 in the fi nancial year starting January 1, 2013, but under present circumstances it is not expected to have any major impact on the fi nancial reports. The standard has not yet been adopted by the EU.

• IFRS 13, "Fair value measurement" aims to make fair value measurements more consistent and less complex in that the standard provides an exact defi nition and a common source in IFRS to fair value measurement and related disclosures. The Group has yet to evaluate the full impact of IFRS 13 on the fi nancial statements. The new standard will be applied on January 1, 2013. The standard has not yet been adopted by the EU.

No other IFRS or IFRIC interpretations that as yet have not come into force are expected to have any material impact on the Group.

1.2 CONSOLIDATED ACCOUNTS Subsidiaries

Subsidiaries are all the companies in which the Group has the power to govern fi nancial 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. Identifi able 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 identifi able 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 identifi able 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 signifi cant infl uence, 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 fi rst carrying amount and forms the basis of continued accounting treatment of the remaining holding as an associated company, joint venture or fi nancial 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 reclassifi ed to profi t or loss.

If the participating interest in an associated company decreases, but a signifi cant infl uence nevertheless remains, where relevant only a proportional share of the amounts previously recorded in other comprehensive income is reclassifi ed to profi t or loss.

Associated companies

Associated companies are all entities over which the Group has signifi cant infl uence 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 identifi ed on acquisition, net of any impairment.

The Group's share of the post-acquisition profi t 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 receiv ables, 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 profi t 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.

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 identifi ed as the President.

1.4 FOREIGN CURRENCY TRANSLATION

Functional and presentation currency

Items included in the fi nancial 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 fi nancial 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 fl ow 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 fi nancial 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 fi nancial assets and liabilities are recorded as part of fair value gains/losses. Translation differences for non-monetary fi nancial assets and liabilities, such as shares recognized at fair value through profi t or loss, are recorded in the income statement as part of fair value gains/losses.

Group companies

The results and fi nancial position of all the Group companies (none of which has the currency of a hyperinfl ationary 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 loans 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 historical cost less depreciation. Historical cost includes expenses directly attributable to the acquisition of the asset. Expenditure for dismantling and restoration is added to the historical 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 historical 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 benefi ts associated with the item will fl ow 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 fi nancial period in which they are incurred.

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

• Buildings		20–50 years
• Machinery		3–20 years

• Equipment and fi xtures and fi ttings 3–20 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

Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associated companies is included in the value of investments in associated companies and tested for impairment as part of the value of the total investment. Goodwill that is disclosed separately is tested annually for impairment and recognized at cost less accumulated impairment losses. Goodwill impairment loss is not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash generating units when tested for impairment. Allocation is to the cash generating units or groups of cash generating units that are expected to benefi t 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 specifi c 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. Contractual customer relations are amortized over 15 years. The amortization period for other rights varies.

1.7 IMPAIRMENT LOSSES ON NON-FINANCIAL ASSETS

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

1.8 FINANCIAL ASSETS

The Group classifi es its fi nancial assets in the following categories: fi nancial assets at fair value through profi t or loss, loans and receivables and fi nancial assets available for sale. The classifi cation depends on the purpose for which the fi nancial asset was acquired. The management determines the classifi cation of fi nancial assets when they are fi rst reported.

Financial assets at fair value through profi t or loss

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

Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determi nable 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 classifi ed 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 22 and 25).

Derivatives for hedging

Derivatives that are classifi ed 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 deri vatives are recorded as current and non-current assets and liabilities.

Recognition and measurement

Purchases and sales of fi nancial 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 fi nancial assets not carried at fair value through profi t or loss. Financial assets recognized at fair value through profi t 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 fl ows from the instruments have expired or have been transferred and the Group has transferred substantially all risks and benefi ts of ownership. Financial assets at fair value through profi t 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. Trade receivables with short maturities are recognized at nominal value.

Gains and losses arising from changes in the fair value of the "fi nancial assets at fair value through profi t 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

Assets carried at amortized cost

The Group assesses at the close of each accounting period whether there is objective evidence that a fi nancial asset or group of fi nancial assets is impaired. A fi nancial asset or group of fi nancial 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 fl ows of the fi nancial asset or group of fi nancial assets that can be reliably measured.

The Group fi rst 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 fl ows (excluding future credit losses that have not yet occurred), discounted at the original effective interest rate of the fi nancial asset. The carrying amount of the asset is written down and the impairment loss is recognized in the consolidated income statement. If a loan or investment held to maturity has a variable interest rate, the current contractual effective interest rate is used as the discount rate when impairment has been established. As a practical solution, the Group can establish impairment loss on the basis of the fair value of the instrument using an observable market price.

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

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 identifi ed as a hedging instrument, and, if so, the nature of the hedged item. The Group identifi es certain derivatives as either:

• a hedge of the fair value of a recognized asset or liability or a fi rm commitment (fair value hedge),
• a hedge of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash fl ow 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 fl ows of the hedged items.

Information on the fair value of the different derivative instruments used for hedging purposes is given in note 21. The entire fair value of a derivative designated as a hedging instrument is classifi ed 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 fi nancial non-current assets and loans.

Cash fl ow hedging

The effective portion of the change in fair value of a derivative instrument identifi ed as a cash fl ow 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 items 'Other operating income' or 'Other operating expenses' – net. When a hedging instrument matures or is sold or when the hedge no longer fulfi lls 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 items 'Other operating income' or 'Other operating expenses' – net.

1.12 INVENTORIES

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the fi rst-in, fi rst-out (FIFO) method. The cost of fi nished 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 reported in the amount expected to be paid in after deduction for individually assessed doubtful receivables. The expected maturity of trade receivables is short and therefore the value has been recognized at the nominal amount without discounting. Impairment losses in trade receivables are recognized in the item 'Selling and marketing costs'.

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 classifi ed 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 recognized at fair value and are commitments to pay for goods or services acquired from suppliers in the operating activities. Trade payables have a short expected maturity and are classifi ed as current liabilities.

1.17 LOANS

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

Loans are classifi ed 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 profi t nor taxable profi t. 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 profi t will be available against which the temporary differences can be applied.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend to settle current tax liabilities and assets on a net basis.

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 defi ned benefi t and defi ned contribution plans. A defi ned contribution plan is a pension plan under which the Group pays fi xed 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 suffi cient assets to pay all employee benefi ts associated with the employees' service in the current or prior periods. A defi ned benefi t plan is a pension plan that is not a defi ned contribution plan. It is characteristic of defi ned benefi t plans that they defi ne an amount of pension benefi t 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 defi ned benefi t pension plans is the present value of the defi ned benefi t 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 defi ned benefi t obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defi ned benefi t obligation is determined by discounting the estimated future cash outfl ows using interest rates of high- quality corporate bonds that are denominated in the currency in which the benefi ts 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 specifi ed 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 defi ned 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 benefi t 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 benefi ts

Termination benefi ts 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 benefi ts. The Group recognizes termination benefi ts 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 benefi ts as a result of an offer made to encourage voluntary redundancy. Benefi ts falling due more than 12 months after the balance sheet date are discounted to present value.

Profi t sharing and variable salary components

The Group recognizes a liability and an expense for variable salary and profi t- sharing, based on a formula that takes into consideration the profi t 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 outfl ow 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 outfl ow 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 outfl ow 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 refl ects 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. See note 33, 'Other provisions'.

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 benefi ts will fl ow to the company and special criteria are fulfi lled 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.

Revenue for the software developed by the Group is received through contract revenue, sales of software and through license fees.

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 profi ts 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 profi ts.

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

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

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

1.22 LEASES

Leases in which a signifi cant portion of the risks and rewards of ownership are retained by the lessor are classifi ed 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 fi nancial risks and rewards incident to legal ownership, are classifi ed as fi nance leases. At the start of the lease term fi nance 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 fi nancial costs for achieving a fi xed rate of interest on the reported debt. The corresponding payment liabilities, less fi nancial expenses, are included in the balance sheet items 'Non-current loans' and 'Current loans'. The interest component of the fi nancial expenses is allocated over the lease term in the income statement so that each accounting period is charged with an amount equivalent to a fi xed interest rate on the reported debt in the respective period. Non-current assets held as fi nance 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 fi nancial 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 Swedish Annual Accounts Act (ÅRL) and RFR 2, Accounting for Legal Entities. RFR 2 means that the Parent Company, in its separate fi nancial statements, must apply all the IFRS and statements adopted by the EU as far as possible, subject to the Annual Accounts Act and the Act on Safeguarding Pension Obligations, taking into account the connection between accounting and taxation. The recommendation specifi es 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:

Formats

The income statement and balance sheet follow the format of the Annual Accounts Act. This entails differences compared with the consolidated accounts, mainly as regards fi nancial income and expense, the statement of comprehensive income, provisions and the statement of changes in equity.

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 and recorded in the item 'Profi t/loss from participations in Group companies '. Dividend received is reported as fi nancial income.

Income

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

Leases

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

Pensions

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

Taxes

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

Group contributions and shareholders' contributions for legal entities

The company reports shareholders' contributions and group contributions in accordance with statements from RFR 2. Share holders' 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 from subsidiaries are reported as fi nancial income as is normal dividend from subsidiaries. Tax on group contributions is reported in accordance with IAS 12 in the income statement.

Note 2 Financial risk management

2.1 FINANCIAL RISK FACTORS

Through its operations the Group is exposed to a number of different fi nancial risks: market risk (covering currency risk, fair value interest rate risk, cash-fl ow interest rate risk and price risk), credit risk and liquidity risk. The fi nancial risks also include the company's ability to uphold fi nancial key ratios (covenants) that regulate borrowing. The Group's overall risk management policy focuses on the unpredictability of fi nancial markets and aims to minimize potential adverse effects on the Group's fi nancial 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 identifi es, evaluates and hedges fi nancial 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 specifi c areas, such as currency risk, interest rate risk, credit risk, use of derivative and non-derivative fi nancial instruments and investment of surplus liquidity.

Market risk

Price risk

The Group's largest single cost item is personnel, which accounts for 54 (54) per cent of total costs. Other expenses vary. The Group's risk exposure as regards purchases is therefore of less signifi cance.

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 classifi ed as hedges of gross amounts of specifi c 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 profi t as at December 31, 2011 would have been SEK 2.6 million (–0.3) higher, mainly as a result of positive net earnings in the US operations. Equity would have been SEK 24.5 million (23.3) higher, mainly due to translation of the Group's net investments in the USA.

If the Swedish krona had weakened by 10 per cent against the euro, all other variables being constant, the year's profi t as at December 31, 2011 would have been SEK 7.5 million (10.0) higher, mainly as a result of positive net earnings in the German operations. Equity would have been SEK 9.2 million (9.5) 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 profi t as at December 31, 2011 would have been SEK 1.8 million (0.0) higher, as the Group's total revenues in pound sterling are greater than the corresponding expenses in pound sterling. Equity would have been SEK 1.2 million (0.3) 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 profi t as at December 31, 2011 would have been SEK 0.0 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 fl ows and fair values

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

The Group's interest rate risk arises through non-current loans. Loans at variable interest rates exposes the Group to cash fl ow interest rate risk. Loans at fi xed interest rates exposes the Group to fair value interest rate risk. In 2011 and 2010 there were no loans at variable interest rates. The Group's contractual repricing dates for interest rates are shown in note 30.

The Group analyses its interest rate exposure regularly. Different scenarios are simulated, taking into account refi nancing, 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 0.1 million (0.2).

If the interest rate on loans in US dollars on December 31, 2011 had been 0.5 percentage points higher/lower, all other variables being constant, the profi t after tax for the fi nancial year would have been SEK 0.5 million (0.6) lower/higher, as an effect of higher/lower interest expense in connection with renegotiation of new interest fi xing periods.

If the interest rate on loans in pound sterling on December 31, 2011 had been 0.5 percentage points higher/lower, all other variables being constant, the profi t after tax for the fi nancial year would have been SEK 0.1 million (0.2) lower/higher, as an effect of higher/lower interest expense in connection with renegoti ation of new interest fi xing periods.

If the interest rate on loans in euros on December 31, 2011 had been 0.5 percentage points higher/lower, all other variables being constant, the profi t after tax for the fi nancial year would have been SEK 0.0 million (0.0) lower/higher, as an effect of higher/lower interest expense in connection with renegotiation of new interest fi xing periods.

Borrowing in other currencies in 2011 was at fi xed 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 fi nancial 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 fi nancial position and prior experience and other factors are taken into consider ation. 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 fi nancial assets is reported in note 20.

Liquidity risk

Liquidity risk is managed through the Group holding suffi cient 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 fl exibility 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 30) and cash and cash equi valents (note 25), on the basis of expected cash fl ows.

The table below analyses the Group's fi nancial liabilities and derivative instruments settled net that constitute fi nancial 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 fl ows. The amounts falling due within 12 months agree with book amounts, since the discount effect is immaterial.

As at December 31, 2011	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Bank loans	125,537	85,116	5,602	1,420
Derivative fi nancial instruments	5,266	1,033	–	–
Trade and other payables	333,380	1,444	2,976	33,592
As at December 31, 2010	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Bank loans	129,933	45,177	98,304	2,521
Derivative fi nancial instruments	1,987	202	5	741

The table below analyses the Group's fi nancial 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 fl ows. The amounts falling due within 12 months agree with book amounts, since the discount effect is immaterial.

As at December 31, 2011	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Forward exchange contracts – cash fl ow hedges
– Outfl ow	9,818	–	–	–
– Infl ow	161,373	112,124	1,207	–
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 fl ow hedges
– Outfl ow	33,794	604	–	–
– Infl ow	278,658	13,339	3,044	118,104

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 benefi t 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 defi ned as net debt divided by total equity. Net debt is defi ned as total borrowing (including the items 'Current loans' and 'Noncurrent loans' in the consolidated balance sheet) less cash and cash equivalents. Equity is calculated including non-controlling interests.

	2011	2010
Total loans (note 30)	217,675	275,935
Less cash and cash equivalents (note 25)	–122,092	–68,376
Net debt	95,583	207,559
Total equity	548,778	520,808
Debt-equity ratio	17%	40%

The change in debt/equity ratio in 2011 was mainly a consequence of lower net debt and higher equity. Borrowing decreased during the year and the cash fl ow after investments was suffi cient to balance the reduction in borrowing, consequently cash and cash equivalents increased. The positive comprehensive income for 2011 as a result of improved operating profi t and positive translation differences on foreign subsidiaries is the main reason for higher equity.

2.3 FAIR VALUE ESTIMATION

The table below shows fi nancial instruments at fair value on the basis of their classifi cation in the fair value hierarchy. The different levels are defi ned as follows:

• Level 1 Quoted prices (unadjusted) on active markets for identical assets or lia bilities.
• 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, 2011.

	Level 1	Level 2	Level 3
Assets
Financial assets at fair value through profi t or loss
– Unlisted shareholdings	–	–	5,428
– Capital insurance	–	11,386	–
– Non-current bank deposits	–	39,061	–
Derivatives used for hedging	–	1,232	–
Total assets	–	51,679	5,428
Liabilities
Derivatives used for hedging	–	6,299	–
Total liabilities	–	6,299	–

Note 2 (continued)

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 profi t 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	–

The fair value of fi nancial 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 fi nancial 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-specifi c 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 classifi ed at level 3.

• Specifi c valuation techniques used to measure fi nancial 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 fl ows 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 fl ows, are used to determine the fair value of remaining fi nancial instruments.

The following table shows changes for instruments at level 3 in 2011.

	Level 3
Opening balance	4,232
Gains recognized in the income statement	1,196
Closing balance	5,428
Total gains or losses for the period included in profi t or loss for assets held at the end of the reporting period	1,196

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 profi t or
loss for assets held at the end of the reporting period	1,256

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 defi nition, seldom correspond to the actual outcome. The estimates and assumptions that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial 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 fi nal tax is uncertain at the time the transactions and calculations are made. The Group reports a liability for expected tax fi eld audits based on assessments of whether further tax liability will arise. In cases where the fi nal tax for these cases differs from the amounts fi rst reported, the differences will affect current tax and provisions for deferred tax in the period when these determinations are made.

If the actual fi nal 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 0.0 million (0.5) if the outcome is unfavor able, or
• increase the deferred tax asset by SEK 0.0 million (0.5) if the outcome is favorable.

Fair value of derivative instruments or other fi nancial instruments

Fair value of fi nancial 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 fi xed 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 7.3 million (2.8) if the percentage of completion had increased, or decrease by SEK 7.3 million (2.8) 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 fi nancial obligations and revises the value of these provisions annually. The commitment consists of discounted values of future cash fl ows.

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 (0.2) 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 3.0 million (1.0) lower for a higher estimate of future costs. Changes in estimates of future costs refer to repository costs for waste treated in the Group's Erwin facility and future waste costs in the Group's Swedish facility, which affect future cash fl ows. Other changes in estimated future costs are capitalized as property, plant and equipment and thus affect future depreciation.

Changes in the Group's provisions are presented in note 33.

Note 4 Segment reporting

Operating segments have been established on the basis of information dealt with by the Board of Directors and the President and used to make strategic decisions. The clear geographical management structure that exists in Studsvik's organization, has infl uenced the segment structure. The Board of Directors and the President assess operations from both a geographical and product perspective.

The segments obtain their revenues from various services and products. The major part of segment Sweden's revenues derive from treatment and volume reduction of low and intermediate level waste. The United Kingdom segment derives revenues from engineering and consultancy services, treatment of low-level waste and decommissioning services. Revenues in segment Germany derive from services in the areas of decommissioning, operational and outage support and from health physics services. The main source of revenue in segment USA is from treatment of low and intermediate level waste, but consultancy and engineering services also generate revenue. Segment Global Services carries out tests, investigations and analyses in a number of areas where fuel and materials performance analysis constitutes the major source of revenue, but revenue is also generated from engineering and consultancy services and corrosion and water chemistry studies. Another major source of revenue for the Global Services segment is sales of fuel optimization software.

The Board of Directors and the President assess the operating segments' performance on the basis of operating profi t and a measurement called EBITDA before nonrecurring items. This measurement excludes the effects of non-recurring items 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. 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.

Financial year 2011	Sweden	United Kingdom	Germany	USA	Global Services	Other	Eliminations	Group
Net sales	167,289	107,857	365,238	242,610	287,910	47,008	–17,159	1,200,753
External net sales	163,819	107,857	363,467	242,610	287,522	35,478	–	1,200,753
EBITDA before non-recurring items	31,089	–8,798	21,325	43,893	39,554	–26,589	–	100,474
Non-recurring items	–	–	–	8,869	–	–	–	8,869
Depreciation/amortization and impairment	–11,238	–5,030	–2,895	–33,643	–5,889	–4,626	–	–63,321
Earnings from associated companies and
joint ventures	–	4,109	–	3,444	19	–	–	7,572
Operating profi t/loss	19,851	–9,719	18,430	22,563	33,684	–31,215	0	53,594
Net fi nancial items								–12,898
Taxes								–17,967
Net profi t for the year								22,729
Share of equity in associated
companies and joint ventures	–	2,681	–	11,274	48	–	–	14,003
Other operating segment assets	172,906	204,330	227,864	595,382	195,618	299,752	–253,890	1,441,962
Total assets								1,455,965
Operating segment liabilities	171,164	106,155	166,127	383,936	131,716	201,979	–253,890	907,187
Adjusted equity								548,778
Total equity and liabilities								1,455,965
Investments	26,067	1,649	1,336	7,372	17,486	1,490	–	55,400
Average number of employees	92	71	646	109	161	74	–	1,153
Financial year 2010	Sweden	United Kingdom	Germany	USA	Global 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 profi t/loss	19,927	–24,187	28,734	1,442	33,056	–25,564	0	33,408
Net fi nancial items								–19,044
Taxes								–10,352
Net profi t for the year								4,012
Share 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

Note 4 (continued)

EBITDA before non-recurring items is reconciled against profi t before tax.

	2011	2010
EBITDA before non-recurring items	109,343	100,743
Depreciation of property, plant and equipment	–57,623	–63,090
Amortization of intangible assets	–4,705	–5,590
Impairment of assets	–993	–
Severance pay	–	–5,915
Profi t share from associated	7,572	7,260
companies and joint ventures
Net fi nancial items	–12,898	–19,044
Profi t before tax	40,696	14,364
External net sales per product area	2011	2010
Treatment of radioactive waste	411,423	431,503
On-site waste services	–	12,149
Consulting and engineering services	134,771	123,687
Health physics services	88,736	104,964
Transport and logistics	11,636	7,256
Decommissioning services	165,576	203,314
Operational and outage support	118,479	159,747
Fuel and materials performance	114,590	119,835
Corrosion and water chemistry	34,335	30,316
Fuel optimization software	84,099	86,766
Design and build	1,630	5,003
Other operations	35,478	59,566
Total	1,200,753	1,344,106

Other operations include the parent company and the part of the Swedish company Studsvik Nuclear AB that is not part of the Global Services or Sweden segments.

External net sales		2011		2010
based on the customer's country of location	SEK thousand	Per cent	SEK thousand	Per cent
Sweden	199,943	16.7	240,834	17.9
Europe excl. Sweden	652,500	54.2	724,381	53.9
North America	321,234	26.8	353,651	26.3
Asia	27,076	2.3	25,221	1.9
All other countries	–	–	19	0.0
Total	1,200,753	100.0	1,344,106	100.0

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

		2011		2010
Non-current assets per country	SEK thousand	Per cent	SEK thousand	Per cent
Sweden	201,746	20.2	179,756	17.7
Europe excl. Sweden	299,262	29.9	301,137	29.7
North America	499,751	49.9	533,567	52.6
Asia	197	0.0	194	0.0
Total	1,000,956	100.0	1,014,654	100.0

Note 5 Other operating income

Other income	2011	2010
Sale of property, plant and equipment	1,413	363
Insurance compensation	532	251
Rental income	503	502
Compensation for legal settlement	8,869	–
Other	3,361	434
Total	14,678	1,550

Note 5 (continued)

Other gains	2011	2010
Other fi nancial assets measured at fair value through profi t or loss
– Fair value gains	4,378	1,744
Forward exchange contracts
– Foreign exchange differences	2,750	–
Total	7,128	1,744

Note 6 Other operating expenses

Other costs	2011	2010
Bad debt losses	–	14
Sale of property, plant and equipment	791	1,603
Other impairment losses	993	462
Non-recurrent structural costs	–	5,915
Other	81	89
Total	1,865	8,083
Other losses	2011	2010
Other fi nancial assets measured at fair value through profi t or loss
– Fair value losses	782	2,420
Forward exchange contracts
– Foreign exchange differences	2,167	3,904
Total	2,949	6,324

Note 7 Costs by nature of expense

	2011	2010
Purchases of material and services	438,399	475,985
Personnel costs	637,416	705,076
Energy	28,462	27,240
Depreciation/amortization and impairment	62,327	68,890
Other costs	5,119	29,654
Total	1,171,723	1,306,845

Note 8 Remuneration to auditors

Group, total	5,379	4,826
Total	670	255
– Other services	57	54
– Tax consultancy	–	–
– Audit business in addition to audit	58	93
– Audit assignments	555	108
Other auditors
Total	4,709	4,571
– Other services	369	363
– Tax consultancy	480	376
– Audit business in addition to audit	182	394
– Audit assignments	3,678	3,438
PricewaterhouseCoopers
	2011	2010

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 benefi ts

Employee benefi ts	2011	2010
Salaries	506,727	549,941
Social security costs	96,536	98,698
Pension costs – defi ned contribution based	27,584	28,942
Pension costs – defi ned benefi t based	1,073	1,150
Total	631,920	678,731

Salaries and other remuneration by country

			2011			2010
and between Board members and President 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	5,050	–	6,809	5,293	–	6,088
Subsidiaries in Sweden	3,783	268	122,114	4,446	735	126,142
Subsidiaries abroad
– Norway	–	–	1,189	–	–	1,672
– Germany	2,031	496	248,683	1,812	190	292,601
– United Kingdom	1,273	–	33,286	1,311	–	20,765
– USA	2,683	677	69,352	2,165	–	77,895
– Japan	892	37	423	901	37	428
– Switzerland	–	–	2,551	–	–	2,498
– France	–	–	6,608	–	–	5,924
Total, subsidiaries	10,662	1,478	484,206	10,635	962	527,925
Total, Group	15,712	1,478	491,015	15,928	962	534,013

		2011				2010
Average number of employees	Men	Women	Total	Men	Women	Total
Parent company	5	5	10	6	5	11
Subsidiaries in Sweden	208	73	281	211	77	288
Subsidiaries abroad
–Norway	1	–	1	1	–	1
–Germany	544	75	619	567	75	642
–United Kingdom	60	11	71	56	8	64
–USA	114	21	135	115	20	135
–Japan	1	1	2	1	1	2
–Switzerland	1	1	2	1	1	2
–France	27	5	32	20	4	24
Total, subsidiaries	956	187	1,143	972	186	1,158
Total, Group	961	192	1,153	978	191	1,169

		2011
Gender breakdown in the Group (including subsidiaries) for members of the Board and other senior management	Number on balance sheet date	Of whom men	Number on balance sheet date	Of whom men
Board members	11	8	11	7
President and other senior management	10	10	11	11
Total, Group	21	18	22	18

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

Note 10 Financial income and expense

	2011	2010
Financial income
Current bank balances	257	850
Fair value gains (unrealized and realized)	14,313	2,947
Other fi nancial income	520	33
Total	15,090	3,830
Finance expenses
Bank loans	–11,611	–15,168
Fair value losses (unrealized and realized)	–14,227	–6,271
Other fi nancial expenses	–2,150	–1,435
Total	–27,988	–22,874
Net fi nancial items	–12,898	–19,044

Note 11 Income tax

	2011	2010
Current tax
Current tax on profi t for the year	–14,943	–12,308
Adjustment for previous years	12	164
Total	–14,931	–12,144
Deferred tax (note 31)
Origination and reversal of temporary differences	–2,237	2,403
Effect of change in tax rate	–799	–611
Total	–3,036	1,792
Total income tax	–17,967	–10,352

The Swedish tax rate is 26.3 (26.3) per cent. The income tax on the Group's profi t before tax differs from the theoretical amount that would arise using the weighted average tax rate for profi ts of the consolidated companies as follows.

	2011	2010
Profi t before tax	40,696	14,364
Tax in accordance with the current tax rate	–10,703	–3,777
Non-taxable revenue	1,217	330
Expenses not deductible for tax purposes	–878	–599
Unrecognized tax asset in respect of loss carry forwards	–2,344	–4,598
Adjustment for foreign tax rate	–3,100	916
Revaluation of deferred tax – change in tax rate	–799	–611
Adjustment for previous years' tax assessment	12	164
Other effects	–1,372	–2,177
Tax expense	–17,967	–10,352

The deferred taxes in England have been revalued due to the changed tax rate from 27 per cent to 26 per cent, which is applicable from April 1, 2011. The revaluation is SEK –799 thousand (–611). Further tax cuts have been proposed in of 1 per cent per year to 24 per cent by April 1, 2014. This has not, however, been taken into account in the fi gures reported.

The weighted average tax rate was 44 (72) per cent. The main reason for the difference between Swedish income tax and the weighted average tax rate is that no tax asset was recognized for the operating loss in the British operations. The higher tax rate in the USA and Germany combined with operating profi t has had a negative impact on the tax expense.

Other comprehensive income only includes tax effects on cash fl ow hedges and on December 31 these were SEK –484 thousand (–1,387). Other comprehensive income also includes exchange rate differences, but there is no tax effect on these.

Note 12 Foreign exchange differences – net

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

Total	2,524	–9,162
Financial items (note 10)	86	–3,324
Other gains and losses – net (notes 5 and 6)	2,438	–5,838
	2011	2010

Note 13 Earnings per share

Before dilution

Earnings per share before dilution is calculated by dividing the profi t for the year by the weighted average number of shares in issue (note 26).

Net profi t for the year	22,729	4,012
Weighted average number of ordinary shares in issue	8,218,611	8,218,611
Earnings per share before dilution (SEK per share)	2.77	0.49

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.

Diluted earnings per share (SEK per share)	2.77	0.49
Weighted average number of ordinary shares in issue	8,218,611	8,218,611
Net profi t for the year	22,729	4,012
	2011	2010

Note 14 Dividend per share

Dividend paid in 2011 and 2010 amounted to SEK 0 thousand (SEK 0 per share) and SEK 0 thousand (SEK 0 per share). At the Annual General Meeting on April 26, 2012 it will be proposed that dividend of SEK 1 per share be distributed for the 2011 fi nancial 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, 2010
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
January 1 – December 31, 2011
Opening book value	230,252	165,062	72,940	21,890	490,144
Foreign exchange differences	2,512	479	164	73	3,228
Investments	214	441	5,108	47,659	53,422
Capitalization of future restoration cost	–	–3,737	–1,292	–	–5,029
Redistributions	–978	5,933	2,833	–4,466	3,322
Disposals and retirements	–4,133	–855	–418	–	–5,406
Depreciation/amortization	–7,087	–31,362	–19,174	–	–57,623
Impairment losses for the year	–	–	–	–993	–993
Closing book value	220,780	135,961	60,161	64,163	481,065
As at December 31, 2011
Cost of acquisition	326,894	444,020	284,162	65,221	1,120,297
Accumulated amortization and impairment	–106,114	–308,059	–224,001	–1,058	–639,232
Book value	220,780	135,961	60,161	64,163	481,065

Depreciation costs include SEK 50,326 thousand (54,752) in cost of services sold, SEK 175 thousand (119) in selling and marketing costs, SEK 6,774 thousand (7,654) in administrative expenses and SEK 348 thousand (565) in research and development costs. Interest of SEK 4,916 thousand (4,833) is included in the cost of acquisition of buildings, plant and machinery. The assessed value of buildings is SEK 27,997 thousand and of land SEK 25,709 thousand. The value of fi nance leases capitalized as property, plant and equipment is presented in note 36.

During the year a building in the US operations in Erwin was sold, generating proceeds of SEK 535 thousand.

Note 16 Intangible assets

			Contractual customer relations and
	Goodwill	Software rights	similar rights	Total
As at January 1, 2010
Cost of acquisition	379,883	23,594	73,117	476,594
Accumulated amortization
and impairment	–37,568	–21,864	–29,652	–89,084
Book value	342,315	1,730	43,465	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
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
January 1 – December 31, 2011
Opening book value	313,421	1,279	35,959	350,659
Foreign exchange differences	2,480	15	288	2,783
Investments	–	1,729	249	1,978
Disposals and retirements	–	–	–	–
Depreciation/amortization	–	–611	–4,094	–4,705
Closing book value	315,901	2,412	32,402	350,715
As at December 31, 2011
Cost of acquisition	348,886	25,042	68,971	442,899
Accumulated amortization
and impairment	–32,985	–22,630	–36,569	–92,184
Book value	315,901	2,412	32,402	350,715

Contractual customer relations and similar rights consist mainly of customer relations/contracts as well as some tenancy rights. Depreciation of SEK 4,705 thousand (5,590) is included in 'Cost of services sold' in the income statement.

Note 16 (continued)

Impairment tests for goodwill

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

	2011	2010
Sweden	–	–
United Kingdom	23,015	22,625
Germany	107,018	107,859
USA	183,037	180,106
Global Services	2,831	2,831
Total	315,901	313,421

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 identifi ed 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 fl ows based on business plans approved by the Board of Directors 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 fl ows 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 2011:

	Gross margin %	Growth rate after year 3 %	Discount rate %
United Kingdom	15	3	8
Germany	13	2	9
USA	35	3	8
Global Services	47	3	8

Material estimates used for calculating value in use in 2010:

	Gross margin %	Growth rate after year 3 %	Discount rate %
United Kingdom	14	3	9
Germany	16	2	7
USA	32	3	9
Global Services	45	3	8

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 riskfree investments for each segment, plus a market risk premium. The weighted cost of capital used in calculating the recoverable amount is about 8 to 9 (7 to 9) 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 fl ows and discount rate. These amounts also exceeded the carrying amounts for net assets. There are no other specifi c circumstances that have affected impairment testing.

Sensitivity analysis	Margin at carrying amount %	Margin at 25 % higher discount rate %	Margin at 25 % lower operating profi t %
United Kingdom	168	80	87
Germany	222	126	152
USA	99	39	71
Global Services	2,647	1,787	2,110

Note 17 Investments in associated companies

	2011	2010
As at January 1	50	50
Share in earnings	19	–
Dividend received from associated companies	–21	–
As at December 31	48	50

The Group's share in earnings of the associated company KraftAkademin AB, which is unlisted, and its share of assets (including goodwill and liabilities) is as follows.

2011		Current assets	Current liabilities	Income	Profi t/loss	Participating interest %
KraftAkademin AB	Sweden	75	26	19	–2	20
Total		75	26	19	–2
2010		Current assets	Current liabilities	Income	Profi t/loss	Participating interest %
KraftAkademin AB	Sweden	155	84	114	1	20
Total		155	84	114	1

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 competence in thermo hydraulics, reactor dynamics and health physics to KraftAkademin's operations.

Note 18 Interests in joint ventures

	2011	2010
As at January 1	25,298	30,651
Share in earnings	7,553	7,260
Dividend received from joint ventures	–20,001	–10,369
Share received through formation of joint venture	350	–
Foreign exchange differences	755	–2,244
As at December 31	13,955	25,298

The Group's share in earnings of the joint ventures in which the company has interests, all of which are unlisted, and its share of assets (including goodwill and liabilities) is as follows.

2011		Non-current assets	Current assets	Current liabilities	Income	Profi t/loss	Participating interest %
THOR Treatment Technologies, LLC	USA	601	12,490	2,172	53,243	3,447	50
SEMPRASAFE, LLC	USA	–	128	877	–	–1,032	51
UK Nuclear Waste Management Ltd	United Kingdom	–	4,155	3,935	3,926	4,329	15
Total		601	16,773	6,984	57,169	6,744
2010		Non-current assets	Current assets	Current liabilities	Income	Profi t/loss	Participating interest %
THOR Treatment Technologies, LLC	USA	1,774	34,598	14,032	71,166	3,862	50
UK Nuclear Waste Management Ltd	United Kingdom	–	4,070	3,895	5,066	3,620	15
Total		1,774	38,668	17,927	76,232	7,482

THOR Treatment Technologies, LLC (TTT), 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.

SEMPRASAFE, LLC is a joint venture between Studsvik and EnergySolutions in which there is an agreement on joint control. SEMPRASAFE uses Studsvik's technology to create safer and more stable waste for fi nal disposal of Class A waste at the EnergySolutions Clive Facility in the USA.

UK Nuclear Waste Management Ltd is a joint venture where Studsvik is one of four partners. Studsvik has a signifi cant infl uence 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 fi nal repository and to implement a well-functioning strategy for management of low level radioactive waste in the United Kingdom.

Note 19 Financial instruments by category

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

	Loans and trade receivables	Assets at fair value through profi t or loss	Derivatives for hedging	Total
As at December 31, 2011
Assets on the balance sheet
Derivative fi nancial instruments	–	469	763	1,232
Trade and other receivables	319,489	–	–	319,489
Other fi nancial assets measured at fair value through profi t or loss	–	55,875	–	55,875
Cash and cash equivalents	122,092	–	–	122,092
Total	441,581	56,344	763	498,688

	Liabilities at fair value through profi t or loss	Other fi nancial liabilities	Derivatives for hedging	Total
Liabilities on the balance sheet
Loans	–	217,675	–	217,675
Derivative fi nancial instruments	3,181	–	3,118	6,299
Total	3,181	217,675	3,118	223,974

	Loans and trade receivables	Assets at fair value through profi t or loss	Derivatives for hedging	Total
As at December 31, 2010
Assets on the balance sheet
Derivative fi nancial instruments	–	4,307	1,361	5,668
Trade and other receivables	322,230	–	–	322,230
Other fi nancial assets measured at fair value through profi t 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 profi t or loss	Other fi nancial liabilities	Derivatives for hedging	Total
Liabilities on the balance sheet
Loans	–	275,935	–	275,935
Derivative fi nancial instruments	645	–	2,290	2,935
Total	645	275,935	2,290	278,870

Note 20 Credit quality of the fi nancial assets

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

	2011	2010
Trade receivables
Counterparties without external credit rating
– New customers (less than 6 months)	3,409	11,081
– Existing customers with no defaults in the past	161,229	169,904
– Existing customers with some delayed payments in the past	58,340	58,756
Total	222,978	239,741
Loans to related parties
Existing related party with no previous defaults	2,394	2,354
Total	2,394	2,354
Bank balances and current loans
AA	122,092	68,376
Total	122,092	68,376
Derivative fi nancial instruments
AA	1,232	5,668
Total	1,232	5,668

None of the fully performing fi nancial assets has been renegotiated in the last year. No repayment of loans to related parties was made during the year.

Note 21 Derivative instruments

		2011	2010
	Assets	Liabilities	Assets	Liabilities
Forward exchange contracts – Cash fl ow hedges	1,232	6,299	5,668	2,935

The entire fair value of a derivative instrument designated as a hedging instrument is classifi ed 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 profi t or loss.

The ineffective portion, recognized in the income statement, referring to cash fl ow hedges, amounts to SEK 583 thousand (notes 5 and 6).

The hedged, highly probable forecast transactions in foreign currency are expected to occur at varying dates during the coming 27 months. Gains and losses on forward exchange contracts as at December 31, 2011, recognized in the hedging reserve in equity (note 28), are recognized in the income statement in the period or periods during which the hedged forecast transaction affects the income statement.

Outstanding forward exchange contracts on December 31, 2011

								INFLOW CURRENCIES		OUTFLOW CURRENCIES
		CAD	CHF	EUR	GBP	JPY	NOK	USD	EUR	JPY	USD
Maturity year		000	000	000	000	000	000	000	000	000	000
2012	Amount	1,600	29	1,098	5,578	80,740	125	11,076	948	6,870	82
	Rate1)	6.614	7.49	9.382	10.678	0.084	1.177	6.657	9.17	0.088	6.364
2013	Amount	13,400		69	1,618		125	437
	Rate1)	6.794		9.328	10.66		1.168	6.97
2014	Amount						125	150
	Rate1)						1.159	7.083
	Translated to fair value, SEK thousand	99,175	216	10,546	75,775	7,182	416	80,362	8,432	613	566

1) Average contractual rate

The nominal amount for outstanding forward exchange contracts is SEK 284,522 thousand (446,538).

Note 22 Trade and other receivables

	2011	2010
Trade receivables	225,033	241,124
Less – Provision for impairment of receivables	–2,055	–1,383
Trade receivables – net	222,978	239,741
Loans to related parties	2,394	2,354
Work in progress	39,935	32,541
Tax assets	3,755	2,242
Other receivables	18,168	18,376
Prepaid expenses and accrued income
– Accrued income	14,008	8,386
– Accrued interest income	62	27
– Prepaid rent	317	598
– Prepaid lease charges	532	443
– Prepaid insurance premiums	4,875	3,987
– Other prepaid expenses	12,465	13,535
Total	319,489	322,230
Non-current portion	2,625	3,396
Current portion	316,864	318,834
Total	319,489	322,230

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

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

	2011	2010
Loans to related parties (note 37)	2.0%	2.0%

No impairment loss is considered to exist for trade receivables with maturity dates of up to 3 months. As at December 31, 2011 trade receivables of SEK 91,352 thousand (82,243) were overdue without any impairment loss being identifi ed. These refer to a number of independent customers who have not had payment diffi culties in the past. An age analysis of these trade receivables is given below.

2011 Less than 3 months 89,419 3 to 6 months 1,574	–151
	2,587
	79,807
	2010

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

	2011	2010
SEK	133,290	101,649
EUR	53,032	90,367
GBP	36,146	25,955
USD	95,003	103,645
Other currencies	2,018	614
Total	319,489	322,230

Changes in the reserve for doubtful receivables:

	2011	2010
As at January 1	–1,383	–4,729
Translation difference	–6	309
Provision for doubtful receivables	–693	–885
Receivables written off as unrecoverable	–	3,922
Unused amounts reversed	27	–
As at December 31	–2,055	–1,383

Transfers to and reversals from reserves for doubtful receivables are included in the item 'Other costs' in the income statement. Amounts stated in the depreciation account are normally written off when the Group is not expected to recover further cash funds. No impairment loss has been identifi ed 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 23 Financial assets at fair value through profi t or loss

	2011	2010
Unlisted shareholdings	5,428	4,232
Capital insurance	11,386	11,818
Non-current bank deposits	39,061	30,750
Total	55,875	46,800

The statement of cash fl ows includes fi nancial assets measured at fair value through profi t or loss in the category 'Cash fl ow from operating activities' as part of the change in working capital. This does not, however, apply to non-current bank deposits recorded as 'Cash fl ow from fi nancing activities'. Blocked bank funds in the USA amount to SEK 37,257 thousand (29,839) and blocked funds in the Nuclear Waste Fund to SEK 1,804 thousand (911) and are recorded as non-current bank deposits.

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

Note 24 Inventories

	2011	2010
Raw material	5,200	4,540
Products in progress	6,514	13,075
Finished goods	3,105	1,892
Total	14,819	19,507

The expensed expenditure for inventories is included under 'Cost of services sold' and amounts to SEK 12,285 thousand (15,700).

Note 25 Cash and cash equivalents

	2011	2010
Cash and bank balances	122,092	68,376
Total	122,092	68,376

Note 26 Share capital and other contributed capital

	Number of shares	Share capital	Other paid-in capital
As at January 1, 2010	8,218,611	8,219	225,272
As at December 31, 2010	8,218,611	8,219	225,272
As at January 1, 2011	8,218,611	8,219	225,272
As at December 31, 2011	8,218,611	8,219	225,272

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

Note 27 Retained earnings

As at January 1, 2010	284,568
Net profi t for the year	4,012
As at December 31, 2010	288,580
As at January 1, 2011	288,580
Net profi t for the year	22,729
As at December 31, 2011	311,309

Note 28 Reserves

	Currency translation reserve	Hedging reserve	Total reserves
As at January 1, 2010	26,851	–3,979	22,872
Foreign exchange differences
– Group	–28,288	–	–28,288
– Associated companies	–16	–	–16
Cash fl ow hedges
– Fair value differences during the year	–	5,274	5,274
– Tax on fair value differences (note 31)	–	–1,387	–1,387
As at December 31, 2010	–1,453	–92	–1,545
As at January 1, 2011	–1,453	–92	–1,545
Foreign exchange differences
– Group	6,586	–	6,586
– Associated companies	5	–	5
Cash fl ow hedges
– Fair value differences during the year	–	–1,839	–1,839
– Tax on fair value differences (note 31)	–	484	484
As at December 31, 2011	5,138	–1,447	3,691

Note 29 Trade and other payables

	2011	2010
Trade payables	84,162	85,797
Liabilities for work in progress	107,172	54,660
Social security and other taxes	69,207	75,442
Other liabilities	38,133	12,018
Accrued expenses and deferred income
– Deferred income	19,430	14,224
– Accrued interest expense	904	572
– Accrued salaries	28,978	30,649
– Accrued pension costs	11,386	11,818
– Accrued consulting and service costs	2,641	1,178
– Accrued audit fees	1,602	949
– Other items	7,777	62,777
Total	371,392	350,084
Non-current portion	38,012	12,605
Current portion	333,380	337,479
Total	371,392	350,084

Note 30 Loans

Total	217,675	275,935
Current portion	125,537	129,933
Non-current portion	92,138	146,002
	2011	2010

The exposure of the Group's loans to interest

rate changes and the contractual repricing
dates at the balance sheet date	2011	2010
0–6 months	147,982	199,707
6–12 months	67,489	73,456
1–5 years	2,204	2,772
Total	217,675	275,935

Bank loans mature until 2017. Total loans include bank and other collateralized loans of SEK 159,361 thousand (105,255). The Group's bank loans are secured by shares in Studsvik GmbH and Studsvik Verwaltungs GmbH. The Group's loans are recognized at fair value.

Note 30 (continued)

Maturities of loans 2011 Less than 1 year 125,537 Between 1 and 2 years 85,116 Between 2 and 5 years 5,602 More than 5 years 1,420	Total	217,675	275,935
			2,448
			90,353
			53,201
			129,933
			2010

The Group has the following
unutilized credit facilities	2011	2010
Variable interest rate
– Matures within one year	62,119	39,167
Total	62,119	39,167

The lines of credit that mature within one year are one-year credit facilities that will be reviewed on varying dates in 2012.

The carrying amounts of the Group's loans
are denominated in the following currencies	2011	2010
SEK	2,204	2,772
EUR	64,776	73,456
USD	141,715	171,981
GBP	8,980	27,726
Total	217,675	275,935

Average effective interest rate on balance sheet date, bank loans 2011 2010 SEK 4.40% 2.09% EUR 2.91% 2.64% USD 3.74% 4.35% GBP 2.97% 3.34%

Note 31 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	2011	2010
Deferred tax assets
Deferred tax assets to be utilized after more than 12 months	97,065	95,615
Deferred tax assets to be utilized within 12 months	–389	2,676
Total	96,676	98,291
Deferred tax liabilities
Deferred tax liabilities to be paid after more than 12 months	35,553	35,658
Deferred tax liabilities to be paid within 12 months	3,019	2,405
Total	38,572	38,063

Deferred tax assets	Tax losses	Fair value gains	Other	Total
As at January 1, 2010	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
Charged/credited to the income statement	–2,697	860	–1,390	–3,227
Tax referring to components in other comprehensive income	–	484	–	484
Reposting to current tax	–	–19	–	–19
Translation differences	784	–	363	1,147
As at December 31, 2011	92,645	3,720	311	96,676

Deferred tax liabilities	Accelerated tax depreciation	Fair value gains	Other	Total
As at January 1, 2010	6,017	800	27,138	33,955
Charged/credited to the income statement	1,657	610	5,365	7,632
Tax referring to components in other comprehensive income	–	–	–	–
Reposting to current tax	–	–	1,032	1,032
Translation differences	–	–	–4,556	–4,556
As at December 31, 2010	7,674	1,410	28,979	38,063
Charged/credited to the income statement	–418	–	227	–191
Tax referring to components in other comprehensive income	–	–	–	–
Reposting to current tax	–	–	–	–
Translation differences	–	–3	703	700
As at December 31, 2011	7,256	1,407	29,909	38,572

Deferred tax assets are recognized for tax loss carry forwards to the extent that the realization of the related tax benefi t through the future taxable profi ts is probable. Most of the Group's tax loss carry forwards are related to the US and UK operations. These total USD 45.1 million (47.0), to be utilized within a 20 year period in the USA and GBP 2.2 million (2.1) in the UK. The Group's recognized deferred tax assets include tax loss carry forwards in the USA of SEK 66.7 million (70.9) and in the UK of SEK 21.4 million (21.0).

Note 32 Pension obligations

Defi ned benefi t pension plans

There are a few defi ned benefi t pension plans within the Group, which are primarily based on fi nal salary. The plans that have been considered to be material are in Germany. Other pension obligations, which also exist in Germany and Japan, 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 Reporting Board, UFR 3, this is a defi ned benefi t plan covering several employers. For the 2011 fi nancial year the Group has not had access to such information as will make it possible to report this plan as a defi ned benefi t plan. The pension plan under ITP, which is vested through insurance with Alecta, is therefore reported as a defi ned contribution plan. The year's contributions for pension insurance taken out with Alecta amounted to SEK 5,669 thousand (5,854). Alecta's surplus can be distributed to the policy-holders and/or the insured. At the end of 2011 Alecta's surplus in the form of a collective solvency level l was 113 (134) 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.

	2011	2010
Obligations in the balance sheet for
Pension benefi ts	6,165	5,749
Income statement charge for (note 9)
Pension costs	28,657	30,092
Amounts recognized in the balance sheet	2011	2010
Present value of unfunded obligations	6,165	5,749
Total	6,165	5,749
Amounts recognized in the income statement	2011	2010
Defi ned benefi t plans
Current service cost	242	563
Interest expense	135	134
Total	377	697

Of the total cost, SEK 365 thousand (407) was included in 'Cost of services sold' and SEK 12 thousand (290) 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	2011	2010
At the start of the year	5,749	7,489
Translation differences	145	–506
Total expense recognized in the income statement	377	697
Contributions paid	–106	–1,931
At the end of the year	6,165	5,749

Total pension costs recognized in the consolidated

income statement	2011	2010
Total costs for defi ned benefi t plans	377	697
Total costs for defi ned contribution plans	24,117	24,810
Costs of special employer's contribution and tax on returns from pension funds	4,163	4,585
Total	28,657	30,092
Actuarial assumptions	2011	2010
Discount rate	4.7%	5.2%
Expected return on plan assets	0.0%	0.0%
Future salary increases	0.0%	0.0%
Future pension increases	2.0%	1.8%

Note 33 Other provisions

	Future waste management expenses	Other provisions	Total
As at January 1, 2011	90,139	127,375	217,514
Recognized as an expense in the consolidated income statement
– Additional provisions	28,380	6,880	35,260
Capitalized as property, plant and equipment	–	–5,029	–5,029
Discount effect	1,451	193	1,644
Amount utilized during the period	–4,908	–	–4,908
Translation difference	855	1,438	2,293
As at December 31, 2011	115,917	130,857	246,774
Non-current portion	107,483	130,857	238,340
Current portion	8,434	–	8,434
Total	115,917	130,857	246,774

Future waste management expenses

The Group's operations generate nuclear waste and radioactive waste which must be sent for fi nal 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 fi nanced, 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 1,804 thousand (911) 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 this. Recognized provisions include management of waste in connection with decommissioning of SEK 37.1 million. Of the total provisions SEK 1.8 million is expected to be utilized in 2012. The rest is expected to be utilized successively and at the earliest at the beginning of 2013.

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 amounted to SEK 78.8 million at year-end and are expected to be utilized no earlier than 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 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 2012. The remaining part of the provisions is expected to be utilized only in connection with decommissioning operations.

Note 34 Cash fl ow from operating activities

Non-cash items	2011	2010
Depreciation/amortization and impairment	63,678	70,394
Proceeds from sale of property, plant and equipment	–622	1,240
Share in earnings from associated companies	–7,572	–7,260
Revaluation of fi nancial holdings	–1,196	–1,222
Change in provisions	29,958	10,306
Total	84,246	73,458

Note 35 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 154,052 thousand (139,329) to third parties. No further payments are expected as at the date of these fi nancial statements.

Note 36 Commitments

CAPITAL COMMITMENTS

Capital expenditure contracted for at the balance sheet date but not yet recognized in the fi nancial statements is as follows.

	2011	2010
Property, plant and equipment	6,129	14,727
Total	6,129	14,727

OPERATING LEASE COMMITMENTS

Lease expenses for operating leases for the year amounted to SEK 9,563 thousand (7,681).

Future aggregate minimum lease payments	2011	2010
Within 1 year	4,346	4,033
Between 1 and 5 years	17,511	14,020
Total	21,857	18,053

FINANCE LEASE COMMITMENTS

Assets recognized as fi nance leases		Equipment and tools
Opening book value January 1, 2010		3,435
Investments		104
Depreciation/amortization for the year		–673
Disposals and retirements		–94
Closing book value December 31, 2010		2,772
Opening book value January 1, 2011		2,772
Investments		65
Depreciation/amortization for the year		–633
Disposals and retirements		–
Closing book value December 31, 2011		2,204
Future aggregate minimum lease payments	2011	2010
Within 1 year	568	603
Between 1 and 5 years	1,636	2,169
Total	2,204	2,772

Finance lease commitments for the year amount to SEK 633 thousand (673). Finance leases comprise equipment for processing large components in the Swedish operations.

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 related parties	2011	2010
Sale of services
– THOR Treatment Technologies, LLC	4,981	4,944
– UK Nuclear Waste Management Ltd	8,544	9,822
Receivables from related parties
– THOR Treatment Technologies, LLC	398	1,501
– UK Nuclear Waste Management Ltd	4,075	2,354
Change in loans to related parties
– UK Nuclear Waste Management Ltd	–	–785

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

Studsvik holds 79 per cent of Studsvik Scandpower, Inc. The remaining 21 per cent is held by a private individual previously employed by the company. Studsvik holds 91 per cent of Studsvik Scandpower AB with the subsidiaries Studsvik Scandpower GmbH, Studsvik Scandpower Suisse GmbH and Studsvik Scandpower AS. The remaining 9 per cent is held by the minority shareholder of Studsvik Scandpower, Inc.

The owners have agreed on how share transfers are to take place in the event of one of the parties wishing to relinquish or increase their holdings in the two companies. Studsvik can only increase its ownership through acquisition of the entire minority holding. The acquisition must be at market price. An acquisition must cover both companies. If the minority wishes to relinquish its ownership, the shares must be offered to Studsvik at market price. The market price will be determined by an independent valuation institute. In a situation where Studsvik AB wishes to relinquish its holding the minority has an option to acquire 12 per cent of the shares in Studsvik Scandpower AB at book value of equity.

Note 38 Information on the Board of Directors and senior management

Salaries and other benefi ts, 2011	Basic salary/ Board fee	Committee fee	Variable remuneration	Other benefi ts	Pension cost	Other remuneration	Total
Chairman of the Board
– Anders Ullberg	650	50	–	–	–	–	700
Members of the board (6)
– Jan Barchan	225	–	–	–	–	–	225
– Lars Engström	225	50	–	–	–	–	275
– Anna Karinen	225	–	–	–	–	–	225
– Alf Lindfors	225	–	–	–	–	–	225
– Per Ludvigsson	225	100	–	–	–	–	325
– Agneta Nestenborg	225	–	–	–	–	–	225
Employee representatives (4)	–	–	–	–	–	–	–
President	1,894	–	–	64	646	–	2,604
Vice President*	1,823	–	124	56	892	–	2,895
Other senior management (6)	7,182	–	991	507	1,495	–	10,175
– of whom outgoing (1)	1,894	–	–	64	646	–	2,604
Total	12,899	200	1,115	627	3,033	–	17,874

* Acting President from September 1 to December 31, 2011.

Salaries and other benefi ts, 2010	Basic salary/ Board fee	Committee fee	Variable remuneration	Other benefi ts	Pension cost	Other remuneration	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
Vice President	1,410	–	150	60	896	–	2,516
Other senior management (7)	8,923	–	684	537	1,749	5,724	17,617
– 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.

Note 38 (continued)

Remuneration to the Board of Directors

and senior management	2011	2010
Parent company
Salaries and other remuneration	7,288	7,863
– Of which variable remuneration	124	260
Pensions	2,022	2,564
Number of persons	14	15
Subsidiaries
Salaries and other remuneration	6,926	13,990
– Of which variable remuneration	991	574
Pensions	1,011	1,174
Number of persons	5	6
Group
Salaries and other remuneration	14,214	21,853
– Of which variable remuneration	1,115	834
Pensions	3,033	3,738
Number of persons	19	21

Principles

In 2011 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 2012 the variable component of the salary is based on the Group's operating profi t and maximized to 50 per cent of annual salary. The variable salary component for other senior management for 2012 is based on outcomes related to individually specifi ed targets at both Group and unit level. For 100 per cent target fulfi llment in all parameters a maximum variable salary component is payable of 50 per cent of the basic salary.

Other benefi ts and remuneration

Other benefi ts reported are company car, meal subsidies and other benefi ts 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. Apart from statutory national pension he has a defi ned contribution pension plan to which the company pays in a monthly pension premium equivalent to 35 per cent of fi xed monthly salary. For other members of the Executive Group Management a pension is payable as a rule from the age of 65. Swedish members of the Executive Group Management follow the ITP plan and the pension obligation is secured through insurance with Alecta. In one case there is a supplementary defi ned contribution pension plan to which the company pays a premium equivalent to about 18 per cent of fi xed salay. Defi ned contribution plans apply to members of the Executive Group Management outside Sweden, with the exception of Germany, where a defi ned benefi t plan based on period of employment applies. 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 6 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 monthly severance payment for 12 months after termination of employment, though no longer than until retirement age. The monthly severance payment will be equivalent to the fi xed monthly salary received during the period of notice. Deduction is made for any salary from a new employer. 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 of up to 12 months' salary.

Note 39 Events after the close of the reporting period

No events considered to be material as defi ned in IAS 10 have occurred after the close of the reporting period on December 31, 2011.

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	2011	2010
Sweden	4,808	4,239
Europe, not including Sweden	3,906	4,174
North America	2,161	2,106
Total	10,875	10,519

Note 41 Employee benefi ts

		2011		2010
	Salaries and other remuneration (of which variable re muneration)	Social security expenses (of which pension costs)	Salaries and other remuneration (of which variable remuneration)	Social security expenses (of which pension costs)
Board of Directors and	5,050	2,064	5,293	2,718
President	(–)	(698)	(–)	(1,201)
Other employees	6,809	4,788	6,088	5,121
	(–215)	(2,319)	(356)	(2,620)
Total	11,859	6,852	11,381	7,839
	(–215)	(3,017)	(356)	(3,821)

Note 42 Costs by nature of expense

	2011	2010
Purchases of material and services	19,050	17,572
Personnel costs	18,116	19,383
Depreciation/amortization	72	272
Total	37,238	37,227

Services include fees and remuneration to accounting fi rms as follows:

	2011	2010
PricewaterhouseCoopers
Audit assignments	963	1,058
Audit business in addition to audit	95	15
Other services	121	107

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 examination or performance of such duties.

Note 43 Depreciation

		2011		2010
	According to plan	Book	According to plan	Book
Equipment and tools	72	72	272	272
Total	72	72	272	272

Note 44 Other operating income and expenses

Other operating income	2011	2010
Financial assets at fair value through profi t or loss
– Fair value gains	1,193	1,258
Total	1,193	1,258
Other operating expenses	2011	2010
Foreign exchange differences	–45	–115
Total	–45	–115

Note 45 Operating leases

Total	2,377	2,606
Maturity after one year but within fi ve years	1,163	1,674
Maturity within one year	1,214	932
	2011	2010

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

Note 46 Result from participation in Group companies

	2011	2010
Dividend from Group companies	17,869	21,422
Group contributions received	25,000	30,000
Result of recognition of impairment
loss on shares in subsidiary	–55,000	–
Total	–12,131	51,422

The result of recognition of impairment loss on shares in subsidiary refers to the writedown of shares in Studsvik Holding, Inc. by SEK 55,000 thousand.

Note 47 Interest income and similar profi t/loss items

	2011	2010
Interest	7,132	10,528
Exchange rate differences	14,003	2,422
Total	21,135	12,950
Of which, in respect of Studsvik Group companies
Interest	6,901	10,495
Total	6,901	10,495

Note 48 Interest expense and similar profi t/loss items

	2011	2010
Interest	5,676	7,482
Exchange rate differences	12,306	3,874
Total	17,982	11,356
Of which, in respect of Studsvik Group companies
Interest	1,454	473
Total	1,454	473

Note 49 Appropriations

	2011	2010
Dissolution of tax allocation reserve	–	–
Total	–	–

Note 50 Income tax

	2011	2010
Current tax
Current tax on profi t for the year	–1,830	–863
Adjustment for previous years	70	164
Total	–1,760	–699

Deferred tax

Total income tax	–599	–994
Total	1,161	–295
Origination and reversal of temporary differences	1,161	–295

The Swedish tax rate is 26.3 (26.3) per cent. The income tax on the parent company's profi t before tax differs from the theoretical amount that would arise using the weighted average tax rate for profi ts as follows.

	2011	2010
Profi t/loss before tax	–34,193	27,451
Tax in accordance with the current tax rate	8,993	–7,220
Non-taxable revenue	5,014	5,964
Expenses not deductible for tax purposes	–14,587	–242
Deferred tax asset referring to pensions	–89	322
Adjustment for previous years' tax assessment	70	164
Other	–	18
Total	–599	–994

The weighted average tax rate was –2 (4) per cent, mainly as an effect of dividends received from subsidiaries and non-deductible impairment loss on shares in a subsidiary (note 46).

Note 51 Property, plant and equipment

2011	2010
1,752	1,771
–	–19
1,752	1,752
–1,642	–1,384
–72	–272
–	14
–1,714	–1,642
38	110

	Note 52 Financial assets

	2011	2010
Shares in subsidiaries
Opening cost of acquisition	876,944	855,461
Shareholder's contribution	82,480	21,483
Closing cost of acquisition	959,424	876,944
Opening impairment losses	–42,949	–42,949
Impairment losses for the year	–55,000	–
Closing impairment losses	–97,949	–42,949
Closing value	861,475	833,995

During the year a shareholder's contribution was made to Studsvik UK Ltd. The impairment loss on shares in a subsidiary refers to Studsvik Holding, Inc.

Note 52 (continued)

Receivables from Group companies Loans to Studsvik Holding, Inc. Group

Closing value	16,770	15,493
Foreign exchange differences	–	–231
Revaluation to fair value	768	1,487
Items added	509	1,185
Opening cost of acquisition	15,493	13,052
Other non-current receivables
Closing value	24,186	95,567
– Foreign exchange differences	–818	–9,672
– Conversion to shareholders' contribution	–82,480	–19,388
– Items added	11,917	24,099
– Opening cost of acquisition	95,567	100,528
Loan to Studsvik UK Ltd
Closing value	142,343	155,993
– Foreign exchange differences	1,722	–5,743
– Items deducted	–15,372	–4,602
– Opening cost of acquisition	155,993	166,338

Note 53 Prepaid expenses and accrued income

	2011	2010
Prepaid rent	221	278
Prepaid insurance premiums	–	176
Prepaid pension premiums	112	52
Prepaid software licenses	406	443
Prepaid service charges	240	68
Other	156	148
Total	1,135	1,165

Note 54 Shares and participations in subsidiaries

	Share of equity, %	Share of voting rights, %	Number of parti cipations/ shares		Nominal value	Book value
Parent company's holdings
Studsvik Holding Inc.	100	100	2,000	USD thousand		25,372 513,747
Studsvik Nuclear AB	100	100	5,000	SEK thousand		50,000 133,400
Studsvik Scand power, Inc.	79	79	1,503	USD thousand	149	984
Studsvik Scandpower AB	91	91	910	SEK thousand	91	603
Studsvik Japan Ltd	100	100	10,000	JPY thousand	10,000	373
Studsvik Germany GmbH	100	100		EUR thousand	26	241
Studsvik Verwaltungs GmbH	100	100		EUR thousand	26	261
Studsvik UK Ltd	100	100	1,022,500	GBP thousand		1,023 193,760
Studsvik Instrument Systems AB	100	100	17,000	SEK thousand	17,000	18,106
Total						861,475

Note 54 (continued)

Information on subsidiaries' corporate identity numbers and registered offi ces

	Corporate identity number	Registered offi ce
Studsvik Nuclear AB	556051-6212	Nyköping, Sweden
ALARA Holding i Skultuna AB	556573-6591	Nyköping, Sweden
Studsvik 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	62-1801098	Erwin, USA
Memphis, LLC		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	4 772 229	Newcastle, England
Studsvik Alpha Engineering Ltd	3 658 198	Newcastle, England
Studsvik Instrument Systems AB	556197-1481	Nyköping, Sweden

Note 55 Liabilities to credit institutions

	2011	2010
Bank loans
Non-current portion	12,710	37,518
Current portion	82,097	98,215
Total	94,807	135,733

Note 56 Accrued expenses and deferred income

	2011	2010
Holiday pay liability	1,632	1,673
Accrued salaries	489	802
Accrued social security contributions	4,322	4,568
Accrued interest expense	522	551
Total	6,965	7,594

Note 57 Pledged assets

	2011	2010
Shares in subsidiaries	502	111,782
Total	502	111,782

Shares in Studsvik GmbH and Studsvik Verwaltungs GmbH have been put up as collateral for bank loans. The shares in Studsvik UK Ltd were collateral for a loan that was fully repaid in 2011.

Note 58 Contingent liabilities

	2011	2010
Guarantees	–	393
Contingent liabilities referring to insurance	3,014	3,030
Total	3,014	3,423

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

Note 59 Derivative instruments

	2011			2010
	Assets	Liabilities	Assets	Liabilities
Forward exchange contracts	36	2,530	2,933	628

Revaluation of forward exchange contracts is through profi t or loss.

Outstanding forward exchange contracts, December 31, 2011

		INFLOW CURRENCIES
Maturity year	GBP 000	USD 000
2012 Amount	2,139	6,430
Average rate	10.697	6.555
Remeasured at fair value	22,722	44,341

Note 60 Investments in property, plant and equipment

	2011	2010
Equipment and tools	–	–
Total	–	–

No investments were made during the year.

Note 61 Cash fl ow from operating activities

Non-cash items	2011	2010
Depreciation/amortization	72	272
Fair value gains	–1,196	–1,256
Other items	–	34
Total	–1,124	–950

Note 62 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.

	2011	2010
Purchases	4%	10%
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 6 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. See also note 38.

Note 63 Number of employees

			2011	2010
Women			5	5
Men			6	6
Total			11	11
		2011		2010
Board members and senior	Number on balance	Of which	Number on balance	Of which

management executives	sheet date	men	sheet date	men
Board members	11	8	11	7
President and other senior
management executives	2	2	3	3

Note 64 Investment in subsidiaries

Shareholder's contribution	82,480	21,483
Total	82,480	21,483

Shareholder's contribution to Studsvik UK Ltd in 2011 and 2010 through conversion of loan, accrued interest and other receivables.

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, 2012. In our view, the consolidated accounts have been prepared in accordance with international fi nancial reporting standards (IFRS) as adopted by the EU and give a true and fair view of the Group's fi nancial 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 fi nancial 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, fi nancial position and performance and describes signifi cant risks and uncertainties faced by the parent company and the companies that are part of the Group.

Nyköping, March 5, 2012

Anders Ullberg Anna Karinen Jan Barchan

Chairman Vice Chairman Member

Lars Engström Maria Lindberg Alf Lindfors Member Employee representative Member

Per Ludvigsson Roger Lundström Agneta Nestenborg Member Employee representative Member

Anders Jackson President

Our audit report was submitted on March 9, 2012 PricewaterhouseCoopers AB

Lennart Danielsson Authorized Public Accountant

Audit report

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

REPORT ON THE ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS

We have audited the annual accounts and consolidated accounts of Studsvik AB for 2011. The company's annual accounts and consolidated accounts are included in the printed version of this document on pages 4–52.

Responsibilities of the Board of Directors and the President for the annual accounts and consolidated accounts

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

Auditor's responsibility

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

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

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

Opinions

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the fi nancial position of the parent company as at December 31, 2011 and of its fi nancial performance and its cash fl ows for the year then ended in accordance with the Annual Accounts Act, and the consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the fi nancial position of the Group as at December 31, 2011 and of their fi nancial performance and cash fl ows in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and the consolidated accounts.

We therefore recommend that the Annual General Meeting adopt the income statement and balance sheet for the parent company and the Group.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In addition to our audit of the annual accounts and consolidated accounts, we have examined the proposed appropriations of the company's profi t or loss and the administration of the Board of Directors and the President of Studsvik AB for 2011.

Responsibilities of the Board of Directors and President

The Board of Directors is responsible for the proposal for appropriations of the company's profi t or loss, and the Board of Directors and the President are responsible for administration under the Companies Act.

Auditor's responsibility

Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company's profi t or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.

As a basis for my our opinion on the Board of Directors' proposed appropriations of the company's profi t or loss, we examined the Board of Directors' reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined signifi cant decisions, actions taken and circumstances of the company in order to be able to determine whether any member of the Board of Directors or the President is liable to the company. We also examined whether any member of the Board of Directors 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 the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinion.

Opinions

We recommend to the Annual General Meeting that the profi t be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the President be discharged from liability for the fi nancial year.

Stockholm, March 9, 2012

PricewaterhouseCoopers AB

Lennart Danielsson Authorized public accountant

Corporate Governance

Studsvik AB is a Swedish public company with its registered offi ce 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 decisionmaking body, where the shareholders exercise their infl uence 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 fi nancial results are to be allocated and elect a board of directors and auditors.

The number of shareholders on December 31, 2011 was 4,183. The total number of shares was 8,218,611. All shares have an equal right to participate in the company's assets and profi ts. 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, pages 15–17.

At the Annual General Meeting in April 2011, 44 shareholders participated, representing a total of 36.5 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, discharged the Board of Directors and President from liability and appointed PricewaterhouseCoopers AB as auditor. All members of the Board of Directors were re-elected and Anders Ullberg was appointed as Chairman. The Meeting also established principles for benefi ts 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 appointed Stina Barchan (Briban Invest AB), Erik Feldt (Nordea Fonder), Bill Tunbrant (representative of the Karinen family) and Anders Ullberg (Chairman of the Board) as members of the Nomination Committee. The Nomination Committee appointed Bill Tunbrant as chairman. The Nomination Committee's term of offi ce is until a new Nomination Committee is appointed. The composition of the Nomination Committee was announced on April 26, 2011 in a press release and on Studsvik's website.

The Nomination Committee held two meetings. Information on how shareholders can submit proposals to the Nomination Committee has been published on Studsvik's website. The work of the Nomination Committee focuses on ensuring that the Board of Directors is composed of members that together have the knowledge and experience that meets the requirements of the owners concerning Studsvik's highest governing body. In the process of preparing proposals for candidate members of the Board the Chairman of the Board therefore presents to the Nomination Committee the evaluation made of the work of the Board of Directors in the past year. The company's operations and future direction is also presented by the President.

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 of the annual report and under Board of Directors and auditors on the website.

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 fi nancial reporting. The President takes part in the work of the Board of Directors and other employees take part when this is called for. The Group's Chief Financial Offi cer, who is also Executive Vice President, acts as secretary to the Board.

In 2011 the Board of Directors held 11 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 fi nancial situation through monthly reports and at board meetings. Operations in the various segments are monitored and discussed in accordance with a rolling plan, which means that the Board of Directors makes a detailed analysis of each segment at least once a year. Moreover the Board of Directors agrees each year on a number of issues that are to be examined at a board meeting during the year. In 2011 the Group's strategic position, organization and personnel development were dealt with.

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 March 2011 a major natural disaster took place in Japan, which had a strong impact on the Japanese nuclear power industry, and which subsequently led to a decision in the German parliament to phase out nuclear power in the long term in the country. In light of these events the Board devoted particular attention in 2011 to the immediate effects on the German operations. In the same context the short-term and long-term effects on the Group's other operations were also analyzed. The Board of Directors continued in 2011 to follow in detail the Group's UK and US operations and the measures taken to adapt them in order to improve profi tability.

The former President, Magnus Groth, announced in April that he would leave his position. The Board of Directors then started a recruitment process and in August appointed Anders Jackson as new President from January 1, 2012. The Group's Executive Vice President, Jerry Ericsson, was acting President for the period September 1 – December 31, 2011.

At one meeting the company's auditors reported on their observations from the audit of the annual accounts and the company's administration. The Board of Directors was also given the opportunity of 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. The evaluation is discussed by the Board of Directors as a basis for planning the Board's work for the coming year.

Policies, guidelines and instructions

The Board annually reviews and adopts Group policies and guidelines. These include:

• 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

Board members	Elected	Atten dance	Remune ration Committee	Audit Committee	Independ ent of company	Independ ent of share holders	Fee SEK thousand
Anders Ullberg, Chairman of the Board	2007	11/11	1/1	4/4	yes	yes	700
Anna Karinen, vice Chairman	2003	11/11	1/1		yes	no	225
Jan Barchan	2004	10/11	1/1		yes	no	225
Lars Engström	2008	11/11		4/4	yes	yes	275
Alf Lindfors	2006	11/11			yes	yes	225
Per Ludvigsson	2007	11/11		4/4	yes	no	325
Agneta Nestenborg	2010	11/11			yes	yes	225
Maria Lindberg (Employee rep)	2006	9/11
Roger Lundström (Employee rep)	2005	9/11
Lena Bergström1) (Employee rep) alternate	2008	1/4
Per Ekberg (Employee rep) alternate	2006	6/11
Thomas Kinell2) (Employee rep) alternate	2011	5/7

1) Alternate member of the Board up to and including May 17, 2011

2) Alternate member of the Board from June 7, 2011

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

Audit Committee

The Board of Directors has set up an Audit Committee. The Committee monitors the effectiveness of the company's internal controls, management of the company's risks and assures the quality of the company's fi nancial reporting. The Audit Committee consists of Per Ludvigsson (chairman), Lars Engström and Anders Ullberg. The presenter in the Committee is the Chief Financial Offi cer. Apart from the Group's quarterly reports, during the year the Committee has taken note of and dealt with reports from the internal follow-up of internal controls. In addition, the Committee has been updated on the development of major ongoing fi xed price contracts, dealt with accounting matters, with particular focus on impairment calculations, as well as continually following the progress of the Group's legal disputes.

The company's auditors reported to the Committee on their observations from the hard-close and internal control, conducted at the time of the second and third quarter closings, and the audit of the annual accounts. 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.

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 approves salaries and other conditions of employment for the Executive Group Management proposed by the President. 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 Committee held one meeting during the year. 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.

A description of benefi ts to senior management is given in note 38 on pages 46–47.

Board fees

The total board fee paid by Studsvik AB for 2011 amounted to SEK 2,200,000 (2,149,000). 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 2011 Annual General Meeting the registered public accounting fi rm PricewaterhouseCoopers AB was elected as auditor for the period up to and including the 2012 Annual General Meeting. The auditor in charge is authorized public accountant Lennart Danielsson. Pricewaterhouse-Coopers audits all companies in the Group. The audit is based on an audit plan and during the year the auditor regularly reports observations made to the Audit Committee and on at least one occasion to the Board of Directors. The auditor obtains views from the Audit Committee concerning Studsvik's risks, which are thereafter given particular consideration in the audit plan. The auditor also participates in the Annual General Meeting to present the audit report and describe the audit work and observations made. In addition to the audit assignment Studsvik has consulted PricewaterhouseCoopers in the area of taxation and on various accounting and fi nancial issues. PricewaterhouseCoopers is obliged to test its independence prior to every decision to provide advice to Studsvik unrelated to the audit assignment. Remuneration to the company's auditors is paid in accordance with an approved invoice on agreed terms. For information concerning remuneration in 2011 please refer to note 8 and note 42.

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/Chief Financial Offi cer, the head of the Group function company acquisitions and projects, and the heads of the fi ve segments. The President and Executive Group Management are presented on pages 60–61 of the annual report and under Executive Group Management on the website.

The Executive Group Management meets weekly to follow up operative and fi nancial developments in the segments. On two to three occasions during the fi nancial 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 fi nancial resources among the Group's operations, capital structure and risk management. The tasks also include questions of Group wide acquisitions and disposals, certain major projects, the Group's fi nancial reporting, communication with the stock market, internal and external communication, 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. Business in the subsidiaries is followed up partly through monthly business reviews, partly through active board work under the leadership of

the Chief Executive Offi cer. 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,
• that shareholders' interests are protected,
• that external fi nancial reporting refl ects the actual situation with reasonable certainty,
• that the fi nancial reports are prepared in accordance with generally accepted accounting principles, laws and ordinances and other requirements of listed companies.

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 fi nancial 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 fi nance 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 at Group level, and on checklists and question lists in material for self-assessment that are subsequently verifi ed from the point of view of materiality through direct examination. A detailed description of the Group's risks and how they are managed is presented in the Administration Report on pages 13–15. An account of the Group's fi nancial risks can be found in note 2 on pages 30–32.

The outcome of the review is reported to the Audit Committee and the Board.

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 Responsi bility Report for 2011 in accordance with level B of the Global Reporting Initiative (GRI), published on www.studsvik.com.

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 2011 and for its preparation in accordance with the Annual Accounts Act. As a basis for 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 9, 2012 PricewaterhouseCoopers AB

Lennart Danielsson 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 the BE Group, Boliden, Eneqvist Consulting and Natur & Kultur, 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: 40,000 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 local 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 and AudioDev AB and member of the board of Assistera AB, Skånemejerier, Trianon AB and Arcam AB 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: 5,100 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 qualifi cation in reactor technology Holding: 0 shares

Per Ludvigsson

Råå, born in 1943 Member since 2008 Chairman of the board of the Inter IKEA Group and member of the board of IKANO and Briban Invest AB Education: M.Sc. (Business and Economics) Holding: 5,000 shares

Agneta Nestenborg

Södra Sandby, born in 1961 Member since 2010 Head of Business Integration, 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

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

Thomas Kinell

Nyköping, born in 1950 Alternate since 2011 Representative of the Swedish Association of Graduate Engineers. Responsible for independent safety review at Studsvik Nuclear AB Education: Licentiate of theoretical engineering physics Holding: 0 shares

AUDITOR

PricewaterhouseCoopers AB

Auditor in charge: Lennart Danielsson Born in 1959 Auditor of Studsvik since 2011 Other assignments: Clas Ohlson AB, Indutrade AB and Sweco AB

Anders Ullberg Alf Lindfors

Jan Barchan

Lars Engström

Per Ludvigsson Anna Karinen Roger Lundström

Agneta Nestenborg

Maria Lindberg

Per Ekberg

Thomas Kinell

Executive Group Management

Anders Jackson

President and Chief Executive Offi cer Education: M.Sc. Engineering physics Year of birth: 1959 Year of employment: 2012 Background: Several different roles in Westinghouse, including President Europe, VP M&S New Nuclear Power Plants, President Westinghouse Electric Sweden Directorships: Chairman of the Board of ArosFortet AB Holding: 4,270 shares

Sten-Olof Andersson

Director, Group wide projects and company acquisitions Education: Engineer Born in: 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

Jerry Ericsson

Executive Vice President and Chief Financial Offi cer Education: M.Sc. (Business and Economics) Born in: 1951 Year of employment: 1984 Background: Controller and CFO in various industries, at top management level since 1978 Holding: 17,600 shares

Magnus Arbell

President, Studsvik Nuclear AB Education: M.Sc. (Materials Technology) Born in: 1963 Year of employment: 2008 Background: President of StiebelEltron 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 segment Sweden Education: System scientist, post-secondary education in Norrköping and Linköping University Born in: 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

President, Studsvik, Inc. and head of segment USA Education: Master of International Business Administration Born in: 1962 Year of employment: 2007 Background: President and CEO of Radatec, Inc Holding: 0 shares

Sam Usher

President, Studsvik UK Ltd and head of segment UK Education: MEng Chemical Engineering, MSc Engineering Management, CEng Chartered Engineer Born in: 1969 Year of employment: 2008 Background: Plant Manager BNFL Sellafi eld, Business, Project and Strategic Development Manager, AMEC Holding: 0 shares

Stefan Berbner

President, Studsvik Verwaltungs GmbH and head of segment Germany Education: PhD Chemical Engineering Born in: 1963 Year of employment: 2011 Background: Several senior management positions in the Freudenberg Group, including General Manager Engineering Projects, Director Industrial Filtration Holding: 0 shares

Anders Jackson

Sten-Olof Andersson

Mats Fridolfsson

Five year review

CONDENSED INCOME STATEMENTS

Amount, SEK million	2007	2008	2009	2010	2011
Net sales	1,314.7	1,285.9	1,216.3	1,344.1	1,200.7
Cost of services sold	–1,000.1	–986.3	–949.4	–1,027.2	–924.8
Gross profi t	314.6	299.6	266.9	316.9	275.9
Selling and marketing costs	–53.8	–52.1	–52.0	–52.8	–46.6
Administrative expenses	–180.4	–194.8	–201.1	–186.6	–171.9
Research and development costs	–41.8	–44.8	–46.1	–40.3	–28.4
Participation in associated company's profi t before tax	–	8.5	13.1	7.3	7.6
Other, net	23.5	–3.7	–10.8	–11.1	17.0
Operating profi t/loss	62.1	12.7	–30.0	33.4	53.6
Net fi nancial items	–16.1	–12.0	–19.7	–19.1	–12.9
Profi t after fi nancial items	46.0	0.7	–49.7	14.3	40.7
Tax on profi t for the year	1.2	0.4	14.5	–10.3	–18.0
NET PROFIT/LOSS FOR THE YEAR	47.2	1.1	–35.2	4.0	22.7

CONDENSED BALANCE SHEETS

Amount, SEK million	2007	2008	2009	2010	2011
Assets
Goodwill	311.7	363.0	342.3	313.4	315.9
Other non-current assets	530.9	661.5	720.8	701.2	685.1
Trade receivables	206.0	201.7	228.3	239.7	223.0
Other non-interest bearing current assets	120.5	136.9	87.2	104.3	109.9
Cash and cash equivalents and current investments	176.9	147.7	74.7	68.4	122.1
Total assets	1,346.0	1,510.8	1,453.3	1,427.0	1,456.0
Equity and liabilities
Equity	568.4	610.5	540.9	520.5	548.5
Non-controlling interests	3.4	0.3	0.3	0.3	0.3
Non-current interest-bearing liabilities	196.4	350.5	284.5	146.0	92.1
Non-current non interest-bearing liabilities	110.2	137.0	181.3	273.0	322.2
Current interest-bearing liabilities	122.3	37.7	85.4	129.9	125.5
Current non interest-bearing liabilities	345.3	374.8	360.9	357.3	367.4
Total equity and liabilities	1,346.0	1,510.8	1,453.3	1,427.0	1,456.0

CONDENSED CASH FLOW STATEMENTS

Amount, SEK million	2007	2008	2009	2010	2011
Operating profi t/loss	62.1	12.7	–30.0	33.4	53.6
Reversal of depreciation/amortization	60.1	67.2	75.2	68.6	62.3
Other non-cash items	–22.6	–6.2	18.0	4.8	21.9
Cash fl ow from operating activities	99.6	73.7	63.2	106.8	137.8
Net fi nancial items	–16.1	–13.0	–21.4	–15.7	–13.0
Taxes	–6.8	1.2	–3.1	–12.3	–12.0
Cash fl ow before changes in working capital	76.7	61.9	38.7	78.8	112.8
Changes in working capital	–37.7	–32.4	–17.3	28.7	38.3
Cash fl ow before investments	39.0	29.5	21.4	107.5	151.1
Investments	–122.4	–103.3	–83.1	–52.8	–63.3
Cash fl ow after investments	–83.4	–73.8	–61.7	54.7	87.8

DATA PER SHARE	2007	2008	2009	2010	2011
After new share issue and shareholders' contribution
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	5.65	–0.05	–4.28	0.49	2.77
Earnings per share after dilution, SEK	5.65	–0.05	–4.28	0.49	2.77
Equity per share, SEK	69.58	74.32	65.82	63.37	66.77

KEY FINANCIAL FIGURES AND RATIOS	2007	2008	2009	2010	2011
Margins
Operating margin, %	4.7	1.0	neg	2.5	4.5
Profi t margin, %	3.5	0.1	neg	1.1	3.4
Return on investment
Return on operating capital, %	9.0	1.6	neg	4.3	8.2
Return on capital employed, %	7.9	2.1	neg	4.4	9.1
Return on equity, %	8.2	0.2	neg	0.8	4.3
Capital structure
Operating capital, SEK million	713.6	851.3	836.5	729.3	645.4
Capital employed, SEK million	890.5	999.0	911.2	797.7	767.5
Equity, SEK million	571.8	610.8	541.2	520.8	548.8
Net interest-bearing debt, SEK million	141.8	240.5	295.3	207.6	95.6
Net debt-equity ratio, multiple	0.2	0.4	0.5	0.4	0.2
Interest coverage ratio, multiple	2.9	1.0	neg	1.6	2.5
Equity-assets ratio, %	42.5	40.4	37.2	36.5	37.7
Cash fl ow
Self-fi nancing ratio, multiple	0.3	0.2	0.3	2.1	2.6
Investments, SEK million	127.3	108.4	81.6	25.6	55.4
Employees
Average number of employees	1,141	1,130	1,132	1,169	1,153
Net sales per employee, SEK million	1.2	1.1	1.1	1.1	1.0

Defi nitions of key fi gures 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.

Net debt

Total non-current and current loans less cash and cash equivalents.

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-fi nancing ratio

Cash fl ow 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

Profi t 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

Profi t for the year as a percentage of average equity.

Return on operating capital

Operating profi t as a percentage of average operating capital.

Return on capital employed

Profi t/loss after fi nancial items with fi nancial 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

Profi t after fi nancial income divided by fi nancial expense.

Operating margin

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

Profi t margin

Profi t/loss after fi nancial items as a percentage of net sales.

Worldwide Worldwide

SWEDEN 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 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 Visiting address: Studsvik Tel: +46 155 22 10 00 Fax: +46 155 26 30 70 Studsvik Nuclear AB SE-611 82 Nyköping Sweden Visiting address: 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 Studsvik Scandpower AB Stensborgsgatan 4 SE-721 32 Västerås Sweden Tel: +46 21 41 57 70

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

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

SWITZERLAND Studsvik Scandpower Suisse GmbH Klausenstrasse 21 CH-5525 Fischbach-Göslikon Switzerland Tel: +41 79 319 1501 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 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 Team Valley Trading Estate Gateshead Tyne & Wear NE11 0NF United Kingdom Tel: +44 191 482 1744 Fax: +44 191 482 1747

GERMANY GERMANY

Studsvik Scandpower GmbH Rathausallee 28 DE-22846 Norderstedt Germany Tel: +49 40 3098 088 10 Fax: +49 40 3098 088 88 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 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. 309 Waverley Oaks Road Waltham, MA 02452 USA Tel: +1 617 965 7450 Studsvik Scandpower, Inc. 309 Waverley Oaks Road Waltham, MA 02452 Tel: +1 617 965 7450

Fax: +1 617 965 7549 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, Inc. 5605 Glenridge Dr, NE Suite 705 Atlanta, GA 30342 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 Memphis, LLC 2550 Channel Ave P.O. Box 13143 Memphis, TN 38113 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 Processing Facility Erwin, LLC 151 T.C. Runnion Rd Erwin, TN 37650 Tel: +1 423 735 6300 Fax: +1 423 743 0794

Studsvik AB (publ) Annual Report 2011 Org nr 556501-0997 Studsvik AB (publ) Annual Report 2011 Org nr 556501-0997

© Studsvik AB (publ) © 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). 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: Intellecta AB, Comir AB Photo: Jan Lindblad Jr, Janne Höglund, Mattias Bardå and others Printing: Österbergs Production: Intellecta AB, Comir AB Photo: Jan Lindblad Jr, Janne Höglund, Mattias Bardå and others Printing: Österbergs

Studsvik AB (publ)

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